8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 29, 2003

GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation or organization)	0-23113 (Commission File Number)	75-1656431 (I.R.S. Employer Identification No.)
100 West Arkansas Mount Pleasant, Texas (Address of principal executive offices)		75455 (Zip Code)

Registrant’s telephone number, including area code: (903) 572-9881

Item 7. Financial Statements and Exhibits.

Exhibits. The following materials are filed as exhibits to this Current Report on Form 8-K:

99.1 -      Press Release issued by Guaranty Bancshares, Inc. dated October 29, 2003.

Item 12. Disclosure of Results of Operations and Financial Condition.

              On October 29, 2003, Guaranty Bancshares, Inc. publicly disseminated a press release announcing its financial results for the third quarter ended September 30, 2003. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.

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 hereunto duly authorized.

	GUARANTY BANCSHARES, INC.
Dated: October 29, 2003	By: /s/ Clifton A. Payne —————————————— Clifton A. Payne Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release issued by Guaranty Bancshares, Inc. dated October 29, 2003.

EX-99.1

Exhibit 99.1

Guaranty Bancshares, Inc.
Reports Third Quarter and Year-To-Date Earnings

MOUNT PLEASANT, TEXAS – October 29, 2003 – Guaranty Bancshares, Inc. (Nasdaq: GNTY), a community-oriented bank holding company in Northeast Texas and the parent company of Guaranty Bond Bank, reported third quarter and nine-month earnings today as of September 30, 2003. Net income for the third quarter of 2003 was $935,000, a decrease of $157,000 or 14.4% over the third quarter of 2002. Net income for the first nine months of 2003 was $2.8 million, a decrease of $412,000 or 13.0% from the first nine months of 2002. Diluted earnings per share for the quarter was $0.32 and for the first nine months was $0.94, down 11.1% and 10.5% respectively over the same comparable periods last year.

Ty Abston, President of Guaranty Bond Bank, stated, “Although we will come in short of our original projections for the year, our financial results are encouraging and we will have a respectable year in earnings. Our strategy to not chase short-term profits by investing in riskier loans and longer-term securities, should pay off as the economy improves and interest rates rise. Our Company is positioned so that long-term earnings should continue to prosper. We are particularly pleased this year with our improvements in technology, staff training, and internal procedures. Guaranty continues to stay focused on a strategy that provides ongoing value to our shareholders and our communities.”

Assets were $526.2 million at September 30, 2003 representing an increase of $10.4 million or 2.0% since September 30, 2002. Customer funding sources, representing deposits, and borrowings created the growth in assets. Deposits grew $4.8 million or 1.2% to $420.7 million during the same period. Long-term debt, Trust Preferred Securities, increased $3.0 million or 42.9% and Federal Home Loan Bank borrowings increased $2.7 million or 5.2%. Also during the period since September 30, 2002, total loans grew $5.4 million or 1.5% to $356.8 million. Stockholders’ equity increased $613,000, or 1.8% to $35.6 million since September 30, 2002.

The decrease in net income for the third quarter and nine months ended September 30, 2003 was primarily attributable to an increase in noninterest expense partially offset by an increase in net interest income and a lower provision for loan losses for the three and nine-month periods.

The increase in net interest income was $13,000 or 0.3% for the third quarter and $421,000 or 3.4% for the nine months ended September 30, 2003. The increase is primarily the result of more earnings from an increase in average earning assets partially offset by a lower net interest margin. The net interest margin decreased from 3.75% to 3.57% for the third quarter and from 3.75% to 3.56% for the nine months ended September 30, 2003.

Non-interest income decreased $18,000 or 1.5% for the third quarter and increased $159,000 or 4.3% for the nine months ended September 30, 2003. The increase in the nine-month period is primarily due to an increase in fee income from the sale of mortgage loans into the secondary market.

Non-interest expense increased $280,000 or 7.6% for the third quarter and $1.3 million or 12.0% for the nine months ended September 30, 2003. These increases reflect costs associated with the Company’s growth and included increases in salary and employee benefits expense, primarily for additional staff in the Mt. Pleasant, Texarkana and Sulphur Springs locations.

The provision for loan losses was $250,000 compared to $335,000 for the quarter ended September 30, 2003 and 2002 respectively and $775,000 compared to $1.0 million for the nine months ended September 30, 2003 and 2002 respectively. The overall decrease is primarily due to fewer net charge-offs during the period.

Exhibit 99.1

The annualized return on average shareholders’ equity for the quarter ended September 30, 2003, was 10.53% compared to 12.51% for the same period in 2002. The annualized return on average assets was 0.70% for the quarter ended September 30, 2003 compared to 0.87% for the same period in 2002. The annualized return on average shareholders’ equity for the nine months ended September 30, 2003, was 10.45% compared to 12.61% for the same period in 2002. The annualized return on average assets was 0.70% for the nine months ended September 30, 2003 compared to 0.88% for the same period in 2002.

Asset quality remained strong at September 30, 2003, with non-performing assets declining from $4.3 million at December 31, 2002 to $4.2 million at September 30, 2003, a 4.0% decrease. As of September 30, 2003, non-performing assets represented only 0.79% of total assets. Net charge-offs during the three months ended September 30, 2003 totaled $240,000 or 0.07% of average loans compared to $279,000 or 0.08% during the same period in 2002. For the nine months ended September 30, 2003, the Company recorded net charge-offs of $627,000 or 0.17% of average loans as compared to net charge-offs of $749,000 or 0.22% during the same period of 2002. At September 30, 2003, the allowance for loan losses totaled $3.8 million or 1.08% of loans.

Cappy Payne, Senior Vice President and Chief Financial Officer of Guaranty Bancshares, Inc., commented, “Net interest income remains under pressure during the quarter as rates continue to hover at historical lows. We are continuing to focus on increasing net interest income by making prudent loan decisions coupled with careful management of interest margins and funding. We will continue to specialize in relationship banking, producing a loyal and diverse customer base.”

Guaranty Bancshares, Inc. is a $526.2 million holding company that owns 100% of Guaranty Bond Bank. The Bank currently has ten locations in Northeast Texas and one location in Fort Stockton, Texas. Guaranty Bond Bank is celebrating its 90th Anniversary in 2003.

Operating under a community banking philosophy, the Company seeks to develop broad customer relationships based on personal service and convenience. The Company offers a variety of traditional loan and deposit products to its customers. The Company’s customers consist primarily of small and medium sized businesses and consumers. In addition to established banking products, the bank offers a complete line of trust services, on-line banking, phone-plus banking, debit cards, and brokerage services through its subsidiary.

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

The information in this press release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the further performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, impact of competitive services, interest rates and general economic risks and uncertainties.

Other Information

For more information about Guaranty Bancshares, Inc., please access the Company’s web site at http://www.gnty.com.

For further information contact:

Arthur B. Scharlach, Jr., President & CEO
or
Clifton A. Payne, Senior Vice President & CFO
903/ 572-9881

903/ 572-9881

Exhibit 99.1

GUARANTY BANCSHARES, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA

	Quarter Ended September 30,						Nine Months Ended September 30,
	2003			2002			2003			2002
	(Dollars in thousands, except per share data)
Income Statement Data:
Interest Income	$	6,722		$	7,357		$	20,765		$	21,631
Interest Expense		2,413			3,061			8,013			9,300
Net interest income	$	4,309		$	4,296		$	12,752		$	12,331
Provision for loan losses		250			335			775			1,035
Net interest income after provision for loan losses		4,059			3,961			11,977			11,296
Noninterest income		1,209			1,227			3,895			3,736
Noninterest expense		3,963			3,683			12,032			10,747
Earnings before taxes		1,305			1,505			3,840			4,285
Provision for income tax expense		370			413			1,085			1,118
Net earnings		935			1,092			2,755			3,167
Preferred stock dividend	$	—		$	—			—			—
Net earnings available to common shareholders	$	935		$	1,092		$	2,755		$	3,167
Common Share Data:
Net earnings (basic) (1)	$	0.32		$	0.36		$	0.94		$	1.06
Net earnings (diluted) (1)		0.32			0.36			0.94			1.05
Book value		12.18			11.68			12.18			11.68
Tangible book value		11.38			10.90			11.38			10.90
Cash dividends		0.0000			0.0000			0.1700			0.1500
Dividend payout ratio		N/A			N/A			18.03	%		14.19	%
Weighted average shares outstanding (in thousands)		2,922			2,996			2,923			2,998
Period end shares outstanding (in thousands)		2,922			2,996			2,922			2,996
Balance Sheet Data:
Total assets	$	526,239		$	515,835		$	526,229		$	515,835
Securities		107,219			96,958			107,219			96,958
Loans		356,828			351,407			356,828			351,407
Allowance for loan losses		3,840			3,632			3,840			3,632
Total deposits		420,724			415,885			420,724			415,885
Total common shareholders’ equity		35,597			34,984			35,597			34,984
Average Balance Sheet Data:
Total assets	$	528,418		$	498,322		$	526,885		$	482,511
Securities		110,938			92,918			111,321			87,586
Loans		358,357			347,446			360,387			338,702
Allowance for loan losses		3,795			3,574			3,753			3,434
Total deposits		424,536			404,960			426,259			397,282
Total common shareholders’ equity		35,219			34,645			35,261			33,587
Performance Ratios:
Return on average assets		0.70	%		0.87	%		0.70	%		0.88	%
Return on average common equity		10.53	%		12.51	%		10.45	%		12.61	%
Net interest margin		3.57	%		3.75	%		3.56	%		3.75	%
Efficiency ratio (2)		72.03	%		71.39	%		73.10	%		68.44	%

Page 1

Exhibit 99.1

GUARANTY BANCSHARES, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA

	Quarter Ended September 30,				Six Months Ended September 30,
	2003		2002		2003		2002
Asset Quality Ratios (3):
Nonperforming assets to total loans and other real estate	1.16	%	1.06	%	1.16	%	1.06	%
Net loan charge-offs to average loans	0.07	%	0.08	%	0.17	%	0.22	%
Allowance for loan losses to total loans	1.08	%	1.03	%	1.08	%	1.03	%
Allowance for loan losses to nonperforming loans (4)	114.83	%	127.93	%	114.83	%	127.93	%
Capital Ratios:
Leverage ratio	8.17	%	8.22	%	8.17	%	8.22	%
Average shareholders’ equity to average total assets	6.66	%	6.95	%	6.69	%	6.96	%
Tier 1 risk-based capital ratio	12.10	%	11.62	%	12.10	%	11.42	%
Total risk-based capital ratio	13.18	%	12.69	%	13.18	%	12.69	%

(1) Net earnings per share is based upon the weighted average number of common shares outstanding during the period.

(2) Calculated by dividing total noninterest expenses by net interest income plus noninterest income, excluding securities losses or gains.

(3) At period end, except net loan charge-offs to average loans.

(4) Nonperforming loans consist of nonaccrual loans, loans contractually past due 90 days or more and restructured loans.

Page 2