Q2 2024 Guaranty Bancshares Inc Earnings Call

Speaker Change: Good morning.

Nona Branch: Good morning. Welcome to the Guaranty Bancshares second quarter 2024 earnings call. My name is Nona Branch, and I will be your operator for today's call. I want to remind everyone that today's 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, and Shalene Jacobson, Executive Vice President and Chief Financial Officer. To begin our call, I will now turn it over to our CEO, Ty Abston.

Nona Branch: Welcome to the Guaranty Bancshares second quarter 2024 earnings call. My name is Nona Branch and I will be your operator for today's call. I want to remind everyone that today's call is being recorded.

Nona Branch: After the prepared remarks, there will be a Q&A session.

Nona Branch: Our hosts for today's call will be Ty Abston, Chairman and Chief Executive Officer, Shalene Jacobson, Executive Vice President and Chief Financial Officer. To begin our call, I will now turn it over to our CEO , Ty Abston.

Tyson Todd Abston: Thank you, Nona. Good morning, and welcome to our second quarter earnings call. Before I turn it over to Shalene and go through our investor deck, I want to make a few comments. First, I wanted to say how proud I am of our team and the results we've produced, not only for this quarter but for the full year. Our team continues to do a great job of serving our customers and maintaining strong relationships in all of our markets, and we continue to look for opportunities to build our franchise.

Tyson Todd Abston: Thank you, Nona. Good morning and welcome to our second quarter earnings call.

Tyson Todd Abston: Before we turn it over to Shalene and go through our investor deck, I want to make a few comments. First, I wanted to say how proud I am of our team and the results we've produced, not only for this quarter, but for the full year. Our team continues to do a great job at serving our customers.

Tyson Todd Abston: and maintaining strong relationships in all of our markets and to continue to look for opportunities to build our franchise. The Texas economy remains resilient and I really see 2025 as the year that we're going to start seeing additional growth and continued growth in our markets.

Tyson Todd Abston: The Texas economy remains resilient, and I really see 2025 as the year that we're going to start seeing additional growth and continued growth in our market. Our strategy has been, and continues to be, to maintain a well-positioned bank for an uptick in economic growth. This requires us to maintain strong asset quality, a strong capital position, good liquidity, and really have lending capacity in all of our key sectors, which we currently have and plan to maintain so we are positioned for growth in the coming quarters. With these comments, I'll turn it over to Shalene. She's going to go through our investor deck, and then we'll open it up to Q&A. Shalene.

Tyson Todd Abston: Our strategy has been and continues to be

Tyson Todd Abston: to maintain a well-positioned bank for an uptick in economic growth. This requires us to maintain strong asset quality.

Tyson Todd Abston: strong capital position, good liquidity, and really to have lending capacity in all of our key sectors, which we currently have and plan to maintain so we are positioned for growth in the coming quarters.

Speaker Change: With these comments, after this I'll turn it over to Shalene. She's going to go through her investor deck and then we'll open it up to Q&A.

Shalene A. Jacobson: Great, thanks, Ty. I'll kick it off with the balance sheet first. As Ty mentioned, we're continuing with our strategy to shrink the balance sheet. You know, we believe there are still some economic and political uncertainties out there right now that require heightened risk management around loan growth, but hopefully, those will start to improve in 2025, as he mentioned.

Speaker Change: Join

Shalene A. Jacobson: Great, thanks Ty. I'll kick it off with the balance sheet first.

Shalene A. Jacobson: As Ty mentioned, we're continuing with our strategy to shrink the balance sheet. You know, we believe there's still some economic and political uncertainties out there.

Shalene A. Jacobson: Right now that require heightened risk management around loan growth, but hopefully this will start to improve in 25, as he mentioned. However, because of our strong core earning stream and our customer base, our net income remains good.

Shalene A. Jacobson: However, because of our strong core earnings stream and our customer base, our net income remains good, and we're on target to keep earnings similar to what they were in 2023. Our total assets decreased $45.8 million during the quarter, while total liabilities decreased about $48.5 million. Those decreases are primarily from loans, which were down gross by about $50.3 million and also on the liability side from a $30 million decrease in federal home loan bank advances that we repaid during the quarter and some lower customer repurchase account balance. Pass was up somewhat.

Shalene A. Jacobson: and we're on target to keep earnings similar to what they were in 2023.

Shalene A. Jacobson: Our total assets decreased $45.8 million during the quarter, while total liabilities decreased about $48.5 million.

Shalene A. Jacobson: Those decreases are primarily from loans, which were down gross about $50.3 million and also on the liability side from a $30 million decrease in federal home loan bank advances that we repaid during the quarter.

Shalene A. Jacobson: and some lower customer repurchase account balances.

Shalene A. Jacobson: And we also purchased about $18.6 million in new available for sale securities during the quarter, which had an average yield of about 5.3%. On the liability side, deposits were fairly flat. As I mentioned, we repaid some federal home loan bank advances, and then customer repo balances were down about $13.9 million. Total equity increased $2.7 million during the quarter, which was a result of net income of $7.4 million and an improvement in unrealized losses on the AFF portfolio of $1.45 million.

Shalene A. Jacobson: Pass was up somewhat, and we also purchased about $18.6 million in new available-for-sale securities during the quarter, which had an average yield of about 5.3%.

Shalene A. Jacobson: On the liability side, deposits were fairly flat. As I mentioned, we repaid some federal home loan bank advances and then customer repo balances were down about $13.9 million.

Shalene A. Jacobson: Total equity increased $2.7 million during the quarter, which was a result of net income of $7.4 million and an improvement in unrealized losses on the AFF portfolio of $1.45 million.

Shalene A. Jacobson: That was offset by dividends that we paid of $2.7 million, or $0.24 per share. That quarterly dividend is up from $0.23 per share back in 2023. We've paid $0.24 now for the first quarter and the second quarter.

Shalene A. Jacobson: That was offset by dividends that we paid of $2.7 million, or $0.24 per share. That quarterly dividend is up from $0.23 per share back in 2023. We've paid $0.24 now for the first quarter and the second quarter.

Shalene A. Jacobson: And also, we repurchased 138,427 shares of guarantee stock during the quarter. On the income statement, the bank earned $7.4 million, as I mentioned, in net income, which equates to $0.65 per basic share in the second quarter, which is up from $0.58 per share in the first quarter and down from $0.82 in the second quarter of 2023. But in the second quarter of 2023, you'll recall we had a large one-time gain from the sale of TIB stock of $2.8 million, which, of course, we didn't have this year and helped explain some of that change from the prior year.

Shalene A. Jacobson: And also, we repurchased 138,427 shares of guarantee stock during the quarter.

Shalene A. Jacobson: On the income statement, the bank earned $7.4 million, as I mentioned, in net income, which equates to $0.65 per basic share in the second quarter, which is up from $0.58 per share in the first quarter.

Shalene A. Jacobson: and down from 82 cents in the second quarter of 23. But in the second quarter of 23, you'll recall we had a large one-time gain from the sale of TIB stock.

Shalene A. Jacobson: of $2.8 million, which of course we didn't have this year, and helps explain some of that change from the prior year quarter.

Shalene A. Jacobson: Our return on average assets was 0.95% for the quarter compared to 0.85% in Q1, and our return on average equity was 9.91% for the quarter compared to 8.93% in Q1. Our net interest margin continues to increase, which we're proud of. It was 3.26% in the second quarter, up from 3.16% in the first quarter and 3.19% during this quarter last year. The increase from the prior quarter and the prior year quarter results from improvements in our interest earning assets in both loans and securities that are higher than the costing liabilities during the same period.

Shalene A. Jacobson: Our return on average assets was 0.95% for the quarter compared to 0.85% in Q1, and our return on average equity was 9.91% for the quarter compared to 8.93% in Q1.

Shalene A. Jacobson: Our net interest margin continues to increase, which we're proud of. It was 3.26% in the second quarter, up from 3.16% in the first quarter and 3.19% during this quarter last year.

Shalene A. Jacobson: The increase from prior quarter and prior year quarter results from improvements in our interest earning assets in both loans and securities that are higher than the costing liabilities during the same period. And of course, from a lower denominator in that ratio, the average interest earning assets are lower as well.

Shalene A. Jacobson: And of course, from a lower denominator in that ratio, the average interest earning assets are lower as well. Non-interest income decreased by $659,000 during the quarter, which resulted primarily from a $900,000 ORE valuation allowance, which I'll talk about in a second. That was offset by higher debit card income in the current quarter from an annual MasterCard bonus payment that we received. And then in the first quarter, we also had a $499,000 receivable recovery that we did not have this quarter, which also contributed to the length of the quarter change.

Shalene A. Jacobson: Overall.

Shalene A. Jacobson: Non-interest income decreased by $659,000 during the quarter, which resulted primarily from a $900,000 ORE valuation allowance.

Shalene A. Jacobson: which I'll talk about in a second. That was offset by higher debit card income in the current quarter from an annual MasterCard bonus payment that we received.

Shalene A. Jacobson: And then in the first quarter, we also had a $499,000 receivable recovery that we did not have this quarter, which also contributed to the length quarter change.

Shalene A. Jacobson: For the ORE evaluation allowance, we mentioned last quarter that we foreclosed on a nice mixed-use property in a good area in South Austin. The appraisal we had from March of 2023 had a pretty aggressive capitalization rate. And as we dug into the cap rate trends in South Austin, along with getting a better understanding of the property and the income stream from that property, we felt it was prudent to apply a more aggressive cap rate.

Shalene A. Jacobson: For the ORE Valuation Allowance, we mentioned last quarter that we foreclosed on a nice mixed-use property in a good area in South Austin.

Shalene A. Jacobson: The appraisal we had from March of 2023 had a pretty aggressive capitalization rate. And as we dug into the cap rate trends in South Austin, along with getting a better understanding of the property and the income stream from that property, we felt it was

Shalene A. Jacobson: So that resulted in the $900,000 valuation allowance that we recorded. But of course, you know, there are factors that could allow us to reverse that if cap rates go back down, or hopefully not, but conversely, go the other way as well. But we believe that with that valuation allowance, we have the property conservatively valued on our books right now and appropriately valued. Ty, do you have any further comments on that right now? Now we're

Shalene A. Jacobson: It's prudent to apply a more aggressive cap rate, so that resulted in the $900,000 valuation allowance that we recorded.

Shalene A. Jacobson: But of course, you know, there's factors that could allow us to reverse that if cap rates go back down, or hopefully not, but conversely go the other way as well. But we believe that with that valuation allowance, we have the property conservatively valued on our books right now.

Speaker Change: and Appropriately Valued. Ty, do you have any further comments on that right now?

Tyson Todd Abston: No, we have a team that's marketing the property. They're going to start marketing the property in the next couple of weeks. We have had some indication of interest. We do think we have it fairly valued, and we're going to recognize full value on the property. It's a good property, has a good yield on it, and it just comes down to where the cap rates are and ultimately where we're able to sell it and at what cap rate. But we just felt, instead of taking, you know, we felt like it was prudent to take this provision and reserve against it, given that we had some extraordinary income during the quarter.

Tyson Todd Abston: No, we are we have a team that's marketing the property. They're going to start marketing the property in the next couple of weeks. We have had some indication of interest.

Tyson Todd Abston: We do think we have it fairly valued and

Speaker Change: We're going to recognize full value on the property. It's a good property, has a good yield on it, and it just comes down to, you know, where the cap rates are and ultimately where we're able to sell it and what cap rate.

Speaker Change: But we just felt like, instead of taking, you know, we felt like it was prudent to take this provision and reserve against it, given that we had some extraordinary income during the quarter.

Shalene A. Jacobson: Before we move on, non-interest expense was down slightly by about $90,000, and that was due to lower employee-related costs that were then offset by some higher occupancy, debit card, and other non-interest expenses. Our efficiency ratio was 72.34% for the quarter, which was driven higher by the decrease in non-interest income.

Speaker Change: All right, thank you.

Speaker Change: Before we move on, non-interest expense was down slightly by about $90,000, and that was due to lower employee-related costs, but then offset by some higher occupancy, debit card, and other non-interest expenses.

Speaker Change: Our efficiency ratio was 72.34% for the quarter, which was driven higher by the decrease in non-interest income.

Shalene A. Jacobson: All right, on to our credit portfolio and allowance for loan losses. As I mentioned, gross loans decreased by $50.3 million in the first quarter and have decreased by about $108 million year-to-date. That was primarily in our construction and development and our CRE segments.

Speaker Change: All right, on to our credit portfolio and allowance for loan losses.

Speaker Change: As I mentioned, gross loans decreased by $50.3 million in the first quarter and have decreased by about $108 million year to date. That was primarily in our construction and development and our CRE segment.

Shalene A. Jacobson: We did originate 73 and a half million in new loans during the second quarter at an average rate of 8.26%. Thus, new loan yields remain strong. Non-performing assets continue to remain at historically low levels. They were 0.71% of total assets for the quarter compared to 0.68% in the prior quarter, so still well below 1%. Those percentages include both the ORE and nonaccrual loans, but if we exclude the ORE, non-performing loans as a percentage of total loans is only 0.28%, and non-performing loans as a percentage of total assets are only 0.2%, still pretty good percentages there.

Speaker Change: We did originate $73.5 million in new loans during the second quarter at an average rate of 8.26%, so new loan yields remain strong.

Speaker Change: Non-performing assets continue to remain at historically low levels.

Speaker Change: They were 0.71% of total assets for the quarter compared to 0.68% in the prior quarter, so still well below 1%.

Speaker Change: Those percentages include both the ORE and non-accrual loans, but if we exclude the ORE, non-performing loans as a percentage of total loans is only 0.28%, and non-performing loans as a percentage of total assets is only 0.2%.

Shalene A. Jacobson: Net charge-offs also remain low. We had 78,000 net charge-offs during the quarter and a net charge-off to average loans ratio of 0.01% for the second quarter. In early July, we did foreclose on a single family property in our VFW market that has a book value of $1.2 million. That property is for sale, and we expect minimal losses in disposing of that asset.

Speaker Change: So still, you know, pretty good percentages there. Net charge-offs also remain low. We had 78,000 in net charge-offs during the quarter and a net charge-off to average loans ratio of 0.01% for the second quarter.

Speaker Change: In early July , we did foreclose on a single-family property in our DFW market that has a book value of $1.2 million. That property is for sale and we expect minimal losses in disposing of that asset.

Shalene A. Jacobson: Commercial real estate and office-related loans continue to be a hot topic, as you all know. However, as we've mentioned in prior calls, we manage those concentrations very well. We've got a diverse portfolio, and really don't have any significant concerns in those areas.

Speaker Change: Commercial real estate and office related loans continue to be a hot topic as you all know. However, as we've mentioned in prior calls, we manage those concentrations very well. We've got a diverse portfolio and really don't have any significant concerns in those areas.

Shalene A. Jacobson: CRE represents about 40.6% of our total loan portfolio, and of that percentage, only 5.5% is office related, with relatively low average loan balances of only 551,000 as of June 30th. Our set standard loans were $23.5 million at quarter end, which is up from $17.5 million at the end of Q1. That increase is primarily due to two loan relationships totaling $7.9 million that were downgraded to substandard this quarter. However, those loans are current on payments, we're well collateralized on those, and we really don't expect any significant losses, if any, as we work through those.

Speaker Change: CRE represents about 40.6% of our total loan portfolio, and of that percentage, only 5.5% is office related, with relatively low average loan balances of only $551,000 as of June 30th.

Speaker Change: Our substandard loans were $23.5 million at quarter end, which is up from $17.5 million at the end of Q1.

Speaker Change: That increase is the result primarily of two loan relationships totaling $7.9 million that were downgraded to substandard this quarter.

Speaker Change: However, those loans are on their...

Speaker Change: Current on payments, we're well collateralized on those, and we really don't expect any significant losses, if any, as we work through those. We believe those loans are reserved appropriately as a result of their substandard risk rating now.

Shalene A. Jacobson: But we believe those loans are reserved appropriately as a result of their substandard risk rating now. Overall, we have 131 substandard loans with an average balance of only about $179,000. So most of those loans are smaller consumer or small business loans that we're working with to get those loans current or, hopefully, paid.

Speaker Change: Overall, we have 131 substandard loans with an average balance of only about $179,000.

Speaker Change: So most of those credits are smaller consumer or small business related customers that we're working with to get those loans current or hopefully paid.

Shalene A. Jacobson: We did have a reverse provision for credit losses of $1.2 million during the quarter, and that's almost entirely due to the lower loan balances of $108 million so far year-to-date that I described earlier, as well as our just stable overall credit trends. You know, we, like everyone else, I think have some one-offs, but overall, our past few percentages, our non-equal percentages, those non-performing loan trends are still We've made minimal adjustments to applicable Q factors so far in 2024 because we think that the adjustments that we made during 2023 remain relevant today.

Speaker Change: We did have a reverse provision for credit losses of $1.2 million during the quarter, and that's almost entirely due to the lower loan balances of $108 million so far year-to-date that I described earlier.

Speaker Change: As well as our just stable overall credit trends, you know, we, like everyone else, I think, have some one-offs, but overall, our past few percentages, our non-accrual percentages, those non-performing loan trends are still looking really good.

Speaker Change: We've made minimal adjustments to applicable Q factors so far in 2024 because we think that the adjustments that we made during 23 remain relevant today.

Shalene A. Jacobson: The reverse provision, again, is almost entirely due to lower loan balances, but it was offset somewhat in Q2 by that increase in the substandard loan pool that I mentioned. The quarter-end ACL coverage is 1.32% of total loans, which is similar to the ratios we had at the end of the first quarter and year end, which were 1.35% and 1.33%, respectively. All right, on to deposits, liquidity, and capital. As I mentioned previously, total deposits were relatively flat during the quarter, while customer repo balances were down about $14 million.

Speaker Change: The reverse provision, again, is almost entirely due to lower loan balances, but it was offset somewhat in Q2 by that increase in the substandard loan pool that I mentioned.

Speaker Change: The quarter-end ACL coverage is 1.32% of total loans, which is similar to the ratios we had at the end of the first quarter and year-end, which were 1.35% and 1.33% respectively.

Speaker Change: All right, on to deposits, liquidity, and capital.

Speaker Change: As I mentioned previously, total deposits were relatively flat during the quarter, while customer repo balances were down about $14 million.

Shalene A. Jacobson: We continue to see a shift from non-interest bearing to interest-bearing deposits, although it is slowing down. Non-interest bearing deposits decreased $8.4 million in the second quarter, while interest-bearing accounts increased $6.8 million, primarily driven by new CDs. We've got a few markets that have some specials and are doing a good job getting new CDs.

Speaker Change: We continue to see a shift from non-interest-bearing to interest-bearing deposits, although it is slowing down. Non-interest-bearing deposits decreased $8.4 million in the second quarter, while interest-bearing accounts increased $6.8 million, primarily driven by new CDs. We've got a few markets that have some specials and are doing a good job.

Shalene A. Jacobson: Despite the shift, non-interest-bearing deposits still represent 31.2% of total deposits at quarter end. And, as I've mentioned in previous quarters, we expect that ratio to be closer to our historical average of mid to high 20s at some point as we continue to move later into 24, early 25, but we're happy to see it continuing to be above 30% for now. With respect to overall deposit risk, Guarantee has a very granular and historically stable core deposit base. At quarter end, we had over 89,000 deposit accounts with an average account balance of just over 29,000. Our uninsured deposits also remain relatively low, excluding public funds and guarantee-owned accounts.

Speaker Change: getting you.

Speaker Change: CDs.

Speaker Change: Despite the shift, non-interest bearing deposits still represent 31.2% of total deposits at quarter end.

Speaker Change: And as I've mentioned in previous quarters, we expect that ratio to be closer to our historical average of mid to high 20s at some point as we continue to move later into 24, early 25, but we're happy to see it continuing to be above 30% for now.

Speaker Change: With respect to overall deposit risk, Guarantee has a very granular and historically stable core deposit base. At quarter end, we had over 89,000 deposit accounts with an average account balance of just over 29,000.

Speaker Change: Our uninsured deposits also remain relatively low, excluding public funds and guarantee-owned accounts, uninsured deposits were 25.7% of our total deposits.

Shalene A. Jacobson: Uninsured deposits were 25.7% of our total deposits at quarter end. Liquidity is good. We ended the quarter with a liquidity ratio of 13.6% despite using some cash flows from insured securities to end loan repayments to invest in some new, higher yielding AFS securities and to pay down federal home loan bank advances by $30 million during the quarter. We've actually repaid $150 million in FHLB advances during the last 12 months. We also have total contingent liquidity of about $1.3 billion available through either Federal Hemlin Bank Advances, the Federal Reserve Bank, or Correspondent Bank Fed Funds lines and revolving lines of credit.

Speaker Change: at quarter end.

Speaker Change: Liquidity is good. We ended the quarter with a liquidity ratio of 13.6% despite using some cash flows from insured securities and loan repayments to invest in some new higher yielding AFS securities and to pay down.

Speaker Change: Federal Home Loan Bank advances about $30 million during the quarter. We've actually repaid $150 million in FHLB advances during the last 12 months.

Speaker Change: We also have total contingent liquidity of about 1.3 billion available through either Federal Homeland Bank Advances, the Federal Reserve Bank, or Correspondent Bank Fed Funds lines and revolving lines of credit.

Shalene A. Jacobson: Our total net unrealized losses on investment securities remain reasonable at about $50.8 million, of which $19.1 million is attributable to our AFS securities and included within the equity in AOCI. Our capital also remains strong. We used a portion of our excess capital in the second quarter to pay the $0.24 per share dividend that I mentioned earlier and also to repurchase those 138,427 shares of Guarantee Common Stock at an average price of $29.50 per share.

Speaker Change: Our total net unrealized losses on investment securities remains reasonable at about $50.8 million, of which $19.1 million is attributable to our AFS securities and included within the equity in AOCI.

Speaker Change: Our capital also remains strong.

Speaker Change: We used a portion of our excess capital in the second quarter to pay the $0.24 per share dividend that I mentioned earlier, and also to repurchase those 138,427 shares.

Speaker Change: of Guarantee Common Stock at an average price of $29.50 per share, and this of course continues to add intrinsic value for our shareholders, we believe.

Shalene A. Jacobson: And this, of course, continues to add intrinsic value for our shareholders, we believe. Our total equity to average assets as of June 30th was 9.9%. That concludes our prepared remarks, so I will turn it back over to Nona for Q&A.

Speaker Change: Our total equity to average assets as of June 30th was 9.9%.

Speaker Change: That concludes our prepared remarks, so I will turn it back over to Nona for Q&A.

Nona Branch: Thank you, Shalene. It is now time for our Q&A session. Our first question will be from Matt Olney with Stephen. I will unmute Matt's line.

Nona Branch: Thank you, Shalene. It is now time for our Q&A session. Our first question will be from Matt Olney with Stevens.

Nona Branch: And I will unmute Matt's line.

Matthew Covington Olney: Hey, good morning. Can you hear me? Yes, come on, man. Okay, great. Thanks for taking my question. On the balance sheet, we saw the loan balances contract again in the second quarter, trying to get a better idea of what we can see low and balanced and stabilized. And Kai, I think you mentioned that you expect 2025 to be the year of growth and footprint. Just trying to understand if we should read into this that there could be additional loan pressure in the back half of the year.

Matthew Covington Olney: Hey, good morning. Can you hear me?

Matthew Covington Olney: Yes, come on, man.

Matthew Covington Olney: Okay, great. Thanks for taking my question.

Matthew Covington Olney: On the balance sheet, we saw the loan balances contract again the second quarter.

Speaker Change: Just trying to get a better idea of when we could see loan balances stabilize. And Ty, I think you mentioned you expect 2025 to be the year of growth and footprint. Just trying to appreciate if we should read into this that there could be additional loan pressure in the back half of the year.

Tyson Todd Abston: Matt, I would say that's a possibility in the second half of the year. I mean, we could have the loan book overall pay down. It could be another 100 million, just depends on kind of how things go.

Speaker Change: Matt, I would say that's that's possible second half of the year. I mean, we could have the loan book overall pay down. I mean, it could be another 100 million just depends on kind of how things

Tyson Todd Abston: I mean, I am saying, and I think everyone else is seeing the possibility of rate decreases in the coming quarters, and the economy seems like it's continuing to be very resilient. So, once we get maybe a rate decrease or two and get past this election, it's just starting to feel like things are going to kind of strengthen across the board. And that would give us more growth opportunities. And that's probably going to happen in 25. At least that's my current thought.

Speaker Change: Go, I mean, I am saying, and I'm what, what, you know, I think everyone else is seeing is the possibility of rate decreases, you know, in the coming quarters, and the economy seems like it's continuing to be very resilient. So, um,

Speaker Change: Once we get maybe a rate decrease or two and get past this election, it's just starting to feel like things are going to kind of strengthen across the board. And that would give us more growth opportunities. And that's probably going to happen in 25. At least that's my current thoughts.

Shalene A. Jacobson: Okay, thanks for that, Ty. And then on the funding side, any more color on the FHLB advances that you pay down in the quarter as far as when that was, what the rate was, and then on the remaining FHLB advances still in the books as of June 30th, any more color on the duration of those? at a rate on the.

Speaker Change: OK, thanks for that, Ty, and then.

Speaker Change: On the funding side, any more color on the FHLB advances that you paid down in the quarter as far as when that was, what the rate was, and then on the remaining FHLB advances still in the books as of June 30th?

Speaker Change: Enumeral color on the duration of those and the rate on those.

Shalene A. Jacobson: Yeah, so we paid down a majority of those towards the end of the quarter. The rate was around 5.38, 5.4 percent. The remaining advances are short-term, and the rate is about that same amount, 5.4%.

Speaker Change: Yeah, so we paid down a majority of those towards the end of the quarter. The rate was around 5.38, 5.4 percent.

Speaker Change: The remaining advances are short-term, and the rate is about that same amount, 5.4%.

Shalene A. Jacobson: We'll just see where we are. If we've got good opportunities to invest in more available for sale securities, Matt, we'll do that. If not, we'll likely take some of our excess cash and continue to pay those down. We're just going to play that by year, but the remaining amount is due within this quarter, and 5.4% is about right.

Speaker Change: We'll just see where we are. If we've got good opportunities to invest into more available-for-sale securities, Matt, we'll do that. If not, we'll likely take some of our excess cash and continue to pay those down. We're just going to play that by year. But the remaining amount is due within this quarter, and 5.4% is about the rate.

Shalene A. Jacobson: Okay, thanks for that, Shalene. And then on the Austin property that you guys discussed, sounds like you're putting a more conservative cap rate assumption on that. Just remind me of the most recent appraisal on that property, and then any more color on just the existing leases on that property.

Speaker Change: OK, thanks for that, Shalene. And then on the Austin property that you guys discussed.

Speaker Change: Sounds like you're putting a more conservative cap rate assumption on that. Just remind me of the most recent appraisal on that property, and then any more color on just the existing leases on that property.

Shalene A. Jacobson: Yeah, it's it's I think we have one remaining space that is under an LOI and we're negotiating to get the lease signed it'll be 100% occupied it just you know with our appraisal we have I believe is 17 million depends on the cap rates you use we did receive an LOI on the property that's 90% of what we originally booked it at that we passed on uh we did take this reserve because you know again it depends on the the cap rate you use and we just felt it was prudent to take the reserve we took because we had available you know earnings to do it and um but we think it's a good property good assets and a strong part of Austin and we're gonna you know we don't have the pressure to you know offload it immediately so we're going to get it leased up we have one of the you know the best um management firms in Austin managing it for us and also marketing it for us and they're rolling out the marketing I think that's starting actually this week and uh we're gonna we're going to dispose of the property sell it but we're going to get full value for it and we think it's a good asset for the bank while we're while we're getting to that point, property we foreclosed on the home. I mean, that was that's, that's 1,000,008 appraisal on 1,000,002 home in the DFW market, we think we'll actually sell it probably as is where is and we we don't see any exposure on that. It's kind of an unusual situation that we even foreclosed on it, but we don't see any exposure on that property. Okay, guys.

Speaker Change: Yeah, it's it's

Speaker Change: I think we have one remaining space that is under an LOI and we're negotiating to get the lease signed. It'll be 100% occupied. It just, you know, with our appraisal we have, I believe, is $17 million. Depends on the cap rates you use. We did receive an LOI on the property that's 90% of what we originally booked it at that we passed on.

Speaker Change: We did take this reserve because, you know, again, it depends on the...

Speaker Change: The cap rate you use, and we just felt it was prudent to take the reserve we took because we had available, you know, earnings to do it and

Speaker Change: but

Speaker Change: We think it's a good property, good assets in a strong part of Austin.

Speaker Change: And we're going to, you know, we don't have the pressure to, you know, offload it immediately. So we're going to get it leased up. We have one of the, you know, the best management firms in Austin managing it for us and also marketing it for us, and they're rolling out the marketing. I think that's starting actually this week.

Speaker Change: We're going to dispose of the property, sell it, but we're going to get full value for it, and we think it's a good asset for the bank while we're getting to that point.

Speaker Change: The property we foreclosed on the home, I mean, that's a 1.8 million appraisal on a 1.2 million home in the DFW market. We think we'll actually sell it probably as is, where is, and we don't see any exposure on that.

Speaker Change: It's kind of an unusual situation that we even foreclosed on it, but we don't see any exposure on that property.

unknown: Okay, guys, thank you for taking my question. Thanks, Matt.

Speaker Change: Okay, guys, thanks for taking my questions.

Speaker Change: Thanks, Matt. Thanks.

Michael Edward Rose: Our next call will be from Michael Rose with Raymond James.

Speaker Change: Our next call will be from Michael Rose with Raymond James.

Michael Edward Rose: Hey, good morning, everyone. Can you hear me?

Unknown Executive: Sure. Good morning, Michael. Good morning.

Michael Edward Rose: Hey, good morning, everyone. Can you hear me? Sure. Good morning, Michael. Good morning.

Michael Edward Rose: Hey, good morning. Thanks for taking my questions. Just following up on a similar line to Matt, just as it relates to some of the on balance sheet liquidity and FHLB borrowings. I think your liquidity ratio was up about 300 basis points, Q on Q. I know there's been a push by regulators, particularly for banks over $10 billion in size, to have more on balance sheet liquidity. Was that some of the rationale for that?

Michael Edward Rose: Hey, good morning. Thanks for taking my

Speaker Change: Questions, just following up on a similar line to Matt, just as it relates to

Michael Edward Rose: Yeah, some of the on balance sheet liquidity and FHOB borrowings, you know, I think your liquidity ratio was up about 300 basis points queue on queue. I know there's been a push for

Michael Edward Rose: by regulators, particularly for the banks over $10 billion in size, to have more on-balance sheet liquidity.

Speaker Change: Was that some of the rationale there? And then just separately related to that, you know, if I look at cash to assets, which, you know, I've heard from an increasing number of banks,

Michael Edward Rose: And then separately related to that, if I look at cash to assets, which I've heard from an increasing number of banks that regulators may want that number or percentage higher, I think you guys are about 1.5%. Would you take some of those maturing cash flows? I understand that you would look to buy some additional AFS securities, but just given what we saw with the total liquidity ratio this quarter, would you expect that to continue to build as we move forward? Thanks.

Speaker Change: You know regulators may want that number or percentage higher. I think you guys are about 1.5 percent.

Speaker Change: You know, would you take some of those maturing cash flows, understanding that you would look to buy some additional AFS securities, but, you know, just given what we saw with the total liquidity ratio this quarter, would you expect that to continue to build as we move forward? Thanks.

Tyson Todd Abston: Yeah, Mike, I would say that it's likely to build. Our strategy, like I said, I'm open to comments, is to really maintain a strong position. So we are, we are, we're ready to grow the balance sheet as we see the economy improve and opportunities improve. And that's very similar to how we approached the 2008 financial crisis.

Mike: Yeah, Mike, I would say that it's likely to build. I mean, our strategy, like I said in my opening comments, is to really, you know, maintain a strong position. So we're, we are

Mike: We're ready to grow the balance sheet as we see the economy improve and opportunities improve and that's very similar to how we approached you know the 2008 financial crisis.

Tyson Todd Abston: And we want to be positioned with liquidity, with capital, and also with capacity, lending capacity in all of our buckets to grow the company as we see growth opportunities open back up. So we're going to grow liquidity, and as we see that it makes sense for us, we are adding to the bond portfolio because we think adding that portfolio now is a good time. And we have the ability to do it, which is a good place to be. We have the excess capital buyback stock at advantageous prices.

Mike: and we want to be positioned with liquidity, with capital.

Mike: and also with capacity, lending capacity in all of our buckets.

Mike: to grow the company as we see growth opportunities open back up. So we're going to grow liquidity.

Mike: And as we see...

Mike: that it makes sense for us. We are adding to the bond portfolio, which we think adding that portfolio now is a good time, you know, now's a good time to do that, and we have the ability to do it, which is.

Mike: which is a good place to be. We have the excess capital buyback stock at advantageous prices. Again, trying to make sure we're positioned.

Mike: Take advantage of opportunities we see not only currently, but also in front of us.

Shalene A. Jacobson: Again, trying to make sure we're positioned to take advantage of opportunities we see not only currently but also in front of us. So we'll build liquidity, and more than likely, we're just not seeing strong loan demand, although we're seeing, again, a very resilient economy across Texas. But, you know, things just aren't as attractive for our customers as we're looking at opportunities that, you know, seven and a half, eight and a half percent borrowing versus what they've been.

Mike: So we'll build liquidity, and more than likely, we're not seeing strong loan demand, although we're seeing, again, a very resilient economy across Texas.

Mike: But, you know, things just aren't as attractive for our customers as we're looking at opportunities.

Mike: you know, seven and a half, eight and a half percent borrowings versus what they've been.

Shalene A. Jacobson: So we're not going to fight against that reality, but we plan to be well positioned as things improve. Because we don't want to be in a position where we either don't have the capacity to lend, we don't have the capital, we don't have liquidity, and when things open up, we can't go back on offense. So that's been our strategy, really, for the last two years, and we plan to continue that more than likely throughout the remainder of this year until we see the environment improve.

Mike: So we're not going to we're not going to fight against that reality, but.

Mike: But we plan to be well positioned as things improve.

Mike: because we don't want to be in a position where we either don't have capacity to lend, we don't have the capital, we don't have liquidity, and when things open up we can't go back on offense. So that's been our strategy really the last two years and we plan to continue that more than likely throughout the remainder of this year until we see the environment improve.

Shalene A. Jacobson: Very helpful. And then just as we think about maybe the potential for more on balance sheet liquidity, you know, juxtaposed with, you know, the declining loan balances, you know, you guys have done pretty well on the margin, particularly this quarter with 10 basis points. Q1Q, previously talked about, you know, two to three basis points a month with some of the fixed asset repricing. Can you just help us appreciate, you know, some of the puts and takes and if that two to three basis points a month is the way we should still think about it with all that in context?

Speaker Change: Very helpful. And then just as we think about maybe potential for more on balance sheet liquidity, you know, juxtaposed with, you know, the declining loan balances, you know, you guys have done pretty well on the margin, particularly this quarter of 10 basis points.

Speaker Change: Q on Q. You previously talked about, you know, two to three basis points a month with some of the fixed asset repricing. Can you just help us appreciate, you know, some of the puts and takes, and if that two to three basis points a month is the way we should still think about it with all that in context? Thanks.

Shalene A. Jacobson: Yes, I mean, that's still kind of the run rate with our now, and it's still improving two to three basis points a month as we're catching up on the asset side of the balance sheet repricing. And so that's what we anticipate to continue seeing as we go forward, and I think that's a pretty good assumption.

Speaker Change: Yes, I mean, that's still kind of the run rate with our now it's still improving two to three basis points a month as we're as we're catching up on the asset side of the balance sheet repricing. And so that's what we anticipate to continue seeing as we go forward. And

Shalene A. Jacobson: Okay, and then I know previously talked about kind of a 350 level by the end of next year, but just given that dynamic and then, you know, what I'm hearing, which I think is just the, you know, an inflection in the balance sheet, you know, as we get into next year, and maybe, maybe pushing on the accelerator a little bit in terms of growth, it seems like that number could actually end up being a little bit lower You know, so just how should we kind of think about that number? Is that number actually closer to 360? Just if I do three to two to three basis points a month and add in some growth? I mean,

Speaker Change: I think that's a pretty good assumption.

Speaker Change: Okay, and then I know previously it talked about kind of a 350 level by the end of next year, but just given that dynamic and then, you know, what I'm hearing, I think, is just the, you know, an inflection in the balance sheet, you know, as we get into next year and maybe.

Speaker Change: maybe pushing on the accelerator a little bit in terms of growth. It seems like that number could actually end up being the 350 could could actually end up being a little bit lower. You know, so just how should we kind of think about that number? Is that number actually closer to 360?

Speaker Change: Just if I do two to three basis points a month and add in some growth. I mean more than likely the answer to that is yes. I mean that's certainly our goal is to get our NIM back to where we're

Shalene A. Jacobson: I mean, more than likely, the answer to that is yes. I mean, that's certainly our goal, is to get our NEM back to where we are, you know, our historical average. And that creates a much stronger earnings stream, helps our efficiency ratio, helps all of our metrics. At this point, you know, like everyone else, we've been trying to build it back, so we kind of targeted $350 without any without a material change in rates, and I'm talking about, you know, to 300 basis points change in rates over a short period of time. We should pick up to three basis points on a four basis a So we do go past that 350 as we're continuing to, you know, again, reprice the assets out of the balance sheet.

Speaker Change: you know, our historical average, and that creates a much stronger earning stream, helps our efficiency ratio, helps all of our metrics. At this point, you know, like everyone else, you know, we've been trying to build it back, so we kind of targeted 350, but

Unknown Executive: Without a material change in rates, and I'm talking about, you know, 2, 300 base points, changed rates over, you know, short period of time, we should pick up 2, 3 basis points on a 4 basis a month for the next, you know, several quarters. So we do go past that 3 50 as we're continuing to, you know, again, repost the assets of the balance sheet.

Speaker Change: Without a material change in rates, and I'm talking about 200-300 basis points change in rates over a short period of time, we should pick up 2-3 basis points on a 4 basis a month.

Speaker Change: for the next, you know, several quarters. So we do go past that 350 as we're continuing to, you know, again, reprice the assets out of the balance sheet.

Unknown Executive: Very helpful, and then maybe just finally, for me, just on the buyback, I think the earned back this quarter was around 3.6 years, certainly, you know, well within, you know, acceptable earned back.

Shalene A. Jacobson: Very helpful. And then maybe just finally, for me, just on the buyback, I think the earnback this quarter was around 3.6 years, certainly, you know, well within, you know, acceptable earnback. Should we expect, you know, continued, you know, just given where your capital levels are, you know, looks like more shrinkage of the balance sheet, potentially here in the next couple quarters, you know, should we expect, you know, share repurchases to continue at or around this pace as we move forward and potentially finish out the program?

Speaker Change: Very helpful. And then maybe just finally for me just on the on the buyback, I think the earned back this quarter was was around 3.6 years, certainly, you know, well within

Speaker Change: you know, acceptable earn back.

Michael Rose: Should, should we expect, you know, continued, you know, skim-weight copper levels are, you know, looks like more shrinkage of the balance sheet, potentially here in the next couple quarters, you know, should we expect, you know, share repurchases to continue at or around this space as we move forward and potentially finish out the program, you know, in the, in the timeline, I think it expires in April of 2026? Should, should we expect full usage of that assuming, you know, earned back around, you know, these levels, and, you know, just the capital levels, thanks. The answers, yes, Michael, if the earned back is kind of in that same range, which means our price would be average price would be in the range we purchased in this past quarter, then yes, that's a capital allocation party for us.

Speaker Change: Should we expect continued, given where your capital levels are, looks like more shrinkage of the balance sheet?

Speaker Change: potentially here in the next couple quarters, you know, should we expect, you know, share repurchases to continue at or around?

Speaker Change: this pace as we move forward and potentially finish out the the program, you know, in the in the timeline, I think it expires in April of 2026. Should we expect full usage of that assuming, you know, and earn back around, you know, these levels and, you know, just the capital levels? Thanks.

Shalene A. Jacobson: You know, in the timeline, I think it expires in April 2026. Should we expect full usage of that, assuming you don't earn back around, you know, these levels and, you know, just the capital levels? Thanks. All right.

Shalene A. Jacobson: The answer is yes, Michael. If the earn back is kind of in that same range, which means our price would be, average price would be, in the range we've purchased in this past quarter, then yes, that's a capital allocation priority for us. If the IRMBAC pushes out, obviously, we'd be less aggressive.

Speaker Change: The answer is yes, Michael. If the earn back is kind of in that same range, which means our price would be, average price would be in the range we've purchased in this past quarter, then yes, that's a capital allocation priority for us. If the earn back pushes out, obviously we'd be less aggressive.

Michael Rose: If the earned back pushes out, obviously, we'd be less aggressive.

Michael Edward Rose: I totally understand. Thanks for taking all my questions. Absolutely. Thank you.

Unknown Executive: So we understand; thanks for taking all my questions. Thank you.

Speaker Change: Thanks for taking all my questions. Absolutely. Thank you.

Woody Slay: Our next call will be from Woody Slay with KBW.

Woody Lay: Our next call will be from Woody, play with KVW. Hey, good morning, guys. Can you hear me? Yeah, yeah, yeah, yeah.

Speaker Change: Our next call will be from Woody Slay with KBW.

Woody Slay: Hey, good morning, guys. Can you hear me? Yes, yes, good morning.

Woody Slay: Hey, good morning guys. Can you hear me? Yes. Yes.

Woody Lay: Yeah, wanted to, wanted to touch on the loan growth and the expectations that, you know, maybe we see it pick up in, in 2025. It's just as you talked to your customers, you know, do you think it's enough to just get one rate cut, that'll push one growth higher? Do you think, you know, your customers need to see, to see two or three rate cuts to really engage on potential projects?

Woody Slay: Yeah, I wanted to touch on loan growth and the expectations that, you know, maybe we'll see a pickup in 2025. And just as you talk to your customers, do you think it's enough to just get one rate cut and that'll push loan growth higher? Or do you think, you know, your customers need to see two or three rate cuts to really engage with potential projects?

Woody Slay: Yeah, I wanted to touch on the loan growth and the expectations that maybe we see a pickup in 2025. Just as you talk to your customers.

Woody Slay: Do you think it's enough to just get one rate cut and that'll push loan growth higher, or do you think your customers need to see two or three rate cuts to really engage on potential projects?

Tyson Todd Abston: Woody, I would say that it's more the latter. I would say that, you know, two or three cuts certainly would gain more confidence, you know, in the overall marketplace. And, you know, getting past this election and the uncertainty of that and kind of where the policies are going to land, regulatory policies and growth policies. And we're just hearing a lot of that kind of conversation that, you know, everyone wants to get past that, see some rate cuts, because they see tremendous opportunities for growth in our state and opportunities, you know, going forward.

Unknown Executive: Woody, I would say it's more than a ladder. I would say that, you know, two or three cuts certainly would get more confidence, you know, in the overall marketplace. And, you know, getting past this election and certainly that and kind of where the policies are going to land, regulatory policies and the growth policies, and we're just hearing a lot of that kind of conversation that, you know, everyone wants to get past that, get, you know, see some rate cuts, because they see tremendous opportunities for growth in our state and opportunities, you know, going forward.

Woody Slay: Woody, I would say that it's more the latter. I would I would say that, you know, two or three cuts certainly would would give more confidence, you know, in the overall marketplace.

Woody Slay: And, you know, getting past this election and the uncertainty of that and kind of where the policies are going to land, regulatory policies and the growth policies. And we're just hearing a lot of that kind of conversation that

Woody Slay: You know, everyone wants to get past that and get, you know, see some rate cuts because they see tremendous opportunities for growth in our state and opportunities, you know, going forward.

Unknown Executive: There's just a lot of uncertainty right now, and so just a lot of capital that's on the sidelines waiting for those, those that environment to kind of improve, and we'll see how that plays out. But my, my best sense is that, you know, sometimes the first half of 25 we could see those, those events play out that would create. The opportunities for us to get back into a more of a growth mode in our markets, and that would be, you know, that would be obviously strong for our state and our bank, and it would be very welcome.

Tyson Todd Abston: There's just a lot of uncertainty right now, and so there's a lot of capital that's on the sidelines waiting for that environment to kind of improve. And we'll see how that plays out. But my best sense is that, you know, sometime in the first half of 25, we could see those events play out that would create opportunities for us to get back into more of a growth mode in our markets. And that would be, you know, that'd be obviously good for our state and our bank.

Woody Slay: They're just a lot of uncertainty right now and so there's a lot of capital that's on the sidelines waiting for those, those, that environment to kind of improve and, and we'll see how that plays out but my, my best sense is that

Woody Slay: You know, sometime in the first half of 25, we could see those those events play out that would create Opportunities for us to get back into a more of a growth mode in our markets. And that would be, you know, that'd be obviously strong for our state, our bank, and they would be very welcome.

Woody Lay: Yeah, and then I also just wanted to touch on the construction portfolio. You know, construction and development balances have been.

Tyson Todd Abston: Yeah, and then I also just wanted to touch on the construction portfolio. Construction and development balances have been gradually falling over the past year. Can you just give some overarching comments on the segment and maybe what your appetite is for the segment?

Speaker Change: Yeah, and then I also just wanted to touch on the construction portfolio, you know, construction and development balances have been gradually falling over the past year. Can you just give some overarching comments on the segment and maybe what your appetite is for the segment?

Woody Lay: Gradually falling over the past year, can you just give some overarching comments on the segment and maybe what your appetite is for the segment, you know, it may be heading in closer to 25.

Tyson Todd Abston: You know, maybe.

Unknown Executive: I mean, our appetite is more constrained.

Tyson Todd Abston: I mean, our appetite is more constrained. Obviously, we've been underwriting and have been for a couple of years with obviously higher rates and looking at more equity positions, stronger guarantors for those things as you would with higher rates that are, you know, that we're currently, you know, managing. So I do think again, we're seeing projects that are put on the shelf that are good projects that just the investors and borrowers are waiting for a more favorable environment, not just rates, but the overall, you know, environment has a little less uncertainty to it.

Speaker Change: you know, may be heading in closer to 2025.

Unknown Executive: Obviously, we're underwriting and have been for a couple of years with obviously higher rates and looking at more equity positions, stronger guarantors for more than those things as you would with higher rates that are, you know, that we're currently, you know, managing. So I do think, again, we're seeing projects that are put on the shelf that are good projects that just the investors and borrowers are waiting for a more favorable environment. Not just rape, but overall, you know, environment had a little less uncertainty to it. So we do see opportunities going forward, but it's going to be more muted in it.

Speaker Change: I mean, our appetite is more constrained, obviously. We're underwriting and have been for a couple of years with obviously higher rates.

Speaker Change: looking at more equity positions, stronger guarantors for it and those things as you would with higher the rates that are, you know, that we're currently

Speaker Change: you know, managing. So I do think again, we're seeing projects are put on the shelf that are good projects that just the the

Speaker Change: The Ambassadors and...

Speaker Change: borrowers are waiting for a more favorable environment. Not just rate, but the overall environment has a little less uncertainty to it. So we do see opportunities going forward, but it's going to be more muted, like it has been the last

Tyson Todd Abston: So, we do see opportunities going forward, but they're going to be more muted, like they have been in the last 12, 18 months with the current environment where rates are, and then certainly the bank's appetite for risk has tightened in the last two years. And so, we're underwriting a little closer and more stringent, just like every bank, I'm sure.

Unknown Executive: Like it has been the last 12, 18 months with the current environment where rates are, and then certainly banks have a time for risk is as tightened the last two years. And so we're underwriting a little closer and more stranger, just like every bank, I'm sure, is.

Speaker Change: 12-18 months with the current environment where rates are and then certainly the bank's appetite for risk has tightened in the last two years and so we're underwriting a little closer and more stringent just like every bank I'm sure is.

Unknown Executive: Yeah, and then lastly, just on expenses, you know, they were relatively flat quarter. I know the Oreo project has a little bit of variability in there, but does it seem like second quarter's rate is a pretty good run rate going forward? Yes, wait, I think it is a good run rate.

Woody Slay: Yeah, and then lastly, just on expenses, um, you know, they're relatively flat quarter over quarter. I know the Oreo project has a little bit of variability in there, but, uh, does it seem like the second quarter's rate is a pretty good run rate going forward?

Speaker Change: Yeah, and then lastly, just on expenses, you know, they were relatively flat quarter over quarter. I know the Oreo project has a little bit of variability in there, but does it seem like second quarter's rate is a pretty good run rate going forward?

Shalene A. Jacobson: to let you take that question.

Shalene A. Jacobson: Yes, Woody, I think it is a good run. Right?

Speaker Change: Ladies, take that clay.

Woody Slay: Yes, Woody, I think it is a good run, right?

Unknown Executive: All right, thanks for taking my questions. Sure, thanks, Woody.

Woody Slay: All right, thanks for taking my question.

Speaker Change: Alright, thanks for taking my questions.

Unknown Executive: Thank you for your questions.

Nona Branch: Thank you for your questions. I would like to remind everyone that the recording of this call will be available by 1 p.m. Central Time today on our Investor Relations page at GNTY.com. Thank you for attending, and this concludes our call.

Speaker Change: Sure. Thanks, Woody.

Unknown Executive: I would like to remind everyone that the recording of this call will be available by 1 p.m. Central time today on our investor relations page at gntwan.com.

Speaker Change: Thank you for your questions. I would like to remind everyone the recording of this call will be available by 1 p.m. Central Time today on our Investor Relations page at GNTY.com. Thank you for attending and this concludes our call.

Unknown Executive: Thank you for attending, and this concludes our call. Have a good day. Good bye.