Guaranty Banchsares going private
Announcement fuels flurry of stock trading
From Staff Reports

June 10, 2005 - The parent company of a Sulphur Springs bank saw a flurry of trading on the NASDAQ exchange Wednesday morning after directors announced they intend to take the company private.

The board of directors of Guaranty Bancshares Inc., the parent company of Guaranty Bond Bank in Sulphur Springs, approved the plan Tuesday to move from a publicly traded company to a private one, ending obligations to file reports with the federal Securities and Exchange Commission.

Ty Abston, president of the company, said the decision came after management and directors examined the advantages and disadvantages of operating as a publicly traded company.

“It became evident that, in view of our low trading volume and additional compliance costs associated with remaining publicly traded, this plan would allow the company to operate more efficiently,” Abston stated in a press release issued Wednesday.

Shareholders owning less than 600 shares of common stock in the company will receive a cash payment equal to $24 per share, according to the press release.

Those with 600 shares or more (including shares held in IRA accounts) will remain outstanding and be unaffected.

Under the plan, the company’s number of record shareholders will be less than 300, enabling Guaranty to cease filing periodic reports, proxy statements and other reports under the Securities Exchange Act of 1934. Company officers said that will mean a reduction in costs.

“There will be no changes in any of the officers, directors, or employees, or in the operations of the company or its subsidiary, Guaranty Bond Bank, as a result of the transaction,” Guaranty Chairman of Board and Chief Executive Officer Art Scharlach Jr. stated in the release. “The additional cost of being a publicly traded company is not justified and represents a significant expense that decreases earnings per share. Our long-term plan is to remain an independent community bank, and this transaction will help continue that strategy.”

The news was followed by a rapid rise in activity on the NASDAQ exchange. After closing at $19.35 on Tuesday, the stock opened at $22.25 Wednesday morning and had climbed to $22.75 before 11 a.m. The volume — the number of stocks traded — was over 25,000 a midday In the previous three months, the volume averaged 1,164.

The proposed transaction is subject to various conditions, including the approval by the holders of a majority of the issued and outstanding common stock of the company. Shareholders will be asked to approve the transaction at a special called meeting — currently expected to be held in the third quarter of 2005 — following the distribution of a definitive proxy statement.

The company intends to file the preliminary proxy statement and Schedule 13E-3 with the SEC outlining the transaction described above and will file a definitive proxy statement upon completion of the SEC review. The definitive proxy statement will be sent to the shareholders of the company seeking their approval of the plan. Copies of the definitive proxy statement, when it becomes available, may be obtained at www.sec.gov. Free copies of the definitive proxy statement and other documents filed by the company with the SEC may also be obtained by directing a written request to: Guaranty Bancshares, Inc., 100 W. Arkansas, Mt. Pleasant, Texas 75455, Attn: Investor Relations.

Guaranty Bancshares Inc. is a bank holding company headquartered in Mount Pleasant. The company derives substantially all of its revenue and income from the operation of its bank subsidiary, Guaranty Bond Bank, one of the oldest and largest community banks in Northeast Texas. The company currently serves eight Northeast Texas counties with 11 locations and Pecos County in West Texas with one location in Fort Stockton.

On the Net:

www.gnty.com

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