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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Guaranty Bancshares Inc | NYSE:GNTY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.03 | -0.10% | 29.48 | 29.73 | 29.11 | 29.52 | 35,679 | 22:30:00 |
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, 2023. The Company's net income available to common shareholders was $9.6 million, or $0.82 per basic share, for the quarter ended June 30, 2023, compared to $8.3 million, or $0.69 per basic share, for the quarter ended March 31, 2023 and $10.8 million, or $0.90 per basic share, for the quarter ended June 30, 2022. Return on average assets and average equity for the second quarter of 2023 were 1.17% and 12.87%, respectively, compared to 1.01% and 11.18%, respectively, for the first quarter of 2023 and 1.35% and 14.85%, respectively, for the second quarter of 2022. The increase in earnings during the second quarter of 2023, compared to the first quarter of 2023 was primarily due to a one-time gain on the sale of nonmarketable correspondent bank stock of $2.8 million. Without this one-time gain, net of tax, earnings for the quarter were $7.3 million1, or $0.63 earnings per basic common share.
"We are pleased with several positive developments during the second quarter that continue to strengthen our balance sheet and drive long term shareholder value. The Bank has strong asset quality with historically low nonperforming assets and we expect our credit quality metrics will continue to experience benefits from the robust economic environment in Texas. We put our excess capital to work and repurchased 322,601 shares of stock during the quarter at an attractive average price of $25.13 per share. Our earnings were good with earnings per basic share, net of extraordinary items, of $0.63 per share1. We've also been able to defend our NIM relative to peers with a 3.19% tax equivalent margin, a slight decrease from the prior quarter. During this period of lower asset growth, we'll continue to focus efforts on our strategic plan execution, improvements to net interest margin and operational efficiencies throughout the Company," said Ty Abston, the Company's Chairman and Chief Executive Officer.
1. Net earnings less extraordinary items is calculated as net earnings, less the gain on sale of correspondent bank stock, net of tax, of $2.2 million during the quarter ended June 30, 2023.
QUARTERLY HIGHLIGHTS
June 30, 2023
Net Unrealized Loss
(dollars in thousands)
Amortized Cost
Estimated Fair Value
-100 bps
Actual
+100 bps
Available for sale
$
187,959
$
166,596
$
(12,801
)
$
(21,363
)
$
(29,313
)
Held to maturity
437,292
402,735
(18,333
)
(34,557
)
(50,644
)
Total securities
$
625,251
$
569,331
$
(31,134
)
$
(55,920
)
$
(79,957
)
† 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 2023 and 2022 was $24.7 million and $26.9 million, respectively, a decrease of $2.1 million, or 8.0%. The decrease in net interest income resulted from an increase in interest expense of $11.8 million, or 518.4%, compared to the prior year quarter, which was partially offset by an increase in interest income of $9.6 million, or 33.0%, from the same quarter in the prior year. The increase in interest expense was due primarily to an $8.3 million increase in deposit interest and a $3.2 million increase in FHLB advance interest, each resulting from rising interest rates between the two periods. The increase in interest income was primarily due to an increase in loan interest of $9.0 million, or 36.6%, and an increase in fed funds sold and interest-bearing deposits of $701,000, or 667.6%, during the current quarter compared to the prior year quarter.
Net interest margin, on a fully taxable equivalent basis, for the second quarter of 2023 and 2022 was 3.19% and 3.61%, respectively. Net interest margin decreased 41 basis points primarily due to interest bearing liabilities repricing faster than our interest-earning assets. The cost of interest-bearing liabilities increased 232 basis points from the prior year quarter, while interest earning asset yields increased 117 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 0.38% to 2.41%, a change of 203 basis points, in the second quarter of 2023 compared to the same period in 2022, as well as increased rates on FHLB advances, which increased from 1.62% to 5.13%, an increase of 351 basis points, from the prior year quarter. The increases in cost were partially offset by increases in yield on the loan portfolio from 4.77% to 5.70%, or 93 basis points, as well as 54 bps and 70 bps 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 $65.2 million in new loans originated in the second quarter was 8.14%.
Net interest income, before the provision for credit losses, decreased $459,000, or 1.8%, from $25.2 million in the first quarter of 2023 to $24.7 million in the second quarter of 2023. The decrease in net interest income resulted primarily from an increase in interest expense of $2.0 million, or 17.1%, partially offset by an increase in interest income of $1.6 million, or 4.3%. The increase in interest expense resulted primarily from an increase of $2.3 million, or 29.9%, in interest-bearing deposit expense, offset by a slight decrease in FHLB advances expense of $425,000, or 11.3%, from the prior quarter. Interest earned on loans increased $1.4 million, or 4.5%, from the prior quarter.
Net interest margin, on a taxable equivalent basis, decreased from 3.24% for the first quarter of 2023 to 3.19% for the second quarter of 2023, a decrease of five basis points. The decrease in net interest margin was primarily due to an increase in the cost of interest-bearing deposits from 1.91% in the first quarter to 2.41% in the second quarter of 2023, a change of 50 basis points, while loan yield increased from 5.46% for the first quarter of 2023 to 5.70% for the second quarter of 2023, a change of 24 basis points.
During the first and second quarters of 2023, we recorded no provision for credit losses. During the fourth quarter of 2022, we recorded a $2.8 million provision to incorporate economic forecasts for a recession into our CECL model. The factors that were adjusted in the fourth quarter of 2022 are still relevant, however additional adjustments to certain qualitative factors were made in the current quarter to incorporate industry level concerns with respect to CRE valuations and "higher for longer" interest projections that could impact borrower cash flows and repayment ability. These qualitative factor adjustments were offset by a decline in the total loan portfolio balance during the quarter, resulting in no adjustment to the ACL during the quarter. As of June 30, 2023 and December 31, 2022, our allowance for credit losses as a percentage of total loans was 1.36% and 1.34%, respectively.
Noninterest income increased $1.8 million, or 29.5%, in the second quarter of 2023 to $7.9 million, compared to $6.1 million for the second quarter of 2022. The increase from the same quarter in 2022 was due to an increase in other noninterest income of $2.6 million, or 295.1%, resulting primarily from a one-time gain on the sale of nonmarketable correspondent bank stock of $2.8 million. This increase was partially offset by a decrease in the gain on sale of loans of $409,000, or 46.4%, and a $322,000, or 100.0%, increase in the net realized loss on sale of securities, along with a $52,000, or 51.0%, decrease in mortgage fee income compared to the same quarter in the prior year.
Noninterest expense increased $777,000, or 3.9%, in the second quarter of 2023 to $20.5 million, compared to the second quarter of 2022. The increase in noninterest expense in the second quarter of 2023 was driven primarily by a $285,000, or 120.3%, increase in FDIC insurance assessment fees, a $212,000, or 27.4%, increase in legal and professional fees primarily related to recruiting and additional proxy related fees, a $209,000, or 1.8%, increase in employee compensation and benefits, due to higher salaries and benefits of $581,000, partially offset by a decrease in bonus expense of $404,000, and an increase in software and technology expense of $192,000, or 14.3%, compared to the second quarter of 2022, due to additional technology investments and an increase in the cost of our core processing software. The increases were partially offset by a $94,000, or 3.3%, decrease in occupancy expense, a $51,000, or 15.9%, decrease in advertising and promotions fees and a decrease in amortization expense of $29,000, or 16.3%, from the prior year quarter.
Noninterest income in the second quarter of 2023 increased by $3.0 million, or 60.5%, from $4.9 million in the first quarter of 2023. The increase is due to an increase in other noninterest income of $2.8 million, or 406.8%, primarily resulting from a one-time gain on the sale of nonmarketable correspondent bank stock of $2.8 million. Merchant and debit card fee income also increased $447,000, or 26.7%, quarter-over-quarter, due to an annual service provider bonus of $299,000 received during the current quarter. These increases were partially offset by a $415,000, or 446.2%, decrease in income resulting from a realized gain on securities of $93,000 in the first quarter and realized loss on securities of $322,000 in the second quarter of 2023.
Noninterest expense increased $504,000, or 2.5%, in the second quarter of 2023, from $20.0 million for the quarter ended March 31, 2023. The increase resulted from a $402,000, or 69.0%, increase in legal and professional fees which was primarily due to annual meeting, proxy and related filing fees paid during the second quarter of 2023. The remainder of the increase was due to an increase in FDIC insurance assessment fees of $221,000, or 73.4%, a $140,000, or 23.4%, increase in ATM and debit card expense and a $135,000, or 9.7%, increase in software and technology expense during the second quarter of 2023 compared to the first quarter of 2023. These increases were partially offset by a $325,000, or 2.7%, decrease in employee compensation and benefits, primarily from lower bonus expense accruals.
The Company’s efficiency ratio in the second quarter of 2023 was 62.84%, compared to 59.80% in the prior year quarter and 66.41% in the first quarter of 2023.
FINANCIAL CONDITION
Consolidated assets for the Company totaled $3.21 billion at June 30, 2023, compared to $3.36 billion at March 31, 2023 and $3.28 billion at June 30, 2022.
Gross loans decreased $43.9 million, or 1.85%, to $2.33 billion at June 30, 2023, compared to loans of $2.38 billion at March 31, 2023. Loan growth has declined as we have tightened credit underwriting standards and loan terms and borrowers have responded to the increases in interest rates with fewer requests.
Gross loans increased $195.5 million, or 9.1%, from $2.14 billion at June 30, 2022. The increase in gross loans during the second quarter of 2023 compared to the second quarter of 2022 resulted from organic loan growth and was partially offset by a $25.3 million decrease in warehouse lending loans, as we discontinued that line of business in the second quarter of 2023, and a $2.1 million reduction in PPP loan balances during the period. Excluding PPP and warehouse lending loans, gross loans increased $223.0 million, or 10.6%, from June 30, 2022.
Total deposits decreased by $20.6 million, or 0.8%, to $2.60 billion at June 30, 2023, compared to $2.62 billion at March 31, 2023, and decreased $176.8 million, or 6.4%, from $2.78 billion at June 30, 2022. The decrease in deposits during the quarter resulted from a decrease in noninterest-bearing deposits of $77.1 million, offset by an increase in interest-bearing deposits of $56.5 million. The decrease in deposits during the current quarter compared to the prior year quarter resulted primarily from a decrease in noninterest-bearing deposits of $190.3 million and an increase in interest-bearing deposits of $13.5 million.
Nonperforming assets as a percentage of total loans were 0.15% at June 30, 2023, compared to 0.57% at March 31, 2023 and 0.46% at June 30, 2022. Nonperforming assets as a percentage of total assets were 0.11% at June 30, 2023, compared to 0.40% at March 31, 2023, and 0.30% at June 30, 2022. The Bank's nonperforming assets consist primarily of nonaccrual loans. The decrease in nonperforming assets is primarily due to the resolution of several nonperforming assets during the quarter, four of which had outstanding principal balances of $6.7 million and were Small Business Administration (SBA) 7(a), partially guaranteed (75%) loans, acquired in the June 2018 acquisition of Westbound Bank. All of these nonperforming assets were resolved with minimal incurred losses.
Total equity was $297.4 million as of June 30, 2023, compared to $300.3 million at March 31, 2023 and $282.8 million at June 30, 2022. The decrease from the previous quarter resulted primarily from an escalation in accumulated other comprehensive loss of $1.8 million due to fluctuations in the fair value of available for sale securities during the period, by the payment of dividends of $2.7 million and repurchase of Company stock of $8.1 million during the second quarter of 2023. This was partially offset by net income of $9.6 million during the period.
As of
2023
2022
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
ASSETS
Cash and due from banks
$
47,663
$
59,030
$
52,390
$
48,010
$
56,545
Federal funds sold
44,950
95,400
47,275
71,875
2,425
Interest-bearing deposits
4,738
3,695
6,802
4,284
12,053
Total cash and cash equivalents
97,351
158,125
106,467
124,169
71,023
Securities available for sale
166,596
173,744
188,927
197,944
196,095
Securities held to maturity
437,292
476,105
509,008
633,386
713,390
Loans held for sale
795
1,260
3,156
2,749
2,770
Loans, net
2,300,882
2,344,240
2,344,245
2,234,782
2,107,658
Accrued interest receivable
11,110
10,443
11,555
10,111
10,144
Premises and equipment, net
56,151
55,457
54,291
54,212
54,437
Other real estate owned
—
38
38
5
—
Cash surrender value of life insurance
41,830
38,619
38,404
38,194
37,979
Core deposit intangible, net
1,633
1,746
1,859
1,973
2,086
Goodwill
32,160
32,160
32,160
32,160
32,160
Other assets
60,396
64,350
61,385
60,581
53,171
Total assets
$
3,206,196
$
3,356,287
$
3,351,495
$
3,390,266
$
3,280,913
LIABILITIES AND EQUITY
Deposits
Noninterest-bearing
$
915,462
$
992,527
$
1,052,144
$
1,141,184
$
1,105,756
Interest-bearing
1,687,355
1,630,841
1,629,010
1,649,326
1,673,865
Total deposits
2,602,817
2,623,368
2,681,154
2,790,510
2,779,621
Securities sold under agreements to repurchase
20,532
13,338
7,221
7,592
7,871
Accrued interest and other liabilities
30,701
30,125
28,409
27,384
28,033
Line of credit
12,000
—
—
—
—
Federal Home Loan Bank advances
195,000
340,000
290,000
225,000
131,500
Subordinated debentures
47,719
49,186
49,153
51,119
51,053
Total liabilities
2,908,769
3,056,017
3,055,937
3,101,605
2,998,078
Equity attributable to Guaranty Bancshares, Inc.
296,862
299,700
294,984
288,084
282,255
Noncontrolling interest
565
570
574
577
580
Total equity
297,427
300,270
295,558
288,661
282,835
Total liabilities and equity
$
3,206,196
$
3,356,287
$
3,351,495
$
3,390,266
$
3,280,913
Quarter Ended
2023
2022
(dollars in thousands, except per share data)
June 30
March 31
December 31
September 30
June 30
STATEMENTS OF EARNINGS
Interest income
$
38,734
$
37,144
$
35,720
$
32,476
$
29,120
Interest expense
14,031
11,982
7,362
4,179
2,269
Net interest income
24,703
25,162
28,358
28,297
26,851
Provision for credit losses
—
—
2,800
600
—
Net interest income after provision for credit losses
24,703
25,162
25,558
27,697
26,851
Noninterest income
7,873
4,905
5,122
5,803
6,081
Noninterest expense
20,471
19,967
20,897
20,237
19,694
Income before income taxes
12,105
10,100
9,783
13,263
13,238
Income tax provision
2,529
1,823
1,764
2,363
2,472
Net earnings
$
9,576
$
8,277
$
8,019
$
10,900
$
10,766
Net loss attributable to noncontrolling interest
5
4
3
3
18
Net earnings attributable to Guaranty Bancshares, Inc.
$
9,581
$
8,281
$
8,022
$
10,903
$
10,784
PER COMMON SHARE DATA
Earnings per common share, basic
$
0.82
$
0.69
$
0.67
$
0.92
$
0.90
Earnings per common share, diluted
0.81
0.69
0.67
0.91
0.89
Cash dividends per common share
0.23
0.23
0.22
0.22
0.22
Book value per common share - end of quarter
25.58
25.13
24.70
24.18
23.69
Tangible book value per common share - end of quarter(1)
22.67
22.29
21.85
21.31
20.82
Common shares outstanding - end of quarter(4)
11,603,167
11,925,357
11,941,672
11,915,372
11,912,249
Weighted-average common shares outstanding, basic
11,735,475
11,939,593
11,938,973
11,907,233
11,968,227
Weighted-average common shares outstanding, diluted
11,756,512
12,012,004
12,048,475
12,032,391
12,098,983
PERFORMANCE RATIOS
Return on average assets (annualized)
1.17
%
1.01
%
0.95
%
1.30
%
1.35
%
Return on average equity (annualized)
12.87
11.18
10.88
14.87
14.85
Net interest margin, fully taxable equivalent (annualized)(2)
3.19
3.24
3.57
3.59
3.61
Efficiency ratio(3)
62.84
66.41
62.42
59.35
59.80
(1) See Reconciliation of non-GAAP Financial Measures table.
(2) Net interest margin on a 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.
As of
2023
2022
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
LOAN PORTFOLIO COMPOSITION
Commercial and industrial
$
295,864
$
295,936
$
314,067
$
289,029
$
294,156
Real estate:
Construction and development
345,127
372,203
377,135
391,564
350,024
Commercial real estate
891,883
900,190
887,587
821,941
749,603
Farmland
187,105
190,802
185,817
179,402
166,309
1-4 family residential
496,340
499,944
493,061
467,983
450,929
Multi-family residential
44,385
44,760
45,147
43,025
55,985
Consumer
59,498
60,163
61,394
58,835
56,433
Agricultural
13,447
13,545
13,686
13,917
14,502
Overdrafts
252
270
282
369
435
Total loans(1)(2)
$
2,333,901
$
2,377,813
$
2,378,176
$
2,266,065
$
2,138,376
Quarter Ended
2023
2022
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period
$
31,953
$
31,974
$
29,235
$
28,997
$
29,096
Loans charged-off
(224
)
(94
)
(103
)
(418
)
(125
)
Recoveries
30
73
42
56
26
Provision for credit loss expense
—
—
2,800
600
—
Balance at end of period
$
31,759
$
31,953
$
31,974
$
29,235
$
28,997
Allowance for credit losses / period-end loans
1.36
%
1.34
%
1.34
%
1.29
%
1.36
%
Allowance for credit losses / nonperforming loans
894.6
238.4
294.7
313.3
294.4
Net charge-offs / average loans (annualized)
0.03
0.00
0.01
0.07
0.02
NONPERFORMING ASSETS
Nonaccrual loans
$
3,550
$
13,405
$
10,848
$
9,330
$
9,848
Other real estate owned
—
38
38
5
—
Repossessed assets owned
—
—
—
—
27
Total nonperforming assets
$
3,550
$
13,443
$
10,886
$
9,335
$
9,875
Nonperforming assets as a percentage of:
Total loans(1)(2)
0.15
%
0.57
%
0.46
%
0.41
%
0.46
%
Total assets
0.11
0.40
0.32
0.28
0.30
(1) Excludes outstanding balances of loans held for sale of $795,000, $1.3 million, $3.2 million, $2.7 million, and $2.8 million as of June 30 and March 31, 2023 and December 31, September 30, June 30, 2022, respectively.
(2) Excludes deferred loan fees of $1.3 million, $1.6 million, $2.0 million, $2.0 million, and $1.7 million as of June 30 and March 31, 2023 and December 31, September 30, June 30, 2022, respectively.
Quarter Ended
2023
2022
(dollars in thousands)
June 30
March 31
December 31
September 30
June 30
NONINTEREST INCOME
Service charges
$
1,056
$
1,077
$
1,096
$
1,146
$
1,070
Net realized (loss) gain on securities transactions
(322
)
93
172
—
—
Net realized gain on sale of loans
473
314
310
338
882
Fiduciary and custodial income
630
638
642
576
638
Bank-owned life insurance income
211
214
209
215
207
Merchant and debit card fees
2,121
1,674
1,711
1,738
2,061
Loan processing fee income
142
134
150
192
232
Mortgage fee income
50
68
81
75
102
Other noninterest income
3,512
693
751
1,523
889
Total noninterest income
$
7,873
$
4,905
$
5,122
$
5,803
$
6,081
NONINTEREST EXPENSE
Employee compensation and benefits
$
11,939
$
12,264
$
12,364
$
11,851
$
11,730
Occupancy expenses
2,754
2,830
2,770
2,800
2,848
Legal and professional fees
985
583
779
503
773
Software and technology
1,531
1,396
1,525
1,409
1,339
Amortization
149
161
161
166
178
Director and committee fees
201
199
199
213
219
Advertising and promotions
269
267
488
378
320
ATM and debit card expense
739
599
740
723
674
Telecommunication expense
171
183
193
184
187
FDIC insurance assessment fees
522
301
359
272
237
Other noninterest expense
1,211
1,184
1,319
1,738
1,189
Total noninterest expense
$
20,471
$
19,967
$
20,897
$
20,237
$
19,694
Quarter Ended June 30,
2023
2022
(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)
$
2,363,158
$
33,591
5.70
%
$
2,068,379
$
24,587
4.77
%
Securities available for sale
175,447
1,205
2.75
267,823
1,473
2.21
Securities held to maturity
455,626
2,831
2.49
596,013
2,666
1.79
Nonmarketable equity securities
28,931
301
4.17
14,128
289
8.20
Interest-bearing deposits in other banks
62,165
806
5.20
74,047
105
0.57
Total interest-earning assets
3,085,327
38,734
5.04
3,020,390
29,120
3.87
Allowance for credit losses
(31,909
)
(29,056
)
Noninterest-earning assets
219,532
218,106
Total assets
$
3,272,950
$
3,209,440
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,653,237
$
9,946
2.41
%
$
1,694,363
$
1,623
0.38
%
Advances from FHLB and fed funds purchased
262,088
3,349
5.13
47,016
190
1.62
Line of credit
7,352
64
3.49
—
—
—
Subordinated debt
48,192
535
4.45
52,326
453
3.47
Securities sold under agreements to repurchase
24,823
137
2.21
9,045
3
0.13
Total interest-bearing liabilities
1,995,692
14,031
2.82
1,802,750
2,269
0.50
Noninterest-bearing liabilities:
Noninterest-bearing deposits
948,083
1,090,288
Accrued interest and other liabilities
30,480
25,090
Total noninterest-bearing liabilities
978,563
1,115,378
Equity
298,695
291,312
Total liabilities and equity
$
3,272,950
$
3,209,440
Net interest rate spread(2)
2.22
%
3.37
%
Net interest income
$
24,703
$
26,851
Net interest margin(3)
3.21
%
3.57
%
Net interest margin, fully taxable equivalent(4)
3.19
%
3.61
%
(1) Includes average outstanding balances of loans held for sale of $1.4 million and $2.6 million for the quarter ended June 30, 2023 and 2022, 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 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,
2023
2022
(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)
$
2,375,533
$
65,748
5.58
%
$
2,003,053
$
46,859
4.72
%
Securities available for sale
179,984
2,273
2.55
377,132
3,091
1.65
Securities held to maturity
479,063
5,881
2.48
393,110
4,151
2.13
Nonmarketable equity securities
28,658
720
5.07
14,678
698
9.59
Interest-bearing deposits in other banks
48,650
1,256
5.21
203,738
214
0.21
Total interest-earning assets
3,111,888
75,878
4.92
2,991,711
55,013
3.71
Allowance for credit losses
(31,922
)
(29,628
)
Noninterest-earning assets
218,868
215,886
Total assets
$
3,298,834
$
3,177,969
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,639,003
$
17,601
2.17
%
$
1,702,216
$
2,865
0.34
%
Advances from FHLB and fed funds purchased
285,963
7,123
5.02
42,395
236
1.12
Line of credit
3,696
64
3.49
1,878
34
3.65
Subordinated debt
48,675
1,075
4.45
41,572
699
3.39
Securities sold under agreements to repurchase
17,937
150
1.69
9,976
5
0.10
Total interest-bearing liabilities
1,995,274
26,013
2.63
1,798,037
3,839
0.43
Noninterest-bearing liabilities:
Noninterest-bearing deposits
977,738
1,059,032
Accrued interest and other liabilities
28,706
24,680
Total noninterest-bearing liabilities
1,006,444
1,083,712
Equity
297,116
296,220
Total liabilities and equity
$
3,298,834
$
3,177,969
Net interest rate spread(2)
2.29
%
3.28
%
Net interest income
$
49,865
$
51,174
Net interest margin(3)
3.23
%
3.45
%
Net interest margin, fully taxable equivalent(4)
3.22
%
3.49
%
(1) Includes average outstanding balances of loans held for sale of $1.5 million and $2.9 million for the six months ended June 30, 2023 and 2022, 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 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
2023
2022
(dollars in thousands, except per share data)
June 30
March 31
December 31
September 30
June 30
Equity attributable to Guaranty Bancshares, Inc.
$
296,862
$
299,700
$
294,984
$
288,084
$
282,255
Adjustments:
Goodwill
(32,160
)
(32,160
)
(32,160
)
(32,160
)
(32,160
)
Core deposit intangible, net
(1,633
)
(1,746
)
(1,859
)
(1,973
)
(2,086
)
Total tangible common equity attributable to Guaranty Bancshares, Inc.
$
263,069
$
265,794
$
260,965
$
253,951
$
248,009
Common shares outstanding(1)
11,603,167
11,925,357
11,941,672
11,915,372
11,912,249
Book value per common share
$
25.58
$
25.13
$
24.70
$
24.18
$
23.69
Tangible book value per common share(1)
22.67
22.29
21.85
21.31
20.82
(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 % of Total Equity
(dollars in thousands)
June 30, 2023
Total equity(1)
$
297,427
Less: net unrealized loss on HTM securities, tax effected
(27,300
)
Total equity, including net unrealized loss on AFS and HTM securities
$
270,127
Net unrealized loss on AFS securities, tax effected
16,877
Net unrealized loss on HTM securities, tax effected
27,300
Net unrealized loss on AFS and HTM securities, tax effected
$
44,177
Net unrealized loss on securities as % of total equity(1)
14.9
%
Total equity before impact of unrealized losses
$
314,304
Net unrealized loss on securities as % of total equity before impact of unrealized losses
14.1
%
Total average assets
$
3,272,950
Total equity to average assets
9.1
%
Total equity, adjusted for tax effected net unrealized loss, to average assets
8.3
%
(1) Includes the net unrealized loss on AFS securities, tax effected, of $16,877.
Cost of Total Deposits
Quarter Ended
(dollars in thousands)
June 30, 2023
March 31, 2023
June 30, 2022
Total average interest-bearing deposits
$
1,653,237
$
1,624,610
$
1,694,363
Adjustments:
Noninterest-bearing deposits
948,083
1,002,793
1,090,288
Total average deposits
$
2,601,320
$
2,627,403
$
2,784,651
Total deposit-related interest expense
$
9,946
$
7,655
$
1,623
Average cost of interest-bearing deposits
2.41
%
1.91
%
0.38
%
Average cost of total deposits (cost of funds)
1.53
1.18
0.23
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including “tangible book value per share” and PPP-adjusted metrics 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 2023 financial results on Monday, July 17, 2023 at 10:00 am Central Time. The conference call will be hosted by Ty Abston, Chairman and CEO, Cappy Payne, SEVP and Company CFO, and Shalene Jacobson, EVP and Bank 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, 2023 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 32 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, 2023, Guaranty Bancshares, Inc. had total assets of $3.2 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, other risks and uncertainties listed from time to time in our reports and documents filed with the Securities and Exchange Commission ("SEC"). 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/20230717741549/en/
Cappy Payne Senior Executive Vice President and Chief Financial Officer Guaranty Bancshares, Inc. (888) 572-9881 investors@gnty.com
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