Good morning. Welcome to the Guaranty Bancshares first quarter 2022 earnings call. My name is Nona Branch, and I will be your operator for today's call. A reminder that this call is being recorded. After the prepared remarks, there will be a Q&A session. Our hosts for today's call will be Ty Abston, Chairman and Chief Executive Officer of the company, Cappy Payne, Senior Executive Vice President and Chief Financial Officer, Shalene Jacobson, Executive Vice President and Chief Risk Officer. To begin our call, I will now turn it over to our CEO, Ty Abston. Thank you, Nona. Good morning, everyone. Welcome to our call for the first quarter earnings call for Guaranty Bancshares. As we noted in our press release this morning, the company had a very good quarter with very strong growth and good earnings for our company. As we mentioned, we did unwind all of our COVID-related reserves, and Shalene will go through that in a little bit. We did offset most of that negative or that release with additional reserves on some of the macro factors we're seeing out there in the economy and everything going on right now, and we'll discuss that further too. I'm gonna turn it over to Cappy and Shalene to go through the numbers, and then when they're done, we'll do Q&A and cover anything you'd like to cover. Cappy? Thank you, Ty. Thanks for joining us, everyone. As Ty said, we had a good quarter starting off 2022. A lot of key components on our balance sheet saw nice increases. Our total assets were up $104 million for the quarter, now stand at just under $3.2 billion. I think obviously the biggest component of that is loans. They closed at a little over $2 billion. And looking at the growth for the quarter, ex-PPP and warehouse lending, we had a nice increase of $157 million. That's 8.6% of those loans when you take out PPP and warehouse. The other big change is, as you saw in the earnings release, was a 50%+ increase in our bond portfolio, putting some of that excess liquidity to work. Shalene will talk a little bit about that in a minute, and we can answer any questions you might have on that later on also. Really the biggest driver of that growth in assets was created by our growth in deposits. Deposits grew again nicely this quarter, $127 million for the quarter, and they're now at $2.8 billion. We continue to add core deposits and open new checking accounts just like we did in 2021. A quarter in, our DDA accounts were, or non-interest-bearing accounts were 38% of our total deposits, so a good portion of those being in, core DDA checking type accounts. You noticed our shareholders' equity did decrease during the quarter, a little unusual. It decreased about $10.3 million. That's driven by a negative market value swing of just right at $17 million that went through our OCI, our other comprehensive income category in our capital account. That's related to what is now an unrealized loss in our securities portfolio. At the beginning of the quarter, we had a $6 million unrealized gain in that portfolio, and that moved to the, at the end of the quarter, fell to an $11 million unrealized loss in the bond portfolio. That's that $17 million swing, which is about a $1.40, $1.45 of tangible book value. We also bought back shares during the quarter, over 56,000 shares at, spending a little over $2 million or right at $2 million, and we paid an increased cash dividend of $0.22 for the quarter. That's up from $0.20 in Q4 2021. Of course, the positive to our capital count was our good earnings that Ty was talking about. For the quarter, we reported $0.89 per share, $0.88 fully diluted. That's related to the $10.7 million net earnings that we reported in Q1. Those earnings are up $1.6 million from linked quarter. The biggest drivers of those, the extraordinary, in comparing quarter- to- quarter, would be the release of provision Ty alluded to of $1.25 million, and then the gain on some swap transactions that we terminate a swap that Shalene will talk about in a little bit, and that's in non-interest income, $685,000. She'll talk about the process of that. Even looking at our core earnings, and we define that in our earnings release as pre-tax, pre-provision, and pre-PPP, it was the highest it's been in the last six quarters and our Q1 core earnings were 10.9%. Looking at our on the income side, our NIM stayed pretty steady. Our stated NIM was 3.37%. That's down 2 basis points. Looking at it ex-PPP activity, our NIM was 3.30%, down 3 basis points, so really pretty steady. Our loan yield slipped a little bit. Still strong at 4.59%. That's ex PPP, but that's down 7 basis points. We did, as I said, book quite a few loans. Our, looking at our yield on new loans originated, they stayed steady for the quarter. They were 4.22%, and that's compared to 4.24% in linked quarter. Our cost of deposits remained steady for this quarter. They were 18 basis points, and they were 18 basis points in Q4 of last year. They have remained steady. Looking at our non-interest income category, it's showing up 7%. Shalene's gonna give us the details on the main driver of that being the termination of the swaps. I will say, if you looked at the components of that, our mortgage volume was down, as expected, a little more than what we thought. I think I projected last time it'd be 12%-15%. It was down 20% linked quarter. Actually down 35% from a year ago when mortgage activity was really at its highest. I'll speak to a little bit about that in just a second. Looking at our expenses, they were up slightly, about $103,000 for the quarter. The main driver continues to be employee compensation and benefits. Three quick points I think to that regard. The first one is we did onboard five new production officers in Q1. Three of those were in the Central Texas region, one in the DFW region, and then one SBA. And then the second bullet point I'd say is, we did have a turnover in leadership in our mortgage division. There's gonna be some added staff there most likely in Q2 related to that as we develop a more defined strategic plan in mortgage. And that staff should include both production and back office. So that's a change that we're looking forward to going forward. I guess the third bullet point, I think we addressed this last quarter too. We still have about four to five key production positions open that are currently not filled, but likely to be filled sometime in 2022. We'll see. And those are production offices in Houston, Central Texas, and DFW mainly. So that's a quick recap of the balance sheet. Shalene, I'll turn it over to you. Thanks, Cappy. Next I'll cover some of the highlights of our loan portfolio, credit quality, and the allowance for credit losses. Luckily, our economy here in Texas continues to be outstanding. Hopefully most of you have received our annual report by now, which we highlight several really interesting statistics about the growth in our state and economy. Last year, Texas was number one on the U-Haul One-Way Growth Index. We've got lots of people coming to our state, and I think as a result of that, partially as a result of that, loan demand has been really strong as well. As Cappy mentioned a moment ago, excluding PPP and warehouse loans, our loans increased about $157 million or 8.6% during the quarter. Our loan yields, excluding PPP, did slip slightly during the quarter to 4.59%, compared to 4.66% in the previous quarter. However, you know, we hope that downward trend will soon reverse itself as rates increase as some economists and others predict that they will. We included some information about rate sensitivity here in the presentation and in our release. We have about $1.3 billion or 65% of our loan portfolio that have variable rates. If rates increase as expected, which we estimated as 50 basis points in both May and June, and 25 basis points in each of the remaining Fed meetings during 2022, then $346 million or 27% of those variable rate loans will reprice by year-end. The loans that aren't repricing are really because of their next repricing date being after December 31, 2021, and not because of loan rate floors. We, as of March 31, 2022, we have $685 million of loans that are at their floor rate. But if rates increased 75 basis points, 83% of those would be above their loan floor rate. And at a 150 basis point increase, 97% would be above their floor rate. Again, the loans that are not going to be repricing by year-end are because their next repricing date is in 2023 or 2024. And then we also crunched some numbers and basically said, you know, assuming no payoffs or modifications, under the scenario described, repricing would provide us with an estimated additional loan interest income of about $2.8 million between now and year-end. And then we also have a few bullets illustrating recent non-performing asset and charge-off trends which continue to remain low. For the allowance for credit losses, as Cappy mentioned, we recorded a reverse provision of $1.25 million during the quarter. We've seen significant improvements in COVID-related health statistics and economic impacts of COVID during the first quarter in our communities. As a result of that, we fully unwound the remaining COVID-specific Q factor in our allowance methodology. However, the effect of unwinding that COVID-specific Q factor was really offset quite a bit by growth in our loan portfolio. We also did make some adjustments to some of our standard Q factors for uncertainties related to inflation, uncertainties related to the impact of increases in interest rates on our borrowers, and then overall geopolitical concerns such as the war in Ukraine and Russia. As of quarter end, our allowance coverage excluding PPP loans was 1.46%, which is down from 1.64% at year-end. On to the next slide, we talk a bit about PPP updates and asset liability management and other items. Nearly all of our PPP 1 loans have been forgiven or are paying as agreed, and all of the related deferred income has been recognized. We made really good progress on PPP loan forgiveness during the quarter, with only about $19.1 million remaining on our books and unrecognized deferred fees of about $477,000. As both Ty and Cappy mentioned, we did terminate some interest rate swaps that were used to hedge three-month Federal Home Loan Bank advances. We paid off those advances that were $40 million, and then we recognized a $685,000 net gain on termination of those swaps, which is included in other non-interest income on the income statement. We also deployed quite a bit of excess cash to purchase securities, including about $270 million in short-term treasuries that mature from August 2022 through March 2024. And we purchased about $30 million of agency mortgage-backed securities. All of the purchases in 2022 are classified as held to maturity, and if we continue to buy more, we'll classify those as held to maturity as well in order to take some of that volatility out of the AOCI and tangible book value, hopefully. And then we will continue to maintain a conservative stance on our cost of total deposits and raising rates there given our excess liquidity position. As of quarter end, 38.1% of our total deposits are non-interest bearing, so that helps as well. Finally, back on March 4, we issued $35 million in subordinated notes with a fixed rate of 3.625%. It's fixed for five years and then converts to a floating rate equal to the three-month term SOFR plus a spread of 192 basis points until it matures in April of 2032. We've already been able to put quite a bit of that money to work through the share repurchases that Cappy mentioned earlier. That concludes our presentation today. We'll now turn it over to you all for questions. Thank you, Shalene. It is now time for our Q&A part of our call. If you have any questions, you can hit the raise your hand button at the bottom of your screen. If you're participating by telephone, star nine will raise your hand, star six will unmute your line. Our first call today will be from Brady Gailey with KBW. Hey, thanks. Good morning, guys. Good morning, Brady. So you have several moving parts within spread income with the termination and also with this bond book growth. You know, I think you ended the quarter at about $800 million in bonds. But it seems like you have a little more cash that you could put to use there. How should we think about, you know, the bond balances going forward? Brady, it's Ty. So we, this quarter, we purchased quite a few bonds and really they're short treasuries. We started, kind of built a ladder from six months out to two years just because everything that was going on in the yield curve. That leaves us with about $150 million-$160 million or so in Fed funds. That's kind of a peg balance for us. We're not gonna probably be moving a lot of additional funds into that program. We certainly could. We just were taking advantage of the yield curve, the shift in the yield curve, and felt like it made sense and still kept us very short, as far as those bonds. Okay. All right. That's helpful. And then on the expense side, you know, it sounds like you're making some changes in mortgage and maybe growing that group more now. How should that impact expenses? I know before we've kind of talked about a $76 million-$77 million expense run rate. You know, will that be higher given the changes you're making in mortgage this year? Yeah, a little bit, Brady. This is Cappy. I would say our run rate will be in the $77 million to maybe $78 million range, going forward for this year. Okay and then yes, I think mortgage fees dipped a little more than you thought. Any update on how you think, you know, mortgage and just overall fee income will trend for the rest of the year? I think as we deploy this new team, we're gonna think of different ways to be more productive and get more production off of our staff. So I think that will increase going forward. Well, I'm just gonna say this, I think it will not continue to decrease. I think we'll be flat for Q2, and then Q3 and Q4, we'll see how we can grow that. Okay. All right, great. Thanks, guys. Thanks, Brady. Our next call will be from Michael Rose with Raymond James. Hey, good morning, everyone. How are you? Hi, Michael. Hey. Good morning, Michael. Hey, really strong loan growth this quarter, and, you know, you mentioned that the pipelines, you know, still remain, you know, pretty strong. You know, previously, you guys had talked about kind of a high single digit growth rate. You're well above that, if you annualize this quarter's growth, ex- warehouse, ex- PPP. Any sort of way we should think about it? Is, are you seeing any pull forward of growth, some rebuilding of inventories? And then conversely, do you have any caution as we potentially move into the back half of the year, just given obviously some of the Q factors for, you know, that went up for environmental concerns? Thanks. Michael, there's like I mentioned, I mean, there's a lot of positive things going on in our state and we're certainly participating in that. I would guide, you know, on an annualized basis, low to mid double digits for our growth. Like I said in my press release, I mean, with all the things going on that are positive, we still can have growing concerns from a macro standpoint of things that are going on, obviously outside of our control with inflation, rising rates, and just the geopolitical environment, things going around the world. All those things collectively, you know, create, you know, some real concerns. That's why we added the additional reserves. Like I mentioned, we took COVID out of our reserve models, but we dialed in some additional concerns we have from a macro standpoint. We're gonna, you know, continue to, you know, be cautious as we look at opportunities to grow the company and as we're certainly underwriting with that caution, but there's just a lot of very positive things happening in our state. Those things can be, you know, sidelined as well with macro events. Okay. Maybe as a follow-up to that, so if I look at kind of post CECL, your reserve was, you know, around the 1.20, 1.2% range. You guys are a little bit above that, obviously negative provision this quarter as we kind of walk through. Do you still feel like there's room to bring that down over coming quarters, just given how strong the asset quality metrics are? Or would you expect to be, you know, somewhat cautious just given the broader economic concerns? It's gonna be more the latter, Michael. I mean, we're gonna, you know, we're still gonna. Well, obviously we have very strong asset quality, but just the factors that we've put in place and just our overall thoughts on things I mentioned, we're gonna maintain pretty conservative reserves, for the foreseeable future. Okay. Maybe finally for me, you guys repurchased a little bit of stock this quarter, but I think your program expired at the middle of last month. Is there any plans to potentially put another one into place, just given the performance of, you know, just bank stocks in general, yours included, and be a little bit more opportunistic here, or just any sort of thoughts on buyback would be great. Thanks. Yes, Michael. Go ahead. We have that already teed up and that will be renewed this week. Perfect. Thanks for taking my questions. Thanks, Michael. Our next call is for Matt Olney with Stephens. Hey, thanks. Morning, everybody. Morning, Matt. Morning. I wanna circle back on the loan growth commentary. It sounds like the guidance is a little bit more optimistic now than it was previously. I think last time we talked in January, you talked about the concern of loan pay downs were gonna remain elevated and possibly accelerate. I'm curious what you saw on the pay down front in 1Q and what the expectations are now for the full year with respect to the pay downs and what that updated guidance now assumes. So Matt, the pay down's definitely slowed in Q1 and we anticipate that kind of maintaining its current pace. That being said, the things I've been talking about, really it's hard to gauge that. Pay down slowed down and some of the things that we've had in pipeline ending the year kind of came to fruition and we're able to close in Q1. So, I still, I'm confident that you know guiding higher based on those two factors and just the overall you know strength we're seeing in our footprint. But again, just trying not to get ahead of ourselves with everything else going on. Okay. Yeah. Thank you for that. Sure. Then on the deposit growth, some really good numbers in 1Q. Just remind us of the seasonal nature of the bank's deposit base, just trying to appreciate what the expectation should be, for the rest of the year with respect to deposit growth. Well, I don't think we'll have that type of growth going forward, Matt, but normally in Q1 we see pretty good growth in public funds deposits, and that did not happen this year. None of that growth for this quarter was really related to public fund money. When you separate that out, typically public fund money will decrease in Q3 and Q4, and increase in Q1 specifically. I think that will pan out and the fact that we'll have a little bit of a decrease there. As we continue to open up new accounts and new markets, and we really emphasize the total relationship, even as we're finding loan customers to add checking accounts and deposit accounts with it. I think that pace will slow down, but I don't see a big drop-off. Okay. Thanks for that, Cappy. Just last question from me. I wanna dig in a little bit more on the loan floors and the expectations of repricing some of those loans. I was a little surprised at the disclosure that 27% of the variable rate loans would reprice higher under that rate scenario that you guys disclosed. Shalene, I think you were saying this is more of a timing issue because it sounds like the loans are gonna be above the floors for a while, but contractually it can still be several months before you receive the benefits of higher rates. Any more color you can give me on the timing aspect of those loans? Yeah, it definitely is. The floors really aren't gonna play a significant factor because, you know, we're estimating that they're raising the rates so quickly. Yes, we have quite a few loans that, you know, reprice every 12 months or every 24 months, or maybe they're fixed for a period of time and then they move to variable. So we're including those within the $1.3 billion of variable rate loans that we mentioned. It really is just a timing issue. I don't have the numbers. I've got some people pulling a report that can tell me exactly when the remainder will reprice. It'll be majority of it'll reprice in 2023, with some going over into 2024 because most of our variable rate loans that reprice over a period of time will be 12 months. Got it. Okay. Thanks guys. I appreciate your help. Sure. Thanks, Matt. Our next call will be from Brad Milsaps with Piper Sandler. Hey, good morning, guys. Hi, Brad. Hey, Brad. I just wanted to maybe delve into the margin a little bit more. Could you guys give me a sense of kind of the rates on the bonds that you purchased during the quarter? You know, obviously, you know, you're gonna have you benefit from a mix change here, just kind of how you're thinking about, you know, the NIM, Cappy sort of rate hike side. Well, the bonds we purchased during the quarter, as Ty and Shalene both mentioned, were pretty short term. A lot of taking advantage of that shift in the yield curve. A lot of the Treasury notes that we bought were again six month to two year. Those rates weren't very high. It was just more a fact of putting our excess liquidity to work quicker and that will work you know until they mature. We did buy a few mortgage backs, not much really. That yield was somewhere in the 3% now, so you know that's a pretty good increase from what they were about a year ago when about 1%. It's again, getting back to what Ty said, I think the bond portfolio growth will probably slow down quite a bit. As far as the loan growth, putting those loans to work quicker or putting those loans on the books in Q1 got that margin working a little quicker. I think we continue to see a little bit of a shift or decrease in the loan yield, but they'll start going up here in the second half of the year for sure. So I don't see much slippage at all in our margin. I think we can really play defensive on our liability side still. We'll see an increase in cost of funds as rates go up, no doubt, but not to the pace that they change prime for sure. And just to follow up on that point, Cappy, have you guys. I know this is tough to predict, but you know, if we do get that you know, rate scenario that you guys laid out in the deck, you know, that would you know, result in your loan portfolio repricing as you expect. What do you think that would do to the right side of the balance sheet? What does your crystal ball say sort of on deposit betas, you know, at various levels of rates going up? Well, as I said, we're gonna have to increase rates on deposits. There's no doubt we're gonna do that to be competitive. It's just not gonna keep up with the same pace. I guess if you will, if it's a 20% for every or 20% for every 50 basis point increase or something like that, and or any increase in prime or increase in Fed funds would be our increase in deposits. Okay. Finally, just maybe a question for Ty. The five new producers that you brought over, were they a contributor at all during the first quarter? And then to the extent they were, they weren't, what would be your expectation on what those folks can kind of bring in? Is that a big part of sort of your increased loan guidance as you think about 2022? No, Brad, it really, I mean, yes, producers we onboarded the last 12 months were part of that growth, but honestly, it was really across our footprint. All four regions that we're in really had a strong quarter. Our expectations, yes, new producers will be part of that, our growth, the rest of this year. Our existing producers and our existing footprint big part of the equation as well. Okay, great. Thank you, guys. Sure. Thanks, Brad. This concludes our Q&A session for our call. I would like to remind everyone the recording will be available at gnty.com in our investor relations page by 1 P.M. today. Thank you for attending. Goodbye.