Press Release

Guaranty Bancshares, Inc. Reports Second Quarter 2020 Financial Results

Company Release - 7/20/2020

ADDISON, Texas--(BUSINESS WIRE)-- Guaranty Bancshares, Inc. (NASDAQ: GNTY), the parent company of Guaranty Bank & Trust, N.A., today reported financial results for the fiscal quarter ended June 30, 2020. The Company's net income available to common shareholders was $1.1 million, or $0.10 per basic share, for the quarter ended June 30, 2020, compared to $6.3 million, or $0.55 per basic share, for the quarter ended March 31, 2020 and $6.0 million, or $0.52 per basic share, for the quarter ended June 30, 2019. Return on average assets and average equity for the second quarter of 2020 were 0.16% and 1.67%, respectively, compared to 1.09% and 9.94%, respectively, for the first quarter of 2020 and 1.05% and 9.97%, respectively, for the second quarter of 2019. Earnings were impacted during the second quarter of 2020 by a large provision for loan loss reserves resulting from additional assumptions made in our CECL methodology due to COVID-19, which was partially offset by loan origination fees earned from the Small Business Association’s (SBA) Paycheck Protection Program (PPP). Net core earnings, excluding provisions for loan losses and income taxes and PPP net origination income, as well as our core net interest margin, adjusted to exclude the effects of PPP loans, are described further in tables below.

"We continue to work with our borrowers, communities and employees to assess and combat the impacts of COVID-19. We are in close contact with borrowers who requested temporary financial relief in order to understand potential longer-term impacts. We are anticipating further guidance from the SBA on the forgiveness of PPP loans, will work with affected borrowers to provide a smooth loan forgiveness process, and will recognize additional deferred revenue as a result. We continue to have a significant portion of our employees working from their homes and closely monitor the trends in COVID-19 positive test results and hospitalizations to determine whether location hours and remote working arrangements should be adjusted to maintain proper virus risk mitigation. These are unusual and uncharted times, however, our Bank has a solid core earnings foundation, sustained net interest margins, a history of strong asset quality and strong capital and liquidity that will allow us to work through this crisis. COVID-19 has also allowed us to realize returns on significant investments in technology and remote banking that we have made in recent years. Investments in video banking, electronic signatures, online account opening, digital marketing and other remote banking channels have allowed us to seamlessly continue delivering banking services to new and existing customers, while maintaining higher levels of safety during this virus," commented Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY HIGHLIGHTS

  • Steady Credit Quality. Non-performing assets as a percentage of total loans declined to 0.76% at June 30, 2020, compared to 1.00% at March 31, 2020 and 0.64% at June 30, 2019. The Bank provided financial relief to many of its customers during the quarter due to the COVID-19 outbreak through a 3-month principal and interest payment deferral program. At period-end, the Bank had outstanding loan balances of $247.8 million under the 3-month deferral program.
  • COVID-19 Impact on Net Earnings. The Bank had a $12.1 million provision for loan losses in the quarter, compared to $1.4 million in the first quarter of 2020 and $575,000 in the second quarter of 2019. The $12.1 million provision resulted largely from additional qualitative factors considered under the Current Expected Credit Losses (CECL) standard adopted by the bank on January 1, 2020, primarily derived from changes in national GDP, Texas unemployment rates and national industry-related CRE trends, all of which are impacted by the effects of COVID-19.

    Net earnings for the quarter were $1.1 million, down from $6.3 million for the immediately prior quarter and $6.0 million for the same quarter of 2019. Net core earnings, which exclude provisions for loan losses and income tax, net PPP income, and interest on PPP-related borrowings was $10.5 million for the second quarter of 2020, an increase of $1.4 million, or 14.8%, compared to the immediately prior quarter and an increase of $2.5 million, or 30.9%, compared to the same quarter in 2019.
  • Paycheck Protection Program. The Bank issued $208.8 million of PPP loans to 1,905 borrowers, which resulted in $2.1 million in net origination fees recognized by the Bank and $4.9 million in net deferred origination fees. The Bank found that many PPP borrowers deposited the proceeds of such loans into non-interest bearing demand accounts at the Bank, which were largely maintained during the quarter.

† Non GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

 

RESULTS OF OPERATIONS

With the credit outlook still uncertain as a result of COVID-19 and other economic factors, the following table illustrates net earnings and net core earnings results, which are pre-tax, pre-provision and pre-extraordinary PPP income, as well as performance ratios for the prior five quarters:

       

 

 

Quarter Ended

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

Net earnings

 

$

1,075

 

 

$

6,278

 

 

$

7,369

 

 

$

7,530

 

 

$

6,043

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

12,100

 

 

 

1,400

 

 

 

 

 

 

100

 

 

 

575

 

Income tax provision

 

 

(190

)

 

 

1,445

 

 

 

1,573

 

 

 

1,634

 

 

 

1,384

 

PPP net origination and interest income

 

 

(2,540

)

 

 

 

 

 

 

 

 

 

 

 

 

Net interest expense on PPP-related borrowings

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

Net core earnings

 

$

10,476

 

 

$

9,123

 

 

$

8,942

 

 

$

9,264

 

 

$

8,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets

 

$

2,657,609

 

 

$

2,325,618

 

 

$

2,341,766

 

 

$

2,328,603

 

 

$

2,314,628

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan average balance

 

 

(163,184

)

 

 

 

 

 

 

 

 

 

 

 

 

Excess fed funds sold due to PPP-related borrowings

 

 

(84,066

)

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets, adjusted

 

$

2,410,359

 

 

$

2,325,618

 

 

$

2,341,766

 

 

$

2,328,603

 

 

$

2,314,628

 

Total average equity

 

$

258,225

 

 

$

251,159

 

 

$

260,160

 

 

$

254,788

 

 

$

243,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings to average assets (annualized)

 

 

0.16

%

 

 

1.09

%

 

 

1.25

%

 

 

1.28

%

 

 

1.05

%

Net earnings to average equity (annualized)

 

 

1.67

 

 

 

9.94

 

 

 

11.24

 

 

 

11.73

 

 

 

9.97

 

Net core earnings to average assets, as adjusted (annualized)

 

 

1.75

 

 

 

1.56

 

 

 

1.51

 

 

 

1.58

 

 

 

1.39

 

Net core earnings to average equity (annualized)

 

 

16.32

 

 

 

14.45

 

 

 

13.64

 

 

 

14.43

 

 

 

13.20

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,025,924

 

 

 

11,432,391

 

 

 

11,533,849

 

 

 

11,550,335

 

 

 

11,659,513

 

Earnings per common share, basic

 

$

0.10

 

 

$

0.55

 

 

$

0.64

 

 

$

0.65

 

 

$

0.52

 

Net core earnings per common share, basic

 

 

0.95

 

 

 

0.80

 

 

 

0.78

 

 

 

0.80

 

 

 

0.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† 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 loan losses, in the second quarter of 2020 and 2019 was $23.2 million and $19.3 million, respectively, an increase of $3.9 million, or 20.2%, resulting primarily from the recognition of $2.1 million of net PPP loan origination fees and a decrease in deposit-related interest expense of $2.7 million, or 46.7%, compared to the same quarter of the prior year. Net interest margin, on a taxable equivalent basis, for the second quarter of 2020 and 2019 was 3.78% and 3.61%, respectively. Net interest margin, on a taxable equivalent basis, decreased from 3.87% in the first quarter of 2020 to 3.78% in the second quarter of 2020, primarily due to the effects of the PPP loans, which earn only 1.00% interest, on the loan yield for the period. During the period, loan yield decreased from 5.39% for the second quarter of 2019 to 5.15% for the second quarter of 2020, a change of 24 basis points, while the cost of interest bearing deposits decreased from 1.56% to 0.83% during the same period, a change of 73 basis points. The decrease in loan yield was primarily due to the dilutive effect of the 1.00% yield on PPP loans originated during the second quarter of 2020. Loan yield decreased from 5.32% for the first quarter of 2020 to 5.15% for the second quarter of 2020, a change of 17 basis points, while the cost of interest bearing deposits decreased from 1.21% to 0.83% during the same period, a change of 38 basis points. These decreases were due primarily to reductions in interest rates by the Federal Reserve at the end of the first quarter of 2020.

During the second quarter, the Bank’s participation in the PPP program created temporary extraordinary results in the calculation of net interest margin. In order to prepare for participation in this program, the Bank borrowed $100.0 million from the FHLB at an interest rate of 0.25%. However, the Bank discovered that PPP loans mostly self-funded as many of the borrowers during the quarter deposited their loan proceeds into non-interest bearing demand accounts at the Bank and largely maintained those deposits during the quarter. As a result, the Bank had large amounts of fed funds sold during the quarter, which earned an interest rate of 0.10%. To illustrate core net interest margin and remove the noise resulting from the PPP, the table below excludes PPP loans and their associated fees and costs, as well as the average balance of related FHLB borrowings and fed funds sold, for the three and six months ended June 30, 2020:

             

 

 

For the Three Months Ended June 30, 2020

 

 

For the Six Months Ended June 30, 2020

 

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

Total interest-earnings assets

 

$

2,486,636

 

 

$

26,581

 

 

 

4.30

%

 

$

2,318,947

 

 

$

51,833

 

 

 

4.49

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan average balance and net fees(1)

 

 

(163,184

)

 

 

(2,540

)

 

 

6.26

 

 

 

(81,592

)

 

 

(2,540

)

 

 

6.26

 

Excess fed funds sold due to PPP-related borrowings

 

 

(84,066

)

 

 

(21

)

 

 

0.10

 

 

 

(42,033

)

 

 

(21

)

 

 

0.10

 

Total interest-earnings assets, net of PPP effects

 

$

2,239,386

 

 

$

24,020

 

 

 

4.31

%

 

$

2,195,322

 

 

$

49,272

 

 

 

4.51

%

Interest expense adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP-related borrowings

 

 

(84,066

)

 

 

(52

)

 

 

0.25

 

 

 

(42,033

)

 

 

(52

)

 

 

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

23,182

 

 

 

 

 

 

 

 

 

 

$

43,751

 

 

 

 

 

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.75

%

 

 

 

 

 

 

 

 

 

 

3.79

%

Net interest income, net of PPP effects

 

 

 

 

 

 

20,673

 

 

 

 

 

 

 

 

 

 

 

41,242

 

 

 

 

 

Net interest margin, net of PPP effects

 

 

 

 

 

 

 

 

 

 

3.71

 

 

 

 

 

 

 

 

 

 

 

3.78

 

Efficiency ratio(2)

 

 

 

 

 

 

 

 

 

 

53.90

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio, net of PPP effects†(3)

 

 

 

 

 

 

 

 

 

 

62.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

 

(1) Interest earned consists of interest income of $407,000 and net origination fees recognized of $2.1 million for the three and six months ended June 30, 2020.

 

(2) 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.

 

(3) The efficiency ratio 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.

 

   

The Bank adopted the Current Expected Credit Losses (CECL) standard (Accounting Standards Update 2016-13 or ASC 326) on January 1, 2020. The day one impact of adopting CECL resulted in an allowance increase of $4.5 million, or 28.1%, from December 31, 2019. There was a $12.1 million provision for loan losses in the second quarter of 2020, compared to $1.4 million in the first quarter of 2020 and $575,000 in the second quarter of 2019. The $12.1 million provision this quarter results largely from additional qualitative factors, primarily derived from changes in national GDP, Texas unemployment rates and national industry related CRE trends, all of which are impacted by the effects of COVID-19. Beginning in March 2020, and through the date of this earnings release, the Bank has closely reviewed its loan portfolio and has spoken to borrowers about their financial hardships, if any. As a result, the Bank has downgraded additional loans in industries affected by this crisis to appropriate risk ratings given the expected impacts of COVID-19 on those industries. Management believes the provisions made in both the first and second quarter, as a result of loan downgrades and qualitative factor adjustments in the CECL model, appropriately capture the current credit risks associated with COVID-19 and do not anticipate provisions at these levels during the second half of 2020 at this time. However, the outbreak could worsen in the short term, leading to possible changes in customer and consumer behavior and stronger response measures by government officials, and the long term economic impacts of COVID-19 are still very much unknown.

Noninterest income increased $877,000, or 21.3%, in the second quarter of 2020, to $5.0 million, compared to $4.1 million for the quarter ended June 30, 2019. The increase from the same quarter in 2019 was due primarily to an increase in the gain on sales of loans of$825,000, or120.8%, and anincreasein merchant and debit card fees of $265,000, or 24.8%, from the same quarter of the prior year. Additionally, bank-owned life insurance income increased $52,000, or 33.5%, and fiduciary income increased $40,000, or 9.2%, during the second quarter of 2020. These increases were partially offset by a $318,000 or 35.8% decrease in service charges during the second quarter of 2020, as compared to the same quarter of 2019, due to certain temporary service charge waivers as a result of COVID-19.

Noninterest income increased $26,000, or 0.5%, to $5.0 million in the second quarter of 2020, compared to $5.0 million for the quarter ended March 31, 2020. This was primarily attributable to an increase in the realized gain on sale of loans of $319,000, or 26.8%, and an increase in merchant and debit card fees of $203,000, or 17.9%, from the prior quarter. These gains were partially offset by a $337,000, or 37.1%, decrease in service charge income due to certain temporary service charge waivers as a result of COVID-19 and decrease in fiduciary income of $40,000, or 7.8%, from the previous quarter.

Noninterest expense decreased $210,000, or 1.4%, in the second quarter of 2020, compared to the second quarter of 2019. The decrease in noninterest expense in the second quarter of 2020 was primarily driven by a decrease in employee compensation and benefits expense to $8.1 million, a decrease of $616,000, or 7.1%, from the same quarter of the prior year due to a reduction in bonus accrual during the quarter, as well as the effects of deferred origination fees associated with PPP loan originations. Legal and professional fees decreased $98,000, or 14.3%, compared to the same quarter of the prior year due and director and committee fees decreased $61,000, or 27.0%. These decreases were partially offset by an increase in software and technology expense of $173,000, or 22.4%, resulting from new software and hardware investments to allow employees to securely work from home and to improve online deposit account opening. Additionally, there was an increase in ATM and debit card expense of $176,000, or 58.1%, resulting from increased usage of debit cards during the period. Occupancy expenses increased $113,000, or 4.6%, from the same quarter of the prior year. The company’s efficiency ratio in the second quarter of 2020 was 53.90%, compared to 65.74% in the same quarter last year. Adjusted to remove the effects of PPP-related transactions, the company’s efficiency ratio for the second quarter of 2020 would have been 62.44%.

Noninterest expense decreased $1.2 million, or 7.5%, in the second quarter of 2020 to $15.2 million, compared to the quarter ended March 31, 2020. The decrease was primarily due to a $1.4 million, or 14.7%, decrease in employee compensation and benefits, resulting primarily from reduction of the employee bonus and effects of net deferred revenue associated with PPP loan originations. This was partially offset by a $73,000, or 2.9%, increase in occupancy expenses and a $70,000, or 13.5%, increase in legal and professional fees from the previous quarter. Other noninterest expense increased $74,000, or 6.0%, from the previous quarter. The company’s efficiency ratio in the second quarter of 2020 was 53.90%, compared to 64.27% in the prior quarter. Adjusted to remove the effects of PPP-related transactions, the company’s efficiency ratio for the second quarter of 2020 was 62.44%.

 

† 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 $2.67 billion at June 30, 2020, compared to $2.39 billion at March 31, 2020 and $2.33 billion at June 30, 2019. Gross loans increased 13.9%, or $239.1 million, to $1.96 billion at June 30, 2020, compared to loans of $1.72 billion at March 31, 2020. Gross loans increased 15.6%, or $263.6 million, from $1.69 billion at June 30, 2019. The increase in gross loans during the second quarter of 2020 included outstanding PPP loan balances of $208.8 million, to 1,905 borrowers, as of June 30, 2020. Excluding the outstanding balance of PPP loans, gross loans increased 1.8%, or $30.3 million, from the prior quarter. Deposits increased by 12.1%, or $241.6 million, to $2.24 billion at June 30, 2020, compared to $2.00 billion at March 31, 2020. Total deposits increased 13.0%, or $258.0 million, from $1.98 billion at June 30, 2019. Changes in gross loans and deposits during these periods resulted primarily from PPP loans and the deposit of related PPP funds into demand accounts at the Bank, as well as apparent changes in depositor spending habits during the quarter resulting from economic and other uncertainties due to COVID-19. Shareholders' equity totaled $258.9 million as of June 30, 2020, compared to $253.6 million at March 31, 2020 and $250.1 million at June 30, 2019. The increase from the previous quarter resulted primarily from net income of $1.1 million and unrealized gains in our investment security portfolio of $8.8 million, partially offset by purchase of treasury stock early in the quarter of $2.7 million and payment of dividends of $2.1 million. The company will limit additional purchases of treasury stock for the foreseeable future.

During the first quarter of 2020, the Bank transferred all of its investment securities classified as held-to-maturity to available-for-sale in order to provide maximum flexibility to address liquidity and capital needs that may result from COVID-19. Management believes these transfers are allowable under existing GAAP due to the isolated, non-recurring and usual events resulting from the pandemic.

Nonperforming assets as a percentage of total loans were 0.76% at June 30, 2020, compared to 1.00% at March 31, 2020, and 0.64% at June 30, 2019. The Bank’s nonperforming assets consist primarily of nonaccrual loans, three of which 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 $8.7 million as of June 30, 2020. These loans were internally identified as problem assets prior to COVID-19 and are properly reserved. Management expects these three loans to be resolved in the second half of 2020. Excluding these partially guaranteed SBA loans, non-performing assets as a percentage of total loans at June 30, 2020 would be 0.30%.

The Bank has worked with borrowers since March of 2020 to provide financial relief through a 3-month principal and interest payment deferral program due to the impact of the COVID-19 pandemic. This initial relief program was offered to loan customers in good standing who needed, or wanted, the additional liquidity during the early stages of the virus. However, further modification requests will be carefully reviewed prior to approval in order to evaluate a true financial hardship and need for additional relief. As of June 30, 2020, the Bank had 658 borrowers with outstanding loan balances totaling $247.8 million who had requested this relief under the 3-month payment deferral program. The Bank will closely monitor the credit quality and repayment ability of these borrowers as the temporary modification periods end.

Finally, management continues to closely monitor loans and concentrations in COVID-19 effected industries. Social distancing, stay-at-home orders and other measures as a result of the virus have particularly affected the restaurant, hospitality, retail commercial real estate (CRE) and energy sectors. Excluding SBA partially guaranteed (75%) loans, the Bank has direct exposure, through total loan commitments and weighted average loan-to-values (LTV), as of June 30, 2020, of $35.8 million and 64.6% weighted average LTV to restaurants, of $61.5 million and 52.17% weighted average LTV to retail CRE and $71.8 million and 56.8% weighted average LTV to hotel/hospitality borrowers.

       

Guaranty Bancshares, Inc.

Consolidated Financial Summary (Unaudited)

(In thousands, except share and per share data)

       

 

 

As of

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

35,490

 

 

$

40,354

 

 

$

39,907

 

 

$

42,051

 

 

$

34,823

 

Federal funds sold

 

 

104,375

 

 

 

81,250

 

 

 

45,246

 

 

 

14,250

 

 

 

46,450

 

Interest-bearing deposits

 

 

51,129

 

 

 

25,324

 

 

 

5,561

 

 

 

2,347

 

 

 

11,162

 

Total cash and cash equivalents

 

 

190,994

 

 

 

146,928

 

 

 

90,714

 

 

 

58,648

 

 

 

92,435

 

Securities available for sale

 

 

376,381

 

 

 

377,062

 

 

 

212,716

 

 

 

221,345

 

 

 

228,714

 

Securities held to maturity

 

 

 

 

 

 

 

 

155,458

 

 

 

156,925

 

 

 

158,915

 

Loans held for sale

 

 

7,194

 

 

 

4,024

 

 

 

2,368

 

 

 

3,841

 

 

 

4,052

 

Loans, net

 

 

1,919,201

 

 

 

1,696,861

 

 

 

1,690,794

 

 

 

1,720,595

 

 

 

1,678,705

 

Accrued interest receivable

 

 

11,864

 

 

 

8,148

 

 

 

9,151

 

 

 

7,825

 

 

 

9,098

 

Premises and equipment, net

 

 

55,251

 

 

 

54,496

 

 

 

53,431

 

 

 

52,956

 

 

 

52,606

 

Other real estate owned

 

 

402

 

 

 

605

 

 

 

603

 

 

 

551

 

 

 

535

 

Cash surrender value of life insurance

 

 

34,920

 

 

 

34,713

 

 

 

34,495

 

 

 

34,280

 

 

 

34,039

 

Deferred tax asset

 

 

 

 

 

 

 

 

 

 

 

2,363

 

 

 

2,050

 

Core deposit intangible, net

 

 

3,426

 

 

 

3,639

 

 

 

3,853

 

 

 

4,066

 

 

 

4,279

 

Goodwill

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

Other assets

 

 

35,402

 

 

 

32,348

 

 

 

32,701

 

 

 

30,467

 

 

 

35,039

 

Total assets

 

$

2,667,195

 

 

$

2,390,984

 

 

$

2,318,444

 

 

$

2,326,022

 

 

$

2,332,627

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

772,179

 

 

$

528,817

 

 

$

525,865

 

 

$

528,301

 

 

$

498,349

 

Interest-bearing

 

 

1,469,847

 

 

 

1,471,609

 

 

 

1,430,939

 

 

 

1,435,012

 

 

 

1,485,641

 

Total deposits

 

 

2,242,026

 

 

 

2,000,426

 

 

 

1,956,804

 

 

 

1,963,313

 

 

 

1,983,990

 

Securities sold under agreements to repurchase

 

 

17,414

 

 

 

11,843

 

 

 

11,100

 

 

 

11,363

 

 

 

10,814

 

Accrued interest and other liabilities

 

 

25,960

 

 

 

23,645

 

 

 

23,061

 

 

 

23,508

 

 

 

24,265

 

Line of credit

 

 

2,000

 

 

 

20,000

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

 

100,610

 

 

 

70,614

 

 

 

55,118

 

 

 

60,623

 

 

 

52,127

 

Subordinated debentures

 

 

20,310

 

 

 

10,810

 

 

 

10,810

 

 

 

11,310

 

 

 

11,310

 

Total liabilities

 

 

2,408,320

 

 

 

2,137,338

 

 

 

2,056,893

 

 

 

2,070,117

 

 

 

2,082,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

258,875

 

 

 

253,646

 

 

 

261,551

 

 

 

255,905

 

 

 

250,121

 

Total liabilities and shareholders' equity

 

$

2,667,195

 

 

$

2,390,984

 

 

$

2,318,444

 

 

$

2,326,022

 

 

$

2,332,627

 

       

Guaranty Bancshares, Inc.

Consolidated Financial Summary (Unaudited)

(In thousands, except share and per share data)

       

 

 

Quarter Ended

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

STATEMENTS OF EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

26,581

 

 

$

25,252

 

 

$

25,848

 

 

$

25,853

 

 

$

25,553

 

Interest expense

 

 

3,399

 

 

 

4,683

 

 

 

5,354

 

 

 

5,770

 

 

 

6,267

 

Net interest income

 

 

23,182

 

 

 

20,569

 

 

 

20,494

 

 

 

20,083

 

 

 

19,286

 

Provision for credit losses

 

 

12,100

 

 

 

1,400

 

 

 

 

 

 

100

 

 

 

575

 

Net interest income after provision for loan losses

 

 

11,082

 

 

 

19,169

 

 

 

20,494

 

 

 

19,983

 

 

 

18,711

 

Noninterest income

 

 

4,987

 

 

 

4,961

 

 

 

4,674

 

 

 

4,616

 

 

 

4,110

 

Noninterest expense

 

 

15,184

 

 

 

16,407

 

 

 

16,226

 

 

 

15,435

 

 

 

15,394

 

Income before income taxes

 

 

885

 

 

 

7,723

 

 

 

8,942

 

 

 

9,164

 

 

 

7,427

 

Income tax provision

 

 

(190

)

 

 

1,445

 

 

 

1,573

 

 

 

1,634

 

 

 

1,384

 

Net earnings

 

$

1,075

 

 

$

6,278

 

 

$

7,369

 

 

$

7,530

 

 

$

6,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share, basic

 

$

0.10

 

 

$

0.55

 

 

$

0.64

 

 

$

0.65

 

 

$

0.52

 

Earnings per common share, diluted(1)

 

 

0.10

 

 

 

0.55

 

 

 

0.63

 

 

 

0.65

 

 

 

0.52

 

Cash dividends per common share

 

 

0.19

 

 

 

0.19

 

 

 

0.18

 

 

 

0.18

 

 

 

0.17

 

Book value per common share - end of quarter

 

 

23.50

 

 

 

22.79

 

 

 

22.65

 

 

 

22.19

 

 

 

21.64

 

Tangible book value per common share - end of quarter(2)

 

 

20.27

 

 

 

19.58

 

 

 

19.53

 

 

 

19.05

 

 

 

18.48

 

Common shares outstanding - end of quarter

 

 

11,013,804

 

 

 

11,128,556

 

 

 

11,547,443

 

 

 

11,534,393

 

 

 

11,560,058

 

Weighted-average common shares outstanding, basic

 

 

11,025,924

 

 

 

11,432,391

 

 

 

11,533,849

 

 

 

11,550,335

 

 

 

11,659,513

 

Weighted-average common shares outstanding, diluted(1)

 

 

11,025,924

 

 

 

11,432,391

 

 

 

11,621,887

 

 

 

11,612,873

 

 

 

11,730,058

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

0.16

%

 

 

1.09

%

 

 

1.25

%

 

 

1.28

%

 

 

1.05

%

Return on average equity (annualized)

 

 

1.67

 

 

 

9.94

 

 

 

11.24

 

 

 

11.73

 

 

 

9.97

 

Net interest margin (annualized)(3)

 

 

3.78

 

 

 

3.87

 

 

 

3.77

 

 

 

3.71

 

 

 

3.61

 

Efficiency ratio(4)

 

 

53.90

 

 

 

64.27

 

 

 

64.47

 

 

 

62.49

 

 

 

65.74

 

(1) Outstanding options and the closing price of the company's stock as of June 30 and March 31, 2020 had an anti-dilutive effect on the weighted-average common shares outstanding for the quarter ended June 30 and March 31, 2020; therefore, the effect of their conversion has been excluded from the calculation of the diluted weighted-average common shares outstanding for the period. The diluted EPS has been calculated using the basic weighted-average shares outstanding in order to comply with GAAP.

 

(2) See Reconciliation of non-GAAP Financial Measures table.

 

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

 

(4) The efficiency ratio was calculated by dividing total noninterest expense by net interest income plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.

 

       

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

       

 

 

As of

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

LOAN PORTFOLIO COMPOSITION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

522,248

 

 

$

297,163

 

 

$

279,583

 

 

$

299,714

 

 

$

286,190

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and development

 

 

265,982

 

 

 

263,973

 

 

 

280,498

 

 

 

256,459

 

 

 

231,167

 

Commercial real estate

 

 

606,061

 

 

 

584,883

 

 

 

567,360

 

 

 

581,742

 

 

 

592,945

 

Farmland

 

 

77,625

 

 

 

78,635

 

 

 

57,476

 

 

 

61,073

 

 

 

71,009

 

1-4 family residential

 

 

383,590

 

 

 

400,605

 

 

 

412,166

 

 

 

406,880

 

 

 

391,789

 

Multi-family residential

 

 

29,692

 

 

 

20,430

 

 

 

37,379

 

 

 

58,198

 

 

 

44,699

 

Consumer

 

 

52,986

 

 

 

52,996

 

 

 

53,245

 

 

 

53,315

 

 

 

56,099

 

Agricultural

 

 

18,981

 

 

 

19,314

 

 

 

18,359

 

 

 

18,728

 

 

 

19,721

 

Overdrafts

 

 

275

 

 

 

354

 

 

 

329

 

 

 

330

 

 

 

228

 

Total loans(1)(2)

 

$

1,957,440

 

 

$

1,718,353

 

 

$

1,706,395

 

 

$

1,736,439

 

 

$

1,693,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period(3)

 

$

21,948

 

 

$

20,750

 

 

$

16,394

 

 

$

15,743

 

 

$

15,190

 

Loans charged-off

 

 

(59

)

 

 

(224

)

 

 

(221

)

 

 

(67

)

 

 

(87

)

Recoveries

 

 

130

 

 

 

22

 

 

 

29

 

 

 

618

 

 

 

65

 

Provision for loan loss expense

 

 

12,100

 

 

 

1,400

 

 

 

 

 

 

100

 

 

 

575

 

Balance at end of period

 

$

34,119

 

 

$

21,948

 

 

$

16,202

 

 

$

16,394

 

 

$

15,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses / period-end loans

 

 

1.74

%

 

 

1.28

%

 

 

0.95

%

 

 

0.94

%

 

 

0.93

%

Allowance for loan losses / nonperforming loans

 

 

235.6

 

 

 

135.2

 

 

 

143.9

 

 

 

150.7

 

 

 

163.2

 

Net charge-offs / average loans (annualized)

 

 

(0.02

)

 

 

0.05

 

 

 

0.04

 

 

 

(0.13

)

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-PERFORMING ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans(4)

 

$

14,480

 

 

$

16,232

 

 

$

11,262

 

 

$

10,881

 

 

$

9,645

 

Other real estate owned

 

 

402

 

 

 

605

 

 

 

603

 

 

 

551

 

 

 

535

 

Repossessed assets owned

 

 

38

 

 

 

292

 

 

 

392

 

 

 

500

 

 

 

612

 

Total non-performing assets

 

$

14,920

 

 

$

17,129

 

 

$

12,257

 

 

$

11,932

 

 

$

10,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets as a percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)(2)

 

 

0.76

%

 

 

1.00

%

 

 

0.72

%

 

 

0.69

%

 

 

0.64

%

Total assets

 

 

0.56

 

 

 

0.72

 

 

 

0.53

 

 

 

0.51

 

 

 

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TDR loans - nonaccrual

 

$

95

 

 

$

97

 

 

$

101

 

 

$

118

 

 

$

119

 

TDR loans - accruing

 

 

7,216

 

 

 

7,220

 

 

 

7,240

 

 

 

7,297

 

 

 

2,278

 

(1) Excludes outstanding balances of loans held for sale of $7.2 million, $4.0 million, $2.4 million, $3.8 million, and $4.1 million as of June 30 and March 31, 2020 and December 31, September 30, and June 30, 2019, respectively.

(2) Excludes deferred loan fees of $4.1 million, $456,000, $601,000, $550,000, and $601,000 as of June 30 and March 31, 2020 and December 31, September 30, and June 30, 2019, respectively.

(3) The balance at the beginning of the period ended March 31, 2020 includes a $4.5 million impact of adopting ASC 326.

(4) TDR 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

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges

 

$

571

 

 

$

908

 

 

$

1,022

 

 

$

978

 

 

$

889

 

Net realized loss on securities transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22

)

Net realized gain on sale of loans

 

 

1,508

 

 

 

1,189

 

 

 

780

 

 

 

910

 

 

 

683

 

Fiduciary and custodial income

 

 

474

 

 

 

514

 

 

 

455

 

 

 

446

 

 

 

434

 

Bank-owned life insurance income

 

 

207

 

 

 

218

 

 

 

214

 

 

 

247

 

 

 

155

 

Merchant and debit card fees

 

 

1,334

 

 

 

1,131

 

 

 

1,140

 

 

 

1,096

 

 

 

1,069

 

Loan processing fee income

 

 

130

 

 

 

150

 

 

 

157

 

 

 

157

 

 

 

148

 

Other noninterest income

 

 

763

 

 

 

851

 

 

 

906

 

 

 

782

 

 

 

754

 

Total noninterest income

 

$

4,987

 

 

$

4,961

 

 

$

4,674

 

 

$

4,616

 

 

$

4,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

$

8,077

 

 

$

9,466

 

 

$

9,332

 

 

$

8,896

 

 

$

8,693

 

Occupancy expenses

 

 

2,550

 

 

 

2,477

 

 

 

2,498

 

 

 

2,448

 

 

 

2,437

 

Legal and professional fees

 

 

589

 

 

 

519

 

 

 

611

 

 

 

686

 

 

 

687

 

Software and technology

 

 

945

 

 

 

939

 

 

 

902

 

 

 

885

 

 

 

772

 

Amortization

 

 

338

 

 

 

333

 

 

 

338

 

 

 

342

 

 

 

349

 

Director and committee fees

 

 

165

 

 

 

219

 

 

 

188

 

 

 

220

 

 

 

226

 

Advertising and promotions

 

 

408

 

 

 

433

 

 

 

523

 

 

 

339

 

 

 

408

 

ATM and debit card expense

 

 

479

 

 

 

418

 

 

 

456

 

 

 

310

 

 

 

303

 

Telecommunication expense

 

 

209

 

 

 

180

 

 

 

168

 

 

 

165

 

 

 

169

 

FDIC insurance assessment fees

 

 

122

 

 

 

195

 

 

 

 

 

 

 

 

 

140

 

Other noninterest expense

 

 

1,302

 

 

 

1,228

 

 

 

1,210

 

 

 

1,144

 

 

 

1,210

 

Total noninterest expense

 

$

15,184

   

$

16,407

   

$

16,226

   

$

15,435

   

$

15,394

 

 

       

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

       

 

 

For the Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

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)

 

$

1,885,959

 

 

$

24,139

 

 

 

5.15

%

 

$

1,681,043

 

 

$

22,581

 

 

 

5.39

%

Securities available for sale

 

 

379,803

 

 

 

2,273

 

 

 

2.41

 

 

 

233,196

 

 

 

1,471

 

 

 

2.53

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

160,108

 

 

 

1,013

 

 

 

2.54

 

Nonmarketable equity securities

 

 

11,869

 

 

 

108

 

 

 

3.66

 

 

 

12,180

 

 

 

139

 

 

 

4.58

 

Interest-bearing deposits in other banks

 

 

209,005

 

 

 

61

 

 

 

0.12

 

 

 

56,863

 

 

 

349

 

 

 

2.46

 

Total interest-earning assets

 

 

2,486,636

 

 

 

26,581

 

 

 

4.30

 

 

 

2,143,390

 

 

 

25,553

 

 

 

4.78

 

Allowance for loan losses

 

 

(27,720

)

 

 

 

 

 

 

 

 

 

 

(15,448

)

 

 

 

 

 

 

 

 

Noninterest-earnings assets

 

 

198,693

 

 

 

 

 

 

 

 

 

 

 

186,686

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,657,609

 

 

 

 

 

 

 

 

 

 

$

2,314,628

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,480,106

 

 

$

3,040

 

 

 

0.83

%

 

$

1,464,464

 

 

$

5,704

 

 

 

1.56

%

Advances from FHLB and fed funds purchased

 

 

134,677

 

 

 

123

 

 

 

0.37

 

 

 

62,403

 

 

 

381

 

 

 

2.45

 

Line of credit

 

 

7,791

 

 

 

47

 

 

 

2.43

 

 

 

 

 

 

 

 

 

 

Subordinated debentures

 

 

17,618

 

 

 

175

 

 

 

4.00

 

 

 

12,491

 

 

 

173

 

 

 

5.56

 

Securities sold under agreements to repurchase

 

 

18,106

 

 

 

14

 

 

 

0.31

 

 

 

10,521

 

 

 

9

 

 

 

0.34

 

Total interest-bearing liabilities

 

 

1,658,298

 

 

 

3,399

 

 

 

0.82

 

 

 

1,549,879

 

 

 

6,267

 

 

 

1.62

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

718,378

 

 

 

 

 

 

 

 

 

 

 

503,347

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

22,708

 

 

 

 

 

 

 

 

 

 

 

21,001

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

741,086

 

 

 

 

 

 

 

 

 

 

 

524,348

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

258,225

 

 

 

 

 

 

 

 

 

 

 

240,401

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,657,609

 

 

 

 

 

 

 

 

 

 

$

2,314,628

 

 

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

 

 

3.48

%

 

 

 

 

 

 

 

 

 

 

3.16

%

Net interest income

 

 

 

 

 

$

23,182

 

 

 

 

 

 

 

 

 

 

$

19,286

 

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

 

 

3.75

%

 

 

 

 

 

 

 

 

 

 

3.61

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $6.5 million and $1.2 million for the three months ended June 30, 2020 and 2019, 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 3.78% and 3.61% for the three months ended June 30, 2020 and 2019, respectively, using a marginal tax rate of 21%.

 

       

Guaranty Bancshares, Inc.

Selected Financial Data (Unaudited)

(In thousands)

       

 

 

For the Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

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)

 

$

1,793,742

 

 

$

46,656

 

 

 

5.23

%

 

$

1,666,407

 

 

$

44,825

 

 

 

5.42

%

Securities available for sale

 

 

300,053

 

 

 

3,586

 

 

 

2.40

 

 

 

233,409

 

 

 

3,001

 

 

 

2.59

 

Securities held to maturity

 

 

72,266

 

 

 

956

 

 

 

2.66

 

 

 

161,109

 

 

 

2,041

 

 

 

2.55

 

Nonmarketable equity securities

 

 

10,545

 

 

 

222

 

 

 

4.23

 

 

 

12,154

 

 

 

309

 

 

 

5.13

 

Interest-bearing deposits in other banks

 

 

142,341

 

 

 

413

 

 

 

0.58

 

 

 

57,051

 

 

 

684

 

 

 

2.42

 

Total interest-earning assets

 

 

2,318,947

 

 

 

51,833

 

 

 

4.49

 

 

 

2,130,130

 

 

 

50,860

 

 

 

4.81

 

Allowance for credit losses

 

 

(24,250

)

 

 

 

 

 

 

 

 

 

 

(15,178

)

 

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

196,917

 

 

 

 

 

 

 

 

 

 

 

187,795

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,491,614

 

 

 

 

 

 

 

 

 

 

$

2,302,747

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,477,806

 

 

$

7,461

 

 

 

1.02

%

 

$

1,461,379

 

 

$

11,377

 

 

 

1.57

%

Advances from FHLB and fed funds purchased

 

 

78,957

 

 

 

205

 

 

 

0.52

 

 

 

68,517

 

 

 

828

 

 

 

2.44

 

Line of credit

 

 

5,599

 

 

 

75

 

 

 

2.69

 

 

 

 

 

 

 

 

 

 

Subordinated debentures

 

 

14,214

 

 

 

318

 

 

 

4.50

 

 

 

12,401

 

 

 

342

 

 

 

5.56

 

Securities sold under agreements to repurchase

 

 

15,466

 

 

 

23

 

 

 

0.30

 

 

 

10,792

 

 

 

20

 

 

 

0.37

 

Total interest-bearing liabilities

 

 

1,592,042

 

 

 

8,082

 

 

 

1.02

 

 

 

1,553,089

 

 

 

12,567

 

 

 

1.63

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

618,176

 

 

 

 

 

 

 

 

 

 

 

489,694

 

 

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

22,121

 

 

 

 

 

 

 

 

 

 

 

20,950

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

640,297

 

 

 

 

 

 

 

 

 

 

 

510,644

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

259,275

 

 

 

 

 

 

 

 

 

 

 

239,014

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,491,614

 

 

 

 

 

 

 

 

 

 

$

2,302,747

 

 

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

 

 

 

 

3.18

%

Net interest income

 

 

 

 

 

$

43,751

 

 

 

 

 

 

 

 

 

 

$

38,293

 

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

 

 

3.79

%

 

 

 

 

 

 

 

 

 

 

3.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $4.5 million and $1.9 million for the six months ended June 30, 2020 and 2019, 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 3.82% and 3.64% for the six months ended June 30, 2020 and 2019, respectively, using a marginal tax rate of 21%.

 

   

Guaranty Bancshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In thousands, except share and per share data)

Tangible Book Value per Common Share

 

 

As of

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

Total shareholders’ equity

 

$

258,875

 

 

$

253,646

 

 

$

261,551

 

 

$

255,905

 

 

$

250,121

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

Core deposit intangible, net

 

 

(3,426

)

 

 

(3,639

)

 

 

(3,853

)

 

 

(4,066

)

 

 

(4,279

)

Total tangible common equity

 

$

223,289

 

 

$

217,847

 

 

$

225,538

 

 

$

219,679

 

 

$

213,682

 

Common shares outstanding - end of quarter(1)

 

 

11,013,804

 

 

 

11,128,556

 

 

 

11,547,443

 

 

 

11,534,393

 

 

 

11,560,058

 

Book value per common share

 

$

23.50

 

 

$

22.79

 

 

$

22.65

 

 

$

22.19

 

 

$

21.64

 

Tangible book value per common share

 

 

20.27

 

 

 

19.58

 

 

 

19.53

 

 

 

19.05

 

 

 

18.48

 

                                         

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

 

Net Core Earnings and Net Core Earnings per Common Share

 

 

Quarter Ended

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

Net earnings

 

$

1,075

 

 

$

6,278

 

 

$

7,369

 

 

$

7,530

 

 

$

6,043

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

12,100

 

 

 

1,400

 

 

 

 

 

 

100

 

 

 

575

 

Income tax provision

 

 

(190

)

 

 

1,445

 

 

 

1,573

 

 

 

1,634

 

 

 

1,384

 

PPP net origination and interest income

 

 

(2,540

)

 

 

 

 

 

 

 

 

 

 

 

 

Net interest expense on PPP-related borrowings

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

Net core earnings

 

$

10,476

 

 

$

9,123

 

 

$

8,942

 

 

$

9,264

 

 

$

8,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,025,924

 

 

 

11,432,391

 

 

 

11,533,849

 

 

 

11,550,335

 

 

 

11,659,513

 

Earnings per common share, basic

 

$

0.10

 

 

$

0.55

 

 

$

0.64

 

 

$

0.65

 

 

$

0.52

 

Net core earnings per common share, basic

 

 

0.95

 

 

 

0.80

 

 

 

0.78

 

 

 

0.80

 

 

 

0.69

 

                                         

Net Core Earnings to Average Assets, as Adjusted, and Average Equity

 

 

Quarter Ended

 

 

 

2020

 

 

2019

 

 

 

June 30

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

Net core earnings

 

$

10,476

 

 

$

9,123

 

 

$

8,942

 

 

$

9,264

 

 

$

8,002

 

Total average assets

 

$

2,657,609

 

 

$

2,325,618

 

 

$

2,341,766

 

 

$

2,328,603

 

 

$

2,314,628

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan average balance

 

 

(163,184

)

 

 

 

 

 

 

 

 

 

 

 

 

Excess fed funds sold due to PPP-related borrowings

 

 

(84,066

)

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets, adjusted

 

$

2,410,359

 

 

$

2,325,618

 

 

$

2,341,766

 

 

$

2,328,603

 

 

$

2,314,628

 

Net core earnings to average assets, as adjusted (annualized)

 

 

1.75

 

 

 

1.56

 

 

 

1.51

 

 

 

1.58

 

 

 

1.39

 

Total average equity

 

$

258,225

 

 

$

251,159

 

 

$

260,160

 

 

$

254,788

 

 

$

243,113

 

Net core earnings to average equity (annualized)

 

 

16.32

 

 

 

14.45

 

 

 

13.64

 

 

 

14.43

 

 

 

13.20

 

                                         

Guaranty Bancshares, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In thousands, except share and per share data)

Total Interest-Earning Assets and Borrowings, net of PPP Effects

 

 

For the Three Months Ended June 30, 2020

 

 

For the Six Months Ended June 30, 2020

 

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance