Guaranty Bancshares, Inc. (NASDAQ: GNTY) (the "Company"), the
parent company of Guaranty Bank & Trust, N.A. (the "Bank"),
today reported financial results for the fiscal quarter and year
ended December 31, 2022. The Company's net income available to
common shareholders was $8.0 million, or $0.67 per basic share, for
the quarter ended December 31, 2022, compared to $10.9 million, or
$0.92 per basic share, for the quarter ended September 30, 2022 and
$9.2 million, or $0.76 per basic share, for the quarter ended
December 31, 2021. Return on average assets and average equity for
the fourth quarter of 2022 were 0.95% and 10.88%, respectively,
compared to 1.30% and 14.87%, respectively, for the third quarter
of 2022 and 1.20% and 12.06%, respectively, for the fourth quarter
of 2021. The decrease in earnings during the fourth quarter of
2022, compared to the third quarter of 2022 and the fourth quarter
of 2021, was primarily due to a provision for credit losses of $2.8
million, compared to $600,000 during the third quarter of 2022 and
no provision during the prior year quarter. Our net core
earnings†, excluding provisions for credit losses, income
taxes and PPP1/PPP2 net income, as well as our core net interest
margin, adjusted to exclude the effects of PPP1/PPP2 loans in prior
periods, are described further in tables below.
"Despite the economic, inflationary and geopolitical challenges
of 2022, we had strong earnings for the year. Fourth quarter net
income was $8.0 million, which included a $2.8 million provision
for credit losses to adjust for economic forecasts in accordance
with our CECL methodology. We don't foresee significant losses at
this time but economists are overwhelmingly predicting an economic
recession in 2023 so there is strong evidence to support the added
provision. We had a very good 2022 with total net income of $40.4
million for the year. Loans increased $112.1 million in the fourth
quarter and $470.1 million for the year. Deposits decreased $109.4
million in the fourth quarter but grew $10.3 million for the year.
The decline in deposits during the fourth quarter came primarily
from our newer, urban growth markets while our legacy East Texas
market grew deposits slightly during the quarter, continuing to
illustrate the core deposit base we have in that market. Cost of
deposits increased in the fourth quarter as the Bank raised
interest rates to retain existing depositors and remain
competitive. However, new and renewed loans are being booked at
higher rates and we'll continue to see the benefits of floating and
variable rate loans going forward, although some margin compression
is expected in 2023. We maintain effective asset and liability
management, low levels of nonperforming assets, good core deposits
and a solid earnings stream that should continue to benefit our
stakeholders," commented Ty Abston, the Company's Chairman and
Chief Executive Officer.
QUARTERLY AND ANNUAL HIGHLIGHTS
- Strong Loan Growth. The fourth quarter of 2022 continued
to provide strong organic loan growth, increasing $112.1 million,
or 4.9%, during the quarter. Excluding PPP and warehouse lending
changes, our loans increased $112.4 million, or 5.0%, during the
quarter. The weighted average yield on new loans originated in the
fourth quarter was 6.53%. Loans increased $470.1 million, or 24.6%,
during the year and excluding PPP and warehouse lending changes
increased by $553.2 million, or 30.5%. Our loan growth is a result
of internally generated sources and is not from loan purchases from
other originators.
- Reliable Core Deposits. Deposits decreased 3.9% in the
fourth quarter of 2022, from $2.8 billion to $2.7 billion, but
increased slightly for the year by $10.3 million. Our legacy East
Texas market represents approximately 57% of our total deposits and
the balance of deposits in that market increased by $3.1 million
during the fourth quarter. These deposits have historically been a
very stable and reliable source of funding and continue to
demonstrate those trends now. We continued to increase interest
rates paid on deposits during the quarter and for the year in order
to pay competitive rates, however non-interest bearing deposits
continue to represent 39.2% of total deposits. Our cost of interest
bearing deposits increased 49 basis points during the quarter from
0.59% to 1.08%, representing a beta on interest bearing deposits of
approximately 40% for the quarter. Our cost of interest bearing
deposits for the year ending December 31, 2022 increased 23 basis
points from 0.35% to 0.58%, representing a beta on these deposits
of approximately 5% for the year.
- Robust Net Earnings and Core Earnings. Net earnings are
strong as net interest income continues to show upwards trends,
quarter-over-quarter. Earnings per share were $0.67 per share, down
from $0.92 per share in the prior quarter, primarily due to a $2.8
million provision for credit losses during the quarter. Net core
earnings per share†, which excludes the provision for credit
losses and income tax, was $1.05 in the fourth quarter, compared to
$1.16 in the third quarter, demonstrating a solid and consistent
core earnings stream. Basic earnings per share was $3.38 for the
year ending December 31, 2022 compared to $3.30 per basic share in
the prior year.
- Net earnings for the year ended December 31, 2022 were $40.4
million, up from $39.8 million for the year ended December 31,
2021. Net core earnings† were $50.2 million for the year
ended December 31, 2022, compared to $39.0 million for 2021.
- Net core earnings† were $12.6 million for the fourth
quarter, compared to $13.8 million for the third quarter of 2022,
and $10.1 million during the fourth quarter of 2021.
- Good Asset Quality. Nonperforming assets as a percentage
of total assets were 0.32% at December 31, 2022, compared to 0.28%
at September 30, 2022 and 0.09% at December 31, 2021. Net
charge-offs (annualized) to average loans were 0.01% for the
quarter ended December 31, 2022, compared to 0.07% for the quarter
ended September 30, 2022, and 0.04% for the quarter ended December
31, 2021. A provision for credit losses of $2.8 million was
recorded during the fourth quarter, as we incorporated recession
forecasts for 2023 into our CECL model.
- Asset Liability Management. The Bank is slightly
asset-sensitive and should continue to benefit from expected rate
increases by the Federal Reserve in the first quarter of 2023 and
from future loan repricing. Although we expect loan growth to slow
considerably in 2023, we are well-positioned for loan funding with
a loan-to-deposit ratio at quarter-end of 88.7%. Our FHLB advances
were $290.0 million as of December 31, 2022 and are expected to be
paid down in 2023 from balance sheet cash flows. Approximately
$127.6 million in securities will mature or pay down during 2023.
As of December 31, 2022, $256.0 million, or 10.8% of our loan
portfolio is fully floating and $1.3 billion, or 53.1% are
adjustable rate term loans, repricing at defined future time
periods.
RESULTS OF OPERATIONS
Participation in the PPP1 and PPP2 program, as well as economic
and COVID-related provisions for credit losses, has created
temporary extraordinary results in the calculation of net earnings
and related performance ratios. The following table illustrates net
earnings and net core earnings results, which are pre-tax,
pre-provision and pre-extraordinary PPP1/PPP2 income, as well as
performance ratios for the prior five quarters:
Quarter Ended
2022
2021
(dollars in thousands, except per share
data)
December 31
September 30
June 30
March 31
December 31
Net earnings attributable to Guaranty
Bancshares, Inc.
$
8,022
$
10,903
$
10,784
$
10,738
$
9,159
Adjustments:
Provision for credit losses
2,800
600
—
(1,250
)
—
Income tax provision
1,764
2,363
2,472
2,235
1,923
PPP loan interest and fees
(1
)
(57
)
(436
)
(783
)
(958
)
Net core earnings attributable to Guaranty
Bancshares, Inc.†
$
12,585
$
13,809
$
12,820
$
10,940
$
10,124
Total average assets
$
3,346,358
$
3,337,348
$
3,209,440
$
3,146,339
$
3,021,079
Adjustments:
PPP loans average balance
(539
)
(1,159
)
(8,885
)
(36,720
)
(61,062
)
Total average assets, adjusted†
$
3,345,819
$
3,336,189
$
3,200,555
$
3,109,619
$
2,960,017
Total average equity
$
292,471
$
290,806
$
291,312
$
301,579
$
301,398
PERFORMANCE RATIOS
Net earnings to average assets
(annualized)
0.95
%
1.30
%
1.35
%
1.38
%
1.20
%
Net earnings to average equity
(annualized)
10.88
14.87
14.85
14.44
12.06
Net core earnings to average assets, as
adjusted (annualized)†
1.49
1.64
1.61
1.43
1.36
Net core earnings to average equity
(annualized)†
17.07
18.84
17.65
14.71
13.33
PER COMMON SHARE DATA
Weighted-average common shares
outstanding, basic
11,938,973
11,907,233
11,968,227
12,109,074
12,097,100
Earnings per common share, basic
$
0.67
$
0.92
$
0.90
$
0.89
$
0.76
Net core earnings per common share,
basic†
1.05
1.16
1.07
0.90
0.84
† Non-GAAP financial metric. Calculations
of this metric and reconciliations to GAAP are included in the
schedules accompanying this release.
Net interest income, before the provision for credit losses, in
the fourth quarter of 2022 and 2021 was $28.4 million and $24.0
million, respectively, an increase of $4.3 million, or 18.1%. The
increase in net interest income resulted from an increase in
interest income of $10.2 million, or 40.0%, which was partially
offset by an increase in interest expense of $5.9 million, or
391.5%, compared to the prior year quarter. Interest income on
loans increased $7.4 million, or 32.2%, during the current quarter
compared to the prior year quarter. In addition, interest income
from investment securities and other interest income increased $2.8
million, or 106.1%, from the same quarter in the prior year.
Net interest margin, on a fully taxable equivalent basis, for
the fourth quarter of 2022 and 2021 was 3.57% and 3.39%,
respectively. Net interest margin increased 18 basis points
primarily due to a 93 basis point yield increase on total interest
earning assets, which was partially offset by a 117 basis point
cost increase on interest bearing liabilities. The increase in
yield on interest earning assets resulted in part from average loan
yields increasing from 4.71% for the fourth quarter of 2021 to
5.19% for the fourth quarter of 2022, an increase of 48 basis
points, due to increases in the federal fund target interest rates,
and an increase in yields of available for sale securities of 114
basis points from 1.75% in the fourth quarter of 2021 to 2.89% in
the same period in 2022. Additionally, we reinvested a large amount
of interest bearing deposits held at other banks, which earned a
yield of 0.10% in the prior year quarter, into higher yielding
investment securities and loans. The increase in the cost of
interest bearing liabilities was due primarily to an increase in
the cost of interest-bearing deposits from 0.30% to 1.08%, a change
of 78 basis points, in the fourth quarter of 2022 compared to the
same period in 2021, as well as increased rates on FHLB advances,
which increased from 0.88% to 3.97%, an increase of 309 basis
points, quarter over quarter.
Net interest income, before the provision for credit losses,
increased $61,000, or 0.2%, from $28.3 million in the third quarter
of 2022 to $28.4 million in the fourth quarter of 2022. The
increase in net interest income resulted primarily from an increase
in loan interest income of $2.7 million, or 10.0%, from the prior
quarter. Average yield increased from 4.97% in the third quarter to
5.19% in the fourth quarter. Those increases were partially offset
by an increase in interest expense on interest-bearing deposits of
$2.0 million, or 80.6% and FHLB advances of $1.2 million, or 98.8%,
from the third to fourth quarter of 2022.
Net interest margin, on a taxable equivalent basis, decreased
from 3.59% for the third quarter of 2022 to 3.57% for the fourth
quarter of 2022, a decrease of two basis points. The decrease in
net interest margin was primarily due to an increase in the cost of
interest-bearing deposits from 0.59% in the third quarter to 1.08%
in the fourth quarter of 2022, a change of 49 basis points, while
loan yield only increased from 4.97% for the third quarter of 2022
to 5.19% for the fourth quarter of 2022, a change of 22 basis
points.
The Bank’s participation in the PPP program created temporary
extraordinary results in the calculation of net interest margin. To
illustrate the impact of the PPP program on net interest margin,
the table below excludes PPP1 and PPP2 loans and their associated
fees and costs for the quarter and year ended December 31,
2022:
Quarter Ended
December 31, 2022
For the Year Ended December
31, 2022
(dollars in thousands)
Average
Outstanding
Balance
Interest
Earned
Average
Yield
Average
Outstanding
Balance
Interest
Earned
Average
Yield
Total loans
$
2,305,688
$
30,189
5.19
%
$
2,126,810
$
104,503
4.91
%
Adjustments:
PPP1 loans average balance and net
fees(1)
(140
)
—
—
(317
)
(6
)
1.89
PPP2 loans average balance and net
fees(2)
(399
)
(1
)
0.99
(11,503
)
(1,271
)
11.05
Total PPP loans(3)
$
(539
)
$
(1
)
0.74
%
$
(11,820
)
$
(1,277
)
10.80
%
Total loans, excluding PPP†
$
2,305,149
$
30,188
5.20
%
$
2,114,990
$
103,226
4.88
%
Total interest-earning assets
3,157,181
35,720
4.49
3,073,187
123,209
4.01
Total interest-earning assets, net of PPP
effects†
$
3,156,642
$
35,719
4.49
%
$
3,061,367
$
121,932
3.98
%
Net interest income
$
28,358
$
107,829
Net interest margin(4)
3.56
%
3.51
%
Net interest margin, FTE(5)
3.57
3.54
Net interest income, net of PPP
effects†
28,357
106,552
Net interest margin, net of PPP
effects†(6)
3.56
3.48
Net interest margin, FTE, net of PPP
effects†(7)
3.57
3.51
Efficiency ratio(8)
62.42
60.85
Efficiency ratio, net of PPP
effects†(9)
62.42
61.45
† Non-GAAP financial metric. Calculations
of this metric and reconciliations to GAAP are included in the
schedules accompanying this release.
(1) Interest earned on PPP1 loans consists
of interest income of $3,000, and net origination fees recognized
in earnings of $3,000 for the year ended December 31, 2022. No
interest income or net origination fees were recognized for the
quarter ended December 31, 2022.
(2) Interest earned on PPP2 loans consists
of interest income of $1,000 and $112,000, and net origination fees
recognized in earnings of $0 and $1.2 million for the quarter and
year ended December 31, 2022.
(3) Interest earned consists of interest
income of $1,000 and $115,000, and net origination fees recognized
in earnings of $0 and $1.2 million for the quarter and year ended
December 31, 2022.
(4) Net interest margin is equal to net
interest income divided by average interest-earning assets,
annualized. Taxes are not a part of this calculation.
(5) 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%.
(6) Net interest margin is equal to net
interest income, net of PPP effects, divided by average
interest-earning assets, excluding average PPP loans, annualized.
Taxes are not a part of this calculation.
(7) Net interest margin on a taxable
equivalent basis is equal to net interest income, net of PPP
effects, adjusted for nontaxable income divided by average
interest-earning assets, excluding average PPP loans, annualized,
using a marginal tax rate of 21%.
(8) 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.
(9) The efficiency ratio, net of PPP
effects, was calculated by dividing total noninterest expense, net
of PPP-related deferred costs, by net interest income, net of PPP
effects, plus noninterest income, excluding securities gains or
losses. Taxes are not part of this calculation.
During the fourth quarter of 2022, we recorded a $2.8 million
provision for credit losses. The provision was recorded primarily
due to incorporating economic forecasts for a recession into our
CECL model, as well as continued organic loan growth during the
quarter. During the first quarter of 2022, we fully unwound the
COVID-specific qualitative factor that we implemented at the onset
of the pandemic in early 2020 and adjusted our standard qualitative
factors in the second quarter of 2022 to capture macro-economic
conditions that we believed were more similar to the environment
prior to the COVID-19 pandemic (i.e. near the end of a long
up-cycle with a moderate downturn expected). Minimal updates were
made to our qualitative factors, including forecasted conditions,
during the third quarter of 2022. However, in the fourth quarter of
2022, consensus among economists, as typified by a Wall Street
Journal survey, indicated that an economic recession is likely in
2023. Using this information, along with other economic indicators
(such as the inverted yield curve), we adjusted certain qualitative
factors to account for the forecasted information. As of December
31, 2022, our allowance for credit losses as a percentage of total
loans was 1.34%, up from 1.29% in the prior quarter.
Noninterest income decreased $916,000, or 15.2%, in the fourth
quarter of 2022 to $5.1 million, compared to $6.0 million for the
fourth quarter of 2021. The decrease from the same quarter in 2021
was due primarily to a decrease in the gain on sale of loans of
$817,000, or 72.5%, along with a $52,000, or 39.1%, decrease in
mortgage fee income, a $127,000, or 77.4%, decrease in warehouse
lending fees, and a decrease in other noninterest income of
$136,000, or 16.0%. The decreases were partially offset by an
increase in gain on sale of securities of $172,000, or 100%, and an
increase in merchant and debit card fees of $42,000, or 2.5%,
compared to the same quarter in the prior year. The gain on sale of
securities resulted from the sale of five available for sale
securities during favorable market conditions for liquidity
purposes and the increase in service charges and merchant and debit
card fees were primarily volume driven. The decrease in other
noninterest income was due to a $41,000 decrease in the value of
the SBA servicing asset, $17,000 less in rental income and $14,000
less in SBA servicing revenue in the current quarter compared to
the prior year quarter. There was also a gain on sale of assets of
$36,000 in the prior year quarter that was not present during the
fourth quarter of 2022.
Noninterest expense increased $1.9 million, or 10.1%, in the
fourth quarter of 2022 to $20.9 million, compared to the fourth
quarter of 2021. The increase in noninterest expense in the fourth
quarter of 2022 was driven primarily by a $1.2 million, or 10.4%,
increase in employee compensation and benefits due to increased
salaries, higher insurance expense accruals due to increased claims
experience and increased bonus accruals due to higher net income.
Software and technology expense increased $358,000, or 30.7%,
compared to the fourth quarter of 2021, due to additional
technology investments and an increase in the cost of our core
processing software resulting from a new asset tier threshold and
legal and professional fees increased $175,000, or 29.0%, resulting
from an increase in audit and exam fees of $117,000 and legal fees
of $63,000. The increase was partially offset by a $61,000, or
27.5%, decrease in amortization expense from the prior year
quarter.
Noninterest income in the fourth quarter of 2022 decreased by
$681,000, or 11.7%, from $5.8 million in the third quarter of 2022.
The decrease is due primarily due to lower other noninterest income
of $750,000, or 51.2%, resulting from a gain on sale of an airplane
asset for $894,000 during the prior quarter that was not present
during the current quarter. The decrease was partially offset by
the gain on sale of securities of $172,000, or 100%, and an
increase in fiduciary and custodial income of $66,000, or 11.5%,
from the linked quarter.
Noninterest expense increased $660,000, or 3.3%, in the fourth
quarter of 2022, from $20.2 million for the quarter ended September
30, 2022. The increase is primarily due to an increase in employee
compensation and benefits of $513,000, or 4.3%, due to higher
salaries and insurance expense accruals. Annual employee raises are
given in October of each year. Other increases included legal and
professional fees of $276,000, or 54.9%, due to higher recruiter
and third party consulting fees, software and technology expenses
of $116,000, or 8.2% and advertising and promotions of $110,000, or
29.1%, from the prior quarter. The increases were partially offset
by a decrease in other noninterest expense of $419,000, or 24.1%,
that resulted primarily from a $487,000 write-down of an SBA
receivable balance during the third quarter of 2022, which was not
present in the current quarter.
The Company’s efficiency ratio in the fourth quarter of 2022 was
62.42%, compared to 63.13% in the prior year quarter and 59.35% in
the third quarter of 2022. Adjusted to remove the effects of
PPP-related transactions, the Company’s efficiency ratio† in
the fourth quarter of 2022 was 62.42%, compared to 65.21% in the
prior year quarter and 59.45% in the third quarter of 2022.
† Non-GAAP financial metric. Calculations of this metric
and reconciliations to GAAP are included in the schedules
accompanying this release.
FINANCIAL CONDITION
Consolidated assets for the Company totaled $3.35 billion at
December 31, 2022, compared to $3.39 billion at September 30, 2022
and $3.09 billion at December 31, 2021.
Gross loans increased $112.1 million, or 4.9%, to $2.38 billion
at December 31, 2022, compared to loans of $2.27 billion at
September 30, 2022. The increase in gross loans from the third
quarter of 2022 to the fourth quarter of 2022 is due to increased
loan originations and advances. Excluding PPP and warehouse lending
loans, gross loans increased $112.4 million, or 5.0%, from
September 30, 2022.
Gross loans increased $470.1 million, or 24.6%, from $1.91
billion at December 31, 2021. The increase in gross loans during
the fourth quarter of 2022 compared to the fourth quarter of 2021
resulted from organic loan growth and was partially offset by a
$50.1 million reduction in PPP loan balances during the period.
Excluding PPP and warehouse lending loans, gross loans increased
$553.2 million, or 30.5%, from December 31, 2021.
Total deposits decreased by $109.4 million, or 3.9%, to $2.68
billion at December 31, 2022, compared to $2.79 billion at
September 30, 2022, and increased $10.3 million, or 0.4%, from
$2.67 billion at December 31, 2021. The decrease in deposits during
the current quarter resulted primarily from a decrease in
non-interest bearing deposits of $89.1 million and a decrease in
interest bearing deposits of $20.3 million. The increase in
deposits during the year resulted from an increase in non-interest
bearing deposits of $37.6 million, offset by a decrease in interest
bearing deposits of $27.3 million.
Nonperforming assets as a percentage of total loans were 0.46%
at December 31, 2022, compared to 0.41% at September 30, 2022 and
0.15% at December 31, 2021. The Bank's nonperforming assets consist
primarily of nonaccrual loans. Four loans were added to nonaccrual
status in the second quarter of 2022 and are Small Business
Administration (SBA) 7(a), partially guaranteed (75%) loans,
acquired in the June 2018 acquisition of Westbound Bank, with
combined book balances of $6.7 million as of December 31, 2022.
These loans, collateralized by two hotels, were identified as
problem assets prior to COVID-19 but obtained government stimulus
and other relief which allowed the two related borrowers to remain
current through early 2022. Management continues to work toward a
satisfactory resolution for these four loans, however, in the event
of foreclosure, a significant loss is not expected due to estimated
current collateral values and the SBA guarantees. Another
previously classified loan was downgraded to non-accrual status
during the fourth quarter with a principal balance of $1.4 million.
The loan is considered well-secured and has a low loan-to-value
ratio with guarantor support. Management expects this loan will be
paid in full in early 2023. No losses are anticipated.
Total equity was $295.6 million as of December 31, 2022,
compared to $288.7 million at September 30, 2022 and $302.2 million
at December 31, 2021. The increase from the previous quarter
resulted primarily from net income of $8.0 million and an
improvement in accumulated other comprehensive loss of $713,000 due
to fluctuations in the fair value of available for sale securities
during the period offset by the payment of dividends of $2.6
million during the fourth quarter of 2022. Although the unrealized
losses in accumulated other comprehensive income during the quarter
do not impact regulatory capital ratios, they did result in a
decrease in the tangible common equity† ratio from 8.77% as
of December 31, 2021 to 7.87% as of December 31, 2022.
In September 2021, we announced the formation of a partnership
with CaliberCos, Inc., a vertically integrated alternative asset
manager and fund sponsor, in an effort to drive investments that
will revitalize communities across Texas through real estate
developments. We recorded this investment by our Bank subsidiary
and the noncontrolling interest during the first quarter of 2022.
Further details of this partnership can be found in our Form 8-K
filed with the Securities and Exchange Commission on September 7,
2021.
Nonperforming assets as a percentage of total assets were 0.32%
at December 31, 2022, compared to 0.28% at September 30, 2022, and
0.09% at December 31, 2021.
As of
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
ASSETS
Cash and due from banks
$
52,390
$
48,010
$
56,545
$
58,788
$
42,979
Federal funds sold
47,275
71,875
2,425
139,300
431,975
Interest-bearing deposits
6,802
4,284
12,053
24,003
24,651
Total cash and cash equivalents
106,467
124,169
71,023
222,091
499,605
Securities available for sale
188,927
197,944
196,095
306,704
342,206
Securities held to maturity
509,008
633,386
713,390
494,289
184,263
Loans held for sale
3,156
2,749
2,770
1,166
4,129
Loans, net
2,344,245
2,234,782
2,107,658
1,983,449
1,876,076
Accrued interest receivable
11,555
10,111
10,144
8,961
8,901
Premises and equipment, net
54,291
54,212
54,437
54,316
53,470
Other real estate owned
38
5
—
—
—
Cash surrender value of life insurance
38,404
38,194
37,979
37,352
37,141
Core deposit intangible, net
1,859
1,973
2,086
2,199
2,313
Goodwill
32,160
32,160
32,160
32,160
32,160
Other assets
61,385
60,581
53,171
47,142
45,806
Total assets
$
3,351,495
$
3,390,266
$
3,280,913
$
3,189,829
$
3,086,070
LIABILITIES AND EQUITY
Deposits
Noninterest-bearing
$
1,052,144
$
1,141,184
$
1,105,756
$
1,065,789
$
1,014,518
Interest-bearing
1,629,010
1,649,326
1,673,865
1,731,621
1,656,309
Total deposits
2,681,154
2,790,510
2,779,621
2,797,410
2,670,827
Securities sold under agreements to
repurchase
7,221
7,592
7,871
11,090
14,151
Accrued interest and other liabilities
28,409
27,384
28,033
27,803
26,568
Line of credit
—
—
—
—
5,000
Federal Home Loan Bank advances
290,000
225,000
131,500
7,500
47,500
Subordinated debentures
49,153
51,119
51,053
54,146
19,810
Total liabilities
3,055,937
3,101,605
2,998,078
2,897,949
2,783,856
Equity attributable to Guaranty
Bancshares, Inc.
294,984
288,084
282,255
291,282
302,214
Noncontrolling interest
574
577
580
598
—
Total equity
295,558
288,661
282,835
291,880
302,214
Total liabilities and equity
$
3,351,495
$
3,390,266
$
3,280,913
$
3,189,829
$
3,086,070
† Non-GAAP financial metric.
Calculations of this metric and reconciliations to GAAP are
included in the schedules accompanying this release.
Quarter Ended
2022
2021
(dollars in thousands, except per share
data)
December 31
September 30
June 30
March 31
December 31
STATEMENTS OF EARNINGS
Interest income
$
35,720
$
32,476
$
29,120
$
25,893
$
25,518
Interest expense
7,362
4,179
2,269
1,570
1,498
Net interest income
28,358
28,297
26,851
24,323
24,020
Provision for credit losses
2,800
600
—
(1,250
)
—
Net interest income after provision for
credit losses
25,558
27,697
26,851
25,573
24,020
Noninterest income
5,122
5,803
6,081
6,479
6,038
Noninterest expense
20,897
20,237
19,694
19,079
18,976
Income before income taxes
9,783
13,263
13,238
12,973
11,082
Income tax provision
1,764
2,363
2,472
2,235
1,923
Net earnings
$
8,019
$
10,900
$
10,766
$
10,738
$
9,159
Net loss attributable to noncontrolling
interest
3
3
18
—
—
Net earnings attributable to Guaranty
Bancshares, Inc.
$
8,022
$
10,903
$
10,784
$
10,738
$
9,159
PER COMMON SHARE DATA
Earnings per common share, basic
$
0.67
$
0.92
$
0.90
$
0.89
$
0.76
Earnings per common share, diluted
0.67
0.91
0.89
0.88
0.75
Cash dividends per common share
0.22
0.22
0.22
0.22
0.20
Book value per common share - end of
quarter
24.70
24.18
23.69
24.14
24.93
Tangible book value per common share - end
of quarter(1)
21.85
21.31
20.82
21.29
22.09
Common shares outstanding - end of
quarter(4)
11,941,672
11,915,372
11,912,249
12,066,480
12,122,717
Weighted-average common shares
outstanding, basic
11,938,973
11,907,233
11,968,227
12,109,074
12,097,100
Weighted-average common shares
outstanding, diluted
12,048,475
12,032,391
12,098,983
12,260,945
12,263,252
PERFORMANCE RATIOS
Return on average assets (annualized)
0.95
%
1.30
%
1.35
%
1.38
%
1.20
%
Return on average equity (annualized)
10.88
14.87
14.85
14.44
12.06
Net interest margin, fully taxable
equivalent (annualized)(2)
3.57
3.59
3.61
3.37
3.39
Efficiency ratio(3)
62.42
59.35
59.80
61.94
63.13
For the Years Ended
December 31,
(dollars in thousands, except per share
data)
2022
2021
INCOME STATEMENTS
Interest income
$
123,209
$
102,550
Interest expense
15,380
6,992
Net interest income
107,829
95,558
Provision for loan losses
2,150
(1,700
)
Net interest income after provision for
loan losses
105,679
97,258
Noninterest income
23,485
24,576
Noninterest expense
79,907
73,278
Income before income taxes
49,257
48,556
Income tax provision
8,834
8,750
Net earnings
$
40,423
$
39,806
Net loss attributable to noncontrolling
interest
24
—
Net earnings attributable to Guaranty
Bancshares, Inc.
$
40,447
$
39,806
PER COMMON SHARE DATA
Earnings per common share, basic
$
3.38
$
3.30
Earnings per common share, diluted
3.34
3.26
Cash dividends per common share
0.88
0.80
Book value per common share - end of
period
24.70
24.93
Tangible book value per common share - end
of period(1)
21.85
22.09
Common shares outstanding - end of
period(4)
11,941,672
12,122,717
Weighted-average common shares
outstanding, basic
11,980,209
12,065,182
Weighted-average common shares
outstanding, diluted
12,092,847
12,211,758
PERFORMANCE RATIOS
Return on average assets
1.24
%
1.36
%
Return on average equity
13.76
13.72
Net interest margin, fully taxable
equivalent(2)
3.54
3.51
Efficiency ratio(3)
60.85
61.00
(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
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
LOAN PORTFOLIO COMPOSITION
Commercial and industrial
$
303,373
$
278,091
$
268,812
$
270,074
$
280,569
Real estate:
Construction and development
377,135
391,564
350,024
318,035
307,797
Commercial real estate
887,587
821,941
749,603
674,558
622,842
Farmland
185,817
179,402
166,309
186,982
145,501
1-4 family residential
493,061
467,983
450,929
430,755
410,673
Multi-family residential
45,147
43,025
55,985
42,021
30,971
Consumer
61,394
58,835
56,433
52,670
50,965
Agricultural
13,686
13,917
14,502
14,403
14,639
Warehouse lending
10,694
10,938
25,344
24,260
43,720
Overdrafts
282
369
435
303
363
Total loans(1)(2)
$
2,378,176
$
2,266,065
$
2,138,376
$
2,014,061
$
1,908,040
Quarter Ended
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period
$
29,235
$
28,997
$
29,096
$
30,433
$
30,621
Loans charged-off
(103
)
(418
)
(125
)
(203
)
(239
)
Recoveries
42
56
26
116
51
Provision for credit loss expense
2,800
600
—
(1,250
)
—
Balance at end of period
$
31,974
$
29,235
$
28,997
$
29,096
$
30,433
Allowance for credit losses / period-end
loans
1.34
%
1.29
%
1.36
%
1.44
%
1.59
%
Allowance for credit losses /
nonperforming loans
294.7
313.3
294.4
1,084.9
1,075.0
Net charge-offs / average loans
(annualized)
0.01
0.07
0.02
0.02
0.04
NONPERFORMING ASSETS
Nonaccrual loans(3)
$
10,848
$
9,330
$
9,848
$
2,682
$
2,831
Other real estate owned
38
5
—
—
—
Repossessed assets owned
—
—
27
7
14
Total nonperforming assets
$
10,886
$
9,335
$
9,875
$
2,689
$
2,845
Nonperforming assets as a percentage
of:
Total loans(1)(2)
0.46
%
0.41
%
0.46
%
0.13
%
0.15
%
Total assets
0.32
0.28
0.30
0.08
0.09
TDR loans - nonaccrual
$
6,728
$
6,753
$
6,764
$
98
$
103
TDR loans - accruing
642
1,895
2,652
9,418
9,466
(1) Excludes outstanding balances of loans
held for sale of $3.2 million, $2.7 million, $2.8 million, $1.2
million, and $4.1 million as of December 31, September 30, June 30
and March 31, 2022, and December 31, 2021, respectively.
(2) Excludes deferred loan fees of $2.0
million, $2.0 million, $1.7 million, $1.5 million, and $1.5 million
as of December 31, September 30, June 30 and March 31, 2022, and
December 31, 2021, respectively.
(3) TDR loans - nonaccrual are included in
nonaccrual loans, which are a component of nonperforming loans.
Quarter Ended
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
NONINTEREST INCOME
Service charges
$
1,096
$
1,146
$
1,070
$
976
$
1,085
Net realized gain on securities
transactions
172
—
—
—
—
Net realized gain on sale of loans
310
338
882
905
1,127
Fiduciary and custodial income
642
576
638
642
615
Bank-owned life insurance income
209
215
207
211
207
Merchant and debit card fees
1,711
1,738
2,061
1,611
1,669
Loan processing fee income
150
192
232
187
188
Warehouse lending fees
37
59
79
116
164
Mortgage fee income
81
75
102
131
133
Other noninterest income
714
1,464
810
1,700
850
Total noninterest income
$
5,122
$
5,803
$
6,081
$
6,479
$
6,038
NONINTEREST EXPENSE
Employee compensation and benefits
$
12,364
$
11,851
$
11,730
$
11,532
$
11,200
Occupancy expenses
2,770
2,800
2,848
2,711
2,686
Legal and professional fees
779
503
773
770
604
Software and technology
1,525
1,409
1,339
1,209
1,167
Amortization
161
166
178
219
222
Director and committee fees
199
213
219
205
204
Advertising and promotions
488
378
320
407
470
ATM and debit card expense
740
723
674
578
643
Telecommunication expense
193
184
187
186
196
FDIC insurance assessment fees
359
272
237
233
300
Other noninterest expense
1,319
1,738
1,189
1,029
1,284
Total noninterest expense
$
20,897
$
20,237
$
19,694
$
19,079
$
18,976
Quarter Ended December
31,
2022
2021
(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)
$
2,305,688
$
30,189
5.19
%
$
1,925,046
$
22,833
4.71
%
Securities available for sale
202,829
1,478
2.89
307,345
1,358
1.75
Securities held to maturity
574,951
3,222
2.22
178,131
1,087
2.42
Nonmarketable equity securities
24,291
377
6.16
10,044
128
5.06
Interest-bearing deposits in other
banks
49,422
454
3.64
423,581
112
0.10
Total interest-earning assets
3,157,181
35,720
4.49
2,844,147
25,518
3.56
Allowance for credit losses
(29,634
)
(30,552
)
Noninterest-earning assets
218,811
207,484
Total assets
$
3,346,358
$
3,021,079
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,627,442
$
4,433
1.08
%
$
1,622,607
$
1,207
0.30
%
Advances from FHLB and fed funds
purchased
240,489
2,408
3.97
47,500
105
0.88
Line of credit
—
—
—
4,761
42
3.50
Subordinated debt
49,806
514
4.09
19,810
142
2.84
Securities sold under agreements to
repurchase
7,634
7
0.36
11,156
2
0.07
Total interest-bearing liabilities
1,925,371
7,362
1.52
1,705,834
1,498
0.35
Noninterest-bearing liabilities:
Noninterest-bearing deposits
1,102,016
988,676
Accrued interest and other liabilities
26,500
25,171
Total noninterest-bearing liabilities
1,128,516
1,013,847
Equity
292,471
301,398
Total liabilities and equity
$
3,346,358
$
3,021,079
Net interest rate spread(2)
2.97
%
3.21
%
Net interest income
$
28,358
$
24,020
Net interest margin(3)
3.56
%
3.35
%
Net interest margin, fully taxable
equivalent(4)
3.57
%
3.39
%
(1) Includes average outstanding balances
of loans held for sale of $1.5 million and $2.7 million for the
quarter ended December 31, 2022 and 2021, 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%.
Year Ended December
31,
2022
2021
(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)
$
2,126,810
$
104,503
4.91
%
$
1,911,540
$
92,497
4.84
%
Securities available for sale
287,764
5,808
2.02
356,232
6,839
1.92
Securities held to maturity
518,213
10,789
2.08
74,270
2,141
2.88
Nonmarketable equity securities
18,791
1,246
6.63
10,043
740
7.37
Interest-bearing deposits in other
banks
121,609
863
0.71
399,285
333
0.08
Total interest-earning assets
3,073,187
123,209
4.01
2,751,370
102,550
3.73
Allowance for credit losses
(29,415
)
(31,888
)
Noninterest-earning assets
216,812
203,468
Total assets
$
3,260,584
$
2,922,950
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits
$
1,670,287
$
9,753
0.58
%
$
1,601,375
$
5,651
0.35
%
Advances from FHLB and fed funds
purchased
132,764
3,855
2.90
49,056
413
0.84
Line of credit
—
34
—
6,066
216
3.56
Subordinated debt
46,977
1,722
3.67
19,810
700
3.53
Securities sold under agreements to
repurchase
8,596
16
0.19
14,812
12
0.08
Total interest-bearing liabilities
1,858,624
15,380
0.83
1,691,119
6,992
0.41
Noninterest-bearing liabilities:
Noninterest-bearing deposits
1,082,513
916,562
Accrued interest and other liabilities
25,537
25,218
Total noninterest-bearing liabilities
1,108,050
941,780
Equity
293,910
290,051
Total liabilities and equity
$
3,260,584
$
2,922,950
Net interest rate spread(2)
3.18
%
3.32
%
Net interest income
$
107,829
$
95,558
Net interest margin(3)
3.51
%
3.47
%
Net interest margin, fully taxable
equivalent(4)
3.54
%
3.51
%
(1) Includes average outstanding balances
of loans held for sale of $2.4 million and $3.4 million for the
years ended December 31, 2022 and 2021, 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.
(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, using
a marginal tax rate of 21%.
NON-GAAP RECONCILING TABLES
Tangible Book Value per Common
Share
As of
2022
2021
(dollars in thousands, except per share
data)
December 31
September 30
June 30
March 31
December 31
Equity attributable to Guaranty
Bancshares, Inc.
$
294,984
$
288,084
$
282,255
$
291,282
$
302,214
Adjustments:
Goodwill
(32,160
)
(32,160
)
(32,160
)
(32,160
)
(32,160
)
Core deposit intangible, net
(1,859
)
(1,973
)
(2,086
)
(2,199
)
(2,313
)
Total tangible common equity attributable
to Guaranty Bancshares, Inc.
$
260,965
$
253,951
$
248,009
$
256,923
$
267,741
Common shares outstanding(1)
11,941,672
11,915,372
11,912,249
12,066,480
12,122,717
Book value per common share
$
24.70
$
24.18
$
23.69
$
24.14
$
24.93
Tangible book value per common
share(1)
21.85
21.31
20.82
21.29
22.09
(1) Excludes the dilutive effect, if any,
of shares of common stock issuable upon exercise of outstanding
stock options.
Tangible Common Equity to Tangible
Assets
As of
2022
2021
(dollars in thousands, except per share
data)
December 31
September 30
June 30
March 31
December 31
Total assets
$
3,351,495
$
3,390,266
$
3,280,913
$
3,189,829
$
3,086,070
Adjustments:
Goodwill
(32,160
)
(32,160
)
(32,160
)
(32,160
)
(32,160
)
Core deposit intangible, net
(1,859
)
(1,973
)
(2,086
)
(2,199
)
(2,313
)
Total tangible assets
$
3,317,476
$
3,356,133
$
3,246,667
$
3,155,470
$
3,051,597
Total tangible common equity attributable
to Guaranty Bancshares, Inc.
260,965
253,951
248,009
256,923
267,741
Tangible common equity to tangible
assets
7.87
%
7.57
%
7.64
%
8.14
%
8.77
%
Net Core Earnings and Net Core Earnings
per Common Share
Quarter Ended
2022
2021
(dollars in thousands, except per share
data)
December 31
September 30
June 30
March 31
December 31
Net earnings attributable to Guaranty
Bancshares, Inc.
$
8,022
$
10,903
$
10,784
$
10,738
$
9,159
Adjustments:
Provision for credit losses
2,800
600
—
(1,250
)
—
Income tax provision
1,764
2,363
2,472
2,235
1,923
PPP loans, including fees
(1
)
(57
)
(436
)
(783
)
(958
)
Net core earnings attributable to Guaranty
Bancshares, Inc.
$
12,585
$
13,809
$
12,820
$
10,940
$
10,124
Weighted-average common shares
outstanding, basic
11,938,973
11,907,233
11,968,227
12,109,074
12,097,100
Earnings per common share, basic
$
0.67
$
0.92
$
0.90
$
0.89
$
0.76
Net core earnings per common share,
basic
1.05
1.16
1.07
0.90
0.84
Year Ended December
31,
(dollars in thousands, except per share
data)
2022
2021
Net earnings attributable to Guaranty
Bancshares, Inc.
$
40,447
$
39,806
Adjustments:
Reversal of provision for credit
losses
2,150
(1,700
)
Income tax provision
8,834
8,750
PPP loans, including fees
(1,277
)
(7,822
)
Net core earnings attributable to Guaranty
Bancshares, Inc.
$
50,154
$
39,034
Weighted-average common shares
outstanding, basic
11,980,209
12,065,182
Earnings per common share, basic
$
3.38
$
3.30
Net core earnings attributable to Guaranty
Bancshares, Inc. per common share, basic
4.19
3.24
NON-GAAP RECONCILING TABLES
Net Core Earnings to Average Assets, as
Adjusted, and Average Equity
Quarter Ended
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
Net core earnings attributable to Guaranty
Bancshares, Inc.
$
12,585
$
13,809
$
12,820
$
10,940
$
10,124
Total average assets
$
3,346,358
$
3,337,348
$
3,209,440
$
3,146,339
$
3,021,079
Adjustments:
PPP loan average balance
(539
)
(1,159
)
(8,885
)
(36,720
)
(61,062
)
Total average assets, adjusted
$
3,345,819
$
3,336,189
$
3,200,555
$
3,109,619
$
2,960,017
Net core earnings attributable to Guaranty
Bancshares, Inc. to average assets, as adjusted (annualized)
1.49
%
1.64
%
1.61
%
1.43
%
1.36
%
Total average equity
$
292,471
$
290,806
$
291,312
$
301,579
$
301,398
Net core earnings attributable to Guaranty
Bancshares, Inc. to average equity (annualized)
17.07
%
18.84
%
17.65
%
14.71
%
13.33
%
Total Nonperforming Assets to Total
Loans, Excluding PPP
Quarter Ended
2022
2021
(dollars in thousands)
December 31
September 30
June 30
March 31
December 31
Total loans(1)(2)
$
2,378,176
$
2,266,065
$
2,138,376
$
2,014,061
$
1,908,040
Adjustments:
PPP loans balance
(529
)
(576
)
(2,605
)
(19,302
)
(50,611
)
Total loans, excluding PPP(1)(2)
$
2,377,647
$
2,265,489
$
2,135,771
$
1,994,759
$
1,857,429
Warehouse loans
(10,694
)
(10,938
)
(25,344
)
(24,260
)
(43,720
)
Total loans, excluding warehouse and
PPP(1)(2)
$
2,366,953
$
2,254,551
$
2,110,427
$
1,970,499
$
1,813,709
Total nonperforming assets
$
10,886
$
9,335
$
9,875
$
2,689
$
2,845
Nonperforming assets as a percentage
of:
Total loans(1)(2)
0.46
%
0.41
%
0.46
%
0.13
%
0.15
%
Total loans, excluding PPP(1)(2)
0.46
0.41
0.46
0.13
0.15
Total loans, excluding PPP and
warehouse(1)(2)
0.46
0.41
0.47
0.14
0.16
(1) Excludes outstanding balances of loans
held for sale of $3.2 million, $2.7 million, $2.8 million, $1.2
million, and $4.1 million as of December 31, September 30, June 30
and March 31, 2022, and December 31, 2021, respectively.
(2) Excludes deferred loan fees of $2.0
million, $2.0 million, $1.7 million, $1.5 million, and $1.5 million
as of December 31, September 30, June 30 and March 31, 2022, and
December 31, 2021, respectively.
Total Interest-Earning Assets, Net of
PPP Effects
Quarter Ended December 31,
2022
Year Ended December 31,
2022
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Total interest-earning assets
$
3,157,181
$
35,720
4.49
%
$
3,073,187
$
123,209
4.01
%
Total loans
2,305,688
30,189
5.19
2,126,810
104,503
4.91
Adjustments:
PPP loan average balance and net
fees(1)
(539
)
(1
)
0.74
(11,820
)
(1,277
)
10.80
Total loans, net of PPP effects
2,305,149
30,188
5.20
2,114,990
103,226
4.88
Total interest-earning assets, net of PPP
effects
$
3,156,642
$
35,719
4.49
%
$
3,061,367
$
121,932
3.98
%
(1) Interest earned consists of interest
income of $1,000 and $115,000 and net origination fees recognized
in earnings of $0 and $1.2 million for the quarter and year ended
December 31, 2022, respectively.
Quarter Ended September 30,
2022
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Total interest-earning assets
$
3,149,502
$
32,476
4.09
%
Total loans
2,191,411
27,455
4.97
Adjustments:
PPP loan average balance and net
fees(1)
(1,159
)
(57
)
19.51
Total loans, net of PPP effects
2,190,252
27,398
4.96
Total interest-earning assets, net of PPP
effects
$
3,148,343
$
32,419
4.09
%
(1) Interest earned consists of interest
income of $4,000 and net origination fees recognized in earnings of
$53,000 for the quarter ended September 30, 2022.
NON-GAAP RECONCILING TABLES
Net Interest Income and Net Interest
Margin, Net of PPP Effects
Quarter Ended
Year Ended
(dollars in thousands)
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Net interest income
$
28,358
$
28,297
$
24,020
$
107,829
$
95,558
Adjustments:
PPP-related interest income
(1
)
(4
)
(154
)
(115
)
(1,144
)
PPP-related net origination fees
—
(53
)
(804
)
(1,162
)
(6,079
)
Net interest income, net of PPP
effects
$
28,357
$
28,240
$
23,062
$
106,552
$
88,335
Total average interest-earning assets
$
3,157,181
$
3,149,502
$
2,844,147
$
3,073,187
$
2,751,370
Total average interest-earning assets, net
of PPP effects
3,156,642
3,148,343
2,783,085
3,061,367
2,635,968
Net interest margin(1)
3.56
%
3.56
%
3.35
%
3.51
%
3.47
%
Net interest margin, net of PPP
effects(2)
3.56
3.56
3.29
—
3.35
Net interest income
$
28,358
$
28,297
$
24,020
$
107,829
$
95,558
Interest income tax adjustments
61
215
277
900
1,076
Net interest income, fully taxable
equivalent ("FTE")
$
28,419
$
28,512
$
24,297
$
108,729
$
96,634
Net interest income, FTE, net of PPP
effects
28,418
28,455
23,339
107,452
89,411
Net interest margin, FTE(3)
3.57
%
3.59
%
3.39
%
3.54
%
3.51
%
Net interest margin, FTE, net of PPP
effects(4)
3.57
3.59
3.33
3.51
3.39
(1) Net interest margin is equal to net
interest income divided by average interest-earning assets,
annualized.
(2) Net interest margin is equal to net
interest income, net of PPP effects, divided by average
interest-earning assets, excluding average PPP loans, annualized.
Taxes are not a part of this calculation.
(3) 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%.
(4) Net interest margin on a taxable
equivalent basis is equal to net interest income, net of PPP
effects, adjusted for nontaxable income divided by average
interest-earning assets, excluding average PPP loans, annualized,
using a marginal tax rate of 21%.
Efficiency Ratio, Net of PPP Effects
Quarter Ended
Year Ended
(dollars in thousands)
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Total noninterest expense
$
20,897
$
20,237
$
18,976
$
79,907
$
73,278
Adjustments:
PPP-related deferred costs
—
—
—
—
599
Total noninterest expense, net of PPP
effects
$
20,897
$
20,237
$
18,976
$
79,907
$
73,877
Net interest income
28,358
28,297
24,020
107,829
95,558
Adjustments:
PPP-related interest income
(1
)
(4
)
(154
)
(1,144
)
(1,144
)
PPP-related net origination fees
—
(53
)
(804
)
(6,079
)
(6,079
)
Net interest income, net of PPP
effects
28,357
28,240
23,062
100,606
88,335
Total noninterest income
$
5,122
$
5,803
$
6,038
$
23,485
$
24,576
Efficiency ratio(1)
62.42
%
59.35
%
63.13
%
60.85
%
61.00
%
Efficiency ratio, net of PPP
effects(2)
62.42
59.45
65.21
64.39
65.43
(1) 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.
(2) The efficiency ratio, net of PPP
effects, was calculated by dividing total noninterest expense, net
of PPP-related deferred costs, by net interest income, net of PPP
effects, plus noninterest income, excluding securities gains or
losses. Taxes are not part of this calculation.
NON-GAAP RECONCILING TABLES
Loan Yield, Net of PPP Effects
Quarter Ended December 31,
2022
Quarter Ended September 30,
2022
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Total loans
$
2,305,688
$
30,189
5.19
%
$
2,191,411
$
27,455
4.97
%
Adjustments:
PPP loans average balance and net fees
(539
)
(1
)
0.74
(1,159
)
(57
)
19.51
Total loans, net of PPP effects
$
2,305,149
$
30,188
5.20
%
$
2,190,252
$
27,398
4.96
%
Effect of removing PPP loans on loan
yield
0.01
%
(0.01
%)
Quarter Ended December 31,
2022
Quarter Ended December 31,
2021
(dollars in thousands)
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Average Outstanding
Balance
Interest Earned/ Interest
Paid
Average Yield/ Rate
Total loans
$
2,305,688
$
30,189
5.19
%
$
1,925,046
$
22,833
4.71
%
Adjustments:
PPP loans average balance and net fees
(539
)
(1
)
0.74
(61,062
)
(958
)
6.22
Total loans, net of PPP effects
$
2,305,149
$
30,188
5.20
%
$
1,863,984
$
21,875
4.66
%
Effect of removing PPP loans on loan
yield
0.01
%
(0.05
%)
ACL to Total Loans, Excluding
PPP
(dollars in thousands)
As of December 31,
2022
As of September 30,
2022
As of December 31,
2021
Total loans
$
2,378,176
$
2,266,065
$
1,908,040
Adjustments:
PPP loans
(529
)
(576
)
(50,611
)
Total loans, excluding PPP
$
2,377,647
$
2,265,489
$
1,857,429
Allowance for credit losses
$
31,974
$
29,235
$
30,433
Allowance for credit losses / period-end
loans
1.34
%
1.29
%
1.59
%
Allowance for credit losses / period-end
loans. excluding PPP
1.34
1.29
1.64
Cost of Total Deposits
Quarter Ended
Year Ended
(dollars in thousands)
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Total average interest-bearing
deposits
$
1,627,442
$
1,650,314
$
1,622,607
$
1,670,287
$
1,601,375
Adjustments:
Noninterest-bearing deposits
1,102,016
1,109,205
988,676
1,082,513
916,562
Total average deposits
$
2,729,458
$
2,759,519
$
2,611,283
$
2,752,800
$
2,517,937
Total deposit-related interest expense
$
4,433
$
2,455
$
1,207
$
9,753
$
5,651
Average cost of interest-bearing
deposits
1.08
%
0.59
%
0.30
%
0.58
%
0.35
%
Average cost of total deposits (cost of
funds)
0.64
0.35
0.18
0.35
0.22
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present,
including “tangible book value per share”, “net core earnings,”
“core net interest margin,” 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 fourth
quarter and year-end 2022 financial results on Monday, January 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
January 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 December 31, 2022, Guaranty Bancshares, Inc. had total
assets of $3.4 billion, total loans of $2.4 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. Actual
results may also be significantly impacted by the effects of the
ongoing COVID-19 pandemic, including, among other effects: the
impact of the public health crisis; the operation of financial
markets; global supply chain disruption; employment levels; market
liquidity; the impact of various actions taken in response by the
U.S. federal government, the Federal Reserve, other banking
regulators, state and local governments; and the impact that all of
these factors have on our borrowers, other customers, vendors and
counterparties. Accordingly, we caution you that any such
forward-looking statements are not guarantees of future performance
and are subject to risks, assumptions and uncertainties that are
difficult to predict. Although we believe that the expectations
reflected in these forward-looking statements are reasonable as of
the date made, actual results may prove to be materially different
from the results expressed or implied by the forward-looking
statements. Such factors include, without limitation, the “Risk
Factors” referenced in our most recent Annual Report on Form 10-K
and any subsequent Quarterly Reports on Form 10-Q, other risks and
uncertainties listed from time to time in our reports and documents
filed with the Securities and Exchange Commission ("SEC"). We can
give no assurance that any goal or plan or expectation set forth in
forward-looking statements can be achieved and readers are
cautioned not to place undue reliance on such statements. The
forward-looking statements are made as of the date of this
communication, and we do not intend, and assume no obligation, to
update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events or circumstances,
except as required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230117005332/en/
Cappy Payne Senior Executive Vice President and Chief Financial
Officer Guaranty Bancshares, Inc. (888) 572-9881
investors@gnty.com
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