UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-38087

GUARANTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)



Texas	001-38087	75-1656431
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
16475 Dallas Parkway, Suite 600 Addison, Texas		75001
(Address of Principal Executive Offices)		(Zip Code)

(888) 572 - 9881

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, par value $1.00 per share	GNTY	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2025, there were 11,341,051 outstanding shares of the registrant’s common stock, par value $1.00 per share.

GUARANTY BANCSHARES, INC.


	PART I — FINANCIAL INFORMATION	Page

Item 1.	Financial Statements – (Unaudited)	1
	Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	1
	Consolidated Statements of Earnings for the Three Months Ended March 31, 2025 and 2024	2
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024	3
	Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2025 and 2024	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	57
Item 4.	Controls and Procedures	57

	PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	59

SIGNATURES		60

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GUARANTY BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)


	(Unaudited)			(Audited)
	March 31, 2025			December 31, 2024
ASSETS
Cash and due from banks	$	50,080		$	47,417
Federal funds sold		163,375			94,750
Interest-bearing deposits		4,358			3,797
Total cash and cash equivalents		217,813			145,964
Securities available for sale		362,647			340,304
Securities held to maturity		305,153			334,732
Loans held for sale		150			143
Loans, net of allowance for credit losses of $27,865 and $28,290, respectively		2,079,864			2,102,565
Accrued interest receivable		10,764			12,016
Premises and equipment, net		55,108			56,010
Other real estate owned		—			1,184
Cash surrender value of life insurance		43,136			42,883
Core deposit intangible, net		888			994
Goodwill		32,160			32,160
Other assets		45,478			46,599
Total assets	$	3,153,161		$	3,115,554
LIABILITIES AND EQUITY
Liabilities
Deposits
Noninterest-bearing	$	845,723		$	837,432
Interest-bearing		1,858,617			1,854,735
Total deposits		2,704,340			2,692,167
Securities sold under agreements to repurchase		47,702			31,075
Accrued interest and other liabilities		33,362			31,320
Subordinated debt, net		41,951			41,918
Total liabilities		2,827,355			2,796,480
Commitments and contingencies (see Note 10)
Equity
Preferred stock, $5.00 par value, 15,000,000 shares authorized, no shares issued		—			—
Common stock, $1.00 par value, 50,000,000 shares authorized, 14,396,151 and 14,343,326 shares issued, and 11,356,856 and 11,431,568 shares outstanding, respectively		14,396			14,343
Additional paid-in capital		233,059			231,684
Retained earnings		183,221			177,421
Treasury stock, 3,039,295 and 2,911,758 shares, respectively, at cost		(83,025	)		(77,852	)
Accumulated other comprehensive loss		(22,404	)		(27,098	)
Equity attributable to Guaranty Bancshares, Inc.		325,247			318,498
Noncontrolling interest		559			576
Total equity		325,806			319,074
Total liabilities and equity	$	3,153,161		$	3,115,554

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended March 31,
	2025			2024
Interest income
Loans, including fees	$	33,316		$	35,491
Securities
Taxable		4,636			3,219
Nontaxable		996			1,165
Nonmarketable equity securities		117			248
Federal funds sold and interest-bearing deposits		1,218			629
Total interest income		40,283			40,752

Interest expense
Deposits		12,877			14,459
FHLB advances and federal funds purchased		—			1,920
Subordinated debt		442			517
Other borrowed money		238			269
Total interest expense		13,557			17,165

Net interest income		26,726			23,587
Reversal of provision for credit losses		(300	)		(250	)
Net interest income after reversal of provision for credit losses		27,026			23,837

Noninterest income
Service charges		1,086			1,069
Net realized gain on sale of loans		140			272
Merchant and debit card fees		2,127			1,706
Other income		1,680			2,211
Total noninterest income		5,033			5,258

Noninterest expense
Employee compensation and benefits		12,240			12,437
Occupancy expenses		3,173			2,747
Other expenses		5,796			5,508
Total noninterest expense		21,209			20,692

Income before income taxes		10,850			8,403
Income tax provision		2,227			1,722
Net earnings	$	8,623		$	6,681
Net loss attributable to noncontrolling interest		17			7
Net earnings attributable to Guaranty Bancshares, Inc.	$	8,640		$	6,688
Basic earnings per share	$	0.76		$	0.58
Diluted earnings per share	$	0.75		$	0.58

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)


	Three Months Ended March 31,
	2025			2024
Net earnings	$	8,623		$	6,681
Other comprehensive income (loss):
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period, net of tax		4,784			(1,553	)
Change in net unrealized loss on available for sale securities transferred to held to maturity, net of tax		(90	)		(167	)
Unrealized gains (losses) on securities, net of tax		4,694			(1,720	)

Total other comprehensive income (loss)		4,694			(1,720	)

Comprehensive income		13,317			4,961
Less: comprehensive loss attributable to noncontrolling interest		17			7
Comprehensive income attributable to Guaranty Bancshares, Inc.	$	13,334		$	4,968

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

(Dollars in thousands, except per share data)


	Attributable to Guaranty Bancshares, Inc.
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Equity
For the Three Months Ended March 31, 2025
Balance at December 31, 2024	$	—	$	14,343	$	231,684		$	177,421		$	(77,852	)	$	(27,098	)	$	576		$	319,074
Net earnings		—		—		—			8,640			—			—			(17	)		8,623
Other comprehensive income		—		—		—			—			—			4,694			—			4,694
Exercise of stock options, net of shares surrendered for cashless exercises and tax withholdings		—		51		1,265			—			—			—			—			1,316
Purchase of treasury stock		—		—		—			—			(5,173	)		—			—			(5,173	)
Restricted stock grants		—		2		(2	)		—			—			—			—			—
Stock based compensation		—		—		112			—			—			—			—			112
Cash dividends:
Common - $0.25 per share		—		—		—			(2,840	)		—			—			—			(2,840	)
Total equity at March 31, 2025	$	—	$	14,396	$	233,059		$	183,221		$	(83,025	)	$	(22,404	)	$	559		$	325,806


	Attributable to Guaranty Bancshares, Inc.
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Equity
For the Three Months Ended March 31, 2024
Balance at December 31, 2023	$	—	$	14,242	$	228,986		$	156,878		$	(71,484	)	$	(25,322	)	$	546		$	303,846
Net earnings		—		—		—			6,688			—			—			(7	)		6,681
Other comprehensive loss		—		—		—			—			—			(1,720	)		—			(1,720	)
Exercise of stock options		—		3		66			—			—			—			—			69
Purchase of treasury stock		—		—		—			—			(335	)		—			—			(335	)
Restricted stock grants		—		3		(3	)		—			—			—			—			—
Stock based compensation		—		—		138			—			—			—			—			138
Cash dividends:
Common - $0.24 per share		—		—		—			(2,769	)		—			—			—			(2,769	)
Total equity at March 31, 2024	$	—	$	14,248	$	229,187		$	160,797		$	(71,819	)	$	(27,042	)	$	539		$	305,910

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)


	For the Three Months Ended March 31,
	2025			2024
Cash flows from operating activities
Net earnings	$	8,623		$	6,681
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		1,121			1,025
Amortization		173			177
Deferred taxes		29			—
Premium amortization, net of discount accretion		31			435
Gain on sale of loans		(140	)		(272	)
Reversal of provision for credit losses		(300	)		(250	)
Origination of loans held for sale		(5,178	)		(7,798	)
Proceeds from loans held for sale		5,311			8,172
Net loss (gain) on sale of premises, equipment, other real estate owned and other assets		203			(11	)
Stock based compensation		112			138
Net change in accrued interest receivable and other assets		785			(8,627	)
Net change in accrued interest payable and other liabilities		1,946			1,450
Net cash provided by operating activities	$	12,716		$	1,120

Cash flows from investing activities
Securities available for sale:
Purchases	$	(30,928	)	$	(439,214	)
Proceeds from maturities and principal repayments		14,841			404,493
Securities held to maturity:
Proceeds from maturities and principal repayments		29,258			39,806
Net repayments of loans		23,001			42,173
Purchases of premises and equipment		(209	)		(997	)
Proceeds from sale of premises, equipment, other real estate owned and other assets		971			124
Net cash provided by investing activities	$	36,934		$	46,385

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)


	For the Three Months Ended March 31,
	2025			2024
Cash flows from financing activities
Net change in deposits	$	12,173		$	(5,402	)
Net change in securities sold under agreements to repurchase		16,627			13,886
Proceeds from FHLB advances		—			590,000
Repayment of FHLB advances		—			(655,000	)
Proceeds from line of credit		2,000			—
Repayment of line of credit		(2,000	)		(4,500	)
Purchase of treasury stock		(5,173	)		(335	)
Exercise of stock options		1,316			69
Cash dividends paid		(2,744	)		(2,654	)
Net cash provided by (used in) financing activities	$	22,199		$	(63,936	)
Net change in cash and cash equivalents		71,849			(16,431	)
Cash and cash equivalents at beginning of period		145,964			89,524
Cash and cash equivalents at end of period	$	217,813		$	73,093

Supplemental disclosures of cash flow information
Interest paid	$	13,619		$	16,849

Supplemental schedule of noncash investing and financing activities
Cash dividends accrued	$	2,840		$	2,769
Transfer of loans to other real estate owned and repossessed assets		—			14,946

See accompanying notes to consolidated financial statements.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations: Guaranty Bancshares, Inc. (“Guaranty”) is a bank holding company headquartered in Mount Pleasant, Texas that provides, through its wholly-owned subsidiary, Guaranty Bank & Trust, N.A. (the “Bank”), a broad array of financial products and services to individuals and corporate customers, primarily in its markets of East Texas, Dallas/Fort Worth, Greater Houston and Central Texas. The terms “the Company,” “we,” “us” and “our” mean Guaranty and its subsidiaries, when appropriate. The Company’s main sources of income are derived from granting loans throughout its markets and investing in securities issued or guaranteed by the U.S. Treasury, U.S. government agencies and state and political subdivisions. The Company’s primary lending products are real estate, commercial and consumer loans. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ abilities to honor contracts is dependent on the economy of the State of Texas and primarily the economies of East Texas, Dallas/Fort Worth, Greater Houston and Central Texas. The Company primarily funds its lending activities with deposit operations. The Company’s primary deposit products are checking accounts, money market accounts, savings accounts and certificates of deposit.

Principles of Consolidation: The consolidated financial statements in this Quarterly Report on Form 10-Q (this “Report”) include the accounts of Guaranty, the Bank and indirect subsidiaries that are wholly-owned or controlled. Subsidiaries that are less than wholly owned are fully consolidated if they are controlled by Guaranty or one of its subsidiaries, and the portion of any subsidiary not owned by Guaranty is reported as noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The Bank has seven wholly-owned or controlled non-bank subsidiaries, Guaranty Company, Inc., G B COM, INC., 2800 South Texas Avenue LLC, Pin Oak Realty Holdings, Inc., Pin Oak Asset Management, LLC, Guaranty Bank & Trust Political Action Committee and Caliber Guaranty Private Account, LLC (the entity which has a noncontrolling interest). The accounting and financial reporting policies followed by the Company conform, in all material respects, to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the financial services industry.

Basis of Presentation: The consolidated financial statements in this Report have not been audited by an independent registered public accounting firm, but in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2024, included in Guaranty’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

All dollar amounts referenced and discussed in the notes to the consolidated financial statements in this Report are presented in thousands, unless noted otherwise.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

(Continued)

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

NOTE 2 - MARKETABLE SECURITIES

The following tables summarize the amortized cost and fair value of available for sale and held to maturity securities as of March 31, 2025 and December 31, 2024 and the corresponding amounts of gross unrealized gains and losses:


March 31, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
Treasury securities	$	44,266	$	—	$	175	$	44,091
Corporate bonds		22,285		—		1,362		20,923
Municipal securities		2,317		48		—		2,365
Mortgage-backed securities		288,123		1,656		13,639		276,140
Collateralized mortgage obligations		20,357		85		1,314		19,128
Total available for sale	$	377,348	$	1,789	$	16,490	$	362,647

Held to maturity:
U.S. government agencies	$	9,489	$	—	$	775	$	8,714
Treasury securities		19,955		—		67		19,888
Municipal securities		136,134		161		6,625		129,670
Mortgage-backed securities		106,920		—		13,854		93,066
Collateralized mortgage obligations		32,655		—		5,824		26,831
Total held to maturity	$	305,153	$	161	$	27,145	$	278,169


December 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
Treasury securities	$	44,015	$	—	$	340	$	43,675
Corporate bonds		27,805		—		1,822		25,983
Municipal securities		2,318		75		—		2,393
Mortgage-backed securities		265,369		487		17,122		248,734
Collateralized mortgage obligations		21,554		33		2,068		19,519
Total available for sale	$	361,061	$	595	$	21,352	$	340,304

Held to maturity:
U.S. government agencies	$	9,449	$	—	$	948	$	8,501
Treasury securities		29,871		—		165		29,706
Municipal securities		152,626		289		7,020		145,895
Mortgage-backed securities		109,281		—		16,015		93,266
Collateralized mortgage obligations		33,505		—		7,628		25,877
Total held to maturity	$	334,732	$	289	$	31,776	$	303,245

From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The unrealized holding gains and losses at the date of transfer are retained in accumulated other comprehensive loss and in the carrying value of the held to maturity securities and are amortized or accreted over the remaining life of the security. During the second quarter of 2022, we transferred $106,157 of securities from available for sale to held to maturity, which included a net unrealized loss on the date of transfer of $13,186. During the third quarter of 2021, we transferred $172,292 of securities from available for sale to held to maturity, which included a net unrealized gain on the date of transfer of $10,235. These unamortized unrealized losses and unaccreted unrealized gains on our transferred securities are included in accumulated other comprehensive loss on our balance sheet and they netted to an unrealized loss of $7,588 at March 31, 2025 compared to an unrealized loss of $7,498 at December 31, 2024. This amount will continue to be amortized and accreted out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities.

There is no allowance for credit losses recorded for our available for sale or held to maturity debt securities as of March 31, 2025 or December 31, 2024.

(Continued)

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Information pertaining to securities with gross unrealized losses as of March 31, 2025 and December 31, 2024, for which no allowance for credit losses has been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:


	Less Than 12 Months					12 Months or Longer					Total
March 31, 2025	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Treasury securities	$	(175	)	$	44,091	$	—		$	—	$	(175	)	$	44,091
Corporate bonds		—			—		(1,362	)		20,923		(1,362	)		20,923
Mortgage-backed securities		(553	)		57,006		(13,086	)		100,731		(13,639	)		157,737
Collateralized mortgage obligations		—			—		(1,314	)		10,457		(1,314	)		10,457
Total available for sale	$	(728	)	$	101,097	$	(15,762	)	$	132,111	$	(16,490	)	$	233,208


	Less Than 12 Months					12 Months or Longer					Total
December 31, 2024	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Treasury securities	$	(340	)	$	43,675	$	—		$	—	$	(340	)	$	43,675
Corporate bonds		—			—		(1,822	)		25,983		(1,822	)		25,983
Mortgage-backed securities		(1,689	)		99,924		(15,433	)		101,274		(17,122	)		201,198
Collateralized mortgage obligations		(385	)		6,538		(1,683	)		10,884		(2,068	)		17,422
Total available for sale	$	(2,414	)	$	150,137	$	(18,938	)	$	138,141	$	(21,352	)	$	288,278

There were 257 investments in an unrealized loss position at March 31, 2025, of which 92 were available for sale debt securities in an unrealized loss position with no recorded allowance for credit losses. The available for sale securities in a loss position included treasury securities, corporate bonds, mortgage-backed securities and collateralized mortgage obligations. Management evaluates available for sale debt securities in an unrealized loss position to determine whether the impairment is due to credit-related factors or noncredit-related factors. With respect to the treasury securities, collateralized mortgage obligations, and mortgage-backed securities issued by the U.S. government and its agencies, the Company has determined that the decline in fair value is not due to credit-related factors. The Company monitors the credit quality of other debt securities through the use of credit ratings and other factors specific to an individual security in assessing whether or not the decline in fair value of municipal or corporate securities, relative to their amortized cost, is due to credit-related factors. Triggers to prompt further investigation of securities when the fair value is less than the amortized cost are when a security has been downgraded and falls below an A credit rating, and the security’s unrealized loss exceeds 20% of its book value. Consideration is given to (1) the extent to which fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Based on evaluation of available evidence, management believes the unrealized losses on the securities as of March 31, 2025 and December 31, 2024 are not credit-related. Management does not have the intent to sell any of these securities and believes that it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities.

Management assesses held to maturity securities sharing similar risk characteristics on a collective basis for expected credit losses under the current expected credit losses ("CECL") methodology. As of March 31, 2025 and December 31, 2024, our held to maturity securities consisted of U.S. government agencies, treasury securities, municipal bonds, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies. With regard to the treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the government National Mortgage Association. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined that there is no current expectation of credit loss. Accordingly, there is no

(Continued)

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

allowance for credit losses recorded for our available for sale or held to maturity debt securities as of March 31, 2025 and December 31, 2024.

As of March 31, 2025, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations, treasuries and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of total equity attributable to Guaranty Bancshares, Inc.

Securities with fair values of approximately $304,821 and $316,120 at March 31, 2025 and December 31, 2024, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law.

There were no available for sale or held to maturity securities sold during the three months ended March 31, 2025 or 2024.

The contractual maturities at March 31, 2025 of available for sale and held to maturity securities at carrying value and estimated fair value are shown below. The Company invests in securities that may have expected maturities that differ from their contractual maturities. These differences arise because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	Available for Sale				Held to Maturity
March 31, 2025	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	36,285	$	36,122	$	24,434	$	24,359
Due after one year through five years		9,998		9,948		40,061		38,550
Due after five years through ten years		22,585		21,309		73,879		70,716
Due after ten years		—		—		27,204		24,647
Mortgage-backed securities		288,123		276,140		106,920		93,066
Collateralized mortgage obligations		20,357		19,128		32,655		26,831
Total securities	$	377,348	$	362,647	$	305,153	$	278,169

(Continued)

10.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

NOTE 3 - LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table summarizes the Company’s loan portfolio by type of loan as of:


	March 31, 2025			December 31, 2024
Commercial and industrial	$	226,819		$	254,702
Real estate:
Construction and development		225,051			218,617
Commercial real estate		866,891			866,684
Farmland		139,455			147,191
1-4 family residential		534,991			529,006
Multi-family residential		51,249			51,538
Consumer		50,434			51,394
Agricultural		12,634			11,726
Overdrafts		637			279
Total loans		2,108,161			2,131,137
Net of:
Deferred loan fees, net		(432	)		(282	)
Allowance for credit losses		(27,865	)		(28,290	)
Total net loans(1)	$	2,079,864		$	2,102,565

(1) Excludes accrued interest receivable on loans of $8,019 and $8,399 as of March 31, 2025 and December 31, 2024, respectively, which is presented separately on the consolidated balance sheets.

(Continued)

11.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The Company’s estimate of the allowance for credit losses (“ACL”) reflects losses expected over the remaining contractual life of the assets, adjusted for expected prepayments when appropriate. The contractual term does not consider possible extensions, renewals or modifications. The following tables present the activity in the ACL by class of loans for the three months ended March 31, 2025, for the year ended December 31, 2024 and for the three months ended March 31, 2024:


For the Three Months Ended March 31, 2025	Commercial and industrial			Construction and development		Commercial real estate			Farmland			1-4 family residential		Multi-family residential			Consumer			Agricultural		Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	2,973		$	2,738	$	11,718		$	1,830		$	7,656	$	528		$	844		$	—	$	3		$	28,290
(Reversal of) provision for credit losses		(271	)		27		(109	)		(82	)		7		(12	)		(37	)		136		41			(300	)
Loans charged-off		(93	)		—		—			—			—		—			(3	)		—		(49	)		(145	)
Recoveries		1			—		—			—			—		—			7			—		12			20
Ending balance	$	2,610		$	2,765	$	11,609		$	1,748		$	7,663	$	516		$	811		$	136	$	7		$	27,865


For the Year Ended December 31, 2024	Commercial and industrial			Construction and development			Commercial real estate			Farmland			1-4 family residential		Multi-family residential		Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	3,719		$	3,623		$	12,257		$	2,231		$	7,470	$	521	$	945		$	152		$	2		$	30,920
(Reversal of) provision for credit losses		(524	)		(885	)		(539	)		(401	)		186		7		(80	)		(155	)		191			(2,200	)
Loans charged-off		(630	)		—			—			—			—		—		(106	)		—			(242	)		(978	)
Recoveries		408			—			—			—			—		—		85			3			52			548
Ending balance	$	2,973		$	2,738		$	11,718		$	1,830		$	7,656	$	528	$	844		$	—		$	3		$	28,290


For the Three Months Ended March 31, 2024	Commercial and industrial			Construction and development			Commercial real estate		Farmland			1-4 family residential		Multi-family residential			Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	3,719		$	3,623		$	12,257	$	2,231		$	7,470	$	521		$	945		$	152		$	2			30,920
Provision for (reversal of) credit losses		67			(363	)		19		(27	)		215		(4	)		(194	)		(6	)		43			(250	)
Loans charged-off		(216	)		—			—		—			—		—			(35	)		—			(59	)		(310	)
Recoveries		174			—			—		—			—		—			7			2			17			200
Ending balance	$	3,744		$	3,260		$	12,276	$	2,204		$	7,685	$	517		$	723		$	148		$	3		$	30,560

(Continued)

12.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

We recorded a reversal of the provision for credit losses of $300 during the first quarter of 2025, compared to a $250 reversal made in the fourth quarter of 2024 and a total reversal of provision for credit losses in 2024 of $2,200. The reversal of the provision for credit losses resulted primarily from a decline in gross loan balances of $22,976 during the first quarter of 2025.

The Company uses the weighted-average remaining maturity ("WARM") method as the basis for the estimation of expected credit losses. The WARM method uses a historical average annual charge-off rate containing loss content over a historical lookback period and is used as a foundation for estimating the credit loss reserve for the remaining outstanding balances of loans in a segment at the balance sheet date. The average annual charge-off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge-off rate. The calculation of the unadjusted historical charge-off rate is then adjusted, using qualitative factors, for current conditions and for reasonable and supportable forecast periods. Qualitative loss factors are based on the Company’s judgment of company, market, industry or business specific data, differences in loan-specific risk characteristics such as underwriting standards, portfolio mix, risk grades, delinquency level, or term. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in our historic loss factors. Additionally, we have adjusted for changes in expected environmental and economic conditions, such as changes in unemployment rates, property values, and other relevant factors over the next 12 to 24 months. Management adjusted the historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Company’s estimate was a cumulative loss rate covering the expected contractual term of the portfolio.

The ACL is measured on a collective segment basis when similar risk characteristics exist. Our loan portfolio is segmented first by regulatory call report code, and second, by internally identified risk grades for our commercial loan segments and by delinquency status for our consumer loan segments. We also have separate segments for our internally originated SBA loans and for our SBA loans acquired from Westbound Bank. Consistent forecasts of the loss drivers are used across the loan segments. For loans that do not share general risk characteristics with segments, we estimate a specific reserve on an individual basis. A reserve is recorded when the carrying amount of the loan exceeds the discounted estimated cash flows using the loan's initial effective interest rate or the fair value of collateral for collateral-dependent loans.

Assets are graded “pass” when the relationship exhibits acceptable credit risk and indicates repayment ability, tolerable collateral coverage and reasonable performance history. Lending relationships exhibiting potentially significant credit risk and marginal repayment ability and/or asset protection are graded “special mention.” Assets classified as “substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness that jeopardizes the liquidation of the debt. Substandard graded loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets graded “doubtful” are substandard graded loans that have added characteristics that make collection or liquidation in full improbable. Loans that are on nonaccrual status are generally classified as substandard.

In general, the loans in our portfolio have low historical credit losses. The Company closely monitors economic conditions and loan performance trends to manage and evaluate the exposure to credit risk. Key factors tracked by the Company and utilized in evaluating the credit quality of the loan portfolio include trends in delinquency ratios, the level of nonperforming assets, borrower’s repayment capacity, and collateral coverage.

(Continued)

13.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of March 31, 2025:


March 31, 2025	2025		2024		2023		2022			2021		Prior		Revolving Loans Amortized Cost			Total
Commercial and industrial:
Pass	$	5,454	$	33,193	$	24,750	$	46,832		$	25,734	$	24,955	$	64,154		$	225,072
Special mention		—		25		—		—			48		374		35			482
Substandard		—		34		90		638			—		209		10			981
Nonaccrual		—		16		48		174			27		19		—			284
Total commercial and industrial loans	$	5,454	$	33,268	$	24,888	$	47,644		$	25,809	$	25,557	$	64,199		$	226,819

Charge-offs	$	—	$	—	$	—	$	(74	)	$	—	$	—	$	(19	)	$	(93	)
Recoveries		—		—		—		—			—		1		—			1
Current period net	$	—	$	—	$	—	$	(74	)	$	—	$	1	$	(19	)	$	(92	)

Construction and development:
Pass	$	5,281	$	86,452	$	24,368	$	39,633		$	34,459	$	30,055	$	1,113		$	221,361
Special mention		—		—		—		3,690			—		—		—			3,690
Substandard		—		—		—		—			—		—		—			—
Nonaccrual		—		—		—		—			—		—		—			—
Total construction and development loans	$	5,281	$	86,452	$	24,368	$	43,323		$	34,459	$	30,055	$	1,113		$	225,051

Charge-offs	$	—	$	—	$	—	$	—		$	—	$	—	$	—		$	—
Recoveries		—		—		—		—			—		—		—			—
Current period net	$	—	$	—	$	—	$	—		$	—	$	—	$	—		$	—

Commercial real estate:
Pass	$	32,619	$	59,717	$	46,881	$	320,063		$	116,591	$	255,969	$	15,296		$	847,136
Special mention		—		—		—		8,125			9,314		561		—			18,000
Substandard		—		—		—		—			—		1,536		—			1,536
Nonaccrual		—		—		—		—			—		219		—			219
Total commercial real estate loans	$	32,619	$	59,717	$	46,881	$	328,188		$	125,905	$	258,285	$	15,296		$	866,891

Charge-offs	$	—	$	—	$	—	$	—		$	—	$	—	$	—		$	—
Recoveries		—		—		—		—			—		—		—			—
Current period net	$	—	$	—	$	—	$	—		$	—	$	—	$	—		$	—

(Continued)

14.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


March 31, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost		Total
Farmland:
Pass	$	3,996	$	11,108	$	14,573	$	38,800	$	39,727	$	21,030	$	6,334	$	135,568
Special mention		—		—		1,687		—		—		1,617		—		3,304
Substandard		—		—		—		—		45		119		—		164
Nonaccrual		—		—		—		—		—		419		—		419
Total farmland loans	$	3,996	$	11,108	$	16,260	$	38,800	$	39,772	$	23,185	$	6,334	$	139,455

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

1-4 family residential:
Pass	$	20,892	$	66,807	$	60,296	$	125,320	$	103,758	$	133,405	$	20,761	$	531,239
Special mention		—		—		—		201		24		18		—		243
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		27		341		324		—		2,667		150		3,509
Total 1-4 family residential loans	$	20,892	$	66,834	$	60,637	$	125,845	$	103,782	$	136,090	$	20,911	$	534,991

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family residential:
Pass	$	—	$	1,004	$	1,749	$	30,255	$	14,226	$	3,948	$	67	$	51,249
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	—	$	1,004	$	1,749	$	30,255	$	14,226	$	3,948	$	67	$	51,249

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(Continued)

15.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


March 31, 2025	2025			2024			2023		2022			2021		Prior			Revolving Loans Amortized Cost			Total
Consumer and overdrafts:
Pass	$	8,340		$	17,211		$	10,339	$	5,515		$	2,491	$	2,819		$	3,968		$	50,683
Special mention		—			23			66		—			4		8			—			101
Substandard		—			—			—		—			—		—			—			—
Nonaccrual		—			13			147		96			—		31			—			287
Total consumer loans and overdrafts	$	8,340		$	17,247		$	10,552	$	5,611		$	2,495	$	2,858		$	3,968		$	51,071

Charge-offs	$	(49	)	$	(2	)	$	—	$	—		$	—	$	(1	)	$	—		$	(52	)
Recoveries		11			—			1		4			—		3			—			19
Current period net	$	(38	)	$	(2	)	$	1	$	4		$	—	$	2		$	—		$	(33	)

Agricultural:
Pass	$	1,300		$	2,336		$	901	$	1,081		$	635	$	864		$	5,468		$	12,585
Special mention		—			—			—		—			—		—			—			—
Substandard		—			—			—		—			—		11			—			11
Nonaccrual		—			—			—		21			—		17			—			38
Total agricultural loans	$	1,300		$	2,336		$	901	$	1,102		$	635	$	892		$	5,468		$	12,634

Charge-offs	$	—		$	—		$	—	$	—		$	—	$	—		$	—		$	—
Recoveries		—			—			—		—			—		—			—			—
Current period net	$	—		$	—		$	—	$	—		$	—	$	—		$	—		$	—

Total loans:
Pass	$	77,882		$	277,828		$	183,857	$	607,499		$	337,621	$	473,045		$	117,161		$	2,074,893
Special mention		—			48			1,753		12,016			9,390		2,578			35			25,820
Substandard		—			34			90		638			45		1,875			10			2,692
Nonaccrual		—			56			536		615			27		3,372			150			4,756
Total loans	$	77,882		$	277,966		$	186,236	$	620,768		$	347,083	$	480,870		$	117,356		$	2,108,161

Charge-offs	$	(49	)	$	(2	)	$	—	$	(74	)	$	—	$	(1	)	$	(19	)	$	(145	)
Recoveries		11			—			1		4			—		4			—			20
Total current period net (charge-offs) recoveries	$	(38	)	$	(2	)	$	1	$	(70	)	$	—	$	3		$	(19	)	$	(125	)

(Continued)

16.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of December 31, 2024:


December 31, 2024	2024		2023			2022			2021			2020			Prior			Revolving Loans Amortized Cost			Total
Commercial and industrial:
Pass	$	40,229	$	28,317		$	50,065		$	28,856		$	9,837		$	15,639		$	80,106		$	253,049
Special mention		26		—			—			57			—			453			36			572
Substandard		36		137			167			—			136			59			10			545
Nonaccrual		17		42			410			27			—			40			—			536
Total commercial and industrial loans	$	40,308	$	28,496		$	50,642		$	28,940		$	9,973		$	16,191		$	80,152		$	254,702

Charge-offs	$	—	$	(7	)	$	(96	)	$	(38	)	$	(249	)	$	(6	)	$	(234	)	$	(630	)
Recoveries		—		15			—			—			217			176			—			408
Current period net	$	—	$	8		$	(96	)	$	(38	)	$	(32	)	$	170		$	(234	)	$	(222	)

Construction and development:
Pass	$	80,512	$	34,301		$	40,399		$	35,409		$	6,222		$	16,857		$	1,208		$	214,908
Special mention		—		—			3,709			—			—			—			—			3,709
Substandard		—		—			—			—			—			—			—			—
Nonaccrual		—		—			—			—			—			—			—			—
Total construction and development loans	$	80,512	$	34,301		$	44,108		$	35,409		$	6,222		$	16,857		$	1,208		$	218,617

Charge-offs	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—			—			—			—			—			—			—
Current period net	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Commercial real estate:
Pass	$	58,453	$	48,300		$	328,088		$	120,214		$	76,684		$	198,433		$	11,921		$	842,093
Special mention		—		—			13,429			9,377			—			—			—			22,806
Substandard		—		—			—			—			—			1,558			—			1,558
Nonaccrual		—		—			—			—			209			18			—			227
Total commercial real estate loans	$	58,453	$	48,300		$	341,517		$	129,591		$	76,893		$	200,009		$	11,921		$	866,684

Charge-offs	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—			—			—			—			—			—			—
Current period net	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—

(Continued)

17.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost		Total
Farmland:
Pass	$	12,779	$	21,451	$	39,694	$	42,108	$	7,357	$	16,747	$	4,740	$	144,876
Special mention		—		1,687		—		—		—		—		—		1,687
Substandard		—		—		—		86		99		22		—		207
Nonaccrual		—		—		—		—		—		421		—		421
Total farmland loans	$	12,779	$	23,138	$	39,694	$	42,194	$	7,456	$	17,190	$	4,740	$	147,191

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

1-4 family residential:
Pass	$	66,808	$	61,249	$	133,197	$	106,297	$	35,825	$	101,662	$	20,557	$	525,595
Special mention		29		—		—		—		—		1,094		—		1,123
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		338		—		—		228		1,567		155		2,288
Total 1-4 family residential loans	$	66,837	$	61,587	$	133,197	$	106,297	$	36,053	$	104,323	$	20,712	$	529,006

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family residential:
Pass	$	1,010	$	1,759	$	30,389	$	14,340	$	1,324	$	2,665	$	51	$	51,538
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	1,010	$	1,759	$	30,389	$	14,340	$	1,324	$	2,665	$	51	$	51,538

Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Recoveries		—		—		—		—		—		—		—		—
Current period net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(Continued)

18.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


December 31, 2024	2024			2023			2022			2021			2020			Prior			Revolving Loans Amortized Cost			Total
Consumer and overdrafts:
Pass	$	21,519		$	12,431		$	6,955		$	3,009		$	1,192		$	2,120		$	4,210		$	51,436
Special mention		14			4			—			—			—			—			—			18
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		12			80			86			7			18			16			—			219
Total consumer loans and overdrafts	$	21,545		$	12,515		$	7,041		$	3,016		$	1,210		$	2,136		$	4,210		$	51,673

Charge-offs	$	(252	)	$	(44	)	$	(43	)	$	—		$	—		$	(9	)	$	—		$	(348	)
Recoveries		52			—			—			14			3			17			51			137
Current period net	$	(200	)	$	(44	)	$	(43	)	$	14		$	3		$	8		$	51		$	(211	)

Agricultural:
Pass	$	2,644		$	993		$	1,225		$	673		$	367		$	597		$	5,104		$	11,603
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			85			—			85
Nonaccrual		—			—			21			—			—			17			—			38
Total agricultural loans	$	2,644		$	993		$	1,246		$	673		$	367		$	699		$	5,104		$	11,726

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			3			—			3
Current period net	$	—		$	—		$	—		$	—		$	—		$	3		$	—		$	3

Total loans:
Pass	$	283,954		$	208,801		$	630,012		$	350,906		$	138,808		$	354,720		$	127,897		$	2,095,098
Special mention		69			1,691			17,138			9,434			—			1,547			36			29,915
Substandard		36			137			167			86			235			1,724			10			2,395
Nonaccrual		29			460			517			34			455			2,079			155			3,729
Total loans	$	284,088		$	211,089		$	647,834		$	360,460		$	139,498		$	360,070		$	128,098		$	2,131,137

Charge-offs	$	(252	)	$	(51	)	$	(139	)	$	(38	)	$	(249	)	$	(15	)	$	(234	)	$	(978	)
Recoveries		52			15			—			14			220			196			51			548
Total current period net (charge-offs) recoveries	$	(200	)	$	(36	)	$	(139	)	$	(24	)	$	(29	)	$	181		$	(183	)	$	(430	)

There were no loans classified in the “doubtful” or “loss” risk rating categories as of March 31, 2025 or December 31, 2024.

The following table presents the amortized cost basis of individually evaluated collateral-dependent loans within the ACL model as of March 31, 2025.


March 31, 2025	Real Estate		Non-RE		Total		Allowance for Credit Losses Allocation
Commercial real estate		1,509		—		1,509		250
Total	$	1,509	$	—	$	1,509	$	250

The following table presents the amortized cost basis of individually evaluated collateral-dependent loans within the ACL model as of December 31, 2024.


December 31, 2024	Real Estate		Non-RE		Total		Allowance for Credit Losses Allocation
Commercial real estate	$	1,530	$	—	$	1,530	$	250
Total	$	1,530	$	—	$	1,530	$	250

(Continued)

19.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The following tables summarize the payment status of loans in the Company’s total loan portfolio, including an aging of delinquent loans and loans 90 days or more past due continuing to accrue interest as of:


March 31, 2025	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	865	$	36	$	95	$	996	$	225,823	$	226,819	$	—
Real estate:
Construction and development		—		—		—		—		225,051		225,051		—
Commercial real estate		338		—		203		541		866,350		866,891		—
Farmland		2,053		156		140		2,349		137,106		139,455		—
1-4 family residential		2,288		304		2,109		4,701		530,290		534,991		—
Multi-family residential		—		—		—		—		51,249		51,249		—
Consumer		163		107		239		509		49,925		50,434		—
Agricultural		—		40		21		61		12,573		12,634		—
Overdrafts		—		—		—		—		637		637		—
Total	$	5,707	$	643	$	2,807	$	9,157	$	2,099,004	$	2,108,161	$	—


December 31, 2024	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	465	$	231	$	436	$	1,132	$	253,570	$	254,702	$	—
Real estate:
Construction and development		778		—		—		778		217,839		218,617		—
Commercial real estate		659		18		209		886		865,798		866,684		—
Farmland		307		90		140		537		146,654		147,191		—
1-4 family residential		3,587		1,261		1,214		6,062		522,944		529,006		—
Multi-family residential		—		—		—		—		51,538		51,538		—
Consumer		280		61		174		515		50,879		51,394		—
Agricultural		150		—		21		171		11,555		11,726		—
Overdrafts		—		—		—		—		279		279		—
Total	$	6,226	$	1,661	$	2,194	$	10,081	$	2,121,056	$	2,131,137	$	—

The following table presents information regarding nonaccrual loans as of:


	March 31, 2025		December 31, 2024
Commercial and industrial	$	284	$	536
Real estate:
Commercial real estate		219		227
Farmland		419		421
1-4 family residential		3,509		2,288
Consumer and overdrafts		287		219
Agricultural		38		38
Total	$	4,756	$	3,729

There were no commitments to lend additional funds to borrowers whose loans were classified as nonaccrual. Nonaccrual loans had reserves for credit losses applied under their pooled segments, and there were no nonaccrual loans for which there was no related allowance at March 31, 2025 and December 31, 2024.

Modifications to Borrowers Experiencing Financial Difficulty

The following table presents the amortized cost basis of loans made to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2025. No loan modifications were made during the three months ended March 31, 2024.

(Continued)

20.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


For the Three Months Ended March 31, 2025	Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Commercial and industrial	$	58	$	—	$	—		0.03	%
1-4 family residential		—		—		83		0.02	%
Total loans	$	58	$	—	$	83		0.01	%

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three months ended March 31, 2025.


For the Three Months Ended March 31, 2025
Term Extension		Financial Effect
Commercial and industrial		Amortization period was extended by a weighted-average period of 2.99 years.

Combo Interest Rate and Term		Financial Effect
1-4 family residential		Reduced weighted-average contractual interest rate from 9.74% to 8.24% and amortization period was extended by a weighted-average period of 1.88 years.

The following table provides an age analysis of loans made to borrowers experiencing financial difficulty that were modified during the last twelve months and continue to experience financial difficulty as of March 31, 2025.


	Current		30 to 89 Days Past Due		90 Days or Greater Past Due		Nonaccrual
Commercial and industrial	$	148	$	16	$	—	$	—
Real estate:
Construction and development		11		—		—		—
1-4 family residential		—		—		—		83
Total loans	$	159	$	16	$	—	$	83

As of March 31, 2025, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2025 and 2024 that subsequently defaulted.

NOTE 4 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER DEBT

Securities sold under agreements to repurchase were $47,702 and $31,075 as of March 31, 2025 and December 31, 2024, respectively, and are secured by mortgage-backed securities and collateralized mortgage obligations.

The Company has an unsecured $25,000 revolving line of credit with a correspondent bank that bears interest at the greater of (i) the prime rate, which was 7.50% at March 31, 2025, or (ii) the rate floor of 3.50%, with interest payable quarterly, and matures in March 2026. There was no outstanding balance on the line of credit as of March 31, 2025 and December 31, 2024. The Company also maintains two federal funds lines of credit with commercial banks that provide the availability to borrow up to an aggregate $75,000 in federal funds for short-term contingent funding if necessary, of which the rate is agreed upon at the time of each advance. There were no outstanding balances on these facilities as of March 31, 2025 and December 31, 2024.

The Company had no advances from the Federal Home Loan Bank ("FHLB") outstanding as of March 31, 2025 or December 31, 2024.

(Continued)

21.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

NOTE 5 - SUBORDINATED DEBT

Subordinated debt was made up of the following as of:


	March 31, 2025		December 31, 2024
Trust III Debentures	$	2,062	$	2,062
DCB Trust I Debentures		5,155		5,155
Subordinated note, net		34,734		34,701
	$	41,951	$	41,918

As of March 31, 2025, the Company has two active trusts, Guaranty (TX) Capital Trust III (“Trust III”) and DCB Financial Trust I (“DCB Trust I” and together with Trust III, the "Trusts"). Upon formation, the Trusts issued trust preferred securities (“TruPS”) with a liquidation value of $1,000 per share to third parties in private placements. Concurrently with the issuance of the TruPS, the Trusts issued common securities to the Company. The Trusts invested the proceeds of the sales of their securities in junior subordinated debentures issued by the Company (“Debentures”). The Debentures mature approximately 30 years after the issuance date, which may be shortened if certain conditions are met (including the Company having received prior approval of the Board of Governors of the Federal Reserve System (the "Federal Reserve") and any other required regulatory approvals).


	Trust III		DCB Trust I
Issuance date	July 25, 2006		March 29, 2007
Capital trust pass-through securities
Number of shares		2,000		5,000
Original liquidation value	$	2,000	$	5,000
Common securities liquidation value		62		155

The securities held by the Trusts qualify as Tier 1 capital for the Company under Federal Reserve Board guidelines. The Federal Reserve’s guidelines restrict core capital elements (including trust preferred securities and qualifying perpetual preferred stock) to 25% of all core capital elements, net of goodwill less any associated deferred tax liability. Because the Company’s aggregate amount of trust preferred securities is less than the limit of 25% of Tier 1 capital, net of goodwill, the full amount is includable in Tier 1 capital at March 31, 2025 and December 31, 2024. Additionally, the terms provide that trust preferred securities would no longer qualify for Tier 1 capital within five years of their maturity, but would be included as Tier 2 capital. However, the trust preferred securities would be amortized out of Tier 2 capital by one-fifth each year and excluded from Tier 2 capital completely during the year prior to maturity of the Debentures.

With certain exceptions, the amount of the principal and any accrued and unpaid interest on the Debentures are subordinated in right of payment to the prior payment in full of all senior indebtedness of the Company. Interest on the Debentures is payable quarterly. The interest is deferrable on a cumulative basis for up to five consecutive years following a suspension of dividend payments on all other capital stock. No principal payments are due until maturity for each of the Debentures.


	Trust III Debentures		DCB Trust I Debentures
Original amount	$	2,062	$	5,155
Maturity date	October 1, 2036		June 15, 2037
Interest due	Quarterly		Quarterly

In accordance with ASC 810, "Consolidation," the Debentures issued by the Company to the Trusts are shown as liabilities in the consolidated balance sheets and interest expense associated with the Debentures is shown in the consolidated statements of earnings.

Trust III Debentures

Interest is payable at a variable rate per annum, reset quarterly, equal to 3-month Secured Overnight Financing Rate ("SOFR", which was 4.35% at March 31, 2025) plus 1.93%.

On any interest payment date on or after October 1, 2016 and prior to maturity date, the Debentures are redeemable for cash at the option of the Company, on at least 30, but not more than 60 days’ notice, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption.

(Continued)

22.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

DCB Trust I Debentures

Interest is payable at a variable rate per annum, reset quarterly, equal to 3-month SOFR plus 2.06%.

On any interest payment date on or after June 15, 2012 and prior to maturity date, the Debentures are redeemable for cash at the option of the Company, on at least 30, but not more than 60 days’ notice, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption.

Subordinated Note

In March 2022, the Company completed a private placement of $35,000 aggregate principal amount of its fixed-to-floating rate subordinated note due April 1, 2032. The subordinated note initially bears a fixed interest rate of 3.625% per year, due semi-annually in arrears on April 1 and October 1. Commencing on April 1, 2027, the interest rate on the subordinated note will reset each quarter at a floating interest rate equal to the then-current three-month term SOFR plus 192 basis points. The Company may at its option redeem in whole or in part the subordinated note on or after March 4, 2027 without a premium. The subordinated note is treated as Tier 2 capital for regulatory purposes (subject to reductions in the amount includable as Tier 2 capital in the final five years prior to maturity), and is presented net of related unamortized issuance costs on the consolidated balance sheets.

The scheduled principal payments and weighted average rates of the Debentures and the subordinated note are as follows:


Year	Current Weighted Average Rate			Principal Due
After 2030		4.10	%		42,217
Total scheduled principal payments					42,217
Unamortized debt issuance costs					(266	)
				$	41,951

NOTE 6 – EQUITY AWARDS

The Company’s 2015 Equity Incentive Plan (the “Plan”) was adopted by the Company and approved by its shareholders in April 2015. The maximum number of shares of common stock that may be issued pursuant to stock-based awards under the Plan equals 1,314,000 shares, all of which may be subject to incentive stock option treatment. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant; those option awards have vesting periods ranging from 5 to 10 years and have 10-year contractual terms. Restricted stock awards vest under the period of restriction specified within their respective award agreements as determined by the Company. Forfeitures are recognized as they occur, subject to a 90-day grace period for vested options.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock and similar peer group averages. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes in to account that the options are not transferable. The dividend yield is the total dividends per share paid during the period divided by the average of the Company's stock price on each date a grant was issued. The risk-free interest rate for the expected term of the option is based on U.S. Treasury yield curve in effect at the time of the grant.

(Continued)

23.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

A summary of stock option activity in the Plan during the three months ended March 31, 2025 and 2024 follows:


Three Months Ended March 31, 2025	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at beginning of year		393,770		$	29.24		5.93	$	2,739
Granted		5,500			41.11
Exercised		(50,890	)		25.54
Forfeited		(6,600	)		24.55
Balance, March 31, 2025		341,780		$	30.07		6.29	$	3,409

Exercisable at end of period		185,340		$	29.14		4.76	$	2,019


Three Months Ended March 31, 2024	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at beginning of year		465,680		$	28.12		5.46	$	2,782
Granted		2,500			30.49
Exercised		(3,300	)		20.91
Forfeited		(10,500	)		34.84
Balance, March 31, 2024		454,380		$	28.03		5.20	$	1,632

Exercisable at end of period		294,880		$	26.28		3.77	$	1,378

A summary of nonvested stock option activity in the Plan during the three months ended March 31, 2025 and 2024 follows:


Three Months Ended March 31, 2025	Number of Shares			Weighted-Average Grant Date Fair Value
Nonvested at beginning of year		161,280		$	6.32
Granted		5,500			10.71
Vested		(10,340	)		5.88
Balance, March 31, 2025		156,440		$	6.51


Three Months Ended March 31, 2024	Number of Shares			Weighted-Average Grant Date Fair Value
Nonvested at beginning of year		182,570		$	6.10
Granted		2,500			5.28
Vested		(17,170	)		5.53
Forfeited		(8,400	)		8.95
Balance, March 31, 2024		159,500		$	6.09

Information related to stock options in the Plan is as follows for the three months ended:


	March 31, 2025		March 31, 2024
Intrinsic value of options exercised	$	738	$	31
Cash received from options exercised		1,300		69
Net exercise of options		16		—
Weighted average fair value of options granted		10.71		5.28

(Continued)

24.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Restricted Stock Awards

A summary of restricted stock activity in the Plan during the three months ended March 31, 2025 and 2024 follows:


Three Months Ended March 31, 2025	Number of Shares			Weighted-Average Grant Date Fair Value
Nonvested at beginning of year		8,317		$	29.81
Granted		1,935			41.11
Vested		(1,272	)		31.97
Balance, March 31, 2025		8,980		$	31.93


Three Months Ended March 31, 2024	Number of Shares			Weighted-Average Grant Date Fair Value
Nonvested at beginning of year		15,390		$	28.87
Granted		2,388			30.49
Vested		(3,511	)		5.31
Forfeited		(221	)		34.10
Balance, March 31, 2024		14,046		$	29.14

Restricted stock granted to employees typically vests over five years, but vesting periods may vary. Compensation expense for these grants will be recognized over the vesting period of the awards based on the fair value of the stock at the issue date.

As of March 31, 2025, there was $1,153 of total unrecognized compensation expense related to nonvested stock options granted under the Plan. The expense is expected to be recognized over a weighted-average period of 2.98 years.

The Company granted options and restricted stock under the Plan during the first three months of 2025 and 2024. Expense of $112 and $138 was recorded during the three months ended March 31, 2025 and 2024, respectively, which represents the fair value of shares, restricted stock and stock options vested during those periods.

NOTE 7 - EMPLOYEE BENEFITS

KSOP

The Company maintains an Employee Stock Ownership Plan containing Section 401(k) provisions covering substantially all employees (“KSOP”). The KSOP provides for a matching contribution of up to 5% of a participant’s qualified compensation starting January 1, 2016. Guaranty’s total contributions accrued or paid during the three months ended March 31, 2025 and 2024 totaled $452 and $455, respectively, and is included in employee compensation and benefits on the Company’s consolidated statements of earnings.

Upon separation from service or other distributable event, a participant’s account under the KSOP may be distributed in kind in the form of the Guaranty common shares allocated to his or her account (with the balance payable in cash), or the entire account can be liquidated and distributed in cash.

As of March 31, 2025, the number of shares held by the KSOP was 863,112. There were no unallocated shares to plan participants as of March 31, 2025, and all shares held by the KSOP were treated as outstanding.

Executive Incentive Retirement Plan

The Company established a nonqualified, non-contributory executive incentive retirement plan covering a selected group of key personnel to provide benefits equal to amounts computed under an “award criteria” at various targeted salary levels as adjusted for annual earnings performance of the Company. The plan is non-funded.

In connection with the executive incentive retirement plan, the Company has purchased life insurance policies on the respective officers. The cash surrender value of life insurance policies held by the Company totaled $43,136 and $42,883 as of March 31, 2025 and December 31, 2024, respectively.

(Continued)

25.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Expense related to these plans totaled $443 and $429 for the three months ended March 31, 2025 and 2024, respectively. This expense is included in employee compensation and benefits on the Company’s consolidated statements of earnings. The recorded liability totaled approximately $7,142 and $6,661 as of March 31, 2025 and December 31, 2024, respectively and is included in accrued interest and other liabilities on the Company’s consolidated balance sheets.

Bonus Plan

The Company has a bonus plan that rewards officers and employees based on performance of individual business units of the Company. Earnings and growth performance goals for each business unit and for the Company as a whole are established at the beginning of the calendar year and approved annually by Guaranty’s board of directors. The bonus plan provides for a predetermined bonus amount to be contributed to the employee bonus pool based on (i) earnings target and growth for individual business units and (ii) achieving certain pre-tax return on average equity and pre-tax return on average asset levels for the Company as a whole. These bonus amounts are established annually by Guaranty’s board of directors. The bonus expense under this plan for the three months ended March 31, 2025 and 2024 totaled $967 and $885, respectively. This expense is included in employee compensation and benefits on the consolidated statements of earnings.

NOTE 8 – LEASES

The Company has operating leases for bank locations, ATMs, corporate offices, and certain other arrangements, which have remaining lease terms of 1 year to 11 years. Some of the Company’s operating leases include options to extend the leases for up to 10 years.

Operating leases in which we are the lessee must be recorded as right-of-use assets with corresponding lease liabilities. The right-of-use asset represents our right to utilize the underlying asset during the lease term, while the lease liability represents the present value of the obligation of the Company to make periodic lease payments over the life of the lease. The associated operating lease costs are composed of the amortization of the right-of-use asset and the implicit interest accreted on the lease liability, which is recognized on a straight-line basis over the life of the lease. As of March 31, 2025, operating lease right-of-use assets were $11,099 and lease liabilities were $11,757, and as of December 31, 2024, operating lease right-of-use assets and lease liabilities were $11,635 and $12,300, respectively, and were included within the accompanying consolidated balance sheets as components of other assets and accrued interest and other liabilities, respectively.

Cash paid for operating leases was $614 and $570 for the three months ended March 31, 2025 and 2024, respectively. Operating lease expense for operating leases accounted for under ASC 842 for the three months ended March 31, 2025 and 2024 was approximately $606 and $584, respectively, and is included as a component of occupancy expenses within the accompanying consolidated statements of earnings.

The table below summarizes other information related to our operating leases as of:


	March 31, 2025			December 31, 2024
Operating leases
Operating lease right-of-use assets	$	11,099		$	11,635
Operating lease liabilities		11,757			12,300

Weighted average remaining lease term
Operating leases	7 years			7 years
Weighted average discount rate
Operating leases		2.47	%		2.45	%

(Continued)

26.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The Company leases some of its banking facilities under non-cancelable operating leases expiring in various years through 2029 and thereafter. Minimum future lease payments under these non-cancelable operating leases as of March 31, 2025, are as follows:


Year Ended December 31,	Amount
2025	$	1,697
2026		2,068
2027		1,906
2028		1,859
2029		1,308
Thereafter		3,261
Total lease payments		12,099
Less: interest		(342	)
Present value of lease liabilities	$	11,757

As of March 31, 2025, the Company had no additional operating leases that had not yet commenced.

NOTE 9 - INCOME TAXES

Income tax expense was as follows for:


	Three Months Ended March 31,
	2025			2024
Income tax expense for the period	$	2,227		$	1,722
Effective tax rate		20.53	%		20.49	%

The effective tax rates differ from the statutory federal tax rate of 21% for the three months ended March 31, 2025 and 2024 largely due to tax exempt interest income earned on certain investment securities and loans.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company enters into various transactions, which, in accordance with GAAP, are not included in its consolidated balance sheets. These transactions are referred to as “off-balance sheet commitments.” The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and letters of credit, which involve elements of credit risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures.

The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Customers use credit commitments to ensure that funds will be available for working capital purposes, for capital expenditures and to ensure access to funds at specified terms and conditions. Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. Management considers the likelihood of commitments and letters of credit to be funded, along with credit related conditions present in the loan agreements when estimating an ACL for off-balance sheet commitments. Loan agreements executed in connection with construction loans and commercial lines of credit have standard conditions which must be met prior to the Company being required to provide additional funding, including conditions precedent that typically include: (i) no event of default or potential default has occurred; (ii) that no material adverse events have taken place that would materially affect the borrower or the value of the collateral, (iii) that the borrower remains in compliance with all loan obligations and covenants and has made no misrepresentations; (iv) that the collateral has not been damaged or impaired; (v) that the project remains on budget and in compliance with all laws and regulations; and (vi) that all management agreements, lease agreements and franchise agreements that affect the value of the collateral remain in force. If the conditions precedent have not been met, the Company retains the option to cease current draws and/or future funding. As a result of these conditions within our loan agreements, management has determined that credit risk is minimal and there is no recorded ACL with respect to these commitments as of March 31, 2025 and December 31, 2024.

(Continued)

27.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The Company’s policies generally require that letters of credit arrangements contain security and debt covenants similar to those contained in loan agreements. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount shown in the table below. If the commitment were funded, the Company would be entitled to seek recovery from the customer. Our credit risk associated with issuing letters of credit is essentially the same as the risk involved in extending loan facilities to our customers. As of March 31, 2025 and December 31, 2024, no amounts have been recorded as an ACL for the Bank’s potential obligations under these guarantees.

Commitments and letters of credit outstanding were as follows as of:


	Contract or Notional Amount
	March 31, 2025		December 31, 2024
Commitments to extend credit	$	298,725	$	289,821
Letters of credit		10,853		10,242

Litigation

The Company is involved in certain claims and lawsuits occurring in the normal course of business. Management, after consultation with legal counsel, does not believe that the outcome of these actions, if determined adversely, would have a material impact on the consolidated financial statements of the Company.

FHLB Letters of Credit

At March 31, 2025, the Company had no letters of credit pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.

NOTE 11 - REGULATORY MATTERS

The Company on a consolidated basis and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The Basel III Capital Rules, a comprehensive capital framework for U.S. banking organizations, became effective for the Company and Bank on January 1, 2015, with certain transition provisions that were fully phased in on January 1, 2019. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1 capital, Tier 1 capital and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and or Tier 1 capital to adjusted quarterly average assets (as defined). Management believes, as of March 31, 2025 and December 31, 2024, that the Bank met all capital adequacy requirements to which it was subject.

The Basel III Capital Rules, among other things, (i) introduced a new capital measure called “Common Equity Tier 1” (“CET1”), (ii) specified that Tier 1 capital consist of CET1 and “Additional Tier 1 Capital” instruments meeting specified requirements, (iii) defined CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital, (iv) expanded the scope of the deductions/adjustments as compared to existing regulations, and (v) imposed a "capital conservation buffer" of 2.5% above minimum risk-based capital requirements, below which an institution would be subject to limitations on certain activities including payment of dividends, share repurchases and discretionary bonuses to executive officers.

As of March 31, 2025 and December 31, 2024, the Company’s capital ratios exceeded those levels necessary to be categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized”, the Company must maintain minimum capital ratios as set forth in the table. There are no conditions or events since March 31, 2025 that management believes have changed the Company’s category.

(Continued)

28.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The Federal Reserve’s guidelines regarding the capital treatment of trust preferred securities limits restricted core capital elements (including trust preferred securities and qualifying perpetual preferred stock) to 25% of all core capital elements, net of goodwill less any associated deferred tax liability. Because the Company’s aggregate amount of trust preferred securities is less than the limit of 25% of Tier 1 capital, net of goodwill, the rules permit the inclusion of $7,217 of trust preferred securities in Tier 1 capital as of both March 31, 2025 and December 31, 2024. Additionally, the rules provide that trust preferred securities would no longer qualify for Tier 1 capital within five years of their maturity, but would be included as Tier 2 capital. However, the trust preferred securities would be amortized out of Tier 2 capital by one-fifth each year and excluded from Tier 2 capital completely during the year prior to maturity of the Debentures.

A comparison of the Company’s and Bank’s actual capital amounts and ratios to required capital amounts and ratios are presented in the following tables as of:


	Actual			Minimum Required For Capital Adequacy Purposes			Minimum Required Under Basel III (Including Buffer)			To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
March 31, 2025
Total capital to risk-weighted assets:
Consolidated	$	384,928	17.24%	$	178,637	8.00%	$	234,461	10.50%	$	223,296	10.00%
Bank		375,638	16.84%		178,436	8.00%		234,198	10.50%		223,045	10.00%
Tier 1 capital to risk-weighted assets:
Consolidated		322,329	14.44%		133,978	6.00%		189,802	8.50%		133,978	6.00%
Bank		347,773	15.59%		133,827	6.00%		189,589	8.50%		178,436	8.00%
Tier 1 capital to average assets:(1)
Consolidated		322,329	10.42%		123,732	4.00%		123,732	4.00%	n/a
Bank		347,773	11.26%		123,592	4.00%		123,592	4.00%		154,490	5.00%
Common equity tier 1 capital to risk-weighted assets:
Consolidated		315,112	14.11%		100,483	4.50%		156,307	7.00%	n/a
Bank		347,773	15.59%		100,370	4.50%		156,132	7.00%		144,979	6.50%
(1) The Tier 1 capital ratio (to average assets) is not impacted by the Basel III Capital Rules; however, the Federal Reserve and the FDIC may require the Consolidated Company and the Bank, respectively, to maintain a Tier 1 capital ratio (to average assets) above the required minimum.


	Actual			Minimum Required For Capital Adequacy Purposes			Minimum Required Under Basel III (Including Buffer)			To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31, 2024
Total capital to risk-weighted assets:
Consolidated	$	382,893	17.09%	$	179,268	8.00%	$	235,290	10.50%	$	224,085	10.00%
Bank		381,280	17.04%		179,054	8.00%		235,008	10.50%		223,818	10.00%
Tier 1 capital to risk-weighted assets:
Consolidated		320,185	14.29%		134,451	6.00%		190,473	8.50%		134,451	6.00%
Bank		353,299	15.79%		134,291	6.00%		190,245	8.50%		179,054	8.00%
Tier 1 capital to average assets:(1)
Consolidated		320,185	10.27%		124,714	4.00%		124,714	4.00%	n/a
Bank		353,299	11.37%		124,321	4.00%		124,321	4.00%		155,401	5.00%
Common equity tier 1 capital to risk-weighted assets:
Consolidated		312,968	13.97%		100,838	4.50%		156,860	7.00%	n/a
Bank		353,299	15.79%		100,718	4.50%		156,672	7.00%		145,481	6.50%
(1) The Tier 1 capital ratio (to average assets) is not impacted by the Basel III Capital Rules; however, the Federal Reserve and the FDIC may require the Consolidated Company and the Bank, respectively, to maintain a Tier 1 capital ratio (to average assets) above the required minimum.

Dividends paid by Guaranty are mainly provided by dividends from its subsidiaries. However, certain regulatory restrictions exist regarding the ability of its bank subsidiary to transfer funds to Guaranty in the form of cash dividends, loans or

(Continued)

29.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

advances. The amount of dividends that a subsidiary bank organized as a national banking association, such as the Bank, may declare in a calendar year is the subsidiary bank’s net profits for that year combined with its retained net profits for the preceding two years. Retained net profits, as defined by the Office of the Comptroller of the Currency, consist of net income less dividends declared during the period.

NOTE 12 - FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Marketable Securities: The fair values for marketable securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Loans Held For Sale: Loans held for sale are carried at the lower of cost or fair value, which is evaluated on a pool-level basis. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 3).

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly (Level 3).

Individually Evaluated Collateral Dependent Loans: The fair value of individually evaluated collateral dependent loans is generally based on the fair value of collateral, less costs to sell. The fair value of real estate collateral is determined using recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant (Level 3). Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business (Level 3).

(Continued)

30.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The following tables summarize quantitative disclosures about the fair value measurements for each category of financial assets (liabilities) carried at fair value:


March 31, 2025	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets at fair value on a recurring basis:
Available for sale securities:
Treasury securities	$	44,091	$	44,091	$	—	$	—
Mortgage-backed securities		276,140		—		276,140		—
Collateralized mortgage obligations		19,128		—		19,128		—
Municipal securities		2,365		—		2,365		—
Corporate bonds		20,923		—		20,923		—
Loans held for sale		150		—		—		150
Cash surrender value of life insurance		43,136		—		43,136		—
SBA servicing assets		487		—		—		487

Assets at fair value on a nonrecurring basis:
Individually evaluated collateral dependent loans		1,259		—		—		1,259


December 31, 2024	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets at fair value on a recurring basis:
Available for sale securities:
Treasury securities	$	43,675	$	43,675	$	—	$	—
Mortgage-backed securities		248,734		—		248,734		—
Collateralized mortgage obligations		19,519		—		19,519		—
Municipal securities		2,393		—		2,393		—
Corporate bonds		25,983		—		25,983		—
Loans held for sale		143		—		—		143
Cash surrender value of life insurance		42,883		—		42,883		—
SBA servicing assets		495		—		—		495

Assets at fair value on a nonrecurring basis:
Other real estate owned		1,184		—		—		1,184
Individually evaluated collateral dependent loans		1,280		—		—		1,280

There were no transfers between Level 2 and Level 3 during the three months ended March 31, 2025 or during the year ended December 31, 2024.

Nonfinancial Assets and Nonfinancial Liabilities

Nonfinancial assets measured at fair value on a nonrecurring basis include certain foreclosed assets which, upon initial recognition, are remeasured and reported at fair value through a charge-off (if applicable) to the allowance for credit losses and certain foreclosed assets which, subsequent to their initial recognition, are remeasured at fair value through a write-down included in current earnings. The fair value of a foreclosed asset is estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria.

As of March 31, 2025 and 2024, and December 31, 2024, there were no foreclosed assets that were remeasured and recorded at fair value.

(Continued)

31.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

The following tables present quantitative information about nonrecurring Level 3 fair value measurements as of March 31, 2025 and December 31, 2024.


March 31, 2025	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated collateral dependent loans	$	1,259	Market approach	Appraised value less selling costs	16.00%


December 31, 2024	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually evaluated collateral dependent loans	$	1,280	Market approach	Appraised value less selling costs	16.00%
Other real estate owned	$	1,184	Market approach	Appraised value less selling costs	26.00%

The following tables present information on individually evaluated collateral dependent loans, net of any specific reserves assigned to them, included in the ACL model as of March 31, 2025 and December 31, 2024.


	Fair Value Measurements Using
March 31, 2025	Level 1		Level 2		Level 3		Total Fair Value
Commercial real estate	$	—	$	—	$	1,259	$	1,259
Total	$	—	$	—	$	1,259	$	1,259


	Fair Value Measurements Using
December 31, 2024	Level 1		Level 2		Level 3		Total Fair Value
Commercial real estate	$	—	$	—	$	1,280	$	1,280
Total	$	—	$	—	$	1,280	$	1,280

The carrying amounts and estimated fair values of financial instruments not previously discussed in this note, as of March 31, 2025 and December 31, 2024, are as follows:


	Fair value measurements as of March 31, 2025 using:
	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial assets:
Cash, due from banks, federal funds sold and interest-bearing deposits	$	217,813	$	217,813	$	—	$	—	$	217,813
Marketable securities held to maturity		305,153		—		278,169		—		278,169
Loans, net		2,079,864		—		—		2,056,445		2,056,445
Accrued interest receivable		10,764		—		10,764		—		10,764
Nonmarketable equity securities		17,138		—		17,138		—		17,138
Financial liabilities:
Deposits	$	2,704,340	$	1,980,282	$	725,633	$	—	$	2,705,915
Securities sold under repurchase agreements		47,702		—		47,702		—		47,702
Accrued interest payable		5,054		—		5,054		—		5,054
Subordinated debt		41,951		—		41,957		—		41,957

(Continued)

32.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)


	Fair value measurements as of December 31, 2024 using:
	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial assets:
Cash, due from banks, federal funds sold and interest-bearing deposits	$	145,964	$	145,964	$	—	$	—	$	145,964
Marketable securities held to maturity		334,732		—		303,245		—		303,245
Loans, net		2,102,565		—		—		2,088,644		2,088,644
Accrued interest receivable		12,016		—		12,016		—		12,016
Nonmarketable equity securities		17,167		—		17,167		—		17,167
Financial liabilities:
Deposits	$	2,692,167	$	1,949,499	$	745,763	$	—	$	2,695,262
Securities sold under repurchase agreements		31,075		—		31,075		—		31,075
Accrued interest payable		5,116		—		5,116		—		5,116
Federal Home Loan Bank advances		—		—		—		—		—
Subordinated debt		41,918		—		44,133		—		44,133

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values (Level 1).

Marketable Securities Held to Maturity: The fair values for marketable securities held to maturity are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

Loans, net: The fair value of fixed-rate loans and variable-rate loans that reprice on an infrequent basis is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality (Level 3).

Nonmarketable Equity Securities: It is not practical to determine the fair value of Independent Bankers Financial Corporation, Federal Home Loan Bank, Federal Reserve Bank and other stock due to restrictions placed on its transferability.

Deposits and Securities Sold Under Repurchase Agreements: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) (Level 1). The fair values of deposit liabilities with defined maturities are estimated by discounting future cash flows using interest rates currently offered for deposits of similar remaining maturities (Level 2).

Other Borrowings: The fair value of borrowings, consisting of lines of credit, Federal Home Loan Bank advances and subordinated debt is estimated by discounting future cash flows using currently available rates for similar financing (Level 2).

Accrued Interest Receivable/Payable: The carrying amounts of accrued interest approximate their fair values (Level 2).

Off-balance Sheet Instruments: Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

NOTE 13 - EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings available to common shareholders by the weighted-average common shares outstanding for the period. Net losses attributable to the noncontrolling interest during the three months ended March 31, 2025 and 2024 were $17 and $7, respectively, and are excluded from this calculation.

Diluted earnings per share reflects the maximum potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and would then share in the net earnings of the Company. Dilutive share equivalents include stock-based awards issued to employees.

(Continued)

33.

GUARANTY BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Stock options granted by the Company are treated as potential shares in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money awards which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax impact that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

The computations of basic and diluted earnings per share for the Company were as follows (in thousands, except per share amounts) for the:


	Three Months Ended March 31,
	2025		2024
Numerator:
Net earnings attributable to Guaranty Bancshares, Inc.	$	8,640	$	6,688

Denominator:
Weighted-average shares outstanding (basic)		11,404,248		11,539,167
Effect of dilutive securities:
Common stock equivalent shares from stock options		82,875		59,072
Weighted-average shares outstanding (diluted)		11,487,123		11,598,239

Net earnings attributable to Guaranty Bancshares, Inc. per share
Basic	$	0.76	$	0.58
Diluted	$	0.75	$	0.58

(Continued)

34.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Report”), the risk factors appearing in Item 1A of Part II of this Report, and the other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024. Unless the context indicates otherwise, references in this Report to “we,” “our,” “us,” and the “Company” refer to Guaranty Bancshares, Inc., a Texas corporation, and its consolidated subsidiaries. References in this Report to “Guaranty Bank & Trust” and the “Bank” refer to Guaranty Bank & Trust, N.A., a national banking association and our wholly-owned consolidated subsidiary.

General

We were incorporated in 1990 to serve as the holding company for Guaranty Bank & Trust. Since our founding, we have built a reputation based on financial stability and community leadership. In May 2017, we consummated an initial public offering of our common stock, which began trading on the Nasdaq Global Select Market until March 7, 2023, at which time our listing was transferred to the New York Stock Exchange, where our common stock continues to trade under the symbol "GNTY".

We currently operate 33 banking locations in the East Texas, Dallas/Fort Worth, Houston and Central Texas regions of the state. Our principal executive office is located at 16475 Dallas Parkway, Suite 600, Addison, Texas, 75001 and our telephone number is (888) 572-9881. Our website address is www.gnty.com. Information contained on our website does not constitute a part of this Report and is not incorporated by reference into this filing or any other report.

As a bank holding company that operates through one segment, we generate most of our revenue from interest on loans and investments, customer service and loan fees, fees related to the sale of mortgage loans, and trust and wealth management services. We incur interest expense on deposits and other borrowed funds, as well as noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and control the interest expenses of our liabilities, measured as net interest income, through our net interest margin and net interest spread. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities.

Changes in market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as in the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders' equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Texas, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our target markets and throughout the State of Texas.

QUARTERLY HIGHLIGHTS

•

Good Earnings and Improving NIM. Earnings were good in the first quarter, driven primarily from higher net interest margin. Net interest margin, on a fully taxable equivalent basis, has continued to improve from 3.16% in the first quarter of 2024 to 3.54% in the fourth quarter of 2024 and 3.70% in the first quarter of 2025. The improvements have resulted primarily from a decrease in deposit costs, while earning assets have continued to reprice upward.

•

Strong Asset Quality. During the quarter, we resolved and sold the $1.2 million of remaining other real estate owned ("ORE") that was on our balance sheet at year-end 2024, with a minimal loss on sale of $184,000. Nonperforming assets as a percentage of total assets were 0.15% at March 31, 2025, compared to 0.16% at December 31, 2024 and 0.68% at March 31, 2024. Net charge-offs (annualized) to average loans were 0.02% for the quarter ended March 31, 2025, compared to 0.00% for the quarter ended December 31, 2024, and 0.02% for the quarter ended March 31, 2024.

(Continued)

35.

We continue to maintain a granular loan portfolio. As of March 31, 2025, we had 10,951 total active loans with an average loan balance of $193,135. In our commercial real estate ("CRE") portfolio, we had 995 active loans with an average balance of $923,282 and our 1-4 family real estate portfolio had 2,789 loans with an average balance of $181,126.

There was a reversal of the provision for credit losses of $300,000 during the first quarter due to the decreases in our outstanding loan balances. With the current market and economic uncertainties, there were minimal changes to our qualitative factors during the first quarter, which continue to remain at elevated levels. Once there is more economic clarity and stability, we anticipate reductions to our qualitative factors and potential for additional reverse provisions.

•

Granular and Consistent Core Deposit Base. As of March 31, 2025, we have 91,105 total deposit accounts with an average account balance of $29,684. We have a historically reliable core deposit base, with strong and trusted banking relationships. Total deposits increased by $12.2 million during the first quarter. DDA balances increased $11.5 million, and savings and MMDA balances increased $19.6 million, while time deposits decreased $18.9 million. Excluding public funds and bank-owned accounts, our uninsured deposits as of March 31, 2025 were 26.7% of total deposits.

Interest rates paid on deposits during the quarter continued to decrease, primarily due to repricing of certificates of deposit. Our average cost of interest-bearing deposits decreased 24 basis points during the quarter from 3.07% in the prior quarter to 2.83% in the current quarter. Our average cost of total deposits for the first quarter of 2025 decreased 15 basis points from 2.11% in the prior quarter to 1.96%†. As of March 31, 2025, noninterest-bearing deposits represent 31.3% of total deposits.

•

Healthy Capital and Liquidity. Our capital and liquidity ratios, as well as contingent liquidity sources, remain very healthy. During the first quarter of 2025, we repurchased 127,537 shares of our common stock, or 1.12% of average shares outstanding during the period, at an average price of $40.57 per share. Our liquidity ratio, calculated as cash and cash equivalents and unpledged investments divided by total liabilities, was 19.8% as of March 31, 2025, compared to 10.6% as of March 31, 2024. Our total available contingent liquidity, net of current outstanding borrowings, was $1.3 billion, consisting of FHLB, FRB and correspondent bank fed funds and revolving lines of credit. Finally, our total equity to average quarterly assets as of March 31, 2025 was 10.5%. If we had to recognize our entire unrealized losses on both AFS and HTM securities, our total equity to average assets ratio would be 9.8%†, which we believe represents a strong capital level under regulatory requirements.

† Non-GAAP financial metric. Calculations of this metric and reconciliations to GAAP are included in subsequent sections of this MD&A.

Discussion and Analysis of Results of Operations for the Three Months Ended March 31, 2025 and 2024

Results of Operations

The following discussion and analysis of our results of operations compares our results of operations for the three months ended March 31, 2025 with the three months ended March 31, 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025.

Net earnings attributable to Guaranty Bancshares Inc. were $8.6 million for the three months ended March 31, 2025, as compared to $6.7 million for the three months ended March 31, 2024. Basic earnings attributable to Guaranty Bancshares, Inc. per share were $0.76 for the three months ended March 31, 2025, compared to $0.58 during the same period in 2024.

(Continued)

36.

The following table presents key earnings data for the periods indicated:


	Quarter Ended March 31,
(dollars in thousands, except per share data)	2025			2024
Net earnings attributable to Guaranty Bancshares, Inc.	$	8,640		$	6,688
Net earnings attributable to Guaranty Bancshares, Inc. per common share
-basic		0.76			0.58
-diluted		0.75			0.58
Net interest margin, fully taxable equivalent(1)		3.70	%		3.16	%
Net interest rate spread(2)		2.76	%		2.08	%
Return on average assets		1.13	%		0.85	%
Return on average equity		10.83	%		8.93	%
Average equity to average total assets		10.41	%		9.47	%
Cash dividend payout ratio		32.89	%		41.38	%

(1) Net interest margin on a fully 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) Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

Net Interest Income

Net interest income, before the provision for credit losses, in the first quarter of 2025 and 2024 was $26.7 million and $23.6 million, respectively, an increase of $3.1 million, or 13.3%. The increase in net interest income resulted from a decrease in interest expense of $3.6 million, or 21.0%, compared to the prior year quarter, which was partially offset by a decrease in interest income of $469,000, or 1.2%, from the same quarter in the prior year. The decreases in both interest income and expense resulted primarily from a 100 basis point interest rate reduction by the Federal Reserve in late 2024 and from lower outstanding loan balances in the current quarter. We also had $1.9 million in interest expense on FHLB advances during the first quarter of 2024, which we did not have in the current quarter.

Net interest margin, on a fully taxable equivalent ("FTE") basis, for the first quarter of 2025 and 2024 was 3.70% and 3.16%, respectively. Net interest margin, on an FTE basis, increased 54 basis points due to a 10 basis point increase in interest-earning asset yield and further improved by a 58 basis point decrease in the cost of interest-bearing liabilities during the first quarter of 2025. The increase in interest-earning asset yields was due primarily to an increase in yield on the loan portfolio from 6.21% to 6.38%, or 17 basis points, along with 65 and five basis point increases in the yields on AFS and HTM securities, respectively. The weighted average yield on $86.7 million in new loans originated in the first quarter was 7.45%. The decrease in the average cost of interest-bearing liabilities was due primarily to a decrease in the cost of interest-bearing deposits from 3.25% to 2.83%, a change of 42 basis points, in the first quarter of 2025 compared to the same period in 2024, as well no interest expense for FHLB advances in the current quarter, compared to $1.9 million in interest expense at a rate of 5.45% in the prior year quarter.

Average Balance Sheet Amounts, Interest Earned and Yield Analysis

The following table presents an analysis of net interest income and net interest spread for the periods indicated, including average outstanding balances for each major category of interest-earning assets and interest-bearing liabilities, the interest earned or paid on such amounts, and the average rate earned or paid on such assets or liabilities, respectively.

The table also sets forth the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2025 and 2024, the amount of interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield.

(Continued)

37.


	Quarter Ended March 31,
	2025								2024
(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)	$	2,118,783		$	33,316		6.38	%	$	2,299,177		$	35,491		6.21	%
Securities available for sale		351,404			3,545		4.09			216,298			1,851		3.44
Securities held to maturity		320,493			2,087		2.64			393,394			2,533		2.59
Nonmarketable equity securities		17,144			117		2.77			24,438			248		4.08
Interest-bearing deposits in other banks		111,947			1,218		4.41			45,672			629		5.54
Total interest-earning assets		2,919,771			40,283		5.60			2,978,979			40,752		5.50
Allowance for credit losses		(28,084	)							(30,879	)
Noninterest-earning assets		217,157								230,829
Total assets	$	3,108,844							$	3,178,929
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Interest-bearing deposits	$	1,847,115		$	12,877		2.83	%	$	1,789,119		$	14,459		3.25	%
Advances from FHLB and fed funds purchased		—			—		—			141,593			1,920		5.45
Line of credit		156			3		7.80			841			18		8.61
Subordinated debt		41,930			442		4.28			45,797			517		4.54
Securities sold under agreements to repurchase		43,692			235		2.18			41,271			251		2.45
Total interest-bearing liabilities		1,932,893			13,557		2.84			2,018,621			17,165		3.42
Noninterest-bearing liabilities:
Noninterest-bearing deposits		822,324								823,638
Accrued interest and other liabilities		30,064								35,469
Total noninterest-bearing liabilities		852,388								859,107
Equity		323,563								301,201
Total liabilities and equity	$	3,108,844							$	3,178,929
Net interest rate spread(2)							2.76	%							2.08	%
Net interest income				$	26,726							$	23,587
Net interest margin(3)							3.71	%							3.18	%
Net interest margin, fully taxable equivalent(4)							3.70	%							3.16	%

(1) Includes average outstanding balances of loans held for sale of $561,000 and $704,000 for the quarter ended March 31, 2025 and 2024, 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 fully 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%.

(Continued)

38.

The following table presents the change in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and interest rates. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.


	For the Three Months Ended March 31, 2025 vs. 2024
	Increase (Decrease)
	Due to Change in						Total Increase
(in thousands)	Volume			Rate			(Decrease)
Interest-earning assets:
Total loans	$	(2,762	)	$	587		$	(2,175	)
Securities available for sale		1,146			548			1,694
Securities held to maturity		(466	)		20			(446	)
Nonmarketable equity securities		(73	)		(58	)		(131	)
Interest-earning deposits in other banks		905			(316	)		589
Total (decrease) increase in interest income	$	(1,250	)	$	781		$	(469	)

Interest-bearing liabilities:
Interest-bearing deposits	$	465		$	(2,047	)	$	(1,582	)
Advances from FHLB		(1,903	)		(17	)		(1,920	)
Line of credit		(15	)		—			(15	)
Subordinated debt		(43	)		(32	)		(75	)
Securities sold under agreements to repurchase		15			(31	)		(16	)
Total decrease in interest expense		(1,481	)		(2,127	)		(3,608	)
Increase in net interest income	$	231		$	2,908		$	3,139

Provision for Credit Losses

We recorded a reversal of the provision for credit losses of $300,000 during the first quarter of 2025, compared to a $250,000 reversal made in the fourth quarter of 2024 and a total reversal of provision for credit losses in 2024 of $2.2 million. The reversal of the provision for credit losses resulted primarily from a decline in gross loan balances of $23.0 million during the first quarter of 2025. As of March 31, 2025 and December 31, 2024, our allowance for credit losses as a percentage of total loans was 1.32% and 1.33%, respectively.

Noninterest Income

The following table presents components of noninterest income for the three months ended March 31, 2025 and 2024 and the period-over-period variations in the categories of noninterest income:


	Quarter Ended March 31,				Increase (Decrease)
(in thousands)	2025		2024		2025 vs. 2024
Noninterest income:
Service charges	$	1,086	$	1,069	$	17
Gain on sale of loans		140		272		(132	)
Fiduciary and custodial income		668		649		19
Bank-owned life insurance income		254		251		3
Merchant and debit card fees		2,127		1,706		421
Loan processing fee income		110		118		(8	)
Mortgage fee income		24		41		(17	)
Other noninterest income		624		1,152		(528	)
Total noninterest income	$	5,033	$	5,258	$	(225	)

Total noninterest income decreased $225,000, or 4.3%, for the three months ended March 31, 2025 compared to the same period in 2024. Material changes in the components of noninterest income are discussed below.

Gain on Sale of Loans. We sold 17 mortgage loans for $5.3 million during the three months ended March 31, 2025 compared to 27 mortgage loans for $7.0 million during the three months ended March 31, 2024. Gain on sale of loans was $140,000 for the three months ended March 31, 2025, a decrease of $132,000, or 48.5%, compared to $272,000 for the same period in 2024. The total gain on loans sold during the quarter ended March 31, 2025 consisted of a gain of $140,000 in mortgage loans, compared to a gain of $184,000 in mortgage loans during the quarter ended March 31, 2024.

(Continued)

39.

Merchant and Debit Card Fees. We earn interchange income related to the activity of our customers’ merchant debit card usage. We recorded a $421,000, or 24.7%, increase during the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to a MasterCard bonus payment of $400,000 received during the first quarter of 2025, along with growth in the number of DDAs and debit card usage volume during 2025. The total number of DDAs increased by 1,771 accounts, from 56,477 as of March 31, 2024 to 58,248 as of March 31, 2025.

Mortgage Fee Income. Mortgage fee income consists of lender processing fees such as underwriting fees,
administrative fees and funding fees that are collected from mortgage loans that the Bank intends to sell on the secondary
market. Mortgage fee income decreased $17,000, or 41.5%, from March 31, 2024, primarily due to a lower volume of mortgage purchases and refinances during the quarter ended March 31, 2025.

Other. This category includes a variety of other income producing activities, including mortgage loan origination fees, wire transfer fees, loan administration fees, and other fee income. Other noninterest income decreased $528,000, or 45.8%, compared to the same period in 2024. The decrease in other noninterest income was due primarily to $499,000 in recoveries made on three SBA loan guaranty receivables during the first quarter of 2024 that were not present in the first quarter of 2025.

Noninterest Expense

For the three months ended March 31, 2025, noninterest expense totaled $21.2 million, an increase of $517,000, or 2.5%, compared to $20.7 million for the three months ended March 31, 2024. The following table presents, for the periods indicated, the major categories of noninterest expense:


	Quarter Ended March 31,				Increase (Decrease)
(in thousands)	2025		2024		2025 vs. 2024
Employee compensation and benefits	$	12,240	$	12,437	$	(197	)
Non-staff expenses:
Occupancy expenses		3,173		2,747		426
Legal and professional fees		806		772		34
Software and technology		1,777		1,642		135
Amortization		140		143		(3	)
Director and committee fees		187		200		(13	)
Advertising and promotions		189		169		20
ATM and debit card expense		761		609		152
Telecommunication expense		147		173		(26	)
FDIC insurance assessment fees		351		360		(9	)
Other noninterest expense		1,438		1,440		(2	)
Total noninterest expense	$	21,209	$	20,692	$	517

Material changes in the components of noninterest expense are discussed below.

Employee Compensation and Benefits. Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $12.2 million for the three months ended March 31, 2025, a decrease of $197,000, or 1.6%, compared to $12.4 million for the same period in 2024. The decrease resulted primarily from lower salary expense during the quarter ended March 31, 2025.

Occupancy Expense. Occupancy expenses are mainly composed of depreciation expense on fixed assets and lease expense related to ASC 842 accounting. Occupancy expenses increased $426,000, or 15.5%, compared to the same quarter of the prior year. The increase consisted of $216,000 related to ATM servicing and contracts, an increase in depreciation expense of $95,000 driven by completion of our new full service location in Georgetown, Texas and an increase in other building-related expenses of $145,000 from the first quarter of 2024.

Software and Technology. Software and technology expenses increased $135,000, or 8.2%, from $1.6 million for the quarter ended March 31, 2023 to $1.8 million for the quarter ended March 31, 2025. The increase was due to continued investments in technology software, tools to improve efficiencies for customers and operational departments and for cybersecurity enhancements.

Advertising and Promotions. Advertising and promotion-related expenses were $189,000 and $169,000 for the three months ended March 31, 2025 and 2024, respectively, an increase of $20,000, or 11.8%. The increase was primarily due to lower advertising and related vendor costs in the current period compared to the same period in the prior year.

(Continued)

40.

ATM and Debit Card Expense. We pay processing fees related to the activity of our customers’ ATM and debit card usage. ATM and debit card expenses were $761,000 for the three months ended March 31, 2025, an increase of $152,000, or 25.0%, compared to $609,000 for the same period in 2024 as a result of increased ATM and debit card usage by our customers.

Telecommunication Expense. Telecommunication-related expenses were $147,000 for the three months ended March 31, 2025, compared to $173,000 for the same period in 2024. The decrease of $26,000, or 15.0%, was due to an ongoing project to aggregate telecommunication expenses for the purpose of cost control through bundled contracts and negotiated rates.

Income Tax Expense

For the three months ended March 31, 2025 and 2024, income tax expense totaled $2.2 million and $1.7 million, respectively. The effective tax rates for the three months ended March 31, 2025 and 2024 were 20.53% and 20.49%, respectively. The effective tax rates differ from the statutory federal tax rate of 21% for the three months ended March 31, 2025 and 2024, largely due to tax exempt interest income earned on certain investment securities and loans.

Discussion and Analysis of Financial Condition as of March 31, 2025

Assets

Our total assets increased $37.6 million, or 1.2%, from $3.12 billion as of December 31, 2024 to $3.15 billion as of March 31, 2025. The increase was primarily due to an increase in federal funds sold of $68.6 million, or 72.4%, which was partially offset by a decrease in gross loans of $23.0 million, or 1.1%, and a $7.2 million, or 1.1%, decrease in total investment securities during the period.

Loan Portfolio

Our primary source of income is derived through interest earned on loans to small- to medium-sized businesses, commercial companies, professionals and individuals located in our primary market areas. A substantial portion of our loan portfolio consists of commercial and industrial loans and real estate loans secured by commercial real estate properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our earning asset base.

Our loan portfolio is the largest category of our earning assets. As of March 31, 2025 and December 31, 2024, total loans held for investment were $2.11 billion and $2.13 billion, respectively, a decrease of $23.0 million between periods. Additionally, $150,000 and $143,000 in loans were classified as held for sale as of March 31, 2025 and December 31, 2024, respectively.

Total loans, excluding those held for sale, as a percentage of deposits, were 78.0% and 79.2% as of March 31, 2025 and December 31, 2024, respectively. Total loans, excluding those held for sale, as a percentage of total assets, were 66.9% and 68.4% as of March 31, 2025 and December 31, 2024, respectively.

The following table summarizes our loan portfolio by type of loan and dollar change and percentage change from December 31, 2024 to March 31, 2025:


(dollars in thousands)	As of March 31, 2025		As of December 31, 2024		Increase (Decrease)			Percent Change
Commercial and industrial	$	226,819	$	254,702	$	(27,883	)		(10.95	%)
Real estate:
Construction and development		225,051		218,617		6,434			2.94	%
Commercial real estate		866,891		866,684		207			0.02	%
Farmland		139,455		147,191		(7,736	)		(5.26	%)
1-4 family residential		534,991		529,006		5,985			1.13	%
Multi-family residential		51,249		51,538		(289	)		(0.56	%)
Consumer and overdrafts		51,071		51,673		(602	)		(1.17	%)
Agricultural		12,634		11,726		908			7.74	%
Total loans held for investment	$	2,108,161	$	2,131,137	$	(22,976	)		(1.08	%)

Total loans held for sale	$	150	$	143	$	7			4.90	%

(Continued)

41.

The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range as of March 31, 2025 are summarized in the following table:


	As of March 31, 2025
(in thousands)	One Year or Less		After One Through Five Years		After Five Through Fifteen Years		After Fifteen Years		Total
Commercial and industrial	$	85,037	$	94,408	$	44,734	$	2,640	$	226,819
Real estate:
Construction and development		70,486		60,522		59,085		34,958		225,051
Commercial real estate		40,046		239,235		310,699		276,911		866,891
Farmland		33,158		31,864		35,491		38,942		139,455
1-4 family residential		26,561		32,936		166,410		309,084		534,991
Multi-family residential		—		24,680		15,590		10,979		51,249
Consumer		15,381		33,054		878		1,758		51,071
Agricultural		8,448		4,064		122		—		12,634
Total loans	$	279,117	$	520,763	$	633,009	$	675,272	$	2,108,161
Amounts with fixed rates	$	135,456	$	369,145	$	31,199	$	30,873	$	566,673
Amounts with adjustable rates	$	143,661	$	151,618	$	601,810	$	644,399	$	1,541,488

Nonperforming Assets

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. In general, we place loans on nonaccrual status when they become 90 days past due. We also place loans on nonaccrual status if they are less than 90 days past due if the collection of principal or interest is in doubt. When interest accrual is discontinued, all unpaid accrued interest is reversed from income. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are, in management’s opinion, reasonably assured.

We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and timely resolution of problem assets. We have several procedures in place to assist us in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by our bankers, and we also monitor our delinquency levels for any negative or adverse trends. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.

Nonperforming assets as a percentage of total loans were 0.23% at both March 31, 2025 and December 31, 2024. The Bank's nonperforming assets consist primarily of other real estate owned and nonaccrual loans.

The following table presents information regarding nonperforming assets and loans as of:


(dollars in thousands)	March 31, 2025			December 31, 2024
Nonaccrual loans	$	4,756		$	3,729
Total nonperforming loans		4,756			3,729
Other real estate owned:
Residential real estate		—			1,184
Total other real estate owned		—			1,184
Repossessed assets owned		22			22
Total other assets owned		22			1,206
Total nonperforming assets	$	4,778		$	4,935
Ratio of nonaccrual loans to total loans(1)		0.23	%		0.17	%
Ratio of nonperforming assets to total loans(1)		0.23	%		0.23	%
Ratio of nonperforming assets to total assets		0.15	%		0.16	%

(1) Excludes loans held for sale of $150,000 and $143,000 as of March 31, 2025 and December 31, 2024, respectively.

(Continued)

42.

The following table presents nonaccrual loans by category as of:


(in thousands)	March 31, 2025		December 31, 2024
Commercial and industrial	$	284	$	536
Real estate:
Commercial real estate		219		227
Farmland		419		421
1-4 family residential		3,509		2,288
Consumer and overdrafts		287		219
Agricultural		38		38
Total	$	4,756	$	3,729

Potential Problem Loans

From a credit risk standpoint, we classify loans in one of five risk ratings: pass, special mention, substandard, doubtful or loss. Within the pass rating, we classify loans into one of the following five subcategories based on perceived credit risk, including repayment capacity and collateral security: superior, excellent, good, acceptable and acceptable/watch. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. We review the ratings on credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is believed to be inherent in each credit as of each monthly reporting period. Our methodology is structured so that specific ACL allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

Credits rated special mention show clear signs of financial weaknesses or deterioration in creditworthiness; however, such concerns are not so pronounced that we generally expect to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Credits rated as doubtful have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full questionable and there is a high probability of loss based on currently existing facts, conditions and values.

Credits rated as loss are charged off. We have no expectation of the recovery of any payments in respect of credits rated as loss.

The following tables summarize the internal ratings of our performing, classified and nonaccrual (as well as substandard) loans, by category, as of:


	March 31, 2025
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Nonaccrual		Total
Commercial and industrial	$	225,072	$	482	$	981	$	—	$	—	$	284	$	226,819
Real estate:
Construction and development		221,361		3,690		—		—		—		—		225,051
Commercial real estate		847,136		18,000		1,536		—		—		219		866,891
Farmland		135,568		3,304		164		—		—		419		139,455
1-4 family residential		531,239		243		—		—		—		3,509		534,991
Multi-family residential		51,249		—		—		—		—		—		51,249
Consumer and overdrafts		50,683		101		—		—		—		287		51,071
Agricultural		12,585		—		11		—		—		38		12,634
Total	$	2,074,893	$	25,820	$	2,692	$	—	$	—	$	4,756	$	2,108,161

(Continued)

43.


	December 31, 2024
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Nonaccrual		Total
Commercial and industrial	$	253,049	$	572	$	545	$	—	$	—	$	536	$	254,702
Real estate:
Construction and development		214,908		3,709		—		—		—		—		218,617
Commercial real estate		842,093		22,806		1,558		—		—		227		866,684
Farmland		144,876		1,687		207		—		—		421		147,191
1-4 family residential		525,595		1,123		—		—		—		2,288		529,006
Multi-family residential		51,538		—		—		—		—		—		51,538
Consumer and overdrafts		51,436		18		—		—		—		219		51,673
Agricultural		11,603		—		85		—		—		38		11,726
Total	$	2,095,098	$	29,915	$	2,395	$	—	$	—	$	3,729	$	2,131,137

Allowance for Credit Losses

We maintain an allowance for credit losses (“ACL”) that represents management’s best estimate of the appropriate level of losses and risks inherent in our applicable financial assets under the current expected credit loss ("CECL") model. The amount of the allowance for credit losses should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all. The determination of the amount of allowance involves a high degree of judgment and subjectivity.

For available for sale debt securities in an unrealized loss position, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors, including changes in interest rates. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings through provision for credit loss expense. As of March 31, 2025, the Company determined that all available for sale securities that experienced a decline in fair value below the amortized costs basis were due to noncredit-related factors. Therefore, no related ACL was recorded and there was no related provision expense recognized during the three months ended March 31, 2025.

For held to maturity debt securities, the Company evaluates expected credit losses on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Treasury and residential mortgage-backed securities issued by the U.S. governments, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no ACL has been recorded for these securities. With regard to municipal securities, management considers 1) issuer bond ratings, 2) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, 3) internal forecasts and 4) whether or not such securities are guaranteed by the Texas Permanent School Fund or pre-refunded by the issuers. As of March 31, 2025, the Company determined there were no credit related concerns that warrant an ACL for the held to maturity portfolio.

In determining the ACL for loans held for investment, we primarily estimate losses on segments of loans with similar risk characteristics and where the potential loss can be identified and reasonably determined. For loans that do not share similar risk characteristics with our existing segments, they are evaluated individually for an ACL. Our portfolio is segmented by regulatory call report codes, with additional segments for SBA loans acquired from Westbound Bank and for SBA loans originated by us. The segments are further disaggregated by internally assigned risk rating classifications. The balance of the ACL is determined using the CECL model, which considers historical loan loss rates, changes in the nature of our loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and reasonable and supportable forecasts of the impact of future economic conditions on loan loss rates. Please see Part II, Item 7, “Critical Accounting Policies - Loans and Allowance for Credit Losses” in our Annual Report on Form 10-K for the year ended December 31, 2024.

In connection with the review of our loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include:

•

for commercial and industrial loans, the debt service coverage ratio (income from the business in excess of operating expenses compared to loan repayment requirements), the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific

(Continued)

44.

risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral;

•

for commercial mortgage loans and multifamily residential loans, the debt service coverage ratio, operating results of the owner in the case of owner-occupied properties, the loan-to-value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type;

•

for 1-4 family residential mortgage loans, the borrower’s ability to repay the loan, including a consideration of the debt-to-income ratio and employment and income stability, the loan-to-value ratio, and the age, condition and marketability of the collateral; and

•

for construction and development loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan-to-value ratio.

As of March 31, 2025, the ACL for loans totaled $27.9 million, or 1.32%, of total loans, excluding those held for sale. As of December 31, 2024, the ACL for loans totaled $28.3 million, or 1.33%, of total loans, excluding those held for sale. The decrease in the ACL of $425,000, or 1.5%, was primarily due to a decrease in the overall loan portfolio during the first quarter of 2025.

The following table presents, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data:


	As of and For The Three Months Ended March 31,						As of and For The Year Ended December 31,
(dollars in thousands)	2025			2024			2024
Average loans outstanding(1)	$	2,118,783		$	2,299,177		$	2,207,359
Gross loans outstanding at end of period(2)		2,108,161			2,265,257			2,131,137
Allowance for credit losses at beginning of the period		28,290			30,920			30,920
Reversal of provision for credit losses		(300	)		(250	)		(2,200	)
Charge offs:
Commercial and industrial		93			216			630
Real estate:
Consumer		3			35			106
Overdrafts		49			59			242
Total charge-offs		145			310			978
Recoveries:
Commercial and industrial		1			174			408
Real estate:
Consumer		7			7			85
Agriculture		—			2			3
Overdrafts		12			17			52
Total recoveries		20			200			548
Net charge-offs		125			110			430
Allowance for credit losses at end of period	$	27,865		$	30,560		$	28,290
Ratio of allowance to end of period loans(2)		1.32	%		1.35	%		1.33	%
Ratio of net charge-offs to average loans(1)		0.01	%		0.00	%		0.02	%

Total nonaccrual loans	$	4,756		$	6,161		$	3,729
Ratio of allowance to nonaccrual loans		585.9	%		496.0	%		758.7	%

(1) Includes average outstanding balances of loans held for sale of $561,000, $704,000 and $2.4 million for the three months ended March 31, 2025 and 2024, and for the year ended December 31, 2024, respectively.
(2) Excludes loans held for sale of $150,000, $874,000 and $3.2 million for the three months ended March 31, 2025 and 2024, and for the year ended December 31, 2024, respectively.

The ratio of ACL to nonperforming loans decreased from 758.7% at December 31, 2024 to 585.9% at March 31, 2025. Nonperforming loans increased to $4.8 million at March 31, 2025, compared to $3.7 million at December 31, 2024.

(Continued)

45.

Net charge-offs for the quarter ended March 31, 2025 totaled $125,000, compared to $110,000 for the same quarter of 2024. The following table shows the ratio of net charge-offs (recoveries) to average loans outstanding by loan category for the dates indicated:


	Three Months Ended March 31,
	2025			2024
Commercial and industrial		0.04	%		0.01	%
Consumer		(0.01	%)		0.05	%
Agricultural		—			(0.02	%)
Overdrafts		11.49	%		12.21	%
Net charge-offs to total loans		0.01	%		—

Although we believe that we have established our ACL in accordance with GAAP and that the ACL was adequate to provide for known and inherent losses in the portfolio at all times shown above, future provisions for credit losses will be subject to ongoing evaluations of the risks in our loan portfolio. If our primary market areas experience economic declines, if asset quality deteriorates or if we are successful in growing the size of our loan portfolio, our allowance could become inadequate and material additional provisions for credit losses could be required.

The following table shows the allocation of the ACL among loan categories and certain other information as of the dates indicated. The allocation of the ACL as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category.


	As of March 31, 2025					As of December 31, 2024
(dollars in thousands)	Amount		Percent to Total Loans			Amount		Percent to Total Loans
Commercial and industrial	$	2,610		9.37	%	$	2,973		10.51	%
Real estate:
Construction and development		2,765		9.92	%		2,738		9.68	%
Commercial real estate		11,609		41.66	%		11,718		41.42	%
Farmland		1,748		6.27	%		1,830		6.47	%
1-4 family residential		7,663		27.50	%		7,656		27.06	%
Multi-family residential		516		1.85	%		528		1.87	%
Total real estate		24,301		87.20	%		24,470		86.50	%
Consumer and overdrafts		818		2.94	%		847		2.99	%
Agricultural		136		0.49	%		—		—
Total allowance for credit losses	$	27,865		100.00	%	$	28,290		100.00	%

Securities

We use our securities portfolio to provide a source of liquidity, provide an appropriate return on funds invested, manage interest rate risk, meet collateral requirements and meet regulatory capital requirements. As of March 31, 2025, the carrying amount of our investment securities totaled $667.8 million, a decrease of $7.2 million, or 1.1%, compared to $675.0 million as of December 31, 2024. Investment securities represented 21.2% and 21.7% of total assets as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, securities available for sale totaled $362.6 million and securities held to maturity totaled $305.2 million. As of December 31, 2024, securities available for sale totaled $340.3 million and securities held to maturity totaled $334.7 million.

The carrying values of our investment securities classified as available for sale are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of other comprehensive income in equity. As of March 31, 2025, the Company determined that all available for sale securities that experienced a decline in fair value below their amortized cost basis were impacted by noncredit-related factors and that securities held to maturity have not experienced credit deterioration; therefore, the Company carried no ACL with respect to our securities portfolio at March 31, 2025.

From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The net unrealized holding gains or losses at the date of transfer are retained in accumulated other comprehensive income and in the carrying value of the held to maturity securities and are amortized over the remaining life of the security. The net unamortized, unrealized loss remaining on transferred securities included in accumulated other comprehensive loss in the accompanying balance sheets totaled $7.6 million at March 31, 2025,

(Continued)

46.

compared to a net unamortized, unrealized loss of $7.1 million at December 31, 2024. This amount will be amortized out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities.

The following tables summarize the amortized cost and estimated fair value of our investment securities:


	As of March 31, 2025
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	9,489	$	—	$	775	$	8,714
Treasury securities		64,221		—		242		63,979
Corporate bonds		22,285		—		1,362		20,923
Municipal securities		138,451		209		6,625		132,035
Mortgage-backed securities		395,043		1,656		27,493		369,206
Collateralized mortgage obligations		53,012		85		7,138		45,959
Total	$	682,501	$	1,950	$	43,635	$	640,816


	As of December 31, 2024
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	9,449	$	—	$	948	$	8,501
Treasury securities		73,886		—		505		73,381
Corporate bonds		27,805		—		1,822		25,983
Municipal securities		154,944		364		7,020		148,288
Mortgage-backed securities		374,650		487		33,137		342,000
Collateralized mortgage obligations		55,059		33		9,696		45,396
Total	$	695,793	$	884	$	53,128	$	643,549

We do not hold any Fannie Mae or Freddie Mac preferred stock, collateralized debt obligations, structured investment vehicles or second lien elements in our investment portfolio. As of March 31, 2025 and December 31, 2024, our investment portfolio did not contain any securities that are directly backed by subprime or Alt-A mortgages, non-U.S. agency mortgage-backed securities or corporate collateralized mortgage obligations.

The following tables set forth the fair value of available for sale securities and the amortized cost of held to maturity securities, expected maturities and approximated weighted average yield based on estimated annual income divided by the average amortized cost of our securities portfolio as of the dates indicated.


	As of March 31, 2025
	Within One Year			After One Year but Within Five Years			After Five Years but Within Ten Years			After Ten Years			Total
(dollars in thousands)	Amount		Yield	Amount		Yield	Amount		Yield	Amount		Yield	Total		Yield
U.S. government agencies	$	—	—	$	9,489	1.35%	$	—	—	$	—	—	$	9,489	1.35%
Treasury securities		54,098	2.06%		9,948	3.75%		—	—		—	—		64,046	3.52%
Corporate bonds		1,979	4.14%		—	—		18,944	4.01%		—	—		20,923	4.02%
Municipal securities		10,322	3.09%		30,572	2.84%		71,206	3.08%		26,399	3.13%		138,499	3.04%
Mortgage-backed securities		—	—		121,520	3.34%		224,193	3.66%		37,347	4.01%		383,060	3.60%
Collateralized mortgage obligations		837	2.77%		25,814	3.89%		20,641	1.20%		4,491	1.06%		51,783	2.45%
Total	$	67,236	3.43%	$	197,343	3.26%	$	334,984	3.41%	$	68,237	3.39%	$	667,800	3.37%

(Continued)

47.


	As of December 31, 2024
	Within One Year			After One Year but Within Five Years			After Five Years but Within Ten Years			After Ten Years			Total
(dollars in thousands)	Amount		Yield	Amount		Yield	Amount		Yield	Amount		Yield	Total		Yield
U.S. government agencies	$	—	—	$	9,331	1.35%	$	—	—	$	—	—	$	9,331	1.35%
Treasury securities		19,861	2.95%		19,696	2.86%		—	—		—	—		39,557	2.91%
Corporate bonds		7,373	3.17%		1,851	4.13%		17,836	4.00%		—	—		27,060	3.80%
Municipal securities		11,961	2.81%		38,283	2.88%		76,188	2.99%		37,072	3.10%		163,504	2.98%
Mortgage-backed securities		—	—		45,172	2.17%		219,159	3.15%		36,263	3.65%		300,594	3.07%
Collateralized mortgage obligations		1,319	2.91%		19,993	2.92%		17,679	2.03%		13,713	1.20%		52,704	2.10%
Total	$	40,514	2.95%	$	134,326	2.54%	$	330,862	3.11%	$	87,048	2.98%	$	592,750	2.95%

The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly pay downs on mortgage-backed securities typically cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal, and, consequently, the average life of this security is typically lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 5.32 years with an estimated effective duration of 4.07 years as of March 31, 2025.

As of March 31, 2025 and December 31, 2024, respectively, we did not own securities of any one issuer, other than the U.S. government and its agencies, for which aggregate adjusted cost exceeded 10.0% of the consolidated shareholders' equity.

The average yield of our securities portfolio was 3.37% and 2.95% as of March 31, 2025 and December 31, 2024, respectively. Average yield went up 42 basis points primarily due to a 61 basis point increase in yield on treasury securities, a 53 basis point increase in yield on mortgage-backed securities and a 6 basis point increase in yield on municipal securities. As of March 31, 2025, the fair value of available for sale and amortized cost of held to maturity mortgage-backed securities and municipal securities, our two largest segments of securities, comprised 57.4% and 20.7% of the portfolio, respectively. As of December 31, 2024, mortgage-backed securities and municipal securities comprised 50.7% and 27.6% of the portfolio, respectively.

Deposits

We offer a variety of deposit products, which have a wide range of interest rates and terms, including demand, savings, money market and time accounts. We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits.

Average total deposits for the three months ended March 31, 2025 were $2.67 billion, an increase of $32.5 million, or 1.7%, compared to $2.64 billion for the year ended December 31, 2024. The average rate paid on total interest-bearing deposits was 2.83% and 3.24% for the three months ended March 31, 2025 and year ended December 31, 2024, respectively. The decrease in average rates between periods was driven primarily by the continued repricing of certificates of deposit at lower rates and from the 100 basis point interest rate decrease by the Federal Reserve in late 2024.

The following table presents the average balance of, and rate paid on, deposits for the periods indicated:

(Continued)

48.


	Three Months Ended March 31,
	2025					2024
(dollars in thousands)	Average Balance		Average Rate Paid			Average Balance		Average Rate Paid
NOW and interest-bearing demand accounts	$	221,596		0.98	%	$	240,034		1.21	%
Savings accounts		121,371		0.54	%		122,212		0.75	%
Money market accounts		748,885		2.52	%		702,625		3.26	%
Certificates and other time deposits		755,263		4.05	%		724,248		4.34	%
Total interest-bearing deposits		1,847,115		2.83	%		1,789,119		3.25	%
Noninterest-bearing demand accounts		822,324		—			823,638		—
Total deposits	$	2,669,439		1.96	%	$	2,612,757		2.23	%

The following table presents the average balances on deposits for the periods indicated:


(dollars in thousands)	For the Three Months Ended March 31, 2025		For the Year Ended December 31, 2024		Increase (Decrease) ($)		Increase (Decrease) (%)
NOW and interest-bearing demand accounts	$	221,596	$	220,801	$	795		0.36	%
Savings accounts		121,371		119,760		1,611		1.35	%
Money market accounts		748,885		726,080		22,805		3.14	%
Certificates and other time deposits		755,263		749,031		6,232		0.83	%
Total interest-bearing deposits		1,847,115		1,815,672		31,443		1.73	%
Noninterest-bearing demand accounts		822,324		821,291		1,033		0.13	%
Total deposits	$	2,669,439	$	2,636,963	$	32,476		1.23	%

The ratio of average noninterest-bearing deposits to average total deposits for the three months ended March 31, 2025 and year ended December 31, 2024 was 30.8% and 31.2%, respectively.

Total deposits as of March 31, 2025 were $2.70 billion, an increase of $12.2 million, or 0.5%, compared to $2.69 billion as of December 31, 2024.

Noninterest-bearing deposits as of March 31, 2025 were $845.7 million, compared to $837.4 million as of December 31, 2024, an increase of $8.3 million, or 1.0%.

Total interest-bearing deposits as of March 31, 2025 and December 31, 2024 were $1.86 billion and $1.85 billion, respectively, which represented a slight increase of $3.9 million, or 0.2%.

The aggregate amount of certificates and other time deposits in denominations greater than $250,000 as of March 31, 2025 and December 31, 2024 was $301.7 million and $311.4 million, respectively.

The amount of uninsured certificates of deposit will differ from the total amount of certificates of deposit greater than $250,000 due to various factors, including joint account ownership. The following table sets forth the amount of uninsured certificates of deposit greater than $250,000 by time remaining until maturity as of March 31, 2025.


(dollars in thousands)	March 31, 2025
Under 3 months	$	58,090
3 to 6 months		92,550
6 to 12 months		93,922
Over 12 months		4,181
Total	$	248,743

Borrowings

We utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities, each of which is discussed below.

Federal Home Loan Bank (FHLB) Advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by certain securities and loans. As of March 31, 2025 and December 31, 2024, total borrowing capacity of $1.02 billion and $1.03 billion, respectively, was available under this arrangement. We had no outstanding FHLB borrowings as of March 31, 2025 and December 31, 2024. As of March 31, 2025, approximately $1.82 billion in real estate loans were pledged as collateral for our FHLB borrowings. We utilize these borrowings to meet liquidity needs and to hedge interest rate risk.

(Continued)

49.

Federal Reserve Bank of Dallas. The Federal Reserve Bank of Dallas has an available borrower in custody arrangement, which allows us to borrow on a collateralized basis. Certain commercial and industrial and consumer loans are pledged under this arrangement. We maintain this borrowing arrangement to meet liquidity needs pursuant to our contingency funding plan. As of March 31, 2025 and December 31, 2024, $192.5 million and $217.9 million, respectively, were available under this arrangement. As of March 31, 2025 and December 31, 2024, approximately $239.1 million and $257.5 million, respectively, in consumer and commercial and industrial loans were pledged as collateral. As of March 31, 2025 and December 31, 2024, no borrowings were outstanding under this arrangement.

Subordinated Debt, Trust Preferred Securities and Other Debentures. We have Debentures relating to the issuance of trust preferred securities. In July 2006, Trust III issued $2.0 million in trust preferred securities to a third party in a private placement. Concurrent with the issuance of the trust preferred securities, Trust III issued common securities to the Company in the aggregate liquidation value of $62,000. Trust III invested the total proceeds from the sale of the trust preferred securities and the common securities in $2.1 million of the Company’s Debentures, which will mature on October 1, 2036.

In March 2015, we acquired DCB Trust I, which issued $5.0 million in trust preferred securities to a third party in a private placement. Concurrent with the issuance of the trust preferred securities, DCB Trust I issued common securities to the Company in the aggregate liquidation value of $155,000. DCB Trust I invested the total proceeds from the sale of the trust preferred securities and the common securities in $5.2 million of the Company’s Debentures, which will mature on June 15, 2037.

With certain exceptions, the amount of the principal and any accrued and unpaid interest on the Debentures are subordinated in right of payment to the prior payment in full of all of our senior indebtedness. The terms of the Debentures are such that they qualify as Tier 1 capital under the Federal Reserve’s regulatory capital guidelines applicable to bank holding companies. Interest on the Trust III Debentures is payable at a variable rate per annum, reset quarterly, equal to the then-current three month term Secured Overnight Financing Rate ("SOFR") plus 1.93%. Interest on the DCB Trust I Debentures is payable at a variable rate per annum, reset quarterly, equal to 3-month SOFR plus 2.06%. The interest is deferrable on a cumulative basis for up to five consecutive years following a suspension of dividend payments on all other capital stock. No principal payments are due until maturity for each of the Debentures.

Both the DCB Trust I Debentures and the Trust III Debentures are redeemable, in whole or in part, at our option after at least 30, but not more than 60, days' notice, on any interest payment date, at a redemption price equal to 100% of the amount to be redeemed, plus accrued interest to the date of redemption.

On March 4, 2022, the Company completed a private placement of $35.0 million aggregate principal amount of its fixed-to-floating rate subordinated note due April 1, 2032. The subordinated note initially bears a fixed interest rate of 3.625% per year, due semi-annually in arrears on April 1 and October 1. Commencing on April 1, 2027, the interest rate on the subordinated note will reset each quarter at a floating interest rate equal to the then-current three month term SOFR plus 192 basis points. The Company may at its option redeem in whole or in part the subordinated note on or after March 4, 2027 without a premium. The subordinated note is treated as Tier 2 Capital for regulatory purposes (subject to reductions in the amount includable as Tier 2 capital in the final five years prior to maturity), and is presented net of $266,000 in related unamortized issuance costs on the consolidated balance sheets.

Other Borrowings. We have historically used a line of credit with a correspondent bank as a source of funding for working capital needs, the payment of dividends when there is a temporary timing difference in cash flows, and repurchases of equity securities. In March 2017, we entered into an unsecured revolving line of credit for $25.0 million, and we renewed that line of credit in March 2025. The line of credit bears interest at the prime rate (7.50% as of March 31, 2025) subject to a floor of 3.50%, with quarterly interest payments, and matures in March 2026. As of March 31, 2025, there was no outstanding balance on the line of credit.

Liquidity and Capital Resources

Liquidity

Liquidity involves our ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the three months ended March 31, 2025 and the year ended December 31, 2024, liquidity needs were primarily met by core deposits, security and loan maturities and amortizing investment and loan portfolios. Although access to purchased funds from correspondent banks and overnight or longer term advances from the FHLB and the Federal Reserve Bank of Dallas are available, and have been utilized on occasion to take advantage of investment opportunities, we do not generally rely on these external funding sources. The Company also maintains two

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50.

federal funds lines of credit with commercial banks that provide the availability to borrow up to an aggregate $75.0 million in federal funds for short-term contingent funding if necessary, of which the rate is agreed upon at the time of each advance. There were no outstanding balances on these facilities as of March 31, 2025 and December 31, 2024. In addition to these federal funds lines of credit, our $25.0 million revolving line of credit discussed above in “Other Borrowings” provides an additional source of liquidity.

Contingent liquidity sources and availability as of March 31, 2025 are provided below. The table below shows our total lines of credit and current borrowings as of March 31, 2025 and total amounts available for future borrowings, if necessary.


	March 31, 2025				Total Available for Future Liquidity
(dollars in thousands)	Line of Credit		Borrowings
FHLB advances	$	1,020,544	$	—	$	1,020,544
Federal Reserve discount window		192,479		—		192,479
Federal funds lines of credit		75,000		—		75,000
Correspondent bank line of credit		25,000		—		25,000
Total liquidity lines					$	1,313,023

The following table illustrates, during the periods presented, the composition of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated. Average assets were $3.11 billion for the three months ended March 31, 2025 and $3.13 billion for the year ended December 31, 2024.


	Three Months Ended March 31, 2025			Year Ended December 31, 2024
Sources of Funds:
Deposits:
Noninterest-bearing		26.45	%		26.27	%
Interest-bearing		59.41	%		58.08	%
Advances from FHLB		0.00	%		2.07	%
Line of credit		0.01	%		0.01	%
Subordinated debt		1.35	%		1.41	%
Securities sold under agreements to repurchase		1.41	%		1.20	%
Accrued interest and other liabilities		0.96	%		1.17	%
Equity		10.41	%		9.79	%
Total		100.00	%		100.00	%

Uses of Funds:
Loans		67.25	%		69.65	%
Securities available for sale		11.30	%		8.47	%
Securities held to maturity		10.31	%		11.46	%
Nonmarketable equity securities		0.55	%		0.69	%
Federal funds sold		3.42	%		2.12	%
Interest-bearing deposits in other banks		0.18	%		0.17	%
Other noninterest-earning assets		6.99	%		7.44	%
Total		100.00	%		100.00	%

Average noninterest-bearing deposits to average deposits		30.81	%		35.25	%
Average loans to average deposits		79.37	%		89.65	%

Our primary source of funds is deposits, and our primary use of funds is loans. We do not expect a change in the primary source or use of our funds in the foreseeable future. Our average loans, including average loans held for sale, decreased $180.4 million, or 7.8%, for the three months ended March 31, 2025, compared to the same period in 2024, while our average deposits increased $56.7 million, or 2.2%, for the same time period. We predominantly invest excess deposits in overnight deposits with our correspondent banks, federal funds sold, securities, interest-bearing deposits at other banks or other short-term liquid investments until needed to fund loan growth.

As of March 31, 2025, we had $298.7 million in outstanding commitments to extend credit and $10.9 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had $289.8 million in outstanding commitments to extend credit and $10.2 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.

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51.

As of March 31, 2025 and December 31, 2024, we had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature. As of March 31, 2025, we had cash and cash equivalents of $217.8 million, compared to $146.0 million as of December 31, 2024. The increase was primarily due to an increase in federal funds sold of $68.6 million, which is used for liquidity purposes.

Capital Resources

Total equity increased to $325.8 million as of March 31, 2025, compared to $319.1 million as of December 31, 2024, an increase of $6.7 million, or 2.1%. The increase from December 31, 2024 resulted primarily from net income of $8.6 million, $4.7 million of other comprehensive income related to improvements in unrealized losses on our investment securities, and $1.3 million related to the exercise of stock options during the first quarter of 2025. These were partially offset by $5.2 million in treasury stock repurchases and $2.8 million in dividends paid during the first quarter of 2025.

Capital management consists of providing equity and other instruments that qualify as regulatory capital to support current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to certain regulatory capital requirements at the bank holding company and bank levels. As of March 31, 2025 and December 31, 2024, we were in compliance with all applicable regulatory capital requirements at the bank and bank holding company levels, and the Bank was classified as “well capitalized,” for purposes of the prompt corrective action regulations. As we deploy our capital, our regulatory capital levels may decrease depending on our level of earnings and provisions for credit losses. However, we expect to closely monitor our loan portfolio, operating expenses and overall capital levels in order to remain in compliance with all regulatory capital standards applicable to us.

The following table presents our regulatory capital ratios as of:


	March 31, 2025					December 31, 2024
(dollars in thousands)	Amount		Ratio			Amount		Ratio
Guaranty Bancshares, Inc. (consolidated)

Total capital (to risk-weighted assets)	$	384,928		17.24	%	$	382,893		17.09	%
Tier 1 capital (to risk-weighted assets)		322,329		14.44	%		320,185		14.29	%
Tier 1 capital (to average assets)		322,329		10.42	%		320,185		10.27	%
CET1 capital (to risk-weighted assets)		315,112		14.11	%		312,968		13.97	%

Guaranty Bank & Trust, N.A.

Total capital (to risk weighted assets)	$	375,638		16.84	%	$	381,280		17.04	%
Tier 1 capital (to risk weighted assets)		347,773		15.59	%		353,299		15.79	%
Tier 1 capital (to average assets)		347,773		11.26	%		353,299		11.37	%
CET1 capital (to risk-weighted assets)		347,773		15.59	%		353,299		15.79	%

Contractual Obligations

The following table summarizes contractual obligations and other commitments to make future payments as of March 31, 2025, which consist of future cash payments associated with our contractual obligations.


	As of March 31, 2025
(in thousands)	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
Time deposits	$	698,852	$	21,902	$	2,984	$	—	$	723,738
Subordinated debt		—		—		—		42,217		42,217
Operating leases		2,219		3,916		2,978		2,986		12,099
Total	$	701,071	$	25,818	$	5,962	$	45,203	$	778,054

Off-Balance Sheet Items

In the normal course of business, we enter into various transactions, which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve, to

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52.

varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in our consolidated balance sheets.

Our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by period as of March 31, 2025 are summarized below. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.


	As of March 31, 2025
(in thousands)	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
Standby and commercial letters of credit	$	9,138	$	85	$	70	$	1,560	$	10,853
Commitments to extend credit		169,858		59,072		15,317		54,478		298,725
Total	$	178,996	$	59,157	$	15,387	$	56,038	$	309,578

Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. Our credit risk associated with issuing letters of credit is essentially the same as the risk involved in extending loan facilities to our customers. Management evaluated the likelihood of funding the standby and commercial letters of credit as of March 31, 2025, and determined the likelihood to be improbable. Therefore, no ACL was recorded for standby and commercial letters of credit as of March 31, 2025.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer.

Loan agreements executed in connection with construction loans and commercial lines of credit have standard conditions which must be met prior to the Company being required to provide additional funding, including conditions precedent that typically include: (i) no event of default or potential default has occurred; (ii) that no material adverse events have taken place that would materially affect the borrower or the value of the collateral, (iii) that the borrower remains in compliance with all loan obligations and covenants and has made no misrepresentations; (iv) that the collateral has not been damaged or impaired; (v) that the project remains on budget and in compliance with all laws and regulations; and (vi) that all management agreements, lease agreements and franchise agreements that affect the value of the collateral remain in force. If the conditions precedent have not been met, the Company retains the option to cease current draws and/or future funding. As a result of these conditions within our loan agreements, management believes the credit risk of these off balance sheet items is minimal and we recorded no ACL with respect to these loan agreements as of March 31, 2025.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with GAAP and with general practices within the financial services industry. Application of these principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under current circumstances. These assumptions form the basis for our judgments about the carrying values of assets and liabilities that are not readily available from independent, objective sources. We evaluate our estimates on an ongoing basis. Use of alternative assumptions may have resulted in significantly different estimates. Actual results may differ from these estimates. Refer to “Critical Accounting Policies” contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 for a complete discussion of our critical accounting policies. There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.

Interest Rate Sensitivity and Market Risk

As a financial institution, our primary component of market risk is interest rate volatility. Our asset liability and funds management policy provides management with the guidelines for effective funds management, and we have established a

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53.

measurement system for monitoring our net interest rate sensitivity position. We have historically managed our sensitivity position within our established guidelines.

Inflation in the U.S. remains elevated but has improved from very high levels in recent years. The high inflation was primarily a result of lingering effects from the COVID-19 pandemic and related governmental policies, as well as other geo-political factors. However, unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature, which means that interest rates have a more significant impact on our performance than the effects of general levels of inflation.

Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business. We do not enter into instruments such as leveraged derivatives, financial options, financial future contracts or forward delivery contracts for the purpose of reducing interest rate risk. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

Our exposure to interest rate risk is managed by the asset-liability committee of the Bank, in accordance with policies approved by its board of directors. The committee formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital on the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk, which include an analysis of relationships between interest-earning assets and interest-bearing liabilities and an interest rate shock simulation model.

We use interest rate risk simulation models and shock analyses to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated in the model as are prepayment assumptions, maturity data and call options within the investment portfolio. Average life of non-maturity deposit accounts are based on standard regulatory decay assumptions and are incorporated into the model. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.

On a quarterly basis, we run two simulation models including a static balance sheet and dynamic growth balance sheet. These models test the impact on net interest income and fair value of equity from changes in market interest rates under various scenarios. Under the static and dynamic growth models, rates are shocked instantaneously and ramped rate changes over a twelve-month horizon based upon parallel and non-parallel yield curve shifts. Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario. Non-parallel simulation involves analysis of interest income and expense under various changes in the shape of the yield curve. Our internal policy regarding internal rate risk simulations currently specifies that for instantaneous parallel shifts of the yield curve, estimated net income at risk for the subsequent one-year period should not decline by more than 15.0% for a 100 basis point shift, 20.0% for a 200 basis point shift and 30.0% for a 300 basis point shift.

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54.

The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of:


	March 31, 2025						December 31, 2024
Change in Interest Rates (Basis Points)	Percent Change in Net Interest Income			Percent Change in Fair Value of Equity			Percent Change in Net Interest Income			Percent Change in Fair Value of Equity
+300		0.07	%		(11.84	%)		(0.73	%)		(8.82	%)
+200		0.15	%		(5.98	%)		(0.40	%)		(4.33	%)
+100		(0.04	%)		(2.04	%)		(0.30	%)		(1.18	%)
Base		—			—			—			—
-100		(0.72	%)		0.86	%		(0.41	%)		1.09	%
-200		(1.04	%)		(2.69	%)		(0.49	%)		(1.92	%)

The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations. We have found that, historically, interest rates on these deposits change more slowly than changes in the discount and federal funds rates. This assumption is incorporated into the simulation model and is generally not fully reflected in a gap analysis. The assumptions incorporated into the model are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various strategies.

Impact of Inflation

Our consolidated financial statements and related notes included elsewhere in this Report have been prepared in accordance with GAAP. GAAP requires the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or deflation.

Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial measures discussed in this Report as being non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both. 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.

The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this Report may differ from that of other companies reporting measures with similar names. It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this Report when comparing such non-GAAP financial measures.

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55.

The following tables reconcile, as of and for the dates set forth below, the following financial measures:

Net Unrealized Loss on Securities, Tax Effected, as a Percentage of Total Equity


(dollars in thousands)	March 31, 2025
Total equity(1)	$	325,806
Less: net unrealized loss on HTM securities, tax effected		(21,317	)
Total equity, including net unrealized loss on AFS and HTM securities	$	304,489

Net unrealized loss on AFS securities, tax effected		11,614
Net unrealized loss on HTM securities, tax effected		21,317
Net unrealized loss on AFS and HTM securities, tax effected	$	32,931

Net unrealized loss on securities as % of total equity(1)		10.1	%
Total equity before impact of unrealized losses	$	337,420
Net unrealized loss on securities as % of total equity before impact of unrealized losses		9.8	%

Total average assets	$	3,108,844
Total equity to average assets		10.5	%
Total equity, adjusted for tax effected net unrealized loss, to average assets		9.8	%

(1) Includes the net unrealized loss on AFS securities of $11.6 million, tax effected.

Cost of Total Deposits


	Quarter Ended
(dollars in thousands)	March 31, 2025			December 31, 2024			March 31, 2024
Total average interest-bearing deposits	$	1,847,115		$	1,855,713		$	1,789,119
Adjustments:
Noninterest-bearing deposits		822,324			842,655			823,638
Total average deposits	$	2,669,439		$	2,698,368		$	2,612,757

Total deposit-related interest expense	$	12,877		$	14,301		$	14,459

Average cost of interest-bearing deposits		2.83	%		3.07	%		3.25	%
Average cost of total deposits		1.96	%		2.11	%		2.23	%

Cautionary Notice Regarding Forward-Looking Statements

This Report, our other filings with the SEC, and other press releases, documents, reports and announcements that we make, issue or publish may contain statements that we believe are “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance, including our future revenues, income, expenses, provision for taxes, effective tax rate, earnings per share and cash flows, our future capital expenditures and dividends, our future financial condition and changes therein, including changes in our loan portfolio and allowance for credit losses, our future capital structure or changes therein, the plan and objectives of management for future operations, our future or proposed acquisitions, the future or expected effect of acquisitions on our operations, results of the operations and financial condition, our future economic performance and the statements of the assumptions underlying any such statement. 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 or phrases 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. 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.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•

We are subject to interest rate risk and fluctuations in interest rates may adversely affect our earnings;

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56.

•

Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our primary markets, and adverse economic conditions in these markets could negatively impact our operations and customers;

•

As a business operating in the financial services industry, adverse conditions in the general business or economic environment could adversely affect our business, financial condition and results of operations in the future;

•

We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses;

•

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, could adversely affect us;

•

Federal banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations could adversely affect us;

•

We are subject to stringent capital requirements, which may result in lower returns on equity, require the raising of additional capital, limit our ability to repurchase shares or pay dividends and discretionary bonuses, or result in regulatory action;

•

The market price of our common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volume, prices and times desired;

•

An investment in our common stock is not an insured deposit and is subject to risk of loss; and

•

the other factors that are described under the caption “Risk Factors” or referenced in this Report, our Annual Report on Form 10-K for the year ended December 31, 2024, and other risks included in the Company’s filings with the SEC.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company manages market risk, which, as a financial institution is primarily interest rate volatility, through the Asset-Liability Committee of the Bank, in accordance with policies approved by its board of directors. The Company uses an interest rate risk simulation model and shock analysis to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Interest Rate Sensitivity and Market Risk” herein for a discussion of how we manage market risk.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures:

As of the end of the period covered by this Report, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this Report.

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57.

Changes in internal control over financial reporting:

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is from time to time subject to claims and litigation arising in the ordinary course of business. These claims and litigation may include, among other things, allegations of violation of banking and other applicable regulations, competition law, labor laws and consumer protection laws, as well as claims or litigation relating to intellectual property, securities, breach of contract and tort. The Company intends to defend itself vigorously against any pending or future claims and litigation.

At this time, in the opinion of management, the likelihood is remote that the impact of such proceedings, either individually or in the aggregate, would have a material adverse effect on the Company’s combined results of operations, financial condition or cash flows. However, one or more unfavorable outcomes in any claim or litigation against the Company could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect the Company’s reputation, even if resolved in the Company’s favor.

Item 1A. Risk Factors

In evaluating an investment in the Company’s common stock, investors should consider carefully, among other things, the risk factors previously disclosed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and other risks included in the Company’s filings with the SEC. The Company’s business could be harmed by any of these risks. The trading price of the Company’s common stock could decline due to any of these risks, and you may lose all or part of your investment. There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On April 21, 2022, the Company announced the adoption of a stock repurchase program that authorized the repurchase of up to 1,000,000 shares of Company common stock, which was effective until April 21, 2024. On March 13, 2024, the Company approved a new stock repurchase program that authorized the repurchase of up to 1,250,000 shares of Company common stock. The new stock repurchase program became effective April 21, 2024 and will continue to be in effect until the earlier of April 21, 2026, or the date all shares authorized for repurchase under the program have been repurchased, unless shortened or extended by the board of directors. The repurchase plan permits shares to be acquired from time to time in the open market or negotiated transactions at prices management considers to be attractive and in the best interest of both the Company and its shareholders, subject to compliance with applicable laws and regulations, general market and economic conditions, the financial and regulatory condition of the Company, liquidity and other factors.

The table below contains information regarding all shares repurchased by the Company during the periods indicated.


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January, 2025		50,000	$	41.74		50,000		1,025,577
February, 2025		22,349		40.20		22,349		1,003,228
March, 2025		55,188		39.65		55,188		948,040
Total		127,537	$	40.57		127,537

Item 3. Defaults Upon Senior Securities

None.

(Continued)

58.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a)

Not applicable.

(b)

Not applicable.

(c)

During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

Item 6. Exhibits


Exhibit Number		Description of Exhibit

3.1		Third Amended and Restated Certificate of Formation of Guaranty Bancshares, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed May 1, 2017).

3.2		Third Amended and Restated Bylaws of Guaranty Bancshares, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed April 6, 2017).

4.1		Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on April 6, 2017).

		The other instruments defining the rights of the long-term debt securities of Guaranty Bancshares, Inc. and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. Guaranty Bancshares, Inc. hereby agrees to furnish copies of these instruments to the SEC upon request.

10.1		Loan Agreement between Guaranty Bancshares, Inc. and Frost Bank, dated March 31, 2025, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 29, 2025).

10.2		Renewal Promissory Note between Guaranty Bancshares, Inc. and Frost Bank, dated March 31, 2025 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 29, 2025).

31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents*
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*

______________________________

* Filed with this Quarterly Report on Form 10-Q

** Furnished with this Quarterly Report on Form 10-Q

(Continued)

59.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


		GUARANTY BANCSHARES, INC.
		(Registrant)

Date: May 6, 2025		/s/ Tyson T. Abston
		Tyson T. Abston
		Chairman of the Board & Chief Executive Officer

Date: May 6, 2025		/s/ Shalene A. Jacobson
		Shalene A. Jacobson
		Chief Financial Officer

60.