Community Bank Guaranty Bancshares looks to IPO for Expansion funding
Community development always requires some bankrolling. For over 100 years, the Texas community has enjoyed the benefits of low-interest mortgaging and equal housing lender privileges from Guaranty Bancshares Inc., also known as Guaranty Trust and Bank. This Monday the company announced that it was ready to begin functioning on a much larger scale with the launch of its second IPO.
The Mt. Pleasant, Texas-based company, was founded in 1913 as a bank holding company to serve the wider Texas area. Over the years, the institution has grown to cover 18 Texan communities in 26 different locations. Guaranty Bancshares had previously gone public in 1998 but regained its privacy status in 2005. Company CEO Bill Jones and his leadership team confirmed that the bank intended to use the income from the IPO to expand the banking operations of the firm.
Guaranty Bancshares’ operations are quite diversified. The banking trust offers mortgaging services and consultations for its customers. It also allows its customers to set up their bank accounts online. That way, their customers do digital banking- they can buy all their favorite goods from online stores and pay for services online.
In the initial issuance, Guaranty Bancshares Inc. will raise about $54 million dollars if it sells its shares at its current pricing terms. If everything goes according to plan, the company will sell off 2 million of its common stock in the range of $26 to $28 each, garnering a fully diluted market cap of $292 million with those terms. The bank will list in NASDAQ and trade its shares under its original label GNTY. Guaranty Bancshares expects to start trading on its shares in the week of May 8th,. It will be one of few companies listed to trade during this period. Sander O’Neill and Stephens LLC will be the joint book runners on the deal.
As a company Guaranty seems like a safe bet for an investor. After all, the company listed $1.8 billion in assets and recorded a $67 million revenue report in the 12 months that ended on December 31st, 2016. Add to that is the fact that the bank shows considerable liquidity and potential for growth. Put all that together and you have a very enticing investment package.
Guaranty Bancshares Inc., however, concerns investors in that all its revenue stream comes from its banking subsidiary the Guaranty Bank. Banks are profitable but only on a massive scale. Guaranty Bank brings in substantial amounts yearly, but it also holds considerable risk due to its high mortgaging capacities. Additionally, the bank operates in only one state, thus limiting its market considerably. This limited consumer market makes Guaranty Bancshares Inc. shares a high-risk but potentially high earning investment.
While one person may look at the numbers and doubt the wisdom of embarking on such a venture as investing in Guaranty, another will look at the long-term benefits. Guaranty Bancshares Inc. is one of the largest banks in operation in Texas. The monopoly in the market along with the potential for expansion may make it an ideal investment. Also, the possibility of the company’s expansion opens up possibilities for growth that may earn an investor long-term benefits in dividends.