Breaking Down Guaranty Bancshares, Inc. (GNTY) Financial Health: Key Insights for Investors

You're watching the regional banking sector for signs of real strength, not just noise, and Guaranty Bancshares, Inc. (GNTY) is defintely one to put under the microscope right now because their core profitability is holding up well, but a few key asset quality metrics need a closer look. The headline number for the second quarter of 2025 was solid: net income available to common shareholders hit $10.0 million, translating to $0.88 per basic share, a nice jump from the prior quarter's $8.6 million. Here's the quick math: their net interest margin (NIM) improved to a strong 3.71%, signaling effective interest rate management, but still, we saw nonperforming assets tick up to 0.33% of total assets by the end of June, compared to 0.15% in Q1. That's a small change, but in banking, we obsess over small changes. This bank is managing the rate cycle well, but you need to understand where the loan book is showing stress to make an informed decision.

Revenue Analysis

You want to know where Guaranty Bancshares, Inc. (GNTY) is making its money, and the answer is clear: it's a bank, so the vast majority of revenue comes from the core business of lending. The primary revenue stream is Net Interest Income (NII), which is the difference between what the bank earns on loans and investments and what it pays out on deposits and borrowings (cost of funds). The good news is that both NII and total revenue saw solid double-digit growth in the first half of the 2025 fiscal year.

For the second quarter of 2025 (Q2 2025), Guaranty Bancshares, Inc. reported total revenue of approximately $33.26 million. Here's the quick math on the breakdown: Net Interest Income (NII) was $27.7 million, while Noninterest Income was approximately $5.56 million. This shows that NII contributes roughly 83.3% of total revenue, which is typical for a regional bank and underscores the importance of their loan portfolio and net interest margin (NIM).

The year-over-year (YoY) revenue growth rate is defintely a positive story for 2025. Total revenue saw a significant increase in the first two quarters compared to the prior year, driven by effective interest rate management and a lower cost of interest-bearing deposits.

• Q1 2025 Total Revenue Growth: The $31.76 million total revenue was a 10.09% increase from Q1 2024.
• Q2 2025 Total Revenue Growth: The $33.26 million total revenue was an impressive 16.7% increase from Q2 2024.
• Net Interest Income Growth: NII alone jumped 15.8% in Q2 2025 compared to Q2 2024, hitting $27.7 million.

The main segment is, without question, the interest-earning assets side of the business. The Net Interest Margin (NIM) - a key profitability metric for banks - continued to improve, rising to 3.71% in Q2 2025, up from 3.26% in Q2 2024. That's a strong signal of pricing power and cost control on deposits. The Noninterest Income segment, which includes service charges and fees, also saw a substantial increase of 20.9% YoY in Q2 2025.

What this estimate hides is a one-time event that boosted the Noninterest Income. The Q2 2025 increase included a $1.0 million restitution payment from a lawsuit settlement, which is not a recurring source of revenue. So, while the 20.9% growth looks fantastic, you need to normalize (adjust for one-off items) that figure to understand the true underlying growth rate of their fee-based services. The core business is healthy, but that noninterest income spike is temporary.

Here is a snapshot of the revenue composition for the second quarter:

The biggest risk here is the reliance on NII; a shift in the interest rate environment could quickly compress that 3.71% NIM. Still, the current trend is positive, and the Texas economy's strength is a tailwind for their loan pipeline. To get a deeper look into who is capitalizing on this growth, you should check out Exploring Guaranty Bancshares, Inc. (GNTY) Investor Profile: Who's Buying and Why?

Profitability Metrics

You want to know if Guaranty Bancshares, Inc. (GNTY) is making money efficiently, which is the right question to ask before any investment decision. The short answer is yes, GNTY is outperforming industry averages in key profitability metrics as of the second quarter of 2025, but its operational efficiency (cost management) is a point of concern.

We're looking at the most recent data-the first half of the 2025 fiscal year-which is crucial, especially since the company's merger with Glacier Bancorp, Inc. (GBCI) closed in October 2025. This analysis gives you the final picture of GNTY's standalone health.

Gross, Operating, and Net Profit Margins

For a bank, the most direct measure of core profitability is the Net Interest Margin (NIM) and the Gross Margin, which tracks the spread between interest earned on loans and interest paid on deposits. GNTY has been very effective at widening this spread in 2025.

• Gross Profit Margin (TTM): GNTY's trailing twelve-month (TTM) Gross Margin, as of June 30, 2025, stood at a robust 68.11%. This is essentially the percentage of total revenue remaining after the cost of goods sold (for a bank, this is the interest expense).
• Operating Profit Margin (OPM): This margin, which measures profit before taxes and non-operating items, is estimated at approximately 38.11% for Q2 2025. This indicates a solid core business model, though it's impacted by higher operating costs.
• Net Profit Margin (NPM): In the second quarter of 2025, the Net Profit Margin was a healthy 30.10% (calculated as the $10.0 million net income divided by $33.22 million in revenue). This means for every dollar of revenue, GNTY kept about 30 cents as profit.

Here's the quick math on the key quarterly performance indicators, which show a positive trend from Q1 to Q2 2025:

Trends and Industry Comparison

The trend in GNTY's profitability is defintely upward in 2025, largely driven by an expanding Net Interest Margin (NIM) which increased from 3.70% in Q1 2025 to 3.71% in Q2 2025. This is a critical sign of a bank managing its funding costs better than its asset yields, which is a major tailwind in the current rate environment.

When you stack GNTY against the industry, the picture is generally favorable, especially on returns, but it flags an area for operational improvement:

• Return on Assets (ROAA): GNTY's Q2 2025 ROAA of 1.28% is significantly stronger than the aggregate industry average of 1.16% reported for Q1 2025. This means GNTY is using its assets to generate profit more effectively than the typical U.S. bank.
• Return on Equity (ROAE): The Q2 2025 ROAE of 12.19% is also ahead of the regional bank industry's 11% figure from Q3 2024, indicating good returns for shareholders' capital.
• Operational Efficiency: The one area for caution is the efficiency ratio (Non-interest Expense as a percentage of Net Operating Revenue). While GNTY's estimated Q2 2025 ratio of approximately 61.89% is an improvement from Q1's 66.78%, it is still higher than the aggregate banking industry's 56.2% in Q1 2025. This suggests that while GNTY is growing revenue well, its non-interest expenses (like salaries and technology) consume a larger slice of that revenue compared to peers. You can read more about GNTY's strategic direction, which will impact future efficiency, here: Mission Statement, Vision, & Core Values of Guaranty Bancshares, Inc. (GNTY).

The key takeaway is that GNTY's core lending business is highly profitable, evidenced by the expanding NIM and strong returns. The next step is for the combined entity (post-merger) to address the cost structure to bring that efficiency ratio down closer to the industry's best-in-class range. That's where the real opportunity for margin expansion lies in the near term.

Debt vs. Equity Structure

Guaranty Bancshares, Inc. (GNTY) maintains a highly conservative capital structure, prioritizing equity funding over debt, which is a significant strength for a regional bank. You can see this immediately in their low debt-to-equity (D/E) ratio, which stood at just 0.14 as of September 2025. [cite: 1 in step 1, 2 in step 1]

This ratio is substantially lower than the industry average for Regional Banks, which is typically around 0.5. [cite: 10 in step 2] A low D/E ratio means the company relies far more on shareholder capital-your money-than borrowed funds to finance its assets. Honestly, for a bank, this is a sign of exceptional balance sheet health and a strong buffer against economic downturns.

Here's the quick math on their debt levels: With total equity reported at $331.8 million as of June 30, 2025, [cite: 6 in step 2, 9 in step 2] a D/E ratio of 0.14 implies a total debt of approximately $46.5 million. This figure represents the holding company's debt, not the bank's operational liabilities like deposits, which are the core of a bank's business model. Their approach is simple: keep the holding company's debt minimal.

The company's strategy for balancing debt and equity is clear: use equity and core deposits for growth, and only minimal debt for strategic purposes. This is a defintely conservative approach. A key action demonstrating this is the management of their Federal Home Loan Bank (FHLB) advances, a common form of secured short-term debt for banks.

• Short-Term Debt Management: The company reported a reduction in interest expense in the second quarter of 2025 because they did not have $1.2 million in interest expense on FHLB advances, which they had in the prior year's quarter. [cite: 5 in step 2] This shows a proactive reduction in short-term secured borrowing.
• Equity Funding: They repurchased 127,537 shares of common stock at an average price of $40.56 per share in Q1 2025, [cite: 5 in step 1, 12 in step 1] deploying excess capital to improve shareholder value, which is a direct use of equity.

The most recent and significant capital event is the impending merger with Glacier Bancorp, Inc. (GBCI), which was approved by shareholders and expected to close on October 1, 2025. [cite: 7 in step 2] In connection with this merger, Guaranty Bancshares, Inc. declared a special cash dividend of $2.30 per share. [cite: 7 in step 2] This move effectively returns a portion of the company's strong capital base to shareholders before the acquisition. Furthermore, they entered into interest rate swaption contracts to mitigate interest rate risk during the merger period, [cite: 2 in step 2] acting to protect the value of their fixed-rate assets. This is smart risk management right before a major transaction.

The table below summarizes the core of their capital structure as of the end of the second quarter of 2025, which reflects a strong, low-leverage model.

For a deeper dive into the company's long-term philosophy that drives this conservative financial posture, you can review the Mission Statement, Vision, & Core Values of Guaranty Bancshares, Inc. (GNTY).

Liquidity and Solvency

You need to know if Guaranty Bancshares, Inc. (GNTY) can meet its short-term obligations, and for a regional bank, that analysis looks different than for a manufacturing firm. We don't rely on the standard Current or Quick Ratios (current assets divided by current liabilities) because a bank's primary assets are loans and its liabilities are deposits-neither is a typical current asset/liability in the corporate sense. Instead, we look at their core liquidity position, which looks quite strong as of the first half of 2025.

Guaranty Bancshares, Inc.'s own calculated liquidity ratio-cash, cash equivalents, and unpledged investments divided by total liabilities-was a solid 19.8% as of March 31, 2025. This is a significant improvement from 10.6% just a year prior, indicating a deliberate and successful effort to fortify their cash reserves and available funds. That's a huge jump in financial flexibility.

The bank's total available contingent liquidity, which is essentially their backup borrowing capacity, stood at a massive $1.3 billion as of the end of Q1 2025. This contingent liquidity is drawn from sources like the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank (FRB), providing a substantial buffer against any unexpected deposit outflows or funding needs.

Working Capital and Deposit Trends

For a bank, managing working capital is mostly about managing the balance between deposits (their primary source of funds) and loans (their primary use of funds). The trend in Q1 2025 showed a healthy inflow of funds. Total deposits grew by $12.2 million, reaching $2.70 billion at March 31, 2025.

The composition of these deposits is also a strength: noninterest-bearing deposits represented 31.3% of total deposits at the end of the first quarter. This is cheap, stable funding. Plus, the company has been effectively managing its interest expense, with the average cost of total deposits decreasing 15 basis points to 1.96% in Q1 2025.

• Total Assets: $3.15 billion at March 31, 2025.
• Deposit Growth (Q1 2025): $12.2 million increase.
• Uninsured Deposits: 26.7% of total deposits (excluding public funds and bank-owned accounts).

Cash Flow Statement Overview

Reviewing the cash flow trends for Guaranty Bancshares, Inc. (GNTY) in the first half of 2025 shows a stable core business generating cash, while management is strategically using capital.

The Operating Cash Flow is best proxied by the net income, which shows a strong, improving trend: $8.6 million in net income for Q1 2025, which then rose to $10.0 million in Q2 2025. This consistent profitability is the bedrock of their operational cash generation.

The Investing Cash Flow side saw a cash source, not a drain, in Q1 2025, as gross loans decreased by $23.0 million. This means more cash came in from loan payoffs/maturities than went out in new loans. Also, the company anticipates another $116 million in principal and interest cash flows from maturing securities between Q1 and year-end 2025, which provides significant reinvestment flexibility.

Financing Cash Flow was active. The deposit growth of $12.2 million was a notable cash source. However, the company used cash for shareholder returns, repurchasing 127,537 shares of common stock at an average price of $40.56 per share in Q1 2025. The pending merger with Glacier Bancorp, Inc. (GBCI), expected to close in October 2025, also resulted in a special cash dividend of $2.30 per share declared in Q3 2025, which is a major cash outflow to shareholders.

The biggest near-term liquidity strength is the high contingent liquidity and the anticipated cash from maturing securities. The biggest immediate change is the merger, which will defintely alter the entire financial structure, making the current liquidity discussion a snapshot of the bank's health right before the transaction. If you want a deeper dive into the ownership structure, you can check out Exploring Guaranty Bancshares, Inc. (GNTY) Investor Profile: Who's Buying and Why?

Valuation Analysis

You want to know if Guaranty Bancshares, Inc. (GNTY) was overvalued or undervalued, but the most important context is that the company was acquired and delisted on October 1, 2025, by Glacier Bancorp, Inc. (GBCI). The final valuation is therefore locked in by the all-stock merger, not by a future market price. The deal was valued at approximately $476.2 million, equating to a share price of $41.58 based on Glacier's stock price at the time of the June 2025 announcement. The market price, however, closed higher, signaling investors saw a slightly better value or expected a higher final exchange rate.

Honestly, the pre-acquisition trading multiples suggested a fair-to-rich valuation compared to the broader regional bank sector, but the deal price itself set the floor.

• P/E Ratio (Trailing 12 Months): Around 17.72x
• EV/EBITDA (Q2 2025): 7.49x
• Price-to-Tangible Book Value (Implied Deal): 1.65x

Here's the quick math on the Price-to-Earnings (P/E) ratio: A P/E of 17.72 is higher than many regional bank peers, which often trade in the 12x to 15x range. This suggests the market was already pricing in the company's strong performance, like the net interest margin improvement to 3.70% in Q1 2025, or anticipating the acquisition premium. The Enterprise Value-to-EBITDA (EV/EBITDA) of 7.49x for Q2 2025 was relatively low for a growing bank, which could have indicated undervaluation based on cash flow potential, but banks are typically valued on Price-to-Book (P/B).

Stock Price Trend and Dividend Analysis

The stock's performance over the last 12 months showed a clear upward trend leading into the acquisition announcement. The 52-week trading range was between a low of $32.04 and a high of $50.50 [cite: 4 in initial search], with the final trading price before delisting settling at $48.75 [cite: 15 in initial search]. This final price was significantly higher than the announced deal value of $41.58, which is a classic merger arbitrage situation, meaning traders bet the final value would be higher or the stock would trade closer to the acquirer's price.

The dividend profile was solid, showing a commitment to shareholders. The annual dividend was $1.00 per share [cite: 1 in initial search, 10], resulting in a dividend yield of around 2.05% [cite: 1 in initial search, 10]. Plus, the payout ratio was a very healthy 31.85% of trailing 12-month earnings, which is defintely sustainable and below the 75% threshold that signals a potential risk.

Analyst Consensus and Final Takeaway

Before the acquisition closed, the analyst consensus was a Moderate Buy. The average 12-month price target was around $45.00. What this estimate hides is the fact that the stock traded above this average target right up until the merger closed, suggesting the market had a more bullish view than the average analyst forecast.

The acquisition at 1.65x tangible book value is a key metric for a bank deal; in the end, the stock was neither dramatically overvalued nor undervalued, but rather a strategic target that was acquired at a fair premium. For a deeper dive into the company's underlying performance before the merger, check out Breaking Down Guaranty Bancshares, Inc. (GNTY) Financial Health: Key Insights for Investors.

Next step: Review the Glacier Bancorp, Inc. (GBCI) stock performance to understand the value of the stock you received in the all-stock transaction.

Risk Factors

You need to understand that investing in a regional bank like Guaranty Bancshares, Inc. (GNTY) isn't just about looking at the solid $10.0 million net income they posted in Q2 2025; it's about mapping the near-term risks that could erode that performance. The biggest risk, honestly, is the one that changes everything: the pending merger with Glacier Bancorp (GBCI), which was expected to close on October 1, 2025.

Beyond the merger, the core operational and market risks are what we, as analysts, track daily. The Texas economy is strong, but national headwinds still create uncertainty. Here's the quick breakdown of the risks GNTY highlighted in their recent 2025 reporting.

• Loan Demand Slowdown: Gross loans decreased by $23.0 million in Q1 2025, a direct result of potential borrowers holding off on new projects until there's greater economic certainty. That's a clear revenue headwind.
• Noninterest Expense Creep: Profitability can be squeezed by rising internal costs, specifically increased noninterest expenses tied to executive incentive plans and payroll taxes.
• Deposit Competition: Even with a net interest margin (NIM) improving to 3.71% in Q2 2025, intense market competition for deposits could challenge future margin expansion.
• Regulatory Shifts: As a regional bank, GNTY is always exposed to potential regulatory changes that can significantly increase compliance costs and alter operational strategy.

To be fair, Guaranty Bancshares, Inc. has maintained an exceptionally clean balance sheet, which is their primary defense. Nonperforming assets were only 0.15% of total assets in Q1 2025, which is a sign of conservative underwriting. Still, any deterioration in credit quality, even from a low base, would force reserve adjustments and hit the bottom line.

Operational Strength and Strategic Mitigation

The company isn't just sitting still; they're actively managing these risks. Their mitigation strategy centers on maintaining a strong financial fortress and systematic asset management.

For one, they possess strong capital and liquidity, reporting total available contingent liquidity of $1.3 billion in Q1 2025. That kind of cushion provides resilience against unexpected market volatility. Plus, management has been proactive in their interest rate risk (IRR) management, which is why the NIM has shown continued improvement.

Here is a snapshot of the key financial health indicators from the first half of 2025:

The ultimate strategic move, of course, is the merger with Glacier Bancorp. This action fundamentally changes the risk and opportunity profile, translating a regional bank risk into a larger, more diversified entity. It's a clear action to maximize shareholder value and mitigate the long-term competitive pressures facing smaller regional players. If you want to dive deeper into the players involved in this change, you should read Exploring Guaranty Bancshares, Inc. (GNTY) Investor Profile: Who's Buying and Why?

The plan is clear: Finance is focused on maintaining strong liquidity, and the executive team has executed a strategic exit via the merger. That's how you manage risk in a defintely challenging banking environment.

Growth Opportunities

You need to look past the historical financials for Guaranty Bancshares, Inc. (GNTY) because the company's future is defined by its merger with Glacier Bancorp, Inc. (GBCI). The core growth story for the independent Guaranty Bancshares, Inc. culminated on October 1, 2025, when the acquisition by Glacier Bancorp, Inc. was completed. This is the ultimate strategic move, fundamentally changing the risk and opportunity profile for former GNTY shareholders.

The near-term growth drivers for Guaranty Bancshares, Inc. leading up to the merger were strong, particularly in its Texas market. For the first quarter of 2025, the company reported revenue of $31.76 million, exceeding analyst forecasts. Net income for Q1 2025 was $8.6 million, translating to $0.76 per basic share, and this improved in Q2 2025 with net income hitting $10.0 million, or $0.88 per basic share. That's a defintely solid performance leading into an exit.

Here's the quick math on their operational strength: The Net Interest Margin (NIM)-the key profitability metric for a bank-improved to 3.70% in Q1 2025 and continued to rise to 3.71% in Q2 2025, signaling effective interest rate management. Plus, management was confident enough to increase the quarterly dividend to $0.25 per share and execute share repurchases, reflecting a strong capital position before the transaction.

The strategic value that Glacier Bancorp, Inc. saw in Guaranty Bancshares, Inc. was rooted in its Texas footprint and its conservative, relationship-focused banking model. The former GNTY is now operating as Guaranty Bank & Trust, Division of Glacier Bank, retaining its name and management team. This partnership gives the Texas operation a much larger balance sheet and the resources to invest in technology, which is a significant growth accelerant for a regional bank.

The key growth drivers now transition from independent expansion to leveraging the parent company's scale:

• Balance Sheet Strength: Access to Glacier Bancorp, Inc.'s larger balance sheet supports greater loan capacity.
• Technology Investment: Resources to invest in new digital banking and treasury management products.
• Deposit Stability: The company expected 2-5% net deposit growth for the year, a stable base for future lending.
• Asset Quality: Strong credit quality was a competitive advantage, with nonperforming assets at only 0.15% of total assets in Q1 2025.

The merger is a clear strategic move to drive future growth through scale and resource injection, rather than organic, branch-by-branch expansion. For a deeper dive into who was holding the stock before this major change, you should read Exploring Guaranty Bancshares, Inc. (GNTY) Investor Profile: Who's Buying and Why?

The near-term opportunity for the Guaranty Bank & Trust division is converting its strong loan pipeline-which was the strongest in three years in Q1 2025-into funded loans, now backed by the larger entity's liquidity. The company also maintained a high level of contingent liquidity at about $1.3 billion in Q1 2025, providing a significant buffer to support this loan growth.