Guaranty Bancshares(GNTY) - 2024 Q3 - Quarterly Report

Financial Performance - Net earnings attributable to Guaranty Bancshares, Inc. for the nine months ended September 30, 2024, were $21.5 million, down from$ 24.2 million in the same period of 2023[143]. - Net earnings attributable to Guaranty Bancshares Inc. were $7.4 million for the three months ended September 30, 2024, compared to$ 6.3 million for the same period in 2023[182]. - Basic earnings per share increased to $0.65 for the three months ended September 30, 2024, from$ 0.54 in the same period in 2023[183]. - Noninterest income decreased by $2.7 million, or 15.3%, for the nine months ended September 30, 2024, compared to the same period in 2023[159]. - Noninterest income increased by$ 215,000, or 4.4%, to $5,154,000 for the three months ended September 30, 2024, compared to the same period in 2023[196]. Interest Income and Margin - Net interest margin improved to 3.33% in Q3 2024, up from 3.26% in Q2 2024 and 3.02% in Q3 2023[140]. - Net interest income before provision for credit losses was$ 71.7 million for the nine months ended September 30, 2024, a decrease of 2.1% from $73.2 million in 2023[145]. - Net interest income increased by$ 889,000, or 3.8%, to $24.2 million for the third quarter of 2024, driven by a$ 615,000 increase in interest income[184]. - The net interest margin for the nine months ended September 30, 2024, was 3.28%, compared to 3.17% for the same period in 2023[151]. Deposits and Liquidity - Total deposits increased by $42.8 million during Q3 2024, with noninterest-bearing deposits representing 31.5% of total deposits[141]. - Total deposits as of September 30, 2024, were$ 2.67 billion, an increase of $35.7 million, or 1.4%, compared to$ 2.63 billion as of December 31, 2023[251]. - Average total deposits for the nine months ended September 30, 2024, were $2.62 billion, a decrease of$ 7.4 million, or 6.1%, compared to the year ended December 31, 2023[248]. - Noninterest-bearing deposits as of September 30, 2024, were $839.6 million, a decrease of$ 13.4 million, or 1.6%, compared to $853.0 million as of December 31, 2023[251]. - The liquidity ratio was 17.1% as of September 30, 2024, up from 14.0% a year earlier[141]. Loans and Credit Quality - Total loans decreased by$ 186.0 million during the first nine months of 2024, with gross loan balances down by $78.5 million in the third quarter alone[155]. - The allowance for credit losses as a percentage of total loans was 1.34% as of September 30, 2024, compared to 1.33% as of December 31, 2023[155]. - Nonperforming assets as a percentage of total assets decreased to 0.66% as of September 30, 2024, compared to 0.71% at June 30, 2024[141]. - The total nonperforming assets increased to$ 20.4 million as of September 30, 2024, compared to $5.8 million as of December 31, 2023[219]. - The total allowance for credit losses was$ 28.5 million as of September 30, 2024, down from $30.9 million as of December 31, 2023[236]. Expenses and Cost Management - Noninterest expense totaled$ 62.0 million, an increase of $1.0 million, or 1.7%, compared to$ 61.0 million for the same period in 2023[171]. - Employee compensation and benefits decreased by $401,000, or 1.1%, primarily due to a reduction in bonus expenses during the nine months ended September 30, 2024[172]. - Noninterest expense totaled$ 20,678,000, an increase of $164,000, or 0.8%, compared to$ 20,514,000 for the same quarter in 2023[202]. Capital and Equity - As of September 30, 2024, total equity increased to $319.3 million, up$ 15.4 million or 5.1% from $303.8 million as of December 31, 2023[273]. - Total capital to risk-weighted assets ratio was 16.59% as of September 30, 2024, compared to 15.22% as of December 31, 2023[276]. - Tier 1 capital to risk-weighted assets ratio was 13.81% as of September 30, 2024, up from 12.53% as of December 31, 2023[276]. Market and Economic Conditions - Inflation in the U.S. remains elevated, but the company’s performance is more significantly impacted by interest rate changes than by inflation levels[286]. - The Federal Reserve raised interest rates by 525 basis points over 15 months, followed by a decrease of 50 basis points during the three months ended September 30, 2024[287]. - Future performance is subject to various risks, including interest rate volatility, asset quality deterioration, and competition in the financial services industry[303]. Risk Management - The company utilizes an interest rate risk simulation model to manage market risk and assess the impact of interest rate changes on net interest income and equity[306]. - The asset-liability committee regularly reviews the sensitivity of assets and liabilities to interest rate changes and adjusts strategies accordingly[290]. - The company does not engage in leveraged derivatives or financial options to manage interest rate risk, focusing instead on balance sheet structuring[289].