• Total Assets: Increased by $19 million during Q4 2024.
• Securities Portfolio: Increased by $56 million in Q4 2024.
• Net Loans: Decreased by $5 million in Q4 2024.
• Total Deposits: Increased by $23 million in Q4 2024; up $59 million for the year.
• Net Income: $10 million for Q4 2024; $31.5 million for the year.
• Earnings Per Share (EPS): $0.88 per basic share in Q4 2024; $2.75 per basic share for the year.
• Return on Average Assets (ROA): 1.2% for Q4 2024.
• Return on Average Equity (ROE): 12.68% for Q4 2024.
• Net Interest Margin: 3.54% in Q4 2024.
• Noninterest Income: Increased by $572,000 in Q4 2024.
• Noninterest Expense: Decreased by $798,000 in Q4 2024.
• Efficiency Ratio: Improved to 62.23% in Q4 2024.
• Nonperforming Assets: 0.16% of total assets at year-end 2024.
• Net Charge-Offs: 0.02% for the year.
• Nonaccrual Loans: $3.7 million as of December 30, 2024.
• Substandard Loans: $2.4 million at year-end 2024.
• Liquidity Ratio: 16.5% at the end of Q4 2024.
• Uninsured Deposits: 26.3% of total deposits at year-end 2024.
• Unrealized Losses on Securities: $52.2 million at year-end 2024.
• Dividends Paid: $0.24 per share in Q4 2024; $0.96 per share for the year.
• Share Repurchases: 211,000 shares or 1.8% of outstanding shares in 2024.
• Total Equity to Average Assets: 10.2% at year-end 2024.

• Warning! GuruFocus has detected 7 Warning Signs with CSLR.

Release Date: January 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Guaranty Bancshares Inc (NYSE:GNTY) reported strong performance metrics, including robust credit metrics, liquidity, capital, and earnings.
• The company plans to utilize its strong capital position to aggressively buy back stock, aiming to enhance shareholder value.
• Net interest margin improved significantly to 3.54% in the fourth quarter, up from 3.3% in the previous quarter.
• Nonperforming assets remain at very low levels, with nonperforming assets to total assets at 0.16% at year-end.
• The company has a strong funding base of core deposits, with total deposits increasing by $23 million during the fourth quarter.

Negative Points

• Total assets decreased by $69 million for the year, primarily due to a smaller loan portfolio.
• Net loans were down $5 million during the fourth quarter, and the company sold an REO property with a book value of $14 million.
• Equity was down slightly in the fourth quarter due to an increase in unrealized losses in the AFS securities portfolio.
• The company experienced a decrease in cash balances of about $17 million during the fourth quarter.
• Unrealized losses on investment securities increased during the fourth quarter, with total net unrealized losses at $52.2 million.

Q & A Highlights

Q: The NIM expansion was really nice to see in the quarter. I wanted to start off on the loan yields. They were actually up quarter-over-quarter. Just wanted to make sure there wasn't any sort of onetime interest benefit in the quarter. And assuming not, how do you think about that loan yield going forward? A: Shalene Jacobson, CFO: We did have a small amount of nonaccrual interest that came back on, but it was less than $500,000, so it wouldn't have been real meaningful to the NIM. If the Fed keeps rates flat, we probably won't move our cost of deposits much. We have about $450 million of variable rate loans that will reprice during 2025, so we expect loan yields to continue to rise.

Q: Looking at the overall NIM, is the expectation that it can continue to expand from the fourth quarter level? A: Tyson Abston, CEO: Yes, we're modeling continued growth in our NIM throughout '25. We're not giving specific guidance, but we see expansion in our NIM in different rate environments, whether rates go up, down, or stay flat.

Q: Do you think we begin to see loans growing in the first quarter of 2025? Or is it going to take some time? A: Tyson Abston, CEO: We anticipate some loan growth, but we're not sure exactly how it will net out during the year. We have the capacity and liquidity to grow the loan book as we see quality opportunities, and we're more optimistic on loan growth in '25 than in the last two years.

Q: How does the loan-to-deposit ratio impact your view on deposit growth in the year ahead with the potential for loan growth to pick up? A: Tyson Abston, CEO: Focusing on deposit growth as a core strategy isn't our focus for '25, but we are always focused on building core deposit relationships. We generally open about 10,000 new checking accounts a year, which is a core driver of franchise value.

Q: Any color for us for the expense growth in 2025? A: Shalene Jacobson, CFO: We're expecting expenses to be up only about 1% or 2% next year. We're targeting a 2.5% expense growth relative to total assets, with some commercial loan officers built into our budget for 2025.

Q: On the M&A theme, what are your updated thoughts around consolidation in Texas? A: Tyson Abston, CEO: We're open to anything that makes sense for our shareholders long term. We're primarily focused on organic growth but are in a position to be acquisitive if the right opportunity comes along.

Q: Is there any reason to think that you would have any sort of provision expense in the near term? A: Shalene Jacobson, CFO: Our ACL model is based on qualitative factors and forward economic estimates. If the economy continues to improve, we may adjust those factors down and reduce our provision unless we grow significantly.

Q: How aggressive would you like to be with the buyback? A: Tyson Abston, CEO: We're willing to be more aggressive with the buyback. We see a disconnect between the intrinsic value of the bank and where we're trading, so we plan to be more aggressive in utilizing our buyback capacity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.