Guaranty Bancshares(US:GNTY)2022-01-18 19:07Financial Data and Key Metrics Changes - Total assets increased to $3.09 billion, a rise of $345 million or 12.6% for 2021, driven by a $384 million increase in deposits [6][10] - Net earnings for Q4 were $9.2 million, or $0.76 per share, compared to $9.3 million and $0.77 per share in Q3 [19] - Year-to-date earnings were $39.8 million, or $3.30 per share, up from $27.4 million or $2.25 per share in 2020 [20] - Return on assets for the year was 1.36% and return on equity was 13.72% [20] Business Line Data and Key Metrics Changes - Core loan growth, excluding PPP and warehouse lending, was 10.8% for 2021, representing $176 million in loan growth [10] - In Q4, net core loans decreased by $10 million, or 0.5%, due to elevated paydowns [11] - Non-interest income decreased by $400,000, or about 6%, in Q4, primarily due to a decrease in loans sold in the secondary market [28] Market Data and Key Metrics Changes - Deposits increased by $384 million, or nearly 17% for the year, with $108 million of that in Q4 [13] - Non-performing assets as a percentage of total assets were 0.09% at the end of Q4 [49] - The average loan yield for Q4 was 4.66%, down from 4.73% in Q3 [25] Company Strategy and Development Direction - The company plans to continue onboarding new producers and maintain a focus on core deposit relationships to drive franchise value [73] - The company is cautious about loan growth expectations for 2022, estimating high-single-digit growth due to potential headwinds from rising rates [41] - The company is actively looking for M&A opportunities that align with its internal growth plans [80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Texas economy and the company's growth prospects in 2022 [4] - The company remains cautious regarding the impact of COVID-19 variants and the end of economic stimulus programs on borrowers [48][50] - Management expects to recognize a significant portion of deferred fees from the PPP program during 2022 [40] Other Important Information - The company did not buy back any stock in the quarter and paid a $0.20 dividend, totaling $0.80 for the year, which is about 24% of earnings per share [17][18] - The company has a strong allowance for credit losses, with no provision or reverse provision during Q4 [49][52] Q&A Session Summary Question: Loan growth expectations and paydowns - Management indicated that loan growth is influenced by robust paydowns and sourcing new relationships, projecting high-single-digit growth for 2022 [55][58] Question: Excess liquidity and securities growth - Management expects a 5% to 10% increase in securities each quarter while maintaining excess liquidity as rates rise [61][62] Question: Operating leverage and expenses - Management plans to drive positive operating leverage despite higher expenses, focusing on adding producers to support growth [63] Question: Variable rate loan portfolio - Management confirmed that approximately $1.25 billion of total variable rate loans exist, with about $500 million repricing immediately [65][66] Question: M&A activity - Management is open to M&A opportunities that align with internal growth strategies but has no specific targets at this time [80] Question: Non-interest income outlook - Management anticipates a 5% increase in non-interest income for 2022, with a baseline of approximately $24 million from 2021 [82]