GNTY - Earnings call transcript Q4 2024 | Guaranty Bancshares, Inc.

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Nona Branch

Good morning. Welcome to Guaranty Bancshares Fourth Quarter 2024 Earnings Call. My name is Nona Branch, and I will be your operator for today's call. This call is being recorded.

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, Call. and Guaranty Fourth Bancshares Good everyone, Earnings Quarter morning, to

one Our and XXXX customers positive proud board year an good strong see to company a had very and build in in footprint team our year our of deepen in in 'XX. continue We to whole with our even in the with our I'm markets. trends our very our every across of relationships and company ability throughout stronger of prospects Texas.

the are metrics. We very year ending with strong performance

strong. credit capital Our liquidity, and metrics, earnings are all

We liquidity our continued of as from -- in position. further markets fact our all have year. biggest going good in current increased build the coming also the well core strong our state mature footprint value the capacity of have and remain hopefully This that our we our for opportunities. the of to growth is the to to the our loan portfolio see company expansion our and in organic throughout we as as grow overall capacity funding opportunity our in We we further buckets comes see lending capacity the strong area base year Texas. This and of shareholder focus as further deposits

for of in value growth long us very shareholder our assets our term. organic accretive Additional current platform to is

is we see current fair a what price feel value the also of We disconnect our company. between market and our stock

our the months. more buy in aggressively to coming So much we back also strong capital utilize to position plan stock

also rightsized this $X brand within proud very country and and And Texas. small the the the produced of brand the customer We the state being billion almost excited have in time name our results current year. same Again, past in of extremely team are strong I'm year, community we're fortunate some and be handle a the any at true the to markets enough to our at while a bank to recognition very and team of bank strongest philosophy maintain focus. relationship and about we're

I'm Shalene? to through this, going questions. and our it for with Now turn to it then Shalene we'll investor up go to open deck, over

Shalene Jacobson

kick this about Ty. million fourth balance quarter during sheet. were Thanks, XXXX. off with assets morning it Total the $XX of I'll up the

$XX Our securities by portfolio increased nearly million.

of However, offset million. balances that decrease cash about was in a by $XX

loans quarter. during book net $X a million down and sold REO $XX value were also an Our the million, property that of we had

during fourth share but side, per we AFS about the On also million fourth was of because quarter, the were our unrealized in slightly deposits paid $X.X $X.XX million, $X.X liability portfolio net securities down equity an $XX income was total or offset in the during of of losses quarter. million up million increase dividends by and $XX the

XXXX increased assets comprehensive had by year, about million. $XXX nearly by $XXX the million, decreased $X.X by partially million, which of million, $X.X other down and an deposits $XX.X which about million $XX million Bank exercised advances in Federal and for primarily increased from was replaced to equity portfolio our securities in of during with million. total were million. other loss net cash Home loan year, For increased during increase paid in resulting primarily $XX.X million and borrowings. Total Total and the year also Loan $XX $XX securities, in Loans $XX due portfolio. were down We a during that that XXXX that increased offset we stock the income million, options the smaller some

$XX during million year per million, of $X.X we dividends the had and share. also We of $X.XX stock or repurchases paid

up to $X.XX quarter from quarter, of in $X.XX from net and On the is quarter, fourth income, in fourth $XX earned basic company the the equates the XXXX. linked the income statement which $X.XX million share up during in per

income discuss in year total net income earnings minute. an in improvement in the was from And improved, by or linked I'll per here which the boosted prior net were a and $XX.X for quarters. largely $X.XX then basic Our interest million expense Noninterest also share. income

we for The basis average to from points as quarter, basis to rate return which X.XX% was during on XX loans bit. while September and you decreased compared to margin X.XX% while of interest a at quarter for quarter, average on quarter the benefited points X was the Our X.X% in assets X.XX% X.XX% rates liabilities, during costing X.XX% of last of securities during quarter. year. Fed deposits, was quarter, to to return same average the in know, XX our upward. The X.XX% points of quite continue that AFS And increase during of cost QX. Net the average And end quarter. securities all X.X% QX. X.XX% the the at end basis increased equity on our XX, lowered compared portfolios prior on the from X.XX% increased basis the to loan our however, on reprice quarter and X the is at improved points It fourth from XX.XX% the and the yield the end an third by quarter the

value the the is the That on ORE sale Austin of XX gain increased the increased income liabilities to points. Noninterest year, as XXXX. compared quarter. due is $XXX,XXX quarter margin only XX from interest-earning income book from on million to included X.XX% on sale quarter $XX the in in during reserved for in to property cost primarily interest the XX had the yield our of of that a we basis back X.XX% a is statement. of increased that by while of points, basis basis income fourth net other noninterest second property third assets the the that after points For $XXX,XXX This gain increased $XXX,XXX

fourth to we the the large the was third quarter due compared holding costs quarter in decrease A not allowance recovered the quarter. quarter. have of $XXX,XXX did some the third of quarter. Noninterest the we during decreased portion that So of in expense ORE fourth fourth $XXX,XXX during by to that expense

the of And third booked partially during employee based somewhat from lower actual claims meant from which The decrease costs lower declining. so needed quarter. mostly And accruals claims $XXX,XXX the in employees. benefit remaining were quarter. we've costs the can decrease that for from throughout thankfully, health the year, fluctuate So self-insured resulted we're expense is had we the care, on our

did had of real also some year We and notable not of growth any the long-time senior the employees number have during employees. retirements in

in loan benefit costs then ratio and X and part position improved portfolio growth we loan the past quarter income tightened from And salary couple expenses, in transactional we've 'XX right. and overall. the that to was of finally, this lower quality. and 'XX because resulted On mentioned these move we for loan XX.XX%. All So to allowed loans underwriting, also of the strategically shrunk lower certainly that's and to We higher fourth several efficiency during our portfolio to that. $XXX.X and on segments. accounts Gross the and limit in and the elsewhere. of decreased some million our times decreased CRE losses quarter future million We've year-to-date, year $X.X calls credit C&I, C&D our and primarily possible to from back exposure a balance years, loan to sheet over had past really uncertainty over ourselves or the economic

million the did fourth new during $XXX.X X.XX%. to average loans quarter, we We loans. an continue at originate However, new originated of in rate

remain continue pretty yield So Nonperforming our loan to also good. remains at assets low levels. new very

the at and nonperforming to Our to percentages of nonaccrual assets both Those were X.XX% assets total X.XX% include end year-end at QX. loans. compared ORE

So lead the there. of Austin in property the the ORE quarter course, the sale helped improvement of to during

of We to the very, X.XX%. fourth low. net net And very essentially are net quarter. the during loans a no year, average charge-offs charge-off we had Our for had charge-offs ratio

property For hopeful we and we're one that with losses the any currently ORE, the before single-family of end can sell quarter. have minimal we the or that remaining,

office-related C&D including CRE that we concentrations manage and mention also our closely, I'll the loans.

XX.X% related, smaller areas. that CRE an our And loan represents those only don't XX.X%, about is mostly concerns a average have and have significant any loans $XXX,XXX. diverse of portfolio total have in X.X% We of and of balance office only are those that portfolio.

loans as million prior nonaccrual our is total loans. XX, down the from and December $X.X our in $X.X which of X.XX% of Finally, were only million quarter, represents

relationship loans XX, were $X.X that it million noncompliant $XX.X which million have substandard at decrease XXXX. The never result didn't with. a really any was due is of Our stress past September the loan that down was from risk that terms of some for financial had year-end, the rating primarily end upgrading the and is at

during $XX.X that the on quarter, in back resulting the of So and reverse got all on we either. We then assets with loan terms no provision loan We and have of loan the worked for losses trends. substandard. problem from did borrower, longer credit the $XXX,XXX credit a the out any lower noncompliance lower balances, with overall anticipate was upgraded, loan loan compliance the stable really million losses don't

next the deposits, slide, to liquidity On we've got capital. and

CDs our previously, increased million. million grew the savings DDA balances million decreased $XX.X deposits during mentioned million. balances increased quarter and $XX.X by total I As $X.X Money quarter. and the market $X.X during

a very for historic has this total our an at represent our continue $XX,XXX. with quarter, granular the base. although accounts they're are of deposits good stable million. Noninterest-bearing up end year, XX,XXX year, have total core deposits, that and And account to At the deposit we deposit respect QX. ended deposits for For slightly risk, overall a XX.X% nearly had percentage $XX.X to balance down of of Guaranty they deposit the average

So balances. lots account of smaller granular deposit

uninsured about total mentioned. compared Our excluding liquidity of relatively at XX.X% as also unsecured accounts, with a were ended good, XX.X% quarter low, the the guarantee-owned XXXX. Ty end remains funds of year-end. Liquidity ratio XX.X% our at deposits deposits of to also We and public remain deposits

year some cash of year. mentioned used payoffs also of previously, and from to I securities securities and also flows borrowings pay the the increased deposits available-for-sale and the loan $XXX about in advances we from to and maturing As new million during down invest those during

of through contingent losses, $X.X Home available gone billion, We the to investment Bank, at lines in they included a and Loan liability income. the which million, little fourth our unfortunately, also credit section have of comprehensive during correspondent some remains unrealized AFS up securities $XX.X on have accumulated is but Federal With to total including reasonable the about $XX.X Federal and million our respect Bank within securities sources, unrealized the banks. various Reserve bit equity with of attributable other losses total quarter, net

of is Capital excess We in a used fourth quarter a $X.XX dividend. to per capital strong. pay our share portion also the

year for the also $X.XX a We paid share. of dividend per

intrinsic value the than also into less shares to company. continues X.X% During or mentioned, continue the our little course, XXX,XXX repurchases add And for a And of repurchased XXXX, of those looking we shares of we're shareholders. to that, Tom as outstanding XXXX.

total remarks. to concludes end assets that prepared was the the average at of Our equity year XX.X%. And my

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

Nona Branch

It Lay time our now first And is with will for Woody be KBW. from Q&A. question our

Wood Lay

off nice start the were yields. The NIM quarter. I see on really up to expansion the wanted quarter-over-quarter. loan was in to actually They

make about forward? that loan any assuming the of wanted wasn't And Just benefit do sure sort not, yield interest going in quarter. think to how there onetime you

Shalene Jacobson

So have came than Woody, small I that nonaccrual we but believe amount it on, was back interest a less of did $XXX,XXX.

$XXX,XXX or $XXX,XXX. was it think probably around I

at deposits -- it of flat, a been we'll the that Fed if we of term the NIM. We repricing. terms. got lot to meaningful we've million will rate the $XXX probably in real So are we've does, $XXX got rates I'm what than near on And those million reprice XX sorry, keep whole not wouldn't XXXX loans about our that move -- they have but certain future. that, have on reprice during But cost that about variable more depending

costs than if maybe to at, to but stay flat, go bit, books little now. repricing higher at down rates deposit see So we they're a we continue rates have where loans think we'll stay continue our that will on

Wood Lay

expectation guess, expand it. the that fourth can NIM, level? the the looking overall then at continue is Got I to quarter it from And

Tyson Abston

rates different we're Yes, go flat. on guidance but specific whether NIM that. rate We're through to continued go And environments, or Yes. give throughout in modeling actually Woody, our not 'XX. we're little going I'll down rates rates bit, modeling expanding to up growth modeling in speak 'XX. that a stay NIM we're that,

scenarios So and we've in NIM. still moderate we see scenarios, up pretty it rate our or modeled different expansion down, in

Wood Lay

growth. loan That's helpful. Maybe over shifting to

time? the you going a the in sound some outlook about all the we Do You loans little bullish is it you're growing take towards think more begin overall growth expectation first any here. of bit XXXX? to expecting And just see level to quarter Or XXXX? in from of

Tyson Abston

year. capacity seeing in growth. We're we the fall way, the to loan at opportunities overall But the main grow for -- position going markets. quality definitely come has exactly see thing we growth positive, opportunities environment how position as we're liquidity markets the do and our sure certainly, see Yes. point, our very in in we that's more buckets us going post-election, just to that's for during and the our quality been the And -- and anticipate not to loan we're book net and We're out I a to some those. have loan we're mean, is the in in where this to

happens X what years. on with 'XX So and loan positive just we're growth it's certainly, in definitely the have to last environment, in overall we rates have there. more just more much -- see out the We'll but than I mean, optimistic we're

Wood Lay

relates How deposit Yes. ahead ratio it potential up? in the XX%. your for loan-to-deposit impact growth does year at mean, the to And growth I to view that pick deposits, with loan sitting as on the

Tyson Abston

And far 'XX. deposit core But mentioned that relationships. And deposit itself, growth for I mean, XX,XXX a a new about accounts for are always building mean to this we we a driver value. in core we before, I as of open as strategy not year. we focusing will growth core franchise -- focus a focused us see as checking as I've continue that's generally on on

and of which, the of out optionality will position us been a marginal go to fund standpoint a we're have be to we where unfolds. that's environment So focus in in again, to in ours sheet, how core raise position relationships. any But the continue a have from deposit granular puts not year always we the in the strong funds balance and

Shalene Jacobson

have, that Woody, to about XXXX. mention due at just in million growth of expected cash in funding from we portfolio also flows the $XXX bond

Nona Branch

be from Next question will with today Stephens. Matt Olney

Matt Olney

saw the to on on color drill want back new in more Any more fourth specifically, I that bit loan little customers existing of quarter. or to bit customers? utilization a growth just We a C&I. commentary, Going little growth of down C&I the the

Tyson Abston

existing utilization have. Matt, quarter, that customers. that's program -- to going be of existing targeted but haven't lines definitely, last C&I we primarily There's for saw customers not specific a utilization growth, more of had we we our

Matt Olney

identify? was any driving Ty, that, within And can increase? some utilization it seasonality? theme that Anything that specifically the you Was

Tyson Abston

that that I going been really I Nothing could that. that nothing and -- I point I that but -- specific we've mean, spring can typically into it's mean nothing speak year-end and to see to no. the we at -- specifically,

Matt Olney

back especially the Okay. fourth of deposit growth, deposit quarter. And good then growth, end the the really on towards

the remind for me Just seasonality any outlook or of in any growth deposit near there term?

Tyson Abston

has some is just of We Shalene that. mean, deposit in But probably exact that, our of an of, comes fund again, other have quarter that -- fourth I some in, on do primary than don't core seasonality that money I with our growth been in Texas kind our our one That's strategies. region. East know public number

replace again, deposit And 'XX. how part as out some QX, so will we it in other there franchise. But in that of during some with funds typically, look fourth growth year, that be core we're the at quarter which, some growth. that's building typically East we region moves of -- the Texas QX, just into planning public of that in has our for stays And deposit get we that's

Matt Olney

us expense care you XXXX? mentioned expenses, operating on then for lower then the growth the throughout color health in costs the year. and I for some retirements And Okay. Any think

Tyson Abston

one? that Shalene, do want do you to

Shalene Jacobson

very times assets. X.X% that growth really Yes. for expense target about guys that told in We're X.X% total mean, shooting XXXX. we've I you little several before, of

or So up X% we're to X% year. be expenses expecting really only next about

Matt Olney

seems Texas. is And I nice Understood. consolidation. your bank a just in love position really consolidation the theme, thoughts then M&A the to on participate It hear lastly, in guess, Yes. just I that would around to updated in like

been curious having merger conversations Just about your you've partners. potential with

Tyson Abston

have sense. conversations. and know term. of to primarily position position conversations. I've it a opportunity in certainly sheet for fit our And on long good we balance metrics and we're where mean, lot Matt, open we're makes continuing could but if capital we're sense and our different Like be we're conversations a about the anything focused to shareholders made that organic the growth and have to continuing right with I along, -- overall was We're a acquisitive and came culture said,

in and conversations out So we're to see that how kind have we'll plays 'XX. those lines, continuing of along

Nona Branch

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

Michael Rose

expenses, a could give terms other have on you down sense I I expenses it we X.X% a row. that for -- just next about appreciate whole. potential think that of that you that kind line you back in growth in hires think increase expecting? employee like just should employee just just would trying the part we can certainly maybe contemplates of line. Just But would quarters of that the year. sense how maybe noninterest for for retirements lending have better be compensation and Maybe to a do then for as and something X understand what kind is now expense But get any a a of what offset bogey -- I seen you're the and Shalene. look said expect the Is compensation you

Shalene Jacobson

Yes. Sure.

benefits other budget but to make we to planned, additional do anticipate and continue to probably lenders down. some some additional some growth that back did for don't officers in go our that continue we'll changes partially go envision savings expect expense during get retirements commercial into don't will vendors to health don't hopefully loan built self-insured So cost down. I vendors we're and care to insurance. related the We some do those some health We for have have our that we XXXX. Again, XXXX. expenses any add We XXXX,

So to adjust that the it's going we accruing then be. expect start to of more see actuaries expense towards the what year. end or the And our if we the that to we'll be year less,

be employee QX QX. in will from the back will ended where So it in expenses they -- up

Michael Rose

at that color. to this would in the provision think, outlook asset down to reason X.XX% to front. any are, reserves there last any be you your good. some like some come seems know to Perfect. quality relatively but you I on with quarter-to-quarter, sold the kind down, then basically I maybe be near the I think term? And appreciate are just of loans that point Is mean, you here. I probably guys that guys property OREO to loans. of nothing expected of Should is sort And continue holds we have to expense -- assuming credit it to guys there variation there'll stable? expect pretty

Shalene Jacobson

it is, Michael. Yes,

ACL factors XX-month, XX-month then, have at losses. our we Our model those because model on And estimates. -- is don't looking CECL any economic course, really forward qualitative based is based primarily of historical

key we'll anyway, factors a our need we down continues we'll our We then anticipate probably conservative if have extra those more provision plays we the everything adjust not much, and but grow. will changed grow, provision economy. But then bit waiting factors see those economy If out that even little I Q to reduce of those the expense. need Q to how improve, reduce unless being sort that to not probably with just factors and

provision. And may anything, little provision, growth if additional we If have may than it, we up we not expect we than much. we more expect, we'll provision. there's a grow but end if expect, having anticipate have where some any lower is reverse not So we if growth

Michael Rose

And buyback, hear lean in on you the little guys Perfect. bit then the Okay. maybe maybe I more message that are just to a looking aggressive.

X I the Would the the back earn how part with time -- And be X would think program mean, guess, I is to through little mean, of April the to think think aggressive the million I I early I use I the you in over buyback? XXXX. goes left. frame? a it you in well, like expect have program all around shares years. you

Tyson Abston

Michael, willing use it, of I don't have we're certainly to. and capacity know to if but the all we would

the aggressive. been So going good be value we're again, bank trading, just -- at just where how a We versus bank we're just we the there's to disconnect. and we've more look intrinsic pretty of

the rise years have And X think the cycle of capital, seeing also in so credit through kind that our And last in X for out. But this to lot to that's we just the and all been sense of a kind of of excess -- capital. being we we've how the we've years, where land. credit is a continue of period, part where that hesitation created is played going AOCI cautious -- monthly the and rates with create last and

a the great. be -- based a see and know from that be that, this value well very could a buyback at company. aggressive -- nice use be we But to think we just able kind makes we I our bank, to would being standpoint plan, multiple. So much the acquire sense aggressive share more definitely, of again, that more we that plan. And of plan, point intrinsic X of to at and going that's the We're kind if million how a of of on that lot than that's

Michael Rose

the basis at so is loans last Okay. of and And kind to certainly said the just the maybe what drivers one kind final for repricing not but going of me. per quarter that you of of what I or tailwind X that you assume looking forward, appreciate understand points securities expect one Great. I certainly month, expansion margin. probably NIM have. you're the

sense margin quarter us expansion? in this at obviously strong. could very, least, next give the X or we Because what of here a expect, quarter you in very of Can better was terms

Tyson Abston

to points point the disappoint, I year. the of But model -- is a I X with basis we and continue key variables put a I stay the in obviously, expanding out Well, to lot it that. there's way. NIM throughout try mean, guess the month as there's we'd not mean, a that baseline

And basis good So hopefully, baseline there. is the won't as to place from a I X month a again, be. think points disappoint a we pretty

Nona Branch

Thank X:XX for attending. will at page this p.m. on of call available I remind today, questions. Thank your would gnty.com. concludes to everyone, our for This our be call. Relations you the you all like recording by Investor

Guaranty Bancshares (GNTY) 21 Jan 252024 Q4 Earnings call transcript