GUARANTY BANCSHARES INC /TX/ (GNTY)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered solid operating momentum: diluted EPS was $0.87 (basic $0.88), up 16.9% YoY and 16.0% QoQ, on stronger net interest income, higher noninterest income, and lower noninterest expense; ROAA/ROAE improved to 1.28%/12.19% .
• Net interest margin (FTE) expanded to 3.71% (from 3.26% YoY; 3.70% in Q1) as deposit costs fell again and there was no FHLB advance expense, while loan and securities yields continued to reprice higher .
• Q2 beat S&P Global consensus: EPS $0.87 vs $0.81 and revenue $33.22m vs $32.67m; beat driven by NIM expansion and expense control; coverage remains light (2 estimates)*.
• Asset quality remains healthy, though NPAs/Assets rose to 0.33% from 0.15% on one borrowing relationship ($5.4m) that management expects to resolve in Q3 with minimal, if any, losses .
• Strategic backdrop: Definitive agreement for an all-stock acquisition by Glacier Bancorp (1.00 GBCI share per GNTY share), expected close in Q4 2025; GNTY entered interest rate swaptions in Q2 to mitigate deal-related rate risk .

What Went Well and What Went Wrong

What Went Well

• NIM-led earnings strength: Net interest income rose 15.8% YoY to $27.7m and QoQ by 3.5%, as average cost of interest-bearing deposits declined (2.76% vs 3.32% YoY) and no FHLB advance expense this quarter .
• Efficiency improved: Efficiency ratio fell to 62.32% from 72.34% YoY and 66.78% in Q1, with QoQ noninterest expense down 2.4% on lower compensation/benefits and other expense .
• Management tone: “Earnings were strong at $10.0 million… driven primarily from the improvement in [FTE] net interest margin… Both our core deposits and loan levels are stable and grew slightly… Asset quality remains strong” — Ty Abston, Chairman & CEO .

What Went Wrong

• NPA uptick: Nonperforming assets/Total assets increased to 0.33% (from 0.15% in Q1), largely from one nonaccrual relationship; net charge-offs were still low at 0.05% annualized .
• Fee headwinds: Merchant & debit card fees fell 12.3% YoY; noninterest income benefited from a $1.0m restitution, but this was partially offset by $547k of swaption losses related to merger hedging .
• Merger-related costs: Legal/professional and director fees rose QoQ linked to the proposed Glacier transaction; software/technology expense increased YoY .

Financial Results

EPS and Profitability Metrics

Revenue Components (Net Revenue = Net Interest Income + Noninterest Income)

Margins and Efficiency

Balance Sheet and Credit KPIs

Noninterest Income Mix

Q2 2025 vs S&P Global Consensus (Beats in bold)

Values retrieved from S&P Global*

Why the beats: deposit cost declines and absence of FHLB interest expense, incremental earning-asset yields, and lower QoQ operating costs; noninterest income benefited from a $1.0m restitution, partially offset by $0.55m swaption losses related to merger hedging .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Earnings were strong at $10.0 million… driven primarily from the improvement in net interest margin… Both our core deposits and loan levels are stable and grew slightly… Asset quality remains strong… Liquidity and capital both remain at high levels.” — Ty Abston, Chairman & CEO .
• On NIM drivers: Fed’s late-2024 100 bps rate reduction lowered funding costs; interest-bearing deposit cost fell to 2.76% (from 3.32% YoY); no FHLB expense this quarter .
• On merger risk management: The company entered pay-fixed, receive-variable interest rate swaptions tied to the proposed Glacier deal; fair value changes produced a $547k loss in other noninterest income .

Q&A Highlights

• No Q2 2025 earnings call transcript found; Q&A highlights unavailable (company did not have a transcript in our document set).

Estimates Context

• Q2 2025: EPS $0.87 vs $0.81 consensus; revenue $33.22m vs $32.67m consensus — modest beats on both lines; number of estimates was 2 for both EPS and revenue, indicating light coverage that can amplify revision impact*.
• Potential estimate revisions: Continued tailwind from deposit cost repricing and incremental earning-asset yields, partially offset by fee variability and merger-related costs/hedges .

Values retrieved from S&P Global*

Key Takeaways for Investors

• Positive NIM trajectory continues with deposit costs trending lower and earning-asset yields holding; this remains the core earnings lever near term .
• QoQ operating leverage improved (efficiency 62.32%) as compensation/benefits and other expenses receded; watch for merger-related professional fees intermittently elevating OpEx .
• Asset quality fundamentally solid; the Q2 NPA rise is concentrated in a single credit expected to resolve in Q3 with minimal loss — a manageable idiosyncratic issue rather than a trend shift .
• Loan growth inflected positively in Q2; origination yields remain attractive (7.22%), supporting margin resilience even if rate paths stabilize .
• Strategic catalyst: Glacier Bancorp transaction (1.00 GBCI per GNTY share) expected to close in Q4 2025; deal hedging via swaptions indicates active rate risk management between signing and close .
• Dividend maintained at $0.25/share (paid July 9, 2025), underscoring confidence in capital and earnings durability .
• Near-term trading setup: modest fundamental beat and improving margin/efficiency are positives; merger-spread dynamics and any updates on the single NPA resolution are likely to drive stock narrative into the expected Q4 close .

Sources

• Q2 2025 press release and tables: financial/operating detail, KPIs, and management commentary .
• Q2 2025 8-K (Item 2.02) furnishing press release: confirmation and exhibits .
• Q1 2025 press release: comps and trend commentary .
• Q4 2024 press release: comps and trend commentary .
• Dividend declaration (June 20, 2025) .
• Glacier Bancorp acquisition announcement (June 24, 2025) .

S&P Global consensus and actuals used in the estimates table (EPS and revenue) obtained via GetEstimates.*