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ADDISON, Texas--(BUSINESS WIRE)--Guaranty Bancshares, Inc. (NASDAQ: GNTY), the parent company of Guaranty Bank & Trust, N.A., today reported financial results for the fiscal quarter ended March 31, 2021. The Company's net income available to common shareholders was $11.0 million, or $0.95 per basic share, for the quarter ended March 31, 2021, compared to $9.9 million, or $0.90 per basic share, for the quarter ended December 31, 2020 and $6.3 million, or $0.55 per basic share, for the quarter ended March 31, 2020. Return on average assets and average equity for the first quarter of 2021 were 1.60% and 16.01%, respectively, compared to 1.48% and 14.53%, respectively, for the fourth quarter of 2020 and 1.09% and 9.94%, respectively, for the first quarter of 2020. The increase in earnings during the first quarter of 2021, compared to the fourth quarter of 2020, was partly due to the forgiveness and amortization of Paycheck Protection Program - round one (PPP1) loans and recognition of associated loan origination fees for both PPP1 and round two (PPP2) loans, decreases in interest expense relative to interest income, decreases in non-interest expense resulting from PPP origination costs and lower legal and professional expenses. Net core earnings, excluding provisions for credit losses, income taxes and PPP1/PPP2 net origination 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 are very pleased with our operating and financial results for the first quarter of 2021. The Texas economy appears to be rebounding nicely from many of the prior years concerns resulting from COVID-19 and were glad to see people in our communities receiving vaccinations and continuing to work at stopping the spread of the virus. All of our lobbies are back open at normal business hours, and many of our employees have returned to normal working conditions with the remainder expected to during the second quarter. Our borrowers have generally weathered the downturn well over the last year and were pleased that only a handful of credits remain in an interest-only deferral period. We anticipate that these borrowers will return to their normal contractual payment schedules during the second quarter of 2021. As our first quarter results indicate, weve sustained our net interest margin at good levels compared to industry trends and continue to have excellent asset quality and strong net core earnings. Additionally, during the first quarter of 2021 we issued a 10% stock dividend and declared a cash dividend of $0.20/share, which is an increase over last year on a split-adjusted basis of over 12%. We continue to view our multi-decade history of providing a growing dividend to our shareholders as a big part of the value proposition to our shareholders total return," commented Ty Abston, the Company's Chairman and Chief Executive Officer. QUARTERLY HIGHLIGHTS RESULTS OF OPERATIONS Large provisions for credit losses in the second quarter of 2020 resulting from effects of COVID-19 and participation in the PPP1 and PPP2 program have created temporary extraordinary results in the calculation of net earnings and related performance ratios. With the credit outlook still uncertain as a result of COVID-19 and other economic factors, 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 2021 2020 $ in thousands ('000s) March 31 December 31 September 30 June 30 March 31 Net earnings $ 10,962 $ 9,915 $ 10,134 $ 1,075 $ 6,278 Adjustments: Provision for credit losses (300 ) 12,100 1,400 Income tax provision (benefit) 2,336 2,290 2,350 (190 ) 1,445 PPP loans, including fees (3,513 ) (2,654 ) (1,076 ) (2,540 ) Net interest expense on PPP-related borrowings 3 31 Net core earnings $ 9,785 $ 9,551 $ 11,111 $ 10,476 $ 9,123 Total average assets $ 2,775,567 $ 2,659,725 $ 2,639,335 $ 2,657,609 $ 2,325,618 Adjustments: PPP loans average balance (137,251 ) (179,240 ) (209,506 ) (163,184 ) Excess fed funds sold due to PPP-related borrowings (8,152 ) (84,066 ) Total average assets, adjusted $ 2,638,316 $ 2,480,485 $ 2,421,677 $ 2,410,359 $ 2,325,618 Total average equity $ 277,612 $ 271,397 $ 265,027 $ 258,225 $ 253,919 PERFORMANCE RATIOS Net earnings to average assets (annualized) 1.60 % 1.48 % 1.53 % 0.16 % 1.09 % Net earnings to average equity (annualized) 16.01 14.53 15.21 1.67 9.94 Net core earnings to average assets, as adjusted (annualized) 1.50 1.53 1.83 1.75 1.58 Net core earnings to average equity (annualized) 14.29 14.00 16.68 16.32 14.45 PER COMMON SHARE DATA Weighted-average common shares outstanding, basic 11,528,140 10,966,504 11,012,060 11,025,924 11,432,391 Earnings per common share, basic $ 0.95 $ 0.90 $ 0.92 $ 0.10 $ 0.55 Net core earnings per common share, basic 0.85 0.87 1.01 0.95 0.80 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 2021 and 2020 was $24.5 million and $20.6 million, respectively, an increase of $3.9 million, or 19.1%, as a result of PPP origination income of $3.5 million recorded in the first quarter of 2021 that did not occur in the first quarter of 2020 partially offset by a $1.8 million decline in loan interest income, excluding PPP-related income, due to the continued repricing of variable rate loans to lower interest rates. The increase in net interest income was also due to a decrease in deposit-related interest expense of $2.8 million, or 63.7%, compared to the same quarter of the prior year. Net interest income, before the provision for credit losses, in the fourth quarter of 2020 and first quarter of 2021 was $24.0 million and $24.5 million, respectively, an increase of $539,000, or 2.3%, resulting primarily from a decrease in deposit-related interest expense of $275,000, or 14.6%, and an increase in loan income of $197,000, or 0.8%, during the current quarter driven primarily by $3.5 million of PPP origination income compared to $2.7 million in the fourth quarter of 2020. Net interest margin, on a taxable equivalent basis, for the first quarter of 2021 and 2020 was 3.85% and 3.87%, respectively. Loan yield decreased from 5.32% for the first quarter of 2020 to 5.20% for the first quarter of 2021, a change of 12 basis points, while the cost of interest-bearing deposits decreased from 1.21% to 0.42% during the same period, a change of 79 basis points. The decrease in loan yield was primarily due to the repricing of variable rate loans to lower interest rates during the period. The decrease in average deposit rate was primarily due to continued reductions in interest rates for non-maturing deposits as market conditions have allowed. Net interest margin, on a taxable equivalent basis, stayed at 3.85% from the fourth quarter of 2020 to the first quarter of 2021. Loan yield increased from 4.93% for the fourth quarter of 2020 to 5.20% for the first quarter of 2021, a change of 27 basis points. Loan yield, excluding the effect PPP loans, was 4.79% in the first quarter of 2021, compared to 4.83% in the fourth quarter of 2020, a decrease of four basis points, due to the continued repricing of variable rate loans to lower interest rates. The cost of interest-bearing deposits decreased from 0.51% to 0.42% during the same period, a change of nine basis points. The decrease was due primarily to the maturity of higher-rate CDs during the first quarter of 2021, as well as continued reductions in interest rates for non-maturing deposits as market conditions have allowed. The Banks continued participation in the PPP program has created temporary extraordinary results in the calculation of net interest margin. To illustrate core net interest margin, the table below excludes PPP1 and PPP2 loans and their associated fees and costs for the three months ended March 31, 2021: For the Three Months Ended March 31, 2021 $ in thousands ('000s) Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Total loans $ 1,886,863 $ 24,195 5.20 % Adjustments: PPP1 loans average balance and net fees(1) (101,689 ) (1,651 ) 6.58 PPP2 loans average balance and net fees(2) (35,562 ) (1,862 ) 21.23 Total PPP loans(3) $ (137,251 ) $ (3,513 ) 10.38 % Total loans, excluding PPP $ 1,749,612 $ 20,682 4.79 % Total interest-earning assets 2,609,299 26,513 4.12 Total interest-earning assets, net of PPP effects $ 2,472,048 $ 23,000 3.77 % Net interest income $ 24,491 Net interest margin(4) 3.81 % Net interest margin, FTE(5) 3.85 Net interest income, net of PPP effects 20,978 Net interest margin, net of PPP effects(6) 3.44 Net interest margin, FTE, net of PPP effects(7) 3.48 Efficiency ratio(8) 56.56 Efficiency ratio, net of PPP effects(9) 65.34 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 $247,000 and net origination fees recognized in earnings of $1.4 million for the three months ended March 31, 2021. (2) Interest earned on PPP2 loans consists of interest income of $88,000 and net origination fees recognized in earnings of $1.8 million for the three months ended March 31, 2021. (3) Interest earned consists of interest income of $335,000 and net origination fees recognized in earnings of $3.2 million for the three months ended March 31, 2021. (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, 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, 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 year ended December 31, 2020, a total allowance for credit losses provision of $13.2 million was recorded primarily to account for the estimated impact of COVID-19 on credit quality and resulted largely from changes to individual loan risk ratings, as well as COVID-specific qualitative factors primarily derived from changes in national GDP, Texas unemployment rates and national industry related CRE trends, all of which were impacted by the effects of COVID-19. There was no provision for ACL during the first quarter of 2021, partially due to the aforementioned COVID-specific qualitative factors established during 2020 being reduced during the quarter from 55 basis points across the loan portfolio to 42 basis points in order to begin to capture the improvements that have occurred to macro-economic factors evaluated at the onset of the pandemic. Despite our current quarter loan growth, ex-PPP, of 1.6%, we did not record a provision because our reductions in the COVID-specific qualitative factors, as well as increases in our standard qualitative factors during the quarter, outweigh the effects of the loan growth. Although management is cautiously optimistic about improving vaccination and economic trends, it is possible that the economic effects of the pandemic could continue beyond 2021, although we expect the credit impact of the pandemic to be largely understood and accounted for by the end of 2021. Noninterest income increased $1.2 million, or 23.3%, in the first quarter of 2021, to $6.1 million, compared to $5.0 million for the first quarter of 2020. The increase from the same quarter in 2020 was due primarily to an increase in the gain on sale of loans of $209,000, or 17.6%, and an increase in merchant and debit card fees of $375,000, or 33.2%, from the same quarter of the prior year. The remaining increase resulted from a $277,000 gain on bank-owned life insurance proceeds resulting from the death of a former bank officer, a $156,000 increase in mortgage and warehouse fee income, a $57,000 increase in SBA income due to a fair value adjustment and a $48,000 increase on gains on sale of ORE. Noninterest income in the first quarter of 2021 decreased by $307,000, or 4.8%, from $6.4 million in fourth quarter of 2020 due primarily to a decrease in gains on sales of mortgage and SBA loans of $625,000, or 30.9%. Of the decrease in gains on sales of loans, $497,000 was attributable to lower mortgage related gains and $127,000 was attributable to the sale of SBA loans during the fourth quarter of 2020, and no SBA loan sales in the first quarter of 2021. The decrease was partially offset by a $277,000 gain from bank-owned life insurance proceeds. Noninterest expense increased $905,000, or 5.5%, in the first quarter of 2021, compared to the first quarter of 2020. The increase in noninterest expense in the first quarter of 2021 was primarily driven by an increase in employee compensation and benefits expense of $477,000, or 5.0%, to $9.9 million, from the same quarter of the prior year, as well as an increase in occupancy expenses of $210,000, or 8.5%, from the same quarter of the prior year and an increase in ATM and debit card expense of $122,000, or 29.2%, resulting from increased usage of ATM and debit cards during the period. Software and technology expense also increased $175,000, or 18.6%, as a result of new software and hardware investments to allow employees to securely work from home and to improve online deposit account opening. Noninterest expense decreased $861,000, or 4.7%, in the first quarter of 2021 to $17.3 million, compared to the quarter ended December 31, 2020. The decrease was primarily due to a $364,000, or 37.6%, decrease in legal and professional fees, primarily recruiter and audit fees incurred in fourth quarter of 2020 that were not incurred during the first quarter of 2021, and a $268,000, or 2.6%, decrease in employee compensation and benefits, primarily attributable to PPP2 origination costs deferred of $392,000. The remaining decrease was due to a $315,000 decrease in other noninterest expense, which includes a $93,000 decrease in stock compensation expense from the prior quarter. The companys efficiency ratio in the first quarter of 2021 was 56.56%, compared to 59.82% in the prior quarter and 64.27% in the same quarter last year. Adjusted to remove the effects of PPP-related transactions, the companys efficiency ratio for the first quarter of 2021 was 65.34% and for the fourth quarter of 2020 was 65.55%. 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 $2.89 billion at March 31, 2021, compared to $2.74 billion at December 31, 2020 and $2.39 billion at March 31, 2020. Gross loans increased 2.4%, or $45.5 million, to $1.91 billion at March 31, 2021, compared to loans of $1.87 billion at December 31, 2020. Gross loans increased 11.3%, or $194.0 million, from $1.72 billion at March 31, 2020. The increase in gross loans during the first quarter of 2021 compared to the first quarter of 2020 included outstanding PPP loan balances of $158.2 million, to 1,462 borrowers, as of March 31, 2021. Excluding the outstanding PPP balances as of March 31, 2021, gross loans increased $35.8 million, or 2.08%, from the same quarter of the prior year. The increase in gross loans from the fourth quarter of 2020 to the first quarter of 2021 is primarily due to organic growth, but also due to the $18.4 million, or 13.2%, growth in outstanding PPP loan balances in the first quarter of 2021. Excluding the increase in the balance of PPP loans, gross loans increased by 1.57%, or $27.1 million, from the prior quarter. Deposits increased by 8.3%, or $188.8 million, to $2.48 billion at March 31, 2021, compared to $2.29 billion at December 31, 2020. Total deposits increased 23.7%, or $474.8 million, from $2.00 billion at March 31, 2020. Changes in deposits during these periods were heavily impacted by the deposit of PPP loan proceeds into demand accounts at the Bank, as well as apparent changes in depositor spending habits in these periods resulting from economic and other uncertainties due to COVID-19. Shareholders' equity totaled $280.1 million as of March 31, 2021, compared to $272.6 million at December 31, 2020 and $253.6 million at March 31, 2020. The increase from the previous quarter resulted primarily from net income of $11.0 million, offset by the payment of dividends of $2.4 million and $1.8 million of other comprehensive expense during the first quarter of 2021. Nonperforming assets as a percentage of total loans were 0.19% at March 31, 2021, compared to 0.70% at December 31, 2020 and 1.00% at March 31, 2020. The Banks nonperforming assets consist primarily of nonaccrual loans. During 2020, nonperforming assets included three Small Business Administration (SBA) 7(a), partially guaranteed (75%) loans that were acquired in the June 2018 acquisition of Westbound Bank, with combined book balances of $8.7 million as of December 31, 2020. During the first quarter of 2021, one of these loans was resolved when the underlying collateral, a hotel, was sold to a third party. The bank charged off $475,000 in connection with the sale, all of which had previously been specifically reserved within the ACL. The other two loans, collateralized by a hotel and both to one borrower, were resolved through a bankruptcy judgement that allows the borrower to adequately service their debt coverage. The bankruptcy order resulted in a charge-off of $270,000, which was fully reserved in the ACL. These loans were internally identified as problem assets prior to COVID-19 and were properly reserved. During the first and second quarters of 2020, the Bank provided financial relief to many of its customers due to the COVID-19 outbreak through either 3-month principal and interest (P&I) payment deferrals or through 6-month interest-only (I/O) deferrals. Under the initial deferral program, the Bank provided 3-month P&I deferrals on 658 loans with principal balances of $247.8 million and provided up to 6-month I/O deferrals on 336 loans with principal balances of $183.7 million. As of March 31, 2021, there are no loans remaining in the P&I deferral program and there are 11 loans totaling $49.8 million that remain in a subsequent I/O deferral program. We anticipate that all of these borrowers, who are primarily in the hotel, restaurant and hospitality industries, will return to their contractual payment schedules at the end of their I/O deferral period with no additional subsequent deferrals. Finally, management continues to closely monitor loans and concentrations in COVID-19 affected industries. Social distancing and other measures as a result of the virus have particularly affected the restaurant, hospitality and retail commercial real estate (CRE) sectors. Although all capacity and other restrictions in Texas have been removed, some local and business-specific restrictions remain in place. Excluding SBA partially guaranteed (75%) loans, the Bank has direct exposure, through total loan commitments with weighted average loan-to-values (LTV), as of March 31, 2021, of $24.9 million with 59.7% weighted average LTV to restaurants, $51.4 million with 51.5% weighted average LTV to retail CRE and $68.5 million with 56.3% weighted average LTV to hotel/hospitality borrowers. Guaranty Bancshares, Inc. Consolidated Financial Summary (Unaudited) (In thousands, except share and per share data) As of 2021 2020 March 31 December 31 September 30 June 30 March 31 ASSETS Cash and due from banks $ 38,534 $ 47,836 $ 35,714 $ 35,490 $ 40,354 Federal funds sold 356,750 218,825 101,300 104,375 81,250 Interest-bearing deposits 28,188 85,130 56,357 51,129 25,324 Total cash and cash equivalents 423,472 351,791 193,371 190,994 146,928 Securities available for sale 407,736 380,795 368,887 376,381 377,062 Securities held to maturity Loans held for sale 4,663 5,542 9,148 7,194 4,024 Loans, net 1,876,985 1,831,737 1,921,234 1,919,201 1,696,861 Accrued interest receivable 8,064 9,834 8,361 11,864 8,148 Premises and equipment, net 54,903 55,212 55,468 55,251 54,496 Other real estate owned 312 404 310 402 605 Cash surrender value of life insurance 35,836 35,510 35,304 34,920 34,713 Core deposit intangible, net 2,786 2,999 3,213 3,426 3,639 Goodwill 32,160 32,160 32,160 32,160 32,160 Other assets 44,383 34,848 35,228 35,402 32,348 Total assets $ 2,891,300 $ 2,740,832 $ 2,662,684 $ 2,667,195 $ 2,390,984 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Noninterest-bearing $ 878,883 $ 779,740 $ 776,364 $ 772,179 $ 528,817 Interest-bearing 1,596,327 1,506,650 1,446,718 1,469,847 1,471,609 Total deposits 2,475,210 2,286,390 2,223,082 2,242,026 2,000,426 Securities sold under agreements to repurchase 24,007 15,631 20,520 17,414 11,843 Accrued interest and other liabilities 28,080 25,257 25,814 25,960 23,645 Line of credit 15,000 12,000 7,000 2,000 20,000 Federal Home Loan Bank advances 49,096 109,101 99,105 100,610 70,614 Subordinated debentures 19,810 19,810 20,310 20,310 10,810 Total liabilities 2,611,203 2,468,189 2,395,831 2,408,320 2,137,338 Total shareholders' equity 280,097 272,643 266,853 258,875 253,646 Total liabilities and shareholders' equity $ 2,891,300 $ 2,740,832 $ 2,662,684 $ 2,667,195 $ 2,390,984 Guaranty Bancshares, Inc. Consolidated Financial Summary (Unaudited) (In thousands, except share and per share data) Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 STATEMENTS OF EARNINGS Interest income $ 26,513 $ 26,253 $ 24,956 $ 26,581 $ 25,252 Interest expense 2,022 2,301 2,677 3,399 4,683 Net interest income 24,491 23,952 22,279 23,182 20,569 Provision for credit losses (300 ) 12,100 1,400 Net interest income after provision for credit losses 24,491 23,952 22,579 11,082 19,169 Noninterest income 6,119 6,426 6,663 4,987 4,961 Noninterest expense 17,312 18,173 16,758 15,184 16,407 Income before income taxes 13,298 12,205 12,484 885 7,723 Income tax provision (benefit) 2,336 2,290 2,350 (190 ) 1,445 Net earnings $ 10,962 $ 9,915 $ 10,134 $ 1,075 $ 6,278 PER COMMON SHARE DATA Earnings per common share, basic $ 0.95 $ 0.90 $ 0.92 $ 0.10 $ 0.55 Earnings per common share, diluted(1) 0.94 0.90 0.92 0.10 0.55 Cash dividends per common share 0.20 0.20 0.20 0.19 0.19 Book value per common share - end of quarter 23.24 24.93 24.29 23.50 22.79 Tangible book value per common share - end of quarter(2) 20.34 21.72 21.07 20.27 19.58 Common shares outstanding - end of quarter 12,053,597 10,935,415 10,988,239 11,013,804 11,128,556 Weighted-average common shares outstanding, basic 11,528,140 10,966,504 11,012,060 11,025,924 11,432,391 Weighted-average common shares outstanding, diluted(1) 11,667,278 11,019,292 11,012,060 11,025,924 11,432,391 PERFORMANCE RATIOS Return on average assets (annualized) 1.60 % 1.48 % 1.53 % 0.16 % 1.09 % Return on average equity (annualized) 16.01 14.53 15.21 1.67 9.94 Net interest margin, fully taxable equivalent (annualized)(3) 3.85 3.85 3.61 3.78 3.87 Efficiency ratio(4) 56.56 59.82 57.90 53.90 64.27 (1) Outstanding options and the closing price of the company's stock as of September 30, June 30 and March 31, 2020 had an anti-dilutive effect on each respective quarter end's weighted-average common shares outstanding; therefore, the effect of their conversion has been excluded from the calculation of the diluted weighted-average common shares outstanding for those periods. The diluted EPS for those quarters has been calculated using the basic weighted-average shares outstanding in order to comply with GAAP. There was not an anti-dilutive effect for the quarters ended March 31, 2021 and December 31, 2020. (2) See Reconciliation of non-GAAP Financial Measures table. (3) 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%. (4) 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. Guaranty Bancshares, Inc. Selected Financial Data (Unaudited) (In thousands) As of 2021 2020 March 31 December 31 September 30 June 30 March 31 LOAN PORTFOLIO COMPOSITION Commercial and industrial $ 460,491 $ 445,771 $ 531,152 $ 522,248 $ 297,163 Real estate: Construction and development 257,886 270,407 269,101 265,982 263,973 Commercial real estate 630,479 594,216 602,664 606,061 584,883 Farmland 76,867 78,508 80,197 77,625 78,635 1-4 family residential 389,542 389,096 385,783 383,590 400,605 Multi-family residential 32,090 21,701 19,499 29,692 20,430 Consumer 49,780 51,044 52,855 52,986 52,996 Agricultural 14,905 15,734 17,004 18,981 19,314 Overdrafts 327 342 379 275 354 Total loans(1)(2) $ 1,912,367 $ 1,866,819 $ 1,958,634 $ 1,957,440 $ 1,718,353 Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 ALLOWANCE FOR CREDIT LOSSES Balance at beginning of period $ 33,619 $ 33,757 $ 34,119 $ 21,948 $ 20,750 Loans charged-off (875 ) (159 ) (101 ) (59 ) (224 ) Recoveries 26 21 39 130 22 Provision for credit loss expense (300 ) 12,100 1,400 Balance at end of period $ 32,770 $ 33,619 $ 33,757 $ 34,119 $ 21,948 Allowance for credit losses / period-end loans 1.71 % 1.80 % 1.72 % 1.74 % 1.28 % Allowance for credit losses / nonperforming loans 968.7 264.6 245.0 235.6 135.2 Net charge-offs (recoveries) / average loans (annualized) 0.18 0.03 0.01 (0.02 ) 0.05 NON-PERFORMING ASSETS Non-accrual loans(3) $ 3,383 $ 12,705 $ 13,780 $ 14,480 $ 16,232 Other real estate owned 312 404 310 402 605 Repossessed assets owned 4 6 3 38 292 Total non-performing assets $ 3,699 $ 13,115 $ 14,093 $ 14,920 $ 17,129 Non-performing assets as a percentage of: Total loans(1)(2) 0.19 % 0.70 % 0.72 % 0.76 % 1.00 % Total loans, excluding PPP(1)(2) 0.21 0.76 0.81 0.85 1.00 Total assets 0.13 0.48 0.53 0.56 0.72 TDR loans - nonaccrual $ 87 $ 90 $ 92 $ 95 $ 97 TDR loans - accruing 9,598 9,626 7,891 7,216 7,220 (1) Excludes outstanding balances of loans held for sale of $4.7 million, $5.5 million, $9.1 million, $7.2 million, and $4.0 million as of March 31, 2021, December 31, September 30, June 30 and March 31, 2020, respectively. (2) Excludes deferred loan (fees) costs of $(2.6) million, $(1.5) million, $(3.6) million, $(4.1) million, and $456,000 as of March 31, 2021, December 31, September 30, June 30 and March 31, 2020, respectively. (3) TDR loans - nonaccrual are included in nonaccrual loans, which are a component of nonperforming loans. Guaranty Bancshares, Inc. Selected Financial Data (Unaudited) (In thousands) Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 NONINTEREST INCOME Service charges $ 829 $ 868 $ 717 $ 571 $ 908 Net realized gain on sale of loans 1,398 2,023 2,114 1,508 1,189 Fiduciary and custodial income 549 513 511 474 514 Bank-owned life insurance income 212 205 208 207 218 Merchant and debit card fees 1,506 1,396 1,654 1,334 1,131 Loan processing fee income 153 167 181 130 150 Warehouse lending fees 241 262 288 243 164 Mortgage fee income 177 197 272 204 98 Other noninterest income 1,054 795 718 316 589 Total noninterest income $ 6,119 $ 6,426 $ 6,663 $ 4,987 $ 4,961 NONINTEREST EXPENSE Employee compensation and benefits $ 9,943 $ 10,211 $ 9,439 $ 8,077 $ 9,466 Occupancy expenses 2,687 2,596 2,597 2,550 2,477 Legal and professional fees 604 968 574 589 519 Software and technology 1,114 1,127 1,093 945 939 Amortization 343 340 338 338 333 Director and committee fees 255 251 211 165 219 Advertising and promotions 455 356 301 408 433 ATM and debit card expense 540 545 509 479 418 Telecommunication expense 234 244 231 209 180 FDIC insurance assessment fees 169 252 252 122 195 Other noninterest expense 968 1,283 1,213 1,302 1,228 Total noninterest expense $ 17,312 $ 18,173 $ 16,758 $ 15,184 $ 16,407 Guaranty Bancshares, Inc. Selected Financial Data (Unaudited) (In thousands) For the Three Months Ended March 31, 2021 2020 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) $ 1,886,863 $ 24,195 5.20 % $ 1,701,525 $ 22,517 5.32 % Securities available for sale 378,076 2,091 2.24 220,303 1,313 2.40 Securities held to maturity 144,531 956 2.66 Nonmarketable equity securities 10,031 101 4.08 9,221 114 4.97 Interest-bearing deposits in other banks 334,329 126 0.15 75,677 352 1.87 Total interest-earning assets 2,609,299 26,513 4.12 2,151,257 25,252 4.72 Allowance for loan losses (33,242 ) (20,781 ) Noninterest-earning assets 199,510 195,142 Total assets $ 2,775,567 $ 2,325,618 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing deposits $ 1,559,865 $ 1,603 0.42 % $ 1,475,507 $ 4,421 1.21 % Advances from FHLB and fed funds purchased 51,098 99 0.79 23,236 82 1.42 Line of credit 14,633 128 3.55 3,407 Subordinated debentures 19,810 188 3.85 10,810 171 6.36 Securities sold under agreements to repurchase 21,173 4 0.08 12,827 9 0.28 Total interest-bearing liabilities 1,666,579 2,022 0.49 1,525,787 4,683 1.23 Noninterest-bearing liabilities: Noninterest-bearing deposits 808,007 524,263 Accrued interest and other liabilities 23,369 21,649 Total noninterest-bearing liabilities 831,376 545,912 Shareholders equity 277,612 253,919 Total liabilities and shareholders equity $ 2,775,567 $ 2,325,618 Net interest rate spread(2) 3.63 % 3.49 % Net interest income $ 24,491 $ 20,569 Net interest margin(3) 3.81 % 3.85 % Net interest margin, fully taxable equivalent(4) 3.85 % 3.87 % (1) Includes average outstanding balances of loans held for sale of $4.2 million and $2.4 million for the three months ended March 31, 2021 and 2020, 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%. Guaranty Bancshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data) As of 2021 2020 March 31 December 31 September 30 June 30 March 31 Total shareholders equity $ 280,097 $ 272,643 $ 266,853 $ 258,875 $ 253,646 Adjustments: Goodwill (32,160 ) (32,160 ) (32,160 ) (32,160 ) (32,160 ) Core deposit intangible, net (2,786 ) (2,999 ) (3,213 ) (3,426 ) (3,639 ) Total tangible common equity $ 245,151 $ 237,484 $ 231,480 $ 223,289 $ 217,847 Common shares outstanding - end of quarter(1) 12,053,597 10,935,415 10,988,239 11,013,804 11,128,556 Book value per common share $ 23.24 $ 24.93 $ 24.29 $ 23.50 $ 22.79 Tangible book value per common share 20.34 21.72 21.07 20.27 19.58 (1) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options. Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 Net earnings $ 10,962 $ 9,915 $ 10,134 $ 1,075 $ 6,278 Adjustments: Provision for credit losses (300 ) 12,100 1,400 Income tax provision (benefit) 2,336 2,290 2,350 (190 ) 1,445 PPP loans, including fees (3,513 ) (2,654 ) (1,076 ) (2,540 ) Net interest expense on PPP-related borrowings 3 31 Net core earnings $ 9,785 $ 9,551 $ 11,111 $ 10,476 $ 9,123 Weighted-average common shares outstanding, basic 11,528,140 10,966,504 11,012,060 11,025,924 11,432,391 Earnings per common share, basic $ 0.95 $ 0.90 $ 0.92 $ 0.10 $ 0.55 Net core earnings per common share, basic 0.85 0.87 1.01 0.95 0.80 Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 Net core earnings $ 9,785 $ 9,551 $ 11,111 $ 10,476 $ 9,123 Total average assets $ 2,775,567 $ 2,659,725 $ 2,639,335 $ 2,657,609 $ 2,325,618 Adjustments: PPP loan average balance (137,251 ) (179,240 ) (209,506 ) (163,184 ) Excess fed funds sold due to PPP-related borrowings (8,152 ) (84,066 ) Total average assets, adjusted $ 2,638,316 $ 2,480,485 $ 2,421,677 $ 2,410,359 $ 2,325,618 Net core earnings to average assets, as adjusted (annualized) 1.50 1.53 1.83 1.75 1.58 Total average equity $ 277,612 $ 271,397 $ 265,027 $ 258,225 $ 253,919 Net core earnings to average equity (annualized) 14.29 14.00 16.68 16.32 14.45 Guaranty Bancshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data) Quarter Ended 2021 2020 March 31 December 31 September 30 June 30 March 31 Total loans(1)(2) $ 1,912,367 $ 1,866,819 $ 1,958,634 $ 1,957,440 $ 1,718,353 Adjustments: PPP loans balance (158,236 ) (139,808 ) (209,609 ) (208,793 ) Total loans, excluding PPP(1)(2) $ 1,754,131 $ 1,727,011 $ 1,749,025 $ 1,748,647 $ 1,718,353 Total non-performing assets $ 3,699 $ 13,115 $ 14,093 $ 14,920 $ 17,129 Non-performing assets as a percentage of: Total loans(1)(2) 0.19 % 0.70 % 0.72 % 0.76 % 1.00 % Total loans, excluding PPP(1)(2) 0.21 0.76 0.81 0.85 1.00 (1) Excludes outstanding balances of loans held for sale of $4.7 million, $5.5 million, $9.1 million, $7.2 million, and $4.0 million as of March 31, 2021, December 31, September 30, June 30 and March 31, 2020, respectively. (2) Excludes deferred loan (fees) costs of $(2.6) million, $(1.5) million, $(3.6) million, $(4.1) million, and $456,000 as of March 31, 2021, December 31, September 30, June 30 and March 31, 2020, respectively. For the Three Months Ended March 31, 2021 Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Total interest-earning assets $ 2,609,299 $ 26,513 4.12 % Total loans 1,886,863 24,195 5.20 Adjustments: PPP loan average balance and net fees(1) (137,251 ) (3,513 ) 10.38 Total loans, net of PPP effects 1,749,612 20,682 4.79 Total interest-earning assets, net of PPP effects $ 2,472,048 $ 23,000 3.77 % (1) Interest earned consists of interest income of $335,000 and net origination fees recognized in earnings of $3.2 million for the three months ended March 31, 2021. For the Three Months Ended March 31, 2021 Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Net interest income $ 24,491 Adjustments: PPP-related interest income (335 ) PPP-related net origination fees (3,178 ) Net interest income, net of PPP effects $ 20,978 Total interest-earning assets $ 2,609,299 Total interest-earning assets, net of PPP effects 2,472,048 Net interest margin(1) 3.81 % Net interest margin, net of PPP effects 3.44 % (1) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized. Guaranty Bancshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data) Three Months Ended March 31, 2021 Three Months Ended December 31, 2020 Total noninterest expense $ 17,312 $ 18,173 Adjustments: PPP-related deferred costs 392 Total noninterest expense, net of PPP effects $ 17,704 $ 18,173 Net interest income 24,491 23,952 Net interest income, net of PPP effects 20,978 21,298 Noninterest income $ 6,119 $ 6,426 Efficiency ratio(1) 56.56 % 59.82 % Efficiency ratio, net of PPP effects(2) 65.34 65.55 (1) 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. (2) The efficiency ratio, net of PPP effects, 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. Three Months Ended March 31, 2021 Three Months Ended December 31, 2020 Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Total loans $ 1,886,863 $ 24,195 5.20 % $ 1,937,556 $ 23,998 4.93 % Adjustments: PPP loans average balance and net fees (137,251 ) (3,513 ) 10.38 (179,240 ) (2,654 ) 5.89 Total loans, net of PPP effects $ 1,749,612 $ 20,682 4.79 % $ 1,758,316 $ 21,344 4.83 % Effect of removing PPP loans on loan yield 0.41 % 0.10 % Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Average Outstanding Balance Interest Earned/ Interest Paid Average Yield/ Rate Total loans $ 1,886,863 $ 24,195 5.20 % $ 1,701,525 $ 22,517 5.32 % Adjustments: PPP loans average balance and net fees (137,251 ) (3,513 ) 10.38 Total loans, net of PPP effects $ 1,749,612 $ 20,682 4.79 % $ 1,701,525 $ 22,517 5.32 % Effect of removing PPP loans on loan yield 0.41 % 0.00 % Guaranty Bancshares, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data) Three Months Ended March 31, 2021 Three Months Ended December 31, 2020 Three Months Ended March 31, 2020 Total loans $ 1,912,367 $ 1,866,819 $ 1,718,353 Adjustments: PPP loans (158,236 ) (139,808 ) Total loans, excluding PPP $ 1,754,131 $ 1,727,011 $ 1,718,353 Allowance for credit losses $ 32,770 $ 33,619 $ 21,948 Allowance for credit losses / period-end loans 1.71 % 1.80 % 1.28 % Allowance for credit losses / period-end loans. excluding PPP 1.87 1.95 1.28 About Non-GAAP Financial Measures Certain of the financial measures and ratios we present, including tangible book value per share, net core earnings, core net interest margin, and PPP-adjusted metrics are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as non-GAAP financial measures. We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods. These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables. Conference Call Information The Company will hold a conference call to discuss first quarter 2021 financial results on Tuesday, April 19, 2021 at 10:00 am CST. The conference call will be hosted by Ty Abston, Chairman and CEO, Cappy Payne, SEVP and CFO, and Shalene Jacobson, EVP and CRO. All conference attendees must register before the call at https://www.gnty.com/register. The conference materials will be available by accessing the Investor Relations page on our website, gnty.com. A recording of the conference call will be available by 1:00 pm CST the day of the call and remain available through April 31, 2021 on our Investor Relations webpage. About Guaranty Bancshares, Inc. Guaranty Bancshares, Inc. is a bank holding company that conducts commercial banking activities through its wholly-owned subsidiary, Guaranty Bank & Trust, N.A. As one of the oldest regional community banks in Texas, Guaranty Bank & Trust provides its customers with a full array of relationship-driven commercial and consumer banking products and services, as well as mortgage, trust, and wealth management services. Guaranty Bank & Trust has 31 banking locations across 24 Texas communities located within the East Texas, Dallas/Fort Worth, greater Houston and Central Texas regions of the state. As of March 31, 2021, Guaranty Bancshares, Inc. had total assets of $2.9 billion, total loans of $1.9 billion and total deposits of $2.5 billion. Visit gnty.com for more information. Cautionary Statement Regarding Forward-Looking Information This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our results of operations, financial condition and financial performance. These statements are often, but not always, made through the use of words or phrases such as may, should, could, predict, potential, believe, will likely result, expect, continue, will, anticipate, seek, estimate, intend, plan, projection, would and outlook, or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, managements beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Actual results will also be significantly impacted by the effects of the ongoing COVID-19 pandemic, including, among other effects: the impact of the public health crisis; the extent and duration of closures of businesses, including our branches, vendors and customers; the operation of financial markets; employment levels; market liquidity; the impact of various actions taken in response by the U.S. federal government, the Federal Reserve, other banking regulators, state and local governments; the adequacy of our allowance for credit losses in relation to potential losses in our loan portfolio; and the impact that all of these factors have on our borrowers, other customers, vendors and counterparties. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Such factors include, without limitation, the Risk Factors referenced in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, other risks and uncertainties listed from time to time in our reports and documents filed with the Securities and Exchange Commission ("SEC"). We can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this communication, and we do not intend, and assume no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

Answer: Guaranty Bancshares, Inc. Reports First Quarter 2021 Financial Results