SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual Report Pursuant To Section 13 or 15 (d) of the Securities
Exchange Act of 1934(Fee Required)
----------------
For the fiscal year ended December 31, 1994
Commission file number: 0-10929
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
GUARANTY BANCSHARES HOLDING CORPORATION
(exact name of registrant as specified in its charter)
Louisiana 72-0933277
(State of incorporation) (I.R.S. Employer Identification No.)
1201 Brashear Avenue, Morgan City, Louisiana 70380
(address of principal executive offices and zip code)
Registrant's telephone number, including area code: (504) 384-2813
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Title of each class:
Class A Common Stock, $5.00 par value
Class B Common Stock, No par value
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 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
State the aggregate market value of the voting stock held by
nonaffiliates of the Registrant: (Total number of shares held by non-
affiliates: See Part II, Item 5.)
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date.
Class A Common Stock, $5 Par Value, 210,000 shares outstanding as of
March 10, 1995
Class B Common Stock, No Par Value, 170,877 shares outstanding as of
March 10, 1995
Documents Incorporated by Reference
Annual Report to Shareholders for the
Year Ended December 31, 1994 Parts I, II and IV
Definitive Proxy Statement for the 1995
Annual Meeting of Shareholders Part IV
PART I
Item 1. Business
Guaranty Bancshares Holding Corporation (Bancshares) was incorporated
under the laws of the State of Louisiana in 1982. On January 13, 1983,
Guaranty Bank & Trust Company of Morgan City (the Bank) was reorganized
pursuant to a Reorganization and Merger Agreement (the Merger) whereby
the Bank was merged into a subsidiary of Bancshares with the effect that
the Bank became a wholly owned subsidiary of Bancshares. Prior to
January 13, 1983, Bancshares had no material activity. Bancshares is
currently engaged, through the Bank, in banking and related business.
The Bank is Bancshares' principal asset and source of revenue, and since
Bancshares is a one bank holding company, it shares a common
directorship with the Bank.
The Bank
The Bank was organized in 1966 under the laws of the State of
Louisiana and is a full service commercial bank in the business of
gathering deposits and employing these funds by extending credit and
investing in securities and other income earning assets.
The Bank has no material concentration of deposits from any single
customer or group of customers except that approximately ten percent of
the Bank's total deposits at December 31, 1994 were those of public
bodies, including parish and municipal districts. Deposits of public
bodies in excess of amounts insured by the Federal Deposit Insurance
Corporation (the F.D.I.C.) are secured by pledges of certain of the
Bank's securities against the deposit amounts. Management of the Bank
has no reason to believe that the loss of several of these public
deposit accounts would have a materially adverse effect upon the
operations of the Bank or the soundness of its deposit base although
there has been a recent trend for these bodies to invest excess funds
directly in the securities market rather than in interest bearing bank
deposits with the Bank and competing local financial institutions. No
significant portion of its loans is concentrated within a single
industry or group of related industries, except that approximately 16.2
percent of the loans are in the oil field services and maritime support
and transportation industries and 32.9 percent are in real estate
related activities. There are no material seasonal factors that would
have any adverse effect on the Bank. The Bank does not rely on foreign
sources of funds or income.
The Bank's general market area is in East St. Mary Parish, Louisiana,
which has a population of approximately 30,000.
Economic activity in the area is diversified, with emphasis on
manufacturing, oil and gas, agriculture and maritime support and
distribution services. Commercial banking in the marketing area served
by the Bank is highly competitive. The Bank competes with three banks
and three savings and loan institutions located in East St. Mary Parish.
Following is a list of the banks headquartered in the market area with
total deposits and assets as of December 31, 1994.
DEPOSITS ASSETS
(dollars in thousands)
First National Bank in
St. Mary Parish $202,314 53.4% $224,202 52.5%
MC Bank & Trust Company 73,667 19.5 87,011 20.4
Guaranty Bank & Trust Company
of Morgan City 51,612 13.6 60,687 14.2
Patterson State Bank 51,253 13.5 55,366 12.9
-------- ------ -------- ------
TOTAL $378,846 100.0% $427,266 100.0%
======== ====== ======== ======
Further competition is provided by other banks located in St. Mary
Parish and by banks and other financial institutions, including savings
and loan associations, insurance companies, finance companies, credit
unions, factors and pension trusts located elsewhere in Louisiana,
principally institutions in Lafayette, Houma, Baton Rouge and New
Orleans, all of whose advertising media cover the Bank's market area.
Interest rates on loans are substantially the same among banks
operating in the market area served. Competition among banks for loans
is generally governed by such factors as loan terms, other than interest
charges, restrictions on borrowers, compensating balances, and other
services offered by the Bank.
Employees
Bancshares has no employees (active officers of Bancshares are
employed by the Bank). As of March 10, 1995 the Bank had 29 full-time
employees and 2 part-time employees. There are no unions or bargaining
units which represent the employees. The Bank considers its
relationship with its employees to be excellent. Employee benefit
programs provided by the Bank include group life and health insurance,
paid vacations and sick leave.
Supervision and Regulation
The Bank is subject to regulation and regular examinations by the
Louisiana Office of Financial Institutions and by the Federal Deposit
Insurance Corporation (FDIC). Applicable regulations relate to
reserves, investments, loans, issuance of securities, branching, and
other aspects of its operations.
Bancshares is a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (the Act), and is thereby
subject to the provisions of the Act and to regulations by the Board of
Governors of the Federal Reserve System (the Board).
Bancshares is required to file with the Board annual reports and other
information regarding its business operations and those of its
subsidiaries. It is also subject to examination by the Board and is
required to obtain Board approval prior to acquiring, direct or
indirectly, ownership or control of any voting shares of any bank if,
after such acquisition, it would own or control, directly or indirectly,
more than 5% of the voting stock of such bank, unless it already owns
a majority of the voting stock of such bank. Furthermore, a bank
holding company is, with limited exceptions, prohibited from acquiring
direct or indirect ownership or control of more than 5% of the voting
stock of any company which is not a bank or a bank holding company, and
must engage only in the business of banking or managing or controlling
banks or furnishing services to or performing services for its
subsidiary banks. One of the exceptions to this prohibition is the
ownership of shares of a company the activities of which the Board has
determined to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.
Whether or not a particular non-banking activity is permitted under
the Act, the Board is authorized to require a holding company to
terminate any activity, or divest itself of any non-banking subsidiary,
if in its judgment the activity or subsidiary would be unsound.
In addition to the limitations of Louisiana law with respect to the
ownership of banks described below, the ownership or control of voting
shares of a second bank by a bank holding company, is restricted by the
Bank Holding Company Act unless the prior approval of the Federal
Reserve Board is obtained.
Bancshares is also subject to provisions of the Louisiana Bank Holding
Company Act which permits acquisitions of banks or bank holding
companies. Other provisions of the Act prohibit subsidiaries of a bank
holding company from engaging in any business other than those closely
related to banking. The Louisiana Office of Financial Institutions is
authorized to administer the Louisiana Act by the issuance of orders and
regulations. At present, prior approval of the Commissioner of
Financial Institutions would not be required for the formation and
operation of a non-bank subsidiary of Bancshares if its activities meet
the requirements of the Louisiana Act.
The Bank is subject to regulation and supervision, of which regular
bank examinations are a part, by the Louisiana Office of Financial
Institutions. The Bank is a member of the FDIC which currently insures
the deposits of each member bank to a maximum of $100,000 per depositor.
For this protection, each bank pays a semi-annual statutory assessment
and is subject to the rules and regulations of the FDIC. The Bank is
not a member of the Federal Reserve System. However, upon consummation
of the Merger, Bancshares became a "affiliate" of the Bank within the
meaning of the Federal Reserve Act and the Federal Deposit Insurance Act
which impose restrictions on loans by the Bank to Bancshares,
investments by the Bank in the stock or securities of Bancshares, and
on the use of such stock or securities as collateral security for loans
by the Bank to any borrower. Bancshares is also subject to certain
restrictions with respect to engaging in the business of issuing,
flotation, underwriting, public sale and distribution of securities.
The Board of Directors of Bancshares has no present plans or
intentions to cause Bancshares to engage in any substantial business
activity which would be permitted to it under the Act or the Louisiana
Act but which is not permitted to the Bank; however, a significant
reason for formation of the one-bank holding company was to take
advantage of the additional flexibility afforded by the structure if the
Board of Directors concludes that such action would be in the best
interest of its shareholders.
Regulatory Matters
At periodic intervals, both Louisiana Department of Financial
Institutions examiners and the FDIC routinely examine Bank's financial
statements as part of their legally prescribed oversight of the Banking
industry. Based on these examinations, the regulators can direct that
the Bank's financial statements be adjusted in accordance with their
findings. The regulators have not proposed adjustments to the Bank's
financial statements in prior years. However, in view of the
increasingly uncertain regulatory environment in which the Bank now
operates, the extent, if any, to which a forthcoming regulatory
examinations may ultimately result in adjustments to the 1994 financial
statements cannot presently be determined.
Statistical Information
The following tables contain additional information concerning the
business and operations of Bancshares and its subsidiaries and should
be read in conjunction with the Consolidated Financial Statements of the
Registrant and Management's Discussion and Analysis of Financial
Condition and Results of Operations.
I. DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY:
INTEREST RATES AND INTEREST DIFFERENTIAL
The information called for in this item is included in Bancshares'
Annual Report to Shareholders on page 13 and is incorporated herein
by reference.
II. INVESTMENT PORTFOLIO
Carrying values of securities held are as follows (in thousands
of dollars):
December 31
1994 1993 1992
Hold to Maturity
U.S. Treasury $ 3,156 $ 5,762 $ 6,142
U.S. Agencies and
Corporations 5,943 10,747 15,270
States and Political
Subdivisions 366 28 57
Other Investments 29 365 463
------- ------- -------
$ 9,494 $16,902 $21,932
======= ======= =======
Available for Sale
U.S. Treasury $ 1,499
U.S. Agencies and
Corporations 5,219
Other Investments 472
-------
$ 7,190
=======
Carrying values, maturities and average yields of securities held are
as follows (in thousands of dollars):
December 31, 1994
Amortized Average Market
Cost Yield Value
Hold to Maturity
U.S. Treasury
Due within one year $ 3,156 5.3% $ 3,128
U.S. Agencies and
Corporations
Due within one year 4,505 5.8 4,488
One to five years 1,078 4.8 1,041
Five to ten years 214 9.4 216
After ten years 146 8.3 136
----- -----
5,943 5.8 5,881
States and Political
Subdivisions
Due within one year 9 7.3 9
One to five years 96 5.6 95
Five to ten years 261 5.6 251
---- ----
366 5.6 355
Other Investments
One to five years 29 18.0 29
------- -------
$ 9,494 5.7% $ 9,393
======= ===== =======
Available for Sale
U.S. Treasury
Due within one year $ 1,500 4.6% $ 1,499
U.S. Agencies and
Corporations
Due within one year 950 5.2 922
One to five years 3,510 5.9 3,534
Over ten years 774 5.5 763
----- -----
5,234 5.7 5,219
Other Investments
Over ten years 472 2.6 472
------- -------
$ 7,206 5.3% $ 7,190
======= ==== =======
Carrying values, maturities and average yields of securities held are
as follows (in thousands of dollars):
December 31, 1993
Book Average Market
Value Yield Value
U. S. Treasury
Due within one year $ 4,261 4.0% $ 4,259
One to five years 1,501 4.6 1,508
------ ------
5,762 4.0% 5,767
U. S. Agencies and
Corporations
Due within one year 4,126 6.4% 4,133
One to five years 4,034 4.8 4,041
Five to ten years 1,537 3.9 1,554
After ten years 1,050 7.2 1,061
------ ------
10,747 5.5 10,789
States and political subdivisions
Due within one year 24 9.7 25
One to five years 4 9.5 4
--- ---
28 9.7 29
Other investments
One to five years 36 18.0 36
After ten years 329 3.0 329
------ ------
365 4.5 365
------ ------
TOTAL $16,902 5.0% $16,950
====== ===== ======
The weighted average yields shown have been computed by
relating the forward income stream on the investments, plus or minus the
anticipated accretion of discounts or amortization of premiums, to the
book value of the securities. This in turn is stated at cost, adjusted
for previous amortization or accretion. Average yields on issues of
states and political subdivisions have not been computed on a tax
equivalent basis.
III. LOAN PORTFOLIO
A. Types of Loans
The amount of loans outstanding is shown in the following
table according to type and concentration of loans (in thousands
of dollars):
December 31
1994 1993 1992
Commercial, financial
and agricultural $24,652 $23,650 $ 12,567
Real estate:
Construction 3,070 419 838
Mortgage 3,066 3,558 9,950
Installment 4,022 4,335 4,419
------ ------ ------
34,810 31,962 27,774
Less unearned income 35 74 109
------ ------ ------
$34,775 $31,888 $27,665
====== ====== ======
The loan portfolio contains no foreign loans.
B. Maturities and Sensitivities of Loans to Changes in Interest Rates
The following table presents the maturity distribution and
sensitivity to interest rate changes of the loan portfolio at December
31, 1994 (in thousands of dollars):
DUE IN DUE IN
DUE IN OVER OVER
ONE YEAR ONE TO FIVE
OR FIVE TO TEN
LESS * YEARS YEARS TOTAL
Maturity of Loans
Commercial, financial
and agriculture $ 7,144 $12,696 $ 4,812 $24,652
Real estate
Construction 2,283 787 0 3,070
Mortgage 685 563 1,818 3,066
Installment 761 2,963 298 4,022
------ ------ ----- ------
$10,873 $17,009 $ 6,928 $34,810
====== ====== ===== ======
Interest Rate Sensitivity
Loans with Pre-
determined rates $ 9,318 $11,785 $ 6,505 $27,608
Loans with floating
rates 1,555 5,224 423 7,202
------ ------ ------ ------
$10,873 $17,009 $ 6,928 $34,810
====== ====== ====== ======
*Includes demand loans, loans having no stated schedule
of repayments and no stated maturity and overdrafts.
C. Risk Elements
The following table sets forth the nonaccrual, past due and
restructured loans.
December 31
1994 1993 1992
(in thousands)
Interest accruing loans past due
90 days or more:
Commercial, financial and
agricultural $ 15 $ 0 $ 538
Loans secured primarily
by real estate mortgages 152 0 204
Installment 1 76 4
---- ---- ----
$ 168 $ 76 $ 746
==== ==== ====
Nonaccrual loans $ 30 $ 32 $ 32
==== ==== ====
At year end 1994, the loan portfolio included $46,000 in real estate
loans which had been restructured.
Loans are placed on nonaccrual status when principal or interest is
due and remains unpaid for ninety or more days, unless the loan is both
well secured and in process of collection, or when management determines
that the collateral position in the loan has deteriorated to a position
where collection of principal and interest is questionable.
The Bank recognized approximately $1,000 in interest income related
to these loans in the year ended December 31, 1993. No interest income
was recognized in 1994 or 1992. Had the loans been accruing interest
at their contracted rates, approximately $5,000, $5,000, and $75,000 of
additional interest income would have been recognized for 1994, 1993 and
1992, respectively.
Potential Problem Loans
Potential problem loans, i.e. loans which are now current where there
are serious doubts as to the ability of the borrower to comply with
repayment terms, at December 31, 1994, amounted to $282,000 and are
concentrated in private households. No significant losses are
anticipated in these extensions of credit.
At December 31, 1994, loans which are classified as past due 90 days
or more and on which interest is being accrued amounted to $168,000 and
were concentrated in the real estate mortgage loan
sector.
The following identifies the loan which is accounted for on a
nonaccrual basis as of December 31, 1994 (in thousands):
Nonaccrual Loans:
Religious Organizations $30
The maritime, oil field, real estate and service industries in
particular had been adversely affected by the decline in petroleum
related activities in the Bank's market area. The area has experienced
a recovery in this industry in recent years. Whether the recovery will
continue depends on the worldwide petroleum industry.
The Bank's collateral position in those loans is such that any
potential losses which may be sustained will not be significant.
Loan Concentrations
Following is a summary of gross loans and lease outstanding as of
December 31, 1994, by major industry classifications (in thousands):
Oil and gas $3,066 8.8%
Construction - contractors 1,586 4.6
Manufacturing:
Wood products 641 1.8
Book Binding 296 .9
----- ----
937 2.7
Transportation:
Maritime 2,586 7.4
Sanitary Services 350 1.0
Wholesale and retail trade 4,217 12.1
Real estate 11,410 32.8
Services:
Hotel and Motel 1,288 3.7
Health 812 2.3
Miscellaneous repair 237 .7
Membership and religious organizations 30 .1
----- ---
2,367 6.8
Private households 8,291 23.8
------ -----
Total $34,810 100.0%
====== =====
The above table includes unearned income on installment and real
estate loans.
IV. SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes the activity in the allowance for
loan losses arising from loans charged off, recoveries of loans
previously charged off, and additions to the allowance charged to
operating expense.
Year ended December 31
1994 1993 1992
(in thousands of dollars)
Total loans outstanding at
December 31, net of unearned
income $34,775 $31,888 $27,665
Daily average amount of loans
outstanding, net of unearned
income $34,148 $30,306 $29,678
Balance of the allowance for loan
losses at beginning of year $ 621 $ 546 $ 642
Loans charged off:
Commercial, financial and
agricultural - - 151
Real estate 29 28 11
Installment and credit card 6 9 20
----- ----- -----
Total charge-offs 35 37 182
Recoveries of loans previously
charged off:
Commercial, financial and
agricultural 17 8 40
Real estate 72 96 11
Installment and credit card 7 8 15
---- ---- ----
Total recoveries 96 112 66
---- ---- ----
Net charge-offs
(recoveries) (61) (75) 116
---- ---- ----
Additions (credits) to the
allowance charged to expense (180) - 20
------ ------ -----
Balance of the allowance for loan
losses at end of year $ 502 $ 621 $ 546
====== ====== =====
Ratios:
Net charge-offs (recoveries) during
year to average loans outstanding (0.18)% (0.25)% 0.39%
Net charge-offs (recoveries) to loans
at end of year (0.18) (0.24)% 0.42
Year ended December 31
1994 1993 1992
(in thousands of dollars)
Allowance for loan losses to
average loans 1.47 2.05 1.84
Allowance for loan losses to loans
at year end 1.44 1.95 1.97
Net charge-offs (recoveries)
to allowance for loan losses
at end of year (12.2) 12.08 21.25
Net charge-offs to provision for
loan losses N/A N/A 580.00
Provision For Loan Losses and Non-performing Loans.
Management considers the allowance for possible loan losses adequate
to cover possible losses on the loans outstanding as of each reporting
date. It must be emphasized, however, that the determination of the
level of the allowance for possible loan losses using the Bank's
procedures and methods rests upon various judgments and assumptions.
The factors which influence management's judgment in determining the
level of the allowance for loan losses and the amount which is
charged to operating expenses are: (1) past loan loss experience,
(2) composition of the loan portfolio, (3) evaluation of possible
future losses, (4) current economic conditions, (5) specific
identification and anticipation of problem and non-performing loans, and
(6) other relevant factors affecting loans.
No assurance can be given that the Bank will not in any particular
period sustain loan losses which are sizable in relationship to the
amount reserved or that subsequent evaluations of the loan portfolio,
in light of conditions and factors then prevailing, will not require
significant changes in the allowance for possible loan losses.
The following is an allocation of the allowance for loan losses by
related categories of loans and the percentage of loans in each category
to total loans.
December 31
1994 1993 1992
(dollars in thousands)
Commercial, financial
and agricultural $ 258 51.4% $ 363 74.0% $ 429 45.3%
Real estate
Construction 23 4.6 15 1.3 -0- 3.0
Mortgage 122 24.3 73 11.0 72 35.8
Installment 99 19.7 170 13.7 45 15.9
---- ----- ---- ----- ---- -----
$ 502 100.0% $ 621 100.0% $ 546 100.0%
==== ===== ==== ===== ==== =====
V. DEPOSITS
The daily average amounts of deposits for the years ended are
summarized below:
December 31
1994 1993 1992
(in thousands of dollars)
Demand deposits (non-interest bearing) $ 8,115 $ 8,649 $ 8,426
Savings deposits 7,961 8,410 7,078
NOW accounts 4,603 4,507 3,625
Money market accounts 4,587 5,413 5,386
Other time deposits 23,073 21,931 25,436
------ ------ ------
$48,339 $48,910 $49,951
====== ====== ======
Remaining maturities of time deposits of $100,000 or more at
December 31, 1994, are summarized as follows (in thousands of
dollars):
AFTER AFTER
THREE SIX
BUT BUT
WITHIN WITHIN WITHIN
THREE SIX TWELVE
MONTHS MONTHS MONTHS TOTAL
Certificates of
Deposit $3,296 $3,929 $ 764 $7,989
Other time deposits -0- 719 -0- 719
----- ----- ----- -----
$3,296 $4,648 $ 764 $8,708
===== ===== ===== =====
The Bank has no material foreign depositors.
VI. RETURN ON EQUITY AND ASSETS
The following table shows the return on assets (net income) divided
by average total assets), return on equity (net income) divided by
average equity), dividend payout ratio (dividends declared per common
share divided by net income per common share), equity to assets ratio
(average equity divided by average total assets), and ratio of earnings
to fixed charges (pre-tax income plus fixed charges divided by fixed
charges) for each period indicated.
Year ended December 31
1994 1993 1992
Return on assets .89% 1.92% 1.05%
Return on equity 10.16 23.14 14.98
Dividend payout ratio -0- -0- -0-
Equity to assets ratio 8.79 8.31 7.04
Ratio of earnings to fixed charges 953.76 3,045.00 384.00
VII. SHORT-TERM BORROWING
The following table summarized short-term borrowing:
1994 1993 1992
(amounts in thousands
of dollars)
Amount outstanding at December 31, $ - $ - $ -
Weighted average interest rate - - -
Maturity of borrowings at December 31,
Two to 30 days - - -
31 days to one year - - -
One to two years - - -
Maximum amount outstanding at any
month-end during each year - 450 -
Average amount outstanding during
each year - 12 -
Weighted average interest rate - 3.0% -
Item 2. Properties
Since November 1980 the main offices of the Bank and since 1982 the main
offices of Bancshares have been located in a four-story office building
at 1201 Brashear Avenue, Morgan City, Louisiana. The premises consist
of approximately 65,000 total square feet of office space, a parking lot
for 280 vehicles, and six drive-in banking stations.
During the second quarter of 1991, the Bank sold its bank building and
land for its approximate book value of $2,800,000 and retained as
leasehold improvements assets with a depreciated book value of
approximately $500,000. These retained assets consist of items used in
performance of routine banking functions such as teller stations, drive-
in facilities, vaults, etc.
As part of the agreement, the Bank has leased back approximately 25,000
square feet of usable building space and the land for approximately
$320,000 per year. Under the long-term operating lease the minimum term
will be 15 years.
See note 16 of the financial statements.
Item 3. Legal Proceedings
Bancshares is not engaged in any legal actions. The Bank is involved
in a number of legal actions in the normal course of its operations.
In the opinion of management, based on a review of such litigation with
legal counsel, the outcome of such actions should not have a material
effect upon the consolidated financial position or results of
operations.
Item 4. Matters Submitted to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
The primary market area for Bancshares' stock is the Morgan City and
St. Mary Parish, Louisiana, area. The stock is not listed on any
exchange and is not registered with the National Association of
Securities Dealers, Inc. Due to lack of an actual trading market,
Bancshares does not have available information to furnish the high and
low sales prices or the range of bid and asked quotations for its stock.
Bancshares' subsidiary, Guaranty Bank & Trust Company of Morgan City
is registrar and transfer agent for Bancshares' common stock. There
were approximately 700 stockholders of record at March 10, 1995.
Bancshares declared a $0.675 dividend on its $2.70 cumulative
preferred stock, payable January 4, 1995. No dividends have been
declared or paid on its $.50 cumulative preferred stock since their
issuance. See the Annual Report to Shareholders, pages 4-12
(Management's Discussion and Analysis of Financial Condition and Results
of Operations).
Non-affiliates hold 229,019, or 60 percent of the 380,877 voting
shares outstanding as of March 10, 1995.
Item 6 Selected Financial Data
The information called for by Item 6 is included in Bancshares' Annual
Report to Shareholders on page 3, in the section titled "Selected
Consolidated Financial Data", and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information called for by Item 7 is included in Bancshares' Annual
Report on pages 4-12, in the section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations", and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The following consolidated financial statements of Bancshares and its
subsidiaries, included on pages 16-40, in the Annual Report to
Shareholders, are incorporated herein by reference.
Consolidated Statements of Condition - December 31, 1994
and 1993
Consolidated Statements of Income - Years ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Changes in Stockholders'
Equity - Years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended
December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Auditors' Report
Item 9. Disagreements on Accounting and Financial Disclosure
There have been no disagreements with Bancshares' or the Bank's
independent certified public accountants on any matter of accounting
principles or practice, financial statement disclosure or auditing scope
or procedure within the twenty-four months prior to December 31, 1994
reported on Form 8-K.
Part III
Item 10. Directors and Executive Officers of the Registrant
The information called for by Item 10 is included in Bancshares'
definitive Proxy Statement filed pursuant to Regulation 14(a) of the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 11. Executive Compensation
The information called for by this item is included in Bancshares'
definitive Proxy Statement field pursuant to Regulation 14(a) of the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information called for by this item is included in Bancshares'
definitive Proxy Statement filed pursuant to Regulation 14(a) of the
Securities Exchange Act of 1934 and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
During 1994, the Bank engaged in banking transactions in the ordinary
course of business with directors and officers of Bancshares and the
Bank, and their affiliates, and expects to have such transactions in the
future. In the opinion of Management, all such transactions were on
substantially the same terms, including interest rates and collateral
on loans, as those prevailing at the same time for comparable
transactions with others and did not involve more than normal risk of
collectibility or present other unfavorable features.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) 1. Financial Statements
The following consolidated financial statements of Guaranty
Bancshares Holding Corporation and Subsidiaries, included on
pages 16-40 of the Bancshares Annual Report to Shareholders are
incorporated by reference in Item 8:
Consolidated Statements of Condition - December 31, 1994
and 1993
Consolidated Statements of Income - Years ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows - Years ended
December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a) 2. Financial Statements Schedules
All schedules have been omitted because they are not
applicable or the required information is presented in the
consolidated statements or notes thereto.
(a) 3. Exhibits
(3) Articles of incorporation and by-laws*
(4) Instruments defining the rights of security holders,
including indentures*
(10) Material contracts*
(11) Computation of earnings per share
(12) Statement regarding computation of ratios
(13) Annual Report to Shareholders
(23) Proxy Statement for Annual Meeting of Shareholders
to be held April 17, 1995
(24) Consent of Darnall, Sikes, Kolder, Fredericks & Rainey
(27) Financial Data Schedule
*Incorporated by reference to Bancshares' registration statement
on Form S-14, registration number 2-79378.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Bancshares during the
quarter ended December 31, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
GUARANTY BANCSHARES HOLDING CORPORATION
(Registrant)
By: /s/ Randolph Cullom
Randolph Cullom, President and
Chief Executive Officer
Dated March 28, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Brooks Blakeman /s/ Randolph Cullom
Brooks Blakeman, Chairman of the President and Chief
Board Executive Officer
Director
H. W. Bailey /s/ Conley Dutreix
Director Conley Dutreix
Asst. Secretary
Director
/s/ Vincent Cannata /s/ Frank J. Domino
Vincent Cannata Frank J. Domino, Sr.,
Director Director
/s/ Anthony J. Guarisco, Sr. /s/ Wiley Magee
Anthony J. Guarisco, Sr., Wiley Magee
Director Secretary/Treasurer
Director
/s/ Lee A. Ringeman /s/ Murray Ordogne
Lee A. Ringeman, Executive Vice Murray Ordogne
President and Chief Financial Director
Officer
Director
EXHIBIT 11
GUARANTY BANCSHARES HOLDING CORPORATION
COMPUTATION OF EARNINGS (LOSS) PER SHARE
1994 1993 1992
Number of shares - beginning of year 380,877 380,877 380,877
Issued during year -0- -0- -0-
Number of shares - end of year 380,877 380,877 380,877
Weighted average number of shares
outstanding 374,375 374,375 376,504
NOTE: Weighted average calculated based upon actual number of days
outstanding for each share, exclusive of 6,502 shares held in
treasury.
EXHIBIT 12
STATEMENT REGARDING COMPUTATION OF RATIOS
1994 1993 1992
(Dollars in Thousands)
Pre-tax earnings $ 794 $ 589 $ 142
Total fixed charges:
Interest on notes payable 93 20 -
Interest and discount amortization
on 10% subordinated debentures - - 50
---- ----- -----
Total $ 887 $ 609 $ 192
==== ===== =====
Fixed charges $ 93 $ 20 $ 50
Ratio of earnings to fixed charges 953.76% 3,045.0% 384.0%
To Our Stockholders,
This is the time of year when we assess the progress your
company has made toward meeting the financial and corporate goals
set by your management and stockholders and determine what kind of
company we are, what kind of company we are building and what
opportunities are presented.
In our letter to you last year, we reported that prior years'
earnings were used to eliminate all corporate debt, to rebuild
stockholders' equity and to pay dividends to the holders of $2.70
Cumulative Preferred Stock. Another dividend, although smaller,
was paid in January 1995.
During 1994 we experienced a number of events important to your
company.
- earnings, exclusive of accounting changes and extraordinary
items, were up.
- total assets rebounded to the highest level since 1989.
- loans, the primary source of income, increased $2.9 million
over year end 1993 and $7.1 million over 1992.
- rates on investments and loans increased, and finally
- Guaranty Bank & Trust Company has received approval for a
branch in Lafayette, Louisiana
Consolidated net income totaled $508,000, compared with
$1,079,000 in 1993 and $597,000 in 1992. However, 1993 included
$674,000 from the change in treatment of income taxes and 1992
included $489,000 in extraordinary items relating to refunds of
prior years' income taxes. Without these one time occurrences,
1994 operating net income compares favorably with $405,000 in 1993
and $108,000 in 1992.
Operating expenses declined for the third year and were below
1990 levels. Net interest income improved $83,000 to $2,463,000,
primarily the result of increased loan activity. The combined
effect of low cost of funds, increased average loans outstanding
and slightly higher average yields on investments, contributed to
this higher net interest income.
Total assets at year end increased $5.7 million to $60.7
million, of this increase in assets, $3.8 million was in interest
earning assets. Asset quality measures improved again in 1994,
following similar increases in 1993. Average earning assets as a
percent of total assets improved. Repossessed real estate of
$34,000 at December 31, 1993 was sold early in 1994. Late in 1994
the Bank repossessed 35 acres of land, carried at $80,000 at year
end. This property was sold in early March of this year.
Non performing loans on non-accrual status were only $30,000,
down from $36,000 in 1993 and represented less than 0.1% of
outstanding loans. Delinquent loans, i.e. those loans past due 30
days or more and still accruing interest, amounted to 1.3% of
outstanding loans. The Bank made no provision for loan losses in
1994 and, considering the quality of the portfolio, recovered
$180,000 from the allowance for loan losses. The Bank made no loan
loss provision in 1993 and only $20,000 in 1992. The Bank has had
$103,000 in net recoveries of previously charged off loans in the
last three years.
Over the last several years, your management held the opinion
that interest rates, which had trended downward, would stabilize
and then begin a sharp upward swing. As an extension of this
belief, securities were reinvested with short maturities, resulting
in a low average lived portfolio. Approximately $14 million of the
$16.7 million investment portfolio will mature or reprice during
1995. Considering the present level of investment yields, this
investment policy will prove to be very advantageous as these short
lived securities mature and are reinvested at much higher yields.
Finally, the Bank has received regulatory approval to open a
branch office in Lafayette, Louisiana. This location will allow
Guaranty Bank & Trust Company to take advantage of that rapidly
growing deposit and loan market. We anticipate opening this new
branch in April.
The success enjoyed in recent years was the result of the
support of our many customers and stockholders. All of these
individuals and companies have earned our thanks. By your ongoing
support, you have allowed your company to build long term value in
your investment. On behalf of the Board of Directors, management
and staff, I express my sincere appreciation for the trust and
faith you have placed in us over the years. We look forward to
another successful year.
Brooks Blakeman
Chairman of the Board
<TABLE>
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
--------------------------------------------------------
SELECTED CONSOLIDATED DATA
--------------------------
(In thousands of dollars, except per share data)
<CAPTION>
Years Ended December 31
------------------------------------------------------------
1994 1993 1992 1991 1990
Operating data: ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Total interest income $4,110 $3,871 $ 4,082 $ 4,805 $ 5,299
=========== =========== =========== =========== ===========
Net interest income $2,463 $2,380 $ 2,092 $ 1,964 $ 1,931
Recovery (provision) from (for)
loan losses 180 - (20) 100 240
Other non-interest income (loss) 364 445 344 410 (43)
Non-interest operating expense 2,213 2,236 2,275 2,290 2,287
Income taxes 286 184 34 49 -
----------- ----------- ----------- ----------- -----------
Income (loss) before
extraordinary items and change
in accounting principle 508 405 108 135 (159)
Extraordinary items and change
in accounting principle - 674 489 516 -
----------- ----------- ----------- ---------- -----------
Net income (loss) $ 508 $1,079 $ 597 $ 651 $ (159)
=========== =========== =========== =========== ===========
Per common share data:
Net income (loss) before
extraordinary items and change
in accounting principle $ - $ - $ (.79) $ (.73) $ (1.52)
Extraordinary items and change
in accounting principle - 1.80 1.30 1.35 -
Net income (loss) .28 1.80 0.51 .62 (1.52)
Cash dividends 2.70 - - - -
Number of common shares
outstanding 380,877 380,877 380,877 380,877 380,877
Weighted average of common
shares outstanding 374,375 374,375 376,504 380,877 377,277
Selected statements of
condition items:
Year end balances:
Total assets $60,687 $54,952 $58,419 $55,030 $59,767
Investment securities 9,494 16,902 21,932 15,031 15,800
Securities available for sale 7,190
Loans, net of unearned
income 34,775 31,888 27,665 31,930 28,399
Total deposits 51,498 47,053 52,251 47,518 54,313
Notes payable 1,854 581 - 807 807
10% subordinated
debentures, net - - - 668 651
Stockholders' equity 5,179 4,780 4,094 3,592 2,941
</TABLE>
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Guaranty Bancshares Holding Corporation's (Bancshares) net
operating income for 1994 was $508,000, compared with $405,000 in
1993, before the $674,000 cumulative effect of adopting Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes", and $108,000 in 1992, before extraordinary items relating
to refunds of prior years' income taxes. These extraordinary items
amounted to $489,000 in 1992. Net income of $508,000 in 1994
compares with $1,079,000 in 1993 and $597,000 in 1992. Earnings
per common share were $.28, $1.80 and $.51 for 1994, 1993 and 1992,
respectively. Return on average assets was 0.89% for the current
year, 1.92% for 1993 and 1.05% for 1992. Return on average equity
was 10.16% in 1994, 23.1% in 1993 and 15.0% in 1992.
At December 31, 1994 Bancshares and its subsidiaries had total
assets of $60,687,000 and deposits of $51,498,000, compared with
assets and deposits of $54,952,000 and $47,053,000 in 1993 and
$58,419,000 and $52,251,000 in 1992. Total assets and deposits
were lower at year end 1993 from 1992 because of the unusual surge
of hurricane damage related funds which flowed through the
community in late 1992.
Bancshares' principal subsidiary, Guaranty Bank & Trust Company
operates two banking offices in East St. Mary Parish, Louisiana,
with 29 full time and 2 part time employees.
Net interest income was $2,463,000, 3.5% and 17.7% higher than in
1993 and 1992. Other income was $364,000 in 1994, down from
$445,000 in 1993 and up $20,000 from 1992. Non performing loans
at December 31, 1994 were $30,000, down from $36,000 in 1993 and
amounted to less than 0.1% of outstanding loans. Foreclosed real
estate at December 31, 1994 was $80,000, up from $34,000 in 1993
and $78,000 in 1992. The allowance for loan losses was 1.44% of
loans as of December 31, 1994 versus 1.95% in 1993 and 1.97% in
1992. Recoveries from previously charged off loans exceeded 1994
charge offs by $61,000. At December 31, 1994, Bancshares' leverage
ratio was 9.1% and stockholders' equity as a percent of total
assets was 8.5%. The risk-based capital ratio was 10.9%.
Management's discussion and analysis of financial condition and
results of operations should be read in conjunction with the
accompanying consolidated financial statements, related notes, and
the consolidated selected financial data presented in this report.
NET OPERATING RESULTS
Bancshare' consolidated net interest income was $2,463,000 in 1994,
compared with $2,380,000 in 1993 and $2,092,000 in 1992. These
increases were primarily due to changes in the level of loans
outstanding, offset by lower securities investments and higher
interest paid on other time deposits and borrowed funds. Daily
average interest earning assets increased $712,000 and interest
bearing liabilities increased $919,000. Average rates earned
increased 0.4% while average rates paid increased 0.3% from 1993
levels. During 1993 rates earned decreased 0.4% while average
rates paid decreased 1.0% from 1992.
The increase in average interest earning assets in 1994 was
primarily in loans. Average loans increased $3,842,000 over 1993
while average investments declined $2,268,000. This shift in
investment emphasis was begun in 1993 when the Bank began actively
soliciting loans and emphasizing business development.
The increase in average interest bearing liabilities was in other
time deposits, primarily certificates of deposit and in borrowing
from the Federal Home Loan Bank of Dallas. The banking industry
created a favorable interest rate market and some of the deposits
which had sought better rates outside of the industry returned.
Also, the Bank actively pursued deposits to fund loans.
The capital lease initiated in June 1991 was outstanding for the
entire years 1994, 1993 and 1992. This capital lease is related
to the sale/lease back transactions on the Bank's office building.
(See note 16 to the financial statements.)
Changes in the composition of the deposit structure and generally
higher rates paid increased the amount paid on deposits by $90,000,
following $464,000 decrease in 1993 from 1992 levels.
Interest on the demand notes payable increased $73,000 from 1993.
This is the result of increased Bank borrowing from the Federal
Home Loan Bank of Dallas to fund commercial real estate loans which
have comparable scheduled amortizations.
As indicated in the following table, average balances of Bancshares
available funds have reversed earlier downward trends. Average
available funds increased $385,000 in 1994 following declines of
$1,254,000 in 1993 and $1,056,000 in 1992.
<TABLE>
TOTAL AVAILABLE FUNDS (In Thousands of Dollars)
<CAPTION>
1994 1993 1992
-------------------- -------------------- ----------------------
DAILY DAILY DAILY
AVERAGE AVERAGE AVERAGE
BALANCE % BALANCE % BALANCE %
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Savings and NOW accounts $12,564 24.4 $12,917 25.3 $10,703 20.4
Money market investment accounts 4,587 8.9 5,413 10.6 5,386 10.3
Other time deposits 15,674 30.4 15,906 31.1 18,541 35.4
Certificates of deposit of
$100,000 or more 7,399 14.4 6,025 11.8 6,895 13.2
Federal funds purchased and
securities sold under
agreements to repurchase - - 12 - - -
Investment in capital lease 1,759 3.4 1,832 3.6 1,898 3.6
Notes payable and 10%
subordinated debentures 1,377 2.7 336 .7 495 1.0
--------- --------- --------- --------- --------- ---------
Total interest bearing
liabilities 43,360 84.2 42,441 83.1 43,918 83.9
Demand deposits 8,115 15.8 8,649 16.9 8,426 16.1
--------- --------- --------- --------- --------- ---------
Total available funds $51,475 100.0% $51,090 100.0% $52,344 100.0%
========= ======== ========= ========= ========= =========
</TABLE>
During 1994, available yields in investment securities increased
and loan demand increased, although the Bank's average loan yields
were slightly lower. Interest differentials increased as the
composition of earning assets changed toward a greater proportion
of loans.
PROVISION FOR LOAN LOSSES AND NON-PERFORMING LOANS
The provision for loan losses is the expense recorded to maintain
the allowance for loan losses at a level which in management's
judgment will be adequate to absorb probable losses in existing
loans which may become uncollectible.
The allowance for loan losses as a percentage of loans, less
unearned income, outstanding at year-end is as follows: (In
thousands of dollars)
Provision
For
Allowance Allowance Net Loans (Recovered
Loans For Loan As A % Of Charged Off From) Loan
Outstanding Losses Loans (Recovered) Losses
1994 $ 34,775 $ 502 1.44% $ (61) $ (180)
1993 31,888 621 1.95% (75) -
1992 27,665 546 1.97% 117 20
Considering the low level of non-performing loans and
delinquencies, the Bank recovered $180,000 from the allowance for
loan losses in 1994, made no provision for loan losses in 1993 and
provided only $20,000 in 1992. Non-performing loans on non-accrued
status decreased $6,000 to approximately $30,000 at year end 1994,
compared with $36,000 and $33,000 at December 31, 1993 and 1992,
respectively.
At any given date, the amount of the allowance for loan losses will
be less than the total of loans outstanding to borrowers who are
experiencing varying degrees of financial difficulty. This is
because experience has shown that the probability of all these
loans becoming completely uncollectible is remote. Therefore,
management determines a lesser amount which is believed to be
sufficient to absorb loan losses.
The evaluation of our loan portfolio to establish the allowance
level includes specific review of all loans criticized during
internal reviews, by regulatory examination and all delinquent
loans. Management considers the allowance for loan losses adequate
to cover losses on the loans outstanding as of each reporting date.
It must be emphasized that the determination of the allowance for
loan losses using the Bank's procedures and methods rests upon
various judgments and assumptions. The factors which influence
management's judgment in determining the level of the allowance for
loan losses and the amount which is charged to operating expenses
are: (1) past loan loss experience, (2) composition of the loan
portfolio, (3) evaluation of future losses, (4) current economic
conditions, (5) specific identification and anticipation of
problem and non-performing loans, and (6) other relevant factors
affecting loans.
No assurance can be given that the Bank will not in any particular
period sustain loan losses which are sizable in relation to the
amount reserved or that subsequent evaluations of the loan
portfolio, in light of conditions and factors then prevailing, will
not require significant changes in the allowance for loan losses.
OTHER INCOME
Other operating income was approximately $364,000 during 1994,
compared with $445,000 in 1993 and $344,000 in 1992. There were
no securities gains in 1994, following $37,000 in 1993 and $19,000
in 1992. Gains on the sale of repossessed property contributed
approximately $6,000 to the level of other operating income in 1994
compared with $91,000 in 1993. Service charges on deposit accounts
continued to decline slightly from 1993 and 1992 levels. The
slight increase in insurance commissions and other service charges
and fees was primarily attributable to a recovery in consumer loan
activity.
OTHER OPERATING EXPENSES
Other operating expenses totaled $2,213,000 in 1994, compared with
$2,237,000 in 1993, a $24,000 decrease, following a $39,000
decrease in 1993 from 1992. The following Analysis of Other
Operating Expenses details the major categories of other operating
expenses. Personnel expense, which normally comprises
approximately one-half of other expenses, totaled $972,000,
compared with $954,000 in 1993, and a $23,000 increase from 1992.
Net occupancy, computer and equipment expense decreased a net total
of $19,000 from 1993 and increased $1,000 from 1992.
Expenses related to other real estate and repossessed property, net
of rental income on these properties, increased $4,000, following
the sale of several small parcels of real estate and repossession
of a 34 acre parcel late in 1994. There were no market value
adjustments in 1994, 1993 or 1992. Aggregate related expenses,
such as taxes, insurance and losses on sales of these properties,
totaled $12,000 in 1994, compared with $10,000 in 1993 and $23,000
in 1992. Rental income on these properties totaled $4,000 in 1994
and $6,000 in 1993 and 1992.
Professional fees and services, primarily legal and accounting
fees, decreased $32,000 to $128,000 in 1994 following an $11,000
increase in 1993 from 1992.
<TABLE>
ANALYSIS OF OTHER OPERATING EXPENSES (In Thousands of Dollars)
<CAPTION>
1994/1993 1993/1992
Change Change
----------------- -----------------
1994 1993 1992 Amount % Amount %
-------- -------- -------- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Salaries and employee
benefits $ 972 $ 954 $ 949 $ 18 2 $ 5
Expenses related to
other real estate and
repossessed property,
net of rental income
on these properties 8 4 17 4 100 (13) (76)
Net occupancy expense 426 456 448 (30) (7) 8 2
Equipment and computer
expense 193 182 170 11 6 12 7
Professional fees and
services 128 160 149 (32) (20) 11 7
Advertising and public
relations 35 38 49 (3) (8) (11) (22)
Stationery and supplies 42 41 63 1 2 (22) (35)
FDIC and other insurance 141 146 133 (5) (3) 13 10
Directors fees 64 75 71 (11) (15) 4 6
Other operating expenses 204 181 226 23 13 (45) (20)
-------- -------- -------- -------- --------
$ 2,213 $ 2,237 $ 2,275 $ (24) (1) $ (38) (2)
======== ======== ======== ======== ======== ======== =======
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Principal components of Bancshares' funds management program are
the maintenance of adequate liquidity and the management of rate
sensitive assets and liabilities. These strategies are designed
to integrate sources and investment of funds to assure the Bank's
ability to meet effectively the requirements of customers for loan
and deposit withdrawals. Liquidity management attempts to match
the sources and uses of funds, while interest sensitivity
management attempts to stabilize net interest income during periods
of changing interest rates.
Some liquidity is assured by maintaining marketable assets which
may immediately be converted into cash, by receipt of loan
repayments, and by the maturity of other earning assets. Liquidity
from liabilities results from the generation of new deposits as
well as short-term purchases of federal funds.
The Bank has $9,318,000 in loans outstanding, including demand
loans with no stated repayments and no stated maturity, scheduled
to mature in 1995 and another $10,553,000 floating rate loans which
reprice annually or more frequently. In addition $10,120,000 of
investment securities will mature in 1995 and another $5,232,000
of floating rate debt securities will reprice within one year.
Federal funds sold can amounted to $2,640,000 on December 31, 1994.
These funds sold can immediately be converted to cash without
interest or principal penalty.
Capital adequacy depends on a variety of interacting factors,
including asset quality, liquidity, economic conditions in the
market served and strength of management. Bancshares' ratio of
stockholders' equity to assets and to total deposits at December
31, 1994, 1993 and 1992 are as follows (in thousands of dollars):
1994 1993 1992
Stockholders' equity $ 5,179 $ 4,780 $ 4,094
Total assets 60,687 54,952 58,419
Total deposits 51,498 47,053 52,251
Ratio of stockholders'
equity to:
Total assets 8.5% 8.7% 7.0%
Total deposits 10.1% 10.2% 7.8%
Bancshares does not have immediate plans for expansion through
acquisitions of other banks or financial institutions, or
commitments for significant capital expenditures. The Bank has
received regulatory approval for an additional branch location.
The anticipated opening date is early 1995.
A new form of capital measurement, risk-based capital, was
implemented by regulatory authorities in recent years. Under this
measure, distinctions are made according to the relative risks
incurred among the various items on and off of the balance sheet.
Under regulatory guidelines, for Guaranty Bancshares, Tier 1
capital represents the sum of stockholders' equity. Total capital
represents Tier 1 capital plus the allowance for loan losses,
subject to limitations defined by regulatory authorities. These are
usually expressed as a percentage of risk-weighted assets. Risk-
weighted assets are the total of assets and off-balance sheet items
which have been weighted based upon risk factors assigned by the
regulatory authorities. Banks and bank holding companies are
considered to be well capitalized with total capital of 10% and
Tier 1 capital of not less than 6%.
Selected capital adequacy measures for Bancshares and Guaranty Bank
are as follows as of December 31, 1994:
Risk-based capital
GUARANTY GUARANTY
BANCSHARES BANK
Tier 1 9.94% 9.90%
Total capital 10.91% 10.86%
Leverage ratio 9.11% 9.05%
Bancshares has declared a $.675 dividend on its $2.70 cumulative
preferred stock, payable January 4, 1995. No dividends have been
declared or paid on its $.50 cumulative preferred stock since their
issuance. As a result, accumulated and unpaid dividends are as
follows:
$2.70 Preferred stock, dividends
accumulated from January 13, 1990
through January 13, 1995 $2,064,957
$.50 Preferred stock, dividends
accumulated from January 13, 1990
through January 13, 1995 58,425
$2,123,382
Bancshares' primary source of income is dividends from the Bank.
FUTURE FINANCIAL ACCOUNTING AND INCOME TAX MATTERS
The Financial Accounting Standards Board issued SFAS No.109
(Accounting for Income Taxes) which pronouncement requires an asset
and liability approach to account for the effects of income taxes
that result from a company's activities during the current and
preceding years. The pronouncement supersedes the deferral method
of accounting for income taxes. The principal changes in
accounting treatment are differences resulting from net operating
loss carryforwards, tax credit carryforwards, differences due to
book and tax depreciation differences, and basis differences in the
reserve for loan losses. Bancshares' implementation of this change
in accounting treatment resulted in the $674,000 change in
accounting principle reflected in the 1993 statement of income.
EFFECTS OF INFLATION
Due to our size, Bancshares is not required to make price level
disclosures in our financial statements. Although the rate of
inflation has stabilized in recent years, the long-term effects of
previous years continue to impact the Bank's operations. However,
since most of the assets and liabilities of a financial institution
are monetary in nature, changes in interest rates have a much more
significant impact on performance than the effects of general
levels of inflation. Inflation does impact the growth of total
assets in the banking industry and the need to retain earnings to
increase and maintain equity at appropriate capital/asset ratios.
REGULATORY MATTERS
At periodic intervals, examiners from the Louisiana Department of
Financial Institutions and the FDIC routinely examine the Bank's
financial statements as part of their legally prescribed oversight
of the banking industry. Based on these examinations, the
regulators can direct that the Bank's financial statements be
adjusted in accordance with their findings. The regulators have
not proposed significant adjustments to the Bank's financial
statements in prior years. Although no adjustments are
anticipated, in view of the increasingly uncertain regulatory
environment in which the Bank now operates, the extent, if any, of
such adjustments to the 1994 financial statements cannot presently
be determined.
<TABLE>
INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------
(In thousands)
--------------------------
<CAPTION>
1994 Compared with 1993
1994 1993 Variance due to
------------------------- --------------------------- ---------------------------------
Daily Amount Daily Amount
Average Earned Average Average Earned Average Rate/
Balance or Paid Rate Balance or Paid Rate Volume Rate Volume Total
-------- ------- ------- -------- -------- -------- ------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Interest earning assets:
Loans $ 34,148 $ 3,286 9.6% $ 30,306 $2,988 9.9% 379 (72) (9) 298
Taxable securities 15,367 731 4.8 17,745 783 4.4 (105) 62 (9) (52)
Tax exempt securities 147 9 6.1 37 4 10.8 12 (2) (5) 5
Federal funds sold and time
deposits with other banks 1,903 84 4.4 2,765 96 3.5 (30) 26 (8) (12)
-------- ------- -------- -------- ------- ------ ------ -------
Total interest earning assets 51,565 4,110 8.0% 50,853 3,871 7.6% 256 14 (31) 239
-------- ------- ------- -------- -------- -------- ------- ------ ------ -------
Non-interest earning assets:
Cash and due from banks 1,983 1,856
Bank premises and equipment 2,302 2,507
Other assets 1,588 1,479
Allowance for loan losses (588) (586)
-------- --------
Total assets $ 56,850 $ 56,109
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing liabilities:
Deposits:
Savings accounts $ 7,961 240 3.0% $8,410 255 3.0% (13) (2) - (15)
NOW accounts 4,603 113 2.5 4,507 123 2.7 3 (13) - (10)
Money market investment
accounts 4,587 119 2.6 5,413 140 2.6 (21) - - (21)
Other time deposits 23,073 906 3.9 21,931 770 3.5 40 92 4 136
Federal funds purchased and
securities sold under
agreements to repurchase - - - 12 - - - - - -
Investment in capital lease 1,759 176 10.0 1,832 183 10.0 (7) - - (7)
Notes payable and 10%
subordinated debentures 1,377 93 6.8 336 20 5.9 62 3 8 73
-------- ------- -------- -------- ------- ------ ------- -------
Total interest bearing
liabilities 43,360 1,647 3.8% 42,441 1,491 3.5% 64 80 12 156
-------- ------- ------- -------- -------- -------- ------- ------ ------- -------
Non-interest bearing liabilities
and stockholders' equity
Demand deposits 8,115 8,649
Other liabilities 377 356
Stockholders' equity 4,998 4,663
-------- --------
Total liabilities and
stockholders' equity $ 56,850 $56,109
======== ========
Net interest income/average
interest earnings assets $ 2,463 4.8% $2,380 4.7% 192 (66) (43) 83
======= ======= ======== ========= ======= ======= ======= =======
</TABLE>
1993 Compared with 1992
Variance due to
------------------------------
Rate/
Volume Rate Volume Total
------------------------------
ASSETS:
Interest earning assets:
Loans - 62 1 63
Taxable securities 110 (238) (32) (160)
Tax exempt securities (3) 1 - (2)
Federal funds sold and time
deposits with other banks (102) (19) 9 (112)
------ ---- ------ ------
Total interest earning assets 5 (194) (22) (211)
------ ---- ------ ------
Non-interest earning assets:
Cash and due from banks
Bank premises and equipment
Other assets
Allowance for loan losses
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing liabilities:
Deposits:
Savings accounts 48 (44) (8) (4)
NOW accounts 28 (15) (4) 9
Money market investment
accounts 1 (37) - (36)
Other time deposits (166) (308) 43 (431)
Federal funds purchased and
securities sold under
agreements to repurchase - - - -
Investment in capital lease (7) - - (7)
Notes payable and 10%
subordinated debentures (16) (20) 6 (30)
------ ----- ------ -------
Total interest bearing
liabilities (112) (424) 37 (499)
------ ----- ------ -------
Non-interest bearing liabilities
and stockholders' equity
Demand deposits
Other liabilities
Stockholders' equity
Total liabilities and
stockholders' equity
Net interest income/average
interest earnings assets 117 230 (59) 288
====== ===== ====== =======
Loans on which interest accruals have been stopped are included
in the daily average balances of loans outstanding.
MANAGEMENT STATEMENT
The accompanying financial statements and related financial data
were prepared by management, which is responsible for the integrity
and objectivity of the data presented, including amounts that must
necessarily be based on judgments and estimates. The financial
statements were prepared in conformity with generally accepted
accounting principles, and in situations where acceptable
alternative accounting principles exist, management selected the
method which was appropriate in the circumstances. All financial
information contained in this annual report is consistent with that
in the financial statements.
Management depends upon Guaranty Bancshares' system of internal
control in meeting its responsibilities for reliable financial
statements. In management's opinion, these systems provide
reasonable assurance that assets are safeguarded and that
transactions are properly recorded and executed in accordance with
management's authorization. Judgments are required to assess and
balance the relative cost and expected benefits of these controls.
As an integral part of the systems of internal control, Guaranty
Bancshares maintains a professional staff which conducts
operational and special reviews and coordinates audit coverage with
the independent certified public accountants.
The financial statements have been examined by Darnall, Sikes,
Kolder, Frederick & Rainey, independent certified public
accountants, whose independent professional opinion on management's
financial statements appears in the financial statements.
The Audit Committee of the Board of Directors, composed solely of
outside directors, may meet periodically with the independent
certified public accountants and management to review the work of
each and ensure that each is properly discharging its
responsibilities. The independent certified public accountants
have free access to the Committee, to discuss the results of their
audit work and their evaluations of the adequacy of internal
controls and the quality of financial reporting.
Financial Statements
GUARANTY BANCSHARES HOLDING CORPORATION
AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993 and 1992
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Guaranty Bancshares Holding Corporation
Morgan City, Louisiana
We have audited the consolidated statements of financial condition
of Guaranty Bancshares Holding Corporation and Subsidiaries as of
December 31, 1994 and 1993, and the related consolidated statements of
income, changes in stockholders' equity, and cash flows for the years ended
December 31, 1994, 1993, and 1992. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the consolidated financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1994, 1993 and 1992 consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of Guaranty Bancshares Holding Corporation and
Subsidiaries as of December 31, 1994, and 1993 and the results of their
operations and their cash flows for the years ended December 31, 1994, 1993
and 1992 in conformity with generally accepted accounting principles.
Darnall, Sikes, Kolder, Frederick & Rainey
A Corporation of Certified Public Accountants
Morgan City, Louisiana
January 13, 1995
<TABLE>
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
December 31, 1994 and 1993
<CAPTION>
1994 1993
ASSETS
<S> <C> <C>
CASH AND DUE FROM BANKS $ 3,435,866 $ 1,107,929
INTEREST-BEARING DEPOSITS IN OTHER BANKS - 515,000
FEDERAL FUNDS SOLD 2,640,000 1,100,000
INVESTMENT SECURITIES
Securities held to maturity (market value $9,393,000
and $16,950,000, respectively) 9,493,656 16,901,759
Securities available for sale, at market 7,189,984 -
---------- ----------
Total investment securities 16,683,640 16,901,759
LOANS 34,810,619 31,962,088
Less: Allowance for loan losses 502,145 620,795
Unearned income 35,553 74,470
---------- ----------
Total net loans 34,272,921 31,266,823
OTHER REAL ESTATE 80,000 34,155
BANK PREMISES AND EQUIPMENT 2,176,467 2,402,385
ACCRUED INTEREST RECEIVABLE 360,482 352,945
OTHER ASSETS 1,037,765 1,270,639
---------- ----------
TOTAL ASSETS $60,687,141 $54,951,635
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS
Non-interest bearing deposits $ 8,289,121 $ 8,285,622
NOW account deposits 4,882,892 4,786,267
Money market investment accounts 4,663,666 4,573,787
Savings deposits 7,603,436 7,973,959
Other time deposits 17,871,452 15,062,578
Certificates of deposits of $100,000 or more 8,187,058 6,371,011
---------- ----------
Total deposits 51,497,625 47,053,224
Notes payable 1,854,169 581,412
Obligation under capital lease 1,723,339 1,799,557
Accrued interest payable 124,101 89,732
Other liabilities 308,913 647,499
---------- ----------
Total liabilities 55,508,147 50,171,424
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
$2.70 cumulative preferred stock 3,497,320 3,497,320
$.50 cumulative preferred stock 107,310 107,310
Class A common stock 1,050,000 1,050,000
Class B common stock 17,088 17,088
Capital surplus 2,039,004 2,039,004
Accumulated deficit (1,504,893) (1,914,676)
Treasury stock (15,835) (15,835)
Net unrealized loss on securities available for sale (11,000) -
---------- ----------
Total stockholders' equity 5,178,994 4,780,211
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $60,687,141 $54,951,635
=========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 3,285,524 $ 2,988,138 $ 2,924,805
Interest on investment securities:
U. S. Treasury securities 221,301 254,811 162,466
Obligations of U. S. agencies and corporations 493,449 511,402 730,539
Obligations of states and political subdivisions 8,610 3,573 6,351
Other investments 16,528 16,561 50,691
Interest on federal funds sold and time deposits with banks 84,242 96,109 207,590
--------- --------- ---------
Total interest income 4,109,654 3,870,594 4,082,442
INTEREST EXPENSE
Interest on deposit accounts 1,377,954 1,286,848 1,750,447
Interest on federal funds purchased - 345 -
Interest on capital lease 175,891 183,223 189,768
Interest on notes payable 93,082 19,753 -
Interest and discount amortization on 10% subordinated
debentures - - 50,095
--------- --------- ---------
Total interest expense 1,646,927 1,490,169 1,990,310
--------- --------- ---------
Net interest income 2,462,727 2,380,425 2,092,132
RECOVERY (PROVISION) FROM (FOR) LOAN LOSSES 180,000 - (20,000)
--------- --------- ---------
Net interest income after recovery (provision)
from (for) loan losses 2,642,727 2,380,425 2,072,132
OTHER INCOME
Service charges on deposit accounts 231,685 236,833 237,270
Insurance commissions, other service charges and fees 54,967 52,163 44,525
Other operating income 77,439 119,128 43,124
Net investment securities gain - 37,307 19,498
--------- --------- ---------
Total other income 364,091 445,431 344,417
--------- --------- ---------
OPERATING EXPENSES 2,213,202 2,236,646 2,275,007
--------- --------- ---------
Net income before income tax expense, extraordinary items
and change in accounting principle 793,616 589,210 141,542
INCOME TAX EXPENSE
Current 4,622 5,888 33,785
Deferred 280,878 178,112 -
--------- --------- ---------
285,500 184,000 33,785
--------- --------- ---------
Net income before extraordinary items and change in
accounting principle 508,116 405,210 107,757
EXTRAORDINARY ITEMS - - 489,478
--------- --------- ---------
Net income before change in accounting principle 508,116 405,210 597,235
CHANGE IN ACCOUNTING PRINCIPLE
Cumulative effect to December 31, 1992 of application of
Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" - 674,000 -
--------- --------- ---------
Net income 508,116 1,079,210 597,235
DIVIDENDS REQUIRED FOR PREFERRED STOCK (404,275) (404,275) (404,275)
--------- --------- ---------
NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS $ 103,841 $ 674,935 $ 192,960
=========== =========== ===========
Income (loss) per common share before extraordinary items and
change in accounting principle $ - $ - $ (.79)
=========== =========== ===========
Income per common share after extraordinary items and
before change in accounting principle $ - $ - $ .51
=========== =========== ===========
Income per common share after extraordinary items and change
in accounting principle $ .28 $ 1.80 $ .51
=========== =========== ===========
Weighted average common shares outstanding 374,375 374,375 376,504
=========== =========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
$2.70 Cumulative Preferred $.50 Cumulative Preferred
Number of Shares Number of Shares
Authorized Issued Amount Authorized Issued Amount
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1992 148,977 148,977 $3,576,569 61,023 21,900 $107,310
Net income - - - - - -
Net acquisition of treasury stock:
3,201 shares Class A common stock - - - - - -
3,301 shares Class B common stock - - - - - -
3,301 shares $2.70 cumulative
preferred stock (3,301) (3,301) (79,249) 3,301 - -
------- ------- --------- ------- ------- -------
Balance at December 31, 1992 145,676 145,676 3,497,320 64,324 21,900 107,310
Net income - - - - - -
Cash dividends:
$2.70 preferred stock - - - - - -
------- ------- --------- ------- ------- -------
Balance at December 31, 1993 145,676 145,676 3,497,320 64,324 21,900 107,310
Net income - - - - - -
Cash dividends:
$2.70 preferred stock - - - - - -
Net unrealized (loss) on securities
available for sale - - - - - -
------- ------- --------- ------- ------- -------
Balance at December 31, 1994 145,676 145,676 $3,497,320 64,324 21,900 $107,310
======== ======== ========== ======= ======= ========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
Net
Unrealized
Loss on
Class A Common Class B Common Securities
Number of Shares Number of Shares Capital Accumulated Treasury Available
Authorized Issued Amount Authorized Issued Amount Surplus Deficit Stock For Sale
<CAPTION>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
210,000 210,000 $1,050,000 210,000 170,877 $17,088 $2,039,004 $(3,197,796) $ - $ -
- - - - - - - 597,235 - -
- - - - - - - - (15,505) -
- - - - - - - - (330) -
- - - - - - - - - -
------- ------- --------- -------- ------- ------- --------- ----------- --------- ---------
210,000 210,000 1,050,000 210,000 170,877 17,088 2,039,004 (2,600,561) (15,835) -
- - - - - - - 1,079,210 - -
- - - - - - - (393,325) - -
------- ------- --------- -------- ------- ------- --------- ----------- --------- ---------
210,000 210,000 1,050,000 210,000 170,877 17,088 2,039,004 (1,914,676) (15,835) -
- - - - - - - 508,116 - -
- - - - - - - (98,333) - -
- - - - - - - - - (11,000)
------- ------- --------- -------- ------- ------- --------- ----------- --------- ---------
210,000 210,000 $1,050,000 210,000 170,877 $17,088 $2,039,004 $(1,504,893) $(15,835) $(11,000)
======== ======== ========== ======== ======== ======= ========== =========== ======== ========
</TABLE>
<TABLE>
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 508,116 $ 1,079,210 $ 597,235
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on sales of investment securities - 37,307 19,498
Amortization of premium (accretion of discount)
on investments (42,311) 72,971 55,898
(Recovery) provision for loan losses (180,000) - 20,000
Gain on sale of fixed assets (8,294) - -
Gain on sale of other real estate (5,846) (2,850) (28,364)
Gain on sale of repossessed property - (91,337) -
Depreciation and amortization 274,605 273,982 268,021
(Increase) decrease in accrued interest receivable (7,537) 17,325 40,098
Increase (decrease) in accrued interest payable 34,369 (23,982) (157,329)
Increase (decrease) in other liabilities (338,586) 89,413 (152,517)
Accretion of discount on subordinated debentures - - 24,960
--------- --------- ---------
Net cash provided by operating activities 234,516 1,452,039 687,500
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in federal funds sold (1,540,000) 775,000 475,000
Proceeds from sales of investment securities - 1,666,917 2,400,767
Proceeds from maturities of investment securities 12,979,412 16,439,635 7,092,524
Purchase of investment securities (12,693,828) (13,892,828) (16,732,757)
Net (increase) decrease in loans (3,006,098) (4,147,160) 4,167,813
Proceeds from sales of other real estate and repossessed property 43,000 621,300 322,057
(Purchase) sale of interest-bearing deposits 515,000 1,084,809 (1,289,042)
Proceeds from sales of premises and equipment 26,000 - -
Purchase of bank premises and equipment (58,034) (95,609) (350,359)
Changes in other assets 187,029 (54,946) 77,239
--------- --------- ---------
Net cash provided (used) by investing activities (3,547,519) 2,397,118 (3,836,758)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW accounts
and savings accounts (180,520) (2,954,548) 7,282,599
Net increase (decrease) in certificates of deposit 4,624,921 (2,243,188) (2,549,378)
Proceeds from note payable 1,400,000 600,000 -
Repayment of note payable (127,243) (18,588) (806,848)
Repayments of capital lease obligation (76,218) (68,995) (62,455)
Repayment of subordinated debentures - - (692,712)
--------- --------- ---------
Net cash provided (used) by financing activities 5,640,940 (4,685,319) 3,171,206
--------- --------- ---------
Net increase (decrease) in cash, cash equivalents
and due from banks 2,327,937 (836,162) 21,948
CASH, CASH EQUIVALENTS AND DUE FROM BANKS, beginning of year 1,107,929 1,944,091 1,922,143
--------- --------- ---------
CASH, CASH EQUIVALENTS AND DUE FROM BANKS, end of year $ 3,435,866 $ 1,107,929 $ 1,944,091
============ ============ ============
Supplemental Cash Flow Information:
Interest paid $1,612,558 $ 1,514,151 $ 2,147,639
=========== =========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
Supplemental schedule of noncash investing and financing activities:
During 1992, the Bank foreclosed on a loan which was secured by
stock of Guaranty Bancshares Holding Corporation. This transaction
resulted in a reduction of the $2.70 cumulative preferred stock by $79,249
and the recording of treasury stock in the amount of $15,835.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accounting and reporting policies of Guaranty Bancshares
Holding Corporation (Bancshares) and its subsidiaries conform with
generally accepted accounting principles and general practices followed
in the banking industry. The principles which significantly affect
the determination of financial position, results of operations and
and cash flows are summarized below:
A. Basis of Accounting
The consolidated financial statements include the accounts
of Bancshares and its wholly-owned subsidiaries. Significant
intercompany accounts and transactions are eliminated.
B. Investment Securities
On January 1, 1994, Bancshares adopted Statement of
Financial Accounting Standards (SFAS) No. 115 "Accounting for
Certain Investments in Debt and Equity Securities." SFAS No.
115 requires the classification of securities into one of three
catagories trading, available for sale or held to maturity.
Securities which Bancshares has the intent and ability to
hold for the long-term or until maturity are classified as held
to maturity or held for investment. These securities are stated
at cost, adjusted for amortization of premiums and accretion of
discounts using either the interest method or straight-line
method, which produces approximately the same results. Realized
gains or losses are recognized at the time of sale or call of a
security and are shown as a separate component of other income
in the consolidated statements of income.
Securities which may be sold in response to changes in
interest rates, liquidity needs or asset/liability management
strategies are classified as held for sale. These securities are
stated at market. Adjustments to market are shown as a separate
component of stockholders' equity.
Interest earned on investment securities is included in
interest income. Also included in interest income are
amoritization of premiums and accretion of discounts on
investment securities which were computed using the
straight-line method.
C. Loans
Interest income on commercial, real estate, mortgage and
installment loans is accrued based on the principal amounts
outstanding.
Nonperforming loans consist of nonaccrual loans and
restructured loans. Loans past due 90 days or more are
considered to be performing until placed on nonaccrual status.
Loans are placed on nonaccrual status when, in the opinion of
management, there is sufficient uncertainty as to timely
collection of reported earnings of some or all of the
contractual interest. When a loan is placed on nonaccrual
status, interest accrued but not collected is usually reversed
against interest income. Generally, any payments received on
nonaccrual loans are first applied to reduce outstanding
principal amounts. Loans are not reclassified as accruing
until interest and principal payments are brought current
and future payments are reasonably assured.
D. Allowance for Loan Losses
The allowance for loan losses is established through a
provision for loan losses charged to expense. The allowance
represents an amount which, in management's judgement, will be
adequate to absorb probable losses on existing loans that may
become uncollectible. Management's judgement in determining the
adequacy of the allowance is based on evaluations of the
collectibility of loans. Ultimate losses may vary from the
current estimates. These estimates are reviewed periodically
and, as adjustments become necessary, they are reported in
earnings in the periods in which they become known. These
evaluations take into consideration such factors as changes in
the nature and volume of the loan portfolio, current economic
conditions that may affect theborrower's ability to pay, overall
portfolio quality, and review of specific problem loans. Loans
are charged against the allowance for loan losses when
management believes that collectibility of the principal is
unlikely.
E. Depreciation
Premises and equipment are stated at cost, less
accumulated depreciation and amortization of $1,267,321 and
$1,037,502 at December 31, 1994 and 1993, respectively. For
book purposes, depreciation and amortization are included in
occupancy expense and are computed on the straight line basis
over the useful lives of the assets which range from three to
forty years. For income tax purposes, depreciation of assets
acquired prior to January 1, 1981, is calculated on the
straight-line method and depreciation of assets acquired after
December 31, 1980, is calculated using the Accrelerated Cost
Recovery (ACRS) or Modified Accelerated Costs Recovery (MACRS)
System of the Internal Revenue Service. Maintenance and repairs
which do not extend the life of banking premises and equipement
are charged to operating expenses.
F. Foreclosed Assets
Property acquired through foreclosure is stated at the
lower of the recorded amount of the loan for which the foreclosed
asset served as collateral or the current fair market value.
Fair value is the anticipated sales price of the assets, based
upon independent appraisals and other relevant factors. When a
reduction of the carrying value to the fair value is required at
the time the loan is reclassified as a foreclosed asset, the
difference is charged to the allowance for loan losses. Any
subsequent reductions are charged to nonperforming assets
expense. Revenues and expenses associated with operating or
disposing of foreclosed assets are recorded during the period in
which they are incurred.
G. Income Taxes
Bancshares and its subsidiaries file a consolidated
federal income tax return. The Company has adopted SFAS 109,
"Accounting for Income Taxes", to account for deferred income
taxes. Deferred taxes are computed based on the tax liability
or benefit in future years of the reversal of temporary
differences in the recognition of income or deduction of
expenses between financial and tax reporting purposes. The
principal items resulting in the differences are net operating
loss carryforwards, tax credit carryforwards, differences due to
book and tax depreciation differences, and basis difference in
the reserve for loan losses. The net difference between tax
expense and taxes currently payable is reflected in the
statement of financial condition as deferred taxes. Deferred
tax assets and/or liabilities are classified as current and
noncurrent based on the classification of the related asset or
liability for financial reporting purposes, or based on the
expected reversal date for deferred taxes that are not related
to an asset or liability. This change in accounting principle
was appropriately reflected in the 1993 statement of income.
H. Amortization of Debt Discount
Bancshares recorded the issuance of its 10% subordinated
debentures at fair value. The difference between the $27
principal stated value per unit and the fair value was amortized
using the interest method over the twelve year term of the debt.
This debenture debt was extinguished in 1992.
I. Cash Equivalents
For purposes of the Statements of Cash Flows, the Bank
considers cash equivalents to be "cash and due from banks."
J. Earnings Per Common Share
Income for primary earnings per share is adjusted for
preferred stock dividends. Earnings per share are computed based
on the weighted average number of common shares outstanding.
(2) Cash and Due From Banks
The Bank is required to maintain average reserve balances with
the Federal Reserve Bank. "Cash and due from banks" in the
consolidated statement of financial condition include amounts so
restricted of $206,000 at December 31, 1994.
(3) Investment Securities
In May 1993, the Financial Accounting Standards Board issued Statement No.
115, "Accounting for Certain Investments in Debt and Equity Securities."
This standard addresses the accounting and reporting for investments in
equity securities which have readily determinable fair values and for all
investments in debt securities. Adoption of the new standard was required
for fiscal years beginning after December 15, 1993. Bancshares adopted
this statement effective January 1, 1994.
Neither Bancshares nor its subsidiaries engage in securities trading
activities.
An analysis of the amortized cost and market value of the investment
portfolio by maturity periods at December 31, 1994 follows (in thousands):
Amortized Market
Cost Value
Due within one year $10,120 $10,067
Due from one to five years 4,713 4,678
Due from five to ten years 475 466
Due after ten years 1,392 1,372
------- --------
Total investment securities $16,700 $16,583
======= =======
A summary of securities classified as held to maturity and
available for sale at amortized cost and approximate market values
follows (in thousands):
Amortized Cost Maturing Gross Approx.
Within One to 5-10 Over Unrealized Market
1 Yr 5 Yrs Yrs 10 Yrs Total Gains Losses Value
December 31, 1994:
Held to maturity
U. S. Treasury
securities $3,156 $ - $ - $ - $3,156 $ - $ 28 $3,128
Obligations
of U. S.
agencies and
corporations 4,505 1,078 214 146 5,943 5 67 5,881
Obligations of
states and
political
subdivisions 9 96 261 - 366 - 11 355
Other investments - 29 - - 29 - - 29
------ ------ ------ ------ ------ ------ ------ ------
TOTAL $7,670 $1,203 $ 475 $ 146 $9,494 $ 5 $ 106 $9,393
====== ====== ====== ====== ====== ====== ====== ======
Available for sale
U. S. Treasury
securities $1,500 $ - $ - $ - $1,500 $ - $ 1 $1,499
Obligations of
U. S. agencies
and corps. 950 3,510 - 774 5,234 11 26 5,219
Other Investments - - - 472 472 - - 472
------ ------ ------ ------ ------ ------ ------ ------
TOTAL $2,450 $3,510 $ - $1,246 $7,206 $ 11 $ 27 $7,190
====== ====== ====== ====== ====== ====== ====== ======
December 31, 1993:
U.S. Treasury
securities $4,261 $1,501 $ - $ - $5,762 $ 16 $ 11 $5,767
Obligations
of U.S.
agencies and
corporations 4,126 4,034 1,537 1,050 10,747 57 15 10,789
Obligations of
states and
political
subdivisions 24 4 - - 28 1 - 29
Other
investments - 36 - 329 365 - - 365
------ ------ ----- ----- ------- ---- ---- ------
8,411 5,575 1,537 1,379 16,902 74 26 16,950
====== ====== ===== ===== ======= ==== ==== ======
Investment securities with aggregate carrying values of
approximately $5,994,000 and $5,896,000 at December 31, 1994 and
1993, respectively, were pledged to secure public deposits as
required by law.
Maturities of mortgage-backed securities are included in
obligations of U.S. agencies and corporations and are classified by
contractual (stated) maturity dates. Expected maturities may differ
from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment
penalties. During 1994, $350,000 of mortgage-backed securities were
paid out prior to maturity.
(4) Loans
Major classifications of loans at December 31, 1994 and 1993
are as follows:
December 31,
1994 1993
Commercial, financial
and agricultural $27,721,641 $23,650,094
Real estate 3,066,572 3,977,064
Installment 4,022,406 4,334,930
----------- -----------
34,810,619 31,962,088
Less: Unearned income (35,553) (74,470)
----------- -----------
$34,775,066 $31,887,618
=========== ===========
The Bank has had transactions, in the ordinary course of business,
with officers and directors of Bancshares and of the Bank, their
immediate families and companies of which the directors are principal
owners. All such transactions were on substantially the same terms,
including interest rates and collateral on loans, as those prevailing
at the same time for comparable transactions with others and did not
involve more than normal risk of collectibility or present other
unfavorable features. Loans to these persons and the related
activity for 1994 are summarized as follows:
Balance, January 1, 1994 $1,820,866
Additions 281,346
Payments (644,784)
Balance, December 31, 1994 $1,457,428
==========
A summary of transactions in the allowance for loan losses follows:
Year Ended December 31,
1994 1993 1992
Balance, beginning of year $ 620,795 $ 545,754 $ 642,421
Losses charged to allowance (34,944) (37,504) (182,126)
Recoveries credited to
allowance 96,294 112,545 65,459
Provision (recovery) charged
(credited) to expense (180,000) - 20,000
--------- --------- ---------
Balance, end of year $ 502,145 $ 620,795 $ 545,754
========= ========= =========
The Bank had non-performing loans on non-accrual status
aggregating approximately $30,000 at December 31, 1994 and $36,000 at
December 31, 1993. During the year ended December 31, 1993, the Bank
recognized approximately $1,000 in interest income related to these
loans. No interest income was recognized in 1994 or 1992. Had all
the non-performing loans during the years been accruing interest at
their contracted rates, approximately $3,000 , $5,000 and $75,000 of
additional interest income would have been recognized for 1994, 1993
and 1992, respectively.
A total of $80,000 and $311,360 was transferred from loans to
other real estate in 1993 and 1992, respectively. There were no
transfers to other real estate during 1994.
(5) Bank Premises and Equipment
Major classification of these assets at December 31, 1994 and
1993 are summarized as follows:
1994 1993
Buildings $ 583,026 $ 583,026
Leased assets and improvements 1,976,310 1,976,310
Furniture and equipment 884,452 880,551
---------- ----------
3,443,788 3,439,887
Accumulated depreciation and amortization 1,267,321 1,037,502
---------- ----------
$2,176,467 $2,402,385
========== ==========
Depreciation and amortization amounted to $274,605, $273,982
and @268,021 for 1994, 1993 and 1992, respectively.
(6) Deposits
A summary of interest expense on deposit accounts follows:
Year Ended December 31,
1994 1993 1992
NOW accounts $ 112,841 $ 113,267 $ 113,799
Money market investment accounts 118,670 140,271 176,016
Savings deposits 240,710 254,577 259,426
Other time and certificates of
deposits 905,733 778,733 1,201,206
---------- ---------- ----------
$1,377,954 $1,286,848 $1,750,447
========== ========== ==========
Interest expense on certificates of deposits of $100,000 or
more for 1994, 1993 and 1992 was approximately $307,000, $212,000
and $296,000, respectively.
(7) Notes Payable and Subordinated Debt
Notes payable to the Federal Home Loan
Bank of Dallas, secured by all first
mortgage documents relating to one-to-four
family residential dwellings.
1994 1993
120 monthly installments, 5.9 percent $ 530,897 $581,412
96 monthly installments, 7.34 percent 1,323,272 -
---------- --------
$1,854,169 $581,412
========== ========
Maturities of long-term debt are as follows:
1995 $ 188,976
1996 202,565
1997 217,139
1998 232,771
1999 249,538
thereafter 763,180
----------
$1,854,169
==========
(8) Stockholders' Equity
On October 31, 1988 Bancshares exchanged approximately 85
percent of its then outstanding 10% subordinated debentures for
Class B common stock and $2.70 cumulative preferred stock.
Bancshares sold 14,700 shares of $.50 cumulative preferred stock and
14,700 shares of Class B common stock in 1989 and 7,200 shares of
$.50 cumulative preferred stock and Class B common stock in 1990
(some of which was sold to Directors of Bancshares). Dividends
required on the cumulative preferred stock at year end are deducted
from the net income to reflect the net income applicable to common
shareholders. No dividends may be paid on common stock until all
unpaid dividends on preferred stock have been paid. The Board of
Directors declared a $.675 dividend on the $2.70 preferred stock, to
be paid on January 4, 1995. The holders of the preferred stock have
no voting rights. In the event of any liquidation or dissolution of
Bancshares, the $2.70 preferred stock shareholders are entitled to
receive $27.00 per share, plus accrued and unpaid dividends to the
date of payment, before any distribution may be made to the holders
of the $.50 preferred or common stock and the $.50 preferred
stockholders are entitled to receive $5.00 per share, plus accrued
and unpaid dividends to the date of payment, before any distribution
may be made to the holders of the common stock. The $2.70 cumulative
perferred stock is redeemable in whole or in part at the Company's
option beginning in 1995, providing that all cumulative dividends
have been paid.
The Class B common stock does not differ from the Class A
common stock except that Class A common stock has a par value of $5
per share and Class B common stock has no par value.
(9) Operating Expenses
Details of operating expenses are as follows:
1994 1993 1992
Salaries and employee benefits $ 971,555 $ 954,032 $ 949,052
Expenses related to other real estate
and repossessed property, net of
rental income on these properties 7,875 4,280 16,651
Net occupancy expense 426,224 456,439 448,386
Equipment and computer expense 193,233 182,245 169,921
Professional fees and services 128,352 159,705 148,692
FDIC and other insurances 140,606 145,575 133,223
Directors' fees 64,000 75,000 70,500
Advertising and public relations 34,778 38,177 49,338
Stationery and supplies 42,418 40,516 63,424
Other operating expenses 204,161 180,677 225,820
---------- ---------- ----------
$2,213,202 $2,236,646 $2,275,007
========== ========== ==========
(10) Income Taxes
The actual tax expense differs from the "expected" tax expense
(computed by applying the U. S. federal corporate tax rate of 34
percent in 1994, 1993 and 1992 to earnings before income taxes) as
follows:
1994 1993 1992
Computed "expected" tax expense $ 269,829 $ 200,315 $ 203,060
Increase (decrease) in tax resulting
from:
Tax-exempt interest (2,927) (1,215) (760)
Non-deductible interest expense 1,274 57 152
Net operating loss carryforwards
utilized to offset income tax
expense (207,175) (221,663) (161,281)
Discount accretion (15,467) - 8,486
Other, net (45,534) 22,506 (49,657)
--------- --------- ---------
Total tax expense $ -0- $ -0- $ -0-
========= ========= =========
An analysis of deferred income taxes follows:
1994 1993 1992
Depreciation expense for tax reporting
in excess of amount for financial
reporting $ 34,712 $ 16,608 $ 42,278
Provision for loan losses for financial
reporting less than (in excess of)
amount for tax reporting 61,200 (51,028) (20,000)
Other real estate gain (write-offs)
for financial statement reporting
in excess of amount for
tax reporting - 21,628 -
Other, net 1,137 (9,546) 244,478
Capitalized leases (18,668) (21,145) (68,784)
Recognition of tax benefit of net
operating loss carryforward for
financial statement purposes limited
to the amount of deferred
tax credits 202,497 221,595 (197,972)
--------- --------- ---------
Total deferred income taxes $ 280,878 $ 178,112 $ -0-
========= ========= =========
At December 31, 1994, Bancshares has net operating loss carryforwards
of approximately $849,000 and $641,000 for income tax and financial
statement purposes, respectively. These carryforwards, if not
utilized to offset taxable income, will expire in years through 2005.
(11) Commitment and Contingent Liabilities
In the normal course of business, the Bank has outstanding
commitments and letters of credit which are not reflected in the
consolidated financial statements. At December 31, 1994 and 1993,
letters of credit outstanding totaled $814,500 and $794,300,
respectively. Management does not expect any loss as a result of
these transactions.
(12) Regulatory Matters
At periodic intervals, both the State Office of Financial
Institutions examiners and the FDIC routinely examine the Bank's
financial statements as part of their legally prescribed oversight
responsibility of the Banking industry. Based on these examinations,
the regulators can direct that the Bank's financial statements be
adjusted in accordance with their findings.
The regulators have not proposed significant adjustments to the
Bank's financial statements in prior years. However, in view of the
increasingly uncertain regulatory environment in which the Bank now
operated, the extent, if any, to which a forthcoming regulatory
examination may ultimately result in adjustments to the 1994
financial statements cannot presently be determined.
(13) Parent Company
Summarized financial information for Bancshares (parent company
only) follows:
A. Statements of Condition
1994 1993
Assets:
Cash $ 113,665 $ 396,112
Investment in 100 percent of the
outstanding common stock of
subsidiaries 5,158,143 4,775,052
Other assets 5,519 2,372
----------- -----------
$ 5,277,327 $ 5,173,536
=========== ===========
Liabilities:
Dividends payable $ 98,333 $ 393,325
Stockholders' equity:
$2.70 cumulative preferred stock 3,497,320 3,497,320
$.50 cumulative preferred stock 107,310 107,310
Class A common stock 1,050,000 1,050,000
Class B common stock 17,088 17,088
Capital surplus 2,039,004 2,039,004
Accumulated deficit (1,504,893) (1,914,676)
Treasury stock (15,835) (15,835)
Net unrealized loss on securities
available for sale (11,000) -
---------- -----------
5,178,994 4,780,211
---------- -----------
$ 5,277,327 $ 5,173,536
=========== ===========
B. Statements of Operations
1994 1993 1992
Dividends received from
subsidiaries $115,000 $ 489,884 $ 1,754,606
Other income 224 1,585 172
Interest expense and discount
amortization on 10%
subordinated debentures - - (50,095)
Other expenses (1,209) (455) (10,812)
--------- ---------- -----------
Income before equity in
undistributed earnings
of subsidiaries and
income tax benefit 114,015 491,014 1,693,871
Equity in undistributed
earnings and (excess) of
dividends over earnings of
subsidiaries 394,101 588,196 (1,096,636)
--------- ---------- -----------
Net income $ 508,116 $1,079,210 $ 597,235
========= ========== ===========
C. Statements of Cash Flows
1994 1993 1992
Cash flows from operating
activities:
Net income $508,116 $1,079,210 $ 597,235
Adjustments to reconcile
net income to net cash
used in operating
activities:
Accretion of discount
on subordinated
debentures - - 24,960
(Increase) decrease in
undistributed earnings
of subsidiaries (394,091) (683,280) 946,883
Change in accrued
interest payable - - (67,975)
-------- ---------- -----------
Net cash provided
by (used in)
operating
activities 114,025 395,930 1,501,103
-------- ---------- -----------
Cash flows from investing
activities:
Change in other assets ( 3,147) (7) (2,365)
-------- ---------- -----------
Cash flows from financing
activities:
Repayments of note payable - - (806,848)
Repayment of subordinated
debentures - - (692,712)
Dividends paid (393,325) - -
-------- ---------- -----------
Net cash used in
financing
activities (393,325) - (1,499,560)
-------- ---------- -----------
Net increase
(decrease) in cash (282,447) 395,923 (822)
Cash, beginning of year 396,112 189 1,011
-------- ---------- -----------
Cash, end of year $113,665 $ 396,112 $ 189
======== ========== ===========
Bancshares' primary source of working capital is dividends from
the Bank. At December 31, 1994, approximately $982,000 of the Bank's
net assets were available for dividends to Bancshares without seeking
regulatory approval.
(14) Concentration of Credit Risk
The Bank grants commercial and individual loans to customers
throughout the state. Although the Bank has a diversified loan
portfolio, a substantial portion of its debtors' ability to honor
their contracts is dependent upon the local economy.
(15) Financial Instruments with Off-Balance-Sheet Risk
In the normal course of business, Guaranty Bank is a party to
financial instruments which are not recorded in the consolidated
financial statements. These financial instruments include
commitments to extend credit and letters of credit.
Loan commitments and lines of credit represent Bank commitments
to lend funds at specific rates, with fixed expiration or review
dates and for specific purposes. These commitments are agreements
to fund loans if all conditions in the agreement are met. For
overdraft lines of credit, the Bank has the right to change or
terminate the terms and conditions of the credit agreement at any
time with appropriate notice. Since many commitments and unused
overdraft lines of credit are never actually drawn upon, the unfunded
amounts do not necessarily represent future funding requirements.
The Bank evaluates each customer's credit worthiness on an individual
basis. The amounts of collateral obtained, if any, upon extension
of credit is based on the credit worthiness of the customer. The
Bank uses the same credit policies in making conditional obligations
as it does for on-balance sheet instruments.
The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for
letters of credit is represented by the contract or notional amount
of those instruments. Letters of credit are conditional commitments
issued by the Bank to guarantee performance to a third party.
Financial instruments whose contract amounts represent credit risk:
Letters of credit $ 814,500
Unused overdraft lines of credit 171,000
Loan commitments 4,338,000
(16) Leases
During the year ended December 31, 1991, the Bank entered into
a sale and leaseback agreement with regard to the bank building and
the grounds on which it is located. Under the agreement, the Bank
leased back a portion of the building for a term of fifteen years
which is accounted for as a capital lease. Also, the Bank leased the
grounds on which the building is located for a term of fifteen years.
The lease of the grounds is accounted for as an operating lease.
The future minimum lease payments under the capitalized lease
and the present value of the net minimum lease payments as of
December 31, 1994, are as follows:
December 31,
1995 $ 252,744
1996 252,744
1997 252,744
1998 252,744
1999 252,744
Thereafter 1,642,841
----------
Total minimum lease payments 2,906,561
Less amount representing interest 1,183,222
----------
Present value of minimum lease payments including
current maturities of $84,202 $1,723,339
==========
The following is a schedule by year of future minimum rental
payments under the operating lease as of December 31, 1994:
December 31,
1995 $135,696
1996 135,696
1997 135,696
1998 67,848
--------
$474,936
========
Although the term of the lease is (15) fifteen years, the
rental payments are to be made over (7 1/2) seven and one-half years.
Half of the rental payments are expensed and half are recorded as
prepaid rent to be amortized over the last (7 1/2) seven and one-half
years of the lease. Rent expense is approximately $67,848 for each
of the years ended December 31, 1994, 1993, and 1992, and $237,845
and $169,997 are included in other assets at December 31, 1994 and
1993, respectively.
(17) Extraordinary items
1992
The extraordinary items consist of the following:
Interest on income tax refund, net of applicable
expenses $ 455,692
Income tax expense attributable to the interest
received on the income tax refund (164,186)
Utilization of the net operating loss carryforward 197,972
---------
$ 489,478
=========
Guaranty Bancshares Holding Corporation and Subsidiaries
Corporate Description
Guaranty Bancshares Holding Corporation is a one-bank holding
company headquartered in Morgan City, Louisiana. Its principal
subsidiary, Guaranty Bank & Trust Company of Morgan City, is a full-
service commercial bank whose business is that of providing general
banking services to the Morgan City and St. Mary Parish, Louisiana
area.
Transfer Agent and Registrar
Guaranty Bank & Trust Company of Morgan City
Morgan City, Louisiana
Market Price
The primary market area for the Company's stock is the Morgan City
and St. Mary Parish, Louisiana area. The Company's stock is not
listed on any securities exchange and is not registered with the
National Association of Securities Dealers. Due to the lack of an
actual trading market, or any significant transactions, the Company
does not have available information to furnish the high and low
sales prices or the range of bid and ask quotations for its stock.
Form 10-K Annual Report
Each year Guaranty Bancshares Holding Corporation files an annual
report with the Securities and Exchange Commission on Form 10-K. A
copy of this report is available upon written request to the Chief
Financial Officer, Guaranty Bancshares Holding Corporation, Post
Office Box 2208, Morgan City, Louisiana 70381.
GUARANTY BANCSHARES HOLDING CORPORATION AND
GUARANTY BANK & TRUST COMPANY OF MORGAN CITY
BOARD OF DIRECTORS
H. W. Bailey Anthony J. Guarisco
Retired Executive President
Vice President Guarisco Enterprises, Inc.
McDermott, Inc. Morgan City, Louisiana
New Orleans, Louisiana
Brooks Blakeman Wiley Magee
Chairman of the Board Secretary to the Board
Guaranty Bancshares Holding Guaranty Bancshares
Corporation and Guaranty Holding Corporation and
Bank & Trust Company Guaranty Bank & Trust
Vice President and Company
General Manager President
Frank's Casing Crews, Inc. Morgan City Supply, Inc.
Lafayette, Louisiana Morgan City, Louisiana
Vincent Cannata
President Murray Ordogne
Cannata's Supermarket, Inc. Owner
Morgan City, Louisiana Morgan City Motel
Morgan City, Louisiana
Randolph Cullom
President and Chief Lee A. Ringeman
Executive Officer Executive Vice President
Guaranty Bancshares Holding and Chief Financial
Corporation and Guaranty Officer
Bank & Trust Company Guaranty Bancshares
Morgan City, Louisiana Holding Corporation and
Guaranty Bank & Trust
Company
Morgan City, Louisiana
Frank J. Domino
President
Frank's Motor Company, Inc. Benny A. Blakeman
Morgan City, Louisiana Retired Clerk of Court
St. Mary Parish
Morgan City, Louisiana
Conley J. Dutreix Director Emeritus
Assistant Secretary to the Guaranty Bank & Trust
Board of Guaranty Bancshares Company
Holding Corporation and
Guaranty Bank & Trust Company
Executive Vice President and
Chief Lending Officer of Guaranty
Bank & Trust Company
GUARANTY BANK & TRUST COMPANY
OFFICERS
Brooks Blakeman, Chairman of the Board
Randolph Cullom, President and Chief Executive Officer
Wiley Magee, Secretary to the Board
Conley J. Dutreix, Executive Vice President and Assistant
Secretary to the Board
Lee A. Ringeman, Executive Vice President and Cashier
J. Michael Bourgeois, Vice President
Elsie R. Gaudet, Vice President
Kevin J. Hymel, Vice President, Security Officer and
Data Systems Officer
Lennis J. Simoneaux, Assistant Vice President
Christine A. Dragna, Assistant Cashier
GUARANTY BANCSHARES HOLDING CORPORATION
OFFICERS
Brooks Blakeman, Chairman of the Board
Randolph Cullom, President and
Chief Executive Officer
Wiley Magee, Secretary-Treasurer
Lee A. Ringeman, Executive Vice President
and Chief Financial Officer
Conley Dutreix, Assistant Secretary
PROXY
GUARANTY BANCSHARES HOLDING CORPORATION
Post Office Box 2208
Morgan City, Louisiana 70381
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Wiley Magee and Frank J. Domino as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of Guaranty Bancshares Holding Corporation held of record by the
undersigned on April 1, 1995, at the annual meeting of shareholders to be
held on April 17, 1995, or any adjournment thereof.
MATTERS TO BE CONSIDERED:
1. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed below
----- -----
H. W. Bailey Randolph Cullom Anthony J. Guarisco, Sr.
Brooks Blakeman Frank J. Domino, Sr. Wiley Magee
Vincent Cannata Conley J. Dutreix Murray Ordogne
Lee A. Ringeman
(INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name on the space provided below.)
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR Proposal 1.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATE , 1995
Signature
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
GUARANTY BANCSHARES HOLDING CORPORATION
Post Office Box 2208
Morgan City, Louisiana 70381
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 17, 1995
TO SHAREHOLDERS OF GUARANTY BANCSHARES HOLDING CORPORATION
The annual meeting of shareholders of Guaranty Bancshares
Holding Corporation will be held in the Board of Directors Room
located on the second floor of the Guaranty Bank & Trust Company
Building, 1201 Brashear Avenue, Morgan City, Louisiana, on Monday,
April 17, 1995, 1:00 p.m., to vote upon the following matters:
1. Election of ten (10) directors for the ensuing year; and
2. Such other matters as may properly come before the
meeting or any adjournments thereof.
Shareholders of record at close of business April 1, 1995, are
entitled to notice of and to vote at the annual meeting.
The accompanying proxy statement contains information
regarding, and a more complete discussion of, the items of business
to be considered at the annual meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. A PROXY MAY BE
REVOKED BY APPROPRIATE NOTICE TO THE SECRETARY OF GUARANTY
BANCSHARES HOLDING CORPORATION AT ANY TIME PRIOR TO THE VOTING
THEREOF.
BY ORDER OF THE BOARD OF DIRECTORS
WILEY MAGEE
Corporate Secretary
Morgan City, Louisiana
April 1, 1995
GUARANTY BANCSHARES HOLDING CORPORATION
Post Office Box 2208
Morgan City, Louisiana 70381
April 1, 1995
PROXY STATEMENT
FOR ITS ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 17, 1995
This Proxy Statement is furnished to shareholders of Guaranty
Bancshares Holding Corporation ("Bancshares") in connection with
the solicitation on behalf of the Board of Directors of Bancshares
of Proxies for use at the annual meeting of shareholders of
Bancshares to be held on Monday, April 17, 1995, at 1:00 p.m., in
the Board of Directors Room located on the second floor of the
Guaranty Bank & Trust Company Building, 1201 Brashear Avenue,
Morgan City, Louisiana. The above described proxy and this proxy
statement were mailed on or about April 1, 1995.
As of the close of business on April 1, 1995, there were
210,000 shares of Class A Common stock, par value $5.00 per share,
and 170,877 shares of Class B Common stock, no par value, of
Bancshares outstanding as the only classes of voting securities.
Each shareholder of record at the close of business on April 1,
1995, is entitled to vote at the meeting and any adjournments
thereof. Each holder is entitled to one vote for each share of
common stock held.
The enclosed proxy may be revoked by the shareholder at any
time prior to the exercise thereof by filing with the Secretary of
Bancshares a written revocation or duly executed proxy bearing a
later date. The proxy will be deemed revoked if the shareholder
is present at the annual meeting and elects to vote in person.
MANAGEMENT AND PRINCIPAL SHAREHOLDERS
OF GUARANTY BANCSHARES HOLDING CORPORATION
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
The By-Laws of Bancshares authorize the Board of Directors or
the shareholders, at any meeting thereof, to fix the size of the
Board at not less than five nor more than thirty, and proxies
cannot be voted for a greater number of persons. Unless authority
is withheld, the persons named in the enclosed proxy will vote for
the election of the ten nominees named below to serve until their
successors are duly elected and qualified. In the unanticipated
event that any of the nominees cannot be a candidate at the annual
meeting, proxies will be voted in favor of such additional nominees
as may be designated by the Board of Directors.
The following table sets forth certain information as of March
10, 1995, concerning the nominees, and all nominees and officers
as a group, including their beneficial ownership of shares of
Common Stock of Bancshares as determined in accordance with Rule
13d-3 of the Securities and Exchange Commission. Unless otherwise
indicated, (i) each nominee has been engaged in the principal
occupation shown for more than the past five years, and (ii)
shares shown as being beneficially owned are held with sole voting
and investment power. The nominees are also members of the Board
of Directors of Bancshares' wholly owned subsidiary, Guaranty Bank
& Trust Company of Morgan City (the "Bank").
The cost of soliciting proxies in the enclosed form will be
borne by Bancshares. In addition to solicitation by mail, certain
officers, directors and regular employees of Bancshares and its
subsidiary, Guaranty Bank & Trust Company of Morgan City, who will
receive no additional compensation for their services, may solicit
proxies by telephone, telegraph or personal call.
Year First
Became
Director Shares Percent
Name, Age, and of the Beneficially of
Principal Occupation Bancshares Owned (1)(2) Class (2)
H. W. Bailey (72) 1982 17,666 (3) 4.64%
Retired since 1-1-83.
Executive Vice President
and Chief Administrative
Officer of McDermott, Inc.
(offshore construction)
Brooks Blakeman (48) 1988 34,070 (4) 8.95%
Chairman of the Board
Bancshares and the Bank
Vice President and General
Manager of Frank's Casing
Crews, Inc. (oilfield services)
Vincent Cannata (80) 1982 22,343 (5) 5.87%
President of Cannata's
Super Market, Inc.
Randolph Cullom (57) 1990 200 -
President and Chief Executive
Officer of Bancshares and the
Bank
Frank J. Domino, Sr. (75) 1982 5,280 (6) 1.39%
President of Frank's Motor
Co., Inc. (auto sales);
Secretary and Treasurer of
Domino Developers, Inc.
(home construction)
Conley J. Dutreix (47) 1993 200 -
Executive Vice President of
Bancshares and the Bank;
Director of the Bank since 1992.
Anthony J. Guarisco, Sr. (84) 1982 36,526 9.59%
President of Guarisco
Enterprises, Inc., (holding
company for subsidiaries
engaged in diesel fuel
distribution, shell sales
and transport and real
estate); President of
Guarisco Evans Shopping
Center, Inc.
Wiley Magee (51) 1982 4,304 1.13%
Secretary to the Board
Bancshares and the Bank
President of Morgan City
Supply, Inc. (wholesale
and retail hardware)
Murray Ordogne (72) 1982 22,806 5.99%
Owner of Morgan City Motel,
Inc.
Lee A. Ringeman (65) 1989 1,931 (7) -
Executive Vice President
and Chief Financial Officer
of Bancshares and the Bank
All executive officers and
directors of Bancshares and the
Bank 145,356 38.16%
(1) Except as noted below, all shares of Bancshares' stock set
forth above constitute direct beneficial ownership by such
director with full voting and investment power. Except as
indicated above, no person owns more than five percent of the
outstanding shares of Bancshares' stock. The address of each
director is c/o Guaranty Bank & Trust Company of Morgan City,
Post Office Box 2208, Morgan City, Louisiana 70381.
(2) Includes aggregate of Class A Common stock and Class B Common
stock. Percent of class omitted where less than one percent.
(3) Includes 7,700 shares in the name of Bailey Estate.
(4) Includes 33,870 shares held by the Blakeman Trust over which
Mr. Blakeman shares voting powers.
(5) Includes 6,910 shares in the name of Cannata's Super Market,
Inc. over which Mr. Cannata shares voting and investment
power.
(6) Includes 60 shares in the name of Mr. Domino's wife.
(7) Includes 1,186 shares held jointly with Mrs. Ringeman and 32
shares held jointly with Mr. Ringeman's grandson.
None of the directors of Bancshares holds a directorship in
any company with a class of securities registered under Section 12
of the Securities Exchange Act of 1934, as amended, or subject to
the requirements of Section 15(d) of that Act or in any company
registered as an investment company under the Investment Company
Act of 1940, as amended.
Bank directors received compensation at the rate of $250 for
each regular directors meeting attended and a $1,500 fee for
serving as a director. No fees were paid for service on
Bancshares' Board or for serving on any committees.
No family relationships exist among the above named directors
or the executive officers of Bancshares or the Bank.
Each of the directors of Bancshares shall serve until the next
annual meeting of stockholders and until their successors are
elected and qualified. Each director has served continuously on
the Board of Directors since his election.
Board Committees
During 1994, the Board of Directors of Bancshares met eight
times. During 1994, the Board of Directors of the Bank met twelve
times. Each director attended at least 75% of the aggregate number
of meetings held.
The Board of Directors of the Bank has an Executive Committee,
the current members of which are Messrs. Bailey, Blakeman, Cullom,
Domino and Magee. The Executive Committee shall have and may
exercise all of the authority of the board of directors in the
management of the business and affairs of the Bank. However, this
committee does not have the authority of the board of directors in
reference to:
(a) amending the articles of incorporation;
(b) approving a plan of merger or consolidation;
(c) recommending to the shareholders the sale, lease, or
exchange of all or substantially all of the property and
assets of the Bank otherwise than in the usual and
regular course of its business;
(d) recommending to the shareholders a voluntary dissolution
of the Bank or a revocation thereof;
(e) amending, altering, or repealing these by-laws or
adopting new by-laws;
(f) filling vacancies in or removing members of the board of
directors or of any committee;
(g) electing or removing officers or committee members;
(h) fixing the compensation of any committee member; and
(i) altering or repealing any resolution of the board of
directors which by its terms provides that it shall not
be amendable or repealable.
The Executive Committee did not meet during 1994.
The Board of Directors of the Bank has an Audit Committee, the
current members of which are Messrs. Blakeman, Cannata, Domino,
Guarisco, and Ordogne, all of whom are outside directors. The
Audit Committee, which met one time during 1994, is responsible
for: (1) making recommendations to the Board of Directors
concerning the selection and retention of Bancshares' independent
auditors, (2) consulting with the Controller with regard to the
plan of audit, (3) consulting directly with the Controller on any
matter the Committee or the Controller deems appropriate in
connection with carrying out the audit, (4) reviewing the plan and
results of audits by its independent auditors and the Federal
Deposit Insurance Corporation and (5) discussing audit
recommendations with management and reporting the results of its
reviews to the Board of Directors. Each director attended the
meeting.
Neither Bancshares nor the Bank has a Nominating Committee.
Nominees for directors are selected by their Boards of Directors.
Neither company has procedures established to consider nominees
recommended by security holders.
Principal Shareholders
The persons named below were, to the knowledge of Bancshares,
the only persons as of March 10, 1995, who beneficially owned more
than 5% of the outstanding Guaranty Bancshares Holding Corporation
Class A and Class B Common stock. Beneficial ownership consists
of sole voting and investment power.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership (1) of Class
Brooks Blakeman 34,070 (2) 8.95%
Post Office Box 2208
Morgan City, Louisiana 70381
Vincent Cannata 22,343 (3) 5.87%
Post Office Box 2208
Morgan City, Louisiana 70381
Anthony J. Guarisco, Sr. 36,526 9.59%
Post Office Box 2208
Morgan city, Louisiana 70381
Murray Ordogne 22,806 5.99%
Post Office Box 2208
Morgan City, Louisiana 70381
(1) Determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934 based upon information furnished by the
persons listed or contained in filings made by them with the
Securities and Exchange Commission.
(2) Includes 33,870 shares held by the Blakeman Trust over which
Mr. Blakeman shares voting powers.
(3) Includes 6,910 shares in the name of Cannata's Super Market,
Inc. over which Mr. Cannata shares voting and investment
power.
Executive Officers
The executive officers of Bancshares and the Bank, as of March 10,
1995, are as follows:
Name Age Position Currently Held
Brooks Blakeman 48 Chairman of the Board of
Bancshares and the Bank
Randolph Cullom 57 President and Chief Executive
Officer of Bancshares and the
Bank
Wiley Magee 51 Secretary of the Board of
Bancshares and the Bank
Lee A. Ringeman 65 Executive Vice President and
Chief Financial Officer of
Bancshares and the Bank
Conley Dutreix 47 Executive Vice President of
the Bank and Assistant
Secretary of the Board of
Directors of Bancshares and
the Bank
Each executive officer has been an officer or director of
Bancshares and the Bank for five years or more.
Executive Compensation
Cash Compensation
The following table sets forth the aggregate cash compensation
paid by the Bank for services rendered in all capacities during the
fiscal years ended December 31, 1992, 1993 and 1994, with respect
to each executive officer whose total cash compensation exceeded
$100,000.
Active officers of Bancshares are also officers of the Bank
and receive no annual compensation from Bancshares.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and Other All
Principal Annual Other
Position Year Salary Bonus (1) Compensation(2) Compensation(3)
Randolph 1994 $90,000 $20,000 $ 4,250 $ 529
Cullom 1993 90,000 30,000 4,500 529
President 1992 90,000 30,000 3,000 150,283
and Chief
Executive
Officer of
Bancshares
and the Bank
(1) Mr. Cullom has an employment contract with the Bank whereby
his initial base annual salary is $90,000. In addition to the
annual salary, he is entitled to non-cumulative annual cash
bonuses of $5,000 when the annual after taxes return on assets
reaches one-fourth of one percent, $20,000 when the annual
after taxes return on assets reaches one-half of one percent
and $30,000 when the annual after taxes return on assets
reaches one percent. The bonus earned in 1993 was paid in 1994
and 1994 was paid in 1995. Also as part of his employment
agreement, in the event Mr. Cullom is terminated without good
cause, he shall be entitled to receive one year annual salary
as severance pay.
(2) Represents director fees.
(3) In addition to the cash bonuses above, Mr. Cullom was entitled
to receive additional cash bonuses of ten percent of any
principal reduction of Bancshares debt paid out of earnings
of the Bank or any principal reduction not paid out of Bank
earnings if such reduction is substantially contributed by his
initiative or effort. Accordingly, with the liquidation of
Bancshares corporate debt in 1992, Mr. Cullom was paid
$149,754.
In addition, the Bank paid approximately $529, in term life
insurance premiums on behalf of Mr. Cullom for each of the
years 1994, 1993 and 1992, respectively. This group policy
has no cash surrender value.
The Bank has instituted an unqualified defined benefit
retirement program for three of its executive officers, as follows:
Name and Annual Planned
Principal Pre-Retirement Retirement Retirement
Position Death Benefit(1) Benefit(2) Date - Age
Randolph Cullom $487,250 $50,000 2002 - 65
President and
Chief Executive
Officer
Lee A. Ringeman 292,350 30,000 2000 - 70
Executive Vice
President
Conley J. Dutreix 292,350 50,000 2012 - 65
Executive Vice
President
(1) Benefits payable to the participant's named beneficiaries.
(2) Benefits payable monthly for life, 15 years certain.
These benefits are funded by single premium life insurance
policies on the lives of the participants. The policies are owned
by the Bank and the proceeds from death benefits are payable to the
Bank. Projected December 31, 1995 death benefits are as follows:
Mr. Cullom - $835,000, Mr. Ringeman - $317,000, and Mr. Dutreix -
$377,000.
If the Bank terminates a participant's employment prior to his
planned retirement date for cause, the participant shall not be
entitled to any benefits. If employment is terminated prior to his
planned retirement date, other than by death or discharge for
cause, the Bank shall pay to the participant an amount which is the
actuarial equivalent of his annual retirement benefit, computed in
accordance with the agreement.
If a participant's employment is terminated within twenty four
(24) months following a change in control of the Bank, the
participant will be entitled to the benefits set forth in the
preceding paragraph with the respective benefits being increased
in amount by fifty (50%) percent.
Bancshares and the Bank have no established policy or practice
with respect to providing personal benefits to officers, directors
or principal stockholders. Although the Bank pays for civic and
social club memberships for certain officers, the aggregate annual
value per person of such benefits is considerably less than $2,500.
Neither Bancshares nor the Bank has any other remuneration,
pension or retirement plans in effect. The Bank provides health
and life insurance coverage for all employees.
Other Transactions
During 1994, the Bank engaged in banking transactions in the
ordinary course of business with directors and officers of
Bancshares and the Bank, and their associates, and expects to have
such transactions in the future. In the opinion of Management, all
such transactions were on substantially the same terms, including
interest rates and collateral on loans, as those prevailing at the
same time for comparable transactions with others and did not
involve more than normal risk of collectibility or present other
unfavorable features.
FINANCIAL STATEMENTS
The consolidated financial statements for the year ended
December 31, 1994, are incorporated herein by reference. A copy
of such Annual Report is being mailed with this Proxy Statement to
each shareholder of record on the record date for the annual
meeting.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Bancshares' consolidated financial statements for the year
ended December 31, 1994, were audited by the firm of Darnall,
Sikes, Kolder, Frederick & Rainey. Under the resolution appointing
Darnall, Sikes, Kolder, Frederick & Rainey to audit Bancshares'
financial statements, such firm will remain as Bancshares' auditors
until replaced by the Board of Directors. Representatives of
Darnall, Sikes, Kolder, Frederick & Rainey are expected to be
present at the annual meeting, with the opportunity to make any
statement they desire at that time, and will be available to
respond to appropriate questions.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority of the
outstanding shares of Common stock of Bancshares is necessary to
constitute a quorum. If a quorum is present, the vote of a
majority of the shares present or represented by proxy will decide
all questions properly brought before the meeting, except that
directors will be elected by plurality vote.
All proxies received in the form enclosed will be voted as
specified, and, in the absence of instructions to the contrary,
will be voted for the election of the nominees named above.
Bancshares does not know of any matters to be presented at the
annual meeting other than those mentioned above. However, if any
other matters properly come before the meeting or any adjournments
thereof, it is the intention of the persons named in the enclosed
proxy to vote the shares represented by them in accordance with
their best judgment.
Shareholder Proposals
Shareholders who desire to present a proposal qualified for
inclusion in the proxy material relating to the 1996 Annual Meeting
of Guaranty Bancshares Holding Corporation must forward such
proposals to the Secretary
of Bancshares at the address listed on the first page of this proxy
statement in time to arrive prior to December 10, 1995, unless
Bancshares notifies the stockholders otherwise. Only those
proposals that are proper for stockholder action and otherwise
proper may be included in Bancshares' proxy statement.
THE ATTACHED PROXY IS SOLICITED BY MANAGEMENT.
BY ORDER OF THE BOARD OF DIRECTORS
Wiley Magee
Corporate Secretary
April 1, 1995
To the Board of Directors and Stockholders
of Guaranty Bancshares Holding Corporation
Morgan City, Louisiana
We consent to the inclusion of our report dated January 13, 1995, with
respect to the consolidated balance sheets as of December 31, 1994 and
1993, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for the years ended December 31, 19
1993,and 1992, which report appears in the 1994 Annual Report of Guarant
Bancshares Holding Corporation.
Darnall, Sikes, Kolder, Frederick & Rainey
Lafayette, Louisiana
March 17, 1995
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