UNITED STATES
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File No. 333-48825-01
March 31, 1998
GUARANTY CAPITAL TRUST I
Delaware 54-6422391
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1658 State Farm Blvd., Charlottesville, VA 22911
(Address of Principal Executive Office)
(804) 970-1100
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark 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 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 ___ No _X_ (not subject to filing requirements for the
past 90 days).
As of May 18, 1998, the Registrant had 8,537 shares of its Common Stock
outstanding.
*This Form 10-QSB also covers 276,000 shares of the Registrant's $1.75
Convertible Preferred Securities, which were registered under the Securities Act
of 1933, as amended, pursuant to a registration statement declared effective on
April 29, 1998.
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements. (See Note Below)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Guaranty Capital Trust I (the "Trust") is a statutory business trust
formed under the Delaware Business Trust Act, as amended, pursuant to a trust
agreement, as amended by an amended and restated declaration of trust (the
"Declaration"), and the filing of a certificate of trust with the Delaware
Secretary of State on November 21, 1997. The Trust exists for the exclusive
purposes of (i) issuing and selling trust securities consisting of $1.75
Convertible Preferred Securities (the "Preferred Securities") and common
securities (the "Common Securities," and together with the Preferred Securities,
the "Trust Securities"), representing undivided beneficial ownership interests
in the assets of the Trust, (ii) investing the proceeds from such issuance in
Junior Subordinated Debt Securities (the "Junior Subordinated Debt Securities")
of Guaranty Financial Corporation, a Virginia corporation (the "Corporation"),
and (iii) engaging in only those other activities necessary, advisable or
incidental thereto. The Trust's sole assets are $7,113,425 principal amount of
Junior Subordinated Debt Securities, and payments under the Junior Subordinated
Debt Securities are the sole revenues of the Trust. Ownership of the Trust is
evidenced by $6,900,000 aggregate liquidation amount of Preferred Securities,
which are held by 38 security holders, and by $213,425 aggregate liquidation
amount of Common Securities, all of which are held by the Corporation, as of May
5, 1998. The Trust makes distributions on the Trust Securities to the extent it
receives distributions from the Corporation on the Junior Subordinated Debt
Securities. Distributions on the Trust Securities are guaranteed by the
Corporation, but only to the extent that the Trust has available funds to pay
such distributions. Each Preferred Security is convertible into a number of
shares of the Corporation's common stock, $1.25 par value, which trades on The
Nasdaq National Market under the symbol "GSLC," at the option of the holder at
any time prior to repayment of the Preferred Security either at redemption or
maturity, and subject to the Corporation's right to terminate the convertibility
of the Preferred Securities.
On May 5, 1998, the Trust invested the proceeds from the sale and
issuance of the Trust Securities in the Junior Subordinated Debt Securities. The
Trust's ability to pay distributions to the holders of the Preferred Securities
is dependent on its receipt of distributions on the Junior Subordinated Debt
Securities from the Corporation. Therefore, upon the receipt by the Trust of
payments from the Corporation, the Trust will pass through such payments to the
holders of the Preferred Securities.
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NOTE: Because the Trust is a special purpose financing entity with no
separate business operations, the only assets of the Trust are the Junior
Subordinated Debt Securities, and the Trust does not believe that financial
statements for the Trust are meaningful. Accordingly, financial statements and
related financial information have not been included in this Form 10-QSB. For
further information concerning the Corporation, including financial statements
and other financial information, see the Corporation's Annual Report on Form
10-KSB for the year ended December 31, 1997, and the Corporation's Quarterly
Report on Form 10-QSB for the quarter ended March 31, 1998, as filed with the
Securities and Exchange Commission, copies of which may be obtained from the
Corporate Secretary of the Corporation at 1658 State Farm Boulevard,
Charlottesville, Virginia 22911.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
(a) Not applicable.
(b) Not applicable.
(c) None.
(d) On April 29, 1998, the Commission declared the
effectiveness of the Corporation's and the Trust's Registration Statement on
Form S-1 (the "Registration Statement"), file numbers 333-48825 and
333-48825-01. The Registration Statement was the first registration statement
filed under the Securities Act of 1933, as amended, by the Trust. The
Registration Statement covered (i) 240,000 Preferred Securities, (ii) the Junior
Subordinated Debt Securities to be purchased by the Trust with the proceeds from
the sale of the Preferred Securities, (iii) the Guarantee of the Corporation
with respect to the Preferred Securities, (iv) such indeterminate number of
shares of the Corporation's common stock, par value $1.25 per share, as may be
issuable upon conversion of the Preferred Securities, and (v) up to 36,000
additional Preferred Securities, issuable if the Trust exercises its right to
increase the aggregate liquidation amount of the offering.
The offering of the Preferred Securities commenced on April 2, 1998,
and the sale of 276,000 Preferred Securities closed on May 5, 1998. The amount
of Preferred Securities registered was 276,000, and the aggregate price of the
offering amount registered was $6,900,000. The amount of Preferred Securities
sold was 276,000, and the aggregate offering price of the amount sold was
$6,900,000. The underwriter of the offering was McKinnon & Company, Inc.
Reasonable estimates for the amount of expenses incurred for the
Corporation's account in connection with the issuance and distribution of the
Preferred Securities described above are $276,000 in underwriting commissions
and $90,000 in offering expenses, neither of which represent direct or indirect
payments to directors, officers, general partners of the Corporation, the
administrative trustees of the Trust or their associates, to persons owning ten
percent or more of any class of equity securities of the Corporation or the
Trust, or to affiliates of the Corporation or the Trust. All expenses related to
the offering, including the underwriter's compensation, were paid by the
Corporation. Accordingly, the total offering proceeds to the Trust were
$6,900,000.
The total proceeds from the Preferred Securities offered as described
above are being invested in the Junior Subordinated Debt Securities. No direct
or indirect payments have been made to directors, officers, general partners of
the Corporation, the administrative trustees of the
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Trust or their associates, to persons owning ten percent or more of any class of
equity securities of the Corporation or the Trust, or to affiliates of the
Corporation or the Trust.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
4.1 Certificate of Trust (incorporated by reference to
Exhibit 4.1 of the Registration Statement of the
Trust on Form S-1 (Nos. 333-48825 and 333-48825-01)).
4.2 Trust Agreement between Guaranty Financial
Corporation and Wilmington Trust Company, as Trustee
(incorporated by reference to Exhibit 4.2 of the
Registration Statement of the Trust on Form S-1 (Nos.
333-48825 and 333-48825-01)).
4.3 Form of Amended and Restated Declaration of Trust
(incorporated by reference to Exhibit 4.3 of the
Registration Statement of the Trust on Form S-1 (Nos.
333-48825 and 333-48825-01)).
4.4 Form of Junior Subordinated Indenture between
Guaranty Financial Corporation and Wilmington Trust
Company, as Trustee (incorporated by reference to
Exhibit 4.4 of the Registration Statement of the
Trust on Form S-1 (Nos. 333-48825 and 333-48825-01)).
4.5 Form of Convertible Preferred Security (included in
Exhibit 4.3 above).
4.6 Form of Junior Subordinated Debt Security (included
in Exhibit 4.4 above).
4.7 Form of Guarantee Agreement with respect to Trust
Securities issued by the Trust (incorporated by
reference to Exhibit 4.7 of the Registration
Statement of the Trust on Form S-1 (Nos. 333-48825
and 333-48825-01)).
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(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
GUARANTY CAPITAL TRUST I
(Registrant)
Date: May 20, 1998 By: /s/ Vincent B. McNelley
------------------------------------
Name: Vincent B. McNelley
Title: Administrative Trustee
(as principal financial officer and
on behalf of the Registrant)
