Guaranty Bancshares, Inc. Reports Third Quarter 2019 Financial Results

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Guaranty Bancshares, Inc. GNTY, the parent company of Guaranty Bank & Trust, N.A., today reported financial results for the fiscal quarter ended September 30, 2019. The company's net income available to common shareholders was $7.5 million, or $0.65 per basic share, for the quarter ended September 30, 2019, compared to $6.0 million, or $0.52 per basic share, for the quarter ended June 30, 2019 and $5.1 million, or $0.43 per basic share, for the quarter ended September 30, 2018. In addition to increased net income, earnings per basic share during the third quarter of 2019 compared to the same period in 2018 were impacted by our repurchase of 486,462 shares of common stock between October 1, 2018 and September 30, 2019. Return on average assets and average equity for the third quarter of 2019 were 1.28% and 11.73%, respectively, compared to 1.05% and 9.97%, respectively, for the second quarter of 2019 and 0.91% and 8.39%, respectively, for the third quarter of 2018.

"We had a strong third quarter and are very satisfied with the financial results. We continue to focus on our strategic initiatives to improve net interest margin and efficiencies, which are apparent in the third quarter earnings results and the 10 and 20 basis point increases in net margin from the second quarter of 2019 and same quarter in 2018, respectively. Loan growth has slowed in recent quarters, however we believe this is prudent to maintain strong asset quality as we continue to move further into this long economic cycle. Companywide, we emphasize building banking relationships that are meaningful to our overall balance sheet and good for our customers and communities. We will continue to execute on our stock repurchase plan when we see our stock valuation as attractive and representing a good long-term value for our stakeholders," commented Ty Abston, the company's Chairman and Chief Executive Officer.

The company's increase in net earnings in the third quarter of 2019, as compared to the third quarter of 2018, was primarily attributable to an increase in net interest income, before the provision for loan losses, of $1.9 million and an increase in noninterest income of $1.1 million. This was partially offset by an increase in noninterest expense of $408,000 and income tax provision of $474,000. These factors impacting net earnings are discussed in more detail below.

Net interest income, before the provision for loan losses, in the third quarter of 2019 and 2018 was $20.1 million and $18.2 million, respectively, an increase of $1.9 million, or 10.2%. Net interest margin, on a taxable equivalent basis, for the third quarter of 2019 and 2018 was 3.71% and 3.51%, respectively. Our net interest income was positively affected by achieving higher increases in loan yields than for deposit costs. During the period, our loan yield increased from 5.12% for the third quarter of 2018 to 5.37% for the third quarter of 2019, a change of 25 basis points, while our interest bearing deposit costs increased from 1.35% to 1.43% during the same period, a change of only eight basis points. Net interest margin increased from 3.61% in the second quarter of 2019 to 3.71% in the third quarter of 2019, primarily due to decreases in the cost of interest-bearing liabilities.

The provision for loan losses was $100,000 in the third quarter of 2019, compared to $575,000 in the second quarter of 2019 and $500,000 in the third quarter of 2018. The provision for loan losses is primarily reflective of organic growth during the respective periods, however, a recovery of $487,000 was received during the quarter from proceeds of a life insurance policy that collateralized a loan that was charged-off several years ago, thus reducing the need for additional provision in the third quarter of 2019. Nonperforming assets as a percentage of total loans were 0.69% at September 30, 2019, compared to 0.64% at June 30, 2019, and 0.69% at September 30, 2018. Our nonperforming assets consist primarily of nonaccrual loans, three of which are Small Business Administration (SBA) partially guaranteed loans with combined book balances of $5.7 million as of September 30, 2019 that were acquired in the acquisition of Westbound Bank in June 2018. Management is currently in the process of working with these borrowers to effectuate a plan which would allow for these loans to return to a performing status in the future. Excluding these partially SBA guaranteed loans, non-performing assets as a percentage of total loans at September 30, 2019 would be 0.36%.

Noninterest income increased $1.1 million, or 30.1%, in the third quarter of 2019, to $4.6 million, compared to $3.5 million for the quarter ended September 30, 2018. The increase from the same quarter in 2018 was due primarily to an increase in the gain on sales of loans of $273,000, or 42.9%, an increase of $159,000, or 17.0%, in merchant and debit card fees, a $90,000, or 57.3%, increase in bank-owned life insurance income and an $88,000, or 75.4%, increase in mortgage loan origination and fee income during the third quarter of 2019. There were also valuation adjustments and losses on sales of repossessed assets during the third quarter of 2018 that reduced other noninterest income by $594,000, which were not present in the third quarter of 2019.

Noninterest income increased $506,000, or 12.3%, to $4.6 million in the third quarter of 2019, compared to $4.1 million for the quarter ended June 30, 2019. The increase was primarily attributable to an increase in the gain on sale of loans of $227,000, or 33.2% from the prior quarter, an increase in bank-owned life insurance income of $92,000, or 59.4%, and an increase in service charge income of $89,000, or 10.0%. Other increases resulted from gains of $27,000, or 2.5%, in merchant and debit card fees and an increase of $28,000, or 3.7%, in other noninterest income during the third quarter of 2019.

Noninterest expense increased $408,000, or 2.7%, in the third quarter of 2019, compared to the third quarter of 2018. The increase in noninterest expense in the third quarter of 2019 was primarily driven by an increase in employee compensation and benefits expense to $8.9 million, a change of $740,000 from the same quarter of the prior year due to annual salary increases and 22 employees added to support operational growth. Occupancy expenses also increased $231,000, from $2.2 million in the third quarter of 2018, to $2.4 million in the third quarter of 2019. The increase in occupancy expense resulted primarily from relocating into a new permanent location in Austin, as well as a new location and corporate offices in Addison, Texas. Software and technology expenses increased by $249,000, or 39.2% compared to the same quarter of the prior year. These increases in noninterest expense were partially offset by decreases in other noninterest expense of $364,000, or 24.1% and a $262,000, or 27.6%, decrease in legal and professional fees compared to the same quarter of the prior year. The company's efficiency ratio in the third quarter of 2019 was 62.49%, compared to 69.00% in the same quarter last year.

Noninterest expense increased $41,000, or 0.3%, in the third quarter of 2019 to $15.4 million, compared to the quarter ended June 30, 2019. The increase was primarily due to a $203,000, or 2.3% increase in employee compensation and benefits in the current quarter. This was partially offset by a decrease in FDIC insurance assessment fees from $140,000 in the previous quarter to none in the third quarter of 2019. The company's efficiency ratio in the third quarter of 2019 was 62.49%, compared to 65.74% in the prior quarter.

Consolidated assets for the company totaled $2.33 billion at September 30, 2019 and June 30, 2019, compared to $2.24 billion at September 30, 2018. Gross loans increased 2.5%, or $42.6 million, to $1.74 billion at September 30, 2019, compared to loans of $1.69 billion at June 30, 2019. Gross loans increased 5.1%, or $84.6 million, from $1.65 billion at September 30, 2018. Deposits decreased by 1.0%, or $20.7 million, to $1.96 billion at September 30, 2019, compared to $1.98 billion at June 30, 2019. Total deposits increased 6.9%, or $126.0 million, from $1.84 billion at September 30, 2018. Changes in gross loans and deposits during these periods resulted from organic growth or from regular fluctuations in customer deposit account balances. Shareholders' equity totaled $255.9 million as of September 30, 2019, compared to $250.1 million at June 30, 2019 and $242.0 million at September 30, 2018. The increase from the previous quarter and from the third quarter of 2018 resulted primarily from increases in operating earnings, partially offset by the repurchase of common stock and payment of dividends during the period.

Guaranty Bancshares, Inc.

Consolidated Financial Summary (Unaudited)

(In thousands, except share and per share data)

 

 

As of

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

42,051

 

 

$

34,823

 

 

$

40,915

 

 

$

44,471

 

 

$

38,483

 

Federal funds sold

 

 

14,250

 

 

 

46,450

 

 

 

58,000

 

 

 

20,275

 

 

 

10,700

 

Interest-bearing deposits

 

 

2,347

 

 

 

11,162

 

 

 

9,389

 

 

 

6,764

 

 

 

4,868

 

Total cash and cash equivalents

 

 

58,648

 

 

 

92,435

 

 

 

108,304

 

 

 

71,510

 

 

 

54,051

 

Securities available for sale

 

 

221,345

 

 

 

228,714

 

 

 

236,979

 

 

 

232,975

 

 

 

232,378

 

Securities held to maturity

 

 

156,925

 

 

 

158,915

 

 

 

160,980

 

 

 

163,164

 

 

 

164,839

 

Loans held for sale

 

 

3,841

 

 

 

4,052

 

 

 

1,222

 

 

 

1,795

 

 

 

826

 

Loans, net

 

 

1,720,595

 

 

 

1,678,705

 

 

 

1,640,979

 

 

 

1,645,444

 

 

 

1,638,149

 

Accrued interest receivable

 

 

7,825

 

 

 

9,098

 

 

 

8,245

 

 

 

9,292

 

 

 

7,760

 

Premises and equipment, net

 

 

52,956

 

 

 

52,606

 

 

 

52,378

 

 

 

52,227

 

 

 

52,660

 

Other real estate owned

 

 

551

 

 

 

535

 

 

 

632

 

 

 

751

 

 

 

1,783

 

Cash surrender value of life insurance

 

 

34,280

 

 

 

34,039

 

 

 

26,458

 

 

 

26,301

 

 

 

25,747

 

Deferred tax asset

 

 

2,363

 

 

 

2,050

 

 

 

2,167

 

 

 

3,209

 

 

 

3,237

 

Core deposit intangible, net

 

 

4,066

 

 

 

4,279

 

 

 

4,493

 

 

 

4,706

 

 

 

4,919

 

Goodwill

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

Other assets

 

 

30,467

 

 

 

35,039

 

 

 

33,994

 

 

 

23,436

 

 

 

24,071

 

Total assets

 

$

2,326,022

 

 

$

2,332,627

 

 

$

2,308,991

 

 

$

2,266,970

 

 

$

2,242,580

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

528,301

 

 

$

498,349

 

 

$

490,206

 

 

$

489,789

 

 

$

479,405

 

Interest-bearing

 

 

1,435,012

 

 

 

1,485,641

 

 

 

1,472,095

 

 

 

1,381,691

 

 

 

1,357,934

 

Total deposits

 

 

1,963,313

 

 

 

1,983,990

 

 

 

1,962,301

 

 

 

1,871,480

 

 

 

1,837,339

 

Securities sold under agreements to repurchase

 

 

11,363

 

 

 

10,814

 

 

 

11,542

 

 

 

12,228

 

 

 

11,107

 

Accrued interest and other liabilities

 

 

23,508

 

 

 

24,265

 

 

 

22,397

 

 

 

10,733

 

 

 

10,187

 

Federal Home Loan Bank advances

 

 

60,623

 

 

 

52,127

 

 

 

50,131

 

 

 

115,136

 

 

 

129,140

 

Subordinated debentures

 

 

11,310

 

 

 

11,310

 

 

 

12,310

 

 

 

12,810

 

 

 

12,810

 

Total liabilities

 

 

2,070,117

 

 

 

2,082,506

 

 

 

2,058,681

 

 

 

2,022,387

 

 

 

2,000,583

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

255,905

 

 

 

250,121

 

 

 

250,310

 

 

 

244,583

 

 

 

241,997

 

Total liabilities and shareholders' equity

 

$

2,326,022

 

 

$

2,332,627

 

 

$

2,308,991

 

 

$

2,266,970

 

 

$

2,242,580

 

Guaranty Bancshares, Inc.

Consolidated Financial Summary (Unaudited)

(In thousands, except share and per share data)

 

 

Quarter Ended

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

25,853

 

 

$

25,553

 

 

$

25,307

 

 

$

24,719

 

 

$

23,675

 

Interest expense

 

 

5,770

 

 

 

6,267

 

 

 

6,300

 

 

 

5,863

 

 

 

5,446

 

Net interest income

 

 

20,083

 

 

 

19,286

 

 

 

19,007

 

 

 

18,856

 

 

 

18,229

 

Provision for loan losses

 

 

100

 

 

 

575

 

 

 

575

 

 

 

500

 

 

 

500

 

Net interest income after provision for loan losses

 

 

19,983

 

 

 

18,711

 

 

 

18,432

 

 

 

18,356

 

 

 

17,729

 

Noninterest income

 

 

4,616

 

 

 

4,110

 

 

 

3,562

 

 

 

4,173

 

 

 

3,549

 

Noninterest expense

 

 

15,435

 

 

 

15,394

 

 

 

15,470

 

 

 

14,544

 

 

 

15,027

 

Income before income taxes

 

 

9,164

 

 

 

7,427

 

 

 

6,524

 

 

 

7,985

 

 

 

6,251

 

Income tax provision

 

 

1,634

 

 

 

1,384

 

 

 

1,187

 

 

 

1,473

 

 

 

1,160

 

Net earnings

 

$

7,530

 

 

$

6,043

 

 

$

5,337

 

 

$

6,512

 

 

$

5,091

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share, basic

 

$

0.65

 

 

$

0.52

 

 

$

0.45

 

 

$

0.55

 

 

$

0.43

 

Earnings per common share, diluted

 

 

0.65

 

 

 

0.52

 

 

 

0.45

 

 

 

0.55

 

 

 

0.42

 

Cash dividends per common share

 

 

0.18

 

 

 

0.17

 

 

 

0.17

 

 

 

0.17

 

 

 

0.15

 

Book value per common share - end of quarter

 

 

22.19

 

 

 

21.64

 

 

 

21.21

 

 

 

20.68

 

 

 

20.23

 

Tangible book value per common share - end of quarter(1)

 

 

19.05

 

 

 

18.48

 

 

 

18.10

 

 

 

17.56

 

 

 

17.13

 

Common shares outstanding - end of quarter

 

 

11,534,393

 

 

 

11,560,058

 

 

 

11,803,786

 

 

 

11,829,868

 

 

 

11,964,472

 

Weighted-average common shares outstanding, basic

 

 

11,550,335

 

 

 

11,659,513

 

 

 

11,815,966

 

 

 

11,888,817

 

 

 

11,962,654

 

Weighted-average common shares outstanding, diluted

 

 

11,612,873

 

 

 

11,730,058

 

 

 

11,859,458

 

 

 

11,951,271

 

 

 

12,033,434

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

1.28

%

 

 

1.05

%

 

 

0.94

%

 

 

1.15

%

 

 

0.91

%

Return on average equity (annualized)

 

 

11.73

 

 

 

9.97

 

 

 

9.11

 

 

 

10.67

 

 

 

8.39

 

Net interest margin (annualized)(2)

 

 

3.71

 

 

 

3.61

 

 

 

3.64

 

 

 

3.58

 

 

 

3.51

 

Efficiency ratio(3)

 

 

62.49

 

 

 

65.74

 

 

 

68.55

 

 

 

63.16

 

 

 

69.00

 

(1)

See Reconciliation of non GAAP Financial Measures table.

(2)

Net interest margin represents the annualized net interest income on a fully tax equivalent basis divided by average interest earning assets.

(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.

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

 

 

As of

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

LOAN PORTFOLIO COMPOSITION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

299,714

 

 

$

286,190

 

 

$

246,176

 

 

$

261,779

 

 

$

248,758

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and development

 

 

256,459

 

 

 

231,167

 

 

 

250,852

 

 

 

237,503

 

 

 

229,307

 

Commercial real estate

 

 

581,742

 

 

 

592,945

 

 

 

581,926

 

 

 

582,519

 

 

 

599,153

 

Farmland

 

 

61,073

 

 

 

71,009

 

 

 

72,274

 

 

 

67,845

 

 

 

65,209

 

1-4 family residential

 

 

406,880

 

 

 

391,789

 

 

 

390,618

 

 

 

393,067

 

 

 

392,456

 

Multi-family residential

 

 

58,198

 

 

 

44,699

 

 

 

37,430

 

 

 

38,386

 

 

 

38,523

 

Consumer

 

 

53,315

 

 

 

56,099

 

 

 

56,158

 

 

 

54,777

 

 

 

53,947

 

Agricultural

 

 

18,728

 

 

 

19,721

 

 

 

19,994

 

 

 

23,277

 

 

 

24,184

 

Overdrafts

 

 

330

 

 

 

228

 

 

 

275

 

 

 

382

 

 

 

326

 

Total loans(1)(2)

 

$

1,736,439

 

 

$

1,693,847

 

 

$

1,655,703

 

 

$

1,659,535

 

 

$

1,651,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

15,743

 

 

$

15,190

 

 

$

14,651

 

 

$

14,441

 

 

$

13,890

 

Loans charged-off

 

 

(67

)

 

 

(87

)

 

 

(78

)

 

 

(507

)

 

 

(94

)

Recoveries

 

 

618

 

 

 

65

 

 

 

42

 

 

 

217

 

 

 

145

 

Provision for loan losses

 

 

100

 

 

 

575

 

 

 

575

 

 

 

500

 

 

 

500

 

Balance at end of period

 

$

16,394

 

 

$

15,743

 

 

$

15,190

 

 

$

14,651

 

 

$

14,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses / period-end loans

 

 

0.94

%

 

 

0.93

%

 

 

0.92

%

 

 

0.88

%

 

 

0.87

%

Allowance for loan losses / nonperforming loans

 

 

150.7

 

 

 

163.2

 

 

 

419.2

 

 

 

248.7

 

 

 

166.8

 

Net charge-offs / average loans (annualized)

 

 

(0.13

)

 

 

0.01

 

 

 

0.01

 

 

 

0.07

 

 

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-PERFORMING ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans (3)

 

$

10,881

 

 

$

9,645

 

 

$

3,624

 

 

$

5,891

 

 

$

8,657

 

Other real estate owned

 

 

551

 

 

 

535

 

 

 

632

 

 

 

751

 

 

 

1,783

 

Repossessed assets owned

 

 

500

 

 

 

612

 

 

 

948

 

 

 

971

 

 

 

986

 

Total non-performing assets

 

$

11,932

 

 

$

10,792

 

 

$

5,204

 

 

$

7,613

 

 

$

11,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets as a percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)(3)

 

 

0.69

%

 

 

0.64

%

 

 

0.31

%

 

 

0.46

%

 

 

0.69

%

Total assets

 

 

0.51

 

 

 

0.46

 

 

 

0.23

 

 

 

0.34

 

 

 

0.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructured loans-nonaccrual

 

$

118

 

 

$

119

 

 

$

487

 

 

$

335

 

 

$

 

Restructured loans-accruing

 

 

7,297

 

 

 

2,278

 

 

 

671

 

 

 

861

 

 

 

727

 

(1)

Excludes outstanding balances of loans held for sale of $3.8 million, $4.1 million, $1.2 million, $1.8 million, and $826,000 as of September 30, June 30, and March 31, 2019, and December 31, and September 30, 2018, respectively.

(2)

Excludes deferred loan fees of $550,000, $601,000, $466,000, $560,000, and $727,000 as of September 30, June 30, and March 31, 2019, and December 31, and September 30, 2018, respectively.

(3)

Restructured loans nonaccrual are included in nonaccrual loans which are a component of nonperforming loans.

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

 

 

Quarter Ended

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges

 

$

978

 

 

$

889

 

 

$

826

 

 

$

939

 

 

$

921

 

Net realized gain (loss) on securities transactions

 

 

 

 

 

(22

)

 

 

 

 

 

 

 

 

1

 

Net realized gain on sale of loans

 

 

910

 

 

 

683

 

 

 

477

 

 

 

437

 

 

 

637

 

Fiduciary income

 

 

446

 

 

 

434

 

 

 

425

 

 

 

408

 

 

 

402

 

Bank-owned life insurance income

 

 

247

 

 

 

155

 

 

 

158

 

 

 

152

 

 

 

157

 

Merchant and debit card fees

 

 

1,096

 

 

 

1,069

 

 

 

959

 

 

 

1,005

 

 

 

937

 

Loan processing fee income

 

 

157

 

 

 

148

 

 

 

128

 

 

 

131

 

 

 

158

 

Other noninterest income

 

 

782

 

 

 

754

 

 

 

589

 

 

 

1,101

 

 

 

336

 

Total noninterest income

 

$

4,616

 

 

$

4,110

 

 

$

3,562

 

 

$

4,173

 

 

$

3,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

$

8,896

 

 

$

8,693

 

 

$

8,986

 

 

$

8,399

 

 

$

8,156

 

Occupancy expenses

 

 

2,448

 

 

 

2,437

 

 

 

2,451

 

 

 

2,322

 

 

 

2,217

 

Legal and professional fees

 

 

686

 

 

 

687

 

 

 

626

 

 

 

531

 

 

 

948

 

Software and technology

 

 

885

 

 

 

772

 

 

 

782

 

 

 

653

 

 

 

636

 

Amortization

 

 

342

 

 

 

349

 

 

 

349

 

 

 

347

 

 

 

349

 

Director and committee fees

 

 

220

 

 

 

226

 

 

 

239

 

 

 

227

 

 

 

255

 

Advertising and promotions

 

 

339

 

 

 

408

 

 

 

385

 

 

 

416

 

 

 

335

 

ATM and debit card expense

 

 

310

 

 

 

303

 

 

 

278

 

 

 

270

 

 

 

289

 

Telecommunication expense

 

 

165

 

 

 

169

 

 

 

174

 

 

 

173

 

 

 

170

 

FDIC insurance assessment fees

 

 

 

 

 

140

 

 

 

33

 

 

 

146

 

 

 

164

 

Other noninterest expense

 

 

1,144

 

 

 

1,210

 

 

 

1,167

 

 

 

1,060

 

 

 

1,508

Total noninterest expense

$

15,435

$

15,394

$

15,470

$

14,544

$

15,027

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

 

 

For the Three Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

 

Average

Outstanding

Balance

 

 

Interest

Earned/

Interest

Paid

 

 

Average

Yield/ Rate

 

 

Average

Outstanding

Balance

 

 

Interest

Earned/

Interest

Paid

 

 

Average

Yield/ Rate

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

1,698,742

 

 

$

22,996

 

 

 

5.37

%

 

$

1,618,199

 

 

$

20,879

 

 

 

5.12

%

Securities available for sale

 

 

225,714

 

 

 

1,371

 

 

 

2.41

 

 

 

239,993

 

 

 

1,465

 

 

 

2.42

 

Securities held to maturity

 

 

158,000

 

 

 

1,001

 

 

 

2.51

 

 

 

166,080

 

 

 

1,026

 

 

 

2.45

 

Nonmarketable equity securities

 

 

12,011

 

 

 

162

 

 

 

5.35

 

 

 

10,351

 

 

 

115

 

 

 

4.41

 

Interest-bearing deposits in other banks

 

 

56,174

 

 

 

323

 

 

 

2.28

 

 

 

32,545

 

 

 

190

 

 

 

2.32

 

Total interest-earning assets

 

 

2,150,641

 

 

 

25,853

 

 

 

4.77

 

 

 

2,067,168

 

 

 

23,675

 

 

 

4.54

 

Allowance for loan losses

 

 

(16,082

)

 

 

 

 

 

 

 

 

 

 

(14,096

)

 

 

 

 

 

 

 

 

Noninterest-earnings assets

 

 

194,044

 

 

 

 

 

 

 

 

 

 

 

182,587

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,328,603

 

 

 

 

 

 

 

 

 

 

$

2,235,659

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,467,502

 

 

$

5,304

 

 

 

1.43

%

 

$

1,375,138

 

 

$

4,670

 

 

 

1.35

%

Advances from FHLB and fed funds purchased

 

 

50,016

 

 

 

298

 

 

 

2.36

 

 

 

117,758

 

 

 

593

 

 

 

2.00

 

Subordinated debentures

 

 

11,527

 

 

 

161

 

 

 

5.54

 

 

 

12,821

 

 

 

173

 

 

 

5.35

 

Securities sold under agreements to repurchase

 

 

10,549

 

 

 

7

 

 

 

0.26

 

 

 

12,571

 

 

 

10

 

 

 

0.32

 

Total interest-bearing liabilities

 

 

1,539,594

 

 

 

5,770

 

 

 

1.49

 

 

 

1,518,288

 

 

 

5,446

 

 

 

1.42

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

511,343

 

 

 

 

 

 

 

 

 

 

 

465,838

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

22,878

 

 

 

 

 

 

 

 

 

 

 

8,705

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

534,221

 

 

 

 

 

 

 

 

 

 

 

474,543

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

254,788

 

 

 

 

 

 

 

 

 

 

 

242,828

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

2,328,603

 

 

 

 

 

 

 

 

 

 

$

2,235,659

 

 

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

 

 

3.28

%

 

 

 

 

 

 

 

 

 

 

3.12

%

Net interest income

 

 

 

 

 

$

20,083

 

 

 

 

 

 

 

 

 

 

$

18,229

 

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

 

 

3.71

%

 

 

 

 

 

 

 

 

 

 

3.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $3.0 million and $1.9 million for the three months ended September 30, 2019 and 2018, 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. Net interest margin on a taxable equivalent basis was 3.71% and 3.51% for the three months ended September 30, 2019 and 2018, respectively.

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

 

 

For the Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

 

Average

Outstanding

Balance

 

 

Interest

Earned/

Interest

Paid

 

 

Average

Yield/ Rate

 

 

Average

Outstanding

Balance

 

 

Interest

Earned/

Interest

Paid

 

 

Average

Yield/ Rate

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

1,676,047

 

 

$

67,821

 

 

 

5.41

%

 

$

1,483,961

 

 

$

55,377

 

 

 

4.99

%

Securities available for sale

 

 

230,816

 

 

 

4,372

 

 

 

2.53

 

 

 

237,619

 

 

 

4,400

 

 

 

2.48

 

Securities held to maturity

 

 

160,061

 

 

 

3,042

 

 

 

2.54

 

 

 

169,211

 

 

 

3,125

 

 

 

2.47

 

Nonmarketable equity securities

 

 

12,106

 

 

 

471

 

 

 

5.20

 

 

 

8,826

 

 

 

300

 

 

 

4.54

 

Interest-bearing deposits in other banks

 

 

56,755

 

 

 

1,007

 

 

 

2.37

 

 

 

35,437

 

 

 

537

 

 

 

2.03

 

Total interest-earning assets

 

 

2,135,785

 

 

 

76,713

 

 

 

4.80

 

 

 

1,935,054

 

 

 

63,739

 

 

 

4.40

 

Allowance for loan losses

 

 

(15,483

)

 

 

 

 

 

 

 

 

 

 

(13,589

)

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

191,189

 

 

 

 

 

 

 

 

 

 

 

161,855

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,311,491

 

 

 

 

 

 

 

 

 

 

$

2,083,320

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,463,457

 

 

$

16,681

 

 

 

1.52

%

 

$

1,306,244

 

 

$

11,948

 

 

 

1.22

%

Advances from FHLB and fed funds purchased

 

 

62,268

 

 

 

1,126

 

 

 

2.42

 

 

 

88,200

 

 

 

1,181

 

 

 

1.79

 

Subordinated debentures

 

 

12,107

 

 

 

502

 

 

 

5.54

 

 

 

13,477

 

 

 

516

 

 

 

5.12

 

Securities sold under agreements to repurchase

 

 

10,710

 

 

 

28

 

 

 

0.35

 

 

 

12,749

 

 

 

34

 

 

 

0.36

 

Total interest-bearing liabilities

 

 

1,548,542

 

 

 

18,337

 

 

 

1.58

 

 

 

1,420,670

 

 

 

13,679

 

 

 

1.29

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

490,088

 

 

 

 

 

 

 

 

 

 

 

432,871

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

21,575

 

 

 

 

 

 

 

 

 

 

 

7,120

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

511,663

 

 

 

 

 

 

 

 

 

 

 

439,991

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

251,286

 

 

 

 

 

 

 

 

 

 

 

222,659

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

2,311,491

 

 

 

 

 

 

 

 

 

 

$

2,083,320

 

 

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

 

 

3.22

%

 

 

 

 

 

 

 

 

 

 

3.12

%

Net interest income

 

 

 

 

 

$

58,376

 

 

 

 

 

 

 

 

 

 

$

50,060

 

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

 

 

3.65

%

 

 

 

 

 

 

 

 

 

 

3.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $2.3 million and $1.8 million for the nine months ended September 30, 2019 and 2018, 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. Net interest margin on a taxable equivalent basis was 3.66% and 3.47% for the nine months ended September 30, 2019 and 2018, respectively.

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Guaranty Bancshares, Inc.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)

 

 

As of

 

 

 

2019

 

 

2018

 

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

Total shareholders' equity

 

$

255,905

 

 

$

250,121

 

 

$

250,310

 

 

$

244,583

 

 

$

241,997

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

Core deposit intangible

 

 

(4,066

)

 

 

(4,279

)

 

 

(4,493

)

 

 

(4,706

)

 

 

(4,919

)

Total tangible common equity

 

$

219,679

 

 

$

213,682

 

 

$

213,657

 

 

$

207,717

 

 

$

204,918

 

Common shares outstanding - end of quarter(1)

 

 

11,534,393

 

 

 

11,560,058

 

 

 

11,803,786

 

 

 

11,829,868

 

 

 

11,964,472

 

Book value per common share

 

$

22.19

 

 

$

21.64

 

 

$

21.21

 

 

$

20.68

 

 

$

20.23

 

Tangible book value per common share

 

 

19.05

 

 

 

18.48

 

 

 

18.10

 

 

 

17.56

 

 

 

17.13

 

(1) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options.

About Non-GAAP Financial Measures

Certain of the financial measures and ratios we present, including "tangible book value per share" 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.

About Guaranty Bancshares, Inc.

Guaranty Bancshares, Inc. is a bank holding company that conducts commercial banking activities through its wholly-owned subsidiary, Guaranty Bank & Trust, N.A. As one of the oldest regional community banks in Texas, Guaranty Bank & Trust provides its customers with a full array of relationship-driven commercial and consumer banking products and services, as well as mortgage, trust, and wealth management services. Guaranty Bank & Trust has 30 banking locations across 24 Texas communities located within the East Texas, Dallas/Fort Worth, greater Houston and Central Texas regions of the state. 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"), and the following factors: business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic market areas; economic, market, operational, liquidity, credit and interest rate risks associated with our business; the composition of our loan portfolio, including deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to execute our business plan; acquisitions and integrations of acquired businesses; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; and the amount of nonperforming and classified assets we hold. 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.

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