Earnings call transcript: Guaranty Bancshares beats Q1 2025 forecasts

Guaranty Bancshares Inc. (GNTY) reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of 75 cents, compared to the forecasted 70 cents. The company’s revenue also exceeded predictions, reaching $31.76 million against an anticipated $30.94 million. The $481 million market cap bank has maintained consistent dividend payments for nine consecutive years, with three analysts recently revising earnings estimates upward. Following the earnings announcement, Guaranty Bancshares’ stock price increased by 2.88%, closing at $39.13, reflecting a positive investor response.

InvestingPro analysis reveals additional insights about GNTY’s performance, with over 30 key metrics and exclusive ProTips available to subscribers.

Key Takeaways

• Guaranty Bancshares exceeded EPS and revenue forecasts for Q1 2025.
• The stock price rose by 2.88% in response to the earnings beat.
• The company reported a strong net interest margin of 3.70%.
• A systematic approach to bond portfolio management and a strong loan pipeline were highlighted.
• The Texas economy’s strength was emphasized as a positive factor.

Company Performance

Guaranty Bancshares demonstrated robust performance in Q1 2025, with notable improvements in key financial metrics compared to the previous quarter. The company’s net income reached $8.6 million, translating to 76 cents per basic share. The return on average assets stood at 1.13%, while the return on average equity was 10.83%. The net interest margin improved to 3.70% from 3.54% in Q4 2024, signaling effective interest rate management and operational efficiency.

Financial Highlights

• Revenue: $31.76 million, up from the forecasted $30.94 million
• Earnings per share: 75 cents, surpassing the 70-cent forecast
• Net income: $8.6 million for Q1 2025
• Net interest margin: 3.70%, an increase from 3.54% in Q4 2024
• Total assets increased by $37 million
• Cash reserves grew by $72 million

Earnings vs. Forecast

Guaranty Bancshares’ actual EPS of 75 cents was 7.14% higher than the forecasted 70 cents, marking a positive earnings surprise. The revenue of $31.76 million also exceeded expectations by 2.68%. This performance indicates the company’s ability to outperform market predictions, continuing a trend of strong quarterly results.

Market Reaction

Following the earnings announcement, Guaranty Bancshares’ stock price increased by 2.88%, closing at $39.13. This rise reflects investor confidence in the company’s financial health and growth prospects. The stock has delivered impressive returns, with a year-to-date gain of 13.8% and a one-year total return of 36.3%. The stock’s movement is within its 52-week range, with a previous high of $42.95 and a low of $27.01, suggesting room for further growth. According to InvestingPro’s Fair Value analysis, the stock appears to be trading near its Fair Value, with analyst targets ranging from $42 to $44.

Outlook & Guidance

Looking ahead, Guaranty Bancshares expects 2-5% net deposit growth for the year and anticipates continued tailwinds for its net interest margin. The company is poised for potential loan growth, contingent on economic clarity, and plans to maintain its systematic securities portfolio management approach. No changes to loan loss reserves are planned, indicating confidence in credit quality.

Executive Commentary

CEO Ty Abston emphasized the resilience of the Texas economy, stating, "The Texas economy remains strong and growing." He highlighted the stability of the company’s deposit base, noting, "We continue to see the granularity of our balance sheet as offering real resilience in uncertain times." Abston also addressed the company’s competitive positioning, remarking, "We’re paying mid-tier on rates. We’re not the lowest rate in the markets. We’re not the highest."

Risks and Challenges

• Economic Uncertainty: National economic conditions and tariff situations remain uncertain, potentially affecting loan demand.
• Noninterest Expense: Increased noninterest expenses due to executive incentive plans and payroll taxes could impact profitability.
• Market Competition: Competitive interest rates could challenge deposit growth and margin expansion.
• Credit Quality: While no immediate concerns were noted, any deterioration in credit quality could necessitate reserve adjustments.
• Regulatory Changes: Potential regulatory shifts may affect operational strategies and compliance costs.

Q&A

During the earnings call, analysts inquired about the composition of the loan pipeline and credit quality concerns. Executives assured that the loan pipeline remains robust and similar to the current portfolio, with no immediate credit quality issues. The management also expressed a cautious approach to navigating economic uncertainties, highlighting potential reserve releases with increased economic clarity.

Full transcript - Guaranty Bancshares Inc (GNTY) Q1 2025:

Operator: Good morning. Welcome to the Guaranty Bancshares First Quarter twenty twenty five Earnings Call. My name is Nona Branch, and I will be your operator for today’s call. I would like to remind everyone that today’s call is being recorded. After our prepared remarks, there will be a Q and A session.

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.

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Thank you, Nona. Good morning, everyone. Welcome to our earnings call for Q1 twenty twenty five. Guaranty achieved good results in the first quarter of this year. I’m very proud of our team and their continued effort to serve our customers and build new relationships across all of our markets in Texas.

The Texas economy remains strong and growing. While there’s certainly economic noise and uncertainty on national levels, so far, we are not seeing negative impact or signs. This quarter, we did highlight the granularity of our balance sheet, both in our loan book and deposit base, similar to how we’ve done in past uncertain times during COVID and two years ago when we had there were bank failures. We continue to see the granularity of our balance sheet as offering real resilience in uncertain times for our company. Our loan book did shrink a little in Q1.

However, our loan pipeline so far in Q2 is as strong as we’ve seen it in the last three years. So we’ll see how the quarter turns out. Our net interest margin continues to build and we’re modeling for good results for the year, really regardless of whether we see rate cuts or see significant loan growth in our loan book. We did repurchase some shares in Q1 as we announced we were planning to do at the end of Q4 last year. We are currently not in the market and active in the market, but we do stand ready to reenter the market if and when we decide it makes sense.

Our capital, asset quality, and liquidity all stand at very strong levels. We continue to be well positioned for future growth, while at the same time also being well positioned for an economic slowdown, whichever we end up facing. I’m going to turn it over to Shalene to go through the investor deck, and then we’ll answer any questions you have. Shalene?

Shalene Jacobson, Executive Vice President and Chief Financial Officer, Guaranty Bancshares: Thanks, Ty. I’ll start today with the balance sheet. As Ty mentioned, total assets increased about 37,000,000 during the first quarter. Cash was up nearly 72,000,000, primarily due to loan and securities related cash flows, as well as we had increases in deposit balances during the quarter of 12,200,000.0. Our net loans decreased 23,000,000, while our total securities portfolio decreased about 7,200,000.0 overall.

We did purchase 30,900,000.0 in new AFS securities during the quarter, but that was offset by about 30 31,500,000.0 in maturities calls and mortgage backed pay downs over the entire portfolio. Unrealized losses on our AFS securities pretax decreased from 20,800,000.0 at December 31 to 14,700,000.0 on March 31, which was an improvement of about $6,000,000. Of course, you know, we’re not sure exactly where that’s at today, but hopefully moving in the right direction there. We also sold the one remaining ORE property that we had, which was a single family home in the DFW market that had a book balance of 1,200,000.0 during the first quarter. Our total equity increased by 6,700,000.0 this quarter, resulting primarily from net income of 8,600,000.0.

We had employee stock option exercises that netted us about 1,300,000.0 and an improvement in other comprehensive income of 4,700,000.0 due to the decrease in unrealized losses on the AFS securities. This was offset by stock repurchases that Ty mentioned at of 5,200,000.0, and we also paid dividends of 2,800,000.0 during the quarter. And we’re happy to say that we did increase our dividend in the first quarter to 25¢ per share, which is up from 24¢ per share for each quarter in 2024. Onto the income statement. The company earned 8,600,000 in net income in the first quarter, which equates to 76¢ per basic share, down from 88¢ per share linked quarter and up from 58¢ per share in the first quarter of twenty twenty four.

Compared to both the first quarter of twenty four and the linked quarter, we continue to have good improvements in net interest income, while noninterest income was down and net interest noninterest expense was a bit higher, which I’ll discuss more shortly. Our return on average assets was 1.13% for the quarter compared to 1.27% last quarter, and our return on average equity was 10.83% for the quarter compared to 12.68% in Q4. Our net interest margin was 3.7% in the first quarter, which is an increase from 3.54% in the fourth quarter and 3.16% during the same quarter last year. The NIM increases resulted from the Fed lowering their rates by 75 basis points in the late in late twenty twenty four, as well as continued repricing of our loans, securities and certificate of deposit portfolios. The average yield on our interest earning assets remained flat at 5.6% from the fourth quarter, while our cost of total deposits decreased 15 basis points from 2.11% in the fourth quarter to 1.96% in the first quarter.

We also believe, and we’ve mentioned this the past few calls, that we’ve got some continued tailwinds in our NIM for the remainder of 2025, and we really expect it to continue to increase a basis point or two over the next several months. The reason for our assumptions here are that, you know, aside from our 263,000,000 in loans that float daily, we also have about 341,000,000 in variable rate loans that reprice on different time intervals, but that we expect to reprice over the next twelve months. So 341,000,000 that we expect to reprice over the next twelve months. Those loans currently have a weighted average rate of 6.36%. Now assuming rates just stay where they are and that all of that 340,000,000 reprice according to their current loan terms and balances, the new weighted average rate twelve months from now on that pool would be 7.42%, which is an increase of a hundred and six basis points.

Now on the cost of funds side, we also have 613,000,000 in certificates of deposit that are repricing between April 1 and year end, they currently have a weighted rate of 4.2 purse 24%. If all of those CDs were to renew into the same product at our current rates, the new weighted average rate will be approximately 3.65%. So, of course, not all of the loans or CDs may reprice at those original terms, but that really helps illustrate our expectation for the continued NIM tailwinds over the next several months. Noninterest income decreased by 693,000 during the first quarter compared to the fourth quarter. This is primarily the result of elevated noninterest income in the fourth quarter from rental income that we were receiving on the Austin ORE property and then a gain on sale of that same property, which was sold during the fourth quarter.

We also had a loss on sale of a hundred and 84,000 during the first quarter of twenty twenty five from the sale of that one remaining ORE property that added to that change quarter over quarter. We also had service charges and gains on sale of mortgage and SBA loans that were down slightly really due to lower volumes during the first quarter. And then we had debit income that was up during the first quarter of twenty twenty five compared to the fourth quarter of twenty four and the first quarter twenty four. That’s due to an annual Mastercard bonus that we received of about 400,000 during the first quarter of this year. In 2024, that was recorded during the second quarter.

So you’ll see an elevated debit card income during the second quarter of last year. Noninterest expense increased by 1,300,000.0 in the first quarter compared to the fourth quarter, and that was primarily due to employee comp and related benefits. During the first quarter of every year, we fund and expense the company contribution to our executive incentive retirement plan, And we also have additional payroll tax expense in the first quarter that’s related to our year end employee bonus that’s paid at the end of twenty January. Both of those expenses accounted for about 575,000 of the linked quarter change. And, again, those are consistent consistently expense or make a difference during the first quarter of every year.

We are also partially self insured for health insurance, which I mentioned last quarter. We were over accrued at the end of twenty twenty four due to lower than expected health claims. And that resulted in a $446,000 reversal of health expense accruals in the fourth quarter of twenty twenty four, which we did not have in 2025. That resets in January of each year. We expect employee comp and benefit costs to be lower in subsequent quarters and and also more consistent.

Finally, our efficiency ratio this quarter was 66.78%. Alright. On to our loan portfolio and allowance for credit losses. As both Ty and I mentioned, gross loans decreased 23,000,000 in the first quarter. You know, Ty spoke to this a little bit, but we certainly anticipated and saw a strong loan pipeline at the end of twenty twenty four, but demand for many of our borrowers has really slowed during the first quarter as a lot of them are waiting to see how the tariff uncertainty is going to impact their businesses and the overall economy.

That being said, our balance sheet is really strong, and and we’ve got very good liquidity and are ready to grow those loans when our borrowers are ready. Ty said our our pipeline is very full right now, so we’re really hoping we can get that going here soon. Nonperforming assets continue to remain at very low levels. Our NPAs to total assets were 0.15% at March 31 compared to 0.16% at year end. The nonperforming assets include both ORE and nonaccrual loans.

So the sale of the property in Austin during the first court during the fourth quarter helped lead to the improvement there, and then the sale of our single family ORE property in DFW helped reduce the ratio even more in the first quarter. Net charge offs also remain low. Net charge offs were 0.02% in the fourth quarter of in the first quarter of twenty twenty five. They were essentially zero last quarter, and they were also 0.02% in the first quarter of twenty twenty four. Our nonaccrual loans were up slightly to 4,800,000.0 from 3,700,000.0 as of year end, and that represents point 23%, less than a quarter of percent of our total loans.

The increase is primarily due to one single family loan borrower that we’re working on a solution for. We don’t expect any losses on that loan. It’s very well collateralized. Our substandard loans were up slightly, but fairly consistent with year end. We did have a reverse provision for credit losses of 300,000 during the quarter, and we didn’t change our qualitative factors at all, the decreases resulting almost entirely from lower loan balances and stable credit trends.

Our quarter end ACL coverage is 1.32% of total loans, which is one basis point lower than our year end percentage of 1.33. You know, if the tariff situation is is cleared up and we have some more certainty there and the economic outlook starts to improve, we do anticipate that we will adjust the qualitative factors at some point, which may result in in future reverse provisions as well. Of course, that’ll be offset if the loan portfolio starts to grow again. Alright. On to deposits, liquidity, and capital.

Our total deposits grew 12,200,000.0 during the quarter. Money market and savings balances increased 19.6% or 19,600,000.0. Sorry about that. DDA balances increased 11,500,000.0 during the quarter, and our certificates of deposit decreased 18,900,000.0. Noninterest bearing deposits continue to represent a good percentage of our total deposits.

We had a ratio of 31.3% at quarter end, up a couple of basis points from last quarter. With respect to overall deposit risk, Guaranteed has a granular and historically stable core deposit base. At the end of the first quarter, we had just over 91,100 active deposit accounts that had an average account balance of just under $30,000. Our uninsured deposits also remain relatively low, excluding our guarantee owned accounts. Uninsured deposits were 26.7% of total deposits at quarter end.

As I mentioned and I mentioned previously, our liquidity right now is great. We’re ready for some loan growth. We ended the quarter with a liquidity ratio of 19.8% compared to 16.5% at year end. Our cash balances increased 72,000,000 during the quarter to 217,800,000.0 in total cash and cash equivalents. We also anticipate another hundred and 16,000,000 in principal and interest cash flows from maturing securities between now and year end that we’ll either use for loan growth or to reinvest in securities or or cash.

We also have total contingent liquidity of about 1,300,000,000.0 that’s available through the Federal Home Loan Bank, the Federal Reserve Bank, correspondent bank, Fed funds lines, and a revolving line of credit. Finally, respect to liquidity, you know, our total net unrealized losses on investment securities remains very reasonable at 41,700,000.0, of which 14,700,000.0 is related to our AFS securities and included in AOCI on the balance sheet. Capital is also strong. Like Tide mentioned, we used a portion of our excess capital in the first quarter to pay repurchased 127,537 shares of Guaranty stock, which represented about 1.1 of outstanding shares. And this, of course, continues to add intrinsic value for our shareholders.

Our total equity to average assets as of January 30 I’m sorry, March 31 was 10.5%, and our TCE to total assets was strong at 9.37. So this concludes our prepared remarks. I will turn it back over to Nona for Q and A. Thank you, Shalene.

Operator: Our first question is from Woody Lay with KBW. Woody, can you unmute your line?

Woody Lay, Analyst, KBW: Hey. Good morning, guys. Can you hear me?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: We can hear you. Good morning, Woody.

Shalene Jacobson, Executive Vice President and Chief Financial Officer, Guaranty Bancshares: Morning.

Woody Lay, Analyst, KBW: Hey. I wanted to start on the loan pipeline. It’s encouraging to hear it’s kind of at a multiyear high. Any color on the mix of the portfolio of the pipeline and how that compares to the loan portfolio today?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Woody, it’s similar to the current composition of the loan portfolio. It’s really across our footprint and really all four of our regions. It’s pretty granular, like our portfolio. But we just really after the November election, we just started seeing a really strong uptick in opportunities that made sense to us, loan opportunities across our footprint, and we continue to see that. That’s probably muted some in the last couple of weeks, which makes sense.

But as we said today, we have a very strong pipeline and we’ll just see how that plays out. But that’s we’re really pleased with kind of where we are with the pipeline as of today.

Woody Lay, Analyst, KBW: Yes. And then as you talk to your clients and try to get a sense of a sense of timing on when they could execute on these loans. And in your opening comments, you made a comment about how the Texas markets are really strong. It’s kind of the national uncertainty. I guess as you talk to your clients, like what are they looking for to get comfortable in this current environment?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Well, I mean, I think they’re Woody, they’re like the rest of us. I mean, there’s just uncertainty. If you don’t turn on CNBC, they’re not seeing anything in their local markets that are really, you know, concerning at this point. And but like everyone else, they, you know, they they look and see what’s happening on on the national scene, and it that changes, you know, their their views. So I think everyone’s just kind of on on standby trying to see where this how this plays out.

But assuming this gets this whole issue with tariffs gets resolved, then the Texas economy is strong and robust and growing, and that should resume. And I anticipate that will resume once that happens. But everyone, like I said, is the same boat. I mean, we’re just trying to kind of see how this plays itself out. But I think the overall underlying economy is strong, and that’s really the thing we can focus on from our company standpoint.

We really don’t bank a lot of multinational companies, obviously. So direct impact, we’ve been looking at that. We don’t see any direct impacts from tariffs, assuming we stay on this track. There would certainly be indirect impacts on overall economy in all of our customers, but we don’t see we haven’t identified any direct impacts at this point.

Woody Lay, Analyst, KBW: Got it. And then last for me, just touching on the reserve. I think you called out that if we were to get clarity on the economy, you would expect some reserve release. But assuming we’re in the same position we are today, sixty days from now, would you expect to build reserves just based on where the Moody’s forecast is trending? And any color there?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Yes. I wouldn’t expect to build reserves. I mean, we’re still carrying effectively some of the COVID factors, and we kept those in from two years ago when we had some bank failures. So we would not remove those. But continuing those, I can see that if things are currently where they stand.

I mean, it would take a pretty large systemic concern for us to increase our factors based on kind of where we see the quality of the loan portfolio and, again, just the overall economy in Texas.

Shalene Jacobson, Executive Vice President and Chief Financial Officer, Guaranty Bancshares: I can add on to that, too. I mean, we’ve kept our qualitative factors at elevated levels because we wanted to be more conservative. And each time we started thinking about, you know, unwinding some of those economic factors that we put in based on, you know, situations a new event would happen. It started with COVID, and then it was the bank failures. And then there was, you know, the election and now these tariffs uncertainties.

And so we’ve kind of just left those economic factors at elevated levels throughout instead of unwinding unlike some of our peers did. But at some point, you know, if we start getting some certainty, then we’ll we’ll look at unwinding those a little bit, Like I said, that we don’t anticipate increasing that.

Woody Lay, Analyst, KBW: Got it. All right. Thanks for taking my question.

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Sure, Woody.

Operator: Okay. Our next questions will be from Matt Olney with Stephens. Matt, can you unmute your line?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Yes, thanks. Good morning, guys. Good morning, Matt.

Shalene Jacobson, Executive Vice President and Chief Financial Officer, Guaranty Bancshares: Good morning, Matt.

Matt Olney, Analyst, Stephens: On the loan balances, Ty, you highlighted the stronger loan pipelines, which is good to see. Within the 1Q loan balance, I guess it was the C and I mix that drove the contraction. Any more color on that C and I book? Were these company sales? Was it lower utilization?

Just any color you can give us on that portfolio?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: It was really lower utilization. We saw some pay downs in some of those C and I lines. Nothing specific. It just that could very likely reverse itself. But we just for the quarter, we saw net pay downs in some of the utilization of loans.

Matt Olney, Analyst, Stephens: Okay. Appreciate that. And then I guess switching gears on the deposit side. We saw some positive deposit growth in the first quarter. I think most of your peers are still seeing some deposit contraction first quarter.

Any color on kind of what you saw in 1Q? And appreciate any kind of commentary you may have for deposit growth for the full year.

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Yes. I mean, we continue to view core deposits as really key to franchise value in our company. And so that’s a big part of our model to focus on core deposit relationships. And we will open 10,000 checking accounts this year like we have every year for several years. So it’s just a big part of our model to focus on core deposits across our footprint in every market we serve.

We’re paying of mid tier on rates. We’re not the lowest rate in the markets. We’re not the highest. So they’re really relationship based deposits. And again, it’s just I anticipate we’re probably going to see a 2% to 5% kind of net growth in deposit book for the year because it’s just a big part of our model to grow core deposit relationships and but do so in a very granular way as we kind of outlined.

Matt Olney, Analyst, Stephens: Okay. Thank you for that, Ty. And then I think on the prepared remarks, I think it was Shalene that mentioned, expect some pretty good cash flows on the securities portfolio for the rest of the year. I think it’s 116,000,000 Would you just love to hear any kind of preliminary thoughts you have on what the plan is for those cash flows and what you

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: could do? I mean, our plan is to continue to add to the bond portfolio as it make as we see that there’s opportunities to add to that in sort of a dollar cost averaging method as we’ve done the last three years. We’re sitting with about 5% of the balance sheet in Fed funds. So we have a lot of liquidity available to grow the loan book and or add the bond portfolio. But we’re doing so in a systematic way each month.

And again, we’ve been doing that. And that’s also helped our loan portfolio our bond portfolio, excuse me, total yield. And we have gains in bonds because we’ve been able to add the last three years with our liquidity. There’s been some bond market disruptions in the last few weeks as everyone knows, and we were able to step in and buy some bonds during that period at some really attractive pricing. So our plan will be to continue to kind of do that each month in just a systematic way like we’ve been doing.

Matt Olney, Analyst, Stephens: Okay. Well, balance sheet liquidity looks great. So thanks for taking my questions. Sure, Matt.

Operator: Okay. Our next questions are from Michael Rose with Raymond James. Michael, can you unmute?

Michael Rose, Analyst, Raymond James: I am. Can you guys hear me?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Yes, Michael. Good morning.

Michael Rose, Analyst, Raymond James: Hi, good morning. For taking my questions. Maybe just to start on credit, you guys have obviously always done a really good job if I look back in history. But the longer this goes on, there’s probably some risks. So what are some areas of the portfolio that you guys are maybe doing a deeper dive on and maybe some lessons learned from COVID?

I

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: mean, like I mentioned, we’re looking at any customers we have that could have a direct impact to tariffs, any manufacturing customers we have and just trying to game out any kind of concerns that they would have. I mean, at this point, I mean, don’t see anything that concerns us. Again, I think the granularity of our loan portfolio is a big part of the strength of our model. And we just don’t have outsized positions in many credits or in one particular sector or one particular region of the state. And so we are concerned if this stays on this negative track for extended period and the impact it would have on the national economy that ultimately would be the Texas economy and ultimately be markets we’re in.

That’s no different than COVID or any other economic event that we’ve all faced. But we’re very confident in the strength of our portfolio, the strength of our underwriting and the quality of our customer base. We have very resilient companies that we do business with. Some of them we’ve done business with multiple decades. They’ve been through multiple cycles, economic cycles, and they’re well positioned themselves to adjust.

We don’t have, again, a lot of exposure to multinationals that have a direct impact, but certainly would have an indirect impact if this self inflicted economic event happened in a way that damaged the economy overall, then we would certainly adjust to that based on what we saw on environment that we’re operating in. But as of right now, nothing specific, but we’re certainly being prudent and cautious and watching everything that we can to anticipate what may come down the pipe.

Shalene Jacobson, Executive Vice President and Chief Financial Officer, Guaranty Bancshares: Michael, we we also included some additional information in the the quarterly highlights of the earnings release that talked about granularity of our two largest loan segments, CRE and real estate one to one to four. But I can also comment on, you know, the next couple down. Our real estate construction loans, we’ve got about 650 of those with an average balance of 357,000. So it’s pretty low. And then, you know, Matt, this may interest you, but our C and I loans, we’ve got 1,562 C and I loans, and they have an average balance of a hundred and 39,700.

So, again, you know, our loan portfolio, we’ve got a lot of, you know, fairly low average balance loans. And so, you know, if we do have those risks that pop up, up, there’s not as much damage, hopefully.

Michael Rose, Analyst, Raymond James: I appreciate the color. Just switching gears. You guys stepped up the buyback a little bit this quarter. I think last quarter, you mentioned that you could exhaust the authorization. I think you have about 950,000 shares left at the end of the first quarter.

I think the program expires in April of ’twenty six, so about a year from now. Just can you discuss your appetite? Obviously, banks have most bank stocks are down. You guys are one of the few that’s actually up year to date. So can you just kind of discuss the ability and the willingness to repurchase shares?

Thanks.

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: So Michael, yes, I mean, like I mentioned in the fourth quarter, I mean, we do consider that to be a good utilization of our excess capital. And our balance sheet has not been we’ve not grown our balance sheet intentionally the last two or three years really. So as we’re creating excess capital and we opportunities to buy our stock back, we just think that’s a good utilization of resources. We’re not in the market currently. We were at the beginning of the quarter.

But we certainly plan if we see the opportunity to buy our shares back, and that’s kind of a capital allocation priority for us and would continue to be through that plan period.

Michael Rose, Analyst, Raymond James: Helpful. And maybe just last one for me. Certainly understand and appreciate the comments on expenses this quarter. You guys have previously talked about a 2.5% expense to average asset ratio. Is that kind of still what you’re targeting?

And assuming the revenue or the loan growth doesn’t come through, like we all hope, how much flex is there on the downside if the revenue doesn’t come through?

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: I mean, Michael, yes, 2.5% to average to assets has always been probably for twenty years has been kind of our bogey. That creates a nice ROA kind of going through the math. But there’s times we went above that. There’s times we’ve been 2.6, two point seven. There’s times we’ve been 2.3, two point four.

So we’re not married to it in the sense that we’ll make short term decisions versus making long term investments in the growth of the company. But that’s our speed limit and we try to stay within that and always will. But there’s times we’ll fluctuate above or below it. With our margin, obviously, where it is and how it’s building, we had some more flexibility there to continue to hit our earnings goals and be above that a little bit. But you’ll never see us materially move above or below that 2.5% bogey as a goal.

Michael Rose, Analyst, Raymond James: All right. Thanks for taking my questions.

Ty Abston, Chairman and Chief Executive Officer, Guaranty Bancshares: Absolutely, Michael.

Operator: Thank you. Thank you for your questions. I would like to remind everyone that the recording of this call will be available by 1PM today on our Investor Relations page at gnty.com. Thank you for attending and this concludes our call. Have a good day.

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