Guaranty Bancshares Q1 2025: Discrepancies in Loan Growth, Deposit Strategy, and Capital Allocation Plans

Loan growth expectations, deposit growth strategy, net interest margin (NIM) expansion expectations, appetite for share buybacks, and changes in loan growth expectations are the key contradictions discussed in Guaranty Bancshares' latest 2025Q1 earnings call.



Strong Texas Economy and Loan Portfolio:
- Guaranty Bancshares reported a slight decrease in net loans by $23 million in Q1 2025, despite a strong Texas economy.
- The decrease was attributed to a slowdown in loan demands due to tariff uncertainties, with borrowers waiting for clarity before proceeding with loans.
- The company's loan pipeline, however, is at a multiyear high, indicating potential growth in the coming quarters.

Deposit Growth and Liquidity:
- Total deposits grew by $12.2 million during the quarter, with significant increases in money market and savings balances.
- This growth is attributed to the company's focus on core deposit relationships and offering mid-tier interest rates on deposits.
- The company's liquidity ratio stood at 19.8%, indicating ample cash and cash equivalents for loan growth opportunities.

Net Interest Margin Improvement:
- Guaranty Bancshares reported a net interest margin of 3.7%, up from 3.54% in the previous quarter and 3.16% in the same period last year.
- This improvement was due to the Federal Reserve's 75 basis points rate cut and continued repricing of loans, securities, and CD portfolios.
- The bank expects the NIM to continue to increase by 1-2 basis points over the next several months due to loan and CD repricing.

Capital and Share Repurchases:
- Total equity increased by $6.7 million in Q1 2025, with the company paying a dividend of $0.25 per share and repurchasing 127,537 shares.
- These actions were driven by the company's strong capital position and excess capital, which allows for capital allocation to share repurchases as a strategic utilization of excess capital.