Guaranty Bancshares, Inc. Reports Fourth Quarter and Year-End 2022 Financial Results

ADDISON, Texas--()--Guaranty Bancshares, Inc. (NASDAQ: GNTY) (the "Company"), the parent company of Guaranty Bank & Trust, N.A. (the "Bank"), today reported financial results for the fiscal quarter and year ended December 31, 2022. The Company's net income available to common shareholders was $8.0 million, or $0.67 per basic share, for the quarter ended December 31, 2022, compared to $10.9 million, or $0.92 per basic share, for the quarter ended September 30, 2022 and $9.2 million, or $0.76 per basic share, for the quarter ended December 31, 2021. Return on average assets and average equity for the fourth quarter of 2022 were 0.95% and 10.88%, respectively, compared to 1.30% and 14.87%, respectively, for the third quarter of 2022 and 1.20% and 12.06%, respectively, for the fourth quarter of 2021. The decrease in earnings during the fourth quarter of 2022, compared to the third quarter of 2022 and the fourth quarter of 2021, was primarily due to a provision for credit losses of $2.8 million, compared to $600,000 during the third quarter of 2022 and no provision during the prior year quarter. Our net core earnings, excluding provisions for credit losses, income taxes and PPP1/PPP2 net income, as well as our core net interest margin, adjusted to exclude the effects of PPP1/PPP2 loans in prior periods, are described further in tables below.

"Despite the economic, inflationary and geopolitical challenges of 2022, we had strong earnings for the year. Fourth quarter net income was $8.0 million, which included a $2.8 million provision for credit losses to adjust for economic forecasts in accordance with our CECL methodology. We don't foresee significant losses at this time but economists are overwhelmingly predicting an economic recession in 2023 so there is strong evidence to support the added provision. We had a very good 2022 with total net income of $40.4 million for the year. Loans increased $112.1 million in the fourth quarter and $470.1 million for the year. Deposits decreased $109.4 million in the fourth quarter but grew $10.3 million for the year. The decline in deposits during the fourth quarter came primarily from our newer, urban growth markets while our legacy East Texas market grew deposits slightly during the quarter, continuing to illustrate the core deposit base we have in that market. Cost of deposits increased in the fourth quarter as the Bank raised interest rates to retain existing depositors and remain competitive. However, new and renewed loans are being booked at higher rates and we'll continue to see the benefits of floating and variable rate loans going forward, although some margin compression is expected in 2023. We maintain effective asset and liability management, low levels of nonperforming assets, good core deposits and a solid earnings stream that should continue to benefit our stakeholders," commented Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY AND ANNUAL HIGHLIGHTS

  • Strong Loan Growth. The fourth quarter of 2022 continued to provide strong organic loan growth, increasing $112.1 million, or 4.9%, during the quarter. Excluding PPP and warehouse lending changes, our loans increased $112.4 million, or 5.0%, during the quarter. The weighted average yield on new loans originated in the fourth quarter was 6.53%. Loans increased $470.1 million, or 24.6%, during the year and excluding PPP and warehouse lending changes increased by $553.2 million, or 30.5%. Our loan growth is a result of internally generated sources and is not from loan purchases from other originators.
  • Reliable Core Deposits. Deposits decreased 3.9% in the fourth quarter of 2022, from $2.8 billion to $2.7 billion, but increased slightly for the year by $10.3 million. Our legacy East Texas market represents approximately 57% of our total deposits and the balance of deposits in that market increased by $3.1 million during the fourth quarter. These deposits have historically been a very stable and reliable source of funding and continue to demonstrate those trends now. We continued to increase interest rates paid on deposits during the quarter and for the year in order to pay competitive rates, however non-interest bearing deposits continue to represent 39.2% of total deposits. Our cost of interest bearing deposits increased 49 basis points during the quarter from 0.59% to 1.08%, representing a beta on interest bearing deposits of approximately 40% for the quarter. Our cost of interest bearing deposits for the year ending December 31, 2022 increased 23 basis points from 0.35% to 0.58%, representing a beta on these deposits of approximately 5% for the year.
  • Robust Net Earnings and Core Earnings. Net earnings are strong as net interest income continues to show upwards trends, quarter-over-quarter. Earnings per share were $0.67 per share, down from $0.92 per share in the prior quarter, primarily due to a $2.8 million provision for credit losses during the quarter. Net core earnings per share, which excludes the provision for credit losses and income tax, was $1.05 in the fourth quarter, compared to $1.16 in the third quarter, demonstrating a solid and consistent core earnings stream. Basic earnings per share was $3.38 for the year ending December 31, 2022 compared to $3.30 per basic share in the prior year.
    • Net earnings for the year ended December 31, 2022 were $40.4 million, up from $39.8 million for the year ended December 31, 2021. Net core earnings were $50.2 million for the year ended December 31, 2022, compared to $39.0 million for 2021.
    • Net core earnings were $12.6 million for the fourth quarter, compared to $13.8 million for the third quarter of 2022, and $10.1 million during the fourth quarter of 2021.
  • Good Asset Quality. Nonperforming assets as a percentage of total assets were 0.32% at December 31, 2022, compared to 0.28% at September 30, 2022 and 0.09% at December 31, 2021. Net charge-offs (annualized) to average loans were 0.01% for the quarter ended December 31, 2022, compared to 0.07% for the quarter ended September 30, 2022, and 0.04% for the quarter ended December 31, 2021. A provision for credit losses of $2.8 million was recorded during the fourth quarter, as we incorporated recession forecasts for 2023 into our CECL model.
  • Asset Liability Management. The Bank is slightly asset-sensitive and should continue to benefit from expected rate increases by the Federal Reserve in the first quarter of 2023 and from future loan repricing. Although we expect loan growth to slow considerably in 2023, we are well-positioned for loan funding with a loan-to-deposit ratio at quarter-end of 88.7%. Our FHLB advances were $290.0 million as of December 31, 2022 and are expected to be paid down in 2023 from balance sheet cash flows. Approximately $127.6 million in securities will mature or pay down during 2023. As of December 31, 2022, $256.0 million, or 10.8% of our loan portfolio is fully floating and $1.3 billion, or 53.1% are adjustable rate term loans, repricing at defined future time periods.

RESULTS OF OPERATIONS

Participation in the PPP1 and PPP2 program, as well as economic and COVID-related provisions for credit losses, has created temporary extraordinary results in the calculation of net earnings and related performance ratios. The following table illustrates net earnings and net core earnings results, which are pre-tax, pre-provision and pre-extraordinary PPP1/PPP2 income, as well as performance ratios for the prior five quarters:

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands, except per share data)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Net earnings attributable to Guaranty Bancshares, Inc.

 

$

8,022

 

 

$

10,903

 

 

$

10,784

 

 

$

10,738

 

 

$

9,159

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

2,800

 

 

 

600

 

 

 

 

 

 

(1,250

)

 

 

 

Income tax provision

 

 

1,764

 

 

 

2,363

 

 

 

2,472

 

 

 

2,235

 

 

 

1,923

 

PPP loan interest and fees

 

 

(1

)

 

 

(57

)

 

 

(436

)

 

 

(783

)

 

 

(958

)

Net core earnings attributable to Guaranty Bancshares, Inc.

 

$

12,585

 

 

$

13,809

 

 

$

12,820

 

 

$

10,940

 

 

$

10,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average assets

 

$

3,346,358

 

 

$

3,337,348

 

 

$

3,209,440

 

 

$

3,146,339

 

 

$

3,021,079

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loans average balance

 

 

(539

)

 

 

(1,159

)

 

 

(8,885

)

 

 

(36,720

)

 

 

(61,062

)

Total average assets, adjusted

 

$

3,345,819

 

 

$

3,336,189

 

 

$

3,200,555

 

 

$

3,109,619

 

 

$

2,960,017

 

Total average equity

 

$

292,471

 

 

$

290,806

 

 

$

291,312

 

 

$

301,579

 

 

$

301,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings to average assets (annualized)

 

 

0.95

%

 

 

1.30

%

 

 

1.35

%

 

 

1.38

%

 

 

1.20

%

Net earnings to average equity (annualized)

 

 

10.88

 

 

 

14.87

 

 

 

14.85

 

 

 

14.44

 

 

 

12.06

 

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

 

 

1.49

 

 

 

1.64

 

 

 

1.61

 

 

 

1.43

 

 

 

1.36

 

Net core earnings to average equity (annualized)

 

 

17.07

 

 

 

18.84

 

 

 

17.65

 

 

 

14.71

 

 

 

13.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,938,973

 

 

 

11,907,233

 

 

 

11,968,227

 

 

 

12,109,074

 

 

 

12,097,100

 

Earnings per common share, basic

 

$

0.67

 

 

$

0.92

 

 

$

0.90

 

 

$

0.89

 

 

$

0.76

 

Net core earnings per common share, basic

 

 

1.05

 

 

 

1.16

 

 

 

1.07

 

 

 

0.90

 

 

 

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Net interest income, before the provision for credit losses, in the fourth quarter of 2022 and 2021 was $28.4 million and $24.0 million, respectively, an increase of $4.3 million, or 18.1%. The increase in net interest income resulted from an increase in interest income of $10.2 million, or 40.0%, which was partially offset by an increase in interest expense of $5.9 million, or 391.5%, compared to the prior year quarter. Interest income on loans increased $7.4 million, or 32.2%, during the current quarter compared to the prior year quarter. In addition, interest income from investment securities and other interest income increased $2.8 million, or 106.1%, from the same quarter in the prior year.

Net interest margin, on a fully taxable equivalent basis, for the fourth quarter of 2022 and 2021 was 3.57% and 3.39%, respectively. Net interest margin increased 18 basis points primarily due to a 93 basis point yield increase on total interest earning assets, which was partially offset by a 117 basis point cost increase on interest bearing liabilities. The increase in yield on interest earning assets resulted in part from average loan yields increasing from 4.71% for the fourth quarter of 2021 to 5.19% for the fourth quarter of 2022, an increase of 48 basis points, due to increases in the federal fund target interest rates, and an increase in yields of available for sale securities of 114 basis points from 1.75% in the fourth quarter of 2021 to 2.89% in the same period in 2022. Additionally, we reinvested a large amount of interest bearing deposits held at other banks, which earned a yield of 0.10% in the prior year quarter, into higher yielding investment securities and loans. The increase in the cost of interest bearing liabilities was due primarily to an increase in the cost of interest-bearing deposits from 0.30% to 1.08%, a change of 78 basis points, in the fourth quarter of 2022 compared to the same period in 2021, as well as increased rates on FHLB advances, which increased from 0.88% to 3.97%, an increase of 309 basis points, quarter over quarter.

Net interest income, before the provision for credit losses, increased $61,000, or 0.2%, from $28.3 million in the third quarter of 2022 to $28.4 million in the fourth quarter of 2022. The increase in net interest income resulted primarily from an increase in loan interest income of $2.7 million, or 10.0%, from the prior quarter. Average yield increased from 4.97% in the third quarter to 5.19% in the fourth quarter. Those increases were partially offset by an increase in interest expense on interest-bearing deposits of $2.0 million, or 80.6% and FHLB advances of $1.2 million, or 98.8%, from the third to fourth quarter of 2022.

Net interest margin, on a taxable equivalent basis, decreased from 3.59% for the third quarter of 2022 to 3.57% for the fourth quarter of 2022, a decrease of two basis points. The decrease in net interest margin was primarily due to an increase in the cost of interest-bearing deposits from 0.59% in the third quarter to 1.08% in the fourth quarter of 2022, a change of 49 basis points, while loan yield only increased from 4.97% for the third quarter of 2022 to 5.19% for the fourth quarter of 2022, a change of 22 basis points.

The Bank’s participation in the PPP program created temporary extraordinary results in the calculation of net interest margin. To illustrate the impact of the PPP program on net interest margin, the table below excludes PPP1 and PPP2 loans and their associated fees and costs for the quarter and year ended December 31, 2022:

 

 

Quarter Ended

December 31, 2022

 

 

For the Year Ended
December 31, 2022

 

(dollars in thousands)

 

Average

Outstanding

Balance

 

 

Interest

Earned

 

 

Average

Yield

 

 

Average

Outstanding

Balance

 

 

Interest

Earned

 

 

Average

Yield

 

Total loans

 

$

2,305,688

 

 

$

30,189

 

 

 

5.19

%

 

$

2,126,810

 

 

$

104,503

 

 

 

4.91

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP1 loans average balance and net fees(1)

 

 

(140

)

 

 

 

 

 

 

 

 

(317

)

 

 

(6

)

 

 

1.89

 

PPP2 loans average balance and net fees(2)

 

 

(399

)

 

 

(1

)

 

 

0.99

 

 

 

(11,503

)

 

 

(1,271

)

 

 

11.05

 

Total PPP loans(3)

 

$

(539

)

 

$

(1

)

 

 

0.74

%

 

$

(11,820

)

 

$

(1,277

)

 

 

10.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, excluding PPP

 

$

2,305,149

 

 

$

30,188

 

 

 

5.20

%

 

$

2,114,990

 

 

$

103,226

 

 

 

4.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

 

 

3,157,181

 

 

 

35,720

 

 

 

4.49

 

 

 

3,073,187

 

 

 

123,209

 

 

 

4.01

 

Total interest-earning assets, net of PPP effects

 

$

3,156,642

 

 

$

35,719

 

 

 

4.49

%

 

$

3,061,367

 

 

$

121,932

 

 

 

3.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

28,358

 

 

 

 

 

 

 

 

$

107,829

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

 

3.56

%

 

 

 

 

 

 

 

 

3.51

%

Net interest margin, FTE(5)

 

 

 

 

 

 

 

 

3.57

 

 

 

 

 

 

 

 

 

3.54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income, net of PPP effects

 

 

 

 

 

28,357

 

 

 

 

 

 

 

 

 

106,552

 

 

 

 

Net interest margin, net of PPP effects†(6)

 

 

 

 

 

 

 

 

3.56

 

 

 

 

 

 

 

 

 

3.48

 

Net interest margin, FTE, net of PPP effects†(7)

 

 

 

 

 

 

 

 

3.57

 

 

 

 

 

 

 

 

 

3.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio(8)

 

 

 

 

 

 

 

 

62.42

 

 

 

 

 

 

 

 

 

60.85

 

Efficiency ratio, net of PPP effects†(9)

 

 

 

 

 

 

 

 

62.42

 

 

 

 

 

 

 

 

 

61.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(1) Interest earned on PPP1 loans consists of interest income of $3,000, and net origination fees recognized in earnings of $3,000 for the year ended December 31, 2022. No interest income or net origination fees were recognized for the quarter ended December 31, 2022.

 

(2) Interest earned on PPP2 loans consists of interest income of $1,000 and $112,000, and net origination fees recognized in earnings of $0 and $1.2 million for the quarter and year ended December 31, 2022.

 

(3) Interest earned consists of interest income of $1,000 and $115,000, and net origination fees recognized in earnings of $0 and $1.2 million for the quarter and year ended December 31, 2022.

 

(4) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized. Taxes are not a part of this calculation.

 

(5) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.

 

(6) Net interest margin is equal to net interest income, net of PPP effects, divided by average interest-earning assets, excluding average PPP loans, annualized. Taxes are not a part of this calculation.

 

(7) Net interest margin on a taxable equivalent basis is equal to net interest income, net of PPP effects, adjusted for nontaxable income divided by average interest-earning assets, excluding average PPP loans, annualized, using a marginal tax rate of 21%.

 

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

 

(9) The efficiency ratio, net of PPP effects, was calculated by dividing total noninterest expense, net of PPP-related deferred costs, by net interest income, net of PPP effects, plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.

 

During the fourth quarter of 2022, we recorded a $2.8 million provision for credit losses. The provision was recorded primarily due to incorporating economic forecasts for a recession into our CECL model, as well as continued organic loan growth during the quarter. During the first quarter of 2022, we fully unwound the COVID-specific qualitative factor that we implemented at the onset of the pandemic in early 2020 and adjusted our standard qualitative factors in the second quarter of 2022 to capture macro-economic conditions that we believed were more similar to the environment prior to the COVID-19 pandemic (i.e. near the end of a long up-cycle with a moderate downturn expected). Minimal updates were made to our qualitative factors, including forecasted conditions, during the third quarter of 2022. However, in the fourth quarter of 2022, consensus among economists, as typified by a Wall Street Journal survey, indicated that an economic recession is likely in 2023. Using this information, along with other economic indicators (such as the inverted yield curve), we adjusted certain qualitative factors to account for the forecasted information. As of December 31, 2022, our allowance for credit losses as a percentage of total loans was 1.34%, up from 1.29% in the prior quarter.

Noninterest income decreased $916,000, or 15.2%, in the fourth quarter of 2022 to $5.1 million, compared to $6.0 million for the fourth quarter of 2021. The decrease from the same quarter in 2021 was due primarily to a decrease in the gain on sale of loans of $817,000, or 72.5%, along with a $52,000, or 39.1%, decrease in mortgage fee income, a $127,000, or 77.4%, decrease in warehouse lending fees, and a decrease in other noninterest income of $136,000, or 16.0%. The decreases were partially offset by an increase in gain on sale of securities of $172,000, or 100%, and an increase in merchant and debit card fees of $42,000, or 2.5%, compared to the same quarter in the prior year. The gain on sale of securities resulted from the sale of five available for sale securities during favorable market conditions for liquidity purposes and the increase in service charges and merchant and debit card fees were primarily volume driven. The decrease in other noninterest income was due to a $41,000 decrease in the value of the SBA servicing asset, $17,000 less in rental income and $14,000 less in SBA servicing revenue in the current quarter compared to the prior year quarter. There was also a gain on sale of assets of $36,000 in the prior year quarter that was not present during the fourth quarter of 2022.

Noninterest expense increased $1.9 million, or 10.1%, in the fourth quarter of 2022 to $20.9 million, compared to the fourth quarter of 2021. The increase in noninterest expense in the fourth quarter of 2022 was driven primarily by a $1.2 million, or 10.4%, increase in employee compensation and benefits due to increased salaries, higher insurance expense accruals due to increased claims experience and increased bonus accruals due to higher net income. Software and technology expense increased $358,000, or 30.7%, compared to the fourth quarter of 2021, due to additional technology investments and an increase in the cost of our core processing software resulting from a new asset tier threshold and legal and professional fees increased $175,000, or 29.0%, resulting from an increase in audit and exam fees of $117,000 and legal fees of $63,000. The increase was partially offset by a $61,000, or 27.5%, decrease in amortization expense from the prior year quarter.

Noninterest income in the fourth quarter of 2022 decreased by $681,000, or 11.7%, from $5.8 million in the third quarter of 2022. The decrease is due primarily due to lower other noninterest income of $750,000, or 51.2%, resulting from a gain on sale of an airplane asset for $894,000 during the prior quarter that was not present during the current quarter. The decrease was partially offset by the gain on sale of securities of $172,000, or 100%, and an increase in fiduciary and custodial income of $66,000, or 11.5%, from the linked quarter.

Noninterest expense increased $660,000, or 3.3%, in the fourth quarter of 2022, from $20.2 million for the quarter ended September 30, 2022. The increase is primarily due to an increase in employee compensation and benefits of $513,000, or 4.3%, due to higher salaries and insurance expense accruals. Annual employee raises are given in October of each year. Other increases included legal and professional fees of $276,000, or 54.9%, due to higher recruiter and third party consulting fees, software and technology expenses of $116,000, or 8.2% and advertising and promotions of $110,000, or 29.1%, from the prior quarter. The increases were partially offset by a decrease in other noninterest expense of $419,000, or 24.1%, that resulted primarily from a $487,000 write-down of an SBA receivable balance during the third quarter of 2022, which was not present in the current quarter.

The Company’s efficiency ratio in the fourth quarter of 2022 was 62.42%, compared to 63.13% in the prior year quarter and 59.35% in the third quarter of 2022. Adjusted to remove the effects of PPP-related transactions, the Company’s efficiency ratio in the fourth quarter of 2022 was 62.42%, compared to 65.21% in the prior year quarter and 59.45% in the third quarter of 2022.

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

FINANCIAL CONDITION

Consolidated assets for the Company totaled $3.35 billion at December 31, 2022, compared to $3.39 billion at September 30, 2022 and $3.09 billion at December 31, 2021.

Gross loans increased $112.1 million, or 4.9%, to $2.38 billion at December 31, 2022, compared to loans of $2.27 billion at September 30, 2022. The increase in gross loans from the third quarter of 2022 to the fourth quarter of 2022 is due to increased loan originations and advances. Excluding PPP and warehouse lending loans, gross loans increased $112.4 million, or 5.0%, from September 30, 2022.

Gross loans increased $470.1 million, or 24.6%, from $1.91 billion at December 31, 2021. The increase in gross loans during the fourth quarter of 2022 compared to the fourth quarter of 2021 resulted from organic loan growth and was partially offset by a $50.1 million reduction in PPP loan balances during the period. Excluding PPP and warehouse lending loans, gross loans increased $553.2 million, or 30.5%, from December 31, 2021.

Total deposits decreased by $109.4 million, or 3.9%, to $2.68 billion at December 31, 2022, compared to $2.79 billion at September 30, 2022, and increased $10.3 million, or 0.4%, from $2.67 billion at December 31, 2021. The decrease in deposits during the current quarter resulted primarily from a decrease in non-interest bearing deposits of $89.1 million and a decrease in interest bearing deposits of $20.3 million. The increase in deposits during the year resulted from an increase in non-interest bearing deposits of $37.6 million, offset by a decrease in interest bearing deposits of $27.3 million.

Nonperforming assets as a percentage of total loans were 0.46% at December 31, 2022, compared to 0.41% at September 30, 2022 and 0.15% at December 31, 2021. The Bank's nonperforming assets consist primarily of nonaccrual loans. Four loans were added to nonaccrual status in the second quarter of 2022 and are Small Business Administration (SBA) 7(a), partially guaranteed (75%) loans, acquired in the June 2018 acquisition of Westbound Bank, with combined book balances of $6.7 million as of December 31, 2022. These loans, collateralized by two hotels, were identified as problem assets prior to COVID-19 but obtained government stimulus and other relief which allowed the two related borrowers to remain current through early 2022. Management continues to work toward a satisfactory resolution for these four loans, however, in the event of foreclosure, a significant loss is not expected due to estimated current collateral values and the SBA guarantees. Another previously classified loan was downgraded to non-accrual status during the fourth quarter with a principal balance of $1.4 million. The loan is considered well-secured and has a low loan-to-value ratio with guarantor support. Management expects this loan will be paid in full in early 2023. No losses are anticipated.

Total equity was $295.6 million as of December 31, 2022, compared to $288.7 million at September 30, 2022 and $302.2 million at December 31, 2021. The increase from the previous quarter resulted primarily from net income of $8.0 million and an improvement in accumulated other comprehensive loss of $713,000 due to fluctuations in the fair value of available for sale securities during the period offset by the payment of dividends of $2.6 million during the fourth quarter of 2022. Although the unrealized losses in accumulated other comprehensive income during the quarter do not impact regulatory capital ratios, they did result in a decrease in the tangible common equity ratio from 8.77% as of December 31, 2021 to 7.87% as of December 31, 2022.

In September 2021, we announced the formation of a partnership with CaliberCos, Inc., a vertically integrated alternative asset manager and fund sponsor, in an effort to drive investments that will revitalize communities across Texas through real estate developments. We recorded this investment by our Bank subsidiary and the noncontrolling interest during the first quarter of 2022. Further details of this partnership can be found in our Form 8-K filed with the Securities and Exchange Commission on September 7, 2021.

Nonperforming assets as a percentage of total assets were 0.32% at December 31, 2022, compared to 0.28% at September 30, 2022, and 0.09% at December 31, 2021.

 

 

As of

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

52,390

 

 

$

48,010

 

 

$

56,545

 

 

$

58,788

 

 

$

42,979

 

Federal funds sold

 

 

47,275

 

 

 

71,875

 

 

 

2,425

 

 

 

139,300

 

 

 

431,975

 

Interest-bearing deposits

 

 

6,802

 

 

 

4,284

 

 

 

12,053

 

 

 

24,003

 

 

 

24,651

 

Total cash and cash equivalents

 

 

106,467

 

 

 

124,169

 

 

 

71,023

 

 

 

222,091

 

 

 

499,605

 

Securities available for sale

 

 

188,927

 

 

 

197,944

 

 

 

196,095

 

 

 

306,704

 

 

 

342,206

 

Securities held to maturity

 

 

509,008

 

 

 

633,386

 

 

 

713,390

 

 

 

494,289

 

 

 

184,263

 

Loans held for sale

 

 

3,156

 

 

 

2,749

 

 

 

2,770

 

 

 

1,166

 

 

 

4,129

 

Loans, net

 

 

2,344,245

 

 

 

2,234,782

 

 

 

2,107,658

 

 

 

1,983,449

 

 

 

1,876,076

 

Accrued interest receivable

 

 

11,555

 

 

 

10,111

 

 

 

10,144

 

 

 

8,961

 

 

 

8,901

 

Premises and equipment, net

 

 

54,291

 

 

 

54,212

 

 

 

54,437

 

 

 

54,316

 

 

 

53,470

 

Other real estate owned

 

 

38

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Cash surrender value of life insurance

 

 

38,404

 

 

 

38,194

 

 

 

37,979

 

 

 

37,352

 

 

 

37,141

 

Core deposit intangible, net

 

 

1,859

 

 

 

1,973

 

 

 

2,086

 

 

 

2,199

 

 

 

2,313

 

Goodwill

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

 

 

32,160

 

Other assets

 

 

61,385

 

 

 

60,581

 

 

 

53,171

 

 

 

47,142

 

 

 

45,806

 

Total assets

 

$

3,351,495

 

 

$

3,390,266

 

 

$

3,280,913

 

 

$

3,189,829

 

 

$

3,086,070

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

1,052,144

 

 

$

1,141,184

 

 

$

1,105,756

 

 

$

1,065,789

 

 

$

1,014,518

 

Interest-bearing

 

 

1,629,010

 

 

 

1,649,326

 

 

 

1,673,865

 

 

 

1,731,621

 

 

 

1,656,309

 

Total deposits

 

 

2,681,154

 

 

 

2,790,510

 

 

 

2,779,621

 

 

 

2,797,410

 

 

 

2,670,827

 

Securities sold under agreements to repurchase

 

 

7,221

 

 

 

7,592

 

 

 

7,871

 

 

 

11,090

 

 

 

14,151

 

Accrued interest and other liabilities

 

 

28,409

 

 

 

27,384

 

 

 

28,033

 

 

 

27,803

 

 

 

26,568

 

Line of credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,000

 

Federal Home Loan Bank advances

 

 

290,000

 

 

 

225,000

 

 

 

131,500

 

 

 

7,500

 

 

 

47,500

 

Subordinated debentures

 

 

49,153

 

 

 

51,119

 

 

 

51,053

 

 

 

54,146

 

 

 

19,810

 

Total liabilities

 

 

3,055,937

 

 

 

3,101,605

 

 

 

2,998,078

 

 

 

2,897,949

 

 

 

2,783,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to Guaranty Bancshares, Inc.

 

 

294,984

 

 

 

288,084

 

 

 

282,255

 

 

 

291,282

 

 

 

302,214

 

Noncontrolling interest

 

 

574

 

 

 

577

 

 

 

580

 

 

 

598

 

 

 

 

Total equity

 

 

295,558

 

 

 

288,661

 

 

 

282,835

 

 

 

291,880

 

 

 

302,214

 

Total liabilities and equity

 

$

3,351,495

 

 

$

3,390,266

 

 

$

3,280,913

 

 

$

3,189,829

 

 

$

3,086,070

 

 

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

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands, except per share data)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

STATEMENTS OF EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

35,720

 

 

$

32,476

 

 

$

29,120

 

 

$

25,893

 

 

$

25,518

 

Interest expense

 

 

7,362

 

 

 

4,179

 

 

 

2,269

 

 

 

1,570

 

 

 

1,498

 

Net interest income

 

 

28,358

 

 

 

28,297

 

 

 

26,851

 

 

 

24,323

 

 

 

24,020

 

Provision for credit losses

 

 

2,800

 

 

 

600

 

 

 

 

 

 

(1,250

)

 

 

 

Net interest income after provision for credit losses

 

 

25,558

 

 

 

27,697

 

 

 

26,851

 

 

 

25,573

 

 

 

24,020

 

Noninterest income

 

 

5,122

 

 

 

5,803

 

 

 

6,081

 

 

 

6,479

 

 

 

6,038

 

Noninterest expense

 

 

20,897

 

 

 

20,237

 

 

 

19,694

 

 

 

19,079

 

 

 

18,976

 

Income before income taxes

 

 

9,783

 

 

 

13,263

 

 

 

13,238

 

 

 

12,973

 

 

 

11,082

 

Income tax provision

 

 

1,764

 

 

 

2,363

 

 

 

2,472

 

 

 

2,235

 

 

 

1,923

 

Net earnings

 

$

8,019

 

 

$

10,900

 

 

$

10,766

 

 

$

10,738

 

 

$

9,159

 

Net loss attributable to noncontrolling interest

 

 

3

 

 

 

3

 

 

 

18

 

 

 

 

 

 

 

Net earnings attributable to Guaranty Bancshares, Inc.

 

$

8,022

 

 

$

10,903

 

 

$

10,784

 

 

$

10,738

 

 

$

9,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share, basic

 

$

0.67

 

 

$

0.92

 

 

$

0.90

 

 

$

0.89

 

 

$

0.76

 

Earnings per common share, diluted

 

 

0.67

 

 

 

0.91

 

 

 

0.89

 

 

 

0.88

 

 

 

0.75

 

Cash dividends per common share

 

 

0.22

 

 

 

0.22

 

 

 

0.22

 

 

 

0.22

 

 

 

0.20

 

Book value per common share - end of quarter

 

 

24.70

 

 

 

24.18

 

 

 

23.69

 

 

 

24.14

 

 

 

24.93

 

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

 

 

21.85

 

 

 

21.31

 

 

 

20.82

 

 

 

21.29

 

 

 

22.09

 

Common shares outstanding - end of quarter(4)

 

 

11,941,672

 

 

 

11,915,372

 

 

 

11,912,249

 

 

 

12,066,480

 

 

 

12,122,717

 

Weighted-average common shares outstanding, basic

 

 

11,938,973

 

 

 

11,907,233

 

 

 

11,968,227

 

 

 

12,109,074

 

 

 

12,097,100

 

Weighted-average common shares outstanding, diluted

 

 

12,048,475

 

 

 

12,032,391

 

 

 

12,098,983

 

 

 

12,260,945

 

 

 

12,263,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

0.95

%

 

 

1.30

%

 

 

1.35

%

 

 

1.38

%

 

 

1.20

%

Return on average equity (annualized)

 

 

10.88

 

 

 

14.87

 

 

 

14.85

 

 

 

14.44

 

 

 

12.06

 

Net interest margin, fully taxable equivalent (annualized)(2)

 

 

3.57

 

 

 

3.59

 

 

 

3.61

 

 

 

3.37

 

 

 

3.39

 

Efficiency ratio(3)

 

 

62.42

 

 

 

59.35

 

 

 

59.80

 

 

 

61.94

 

 

 

63.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

(dollars in thousands, except per share data)

 

2022

 

 

2021

 

 

 

 

 

 

 

INCOME STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

123,209

 

 

$

102,550

 

 

 

 

 

 

 

Interest expense

 

 

15,380

 

 

 

6,992

 

 

 

 

 

 

 

Net interest income

 

 

107,829

 

 

 

95,558

 

 

 

 

 

 

 

Provision for loan losses

 

 

2,150

 

 

 

(1,700

)

 

 

 

 

 

 

Net interest income after provision for loan losses

 

 

105,679

 

 

 

97,258

 

 

 

 

 

 

 

Noninterest income

 

 

23,485

 

 

 

24,576

 

 

 

 

 

 

 

Noninterest expense

 

 

79,907

 

 

 

73,278

 

 

 

 

 

 

 

Income before income taxes

 

 

49,257

 

 

 

48,556

 

 

 

 

 

 

 

Income tax provision

 

 

8,834

 

 

 

8,750

 

 

 

 

 

 

 

Net earnings

 

$

40,423

 

 

$

39,806

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

24

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to Guaranty Bancshares, Inc.

 

$

40,447

 

 

$

39,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share, basic

 

$

3.38

 

 

$

3.30

 

 

 

 

 

 

 

Earnings per common share, diluted

 

 

3.34

 

 

 

3.26

 

 

 

 

 

 

 

Cash dividends per common share

 

 

0.88

 

 

 

0.80

 

 

 

 

 

 

 

Book value per common share - end of period

 

 

24.70

 

 

 

24.93

 

 

 

 

 

 

 

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

 

 

21.85

 

 

 

22.09

 

 

 

 

 

 

 

Common shares outstanding - end of period(4)

 

 

11,941,672

 

 

 

12,122,717

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,980,209

 

 

 

12,065,182

 

 

 

 

 

 

 

Weighted-average common shares outstanding, diluted

 

 

12,092,847

 

 

 

12,211,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.24

%

 

 

1.36

%

 

 

 

 

 

 

Return on average equity

 

 

13.76

 

 

 

13.72

 

 

 

 

 

 

 

Net interest margin, fully taxable equivalent(2)

 

 

3.54

 

 

 

3.51

 

 

 

 

 

 

 

Efficiency ratio(3)

 

 

60.85

 

 

 

61.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(2) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.

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

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

 

 

As of

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

LOAN PORTFOLIO COMPOSITION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

303,373

 

 

$

278,091

 

 

$

268,812

 

 

$

270,074

 

 

$

280,569

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and development

 

 

377,135

 

 

 

391,564

 

 

 

350,024

 

 

 

318,035

 

 

 

307,797

 

Commercial real estate

 

 

887,587

 

 

 

821,941

 

 

 

749,603

 

 

 

674,558

 

 

 

622,842

 

Farmland

 

 

185,817

 

 

 

179,402

 

 

 

166,309

 

 

 

186,982

 

 

 

145,501

 

1-4 family residential

 

 

493,061

 

 

 

467,983

 

 

 

450,929

 

 

 

430,755

 

 

 

410,673

 

Multi-family residential

 

 

45,147

 

 

 

43,025

 

 

 

55,985

 

 

 

42,021

 

 

 

30,971

 

Consumer

 

 

61,394

 

 

 

58,835

 

 

 

56,433

 

 

 

52,670

 

 

 

50,965

 

Agricultural

 

 

13,686

 

 

 

13,917

 

 

 

14,502

 

 

 

14,403

 

 

 

14,639

 

Warehouse lending

 

 

10,694

 

 

 

10,938

 

 

 

25,344

 

 

 

24,260

 

 

 

43,720

 

Overdrafts

 

 

282

 

 

 

369

 

 

 

435

 

 

 

303

 

 

 

363

 

Total loans(1)(2)

 

$

2,378,176

 

 

$

2,266,065

 

 

$

2,138,376

 

 

$

2,014,061

 

 

$

1,908,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

ALLOWANCE FOR CREDIT LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

29,235

 

 

$

28,997

 

 

$

29,096

 

 

$

30,433

 

 

$

30,621

 

Loans charged-off

 

 

(103

)

 

 

(418

)

 

 

(125

)

 

 

(203

)

 

 

(239

)

Recoveries

 

 

42

 

 

 

56

 

 

 

26

 

 

 

116

 

 

 

51

 

Provision for credit loss expense

 

 

2,800

 

 

 

600

 

 

 

 

 

 

(1,250

)

 

 

 

Balance at end of period

 

$

31,974

 

 

$

29,235

 

 

$

28,997

 

 

$

29,096

 

 

$

30,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses / period-end loans

 

 

1.34

%

 

 

1.29

%

 

 

1.36

%

 

 

1.44

%

 

 

1.59

%

Allowance for credit losses / nonperforming loans

 

 

294.7

 

 

 

313.3

 

 

 

294.4

 

 

 

1,084.9

 

 

 

1,075.0

 

Net charge-offs / average loans (annualized)

 

 

0.01

 

 

 

0.07

 

 

 

0.02

 

 

 

0.02

 

 

 

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONPERFORMING ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans(3)

 

$

10,848

 

 

$

9,330

 

 

$

9,848

 

 

$

2,682

 

 

$

2,831

 

Other real estate owned

 

 

38

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Repossessed assets owned

 

 

 

 

 

 

 

 

27

 

 

 

7

 

 

 

14

 

Total nonperforming assets

 

$

10,886

 

 

$

9,335

 

 

$

9,875

 

 

$

2,689

 

 

$

2,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets as a percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)(2)

 

 

0.46

%

 

 

0.41

%

 

 

0.46

%

 

 

0.13

%

 

 

0.15

%

Total assets

 

 

0.32

 

 

 

0.28

 

 

 

0.30

 

 

 

0.08

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TDR loans - nonaccrual

 

$

6,728

 

 

$

6,753

 

 

$

6,764

 

 

$

98

 

 

$

103

 

TDR loans - accruing

 

 

642

 

 

 

1,895

 

 

 

2,652

 

 

 

9,418

 

 

 

9,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes outstanding balances of loans held for sale of $3.2 million, $2.7 million, $2.8 million, $1.2 million, and $4.1 million as of December 31, September 30, June 30 and March 31, 2022, and December 31, 2021, respectively.

 

(2) Excludes deferred loan fees of $2.0 million, $2.0 million, $1.7 million, $1.5 million, and $1.5 million as of December 31, September 30, June 30 and March 31, 2022, and December 31, 2021, respectively.

 

(3) TDR loans - nonaccrual are included in nonaccrual loans, which are a component of nonperforming loans.

 

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges

 

$

1,096

 

 

$

1,146

 

 

$

1,070

 

 

$

976

 

 

$

1,085

 

Net realized gain on securities transactions

 

 

172

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain on sale of loans

 

 

310

 

 

 

338

 

 

 

882

 

 

 

905

 

 

 

1,127

 

Fiduciary and custodial income

 

 

642

 

 

 

576

 

 

 

638

 

 

 

642

 

 

 

615

 

Bank-owned life insurance income

 

 

209

 

 

 

215

 

 

 

207

 

 

 

211

 

 

 

207

 

Merchant and debit card fees

 

 

1,711

 

 

 

1,738

 

 

 

2,061

 

 

 

1,611

 

 

 

1,669

 

Loan processing fee income

 

 

150

 

 

 

192

 

 

 

232

 

 

 

187

 

 

 

188

 

Warehouse lending fees

 

 

37

 

 

 

59

 

 

 

79

 

 

 

116

 

 

 

164

 

Mortgage fee income

 

 

81

 

 

 

75

 

 

 

102

 

 

 

131

 

 

 

133

 

Other noninterest income

 

 

714

 

 

 

1,464

 

 

 

810

 

 

 

1,700

 

 

 

850

 

Total noninterest income

 

$

5,122

 

 

$

5,803

 

 

$

6,081

 

 

$

6,479

 

 

$

6,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

$

12,364

 

 

$

11,851

 

 

$

11,730

 

 

$

11,532

 

 

$

11,200

 

Occupancy expenses

 

 

2,770

 

 

 

2,800

 

 

 

2,848

 

 

 

2,711

 

 

 

2,686

 

Legal and professional fees

 

 

779

 

 

 

503

 

 

 

773

 

 

 

770

 

 

 

604

 

Software and technology

 

 

1,525

 

 

 

1,409

 

 

 

1,339

 

 

 

1,209

 

 

 

1,167

 

Amortization

 

 

161

 

 

 

166

 

 

 

178

 

 

 

219

 

 

 

222

 

Director and committee fees

 

 

199

 

 

 

213

 

 

 

219

 

 

 

205

 

 

 

204

 

Advertising and promotions

 

 

488

 

 

 

378

 

 

 

320

 

 

 

407

 

 

 

470

 

ATM and debit card expense

 

 

740

 

 

 

723

 

 

 

674

 

 

 

578

 

 

 

643

 

Telecommunication expense

 

 

193

 

 

 

184

 

 

 

187

 

 

 

186

 

 

 

196

 

FDIC insurance assessment fees

 

 

359

 

 

 

272

 

 

 

237

 

 

 

233

 

 

 

300

 

Other noninterest expense

 

 

1,319

 

 

 

1,738

 

 

 

1,189

 

 

 

1,029

 

 

 

1,284

 

Total noninterest expense

 

$

20,897

 

 

$

20,237

 

 

$

19,694

 

 

$

19,079

 

 

$

18,976

 

 

 

Quarter Ended December 31,

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

2,305,688

 

 

$

30,189

 

 

 

5.19

%

 

$

1,925,046

 

 

$

22,833

 

 

 

4.71

%

Securities available for sale

 

 

202,829

 

 

 

1,478

 

 

 

2.89

 

 

 

307,345

 

 

 

1,358

 

 

 

1.75

 

Securities held to maturity

 

 

574,951

 

 

 

3,222

 

 

 

2.22

 

 

 

178,131

 

 

 

1,087

 

 

 

2.42

 

Nonmarketable equity securities

 

 

24,291

 

 

 

377

 

 

 

6.16

 

 

 

10,044

 

 

 

128

 

 

 

5.06

 

Interest-bearing deposits in other banks

 

 

49,422

 

 

 

454

 

 

 

3.64

 

 

 

423,581

 

 

 

112

 

 

 

0.10

 

Total interest-earning assets

 

 

3,157,181

 

 

 

35,720

 

 

 

4.49

 

 

 

2,844,147

 

 

 

25,518

 

 

 

3.56

 

Allowance for credit losses

 

 

(29,634

)

 

 

 

 

 

 

 

 

(30,552

)

 

 

 

 

 

 

Noninterest-earning assets

 

 

218,811

 

 

 

 

 

 

 

 

 

207,484

 

 

 

 

 

 

 

Total assets

 

$

3,346,358

 

 

 

 

 

 

 

 

$

3,021,079

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,627,442

 

 

$

4,433

 

 

 

1.08

%

 

$

1,622,607

 

 

$

1,207

 

 

 

0.30

%

Advances from FHLB and fed funds purchased

 

 

240,489

 

 

 

2,408

 

 

 

3.97

 

 

 

47,500

 

 

 

105

 

 

 

0.88

 

Line of credit

 

 

 

 

 

 

 

 

 

 

 

4,761

 

 

 

42

 

 

 

3.50

 

Subordinated debt

 

 

49,806

 

 

 

514

 

 

 

4.09

 

 

 

19,810

 

 

 

142

 

 

 

2.84

 

Securities sold under agreements to repurchase

 

 

7,634

 

 

 

7

 

 

 

0.36

 

 

 

11,156

 

 

 

2

 

 

 

0.07

 

Total interest-bearing liabilities

 

 

1,925,371

 

 

 

7,362

 

 

 

1.52

 

 

 

1,705,834

 

 

 

1,498

 

 

 

0.35

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,102,016

 

 

 

 

 

 

 

 

 

988,676

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

26,500

 

 

 

 

 

 

 

 

 

25,171

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,128,516

 

 

 

 

 

 

 

 

 

1,013,847

 

 

 

 

 

 

 

Equity

 

 

292,471

 

 

 

 

 

 

 

 

 

301,398

 

 

 

 

 

 

 

Total liabilities and equity

 

$

3,346,358

 

 

 

 

 

 

 

 

$

3,021,079

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

2.97

%

 

 

 

 

 

 

 

 

3.21

%

Net interest income

 

 

 

 

$

28,358

 

 

 

 

 

 

 

 

$

24,020

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

3.56

%

 

 

 

 

 

 

 

 

3.35

%

Net interest margin, fully taxable equivalent(4)

 

 

 

 

 

 

 

 

3.57

%

 

 

 

 

 

 

 

 

3.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $1.5 million and $2.7 million for the quarter ended December 31, 2022 and 2021, respectively.

 

(2) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

 

(3) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized.

 

(4) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)

 

$

2,126,810

 

 

$

104,503

 

 

 

4.91

%

 

$

1,911,540

 

 

$

92,497

 

 

 

4.84

%

Securities available for sale

 

 

287,764

 

 

 

5,808

 

 

 

2.02

 

 

 

356,232

 

 

 

6,839

 

 

 

1.92

 

Securities held to maturity

 

 

518,213

 

 

 

10,789

 

 

 

2.08

 

 

 

74,270

 

 

 

2,141

 

 

 

2.88

 

Nonmarketable equity securities

 

 

18,791

 

 

 

1,246

 

 

 

6.63

 

 

 

10,043

 

 

 

740

 

 

 

7.37

 

Interest-bearing deposits in other banks

 

 

121,609

 

 

 

863

 

 

 

0.71

 

 

 

399,285

 

 

 

333

 

 

 

0.08

 

Total interest-earning assets

 

 

3,073,187

 

 

 

123,209

 

 

 

4.01

 

 

 

2,751,370

 

 

 

102,550

 

 

 

3.73

 

Allowance for credit losses

 

 

(29,415

)

 

 

 

 

 

 

 

 

(31,888

)

 

 

 

 

 

 

Noninterest-earning assets

 

 

216,812

 

 

 

 

 

 

 

 

 

203,468

 

 

 

 

 

 

 

Total assets

 

$

3,260,584

 

 

 

 

 

 

 

 

$

2,922,950

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,670,287

 

 

$

9,753

 

 

 

0.58

%

 

$

1,601,375

 

 

$

5,651

 

 

 

0.35

%

Advances from FHLB and fed funds purchased

 

 

132,764

 

 

 

3,855

 

 

 

2.90

 

 

 

49,056

 

 

 

413

 

 

 

0.84

 

Line of credit

 

 

 

 

 

34

 

 

 

 

 

 

6,066

 

 

 

216

 

 

 

3.56

 

Subordinated debt

 

 

46,977

 

 

 

1,722

 

 

 

3.67

 

 

 

19,810

 

 

 

700

 

 

 

3.53

 

Securities sold under agreements to repurchase

 

 

8,596

 

 

 

16

 

 

 

0.19

 

 

 

14,812

 

 

 

12

 

 

 

0.08

 

Total interest-bearing liabilities

 

 

1,858,624

 

 

 

15,380

 

 

 

0.83

 

 

 

1,691,119

 

 

 

6,992

 

 

 

0.41

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,082,513

 

 

 

 

 

 

 

 

 

916,562

 

 

 

 

 

 

 

Accrued interest and other liabilities

 

 

25,537

 

 

 

 

 

 

 

 

 

25,218

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,108,050

 

 

 

 

 

 

 

 

 

941,780

 

 

 

 

 

 

 

Equity

 

 

293,910

 

 

 

 

 

 

 

 

 

290,051

 

 

 

 

 

 

 

Total liabilities and equity

 

$

3,260,584

 

 

 

 

 

 

 

 

$

2,922,950

 

 

 

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

 

3.18

%

 

 

 

 

 

 

 

 

3.32

%

Net interest income

 

 

 

 

$

107,829

 

 

 

 

 

 

 

 

$

95,558

 

 

 

 

Net interest margin(3)

 

 

 

 

 

 

 

 

3.51

%

 

 

 

 

 

 

 

 

3.47

%

Net interest margin, fully taxable equivalent(4)

 

 

 

 

 

 

 

 

3.54

%

 

 

 

 

 

 

 

 

3.51

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes average outstanding balances of loans held for sale of $2.4 million and $3.4 million for the years ended December 31, 2022 and 2021, respectively.

 

(2) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

 

(3) Net interest margin is equal to net interest income divided by average interest-earning assets.

 

(4) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, using a marginal tax rate of 21%.

 

NON-GAAP RECONCILING TABLES

Tangible Book Value per Common Share

 

 

 

As of

 

 

 

2022

 

 

2021

 

(dollars in thousands, except per share data)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Equity attributable to Guaranty Bancshares, Inc.

 

$

294,984

 

 

$

288,084

 

 

$

282,255

 

 

$

291,282

 

 

$

302,214

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

Core deposit intangible, net

 

 

(1,859

)

 

 

(1,973

)

 

 

(2,086

)

 

 

(2,199

)

 

 

(2,313

)

Total tangible common equity attributable to Guaranty Bancshares, Inc.

 

$

260,965

 

 

$

253,951

 

 

$

248,009

 

 

$

256,923

 

 

$

267,741

 

Common shares outstanding(1)

 

 

11,941,672

 

 

 

11,915,372

 

 

 

11,912,249

 

 

 

12,066,480

 

 

 

12,122,717

 

Book value per common share

 

$

24.70

 

 

$

24.18

 

 

$

23.69

 

 

$

24.14

 

 

$

24.93

 

Tangible book value per common share(1)

 

 

21.85

 

 

 

21.31

 

 

 

20.82

 

 

 

21.29

 

 

 

22.09

 

 

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

Tangible Common Equity to Tangible Assets

 

 

 

As of

 

 

 

2022

 

 

2021

 

(dollars in thousands, except per share data)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Total assets

 

$

3,351,495

 

 

$

3,390,266

 

 

$

3,280,913

 

 

$

3,189,829

 

 

$

3,086,070

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

 

 

(32,160

)

Core deposit intangible, net

 

 

(1,859

)

 

 

(1,973

)

 

 

(2,086

)

 

 

(2,199

)

 

 

(2,313

)

Total tangible assets

 

$

3,317,476

 

 

$

3,356,133

 

 

$

3,246,667

 

 

$

3,155,470

 

 

$

3,051,597

 

Total tangible common equity attributable to Guaranty Bancshares, Inc.

 

 

260,965

 

 

 

253,951

 

 

 

248,009

 

 

 

256,923

 

 

 

267,741

 

Tangible common equity to tangible assets

 

 

7.87

%

 

 

7.57

%

 

 

7.64

%

 

 

8.14

%

 

 

8.77

%

Net Core Earnings and Net Core Earnings per Common Share

 

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands, except per share data)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Net earnings attributable to Guaranty Bancshares, Inc.

 

$

8,022

 

 

$

10,903

 

 

$

10,784

 

 

$

10,738

 

 

$

9,159

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

 

 

2,800

 

 

 

600

 

 

 

 

 

 

(1,250

)

 

 

 

Income tax provision

 

 

1,764

 

 

 

2,363

 

 

 

2,472

 

 

 

2,235

 

 

 

1,923

 

PPP loans, including fees

 

 

(1

)

 

 

(57

)

 

 

(436

)

 

 

(783

)

 

 

(958

)

Net core earnings attributable to Guaranty Bancshares, Inc.

 

$

12,585

 

 

$

13,809

 

 

$

12,820

 

 

$

10,940

 

 

$

10,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,938,973

 

 

 

11,907,233

 

 

 

11,968,227

 

 

 

12,109,074

 

 

 

12,097,100

 

Earnings per common share, basic

 

$

0.67

 

 

$

0.92

 

 

$

0.90

 

 

$

0.89

 

 

$

0.76

 

Net core earnings per common share, basic

 

 

1.05

 

 

 

1.16

 

 

 

1.07

 

 

 

0.90

 

 

 

0.84

 

 

Year Ended December 31,

 

(dollars in thousands, except per share data)

 

2022

 

 

2021

 

Net earnings attributable to Guaranty Bancshares, Inc.

 

$

40,447

 

 

$

39,806

 

Adjustments:

 

 

 

 

 

 

Reversal of provision for credit losses

 

 

2,150

 

 

 

(1,700

)

Income tax provision

 

 

8,834

 

 

 

8,750

 

PPP loans, including fees

 

 

(1,277

)

 

 

(7,822

)

Net core earnings attributable to Guaranty Bancshares, Inc.

 

$

50,154

 

 

$

39,034

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding, basic

 

 

11,980,209

 

 

 

12,065,182

 

Earnings per common share, basic

 

$

3.38

 

 

$

3.30

 

Net core earnings attributable to Guaranty Bancshares, Inc. per common share, basic

 

 

4.19

 

 

 

3.24

 

 

 

 

 

 

 

 

NON-GAAP RECONCILING TABLES

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

 

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Net core earnings attributable to Guaranty Bancshares, Inc.

 

$

12,585

 

 

$

13,809

 

 

$

12,820

 

 

$

10,940

 

 

$

10,124

 

Total average assets

 

$

3,346,358

 

 

$

3,337,348

 

 

$

3,209,440

 

 

$

3,146,339

 

 

$

3,021,079

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan average balance

 

 

(539

)

 

 

(1,159

)

 

 

(8,885

)

 

 

(36,720

)

 

 

(61,062

)

Total average assets, adjusted

 

$

3,345,819

 

 

$

3,336,189

 

 

$

3,200,555

 

 

$

3,109,619

 

 

$

2,960,017

 

Net core earnings attributable to Guaranty Bancshares, Inc. to average assets, as adjusted (annualized)

 

 

1.49

%

 

 

1.64

%

 

 

1.61

%

 

 

1.43

%

 

 

1.36

%

Total average equity

 

$

292,471

 

 

$

290,806

 

 

$

291,312

 

 

$

301,579

 

 

$

301,398

 

Net core earnings attributable to Guaranty Bancshares, Inc. to average equity (annualized)

 

 

17.07

%

 

 

18.84

%

 

 

17.65

%

 

 

14.71

%

 

 

13.33

%

Total Nonperforming Assets to Total Loans, Excluding PPP

 

 

 

Quarter Ended

 

 

 

2022

 

 

2021

 

(dollars in thousands)

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31

 

Total loans(1)(2)

 

$

2,378,176

 

 

$

2,266,065

 

 

$

2,138,376

 

 

$

2,014,061

 

 

$

1,908,040

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loans balance

 

 

(529

)

 

 

(576

)

 

 

(2,605

)

 

 

(19,302

)

 

 

(50,611

)

Total loans, excluding PPP(1)(2)

 

$

2,377,647

 

 

$

2,265,489

 

 

$

2,135,771

 

 

$

1,994,759

 

 

$

1,857,429

 

Warehouse loans

 

 

(10,694

)

 

 

(10,938

)

 

 

(25,344

)

 

 

(24,260

)

 

 

(43,720

)

Total loans, excluding warehouse and PPP(1)(2)

 

$

2,366,953

 

 

$

2,254,551

 

 

$

2,110,427

 

 

$

1,970,499

 

 

$

1,813,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets

 

$

10,886

 

 

$

9,335

 

 

$

9,875

 

 

$

2,689

 

 

$

2,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets as a percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(1)(2)

 

 

0.46

%

 

 

0.41

%

 

 

0.46

%

 

 

0.13

%

 

 

0.15

%

Total loans, excluding PPP(1)(2)

 

 

0.46

 

 

 

0.41

 

 

 

0.46

 

 

 

0.13

 

 

 

0.15

 

Total loans, excluding PPP and warehouse(1)(2)

 

 

0.46

 

 

 

0.41

 

 

 

0.47

 

 

 

0.14

 

 

 

0.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes outstanding balances of loans held for sale of $3.2 million, $2.7 million, $2.8 million, $1.2 million, and $4.1 million as of December 31, September 30, June 30 and March 31, 2022, and December 31, 2021, respectively.

 

(2) Excludes deferred loan fees of $2.0 million, $2.0 million, $1.7 million, $1.5 million, and $1.5 million as of December 31, September 30, June 30 and March 31, 2022, and December 31, 2021, respectively.

 

Total Interest-Earning Assets, Net of PPP Effects

 

 

 

Quarter Ended
December 31, 2022

 

 

Year Ended
December 31, 2022

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

Total interest-earning assets

 

$

3,157,181

 

 

$

35,720

 

 

 

4.49

%

 

$

3,073,187

 

 

$

123,209

 

 

 

4.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

2,305,688

 

 

 

30,189

 

 

 

5.19

 

 

 

2,126,810

 

 

 

104,503

 

 

 

4.91

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan average balance and net fees(1)

 

 

(539

)

 

 

(1

)

 

 

0.74

 

 

 

(11,820

)

 

 

(1,277

)

 

 

10.80

 

Total loans, net of PPP effects

 

 

2,305,149

 

 

 

30,188

 

 

 

5.20

 

 

 

2,114,990

 

 

 

103,226

 

 

 

4.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets, net of PPP effects

 

$

3,156,642

 

 

$

35,719

 

 

 

4.49

%

 

$

3,061,367

 

 

$

121,932

 

 

 

3.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Interest earned consists of interest income of $1,000 and $115,000 and net origination fees recognized in earnings of $0 and $1.2 million for the quarter and year ended December 31, 2022, respectively.

 

 

 

Quarter Ended
September 30, 2022

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

Total interest-earning assets

 

$

3,149,502

 

 

$

32,476

 

 

 

4.09

%

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

2,191,411

 

 

 

27,455

 

 

 

4.97

 

Adjustments:

 

 

 

 

 

 

 

 

 

PPP loan average balance and net fees(1)

 

 

(1,159

)

 

 

(57

)

 

 

19.51

 

Total loans, net of PPP effects

 

 

2,190,252

 

 

 

27,398

 

 

 

4.96

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets, net of PPP effects

 

$

3,148,343

 

 

$

32,419

 

 

 

4.09

%

 

 

 

 

 

 

 

 

 

 

(1) Interest earned consists of interest income of $4,000 and net origination fees recognized in earnings of $53,000 for the quarter ended September 30, 2022.

 

NON-GAAP RECONCILING TABLES

Net Interest Income and Net Interest Margin, Net of PPP Effects

 

 

 

Quarter Ended

 

 

Year Ended

 

(dollars in thousands)

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

 

December 31, 2022

 

 

December 31, 2021

 

Net interest income

 

$

28,358

 

 

$

28,297

 

 

$

24,020

 

 

$

107,829

 

 

$

95,558

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP-related interest income

 

 

(1

)

 

 

(4

)

 

 

(154

)

 

 

(115

)

 

 

(1,144

)

PPP-related net origination fees

 

 

 

 

 

(53

)

 

 

(804

)

 

 

(1,162

)

 

 

(6,079

)

Net interest income, net of PPP effects

 

$

28,357

 

 

$

28,240

 

 

$

23,062

 

 

$

106,552

 

 

$

88,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average interest-earning assets

 

$

3,157,181

 

 

$

3,149,502

 

 

$

2,844,147

 

 

$

3,073,187

 

 

$

2,751,370

 

Total average interest-earning assets, net of PPP effects

 

 

3,156,642

 

 

 

3,148,343

 

 

 

2,783,085

 

 

 

3,061,367

 

 

 

2,635,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin(1)

 

 

3.56

%

 

 

3.56

%

 

 

3.35

%

 

 

3.51

%

 

 

3.47

%

Net interest margin, net of PPP effects(2)

 

 

3.56

 

 

 

3.56

 

 

 

3.29

 

 

 

 

 

 

3.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

28,358

 

 

$

28,297

 

 

$

24,020

 

 

$

107,829

 

 

$

95,558

 

Interest income tax adjustments

 

 

61

 

 

 

215

 

 

 

277

 

 

 

900

 

 

 

1,076

 

Net interest income, fully taxable equivalent ("FTE")

 

$

28,419

 

 

$

28,512

 

 

$

24,297

 

 

$

108,729

 

 

$

96,634

 

Net interest income, FTE, net of PPP effects

 

 

28,418

 

 

 

28,455

 

 

 

23,339

 

 

 

107,452

 

 

 

89,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin, FTE(3)

 

 

3.57

%

 

 

3.59

%

 

 

3.39

%

 

 

3.54

%

 

 

3.51

%

Net interest margin, FTE, net of PPP effects(4)

 

 

3.57

 

 

 

3.59

 

 

 

3.33

 

 

 

3.51

 

 

 

3.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized.

 

(2) Net interest margin is equal to net interest income, net of PPP effects, divided by average interest-earning assets, excluding average PPP loans, annualized. Taxes are not a part of this calculation.

 

(3) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.

 

(4) Net interest margin on a taxable equivalent basis is equal to net interest income, net of PPP effects, adjusted for nontaxable income divided by average interest-earning assets, excluding average PPP loans, annualized, using a marginal tax rate of 21%.

 

Efficiency Ratio, Net of PPP Effects
 

 

 

Quarter Ended

 

 

Year Ended

 

(dollars in thousands)

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

 

December 31, 2022

 

 

December 31, 2021

 

Total noninterest expense

 

$

20,897

 

 

$

20,237

 

 

$

18,976

 

 

$

79,907

 

 

$

73,278

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP-related deferred costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

599

 

Total noninterest expense, net of PPP effects

 

$

20,897

 

 

$

20,237

 

 

$

18,976

 

 

$

79,907

 

 

$

73,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

28,358

 

 

 

28,297

 

 

 

24,020

 

 

 

107,829

 

 

 

95,558

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP-related interest income

 

 

(1

)

 

 

(4

)

 

 

(154

)

 

 

(1,144

)

 

 

(1,144

)

PPP-related net origination fees

 

 

 

 

 

(53

)

 

 

(804

)

 

 

(6,079

)

 

 

(6,079

)

Net interest income, net of PPP effects

 

 

28,357

 

 

 

28,240

 

 

 

23,062

 

 

 

100,606

 

 

 

88,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

$

5,122

 

 

$

5,803

 

 

$

6,038

 

 

$

23,485

 

 

$

24,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio(1)

 

 

62.42

%

 

 

59.35

%

 

 

63.13

%

 

 

60.85

%

 

 

61.00

%

Efficiency ratio, net of PPP effects(2)

 

 

62.42

 

 

 

59.45

 

 

 

65.21

 

 

 

64.39

 

 

 

65.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(2) The efficiency ratio, net of PPP effects, was calculated by dividing total noninterest expense, net of PPP-related deferred costs, by net interest income, net of PPP effects, plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.

 

NON-GAAP RECONCILING TABLES

Loan Yield, Net of PPP Effects
 

 

 

Quarter Ended December 31, 2022

 

 

Quarter Ended September 30, 2022

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

Total loans

 

$

2,305,688

 

 

$

30,189

 

 

 

5.19

%

 

$

2,191,411

 

 

$

27,455

 

 

 

4.97

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loans average balance and net fees

 

 

(539

)

 

 

(1

)

 

 

0.74

 

 

 

(1,159

)

 

 

(57

)

 

 

19.51

 

Total loans, net of PPP effects

 

$

2,305,149

 

 

$

30,188

 

 

 

5.20

%

 

$

2,190,252

 

 

$

27,398

 

 

 

4.96

%

Effect of removing PPP loans on loan yield

 

 

 

 

 

 

 

 

0.01

%

 

 

 

 

 

 

 

 

(0.01

%)

 

 

Quarter Ended December 31, 2022

 

 

Quarter Ended December 31, 2021

 

(dollars in thousands)

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

 

Average
Outstanding
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/ Rate

 

Total loans

 

$

2,305,688

 

 

$

30,189

 

 

 

5.19