UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File No. 000-25905-01
March 31, 2002
GUARANTY CAPITAL TRUST I
Delaware 54-6422391
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1658 State Farm Blvd., Charlottesville, VA 22911
(Address of Principal Executive Offices)
(434) 970-1100
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 __
As of May 1, 2002, the Registrant had 8,537 shares of its Common Stock
outstanding.
* This Form 10-QSB also covers 276,000 shares of the Registrant's $1.75
Convertible Preferred Securities and the Guarantee with respect thereto.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements. (See Note Below)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Guaranty Capital Trust I (the "Trust") is a statutory business trust
formed under the Delaware Business Trust Act, as amended, pursuant to a trust
agreement, as amended by an amended and restated declaration of trust (the
"Declaration"), and the filing of a certificate of trust with the Delaware
Secretary of State on November 21, 1997. The Trust exists for the exclusive
purposes of (i) issuing and selling trust securities consisting of $1.75
Convertible Preferred Securities (the "Preferred Securities") and common
securities (the "Common Securities," and together with the Preferred Securities,
the "Trust Securities"), representing undivided beneficial ownership interests
in the assets of the Trust, (ii) investing the proceeds from such issuance in
Junior Subordinated Debt Securities (the "Junior Subordinated Debt Securities")
of Guaranty Financial Corporation, a Virginia corporation (the "Corporation"),
and (iii) engaging in only those other activities necessary, advisable or
incidental thereto. The Trust's sole assets are $7,113,425 principal amount of
Junior Subordinated Debt Securities, and payments under the Junior Subordinated
Debt Securities are the sole revenues of the Trust. Ownership of the Trust is
evidenced by $6,900,000 aggregate liquidation amount of Preferred Securities and
by $213,425 aggregate liquidation amount of Common Securities, all of which are
held by the Corporation, as of May 5, 1998. The Trust makes distributions on the
Trust Securities to the extent it receives distributions from the Corporation on
the Junior Subordinated Debt Securities. Distributions on the Trust Securities
are guaranteed by the Corporation, but only to the extent that the Trust has
available funds to pay such distributions. Each Preferred Security is
convertible into a number of shares of the Corporation's common stock, $1.25 par
value, which trades on the Nasdaq National Market under the symbol "GSLC," at
the option of the holder at any time prior to repayment of the Preferred
Security either at redemption or maturity, and subject to the Corporation's
right to terminate the convertibility of the Preferred Securities.
On May 5, 1998, the Trust invested the proceeds from the sale and
issuance of the Trust Securities in the Junior Subordinated Debt Securities. The
Trust's ability to pay distributions to the holders of the Preferred Securities
is dependent on its receipt of distributions on the Junior Subordinated Debt
Securities from the Corporation. Therefore, upon the receipt by the Trust of
payments from the Corporation, the Trust will pass through such payments to the
holders of the Preferred Securities.
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In December 1999, the Corporation repurchased 33,000 of the Preferred
Securities. Additionally, the Corporation repurchased 2,500 shares of the
Preferred Securities in January 2000.
In October 2000, both the Corporation and its primary operating
subsidiary, Guaranty Bank, entered into a written agreement with the Federal
Reserve Bank of Richmond ("FRB") and the Bureau of Financial Institutions of the
Commonwealth of Virginia ("BFI"). The agreement provides that neither the
Corporation nor Guaranty Bank shall declare or pay any dividends without the
prior written approval of the FRB and the BFI. Dividend income from Guaranty
Bank is the sole source of revenue of the Corporation. The interest payments on
the Junior Subordinated Debt Securities are the sole revenues of the Trust. The
Trust makes distributions on the Trust Securities to the extent that it receives
distributions from the Corporation on the Junior Subordinated Debt Securities.
Guaranty Bank has received approval by the FRB and the BFI to pay
dividends to the Corporation in an amount sufficient for the Corporation to make
its June 2002 interest payment on the Junior Subordinated Debt Securities. The
Corporation does not have the resources to make the interest payment on the
Junior Subordinated Debt Securities unless it receives the dividend from
Guaranty Bank. The FRB and the BFI have approved all quarterly dividend payment
requests by Guaranty Bank since the written agreement was executed. No
assurances can be given that future requests will be approved.
NOTE: Because the Trust is a special purpose financing entity with no
separate business operations and the only assets of the Trust are the Junior
Subordinated Debt Securities, the Trust does not believe that financial
statements for the Trust are meaningful. Accordingly, financial statements and
related financial information have not been included in this Form 10-QSB. For
further information concerning the Corporation, including financial statements
and other financial information, see the Corporation's Annual Report on Form
10-KSB for the year ended December 31, 2001, and the Corporation's Quarterly
Reports on Form 10-QSB for the quarter ended March 31, 2002, as filed with the
Securities and Exchange Commission, copies of which may be obtained from the
Corporate Secretary of the Corporation at 1658 State Farm Boulevard,
Charlottesville, Virginia 22911.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
GUARANTY CAPITAL TRUST I
(Registrant)
Date: May 14, 2002 /s/ William E. Doyle, Jr.
--------------------------------------------
Name: William E. Doyle, Jr.
Title: Administrative Trustee
(as principal executive officer and
on behalf of the Registrant)
Date: May 14, 2002 /s/ Thomas F. Crump
--------------------------------------------
Name: Thomas F. Crump
Title: Administrative Trustee
(as principal financial officer)
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