GNTY - Earnings call transcript Q1 2022 | Guaranty Bancshares, Inc.

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Operator

Good morning. Welcome to the Guaranty Bancshares' First Quarter 2022 Earnings Call. My name is Nona Branch, and I will be your operator for today's call. A reminder that this call is being recorded. After the prepared remarks, there will be a Q&A session.

Officer; call of Ty Senior Officer. the President Chief today's Chief Chairman Executive for Vice and Officer Executive Executive Company; Financial host will Chief Abston, be and Vice President Our and Jacobson, Risk Shalene Cappy Payne, begin now it our I over will Ty Abston. call, our to To turn CEO,

Ty Abston

first call for Guaranty you morning Welcome everyone. earnings Thank to our quarter, Nona. Good call for the Bancshares’.

had very very press release growth this the good As quarter. for noted a We earnings in our good we strong company and morning, company. had our

then economy some did As we to the that seeing too. we're all further to mentioned, We going that additional and now right related COVID everything of reserves there through anything little do out on that on a you'd go discuss to Shalene the we're we Cappy did and and through the cover, it like unwind that go we'll macro or And Cappy? Q&A and of to when most over Payne done, of with negative our cover factors will offset turn bit. we'll and release I'm going in reserves numbers.

Cappy Payne

for you, everyone. Thank Ty. joining us, Thanks

A had quarter, a As balance Ty said, we key starting lot off components saw increases. good XXXX. nice of sheet our on

$X.X just Our total assets were up the quarter billion. under $XXX stands at for now million

take They and closed million, and those a for over PPP had obviously component growth X.X% warehouse of of little I is of when that when biggest increase you $XXX we the loans. billion. component nice lending, think ex-PPP you loans at of And out that $X quarter warehouse. the the that's looking that

putting that we changes a the in XX Shalene of deposits. growth on the a $XXX And the was talk billion. you work on that later we'll nicely minute. some as assets was portfolio, our quarter that little again might in quarter, driver increase earnings The that of bit grew a release any and our answer liquidity, excess to in have bond growth big liquidity they're other and plus biggest really percent Deposits also. a saw about for and by can $X.X now you questions million this But created was

to -- We At accounts like non-interest of open continue new accounts deposits XXXX. DDA core deposit. we were our were just accounts add end, and checking bearing in our quarter total did XX%

a core So portion type DDA good accounts. in being of those checking

now shareholders during million, quarter, a just went is the little million $XX quarter net of the securities gain market You'll equity had the about value negative notice the other end quarter, a portfolio. comprehensive in capital and portfolio, loss portfolio. our decrease $XX.X unrealized unrealized swing, a of account. we what to to that’s That's driven At the in unrealized and loss just related the by income or our bond $XX that did million beginning in our that, $X to fell move OCR, million a our it that through category that decreased unusual; at right

that swing, $XX value. million book is tangible of about there's So which $X.XX $X.XX,

increased of shares back up and little That's from at XXXX. a quarter. over for right at million, little the We also in during bought paid and $X spin the over a XX,XXX we shares X an $X.XX $X.XX dividend QX quarter, million, of cash

Ty account -- earnings was our talking to course, that about. was talking good the our Of capital positive to

Even a that release quarter-to-quarter then of million. was income be $XX.X and alluded the earnings the in on we that's our per XXX,XXX. For the million $X to million quarter, in of we last Shalene up $X.X those pre-provision reported earnings, swap the talk swap we She'll a and those the reported related of It that. QX that's bit. QX. extraordinary comparing share, would quarter. the the at about talk some six And gain it's process been to non-interest highest will transactions linked from we drivers Ty earnings The that provision little biggest in release And terminate looking that a And fully core net XX.X%. earnings pretax, core quarters the XX in $X.XX define that diluted, our were is pre-PPP. our and earnings about in were $X.XX

pretty stayed So looking income on our at -- side, our the steady. NIM

down Our two stated that's basis points. NIM was X.XX%,

ex-PPP at basis three points, it steady. so really NIM down activity, X.XX% Looking was really, or pretty

But quite bit, a ex-PPP. that's still X.XX% down few strong Our as at points. little I loan basis did, loans. slipped seven at We yield a booked said

last at looking they remained stayed basis year. were they to X.XX%. our and the steady steady originated this cost on deposits quarter, yield points linked and compared that's So quarter. for QX our quarter. of in And of Then new They basis are X.XX% XX points loans XX are for they

So steady. they remained they've have

up linked the But that, just time it'd mortgage XX% the ago category, more from in little give on XX% showing going was Again to our X%. XX% and mortgage second. It I at what volume expected say that the non-interest you thought I'll when swaps. if to bit details it’s driver down down projected of a we at it's to really termination I'd will components be main as our than is the had was was being think quarter Looking income of that a I us about the a little Shalene at actually highest. year speak XX%. activity a down last looked

quarter. be about compensation points, I Three XXX,XXX benefits. quick they expenses, were and employee think, regard. driver The that to main Looking to continues at slightly the for our up

we QX some most staff back in be and develop mortgage. Central a in bullet plan probably and both did have going in And and office. And that in say include Three one did then there's five should production the strategic in those in to more there QX. defined as region in on-board SBA. our one I'd is added we likely second leadership first new staff officers production will in turnover one that The region, to the mortgage division, is the DFW and point of are a related Texas we

that Texas, key to forward those to are that we point, five be Houston, I then XXXX. this DFW currently quarter looking -- bullet to We'll going positions that sometime have in open we're are bullet, think And too. forward. see. addressed So four filled last I positions third change production still about in but likely Central not mainly. And filled and production We

balance it turn quick a the Shalene, over I'll recap sheet, that's of So you. to

Shalene Jacobson

Thanks, Cappy.

of which portfolio, Growth now allowance really the growth our several index. about loan losses. for received in state be credit quality economy the we our Texas on have highlight here most Next, in interesting the to Luckily, and I'll Hopefully, of economy. of our Last U-Haul, cover annual and you outstanding. credit some our highlights one the number by statistics was One-Way year, report Texas continues

So as our state we've as that that, to of result lots I well. result of got been of a partially and people loan coming as a really strong has think demand

increased loans, As or excluding loans and about warehouse the PPP quarter. million Cappy a ago, during mentioned $XXX moment X.X% our

X.XX% to previous yields loan the quarter. excluding did to quarter PPP Our in X.XX% compared during slightly slip the

some as reverse will trend will. others downward soon as that hope we increase rates itself and economists predict However, they that

release. rate and in here presentation information in some about So sensitivity we our included the

portfolio have about rates. our $X.X billion of have or We that variable loan XX%

end. million And so during XX both increase basis XX% estimated May fed as then of rates will we points of and or if XXXX, and XX in points variable expected, meetings loans as each which $XXX June, rate year those in by remaining basis reprice the

that being really because So the not after XX aren't because of loans next of repricing their XXXX repricing are floors. rate December and loan date

floor of that But XX are if basis at basis their as $XXX point increase have those rate and XXX XX% increased be at would points, million be we floor XX% So rates rate. their rate. loans we their would March above of above XX of XXXX, floor loan

additional some by So are route numbers to is that crunch repricing because end. trends now next million scenario described few asset with also a assuming going non-performing have XXXX we loan end, repricing income also provide about to under remain payoffs an basically year recent which we their between and or estimated continued And charge-off again, or or and the date XXXX. pricing then the in no modifications $X.X year interest then illustrating said, loans would and be And bullets not us of low.

credit improvements in of first as specific the $X.XX We've Cappy quarter allowance related factor unwound a losses, provision mentioned, COVID impacts For methodology. so as and health Q million the COVID in significant allowance of reverse seen for that in the our economic the fully statistics recorded communities, result during our we of during COVID remaining a quarter. we

uncertainties uncertainties factors then in in loan our for adjustments standard related factor the inflation, increases key specific growth COVID that and make overall, quite the impact also we unwinding bit some such war interest Russia. on did our Ukraine geopolitical then really borrowers, our of key concerns effect And by of some in and rates of a related to the However, as to was offset portfolio. to

X.XX% quarter of On loans next really related was and good on As and deferred all income are on unrecognized our down have liability PPP PPP about all about to at progress loans or of slide, talk during management remaining and PPP quarter, fees of $XXX,XXX. X the forgiven PPP other our made our end, and about has been X.XX% the been paying Nearly we books updates items. year-end. bit allowance with as which We million XX.X asset a is coverage from the forgiveness deferred excluding only recognized. agreed, of X

we and used both three Loan interest were month advances. some hedge As Bank swaps Home rate Federal terminate Ty did mentioned, to that Cappy

on advances these those statement. in the net other And which So that termination gain paid swaps, we $XX recognize income $XXX,XXX non-interest on the of we were income million. is off then included

out as on from tangible about continue We million the about excess we'll there agency term rates, held a that book And of hopefully. given to to deposits classify in this to and we maturity then mortgage purchase short excess to our maintain AOCI some order August $XXX purchased continue And securities, position. stance of million a And as including total of of treasuries held conservative our maturity. classified cash also are the mature backed raising and will and in XX deployed value buy XX. then of bit as XXXX more, in March that we we cost liquidity to $XX volatility if through to securities, of purchases take quite well, of of all

end that in million $XX of And subordinated deposits are so back As quarter rate XX X% helps finally, with we our notes X.X% non-interest bearing, then as fixed issued X, well. on to X%. of of total March a

converts to earlier. to we've the a Cappy floating the far, then spread and work So XXXX. plus in matures able years sticks a rate of money XXX that mentioned a it term to so it been for basis five of April three share repurchases through And bit put month quite equal until points to already that of

So it turn you our today. over now questions. that for will I to concludes presentation all

Operator

[Operator be Thank Brady Instructions] with you, call Our today from will first KBW. Shalene. Gailey

Brady Gailey

Hey morning good guys. thanks

Ty Abston

Brady. morning, Good

Brady Gailey

and several So moving bond parts income termination this also with growth. you book spread have within with the

put think should ended the you seems there. going cash bonds. XXX bond balances How million it quarter about I have think we at you a to you little could like the about more But forward? in that use

Ty Abston

its Brady, Ty. So

of so million, quite because leaves kind with quarter, gone yield curve. we really a few months treasuries, everything a Fed bounce peg short $XXX the this ladder so Funds. two of has or in That's build a we, $XXX from years us about to we kind for just So bonds. purchased started six on million that to And out And they're us.

And So probably that as a taking we're far bonds. program. curve felt the as were shift advantage the in funds still short not could. kept we we like us be certainly additional wouldn't, yield to very going yield and and curve, lot of of it moving made the But those just I into sense

Brady Gailey

to making the you're Okay, helpful. How expense all like talked will expense kind you're should making year? higher more and now. run it the expenses? that's this million rate in mortgage mortgage and then on impact changes group we've be million side, maybe in know of some before changes that growing $XX I right, And sounds about that given $XX that a

Cappy Payne

maybe year. this Brady, this say our going will would bit. Cappy. little $XX in a I rate forward $XX Yes, million, run be range is million the to

Brady Gailey

rest fee of you mortgage income and mortgage trend the update will how more a overall yes, Okay I then for the fees, think depth little you thought than just any and think year? on your

Cappy Payne

I think more production we're and be get new ways staff. to off of -- different think as productive we're team, we're our more going deploy to this of

going not think decrease. I'm well, that will late that increase -- I assuming So as continue will think or to forward, it I as

and I we and think we'll that we'll can QX be that. flat see grow then for how QX, can, QX we'll how

Brady Gailey

All Okay. guys. right, great. Thanks

Cappy Payne

Thanks Brady.

Operator

Rose call Michael next will from with Raymond be Our James.

Michael Rose

Hey, good you? morning, are How everyone.

Ty Abston

Michael. Hey,

Cappy Payne

good morning, Hey Michael.

Michael Rose

so Previously growth of loan growth you And about the Hey, well strong. a pipelines high rate, you're mentioned this pretty really single talked you that. remain, kind still strong quarter. digit guys have above that

for, half for of If it should -- Thanks. just any we have the of growth, are you you think obviously, of this year concerns? of forward inventories? factors any up went the quarter’s you some sort do conversely, And caution growth, as key annualized, pull move given then ex-PPP, the we any environmental into potentially seeing about Is ex-warehouse, some back it? of way rebuilding

Ty Abston

are there's, mentioned, in we're with world. mean, inflation, my on positive going all concerns going Michael, geopolitical for guide, growing our of I our on a that in state. things have I going positive. growth. they there's rates, And basis, double are there's like going outside participating like I mean, digits, certainly on release, and with control, standpoint But I our of of I a from things things still the to said, would in We obviously, low macro lot an on, press that. environment, So on around rising the things mid annualized And

concerns. real So all some create collectively things those

added in reserve going can there's to And be very we at with our cautious we're We, we we be so some but additional of and have And positive a macro we side state, opportunities why out like as macro additional can to a we lined be, COVID and well lot as things of company. that happen models, but took but reserves. I underwriting were advance. we to our, doubt standpoint, continue look mentioned, grow from so that's things our those certainly caution, as the with just things concerns those

Michael Rose

a maybe to follow that. as Okay up

a the around So negative economic a if somewhat coming I guys you obviously, post expect kind quality seesaw, of kind reserve above your is concerns? quarters, still are little XXX, feel just metrics range, this you provision of one the X.X% at look bit walk was through. quarter that, down there's that Or broader room the you given Do how like strong given are? to just bring would over be, cautious asset to

Ty Abston

reserves to, be we're thoughts we to going latter mean, still going pretty the of but obviously, we've It's place, going strong more I conservative Mike. that foreseeable and I mentioned, our the on in factors very put to, we're quality, just the overall to just have going we're for future. maintain asset things

Michael Rose

plans Okay, general, of little another think one performance stocks there into me, any given just and bit for and I be place repurchase is middle potentially to guys little of then maybe more last just but bank finally, quarter, a a stock your here. in yours you expired included, at bit a the opportunistic this program month, of put

great. thoughts would Just buyback any of sort Thanks. on be

Ty Abston

Yes, Michael. and have renewed we will already We got this that teed up, that week. be

Michael Rose

Perfect. taking my Thanks for questions.

Ty Abston

Thanks Mike.

Operator

call with next from Stephens. Our was Olney Matt

Matt Olney

now optimistic Hey, is sounds long everybody. to It guidance circle little previously. a back bit the was growth than I commentary. want like more thanks, the on morning, it

and that down talked respect the the are possibly what the think time the remain in XQ expectations talked assumes. year now what curious I'm you I are front in full what you pay loan pay with and pay last about updated and on downs we to now guidance January, saw for elevated to going downs accelerate. of the concern

Ty Abston

anticipate QX the it's to downs I've of kind down. really, said, down, Matt, slowed been maintaining pay things current That its we definitely So pay in and pace. hard that that, but gauge being about, slowed to, talking

fruition, kind came of And things we've the and year, the to some able in pipeline, close we're in to ending of QX. had

confident to [ph] of on. not our try strength still, guiding But in else factors, two I'm ahead footprint. higher just get we're on I that with and everything just ourselves based seeing going again, So overall those

Matt Olney

that. Okay, you thank for yes,

Ty Abston

Sure.

Matt Olney

remind And then base, deposit nature to appreciate seasonal rest to numbers the some of really just of expectation the growth? for just trying good the us growth, the the deposit the of on in should banks XQ what year respect with be deposit

Cappy Payne

I funds in forward, growth Well, see did I deposit And have year. don't But happen of don't, not pretty think we type that we'll normally in that public going deposits. QX good growth this Matt.

we for related So really of growth was public that to money. deposit this quarter fund none

money that will specifically. in out, and public separate in and QX typically, you decrease increase fund QX when So QX,

will we'll we as I the new But even back a we of relationship accounts have that really up a open we're accounts and there. and then pan a and markets, loan out emphasize accounts it. and think as deposit to with add customers new decrease to bit that checking continue little as total finding we’re

slow down, I but think off. pace that see big will I don't drop that a

Matt Olney

those because above But still is the disclosed. the Shalene, loans? give like were benefits I loans that, the rates. rate for dig loans some the those you me repricing for variable question the color be can want a it would for And thanks little more higher of bit of was just scenario, going little the sounds disclosure the loan months then a Okay, reprice a Anymore of contractually, floors to timing receive more me, XX% a you loans. last rate you guys are surprised Cappy. of issue, timing I that floors while. of you on before think that higher and in expectations of several under saying I that the it to aspect this be And on

Shalene Jacobson

going really definitely or they're a of loans we're so and months yes, significant play the But, is few every aren't then to maybe time, fixed we XX estimating move floors raising So XX yes, the they rates every variable. quite that that reprice they're have or factor a period because months, for to a quickly. it

XXX within or the rate those mentioned. including the we're of So billion X.X we variable that loans

rate So, the a pulling reprice. will report the is most it timing majority issue. be in can exactly some going will a numbers. got XXXX don't that really XX months. be period because me that some into time over variable of of But it reprice I with when will so that XXXX our will people reprice I've just of remainder have tell over a loans

Matt Olney

Got it.

Okay, thanks, guys. I appreciate your help.

Ty Abston

Thanks, Matt.

Operator

next be will Milsaps Sandler. from Our Brad Piper with call

Brad Milsaps

good Hey, morning, guys.

Ty Abston

Hey Brad.

Cappy Payne

Hey Brad.

Brad Milsaps

about, just I give guys, during a of on to from have benefit Cappy margin going your bonds little here, maybe kind purchase more. side? of hike into wanted that of rate me quarter. bit you of obviously, you're to you And thinking a delve Can rates the sort the how kind an just NIM, you're sense the the exchange the

Cappy Payne

mentioned of we that treasury shift of during we advantage short time in bought Well, of the two lot taking to as yield the term, pretty bonds quarter notes a purchased were A that curve. six the Shalene lot the were months both years. again,

buy backs. the they very X% somewhere So much putting in effective just was mortgage more And it's Not But will work did a yield few the in now. until liquidity those quicker. excess to that mature. work rates that yield, really. weren't that We high, our

from what when they year a X%. pretty ago a increase about about good that's were So, at

think bit. said, portfolio what well, the Ty bond a to down I growth quite again, slow probably getting will will So back

putting work on a As those got work quicker. that loans loan and far QX margin to loans the as in putting books quicker, growth and little those or the

they'll shift think see continue of up and loan of the the decrease for here yield, I the half cube second going So a but start little year I, in the or in to of we bit sure.

of see all in So I much slippage don't our margin. at

cost on that pace think still, I increase prime we'll up, can funds go for not as we our play sure. rates no see that can side the of in our we to defensive really they doubt, but will an change liability

Brad Milsaps

But you rate guys at you if that up? would various in to sort And is deck, out guys the as this the tough you on of what Cappy, loan scenario do of do result that on do I just that is point, side up of you portfolio your get that in have your that know, balance to that we going right very follow think laid would repricing rates What say crystal deposit the levels expect, sheet? ball, to predict. betas,

Cappy Payne

to any Well the there's guess, with increase same going be as I do keep guess, pace. deposits. be or increase XX% forever deposits, would if to you basis I something will, going competitive, no every just prime XX increase or doubt. I if rates Funds, increase, said, that. we're And it it's to or point But for going an to a our like We're not up that in have in on XX% increase Fed to in

Brad Milsaps

what maybe would think of bring just folks Ty, for big at contributor weren't quarter? finally, expectation all, then a kind sort as the And loan extent that you your during those brought on a of question the then they is of Okay. part in, guidance you five a increased your with that to were can XXXX? about they did And what be over, producers the new first

Ty Abston

Producers on but honestly, we're strong XX of quarter. really our we were months it part it in last mean, was really it yes. Brad, across that was regions I All strong in four the board that No, a footprint. growth, part really of had

be footprint, the producers our part of equation will that and this our big our of part existing as yes, well. producers So of year, new expectations existing rest but growth the our

Brad Milsaps

guys. you Thank great. Okay,

Ty Abston

Thanks Brad. Sure.

Operator

Investor our for attending. our for p.m. Q&A page concludes be you I our call. today. at will recording would that Thank gnty.com Goodbye. to available X This Relations by remind like session in everyone

Guaranty Bancshares (GNTY) 18 Apr 222022 Q1 Earnings call transcript