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, 1996
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, 1997
Class B Common Stock, No Par Value, 170,877 shares outstanding as of
March 10, 1997
Documents Incorporated by Reference
Annual Report to Shareholders for the
Year Ended December 31, 1996 Parts I, II and 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 6.5 percent of
the Bank's total deposits at December 31, 1996 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 20.2
percent of the loans are in the oil field services and maritime support
and transportation industries and 25.8 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 35,000.
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 five banks
and three savings and loan institutions located in East St. Mary Parish.
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, 1997 the Bank had 31 full-time
employees and 1 part-time employee. 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 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 1996 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
1996 1995 1994
Hold to Maturity
U.S. Treasury $ 250 $ 1,997 $ 3,156
U.S. Agencies and
Corporations 11,898 8,255 5,943
States and Political
Subdivisions 661 692 366
Other Investments 9 20 29
------- ------- -------
$12,818 $10,964 $ 9,494
======= ======= =======
Available for Sale
U.S. Treasury $ - $ - $ 1,499
U.S. Agencies and
Corporations 4,134 4,704 5,219
Federal Home Loan
Bank Stock, Restricted 364 343 322
Other Investments 150 150 150
------- ------- -------
$ 4,648 $ 5,197 $ 7,190
======= ======= =======
Carrying values, maturities and average yields of securities held are
as follows (in thousands of dollars):
December 31, 1996
Amortized Average Market
Cost Yield Value
Hold to Maturity
U.S. Treasury
Due within one year $ 251 5.6% $ 251
------- ---- -------
U.S. Agencies and
Corporations
Due within one year 8,695 5.3 8,698
One to five years 3,083 6.6 3,080
Five to ten years 26 9.0 27
After ten years 93 7.9 94
------- -------
11,897 5.7 11,899
------- ---- -------
States and Political
Subdivisions
Due within one year 30 5.6 30
One to five years 303 5.6 309
Five to ten years 328 5.7 334
------- -------
661 5.6 673
------- ---- -------
Other Investments
One to five years 9 18.0 9
------- -------
$12,818 5.6% $12,832
======= ===== =======
Available for Sale
U.S. Agencies and
Corporations
Due within one year $ 2,500 5.8 2,519
One to five years 1,001 5.6 1,008
Over ten years 608 6.4 607
------- -------
4,109 5.8 4,134
------- ---- -------
Other Investments
Federal Home Loan
Bank Stock $ 364 6.0 $ 364
Other Investments 150 - 150
------- ---- -------
514 4.2 514
------- ---- -------
$ 4,623 5.6% $ 4,648
======= ==== =======
December 31, 1995
Held to Maturity
U. S. Treasury
Due within one year $ 1,997 4.7% $ 1,999
------- ---- -------
U. S. Agencies and
Corporations
Due within one year 4,968 5.6 4,959
One to five years 3,072 5.3 3,070
Five to ten years 92 10.9 97
After ten years 123 8.0 126
------- -------
8,255 5.6 8,252
------- ---- -------
States and Political
Subdivisions
Due within one year 31 5.7 31
One to five years 250 5.6 257
Five to ten years 411 5.7 421
------- -------
692 5.7 709
------- ---- -------
Other investments
One to five years 20 18.0 20
------- ---- -------
$10,964 5.7% $10,980
======= ===== =======
Available for Sale
U.S. Agencies and
Corporations
Due within one year $ 500 4.1 $ 499
One to five years 3,505 6.0 3,515
Over ten years 688 6.7 690
------- -------
4,693 5.9 4,704
------- ---- -------
Other Investments
Federal Home Loan
Bank Stock 343 6.2 343
Other Investments 150 - 150
------- ---- -------
493 4.3 493
------- ---- -------
$ 5,186 5.7% $ 5,197
======= ==== =======
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
1996 1995 1994
---- ---- ----
Commercial, financial
and agricultural $26,659 $24,166 $ 24,652
Real estate:
Construction 2,081 2,594 3,070
Mortgage 2,850 2,189 3,066
Installment 6,562 5,603 4,022
------ ------ ------
38,152 34,552 34,810
Less unearned income 10 6 35
------ ------ ------
$38,142 $34,546 $34,775
====== ====== ======
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, 1996, excluding those on non-accrual status. In thousands of
dollars:
Fixed rate loans with remaining maturity of:
Three months or less $ 3,502
Over Three months through twelve months 3,549
Over one year through five years 13,977
Over five years 3,863
-------
Total fixed rate loans 24,891
-------
Floating rate loans with a repricing frequency of:
Quarterly or more frequently 10,707
Annually or more frequently, but less
frequently than quarterly 1,148
Every five years or more frequently,
but less frequently than annually 866
Less frequently than every five years 395
-------
Total floating rate loans 13,116
-------
Total loans $38,007
=======
C. Risk Elements
The following table sets forth the nonaccrual, past due and
restructured loans.
December 31
1996 1995 1994
(in thousands)
Interest accruing loans past due
90 days or more:
Commercial, financial and
agricultural $ 0 $ 0 $ 15
Loans secured primarily
by real estate mortgages 0 0 152
Installment 0 0 1
---- ---- ----
$ 0 $ 0 $ 168
==== ==== ====
Nonaccrual loans $ 145 $ 84 $ 30
==== ==== ====
At year end 1996, the loan portfolio contained no 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.
During the years ended December 31, 1996 and December 31, 1995, the
Bank recognized approximately $2,000 and $4,000, respectively in interest
income realted to these loans. No interest income was recognized in 1994.
Had all the non-performing loans during the years been accruing interest
at their contracted rates, approximately $13,000, $4,000 and $3,000 of
additional interest income would have been recognized for 1996, 1995,
and 1994, respectively.
Potential Problem Loans
As of December 31, 1996, the subsidiary bank identified no 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.
No significant losses are anticipated in outstanding extensions of credit.
At December 31, 1996, there were no loans classified as past due 90 days
or more and on which interest was being accrued.
The following identifies the loan which is accounted for on a
nonaccrual basis as of December 31, 1996 (in thousands):
Nonaccrual Loans:
Commercial Real Estate $145
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 in those industries 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, 1996, by major industry classifications (in thousands):
Oil and gas $3,629 9.5%
Construction - contractors 2,569 6.7
Manufacturing:
Wood products 585 1.5
Book Binding 242 .6
Other 55 .2
----- ----
882 2.3
Transportation:
Maritime 2,454 6.4
Transportation and Warehousing 1,611 4.2
Sanitary Services 350 .9
Wholesale and retail trade 3,700 9.7
Real estate 9,838 25.8
Services:
Insurance and Legal 97 .3
Hotel and Motel 1,610 4.2
Health and Beauty 1,298 3.4
Automotive Repair and Services 786 2.1
Miscellaneous repair 1,463 3.8
Membership and religious organizations 100 .3
----- ----
5,354 14.1
Private households 7,765 20.4
------ -----
Total $38,152 100.0%
====== =====
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
1996 1995 1994
---- ---- ----
(in thousands of dollars)
Total loans outstanding at
December 31, net of unearned
income $38,142 $34,546 $34,775
Daily average amount of loans
outstanding, net of unearned
income $36,715 $35,112 $34,148
Balance of the allowance for loan
losses at beginning of year $ 504 $ 502 $ 621
Loans charged off:
Commercial, financial and
agricultural - - -
Real estate - 4 29
Installment and credit card 8 14 6
----- ----- -----
Total charge-offs 8 18 35
Recoveries of loans previously
charged off:
Commercial, financial and
agricultural 2 17 17
Real estate 3 89 72
Installment and credit card 5 14 7
---- ---- ----
Total recoveries 10 120 96
---- ---- ----
Net charge-offs
(recoveries) (2) (102) (61)
---- ---- ----
Additions (credits) to the
allowance charged to expense - (100) (180)
------ ------ -----
Balance of the allowance for loan
losses at end of year $ 506 $ 504 $ 502
====== ====== =====
Ratios:
Net charge-offs (recoveries) during
year to average
loans outstanding (0.01)% (0.29)% (0.18)%
Net charge-offs (recoveries) to loans
at end of year (0.01)% (0.30)% (0.18)%
Year ended December 31
1996 1995 1994
---- ---- ----
(in thousands of dollars)
Allowance for loan losses to
average loans 1.38 1.44 1.47
Allowance for loan losses to loans
at year end 1.33 1.46 1.44
Net charge-offs (recoveries)
to allowance for loan losses
at end of year (0.4) (20.2) (12.2)
Net charge-offs to provision for
loan losses N/A N/A N/A
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
1996 1995 1994
---- ---- ----
(dollars in thousands)
Commercial, financial
and agricultural $ 392 69.9% $ 423 83.9% $ 258 51.4%
Real estate
Construction 16 5.4 15 3.0 23 4.6
Mortgage 65 7.5 15 3.0 122 24.3
Installment 33 17.2 51 10.1 99 19.7
---- ----- ---- ----- ---- -----
$ 506 100.0% $ 504 100.0% $ 502 100.0%
==== ===== ==== ===== ==== =====
V. DEPOSITS
The daily average amounts of deposits for the years ended are
summarized below:
December 31
1996 1995 1994
---- ---- ----
(in thousands of dollars)
Demand deposits (non-interest bearing) $ 9,166 $ 7,806 $ 8,115
Savings deposits 6,760 7,133 7,961
NOW accounts 6,065 4,852 4,603
Money market accounts 6,649 5,379 4,587
Other time deposits 24,475 24,887 23,073
------ ------ ------
$53,115 $50,057 $48,339
====== ====== ======
Remaining maturities of time deposits of $100,000 or more at
December 31, 1996, are summarized as follows (in thousands of
dollars):
AFTER AFTER
THREE SIX
BUT BUT
WITHIN WITHIN WITHIN AFTER
THREE SIX TWELVE TWELVE
MONTHS MONTHS MONTHS MONTHS TOTAL
Certificates of
Deposit $2,955 $1,072 $1,829 $ 550 $6,406
Other time deposits 123 -0- 658 -0- 781
----- ----- ----- ----- -----
$3,078 $1,072 $2,487 $ 550 $7,187
===== ===== ===== ===== =====
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
1996 1995 1994
---- ---- ----
Return on assets .45% .80% 089%
Return on equity 4.91 8.79 10.16
Dividend payout ratio -0- -0- -0-
Equity to assets ratio 9.24 9.13 8.79
Ratio of earnings to fixed charges 499.08 701.63 953.76
VII. SHORT-TERM BORROWING
The following table summarized short-term borrowing:
1996 1995 1994
---- ---- ----
(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 - - -
Average amount outstanding during
each year 1 - -
Weighted average interest rate 5.0% - -
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
The 1996 annual meeting of stockholders was held on October 17, 1996.
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 11, 1997.
Bancshares declared a $2.70 dividend on its $2.70 cumulative
preferred stock, payable January 24, 1997. 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 223,981, or 59 percent of the 380,877 voting
shares outstanding as of March 11, 1997.
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 15-44, in the Annual Report to
Shareholders, are incorporated herein by reference.
Consolidated Statements of Condition - December 31, 1996
and 1995
Consolidated Statements of Income - Years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders'
Equity - Years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended
December 31, 1996, 1995 and 1994
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, 1996
reported on Form 8-K.
Part III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth certain information as of March 11, 1997,
concerning the directors 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 person 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 persons listed
are also members of the Board of Directors of Bancshares' wholly owned
subsidiary, Guaranty Bank & Trust Company of Morgan City (the "Bank").
Name, Age, and Principal Occupation: Virgil Allen (43), Engineer/Safety
Director, Athena Construction.
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 5,478 (4)
Percent of Class of Common Shares: 1.47%
Name, Age, and Principal Occupation: H.W. Bailey (74), Retired since
1/1/83; Executive Vice President and Chief Administrative Officer of
McDermott, Inc. (offshore construction).
Year First Became Director of Bancshares: 1982
Common Shares Beneficially Owned: 17,666 (5)
Percent of Class of Common Shares: 4.73%
Name, Age, and Principal Occupation: Brooks Blakeman (50), Chairman of
the Board of Bancshares and the Bank; Vice President and General Manager
of Frank's Casing Crews, Inc. (oilfield services).
Year First Became Director of Bancshares: 1988
Common Shares Beneficially Owned: 34,070 (6)
Percent of Class of Common Shares: 9.12%
Name, Age, and Principal Occupation: Vincent A. Cannata (35), President of
Cannata's Super Market, Inc. and Cannata Corporation.
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 7,110 (7)
Percent of Class of Common Shares: 1.90%
Name, Age, and Principal Occupation: Randolph Cullom (59), President and
Chief Executive Officer of Bancshares and the Bank.
Year First Became Director of Bancshares: 1990
Common Shares Beneficially Owned: 200
Percent of Class of Common Shares: -
Name, Age, and Principal Occupation: Frank J. Domino, Sr. (77), President
of Frank's Motor, Inc. (auto sales); Secretary and Treasurer of Domino
Developers, Inc. (home construction).
Year First Became Director of Bancshares: 1982
Common Shares Beneficially Owned: 5,280 (8)
Percent of Class of Common Shares: 1.41%
Name, Age, and Principal Occupation: Anthony Guarisco, Jr. (58), Attorney,
Principal of Dispute Resolution Associates (legal mediation firm), former
Louisiana State Senator.
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 200
Percent of Class of Common Shares: -
Name, Age, and Principal Occupation: Anthony Guarisco, Sr. (86), President
of Guarisco Enterprises, Inc. (holding company for subsidiaries engaged in
diesel fuel distribution, shell sales and transport; and real estate).
Year First Became Director of Bancshares: 1982
Common Shares Beneficially Owned: 37,342
Percent of Class of Common Shares: 10.00%
Name, Age, and Principal Occupation: Wiley Magee (53), Secretary to the
Board of Bancshares and the Bank; President of Morgan City Supply, Inc.
(wholesale and retail hardware).
Year First Became Director of Bancshares: 1982
Common Shares Beneficially Owned: 4,304
Percent of Class of Common Shares: 1.15%
Name, Age, and Principal Occupation: Paul Ordogne (45), Treasurer and
Controller (and from 1988 to 1994, Assistant Treasurer and Controller),
Cari Investment Company.
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 24,936 (9)
Percent of Class of Common Shares: 6.68%
Name, Age, and Principal Occupation: Christian Vaccari (37), President
of Cari Investment Company and Cari Capital Company.
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 17,979 (10)
Percent of Class of Common Shares: 4.81%
Name, Age, and Principal Occupation: Kay S. Vinson (57), President of
Sub-Surface Tools, Inc. (oilfield equipment sales and rentals).
Year First Became Director of Bancshares: 1996
Common Shares Beneficially Owned: 200
Percent of Class of Common Shares: -
Name, Age, and Principal Occupation: All Executive Officers and Directors
of Bancshares and the Bank.
Common Shares Beneficially Owned: 156,896
Percent of Class of Common Shares: 42.02%
(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. 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.
(3) Percent of class omitted where less than one percent.
(4) Includes 56 Common Shares held by Katherine Allen over which Mr. Allen
shares voting power.
(5) Includes 7,700 Common Shares in the name of Bailey Estate.
(6) Includes 33,870 common Shares, held by the Blakeman Trust over which
Mr. Blakeman shares voting powers.
(7) Incudes 6,910 owned by Cannata's Super Market, INc. over which Mr.
Cannata shares voting and investment power.
(8) Includes 60 Common Shares in the name of Mr. Domino's wife.
(9) Includes 16,556 Common Shares, held by the Estate of Murray P. Ordogne
of which Mr. Ordogne is executor and a beneficiary.
(10) Includes 17,779 shares are owned by Cari Investment Company over which
Mr. Vaccari shares voting and investment power.
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 $100 for committee meetings
attended. No fees were paid for service on Bancshares' Board.
No family relationships exist among the above named directors, nominees
for the Board or the executive officers of Bancshares or the Bank, except
that Anthony Guarisco, Sr. and Anthony Guarisco, Jr. are father and son.
Executive Officers
The executive officers of Bancshares and the Bank, as of March 11, 1996,
are as follows:
Name: Age: Position Currently Held:
Brooks Blakeman 50 Chairman of the Board of
Bancshares and the Bank
Randolph Cullom 59 President and Chief
Executive Officer of
Bancshares and the Bank
Paul Ordogne 45 Secretary of the Board of
Bancshares and the Bank
Lee A. Ringeman 67 Executive Vice President and
Chief Financial Officer of
Bancshares and the Bank
Conley J. Dutreix 49 Executive Vice President of
the Bank and Assistant
Secretary of the Board of
Directors of Bancshares and
the Bank
Each executive officer, except Mr. Ordogne, has been an officer or director
of Bancshares and the Bank for five years or more. Mr. Ordogne was appointed
Secretary of the Board of Bancshares and the Bank in 1996 following his
election to the Board.
Item 11. 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, 1994, 1995 and 1996, 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 1996 $100,000 $27,042 $5,240 $792
Cullom 1995 90,000 26,785 4,500 765
President 1994 90,000 20,000 4,250 529
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 a non-cumulative annual cash bonus of $300.00 for each basic
point of return on average annual assets, up to a maximum of $30,000.00.
Return on average annual assets is defined as the after tax earnings
before any bonuses. Bonuses earned in 1994, 1995 and 1996 were paid in
1995, 1996 and 1997 respectively. Also as part of his employment agree-
ment, 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) The Bank paid approximately $792, $765 and $529 in term life insurance
premiums on behalf of Mr. Cullom in 1996, 1995, and 1994, respectively.
This group policy has no cash surrender value.
The Bank has instituted an unqualified defined benefit retirement program
for three of its executive officer, 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
Presidnet
Conley J. Dutreix 292,350 50,000 2012 -- 65
Executive Vice
President
(1) Benefits payable to the participant's name 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,
1997 death benefits are as follows: Mr. Cullom - $839,000, Mr. Ringeman -
$317,000 and Mr. Dutreix - $380,000.
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 retire-
ment 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 stock-
holders. 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.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Principal Shareholders
The persons named below were, to the knowledge of Bancshares, the only
persons as of March 11, 1997, 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) 9.12%
Post Office Box 2208
Morgan City, Louisiana 70381
Paul Ordogne 24,936 (3) 6.68%
Post Office Box 2208
Morgan City, Louisiana 70381
Anthony J. Guarisco, Sr. 37,342 10.00%
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 16,556 shares held by the Estate of Murray P. Ordogne of which
Mr. Ordogne is executor and a beneficiary.
Item 13. Certain Relationships and Related Transactions
During 1996, 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 15-44 of the Bancshares Annual Report to Shareholders are
incorporated by reference in Item 8:
Consolidated Statements of Condition - December 31, 1996
and 1995
Consolidated Statements of Income - Years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended
December 31, 1996, 1995 and 1994
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
(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, 1996.
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, 1997
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
/s/ Virgil Allen /s/ Vincent A. Cannata
Virgil Allen, Director Vincent A. Cannata, Director
/s/ Frank J. Domino, Sr. /s/ Anthony J. Guarisco, Sr.
Frank J. Domino, Sr., Anthony J. Guarisco, Sr.,
Director Director
/s/ Wiley Magee /s/ Kay S. Vinson
Wiley Magee, Director Kay S. Vinson, Director
/s/ Lee A. Ringeman
Lee A. Ringeman, Executive
Vice President and Chief
Financial Officer
EXHIBIT 11
GUARANTY BANCSHARES HOLDING CORPORATION
COMPUTATION OF EARNINGS (LOSS) PER SHARE
1996 1995 1994
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 372,958 373,728 374,375
NOTE: Weighted average calculated based upon actual number of
days outstanding for each share, exclusive of 7,452
shares held in treasury.
EXHIBIT 12
STATEMENT REGARDING COMPUTATION OF RATIOS
1996 1995 1994
Pre-tax earnings $ 435 $ 740 $ 794
Total fixed charges:
Interest on notes payable 109 123 93
Total $ 544 $ 863 $ 887
Fixed charges $ 109 $ 123 $ 93
Ratio of earnings to fixed charges 499.08% 701.62% 953.76%
To Our Stockholders,
We are pleased to report that 1996 was another year of
growth for Guaranty Bank & Trust Company and Guaranty Bancshares
Holding Corporation. Year end assets grew over six million
dollars, a ten percent increase, deposits and loans also grew
more than ten percent over 1995. Your board of directors also
declared dividends of approximately $392,000 to holders of $2.70
cumulative preferred stock.
Careful management of asset quality, maintenance of interest
margins, control of personnel and other recurring operating
expenses and continuing development of long term customer
relationships are and will remain essential to our continuing
success.
All asset quality measures again improved in 1996. Average
interest earning assets as a percent of total assets improved 0.7
percent from 91.2 percent to 91.9 percent, following a 0.5
percent improvement in 1995 over 1994. At year end, the Bank had
no repossessed real estate and no repossessed property. Non-performing
loans in non accrual status were only $145,000 and represented 0.38
percent of outstanding loans at year end.
Additionally, the allowance for loan losses rose to $506,000
as a result of net recoveries of previously charged off loans.
The Bank recovered $100,000 from the reserve in 1995 following a
$180,000 recovery in 1994. These recoveries are the result of
aggressive pursuit of previous charge offs. The allowance
represented 1.33 percent of outstanding loans at year end 1996
and 1.46 percent in 1995. The change is due to the increase in
outstanding loans in 1996. The bank has made no provision for
loan losses since a nominal addition in 1992.
Net income was down approximately $193,000 from 1995 levels,
attributable in large part to the non-recurring $100,000 recovery
from the allowance for loan losses mentioned above and the legal
and accounting expenses related to the recapitalization plan
which was rejected by the stockholders.
Operating expenses, exclusive of those related to the plan
of recapitalization were essentially unchanged from 1995, any
increases are primarily attributed to the Lafayette branch which
opened in 1995. Net interest income improved by $71,000 to
$2,647,000, primarily due to increased volume of interest earning
assets, average yields on earning assets, primarily loans,
declined 0.3 percent while the average rates paid on deposits and
other interest bearing liabilities decreased only 0.2 percent.
The offsetting effects of higher volume and lower yields
contributed to this higher net interest income.
Other non interest income decreased $59,000 from 1995,
primarily attributable to a $39,000 non-recurring gain on sale of
repossessed real estate in 1995 and lower service charges on
personal deposit accounts. This latter is the result of the
continued growth in the Bank's NOW and Bayou Accounts where
service charges are reduced or eliminated based on account
balances.
For your company to continue in the successful pattern
established in the last years, we must follow the same guidelines
which have made us successful.
We must-
~Maintain profitability to continue as a profitable
investment for our stockholders.
~Provide a group of quality financial products at
reasonable prices.
~Set the local standard for personal service.
~Establish a stable workplace environment for our
employees which will be challenging andinancially
rewarding.
~Contribute to the well-being of our local economy.
All of these will be impossible to accomplish without the
efforts of all parties. Achieving the above non-monetary goals
will translate into improved earnings for our company.
Many individuals deserve our appreciation for the progress
Bancshares has made in recent years; beginning with the dedicated
directors, officers and employees who work to maintain and
improve customer service. Finally, we want to thank our many
customers and stockholders and the community we serve.
We also want to welcome the six new directors who joined the
board of Bancshares and the Bank in 1996.
As we stated last year, we anticipate more mergers,
acquisitions and de novo competition in the financial services
industry as the definition of these services is expanded and more
institutions perform traditional banking services and more banks
expand into other areas. A pattern has been established where
larger money center banks and growing regional institutions have
reached out to acquire a larger base of deposit and loan
customers. This process is expected to continue and probably
accelerate in the number of smaller institutions acquired.
Our responsibility is to study and monitor our market and
competition to act quickly and decisively to meet our customers'
financial needs and to provide the most advantageous return for
our stockholders.
As true community bankers and lenders, we are closer to our
customers and shareholders to whom we are ultimately responsible.
We believe this special relationship and our ability to respond
quickly to our customers' needs will assure continuing success in
this very competitive marketplace. With this I express our
sincere appreciation for your allowing us to continue serving you
and your financial needs.
Sincerely,
Brooks Blakeman
Chairman or the Board
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
--------------------------------------------------------
SELECTED CONSOLIDATED DATA
--------------------------------------------------------
(In thousands of dollars, except per share data)
Years Ended December 31
-----------------------------------------------------------
1996 1995 1994
Operating data: --------------------------------
Total interest income $4,644 $4,539 $4,110
------- ------ ------
Net interest income $2,647 $2,576 $2,463
Recovery (provision) from
(for) loan losses - 100 180
Other non-interest income 284 343 364
Non-interest operating
expense 2,496 2,279 2,213
Income taxes 150 263 286
------ ------ ------
Income before
extraordinary items and
change in accounting
principle 284 477 508
Extraordinary items and
change in accounting
principle - - -
------ ------ ------
Net income $ 284 $ 477 $ 508
------ ------ ------
Per common share data:
Net income loss before
extraordinary items
and change in
accounting principle $ (32) $ .20 $ .28
Extraordinary items and
change in accounting
principle - - -
Net income (.32) .20 .28
Cash dividends declared
$2.70 Preferred Stock 2.70 .675 2.70
Number of common shares
outstanding 373,425 380,877 380,877
Weighted average of
common shares
outstanding 373,958 373,728 374,375
Selected statements
of condition items:
Year end balances:
Total assets $66,430 $60,245 $60,687
Investment securities 12,818 10,963 9,494
Securities available
for sale 4,648 5,169 7,190
Loans, net of unearned
income 38,142 34,546 34,775
Total deposits 56,793 50,770 51,498
Notes payable 1,480 1,681 1,854
Stockholders' equity 5,566 5,662 5,179
SELECTED CONSOLIDATED DATA (continued)
1993 1992
Operating data: -----------------------
Total interest income $3,871 $4,082
------- ------
Net interest income $2,380 $2,092
Recovery (provision) from
(for) loan losses - (20)
Other non-interest income 445 344
Non-interest operating
expense 2,236 2,275
Income taxes 184 34
------ ------
Income before
extraordinary items and
change in accounting
principle 405 108
Extraordinary items and
change in accounting
principle 674 489
------ ------
Net income $1,079 $ 597
------ ------
Per common share data:
Net income loss before
extraordinary items
and change in
accounting principle $ 1.08 $ (.79)
Extraordinary items and
change in accounting
principle 1.80 1.30
Net income 1.80 0.51
Cash dividends declared
$2.70 Preferred Stock - -
Number of common shares
outstanding 380,877 380,877
Weighted average of
common shares
outstanding 373,375 376,504
Selected statements
of condition items:
Year end balances:
Total assets $54,952 $58,419
Investment securities 16,902 21,932
Securities available
for sale
Loans, net of unearned
income 31,888 27,665
Total deposits 47,053 52,251
Notes payable 581 -
Stockholders' equity 4,780 4,094
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 1996 was $284,000, compared with $477,000 in
1995, and $508,000 in 1994. Earnings per common share, after
providing for dividends on the preferred shares, were $.20 and $.28
for 1995 and 1994, respectively, and a loss of $.32 per share in
1996. Return on average assets was 0.45% for the current year,
0.80% for 1995 and 0.89% for 1994. Return on average equity was
4.91% in 1996, 8.79% in 1995, and 10.16% in 1994.
At December 31, 1996 Bancshares and its subsidiaries had total
assets of $66,430,000 and deposits of $56,793,000, compared with
assets and deposits of $60,245,000 and $50,770,000 in 1995 and
$60,687,000 and $51,498,000 in 1994. Total assets and deposits
were lower at year end 1995 from 1994 because the subsidiary Bank
chose not to compete for higher interest bearing certificates of
deposit.
Bancshares' principal subsidiary, Guaranty Bank & Trust Company
operates three banking offices in East St. Mary Parish and
Lafayette Parish, Louisiana, with 31 full time and 2 part time
employees. Bancshares has no employees.
Net interest income was $2,647,000, 2.8% and 7.5% higher than in
1995 and 1994. Other income was $284,000 in 1996, down from
$343,000 in 1995 and $364,000 in 1994. Non performing loans at
December 31, 1996 were $145,000, up from $84,000 in 1995 and
amounted to less than 0.4% of outstanding loans. Foreclosed real
estate at December 31, 1995 was $65,000, compared with $80,000 in
1994. The Bank had no repossessed real estate or other repossessed
assets at year end 1996. The allowance for loan losses was 1.33%
of loans as of December 31, 1996 versus 1.46% in 1995 and 1.44% in
1994. Recoveries from previously charged off loans exceeded 1996
charge offs by $2,000 and $102,000 in 1995. At December 31, 1996,
Bancshares' leverage ratio was 8.8% and stockholders' equity as a
percent of total assets was 8.4%. The risk-based capital ratio was
10.7%.
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
Bancshares' consolidated net interest income was $2,647,000 in
1996, compared with $2,576,000 in 1995 and $2,463,000 in 1994.
These increases were primarily due to changes in the level of loans
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NET OPERATING RESULTS (continued)
outstanding, offset by higher interest paid on other time deposits.
Daily average interest earning assets increased $3,472,000 and
average interest bearing liabilities increased $1,416,000. Average
rates earned decreased 0.3% while average rates paid decreased 0.3%
from 1995 levels. During 1995 rates earned increased 0.4% while
average rates paid increased 0.5% from 1994 levels.
The increase in average interest earning assets in 1996 was
primarily in loans and funds sold. Average loans increased
$1,603,000 over 1995 while average funds sold increased $1,932,000.
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 NOW and
money market accounts. The banking industry created a favorable
interest rate market and some of the deposits which had sought
better money market rates outside of the industry returned. Also,
the Bank actively sought to retain deposits in order to fund loans.
The capital lease initiated in June 1991 was outstanding for the
entire years 1996, 1995 and 1994. 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 average interest bearing deposits increased the amount paid
on deposits by $56,000, following $295,000 increase in 1995 from
1994 levels.
Interest on the demand notes payable decreased from 1995. This is
the result of amortized Bank borrowing from the Federal Home Loan
Bank of Dallas. These borrowings were incurred in 1993 and 1994 to
fund commercial real estate loans which have comparable scheduled
amortizations.
As indicated in the following table, average balances of Bancshares'
available funds have followed 1994 and 1995 trends. Average available
funds increased $2,776,000 in 1996 following increases of $2,028,000
in 1995 and $385,000 in 1994.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
TOTAL AVAILABLE FUNDS (In Thousands of Dollars)
1996
-------------------
DAILY
AVERAGE
BALANCE %
------- -----
Savings and NOW accounts $12,825 22.8
Money market investment accounts 6,649 11.8
Other time deposits 18,311 32.5
Certificates of deposit of
$100,000 or more 6,164 11.0
Federal funds purchased 1 -
Investment in capital lease 1,589 2.8
Notes Payable 1,574 2.8
------- -----
Total interest bearing
Liabilities $47,113 83.7
Demand deposits 9,166 16.3
------- -----
Total available funds $56,279 100.0%
======= =====
1995
-------------------
DAILY
AVERAGE
BALANCE %
------- -----
Savings and NOW accounts $11,985 22.4
Money market investment accounts 5,379 10.1
Other time deposits 18,183 34.0
Certificates of deposit of
$100,000 or more 6,704 12.5
Federal funds purchased - -
Investment in capital lease 1,678 3.1
Notes Payable 1,768 3.3
------- -----
Total interest bearing
Liabilities $45,697 85.4
Demand deposits 7,806 14.6
------- -----
Total available funds $53,503 100.0%
======= =====
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
TOTAL AVAILABLE FUNDS (In Thousands of Dollars) (continued)
1994
-------------------
DAILY
AVERAGE
BALANCE %
------- -----
Savings and NOW accounts $12,564 24.4
Money market investment accounts 4,587 8.9
Other time deposits 15,674 30.4
Certificates of deposit of
$100,000 or more 7,399 14.4
Federal funds purchased - -
Investment in capital lease 1,759 3.4
Notes Payable 1,377 2.7
------- -----
Total interest bearing
Liabilities $43,360 84.2
Demand deposits 8,115 15.8
------- -----
Total available funds $51,475 100.0%
======= =====
During 1996, available yields in investment securities decreased,
loan demand increased, and the Bank's average loan yields were
slightly lower. Interest differentials decreased as the compo-
sition of earning assets changed with more investments in lower
yielding highly liquid federal funds sold and the ratio of interest
earning assets as a percent of average total assets increased from
1995 and 1994 levels.
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 un-
earned income, outstanding at year-end is as follows: (In thousands
of dollars)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PROVISION FOR LOAN LOSSES(continued)
Provision
For
Allowance Allowance Net Loans (Recovered
Loans For Loan As A % Of Charged Off From) Loan
Outstanding Losses Loans (Recovered) Losses
1996 $ 38,142 $ 506 1.33% $ (2) $ -
1995 34,546 504 1.46% (102) (100)
1994 34,775 502 1.44% (61) (180)
Considering the low level of non-performing loans and delinqen-
cies, the Bank recovered $100,000 from the allowance for loan
losses in 1995 and $180,000 in 1994 and made no provision for loan
losses in 1996. Non-performing loans on non-accrual status in-
creased $61,000 to approximately $145,000 at year end 1996,
compared with $84,000 and $30,000 at December 31, 1995 and 1994,
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
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
PROVISION FOR LOAN LOSSES(continued)
amount reserved or that subsequent evaluations of the loan port-
folio, in light of conditions and factors then prevailing, will not
require significant changes in the allowance for loan losses.
The following table represents maturity and repricing data for
loans (excluding those on non-accrual status.) In thousands of
dollars.
Fixed rate loans with remaining maturity of:
Three months or less $ 3,502
Over three months through twelve months 3,549
Over one year through five years 13,977
Over five years 3,863
Total fixed rate loans 24,891
Floating rate loans with a repricing frequency of:
Quarterly or more frequently 10,707
Annually or more frequently, but less
frequently than quarterly 1,148
Every five years or more frequently,
but less frequently than annually 866
Less frequently than every five years 395
Total floating rate loans 13,116
Total loans $38,007
OTHER INCOME
Other operating income was approximately $284,000 during 1996,
compared with $343,000 in 1995 and $364,000 in 1994. There were no
securities gains in 1996, 1995 or 1994. Gains on the sale of re-
possessed property contributed approximately $39,000 to the level
of other operating income in 1995 compared with $6,000 in 1994.
Service charges on deposit accounts continued to decline slightly
from prior years. 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 $2,496,000 in 1996, compared with
$2,279,000 in 1995, a $217,000 increase, following a $66,000
decrease in 1995 from 1994. The following Analysis of Other
Operating Expenses details the major categories of other operating
expenses. Personnel expense, which normally comprises approxi-
mately one-half of non-interest expenses, totaled $1,074,000
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OTHER OPERATING EXPENSES(continued)
compared with $1,036,000 in 1995, and a $102,000 increase from
1994. The 1995 increase is attributable to the Bank opening a new
facility.
Expenses related to other real estate and repossessed property, net
of rental income on these properties, increased $2,000, following
the 1995 sale of a 34 acre parcel acquired late in 1994 and the
disposition of an unoccupied building acquired in 1995. There were
no real estate market value adjustments in 1996, 1995 or 1994.
Aggregate related expenses, such as taxes, insurance and losses on
sales of these properties, totaled $18,000 in 1996, compared with
$10,000 in 1995, and $12,000 in 1994. Rental income on these
properties totaled $1,000 in 1995 and $4,000 in 1994.
Professional fees and services, primarily legal and accounting
fees, increased $224,000 to $357,000 in 1996 following a $4,000
increase in 1995 from 1994. The 1996 expense increases were
primarily related to a recapitalization plan which was rejected by
the stockholders.
ANALYSIS OF OTHER OPERATING EXPENSES (In Thousands of Dollars)
1996 1995 1994
------ ------ ------
Salaries and employee
benefits $1,074 $1,036 $ 972
Expenses related to
other real estate and
reposessed property,
net of rental income
on these properties 17 9 8
Net occupancy expense 421 432 426
Equipment and computer
expense 187 204 193
Professional fees and
services 357 132 128
Advertising and public
relations 47 38 35
Stationery and supplies 44 39 42
FDIC and other insurance 37 89 141
Directors fees 79 91 64
Other operating expenses 233 209 204
------ ------ ------
$2,496 $2,279 $2,213
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ANALYSIS OF OTHER OPERATING EXPENSES(continued)
1996/1995 1995/1994
Change Change
------------- -------------
Amount % Amount %
------------- -------------
Salaries and employee
benefits $ 38 4 $ 64 7
Expenses related to
other real estate and
reposessed property,
net of rental income
on these properties 8 89 1 12
Net occupancy expense (11) (3) 6 1
Equipment and computer
expense (17) (8) 11 6
Professional fees and
services 225 170 4 3
Advertising and public
relations 9 24 3 9
Stationery and supplies 5 13 (3) (7)
FDIC and other insurance (52) (58) (52) (37)
Directors fees (12) (13) 27 42
Other operating expenses 24 11 5 2
---- ----
$217 10 $ 66 3
==== == ==== ==
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 $7,051,000 in loans outstanding scheduled to mature
in 1997 and another $11,855,000 floating rate loans which reprice
annually or more frequently. In addition $7,985,000 of investment
securities will mature in 1997 and another $5,135,000 of floating
rate debt securities will reprice within one year. Federal funds
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES(continued)
sold amounted to $5,350,000 on December 31, 1996. 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, 1996, 1995, and 1994 are as follows (in thousands of
dollars):
1996 1995 1994
Stockholders' equity $ 5,566 $ 5,662 $ 5,179
Total assets 66,430 60,245 60,687
Total deposits 56,793 50,770 51,498
Ratio of stockholders'
equity to:
Total assets 8.4% 9.4% 8.5%
Total deposits 9.8% 11.2% 10.1%
Bancshares does not have immediate plans for expansion through
acquisitions of other banks or financial institutions, or commit-
ments for significant capital expenditures.
A new form of capital measurement, risk-based capital, was imple-
mented 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, 1996:
Risk-based capital
GUARANTY GUARANTY
BANCSHARES BANK
Tier 1 9.81% 9.31%
Total capital 10.67% 10.16%
Leverage ratio 8.83% 8.79%
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES(continued)
Bancshares paid a $2.70 dividend on its $2.70 cumulative
preferred stock, on January 24, 1997. 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, 1991
through January 13, 1997 $2,446,892
$.50 Preferred stock, dividends
accumulated from January 13, 1990
through January 13, 1997 80,325
$2,527,217
Bancshares' primary source of income is dividends from the Bank.
FUTURE FINANCIAL ACCOUNTING AND INCOME TAX MATTERS
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 1996 financial statements cannot
presently be determined.
INTEREST RATE AND INTEREST DIFFERENTIAL
(In thousands)
1996
-------------------------
Daily Amount
Average Earned Average
Balance or Paid Rate
ASSETS:
Interest earning assets
Loans $36,715 $ 3,467 9.4%
Taxable securities 15,099 864 5.7
Tax exempt securities 670 38 5.7
Federal fund sold and time
deposits with other banks 5,174 275 5.3
------- -------
Total interest earning assets 57,658 4,644 8.1%
------- ------- ---
Non-interest earning assets:
Cash and due from banks 2,081
Bank premises and equipment 2,062
Other assets 1,413
Allowance for loan losses (507)
-------
Total assets $62,707
=======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing liabilities:
Deposits:
Savings accounts 6,760 186 2.8%
NOW accounts 6,065 135 2.2
Money market investment
accounts 6,649 188 2.8
Other time deposits 24,475 1,220 5.0
Federal funds purchased 1 - -
Investment in capital lease 1,589 159 10.0
Notes payable 1,574 109 6.9
------- -------
Total interest bearing
liabilities 47,113 1,997 4.2%
------- ------- ----
Non-interest bearing liabilities
and stockholders' equity
Demand deposits 9,166
Other liabilities 634
Stockholders' equity 5,794
-------
Total liabilities and
stockholders' equity $62,707
=======
Net interest income/average
Interest earnings assets $ 2,647 4.6%
======= ===
1995
-------------------------
Daily Amount
Average Earned Average
Balance or Paid Rate
ASSETS:
Interest earning assets
Loans $35,112 $ 3,430 9.8%
Taxable securities 15,432 898 5.8
Tax exempt securities 400 22 5.5
Federal fund sold and time
deposits with other banks 3,242 189 5.8
------- -------
Total interest earning assets 54,186 4,539 8.4%
------- ------- ---
Non-interest earning assets:
Cash and due from banks 2,120
Bank premises and equipment 2,135
Other assets 1,475
Allowance for loan losses (509)
-------
Total assets $59,407
=======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing liabilities:
Deposits:
Savings accounts 7,133 205 2.9%
NOW accounts 4,852 112 2.3
Money market investment
accounts 5,379 143 2.7
Other time deposits 24,887 1,213 4.9
Federal funds purchased - - -
Investment in capital lease 1,678 168 10.0
Notes payable 1,768 122 6.9
------- -------
Total interest bearing
liabilities 45,697 1,963 4.3%
------- ------- ----
Non-interest bearing liabilities
and stockholders' equity
Demand deposits 7,806
Other liabilities 478
Stockholders' equity 5,426
-------
Total liabilities and
stockholders' equity $59,407
=======
Net interest income/average
Interest earnings assets $ 2,576 4.6%
======= ===
1996 Compared with 1995
Variance due to
---------------------------
Rate/
Volume Rate Volume Total
ASSETS:
Interest earning assets
Loans 157 (115) (5) 37
Taxable securities (19) (15) - (34)
Tax exempt securities 15 1 - 16
Federal fund sold and time
deposits with other banks 113 (17) (10) 86
---- ---- ---- ----
Total interest earning assets 266 (146) (15) 105
---- ---- ---- ----
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 (11) (8) - (19)
NOW accounts 28 (4) (1) 23
Money market investment
accounts 34 9 2 45
Other time deposits (20) 27 - 7
Federal funds purchased - - - -
Investment in capital lease (9) - - (9)
Notes payable (13) - - (13)
---- ---- ---- ----
Total interest bearing
liabilities 9 24 1 34
---- ---- ---- ----
Non-interest bearing liabilities
and stockholders' equity
Demand deposits
Other liabilities
Stockholders' equity
Total liabilities and
stockholders' equity
Net income/average
Interest earnings assets 257 (170) (16) 71
==== ==== ==== ====
1995 Compared with 1994
Variance due to
---------------------------
Rate/
Volume Rate Volume Total
ASSETS:
Interest earning assets
Loans 93 50 1 144
Taxable securities 3 163 1 167
Tax exempt securities 15 (1) (1) 13
Federal fund sold and time
deposits with other banks 59 27 19 105
---- ---- ---- ----
Total interest earning assets 170 239 20 429
---- ---- ---- ----
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 (25) (11) 1 (35)
NOW accounts 6 (7) - (1)
Money market investment
accounts 21 3 - 24
Other time deposits 71 219 17 307
Federal funds purchased - - - -
Investment in capital lease (8) - - (8)
Notes payable 26 2 1 29
---- ---- ---- ----
Total interest bearing
liabilities 91 206 19 316
---- ---- ---- ----
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 79 33 1 113
==== ==== ==== ====
Loans on which interest accruals have been stopped are included
in the daily average balances of loans outstanding.
Yields on tax exempt securities have not been computed on a pre-tax
equivalent basis.
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 audited 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.
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, 1996 and 1995, and the related
consolidated statements of income, changes in stockholders' equity,
and cash flows for the years ended December 31, 1996, 1995 and
1994. 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 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, 1996, and 1995 and the results of
heir operations and their cash flows for the years ended December
31, 1996, 1995 and 1994 in conformity with generally accepted
accounting principles.
Darnall, Sikes, Kolder, Frederick & Rainey
A Corporation of Certified Public Accountants
Morgan City, Louisiana
January 10, 1997
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition
December 31, 1996 and 1995
1996 1995
ASSETS
CASH AND DUE FROM BANKS $ 2,626,234 $ 3,229,648
FEDERAL FUNDS SOLD 5,350,000 3,325,000
INVESTMENT SECURITIES
Securities held to maturity (market
value $12,832,000 and $10,980,000,
respectively) 12,817,805 10,963,516
Securities available for sale, at
market 4,648,356 5,196,792
Total investment securities 17,466,161 16,160,308
LOANS 38,151,912 34,552,371
Less: Allowance for loan losses 505,948 503,826
Unearned income 9,660 6,795
Total net loans 37,636,304 34,041,750
OTHER REAL ESTATE - 64,682
BANK PREMISES AND EQUIPMENT 1,968,945 2,083,415
ACCRUED INTEREST RECEIVABLE 339,229 375,810
OTHER ASSETS 1,043,616 963,977
TOTAL ASSETS $66,430,489 $60,244,590
=========== ===========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition (Continued)
December 31, 1996 and 1995
1996 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS
Non-interest bearing deposits $ 8,825,716 $ 8,418,740
NOW account deposits 7,539,524 5,404,616
Money market investment accounts 8,460,816 6,842,230
Savings deposits 6,675,204 7,147,835
Other time deposits 18,886,236 17,330,796
Certificates of deposits of
$100,000 or more 6,405,906 5,625,997
Total deposits 56,793,402 50,770,214
Notes payable 1,480,051 1,681,446
Obligation under capital lease 1,546,121 1,631,734
Accrued interest payable 209,675 135,287
Other liabilities 834,829 363,896
Total liabilities 60,864,078 54,582,577
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
$2.70 cumulative preferred stock 3,481,115 3,481,115
$.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 (1,130,771) (1,023,669)
Treasury stock (13,835) (15,835)
Net unrealized gain on securities
available for sale 16,500 7,000
Total stockholders' equity 5,566,411 5,662,013
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $66,430,489 $60,244,590
=========== ===========
The accompanying notes are an integral part of this statement.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
INTEREST INCOME
Interest and fees on
loans $ 3,466,559 $ 3,430,339 $ 3,285,524
Interest on investment
securities:
U. S. Treasury
securities 38,775 256,200 221,301
Obligations of
U. S. agencies
and corporations 801,822 616,860 493,449
Obligations of
states and
political
subdivisions 37,878 22,312 8,610
Other investments 23,919 25,070 16,528
Interest on federal
funds sold and time
deposits with banks 275,281 188,458 84,242
Total interest
income 4,644,234 4,539,239 4,109,654
INTEREST EXPENSE
Interest on deposit
accounts 1,729,347 1,673,166 1,377,954
Interest on federal
funds purchased 65 - -
Interest on capital lease 158,953 167,840 175,891
Interest on notes
payable 108,908 121,957 93,082
Total interest
expense 1,997,273 1,962,963 1,646,927
Net interest
income 2,646,961 2,576,276 2,462,727
RECOVERY FROM LOAN
LOSSES - 100,000 180,000
Net interest income
after recovery
from loan losses 2,646,961 2,676,276 2,642,727
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
OTHER INCOME
Service charges on
deposit accounts 183,371 204,908 231,685
Insurance commissions,
other service charges
and fees 59,512 54,061 54,967
Other operating income 40,874 83,711 77,439
Total other
income 283,757 342,680 364,091
OPERATING EXPENSES 2,496,072 2,278,787 2,213,202
Net income before
income tax
expense 434,646 740,169 793,616
INCOME TAX EXPENSE
Current 126,127 96,046 4,622
Deferred 24,118 166,954 280,878
150,245 263,000 285,500
Net income 284,401 477,169 508,116
DIVIDENDS REQUIRED FOR
PREFERRED STOCK (402,453) (402,453) (404,275)
NET INCOME (LOSS)
AVAILABLE FOR
COMMON
STOCKHOLDERS $ (118,052) $ 74,716 $ 103,841
============ =========== ===========
Income (loss) per common
share $ (.32) $ .20 $ .28
=========== =========== ===========
Weighted average common
shares outstanding 372,958 373,728 374,375
=========== =========== ===========
The accompanying notes are an integral part of this statement.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Years Ended December 31, 1996, 1995 and 1994
$2.70 Cumulative Preferred
Number of Shares
Authorized Issued Amount
Balance at January 1, 1994 145,676 145,676 $3,497,320
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Change in net unrealized
(loss) on securities
available for sale - - -
Balance at December 31, 1994 145,676 145,676 3,497,320
Net income - - -
Acquisition of treasury stock:
675 shares $2.70 cumulative
preferred stock (675) (675) (16,205)
Change in net unrealized gain
on securities available
for sale - - -
Balance at December 31, 1995 145,001 145,001 3,481,115
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Sale of treasury stock 400
shares Class A Common - - -
Change in net unrealized gain
on securities available for
sale - - -
Balance at December 31, 1996 145,001 145,001 $3,481,115
======== ======== ==========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Continued)
Years Ended December 31, 1996, 1995 and 1994
$.50 Cumulative Preferred
Number of Shares
Authorized Issued Amount
Balance at January 1, 1994 64,324 21,900 $107,310
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Change in net unrealized (loss)
on securities available for
sale - - -
Balance at December 31, 1994 64,324 21,900 107,310
Net income - - -
Acquisition of treasury stock:
675 shares $2.70 cumulative
preferred stock 675 - -
Change in net unrealized gain on
securities available for sale - - -
Balance at December 31, 1995 64,999 21,900 107,310
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Sale of treasury stock 400 shares
Class A Common - - -
Change in net unrealized gain on
securities available for sale - - -
Balance at December 31, 1996 64,999 21,900 $107,310
======= ======= ========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Continued)
Years Ended December 31, 1996, 1995 and 1994
Class A Common
Number of Shares
Authorized Issued Amount
Balance at January 1, 1994 210,000 210,000 $1,050,000
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Change in net unrealized (loss)
on securities available for
sale - - -
Balance at December 31, 1994 210,000 210,000 1,050,000
Net income - - -
Acquisition of treasury stock:
675 shares $2.70 cumulative
preferred stock - - -
Change in net unrealized gain
on securities available for
sale - - -
Balance at December 31, 1995 210,000 210,000 1,050,000
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Sale of treasury stock 400
shares Class A Common - - -
Change in net unrealised gain
on securities available for
sale - - -
Balance at December 31, 1996 210,000 210,000 $1,050,000
======== ======== ==========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Continued)
Years Ended December 31, 1996, 1995 and 1994
Class B Common
Number of Shares
Authorized Issued Amount
Balance at January 1, 1994 210,000 170,877 $17,088
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Change in net unrealized (loss) on
securities available for sale - - -
Balance at December 31, 1994 210,000 170,877 17,088
Net income - - -
Acquisition of treasury stock:
675 shares #2.70 cumulative
preferred stock - - -
Change in net unrealized gain on
securities available for sale - - -
Balance at December 31, 1995 210,000 170,877 17,088
Net income - - -
Cash dividends:
$2.70 preferred stock - - -
Sale of treasury stock 400 shares
Class A Common - - -
Change in net unrealized gain on
securities available for sale - - -
Balance at December 31, 1996 210,000 170,877 $ 17,088
======== ======== ========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Continued)
Years Ended December 31, 1996, 1995 and 1994
Capital Accumulated
Surplus Deficit
Balance at January 1, 1994 $2,039,004 $(1,914,676)
Net income - 508,116
Cash dividends:
$2.70 preferred stock - (98,333)
Change in net unrealized (loss) on
securities available for sale - -
Balance at December 31, 1994 2,039,004 (1,504,893)
Net income - 477,169
Acquisition of treasury stock:
675 shares $2.70 cumulative
preferred stock - 4,055
Change in net unrealized gain on
securities available for sale - -
Balance at December 31, 1995 2,039,004 (1,023,669)
Net income - 284,401
Cash dividends:
$2.70 preferred stock - (391,503)
Sale of treasury stock 400 shares
Class A Common - -
Change in net unrealized gain on
securities available for sale - -
Balance at December 31, 1996 $2,039,004 $(1,130,771)
========== ===========
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Continued)
Years Ended December 31, 1996, 1995 and 1994
Net
Unrealized
Gain (Loss)
on
Securities
Treasury Available
Stock For Sale
Balance at January 1, 1994 $(15,835) $ -
Net income - -
Cash dividends:
$2.70 preferred stock - -
Change in net unrealized (loss) on
securities available for sale - (11,000)
Balance at December 31, 1994 (15,835) (11,000)
Net income - -
Acquisition of treasury stock:
675 shares $2.70 cumulative
preferred stock - -
Change in net unrealized gain on
securities available for sale - 18,000
Balance at December 31, 1995 (15,835) 7,000
Net income - -
Cash dividends:
$2.70 preferred stock - -
Sale of treasury stock 400 shares
Class A Common 2,000 -
Change in net unrealized gain on
securities available for sale - 9,500
Balance at December 31, 1996 $(13,835) $ 16,500
======== ========
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $ 284,401 $ 477,169 $ 508,116
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Accretion of
discount on
investments (234,221) (234,681) (42,311)
Recovery from
loan losses - (100,000) (180,000)
Gain on sale of
fixed assets - (9,495) (8,294)
Gain on sale of
other real estate - (38,892) (5,846)
Depreciation and
amortization 306,389 302,965 274,605
(Increase) decrease
in accrued interest
receivable 36,581 (15,329) (7,537)
Increase (decrease)
in accrued interest
payable 74,388 11,186 34,369
Increase (decrease)
in other
liabilities 79,430 54,993 (338,586)
Net cash
provided by
operating
activities 546,968 447,916 234,516
CASH FLOWS FROM INVESTING
ACTIVITIES
Increase in federal
funds sold (2,025,000) (685,000) (1,540,000)
Proceeds from
maturities of
investment
securities 30,558,374 20,542,000 12,979,412
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
Purchase of investment
securities (31,620,506) (19,776,840) (12,693,828)
Net (increase)
decrease in loans (3,594,554) 231,171 (3,006,098)
Proceeds from sales
of other real estate
and repossessed
property 64,682 149,903 43,000
Sale of interest-
bearing deposits - - 515,000
Proceeds from sales
of premises and
equipment - 6,500 26,000
Purchase of bank
premises and
equipment (191,919) (180,268) (58,034)
Changes in other
assets (79,639) 50,138 187,029
Proceeds from sale
of treasury stock 2,000 - -
Net cash
provided (used)
by investing
activities (6,886,562) 337,604 (3,547,519)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net increase
(decrease) in
demand deposits,
NOW accounts and
savings accounts 5,243,279 2,374,307 (180,520)
Net increase
(decrease) in
certificates of
deposit 779,909 (3,101,717) 4,624,921
Proceeds from note
payable - - 1,400,000
Repayment of notes
payable (201,395) (172,723) (127,243)
(Continued)
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 1996, 1995 and 1994
1996 1995 1994
Repayments of capital
lease obligation (85,613) (91,605) (76,218)
Net cash
provided (used)
by financing
activities 5,736,180 (991,738) 5,640,940
Net increase
(decrease) in
cash, cash
equivalents and
due from banks (603,414) (206,218) 2,327,937
CASH, CASH EQUIVALENTS
AND DUE FROM BANKS,
beginning of year 3,229,648 3,435,866 1,107,929
CASH, CASH EQUIVALENTS
AND DUE FROM BANKS,
end of year $ 2,626,234 $ 3,229,648 $ 3,435,866
============ ============ ============
Supplemental Cash Flow Information:
Interest paid $ 1,922,885 $ 1,951,777 $ 1,612,558
============ ============ ============
The accompanying notes are an integral part of this statement.
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
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
categories: 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 amortization 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 the borrower'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
$1,870,187 and $1,578,835 at December 31, 1996 and
1995, respectively. For book purposes,
depreciation and amortization are included in
occupancy equipment expenses 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 Accelerated Cost Recovery (ACRS) or
Modified Accelerated Cost Recovery (MACRS) System
of the Internal Revenue Service. Maintenance and
repairs which do not extend the life of banking
premises and equipment 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. Income is
allocated to each member of the group using the
percentage-of-taxable-income method. 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.
H. Cash Equivalents
For purposes of the Statements of Cash Flows,
the Bank considers cash equivalents to be "cash and
due from banks."
I. 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.
J. Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect the reported amounts of
assets and liabilities and disclosures on
contingent assets and liabilities at the date of
the financial statements and the reported amounts
of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Material estimates that are particularly
susceptible to significant change relate to the
determination of the allowance for losses on loans
and the valuation of foreclosed real estate. In
connection with the determination of the estimated
losses on loans and foreclosed real estate,
management obtains independent appraisals for
significant properties.
While management uses available information to
recognize losses on loans and foreclosed real
estate, further reductions in the carrying amounts
of loans and foreclosed assets may be necessary
based on changes in local economic conditions. In
addition, regulatory agencies, as an integral part
of their examination process, periodically review
the estimated losses on loans and foreclosed real
estate. Such agencies may require the Bank to
recognize additional losses based on their
judgments about information available to them at
the time of their examination.
(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 statements of financial condition include
amounts so restricted of $301,000 and $241,000 at December 31,
1996 and 1995, respectively.
(3) Investment Securities
An analysis of the amortized cost and market value of the
investment portfolio by maturity periods at December 31, 1996
follows (in thousands):
Amortized Market
Cost Value
Due within one year $11,485 $11,502
Due from one to five years 4,387 4,404
Due from five to ten years 354 361
Due after ten years 1,215 1,213
Total investment securities $17,441 $17,480
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
Within One to 5-10 Over
1 Yr 5 Yrs Yrs 10 Yrs Total
December 31, 1996:
Held to maturity
U. S. Treasury
securities $ 250 $ - $ - $ - $ 250
Obligations
of U. S.
agencies and
corporations 8,696 3,083 26 93 11,898
Obligations of
states and
political
subdivisions 30 303 328 - 661
Other
investments 9 - - - 9
TOTAL $8,985 $3,386 $ 354 $ 93 $12,818
====== ====== ====== ====== =======
Gross Approx.
Unrealized Market
Gains Losses Value
December 31, 1996:
Held to maturity
U. S. Treasury
securities $ 1 $ - $ 251
Obligations
of U. S.
agencies and
corporations 8 8 11,898
Obligations of
states and
political
subdivisions 13 - 674
Other investments - - 9
TOTAL $ 22 $ 8 $12,832
====== ====== =======
Amortized Cost Maturing
Within One to 5-10 Over
1 Yr 5 Yrs Yrs 10 Yrs Total
Available for sale
Obligations of
U. S. agencies
and corporations $2,501 $1,000 $ - $ 608 $4,109
Federal Home Loan
Bank Stock,
restricted - - - 364 364
Other
investments - - - 150 150
TOTAL $2,501 $1,000 $ - $1,122 $4,623
====== ====== ====== ====== ======
Gross Approx.
Unrealized Market
Gains Losses Value
Available for sale
Obligations of U. S. agencies
and corporations $ 30 $ 5 $4,134
Federal Home Loan Bank stock,
restricted - - 364
Other investments - - 150
TOTAL $ 30 $ 5 $4,648
====== ====== ======
Amortized Cost Maturing
Within One to 5-10 Over
1 Yr 5 Yrs Yrs 10 Yrs Total
December 31, 1995:
Held to maturity
U. S. Treasury
securities $1,997 $ - $ - $ - $ 1,997
Obligations of
U. S. agencies
and corporations 4,968 3,072 92 123 8,255
Obligations of
states and
political
subdivisions 31 250 411 - 692
Other investments - 20 - - 20
TOTAL $6,996 $3,342 $ 503 $ 123 $10,964
====== ====== ====== ====== =======
Gross Approx.
Unrealized Market
Gains Losses Value
December 31, 1995:
Held to maturity
U. S. Treasury securities $ 2 $ - $ 1,999
Obligations of U. S.
agencies and corporations 8 11 8,252
Obligations of states and
political subdivisions 17 - 709
Other investments - - 20
TOTAL $ 27 $ 11 $10,980
====== ====== =======
Amortized Cost Maturing
Within One to 5-10 Over
1 Yr 5 Yrs Yrs 10 Yrs Total
Available for sale
Obligations of
U. S. agencies
and
corporations$ 500 $3,505 $ - $ 688 $ 4,693
Federal Home
Loan Bank
stock,
restricted - - - 343 343
Other
investments - - - 150 150
TOTAL $ 500 $3,505 $ - $1,181 $ 5,186
====== ====== ====== ====== =======
Gross Approx.
Unrealized Market
Gains Losses Value
Available for sale
Obligations of U. S.
agencies and corporations $ 14 $ 3 $4,704
Federal Home Loan Bank
stock, restricted - - 343
Other investments - - 150
TOTAL $ 14 $ 3 $5,197
====== ====== ======
Neither Bancshares nor its subsidiaries engage in
securities trading activities.
Investment securities with aggregate carrying values of
approximately $9,047,000 and $6,882,000 at December 31, 1996
and 1995, 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 1996,
$159,000 of mortgage-backed securities were paid out prior to
maturity.
(4) Loans
Major classifications of loans at December 31, 1996 and
1995 are as follows:
December 31,
1996 1995
Commercial, financial and
agricultural $28,739,748 $26,762,289
Real estate 2,849,817 2,189,211
Installment 6,562,347 5,600,871
38,151,912 34,552,371
Less: Unearned income (9,660) (6,795)
$38,142,252 $34,545,576
=========== ===========
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 1996 are summarized as follows:
Balance, January 1, 1996 $1,728,462
Additions and new directors 2,458,739
Payments and persons no longer with the bank (965,135)
Balance, December 31, 1996 $3,222,066
==========
A summary of transactions in the allowance for loan losses
follows:
Year Ended December 31,
1996 1995 1994
Balance, beginning of year $ 503,826 $ 502,145 $ 620,795
Losses charged to allowance (8,271) (17,526) (34,944)
Recoveries credited to
allowance 10,393 119,207 96,294
Recovery credited to
expense - (100,000) (180,000)
Balance, end of year $ 505,948 $ 503,826 $ 502,145
========= ========= =========
The Bank had non-performing loans on non-accrual status
aggregating approximately $145,000 at December 31, 1996 and
$84,000 at December 31, 1995. During the years ended December
31, 1996 and December 31, 1995, the Bank recognized
approximately $2,000 and $4,000, respectively in interest
income related to these loans. No interest income was
recognized in 1994. Had all the non-performing loans during
the years been accruing interest at their contracted rates,
approximately $13,000, $4,000 and $3,000 of additional
interest income would have been recognized for 1996, 1995 and
1994, respectively.
(5) Bank Premises and Equipment
Major classification of these assets at December 31, 1996
and 1995 are summarized as follows:
1996 1995
Land $ 161,867 $ 10,000
Buildings 652,526 652,526
Leased assets and improvements 1,976,310 1,976,310
Furniture and equipment 1,048,429 1,023,414
3,839,132 3,662,250
Accumulated depreciation and
amortization 1,870,187 1,578,835
$1,968,945 $2,083,415
Depreciation and amortization amounted to $306,389,
$302,965, and $274,605 for 1996, 1995 and 1994, respectively.
(6) Deposits
A summary of interest expense on deposit accounts follows:
Year Ended December 31,
1996 1995 1994
NOW accounts $ 134,655 $ 111,664 $ 112,841
Money market investment
accounts 188,085 142,802 118,670
Savings deposits 185,701 205,396 240,710
Other time and certificates
of deposits 1,220,906 1,213,304 905,733
$1,729,347 $1,673,166 $1,377,954
========== ========== ==========
Interest expense on certificates of deposits of $100,000
or more for 1996, 1995 and 1994 was approximately $322,000,
$349,000, and $307,000, respectively.
At December 31, 1996, the scheduled maturities of
Certificates of Deposit are as follows:
1997 $23,069,296
1998 1,268,479
1999 704,273
2000 169,379
2001 80,715
$25,292,142
===========
The amount of deposits of related parties at December 31,
1996 was $3,027,065.
(7) Notes Payable
Notes payable to the Federal Home Loan
Bank of Dallas, secured by all first
mortgage documents relating to one-to-four
family residential dwellings in the amount
of $5,325,000.
1996 1995
120 monthly installments, 5.9 percent $ 433,238 $ 485,563
96 monthly installments, 7.34 percent 1,046,813 1,195,883
$1,480,051 $1,681,446
========== ==========
Maturities of long-term debt are as follows:
1997 $ 215,885
1998 231,426
1999 248,096
2000 265,976
2001 285,156
thereafter 233,512
$1,480,051
==========
(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 $2.70 dividend on the $2.70 preferred
stock, paid on January 24, 1997.
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 preferred stock is
redeemable in whole or in part at the Company's option
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:
1996 1995 1994
Salaries and employee
benefits $1,074,064 $1,035,568 $ 971,555
Expenses related to other
real estate and
repossessed property,
net of rental income on
these properties 17,469 9,162 7,875
Net occupancy expense 421,416 432,538 426,224
Equipment and computer
expense 187,403 204,004 193,233
Professional fees and
services 357,351 131,828 128,352
FDIC and other insurance 36,608 89,536 140,606
Directors' fees 79,470 90,677 64,000
Advertising and public
relations 46,506 37,639 34,778
Stationery and supplies 43,517 38,557 42,418
Other operating expenses 232,268 209,278 204,161
$2,496,072 $2,278,787 $2,213,202
========== ========== ==========
(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 1996, 1995 and 1994 to earnings before
income taxes) as follows:
1996 1995 1994
Computed "expected" tax
expense $ 147,780 $ 251,657 $ 269,829
Increase (decrease) in tax
resulting from:
Tax-exempt interest (13,135) (7,586) (2,927)
Non-deductible
interest expense 1,451 809 1,274
Net operating loss
carryforwards
utilized to offset
income tax
expense (42,229) (248,950) (207,175)
Discount accretion 9,297 6,559 (15,467)
Other, net 22,963 (2,489) (45,534)
Total tax expense $ 126,127 $ -0- $ -0-
========= ========= =========
An analysis of deferred income taxes follows:
1996 1995 1994
Depreciation expense for
tax reporting in excess
of amount for financial
reporting $ (337) $ (412) $ 34,712
Provision for loan losses
for financial reporting
less than (in excess of)
amount for tax reporting - 34,000 61,200
Other, net 37,364 13,208 1,137
Capitalized leases (12,909) (15,931) (18,668)
Recognition of tax benefit
of net operating loss
carryforward for
financial statement
purposes limited to the
amount of deferred tax
credits - 136,089 202,497
Total deferred income
taxes $ 24,118 $ 166,954 $ 280,878
========= ========= =========
Deferred tax assets and liabilities included in other
assets at December 31 consist of the following:
1996 1995
Deferred tax assets:
Building lease $104,508 $ 91,598
Executive's retirement plan 117,705 80,234
Tax credit carryforwards 81,638 101,389
FHLB stock dividends 17,374 10,234
321,225 283,455
Deferred tax liabilities:
Allowance for loan losses 179,655 145,655
Furniture, fixtures and equipment 114,958 80,275
Discount accretion 2,494 10,979
Net unrealized appreciation on
available-for-sale securities 8,500 4,000
305,607 240,909
Net deferred tax asset $ 15,618 $ 42,546
======== ========
(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, 1996
and 1995, letters of credit outstanding totaled $815,608 and
$838,950, 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 regulatory authorities 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 operates, the extent, if
any, to which a forthcoming regulatory examination may
ultimately result in adjustments to the 1996 financial
statements cannot presently be determined.
Bancshares is subject to various regulatory capital
requirements administered by its primary federal regulator,
the FDIC. Failure to meet the minimum regulatory capital
requirements can initiate certain mandatory, and possible
additional discretionary actions by regulators, that if
undertaken, could have a direct material affect on Bancshares
and the consolidated financial statements. Under the
regulatory capital adequacy guidelines and the regulatory
framework for prompt corrective action, Bancshares must meet
specific capital guidelines involving quantitative measures of
Bancshares' assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices.
Bancshares' capital amounts and classification under the
prompt corrective action guidelines are also subject to
qualitative judgements by the regulators about components,
risk weightings and other factors.
Quantitative measures established by regulation to ensure
capital adequacy require Bancshares to maintain minimum
amounts and ratios of: Tier 1 leverage, Tier 1 risk-based,
and total risk-based capital. As detailed below, as of
December 31, 1996, Bancshares met all of the capital adequacy
requirements to which it is subject.
As of December 31, 1996 and 1995, Bancshares was
categorized as well capitalized under the regulatory framework
for prompt corrective action. There are no conditions or
events since the most recent notification that management
believes have changed the prompt corrective action category.
Required Actual
Ratios Ratios
Tier 1 leverage 5% 8.83%
Tier 1 risk-based 6% 9.81%
Total risk-based capital 10% 10.67%
(13) Parent Company
Summarized financial information for Bancshares (parent
company only) follows:
A. Statements of Condition
1996 1995
Assets:
Cash $ 13,820 $ 11,971
Investment in 100 percent
of the outstanding common
stock of subsidiaries 5,513,965 5,641,127
Other assets 430,129 8,915
$ 5,957,914 $ 5,662,013
=========== ===========
Liabilities:
Dividends payable $ 391,503 $ -
Stockholders' equity:
$2.70 cumulative preferred
stock 3,481,115 3,481,115
$.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 (1,130,771) (1,023,669)
Treasury stock (13,835) (15,835)
Net unrealized gain on
securities available
for sale 16,500 7,000
5,566,411 5,662,013
$ 5,957,914 $ 5,662,013
=========== ===========
B. Statements of Operations
1996 1995 1994
Dividends received from
subsidiaries $ 577,503 $ 12,150 $115,000
Other income 325 426 224
Other expenses (209,530) (382) (1,209)
Income before equity
in undistributed
earnings of
subsidiaries and
income tax benefit 368,298 12,194 114,015
Income tax benefit 52,765 - -
Equity in undistributed
earnings of subsidiaries (136,662) 464,975 394,101
Net income $ 284,401 $477,169 $508,116
========= ======== ========
C. Statements of Cash Flows
1996 1995 1994
Cash flows from operating
activities:
Net income $ 284,401 $ 477,169 $ 508,116
Adjustments to
reconcile net
income to net cash
used in operating
activities:
(Increase) decrease
in undistributed
earnings of
subsidiaries 136,662 (477,135) (394,091)
Net cash
provided
by operating
activities 421,063 34 114,025
Cash flows from investing
activities:
Change in other
assets (29,711) (3,396) (3,147)
Sale of treasury stock 2,000 - -
Net cash used in
investing
activities (27,711) (3,396) (3,147)
Cash flows from financing
activities:
Dividends paid (391,503) (98,332) (393,325)
Net increase
(decrease)
in cash 1,849 (101,694) (282,447)
Cash, beginning of year 11,971 113,665 396,112
Cash, end of year $ 13,820 $ 11,971 $ 113,665
========= ========= =========
Bancshares' primary source of working capital is dividends
from the Bank. At December 31, 1996, approximately $328,000
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.
The Bank maintains its cash in bank deposits at high
credit quality financial institutions. The balances, at
times, may exceed federally insured limits.
(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 $ 815,608
Unused overdraft lines of credit 146,000
Loan commitments 4,880,000
(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, 1996, are as follows:
December 31,
1997 $ 252,744
1998 252,744
1999 252,744
2000 252,744
2001 252,744
Thereafter 1,137,348
Total minimum lease payments 2,401,068
Less amount representing interest 854,947
Present value of minimum lease payments
including current maturities of
$102,758 $1,546,121
==========
The following is a schedule by year of future minimum
rental payments under the operating lease as of December 31,
1996:
December 31,
1997 $135,696
1998 135,696
$271,392
========
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,
1996, 1995 and 1994, and $373,541, and $305,693 are included
in other assets at December 31, 1996 and 1995, respectively.
(17) Fair Value of Financial Instruments
Generally accepted accounting principles require
disclosure of fair value information about financial
instruments for which it is practicable to estimate fair
value, whether or not the financial instruments are recognized
in the financial statements. When quoted market prices are not
available, fair values are based on estimates using present
value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. The derived
fair value estimates cannot be substantiated through
comparison to independent markets and, in many cases, could
not be realized in immediate settlement of the instrument.
Certain financial instruments and all non-financial
instruments are excluded from these disclosure requirements.
Further, the disclosures do not include estimated fair values
for items which are not financial instruments but which
represent significant value to the Bank, among them, core
deposit intangibles, loan servicing rights and other fee-
generating businesses. Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the
Bank.
The carrying amount of cash, short-term investments,
demand deposits and short-term borrowings approximates the
estimated fair value of these financial instruments. The
estimated fair value of securities and off-balance-sheet
instruments is based on quoted market prices or dealer quotes.
The estimated fair value of loans is estimated by discounting
the future cash flows using the current rates at which similar
loans would be made to borrowers with similar credit ratings
and for the same remaining maturities. The estimated fair
value of deposits, savings accounts and certain money market
deposits is the amount payable on demand at the reporting
date. The estimated fair value of fixed-maturity certificates
of deposit is estimated using the rates currently offered for
deposits of similar remaining maturities. Rates currently
available to the Bank for debt with similar terms and
remaining maturities are used to estimate fair value of
existing debt. The estimated fair values of commitments to
extend credit and all types of letters of credit were
established using the fees currently charged to enter into
similar agreements. The aggregate fair value of these
commitments and letters of credit was immaterial.
The estimated fair values of the Bank's financial
instruments at December 31, 1996 follows (in thousands):
Carrying Fair
Amount Value
ASSETS
Cash and due from banks and
short term investments $ 7,976 $ 7,976
Securities available for sale 4,623 4,648
Securities held to maturity 12,818 12,832
Loans, net of unearned income
and the allowance for loan
losses 37,636 38,051
LIABILITIES
Deposits 56,793 56,116
Long-term debt and obligation
under capital lease 3,026 3,264
GUARANTY BANCSHARES HOLDING CORPORATION AND
GUARANTY BANK & TRUST COMPANY OF MORGAN CITY
BOARD OF DIRECTORS
Virgil Allen Anthony Guarisco, Sr.
Engineer/Safety Director President of Guarisco
Athena Construction Enterprises, Inc.
Morgan City, Louisiana Morgan City, Louisiana
H. W. Bailey Wiley Magee
Retired Executive President of Morgan City
Vice President and Supply, Inc.
Chief Administrative Morgan City, Louisiana
Officer of McDermott, Inc.
New Orleans, Louisiana Paul Ordogne
Secretary to the Board of
Brooks Blakeman Bancshares and Guaranty
Chairman of the Board Bank & Trust Company
Guaranty Bancshares Holding Treasurer and Controller of
Corporation and Guaranty Cari Investment Company
Bank & Trust Company New Orleans, Louisiana
Vice President and
General Manager Christian Vaccari
Frank's Casing Crews, Inc. President of Cari
Lafayette, Louisiana Investment Company and
Cari Capital Company
Vincent A. Cannata New Orleans, Louisiana
President
Cannata's Supermarket, Inc. Kay Vinson
and The Cannata Corporation President of Sub-Surface
Morgan City, Louisiana Tools, Inc.
Morgan City, Louisiana
Randolph Cullom
President and Chief Benny A. Blakeman
Executive Officer Retired Clerk of Court
Guaranty Bancshares Holding St. Mary Parish
Corporation and Guaranty Morgan City, Louisiana
Bank & Trust Company Director Emeritus
Morgan City, Louisiana Guaranty Bank & Trust
Company
Frank J. Domino, Sr. Morgan City, Louisiana
President of
Frank's Motor Company, Inc. Vincent Cannata
Secretary and Treasurer of Retired President
Domino Developers, Inc. Cannata's Supermarket
Morgan City, Louisiana and The Cannata
Corporation
Anthony Guarisco, Jr. Morgan City, Louisiana
Attorney Principal of Dispute Director Emeritus
Resolution Associates, former Guaranty Bank & Trust
Louisiana State Senator Company
Baton Rouge, Louisiana Morgan City, Louisiana
GUARANTY BANK & TRUST COMPANY
OFFICERS
Brooks Blakeman, Chairman of the Board
Randolph Cullom, President and Chief Executive Officer
Paul Ordogne, 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
Leo Broussard, Vice President
Elsie R. Gaudet, Vice President and Security Officer
Lennis J. Simoneaux, Assistant Vice President
Kelly Watson, Bank Officer
Christine A. Dragna, Assistant Cashier
GUARANTY BANCSHARES HOLDING CORPORATION
OFFICERS
Brooks Blakeman, Chairman of the Board
Randolph Cullom, President and
Chief Executive Officer
Paul Ordogne, Secretary-Treasurer
Lee A. Ringeman, Executive Vice President
and Chief Financial Officer
Conley J. Dutreix, Assistant Secretary
DARNALL, SIKES, KOLDER, FREDERICK & RAINEY
(A CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS)
1201 BRASHEAR AVENUE
SUITE 301
MORGAN CITY, LA 70380
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 10,
1997, with respect to the consolidated balance sheets as of
December 31, 1996 and 1995, and the related consolidated statements
of income, changes in stockholders' equity, and cash flows for the
years ended December 31, 1996, and 1995, and 1994, which report
appears in the 1996 Annual Report of Guaranty Bancshares Holding
Corporation.
Darnall, Sikes, Kolder, Frederick & Rainey
Darnall, Sikes, Kolder, Frederick & Rainey
- ------------------------------------------
Morgan City, Louisiana
March 21, 1997
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<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 2626
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5350
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4648
<INVESTMENTS-CARRYING> 12818
<INVESTMENTS-MARKET> 12832
<LOANS> 38142
<ALLOWANCE> 506
<TOTAL-ASSETS> 66430
<DEPOSITS> 56793
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<LIABILITIES-OTHER> 1045
<LONG-TERM> 3026
<COMMON> 1067
0
3588
<OTHER-SE> 911
<TOTAL-LIABILITIES-AND-EQUITY> 66430
<INTEREST-LOAN> 3467
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<INTEREST-DEPOSIT> 1729
<INTEREST-EXPENSE> 1997
<INTEREST-INCOME-NET> 2647
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<EXPENSE-OTHER> 2496
<INCOME-PRETAX> 435
<INCOME-PRE-EXTRAORDINARY> 435
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<CHANGES> 0
<NET-INCOME> 284
<EPS-PRIMARY> (.32)
<EPS-DILUTED> (.32)
<YIELD-ACTUAL> 4.6
<LOANS-NON> 145
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<ALLOWANCE-OPEN> 504
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