GNTY Guaranty Bancshares Inc

UNITED STATES

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)

 

April 15, 2024

 

 

GUARANTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

 

 

Texas	001-38087	75-1656431
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
16475 Dallas Parkway, Suite 600 Addison, Texas		75001
(Address of Principal Executive Offices)		(Zip Code)

(888) 572-9881

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, par value $1.00 per share		GNTY		New York Stock Exchange

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02. Results of Operations and Financial Condition.

In accordance with Item 2.02 of Form 8-K of the Securities and Exchange Commission (the “SEC”), Guaranty Bancshares, Inc., a Texas corporation (the “Company”), is furnishing to the SEC a press release that the Company issued on April 15, 2024 (the “Press Release”) announcing the Company’s financial results for the fiscal quarter ended March 31, 2024. A copy of the Press Release is attached as Exhibit 99.1.

 

Item 7.01. Regulation FD Disclosure.

On April 15, 2024, the Company will host a conference call with respect to financial results for the fiscal quarter ended March 31, 2024. A copy of the Earnings Call Presentation materials is attached as Exhibit 99.2.

In accordance with the General Instruction B.2 of Form 8-K, the information in Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 hereto, which are furnished herewith pursuant to and relate to Item 2.02 and Item 7.01, respectively, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of Section 18 of the Exchange Act. The information in Item 2.02 and Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 and Exhibit 99.2 hereto shall not be incorporated by reference into any filing or other document filed by the Company with the SEC pursuant to the Securities Act of 1933, as amended, the rules and regulations of the SEC thereunder, the Exchange Act, or the rules and regulations of the SEC thereunder, except as shall be expressly set forth by specific reference in such filing or document.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

The following is furnished as an exhibit to this Current Report on Form 8-K:

Exhibit Number		Description of Exhibit
99.1		Press Release dated April 15, 2024, reporting first quarter 2024 financial results
99.2		Earnings Call Presentation materials, dated April 15, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL)

 

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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.

 

Dated:		April 15, 2024
		GUARANTY BANCSHARES, INC.
By:		/s/ Tyson T. Abston
Name:		Tyson T. Abston
Title:		Chairman of the Board and Chief Executive Officer

 

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Press Release

For Immediate Release

Guaranty Bancshares, Inc. Reports

First Quarter 2024 Financial Results

Addison, Texas – April 15, 2024 / Business Wire / – 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 March 31, 2024. The Company's net income available to common shareholders was $6.7 million, or $0.58 per basic share, for the quarter ended March 31, 2024, compared to $5.9 million, or $0.51 per basic share, for the quarter ended December 31, 2023 and $8.3 million, or $0.69 per basic share, for the quarter ended March 31, 2023. Return on average assets and average equity for the first quarter of 2024 were 0.85% and 8.93%, respectively, compared to 0.73% and 7.93%, respectively, for the fourth quarter of 2023 and 1.01% and 11.18%, respectively, for the first quarter of 2023. The increase in earnings during the first quarter of 2024 compared to the fourth quarter of 2023 was primarily due to higher non-interest income and lower non-interest expense. The decrease in earnings in the first quarter of 2024 compared to the first quarter of 2023 was primarily due to lower net interest income in the current quarter compared to the prior year quarter.

"We are pleased with our first quarter 2024 results. During the quarter, net interest margin continued to improve, we paid down borrowings from the FHLB, we repaid the remaining $25.0 million of brokered CDs that were obtained to test as a source of liquidity, our core deposits are stable and grew slightly and credit quality remains manageable. Although we've strategically shrunk the balance sheet primarily through more conservative loan underwriting, our balance sheet remains strong and continues to provide consistent earnings results. Liquidity and capital remain solid and our board of directors increased the dividend paid on GNTY stock from $0.23 last quarter to $0.24 this quarter, further improving shareholder returns and value," said Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY HIGHLIGHTS

Commercial real estate (CRE) loans, particularly office related loans, have received increased scrutiny in recent months. As of March 31, 2024, our CRE loans and real estate C&D loans represent 40.0% and 12.1% of the total loan portfolio, respectively, and office-related loans represent 4.6% of the total loan portfolio and have an average balance of $516,000.

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 31.5% of total deposits. Our cost of interest-bearing deposits increased eight basis points during the quarter from 3.17% in the prior quarter to 3.25%. 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 first quarter of 2024 increased nine basis points from 2.14% in the prior quarter to 2.23%†.

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† 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 first quarter of 2024 and 2023 was $23.6 million and $25.2 million, respectively, a decrease of $1.6 million, or 6.3%. The decrease in net interest income resulted from an increase in interest expense of $5.2 million, or 43.3%, compared to the prior year quarter, which was partially offset by an increase in interest income of $3.6 million, or 9.7%, 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 first quarter of 2024 compared to the prior year quarter. Our noninterest-bearing deposits to total deposits were 31.5% and 37.8% as of March 31, 2024 and 2023, respectively.

Net interest margin, on a fully taxable equivalent basis, for the first quarter of 2024 and 2023 was 3.16% and 3.24%, respectively. Net interest margin, on a fully taxable equivalent basis, decreased nine basis points primarily due to interest-bearing liabilities repricing faster than our interest-earning assets during the period. The cost of interest-bearing liabilities increased 98 basis points from the prior year quarter, while interest earning asset yields increased 70 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 1.91% to 3.25%, a change of 134 basis points, in the first quarter of 2024 compared to the same period in 2023, as well as increased rates on FHLB advances, which increased from 4.94% to 5.45%, an increase of 51 basis points, from the prior year quarter. The increases in cost were partially offset by increases in yield on the loan portfolio from 5.46% to 6.21%, or 75 basis points, as well as 109 and 13 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 $62.9 million in new loans originated in the first quarter was 8.39%.

Net interest income, before the provision for credit losses, decreased $226,000, or 0.9%, from $23.8 million in the fourth quarter of 2023 to $23.6 million in the first quarter of 2024. The decrease in net interest income resulted primarily from an increase in interest expense of $182,000, or 1.1%, and a decrease in interest income of $44,000, or 0.1%. The decrease in interest income was primarily due to a decrease in gross loans of $57.3 million, or 2.5%.

Net interest margin, on a fully taxable equivalent basis, increased from 3.11% for the fourth quarter of 2023 to 3.16% for the first quarter of 2024, an increase of four basis points. The increase in net interest margin, on a fully taxable equivalent basis, was primarily due to an increase on loan yield from 6.06% for the fourth quarter of 2023 to 6.21% for the first quarter of 2024, a change of 15 basis points, and a decrease in total interest-earning assets during the first quarter of 2024. This increase was partially offset by an increase in the cost of interest-bearing deposits from 3.17% in the fourth quarter of 2023 to 3.25% in the first quarter of 2024, a change of eight basis points.

We recorded a $250,000 reversal to our provision for credit losses during the first quarter of 2024. Our loan balances decreased $57.3 million during the quarter, while credit quality trends remained relatively stable and the qualitative factors used to account for changes in economic conditions and expected losses were adjusted in 2023. Those assumptions remain relevant in the current quarter, thus no additional q-factor adjustments were made in the current quarter. As of March 31, 2024 and December 31, 2023, our allowance for credit losses as a percentage of total loans was 1.35% and 1.33%, respectively.

Noninterest income increased $353,000, or 7.2%, in the first quarter of 2024 to $5.3 million, compared to $4.9 million for the first quarter of 2023. The increase from the same quarter in 2023 was primarily due to $499,000 in recoveries made on three SBA loans during the first quarter of 2024. This was partially offset by a $130,000 decrease in the gain on mortgage loans sold and a decrease on the gain on sale of loans of $42,000, or 13.4%, along with a $27,000, or 39.7%, decrease in mortgage fee income compared to the same quarter in the prior year.

Noninterest expense increased $725,000, or 3.6%, in the first quarter of 2024 to $20.7 million, compared to $20.0 million for the first quarter of 2023. The increase in noninterest expense in the first quarter of 2024 was driven primarily by a $189,000, or 32.4%, increase in legal and professional fees primarily related to recruiting fees, an increase in software and technology expense of $246,000, or 17.6%, and a $173,000, or 1.4%, increase in employee compensation and benefits compared to the first quarter of 2023. These were partially offset by a $98,000, or 36.7%, decrease in advertising and promotions expense.

Noninterest income in the first quarter of 2024 increased by $462,000, or 9.6%, from $4.8 million in the fourth quarter of 2023. The increase was primarily due to an increase in other noninterest income of $454,000, or 65.0%, primarily the result of $499,000 in recoveries made on three SBA loans and an increase in the gain on sale of loans of $76,000, or 38.8%, during the first quarter of 2024.

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Noninterest expense decreased $710,000, or 3.3%, in the first quarter of 2024, from $21.4 million for the quarter ended December 31, 2023. The decrease resulted from a $278,000, or 2.2%, decrease in employee compensation and benefits due to a retirement accrual booked in the fourth quarter of 2023, which was not present in 2024. Additionally, there was a $183,000, or 52.0%, decrease in advertising and promotions expense, a $182,000, or 19.1%, decrease in legal and professional fees and a $98,000, or 5.6%, decrease in software and technology expense during the first quarter of 2024 compared to the fourth quarter of 2023.

The Company’s efficiency ratio in the first quarter of 2024 was 71.74%, compared to 66.41% in the prior year quarter and 74.81% in the fourth quarter of 2024.

FINANCIAL CONDITION

Consolidated assets for the Company totaled $3.13 billion at March 31, 2024, compared to $3.18 billion at December 31, 2023 and $3.36 billion at March 31, 2023.

Gross loans decreased by $57.3 million, or 2.5%, during the quarter resulting in a gross loan balance of $2.27 billion at March 31, 2024, compared to $2.32 billion at December 31, 2023. 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 $112.6 million, or 4.7%, from $2.38 billion at March 31, 2023. The decrease in gross loans during the first quarter of 2024 compared to the first quarter of 2023 resulted from tightened credit underwriting standards and loan terms, along with fewer borrower requests in response to higher interest rates. Additionally, there was a $10.7 million decrease in warehouse lending loans, as we discontinued that line of business in the second quarter of 2023.

Total deposits decreased by $5.4 million, or 0.2%, to $2.63 billion at March 31, 2024, compared to $2.63 billion at December 31, 2023, and increased $4.5 million, or 0.2%, from $2.62 billion at March 31, 2023. The decrease in deposits during the first quarter of 2024 compared to the fourth quarter of 2023 was the result of a decrease in noninterest-bearing deposits of $24.1 million, offset by an increase in interest-bearing deposits of $18.7 million. The decrease in interest-bearing deposits included the maturity of $25.0 million in brokered CDs in February 2024 that we did not renew. The increase in deposits during the current quarter compared to the prior year quarter resulted primarily from an increase in interest-bearing deposits of $168.1 million, partially offset by a decrease in noninterest-bearing deposits of $163.7 million.

Nonperforming assets as a percentage of total loans were 0.94% at March 31, 2024, compared to 0.25% at December 31, 2023 and 0.57% at March 31, 2023. Nonperforming assets as a percentage of total assets were 0.68% at March 31, 2024, compared to 0.18% at December 31, 2023, and 0.40% at March 31, 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 end and 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 $305.9 million at March 31, 2024, compared to $303.8 million at December 31, 2023 and $300.3 million at March 31, 2023. The increase in total equity compared to the prior year end and prior year quarter resulted primarily from net income of $6.7 million, the payment of dividends of $2.8 million during the period and a reduction in repurchases during the first quarter of 2024 compared to prior quarters.

 

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		As of
		2024				2023
(dollars in thousands)		March 31				December 31				September 30				June 30				March 31
ASSETS
Cash and due from banks		$	43,872			$	47,744			$	47,922			$	47,663			$	59,030
Federal funds sold			24,300				36,575				73,275				44,950				95,400
Interest-bearing deposits			4,921				5,205				8,980				4,738				3,695
Total cash and cash equivalents			73,093				89,524				130,177				97,351				158,125
Securities available for sale			228,787				196,195				178,644				166,596				173,744
Securities held to maturity			363,963				404,208				408,308				437,292				476,105
Loans held for sale			874				976				2,506				795				1,260
Loans, net			2,234,012				2,290,881				2,286,163				2,300,882				2,344,240
Accrued interest receivable			11,747				13,143				11,307				11,110				10,443
Premises and equipment, net			56,921				57,018				56,712				56,151				55,457
Other real estate owned			14,900				—				—				—				38
Cash surrender value of life insurance			42,119				42,348				42,096				41,830				38,619
Core deposit intangible, net			1,312				1,418				1,524				1,633				1,746
Goodwill			32,160				32,160				32,160				32,160				32,160
Other assets			67,550				56,920				80,816				60,396				64,350
Total assets		$	3,127,438			$	3,184,791			$	3,230,413			$	3,206,196			$	3,356,287
LIABILITIES AND EQUITY
Deposits
Noninterest-bearing		$	828,861			$	852,957			$	903,391			$	915,462			$	992,527
Interest-bearing			1,798,983				1,780,289				1,754,902				1,687,355				1,630,841
Total deposits			2,627,844				2,633,246				2,658,293				2,602,817				2,623,368
Securities sold under agreements to repurchase			39,058				25,172				19,366				20,532				13,338
Accrued interest and other liabilities			33,807				32,242				31,218				30,701				30,125
Line of credit			—				4,500				2,000				12,000				—
Federal Home Loan Bank advances			75,000				140,000				175,000				195,000				340,000
Subordinated debentures			45,819				45,785				47,752				47,719				49,186
Total liabilities			2,821,528				2,880,945				2,933,629				2,908,769				3,056,017
Equity attributable to Guaranty Bancshares, Inc.			305,371				303,300				296,226				296,862				299,700
Noncontrolling interest			539				546				558				565				570
Total equity			305,910				303,846				296,784				297,427				300,270
Total liabilities and equity		$	3,127,438			$	3,184,791			$	3,230,413			$	3,206,196			$	3,356,287

 

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		Quarter Ended
		2024				2023
(dollars in thousands, except per share data)		March 31				December 31				September 30				June 30				March 31
STATEMENTS OF EARNINGS
Interest income		$	40,752			$	40,796			$	39,818			$	38,734			$	37,144
Interest expense			17,165				16,983				16,516				14,031				11,982
Net interest income			23,587				23,813				23,302				24,703				25,162
Reversal of provision for credit losses			(250	)			—				—				—				—
Net interest income after provision for credit losses			23,837				23,813				23,302				24,703				25,162
Noninterest income			5,258				4,796				4,939				7,873				4,905
Noninterest expense			20,692				21,402				20,514				20,471				19,967
Income before income taxes			8,403				7,207				7,727				12,105				10,100
Income tax provision			1,722				1,341				1,437				2,529				1,823
Net earnings		$	6,681			$	5,866			$	6,290			$	9,576			$	8,277
Net loss attributable to noncontrolling interest			7				12				7				5				4
Net earnings attributable to Guaranty Bancshares, Inc.		$	6,688			$	5,878			$	6,297			$	9,581			$	8,281
PER COMMON SHARE DATA
Earnings per common share, basic		$	0.58			$	0.51			$	0.54			$	0.82			$	0.69
Earnings per common share, diluted			0.58				0.51				0.54				0.81				0.69
Cash dividends per common share			0.24				0.23				0.23				0.23				0.23
Book value per common share - end of quarter			26.47				26.28				25.64				25.58				25.13
Tangible book value per common share - end of quarter(1)			23.57				23.37				22.72				22.67				22.29
Common shares outstanding - end of quarter(4)			11,534,960				11,540,644				11,554,094				11,603,167				11,925,357
Weighted-average common shares outstanding, basic			11,539,167				11,536,878				11,568,897				11,735,475				11,939,593
Weighted-average common shares outstanding, diluted			11,598,239				11,589,165				11,619,342				11,756,512				12,012,004
PERFORMANCE RATIOS
Return on average assets (annualized)			0.85	%			0.73	%			0.78	%			1.17	%			1.01	%
Return on average equity (annualized)			8.93				7.93				8.43				12.87				11.18
Net interest margin, fully taxable equivalent (annualized)(2)			3.16				3.11				3.02				3.19				3.24
Efficiency ratio(3)			71.74				74.81				72.64				62.84				66.41
(1) See Non-GAAP Reconciling Tables.
(2) 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%.
(3) 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.
(4) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options.

 

 

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		As of
		2024				2023
(dollars in thousands)		March 31				December 31				September 30				June 30				March 31
LOAN PORTFOLIO COMPOSITION
Commercial and industrial		$	269,560			$	287,565			$	292,410			$	295,864			$	295,936
Real estate:
Construction and development			273,300				296,639				317,484				345,127				372,203
Commercial real estate			906,684				923,195				901,321				891,883				900,190
Farmland			180,502				186,295				188,614				187,105				190,802
1-4 family residential			523,573				514,603				504,002				496,340				499,944
Multi-family residential			44,569				44,292				42,720				44,385				44,760
Consumer			54,375				57,059				58,294				59,498				60,163
Agricultural			12,418				12,685				13,076				13,447				13,545
Overdrafts			276				243				328				252				270
Total loans(1)(2)		$	2,265,257			$	2,322,576			$	2,318,249			$	2,333,901			$	2,377,813
		Quarter Ended
		2024				2023
(dollars in thousands)		March 31				December 31				September 30				June 30				March 31
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period		$	30,920			$	31,140			$	31,759			$	31,953			$	31,974
Loans charged-off			(310	)			(242	)			(644	)			(224	)			(94	)
Recoveries			200				22				25				30				73
Reversal of provision for credit loss expense			(250	)			—				—				—				—
Balance at end of period		$	30,560			$	30,920			$	31,140			$	31,759			$	31,953
Allowance for credit losses / period-end loans			1.35	%			1.33	%			1.34	%			1.36	%			1.34	%
Allowance for credit losses / nonperforming loans			496.0				552.9				1,148.2				894.6				238.4
Net charge-offs / average loans (annualized)			0.02				0.04				0.11				0.03				0.00
NONPERFORMING ASSETS
Nonaccrual loans		$	6,161			$	5,592			$	2,712			$	3,550			$	13,405
Other real estate owned			14,900				—				—				—				38
Repossessed assets owned			236				234				250				—				—
Total nonperforming assets		$	21,297			$	5,826			$	2,962			$	3,550			$	13,443
Nonperforming assets as a percentage of:
Total loans(1)(2)			0.94	%			0.25	%			0.13	%			0.15	%			0.57	%
Total assets			0.68				0.18				0.09				0.11				0.40
(1) Excludes outstanding balances of loans held for sale of $874,000, $976,000, $2.5 million, $795,000, and $1.3 million as of March 31, 2024, and December 31, September 30, June 30, and March 31, 2023, respectively.
(2) Excludes deferred loan fees of $685,000, $775,000, $(946,000), $1.3 million, and $1.6 million as of March 31, 2024, and December 31, September 30, June 30, and March 31, 2023, respectively.

 

 

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		Quarter Ended
		2024				2023
(dollars in thousands)		March 31				December 31				September 30				June 30				March 31
NONINTEREST INCOME
Service charges		$	1,069			$	1,123			$	1,131			$	1,056			$	1,077
Net realized (loss) gain on securities transactions			—				—				—				(322	)			93
Net realized gain on sale of loans			272				196				218				473				314
Fiduciary and custodial income			649				624				637				630				638
Bank-owned life insurance income			251				249				267				211				214
Merchant and debit card fees			1,706				1,760				1,752				2,121				1,674
Loan processing fee income			118				116				128				142				134
Mortgage fee income			41				30				46				50				68
Other noninterest income			1,152				698				760				3,512				693
Total noninterest income		$	5,258			$	4,796			$	4,939			$	7,873			$	4,905
NONINTEREST EXPENSE
Employee compensation and benefits		$	12,437			$	12,715			$	11,944			$	11,939			$	12,264
Occupancy expenses			2,747				2,757				2,960				2,754				2,830
Legal and professional fees			772				954				902				985				583
Software and technology			1,642				1,740				1,490				1,531				1,396
Amortization			143				145				147				149				161
Director and committee fees			200				186				192				201				199
Advertising and promotions			169				352				288				269				267
ATM and debit card expense			609				763				803				739				599
Telecommunication expense			173				175				178				171				183
FDIC insurance assessment fees			360				321				363				522				301
Other noninterest expense			1,440				1,294				1,247				1,211				1,184
Total noninterest expense		$	20,692			$	21,402			$	20,514			$	20,471			$	19,967

 

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		Quarter Ended March 31,
		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)		$	2,299,177			$	35,491				6.21	%		$	2,388,045			$	32,157				5.46	%
Securities available for sale			216,298				1,851				3.44				184,572				1,068				2.35
Securities held to maturity			393,394				2,533				2.59				502,760				3,050				2.46
Nonmarketable equity securities			24,438				248				4.08				28,381				419				5.99
Interest-bearing deposits in other banks			45,672				629				5.54				34,986				450				5.22
Total interest-earning assets			2,978,979				40,752				5.50				3,138,744				37,144				4.80
Allowance for credit losses			(30,879	)											(31,934	)
Noninterest-earning assets			230,829												218,195
Total assets		$	3,178,929											$	3,325,005
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits		$	1,789,119			$	14,459				3.25	%		$	1,624,610			$	7,655				1.91	%
Advances from FHLB and fed funds purchased			141,593				1,920				5.45				310,103				3,774				4.94
Line of credit			841				18				8.61				—				—				—
Subordinated debt			45,797				517				4.54				49,164				540				4.45
Securities sold under agreements to repurchase			41,271				251				2.45				10,974				13				0.48
Total interest-bearing liabilities			2,018,621				17,165				3.42				1,994,851				11,982				2.44
Noninterest-bearing liabilities:
Noninterest-bearing deposits			823,638												1,002,793
Accrued interest and other liabilities			35,469												26,912
Total noninterest-bearing liabilities			859,107												1,029,705
Equity			301,201												300,449
Total liabilities and equity		$	3,178,929											$	3,325,005
Net interest rate spread(2)											2.08	%											2.36	%
Net interest income						$	23,587											$	25,162
Net interest margin(3)											3.18	%											3.25	%
Net interest margin, fully taxable equivalent(4)											3.16	%											3.24	%
(1) Includes average outstanding balances of loans held for sale of $704,000 and $1.7 million for the quarter ended March 31, 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%.

 

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Tangible Book Value per Common Share

		As of
		2024				2023
(dollars in thousands, except per share data)		March 31				December 31				September 30				June 30				March 31
Equity attributable to Guaranty Bancshares, Inc.		$	305,371			$	303,300			$	296,226			$	296,862			$	299,700
Adjustments:
Goodwill			(32,160	)			(32,160	)			(32,160	)			(32,160	)			(32,160	)
Core deposit intangible, net			(1,312	)			(1,418	)			(1,524	)			(1,633	)			(1,746	)
Total tangible common equity attributable to Guaranty Bancshares, Inc.		$	271,899			$	269,722			$	262,542			$	263,069			$	265,794
Common shares outstanding(1)			11,534,960				11,540,644				11,554,094				11,603,167				11,925,357
Book value per common share		$	26.47			$	26.28			$	25.64			$	25.58			$	25.13
Tangible book value per common share(1)			23.57				23.37				22.72				22.67				22.29

(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)		March 31, 2024
Total equity(1)		$	305,910
Less: net unrealized loss on HTM securities, tax effected			(25,662	)
Total equity, including net unrealized loss on AFS and HTM securities		$	280,248
Net unrealized loss on AFS securities, tax effected			16,709
Net unrealized loss on HTM securities, tax effected			25,662
Net unrealized loss on AFS and HTM securities, tax effected		$	42,371
Net unrealized loss on securities as % of total equity(1)			13.9	%
Total equity before impact of unrealized losses		$	322,619
Net unrealized loss on securities as % of total equity before impact of unrealized losses			13.1	%
Total average assets		$	3,178,929
Total equity to average assets			9.6	%
Total equity, adjusted for tax effected net unrealized loss, to average assets			8.8	%
(1) Includes the net unrealized loss on AFS securities, tax effected, of $16,709.

Cost of Total Deposits

		Quarter Ended
(dollars in thousands)		March 31, 2024				December 31, 2023				March 31, 2023
Total average interest-bearing deposits		$	1,789,119			$	1,788,863			$	1,624,610
Adjustments:
Noninterest-bearing deposits			823,638				865,817				1,002,793
Total average deposits		$	2,612,757			$	2,654,680			$	2,627,403
Total deposit-related interest expense		$	14,459			$	14,311			$	7,655
Average cost of interest-bearing deposits			3.25	%			3.17	%			1.91	%
Average cost of total deposits			2.23				2.14				1.18

 

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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.

 

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Conference Call Information

The Company will hold a conference call to discuss first quarter 2024 financial results on Monday, April 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 April 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 March 31, 2024, Guaranty Bancshares, Inc. had total assets of $3.1 billion, total loans of $2.3 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.

 

 

 

 

Contact Information:

Shalene Jacobson Executive Vice President and Chief Financial Officer Guaranty Bancshares, Inc. (888) 572-9881

investors@gnty.com

 

 

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INVESTOR PRESENTATION NYSE: GNTY 1ST QUARTER 2024

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SAFE HARBOR STATEMENT 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 March 31, 2024, Guaranty Bancshares, Inc. had total assets of $3.1 billion, total loans of $2.3 billion and total deposits of $2.6 billion. Visit www.gnty.com for more information. NON-GAAP FINANCIAL MEASURES Guaranty reports its results in accordance with United States generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures used in managing its business may provide meaningful information about underlying trends in its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Guaranty’s reported results prepared in accordance with GAAP. Please see “Reconciliation of Non-GAAP Financial Measures” at the end of this presentation for a reconciliation to the nearest GAAP financial measure.

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SAFE HARBOR STATEMENT This presentation 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 presentation, 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.

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QUARTERLY HIGHLIGHTS Ty Abston CEO and Chairman of the Board Shalene Jacobson EVP and Chief Financial Officer

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Q1 2024 – FINANCIAL RESULTS EARNINGS, ROAA AND NIM BALANCE SHEET NON-INTEREST INCOME AND EXPENSE Total assets were $3.13 billion at Mar 31, 2024, compared to $3.18 billion at Dec 31, 2023 Total gross loans were $2.27 billion at Mar 31, 2024, compared to $2.32 billion at Dec 31, 2023 Gross loans decreased $57.3 million (2.5%) in 1Q24 Purchased $39.3 million in AFS securities in 1Q24 at a weighted average yield to maturity of 5.23% Total deposits were $2.63 billion at Mar 31, 2024 and Dec 31, 2023 Reduced FHLB borrowings by $65 million Total equity was $305.9 million at Mar 31, 2024 compared to $303.8 million at Dec 31, 2023 Repurchased 11,651 GNTY shares in 1Q24 at a weighted average price of $28.76 per share Paid cash dividend of $0.24/share in 1Q24, compared to $0.23 in each quarter in 2023 Noninterest income increased by $462,000, or 9.6%, from $4.8 million in 4Q23. The increase was primarily due to $499,000 in recoveries made on three SBA loan receivables and an increase in gain on sale of loans of $76,000 Noninterest expense decreased $710,000, or 3.3%, from 4Q23, due primarily to a retirement accrual booked in 4Q23 not present in 1Q24 and general decreases in advertising, professional fees and software expenses Efficiency ratio of 71.74% for 1Q24 Net earnings of $6.7 million, compared to $5.9 million in 4Q23 and $8.3 million in 1Q23 Net earnings per basic share of $0.58, compared to $0.51 in 4Q23 and $0.69 in 1Q23 ROAA of 0.85% and ROAE of 8.93%, compared to 0.73% and 7.93%, respectively, in 4Q23 Net interest margin (FTE) was 3.16%, compared to 3.11% in 4Q23 and 3.24% in 1Q23 Loan yield was 6.21%, compared to 6.06% in 4Q23 and 5.46% in 1Q23 Cost of total deposits was 2.23%, compared to 2.14% in 4Q23 and 1.18% in 1Q23** **Non-GAAP financial metrics. Calculations of these metrics and reconciliations to GAAP are included in the Reconciliation of Non-GAAP Financial Measures pages at the end of this presentation.

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ACL Reversal to the provision for credit losses of $250,000 in 1Q24 Reduction in gross loan balance and stable credit trends No qualitative factor adjustments in 1Q24 Allowance for credit losses (ACL) coverage is 1.35% at Mar 31, 2024 and 1.33% at Dec 31, 2023 LOAN PORTFOLIO & CREDIT QUALITY Gross loans decreased $57.3 million, or 2.5% in 1Q24 Weighted average yield on new loan originations in 1Q24 was 8.39%, compared to 8.61% in 4Q23 Nonperforming assets to total assets were 0.68% as of Mar 31, 2024 and 0.18% as of Dec 31, 2023. The increase was due to the addition of $14.9 million in other real estate owned. The OREO is a performing/operating commercial real estate property in a vibrant area of South Austin and is providing an additional source of non-interest income until it is sold. Net charge-offs were $110,000 in 1Q24, compared to $220,000 in 4Q23 Net charge-offs to average loans were 0.02% in 1Q24, compared to 0.04% in 4Q23 Loan portfolio quality remains strong and we expect credit metrics to continue to benefit from good economic conditions in Texas CRE and real estate C&D represents 40.0% and 12.1% of our total loan portfolio, respectively. Office-related loans represent 4.6% of the total loan portfolio and have an average balance of $516,000 Non-accrual loans are $6.2 million as of Mar 31, 2024, an increase from $5.6 million as of Dec 31, 2023. Substandard loans at Mar 31, 2024 are $17.5 million, down from $24.6 million at Dec 31, 2023. The decrease was primarily due to the foreclosed South Austin property described above, offset by the addition of some smaller dollar loans. There were 141 substandard loans with an average balance of $109,000 at Mar 31, 2024. Q1 2024 – CREDIT & ACL INFO

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DEPOSITS Granular deposits: 88,493 total deposit accounts with an average balance of $29,696 Uninsured deposits, excluding public funds and GNTY-owned accounts, are 25.43% of total deposits Total deposits decreased by $5.4 million during 1Q24, primarily from the maturity of $25.0 million in brokered deposits that we did not renew. Excluding the brokered CDs, total core deposits grew $19.6 million during 1Q24. DDA balances decreased $27.1 million, savings and MMDA balances increased $30.8 million and time deposits (excluding matured brokered CDs) increased $15.9 million Loan-to-deposit ratio of 86.2% as of Mar 31, 2024 and 88.2% as of Dec 31, 2023 Noninterest-bearing deposits represent 31.5% of total deposits as of Mar 31, 2024, down from 32.4% as of Dec 31, 2023 Q1 2024 – Deposits, Liquidity & Capital LIQUIDITY & INVESTMENTS Liquidity ratio* was 10.6% at Mar 31, 2024 FHLB advances have decreased $265.0 million since 1Q23 Total available contingent liquidity from all sources is $1.3 billion at Mar 31, 2024 Total net unrealized loss on investment securities is $53.6 million, comprised of $21.1 million AFS and $32.5 million HTM. Net of tax, total unrealized loss is $42.4 million, which is 13.9% of total equity before losses** Capital ratios remain strong. Total equity to average assets as of Mar 31, 2024 is 9.6% If we had to recognize our entire unrealized losses on both AFS and HTM securities, the ratio would be 8.8%** During 1Q24, we repurchased 11,651 shares of Company stock at an average price of $28.76 per share. During 4Q23, we repurchased 24,800 shares at an average price of $27.76 per share CAPITAL *Calculated as cash and cash equivalents and unpledged securities divided by total liabilities. **Non-GAAP financial metrics. Calculations of these metrics and reconciliations to GAAP are included in the Reconciliation of Non-GAAP Financial Measures pages at the end of this presentation.

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Q & A

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Net Unrealized Loss on Securities, Tax Effected, as a Percentage of Total Equity (dollars in thousands) March 31, 2024 Total equity(1) $ 305,910 Less: net unrealized loss on HTM securities, tax effected (25,662) Total equity, including net unrealized loss on AFS and HTM securities $ 280,248 Net unrealized loss on AFS securities, tax effected 16,709 Net unrealized loss on HTM securities, tax effected 25,662 Net unrealized loss on AFS and HTM securities, tax effected $ 42,371 Net unrealized loss on securities as % of total equity(1) 13.9% Total equity before impact of unrealized losses $ 322,619 Net unrealized loss on securities as % of total equity before impact of unrealized losses 13.1% Total average assets $ 3,178,929 Total equity to average assets 9.6% Total equity, adjusted for tax effected net unrealized loss, to average assets 8.8% (1) Includes the net unrealized loss on AFS securities, tax effected, of $16,709.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Cost of Total Deposits Quarter Ended (dollars in thousands) March 31, 2024 December 31, 2023 March 31, 2023 Total average interest-bearing deposits $ 1,789,119 $ 1,788,863 $ 1,624,610 Adjustments: Noninterest-bearing deposits 823,638 865,817 1,002,793 Total average deposits $ 2,612,757 $ 2,654,680 $ 2,627,403 Total deposit-related interest expense $ 14,459 $ 14,311 $ 7,655 Average cost of interest-bearing deposits 3.25% 3.17% 1.91% Average cost of total deposits 2.23 2.14 1.18

v3.24.1.u1

Document And Entity Information	Apr. 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Apr. 15, 2024
Entity Registrant Name	GUARANTY BANCSHARES, INC.
Entity Central Index Key	0001058867
Entity Emerging Growth Company	false
Securities Act File Number	001-38087
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	75-1656431
Entity Address, Address Line One	16475 Dallas Parkway
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Addison
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75001
City Area Code	888
Local Phone Number	572-9881
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $1.00 per share
Trading Symbol	GNTY
Security Exchange Name	NYSE

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