SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934.
For Quarter Ended MARCH 31, 1995 Commission File Number 0-10929
GUARANTY BANCSHARES HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA 72-0933277
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 2208, MORGAN CITY, LOUISIANA 70381
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 504-384-2813
NOT APPLICABLE
(Former name, former address and former fiscal year
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No .
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $5 par value, 206,799 shares outstanding as of March 31, 1995
Common Stock, no par value, 167,576 shares outstanding as of March 31, 1995
I N D E X
PART I - Financial Information
Financial Statements
Consolidated Statement of Condition
March 31, 1995, and December 31, 1994 3
Consolidated Statement of Income -
Quarters Ended March 31, 1995,and 1994 4
Consolidated Statement of Cash Flows -
Quarters Ended March 31, 1995 and 1994 5
Consolidated Statement of Changes in
Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Signature 15
Exhibit Index 17
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CONDITION
March 31 December
1995 31, 1994
(in thousands)
(Unaudited)
ASSETS
Cash and due from banks $ 2,191 $ 3,436
Investment securities available for sale 5,677 7,190
Investment securities held to maturity
(Estimated market value $10,848,000 10,932 9,494
Federal funds sold 650 2,640
Loans 35,449 34,775
Less: Allowance for loan losses 505 502
Net Loans 34,944 34,273
Premises and equipment 2,127 2,176
Other real estate 30 80
Other assets 1,522 1,398
Total Assets $58,073 $60,687
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $48,838 $51,498
Obligations under capital lease 1,703 1,723
Notes payable 1,808 1,854
Other liabilities 429 433
Total Liabilities 52,778 55,508
Commitments and contingent liabilities (Note 2) - -
Stockholders' Equity
$2.70 Cumulative Preferred stock; 145,676
shares authorized, issued and outstanding 3,497 3,497
$.50 Cumulative Preferred stock, 64,324 shares
authorized, 21,900 issued and outstanding 107 107
Class A Common stock; $5 par value; 210,000
shares authorized and outstanding 1,050 1,050
Class B Common stock; no par value; 210,000
shares authorized, 170,877 issued and
outstanding 17 17
Capital surplus 2,039 2,039
Accumulated deficit (1,389) (1,504)
Treasury Stock (16) (16)
Unrealized loss on securities
available for sale (10) (11)
Total Stockholders' Equity 5,295 5,179
Total Liabilities and Stockholders' Equity $58,073 $60,687
======= =======
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED
MARCH 31
1995 1994
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
(UNAUDITED)
INTEREST INCOME
Interest and fees on loans $ 841 $ 748
Interest on time deposits and
federal funds sold 35 17
Interest on investment securities:
Taxable income 246 162
Non-Taxable income 5 1
Total Interest Income 1,127 928
INTEREST EXPENSE
Interest on deposits 415 305
Interest on capital lease 43 45
Interest on note payable 31 8
Total Interest Expense 489 358
Net Interest Income 638 570
Provision for loan losses 0 0
Net Interest Income after Provision
for loan losses 638 570
Other operating income 106 122
Operating expenses 566 551
Income before income tax expense 178 141
Income tax expense 63 47
Net income 115 94
Dividends required for preferred stock (101) (101)
Net income (loss) available for common
stockholders $ 14 $ (7)
===== =====
Earnings (loss) per common share $ .04 $(.02)
Weighted average common shares
outstanding 374,275 374,275
======= =======
GUARANTY BANCSHARES HOLDING CORPORATION
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
QUARTER ENDED
MARCH 31
1995 1994
(IN THOUSANDS)
(UNAUDITED)
Cash flows from operating activities:
Net income $ 115 $ 94
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of premium (accretion of discount
on investments),net (70) 1
(Gain) on sale of other real estate owned (30) (1)
Depreciation and amortization 69 69
(Increase) decrease in accrued interest receivable (30) 37
Increase in accrued interest payable 12 12
Increase (decrease) in accounts payable
and other liabilities (12) 5
Net cash provided by operating activities 54 217
Cash flows from investing activities:
(Decrease)increase in federal funds sold 1990 (100)
Proceeds from maturities of investment securities 4,943 5,204
Purchase of investment securities (4,733) (3,032)
Net increase (decrease) in loans (671) (601)
Proceeds from sale of other real estate owned 110 29
Purchase of premises and equipment (20) (20)
Increase in other assets (94) (34)
Net cash provided (used) by investing activities 1,525 1,446
Cash flows from financing activities:
Net increase (decrease) in demand deposits
NOW, savings, and certificates of deposit (2,660) (609)
Repayment of notes payable (46) (11)
Repayments of capital lease obligation (20) (29)
Cash dividends (98) (393)
Net cash provided used in financing activities (2,824) (1,042)
Net increase (decrease) in cash and due from banks (1,245) 621
Cash and due from banks, beginning of year 3,436 1,108
Cash and due from banks, end of quarter $2,191 $1,729
====== ======
Supplemental cash flow information:
Interest paid $ 476 $ 347
====== ======
Income taxes paid $ -0- $ -0-
====== ======
GUARANTY BANCSHARES HOLDING CORPROATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
Unrealized
Gain(Loss)
on Securities
Balance at Available Balance at
Jan.1, 1995 Net Income For Sale Mar.31,1995
$2.70
Preferred
Stock $ 3,497 - - 3,497
$.50
Preferred
Stock $ 107 - - 107
Class A
Common
Stock $ 1,050 - - 1,050
Class B
Common
Stock $ 17 - - 17
Capital
Surplus $ 2,039 - - 2,039
Accumulated
Deficit $ (1,504) 115 - (1,389)
Treasury
Stock $ (16) - - (16)
Unrealized
loss on
Securities
available
for sale $ (11) - 1 (10)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The information furnished reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of
results for the three (3) months ended March 31, 1995 and 1994.
All adjustments are considered to be of a recurring nature.
Results for the interim period may not necessarily be indicative
of results for the entire year.
NOTE 1:
On January 13, 1983, pursuant to a Reorganization and Merger
Agreement, Guaranty Bank & Trust Company of Morgan City (the Bank)
was merged into a subsidiary of Guaranty Bancshares Holding
Corporation (Bancshares) with the effect that the Bank became a
wholly owned subsidiary of Bancshares.
Bancshares has outstanding $2.70 Cumulative Preferred Stock
and Class B, No Par Value Common Stock which were issued in 1988
in exchange for subordinated debentures issued in 1983 when the
company was formed. Bancshares also has outstanding Class A, $5.00
Par Value, Common Stock which were also issued when the company was
formed. The $.50 Cumulative Preferred Stock is subordinate to the
$2.70 Preferred Stock and were issued for cash in 1989 and 1990.
The Class B common stock does not differ from the Class A
common stock except that Class A common stock has a par value of
$5 per share and Class B Common stock has no par value.
During 1992 the Bank acquired, through foreclosure, 3,301
shares of $2.70 preferred stock, 3301 shares of Class A, $5.00 par
value common stock and 3,301 shares of Class B, no par value common
stock. The preferred shares were cancelled and reverted to
authorized but unissued $.50 preferred stock. The common shares
are held as treasury stock at their stated values of $5.00 and
$.10, respectively. (See Capital Resources)
NOTE 2: Contingent Liabilities
As of March 31, 1995, there were $865,925 of letters of credit
outstanding which are not reflected in the consolidated financial
statements. Management does not expect any loss as a result of
these transactions.
GUARANTY BANCSHARES HOLDING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary
For the three months ended March 31, 1995, Bancshares earned
$115,000, compared with earnings of $94,000 for the comparable
period in 1994. The primary reasons for the increase in earnings
were a $68,000 increase in net interest income, offset by a $14,000
decrease in other operating income. The subsidiary bank did not
make a provision for loan losses in either period.
Changes in financial position at March 31, 1995, from December
31, 1994 were net reductions in federal funds sold and deposits,
and increases in loans. Proceeds from federal funds sold were
primarily used to fund new loans and deposit withdrawals.
Investments and federal funds sold declined $75,000 and $1,990,000,
respectively, while loans increased $674,000.
New credit income is the most significant component of
financial operations and is affected by interacting forces,
including changes in investment market interest rates and changes
in volume and mix of interest earning assets and interest bearing
deposits. For the first three months of 1995, net interest income
as a percent of net average earning assets of $54,530,000 was 4.67
percent, up from 4.63 percent for the first quarter of 1994. The
increase is attributable to an increase in higher yielding loans.
Net Operating Results
The following analysis should be read in conjunction with the
accompanying financial statements.
Interest income increased a net of $199,000. Of this amount,
increases were: (a) on investments - $88,000, and (b) on federal
funds sold - $18,000. Interest on loans increased $93,000.
The increase in loan income is attributable to a $2,557,000
increase in average loans outstanding, and 0.3 percent increase in
average yields to 9.6 percent. The increase in investment income
was the result of a $1,926,000 increase in average securities
investments and a 1.6 percent increase in average yields, mirroring
the overall increase in interest rates.
Interest expense increased $131,000 from 1994 levels. Average
interest bearing deposits increased $4,301,000, while average rates
paid increased 0.7 percent from 3.1 percent in 1994 to 3.8 percent
in 1995. During 1994 the subsidiary bank borrowed an additional
$1,400,000 from the Federal Home Loan Bank of Dallas to fund a
commercial real estate loan which has a comparable scheduled
amortization and maturity.
Investment Securities
Investment securities increased from $14,723,000 as of March
31, 1994 to $16,609,000 at March 31, 1995. This is primarily
attributable to purchases of U.S. Treasury securities and
amortization on mortgage backed securities. There were no
securities sales during the first quarter of 1994 or 1995.
An analysis of investment securities follows (in thousands).
Amortized Unrealized Market
Cost Gain Loss Value
March 31, 1995
Held to Maturity
U. S. Treasury Securities $ 5,923 $ - $ 29 $ 5,894
Obligations of U.S.
Agencies and Corporations 4,620 1 51 4,570
Obligations of states and
political subdivisions 362 - 5 357
Other Investments 27 - - 27
Total $10,932 $ 1 $ 85 $10,848
======= ==== ===== =======
Available for Sale
U.S. Treasury Securities $ - $ - $ - $ -
Obligations of U.S.
Agencies and Corporations 5,215 10 25 5,200
Other investments 477 - - 477
Total $ 5,692 $ 10 $ 25 $ 5,677
======= ==== ==== =======
December 31, 1994
Held to Maturity
U. S. Treasury Securities $ 3,156 $ - $ 28 $ 3,128
Obligations of U.S.
Agencies and Corporations 5,943 5 67 5,881
Obligations of states and
political subdivisions 366 - 11 355
Other Investments 29 - - 29
Total $ 9,494 $ 5 $106 $ 9,393
======= ===== ==== =======
Available for Sale
U.S. Treasury Securities $ 1,500 $ - $ 1 $ 1,499
Obligations of U.S.
Agencies and Corporations 5,234 11 26 5,219
Other investments 472 - - 472
Total $ 7,206 $ 11 $ 27 $ 7,190
======= ====== ==== =======
March 31, 1994
Held to Maturity
U. S. Treasury Securities $ 2,255 $ 4 $ 2 $ 2,257
Obligations of U.S.
Agencies and Corporations 4,779 5 9 4,775
Obligations of states and
political subdivisions 28 - - 28
Other Investments 35 - - 35
Total $ 7,097 $ 9 $ 11 $ 7,095
======= ====== ==== =======
Available for Sale
U.S. Treasury Securities $ 2,002 $ 2 $ 9 $ 1,995
Obligations of U.S.
Agencies and Corporations 5,299 12 11 5,300
Other investments 330 - - 330
Total $ 7,631 $ 14 $ 20 $ 7,625
======= ====== ==== =======
An analysis of the market value of the investment portfolio by
maturity periods at March 31, 1995 follows (in thousands):
Amortized Market
Cost Value
Within one year $ 9,867 $ 9,813
One to five years 4,954 4,931
Five to ten years 433 424
After ten years 1,370 1,357
Total $ 16,624 $16,525
========= =======
Maturities of mortgage backed securities are classified by
contractual (stated) maturity dates. Expected maturities will
differ from contractual maturities because borrowers have the right
to call or prepay obligations.
Investment securities with a carrying value of approximately
$6,986,000, $5,994,000, and $4,680,000 at March 31, 1995, December
31, 1994 and March 31, 1994, respectively, were pledged to secure
public deposits as required by law.
Deposits
A summary of the deposits as of March 31, 1995, December 31,
and March 31, 1994 is as follows:
March 31 December 31 March 31
1995 1993 1994
(in thousands)
Demand Deposits $ 6,756 $ 8,289 $ 7,584
NOW Accounts 4,998 4,883 4,763
Money Market
Investment Accts. 5,023 4,664 4,696
Savings Deposits 7,267 7,603 8,127
Other Time Deposits 17,951 17,872 14,772
Certificates of Dep.
of $100,000 or
more 6,843 8,187 6,502
$48,838 $51,498 $46,444
======= ======= =======
Non-interest bearing demand deposits at March 31, 1995
decreased $828,000 from March 31, 1994. As interest rates paid on
money market investment accounts and certificates of deposits
trended up, depositors transferred funds to bank related
institutions. Certificates of deposits of $100,000 or more to
commercial entities increased $664,000. During this period, public
fund deposits in certificates of deposit of $100,000 or more
decreased $323,000.
The Bank has insignificant foreign and no brokered deposits.
Short Term Borrowings
The Bank had no short term borrowings in 1995 or 1994.
Allowance for Loan Losses and Non-Performing Loans and Other Real
Estate
The allowance for loan losses was 1.42 percent of loans
outstanding at March 31, 1995, compared with 1.44 percent at
December 31, 1994 and 1.93 percent at March 31, 1994. The Bank did
not make a provision to the reserve for loan losses during the
first quarter of 1995 or 1994.
1995 1994
Balance at January 1, $502,000 $621,000
(Recovery) Provision for loan losses - -
Recoveries credited to the allowance 4,000 7,000
506,000 628,000
Losses charged to the allowance 1,000 2,000
Balance at March 31 $505,000 $626,000
======== ========
Indicative of improving conditions in the local economy, the
following schedule shows non-performing loans on non-accrual status
and repossessed and foreclosed real estate.
March 31 December 31 March 31
1995 1994 1994
Non-accrual loans $ - $ 30,000 $ 52,000
Foreclosed real estate 30,000 80,000 6,000
Management believes the Bank has adequate reserves to provide
for possible future loan losses.
Other Income
Other operating income aggregated to $106,000 for the first
three months of 1995 compared with $122,000 in 1994. There was no
trading account activity in 1995 or 1994.
Quarter Ending
March 31
1995 1994
Service charges on deposit accounts $ 50,000 $ 52,000
Other service charges and fees 17,000 10,000
Other operating income 39,000 60,000
Net securities and gains - -
Total $106,000 $122,000
======== ========
Operating Expenses
Other operating expenses totaled $556,000 for the first three
months of 1995, compared with $551,000 for 1994, a $5,000 increase.
Personnel expenses totaled $247,000 for the period, compared
with $245,000 in 1994. In 1995, expenses related to other real
estate and repossessed property, net of rental income on these
properties, totaled $6,000. These expenses, representing taxes,
maintenance and insurance, were partially offset by rental income
on these properties of approximately $1,000.
A summary of other operating expenses is as follows:
Three Months 1995
Ending Over
March 31, (Under)
1995 1994 1994
(In Thousands)
Salaries and benefits $ 247 $ 245 $ 2
Expenses related to other real
estate and repossessed
properties, net of rental
income on these properties 6 1 5
Net occupancy expenses 104 99 5
Equipment and computer expenses 50 48 2
Professional fees and services 35 34 1
FDIC and other insurance 37 35 2
Other 77 89 (12)
$ 556 $ 551 $ 5
====== ===== =====
Income Taxes
Income taxes were accrued at the U. S. federal tax rate. At
March 31, 1995. Bancshares has net operating loss carryforwards of
approximately $789,000 and $578,000 for income tax and financial
statement purposes, respectively.
Liquidity
The term "liquidity" generally refers to the ability of a
company to generate adequate amount of cash to meet its needs. For
a bank, "liquidity" represents its ability to meet timely the
demand for funds used to honor checks, to pay maturing time
deposits, to fund increases in loan demand and to satisfy other
commitments. Unless it borrows funds, a bank's source of funds are
generally its core deposits and its retained earnings.
At March 31, 1995 and 1994, the Bank's gross loans-to-deposits
ratios were 72.6 percent and 70.0 percent, respectively. Loans
increased $2,955,000 from 1994 levels. Significant to the loan-
to-deposit ratio computation, deposits increased $2,394,000 as of
March 31, 1995 from 1994. The Bank has no brokered deposits.
As a bank holding company, the ability of Bancshares to pay
its obligations is wholly dependent upon the receipt of dividends
and tax benefits from the Bank.
Capital Resources
At March 31, 1995, stockholders' equity amounted to $5,295,000
compared with $4,870,000 at March 31, 1994 and $5,179,000 at
December 31, 1994.
Bancshares has paid only one $2.70 and one 67.5 cents dividend
on its $2.70 preferred stock and has not declared or paid dividends
on its $.50 preferred stock since their issuance. As a result
accumulated and unpaid dividends are as follows:
$2.70 Preferred Stock, Dividends accumulated
from January 13, 1990 through March 31, 1995 $2,149,000
$.50 Preferred Stock, dividends accumulated
from January 13, 1990 through March 31, 1995 66,000
$2,215,000
==========
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
/s/Lee A. Ringeman
Lee A. Ringeman
Executive Vice President
Chief Financial Officer
DATE: May 11, 1995
PART II
Item 6: Exhibits and Reports on Form 8-K
a. Exhibit No. 11. Computation of Earnings Per Common
Share
b. Exhibit No. 27. Financial Data Schedule
c. The Registrant has not filed any Reports on Form
8-K during the first quarter of 1995.