MOUNT PLEASANT, Texas, July 24, 2018 (GLOBE NEWSWIRE) -- Guaranty Bancshares, Inc. (NASDAQ:GNTY), the holding company for Guaranty Bank & Trust, N.A., today reported financial results for the fiscal quarter ended June 30, 2018. The company's net income available to common shareholders was $4.6 million, or $0.41 per basic share, for the quarter ended June 30, 2018, compared to $4.4 million, or $0.39 per basic share, for the quarter ended March 31, 2018 and $4.0 million, or $0.40 per basic share, for the quarter ended June 30, 2017. The earnings per basic share during the second quarter of 2018 were impacted by the issuance of 899,816 shares of common stock in connection with the completion of the Westbound Bank ("Westbound") acquisition on June 1, 2018. Excluding the Westbound acquisition related expenses, basic earnings per share during the second quarter of 2018 would be $0.46 per basic share. The growth in our net income was primarily attributable to an increase in net interest income, after the provision for loan losses, of $1.8 million and an increase in noninterest income of $400,000, compared to the same period in 2017. Return on average assets and average equity for the second quarter were 0.90% and 8.58%, respectively, compared to 0.89% and 8.35%, respectively for the first quarter of 2018 and 0.85% and 8.85%, respectively, for the same period during 2017.
The company's growth in net earnings in the second quarter of 2018, as compared to the second quarter of 2017, was primarily attributable to growth in net interest income of $1.8 million, an increase in noninterest income of $400,000, and a decrease in the income tax provision of $611,000. These increases were partially offset by an increase in noninterest expense of $2.2 million, which includes nonrecurring Westbound acquisition related expenses during the quarter of $534,000, as well as $7.8 million in employee and compensation benefits for the quarter ended June 30, 2018, an increase of $1.3 million, or 20.9%, from the quarter ended June 30, 2017. The increase in employee compensation and benefits resulted from an increase of 54 full-time equivalent employees, from 395 as of June 30, 2017 to 449 as of June 30, 2018, of which 25 new employees were related to the Westbound acquisition, nine were from our two de novo locations in Austin and Fort Worth, Texas that were opened in the fourth quarter of 2017, and other employees were added to support operational growth and our SBA department.
Net interest income for the second quarter of 2018 and 2017 was $16.5 million and $14.8 million, respectively, an increase of $1.7 million, or 11.2%. Net interest margin for the second quarter of 2018 and 2017 was 3.44% and 3.40% respectively. Net interest income and net interest margin, on a taxable equivalent basis, were $16.5 million and 3.48%, respectively, for the second quarter of 2018.
The provision for loan losses was $650,000 in the second quarter of 2018, compared to $600,000 in the first quarter of 2018 and $800,000 in the second quarter of 2017. The provision for loan losses is primarily reflective of organic growth during the respective periods. Nonperforming assets as a percentage of total loans have remained relatively consistent and were 0.76% at June 30, 2018, compared to 0.64% at March 31, 2018, and 0.71% at June 30, 2017.
Noninterest income increased 6.8% in the second quarter of 2018 to $3.9 million, compared to $3.7 million for the quarter ended March 31, 2018. Noninterest income increased 11.4% in the second quarter of 2018, compared to $3.5 million for the quarter ended June 30, 2017. Merchant and debit card income increased 10.1% to $871,000, compared to $791,000 in the same quarter last year due to continued growth in net new accounts and debit card usage. Gain on sale of mortgage loans increased $206,000, or 43.6%, from $472,000 in the second quarter of 2017 to $678,000 in the current quarter. The increase in gain on sale of mortgage loans results from increases in the volume and amount of the loans sold. Other categories of noninterest income increased with the continued growth of the bank.
Noninterest expense increased 7.1% in the second quarter of 2018 to $14.1 million, compared to $13.1 million for the quarter ended March 31, 2018. Noninterest expense increased 18.2% in the second quarter of 2018, compared to $11.9 million for the second quarter of 2017. The increase in noninterest expense in the second quarter of 2018 was primarily driven by a $1.3 million increase in employee compensation and benefit expenses when compared to the same quarter a year ago, a $614,000 increase in legal and professional fees, primarily associated with the Westbound acquisition and a $140,000 increase in occupancy expenses. Increases in salary and occupancy expenses were significantly impacted as a result of the Westbound acquisition and by our two de novo locations in Austin and Fort Worth, Texas. The company's efficiency ratio in the second quarter of 2018 was 68.88%, compared to 65.10% in the same quarter last year.
As of June 30, 2018, consolidated assets for the company totaled $2.24 billion, compared to $2.00 billion at March 31, 2018 and $1.91 billion at June 30, 2017. Gross loans increased 13.71%, or $192.1 million, to $1.59 billion at June 30, 2018, compared to loans of $1.40 billion at March 31, 2018. Gross loans increased 23.0%, or $297.8 million, from $1.30 billion at June 30, 2017. Excluding the $154.7 million of loans acquired from Westbound, loan growth from June 30, 2017 to June 30, 2018 was $143.1 million or 11.0%. Deposits increased by 9.27%, or $156.8 million, to $1.85 billion at June 30, 2018 compared to $1.69 billion at March 31, 2018. Total deposits increased 12.3%, or $202.1 million, from $1.65 billion at June 30, 2017. Excluding the $181.4 million of deposits acquired from Westbound, deposit growth from June 30, 2017 to June 30, 2018 was $20.6 million, or 1.24%. Shareholders' equity totaled $239.7 million as of June 30, 2018, compared to $207.4 million at March 31, 2018 and $204.6 million at June 30, 2017. The increases from the first quarter and from June 30, 2017 were primarily the result of operating earnings and the issuance of common stock related to the Westbound acquisition during the period.
The company's Chairman and Chief Executive Officer, Ty Abston, said, "Guaranty completed the Westbound acquisition on June 1st with a simultaneous close and system conversion that went very smoothly as our integration team did an excellent job leading up to and during the conversion. We continue to integrate the operations of the Westbound locations into Guaranty and expect to realize cost savings of at least 30.0%. We have hired two additional lenders in the Houston market and plan to further build out our team in that growing region. Our Austin and Dallas/Fort Worth markets continue to grow and we will be moving to permanent facilities in all of those markets during the third and fourth quarters of 2018, which should help us continue our growth momentum."
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