More annual reports from Guaranty Bancshares:
2023 Report2014 Annual Report page 2 Growing because we help you grow Ty Abston Chairman of the Board & CEO Dear Fellow Shareholders, We are pleased to report that Guaranty Bancshares had solid performance in 2014 in almost every area of the Company. We began the year with a strategic goal of generating organic growth in our loan portfolio to replace lower yielding securities. Our efforts proved successful, and we ended the year with record loans of over $792 million, an $86 million or 12% net increase from year end 2013. Total bank deposits reached a new record of over $1.08 billion, and total assets also increased to a record $1.33 billion. Our recent expansion efforts into the new markets of Bryan/College Station and Longview helped fuel this growth. Recently announced expansion plans into the vibrant Dallas/Ft. Worth market should prove to continue this strong growth trend. The Company’s pre-tax earnings were $13.7 million for 2014, similar to last year’s earnings results. Although not completely satisfied with these results, we are pleased that they were achieved while maintaining a very conservative liquidity and interest rate risk posture, and while absorbing the start-up costs of our new market expansions. We continue to prudently manage interest rate risks on our balance sheet, and remain willing to sacrifice some short-term earnings opportunities in order to remain well positioned for rising rates in the future. For the 22nd consecutive year, with the exception of only one year of level dividends, we were able to increase dividends paid to shareholders to a record $1.00 (0.50 cents split adjusted) per share. This represents a 5.26% increase compared to the $0.95 2014 Annual Report page 1 Growing because we help you grow$200,000 !$300,000 !$400,000 !$500,000 !$600,000 !$700,000 !$800,000 !2010!2011!2012!2013!2014!Total Loans!(In Thousands)!$200,000 !$400,000 !$600,000 !$800,000 !$1,000,000 !$1,200,000 !$1,400,000 !2010 2011 2012 2013 2014 Total Assets!(In Thousands)!$200,000 !$400,000 !$600,000 !$800,000 !$1,000,000 !$1,200,000 !2010!2011!2012!2013!2014!Total Deposits!(In Thousands)! We began the year as a C-Corp tax status, having converted from an S-Corp at the beginning of the year to better position the Company for acquisitions and future corporate strategies to enhance shareholder value and liquidity. (0.475 cents split adjusted) per share in 2013. Additionally, in December we paid a special one-time tax free dividend of $1.00 per share, taking advantage of this one-time option in 2014 following our S-Corp. conversion last year. That brings the total dividend paid in 2014 to $1.50 or a 6.5% return on today’s stock valuation. Our stock valuation ended 2014 at $23 per share on a split-adjusted basis. We continue to work hard to create fair and consistent returns for our shareholders. Strategic moves in 2014 We executed on several strategic initiatives in 2014, all designed to better position our Company for continued future growth. Below is a list of major initiatives achieved by the Company in 2014: January: We began the year as a C-Corp tax status, having converted from an S-Corp at the beginning of the year to better position the Company for acquisitions and future corporate strategies to enhance shareholder value and liquidity. April: We opened full-service bank locations in College Station and Longview, Texas. May: We completed a 10% shareholder Rights Offering and raised $14.4 million in new capital to continue our growth trajectory. June: We opened a full-service bank location in Bryan, Texas. July: We changed the bank’s name to “Guaranty Bank & Trust” to give us a commercially strong name as we continue to expand our banking franchise across the state. New Locations Added in 2014 College Station Longview Bryan 2014 Annual Report page 2 Our strategy is simple and straight forward. We plan to remain independent by continuing to grow our franchise and creating shareholder value. August: We announced and completed a 2-for-1 stock split for all GNTY shareholders of record as of August 20th. December: We announced the acquisition of Texas Leadership Bank in Royse City, a move that expanded Guaranty into the rapidly growing Rockwall County. December: We announced the acquisition of Preston State Bank in Dallas with its two locations and strong management team. This merger will be the foundation of our future expansion efforts into the fast growing DFW market. Looking to the future Over the years Guaranty has been a very successful company. In fact, it’s this past success that we are building upon today. But past successes never guarantee future success. Banking remains a rapidly changing industry, with technology and banking regulations significantly impacting the business model of community banks like ours. The strategic moves that we have made over the last five years, and those that we’ll continue to make in 2015, are designed to best position Guaranty to continue building on our past successes. Our strategy is simple and straight forward. We plan to remain independent, and continue to grow our franchise, creating shareholder value. We also plan to continue diversifying our balance sheet with strategic expansion in strong growth markets throughout this vibrant state of ours while maintaining good liquidity and fair valuation options for our shareholders. Status quo and complacency are often initially comfortable when considering corporate strategy. However, that course will Joining Our Guaranty Family in 2015 2014 Annual Report page 3 Growing because we help you grow not necessarily produce good future prospects or results for a company. Regardless of what worked in the past, the banking industry is simply changing too rapidly to remain stagnate. Guaranty’s board and management agree that if we are not growing and diversifying our asset base, expanding our banking footprint and consistently upgrading our talents, then we are really limiting our future prospects. Not only to create continued acceptable shareholder returns, but to remain independent and a vibrant growing company. However, we are not seeking growth for its own sake. Instead we are striving for growth that includes: sheet, · continued diversification of our balance · growing the strengths and talents of our · increasing our technology capabilities, and · positioning the company strategically to be in leadership team, markets that will benefit from the economic growth opportunities that are currently developing in our great state. Guaranty’s board and management agree that if we are not growing and diversifying our asset base, expanding our banking footprint and consistently upgrading our talents, then we are really limiting our future prospects. We strive to do all of this while maintaining our core banking philosophy and focus on strong asset quality. Banking franchises that can accomplish this task in the coming years will be valuable franchises that have their futures in front of them. Those that can’t or just as importantly won’t, will find their futures dictated to them by circumstance. Charting this path forward has been and will remain the overriding goal of our board and this management team. We recently announced the acquisition of Preston State Bank in Dallas and Texas Leadership Bank in Royse City. Both bank franchises bring strong shareholders, customers, and bank staff to join our Guaranty team. In addition, these combinations Increasing our technology capabilities is important in a rapidly changing banking Mobile Applications Online Banking Bill Pay ATM industry. 2014 Annual Report page 4 provide Guaranty with an initial entry platform into the fast growing DFW market. We are excited about the future prospects these mergers offer our combined shareholders. Guaranty’s balance sheet strength and resources position us well for strong growth opportunities in the vibrant Dallas market. In conjunction with this expansion into the Dallas market, we plan to consolidate our corporate functions into the Mt. Pleasant and Dallas markets. This move creates greater efficiencies for the company by consolidating departmental from several different markets. It also maximizes Guaranty’s options in the future as we continue to grow our franchise and need to attract additional talent to our team. The resulting organizational model is a very scalable platform designed and constructed to position Guaranty well for the future as a larger bank franchise. functions Of the more than 500 banks operating in Texas today, Guaranty is now in the Top 50 in the state by asset size. We see great opportunities ahead for our Company. We have the strength and asset base to serve customers of all sizes, offer an array of commercial and consumer banking products, maintain state-of- the-art secure networks for our customer’s peace of mind, and employ top-talented bankers to serve our customers and clients. These facts put Guaranty in a strong position for the future. Our whole team feels very fortunate to have the opportunity to lead such a great company. We look forward to the future and the exciting possibilities that lie ahead for our Company. Thank you, fellow shareholders, for your continued investment, support, and confidence in Guaranty Bank & Trust and Guaranty Bancshares. Ty Abston Chairman of the Board & CEO Guaranty Bancshares, Inc. We have the strength and asset base to serve customers of all sizes, offer an array of commercial and consumer banking products, maintain state-of-the-art secure networks for our customer’s peace of mind, and employ top-talented bankers to serve our customers and clients. Top 50 bank Of the more than 500 banks operating in Texas today, Guaranty is now in the Top 50 in the state by asset size. 2014 Annual Report page 5 Growing because we help you grow Executive Management Team Ty Abston - Chairman of the Board & Chief Executive Officer Ty Abston is Chairman of the Board and CEO of Guaranty Bank & Trust, as well as its parent company, Guaranty Bancshares, Inc. He is also Chairman of the Executive Committee of the Board, a member of the Director’s Loan Committee, and either chairs or is a member of all the key operational committees of the bank. During his 27-year banking career, Abston has demonstrated strong skills in bank management, strategic planning, and mergers & acquisitions. In addition to oversight of the commercial lending and loan portfolio divisions, he chairs the bank’s Investment Committee, managing $400 million in securities for the bank. He has served on the boards of the Federal Home Loan Bank of Dallas and Independent Bankers Association of Texas, and Texas Security Bank in Dallas. Abston received his bachelor’s degree in Finance from the University of North Texas and his MBA in Finance from Texas A&M University–Texarkana. He is a graduate of ABA’s National Commercial Lending School. Starting in 2015, Abston will maintain dual offices in the Dallas and Mt. Pleasant markets. Kirk Lee - Vice Chairman & Chief Credit Officer Kirk Lee has over 30 years of experience in banking. Currently serving as Vice Chairman and Chief Credit Officer of Guaranty Bank & Trust, and as President of its parent company Guaranty Bancshares, Inc. Lee also chairs the Director’s Loan Committee and is a member of the Executive Committee. He served the Arkansas State Banking Department as a Bank Examiner Supervisor, and worked a number of years in commercial lending and management at another community bank prior to joining Guaranty in 1992 as President of the bank’s Paris location. Lee chairs or is a member of all the key operational committees of the bank. He holds a B.A. in Business Administration from Ouachita Baptist University as well as graduated from the Southwestern Graduate School of Banking. Lee offices in the Bryan/College Station market. Cappy Payne - Senior Executive Vice President & Chief Financial Officer Cappy Payne serves as the Senior Executive Vice President and Chief Financial Officer for Guaranty Bank & Trust and its parent company Guaranty Bancshares, Inc. and is a member of the Executive Committee. He started with the bank in 1984 as a Credit Analyst, advancing to Senior Loan Officer, Controller, and Investment Officer. He has served as a director of the bank and holding company since 1995. With almost 30 years of executive financial experience, Payne oversees Guaranty Bank & Trust's divisions in accounting, deposit services, technology, and marketing. He chairs or is a member of all the key operational committees of the bank. During his tenure as CFO, Guaranty Bank & Trust went public in 1998, was listed on the Nasdaq Stock Exchange, and then returned in 2005 to a private entity. Guaranty Bancshares Inc. is currently a privately held company. In 1980, Payne began his career at Oakerson & Arnold PC, a regional CPA firm, becoming a certified public accountant in 1985 after joining Guaranty. Payne holds a BBA in Accounting from Baylor University and is a licensed CPA. Starting in 2015, Payne will office in the Dallas market. Hal Lower - Executive Vice President Hal Lower is Executive Vice President of Guaranty Bank & Trust, serves on the Board of the Bank and Holding company, and is a member of the Director’s Loan Committee and Executive Committee. Lower has an extensive accounting background that supports his credit and lending duties. With administrative oversight of Guaranty Bank & Trust's five Bowie County locations, he serves on most of the key operational committees of the bank. Lower has over 20 years experience in banking. In addition to being a licensed CPA, he holds a Bachelor’s Degree in Accounting from Texas A&M University in College Station. Lower offices in the Texarkana market. Martin Bell - Executive Vice President Martin Bell is Executive Vice President and serves on the board of Guaranty Bank & Trust. Bell has commercial, real estate, and consumer lending responsibilities as well as administrative oversight of 20 bank locations and the bank’s mortgage division. He leads the bank’s Strategic Planning process and M&A integrations. He chairs the bank’s Management Team, Integration Team, and New Product Committees, and serves on all key operational committees of the bank. Bell has over 30 years experience in banking. He holds a BBA in Finance from Texas Christian University and graduated from Texas Tech Intermediate and Advanced Schools of Banking. In 1991, Bell graduated with Honors from the Southwestern Graduate School of Banking in Dallas. Bell offices in the Mt. Pleasant market. 2014 Annual Report page 6 Executive Management Team Robin Sharp - Executive Vice President & Chief Risk Officer Robin Sharp is Executive Vice President and is an Advisory member of the Board of Directors. In addition to commercial lending responsibilities, he supervises the bank’s regulatory compliance and risk management divisions. Sharp serves on all key operational committees of the bank. Sharp has over 30 years experience in banking. He earned his Bachelor’s degree from Texas Tech University, attended the American British College in Barcelona, Spain, and continued his education at Southwestern Graduate School of Banking. Sharp graduated with Honors from the Southwestern Graduate School of Banking in 2007. Sharp offices in the Mt. Pleasant market. Danny Muskrat - Executive Vice President & Chief Technology Officer Danny Muskrat serves as Executive Vice President and Chief Technology Officer and is an Advisory member of the Board of Directors. Muskrat has 16 years of banking experience in digital channel growth, M&A, operations, network infrastructure, system conversions, data processing, and information security. He chairs the Technology Committee and the Business Intelligence Committee in addition to serving on other key operational committees of the bank. Muskrat earned a Bachelor’s Degree in Business Administration with a major in Information Systems Management and a Master’s Degree of Business Administration from Baylor University in Waco, Texas. Muskrat offices in the Mt. Pleasant market. Chuck Cowell - Dallas Market Chairman (Pending completion of the Preston State Bank merger) Upon completion of the merger, Chuck Cowell will become the Dallas Market Chairman for Guaranty's banking operations in the DFW Metroplex. Cowell has served as President and CEO of Preston State Bank and its parent company DCB Financial Corp. in Dallas since September 2009. He has over 40 years of industry experience; having served in Executive Officer positions for both privately held and publicly traded institutions in Midland, Graham, Abilene and Houston markets. Cowell received his undergraduate degree in Finance from Texas Tech University and is a graduate of the National Installment Lending School in Norman, Oklahoma and the Southwestern Graduate School of Banking at Southern Methodist University, Dallas, Texas. Cowell will office in the Dallas market. Randy Kucera - Executive Vice President & General Counsel Randy Kucera serves as General Council and is an Advisory member of the Board of Directors. He also serves as Executive Vice President and General Council for Guaranty Bancshares, Inc. Prior to joining Guaranty Bank & Trust in 2013, he was a partner in the litigation division of Akin & Gump law firm in Dallas. Prior to that he was an assistant district attorney in the Dallas County District Attorney’s Office. In his 30-year legal career, Kucera focused on complex commercial litigation, including a wide variety of contract, antitrust, lender liability, ERISA, environmental, business tort, intellectual property, and insurance matters. He most recently served as the litigation partner in charge of the firm’s commercial mortgage-backed securities (CMBS) litigation practice, which handles complex commercial real estate litigation involving institutional lenders, financial service companies, conduit lenders, and master and special servicers. He graduated summa cum laude with a B.A. in Political Science in 1979 from Vanderbilt University, where he was a Harold Sterling Vanderbilt distinguished scholar and received the Alexander Heard Award as the top graduate in his major. He earned his J.D. in 1983 from Yale Law School, where he received the Thurman Arnold Award as the outstanding oral advocate in the Yale Moot Court competition. He is a member of the State Bar of Texas, the Dallas Bar Association, and the Texas Association of Defense Counsel. He is admitted to practice before the U.S. district courts for the Northern, Southern, Eastern, and Western districts of Texas and the U.S. Court of Appeals for the 5th and 7th circuits. Kucera offices in the Mt. Pleasant market. 2014 Annual Report page 7 Trust & Wealth Management Group The focus of the Trust & Wealth Management services at the Bank can be described in three words: Provide. Protect. Pass.™ We work with our clients to provide for their loved ones and philanthropic interests. We assist our clients with strategies to protect their assets. We advise our clients on methods to pass their values and assets to the next generation and beyond. The net growth rate for the department for the last four years has been over 125%. This growth is propelled by a joining of philosophies, doing what is right for the client in every situation, a highly educated and specialized staff, and the support and oversight of a strong community bank. This blend allows us to offer the kind of personalized service that is often lost these days. Both the Bank’s entrance into new markets and the Trust & Wealth Management Group’s minerals management service implementation provide additional growth opportunities in 2015. Our full range of services include investment management focusing on strategic asset allocation, administration of trusts, estate settlement, and custodial services. The group’s four senior officers have well over 100 years of combined experience in the trust and wealth management industry. Our experience is applied to analyze, evaluate, and address each client’s diverse financial world. Individuals, families, philanthropic organizations, and business entities hold unique assets that include art, minerals, real estate, and businesses, as well as conventional investments of stocks, mutual funds, and bonds. The result is a comprehensive approach to wealth management as a holistic discipline that is used to decipher and administer the complexities of each client’s financial needs. Trust & Wealth Management Group has grown 125% over the last four years. Jennifer Jefferies, Mick Trusty, Andrew Hoeniges & Lacy McMillen 2014 Annual Report page 8 Mortgage Lending Group The mortgage department performed well in 2014, despite compliance and regulatory challenges facing the mortgage industry. We closed 305 secondary market loans totaling $49.4 million. Our entry into the Bryan/College Station and Longview markets contributed to our growth. Additionally, we controlled expenses by implementing a paperless system, consolidated duties in some positions and implemented our e-sign disclosure procedure. Our department is committed to serving our local communities by offering home ownership counseling and participating in local lending programs. During the summer, representatives of the mortgage department conducted an eight-hour home ownership class in partnership with the Housing Authority of the City of Texarkana, Texas. As a result of this program, we helped prospective home buyers achieve the dream of home ownership. We continue to strive for growth, adding experienced mortgage originators in the Bryan/College Station market as well as in the Longview/Hallsville market. In 2014, we also transitioned our portfolio residential lending products to the mortgage operations area in Texarkana. Looking forward, we continue to actively recruit talent not only within our present market but also surrounding markets. We will be adding additional mortgage originators in the Dallas/Ft. Worth market and we will be transitioning to a web-based lending platform, enabling our mortgage originators to work from any location with WIFI access. We look forward to a very successful 2015! Rhoan Hernandez President - Mortgage Guaranty Mortgage Lending Group originated over $49 million in secondary market loans. 2014 Annual Report page 9 Growing because we help you grow Guaranty Gives Back Through Guaranty Gives Back our employees volunteered over 17,000 hours last year and donated more than $250,000 to organizations in the communities we serve. We were honored to receive the Cornerstone Award given by the Texas Bankers Association for these efforts. The Guaranty Gives Back initiative was started to encourage our employees to volunteer their time, talents, and resources for the betterment of the community. Our employees have taken this concept to heart as is evident in the positive impact they have made in all of our local communities. Cornerstone Award for Community Involvement - 2014 By Texas Bankers Association 2014 Annual Report page 10 Best Companies to Work for in Texas Guaranty Bank & Trust has achieved its success over the years because of the quality of our people. We work very hard to attract, retain, and develop the best bankers. We were honored to receive the Best Companies to Work for in Texas, as listed in Texas Monthly magazine, for the sixth straight year for these efforts. We believe that creating a positive work environment for our employees and an ownership mentality will translate into better service to our customers and better returns for our shareholders. And with the team we have assembled, we are very excited about our future. 10th Anniversary Best Companies to Work for in Texas 2015 By Texas Monthly 2014 Annual Report page 11 Guaranty Bank & Trust Board of Directors (L to R from the back:) Barney Bray, Investments; Jim Bunch, President and CEO BWI, Inc.; Art Scharlach, Retired Banker; Robin Sharp, Executive Vice President; Ricky Baker, President and CEO Big Tex Trailer Manufacturing, Inc.: Randy Kucera, Executive Vice President and General Counsel; Danny Muskrat, Executive Vice President & CTO; Bill Priefert, Chairman and CEO Priefert Manufacturing; Tim Kelty, Broker-Owner Century 21 Hometown Real Estate; Chris Elliott, President Elliott Auto Group; Joe Buford, Buford-Redfearn Insurance; Carl Smith, Heritage Constructors, Inc.; Brian Lee, County Judge and Investments; Johnny Conroy, Investments; Gene Watson, Investments; Carl Johnson, Jr., Baker and Johnson, CPA.; Brad Drake, President Lamar Fabrication; Martin Bell, Executive Vice President; Kirk Lee, Vice Chairman of the Board & CCO; Ty Abston, Chairman of the Board and CEO; Cappy Payne, Senior Executive Vice President and CFO; Hal Lower, Executive Vice President; Weldon Miller, President Everybody's Furniture Company Founded in 1913 Guaranty Bank & Trust is one of the oldest and most respected banks in Texas. It has built its strong reputation based on financial stability and community leadership. 2014 Annual Report page 12 Guaranty Banchares, Inc. Board of Directors (L to R from the back:) Carl Johnson, Jr., Chris Elliott, Brad Drake, Jim Bunch, Johnny Conroy, Gene Watson, Weldon Miller, Bill Priefert, Art Scharlach, Hal Lower, Kirk Lee, Ty Abston & Cappy Payne Guaranty Bancshares, Inc. Dividend Calendar Dividends on Guaranty Bancshares, Inc. common stock are payable, if paid, semiannually in June and December. Annual Meeting The annual meeting of Guaranty Bancshares, Inc. will be held on Wednesday, April 15, 2015. Corporate Headquarters Guaranty Bancshares, Inc. 100 W. Arkansas Mt. Pleasant, TX 75455 2014 Annual Report page 13 Investor Information 20 bank locations 14Texas communities 41ATM locations 2014 Annual Report page 14 Performance Graph The following Performance Graph compares the cumulative total shareholder return on the Company’s common stock for the five-year period from December 31, 2009 to December 31, 2014, with the cumulative total return of the S & P 500 (“S & P”) and the SNL Southwest Bank Index (“SNL”) for the same period. Dividend reinvestment has been assumed. The Performance Graph assumes $100 invested on December 31, 2009 in the Company’s common stock, the S & P and the SNL. The historical stock price performance for the Company’s common stock shown on the graph below is not necessarily indicative of future stock performance. The complete financial statements, including the independent auditors' opinion and required notes to the financial statements, can be obtained anytime by emailing a request to irelations@gnty.com. Composite of Cumulative Total Return Guaranty Bancshares, Inc., S & P and the SNL Southwest Bank Index. Period Ending Index 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 Guaranty Bancshares, Inc. S&P 500 SNL Southwest Bank 100.00 100.00 100.00 116.10 115.06 129.89 136.21 117.49 109.35 150.00 136.30 127.92 157.02 180.44 186.46 186.46 205.14 179.09 2014 Annual Report page 15 Growing because we help you grow0 25 50 75 100 125 150 175 200 225 250 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 Index Value Total Return Performance Guaranty Bancshares, Inc. S&P 500 SNL Southwest Bank CHAIRMAN of the BOARD & CEO Ty Abston VICE CHAIRMAN of the BOARD & CCO Kirk Lee SENIOR EXECUTIVE VICE PRESIDENT & CFO Cappy Payne EXECUTIVE VICE PRESIDENTS Martin Bell Hal Lower Danny Muskrat Robin Sharp EXECUTIVE VICE PRESIDENT & GENERAL COUNSEL Randy Kucera DALLAS MARKET CHAIRMAN Chuck Cowell LOCATION PRESIDENTS Trent Abbott Kenny Dority Kenny Hamilton Ryan Hamilton Robert Irwin Joel Jackson Rachel Miner Craig Roberts SENIOR VICE PRESIDENTS Steve Bledsoe Buffy Dyess Marcana Ellithorp Gene B. Erwin, Jr. Dan Herrington Andrew Hoeniges Lacy McMillen Melissa Merchant Sara Neal Jeff Nutt Joe Rose Scott Shirk Brad Thomas Mick Trusty MORTGAGE PRESIDENT Rhoan Hernandez VICE PRESIDENT & LOCATION MANAGERS Mandy Freeman Dureen Fuller Zarinska Morton VICE PRESIDENTS Bill Anderson Gail Blair Alisa Boatner Chase Coleman Sondra Cunningham Susy Guest Jeff Harris Theta Hicks Jennifer Jefferies Matt Johnson Veronica Mitchell Kim Shumate Deann Sowels Michelle Spigener Tommy VanDeaver Justin White Wade White Brenda Wright 2014 Annual Report page 16 2014 Annual Report page 17 Growing because we help you grow
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