<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 000-22487
GREAT GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
72-0919109
LOUISIANA (I.R.S. Employer
(State of Incorporation) Identification Number)
175 NEW ROADS STREET
NEW ROADS, LOUISIANA 70760
(Address of principal executive offices)
(225)638-8621
(Registrant's telephone number, including area code)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 143,374 SHARES AS OF MARCH 31,
2000
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GREAT GUARANTY BANCSHARES, INC.
FORM 10-QSB
MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
REFERENCE
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<S> <C>
ITEM 1. FINANCIAL STATEMENTS 1
Consolidated Balance Sheet as of March 31, 2000 1
Consolidated Statements of Income for the three months
ended March 31, 2000 and 1999 2
Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS 5
Material Changes in Financial Condition 5
Three Months Ended March 31, 2000 Compared with Three Months Ended
March 31, 1999 5
March 31, 2000 Compared with December 31, 1999 6
Loan Loss Provision 6
PART II - OTHER INFORMATION 6
ITEM 1. LEGAL PROCEEDINGS 6
ITEM 2. YEAR 2000 READINESS DISCLOSURES 6
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 7
SIGNATURES 8
EXHIBIT INDEX 9
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GREAT GUARANTY BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Cash and due from banks $ 2,071,589
Interest-bearing deposits with banks 8,467,074
Federal Funds Sold 2,375,000
Investments securities - available for sale 10,685,772
Restricted investments in equity securities 243,000
Loans, net of allowance for loan losses of $349,871 27,479,707
Properties and equipment, net 458,149
Accrued interest receivable 399,162
Other Assets 73,417
------------
TOTAL ASSETS $ 52,252,870
============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Demand deposits $ 14,656,628
NOW accounts 8,750,180
Savings deposits 7,172,288
Time deposits, $100,000 and over 2,587,239
Other time deposits 14,920,602
------------
Total deposits $ 48,086,937
Notes Payable 893,356
Accrued expenses and other liabilities 180,986
Income Taxes Payable 72,128
------------
Total liabilities $ 49,233,407
------------
SHAREHOLDERS' EQUITY
Common stock - $7.50 par value, 500,000 shares
authorized, 143,374 shares issued and outstanding $ 1,075,305
Capital surplus 2,411,471
Accumulated deficit (243,997)
Accumulated Other Comprehensive Income (223,316)
------------
Total shareholders' equity $ 3,019,463
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 52,252,870
============
</TABLE>
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GREAT GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Mar. 31,
2000 1999
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<S> <C> <C>
Interest and fees on loans $ 620,031 $ 507,550
Interest on investment securities 175,899 213,116
Interest on Federal Funds sold 31,345 7,481
Interest on Deposits with Banks 10,909 29,567
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Total interest income $ 838,184 $ 757,714
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INTEREST EXPENSE
Interest on notes payable 17,075 22,978
Interest on deposits 296,720 279,239
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Total interest expense $ 313,795 $ 302,217
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NET INTEREST INCOME $ 524,389 $ 455,497
PROVISION FOR LOAN LOSSES 23,000 6,500
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES $ 501,389 $ 448,997
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NON INTEREST INCOME
Service charges on deposit accounts $ 70,770 $ 70,042
Other service charges and fees 5,626 1,371
Net investment securities gains (losses) 0 491
Other income 13,240 8,407
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$ 89,636 $ 80,311
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NON INTEREST EXPENSE
Salaries and employee benefits $ 198,662 $ 228,075
Occupancy expense 51,488 49,475
Data processing 23,295 24,639
Legal fees 862 1,236
Other expense 103,876 111,629
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$ 378,183 $ 415,054
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INCOME BEFORE INCOME TAXES $ 212,842 $ 114,254
INCOME TAX EXPENSE 72,000 38,846
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NET INCOME $ 140,842 $ 75,408
OTHER COMPREHENSIVE INCOME, NET OF TAX
Unrealized holding losses arising during period (13,608) (3,628)
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COMPREHENSIVE INCOME $ 127,234 $ 71,780
========= =========
PER COMMON SHARE DATA:
NET INCOME $ .98 $ .53
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AVERAGE SHARES OUTSTANDING 143,374 143,374
========= =========
</TABLE>
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GREAT GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) PAGE 1 OF 2
<TABLE>
<CAPTION>
Three months ended Mar. 31,
----------------------------
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 140,842 $ 75,408
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 26,858 26,917
Provision for loan losses 23,000 6,500
Deferred tax 0 38,240
Stock dividends received (3,400) (3,200)
Net investment securities (gains) losses 0 (491)
(Increase) decrease in accrued income and other assets (68,310) (38,884)
Increase (decrease) in accrued expenses and other liabilities 967 58,159
------------ ------------
Net cash provided by (used in) operating activities $ 119,957 $ 162,649
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales/maturities of investment securities
Available for sale $ 260,981 $ 2,869,409
Purchase of investment securities
Available for sale (500,000) (2,000,000)
Net change in:
Interest bearing deposits with banks (7,674,666) 523,762
Federal Funds Sold (2,375,000) (625,000)
Loans (1,930,592) (1,389,090)
Purchase of equipment and building improvements (10,704) (3,958)
------------ ------------
Net cash (used in) provided by investing activities $(12,229,981) $ (624,877)
------------ ------------
</TABLE>
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GREAT GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(UNAUDITED) PAGE 2 OF 2
<TABLE>
<CAPTION>
Three months ended Mar. 31,
----------------------------
2000 1999
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<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in non-interest-bearing
demand, savings and NOW accounts $ 11,432,250 $ 673,764
Net increase (decrease) in time deposit 585,666 (172,393)
Payments on other notes payable (33,597) (31,173)
Net change in federal funds purchased and
Repurchase Agreement Sold 0 (600,000)
Income Taxes Payable 72,000 605
Dividends Paid (35,843) (35,843)
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Net cash provided by (used in)
financing activities $ 12,020,476 $ (165,040)
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NET INCREASE (DECREASE) IN CASH
AND DUE FROM BANKS (89,548) (627,268)
CASH AND DUE FROM BANKS AT BEGINNING
OF PERIOD 2,161,137 2,194,636
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CASH AND DUE FROM BANKS AT END
OF PERIOD $ 2,071,589 $ 1,567,368
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during the year for:
Interest $ 297,556 $ 309,851
============ ============
Income taxes $ 0 $ 20,000
============ ============
</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
MATERIAL CHANGES IN FINANCIAL CONDITION.
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH THREE MONTHS ENDED
MARCH 31, 1999.
Balance Sheet
Total Assets at March 31, 2000 were $52.3 million compared to $41.9
million at March 31, 1999. A substantial portion of the $10 million increase was
due to an $8 million deposit to a demand deposit account which was made on March
31, 2000. This deposit was for severance packages and other benefits due to the
sale of a large commercial entity. These funds will only be on deposit
temporarily, as employees transfer their funds to their personal banks, etc.
Notwithstanding the $8 million deposit, total assets at March 31, 2000 would
have been approximately $44.3 million which represents a 5.7% increase. Total
loans increased to $27.5 million at March 31, 2000 from $23.3 million at March
31, 1999, while securities decreased to $10.7 million from $13.6 million and
deposits increased to $48 million from $37.7 million as of those respective
dates. Shareholders' equity in Bancshares increased to $3.0 million at March 31,
2000 from $2.9 million at March 31, 1999. Bancshares' shareholders' equity in
its wholly owned bank subsidiary, Guaranty Bank & Trust Company ("Guaranty
Bank"), was $3.0 million at March 31, 2000, an increase from $2.9 million at
March 31, 1999, which was a result of the earnings of Guaranty Bank less
dividend payments by Guaranty Bank to Bancshares and an increase in the
unrealized loss on available for sale securities.
Income
The income of Bancshares is ordinarily attributable almost entirely to
dividends on earnings of Guaranty Bank. Consolidated net income of Bancshares is
generally determined by deduction of and expenses incurred by Bancshares from
the net income earned by Guaranty Bank.
Income for the three months ended March 31, 2000 was $140.8 thousand
compared to $75.4 thousand during the same period in 1999. Interest income
increased to $838 thousand for the three month period ended March 31, 2000
compared to $758 thousand for the same period in 1999, primarily as a result of
increased loan volume. Non-interest income totaled $90 thousand for the three
month period, compared to $80 thousand for the same period in 1999. Interest
expense increased to $314 thousand during the three months ended March 31, 2000,
an increase from $302 thousand during the same period in 1999, due primarily to
an increase in NOW account deposits, while non-interest expense decreased to
$378 thousand from $415 thousand during those periods, primarily as a result of
a reduction of in the number of employees of Guaranty Bank.
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<PAGE> 8
MARCH 31, 2000 COMPARED WITH DECEMBER 31, 1999
Balance Sheet
Total assets increased $12 million to $52.3 million at March 31, 2000,
an increase of 30% from $40.1 million at December 31, 1999, due to the short
term deposit mentioned in paragraph one. Assets have since stabilized at $43.6
million, which is approximately the year-to-date average. Total loans increased
by $1.9 million, or 7.5%, to $27.5 million at March 31, 2000 compared to $25.6
million at December 31, 1999, while securities increased $225 thousand to $10.7
million at March 31, 2000, from $10.5 million at December 31, 1999.
Total deposits increased by $12 million to $48.1 million at March 31,
2000, a 33% increase from $36.1 million at December 31, 1999, due to the above
mentioned deposit. Deposits have since stabilized at $39.4 million, which is
also the approximate year-to-date average. This growth of approximately $3.3
million was planned growth, in order to fund loans. Non-interest bearing
deposits increased at a 147% rate, due to the above deposit, compared to a 1.1%
growth in interest bearing deposits. During the first three months of 2000,
shareholders' equity in Bancshares increased $127 thousand to $3 million at
March 31, 2000 due to earnings of Guaranty Bank.
LOAN LOSS PROVISION
As a result of management's assessment of the adequacy of the allowance
for possible loan losses, Guaranty Bank recorded a loan loss provision of $23
thousand at March 31, 2000. The allowance for possible loan losses at March 31,
2000 was $350 thousand, 1.27% of total loans, compared to $333 thousand, or
1.30% of total loans, at December 31, 1999 and $275 thousand or 1.18% at March
31, 1999. On a monthly basis, Guaranty Bank management performs an analysis to
determine the adequacy of the reserve for possible loan losses.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither Bancshares nor Guaranty Bank is party to any litigation other
than routine litigation arising from regular business activities incident to
furnishing financial services.
ITEM 2. YEAR 2000 READINESS DISCLOSURE
Bancshares and Guaranty Bank's Board of Directors and Senior Management
is responsible for the overall process and assurances that sufficient resources
are available to ensure the success of the Year 2000 effort and the business
resumption contingency plan. Guaranty Bank established a Year 2000 Project Team
to deal with the issues of Y2K and delegated responsibilities to the team for
coordinating Y2K initiatives.
The objective of Bancshares and Guaranty Bank was to be Y2K ready by
December 31, 1999 within the regulatory guidelines with minimal impact to the
bank's customers and operations. Guaranty Bank has identified all mission
critical components of Y2K related directly and indirectly to its operations. In
the process the bank has:
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o Completed the Assessment Inventory and Renovation
Phase, replacing and/or upgrading all personal
computers, modems, and hardware which were not Y2K
ready. This was completed March 1998.
o Performed and completed "baseline" and "future" date
testing to establish a model for later test
comparisons to ensure that the programs were computed
correctly. There were no Y2K problems found.
o Contacted third party vendors to follow their Y2K
projects to make sure there will be no disruption to
services they provide to the bank. The bank has
worked with its vendors and has completed testing to
ensure progress toward Y2K readiness. Testing with
the bank's major vendor has determined there are no
related issues outstanding as of November 1998.
Continued testing will be done to ensure this status.
o Conducted point to point and end to end testing with
the Federal Reserve. Testing was completed December
1998. There were no Y2K errors found during testing.
o Developed a bank wide Y2K Business Resumption
Contingency Plan so there will be no disruption of
banking services to its customers or business
partners.
To date the bank has incurred costs of approximately $94,000 in its Y2K
efforts.
The potential consequences of Year 2000 had no material effect on the
Bank's business, results of operations or financial condition as of March 31,
2000, and the Bank is ready for any potential problems that will arise with
critical dates in the year 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(3) (i) Articles of Incorporation. See Exhibit 2.1
to Form 10-SB filed by Great Guaranty
Bancshares, Inc. April 30, 1997, as amended
by Amendment No. 1 filed July 1, 1997, which
exhibit is incorporated herein by reference.
(ii) Bylaws. See Exhibit 2.1 for Form 10-SB filed
by Great Guaranty Bancshares, Inc. April 30,
1997, as amended by Amendment No. 1 filed
July 1, 1997, which exhibit is incorporated
herein by reference.
(4) Instrument defining the rights of Security Holders,
Including Indentures. See Exhibits 3.1 (Form of Stock
Certificate for Common Stock), 3.2 (Stock Redemption
Agreement) and 3.3 (Written Agreement with Federal
Reserve Board) to Form 10-SB filed by Great Guaranty
Bancshares, Inc. April 30, 1997, as amended by
Amendment No. 1 filed July 1, 1997, which exhibits
are incorporated herein by reference.
(27) Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
period for which this report is filed.
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<PAGE> 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
GREAT GUARANTY BANCSHARES, INC.
Dated: May 12, 2000 By: /s/ J. Wade O'Neal, III
----------------------------------------
J. Wade O'Neal, III
Authorized Representative
of Great Guaranty Bancshares, Inc. and
President and CEO of Guaranty Bank &
Trust Company
By: /s/ Beverly B. David
----------------------------------------
Beverly B. David
Assistant Treasurer
of Great Guaranty Bancshares, Inc. and
Senior Vice President of Guaranty Bank
& Trust
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,071,589
<INT-BEARING-DEPOSITS> 8,467,074
<FED-FUNDS-SOLD> 2,375,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,685,772
<INVESTMENTS-CARRYING> 10,685,772
<INVESTMENTS-MARKET> 10,685,772
<LOANS> 27,479,707
<ALLOWANCE> 349,871
<TOTAL-ASSETS> 52,252,870
<DEPOSITS> 48,086,937
<SHORT-TERM> 893,356
<LIABILITIES-OTHER> 180,986
<LONG-TERM> 0
0
0
<COMMON> 1,075,305
<OTHER-SE> 1,944,158
<TOTAL-LIABILITIES-AND-EQUITY> 52,252,870
<INTEREST-LOAN> 620,031
<INTEREST-INVEST> 175,899
<INTEREST-OTHER> 42,254
<INTEREST-TOTAL> 838,184
<INTEREST-DEPOSIT> 296,720
<INTEREST-EXPENSE> 313,795
<INTEREST-INCOME-NET> 524,389
<LOAN-LOSSES> 23,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 378,183
<INCOME-PRETAX> 212,842
<INCOME-PRE-EXTRAORDINARY> 140,842
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,842
<EPS-BASIC> .98
<EPS-DILUTED> .98
<YIELD-ACTUAL> 0
<LOANS-NON> 240,331
<LOANS-PAST> 193,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 12,062
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
