Guaranty Bancshares, Inc. (NYSE: GNTY) (the "Company"), the
parent company of Guaranty Bank & Trust, N.A. (the "Bank"),
today reported financial results for the fiscal quarter ended June
30, 2024. The Company's net income available to common shareholders
was $7.4 million, or $0.65 per basic share, for the quarter ended
June 30, 2024, compared to $6.7 million, or $0.58 per basic share,
for the quarter ended March 31, 2024 and $9.6 million, or $0.82 per
basic share, for the quarter ended June 30, 2023. Return on average
assets and average equity for the second quarter of 2024 were 0.95%
and 9.91%, respectively, compared to 0.85% and 8.93%, respectively,
for the first quarter of 2024 and 1.17% and 12.87%, respectively,
for the second quarter of 2023. The increase in earnings during the
second quarter of 2024 compared to the first quarter of 2024 was
primarily due to the $1.2 million reversal of the provision for
credit losses during the second quarter. The decrease in earnings
in the second quarter of 2024 compared to the second quarter of
2023 was primarily due to a decrease in noninterest income in the
current quarter compared to the prior year quarter.
"Second quarter 2024 results were good and consistent with our
expectations. Net interest margin continued to improve from 3.16%
in the first quarter to 3.26% in the second quarter. Deposit
balances have remained stable as we've strategically shrunk the
balance sheet and repaid an additional $30.0 million in FHLB
advances during the quarter, as well as purchased some
higher-yielding investment securities. Credit quality overall
remains manageable with low past-due and charge-off percentages.
That, along with lower loan balances, resulted in a $1.2 million
reverse provision for credit losses during the quarter. However, we
are closely monitoring and working with a handful of one-off
borrowers that are experiencing financial difficulties and have
adjusted their risk ratings and loss reserve amounts accordingly.
We believe our balance sheet is strong and positioned to go on the
offensive as the economy improves and the Bank continues to provide
consistent earnings results for our shareholders," said Ty Abston,
the Company's Chairman and Chief Executive Officer.
QUARTERLY HIGHLIGHTS
- Growing Earnings and Improving NIM. Net interest margin,
on a fully taxable equivalent basis, continued to improve in the
second quarter, increasing to 3.26%, compared to 3.16% in the first
quarter and 3.19% in the prior year quarter. Earnings also improved
compared to the prior quarter, due to the improved net interest
margin, reverse credit loss provisions, and lower employee and
compensation expenses. The net interest improvements resulted
primarily from a slow-down in deposit cost increases, while earning
assets have continued to reprice upward.
- Good Asset Quality. We have experienced some risk rating
downgrades as we work with certain borrowers that are experiencing
cash flow and other challenges. However, we believe overall credit
quality remains strong and the expected losses on deteriorating
credits are low primarily due to the Bank's equity position and/or
strong guarantor support. Nonperforming assets as a percentage of
total assets were 0.71% at June 30, 2024, compared to 0.68% at
March 31, 2024 and 0.11% at June 30, 2023. Net charge-offs
(annualized) to average loans were 0.01% for the quarter ended June
30, 2024, compared to 0.02% for the quarter ended March 31, 2024,
and 0.03% for the quarter ended June 30, 2023. There was a reverse
provision to the allowance for credit losses of $1.2 million during
the second quarter, in addition to the $250,000 reverse provision
in the first quarter. Changes to historical and qualitative factors
have been minimal during the first half of 2024, therefore the
decrease in the allowance for credit losses is due primarily to the
decreases in outstanding loan balances of $107.6 million, or 4.6%,
since January 1, 2024, which were partially offset by an increase
in special mention and substandard loans during the same period as
we continue to work with some stressed borrowers. Nonperforming
assets consist of both nonaccrual loans and other real estate owned
(ORE). Nonaccrual loans represent 0.28% of total outstanding loan
balances as of June 30, 2024 and consist primarily of smaller
dollar consumer and small business loans. In the first quarter, we
foreclosed on a multi-purpose commercial real estate loan in a
vibrant location in the South Austin area and recorded other real
estate owned of $14.9 million. As the property was prepared for
sale and marketing in the second quarter, management applied a more
conservative capitalization rate to estimate current value and
applied a $900,000 valuation allowance during the quarter, which is
included in other noninterest income on the income statement and
explains the quarter-over-quarter decrease in that balance. During
the second quarter, we also foreclosed on a single-family
residential property with a fair value of $1.2 million. At this
time, we do not expect additional valuation allowances or losses on
the ORE. Commercial real estate (CRE) loans, particularly office
related loans, have received increased scrutiny in recent months.
As of June 30, 2024, our CRE loans and real estate C&D loans
represent 40.6% and 10.4% of the total loan portfolio,
respectively, and office-related loans represent 5.5% of the total
loan portfolio with an average balance of $551,000.
- Granular and Consistent Core Deposit Base. As of June
30, 2024, we have 89,370 total deposit accounts with an average
account balance of $29,385. We have a historically reliable core
deposit base, with strong and trusted banking relationships. Total
deposits decreased slightly by $1.7 million during the second
quarter. DDA balances decreased $11.1 million, savings and MMDA
balances decreased $21.9 million while time deposits increased
$31.3 million. Excluding public funds and Bank-owned accounts, our
uninsured deposits as of June 30, 2024 were 25.7% of total
deposits. Interest rates paid on deposits during the quarter
stabilized with minimal increases. Despite the decrease in DDA
during the quarter, noninterest-bearing deposits still represent
31.2% of total deposits. Our cost of interest-bearing deposits
increased seven basis points during the quarter from 3.25% in the
prior quarter to 3.32%. This increase was primarily due to renewals
of maturing certificates of deposit into new CDs paying higher
rates and the shift from noninterest-bearing balances to
interest-bearing. Our cost of total deposits for the second quarter
of 2024 increased five basis points from 2.23% in the prior quarter
to 2.28%†.
- Healthy Capital and Liquidity. Our capital and liquidity
ratios, as well as contingent liquidity sources, remain very
healthy. During the second quarter of 2024, we repurchased 138,427
shares of our common stock, or 1.21% of our average shares
outstanding during the period, at an average price of $29.56 per
share. Our liquidity ratio, calculated as cash and cash equivalents
and unpledged investments divided by total liabilities, was 13.6%
as of June 30, 2024, compared to 12.9% as of June 30, 2023. Our
total available contingent liquidity, net of current outstanding
borrowings, was $1.3 billion, consisting of FHLB, FRB and
correspondent bank fed funds and revolving lines of credit.
Finally, our total equity to average quarterly assets as of June
30, 2024 was 9.9%. If we had to recognize our entire net unrealized
losses on both AFS and HTM securities, our total equity to average
assets ratio would be 9.1%†, which we believe represents a
strong capital level under regulatory requirements.
† Non-GAAP financial metric. Calculations of this metric
and reconciliations to GAAP are included in the schedules
accompanying this release.
RESULTS OF OPERATIONS
Net interest income, before the provision for credit losses, in
the second quarter of 2024 and 2023 was $23.9 million and $24.7
million, respectively, a decrease of $823,000, or 3.3%. The
decrease in net interest income resulted from an increase in
interest expense of $2.8 million, or 20.0%, compared to the prior
year quarter, which was partially offset by an increase in interest
income of $2.0 million, or 5.1%, from the same quarter in the prior
year. The increases in both interest income and expense resulted
primarily from higher rates during the period. Interest expense was
also somewhat impacted by a shift from noninterest-bearing to
interest-bearing deposit accounts, which resulted in increased
expense in the second quarter of 2024 compared to the prior year
quarter. Our noninterest-bearing deposits to total deposits were
31.2% and 35.2% as of June 30, 2024 and 2023, respectively.
Net interest margin, on a fully taxable equivalent basis, for
the second quarter of 2024 and 2023 was 3.26% and 3.19%,
respectively. Net interest margin, on a fully taxable equivalent
basis, increased seven basis points primarily due to increases in
interest earned on loans and available for sale securities during
the period. The cost of interest-bearing liabilities increased 61
basis points from the prior year quarter, while interest-earning
asset yields increased 57 basis points. The increase in the cost of
interest-bearing liabilities was due primarily to an increase in
the cost of interest-bearing deposits from 2.41% to 3.32%, a change
of 91 basis points, in the second quarter of 2024 compared to the
same period in 2023. The increases in cost were partially offset by
increases in yield on the loan portfolio from 5.70% to 6.29%, or 59
basis points, as well as 97 and 14 basis point increases in yield
on AFS and HTM securities, respectively. Although the cost of
interest-bearing liabilities have repriced more quickly during this
period, the weighted average yield on $73.5 million in new loans
originated in the second quarter was 8.26%.
Net interest income, before the provision for credit losses,
increased $293,000, or 1.2%, from $23.6 million in the first
quarter of 2024 to $23.9 million in the second quarter of 2024. The
increase in net interest income resulted primarily from an decrease
in interest expense of $332,000, or 1.9%, compared to a decrease in
interest income of only $39,000, or 0.1%.
Net interest margin, on a fully taxable equivalent basis,
increased from 3.16% for the first quarter of 2024 to 3.26% for the
second quarter of 2024, an increase of 10 basis points. The
increase in net interest margin, on a fully taxable equivalent
basis, was primarily due to an increase in loan yields from 6.21%
for the first quarter of 2024 to 6.29% for the second quarter of
2024, a change of eight basis points, and a decrease in total
interest-earning assets during the second quarter of 2024. This
increase was partially offset by an increase in the cost of
interest-bearing deposits from 3.25% in the first quarter of 2024
to 3.32% in the second quarter of 2024, a change of seven basis
points.
We recorded a reverse provision for credit losses of $1.2
million and $250,000 during the second and first quarters of 2024,
respectively. Our gross loan balances decreased by $50.3 million
during the second quarter and by $107.6 million during the first
half of 2024, while overall credit quality trends and economic
forecast assumptions remained relatively stable. As of June 30,
2024 and December 31, 2023, our allowance for credit losses as a
percentage of total loans was 1.32% and 1.33%, respectively.
Noninterest income decreased $3.3 million, or 41.6%, in the
second quarter of 2024 to $4.6 million, compared to $7.9 million
for the second quarter of 2023. The decrease from the same quarter
in 2023 was primarily due to a one-time gain on the sale of
nonmarketable correspondent bank stock of $2.8 million in the prior
year quarter and a $900,000 ORE valuation allowance during the
second quarter of 2024 (described further in the Quarterly
Highlights above).
Noninterest expense increased $131,000, or 0.6%, in the second
quarter of 2024 to $20.6 million, compared to $20.5 million for the
second quarter of 2023. The increase in noninterest expense in the
second quarter of 2024 was driven primarily by an increase in other
noninterest expense of $393,000, or 32.5%, due to $222,000 in ORE
expenses during the current quarter, as well as a $123,000 increase
in losses sustained due to fraudulent check activity during the
current quarter. Additionally, the Bank saw an increase in software
and technology expense of $122,000, or 8.0%. These were partially
offset by a $216,000, or 1.8%, decrease in employee compensation
and benefits and a $144,000, or 14.6%, decrease in legal and
professional fees compared to the second quarter of 2023.
Noninterest income in the second quarter of 2024 decreased by
$659,000, or 12.5%, from $5.3 million in the first quarter of 2024.
The decrease was primarily due to a decrease in other noninterest
income of $1.1 million, or 94.3%, primarily the result of a
$900,000 ORE valuation allowance during the second quarter of 2024.
Additionally, there was $499,000 in prior write-down recoveries on
receivables related to SBA loans during the first quarter of 2024
that were not present in the second quarter of 2024.
Noninterest expense decreased $90,000, or 0.4%, in the second
quarter of 2024, from $20.7 million for the quarter ended March 31,
2024. The decrease resulted primarily from a $714,000, or 5.7%,
decrease in employee compensation and benefits. There was a
$287,000 higher expense in the first quarter related to our
executive compensation program, which is primarily funded by the
Company during the first quarter of each year. Payroll tax-related
expense decreased by $192,000 from the first quarter to the second
quarter due to bonus-related taxes paid during the first quarter.
Bonus expense was decreased in the second quarter compared to the
first quarter by $125,000 as production-related incentives are
expected to be lower than originally accrued for. These decreases
were partially offset by a $177,000, or 6.4%, increase in occupancy
expenses, a $176,000, or 28.9%, increase in ATM and debit card
expense and a $164,000, or 11.4%, increase in other noninterest
expense during the second quarter of 2024 compared to the first
quarter of 2024.
The Company’s efficiency ratio in the second quarter of 2024 was
72.34%, compared to 62.84% in the prior year quarter and 71.74% in
the first quarter of 2024.
FINANCIAL CONDITION
Consolidated assets for the Company totaled $3.08 billion at
June 30, 2024, compared to $3.13 billion at March 31, 2024 and
$3.21 billion at June 30, 2023.
Gross loans decreased by $50.3 million, or 2.2%, during the
quarter resulting in a gross loan balance of $2.21 billion at June
30, 2024, compared to $2.27 billion at March 31, 2024. Our decline
in loans resulted primarily from tighter underwriting due to the
current economic environment and from lower demand from potential
borrowers.
Gross loans decreased $118.9 million, or 5.1%, from $2.33
billion at June 30, 2023. The decrease in gross loans during the
second quarter of 2024 compared to the second quarter of 2023
resulted from tightened credit underwriting standards and loan
terms, along with fewer borrower requests in response to higher
interest rates and project costs.
Total deposits decreased by $1.7 million, or 0.1%, to $2.63
billion at June 30, 2024, compared to $2.63 billion at March 31,
2024, and increased $23.3 million, or 0.9%, from $2.60 billion at
June 30, 2023. The decrease in deposits during the second quarter
of 2024 compared to the first quarter of 2024 was the result of a
decrease in noninterest-bearing deposits of $8.4 million, offset by
an increase in interest-bearing deposits of $6.7 million. The
increase in deposits during the current quarter compared to the
prior year quarter resulted primarily from an increase in
interest-bearing deposits of $118.4 million, partially offset by a
decrease in noninterest-bearing deposits of $95.0 million.
Nonperforming assets as a percentage of total loans were 0.98%
at June 30, 2024, compared to 0.94% at March 31, 2024 and 0.15% at
June 30, 2023. Nonperforming assets as a percentage of total assets
were 0.71% at June 30, 2024, compared to 0.68% at March 31, 2024,
and 0.11% at June 30, 2023. The Bank's nonperforming assets consist
primarily of other real estate owned and nonaccrual loans. The
increase in nonperforming assets compared to the prior year quarter
was primarily due to the increase in other real estate owned, which
is described in the Quarterly Highlights above.
Total equity was $308.6 million at June 30, 2024, compared to
$305.9 million at March 31, 2024 and $297.4 million at June 30,
2023. The increase in total equity compared to the prior quarter
and prior year quarter resulted primarily from net income of $7.4
million during the second quarter and a positive shift in our net
unrealized losses on securities compared to the prior periods.
These increases were somewhat offset by the payment of dividends of
$2.7 million during the second quarter of 2024, and a higher volume
of stock share repurchases of $4.1 million during the second
quarter of 2024 compared to prior quarters.
As of
2024
2023
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
ASSETS
Cash and due from banks
$
45,016
$
43,872
$
47,744
$
47,922
$
47,663
Federal funds sold
40,475
24,300
36,575
73,275
44,950
Interest-bearing deposits
4,721
4,921
5,205
8,980
4,738
Total cash and cash equivalents
90,212
73,093
89,524
130,177
97,351
Securities available for sale
242,662
228,787
196,195
178,644
166,596
Securities held to maturity
347,992
363,963
404,208
408,308
437,292
Loans held for sale
871
874
976
2,506
795
Loans, net
2,185,247
2,234,012
2,290,881
2,286,163
2,300,882
Accrued interest receivable
12,397
11,747
13,143
11,307
11,110
Premises and equipment, net
57,475
56,921
57,018
56,712
56,151
Other real estate owned
15,184
14,900
—
—
—
Cash surrender value of life insurance
42,369
42,119
42,348
42,096
41,830
Core deposit intangible, net
1,206
1,312
1,418
1,524
1,633
Goodwill
32,160
32,160
32,160
32,160
32,160
Other assets
53,842
67,550
56,920
80,816
60,396
Total assets
$
3,081,617
$
3,127,438
$
3,184,791
$
3,230,413
$
3,206,196
LIABILITIES AND EQUITY
Deposits
Noninterest-bearing
$
820,430
$
828,861
$
852,957
$
903,391
$
915,462
Interest-bearing
1,805,732
1,798,983
1,780,289
1,754,902
1,687,355
Total deposits
2,626,162
2,627,844
2,633,246
2,658,293
2,602,817
Securities sold under agreements to
repurchase
25,173
39,058
25,172
19,366
20,532
Accrued interest and other liabilities
32,860
33,807
32,242
31,218
30,701
Line of credit
—
—
4,500
2,000
12,000
Federal Home Loan Bank advances
45,000
75,000
140,000
175,000
195,000
Subordinated debentures
43,852
45,819
45,785
47,752
47,719
Total liabilities
2,773,047
2,821,528
2,880,945
2,933,629
2,908,769
Equity attributable to Guaranty
Bancshares, Inc.
308,043
305,371
303,300
296,226
296,862
Noncontrolling interest
527
539
546
558
565
Total equity
308,570
305,910
303,846
296,784
297,427
Total liabilities and equity
$
3,081,617
$
3,127,438
$
3,184,791
$
3,230,413
$
3,206,196
Quarter Ended
2024
2023
(dollars in thousands, except per share
data)
June 30
March 31
December 31
September 30
June 30
STATEMENTS OF EARNINGS
Interest income
$
40,713
$
40,752
$
40,796
$
39,818
$
38,734
Interest expense
16,833
17,165
16,983
16,516
14,031
Net interest income
23,880
23,587
23,813
23,302
24,703
Reversal of provision for credit
losses
(1,200
)
(250
)
—
—
—
Net interest income after provision for
credit losses
25,080
23,837
23,813
23,302
24,703
Noninterest income
4,599
5,258
4,796
4,939
7,873
Noninterest expense
20,602
20,692
21,402
20,514
20,471
Income before income taxes
9,077
8,403
7,207
7,727
12,105
Income tax provision
1,654
1,722
1,341
1,437
2,529
Net earnings
$
7,423
$
6,681
$
5,866
$
6,290
$
9,576
Net loss attributable to noncontrolling
interest
12
7
12
7
5
Net earnings attributable to Guaranty
Bancshares, Inc.
$
7,435
$
6,688
$
5,878
$
6,297
$
9,581
PER COMMON SHARE DATA
Earnings per common share, basic
$
0.65
$
0.58
$
0.51
$
0.54
$
0.82
Earnings per common share, diluted
0.65
0.58
0.51
0.54
0.81
Cash dividends per common share
0.24
0.24
0.23
0.23
0.23
Book value per common share - end of
quarter
26.98
26.47
26.28
25.64
25.58
Tangible book value per common share - end
of quarter(1)
24.06
23.57
23.37
22.72
22.67
Common shares outstanding - end of
quarter(2)
11,417,270
11,534,960
11,540,644
11,554,094
11,603,167
Weighted-average common shares
outstanding, basic
11,483,091
11,539,167
11,536,878
11,568,897
11,735,475
Weighted-average common shares
outstanding, diluted
11,525,504
11,598,239
11,589,165
11,619,342
11,756,512
PERFORMANCE RATIOS
Return on average assets (annualized)
0.95
%
0.85
%
0.73
%
0.78
%
1.17
%
Return on average equity (annualized)
9.91
8.93
7.93
8.43
12.87
Net interest margin, fully taxable
equivalent (annualized)(3)
3.26
3.16
3.11
3.02
3.19
Efficiency ratio(4)
72.34
71.74
74.81
72.64
62.84
(1) See Non-GAAP Reconciling Tables.
(2) Excludes the dilutive effect, if any,
of shares of common stock issuable upon exercise of outstanding
stock options.
(3) Net interest margin on a fully taxable
equivalent basis is equal to net interest income adjusted for
nontaxable income divided by average interest-earning assets,
annualized, using a marginal tax rate of 21%.
(4) The efficiency ratio was calculated by
dividing total noninterest expense by net interest income plus
noninterest income, excluding securities gains or losses. Taxes are
not part of this calculation.
As of
2024
2023
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
LOAN PORTFOLIO COMPOSITION
Commercial and industrial
$
264,058
$
269,560
$
287,565
$
292,410
$
295,864
Real estate:
Construction and development
231,053
273,300
296,639
317,484
345,127
Commercial real estate
899,120
906,684
923,195
901,321
891,883
Farmland
180,126
180,502
186,295
188,614
187,105
1-4 family residential
526,650
523,573
514,603
504,002
496,340
Multi-family residential
47,507
44,569
44,292
42,720
44,385
Consumer
53,642
54,375
57,059
58,294
59,498
Agricultural
12,506
12,418
12,685
13,076
13,447
Overdrafts
335
276
243
328
252
Total loans(1)(2)
$
2,214,997
$
2,265,257
$
2,322,576
$
2,318,249
$
2,333,901
Quarter Ended
2024
2023
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period
$
30,560
$
30,920
$
31,140
$
31,759
$
31,953
Loans charged-off
(115
)
(310
)
(242
)
(644
)
(224
)
Recoveries
37
200
22
25
30
Reversal of provision for credit loss
expense
(1,200
)
(250
)
—
—
—
Balance at end of period
$
29,282
$
30,560
$
30,920
$
31,140
$
31,759
Allowance for credit losses / period-end
loans
1.32
%
1.35
%
1.33
%
1.34
%
1.36
%
Allowance for credit losses /
nonperforming loans
470.4
496.0
552.9
1,148.2
894.6
Net charge-offs / average loans
(annualized)
0.01
0.02
0.04
0.11
0.03
NONPERFORMING ASSETS
Nonaccrual loans
$
6,225
$
6,161
$
5,592
$
2,712
$
3,550
Other real estate owned
15,184
14,900
—
—
—
Repossessed assets owned
331
236
234
250
—
Total nonperforming assets
$
21,740
$
21,297
$
5,826
$
2,962
$
3,550
Nonaccrual loans as a percentage of total
loans(1)(2)
0.28
%
0.27
%
0.24
%
0.12
%
0.15
%
Nonperforming assets as a percentage
of:
Total loans(1)(2)
0.98
%
0.94
%
0.25
%
0.13
%
0.15
%
Total assets
0.71
0.68
0.18
0.09
0.11
(1) Excludes outstanding balances of loans
held for sale of $871,000, $874,000, $976,000, $2.5 million, and
$795,000 as of June 30 and March 31, 2024 and December 31,
September 30, June 30, 2023, respectively.
(2) Excludes deferred loan fees of
$468,000, $685,000, $775,000, $946,000, and $1.3 million as of June
30 and March 31, 2024 and December 31, September 30, June 30, 2023,
respectively.
Quarter Ended
2024
2023
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
NONINTEREST INCOME
Service charges
$
1,098
$
1,069
$
1,123
$
1,131
$
1,056
Net realized loss on securities
transactions
—
—
—
—
(322
)
Net realized gain on sale of loans
227
272
196
218
473
Fiduciary and custodial income
657
649
624
637
630
Bank-owned life insurance income
250
251
249
267
211
Merchant and debit card fees
2,122
1,706
1,760
1,752
2,121
Loan processing fee income
136
118
116
128
142
Mortgage fee income
43
41
30
46
50
Other noninterest income
66
1,152
698
760
3,512
Total noninterest income
$
4,599
$
5,258
$
4,796
$
4,939
$
7,873
NONINTEREST EXPENSE
Employee compensation and benefits
$
11,723
$
12,437
$
12,715
$
11,944
$
11,939
Occupancy expenses
2,924
2,747
2,757
2,960
2,754
Legal and professional fees
841
772
954
902
985
Software and technology
1,653
1,642
1,740
1,490
1,531
Amortization
142
143
145
147
149
Director and committee fees
198
200
186
192
201
Advertising and promotions
208
169
352
288
269
ATM and debit card expense
785
609
763
803
739
Telecommunication expense
159
173
175
178
171
FDIC insurance assessment fees
365
360
321
363
522
Other noninterest expense
1,604
1,440
1,294
1,247
1,211
Total noninterest expense
$
20,602
$
20,692
$
21,402
$
20,514
$
20,471
Quarter Ended June 30,
2024
2023
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
ASSETS
Interest-earning assets:
Total loans(1)
$
2,237,469
$
35,009
6.29
%
$
2,363,158
$
33,591
5.70
%
Securities available for sale
245,309
2,267
3.72
175,447
1,205
2.75
Securities held to maturity
356,922
2,332
2.63
455,626
2,831
2.49
Nonmarketable equity securities
23,243
280
4.85
28,931
301
4.17
Interest-bearing deposits in other
banks
58,341
825
5.69
62,165
806
5.20
Total interest-earning assets
2,921,284
40,713
5.61
3,085,327
38,734
5.04
Allowance for credit losses
(30,407
)
(31,909
)
Noninterest-earning assets
240,707
219,532
Total assets
$
3,131,584
$
3,272,950
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,795,958
$
14,824
3.32
%
$
1,653,237
$
9,946
2.41
%
Advances from FHLB and fed funds
purchased
90,055
1,207
5.39
262,088
3,349
5.13
Line of credit
—
—
—
7,352
64
3.49
Subordinated debt
44,489
511
4.62
48,192
535
4.45
Securities sold under agreements to
repurchase
44,059
291
2.66
24,823
137
2.21
Total interest-bearing liabilities
1,974,561
16,833
3.43
1,995,692
14,031
2.82
Noninterest-bearing liabilities:
Noninterest-bearing deposits
818,290
948,083
Accrued interest and other liabilities
36,931
30,480
Total noninterest-bearing liabilities
855,221
978,563
Equity
301,802
298,695
Total liabilities and equity
$
3,131,584
$
3,272,950
Net interest rate spread(2)
2.18
%
2.22
%
Net interest income
$
23,880
$
24,703
Net interest margin(3)
3.29
%
3.21
%
Net interest margin, fully taxable
equivalent(4)
3.26
%
3.19
%
(1) Includes average outstanding balances
of loans held for sale of $817,000 and $1.4 million for the quarter
ended June 30, 2024 and 2023, respectively.
(2) Net interest spread is the average
yield on interest-earning assets minus the average rate on
interest-bearing liabilities.
(3) Net interest margin is equal to net
interest income divided by average interest-earning assets,
annualized.
(4) Net interest margin on a fully taxable
equivalent basis is equal to net interest income adjusted for
nontaxable income divided by average interest-earning assets,
annualized, using a marginal tax rate of 21%.
Six Months Ended June
30,
2024
2023
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
ASSETS
Interest-earning assets:
Total loans(1)
$
2,268,323
$
70,500
6.25
%
$
2,375,533
$
65,748
5.58
%
Securities available for sale
230,803
4,118
3.59
179,984
2,273
2.55
Securities held to maturity
375,158
4,865
2.61
479,063
5,881
2.48
Nonmarketable equity securities
23,840
528
4.45
28,658
720
5.07
Interest-bearing deposits in other
banks
52,007
1,454
5.62
48,650
1,256
5.21
Total interest-earning assets
2,950,131
81,465
5.55
3,111,888
75,878
4.92
Allowance for credit losses
(30,643
)
(31,922
)
Noninterest-earning assets
235,769
218,868
Total assets
$
3,155,257
$
3,298,834
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,792,538
$
29,283
3.29
%
$
1,639,003
$
17,601
2.17
%
Advances from FHLB and fed funds
purchased
115,824
3,127
5.43
285,963
7,123
5.02
Line of credit
420
18
8.62
3,696
64
3.49
Subordinated debt
45,143
1,028
4.58
48,675
1,075
4.45
Securities sold under agreements to
repurchase
42,665
542
2.55
17,937
150
1.69
Total interest-bearing liabilities
1,996,590
33,998
3.42
1,995,274
26,013
2.63
Noninterest-bearing liabilities:
Noninterest-bearing deposits
820,964
977,738
Accrued interest and other liabilities
36,201
28,706
Total noninterest-bearing liabilities
857,165
1,006,444
Equity
301,502
297,116
Total liabilities and equity
$
3,155,257
$
3,298,834
Net interest rate spread(2)
2.13
%
2.29
%
Net interest income
$
47,467
$
49,865
Net interest margin(3)
3.24
%
3.23
%
Net interest margin, fully taxable
equivalent(4)
3.21
%
3.22
%
(1) Includes average outstanding balances
of loans held for sale of $761,000 and $1.5 million for the six
months ended June 30, 2024 and 2023, respectively.
(2) Net interest spread is the average
yield on interest-earning assets minus the average rate on
interest-bearing liabilities.
(3) Net interest margin is equal to net
interest income divided by average interest-earning assets,
annualized.
(4) Net interest margin on a fully taxable
equivalent basis is equal to net interest income adjusted for
nontaxable income divided by average interest-earning assets,
annualized, using a marginal tax rate of 21%.
NON-GAAP RECONCILING TABLES
Tangible Book Value per Common Share
As of
2024
2023
(dollars in thousands, except per share
data)
June 30
March 31
December 31
September 30
June 30
Equity attributable to Guaranty
Bancshares, Inc.
$
308,043
$
305,371
$
303,300
$
296,226
$
296,862
Adjustments:
Goodwill
(32,160
)
(32,160
)
(32,160
)
(32,160
)
(32,160
)
Core deposit intangible, net
(1,206
)
(1,312
)
(1,418
)
(1,524
)
(1,633
)
Total tangible common equity attributable
to Guaranty Bancshares, Inc.
$
274,677
$
271,899
$
269,722
$
262,542
$
263,069
Common shares outstanding(1)
11,417,270
11,534,960
11,540,644
11,554,094
11,603,167
Book value per common share
$
26.98
$
26.47
$
26.28
$
25.64
$
25.58
Tangible book value per common
share(1)
24.06
23.57
23.37
22.72
22.67
(1) Excludes the dilutive effect, if any,
of shares of common stock issuable upon exercise of outstanding
stock options.
Net Unrealized Loss on Securities, Tax Effected, as a
Percentage of Total Equity
(dollars in thousands)
June 30, 2024
Total equity(1)
$
308,570
Less: net unrealized loss on HTM
securities, tax effected
(25,019
)
Total equity, including net unrealized
loss on AFS and HTM securities
$
283,551
Net unrealized loss on AFS securities, tax
effected
15,110
Net unrealized loss on HTM securities, tax
effected
25,019
Net unrealized loss on AFS and HTM
securities, tax effected
$
40,129
Net unrealized loss on securities as % of
total equity(1)
13.0
%
Total equity before impact of unrealized
losses
$
323,680
Net unrealized loss on securities as % of
total equity before impact of unrealized losses
12.4
%
Total average assets
$
3,131,584
Total equity to average assets
9.9
%
Total equity, adjusted for tax effected
net unrealized loss, to average assets
9.1
%
(1) Includes the net unrealized loss on
AFS securities, tax effected, of $15.1 million.
Cost of Total Deposits
Quarter Ended
(dollars in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
Average interest-bearing deposits
Certificates and other time deposits
$
736,394
$
724,248
$
556,022
Other interest-bearing deposits
1,059,564
1,064,871
1,097,215
Total average interest-bearing
deposits
$
1,795,958
$
1,789,119
$
1,653,237
Adjustments:
Noninterest-bearing deposits
818,290
823,638
948,083
Total average deposits
$
2,614,248
$
2,612,757
$
2,601,320
Deposit-related interest expense
Certificates and other time deposits
$
8,215
$
7,820
$
4,511
Other interest-bearing deposits
6,609
6,639
5,435
Total deposit-related interest expense
$
14,824
$
14,459
$
9,946
Average cost of certificates and other
time deposits
4.49
%
4.34
%
3.25
%
Average cost of other interest-bearing
deposits
2.51
%
2.51
%
1.99
%
Average cost of interest-bearing
deposits
3.32
%
3.25
%
2.41
%
Average cost of total deposits
2.28
2.23
1.53
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present,
including “tangible book value per common share”, "net unrealized
loss on securities, tax effected, as a percentage of total equity"
and "cost of total deposits" are supplemental measures that are not
required by, or are not presented in accordance with, U.S.
generally accepted accounting principles (GAAP). We refer to these
financial measures and ratios as “non-GAAP financial measures.” We
consider the use of select non-GAAP financial measures and ratios
to be useful for financial and operational decision making and
useful in evaluating period-to-period comparisons. We believe that
these non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain
expenditures or assets that we believe are not indicative of our
primary business operating results or by presenting certain metrics
on a fully taxable equivalent basis. We believe that management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning,
forecasting, analyzing and comparing past, present and future
periods.
These non-GAAP financial measures should not be considered a
substitute for financial information presented in accordance with
GAAP and you should not rely on non-GAAP financial measures alone
as measures of our performance. The non-GAAP financial measures we
present may differ from non-GAAP financial measures used by our
peers or other companies. We compensate for these limitations by
providing the equivalent GAAP measures whenever we present the
non-GAAP financial measures and by including a reconciliation of
the impact of the components adjusted for in the non-GAAP financial
measure so that both measures and the individual components may be
considered when analyzing our performance.
A reconciliation of non-GAAP financial measures to the
comparable GAAP financial measures is included at the end of the
financial statement tables.
Conference Call Information
The Company will hold a conference call to discuss second
quarter 2024 financial results on Monday, July 15, 2024 at 10:00 am
Central Time. The conference call will be hosted by Ty Abston,
Chairman and CEO, and Shalene Jacobson, EVP and CFO. All conference
attendees must register before the call at
www.gnty.com/earningscall. The conference materials will be
available by accessing the Investor Relations page on our website,
www.gnty.com. A recording of the conference call will be available
by 1:00 pm Central Time the day of the call and remain available
through July 31, 2024 on our Investor Relations webpage.
About Guaranty Bancshares, Inc.
Guaranty Bancshares, Inc. is the parent company for Guaranty
Bank & Trust, N.A. Guaranty Bank & Trust has 33 banking
locations across 26 Texas communities located within the East
Texas, Dallas/Fort Worth, Houston and Central Texas regions of the
state. As of June 30, 2024, Guaranty Bancshares, Inc. had total
assets of $3.1 billion, total loans of $2.2 billion and total
deposits of $2.6 billion. Visit www.gnty.com for more
information.
Cautionary Statement Regarding Forward-Looking
Information
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements reflect our current views
with respect to, among other things, future events and our results
of operations, financial condition and financial performance. These
statements are often, but not always, made through the use of words
or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “continue,”
“will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,”
“projection,” “would” and “outlook,” or the negative version of
those words or other comparable words of a future or
forward-looking nature. These forward-looking statements are not
historical facts, and are based on current expectations, estimates
and projections about our industry, management’s beliefs and
certain assumptions made by management, many of which, by their
nature, are inherently uncertain and beyond our control.
Accordingly, we caution you that any such forward-looking
statements are not guarantees of future performance and are subject
to risks, assumptions and uncertainties that are difficult to
predict. Although we believe that the expectations reflected in
these forward-looking statements are reasonable as of the date
made, actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements.
Such factors include, without limitation, the “Risk Factors”
referenced in our most recent Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q, and other risks and
uncertainties listed from time to time in our reports and documents
filed with the Securities and Exchange Commission. We can give no
assurance that any goal or plan or expectation set forth in
forward-looking statements can be achieved and readers are
cautioned not to place undue reliance on such statements. The
forward-looking statements are made as of the date of this
communication, and we do not intend, and assume no obligation, to
update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events or circumstances,
except as required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240715812989/en/
Shalene Jacobson Executive Vice President and Chief Financial
Officer Guaranty Bancshares, Inc. (888) 572-9881
investors@gnty.com
Guaranty Bancshares (NYSE:GNTY)
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