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Key takeaways from the call include:
Despite a decrease in loans due to tightened credit underwriting and lower loan demand, Guaranty Bancshares saw a $55 million increase in deposits, bringing the total to $2.7 billion. This increase, along with the company’s strong liquidity ratio of 14% and a tangible common equity ratio of 8.21%, has contributed to the improvement of the loan-to-deposit ratio to 87.2%.
Net earnings for the quarter were reported at $6.3 million, a decrease of $1.2 million from the previous quarter. This decrease was attributed to lower net interest income and non-interest income. However, the quality of the loan portfolio remained strong, with non-performing assets at historically low levels.
The company also repurchased 61,688 shares at an average price of $27.38, using excess capital. The dividend was maintained at $0.92 per share, representing a 5% increase from the previous year.
In the earnings call, Cappy Payne projected that expenses for the fourth quarter would likely be in the range of $81 million to $82 million, aligning with their target of 2.5% of asset level. CEO Ty Abston also provided insights into the company’s future plans, including a focus on retail banking and core deposits, and projected low-single-digit growth in deposits. He also anticipated the possibility of expanding the margin in 2024 due to the repricing of the asset side of their balance sheet.
Abston addressed questions regarding the contraction of loan balances in the construction sector, stating that some loans are being refinanced within the bank, while others are being transferred to other banks or investors, depending on the project. He also expressed confidence in swiftly resolving a downgraded commercial real estate loan in Austin, emphasizing the bank’s proactive approach in managing its loan portfolio.
The company expects the net interest margin to stay around 3% and anticipates lower deposit betas in the fourth quarter. The earnings call concluded with a reminder that the recording of the call will be available on the bank’s investor relations page.
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