Guaranty Bancshares, Inc. Reports First Quarter 2025 Financial Results

ADDISON, Texas--(BUSINESS WIRE)--April 21, 2025-- 

Guaranty Bancshares, Inc. (NYSE: GNTY) (the "Company," "we," "us," or "our"), the parent company of Guaranty Bank & Trust, N.A. (the "Bank"), today reported financial results for the fiscal quarter ended March 31, 2025. The Company's net income available to common shareholders was $8.6 million, or $0.76 per basic share, for the quarter ended March 31, 2025, compared to $10.0 million, or $0.88 per basic share, for the quarter ended December 31, 2024 and $6.7 million, or $0.58 per basic share, for the quarter ended March 31, 2024. Return on average assets and average equity for the first quarter of 2025 were 1.13% and 10.83%, respectively, compared to 1.27% and 12.68%, respectively, for the fourth quarter of 2024 and 0.85% and 8.93%, respectively, for the first quarter of 2024. The decrease in earnings during the first quarter of 2025 compared to the fourth quarter of 2024 was primarily due to higher noninterest expense and lower noninterest income. The increase in earnings in the first quarter of 2025 compared to the first quarter of 2024 was primarily due to an increase in net interest income in the current quarter compared to the prior year quarter.

"We had nice earnings and net interest margin results to begin 2025. Earnings increased $2.0 million from the first quarter of 2024, while net interest margin (on a fully taxable equivalent basis) continued to improve, increasing from 3.16% in the prior year first quarter to 3.70% in the first quarter of 2025. Our core deposits are stable and grew slightly during the period. Asset quality remains strong, as nonperforming assets to total assets is only 0.15% at the end of the quarter. Both liquidity and capital remain at high levels. We continued to improve shareholder value through repurchases of Company stock during the quarter and we increased our quarterly dividend from $0.24 in the prior quarter to $0.25 in the current quarter. There is certainly volatility in the markets right now, but so far we're not seeing any material negative impacts on our projections and modeling of results for the year for our Company," said Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY HIGHLIGHTS

   -- Good Earnings and Improving NIM. Earnings were good in the first quarter, 
      driven primarily from higher net interest margin. Net interest margin, on 
      a fully taxable equivalent basis, has continued to improve from 3.16% in 
      the first quarter of 2024 to 3.54% in the fourth quarter of 2024 and 
      3.70% in the first quarter of 2025. The improvements have resulted 
      primarily from a decrease in deposit costs, while earning assets have 
      continued to reprice upward. 
 
   -- Strong Asset Quality. During the quarter, we resolved and sold the $1.2 
      million of remaining other real estate owned ("ORE") that was on our 
      balance sheet at year-end 2024, with a minimal loss on sale of $184,000. 
      Nonperforming assets as a percentage of total assets were 0.15% at March 
      31, 2025, compared to 0.16% at December 31, 2024 and 0.68% at March 31, 
      2024. Net charge-offs (annualized) to average loans were 0.02% for the 
      quarter ended March 31, 2025, compared to 0.00% for the quarter ended 
      December 31, 2024, and 0.02% for the quarter ended March 31, 2024. We 
      continue to maintain a granular loan portfolio. As of March 31, 2025, we 
      had 10,951 total active loans with an average loan balance of $193,135. 
      In our commercial real estate ("CRE") portfolio, we had 995 active loans 
      with an average balance of $923,282 and our 1-4 family real estate 
      portfolio had 2,789 loans with an average balance of $181,126. There was 
      a reversal of the provision for credit losses of $300,000 during the 
      first quarter due to the decreases in our outstanding loan balances. With 
      the current market and economic uncertainties, there were minimal changes 
      to our qualitative factors during the first quarter, which continue to 
      remain at elevated levels. Once there is more economic clarity and 
      stability, we anticipate reductions to our qualitative factors and 
      potential for additional reverse provisions. 
 
   -- Granular and Consistent Core Deposit Base. As of March 31, 2025, we have 
      91,105 total deposit accounts with an average account balance of $29,684. 
      We have a historically reliable core deposit base, with strong and 
      trusted banking relationships. Total deposits increased by $12.2 million 
      during the first quarter. DDA balances increased $11.5 million, and 
      savings and MMDA balances increased $19.6 million, while time deposits 
      decreased $18.9 million. Excluding public funds and bank-owned accounts, 
      our uninsured deposits as of March 31, 2025 were 26.7% of total deposits. 
      Interest rates paid on deposits during the quarter continued to decrease, 
      primarily due to repricing of certificates of deposit.. Our average cost 
      of interest-bearing deposits decreased 24 basis points during the quarter 
      from 3.07% in the prior quarter to 2.83% in the current quarter. Our 
      average cost of total deposits for the first quarter of 2025 decreased 15 
      basis points from 2.11% in the prior quarter to 1.96% . As of March 31, 
      2025, noninterest-bearing deposits represent 31.3% of total deposits. 
   -- Healthy Capital and Liquidity. Our capital and liquidity ratios, as well 
      as contingent liquidity sources, remain very healthy. During the first 
      quarter of 2025, we repurchased 127,537 shares of our common stock, or 
      1.12% of average shares outstanding during the period, at an average 
      price of $40.56 per share. Our liquidity ratio, calculated as cash and 
      cash equivalents and unpledged investments divided by total liabilities, 
      was 19.8% as of March 31, 2025, compared to 10.6% as of March 31, 2024. 
      Our total available contingent liquidity, net of current outstanding 
      borrowings, was $1.3 billion, consisting of FHLB, FRB and correspondent 
      bank fed funds and revolving lines of credit. Finally, our total equity 
      to average quarterly assets as of March 31, 2025 was 10.5%. If we had to 
      recognize our entire unrealized losses on both AFS and HTM securities, 
      our total equity to average assets ratio would be 9.8% , which we believe 
      represents a strong capital level under regulatory requirements. 

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

RESULTS OF OPERATIONS

Net interest income, before the provision for credit losses, in the first quarter of 2025 and 2024 was $26.7 million and $23.6 million, respectively, an increase of $3.1 million, or 13.3%. The increase in net interest income resulted from a decrease in interest expense of $3.6 million, or 21.0%, compared to the prior year quarter, which was partially offset by a decrease in interest income of $469,000, or 1.2%, from the same quarter in the prior year. The decreases in both interest income and expense resulted primarily from a 100 basis point interest rate reduction by the Federal Reserve in late 2024 and from lower outstanding loan balances in the current quarter. We also had $1.9 million in interest expense on FHLB advances during the first quarter of 2024, which we did not have in the current quarter. Our noninterest-bearing deposits to total deposits were 31.3% and 31.5% as of March 31, 2025 and 2024, respectively.

Net interest margin, on a fully taxable equivalent ("FTE") basis, for the first quarter of 2025 and 2024 was 3.70% and 3.16%, respectively. Net interest margin, on an FTE basis, increased 54 basis points due to a 10 basis point increase in interest-earning asset yield and further improved by a 58 basis point decrease in the cost of interest-bearing liabilities during the first quarter of 2025. The increase in interest-earning asset yields was due primarily to an increase in yield on the loan portfolio from 6.21% to 6.38%, or 17 basis points, along with 65 and five basis point increases in the yields on AFS and HTM securities, respectively. The weighted average yield on $86.7 million in new loans originated in the first quarter was 7.45%. The decrease in the average cost of interest-bearing liabilities was due primarily to a decrease in the cost of interest-bearing deposits from 3.25% to 2.83%, a change of 42 basis points, in the first quarter of 2025 compared to the same period in 2024, as well no interest expense for FHLB advances in the current quarter, compared to $1.9 million in interest expense at a rate of 5.45% in the prior year quarter.

Net interest income, before the provision for credit losses, increased $505,000, or 1.9%, from $26.2 million in the fourth quarter of 2024 to $26.7 million in the first quarter of 2025. The increase in net interest income resulted primarily from a decrease in interest expense of $1.5 million, or 9.9%, which was partially offset by a $979,000, or 2.4%, decrease in interest income. The decrease in interest income was due to a four basis point decrease in average yield and a $7.6 million decrease in the average balance of loans between periods. The decrease in interest expense was due to repricing of certificates of deposit.

Net interest margin, on an FTE basis, increased from 3.54% for the fourth quarter of 2024 to 3.70% for the first quarter of 2025, an increase of 16 basis points. The increase in net interest margin, on an FTE basis, was primarily due to a $12.7 million, or 0.4%, decrease in total interest-earning assets and the $505,000, or 1.9%, increase in net interest income between periods.

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April 21, 2025 07:00 ET (11:00 GMT)