Guaranty Bancshares, Inc. Reports Fourth Quarter and Year-End 2021 Financial Results

By: Guaranty Bancshares, Inc. via Business Wire

January 18, 2022 at 07:00 AM EST

Guaranty Bancshares, Inc. (NASDAQ: GNTY), the parent company of Guaranty Bank & Trust, N.A. (the "Bank"), today reported financial results for the fiscal quarter and year ended December 31, 2021. The Company's net income available to common shareholders was $9.2 million, or $0.76 per basic share, for the quarter ended December 31, 2021, compared to $9.3 million, or $0.77 per basic share, for the quarter ended September 30, 2021 and $9.9 million, or $0.82 per basic share, for the quarter ended December 31, 2020. Return on average assets and average equity for the fourth quarter of 2021 were 1.20% and 12.06%, respectively, compared to 1.24% and 12.44%, respectively, for the third quarter of 2021 and 1.48% and 14.53%, respectively, for the fourth quarter of 2020. The decrease in earnings during the fourth quarter of 2021, compared to the third quarter of 2021, was primarily due to a reverse provision for credit losses of $700,000 recorded in the third quarter of 2021, while no provision reversal was recorded in the fourth quarter of 2021, as well as a decline in non-interest income during the fourth quarter of $411,000, which were offset by a lower tax provision of $256,000. Our net core earnings^†, excluding provisions for credit losses, income taxes and PPP net income, as well as our core net interest margin, adjusted to exclude the effects of PPP loans, are described further in tables below.

"We had a very nice conclusion to 2021 in the fourth quarter and are extremely pleased not only with our record breaking $39.8 million in net earnings during 2021, but also in the resilience and strength of our employees and communities as they continue to manage the challenges from this pandemic. Our loan growth during the year rebounded as well. Excluding PPP and warehouse loans, the loan portfolio increased 10.8% in 2021. The Texas economy is vibrant and our pipeline continues to be strong with increased demand across most loan types and regions. Many of our small business customers who participated in the PPP have received loan forgiveness and only $49.3 million of the original $310.4 million loaned under the program remains on our books. Non-performing assets continue to remain at very low levels. Although we, like our peers, experienced declines in net interest margin during 2021, primarily resulting from record amounts of liquidity and the low interest rate environment, we've been able to minimize the declines compared to others through proactive lending practices such as loan floors and through aggressive cost of funds reductions. As evidenced by our financial results during the quarter and year, our Company has a strong earnings stream that we expect will hold and improve as rates start to normalize," commented Ty Abston, the Company's Chairman and Chief Executive Officer.

QUARTERLY AND ANNUAL HIGHLIGHTS

Solid Net Earnings and Core Earnings. Net earnings have remained solid for the past four quarters. Net core earnings^†, which exclude provisions for credit losses, income tax and net PPP income, have also remained strong over the last four quarters, demonstrating our consistent core earnings stream.
- Net earnings for the year ended December 31, 2021 were $39.8 million, up from $27.4 million for the year ended December 31, 2020. Net core earnings^† were $39.0 million for the year ended December 31, 2021, down only slightly from $40.3 million for 2020.
- Net core earnings^† were $10.1 million for the fourth quarter, compared to $9.7 million for the third quarter of 2021, and $9.6 million during the fourth quarter of 2020.
Producing Loan Pipeline. During 2020 and early 2021, we added new loan producers throughout our footprint and continued to experience strong loan demand within our loan pipeline. Excluding PPP and warehouse loans, our loans decreased $10.0 million, or 0.6%, during the fourth quarter but have grown $176.2 million, or 10.8%, since December 31, 2020. Our loan growth is a result of internally generated sources and is not from loan purchases from other originators.
Strong Credit Quality. Non-performing assets as a percentage of total assets were 0.09% at December 31, 2021, compared to 0.11% at September 30, 2021 and 0.48% at December 31, 2020. Net charge-offs to average loans (annualized) were 0.04% for the quarter ended December 31, 2021, compared to 0.05% for the quarter ended September 30, 2021, and 0.03% for the quarter ended December 31, 2020. The decrease in non-performing assets during the fourth quarter of 2021 compared to the same period of 2020 resulted primarily from the resolution of three problem loans, made to two borrowers, with outstanding combined book balances of $8.7 million at December 31, 2020, that were acquired during the Westbound acquisition and which were fully reserved prior to the onset of COVID-19.
Paycheck Protection Program. As of December 31, 2021, there are outstanding PPP2 balances of $49.3 million to 348 borrowers, down from the $100.8 million to 1,349 borrowers originally extended loans under the PPP2 program during 2021. Those PPP2 loans have resulted in recognition of $4.5 million of net origination fees for the year ended December 31, 2021. The Bank also recognized $2.2 million in PPP1 deferred origination fees for the year ended December 31, 2021 through both amortization and forgiveness of the related PPP1 loans. As of December 31, 2021, there are outstanding PPP1 balances of $1.3 million to 45 borrowers, down from the $209.6 million to 1,944 borrowers that was originated under the PPP1 program during 2020. Net deferred origination fees remaining as of December 31, 2021 are $3,000 and $1.2 million for PPP1 and PPP2, respectively.

† 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, have created temporary extraordinary results in the calculation of net earnings and related performance ratios. With some continued uncertainty 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
(dollars in thousands, except per share data)	December 31			September 30			June 30			March 31			December 31
Net earnings	$	9,159		$	9,253		$	10,432		$	10,962		$	9,915
Adjustments:
Provision for credit losses		—			(700	)		(1,000	)		—			—
Income tax provision		1,923			2,179			2,312			2,336			2,290
PPP loan interest and fees		(958	)		(1,005	)		(1,954	)		(3,905	)		(2,654	)
Net core earnings^†	$	10,124		$	9,727		$	9,790		$	9,393		$	9,551

Total average assets	$	3,021,079		$	2,953,181		$	2,938,944		$	2,775,567		$	2,659,725
Adjustments:
PPP loans average balance		(61,062	)		(107,931	)		(155,417	)		(137,251	)		(179,240	)
Total average assets, adjusted^†	$	2,960,017		$	2,845,250		$	2,783,527		$	2,638,316		$	2,480,485
Total average equity	$	301,398		$	295,076		$	285,803		$	277,612		$	271,397

PERFORMANCE RATIOS
Net earnings to average assets (annualized)		1.20	%		1.24	%		1.42	%		1.60	%		1.48	%
Net earnings to average equity (annualized)		12.06			12.44			14.64			16.01			14.53
Net core earnings to average assets, as adjusted (annualized)^†		1.36			1.36			1.41			1.44			1.53
Net core earnings to average equity (annualized)^†		13.33			13.08			13.74			13.72			14.00

PER COMMON SHARE DATA*
Weighted-average common shares outstanding, basic		12,097,100			12,067,769			12,056,550			12,038,638			12,063,154
Earnings per common share, basic	$	0.76		$	0.77		$	0.87		$	0.91		$	0.82
Net core earnings per common share, basic^†		0.84			0.81			0.81			0.78			0.79

* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.
† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.

Net interest income in the fourth quarters of 2021 and 2020 was consistent at $24.0 million in both quarters, with only a slight increase of $68,000, or 0.3%. The increase was primarily due to a larger decrease in interest expense of $803,000, or 34.9%, compared to a decrease in interest income of $735,000, or 2.8%. The decrease in interest expense is primarily attributable to lower deposit-related interest expense of $671,000, or 35.7%, compared to the same quarter of the prior year.

Net interest margin, on a fully tax equivalent basis ("FTE"), for the fourth quarter of 2021 and 2020 was 3.39% and 3.85%, respectively. Net interest margin FTE decreased 47 basis points due mainly to a decrease in loan yield from 4.93% in the fourth quarter of 2020 to 4.71% in the fourth quarter of 2021, a change of 22 basis points, despite decreases in the cost of interest-bearing deposits from 0.51% to 0.30% during the same period, a change of 21 basis points, and the average cost of funds decreasing from 0.33% in the fourth quarter of 2020 to 0.18% for the same quarter of 2021. The decrease in net interest margin FTE was also due to a 22 basis point decrease in the yield on total securities, from 2.22% in the fourth quarter of 2020 to 2.00% in the same quarter of 2021. Additionally, there was a decrease in the average yield on interest-bearing deposits in other banks, which consists of fed funds sold, from 0.14% in the fourth quarter of 2020 to 0.10% in the current quarter, while the average balance increased 141.5% from the prior year average balance.

The decrease in loan yield was primarily due to a 6.0% increase in average loan balance and only a 2.5% corresponding increase in loan income, net of PPP effects. Loan yield, excluding the effect of PPP loans, was 4.66% in the fourth quarter of 2021, compared to 4.83% in the same quarter of the prior year, a decrease of 17 basis points. The decrease in average deposit rate was primarily due to continued reductions in interest rates for interest-bearing deposits as market conditions have allowed.

Net interest income in the third quarter of 2021 was $23.6 million, resulting in an increase of $450,000, or 1.9%, from the prior quarter through the current quarter. The increase resulted primarily from an increase in interest income of $283,000, or 1.1%, and a decrease in interest expense of $167,000, or 10.0% during the quarter.

Net interest margin, FTE, decreased slightly from 3.40% for the third quarter of 2021 to 3.39% for the fourth quarter of 2021. Loan yield increased from 4.67% in the third quarter of 2021 to 4.71% in the fourth quarter of 2021, a change of four basis points. Loan yield, excluding the effect of PPP loans, decreased seven basis points from 4.73% in the third quarter of 2021 to 4.66% in the most recent quarter. The cost of interest-bearing deposits decreased from 0.33% to 0.30% during the same period, a change of three basis points. Similarly, the average cost of funds decreased three basis points, from 0.21% in the prior quarter.

The Bank’s continued participation in the PPP program has 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 three months and year ended December 31, 2021:

	For the Three Months Ended December 31, 2021									For the Year Ended December 31, 2021
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate
Total loans	$	1,925,046		$	22,833			4.71	%	$	1,911,540		$	92,497			4.84	%
Adjustments:
PPP1 loans average balance and net fees⁽¹⁾		(1,846	)		(50	)		10.75			(43,906	)		(2,614	)		5.95
PPP2 loans average balance and net fees⁽²⁾		(59,216	)		(908	)		6.08			(71,496	)		(4,609	)		6.45
Total PPP loans⁽³⁾	$	(61,062	)	$	(958	)		6.22	%	$	(115,402	)	$	(7,223	)		6.26	%

Total loans, excluding PPP^†	$	1,863,984		$	21,875			4.66	%	$	1,796,138		$	85,274			4.75	%

Total interest-earning assets		2,844,147			25,518			3.56			2,751,370			102,550			3.73
Total interest-earning assets, net of PPP effects^†	$	2,783,085		$	24,560			3.50	%	$	2,635,968		$	95,327			3.62	%

Net interest income				$	24,020								$	95,558
Net interest margin⁽⁴⁾								3.35	%								3.47	%
Net interest margin, FTE⁽⁵⁾								3.39									3.51

Net interest income, net of PPP effects^†					23,062									88,335
Net interest margin, net of PPP effects^†(6)								3.29									3.35
Net interest margin, FTE, net of PPP effects^†(7)								3.33									3.39

Efficiency ratio⁽⁸⁾								63.13									61.00
Efficiency ratio, net of PPP effects^†(9)								65.21									65.43

† 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 $6,000 and $430,000, and net origination fees recognized in earnings of $44,000 and $2.2 million for the three months and year ended December 31, 2021.
(2) Interest earned on PPP2 loans consists of interest income of $148,000 and $714,000, and net origination fees recognized in earnings of $760,000 and $3.9 million for the three months and year ended December 31, 2021.
(3) Interest earned consists of interest income of $154,000 and $1.1 million, and net origination fees recognized in earnings of $804,000 and $6.1 million for the three months and year ended December 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, 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 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. During 2021, we recorded no provision in the first and the fourth quarters, a $1.0 million reverse provision in the second quarter and a $700,000 reverse provision in the third quarter of 2021, for a total reverse provision during the year of $1.7 million. While the provision reversals captured improvements that have occurred to macro-economic factors evaluated at the onset of the pandemic, as well as risk rating upgrades for certain loans, management remains cautious about the recent surge in COVID-19 cases and the conclusion of various government stimulus programs. As such, management remains conservative in releasing COVID related provisions prior to gaining a good understanding of the residual effects of the pandemic and government relief efforts. Management understands that the economic effects of the pandemic may continue through at least the first half of 2022.

Noninterest income decreased $388,000, or 6.0%, in the fourth quarter of 2021 to $6.0 million, compared to $6.4 million for the fourth quarter of 2020. The decrease from the same quarter in 2020 was primarily due to decreases in the net gain on sale of loans of $896,000, or 44.3%, in warehouse lending fees of $98,000, or 37.4%, and in mortgage related fees of $64,000, or 32.5%, compared to the same quarter of the prior year. These decreases were partially offset by increases in merchant and debit card fees of $273,000, or 19.6%, and in service charges of $217,000, or 25.0%.

Noninterest expense increased $803,000, or 4.4%, in the fourth quarter of 2021 to $19.0 million, compared to the fourth quarter of 2020. The increase in noninterest expense in the fourth quarter of 2021 was driven primarily by a $989,000, or 9.7%, increase in employee compensation and benefits due to increased salaries and higher employee health insurance claims. Additionally, there was a $114,000, or 32.0%, increase in advertising and promotions expense and a $98,000, or 18.0%, increase in ATM and debit card expense compared to the fourth quarter of 2020.

Noninterest income in the fourth quarter of 2021 decreased by $411,000, or 6.4%, from $6.4 million in the third quarter of 2021 due primarily to a decrease in gains on sales of loans of $632,000, or 35.9%, and was partially offset by an increase in service charges of $82,000, or 8.2%. Additionally, there was a $49,000 increase in the gain on sale of assets and other real estate, an increase of $32,000 in rental income and a $16,000 positive fair value adjustment to our SBA servicing asset during the fourth quarter of 2021 compared to the prior quarter.

Noninterest expense decreased $311,000, or 1.6%, in the fourth quarter of 2021, from $19.3 million in the quarter ended September 30, 2021. The decrease was primarily due to a one-time expense of $434,000, included in other non-interest expense in the third quarter of 2021, to terminate two swap agreements associated with our trust preferred securities. This was partially offset by an $86,000, or 40.2%, increase in FDIC insurance assessment fees in the fourth quarter of 2021.

The company’s efficiency ratio in the fourth quarter of 2021 was 63.13%, compared to 64.25% in the prior quarter and 59.82% in the third quarter of 2020. Adjusted to remove the effects of PPP-related transactions, the company’s efficiency ratio^† for the fourth quarter of 2021 was 65.21%, was 66.47% for the third quarter of 2021 and was 65.55% for the fourth quarter of 2020.

† 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 $3.09 billion at December 31, 2021, compared to $2.97 billion at September 30, 2021 and $2.74 billion at December 31, 2020.

Gross loans decreased 3.2%, or $62.8 million, to $1.91 billion at December 31, 2021, compared to loans of $1.97 billion at September 30, 2021. The decrease in gross loans from the third to the fourth quarter of 2021 is primarily due to lower net loan originations and advances, as well as continued forgiveness of PPP loans, which decreased $24.7 million during the quarter. Excluding PPP loans and warehouse loans, gross loans decreased $10.0 million, or 0.6%, from the prior quarter.

Gross loans increased 2.2%, or $41.2 million, from $1.87 billion at December 31, 2020. The increase in gross loans during the fourth quarter of 2021 compared to the fourth quarter of 2020 resulted primarily from organic loan growth and was partially offset by a $89.2 million reduction in PPP loan balances during the period. Excluding PPP loans and warehouse loans, gross loans increased $176.2 million, or 10.8%, from the same quarter of the prior year.

Total deposits increased by 4.2%, or $107.8 million, to $2.67 billion at December 31, 2021, compared to $2.56 billion at September 30, 2021, and increased 16.8%, or $384.4 million, from $2.29 billion at December 31, 2020. Changes in deposits during these periods were heavily impacted by the deposit of PPP loan proceeds and COVID-related government stimulus payments 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 $302.2 million as of December 31, 2021, compared to $297.4 million at September 30, 2021 and $272.6 million at December 31, 2020. The increase from the previous quarter resulted primarily from net earnings of $9.2 million, offset by the payment of dividends of $2.4 million and a decrease in other comprehensive income of $3.1 million during the fourth quarter of 2021 resulting from unrealized holding losses on securities available-for-sale during the period. The $29.6 million increase from the prior year resulted from net earnings of $39.8 million, offset by the payment of dividends of $9.7 million.

Nonperforming assets as a percentage of total assets were 0.09% at December 31, 2021 compared to 0.11% at September 30, 2021, and 0.48% at December 31, 2020. The Bank’s nonperforming assets consist primarily of nonaccrual loans. During 2020, nonperforming assets included three 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 allowance for credit losses, or ACL. The other two loans, both to one borrower and collateralized by the same hotel, were resolved through a bankruptcy judgement during the first quarter of 2021 that allows the borrower to adequately service their debt coverage. The bankruptcy order resulted in a charge-off of $270,000, which had previously been fully reserved in the ACL. These loans were internally identified as problem assets prior to COVID-19 and were properly reserved.

	As of
	2021								2020
(dollars in thousands)	December 31		September 30		June 30		March 31		December 31
ASSETS
Cash and due from banks	$	42,979	$	34,741	$	37,611	$	38,534	$	47,836
Federal funds sold		431,975		346,500		385,075		356,750		218,825
Interest-bearing deposits		24,651		27,634		24,532		28,188		85,130
Total cash and cash equivalents		499,605		408,875		447,218		423,472		351,791
Securities available for sale		342,206		269,070		446,636		407,736		380,795
Securities held to maturity		184,263		173,676		—		—		—
Loans held for sale		4,129		1,903		5,088		4,663		5,542
Loans, net		1,876,076		1,938,268		1,856,277		1,876,985		1,831,737
Accrued interest receivable		8,901		7,673		8,801		8,064		9,834
Premises and equipment, net		53,470		53,834		54,405		54,903		55,212
Other real estate owned		—		40		227		312		404
Cash surrender value of life insurance		37,141		36,582		36,367		35,836		35,510
Core deposit intangible, net		2,313		2,426		2,573		2,786		2,999
Goodwill		32,160		32,160		32,160		32,160		32,160
Other assets		45,806		43,761		43,207		44,383		34,848
Total assets	$	3,086,070	$	2,968,268	$	2,932,959	$	2,891,300	$	2,740,832
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing	$	1,014,518	$	972,854	$	928,416	$	878,883	$	779,740
Interest-bearing		1,656,309		1,590,217		1,604,610		1,596,327		1,506,650
Total deposits		2,670,827		2,563,071		2,533,026		2,475,210		2,286,390
Securities sold under agreements to repurchase		14,151		11,195		15,336		24,007		15,631
Accrued interest and other liabilities		26,568		26,284		28,058		28,080		25,257
Line of credit		5,000		3,000		—		15,000		12,000
Federal Home Loan Bank advances		47,500		47,500		49,000		49,096		109,101
Subordinated debentures		19,810		19,810		19,810		19,810		19,810
Total liabilities		2,783,856		2,670,860		2,645,230		2,611,203		2,468,189

Total shareholders' equity		302,214		297,408		287,729		280,097		272,643
Total liabilities and shareholders' equity	$	3,086,070	$	2,968,268	$	2,932,959	$	2,891,300	$	2,740,832

	Quarter Ended
	2021												2020
(dollars in thousands, except per share data)	December 31			September 30			June 30			March 31			December 31
STATEMENTS OF EARNINGS
Interest income	$	25,518		$	25,235		$	25,284		$	26,513		$	26,253
Interest expense		1,498			1,665			1,807			2,022			2,301
Net interest income		24,020			23,570			23,477			24,491			23,952
Provision for credit losses		—			(700	)		(1,000	)		—			—
Net interest income after provision for credit losses		24,020			24,270			24,477			24,491			23,952
Noninterest income		6,038			6,449			5,970			6,119			6,426
Noninterest expense		18,976			19,287			17,703			17,312			18,173
Income before income taxes		11,082			11,432			12,744			13,298			12,205
Income tax provision		1,923			2,179			2,312			2,336			2,290
Net earnings	$	9,159		$	9,253		$	10,432		$	10,962		$	9,915

PER COMMON SHARE DATA*
Earnings per common share, basic	$	0.76		$	0.77		$	0.87		$	0.91		$	0.82
Earnings per common share, diluted		0.75			0.76			0.85			0.90			0.82
Cash dividends per common share		0.20			0.20			0.20			0.20			0.18
Book value per common share - end of quarter		24.93			24.62			23.86			23.24			22.67
Tangible book value per common share - end of quarter⁽¹⁾		22.09			21.75			20.98			20.34			19.74
Common shares outstanding - end of quarter		12,122,717			12,081,477			12,057,937			12,053,597			12,028,957
Weighted-average common shares outstanding, basic		12,097,100			12,067,769			12,056,550			12,038,638			12,063,154
Weighted-average common shares outstanding, diluted		12,263,252			12,211,389			12,251,587			12,177,776			12,121,221

PERFORMANCE RATIOS
Return on average assets (annualized)		1.20	%		1.24	%		1.42	%		1.60	%		1.48	%
Return on average equity (annualized)		12.06			12.44			14.64			16.01			14.53
Net interest margin, fully taxable equivalent (annualized)⁽²⁾		3.39			3.40			3.44			3.85			3.85
Efficiency ratio⁽³⁾		63.13			64.25			60.12			56.56			59.82

* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.
(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.

	For the Years Ended
	December 31,
(dollars in thousands, except per share data)	2021			2020
INCOME STATEMENTS
Interest income	$	102,550		$	103,042
Interest expense		6,992			13,060
Net interest income		95,558			89,982
Provision for loan losses		(1,700	)		13,200
Net interest income after provision for loan losses		97,258			76,782
Noninterest income		24,576			23,037
Noninterest expense		73,278			66,522
Income before income taxes		48,556			33,297
Income tax provision		8,750			5,895
Net earnings	$	39,806		$	27,402

PER COMMON SHARE DATA*
Earnings per common share, basic	$	3.30		$	2.25
Earnings per common share, diluted		3.26			2.24
Cash dividends per common share		0.80			0.71
Book value per common share - end of period		24.93			22.67
Tangible book value per common share - end of period^†		22.09			19.74
Common shares outstanding - end of period		12,122,717			12,028,957
Weighted-average common shares outstanding, basic		12,065,182			12,219,420
Weighted-average common shares outstanding, diluted		12,211,758			12,255,480

PERFORMANCE RATIOS
Return on average assets		1.36	%		1.07	%
Return on average equity		13.72			10.39
Net interest margin, fully taxable equivalent⁽¹⁾		3.51			3.77
Efficiency ratio⁽²⁾		61.00			58.86
† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in the schedules accompanying this release.
* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.
(1) 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%.
(2) 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
	2021												2020
(dollars in thousands)	December 31			September 30			June 30			March 31			December 31
LOAN PORTFOLIO COMPOSITION
Commercial and industrial	$	280,569		$	308,647		$	352,042		$	373,678		$	356,291
Real estate:
Construction and development		307,797			309,746			264,002			257,886			270,407
Commercial real estate		622,842			633,353			608,464			630,479			594,216
Farmland		145,501			135,413			94,525			76,867			78,508
1-4 family residential		410,673			403,403			389,616			389,542			389,096
Multi-family residential		30,971			40,810			42,086			32,090			21,701
Consumer		50,965			52,992			51,795			49,780			51,044
Agricultural		14,639			14,199			14,608			14,905			15,734
Warehouse lending		43,720			71,823			72,582			86,813			89,480
Overdrafts		363			495			444			327			342
Total loans⁽¹⁾⁽²⁾	$	1,908,040		$	1,970,881		$	1,890,164		$	1,912,367		$	1,866,819

	Quarter Ended
	2021												2020
(dollars in thousands)	December 31			September 30			June 30			March 31			December 31
ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period	$	30,621		$	31,548		$	32,770		$	33,619		$	33,757
Loans charged-off		(239	)		(244	)		(283	)		(875	)		(159	)
Recoveries		51			17			61			26			21
Provision for credit loss expense		—			(700	)		(1,000	)		—			—
Balance at end of period	$	30,433		$	30,621		$	31,548		$	32,770		$	33,619

Allowance for credit losses / period-end loans		1.59	%		1.55	%		1.67	%		1.71	%		1.80	%
Allowance for credit losses / nonperforming loans		1,075.0			976.7			878.0			968.7			264.6
Net charge-offs / average loans (annualized)		0.04			0.05			0.05			0.18			0.03

NON-PERFORMING ASSETS
Non-accrual loans⁽³⁾	$	2,831		$	3,135		$	3,593		$	3,383		$	12,705
Other real estate owned		—			40			227			312			404
Repossessed assets owned		14			63			9			4			6
Total non-performing assets	$	2,845		$	3,238		$	3,829		$	3,699		$	13,115

Non-performing assets as a percentage of:
Total loans⁽¹⁾⁽²⁾		0.15	%		0.16	%		0.20	%		0.19	%		0.70	%
Total loans, excluding PPP⁽¹⁾⁽²⁾		0.15			0.17			0.22			0.21			0.76
Total assets		0.09			0.11			0.13			0.13			0.48

TDR loans - nonaccrual	$	103		$	84		$	86		$	87		$	90
TDR loans - accruing		9,466			9,522			9,535			9,598			9,626

(1) Excludes outstanding balances of loans held for sale of $4.1 million, $1.9 million, $5.1 million, $4.7 million, and $5.5 million as of December 31, September 30, June 30 and March 31, 2021, and December 31, 2020, respectively.
(2) Excludes deferred loan fees of $1.5 million, $2.0 million, $2.3 million, $2.6 million, and $1.5 million as of December 31, September 30, June 30 and March 31, 2021, and December 31, 2020, respectively.
(3) TDR loans - nonaccrual are included in nonaccrual loans, which are a component of nonperforming loans.

	Quarter Ended
	2021								2020
(dollars in thousands)	December 31		September 30		June 30		March 31		December 31
NONINTEREST INCOME
Service charges	$	1,085	$	1,003	$	855	$	829	$	868
Net realized gain on sale of loans		1,127		1,759		1,244		1,398		2,023
Fiduciary and custodial income		615		599		570		549		513
Bank-owned life insurance income		207		215		206		212		205
Merchant and debit card fees		1,669		1,620		1,922		1,506		1,396
Loan processing fee income		188		164		164		153		167
Warehouse lending fees		164		196		211		241		262
Mortgage fee income		133		145		157		177		197
Other noninterest income		850		748		641		1,054		795
Total noninterest income	$	6,038	$	6,449	$	5,970	$	6,119	$	6,426

NONINTEREST EXPENSE
Employee compensation and benefits	$	11,200	$	10,998	$	10,204	$	9,943	$	10,211
Occupancy expenses		2,686		2,738		2,833		2,687		2,596
Legal and professional fees		604		644		747		604		968
Software and technology		1,167		1,258		1,055		1,114		1,127
Amortization		222		253		336		343		340
Director and committee fees		204		197		167		255		251
Advertising and promotions		470		495		338		455		356
ATM and debit card expense		643		646		616		540		545
Telecommunication expense		196		197		180		234		244
FDIC insurance assessment fees		300		214		168		169		252
Other noninterest expense		1,284		1,647		1,059		968		1,283
Total noninterest expense	$	18,976	$	19,287	$	17,703	$	17,312	$	18,173

	For the Three Months Ended December 31,
	2021								2020
(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⁾	$	1,925,046		$	22,833		4.71	%	$	1,937,556		$	23,998		4.93	%
Securities available for sale		307,345			1,358		1.75			374,362			2,087		2.22
Securities held to maturity		178,131			1,087		2.42			—			—		—
Nonmarketable equity securities		10,044			128		5.06			9,617			106		4.38
Interest-bearing deposits in other banks		423,581			112		0.10			175,410			62		0.14
Total interest-earning assets		2,844,147			25,518		3.56			2,496,945			26,253		4.18
Allowance for credit losses		(30,552	)							(33,712	)
Noninterest-earning assets		207,484								196,492
Total assets	$	3,021,079							$	2,659,725
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,622,607		$	1,207		0.30	%	$	1,469,890		$	1,878		0.51	%
Advances from FHLB and fed funds purchased		47,500			105		0.88			66,331			124		0.74
Line of credit		4,761			42		3.50			10,696			94		3.50
Subordinated debentures		19,810			142		2.84			19,989			191		3.80
Securities sold under agreements to repurchase		11,156			2		0.07			20,902			14		0.27
Total interest-bearing liabilities		1,705,834			1,498		0.35			1,587,808			2,301		0.58
Noninterest-bearing liabilities:
Noninterest-bearing deposits		988,676								772,422
Accrued interest and other liabilities		25,171								28,098
Total noninterest-bearing liabilities		1,013,847								800,520
Shareholders’ equity		301,398								271,397
Total liabilities and shareholders’ equity	$	3,021,079							$	2,659,725
Net interest rate spread⁽²⁾							3.21	%							3.60	%
Net interest income				$	24,020							$	23,952
Net interest margin⁽³⁾							3.35	%							3.82	%
Net interest margin, fully taxable equivalent⁽⁴⁾							3.39	%							3.85	%

(1) Includes average outstanding balances of loans held for sale of $2.7 million and $5.8 million for the three months ended December 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%.

	For The Years Ended December 31,
	2021								2020
(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⁾	$	1,911,540		$	92,497		4.84	%	$	1,872,914		$	93,335		4.98	%
Securities available for sale		356,232			6,839		1.92			338,510			7,798		2.30
Securities held to maturity		74,270			2,141		2.88			35,935			956		2.66
Nonmarketable equity securities		10,043			740		7.37			10,761			439		4.08
Interest-bearing deposits in other banks		399,285			333		0.08			146,659			514		0.35
Total interest-earning assets		2,751,370			102,550		3.73			2,404,779			103,042		4.28
Allowance for credit losses		(31,888	)							(29,100	)
Noninterest-earning assets		203,468								195,324
Total assets	$	2,922,950							$	2,571,003
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,601,375		$	5,651		0.35	%	$	1,468,353		$	11,624		0.79	%
Advances from FHLB and fed funds purchased		49,056			413		0.84			75,940			470		0.62
Line of credit		6,066			216		3.56			6,727			213		3.17
Subordinated debentures		19,810			700		3.53			17,198			702		4.08
Securities sold under agreements to repurchase		14,812			12		0.08			18,115			51		0.28
Total interest-bearing liabilities		1,691,119			6,992		0.41			1,586,333			13,060		0.82
Noninterest-bearing liabilities:
Noninterest-bearing deposits		916,562								696,454
Accrued interest and other liabilities		25,218								24,450
Total noninterest-bearing liabilities		941,780								720,904
Shareholders’ equity		290,051								263,766
Total liabilities and shareholders’ equity	$	2,922,950							$	2,571,003
Net interest rate spread⁽²⁾							3.32	%							3.46	%
Net interest income				$	95,558							$	89,982
Net interest margin⁽³⁾							3.47	%							3.74	%
Net interest margin, fully taxable equivalent⁽⁴⁾							3.51	%							3.77	%

(1) Includes average outstanding balances of loans held for sale of $3.4 million and $6.0 million for the years ended December 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.
(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, using a marginal tax rate of 21%.

NON-GAAP RECONCILING TABLES

Tangible Book Value per Common Share
	As of
	2021												2020
(dollars in thousands, except per share data)	December 31			September 30			June 30			March 31			December 31
Total shareholders’ equity	$	302,214		$	297,408		$	287,729		$	280,097		$	272,643
Adjustments:
Goodwill		(32,160	)		(32,160	)		(32,160	)		(32,160	)		(32,160	)
Core deposit intangible, net		(2,313	)		(2,426	)		(2,573	)		(2,786	)		(2,999	)
Total tangible common equity	$	267,741		$	262,822		$	252,996		$	245,151		$	237,484
Common shares outstanding - end of quarter*⁽¹⁾		12,122,717			12,081,477			12,057,937			12,053,597			12,028,957
Book value per common share	$	24.93		$	24.62		$	23.86		$	23.24		$	22.67
Tangible book value per common share		22.09			21.75			20.98			20.34			19.74

* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.
(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
	2021												2020
(dollars in thousands, except per share data)	December 31			September 30			June 30			March 31			December 31
Net earnings	$	9,159		$	9,253		$	10,432		$	10,962		$	9,915
Adjustments:
Provision for credit losses		—			(700	)		(1,000	)		—			—
Income tax provision		1,923			2,179			2,312			2,336			2,290
PPP loans, including fees		(958	)		(1,005	)		(1,954	)		(3,905	)		(2,654	)
Net core earnings	$	10,124		$	9,727		$	9,790		$	9,393		$	9,551

Weighted-average common shares outstanding, basic*		12,097,100			12,067,769			12,056,550			12,038,638			12,063,154
Earnings per common share, basic*	$	0.76		$	0.77		$	0.87		$	0.91		$	0.82
Net core earnings per common share, basic*		0.84			0.81			0.81			0.78			0.79

* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.

	Year Ended December 31,
(dollars in thousands, except per share data)	2021			2020
Net earnings	$	39,806		$	27,402
Adjustments:
Provision for credit losses		(1,700	)		13,200
Income tax provision		8,750			5,895
PPP loans, including fees		(7,822	)		(6,270	)
Net interest expense on PPP-related borrowings		—			34
Net core earnings	$	39,034		$	40,261

Weighted-average common shares outstanding, basic*		12,065,182			12,219,420
Earnings per common share, basic*	$	3.30		$	2.25
Net core earnings per common share, basic*		3.24			3.29

* Periods prior to the stock dividend issued during the first quarter of 2021 have been adjusted to give effect to the 10% stock dividend.

NON-GAAP RECONCILING TABLES

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

	Quarter Ended
	2021												2020
(dollars in thousands)	December 31			September 30			June 30			March 31			December 31
Net core earnings	$	10,124		$	9,727		$	9,790		$	9,393		$	9,551
Total average assets	$	3,021,079		$	2,953,181		$	2,938,944		$	2,775,567		$	2,659,725
Adjustments:
PPP loan average balance		(61,062	)		(107,931	)		(155,417	)		(137,251	)		(179,240	)
Total average assets, adjusted	$	2,960,017		$	2,845,250		$	2,783,527		$	2,638,316		$	2,480,485
Net core earnings to average assets, as adjusted (annualized)		1.36	%		1.36	%		1.41	%		1.44	%		1.53	%
Total average equity	$	301,398		$	295,076		$	285,803		$	277,612		$	271,397
Net core earnings to average equity (annualized)		13.33	%		13.08	%		13.74	%		13.72	%		14.00	%


Total Non-Performing Assets to Total Loans, Excluding PPP

	Quarter Ended
	2021												2020
(dollars in thousands)	December 31			September 30			June 30			March 31			December 31
Total loans⁽¹⁾⁽²⁾	$	1,908,040		$	1,970,881		$	1,890,164		$	1,912,367		$	1,866,819
Adjustments:
PPP loans balance		(50,611	)		(75,304	)		(127,390	)		(158,236	)		(139,808	)
Total loans, excluding PPP⁽¹⁾⁽²⁾	$	1,857,429		$	1,895,577		$	1,762,774		$	1,754,131		$	1,727,011

Total non-performing assets	$	2,845		$	3,238		$	3,829		$	3,699		$	13,115

Non-performing assets as a percentage of:
Total loans⁽¹⁾⁽²⁾		0.15	%		0.16	%		0.20	%		0.19	%		0.70	%
Total loans, excluding PPP⁽¹⁾⁽²⁾		0.15			0.17			0.22			0.21			0.76

(1) Excludes outstanding balances of loans held for sale of $4.1 million, $1.9 million, $5.1 million, $4.7 million, and $5.5 million as of December 31, September 30, June 30 and March 31, 2021, and December 31, 2020, respectively.
(2) Excludes deferred loan fees of $1.5 million, $2.0 million, $2.3 million, $2.6 million, and $1.5 million as of December 31, September 30, June 30 and March 31, 2021, and December 31, 2020, respectively.


Total Interest-Earning Assets, Net of PPP Effects

	For the Three Months Ended December 31, 2021									For the Year Ended December 31, 2021
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate
Total interest-earning assets	$	2,844,147		$	25,518			3.56	%	$	2,751,370		$	102,550			3.73	%

Total loans		1,925,046			22,833			4.71			1,911,540			92,497			4.84
Adjustments:
PPP loan average balance and net fees⁽¹⁾		(61,062	)		(958	)		6.22			(115,402	)		(7,223	)		6.26
Total loans, net of PPP effects		1,863,984			21,875			4.66			1,796,138			85,274			4.75

Total interest-earning assets, net of PPP effects	$	2,783,085		$	24,560			3.50	%	$	2,635,968		$	95,327			3.62	%

(1) Interest earned consists of interest income of $154,000 and $1.1 million, and net origination fees recognized in earnings of $804,000 and $6.1 million for the three months and year ended December 31, 2021.


NON-GAAP RECONCILING TABLES

Net Interest Income and Net Interest Margin, Net of PPP Effects

(dollars in thousands)	Three Months Ended December 31, 2021			Year Ended December 31, 2021			Three Months Ended September 30, 2021			Three Months Ended December 31, 2020
Net interest income	$	24,020		$	95,558		$	23,570		$	23,952
Adjustments:
PPP-related interest income		(154	)		(1,144	)		(270	)		(470	)
PPP-related net origination fees		(804	)		(6,079	)		(735	)		(2,184	)
Net interest income, net of PPP effects	$	23,062		$	88,335		$	22,565		$	21,298

Total average interest-earning assets	$	2,844,147		$	2,751,370		$	2,780,081		$	2,496,945
Total average interest-earning assets, net of PPP effects		2,783,085			2,635,968			2,672,150			2,317,705

Net interest margin⁽¹⁾		3.35	%		3.47	%		3.36	%		3.82	%
Net interest margin, net of PPP effects⁽²⁾		3.29			3.35			3.35			3.66

Net interest income	$	24,020		$	95,558		$	23,570		$	23,952
Interest income tax adjustments		277			1,076			278			241
Net interest income, fully taxable equivalent ("FTE")	$	24,297		$	96,634		$	23,848		$	24,193
Net interest income, FTE, net of PPP effects		23,339			89,411			22,843			21,539

Net interest margin, FTE⁽³⁾		3.39	%		3.51	%		3.40	%		3.85	%
Net interest margin, FTE, net of PPP effects⁽⁴⁾		3.33			3.39			3.39			3.70

(1) Net interest margin is equal to net interest income divided by average interest-earning assets, annualized.
(2) 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.
(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) 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%.


Cost of Funds

(dollars in thousands)	Three Months Ended December 31, 2021			Three Months Ended September 30, 2021			Three Months Ended December 31, 2020			Year Ended December 31, 2021			Year Ended December 31, 2020
Total average interest-bearing deposits	$	1,622,607		$	1,599,012		$	1,469,890		$	1,601,375		$	1,468,353
Adjustments:
Noninterest-bearing deposits		988,676			950,574			772,422			916,562			696,454
Total average deposits	$	2,611,283		$	2,549,586		$	2,242,312		$	2,517,937		$	2,164,807

Total deposit-related interest expense	$	1,207		$	1,348		$	1,878		$	5,651		$	11,624

Average cost of interest-bearing deposits		0.30	%		0.33	%		0.51	%		0.35	%		0.79	%
Average cost of total deposits (cost of funds)		0.18			0.21			0.33			0.22			0.54

NON-GAAP RECONCILING TABLES


Efficiency Ratio, Net of PPP Effects

(dollars in thousands)	Three Months Ended December 31, 2021			Year Ended December 31, 2021			Three Months Ended September 30, 2021			Three Months Ended December 31, 2020
Total noninterest expense	$	18,976		$	73,278		$	19,287		$	18,173
Adjustments:
PPP-related deferred costs		—			599			—			—
Total noninterest expense, net of PPP effects	$	18,976		$	73,877		$	19,287		$	18,173

Net interest income		24,020			95,558			23,570			23,952
Net interest income, net of PPP effects		23,062			88,335			22,565			21,298

Total noninterest income	$	6,038		$	24,576		$	6,449		$	6,426

Efficiency ratio⁽¹⁾		63.13	%		61.00	%		64.25	%		59.82	%
Efficiency ratio, net of PPP effects⁽²⁾		65.21			65.43			66.47			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.


Loan Yield, Net of PPP Effects

	Three Months Ended December 31, 2021									Three Months Ended September 30, 2021
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate
Total loans	$	1,925,046		$	22,833			4.71	%	$	1,921,005		$	22,605			4.67	%
Adjustments:
PPP loans average balance and net fees		(61,062	)		(958	)		6.22			(107,931	)		(1,005	)		3.69
Total loans, net of PPP effects	$	1,863,984		$	21,875			4.66	%	$	1,813,074		$	21,600			4.73	%
Effect of removing PPP loans on loan yield								-0.05	%								0.06	%

	Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
(dollars in thousands)	Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate			Average Outstanding Balance			Interest Earned/ Interest Paid			Average Yield/ Rate
Total loans	$	1,925,046		$	22,833			4.71	%	$	1,937,556		$	23,998			4.93	%
Adjustments:
PPP loans average balance and net fees		(61,062	)		(958	)		6.22			(179,240	)		(2,654	)		5.89
Total loans, net of PPP effects	$	1,863,984		$	21,875			4.66	%	$	1,758,316		$	21,344			4.83	%
Effect of removing PPP loans on loan yield								-0.05	%								-0.10	%


NON-GAAP RECONCILING TABLES

ACL to Total Loans, Excluding PPP

(dollars in thousands)	As of December 31, 2021			As of September 30, 2021			As of December 31, 2020
Total loans	$	1,908,040		$	1,970,881		$	1,866,819
Adjustments:
PPP loans		(50,611	)		(75,304	)		(139,808	)
Total loans, excluding PPP	$	1,857,429		$	1,895,577		$	1,727,011

Allowance for credit losses	$	30,433		$	30,621		$	33,619

Allowance for credit losses / period-end loans		1.59	%		1.55	%		1.80	%
Allowance for credit losses / period-end loans. excluding PPP		1.64			1.62			1.95

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 fourth quarter and year-end 2021 financial results on Monday, January 18, 2022 at 10:00 am Central time. 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 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 Central time the day of the call and remain available through January 31, 2022 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 32 banking locations across 26 Texas communities located within the East Texas, Dallas/Fort Worth, greater Houston and Central Texas regions of the state. As of December 31, 2021, Guaranty Bancshares, Inc. had total assets of $3.09 billion, total loans of $1.91 billion and total deposits of $2.67 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, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Actual results may 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 operation of financial markets; global supply chain disruption; 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; 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220118005238/en/

Contacts

Cappy Payne

Senior Executive Vice President and Chief Financial Officer

Guaranty Bancshares, Inc.

(888) 572-9881

investors@gnty.com

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