Guaranty Bancshares, Inc. (NASDAQ:GNTY) (the "Company"), the parent company of Guaranty Bank & Trust, N.A. (the "Bank"), today reported financial results for the fiscal quarter ended March 31, 2022. The Company's net income available to common shareholders was $10.7 million, or $0.89 per basic share, for the quarter ended March 31, 2022, compared to $9.2 million, or $0.76 per basic share, for the quarter ended December 31, 2021 and $11.0 million, or $0.91 per basic share, for the quarter ended March 31, 2021. Return on average assets and average equity for the first quarter of 2022 were 1.38% and 14.45%, respectively, compared to 1.20% and 12.06%, respectively, for the fourth quarter of 2021 and 1.60% and 16.01%, respectively, for the first quarter of 2021. The increase in earnings during the first quarter of 2022, compared to the fourth quarter of 2021, was primarily due to a reverse provision for credit losses of $1.25 million during the first quarter of 2022, in response to the Bank's continued analysis into the effects of COVID-19 on the loan portfolio. Our net core earnings^†, excluding provisions for credit losses, income taxes and PPP1/PPP2 net income, as well as our core net interest margin, adjusted to exclude the effects of PPP1/PPP2 loans, are described further in tables below.

"We achieved excellent financial results and strong loan growth during the first quarter of 2022. Excluding PPP and warehouse loans, our loan portfolio grew 8.6% during the first quarter and our pipeline currently remains robust across our footprint. Our non-performing assets continue to be very low, and we have seen significant improvements in COVID-related statistics and economic impacts. Due to these factors, we fully reversed the COVID-specific reserves from our allowance for credit losses during this quarter. However, we also adjusted the allowance for our increased concerns related to the current environment of very high inflation, the likely negative impacts of rising rates on the economy, and the geopolitical uncertainty that exists today. These negative adjustments offset a significant portion of the reserves that were released due to our improved outlook as it relates to COVID. While we remain very optimistic about the Texas economy, given these external events and backdrop, we are cautiously optimistic about the overall economy in the short to medium term. Guaranty has a long history of maintaining a very strong balance sheet, including strong liquidity and capital, for times of economic uncertainty," commented Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY HIGHLIGHTS

Strong Loan Growth. The first quarter of 2022 saw strong organic loan growth, increasing $106.0 million, or 5.6%, during the quarter. Excluding PPP and warehouse lending changes, our loans grew $156.8 million, or 8.6%, during the quarter. Our loan growth is a result of internally generated sources and is not from loan purchases from other originators.
Solid Net Earnings and Core Earnings. Net earnings have remained consistent quarter-over-quarter. Net core earnings^†, which exclude provisions for credit losses and income tax, and net PPP income, have trended upwards, demonstrating a consistent core earnings stream. Net core earnings^† were $10.9 million for the first quarter, compared to $10.1 million for the fourth quarter of 2021, and $9.4 million during the first quarter of 2021.
Strong Credit Quality. Non-performing assets as a percentage of total assets were 0.08% at March 31, 2022, compared to 0.09% at December 31, 2021 and 0.13% at March 31, 2021. Net charge-offs to average loans (annualized) were 0.02% for the quarter ended March 31, 2022, compared to 0.04% for the quarter ended December 31, 2021, and 0.18% for the quarter ended March 31, 2021.
Favorable Asset and Liability Management. Our Bank is slightly asset-sensitive and should see benefits from expected rate increases by the Federal Reserve. During the quarter, we terminated interest rate swaps that hedged $40.0 million of 3-month FHLB advances, resulting in an extraordinary gain of $685,000, and we paid off the FHLB advances. Also during the first quarter of 2022, we deployed excess cash of $270.0 million to purchase short term U.S. treasuries, maturing from August 2022 through March 2024, to take advantage of higher short term yields. As of March 31, 2022, we have $1.29 billion, or 65.0%, or our loan portfolio in variable rate loans. If rates increase as predicted by 50bps in the May and June FOMC meetings, as well as 25bps in the remaining meetings during 2022, approximately $346.2 million, or 26.7%, of the variable rates loans will reprice by December 31, 2022. We are maintaining a conservative stance on our cost of total deposits, given our excess liquidity position, and as of March 31, 2022, 38.1% of our total deposits are non-interest bearing. Anticipating increases in interest rates, on March 4, 2022, we issued $35.0 million in 10-year subordinated notes (refer to our Form 8-K filed with the Securities and Exchange Commission on March 4, 2022 for more details). Finally, we repurchased 56,237 shares of Company stock during the quarter at an average purchase price per share of $35.44.

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

RESULTS OF OPERATIONS

Participation in the PPP1 and PPP2 program, as well as large provisions for credit losses in the second quarter of 2020 resulting from the expected effects of COVID-19, has created temporary extraordinary results in the calculation of net earnings and related performance ratios. The following table illustrates net earnings and net core earnings results, which are pre-tax, pre-provision and pre-extraordinary PPP1/PPP2 income, as well as performance ratios for the prior five quarters:

	Quarter Ended
	2022			2021
(dollars in thousands, except per share data)	March 31			December 31			September 30			June 30			March 31
Net earnings	$	10,738		$	9,159		$	9,253		$	10,432		$	10,962
Adjustments:
Provision for credit losses		(1,250	)		—			(700	)		(1,000	)		—
Income tax provision		2,235			1,923			2,179			2,312			2,336
PPP loan interest and fees		(783	)		(958	)		(1,005	)		(1,954	)		(3,905	)
Net core earnings^†	$	10,940		$	10,124		$	9,727		$	9,790		$	9,393

Total average assets	$	3,146,399		$	3,021,079		$	2,953,181		$	2,938,944		$	2,775,567
Adjustments:
PPP loans average balance		(36,720	)		(61,062	)		(107,931	)		(155,417	)		(137,251	)
Total average assets, adjusted^†	$	3,109,679		$	2,960,017		$	2,845,250		$	2,783,527		$	2,638,316
Total average equity	$	301,432		$	301,398		$	295,076		$	285,803		$	277,612

PERFORMANCE RATIOS
Net earnings to average assets (annualized)		1.38	%		1.20	%		1.24	%		1.42	%		1.60	%
Net earnings to average equity (annualized)		14.45			12.06			12.44			14.64			16.01
Net core earnings to average assets, as adjusted (annualized)^†		1.43			1.36			1.36			1.41			1.44
Net core earnings to average equity (annualized)^†		14.72			13.33			13.08			13.74			13.72

PER COMMON SHARE DATA
Weighted-average common shares outstanding, basic		12,109,074			12,097,100			12,067,769			12,056,550			12,038,638
Earnings per common share, basic	$	0.89		$	0.76		$	0.77		$	0.87		$	0.91
Net core earnings per common share, basic^†		0.90			0.84			0.81			0.81			0.78

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

Net interest income, before the provision for credit losses, in the first quarter of 2022 and 2021 was $24.3 million and $24.5 million, respectively, a decrease of $168,000, or 0.7%. The slight decline in net interest income resulted from a decrease in interest income of $620,000, or 2.3%, which was partially offset by a decrease in interest expense of $452,000, or 22.4%, quarter over quarter. Interest and fee income from PPP loans decreased $2.7 million, or 77.7%, while all other loan interest income increased $1.2 million, or 5.9%, during the current quarter compared to the prior year quarter. In addition, interest income from investment securities increased $1.0 million, or 48.0%, from the same quarter in the prior year.

Net interest margin, on a taxable equivalent basis, for the first quarter of 2022 and 2021 was 3.37% and 3.85%, respectively. Net interest margin decreased 48 basis points primarily due to a decrease in loan yield from 5.20% for the first quarter of 2021 to 4.66% for the first quarter of 2022, a change of 54 basis points, offset somewhat by a decrease in the cost of interest-bearing deposits from 0.42% to 0.29% during the same period, a change of 13 basis points. The decrease in loan yield was primarily due to recognized PPP origination fee income during the prior year quarter. Loan yield, excluding the effect of PPP loans, was 4.59% in the first quarter of 2022, compared to 4.79% in the same quarter of the prior year, a decrease of 20 basis points.

Net interest income, before the provision for credit losses, increased $303,000, or 1.3%, from $24.0 million in the fourth quarter of 2021 to $24.3 million in the first quarter of 2022.

Net interest margin, on a taxable equivalent basis, decreased from 3.39% for the fourth quarter of 2021 to 3.37% for the first quarter of 2022. Loan yield decreased from 4.71% for the fourth quarter of 2021 to 4.66% for the first quarter of 2022, a change of five basis points. Loan yield, excluding the effect of PPP loans, decreased seven basis points from 4.66% in the fourth quarter of 2021 to 4.59% in the current quarter. The average yield on interest-bearing deposits in other banks increased three basis points from 0.10% in the fourth quarter of 2021, while the average balance decreased by $88.7 million, or 20.9%, in the current quarter.

The Bank's participation in the PPP program created temporary extraordinary results in the calculation of net interest margin. To illustrate the impact of the PPP program on net interest margin, the table below excludes PPP1 and PPP2 loans and their associated fees and costs for the quarter ended March 31, 2022:

	Quarter Ended March 31, 2022
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate
Total loans	$	1,937,000		$	22,272			4.66	%
Adjustments:
PPP1 loans average balance and net fees⁽¹⁾		(769	)		(5	)		2.64
PPP2 loans average balance and net fees⁽²⁾		(35,951	)		(778	)		8.78
Total PPP loans⁽³⁾	$	(36,720	)	$	(783	)		8.65	%

Total loans, excluding PPP^†	$	1,900,280		$	21,489			4.59	%

Total interest-earning assets		2,963,030			25,893			3.54
Total interest-earning assets, net of PPP effects^†	$	2,926,310		$	25,110			3.48	%

Net interest income				$	24,323
Net interest margin⁽⁴⁾								3.33	%
Net interest margin, FTE⁽⁵⁾								3.37

Net interest income, net of PPP effects^†					23,540
Net interest margin, net of PPP effects^†(6)								3.26
Net interest margin, FTE, net of PPP effects^†(7)								3.30

Efficiency ratio⁽⁸⁾								61.94
Efficiency ratio, net of PPP effects^†(9)								63.56

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.
(1) Interest earned on PPP1 loans consists of interest income of $2,000 and net origination fees recognized in earnings of $3,000 for the quarter ended March 31, 2022.
(2) Interest earned on PPP2 loans consists of interest income of $87,000 and net origination fees recognized in earnings of $691,000 million for the quarter ended March 31, 2022.
(3) Interest earned consists of interest income of $89,000 and net origination fees recognized in earnings of $694,000 million for the quarter ended March 31, 2022.
(4) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized. Taxes are not a part of this calculation.
(5) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.
(6) Net interest margin is equal to net interest income, net of PPP effects, divided by average interest-earning assets, excluding average PPP loans, annualized. Taxes are not a part of this calculation.
(7) Net interest margin on a taxable equivalent basis is equal to net interest income, net of PPP effects, adjusted for nontaxable income divided by average interest-earning assets, excluding average PPP loans, annualized, using a marginal tax rate of 21%.
(8) The efficiency ratio was calculated by dividing total noninterest expense by net interest income plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.
(9) The efficiency ratio was calculated by dividing total noninterest expense, net of PPP-related deferred costs, by net interest income, net of PPP effects, plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.

During the first quarter of 2022, we recorded a reverse provision for credit losses of $1.25 million. At the onset of the COVID pandemic in 2020, we established COVID-specific qualitative factors to estimate the potential impact of the pandemic to our loan portfolio as a whole, which led to a provision during 2020 of $13.2 million. As the economic, health and other impacts of the virus became more clear and cases began to decline, we reduced the COVID-specific qualitative factors during 2021 and fully unwound these factors during the first quarter of 2022. The impact of unwinding the remaining COVID-specific qualitative factors was offset by growth in our loan portfolio and increases in certain of our standard qualitative factors to capture current macro-economic concerns related to inflation, rising interest rates and the war in Ukraine. As of March 31, 2022, our allowance for credit losses as a percentage of total loans was 1.44%.

Noninterest income increased $360,000, or 5.9%, in the first quarter of 2022 to $6.5 million, compared to $6.1 million for the first quarter of 2021. The increase from the same quarter in 2021 was due primarily to an increase in other noninterest income of $601,000, or 25.2%, and an increase in service charges of $147,000, or 17.7%, compared to the same quarter of the prior year. The increase in other noninterest income resulted from a net gain of $685,000 from the termination of three interest rate swaps during the first quarter of 2022. The increase in noninterest income was partially offset by a decrease in the gain on sale of loans of $493,000, or 35.3%, a $46,000, or 26.0%, decrease in mortgage fee income and a $125,000, or 51.9%, decrease in warehouse lending fees compared to the same quarter of the prior year.

Noninterest expense increased $1.8 million, or 10.2%, in the first quarter of 2022 to $19.1 million, compared to the first quarter of 2021. The increase in noninterest expense in the first quarter of 2022 was driven primarily by a $1.6 million, or 16.0%, increase in employee compensation and benefits due to increased salaries and higher insurance expense accruals due to increased claims experience. Legal and professional fees also increased $166,000, or 27.5%, from the same quarter of the prior year, primarily due to higher employee recruitment fees in the current quarter.

Noninterest income in the first quarter of 2022 increased by $441,000, or 7.3%, from $6.0 million in the fourth quarter of 2021 due primarily to an increase in other noninterest income of $617,000, or 28.6%, resulting primarily from the $685,000 net gain on the termination of interest rate swaps described above.

Noninterest expense increased $103,000, or 0.5%, in the first quarter of 2022, from $19.0 million in the quarter ended December 31, 2021. The increase was primarily due to a $166,000, or 27.5%, increase in legal and professional fees and a $332,000, or 3.0%, increase in employee compensation and benefits during the first quarter of 2022. These were partially offset by a decrease in FDIC insurance assessment fees of $67,000, or 22.3%, and a decrease in other noninterest expense of $255,000, or 19.9%.

The Company's efficiency ratio in the first quarter of 2022 was 61.94%, compared to 63.13% in the prior year quarter and 56.56% in the fourth quarter of 2021. Adjusted to remove the effects of PPP-related transactions, the Company's efficiency ratio^† for the first quarter of 2022 was 63.56%, was 65.21% for the fourth quarter of 2021 and was 65.34% for the first quarter of 2021.

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

FINANCIAL CONDITION

Consolidated assets for the Company totaled $3.19 billion at March 31, 2022, compared to $3.09 billion at December 31, 2021 and $2.89 billion at March 31, 2021.

Gross loans increased 5.6%, or $106.0 million, to $2.01 billion at March 31, 2022, compared to loans of $1.91 billion at December 31, 2021. The increase in gross loans from the fourth quarter of 2021 to the first quarter of 2022 is primarily due to increased loan originations and advances, which were partially offset by continued forgiveness of PPP loans, which decreased $31.3 million during the quarter. Excluding PPP and warehouse lending loans, gross loans increased $156.8 million, or 8.6%, from December 31, 2021.

Gross loans increased 5.3%, or $101.7 million, from $1.91 billion at March 31, 2021. The increase in gross loans during the first quarter of 2022 compared to the first quarter of 2021 resulted primarily from organic loan growth and was partially offset by a $138.9 million reduction in PPP loan balances during the period. Excluding PPP and warehouse lending loans, gross loans increased $303.2 million, or 18.2%, from March 31, 2021.

Total deposits increased by 4.7%, or $126.6 million, to $2.80 billion at March 31, 2022, compared to $2.67 billion at December 31, 2021, and increased 13.0%, or $322.2 million, from $2.48 billion at March 31, 2021. Changes in deposits during these periods appear to be the result of changes in depositor spending habits resulting from economic and other uncertainties.

Shareholders' equity totaled $291.9 million as of March 31, 2022, compared to $302.2 million at December 31, 2021 and $280.1 million at March 31, 2021. The decrease from the previous quarter resulted from the payment of dividends of $2.7 million, repurchase of 56,237 shares of treasury stock for $2.0 million and a decrease in other comprehensive income of $17.2 million during the first quarter of 2022 resulting from fluctuations in the fair market value of securities, and offset by net income of $10.7 million. Although the unrealized losses in other comprehensive income during the quarter do not impact regulatory capital ratios, they did result in a decrease in the tangible common equity ratio from 8.77% as of December 31, 2021 to 8.16% as of March 31, 2022.

In September 2021, we announced the formation of a partnership with CaliberCos, Inc., a vertically integrated alternative asset manager and fund sponsor, in an effort to drive investments that will revitalize communities across Texas through real estate developments. We began to consolidate the financial statements for this investment by our Bank subsidiary that contains a minority interest position during the first quarter of 2022. The newly formed entity had no assets, liabilities or equity until the first quarter of 2022 and had no income or expense during the first quarter of 2022. Further details of this partnership can be found in a Form 8-K filed with the Securities and Exchange Commission on September 7, 2021.

Nonperforming assets as a percentage of total assets were 0.08% at March 31, 2022 compared to 0.09% at December 31, 2021, and 0.13% at March 31, 2021.

	As of
	2022		2021
(dollars in thousands)	March 31		December 31		September 30		June 30		March 31
ASSETS
Cash and due from banks	$	58,788	$	42,979	$	34,741	$	37,611	$	38,534
Federal funds sold		139,300		431,975		346,500		385,075		356,750
Interest-bearing deposits		24,003		24,651		27,634		24,532		28,188
Total cash and cash equivalents		222,091		499,605		408,875		447,218		423,472
Securities available for sale		306,704		342,206		269,070		446,636		407,736
Securities held to maturity		494,289		184,263		173,676		—		—
Loans held for sale		1,166		4,129		1,903		5,088		4,663
Loans, net		1,983,449		1,876,076		1,938,268		1,856,277		1,876,985
Accrued interest receivable		8,961		8,901		7,673		8,801		8,064
Premises and equipment, net		54,316		53,470		53,834		54,405		54,903
Other real estate owned		—		—		40		227		312
Cash surrender value of life insurance		37,352		37,141		36,582		36,367		35,836
Core deposit intangible, net		2,199		2,313		2,426		2,573		2,786
Goodwill		32,160		32,160		32,160		32,160		32,160
Other assets		47,806		45,806		43,761		43,207		44,383
Total assets	$	3,190,493	$	3,086,070	$	2,968,268	$	2,932,959	$	2,891,300
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing	$	1,065,789	$	1,014,518	$	972,854	$	928,416	$	878,883
Interest-bearing		1,731,621		1,656,309		1,590,217		1,604,610		1,596,327
Total deposits		2,797,410		2,670,827		2,563,071		2,533,026		2,475,210
Securities sold under agreements to repurchase		11,090		14,151		11,195		15,336		24,007
Accrued interest and other liabilities		27,803		26,568		26,284		28,058		28,080
Line of credit		—		5,000		3,000		—		15,000
Federal Home Loan Bank advances		7,500		47,500		47,500		49,000		49,096
Subordinated debentures		54,810		19,810		19,810		19,810		19,810
Total liabilities		2,898,613		2,783,856		2,670,860		2,645,230		2,611,203

Equity attributable to Guaranty Bancshares, Inc.		291,282		302,214		297,408		287,729		280,097
Minority interest		598		—		—		—		—
Total shareholders' equity		291,880		302,214		297,408		287,729		280,097
Total liabilities and shareholders' equity	$	3,190,493	$	3,086,070	$	2,968,268	$	2,932,959	$	2,891,300

	Quarter Ended
	2022			2021
(dollars in thousands, except per share data)	March 31			December 31			September 30			June 30			March 31
STATEMENTS OF EARNINGS
Interest income	$	25,893		$	25,518		$	25,235		$	25,284		$	26,513
Interest expense		1,570			1,498			1,665			1,807			2,022
Net interest income		24,323			24,020			23,570			23,477			24,491
Provision for credit losses		(1,250	)		—			(700	)		(1,000	)		—
Net interest income after provision for credit losses		25,573			24,020			24,270			24,477			24,491
Noninterest income		6,479			6,038			6,449			5,970			6,119
Noninterest expense		19,079			18,976			19,287			17,703			17,312
Income before income taxes		12,973			11,082			11,432			12,744			13,298
Income tax provision		2,235			1,923			2,179			2,312			2,336
Net earnings	$	10,738		$	9,159		$	9,253		$	10,432		$	10,962

PER COMMON SHARE DATA*
Earnings per common share, basic	$	0.89		$	0.76		$	0.77		$	0.87		$	0.91
Earnings per common share, diluted		0.88			0.75			0.76			0.85			0.90
Cash dividends per common share		0.22			0.20			0.20			0.20			0.20
Book value per common share - end of quarter		24.14			24.93			24.62			23.86			23.24
Tangible book value per common share - end of quarter⁽¹⁾		21.29			22.09			21.75			20.98			20.34
Common shares outstanding - end of quarter		12,066,480			12,122,717			12,081,477			12,057,937			12,053,597
Weighted-average common shares outstanding, basic		12,109,074			12,097,100			12,067,769			12,056,550			12,038,638
Weighted-average common shares outstanding, diluted		12,260,945			12,263,252			12,211,389			12,251,587			12,177,776

PERFORMANCE RATIOS
Return on average assets (annualized)		1.38	%		1.20	%		1.24	%		1.42	%		1.60	%
Return on average equity (annualized)		14.45			12.06			12.44			14.64			16.01
Net interest margin, fully taxable equivalent (annualized)⁽²⁾		3.37			3.39			3.40			3.44			3.85
Efficiency ratio⁽³⁾		61.94			63.13			64.25			60.12			56.56

(1) See Reconciliation of non-GAAP Financial Measures table.
(2) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.
(3) The efficiency ratio was calculated by dividing total noninterest expense by net interest income plus noninterest income, excluding securities gains or losses. Taxes are not part of this calculation.

	As of
	2022			2021
(dollars in thousands)	March 31			December 31			September 30			June 30			March 31
LOAN PORTFOLIO COMPOSITION
Commercial and industrial	$	270,074		$	280,569		$	308,647		$	352,042		$	373,678
Real estate:
Construction and development		318,035			307,797			309,746			264,002			257,886
Commercial real estate		674,558			622,842			633,353			608,464			630,479
Farmland		186,982			145,501			135,413			94,525			76,867
1-4 family residential		430,755			410,673			403,403			389,616			389,542
Multi-family residential		42,021			30,971			40,810			42,086			32,090
Consumer		52,670			50,965			52,992			51,795			49,780
Agricultural		14,403			14,639			14,199			14,608			14,905
Warehouse lending		24,260			43,720			71,823			72,582			86,813
Overdrafts		303			363			495			444			327
Total loans⁽¹⁾⁽²⁾	$	2,014,061		$	1,908,040		$	1,970,881		$	1,890,164		$	1,912,367

	Quarter Ended
	2022			2021
(dollars in thousands)	March 31			December 31			September 30			June 30			March 31
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period	$	30,433		$	30,621		$	31,548		$	32,770		$	33,619
Loans charged-off		(203	)		(239	)		(244	)		(283	)		(875	)
Recoveries		116			51			17			61			26
Provision for credit loss expense		(1,250	)		—			(700	)		(1,000	)		—
Balance at end of period	$	29,096		$	30,433		$	30,621		$	31,548		$	32,770

Allowance for credit losses / period-end loans		1.44	%		1.59	%		1.55	%		1.67	%		1.71	%
Allowance for credit losses / nonperforming loans		1,084.9			1,075.0			976.7			878.0			968.7
Net charge-offs / average loans (annualized)		0.02			0.04			0.05			0.05			0.18

NON-PERFORMING ASSETS
Non-accrual loans⁽³⁾	$	2,682		$	2,831		$	3,135		$	3,593		$	3,383
Other real estate owned		—			—			40			227			312
Repossessed assets owned		7			14			63			9			4
Total non-performing assets	$	2,689		$	2,845		$	3,238		$	3,829		$	3,699

Non-performing assets as a percentage of:
Total loans⁽¹⁾⁽²⁾		0.13	%		0.15	%		0.16	%		0.20	%		0.19	%
Total loans, excluding PPP⁽¹⁾⁽²⁾		0.13			0.15			0.17			0.22			0.21
Total assets		0.08			0.09			0.11			0.13			0.13

TDR loans - nonaccrual	$	98		$	103		$	84		$	86		$	87
TDR loans - accruing		9,418			9,466			9,522			9,535			9,598

(1) Excludes outstanding balances of loans held for sale of $1.2 million, $4.1 million, $1.9 million, $5.1 million, and $4.7 million as of March 31, 2022, and December 31, September 30, June 30, and March 31, 2021, respectively.
(2) Excludes deferred loan fees of $1.5 million, $1.5 million, $2.0 million, $2.3 million, and $2.6 million as of March 31, 2022, and December 31, September 30, June 30, and March 31, 2021, respectively.
(3) TDR loans - nonaccrual are included in nonaccrual loans, which are a component of nonperforming loans.

	Quarter Ended
	2022		2021
(dollars in thousands)	March 31		December 31		September 30		June 30		March 31
NONINTEREST INCOME
Service charges	$	976	$	1,085	$	1,003	$	855	$	829
Net realized gain on sale of loans		905		1,127		1,759		1,244		1,398
Fiduciary and custodial income		642		615		599		570		549
Bank-owned life insurance income		211		207		215		206		212
Merchant and debit card fees		1,611		1,669		1,620		1,922		1,506
Loan processing fee income		187		188		164		164		153
Warehouse lending fees		116		164		196		211		241
Mortgage fee income		131		133		145		157		177
Other noninterest income		1,700		850		748		641		1,054
Total noninterest income	$	6,479	$	6,038	$	6,449	$	5,970	$	6,119

NONINTEREST EXPENSE
Employee compensation and benefits	$	11,532	$	11,200	$	10,998	$	10,204	$	9,943
Occupancy expenses		2,711		2,686		2,738		2,833		2,687
Legal and professional fees		770		604		644		747		604
Software and technology		1,209		1,167		1,258		1,055		1,114
Amortization		219		222		253		336		343
Director and committee fees		205		204		197		167		255
Advertising and promotions		407		470		495		338		455
ATM and debit card expense		578		643		646		616		540
Telecommunication expense		186		196		197		180		234
FDIC insurance assessment fees		233		300		214		168		169
Other noninterest expense		1,029		1,284		1,647		1,059		968
Total noninterest expense	$	19,079	$	18,976	$	19,287	$	17,703	$	17,312

	Quarter Ended March 31,
	2022								2021
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
ASSETS
Interest-earning assets:
Total loans⁽¹⁾	$	1,937,000		$	22,272		4.66	%	$	1,886,863		$	24,195		5.20	%
Securities available for sale		328,737			1,618		2.00			378,076			2,091		2.24
Securities held to maturity		347,188			1,485		1.73			—			—		—
Nonmarketable equity securities		15,234			408		10.86			10,031			101		4.08
Interest-bearing deposits in other banks		334,871			110		0.13			334,329			126		0.15
Total interest-earning assets		2,963,030			25,893		3.54			2,609,299			26,513		4.12
Allowance for credit losses		(30,205	)							(33,242	)
Noninterest-earning assets		213,574								199,510
Total assets	$	3,146,399							$	2,775,567
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,710,157		$	1,242		0.29	%	$	1,559,865		$	1,603		0.42	%
Advances from FHLB and fed funds purchased		37,722			46		0.49			51,098			99		0.79
Line of credit		3,778			34		3.65			14,633			128		3.55
Subordinated debentures		30,699			246		3.25			19,810			188		3.85
Securities sold under agreements to repurchase		10,916			2		0.07			21,173			4		0.08
Total interest-bearing liabilities		1,793,272			1,570		0.36			1,666,579			2,022		0.49
Noninterest-bearing liabilities:
Noninterest-bearing deposits		1,027,429								808,007
Accrued interest and other liabilities		24,266								23,369
Total noninterest-bearing liabilities		1,051,695								831,376
Shareholders' equity		301,432								277,612
Total liabilities and shareholders' equity	$	3,146,399							$	2,775,567
Net interest rate spread⁽²⁾							3.18	%							3.63	%
Net interest income				$	24,323							$	24,491
Net interest margin⁽³⁾							3.33	%							3.81	%
Net interest margin, fully taxable equivalent⁽⁴⁾							3.37	%							3.85	%

(1) Includes average outstanding balances of loans held for sale of $3.2 million and $4.2 million for the quarter ended March 31, 2022 and 2021, respectively.
(2) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(3) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized.
(4) Net interest margin on a taxable equivalent basis is equal to net interest income adjusted for nontaxable income divided by average interest-earning assets, annualized, using a marginal tax rate of 21%.

NON-GAAP RECONCILING TABLES

Tangible Book Value per Common Share

	As of
	2022			2021
(dollars in thousands, except per share data)	March 31			December 31			September 30			June 30			March 31
Equity attributable to Guaranty Bancshares, Inc.	$	291,282		$	302,214		$	297,408		$	287,729		$	280,097
Adjustments:
Goodwill		(32,160	)		(32,160	)		(32,160	)		(32,160	)		(32,160	)
Core deposit intangible, net		(2,199	)		(2,313	)		(2,426	)		(2,573	)		(2,786	)
Total tangible common equity attributable to Guaranty Bancshares, Inc.	$	256,923		$	267,741		$	262,822		$	252,996		$	245,151
Common shares outstanding - end of quarter⁽¹⁾		12,066,480			12,122,717			12,081,477			12,057,937			12,053,597
Book value per common share	$	24.14		$	24.93		$	24.62		$	23.86		$	23.24
Tangible book value per common share		21.29			22.09			21.75			20.98			20.34

(1) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options.

Net Core Earnings and Net Core Earnings per Common Share

	Quarter Ended
	2022			2021
(dollars in thousands, except per share data)	March 31			December 31			September 30			June 30			March 31
Net earnings	$	10,738		$	9,159		$	9,253		$	10,432		$	10,962
Adjustments:
Provision for credit losses		(1,250	)		—			(700	)		(1,000	)		—
Income tax provision		2,235			1,923			2,179			2,312			2,336
PPP loans, including fees		(783	)		(958	)		(1,005	)		(1,954	)		(3,905	)
Net core earnings	$	10,940		$	10,124		$	9,727		$	9,790		$	9,393

Weighted-average common shares outstanding, basic		12,109,074			12,097,100			12,067,769			12,056,550			12,038,638
Earnings per common share, basic	$	0.89		$	0.76		$	0.77		$	0.87		$	0.91
Net core earnings per common share, basic		0.90			0.84			0.81			0.81			0.78

Net Core Earnings to Average Assets, as Adjusted, and Average Equity

	Quarter Ended
	2022			2021
(dollars in thousands)	March 31			December 31			September 30			June 30			March 31
Net core earnings	$	10,940		$	10,124		$	9,727		$	9,790		$	9,393
Total average assets	$	3,146,399		$	3,021,079		$	2,953,181		$	2,938,944		$	2,775,567
Adjustments:
PPP loan average balance		(36,720	)		(61,062	)		(107,931	)		(155,417	)		(137,251	)
Total average assets, adjusted	$	3,109,679		$	2,960,017		$	2,845,250		$	2,783,527		$	2,638,316
Net core earnings to average assets, as adjusted (annualized)		1.43	%		1.36	%		1.36	%		1.41	%		1.44	%
Total average equity	$	301,432		$	301,398		$	295,076		$	285,803		$	277,612
Net core earnings to average equity (annualized)		14.72	%		13.33	%		13.08	%		13.74	%		13.72	%

NON-GAAP RECONCILING TABLES

Total Non-Performing Assets to Total Loans, Excluding PPP

	Quarter Ended
	2022		2021
(dollars in thousands)	March 31		December 31		September 30	June 30	March 31
Total loans⁽¹⁾⁽²⁾	$	2,014,061	$	1,908,040

Guaranty Bancshares, Inc. Reports First Quarter 2022 Financial Results