MARKETABLE SECURITIES

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

NOTE 2 - MARKETABLE SECURITIES

The following tables summarize the amortized cost and fair value of available for sale and held to maturity securities as of March 31, 2024 and December 31, 2023 and the corresponding amounts of gross unrealized gains and losses:

March 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
Corporate bonds	$	29,861	$	—	$	2,801	$	27,060
Municipal securities		2,321		152		—		2,473
Mortgage-backed securities		199,776		601		17,237		183,140
Collateralized mortgage obligations		17,980		5		1,871		16,114
Total available for sale	$	249,938	$	758	$	21,909	$	228,787
Held to maturity:
U.S. government agencies	$	9,331	$	—	$	1,127	$	8,204
Treasury securities		39,557		—		725		38,832
Municipal securities		161,031		625		6,604		155,052
Mortgage-backed securities		117,454		—		16,875		100,579
Collateralized mortgage obligations		36,590		—		7,777		28,813
Total held to maturity	$	363,963	$	625	$	33,108	$	331,480

December 31, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for sale:
Corporate bonds	$	29,882	$	—	$	3,077	$	26,805
Municipal securities		2,322		182		—		2,504
Mortgage-backed securities		164,419		1,014		15,621		149,812
Collateralized mortgage obligations		18,757		19		1,702		17,074
Total available for sale	$	215,380	$	1,215	$	20,400	$	196,195
Held to maturity:
U.S. government agencies	$	9,292	$	—	$	1,066	$	8,226
Treasury securities		69,432		—		1,038		68,394
Municipal securities		168,175		923		6,123		162,975
Mortgage-backed securities		119,872		—		15,105		104,767
Collateralized mortgage obligations		37,437		—		7,276		30,161
Total held to maturity	$	404,208	$	923	$	30,608	$	374,523

From time to time, we have reclassified certain securities from available for sale to held to maturity. Such transfers are made at fair value at the date of transfer. The unrealized holding gains and losses at the date of transfer are retained in accumulated other comprehensive loss and in the carrying value of the held to maturity securities and are amortized or accreted over the remaining life of the security. During the second quarter of 2022, we transferred $106,157 of securities from available for sale to held to maturity, which included a net unrealized loss on the date of transfer of $13,186. During the third quarter of 2021, we transferred $172,292 of securities from available for sale to held to maturity, which included a net unrealized gain on the date of transfer of $10,235. These unamortized unrealized losses and unaccreted unrealized gains on our transferred securities are included in accumulated other comprehensive loss on our balance sheet and they netted to an unrealized loss of $7,131 at March 31, 2024 compared to an unrealized loss of $6,964 at December 31, 2023. This amount will continue to be amortized and accreted out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities.

There is no allowance for credit losses recorded for our available for sale or held to maturity debt securities as of March 31, 2024 or December 31, 2023.

Information pertaining to securities with gross unrealized losses as of March 31, 2024 and December 31, 2023, for which no allowance for credit losses has been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:

	Less Than 12 Months					12 Months or Longer					Total
March 31, 2024	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Corporate bonds	$	—		$	—	$	(2,801	)	$	27,060	$	(2,801	)	$	27,060
Mortgage-backed securities		(1,316	)		40,846		(15,921	)		97,768		(17,237	)		138,614
Collateralized mortgage obligations		—			—		(1,871	)		13,084		(1,871	)		13,084
Total available for sale	$	(1,316	)	$	40,846	$	(20,593	)	$	137,912	$	(21,909	)	$	178,758

	Less Than 12 Months					12 Months or Longer					Total
December 31, 2023	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Corporate bonds	$	—		$	—	$	(3,077	)	$	26,805	$	(3,077	)	$	26,805
Mortgage-backed securities		(742	)		13,308		(14,879	)		101,889		(15,621	)		115,197
Collateralized mortgage obligations		—			—		(1,702	)		13,976		(1,702	)		13,976
Total available for sale	$	(742	)	$	13,308	$	(19,658	)	$	142,670	$	(20,400	)	$	155,978

There were 245 investments in an unrealized loss position at March 31, 2024, of which 83 were available for sale debt securities in an unrealized loss position with no recorded allowance for credit losses. The available for sale securities in a loss position included corporate bonds, mortgage-backed securities and collateralized mortgage obligations. Management evaluates available for sale debt securities in an unrealized loss position to determine whether the impairment is due to credit-related factors or noncredit-related factors. With respect to the collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies, the Company has determined that the decline in fair value is not due to credit-related factors. The Company monitors the credit quality of other debt securities through the use of credit ratings and other factors specific to an individual security in assessing whether or not the decline in fair value of municipal or corporate securities, relative to their amortized cost, is due to credit-related factors. Triggers to prompt further investigation of securities when the fair value is less than the amortized cost are when a security has been downgraded and falls below an A credit rating, and the security’s unrealized loss exceeds 20% of its book value. Consideration is given to (1) the extent to which fair value is less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value. Based on evaluation of available evidence, management believes the unrealized losses on the securities as of March 31, 2024 and December 31, 2023 are not credit-related. Management does not have the intent to sell any of these securities and believes that it is more likely than not the Company will not have to sell any such securities before recovery of cost. The fair values are expected to recover as the securities approach their maturity date or repricing date or if market yields for the investments decline. Accordingly, no allowance for credit losses has been recorded for these securities.

Management assesses held to maturity securities sharing similar risk characteristics on a collective basis for expected credit losses under the current expected credit losses ("CECL") methodology. As of March 31, 2024 and December 31, 2023, our held to maturity securities consisted of U.S. government agencies, municipal bonds, treasury securities, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government and its agencies. With regard to the treasuries, collateralized mortgage obligations and mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the government National Mortgage Association. For municipal securities, management reviewed key risk indicators, including ratings by credit agencies when available, and determined that there is no current expectation of credit loss. Accordingly, no allowance for credit losses has been recorded for these securities.

As of March 31, 2024, there were no holdings of securities of any one issuer, other than the collateralized mortgage obligations, treasuries and mortgage-backed securities issued by the U.S. government and its agencies, in an amount greater than 10% of total equity attributable to Guaranty Bancshares, Inc.

Securities with fair values of approximately $318,110 and $317,112 at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law.

The proceeds from sales of available for sale securities and the associated gains and losses are listed below for the:

	Three Months Ended March 31,
	2024		2023
Proceeds from sales	$	—	$	7,239
Gross gains		—		119
Gross losses		—		(26	)

The contractual maturities at March 31, 2024 of available for sale and held to maturity securities at carrying value and estimated fair value are shown below. Expected maturities may differ from contractual maturities because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
March 31, 2024	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	7,497	$	7,373	$	23,695	$	23,456
Due after one year through five years		2,039		1,851		61,338		58,931
Due after five years through ten years		22,646		20,309		86,992		84,340
Due after ten years		—		—		37,894		35,361
Mortgage-backed securities		199,776		183,140		117,454		100,579
Collateralized mortgage obligations		17,980		16,114		36,590		28,813
Total securities	$	249,938	$	228,787	$	363,963	$	331,480