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Guaranty Bancshares, Inc. Reports Second Quarter 2023 Financial Results

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

  • Excellent Asset Quality. 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. Net charge-offs (annualized) to average loans were 0.03% for the quarter ended June 30, 2023, compared to 0.00% for the quarter ended March 31, 2023, and 0.02% for the quarter ended June 30, 2022. During the second quarter, four nonperforming loans that were acquired from Westbound Bank with combined balances of $6.7 million were resolved and paid off with minimal charge-offs. An additional nonperforming loan with an outstanding balance of $1.4 million was resolved and paid off with a minimal charge-off.



    Commercial real estate (CRE) loans, particularly office related loans, have received increased scrutiny in recent months. Our CRE loans and real estate C&D loans represent 38.2% and 14.8% of the total loan portfolio, respectively. Office-related loans represent 4.4% of the total loan portfolio and have an average balance of $541,000.



    Although asset quality remains strong, we adjusted certain qualitative factors during the second quarter to incorporate industry-wide concerns over CRE valuations and the possibility of higher-for-longer interest rates, which could impact cash flows and repayment ability of borrowers. These qualitative adjustments, along with minimal charge-offs and a slight reduction in the loan portfolio, resulted in no provision for credit loss in the second quarter of 2023.
  • Granular and Reliable Deposit Base. As of June 30, 2023, we have 85,615 total deposit accounts with an average account balance of $29,693. We have a historically reliable core deposit base, with strong and trusted banking relationships. Total deposits decreased by $20.6 million during the second quarter, which consisted primarily of a decrease in public funds balances of $28.1 million, a decrease in other deposits of $52.3 million, partially offset by an increase in brokered certificates of deposit of $50.0 million. The bank has not historically used brokered deposits and does not foresee a reliance on them going forward, but issued these deposits during the quarter to test their availability as a contingent liquidity source. We also had an increase of approximately $7.0 million in collateralized repurchase agreements, which are shown on our balance sheet as a separate line item than deposits, but would be classified as deposits if not for the repurchase agreement.



    As an additional resource to our uninsured depositors, we implemented both the IntraFi CDARS and ICS programs during the second quarter of 2023. These programs allow CD and money market deposit customers, respectively, to obtain full FDIC deposit insurance while maintaining one time deposit or savings relationship with our Bank. Excluding public funds and bank-owned accounts, our uninsured deposits as of June 30, 2023 were 22.31% of total deposits.



    We continued to increase interest rates paid on deposits during the quarter in order to pay competitive rates, however noninterest-bearing deposits still represent 35.2% of total deposits. Our cost of interest-bearing deposits increased 50 basis points during the quarter from 1.91% in the prior quarter to 2.41%, representing a beta on interest-bearing deposits of approximately 105.6% for the linked quarter compared to the federal funds target rates. Our cost of total deposits (cost of funds) for the second quarter of 2023 increased 35 basis points from 1.18% in the prior quarter to 1.53%, representing a beta on total deposits of approximately 73.9% for the linked quarter.

  • Strong Capital and Liquidity. Our capital and liquidity ratios, as well as contingent liquidity sources, are solid. We are taking advantage of low stock prices to repurchase shares of Company stock and add intrinsic value for shareholders. During the second quarter of 2023, we repurchased 322,601 shares, or 2.8% of average shares outstanding during the period, at an average price of $25.13 per share. Our liquidity ratio, calculated as cash and cash equivalents and unpledged investments divided by total liabilities, was 12.9% as of quarter-end. Our total available contingent liquidity, net of current outstanding borrowings, is $1.5 billion, consisting of FHLB, FRB and correspondent bank fed funds and revolving lines of credit. Finally, our total equity to average assets as on June 30, 2023 is 9.1%. If we had to recognize our entire unrealized losses on both AFS and HTM securities, the ratio would be 8.3%, which is still well capitalized under regulatory requirements.



  • Investment Portfolio Discipline. During late 2021 and early 2022, we had significant excess cash but did not believe the low yields on investments at that time warranted the interest rate risk. To slightly improve the yields meant investing in securities with much longer lives. Because of this disciplined approach, our total unrealized losses, including both AFS and HTM securities remain manageable and low. However, during the second quarter, we used advantageous market movements to restructure $14.3 million in AFS securities to improve overall yield with minimal realized losses and an estimated earnback period of just under one year. The table below presents total unrealized losses as of June 30, 2023, along with estimated unrealized losses if interest rates increase or decrease by 100 basis points.

 

 

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.

Contacts

Cappy Payne

Senior Executive Vice President and Chief Financial Officer

Guaranty Bancshares, Inc.

(888) 572-9881

investors@gnty.com

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