ADDISON, Texas--(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 September 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 September 30, 2024, compared to $7.4 million, or $0.65 per basic share, for the quarter ended June 30, 2024 and $6.3 million, or $0.54 per basic share, for the quarter ended September 30, 2023. Return on average assets and average equity for the third quarter of 2024 were 0.96% and 9.58%, respectively, compared to 0.95% and 9.91%, respectively, for the second quarter of 2024 and 0.78% and 8.43%, respectively, for the third quarter of 2023. The increase in earnings during the third quarter of 2024 compared to the third quarter of 2023 was primarily due to an increase in net interest income of $889,000, or 3.8%, along with a reverse provision for credit losses of $500,000 during the third quarter of 2024 compared to no provision during the prior year quarter.
"Our earnings and margin results were good in the third quarter and continue to show improvement as the Fed begins to lower interest rates. Net interest margin is now at 3.33%, up 7 basis points from the prior quarter and 31 basis points from the third quarter of 2023. We continue to position our balance sheet to take advantage of possible loan growth and other opportunities when economic conditions improve and interest rates continue to fall. Deposit balances increased during the quarter, we purchased additional higher yielding AFS securities and we repaid the remaining $45.0 million in FHLB advances. We believe credit quality remains strong with very low past-dues and charge-offs. Non-performing assets should also be very low by year-end as we anticipate resolutions for the ORE on our balance sheet. Our capital and liquidity levels are solid and will leave us well positioned to drive positive strategic objectives and obtain favorable results for shareholders for the remainder of 2024 and 2025," said Ty Abston, the Company's Chairman and Chief Executive Officer.
QUARTERLY HIGHLIGHTS
- Improvement in NIM and Stable Earnings. Net interest margin, on a fully taxable equivalent basis, continued to improve in the third quarter, increasing to 3.33%, compared to 3.26% in the second quarter and 3.02% in the prior year quarter. Earnings were fairly consistent with the prior quarter, showing improvements in net interest income, non-interest income and employee and compensation expenses, which were slightly offset by a lower reverse provision for credit losses and higher provision for income taxes in the third quarter. The net interest income improvements resulted primarily from a decrease in interest bearing liability costs, while earning assets have continued to reprice upward.
- Solid Balance Sheet, Capital and Liquidity. During the past year, we have strategically shrunk our balance sheet primarily by paying off debt and allowing transactional/non-relationship loans to pay off. This strategy positions us to be on the offense when we believe strong opportunities for growth or M&A are presented. Our capital and liquidity ratios, as well as contingent liquidity sources, remain very healthy. During the third quarter of 2024, we repurchased 59,996 shares of our common stock, or 0.53% of our average shares outstanding during the period, at an average price of $30.65 per share. Our liquidity ratio, calculated as cash and cash equivalents and unpledged investments divided by total liabilities, was 17.1% as of September 30, 2024, compared to 14.0% as of September 30, 2023. Our total available contingent liquidity, net of current outstanding borrowings, was $1.4 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 September 30, 2024 was 10.4%. 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 9.8%†, which we believe represents a strong capital level under regulatory requirements.
- Good Asset Quality. Overall credit quality remains strong and the expected losses on deteriorating credits are low due to the Bank's equity position and/or strong guarantor support. Nonperforming assets as a percentage of total assets were 0.66% at September 30, 2024, compared to 0.71% at June 30, 2024 and 0.09% at September 30, 2023. Net charge-offs (annualized) to average loans were 0.04% for the quarter ended September 30, 2024, compared to 0.01% for the quarter ended June 30, 2024, and 0.11% for the quarter ended September 30, 2023.
There was a reverse provision to the allowance for credit losses of $500,000 during the third quarter, in addition to the $1.45 million reverse provision during the first half of the year. Changes to historical and qualitative factors have been minimal during the first three quarters of 2024, therefore the decrease in the allowance for credit losses was due primarily to the decreases in outstanding loan balances of $186.0 million, or 8.0%, since January 1, 2024, which were partially offset by an increase in special mention loans during the same period as we continue to work with a relatively small number of stressed borrowers.
Nonperforming assets consist of both nonaccrual loans and other real estate owned (ORE). Nonaccrual loans represented 0.24% of total outstanding loan balances as of September 30, 2024 and consisted primarily of smaller dollar consumer and small business loans. ORE consisted of two real estate properties, both of which we expect to resolve and sell in the fourth quarter of 2024 with minimal, if any, losses. Nonaccrual loans represented 0.28% and 0.12% of total outstanding loan balances as of June 30, 2024 and September 30, 2023, respectively.
- Granular and Consistent Core Deposit Base. As of September 30, 2024, we have 89,878 total deposit accounts with an average account balance of $29,695. We have a historically reliable core deposit base, with strong and trusted banking relationships. Total deposits increased by $42.8 million during the third quarter. DDA and time deposit balances increased $19.2 million and $24.5 million, respectively, while savings and MMDA balances decreased $965,000 during the third quarter of 2024. Excluding public funds and Bank-owned accounts, our uninsured deposits as of September 30, 2024 were 26.3% of total deposits.
Interest rates paid on deposits during the quarter stabilized with minimal increases. Noninterest-bearing deposits represent 31.5% of total deposits as of September 30, 2024. Our cost of interest-bearing deposits increased one basis point during the quarter from 3.32% in the prior quarter to 3.33%. This increase was primarily due to renewals of maturing certificates of deposit into new CDs paying higher rates, although current CD rate offerings were recently lowered late in the quarter. Our cost of total deposits for the third quarter of 2024 increased three basis points from 2.28% in the prior quarter to 2.31%†.
† 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 reversal of the provision for credit losses, for the third quarter of 2024 and 2023 was $24.2 million and $23.3 million, respectively, an increase of $889,000, or 3.8%. The increase in net interest income resulted from an increase in interest income of $615,000, or 1.5%, combined with a decrease in interest expense of $274,000, or 1.7%, compared to the prior year quarter. The increase in interest income resulted primarily from a $670,000, or 16.5%, increase in interest income on securities and a $205,000, or 29.6%, increase in interest income received from Federal funds sold and interest-bearing deposits. The decrease in interest expense resulted primarily from a $2.3 million and $808,000 decrease in interest paid on FHLB borrowings and brokered deposits, respectively. These decreases were partially offset by a $2.6 million increase in interest paid on CD accounts during the third quarter of 2024 compared to the same period of the prior year. Our noninterest-bearing deposits to total deposits were 31.5% and 34.0% as of September 30, 2024 and 2023, respectively.
Net interest margin, on a fully taxable equivalent basis, for the third quarter of 2024 and 2023 was 3.33% and 3.02%, respectively. Net interest margin, on a fully taxable equivalent basis, increased 31 basis points primarily due to a 40 basis point increase in interest-earning asset yields partially offset by an increase of eight basis points in the cost of interest-bearing liabilities from the prior year quarter. The increase in yield on interest-earning assets was primarily due to increases in yield on the loan portfolio from 5.91% to 6.35%, or 44 basis points, as well as 82 and 10 basis point increases in yield on AFS and HTM securities, respectively, during the period. The increase in the cost of interest-bearing liabilities was due primarily to an increase in the cost of interest-bearing deposits from 3.00% to 3.33%, a change of 33 basis points, since September 30, 2023.
Net interest income, before the reversal of the provision for credit losses, increased $311,000, or 1.3%, from $23.9 million in the second quarter of 2024 to $24.2 million for the third quarter of 2024. The increase in net interest income resulted primarily from a larger decrease in interest expense of $591,000, or 3.5%, compared to the decrease in interest income of $280,000, or 0.7%, from the prior quarter.
Net interest margin, on a fully taxable equivalent basis, increased from 3.26% for the second quarter of 2024 to 3.33% for the third quarter of 2024, an increase of seven basis points. The increase in net interest margin, on a fully taxable equivalent basis, was primarily due to a one basis point increase in the yield earned on interest-earning assets, further improved by a seven basis point decrease in rates on interest-bearing liabilities. The increase in yield was primarily due to an increase in loan yields from 6.29% for the second quarter of 2024 to 6.35% for the third quarter of 2024, a change of six basis points, partially offset by decreases in yield on all other interest-earning assets for a net increase of one basis point in yields on interest-earning assets. This increase was improved by a decrease in interest-bearing liabilities of seven basis points since June 30, 2024.
We recorded a reverse provision for credit losses of $500,000 during the third quarter of 2024, and $1.2 million and $250,000 of reverse provisions during the second and first quarters of 2024, respectively. The reverse provisions resulted from a decline in gross loan balances of $78.5 million during the third quarter and of $186.0 million year to date, while overall credit quality trends and economic forecast assumptions remained relatively stable. As of September 30, 2024 and December 31, 2023, our allowance for credit losses as a percentage of total loans was 1.34% and 1.33%, respectively.
Noninterest income increased $215,000, or 4.4%, during the third quarter of 2024 to $5.2 million, compared to $4.9 million for the third quarter of 2023. The increase from the same quarter in 2023 was primarily due to rental income received during the quarter.
Noninterest income for the third quarter of 2024 increased by $555,000, or 12.1%, from $4.6 million in the second quarter of 2024. The increase was primarily due to an increase in other noninterest income of $909,000, or 1377.3%, primarily the result of a $900,000 ORE valuation allowance during the second quarter of 2024. This was partially offset by a $305,000, or 14.4%, decrease in merchant and debit card fees due to an annual payment from our third party processing vendor during the second quarter of 2024.
Noninterest expense increased $164,000, or 0.8%, during the third quarter of 2024 to $20.7 million, compared to $20.5 million for the third quarter of 2023. The increase in noninterest expense during the third quarter of 2024 was driven primarily by an increase in other noninterest expense of $498,000, or 39.9%, due to $642,000 in ORE-related holding costs during the current quarter, which was partially offset by a $358,000, or 3.0%, decrease in employee compensation and benefits and a $127,000, or 14.1%, decrease in legal and professional fees compared to the third quarter of 2023.
Noninterest expense increased $76,000, or 0.4%, during the third quarter of 2024, from $20.6 million for the quarter ended June 30, 2024. The increase resulted primarily from a $141,000, or 8.8%, increase in other noninterest expense due to $642,000 in ORE-related holding costs during the current quarter. Additionally, the Bank saw a $102,000, or 3.5%, increase in occupancy expenses during the third quarter of 2024 compared to the second quarter of 2024. These increases were partially offset by a $137,000, or 1.2%, decrease in employee compensation and benefits.
The Company's efficiency ratio for the third quarter of 2024 was 70.47%, compared to 72.64% for the prior year quarter and 72.34% for the second quarter of 2024.
FINANCIAL CONDITION
Consolidated assets for the Company totaled $3.10 billion at September 30, 2024, compared to $3.08 billion at June 30, 2024 and $3.23 billion at September 30, 2023.
Gross loans decreased by $78.5 million, or 3.5%, during the quarter resulting in a gross loan balance of $2.14 billion at September 30, 2024, compared to $2.21 billion at June 30, 2024. Our decline in loans resulted primarily from tighter underwriting, strategic non-renewal decisions and from lower demand from potential borrowers.
Gross loans decreased $181.7 million, or 7.8%, from $2.32 billion at September 30, 2023. The decrease in gross loans during the third quarter of 2024 compared to the third 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 increased by $42.8 million, or 1.6%, to $2.67 billion at September 30, 2024, compared to $2.63 billion at June 30, 2024, and increased $10.6 million, or 0.4%, from $2.66 billion at September 30, 2023. The increase in deposits during the third quarter of 2024 compared to the second quarter of 2024 was the result of an increase in noninterest-bearing and interest-bearing deposits of $19.1 million and $23.6 million, respectively. The increase in deposits during the current quarter compared to the prior year quarter resulted primarily from an increase in interest-bearing deposits of $74.4 million, offset by a decrease in noninterest-bearing deposits of $63.8 million.
Nonperforming assets as a percentage of total loans were 0.96% at September 30, 2024, compared to 0.98% at June 30, 2024 and 0.13% at September 30, 2023. Nonperforming assets as a percentage of total assets were 0.66% at September 30, 2024, compared to 0.71% at June 30, 2024, and 0.09% at September 30, 2023. The Bank's nonperforming assets consist primarily of ORE and nonaccrual loans. The increase in nonperforming assets compared to the prior year quarter was primarily due to the acquisition of ORE, which is expected to be fully resolved by year-end.
Total equity was $319.3 million at September 30, 2024, compared to $308.6 million at June 30, 2024 and $296.8 million at September 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 third quarter and from a positive shift in our net unrealized losses on securities compared to the prior periods. The increases in equity were somewhat offset by the payment of dividends and by the repurchase of stock totaling $1.8 million during the third quarter of 2024, $4.1 million during the second quarter of 2024 and $1.7 million during the third quarter of 2023.
As of | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(dollars in thousands) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 50,623 | $ | 45,016 | $ | 43,872 | $ | 47,744 | $ | 47,922 | ||||||||||
Federal funds sold | 108,350 | 40,475 | 24,300 | 36,575 | 73,275 | |||||||||||||||
Interest-bearing deposits | 3,973 | 4,721 | 4,921 | 5,205 | 8,980 | |||||||||||||||
Total cash and cash equivalents | 162,946 | 90,212 | 73,093 | 89,524 | 130,177 | |||||||||||||||
Securities available for sale | 277,567 | 242,662 | 228,787 | 196,195 | 178,644 | |||||||||||||||
Securities held to maturity | 341,911 | 347,992 | 363,963 | 404,208 | 408,308 | |||||||||||||||
Loans held for sale | 770 | 871 | 874 | 976 | 2,506 | |||||||||||||||
Loans, net | 2,107,597 | 2,185,247 | 2,234,012 | 2,290,881 | 2,286,163 | |||||||||||||||
Accrued interest receivable | 10,927 | 12,397 | 11,747 | 13,143 | 11,307 | |||||||||||||||
Premises and equipment, net | 56,964 | 57,475 | 56,921 | 57,018 | 56,712 | |||||||||||||||
Other real estate owned | 15,184 | 15,184 | 14,900 | - | - | |||||||||||||||
Cash surrender value of life insurance | 42,623 | 42,369 | 42,119 | 42,348 | 42,096 | |||||||||||||||
Core deposit intangible, net | 1,100 | 1,206 | 1,312 | 1,418 | 1,524 | |||||||||||||||
Goodwill | 32,160 | 32,160 | 32,160 | 32,160 | 32,160 | |||||||||||||||
Other assets | 47,356 | 53,842 | 67,550 | 56,920 | 80,816 | |||||||||||||||
Total assets | $ | 3,097,105 | $ | 3,081,617 | $ | 3,127,438 | $ | 3,184,791 | $ | 3,230,413 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Noninterest-bearing | $ | 839,567 | $ | 820,430 | $ | 828,861 | $ | 852,957 | $ | 903,391 | ||||||||||
Interest-bearing |
1,829,347 | 1,805,732 | 1,798,983 | 1,780,289 | 1,754,902 | |||||||||||||||
Total deposits | 2,668,914 | 2,626,162 | 2,627,844 | 2,633,246 | 2,658,293 | |||||||||||||||
Securities sold under agreements to repurchase | 31,164 | 25,173 | 39,058 | 25,172 | 19,366 | |||||||||||||||
Accrued interest and other liabilities | 33,849 | 32,860 | 33,807 | 32,242 | 31,218 | |||||||||||||||
Line of credit | - | - | - | 4,500 | 2,000 | |||||||||||||||
Federal Home Loan Bank advances | - | 45,000 | 75,000 | 140,000 | 175,000 | |||||||||||||||
Subordinated debentures | 43,885 | 43,852 | 45,819 | 45,785 | 47,752 | |||||||||||||||
Total liabilities | 2,777,812 | 2,773,047 | 2,821,528 | 2,880,945 | 2,933,629 | |||||||||||||||
Equity attributable to Guaranty Bancshares, Inc. | 318,784 | 308,043 | 305,371 | 303,300 | 296,226 | |||||||||||||||
Noncontrolling interest | 509 | 527 | 539 | 546 | 558 | |||||||||||||||
Total equity | 319,293 | 308,570 | 305,910 | 303,846 | 296,784 | |||||||||||||||
Total liabilities and equity | $ | 3,097,105 | $ | 3,081,617 | $ | 3,127,438 | $ | 3,184,791 | $ | 3,230,413 | ||||||||||
Quarter Ended | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(dollars in thousands, except per share data) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
STATEMENTS OF EARNINGS | ||||||||||||||||||||
Interest income | $ | 40,433 | $ | 40,713 | $ | 40,752 | $ | 40,796 | $ | 39,818 | ||||||||||
Interest expense | 16,242 | 16,833 | 17,165 | 16,983 | 16,516 | |||||||||||||||
Net interest income | 24,191 | 23,880 | 23,587 | 23,813 | 23,302 | |||||||||||||||
Reversal of provision for credit losses | (500 | ) | (1,200 | ) | (250 | ) | - | - | ||||||||||||
Net interest income after reversal of provision for credit losses | 24,691 | 25,080 | 23,837 | 23,813 | 23,302 | |||||||||||||||
Noninterest income | 5,154 | 4,599 | 5,258 | 4,796 | 4,939 | |||||||||||||||
Noninterest expense | 20,678 | 20,602 | 20,692 | 21,402 | 20,514 | |||||||||||||||
Income before income taxes | 9,167 | 9,077 | 8,403 | 7,207 | 7,727 | |||||||||||||||
Income tax provision | 1,788 | 1,654 | 1,722 | 1,341 | 1,437 | |||||||||||||||
Net earnings | $ | 7,379 | $ | 7,423 | $ | 6,681 | $ | 5,866 | $ | 6,290 | ||||||||||
Net loss attributable to noncontrolling interest | 18 | 12 | 7 | 12 | 7 | |||||||||||||||
Net earnings attributable to Guaranty Bancshares, Inc. | $ | 7,397 | $ | 7,435 | $ | 6,688 | $ | 5,878 | $ | 6,297 | ||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||
Earnings per common share, basic | $ | 0.65 | $ | 0.65 | $ | 0.58 | $ | 0.51 | $ | 0.54 | ||||||||||
Earnings per common share, diluted | 0.65 | 0.65 | 0.58 | 0.51 | 0.54 | |||||||||||||||
Cash dividends per common share | 0.24 | 0.24 | 0.24 | 0.23 | 0.23 | |||||||||||||||
Book value per common share - end of quarter | 27.94 | 26.98 | 26.47 | 26.28 | 25.64 | |||||||||||||||
Tangible book value per common share - end of quarter(1) | 25.03 | 24.06 | 23.57 | 23.37 | 22.72 | |||||||||||||||
Common shares outstanding - end of quarter(2) | 11,408,908 | 11,417,270 | 11,534,960 | 11,540,644 | 11,554,094 | |||||||||||||||
Weighted-average common shares outstanding, basic | 11,383,027 | 11,483,091 | 11,539,167 | 11,536,878 | 11,568,897 | |||||||||||||||
Weighted-average common shares outstanding, diluted | 11,443,324 | 11,525,504 | 11,598,239 | 11,589,165 | 11,619,342 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets (annualized) | 0.96 | % | 0.95 | % | 0.85 | % | 0.73 | % | 0.78 | % | ||||||||||
Return on average equity (annualized) | 9.58 | 9.91 | 8.93 | 7.93 | 8.43 | |||||||||||||||
Net interest margin, fully taxable equivalent (annualized)(3) | 3.33 | 3.26 | 3.16 | 3.11 | 3.02 | |||||||||||||||
Efficiency ratio(4) | 70.47 | 72.34 | 71.74 | 74.81 | 72.64 | |||||||||||||||
(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) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||||||||
Commercial and industrial | $ | 245,738 | $ | 264,058 | $ | 269,560 | $ | 287,565 | $ | 292,410 | ||||||||||
Real estate: | ||||||||||||||||||||
Construction and development | 213,014 | 231,053 | 273,300 | 296,639 | 317,484 | |||||||||||||||
Commercial real estate | 866,112 | 899,120 | 906,684 | 923,195 | 901,321 | |||||||||||||||
Farmland | 169,116 | 180,126 | 180,502 | 186,295 | 188,614 | |||||||||||||||
1-4 family residential | 524,245 | 526,650 | 523,573 | 514,603 | 504,002 | |||||||||||||||
Multi-family residential | 54,158 | 47,507 | 44,569 | 44,292 | 42,720 | |||||||||||||||
Consumer | 52,530 | 53,642 | 54,375 | 57,059 | 58,294 | |||||||||||||||
Agricultural | 11,293 | 12,506 | 12,418 | 12,685 | 13,076 | |||||||||||||||
Overdrafts | 331 | 335 | 276 | 243 | 328 | |||||||||||||||
Total loans(1)(2) | $ | 2,136,537 | $ | 2,214,997 | $ | 2,265,257 | $ | 2,322,576 | $ | 2,318,249 | ||||||||||
Quarter Ended | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(dollars in thousands) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
ALLOWANCE FOR CREDIT LOSSES | ||||||||||||||||||||
Balance at beginning of period | $ | 29,282 | $ | 30,560 | $ | 30,920 | $ | 31,140 | $ | 31,759 | ||||||||||
Loans charged-off | (272 | ) | (115 | ) | (310 | ) | (242 | ) | (644 | ) | ||||||||||
Recoveries | 33 | 37 | 200 | 22 | 25 | |||||||||||||||
Reversal of provision for credit losses | (500 | ) | (1,200 | ) | (250 | ) | - | - | ||||||||||||
Balance at end of period | $ | 28,543 | $ | 29,282 | $ | 30,560 | $ | 30,920 | $ | 31,140 | ||||||||||
Allowance for credit losses / period-end loans | 1.34 | % | 1.32 | % | 1.35 | % | 1.33 | % | 1.34 | % | ||||||||||
Allowance for credit losses / nonperforming loans | 560.2 | 470.4 | 496.0 | 552.9 | 1,148.2 | |||||||||||||||
Net charge-offs / average loans (annualized) | 0.04 | 0.01 | 0.02 | 0.04 | 0.11 | |||||||||||||||
NONPERFORMING ASSETS | ||||||||||||||||||||
Nonaccrual loans | $ | 5,095 | $ | 6,225 | $ | 6,161 | $ | 5,592 | $ | 2,712 | ||||||||||
Other real estate owned | 15,184 | 15,184 | 14,900 | - | - | |||||||||||||||
Repossessed assets owned | 154 | 331 | 236 | 234 | 250 | |||||||||||||||
Total nonperforming assets | $ | 20,433 | $ | 21,740 | $ | 21,297 | $ | 5,826 | $ | 2,962 | ||||||||||
Nonaccrual loans as a percentage of total loans(1)(2) | 0.24 | % | 0.28 | % | 0.27 | % | 0.24 | % | 0.12 | % | ||||||||||
Nonperforming assets as a percentage of: | ||||||||||||||||||||
Total loans(1)(2) | 0.96 | % | 0.98 | % | 0.94 | % | 0.25 | % | 0.13 | % | ||||||||||
Total assets | 0.66 | 0.71 | 0.68 | 0.18 | 0.09 | |||||||||||||||
(1) Excludes outstanding balances of loans held for sale of $770,000, $871,000, $874,000, $976,000, and $2.5 million as of September 30, June 30 and March 31, 2024 and December 31 and September 30, 2023, respectively. | ||||||||||||||||||||
(2) Excludes deferred loan fees of $397,000, $468,000, $685,000, $775,000, and $946,000 as of September 30, June 30 and March 31, 2024 and December 31 and September 30, 2023, respectively. | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(dollars in thousands) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges | $ | 1,165 | $ | 1,098 | $ | 1,069 | $ | 1,123 | $ | 1,131 | ||||||||||
Net realized gain on sale of loans | 252 | 227 | 272 | 196 | 218 | |||||||||||||||
Fiduciary and custodial income | 542 | 657 | 649 | 624 | 637 | |||||||||||||||
Bank-owned life insurance income | 255 | 250 | 251 | 249 | 267 | |||||||||||||||
Merchant and debit card fees | 1,817 | 2,122 | 1,706 | 1,760 | 1,752 | |||||||||||||||
Loan processing fee income | 102 | 136 | 118 | 116 | 128 | |||||||||||||||
Mortgage fee income | 46 | 43 | 41 | 30 | 46 | |||||||||||||||
Other noninterest income | 975 | 66 | 1,152 | 698 | 760 | |||||||||||||||
Total noninterest income | $ | 5,154 | $ | 4,599 | $ | 5,258 | $ | 4,796 | $ | 4,939 | ||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Employee compensation and benefits | $ | 11,586 | $ | 11,723 | $ | 12,437 | $ | 12,715 | $ | 11,944 | ||||||||||
Occupancy expenses | 3,026 | 2,924 | 2,747 | 2,757 | 2,960 | |||||||||||||||
Legal and professional fees | 775 | 841 | 772 | 954 | 902 | |||||||||||||||
Software and technology | 1,649 | 1,653 | 1,642 | 1,740 | 1,490 | |||||||||||||||
Amortization | 142 | 142 | 143 | 145 | 147 | |||||||||||||||
Director and committee fees | 188 | 198 | 200 | 186 | 192 | |||||||||||||||
Advertising and promotions | 239 | 208 | 169 | 352 | 288 | |||||||||||||||
ATM and debit card expense | 791 | 785 | 609 | 763 | 803 | |||||||||||||||
Telecommunication expense | 178 | 159 | 173 | 175 | 178 | |||||||||||||||
FDIC insurance assessment fees | 359 | 365 | 360 | 321 | 363 | |||||||||||||||
Other noninterest expense | 1,745 | 1,604 | 1,440 | 1,294 | 1,247 | |||||||||||||||
Total noninterest expense | $ | 20,678 | $ | 20,602 | $ | 20,692 | $ | 21,402 | $ | 20,514 | ||||||||||
Quarter Ended September 30, | ||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||
(dollars in thousands) | Average
| Interest
| Average
| Average
| Interest
| Average
| ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Total loans(1) | $ | 2,167,701 | $ | 34,615 | 6.35 | % | $ | 2,332,171 | $ | 34,765 | 5.91 | % | ||||||||||||
Securities available for sale | 263,487 | 2,484 | 3.75 | 181,946 | 1,346 | 2.93 | ||||||||||||||||||
Securities held to maturity | 345,422 | 2,242 | 2.58 | 432,687 | 2,710 | 2.48 | ||||||||||||||||||
Nonmarketable equity securities | 19,341 | 194 | 3.99 | 25,429 | 304 | 4.74 | ||||||||||||||||||
Interest-bearing deposits in other banks | 66,583 | 898 | 5.37 | 52,424 | 693 | 5.24 | ||||||||||||||||||
Total interest-earning assets | 2,862,534 | 40,433 | 5.62 | 3,024,657 | 39,818 | 5.22 | ||||||||||||||||||
Allowance for credit losses | (29,101 | ) | (31,574 | ) | ||||||||||||||||||||
Noninterest-earning assets | 232,947 | 220,406 | ||||||||||||||||||||||
Total assets | $ | 3,066,380 | $ | 3,213,489 | ||||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 1,821,395 | $ | 15,243 | 3.33 | % | $ | 1,726,218 | $ | 13,069 | 3.00 | % | ||||||||||||
Advances from FHLB and fed funds purchased | 21,739 | 286 | 5.23 | 194,115 | 2,588 | 5.29 | ||||||||||||||||||
Line of credit | 261 | 6 | 9.15 | 5,011 | 204 | 16.15 | ||||||||||||||||||
Subordinated debt | 43,863 | 506 | 4.59 | 47,730 | 534 | 4.44 | ||||||||||||||||||
Securities sold under agreements to repurchase | 34,370 | 201 | 2.33 | 22,718 | 121 | 2.11 | ||||||||||||||||||
Total interest-bearing liabilities | 1,921,628 | 16,242 | 3.36 | 1,995,792 | 16,516 | 3.28 | ||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Noninterest-bearing deposits | 800,573 | 888,772 | ||||||||||||||||||||||
Accrued interest and other liabilities | 36,970 | 32,716 | ||||||||||||||||||||||
Total noninterest-bearing liabilities | 837,543 | 921,488 | ||||||||||||||||||||||
Equity | 307,209 | 296,209 | ||||||||||||||||||||||
Total liabilities and equity | $ | 3,066,380 | $ | 3,213,489 | ||||||||||||||||||||
Net interest rate spread(2) | 2.26 | % | 1.94 | % | ||||||||||||||||||||
Net interest income | $ | 24,191 | $ | 23,302 | ||||||||||||||||||||
Net interest margin(3) | 3.36 | % | 3.06 | % | ||||||||||||||||||||
Net interest margin, fully taxable equivalent(4) | 3.33 | % | 3.02 | % | ||||||||||||||||||||
(1) Includes average outstanding balances of loans held for sale of $882,000 and $1.1 million for the quarter ended September 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%. | ||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||
(dollars in thousands) | Average
| Interest
| Average
| Average
| Interest
| Average
| ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Total loans(1) | $ | 2,234,538 | $ | 105,115 | 6.28 | % | $ | 2,359,880 | $ | 100,513 | 5.69 | % | ||||||||||||
Securities available for sale | 241,777 | 6,602 | 3.65 | 180,645 | 3,619 | 2.68 | ||||||||||||||||||
Securities held to maturity | 365,174 | 7,107 | 2.60 | 463,434 | 8,591 | 2.48 | ||||||||||||||||||
Nonmarketable equity securities | 22,329 | 722 | 4.32 | 27,727 | 1,024 | 4.94 | ||||||||||||||||||
Interest-bearing deposits in other banks | 56,901 | 2,352 | 5.52 | 49,923 | 1,949 | 5.22 | ||||||||||||||||||
Total interest-earning assets | 2,920,719 | 121,898 | 5.57 | 3,081,609 | 115,696 | 5.02 | ||||||||||||||||||
Allowance for credit losses | (30,125 | ) | (31,804 | ) | ||||||||||||||||||||
Noninterest-earning assets | 234,822 | 219,227 | ||||||||||||||||||||||
Total assets | $ | 3,125,416 | $ | 3,269,032 | ||||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits | $ | 1,802,228 | $ | 44,526 | 3.30 | % | $ | 1,668,394 | $ | 30,670 | 2.46 | % | ||||||||||||
Advances from FHLB and fed funds purchased | 84,234 | 3,413 | 5.41 | 255,011 | 9,711 | 5.09 | ||||||||||||||||||
Line of credit | 367 | 24 | 8.74 | 4,139 | 268 | 8.66 | ||||||||||||||||||
Subordinated debt | 44,713 | 1,534 | 4.58 | 48,357 | 1,609 | 4.45 | ||||||||||||||||||
Securities sold under agreements to repurchase | 39,880 | 743 | 2.49 | 19,548 | 271 | 1.85 | ||||||||||||||||||
Total interest-bearing liabilities | 1,971,422 | 50,240 | 3.40 | 1,995,449 | 42,529 | 2.85 | ||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Noninterest-bearing deposits | 814,117 | 944,870 | ||||||||||||||||||||||
Accrued interest and other liabilities | 36,458 | 30,057 | ||||||||||||||||||||||
Total noninterest-bearing liabilities | 850,575 | 974,927 | ||||||||||||||||||||||
Equity | 303,418 | 298,656 | ||||||||||||||||||||||
Total liabilities and equity | $ | 3,125,415 | $ | 3,269,032 | ||||||||||||||||||||
Net interest rate spread(2) | 2.17 | % | 2.17 | % | ||||||||||||||||||||
Net interest income | $ | 71,658 | $ | 73,167 | ||||||||||||||||||||
Net interest margin(3) | 3.28 | % | 3.17 | % | ||||||||||||||||||||
Net interest margin, fully taxable equivalent(4) | 3.25 | % | 3.16 | % | ||||||||||||||||||||
(1) Includes average outstanding balances of loans held for sale of $801,000 and $1.4 million for the nine months ended September 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) | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
Equity attributable to Guaranty Bancshares, Inc. | $ | 318,784 | $ | 308,043 | $ | 305,371 | $ | 303,300 | $ | 296,226 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (32,160 | ) | (32,160 | ) | (32,160 | ) | (32,160 | ) | (32,160 | ) | ||||||||||
Core deposit intangible, net | (1,100 | ) | (1,206 | ) | (1,312 | ) | (1,418 | ) | (1,524 | ) | ||||||||||
Total tangible common equity attributable to Guaranty Bancshares, Inc. | $ | 285,524 | $ | 274,677 | $ | 271,899 | $ | 269,722 | $ | 262,542 | ||||||||||
Common shares outstanding(1) | 11,408,908 | 11,417,270 | 11,534,960 | 11,540,644 | 11,554,094 | |||||||||||||||
Book value per common share | $ | 27.94 | $ | 26.98 | $ | 26.47 | $ | 26.28 | $ | 25.64 | ||||||||||
Tangible book value per common share(1) | 25.03 | 24.06 | 23.57 | 23.37 | 22.72 | |||||||||||||||
(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) | September 30, 2024 | |||
Total equity(1) | $ | 319,293 | ||
Less: net unrealized loss on HTM securities, tax effected | (17,852 | ) | ||
Total equity, including net unrealized loss on AFS and HTM securities | $ | 301,441 | ||
Net unrealized loss on AFS securities, tax effected | 8,374 | |||
Net unrealized loss on HTM securities, tax effected | 17,852 | |||
Net unrealized loss on AFS and HTM securities, tax effected | $ | 26,226 | ||
Net unrealized loss on securities as % of total equity(1) | 8.2 | % | ||
Total equity before impact of unrealized losses | $ | 327,667 | ||
Net unrealized loss on securities as % of total equity before impact of unrealized losses | 8.0 | % | ||
Total average assets | $ | 3,066,380 | ||
Total equity to average assets | 10.4 | % | ||
Total equity, adjusted for tax effected net unrealized loss, to average assets | 9.8 | % | ||
(1) Includes the net unrealized loss on AFS securities of $8.4 million, tax effected. | ||||
Cost of Total Deposits
Quarter Ended | ||||||||||||
(dollars in thousands) | September 30, 2024 | June 30, 2024 | September 30, 2023 | |||||||||
Total average interest-bearing deposits | $ | 1,821,395 | $ | 1,795,958 | $ | 1,726,218 | ||||||
Adjustments: | ||||||||||||
Noninterest-bearing deposits | 800,573 | 818,290 | 888,772 | |||||||||
Total average deposits | $ | 2,621,968 | $ | 2,614,248 | $ | 2,614,990 | ||||||
Total deposit-related interest expense | $ | 15,243 | $ | 14,824 | $ | 13,069 | ||||||
Average cost of interest-bearing deposits | 3.33 | % | 3.32 | % | 3.00 | % | ||||||
Average cost of total deposits | 2.31 | 2.28 | 1.98 | |||||||||
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 third quarter 2024 financial results on Monday, October 21, 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 October 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 September 30, 2024, Guaranty Bancshares, Inc. had total assets of $3.1 billion, total loans of $2.1 billion and total deposits of $2.7 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.
Contacts
Shalene Jacobson
Executive Vice President and Chief Financial Officer
Guaranty Bancshares, Inc.
(888) 572-9881
investors@gnty.com
