UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-38087

GUARANTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Texas	001-38087	75-1656431
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
16475 Dallas Parkway, Suite 600 Addison, Texas		75001
(Address of Principal Executive Offices)		(Zip Code)

(888) 572 - 9881

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $1.00 per share	GNTY	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the

Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒

As of May 2, 2022, there were 12,000,490 outstanding shares of the registrant’s common stock, par value $1.00 per share.

GUARANTY BANCSHARES, INC.

	PART I — FINANCIAL INFORMATION	Page
Item 1.	Financial Statements – (Unaudited)	1
	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1
	Consolidated Statements of Earnings for the Three Months Ended March 31, 2022 and 2021	2
	Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2022 and 2021	3
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	66
Item 4.	Controls and Procedures	67
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	68
Item 1A.	Risk Factors	68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
SIGNATURES		71

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GUARANTY BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

	(Unaudited)			(Audited)
	March 31, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	58,788		$	42,979
Federal funds sold		139,300			431,975
Interest-bearing deposits		24,003			24,651
Total cash and cash equivalents		222,091			499,605
Securities available for sale		306,704			342,206
Securities held to maturity		494,289			184,263
Loans held for sale		1,166			4,129
Loans, net of allowance for credit losses of $29,096 and $30,433, respectively		1,983,449			1,876,076
Accrued interest receivable		8,961			8,901
Premises and equipment, net		54,316			53,470
Cash surrender value of life insurance		37,352			37,141
Core deposit intangible, net		2,199			2,313
Goodwill		32,160			32,160
Other assets		47,142			45,806
Total assets	$	3,189,829		$	3,086,070
LIABILITIES AND EQUITY
Liabilities
Deposits
Noninterest-bearing	$	1,065,789		$	1,014,518
Interest-bearing		1,731,621			1,656,309
Total deposits		2,797,410			2,670,827
Securities sold under agreements to repurchase		11,090			14,151
Accrued interest and other liabilities		27,803			26,568
Line of credit		—			5,000
Federal Home Loan Bank advances		7,500			47,500
Subordinated debt		54,146			19,810
Total liabilities		2,897,949			2,783,856
Commitments and contingencies (see Note 11)
Equity
Preferred stock, $5.00 par value, 15,000,000 shares authorized, no shares issued		—			—
Common stock, $1.00 par value, 50,000,000 shares authorized, 14,138,978 shares issued, and 12,066,480 and 12,122,717 shares outstanding, respectively		14,139			14,139
Additional paid-in capital		225,700			225,544
Retained earnings		115,727			107,645
Treasury stock, 2,072,498 and 2,016,261 shares at cost		(53,412	)		(51,419	)
Accumulated other comprehensive (loss) income		(10,872	)		6,305
Equity attributable to Guaranty Bancshares, Inc.		291,282			302,214
Noncontrolling interest		598			—
Total equity		291,880			302,214
Total liabilities and equity	$	3,189,829		$	3,086,070

See accompanying notes to consolidated financial statements.

1.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended March 31,
	2022			2021
Interest income
Loans, including fees	$	22,272		$	24,195
Securities
Taxable		1,953			1,052
Nontaxable		1,150			1,039
Federal funds sold and interest-bearing deposits		518			227
Total interest income		25,893			26,513
Interest expense
Deposits		1,242			1,603
FHLB advances and federal funds purchased		46			99
Subordinated debt		246			188
Other borrowed money		36			132
Total interest expense		1,570			2,022
Net interest income		24,323			24,491
(Reversal of) provision for credit losses		(1,250	)		—
Net interest income after provision for credit losses		25,573			24,491
Noninterest income
Service charges		976			829
Net realized gain on sale of loans		905			1,398
Merchant and debit card fees		1,611			1,506
Other income		2,987			2,386
Total noninterest income		6,479			6,119
Noninterest expense
Employee compensation and benefits		11,532			9,943
Occupancy expenses		2,711			2,687
Other expenses		4,836			4,682
Total noninterest expense		19,079			17,312
Income before income taxes		12,973			13,298
Income tax provision		2,235			2,336
Net earnings	$	10,738		$	10,962
Basic earnings per share	$	0.89		$	0.91
Diluted earnings per share	$	0.88		$	0.90

See accompanying notes to consolidated financial statements.

2.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,
	2022			2021
Net earnings	$	10,738		$	10,962
Other comprehensive loss:
Unrealized losses on securities, net of tax		(16,989	)		(2,235	)
Unrealized (losses) gains on interest rate swaps:
Unrealized holding gains arising during the period		497			449
Reclassification of realized gains on interest rate swap termination from accumulated other comprehensive income		(685	)		—
Unrealized (losses) gains on interest rate swaps		(188	)		449
Total other comprehensive loss		(17,177	)		(1,786	)
Comprehensive (loss) income	$	(6,439	)	$	9,176

See accompanying notes to consolidated financial statements.

3.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

(Dollars in thousands, except per share data)

	Attributable to Guaranty Bancshares, Inc.
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest		Total Equity
For the Three Months Ended March 31, 2022
Balance at December 31, 2021	$	—	$	14,139	$	225,544	$	107,645		$	(51,419	)	$	6,305		$	—	$	302,214
Net earnings		—		—		—		10,738			—			—			—		10,738
Other comprehensive loss		—		—		—		—			—			(17,177	)		—		(17,177	)
Purchase of treasury stock		—		—		—		—			(1,993	)		—			—		(1,993	)
Stock based compensation		—		—		156		—			—			—			—		156
Cash dividends:
Common - $0.22 per share		—		—		—		(2,656	)		—			—			—		(2,656	)
Equity attributable to Guaranty Bancshares, Inc. at March 31, 2022	$	—	$	14,139	$	225,700	$	115,727		$	(53,412	)	$	(10,872	)	$	—	$	291,282
Contributions from noncontrolling interest		—		—		—		—			—			—			598		598
Total equity at March 31, 2022	$	—	$	14,139	$	225,700	$	115,727		$	(53,412	)	$	(10,872	)	$	598	$	291,880

	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income			Total Shareholders’ Equity
For the Three Months Ended March 31, 2021
Balance at December 31, 2020	$	—	$	12,952	$	188,032	$	113,449		$	(51,419	)	$	9,629		$	272,643
Net earnings		—		—		—		10,962			—			—			10,962
Other comprehensive loss		—		—		—		—			—			(1,786	)		(1,786	)
10% stock dividend		—		1,094		34,853		(35,947	)		—			—			—
Exercise of stock options		—		24		503		—			—			—			527
Stock based compensation		—		—		162		—			—			—			162
Cash dividends:
Common - $0.20 per share		—		—		—		(2,411	)		—			—			(2,411	)
Balance at March 31, 2021	$	—	$	14,070	$	223,550	$	86,053		$	(51,419	)	$	7,843		$	280,097

See accompanying notes to consolidated financial statements.

4.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

	For the Quarter Ended March 31,
	2022		2021
Cash flows from operating activities
Net earnings	$	10,738	$	10,962
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		1,069		1,108
Amortization		219		343