GNTY - Earnings call transcript Q2 2024 | Guaranty Bancshares, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Nona Branch

Good morning. Welcome to the Guaranty Bancshares Second Quarter 2024 Earnings Call. My name is Nona Branch, and I will be your operator for today's call. [Operator Instructions] Our host for today's call will be Ty Abston, Chairman and Chief Executive Officer; Shalene Jacobson, Executive Vice President and Chief Financial Officer. To begin our call, I will now turn it over to our CEO, Ty Abston.

Tyson Abston

Nona. you, Thank welcome and second earnings quarter Good to call. morning, our

it Before to and comments. over go turn make through few want Shalene I to we deck, the a investor

and I'm this for but for of say not year. quarter to full want we've produced I our First, team the the results only proud

Texas to great our continues in markets. markets our seeing all a serving remains growth look opportunities continued customers build job economy continue to for team in The I growth additional that Our XXXX do and and our franchise. of the and of our and is start to we're really maintain relationships resilient, to strong to going see year

liquidity position, an for our requires we and sectors, is to which maintain has and have uptick all so to in -- are us to been and maintain economic strategy of good Our coming growth. lending quarters. key strong in to the we capital -- continues have strong This really asset bank quality, this currently capacity be plan to growth and maintain for positioned a well-positioned

open our these deck, Shalene. She's through over after and this, to With to Q&A. go then I'll it going Shalene? to comments, turn it we'll up investor

Shalene Jacobson

Great. kick sheet Thanks, balance it Ty. I'll first. off the with

management mentioned. some those risk 'XX, as As still heightened in political and economic right will with sheet. strategy our that start we're out require We Ty uncertainties growth, continuing improve mentioned, believe loan to shrink there's he but to now balance there around the hopefully

remains XXXX. customer they good, similar our stream to to in income what our and net keep because strong target of However, earnings our earnings and core we're were on base,

quarter, the and new million Federal which quarter million million yield had account down during about gross, million up $XX.X assets that the during from we $XX.X liabilities which during loans, decreases on Those Bank about of a liability Cash was Home securities while total decrease decreased advances Our and and were repaid in some are somewhat, X.X%. primarily in balances. side from repurchase $XX available-for-sale $XX.X lower average about about total Loan the decreased million. we also $XX.X the an quarter, customer purchased also

fairly On side, the liability deposits were flat.

million AFS mentioned, income some I million. Bank improvement during repaid advances equity increased then $XX.X in a Loan in $X.XX quarter we Total offset of were was As shares by repo of We That or on and down dividends during That and we for million and balances quarter. now up XXX,XXX of also, the second Home paid of Federal the $X.X an the we was the share. of unrealized first portfolio quarter, quarterly $X.XX million. net million repurchased And XXXX. share stock $X.XX the from per result back $X.X that $X.X quarter. which is paid guaranteed customer about $X.XX dividend losses per

up income, from $X.XX quarter bank On $X.XX down helps of didn't earned share year have we second of in is share that per first quarter. from the quarter, second we large equates change the the year million, course, statement, the I basic explain of the recall, which gain in second of quarter of and $X.XX of 'XX, TIB which, had the from you'll some net prior million, the mentioned, a quarter onetime But $X.X sale in the this income to which 'XX. that in as per in $X.X from stock

QX. to average equity X.XX% the was assets QX, compared return X.XX% return on Our to average for quarter for the and our in quarter in was compared X.XX% X.XX% on

are higher X.XX% during X.XX% Our was of. X.XX% from quarter, from the last then this income second. payment well receivable quarter improvements to in both bonus talk and prior denominator The $XXX,XXX quarter loans from higher interest-earning results It in quarter, That debit are which Noninterest quarter, by up period. that $XXX,XXX the contributed in interest-earning securities primarily had current that the offset the valuation did overall. the was proud costing we allowance, which change. which we're in in not ORE quarter in a that this course, also from card quarter from during second linked and year. in net $XXX,XXX average decreased income lower a assets And quarter that liabilities resulted which assets have the and as quarter, first And ratio, during the continues in than margin by interest we lower I'll the prior annual a a the Mastercard to received. recovery of increase increase, also quarter year from our the about first same we

trends along into the rate. the as mixed-use with stream the last more aggressive that from good it property in income And cap had had appraisal foreclosed a on a was March better Austin and nice the rate. rate ORE The in property we Austin. South area pretty we For from of we property, prudent we XXXX a allowance, valuation in a cap a we South apply of getting to capitalization quarter dug felt mentioned aggressive that understanding

there's you valuation valued. reverse comments or on But and well. we go have Ty, valuation now? down right $XXX,XXX conversely we that allowance, we But do that allowance not, hopefully the with that factors cap on right valued further that resulted as way any go conservatively us now property if books recorded. have believe So appropriately that course, our back the other of the but allow in could rates that to that

Tyson Abston

No.

have of start weeks. that's a property team the property. are couple -- we in to going We a They're the next marketing marketing

and a it rates down are good We where yield indications do fairly going comes It's have good -- it like has to value able reserve it quarter. that during we're was the just have instead it, had take it cap property. the extraordinary prudent We what and cap interest. property, had sell to we're rate. and full some and to felt we the to and it we at valued think of But income on we recognize on against ultimately a of this given we just provision felt like where some taking

Shalene Jacobson

All right. Thank you.

other expense higher we about some on down $XX,XXX, Before slightly debit lower that noninterest to move due offset card by expenses. noninterest then was employee-related that was by costs occupancy, and and

for credit to portfolio was decrease the allowance higher in efficiency and quarter, All income. was Our ratio XX.XX% On our for driven the which right. losses. by noninterest loan

million loans decreased have $XX.X the $XXX by in second primarily and first quarter X.XX%. loans That $XX.X in during We was our in originate million construction million gross in As CRE I mentioned, did and an segments. of the development quarter about average at decreased year-to-date. new by rate our

levels. yields Nonperforming loans below percentages percentage of is quarter historically is nonperforming and loans. percentage we only But remain only so to include the still prior were and X.XX% low They a remained total strong. assets So continue nonaccrual ORE loans total ORE, X%. the both for X.X%. nonperforming assets X.XX% if loans Those total the well a exclude as of quarter, at of as the assets loan new X.XX% compared to in

the Commercial charge-offs In the loans charge-off quarter ratio July, pretty quarter. topic, that for to on still our value losses asset. We and there. foreclose during expect we all we also DFW in that $XX,XXX know. office-related book continue average Net at charge-offs percentages in remained a of minimal X.XX% of second million you market a as low. for disposing did property a good hot has loans to net and net real So single-family early a properties $X.X of had sale, in be and estate

we we've of of a and diverse in CRE about have as well. low balances in calls, only prior our of total areas. is average relatively portfolio any related XX. portfolio. those significant that managed only concentrations very loan We've represents of office mentioned with XX.X% those loan However, June $XXX,XXX really percentage, X.X% concerns don't And as got

the $XX.X increases $XX.X to were loans this loan totaling end substandard the at up from $X.X two primarily were It quarter. QX. result is of relationships that which downgraded Our end, million of million quarter at substandard million

we're We with we don't we of any, any are collateralized really their through expect rating significant if substandard substandard current However, payments, balance risk about believe as those and loans a well of we those. Overall, result are appropriately loans XXX loans those on work those, losses, as now. only $XXX,XXX. an on reserved have average

so XXXX was again, loan working everyone remain we or trends. total past made reverse respectively. percentages quarter, loans, by business-related We've did that quarter The the entirely one-offs at X.XX%, similar small credits that the most to during in we're On current that year-to-date loans we adjustments earlier it which stable QX and to relevant reverse that far made which the customers somewhat loan looking as adjustments have minimal paid. end losses lower 'XX else, really had the that of quarter X.XX% deposits, capital. I so due liquidity today. The balances during pool lower we far the end increase some of think, loan well due almost mentioned. right. and credit nonaccrual is applicable of first $XXX We nonperforming like or is I balances, So, just is $X.X our overall and Q get overall, to entirely million provision still due All to credit with to in provision and million loan X.XX% good. almost for described hopefully as factors trends in have because offset ratios were those smaller a are substandard those are that I percentages, year-end, our think but the to that's coverage We, are that of consumer of ACL the those

previously, flat mentioned relatively repo were As the about million. total down $XX I balances customer deposits while were quarter, during

happy to deposits, increased [ got mid- are to we continuing few see we specials be 'XX move ratio we're CDs. 'XX quarter, of XX% We end. some point $X.X million, it expect that that to deposits into mentioned to early continue to our it later historical Guaranty above interest-bearing getting at at now. account closer doing noninterest-bearing of balance total for high a decreased just although XXs second that have slowing Despite see as shift XX,XXX be new shift, to to represent continue accounts granular some base. job overall historically stable of deposit had deposit At an XX.X% primarily the XX,XXX. deposits in we core over quarter are very respect in I've average interest-bearing as quarters, -- quarter the ] And CDs. deposits a and Noninterest-bearing million a previous markets noninterest-bearing driven new down. is to good that while still $X.X to from deposit We've a over has end, risk, by with With and average accounts

low, repayments advances uninsured ratio the of by despite $XX from pay securities -- Our and months. public during end. quarter flows uninsured matured repaid Guaranty XX excluding in and FHLB to liquidity securities higher-yielding actually Liquidity Home some last investments loan down million XX.X% with were deposits the ended quarter new deposits during AFS We've of deposits and funds Bank to owned Federal We quarter. $XXX remain to million a at advances accounts, our relatively in Loan good. cash total the is XX.X% using also

Reserve Loan Bank credit. about Home have billion funds either or advances, liquidity correspondent revolving Bank contingent $X.X bank lines and of also of total available We Federal that Federal the lines through

in net securities total AFS our investment about reasonable securities million and included which million, remains unrealized attributable equity $XX.X AOCI. is on within Our $XX.X at the to losses of

We our XXX,XXX Guaranty a of And of and in capital average Our dividend repurchase shareholders, strong. portion at common pay this, those per continues to to for the capital quarter second I used that also our an mentioned $XX.XX stock value we remains the $X.XX course, price of also believe. excess intrinsic to share. share of per earlier shares add

to prepared of June XX assets our equity X.X%. average concludes remarks. Our total was as That

to over Nona So, Q&A. I will for back it turn

Nona Branch

is time Q&A you, now Thank for It Shalene. session. our

will Stephens. Matthew with Olney first Our from be question

Matt Olney

sheet, second loan quarter. the balance the in On we balances contract saw again the

the stabilize. the should pressure And we of to trying balances ] this get think of growth there loan I if in a appreciate back idea footprint? be trying loan Just of expect Just you mentioned the re-into the additional we year to you better when to could [ that year. Ty, be XXXX could in see half

Tyson Abston

just seems could I mean depends say on million. half it the book I Matt, would be have things possible quarters seeing of very down. and I that's the how continuing is decreases and go. seeing possibility in could second overall mean of pay resilient. coming mean $XXX am year. rate it's kind another It loan we just of think the the economy I the I else I be what everyone to like

we are going And decrease at more and and two rate probably once across happen So, this things give in to feel of opportunities. board, current thoughts. maybe that's get my election, that 'XX, a strengthen to would like just growth the least starting it's or going get past that's us to kind

Matt Olney

the of then far advances on the of June as as on remaining the duration more rate still you was? that on Give the any rate what and XX. the the that advances as those. down And was, in side, on more color on funding paid then those books when FHLB the on FHLB quarter the is color And

Shalene Jacobson

Yes.

towards we The are same by So, some those remaining rate the into we've around down. X.XX%, not, available rate. the quarter. where to the about is do that we'll end excess likely and The and take see just going continue majority the those X.X% short down more just But pay this We'll that. advances rate securities that amount we within sale invest cash good opportunities of of due We're not, amount, of X.X%. X.X%. quarter and the to paid If for got was are. is remaining to our term we'll a is about If play year.

Matt Olney

putting more conservative rate you're cap you And sounds that. guys like the discussed, Austin assumption on property a then that on

And existing remind most just property? of any the recent more property? then color the that Just on that appraisal on on me leases

Tyson Abston

LOI don't occupied. appraisal to with under We you we the LOI depends get what originally -- I an negotiating is we the Yes. just use. It's we to -- we take have, on. to took we're XXX% I we're It rates the property We it just It's think depends be offload we but and a the remaining good have that this is the one felt we million. signed, we have and cap because -- -- immediately. a did had was reserve take on pressure it's receive did that and And good it. rate on the do think we're reserve use, again, available booked Austin, $XX because to and it the believe, of prudent part that strong to property, lease of an assets you space earnings our passed it XX% on cap that's that will going to we

get -- So going up. leased we're to it

We have of us marketing marketing. out they're and Austin management rolling for us, best it for the and one also the in managing firms

I the actually sell is, And on foreclosed that's get mean, million the while probably starting week. We of where property that unusual it, I kind to getting asset good see property in for see is don't to any think dispose it, on and we have going that. it, DFW on don't point. the actually we're we're we home, a the but that's as $X.X going it think million exposure think any but bank we it that this we'll and It's it that market. to value foreclosed situation sell property. exposure appraisal we home on an full on it's we and The for we're $X.X

Nona Branch

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

Michael Rose

Matt. Just following similar line a up to on

been in relates then number assets, rationale the FHLB know as for by size look cash there? think over a banks $XX was liquidity to regulators, to I that, XXX of sheet about particularly And it I liquidity Was more points liquidity. that Just on at heard to for percentage Q-on-Q. on-balance from up banks that balance separately, increasing higher. billion and I've basis may that related regulators push ratio the if I to your some which borrowings, some of of have just there's the sheet an or number want

think X.X%. total to this move the of with continue But buy AFS to you cash understanding flows, expect that build you we ratio maturing I would to as saw take liquidity are Would you what would that guys you given we some quarter, just look some additional those about securities. forward?

Tyson Abston

I strong that is opening build. a really likely it's our to strategy, would I my comments, to said like in position. mean say maintain I

balance see the be growth opportunities with liquidity, company So positioned we're how capacity, we also to our ready crisis. with buckets the opportunities the to up. as grow that's to grow back as all we and economy And capital of improve. open see to want similar sheet And the improve and we financial we capacity in approached lending with very XXXX

So, we're now to sense and to portfolio we bond a it that, do for we ability portfolio. is going to have we the adding that makes us, place good adding to that which good as are think be. And grow time do the liquidity. see to We is it, a

stock excess only we advantage advantageous to also We at sure take of but to make us. trying have positioned not of the we're currently prices. front in see capital opportunities Again, buyback

So, loan X%, been. likely. versus as just things what not X.X% we're as than at for demand, we're although seeing opportunities across we're our looking very we'll borrowings liquidity build We're at they've attractive more -- customers just But and seeing, resilient aren't economy strong Texas. again, and

plan to to we want where lend, a we up, we on don't open can't not fight we're have [indiscernible]. be capital, to as capacity things go that things don't have the because but against we So, don't when position don't to liquidity. in going be well reality, back either we improve we have And positioned

of more improve. than that see our we that's year likely to two throughout the really been last strategy and environment we remainder the until continue this plan So the years,

Michael Rose

liquidity, balances. juxtapose maybe as think declining potential just about sheet the on-balance with then loan we for And more

on pretty have margin particularly this up the XX well done quarter points Q-on-Q. basis You guys

repricing. You some you is way think month us if X the the previously some a about appreciate with of context? talked the X that X just about still month basis points takes? a asset of should and in points with fixed help And all to we basis X Can to puts it that

Tyson Abston

mean on of X side points NIM. still balance I the run repricing. month catching It's improving with that's we're a X of the rate up Yes. sheet asset to still kind the our as basis

we think to And I go so as And a that's what in see assumption. pretty continue forward. anticipate we to good that's

Michael Rose

accelerator know the end a kind dynamic then year. we next up into the year that the you by just like being little and a of of million end just little number what end in XXX get $XXX And then previously, think, talked hearing, inflection level up actually and next growth. being is sheet bit on about an could of pushing could as I in the balance actually But It terms seems given bit I a maybe that lower. I'm --

just that to of X So we basis that to X about I Just growth? number? points number and think how $XXX a do kind some adding should Is closer number? month actually if

Tyson Abston

mean, answer our for it I we're helps earnings build historical creates stream, everyone of than that At to back average, else, a metrics. certainly our that, back. help efficiency our to been ratio. to much NIM trying point, like more It mean to this that's get all likely we've stronger where I yes. our to is goal and

change change on quarters. up point But targeted about $XXX month points to rates without basis I'm a we and next rates, for basis in of million. a basis a time, in So, short forward several pick X over period should the XXX, a XXX of X material we kind talking

to, $XXX continuing balance reprice the do go that again, So the out we as assets we're past sheet. of million

Michael Rose

buyback. then me, the just And for just on finally maybe

out earn earn Should certainly quarter sheet continue next acceptable -- X.X as Should we line. expect we where at think to looks around back like the finish space or of couple in the back. the this the share more levels time the balance around potentially was well and I here we years, quarters. expect are, continued capital in it of given shrinkage move potentially program forward repurchases just this within your

expires it just back April the these Should we expect full of usage XXXX. earn think I assuming an in levels and around capital that, levels?

Tyson Abston

The kind yes. If the that our for range, a in That's be out, quarter, purchased is which average in less we've same aggressive. If us. would would back is the yes, capital price of earn-back -- obviously, priority earn Michael. the price range allocation this be then pushes we'd answer means be past

Nona Branch

be Our next call from will Woody with KBW. Lay

Wood Lay

loan we the on expectations growth touch pickup a to see that XXXX. wanted in the and I maybe

think talk to to X see higher? Or and that'll as to get projects? enough rate just do cut think customers Just you rate your engage your push see to X on cuts do you it's one loan to or need customers, growth you potential really

Tyson Abston

to growth conversation they everyone tremendous get rate lot some see because cuts state policies. hearing our I Woody, wants confidence certainly opportunities of and I would just policies that that are that, more And in past and right that the regulatory a policies marketplace. or would election say are for to that X say opportunities would growth now. land more forward. And uncertainty overall of lot X it's latter. cuts kind see we're There and in our just this the give the going getting going uncertainty past kind of the where and a of of

half there's for 'XX, be events and a be into those us improve. kind that would create strong out in growth so, we'll And our back state environment our But bank -- to opportunities on for see could of see mode very that welcome. markets, a of obviously lot would our that that get play sense we it'd for and those more And and sometime sidelines in waiting plays of that the to capital how best first my the out. is of that's

Wood Lay

development in portfolio. balances maybe some past touch closer year. segment segment to your you XXXX? give construction just And just also wanted for have falling the be and Construction heading I to over appetite gradually been is what the comments then Can on may overarching the the on and

Tyson Abston

is rates been rates a appetite for underwriting currently would higher with have obviously constrained. more higher equity that support our we're position, as more couple those things, with years we're of at and and guarantor Obviously, managing. stronger and mean looking you I

So, and think, rate, projects more a good borrowers waiting little seeing that the the we're to less I are that environment. projects favorable the at are just to just but overall environment on for Not are had it. shelf do again, put investors -- a uncertainty

we XX two going So, for but in going muted it And be has tightened risk months certainly, see has XX, than the the current the the opportunities it's last to with last do then appetite forward, been more like in environment years. where rates are. bank's

And so, more we're little closer every underwriting is. and like it a bank, just sure stringent I'm

Wood Lay

OREO just run second seem And I relatively rate forward? like lastly, rate a flat bit in there. good of project does quarter-over-quarter. quarter's has expenses, the it were on going variability then is know But little a pretty they

Shalene Jacobson

think a I good is Yes, it run rate.

Nona Branch

gnty.com. today by this Time for for Thank Investor you our be will attending, p.m. Have available this our that questions. page you of like concludes at your remind call. a good day. everyone recording Central I call X:XX to Thank on Relations would and

Guaranty Bancshares (GNTY) 15 Jul 242024 Q2 Earnings call transcript