SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934.
For Quarter Ended SEPTEMBER 30, 1996 Commission File Number 0-10929
GUARANTY BANCSHARES HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA 72-0933277
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 2208, MORGAN CITY, LOUISIANA 70381
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 504-384-2813
NOT APPLICABLE
(Former name, former address and former fiscal year
if changed since last report.)
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 .
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $5 par value, 206,124 shares outstanding as of
September 30, 1996.
Common Stock, no par value, 166,901 shares outstanding as of
September 30, 1996.
I N D E X
PART I - Financial Information
Financial Statements
Consolidated Statement of Condition
September 30, 1996, and December 31, 1995 3
Consolidated Statement of Income -
Quarters Ended September 30, 1996, and 1995 4
Consolidated Statement of Cash Flows -
Quarters Ended September 30, 1996 and 1995 5
Consolidated Statement of Changes in
Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Signature 15
Exhibit Index 17
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CONDITION
September December
30, 1996 31, 1995
(in thousands)
(Unaudited)
ASSETS
Cash and due from banks $ 2,443 $ 3,230
Investment securities available for sale 5,140 5,197
Investment securities held to maturity
(Estimated market value $14,920,000 and 14,916 10,964
$10,980,000, respectively)
Federal funds sold 2,700 3,325
Loans 37,272 34,547
Less: Allowance for loan losses 510 505
Net Loans 36,762 34,042
Premises and equipment 2,032 2,083
Other real estate 0 65
Other assets 1,454 1,339
Total Assets $65,447 $60,245
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $55,770 $50,770
Obligation under capital lease 1,570 1,632
Notes payable 1,532 1,681
Other liabilities 710 500
Total Liabilities 59,582 54,583
Commitments and contingent liabilities (Note 2) - -
Stockholders' Equity
$2.70 Cumulative Preferred stock; 145,001
shares authorized, issued and outstanding 3,481 3,481
$.50 Cumulative Preferred stock, 64,999 shares
authorized, 21,900 issued and outstanding 107 107
Class A Common stock; $5 par value; 210,000
shares authorized and outstanding 1,050 1,050
Class B Common stock; no par value; 210,000
shares authorized, 170,877 issued and
outstanding 17 17
Capital surplus 2,039 2,039
Accumulated deficit (816) (1,023)
Treasury Stock (16) (16)
Unrealized gain on securities
available for sale 3 7
Total Stockholders' Equity 5,865 5,662
Total Liabilities and Stockholders' Equity $65,447 $60,245
======= =======
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED
SEPTEMBER 30
1996 1995
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
(UNAUDITED)
INTEREST INCOME
Interest and fees on loans $ 877 $ 866
Interest on federal funds sold 82 48
Interest on investment securities:
Taxable income 204 233
Non-Taxable income 9 5
Total Interest Income 1,172 1,152
INTEREST EXPENSE
Interest on deposits 455 437
Interest on capital lease 39 42
Interest on note payable 27 30
Total Interest Expense 521 509
Net Interest Income 651 643
Provision (recovery) from reserve
for loan losses 0 (100)
Net Interest Income after Provision (recovery)
from reserve for loan losses 651 743
Other operating income 68 79
Operating expenses 630 569
Income before income tax expense 89 253
Income tax expense 45 88
Net income 44 165
Dividends required for preferred stock (100) (101)
Net income (loss) available for common
stockholders $ (56) $ 64
======= =======
Earnings (loss) per common share $(.15) $ .17
Weighted average common shares ======= =======
outstanding 373,025 373,025
======= =======
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED
SEPTEMBER 30
1996 1995
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
(UNAUDITED)
INTEREST INCOME
Interest and fees on loans $2,578 $2,588
Interest on federal funds sold 223 109
Interest on investment securities:
Taxable income 614 713
Non-Taxable income 28 15
Total Interest Income 3,443 3,425
INTEREST EXPENSE
Interest on deposits 1,277 1,261
Interest on capital lease 120 127
Interest on note payable 83 92
Total Interest Expense 1,480 1,480
Net Interest Income 1,963 1,945
Provision (recovery) from reserve
for loan losses 0 (100)
Net Interest Income after Provision (recovery)
from reserve for loan losses 1,963 2,045
Other operating income 216 271
Operating expenses 1,837 1,733
Income before income tax expense 342 583
Income tax expense 135 206
Net income 207 377
Dividends required for preferred stock (302) (302)
Net income (loss) available for common
stockholders $ (95) $ 75
===== =====
Earnings (loss) per common share $(.25) $ .20
Weighted average common shares ======= =======
outstanding 373,025 373,925
======= =======
GUARANTY BANCSHARES HOLDING CORPORATION
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
NINE MONTHS ENDED
SEPTEMBER 30
1996 1995
(IN THOUSANDS)
(UNAUDITED)
Cash flows from operating activities:
Net income $ 207 $ 288
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of premium (accretion of discount
on investments), net (148) (184)
Recovery from Reserve for Loan Losses - (100)
Net loss (gain) on sale of other real estate owned 14 (39)
Gain on sale of fixed assets - (9)
Depreciation and amortization 214 215
(Increase) decrease in accrued interest receivable (36) (59)
Increase in accrued interest payable 51 11
Increase (decrease) in accounts payable
and other liabilities 160 99
Net cash provided by operating activities 462 222
Cash flows from investing activities:
(Increase)decrease in federal funds sold 625 240
Proceeds from maturities of investment securities 20,408 13,182
Purchase of investment securities (24,161) (12,673)
Net(increase)decrease in loans (2,720) (542)
Proceeds from sale of other real estate owned 51 167
Proceeds from sale of premises and equipment - 32
Purchase of premises and equipment (163) (178)
Change in other assets (78) 128
Net cash provided (used) by investing activities (6,038) 356
Cash flows from financing activities:
Net increase (decrease) in demand deposits
NOW, savings, and certificates of deposit 5,000 (1,332)
Increase (decrease) of notes payable (149) (124)
Repayments of capital lease obligation (62) (69)
Net cash provided used in financing activities 4,789 (1,525)
Net increase (decrease) in cash and due from banks (787) (947)
Cash and due from banks, beginning of year 3,230 3,436
Cash and due from banks, end of quarter $2,443 $2,489
====== ======
Supplemental cash flow information:
Interest paid $1,432 $1,472
====== ======
Income taxes paid $ 163 $ 2
====== ======
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS
EQUITY
Unrealized
Gain(Loss)
on Securities
Balance at Available Balance at
Jan.1, 1996 Net Income For Sale Sept. 30,1996
$2.70
Preferred
Stock $ 3,481 - - 3,481
$.50
Preferred
Stock $ 107 - - 107
Class A
Common
Stock $ 1,050 - - 1,050
Class B
Common
Stock $ 17 - - 17
Capital
Surplus $ 2,039 - - 2,039
Accumulated
Deficit $ (1,023) 207 - (816)
Treasury
Stock $ (16) - - (16)
Unrealized
loss on
securities
available
for sale $ 7 - (4) 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The information furnished reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of
results for the nine (9) months ended September 30, 1996 and 1995.
All adjustments are considered to be of a recurring nature. Results
for the interim period may not necessarily be indicative of results
for the entire year.
NOTE 1:
On January 13, 1983, pursuant to a Reorganization and Merger
Agreement, Guaranty Bank & Trust Company of Morgan City (the Bank)
was merged into a subsidiary of Guaranty Bancshares Holding
Corporation (Bancshares) with the effect that the Bank became a
wholly owned subsidiary of Bancshares.
Bancshares has outstanding $2.70 Cumulative Preferred Stock
and Class B, No Par Value Common Stock which were issued in 1988 in
exchange for subordinated debentures issued in 1983 when the
company was formed. Bancshares also has outstanding Class A, $5.00
Par Value, Common Stock which were also issued when the company was
formed. The $.50 Cumulative Preferred Stock is subordinate to the
$2.70 Preferred Stock and were issued for cash in 1989 and 1990.
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.
The company has acquired, through foreclosure, 3,976 shares of
$2.70 preferred stock, 3,876 shares of Class A, $5.00 par value
common stock and 3,976 shares of Class B, no par value common
stock. The preferred shares were canceled and reverted to
authorized but unissued $.50 preferred stock. The common shares
are held as treasury stock at a total value of $16,000. (See
Capital Resources)
NOTE 2: Contingent Liabilities
As of September 30, 1996, there were $815,600 of letters of credit
outstanding which are not reflected in the consolidated financial
statements. Management does not expect any loss as a result of
these transactions.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary
For the nine months ended September 30 1996, Bancshares earned
$207,000, compared with earnings of $377,000 for the comparable
period in 1995. The primary reasons for the decrease in earnings
was a $55,000 decrease in non-interest income, no recovery from the
Reserve for Loan Losses and a $104,000 increase in operating expenses.
Changes in financial position at September 30, 1996, from December
31, 1995 were as follows:
NET NET
INCREASES DECREASES
Investments $3,895,000 $ -
Federal Funds sold - 625,000
Gross Loans 2,725,000 -
Deposits 5,000,000 -
Notes Payable - 149,000
Total Assets 5,202,000 -
New credit income is the most significant component of
financial operations and is affected by interacting forces,
including changes in investment market interest rates and changes
in volume and mix of interest earning assets and interest bearing
deposits. For the first nine months of 1996, net interest income as
a percent of net average earning assets of $56,467,000 was 4.63
percent, down from 4.83 percent in 1995. The decrease is attributable
primarily to a net lower yields on loans.
Net Operating Results
The following analysis should be read in conjunction with the
accompanying financial statements.
Interest income increased a net of only $18,000. Of this
amount, interest on federal funds sold increased $114,000. Interest
on investments decreased $86,000. Interest on deposits increased
$16,000 while interest on the capital lease decreased $7,000.
Interest on the notes payable decreased $9,000.
The change in loan income is attributable to an increase
in average loan volume and a decrease in loan yields. Average
yields on loans were 9.4 percent in 1996 and 9.9 percent in 1995.
Average loans outstanding increased from $35,263,000 in 1995 to
$36,485,000. The increase in income from federal funds sold is the
net result of a $3,099,000 increase in average funds invested and a
0.5 percent decrease in average yields. Average securities invest-
ments decreased $1,508,000 while average yields decreased 0.2 percent
from 1995 levels.
Interest expense did not change from 1995 levels. Average
interest bearing deposits increased $736,000, while average rates
paid remained at 3.9 percent for 1995 and 1996.
Interest in the capital lease decreased $7,000 and interest on
borrowed funds decreased $9,000. The subsidiary bank has borrowed
funds from the Federal Home Loan Bank of Dallas to fund commercial
real estate loans which have comparable scheduled amortizations and
maturities.
Investment Securities
Investment securities increased from $16,359,000 as of September
30, 1995 to $20,056,000 at September 30, 1996. This is primarily
attributable to net purchases of U.S. Treasury and U.S. Government
agency securities and by scheduled amortization on mortgage backed
securities. There were no securities sales during the first nine
months of 1996.
Amortized Unrealized Market
Cost Gain Loss Value
September 30, 1996
Held to Maturity
U. S. Treasury Securities $ 251 $ - $ - $ 251
Obligations of U.S.
Agencies and Corporations 13,987 5 10 13,982
Obligations of states and
political subdivisions 666 10 1 675
Other Investments 12 - - 12
Total $14,916 $ 15 $ 11 $14,920
======= ==== ===== =======
Available for Sale
Obligations of U.S.
Agencies and Corporations $ 4,627 $ 11 $ 6 $ 4,632
Other investments 508 - - 508
Total $ 5,135 $ 11 $ 6 $ 5,140
======= ==== ==== =======
December 31, 1995
Held to Maturity
U. S. Treasury Securities $ 1,997 $ 2 $ - $ 1,999
Obligations of U.S.
Agencies and Corporations 8,255 8 11 8,252
Obligations of states and
political subdivisions 692 17 - 709
Other Investments 20 - - 20
Total $10,964 $ 27 $ 11 $10,980
======= ===== ==== =======
Available for Sale
Obligations of U.S.
Agencies and Corporations $ 4,693 $ 14 $ 3 $ 4,704
Other investments 493 - - 493
Total $ 5,186 $ 14 $ 3 $ 5,197
======= ====== ==== =======
September 30, 1995
Held to Maturity
U. S. Treasury Securities $ 4,973 $ 7 $ - $ 4,980
Obligations of U.S.
Agencies and Corporations 5,789 7 34 5,762
Obligations of states and
political subdivisions 362 9 - 371
Other Investments 22 - - 22
Total $11,146 $ 23 $ 34 $11,135
======= ====== ==== =======
Available for Sale
Obligations of U.S.
Agencies and Corporations $ 4,715 $ 11 $ - $ 4,726
Other investments 487 - - 487
Total $ 5,202 $ 11 $ - $ 5,213
======= ====== ==== =======
A comparison of the amortized cost and market values of the investment
portfolio by maturity periods at September 30, 1996 follows (in
thousands):
Amortized Market
Cost Value
Within one year $ 14,053 $ 14,051
One to five years 4,363 4,372
Five to ten years 406 413
After ten years 1,229 1,224
Total $ 20,051 $ 20,060
========= =======
Maturities of mortgage backed securities are classified by
contractual (stated) maturity dates. Expected maturities will
differ from contractual maturities because borrowers have the
right to call or prepay obligations.
Investment securities with a carrying value of approximately
$9,086,000, $6,882,000, and $6,978,000 at September 30, 1996,
December 31, 1995 and September 30, 1995, respectively, were pledged
to secure public deposits as required by law.
Deposits
A summary of the deposits as of September 30, 1996, December 31,
and September 30, 1995 is as follows:
Sept. 30 Dec. 31 Sept. 30
1996 1995 1995
(in thousands)
Demand Deposits $ 8,771 $ 8,419 $ 8,614
NOW Accounts 6,415 5,405 4,775
Money Market
Investment Accts. 8,131 6,842 5,556
Savings Deposits 6,821 7,148 6,874
Other Time Deposits 19,148 17,330 18,247
Certificates of Dep.
of $100,000 or
more 6,484 5,626 6,100
$55,770 $50,770 $50,166
======= ======= =======
Non-interest bearing demand deposits at September 30, 1996
increased $157,000 from September 30, 1995. As interest rates paid
on savings accounts and money market investment accounts remained
relatively low, depositors transferred funds to higher yielding
certificates of deposits which had become more competitive with
non-bank related institutions. Certificates of deposits of $100,000
or more to commercial entities increased $905,000. During this
period, public fund deposits in certificates of deposit of $100,000
or more decreased $521,000 as these municipalities used accumulated
funds on capital projects and transferred funds to more readily
available money market accounts.
The Bank has insignificant foreign and no brokered deposits.
Short Term Borrowings
The Bank had no significant short term borrowings in 1996 and
none in 1995.
Allowance for Loan Losses and Non-Performing Loans and Other Real
Estate
The allowance for loan losses was 1.37 percent of loans
outstanding at September 30, 1996, compared with 1.46 percent at
December 31, 1995 and 1.41 percent at September 30, 1995. The Bank
recorded recoveries from the Reserve for Loan Losses of $100,000
during 1995.
1996 1995
Balance at January 1, $505,000 $ 502,000
(Recovery) Provision for loan losses - (100,000)
Recoveries credited to the allowance 7,000 109,000
512,000 511,000
Losses charged to the allowance 2,000 14,000
Balance at June 30 $510,000 $497,000
======== ========
The following schedule shows non-performing loans on non-accrual
status and repossessed and foreclosed real estate.
Sept. 30 Dec. 31 Sept. 30
1996 1995 1995
Non-accrual loans $ 230,000 $ 84,000 $ -0-
Foreclosed real estate -0- 65,000 64,000
Foreclosed Property -0- -0- 3,000
Management believes the Bank has adequate reserves to provide
for possible future loan losses.
Other Income
Other operating income aggregated to $216,000 for the first
nine months of 1996 compared with $271,000 in 1995. There was no
trading account activity in 1996 or 1995.
Nine Months Ending
September 30
1996 1995
Service charges on deposit accounts $139,000 $154,000
Other service charges and fees 48,000 42,000
Other operating income 29,000 75,000
Total $216,000 $271,000
======== ========
1995 other operating income included a $39,000 gain on sale
of repossessed real estate.
Operating Expenses
Other operating expenses totaled $1,837,000 for the first nine
months of 1996, compared with $1,733,000 for 1995, a $104,000
increase.
Personnel expenses totaled $799,000 for the period, compared
with $780,000 in 1995. In 1996, expenses related to other real
estate and repossessed property, net of rental income on these
properties, totaled to $16,000. These expenses, represented
taxes, maintenance and insurance. FDIC and other insurance expenses
were favorably affected by a reduction of FDIC assessments.
A summary of other operating expenses is as follows:
Nine Months 1996
Ending Over
Sept. 30, (Under)
1996 1995 1995
(In Thousands)
Salaries and benefits $ 799 $ 780 $ 19
Expenses related to other real
estate and repossessed
properties, net of rental
income on these properties 16 8 8
Net occupancy expenses 312 322 (10)
Equipment and computer expenses 142 157 (15)
Professional fees and services 231 91 140
FDIC and other insurance 28 77 (49)
Other 309 298 11
$1,837 $1,733 $ 104
====== ===== =====
Professional fees and services increases in 1996 are attributable
to an abandoned stock exchange offer and related legal expenses.
Income Taxes
Income taxes were accrued at the U. S. federal tax rate.
Liquidity
The term "liquidity" generally refers to the ability of a
company to generate adequate amount of cash to meet its needs. For
a bank, "liquidity" represents its ability to meet timely the
demand for funds used to honor checks, to pay maturing time
deposits, to fund increases in loan demand and to satisfy other
commitments. Unless it borrows funds, a bank's source of funds are
generally its core deposits and its retained earnings.
At September 30, 1996 and 1995, the Bank's gross loans-to-
deposits ratios were 66.8 percent and 70.4 percent, respectively.
Loans increased $1,960,000 from 1995 levels. Significant to the
loan-to-deposit ratio computation, deposits increased $5,603,000
as of September 30, 1996 from 1995. The Bank has no brokered
deposits.
Capital Resources
At September 30, 1996, stockholders' equity amounted to
$5,865,000 compared with $5,562,000 at September 30, 1995 and
$5,662,000 at December 31, 1995.
Bancshares has paid only one $2.70 and one 67.5 cents dividend
on its $2.70 preferred stock and has not declared or paid dividends
on its $.50 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 September 30, 1996 $2,728,000
$.50 Preferred Stock, dividends accumulated
from January 13, 1990 through September 30, 1996 77,000
$2,805,000
==========
SIGNATURES
Pursuant to the requirements 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.
/s/Lee A. Ringeman
Lee A. Ringeman
Executive Vice President
Chief Financial Officer
DATE: October 27, 1996
SIGNATURES
Pursuant to the requirements 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.
____________________
Lee A. Ringeman
Executive Vice President
Chief Financial Officer
DATE: October 27, 1996
PART II
Item 6: Exhibits and Reports on Form 8-K
a. Exhibit No. 11. Computation of Earnings Per
Common Share
b. The Registrant has not filed any Reports on Form
8-K during the third quarter of 1996.
Exhibit No. 11 Computation of Earnings Per Common Share
NINE MONTHS ENDED
SEPTEMBER 30, 1996
Net loss attributable
to common shareholders $ 95,000
Average common shares outstanding 373,025
Loss per common share $ 0.25
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