Guaranty Bancshares(US:GNTY)2021-11-05 12:05Financial Performance - Net core earnings for the third quarter were $9.7 million, compared to $9.8 million in the second quarter of 2021 and $11.1 million in the third quarter of 2020[194]. - Net earnings for the nine months ended September 30, 2021, were $30.6 million, compared to $17.5 million for the same period in 2020, representing a 75.5% increase[225]. - Net earnings for the three months ended September 30, 2021, were $9.3 million, compared to $10.1 million for the same period in 2020, with basic earnings per share decreasing from $0.84 to $0.77[269]. Loan and Asset Growth - Loans grew by $132.8 million, or 7.5%, during the third quarter, and by $168.6 million, or 9.8%, since December 31, 2020, excluding PPP loans[194]. - Average loans outstanding increased by $55.8 million, or 3.0%, for the nine months ended September 30, 2021, compared to the same period in 2020[232]. - Total loans amounted to $1,906,989 thousand, with an average yield of 4.88% for the nine months ended September 30, 2021[237]. - Total loans held for investment reached $1.97 billion, an increase of $104.1 million, or 5.6%, from $1.87 billion at the end of 2020[304]. Credit Quality and Allowance for Credit Losses - Non-performing assets as a percentage of total assets were 0.11% at September 30, 2021, down from 0.53% at September 30, 2020[194]. - The provision for credit losses was $1.7 million for the nine months ended September 30, 2021, compared to $13.2 million for the same period in 2020[229]. - The total allowance for credit losses was adjusted from 55 basis points to 14.75 basis points across the loan portfolio during the first three quarters of 2021[246]. - The total allowance for credit losses (ACL) was $30.6 million, representing 1.55% of total loans, down from $33.6 million or 1.80% as of December 31, 2020[327]. Interest Income and Margin - Net interest income before the reverse provision for credit losses increased by $5.5 million, or 8.3%, to $71.5 million for the nine months ended September 30, 2021[232]. - The net interest margin on a taxable equivalent basis was 3.56% for the nine months ended September 30, 2021, down from 3.75% for the same period in 2020[234]. - The net interest margin for the three months ended September 30, 2021, was 3.40%, down from 3.61% in the same period of 2020[275]. Deposits and Funding - The average deposit balance increased by $126.4 million, or 8.6%, over the same period in 2020, despite a decrease in the cost of interest-bearing deposits by 52 basis points[233]. - Total deposits increased to $2.56 billion as of September 30, 2021, an increase of $276.7 million, or 12.1%, compared to $2.29 billion as of December 31, 2020[346]. - Noninterest-bearing demand accounts increased by $195.8 million, or 28.11%, from $696.5 million as of December 31, 2020 to $892.3 million as of September 30, 2021[347]. Noninterest Income and Expenses - Noninterest income rose by $1,927 thousand, or 11.6%, totaling $18,538 thousand for the nine months ended September 30, 2021, compared to $16,611 thousand in 2020[248]. - Noninterest expense totaled $54.3 million for the nine months ended September 30, 2021, an increase of 12.3% from $48.3 million in the same period of 2020[257]. - Employee compensation and benefits rose to $31.1 million for the nine months ended September 30, 2021, reflecting a 15.4% increase from $27.0 million in the prior year[258]. Tax and Regulatory Capital - The effective tax rate increased to 18.22% for the nine months ended September 30, 2021, compared to 17.09% for the same period in 2020, with income tax expense rising to $6.8 million from $3.6 million[267]. - As of September 30, 2021, Guaranty Bancshares, Inc. reported total capital to risk-weighted assets ratio of 14.13%, up from 13.20% as of December 31, 2020[368]. - The company was classified as "well capitalized" under prompt corrective action regulations as of September 30, 2021[367]. Economic Impact and Future Outlook - The impact of COVID-19 continues to create uncertainties regarding future economic conditions and credit quality[191]. - The company expects to manage interest rate risk effectively, with a target that net income at risk should not decline by more than 15.0% for a 100 basis point shift in interest rates[383]. - A simulated increase of 300 basis points in interest rates could lead to a 6.69% increase in net interest income as of September 30, 2021[384].