SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ___________________.
Commission File Number: 000-23113
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
GUARANTY BANCSHARES, INC. EMPLOYEE
STOCK OWNERSHIP PLAN (WITH 401(K) PROVISIONS)
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
GUARANTY BANCSHARES, INC.
100 WEST ARKANSAS
MOUNT PLEASANT, TEXAS 75455
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401 (k) PROVISIONS
INDEX
PAGE
--------
Independent Auditor's Report 1
Statements of Net Assets Available for Plan Benefits
as of December 31, 1998 and December 31, 1997 2-4
Statements of Changes in Net Assets Available for Plan Benefits
For the years ended December 31, 1998 and December 31, 1997 5-7
Notes to Financial Statements
For the years ended December 31, 1998 and December 31, 1997 8-13
Supplemental Schedule of Assets Held for Investment Purposes 14
Supplemental Schedule of Reportable Transactions 15
<PAGE>
[ARNOLD, WALKER, ARNOLD & CO., P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Administrator of the
Guaranty Bancshares, Inc.
Employee Stock Ownership Plan
with 401(k) Provisions
We were engaged to audit the accompanying financial statements and supplemental
schedules of the Guaranty Bancshares, Inc. Employee Stock Ownership Plan with
401 (k) Provisions (the "Plan") as of December 31, 1998, and 1997, and for the
years then ended, as listed in the accompanying index. These financial
statements and supplemental schedules are the responsibility of the Plan's
management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 ("ERISA"), the plan administrator instructed us not to
perform, and we did not perform, any auditing procedures with respect to the
information summarized in Note 6, which was certified by the Bank of New York,
the asset custodian of the Plan for 1998, and the Guaranty Bank Trust
Department, the asset custodian of the Plan for 1997, except for comparing such
information with the related information included in the 1998 and 1997 financial
statements and supplemental schedules. We have been informed by the plan
administrator that the asset custodian holds the Plan's investment assets and
executes investment transactions. The plan administrator has obtained a
certification from the asset custodians as of and for the years ended December
31, 1998 and 1997, that the information provided to the plan administrator by
the asset custodians is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and supplemental schedules taken as a whole. The form and content of
the information included in the financial statements and supplemental schedules,
other than that derived from the information certified by the asset custodian,
have been audited by us in accordance with generally accepted auditing standards
and, in our opinion, are presented in compliance with the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974.
/s/ ARNOLD, WALKER, ARNOLD & CO., P.C.
Arnold, Walker, Arnold & Co., P.C.
May 20, 1999
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------------------------
PARTICIPANT
DIRECTED
---------------------------------------------------------------
FIXED GROWTH & MONEY
INCOME GROWTH INCOME STOCK MARKET
FUND FUND FUND FUND FUND
<S> <C>
ASSETS
Investments at Fair Value:
Guaranty Bancshares, Inc. Common Stock ............ - - - 1,420,521 --
Pooled Funds and Mutual Funds ..................... - - - 59,331 245,443
-------- -------- ------- --------- ---------
TOTAL INVESTMENTS ................................ - - - 1,479,852 245,443
-------- -------- ------- --------- ---------
TOTAL ASSETS ..................................... - - - 1,479,852 245,443
-------- -------- ------- --------- ---------
LIABILITIES
Participant benefits payable ...................... - - - 6,842 --
-------- -------- ------- --------- ---------
TOTAL LIABILITIES ................................ - - - 6,842 --
-------- -------- ------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ............. - - - 1,473,010 245,443
======== ======== ======= ========= =========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------
PARTICIPANT
DIRECTED
----------------------------------------------
STABLE
VALUE GOVERNMENT S&P
FUND BOND FUND STOCK FUND
<S> <C> <C> <C>
ASSETS
Investments at Fair Value:
Guaranty Bancshares, Inc. Common Stock ............ -- -- --
Pooled Funds and Mutual Funds ..................... 69,350 104,319 400,825
--------- --------- ---------
TOTAL INVESTMENTS ................................ 69,350 104,319 400,825
--------- --------- ---------
TOTAL ASSETS ..................................... 69,350 104,319 400,825
--------- --------- ---------
LIABILITIES
Participant benefits payable ...................... -- -- --
--------- --------- ---------
TOTAL LIABILITIES ................................ -- -- --
--------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ............. 69,350 104,319 400,825
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED)
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
------------------------------------------------------------------
PARTICIPANT
DIRECTED
------------------------------------------------------------------
ASSET ASSET
INTER- ALLOCATION ALLOCATION
S&P MIDCAP NATIONAL FUND FUND GROWTH
STOCK FUND STOCK FUND INCOME PLUS & INCOME
<S> <C> <C> <C> <C>
ASSETS
Investments at Fair Value:
Guaranty Bancshares, Inc. Common Stock ......... -- -- -- --
Pooled Funds and Mutual Funds .................. 143,768 22,490 220,438 169,316
--------- --------- --------- ---------
TOTAL INVESTMENTS ............................ 143,768 22,490 220,438 169,316
--------- --------- --------- ---------
TOTAL ASSETS ................................. 143,768 22,490 220,438 169,316
--------- --------- --------- ---------
LIABILITIES
Participant benefits payable ................... -- -- -- --
--------- --------- --------- ---------
TOTAL LIABILITIES ............................ -- -- -- --
--------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ......... 143,768 22,490 220,438 169,316
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED
-------------- ------------
ASSET
ALLOCATION
FUND STOCK
GROWTH FUND TOTAL
<S> <C> <C> <C>
ASSETS
Investments at Fair Value:
Guaranty Bancshares, Inc. Common Stock ......... -- 2,221,838 3,642,359
Pooled Funds and Mutual Funds .................. 579,917 92,801 2,107,998
--------- --------- ---------
TOTAL INVESTMENTS ............................ 579,917 2,314,639 5,750,357
--------- --------- ---------
TOTAL ASSETS ................................. 579,917 2,314,639 5,750,357
--------- --------- ---------
LIABILITIES
Participant benefits payable ................... -- 10,701 17,543
--------- --------- ---------
TOTAL LIABILITIES ............................ -- 10,701 17,543
--------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ......... 579,917 2,303,938 5,732,814
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED)
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED
--------------------------------------------- ------------
FIXED GROWTH &
INCOME GROWTH INCOME STOCK STOCK
FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash ................................................. 713,685 333,475 109,200 131,108 205,067 1,492,535
Certificates of Deposit .............................. 320,000 90,000 -- -- -- 410,000
Investments, at Fair Value:
Guaranty Bancshares, Inc. Common Stock ............ -- -- -- 1,214,939 1,877,315 3,092,254
Other Investments ................................. 480,134 47,062 34,315 -- -- 561,511
--------- --------- --------- --------- --------- ---------
TOTAL INVESTMENTS .................................... 1,513,819 470,537 143,515 1,346,047 2,082,382 5,556,300
--------- --------- --------- --------- --------- ---------
Participant Loans .................................... 1,859 -- -- -- -- 1,859
--------- --------- --------- --------- --------- ---------
TOTAL ASSETS ......................................... 1,515,678 470,537 143,515 1,346,047 2,082,382 5,558,159
--------- --------- --------- --------- --------- ---------
LIABILITIES
Contributions Held in Suspense (Section 415 IRC) .. -- -- -- -- 1,967 1,967
Due to Bank - Excess Contributions ................ -- -- -- -- 5,119 5,119
--------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES .................................... -- -- -- -- 7,086 7,086
--------- --------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS ............... 1,515,678 470,537 143,515 1,346,047 2,075,296 5,551,073
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------
PARTICIPANT
DIRECTED
-----------------------------------------------------
FIXED GROWTH &
INCOME GROWTH INCOME STOCK
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment income
Net investment gain (loss) ............ 30,908 5,180 975 (104,272)
Interest .............................. 34,126 8,229 2,307 4,633
Dividends ............................. -- -- -- 31,673
---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME ............. 65,034 13,409 3,282 (67,966)
---------- ---------- ---------- ----------
Contributions
Employee Salary Deferral Contributions -- -- -- 147,738
Employee Rollover Contributions ....... -- -- -- 3,889
Employer Matching Contributions ....... -- -- -- --
Employer Optional Contributions ....... -- -- -- --
---------- ---------- ---------- ----------
TOTAL CONTRIBUTIONS ................. -- -- -- 151,627
---------- ---------- ---------- ----------
TOTAL ADDITIONS ......................... 65,034 13,409 3,282 83,661
---------- ---------- ---------- ----------
Deductions from Net Assets Attributed to:
Benefits Paid, Including Vested Benefits
to Former Participants ................ 130,390 5,203 1,565 53,182
Administrative Expenses ................. -- -- -- 5,237
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS ........................ 130,390 5,203 1,565 58,419
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS ..................... (65,356) 8,206 1,717 25,242
Interfund Transfers ..................... (1,450,322) (478,743) (145,232) 101,721
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) ................. (1,515,678) (470,537) (143,515) 126,963
Net Assets Available for Plan Benefits:
Beginning of Year ..................... 1,515,678 470,537 143,515 1,346,047
---------- ---------- ---------- ----------
End of Year ........................... -- -- -- 1,473,010
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------------
PARTICIPANT
DIRECTED
---------------------------------------------------
MONEY STABLE
MARKET VALUE GOVERNMENT S&P 500
FUND FUND BOND FUND STOCK FUND
<S> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment income
Net investment gain (loss) ............ -- 2,700 11,516 42,962
Interest .............................. 18,088 -- -- --
Dividends ............................. -- -- -- --
---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME ............. 18,088 2,700 11,516 42,962
---------- ---------- ---------- ----------
Contributions
Employee Salary Deferral Contributions 6,490 4,413 2,091 45,275
Employee Rollover Contributions ....... -- -- -- --
Employer Matching Contributions ....... -- -- -- --
Employer Optional Contributions ....... -- -- -- --
---------- ---------- ---------- ----------
TOTAL CONTRIBUTIONS ................. 6,490 4,413 2,091 45,275
---------- ---------- ---------- ----------
TOTAL ADDITIONS ......................... 24,578 7,113 13,607 88,237
---------- ---------- ---------- ----------
Deductions from Net Assets Attributed to:
Benefits Paid, Including Vested Benefits
to Former Participants ................ 104,378 851 36 1,944
Administrative Expenses ................. 1,135 243 376 1,121
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS ........................ 105,513 1,094 412 3,065
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS ..................... (80,935) 6,019 13,195 85,172
Interfund Transfers ..................... 326,378 63,331 91,124 315,653
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) ................. 245,443 69,350 104,319 400,825
Net Assets Available for Plan Benefits:
Beginning of Year ..................... -- -- -- --
---------- ---------- ---------- ----------
End of Year ........................... 245,443 69,350 104,319 400,825
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------
PARTICIPANT
DIRECTED
-----------------------------------------------------------------
ASSET ASSET
INTER- ALLOCATION ALLOCATION
S&P MIDCAP NATIONAL FUND FUND GROWTH
STOCK FUND STOCK FUND INCOME PLUS & INCOME
<S> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment income
Net investment gain (loss) ............ 9,664 843 10,885 10,265
Interest .............................. -- -- -- --
Dividends ............................. -- -- -- --
---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME ............. 9,664 843 10,885 10,265
---------- ---------- ---------- ----------
Contributions
Employee Salary Deferral Contributions 16,148 1,087 13,346 9,506
Employee Rollover Contributions ....... -- -- -- --
Employer Matching Contributions ....... -- -- -- --
Employer Optional Contributions ....... -- -- -- --
---------- ---------- ---------- ----------
TOTAL CONTRIBUTIONS ................. 16,148 1,087 13,346 9,506
---------- ---------- ---------- ----------
TOTAL ADDITIONS ..................... 25,812 1,930 24,231 19,771
---------- ---------- ---------- ----------
Deductions from Net Assets Attributed to:
Benefits Paid, Including Vested Benefits
to Former Participants ................ 793 -- 5,592 1,042
Administrative Expenses ................. 386 84 1,127 885
---------- ---------- ---------- ----------
TOTAL DEDUCTIONS ........................ 1,179 84 6,719 1,927
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS ..................... 24,633 1,846 17,512 17,844
Interfund Transfers ..................... 119,135 20,644 202,926 151,472
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) ................. 143,768 22,490 220,438 169,316
Net Assets Available for Plan Benefits:
Beginning of Year ..................... -- -- -- --
---------- ---------- ---------- ----------
End of Year ........................... 143,768 22,490 220,438 169,316
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED
-------------- --------------
ASSET
ALLOCATION
FUND STOCK
GROWTH FUND TOTAL
<S> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment income
Net investment gain (loss) ............ 50,178 (168,649) (96,845)
Interest .............................. -- -- 67,383
Dividends ............................. -- 61,316 92,989
---------- ---------- ----------
TOTAL INVESTMENT INCOME ............. 50,178 (107,333) 63,527
---------- ---------- ----------
Contributions
Employee Salary Deferral Contributions 10,405 -- 256,499
Employee Rollover Contributions ....... -- -- 3,889
Employer Matching Contributions ....... -- 141,295 141,295
Employer Optional Contributions ....... -- 125,771 125,771
---------- ---------- ----------
TOTAL CONTRIBUTIONS ................. 10,405 267,066 527,454
---------- ---------- ----------
TOTAL ADDITIONS ..................... 60,583 159,733 590,981
---------- ---------- ----------
Deductions from Net Assets Attributed to:
Benefits Paid, Including Vested Benefits
to Former Participants ................ 593 82,003 387,572
Administrative Expenses ................. 2,883 8,191 21,668
---------- ---------- ----------
TOTAL DEDUCTIONS .................... 3,476 90,194 409,240
---------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS ..................... 57,107 69,539 181,741
Interfund Transfers ..................... 522,810 159,103 --
---------- ---------- ----------
NET INCREASE (DECREASE) ................. 579,917 228,642 181,741
Net Assets Available for Plan Benefits:
Beginning of Year ..................... -- 2,075,296 5,551,073
---------- ---------- ----------
End of Year ........................... 579,917 2,303,938 5,732,814
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------------------------------------
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED
--------------------------------------------------- -------------
FIXED GROWTH &
INCOME GROWTH INCOME STOCK STOCK
FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income
Net Appreciation (Depreciation) in
Estimated Fair Value of Investments .... (9,030) 53,240 8,437 192,144 255,061 499,852
Realized Gain on Sale of Assets .......... 22,752 11,965 2,332 -- -- 37,049
Interest ................................. 71,415 6,027 2,189 3,500 5,492 88,623
Dividends ................................ 16,345 4,987 2,323 30,228 47,280 101,163
---------- ---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME ............... 101,482 76,219 15,281 225,872 307,833 726,687
---------- ---------- ---------- ---------- ---------- ----------
Contributions
Employee Salary Deferral Contributions ... 43,206 50,747 26,653 82,607 -- 203,213
Employee Rollover Contributions .......... -- -- -- 7,238 -- 7,238
Employer Matching Contributions .......... -- -- -- -- 119,818 119,818
Employer Optional Contributions .......... -- -- -- -- 110,033 110,033
---------- ---------- ---------- ---------- ---------- ----------
TOTAL CONTRIBUTIONS ................. 43,206 50,747 26,653 89,845 229,851 440,302
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ADDITIONS ............................. 144,688 126,966 41,934 315,717 537,684 1,166,989
---------- ---------- ---------- ---------- ---------- ----------
Deductions from Net Assets Attributed to:
Benefits Paid, Including Vested Benefits
to Former Participants ................. 365,680 7,957 142 71,489 115,566 560,834
---------- ---------- ---------- ---------- ---------- ----------
TOTAL DEDUCTIONS ............................ 365,680 7,957 142 71,489 115,566 560,834
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) PRIOR TO
INTERFUND TRANSFERS ....................... (220,992) 119,009 41,792 244,228 422,118 606,155
Interfund Transfers ......................... 23,392 (53) -- (10,559) (12,780) --
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) ..................... (197,600) 118,956 41,792 233,669 409,338 606,155
Net Assets Available for Plan Benefits:
Beginning of Year ....................... 1,713,278 351,581 101,723 1,112,378 1,665,958 4,944,918
---------- ---------- ---------- ---------- ---------- ----------
End of Year ............................. 1,515,678 470,537 143,515 1,346,047 2,075,296 5,551,073
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1. PLAN DESCRIPTION
General
The Plan is a defined contribution plan covering all employees of Guaranty
Bancshares, Inc. and Guaranty Bank, (the "Company") who are employed in a
position requiring at least 1000 hours of service during the plan year. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986.
Contributions
The Company may make three types of contributions to the Plan: (1) Basic
Contributions (discretionary contributions made for all non-highly
compensated participants in order to satisfy the nondiscrimination
requirements of the Internal Revenue Code), (2) Matching Contributions
(Company matches up to a certain percentage of Salary Reduction
Contributions made by the participant), and (3) Optional Contributions
(additional discretionary contributions made by the Company as determined
by the Board of Directors). The employee participant may make Salary
Reduction Contributions and eligible Rollover Contributions.
Participant accounts
Each participant's account is credited with any salary deferrals as well as
an allocation of (a) the Company's contribution, (b) Plan earnings and (c)
forfeitures of terminated participants' non-vested accounts. Allocations of
Company Basic and Optional Contributions is based on a participant's
compensation. Company Matching contributions are allocated based on a
participant's Salary Reduction Contributions. A participant must be
employed by the Company on December 31 of the Plan year to be eligible to
receive an allocation of Company Basic or Optional Contributions. The
Optional Account and 75% of the Match Account are subject to vesting
provisions. For those participants employed after December 31, 1997, 25% of
the Match Account additionally is subject to vesting provisions.
Vesting
Vesting is based on years of service. Vesting commences after three years
of credited service, at which time the participant is 20 percent vested. A
participant is 100 percent vested after seven years of credited service
from the date of employment. Upon death, retirement, or total disability a
participant is also 100 percent vested. A participant is always 100 percent
vested in any salary deferral, rollover, basic, and 25% of matching
contributions except for those employed after December 31, 1997 whose 25%
of matching contributions are subject to a schedule of vesting at the same
rate as mentioned at the opening of this caption.
Plan Administration
Effective January 1, 1998, certain Plan administration duties were
transferred to Pentegra Services, Inc. (Pentegra). Pentegra was contracted
to provide such administrative services as 5500 preparation, performance of
Top Heavy and Code Section 415 analysis, processing of all enrollments and
transactions, and preparation of quarterly member benefit statements and
fund performance summaries. All plan assets were transferred from Guaranty
Bank Trust Department to the custody of The Bank of New York during 1998.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1. PLAN DESCRIPTION - (Continued)
Investment options
Prior to 1998, upon enrollment in the Plan, a participant could direct
employee contributions in 25 percent increments in any of four investment
options.
FIXED INCOME FUND-Funds are invested in bank certificates of
deposit, government backed bonds, other low risk fixed income
securities, and fixed income mutual funds.
GROWTHFUND-Funds are invested in stocks, bonds, mutual funds, and
other investments with long term capital growth.
GROWTH & INCOME FUND-Funds are invested in fixed income securities,
low-risk-high capitalization stocks, mutual funds and other
assets of a high conservative nature.
STOCK FUND-Funds are invested primarily in Company stock.
Effective January 1, 1998, a participant may direct employee contributions
in multiples of 1 percent in any of ten investment options.
MONEY MARKET FUND-Funds are invested in short-term investments
issued by banks, corporations, and the U.S. Government and its
Agencies. These investments include certificates of deposit and U.S.
Treasury bills.
STABLE VALUE FUND-Funds are invested primarily in Guaranteed
Investment Contracts (GICS) and Synthetic Guaranteed Investment
Contracts (SGICS). The Fund may also invest in Bank Investment
Contracts (BICS).
GOVERNMENT BOND FUND-Funds are invested in U.S. Treasury bonds with
a maturity of 20 years or more.
S&P 500 STOCK FUND-Funds are invested in the stocks of a broad array
of established U.S. companies.
S&P MIDCAP STOCK FUND-Funds are invested in the stocks of mid-size
U.S. companies.
INTERNATIONAL STOCK FUND-Funds are invested in over 1,000 foreign
stocks in 20 countries.
ASSET ALLOCATION FUND--INCOME PLUS-This fund invests approximately
80% of its portfolio in a combination of stable value investments
and U.S. bonds. The balance is invested in U.S. and international
stocks.
ASSET ALLOCATION FUND--GROWTH & INCOME-Funds are invested in U.S.
domestic and international stocks, U.S. domestic bonds, and stable
value investments.
ASSET ALLOCATION FUND--GROWTH-This fund invests the majority of its
assets in stocks-domestic as well as international. Approximately
55% of the portfolio is in the U.S. stock market. Approximately 20%
of the portfolio is in international stocks. The other 25% is
invested in a flexible component of U.S. stocks, bonds and money
market instruments.
GUARANTY BANCSHARES, INC. STOCK FUND-Funds are invested primarily in
company stock.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1. PLAN DESCRIPTION - (Continued)
Payment of benefits
On termination of service, participants may elect to receive their benefits
in whole shares of Company stock, cash or a combination of both.
Forfeited accounts
Any portion of the final balances in a participant's accounts which is not
vested (and does not become a part of their Capital Accumulation) will
become a forfeiture upon the occurrence of a break in service. Forfeitures
will be reallocated among the remaining participants of the Plan. At
December 31, 1997, there were no forfeitures to be reallocated. As of
December 31, 1998, the forfeitures account contained a balance of $33,746.
Plan amendments
On July 11, 1997, the Plan was amended to entitle a participant to the
vested portion of their Employer Discretionary Matching Contribution in the
year of their termination, regardless of whether employment terminates
prior to the Anniversary Date. Additionally, a section of the Plan
regarding loans was amended to revise the definition of "immediate and
heavy financial need." On October 21, 1997, the plan was amended to state
that employees will become eligible to participate on the next January 1st
or July 1st following the date that the employee completed one full year of
service in which the employee is credited with at least 1000 hours of
service. In addition, if a participant who becomes employed after December
31, 1997 terminates for reasons other than retirement, disability or death,
his Capital Accumulation attributable to optional and 100% of matching
contributions will be determined on the basis of his nonforfeitable
interest. Finally, the distribution of a participant's Capital Accumulation
who is not a 5% owner must commence no later than April 1st of the next
Plan year following the later of the Plan year in which he attains 70? or
retires. If the participant owns more than 5% of the outstanding stock, the
distribution of such participant with respect to the Plan year in which he
attains 70? must commence no later than April 1st of the next Plan year.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
Investments
The fair value of the Guaranty Bancshares, Inc. common stock was determined
by an independent appraiser for the year ended December 31, 1997. Effective
March 24, 1998, Guaranty Bancshares, Inc. common stock was split in a seven
for one common shares stock split. All statements and disclosures in the
accompanying financial statements, notes thereto, and supplemental
schedules, present the effects of this split. Subsequently, the Company
sold 365,000 shares of its common stock in a public offering. Fair value of
Company stocks is now valued through the Nasdaq National Market. The change
in the estimated value of the Company's common stock is recorded in the
Statement of Changes in Net Assets Available for Plan Benefits.
All other investments are recorded at fair value.
Plan investments were managed by the Guaranty Bank Trust Department
("Guaranty") as asset custodian until April, 1998. At that time, all plan
assets were transferred to the Bank of New York. The asset custodian
invests all contributions, both Company and participant. The plan
administrator has received a certification from the asset custodians as to
the completeness and accuracy of all investment information, and related
activity, included in the basic financial statements and supplemental
schedules.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - (Continued)
Employer contributions
Employer Company contributions were accrued during the plan year to which
the contribution is attributed by the Employer Company's Board of
Directors.
NOTE 3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their
respective accounts.
NOTE 4. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401(a) of the Internal Revenue Code and, therefore, the Plan's
trust is not subject to tax under present income tax laws.
NOTE 5. RELATED PARTY TRANSACTIONS
Administrative expenses and legal fees were paid by the Company for the
year 1997. During 1998, Administrative fees were paid by the Plan totaling
$21,668. During 1998 and 1997 the Plan purchased 61,983 shares, and 20,370
shares of employer securities at a cost of $865,110 and $168,552
respectively.
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 6. INFORMATION CERTIFIED BY ASSET CUSTODIAN
The corporate trustee of the Plan holds the Plan's investment assets and
executes transactions therein. Financial information relating to those
assets is included in the accompanying financial statements based on
information provided by the trustee. That information, which has not been
audited by independent accountants, is summarized as follows:
FAIR VALUE OF ACCOUNT AS OF DECEMBER 31, 1998 1997
- ---------------------------------------- ---------- ----------
Guaranty Bank Trust Department -- 1,515,678
Fixed Income Fund -- 470,537
Growth Fund -- 143,515
Growth & Income Fund -- 3,421,343
Stock Fund
The Bank of New York
Money Market Fund 245,443 --
Stable Value Fund 69,350 --
Government Bond Fund 104,319 --
S&P 500Stock Fund 400,825 --
S&P Midcap Stock Fund 143,768 --
International Stock Fund 22,490 --
Asset Allocation Fund-Income Plus 220,438 --
Asset Allocation Fund-Growth & Income 169,316 --
Asset Allocation Fund-Growth 579,917 --
Stock Fund 3,776,948 --
---------- ----------
Total 5,732,814 5,551,073
========== ==========
NET INCREASE IN THE ACCOUNT FOR THE YEAR
ENDED DECEMBER 31, 1998 1997
- ----------------------------------------- ---------- ----------
Net unrealized appreciation (depreciation) in assets (235,857) 499,852
Net income received 299,384 226,835
Deferrals and contributions received during the year 527,454 440,302
Benefits paid directly to participants (387,572) (560,834)
Administrative expenses (21,668) --
---------- ----------
Net increase 181,741 606,155
Beginning total 5,551,073 4,944,918
---------- ----------
Ending total 5,732,814 5,551,073
========== ==========
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN WITH 401(k) PROVISIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 7. INVESTMENTS
The following tables present the fair values of investments at December 31,
1998 and 1997. Investments that represent 5 percent or more of the Plan's
net assets are separately identified. Also presented is the Plan's
investments' appreciated values for the years then ended.
DECEMBER 31,
1998 1997
--------- ---------
Investments at Fair Value as Determined by
Quoted Market Price
Common Stocks:
Guaranty Bancshares, Inc. Common Stock,
407,514 and 352,485 shares, respectively ..... 3,642,359 3,092,254
Pooled Funds & Mutual Funds .................... 2,107,998 259,000
U.S. Treasury Bonds & Notes .................... -- 59,963
U.S. Government Agency Obligations ............. -- 242,548
--------- ---------
5,750,357 3,653,765
--------- ---------
Investments at Estimated Fair Value
Money Market:
Guaranty Bank Premier Money Market, 4.52% .. -- 1,459,618
Other ...................................... -- 32,917
Certificates of Deposit ...................... -- 410,000
Participant Loans ............................ -- 1,859
--------- ---------
-- 1,904,394
--------- ---------
Total Investments ............................ 5,750,357 5,558,159
========= =========
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
LINE 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
EIN#75-1656431 PLAN #001
<TABLE>
<CAPTION>
(a) (b) (c) (d)
DESCRIPTION OF INVESTMENT INCLUDING MATURITY
IDENTITY OF ISSUE, BORROWER, LESSOR, DATE, RATE OF INTEREST, COLLATERAL, PAR OR
OR SIMILAR PARTY MATURITY VALUE COST CURRENT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund Participation in pooled separate account
which invests in money market obligations
(CD's) and short-term U.S. government
debt issues. 245,443 245,443
Stable Value Fund Participation in pooled separate account
which invests in Guaranteed Investment
Contracts (GICS), Synthetic Guaranteed
Investment Contracts (SGICS), and Bank
Investment Contracts (BICS) 66,650 69,350
Government Bond Fund Participation in
pooled separate account
which invests in long-term
U.S. government debt issues. 92,803 104,319
S&P 500 Stock Fund Participation in pooled separate account
which invests in common stocks 357,862 400,825
S&P Midcap Fund Participation in pooled separate account
which invests in common stocks 134,102 143,768
International Stock Fund Participation in pooled separate account
which invests in foreign common stocks 21,646 22,490
Asset Allocation Participation in pooled separate account
Fund--Income Plus which invests mainly in Stable Value
investments and U.S. government debt issues 209,552 220,438
Asset Allocation Participation in pooled separate account
Fund--Growth & Income which invests mainly in U.S. and
International common stocks 159,052 169,316
Asset Allocation Participation in pooled separate account
Fund-Growth which invests mainly in U.S. and International
common stocks with a small mix of
U.S. government debt issues and money
market instruments 528,995 579,917
Guaranty Bancshares, Inc. Common Stock-407,514 shares 4,521,939 3,642,359
Bank of New York Short-term investments 152,132 152,132
</TABLE>
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
LINE 27D-SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
EIN#75-1656431 PLAN #001
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
DESCRIPTION OF ASSET
(INCLUDING INTEREST RATE
IDENTITY OF PARTY INVOLVED AND MATURITY ) PURCHASE PRICE SELLING PRICE LEASE RENTAL
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GUARANTY BANK
TRUST DEPARTMENT
Fixed Income Fund Bank Certificates of Deposit-
And Government Bonds - 2,207,751(a) N/A
Growth Fund Common Stock,
Bonds, Mutual Funds - 538,251(a) N/A
Growth & Income Fund Fixed income securities,
Common Stock
Mutual funds - 191,920(a) N/A
THE BANK OF NEW YORK
Money Market Fund Money Market Obligations 2,806,633 - N/A
Money Market Fund Money Market Obligations - 2,577,366 N/A
Stable Value Fund GICS, SGICS, BICS 74,075 - N/A
Stable Value Fund GICS, SGICS, BICS - 7,221 N/A
Government Bond Fund US Government Debt Issues 95,682 - N/A
Government Bond Fund US Government Debt Issues - 2,515 N/A
S&P 500 Stock Fund Common Stock 401,689 - N/A
S&P 500 Stock Fund Common Stock - 42,568 N/A
S&P Midcap Stock Fund Common Stock 139,360 - N/A
S&P Midcap Stock Fund Common Stock - 4,733 N/A
International Stock Fund Common Stock 25,577 - N/A
International Stock Fund Common Stock - 3,877 N/A
Asset Allocation Fund--
Income Plus Stable value & US Government Issues 244,633 - N/A
Income Plus Stable value & US Government Issues - 34,094 N/A
Asset Allocation Fund--
Growth & Income Common Stock 238,781 - N/A
Growth & Income Common Stock - 78,748 N/A
Asset Allocation Fund--
Growth Common Stock 651,224 - N/A
Growth Common Stock - 119,027 N/A
Stock Fund
28,000 Shares Common Stock 399,000 - N/A
33,983 Shares Common Stock 466,110 - N/A
</TABLE>
(f) (g) (h) (i)
CURRENT VALUE OF
EXPENSE INCURRED ASSET ON NET GAIN
WITH TRANSACTION COST OF ASSET TRANSACTION DATE OR (LOSS)
- ---------------------------------------------------------------------------
N/A 2,176,843 - 30,908
N/A 533,071 - 5,180
N/A 190,945 - 975
N/A - 2,806,633 -
N/A 2,569,061 - 8,305
N/A - 74,075 -
N/A 7,189 - 32
N/A - 95,682 -
N/A 2,534 - (19)
N/A - 401,689 -
N/A 42,661 - (93)
N/A - 139,360 -
N/A 4,821 - (88)
N/A - 25,577 -
N/A 3,867 - 10
N/A - 244,633 -
N/A 33,981 - 113
N/A - 238,781 -
N/A 78,871 - (123)
N/A - 651,224 -
N/A 119,307 - (280)
N/A - 250,320 -
N/A - 365,977 -
(a) Includes liquidation of assets held for investment
purposes to accomplish transfer from Guaranty Bank
Trust Department to Bank of New York
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed in its behalf by the undersigned
hereunto duly authorized.
June 29, 1999 GUARANTY BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP
PLAN (WITH 401(K) PROVISIONS)
/s/ DEVRY W. GARRETT
Devry W. Garrett
Trustee
/s/ RUSSELL L. JONES
Russell L. Jones
Trustee
/s/ WELDON MILLER
Weldon Miller
Trustee
/s/ CLIFTON A. PAYNE
Clifton A. Payne
Trustee
/s/ RICHARD PERRYMAN
Richard Perryman
Trustee
/s/ D. R. ZACHRY
D. R. Zachry
Trustee
-2-
<PAGE>
INDEX TO EXHIBITS
NUMBER EXHIBIT
- ------ -------
23.1 Consent of Arnold, Walker, Arnold & Co., P.C.
-3-
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Guaranty Bancshares, Inc. (File No. 333-77783) of our
report dated May 20, 1999 on our audit of the financial statements of the
Guaranty Bancshares, Inc. Employee Stock Ownership Plan (With 401(k) Provisions)
as of December 31, 1998 and for the year ended December 31, 1998, which report
is included in this Annual Report on Form 11-K.
/s/ ARNOLD, WALKER, ARNOLD & CO., P.C.
ARNOLD, WALKER, ARNOLD & CO., P.C.
Mount Pleasant, Texas
June 29, 1999
-4-
