Southside Bancshares, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2021

Rhea-AI Summary

Southside Bancshares, Inc. (SBSI) reported a fourth quarter net income of $28.7 million, down 3.0% year-over-year. For the year ended December 31, 2021, net income reached a record $113.4 million, a 38.0% increase compared to 2020. Key metrics included annualized returns on average assets at 1.59% and tangible common equity at 17.04%. Loan growth was 5.0% (net of PPP loans) while deposits rose by 16.0%. However, the efficiency ratio increased slightly to 51.74% for the year. Nonperforming assets decreased to 0.16% of total assets.

Positive

• Record annual net income of $113.4 million, up 38.0% from 2020.
• Annualized return on average assets at 1.59% and return on average tangible common equity at 17.04%.
• Deposits increased by $790 million, or 16%.
• Loan growth of 5% (excluding PPP loans) indicating strong demand.

Negative

• Fourth quarter net income decreased by $0.9 million, or 3.0%, year-over-year.
• Efficiency ratio slightly increased to 51.74% for the year.
• Annualized return on average equity decreased to 12.67% from 13.77% in the previous year.

• Fourth quarter net income of $28.7 million;
• Record annual net income of $113.4 million, an increase of 38.0%, compared to the same period in 2020;
• Annualized linked quarter loan growth, net of Paycheck Protection Program (“PPP”) loans, of 3.8%;
• Annualized linked quarter deposit growth, net of brokered deposits, of 15.9%;
• Linked quarter net interest margin increased to 3.23%;
• Annualized return on fourth quarter average assets of 1.57%;
• Annualized return on fourth quarter average tangible common equity of 16.80%⁽¹⁾; and
• Nonperforming assets decreased to 0.16% of total assets.

TYLER, Texas, Jan. 28, 2022 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter and year ended December 31, 2021. Southside reported net income of $28.7 million for the three months ended December 31, 2021, a decrease of $0.9 million, or 3.0%, compared to $29.6 million for the same period in 2020. Earnings per diluted common share were $0.88 for the three months ended December 31, 2021, compared to $0.89 for the same period in 2020. The annualized return on average shareholders’ equity for the three months ended December 31, 2021 was 12.67%, compared to 13.77% for the same period in 2020.  The annualized return on average assets was 1.57% for the three months ended December 31, 2021, compared to 1.64% for the same period in 2020.

“We reported exceptional financial results for 2021, thanks to the outstanding performance of the Southside team. Highlights included record net income of $113.4 million, a 1.59% return on average assets, a 17.04% return on average tangible common equity, an increase in our net interest margin to 3.16% and continued strong asset quality,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “During 2021, we increased the cash dividend per share 5.4% and reduced the efficiency ratio⁽¹⁾ to 49.03%. In addition, deposits increased $790 million, or 16%, and loans, net of PPP loans, increased $171.2 million, or 5%.”

“As we enter 2022, we do so with a strong balance sheet, capital levels and credit metrics that we believe position us well for continued success. Our loan pipeline is strong, and we anticipate first quarter payoffs will be significantly less than we experienced during the fourth quarter. We remain encouraged by the continued strong economic conditions in the market areas we serve.”

Operating Results for the Three Months Ended December 31, 2021

Net income was $28.7 million for the three months ended December 31, 2021, compared to $29.6 million for the same period in 2020, a decrease of $0.9 million, or 3.0%. Earnings per diluted common share were $0.88 and $0.89 for the three months ended December 31, 2021 and 2020, respectively. The decrease in net income was primarily a result of a decrease in the reversal of provision for credit losses and an increase in income tax expense, partially offset by increases in noninterest income and net interest income. Annualized returns on average assets and average shareholders’ equity for the three months ended December 31, 2021 were 1.57% and 12.67%, respectively, compared to 1.64% and 13.77%, respectively, for the three months ended December 31, 2020.  Our efficiency ratio and tax equivalent efficiency ratio⁽¹⁾ were 50.34% and 47.61%, respectively, for the three months ended December 31, 2021, compared to 49.86% and 47.36%, respectively, for the three months ended December 31, 2020, and 50.64% and 47.92%, respectively, for the three months ended September 30, 2021.

Net interest income for the three months ended December 31, 2021 was $49.4 million, compared to $48.7 million for the same period in 2020, an increase of 1.4%. The increase in net interest income compared to the same period in 2020 was due to the decrease in interest expense on our interest bearing liabilities due to the decline in the average balance and overall rate paid on our interest bearing liabilities, partially offset by the decrease in interest income, a result of a decrease in the interest income from PPP loans during the three months ended December 31, 2021. Linked quarter, net interest income increased $1.2 million, or 2.5%, compared to $48.2 million during the three months ended September 30, 2021. The increase in net interest income was primarily due to a decrease in the average rate and balance on our interest bearing liabilities.

Our net interest margin and tax equivalent net interest margin⁽¹⁾ increased to 3.01% and 3.23%, respectively, for the three months ended December 31, 2021, compared to 3.00% and 3.20%, respectively, for the same period in 2020. Linked quarter, net interest margin increased 5 basis points from 2.96% and tax equivalent net interest margin⁽¹⁾ increased 7 basis points from 3.16% for the three months ended September 30, 2021.

Noninterest income was $12.0 million for the three months ended December 31, 2021, an increase of $1.1 million, or 10.2%, compared to $10.9 million for the same period in 2020. The increase was due to increases in net gain on sale of securities available for sale (“AFS”), deposit services income, brokerage services income and trust fees, partially offset by a decrease in gain on sale of loans. On a linked quarter basis, noninterest income decreased $0.8 million, or 5.9%, compared to the three months ended September 30, 2021. The decrease was due to a decrease in net gain on sale of securities AFS.

Noninterest expense was $31.3 million for the three months ended December 31, 2021 and December 31, 2020. On a linked quarter basis, noninterest expense decreased $0.4 million, or 1.4%, compared to the three months ended September 30, 2021, due to the $1.1 million loss on the redemption of subordinated notes during the third quarter.

Income tax expense increased $0.5 million for the three months ended December 31, 2021 compared to the same period in 2020. On a linked quarter basis, income tax expense decreased $0.2 million, or 3.3%. Our effective tax rate (“ETR”) increased to 14.4% for the three months ended December 31, 2021, compared to 12.6% for the three months ended December 31, 2020, primarily a result of the increase in the annual ETR. Linked quarter, our ETR decreased slightly from 14.5% for the three months ended September 30, 2021, primarily due to a discrete tax benefit recorded in connection with equity award transactions.

Operating Results for the Year Ended December 31, 2021

Net income was $113.4 million for the year ended December 31, 2021, compared to $82.2 million for the same period in 2020, an increase of $31.2 million, or 38.0%. Earnings per diluted common share were $3.47 for the year ended December 31, 2021, compared to $2.47 for the same period in 2020, an increase of 40.5%. The increase in net income was a direct result of a reversal of the provision for credit losses compared to a large increase in the allowance for credit losses for the same period in 2020. Returns on average assets and average shareholders’ equity for the year ended December 31, 2021 were 1.59% and 12.77%, respectively, compared to 1.14% and 9.91%, respectively, for the year ended December 31, 2020.  Our efficiency ratio and tax equivalent efficiency ratio⁽¹⁾ were 51.74% and 49.03%, respectively, for the year ended December 31, 2021, compared to 51.85% and 49.36%, respectively, for the year ended December 31, 2020.

Net interest income was $189.6 million for the year ended December 31, 2021, compared to $187.3 million for the same period in 2020, due to the decrease in interest expense on our interest bearing liabilities, partially offset by the decrease in interest income, both primarily a result of an overall decline in interest rates.

Our net interest margin and tax equivalent net interest margin⁽¹⁾ were 2.96% and 3.16%, respectively, for the year ended December 31, 2021, compared to 2.89% and 3.07%, respectively, for the same period in 2020. The increase in net interest margin was due to lower average rates and balances on our interest bearing liabilities, partially offset by a lower average yield on our interest earning assets during the year ended December 31, 2021.

Noninterest income was $49.3 million for the year ended December 31, 2021, a decrease of 0.8%, compared to $49.7 million for the same period in 2020. The decrease was due to decreases in net gain on sale of securities AFS and gain on sale of loans, partially offset by increases in deposit services income, other noninterest income, brokerage services income and trust fees.

Noninterest expense was $125.0 million for the year ended December 31, 2021, compared to $123.3 million for the same period in 2020, an increase of $1.7 million, or 1.4%. The increase was the result of increases in salaries and employee benefits, a loss on the redemption of subordinated notes, increases in software and data processing expense and FDIC insurance, partially offset by decreases in other noninterest expense and amortization of intangibles.

Income tax expense increased $6.1 million, or 53.7%, for the year ended December 31, 2021, compared to the same period in 2020. Our ETR was approximately 13.3% and 12.1% for the year ended December 31, 2021 and 2020, respectively. The higher ETR for the year ended December 31, 2021, as compared to the same period in 2020, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.

Balance Sheet Data

At December 31, 2021, we had $7.26 billion in total assets, compared to $7.01 billion at December 31, 2020 and $7.14 billion at September 30, 2021.

Loans at December 31, 2021 were $3.65 billion, a decrease of $12.6 million, or 0.3%, compared to $3.66 billion at December 31, 2020. Our PPP loans, a component of the commercial loan category, decreased $183.8 million during the year due to forgiveness payments received for loans funded under the Coronavirus Aid, Relief, and Economic Security Act. Excluding PPP loans, total loans increased $171.2 million, or 5.0%, due to increases of $302.4 million in commercial real estate loans, $45.7 million in commercial loans (excluding PPP loans) and $34.1 million in municipal loans. The increases were partially offset by decreases of $134.1 million in construction loans, $68.8 million in 1-4 family residential loans and $8.1 million in loans to individuals. Excluding a $36.5 million decrease in PPP loans during the quarter, linked quarter loans increased $34.0 million, or 1.0%, due to increases of $25.8 million in construction loans, $15.8 million in municipal loans and $11.7 million in commercial loans (excluding PPP loans). This was partially offset by decreases of $9.5 million in 1-4 family loans, $7.0 million in commercial real estate loans and $2.8 million in loans to individuals.

Securities at December 31, 2021 were $2.86 billion, an increase of $158.8 million, or 5.9%, compared to $2.70 billion at December 31, 2020. Linked quarter, securities increased $9.5 million, or 0.3%, from $2.85 billion at September 30, 2021.

Deposits at December 31, 2021 were $5.72 billion, an increase of $790.0 million, or 16.0%, compared to $4.93 billion at December 31, 2020. Linked quarter, deposits increased $390.7 million, or 7.3%, from $5.33 billion at September 30, 2021. During the three months ended December 31, 2021, brokered deposits increased $181.3 million, or 159.8%, associated with funding our cash flow hedge swaps in place of the Federal Home Loan Bank advances to obtain lower cost funding.

Asset Quality

Nonperforming assets at December 31, 2021 were $11.6 million, or 0.16% of total assets, a decrease of $5.9 million, or 33.6%, compared to $17.5 million, or 0.25% of total assets, at December 31, 2020, and a decrease from $12.4 million, or 0.17% of total assets, at September 30, 2021. During the three months ended December 31, 2021, nonaccrual loans decreased $0.5 million, or 15.8%.

The allowance for loan losses decreased to $35.3 million, or 0.97% of total loans, at December 31, 2021, compared to $49.0 million, or 1.34% of total loans, at December 31, 2020. The decrease was primarily due to an improved economic forecast and improved asset quality. The allowance for loan losses was $38.0 million, or 1.04% of total loans, at September 30, 2021. The decrease compared to the end of the third quarter was primarily due to an improved forecast for commercial real estate, as well as the impact of loan payoffs on the allowance.

We recorded a reversal of provision for credit losses for loans of $2.7 million, $5.9 million and $4.4 million for the three month periods ended December 31, 2021, 2020, and September 30, 2021, respectively. Net charge-offs were $34,000 for the three months ended December 31, 2021, compared to net charge-offs of $0.2 million for the three months ended December 31, 2020 and $0.5 million of net charge-offs for the three months ended September 30, 2021. Net charge-offs were $0.8 million for the year ended December 31, 2021, compared to $1.2 million for the year ended December 31, 2020.

We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.7 million for the three months ended December 31, 2021, as compared to a provision of $0.4 million for the three months ended December 31, 2020 and a reversal of provision of $0.7 million for the three months ended September 30, 2021. For the year ended December 31, 2021, we recorded a reversal of provision of $4.0 million, compared to a provision for credit losses for off-balance-sheet credit exposures of $0.1 million for the year ended December 31, 2020. The balance of the allowance for off-balance-sheet credit exposures at December 31, 2021 was $2.4 million and is included in other liabilities.

Dividend

Southside Bancshares, Inc. declared a fourth quarter cash dividend of $0.33 and a special cash dividend of $0.06 per share on November 4, 2021, which was paid on December 9, 2021, to all shareholders of record as of November 24, 2021.

_______________

(1)	Refer to “Non-GAAP Financial Measures” below and to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for more information and for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Conference Call

Southside's management team will host a conference call to discuss its fourth quarter and year ended December 31, 2021 financial results on Friday, January 28, 2022 at 11:00 a.m. CST.  The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 5753376 or by identifying “Southside Bancshares, Inc., Fourth Quarter and Year End 2021 Earnings Call.”  To listen to the call via webcast, register at https://investors.southside.com.

For those unable to listen to the conference call live, a recording will be available from approximately 2:00 p.m. CST January 28, 2022 through 2:00 p.m. CST February 9, 2022 by accessing the company website, https://investors.southside.com.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include the following fully taxable-equivalent measures (“FTE”): (i) Net interest income (FTE), (ii) net interest margin (FTE), (iii) net interest spread (FTE), and (iv) efficiency ratio (FTE), which include the effects of taxable-equivalent adjustments using a federal income tax rate of 21% to increase tax-exempt interest income to a tax-equivalent basis. Interest income earned on certain assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments.

Net interest income (FTE), net interest margin (FTE) and net interest spread (FTE). Net interest income (FTE) is a non-GAAP measure that adjusts for the tax-favored status of net interest income from certain loans and investments and is not permitted under GAAP in the consolidated statements of income. We believe this measure to be the preferred industry measurement of net interest income and that it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread (FTE) is the difference in the average yield on average earning assets on a tax-equivalent basis and the average rate paid on average interest bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

Efficiency ratio (FTE).  The efficiency ratio (FTE) is a non-GAAP measure that provides a measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. The ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense, excluding amortization expense on intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding net gain (loss) on sale of securities available for sale and certain nonrecurring impairments. The most directly comparable financial measure calculated in accordance with GAAP is our efficiency ratio.

These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. Whenever we present a non-GAAP financial measure in an SEC filing, we are also required to present the most directly comparable financial measure calculated and presented in accordance with GAAP and reconcile the differences between the non-GAAP financial measure and such comparable GAAP measure.

Management believes adjusting net interest income, net interest margin and net interest spread to a fully taxable-equivalent basis is a standard practice in the banking industry as these measures provide useful information to make peer comparisons. Tax-equivalent adjustments are reflected in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables.

A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

About Southside Bancshares, Inc.

Southside Bancshares, Inc. is a bank holding company with approximately $7.26 billion in assets as of December 31, 2021, that owns 100% of Southside Bank.  Southside Bank currently has 56 branches in Texas and operates a network of 73 ATMs/ITMs.

To learn more about Southside Bancshares, Inc., please visit our investor relations website at https://investors.southside.com. Our investor relations site provides a detailed overview of our activities, financial information and historical stock price data.  To receive e-mail notification of company news, events and stock activity, please register on the E-mail Notification portion of the website.  Questions or comments may be directed to Lindsey Bailes at (903) 630-7965, or lindsey.bailes@southside.com.

Forward-Looking Statements

Certain statements of other than historical fact that are contained in this press release and in other written materials, documents and oral statements issued by or on behalf of the Company may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date.  These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “target,” “objective,” “plans,” “potential,” and similar expressions.  Forward-looking statements are statements with respect to the Company’s beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause the Company's actual results to differ materially from the results discussed in the forward-looking statements.  For example, discussions of the effect of our expansion, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, the Company's ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates, tax reform, inflation and other economic factors are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations.  By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future.  Accordingly, our results could materially differ from those that have been estimated. The most recent factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the negative impact of the COVID-19 pandemic and related variants on our business, financial position, operations and prospects, including our ability to continue our business activities in certain communities we serve, the duration of the pandemic and its continued effects on financial markets, a reduction in financial transactions and business activities resulting in decreased deposits and reduced loan originations, increases in unemployment rates impacting our borrowers’ ability to repay their loans, our ability to manage liquidity in a rapidly changing and unpredictable market, additional interest rate changes by the Federal Reserve and other government actions in response to the pandemic, including regulations or laws enacted to counter the effects of the COVID-19 pandemic on the economy.

Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, under “Part I - Item 1. Forward Looking Information” and in the Company’s other filings with the Securities and Exchange Commission.  The Company disclaims any obligation to update any factors or to announce publicly the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

Southside Bancshares, Inc.
Consolidated Financial Summary (Unaudited)
(Dollars in thousands)

	As of
		2021																2020
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
ASSETS
Cash and due from banks	$	91,120			$	83,346			$	92,047			$	78,304			$	87,357
Interest earning deposits		110,633				3,787				36,441				29,319				21,051
Securities available for sale, at estimated fair value		2,764,325				2,753,104				2,766,035				2,546,924				2,587,305
Securities held to maturity, at net carrying value		90,780				92,479				94,850				98,159				108,998
Total securities		2,855,105				2,845,583				2,860,885				2,645,083				2,696,303
Federal Home Loan Bank stock, at cost		14,375				27,248				28,081				18,754				25,259
Loans held for sale		1,684				1,131				2,510				2,615				3,695
Loans		3,645,162				3,647,585				3,642,346				3,716,598				3,657,779
Less: Allowance for loan losses		(35,273	)			(38,022	)			(42,913	)			(41,454	)			(49,006	)
Net loans		3,609,889				3,609,563				3,599,433				3,675,144				3,608,773
Premises & equipment, net		142,509				142,736				142,835				144,628				144,576
Goodwill		201,116				201,116				201,116				201,116				201,116
Other intangible assets, net		6,895				7,553				8,248				8,978				9,744
Bank owned life insurance		131,232				130,522				116,886				116,209				115,583
Other assets		95,044				83,106				93,926				78,736				94,770
Total assets	$	7,259,602			$	7,135,691			$	7,182,408			$	6,998,886			$	7,008,227
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing deposits	$	1,644,775			$	1,596,781			$	1,501,120			$	1,383,371			$	1,354,815
Interest bearing deposits		4,077,552				3,734,874				3,655,047				3,709,272				3,577,507
Total deposits		5,722,327				5,331,655				5,156,167				5,092,643				4,932,322
Other borrowings and Federal Home Loan Bank borrowings		367,257				679,928				745,151				687,845				855,699
Subordinated notes, net of unamortized debt issuance costs		98,534				98,500				197,312				197,268				197,251
Trust preferred subordinated debentures, net of unamortized debt issuance costs		60,260				60,259				60,258				60,256				60,255
Other liabilities		99,052				87,483				129,120				102,277				87,403
Total liabilities		6,347,430				6,257,825				6,288,008				6,140,289				6,132,930
Shareholders' equity		912,172				877,866				894,400				858,597				875,297
Total liabilities and shareholders' equity	$	7,259,602			$	7,135,691			$	7,182,408			$	6,998,886			$	7,008,227

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars and shares in thousands, except per share data)

	Three Months Ended
		2021																2020
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
Income Statement:
Total interest income	$	54,760			$	55,076			$	52,586			$	53,565			$	56,904
Total interest expense		5,359				6,870				6,939				7,262				8,197
Net interest income		49,401				48,206				45,647				46,303				48,707
Provision for (reversal of) credit losses		(3,421	)			(5,071	)			1,677				(10,149	)			(5,545	)
Net interest income after provision for (reversal of) credit losses		52,822				53,277				43,970				56,452				54,252
Noninterest income
Deposit services		6,855				6,779				6,609				6,125				6,419
Net gain (loss) on sale of securities available for sale		463				1,381				15				2,003				(24	)
Gain on sale of loans		356				299				393				593				848
Trust fees		1,586				1,494				1,496				1,383				1,354
Bank owned life insurance		710				637				645				626				655
Brokerage services		907				846				850				780				628
Other		1,134				1,333				925				2,113				1,020
Total noninterest income		12,011				12,769				10,933				13,623				10,900
Noninterest expense
Salaries and employee benefits		20,067				19,777				20,004				20,044				19,609
Net occupancy		3,541				3,532				3,606				3,560				3,795
Advertising, travel & entertainment		876				579				475				437				504
ATM expense		345				311				272				238				290
Professional fees		849				1,135				1,040				991				986
Software and data processing		1,454				1,503				1,406				1,312				1,220
Communications		544				552				612				525				490
FDIC insurance		464				454				435				454				456
Amortization of intangibles		658				695				730				766				825
Loss on redemption of subordinated notes		—				1,118				—				—				—
Other		2,536				2,107				2,119				2,907				3,140
Total noninterest expense		31,334				31,763				30,699				31,234				31,315
Income before income tax expense		33,499				34,283				24,204				38,841				33,837
Income tax expense		4,812				4,977				2,887				4,750				4,265
Net income	$	28,687			$	29,306			$	21,317			$	34,091			$	29,572
Common Share Data:
Weighted-average basic shares outstanding		32,311				32,465				32,632				32,829				33,055
Weighted-average diluted shares outstanding		32,487				32,556				32,799				32,937				33,125
Common shares outstanding end of period		32,352				32,273				32,675				32,659				32,951
Earnings per common share
Basic	$	0.89			$	0.90			$	0.65			$	1.04			$	0.89
Diluted		0.88				0.90				0.65				1.04				0.89
Book value per common share		28.20				27.20				27.37				26.29				26.56
Tangible book value per common share (1)		21.77				20.74				20.97				19.86				20.16
Cash dividends paid per common share		0.39				0.33				0.33				0.32				0.37
Selected Performance Ratios:
Return on average assets		1.57	%			1.61	%			1.20	%			1.99	%			1.64	%
Return on average shareholders’ equity		12.67				12.89				9.73				15.82				13.77
Return on average tangible common equity (1)		16.80				17.10				13.13				21.22				18.71
Average yield on earning assets (FTE) (1)		3.55				3.59				3.49				3.67				3.70
Average rate on interest bearing liabilities		0.46				0.59				0.60				0.64				0.68
Net interest margin (FTE) (1)		3.23				3.16				3.06				3.20				3.20
Net interest spread (FTE) (1)		3.09				3.00				2.89				3.03				3.02
Average earning assets to average interest bearing liabilities		141.21				138.86				137.85				135.56				133.56
Noninterest expense to average total assets		1.72				1.75				1.73				1.82				1.74
Efficiency ratio (FTE) (1)		47.61				47.92				50.31				50.44				47.36

(1)	Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)

	Three Months Ended
		2021																2020
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
Nonperforming Assets:	$	11,609			$	12,424			$	15,269			$	15,367			$	17,480
Nonaccrual loans		2,536				3,013				5,154				5,314				7,714
Accruing loans past due more than 90 days		—				—				—				—				—
Troubled debt restructured loans		9,073				9,371				9,549				9,641				9,646
Other real estate owned		—				25				566				412				106
Repossessed assets		—				15				—				—				14
Asset Quality Ratios:
Ratio of nonaccruing loans to:
Total loans		0.07	%			0.08	%			0.14	%			0.14	%			0.21	%
Ratio of nonperforming assets to:
Total assets		0.16				0.17				0.21				0.22				0.25
Total loans		0.32				0.34				0.42				0.41				0.48
Total loans and OREO		0.32				0.34				0.42				0.41				0.48
Total loans, excluding PPP loans, and OREO		0.32				0.35				0.43				0.44				0.51
Ratio of allowance for loan losses to:
Nonaccruing loans		1,390.89				1,261.93				832.62				780.09				635.29
Nonperforming assets		303.84				306.04				281.05				269.76				280.35
Total loans		0.97				1.04				1.18				1.12				1.34
Total loans, excluding PPP loans		0.98				1.06				1.22				1.19				1.42
Net charge-offs (recoveries) to average loans outstanding		—				0.05				0.01				0.02				0.02
Capital Ratios:
Shareholders’ equity to total assets		12.57				12.30				12.45				12.27				12.49
Common equity tier 1 capital		14.17				14.07				14.38				14.71				14.68
Tier 1 risk-based capital		15.43				15.35				15.71				16.09				16.08
Total risk-based capital		18.15				18.18				20.95				21.52				21.78
Tier 1 leverage capital		10.33				10.14				10.21				10.29				9.81
Period end tangible equity to period end tangible assets (1)		9.99				9.66				9.82				9.55				9.77
Average shareholders’ equity to average total assets		12.42				12.51				12.38				12.56				11.92

(1)	Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)

	Three Months Ended
		2021																2020
Loan Portfolio Composition	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
Real Estate Loans:
Construction	$	447,860			$	422,095			$	528,157			$	605,677			$	581,941
1-4 Family Residential		651,140				660,689				678,402				700,430				719,952
Commercial		1,598,172				1,605,132				1,430,900				1,348,551				1,295,746
Commercial Loans		418,998				443,708				497,513				564,745				557,122
Municipal Loans		443,078				427,259				417,398				406,377				409,028
Loans to Individuals		85,914				88,702				89,976				90,818				93,990
Total Loans	$	3,645,162			$	3,647,585			$	3,642,346			$	3,716,598			$	3,657,779
Summary of Changes in Allowances:
Allowance for Loan Losses
Balance at beginning of period	$	38,022			$	42,913			$	41,454			$	49,006			$	55,110
Loans charged-off		(489	)			(940	)			(527	)			(795	)			(595	)
Recoveries of loans charged-off		455				437				466				622				402
Net loans (charged-off) recovered		(34	)			(503	)			(61	)			(173	)			(193	)
Provision for (reversal of) loan losses		(2,715	)			(4,388	)			1,520				(7,379	)			(5,911	)
Balance at end of period	$	35,273			$	38,022			$	42,913			$	41,454			$	49,006
Allowance for Off-Balance-Sheet Credit Exposures
Balance at beginning of period	$	3,090			$	3,773			$	3,616			$	6,386			$	6,020
Provision for (reversal of) off-balance-sheet credit exposures		(706	)			(683	)			157				(2,770	)			366
Balance at end of period	$	2,384			$	3,090			$	3,773			$	3,616			$	6,386
Total Allowance for Credit Losses	$	37,657			$	41,112			$	46,686			$	45,070			$	55,392

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)

	Year Ended
	December 31,
		2021				2020
Income Statement:
Total interest income	$	215,987			$	231,828
Total interest expense		26,430				44,563
Net interest income		189,557				187,265
Provision for (reversal of) credit losses		(16,964	)			20,201
Net interest income after provision for (reversal of) credit losses		206,521				167,064
Noninterest income
Deposit services		26,368				24,359
Net gain on sale of securities available for sale		3,862				8,257
Gain on sale of loans		1,641				2,772
Trust fees		5,959				5,133
Bank owned life insurance		2,618				2,554
Brokerage services		3,383				2,271
Other		5,505				4,386
Total noninterest income		49,336				49,732
Noninterest expense
Salaries and employee benefits		79,892				77,225
Net occupancy		14,239				14,369
Advertising, travel & entertainment		2,367				2,147
ATM expense		1,166				1,018
Professional fees		4,015				4,224
Software and data processing		5,675				4,957
Communications		2,233				1,984
FDIC insurance		1,807				1,124
Amortization of intangibles		2,849				3,617
Loss on redemption of subordinated notes		1,118				—
Other		9,669				12,642
Total noninterest expense		125,030				123,307
Income before income tax expense		130,827				93,489
Income tax expense		17,426				11,336
Net income	$	113,401			$	82,153
Common Share Data:
Weighted-average basic shares outstanding		32,558				33,201
Weighted-average diluted shares outstanding		32,692				33,281
Common shares outstanding end of period		32,352				32,951
Earnings per common share
Basic	$	3.48			$	2.47
Diluted		3.47				2.47
Book value per common share		28.20				26.56
Tangible book value per common share (1)		21.77				20.16
Cash dividends paid per common share		1.37				1.30
Selected Performance Ratios:
Return on average assets		1.59	%			1.14	%
Return on average shareholders’ equity		12.77				9.91
Return on average tangible common equity (1)		17.04				13.79
Average yield on earning assets (FTE) (1)		3.58				3.75
Average rate on interest bearing liabilities		0.57				0.89
Net interest margin (FTE) (1)		3.16				3.07
Net interest spread (FTE) (1)		3.01				2.86
Average earning assets to average interest bearing liabilities		138.39				130.16
Noninterest expense to average total assets		1.75				1.72
Efficiency ratio (FTE) (1)		49.03				49.36

(1)	Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)

	Year Ended
	December 31,
		2021				2020
Nonperforming Assets:	$	11,609			$	17,480
Nonaccrual loans		2,536				7,714
Accruing loans past due more than 90 days		—				—
Troubled debt restructured loans		9,073				9,646
Other real estate owned		—				106
Repossessed assets		—				14
Asset Quality Ratios:
Ratio of nonaccruing loans to:
Total loans		0.07	%			0.21	%
Ratio of nonperforming assets to:
Total assets		0.16				0.25
Total loans		0.32				0.48
Total loans and OREO		0.32				0.48
Total loans, excluding PPP loans, and OREO		0.32				0.51
Ratio of allowance for loan losses to:
Nonaccruing loans		1,390.89				635.29
Nonperforming assets		303.84				280.35
Total loans		0.97				1.34
Total loans, excluding PPP loans		0.98				1.42
Net charge-offs (recoveries) to average loans outstanding		0.02				0.03
Capital Ratios:
Shareholders’ equity to total assets		12.57				12.49
Common equity tier 1 capital		14.17				14.68
Tier 1 risk-based capital		15.43				16.08
Total risk-based capital		18.15				21.78
Tier 1 leverage capital		10.33				9.81
Period end tangible equity to period end tangible assets (1)		9.99				9.77
Average shareholders’ equity to average total assets		12.47				11.55

(1)	Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)

	Year Ended
	December 31,
Loan Portfolio Composition		2021				2020
Real Estate Loans:
Construction	$	447,860			$	581,941
1-4 Family Residential		651,140				719,952
Commercial		1,598,172				1,295,746
Commercial Loans		418,998				557,122
Municipal Loans		443,078				409,028
Loans to Individuals		85,914				93,990
Total Loans	$	3,645,162			$	3,657,779
Summary of Changes in Allowances:
Allowance for Loan Losses
Balance at beginning of period	$	49,006			$	24,797
Impact of CECL adoption (1) - cumulative effect adjustment		—				5,072
Impact of CECL adoption - purchased loans with credit deterioration		—				231
Loans charged-off		(2,751	)			(2,854	)
Recoveries of loans charged-off		1,980				1,650
Net loans (charged-off) recovered		(771	)			(1,204	)
Provision for (reversal of) loan losses		(12,962	)			20,110
Balance at end of period	$	35,273			$	49,006
Allowance for Off-Balance-Sheet Credit Exposures
Balance at beginning of period	$	6,386			$	1,455
Impact of CECL adoption (1)		—				4,840
Provision for (reversal of) off-balance-sheet credit exposures		(4,002	)			91
Balance at end of period	$	2,384			$	6,386
Total Allowance for Credit Losses	$	37,657			$	55,392

(1)

We adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” on January 1, 2020. ASU 2016-13 replaced the incurred loss model with an expected loss methodology that is referred to as current expected credit losses (“CECL”). Adoption of this guidance on January 1, 2020, resulted in a cumulative-effect adjustment to reduce retained earnings by $7.8 million, net of tax.

Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)

The tables that follow show average earning assets and interest bearing liabilities together with the average yield on the earning assets and the average rate of the interest bearing liabilities for the periods presented. The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” for more information.

	Three Months Ended
	December 31, 2021										September 30, 2021
	Average Balance				Interest			Average Yield/Rate			Average Balance				Interest			Average Yield/Rate
ASSETS
Loans (1)	$	3,668,767			$	36,740		3.97	%		$	3,662,496			$	37,744		4.09	%
Loans held for sale		1,980				11		2.20	%			1,640				12		2.90	%
Securities:
Taxable investment securities (2)		590,104				4,215		2.83	%			532,679				3,853		2.87	%
Tax-exempt investment securities (2)		1,508,196				12,699		3.34	%			1,453,275				12,315		3.36	%
Mortgage-backed and related securities (2)		650,685				4,394		2.68	%			738,287				4,405		2.37	%
Total securities		2,748,985				21,308		3.08	%			2,724,241				20,573		3.00	%
Federal Home Loan Bank stock, at cost, and equity investments		38,832				175		1.79	%			39,786				111		1.11	%
Interest earning deposits		43,841				22		0.20	%			39,382				24		0.24	%
Total earning assets		6,502,405				58,256		3.55	%			6,467,545				58,464		3.59	%
Cash and due from banks		103,126										99,113
Accrued interest and other assets		662,654										684,917
Less:  Allowance for loan losses		(38,317	)									(43,052	)
Total assets	$	7,229,868									$	7,208,523
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	624,377				264		0.17	%		$	598,118				249		0.17	%
Certificates of deposits		632,150				681		0.43	%			629,718				789		0.50	%
Interest bearing demand accounts		2,558,289				1,289		0.20	%			2,496,037				1,196		0.19	%
Total interest bearing deposits		3,814,816				2,234		0.23	%			3,723,873				2,234		0.24	%
Federal Home Loan Bank borrowings		609,310				1,758		1.14	%			656,474				1,865		1.13	%
Subordinated notes, net of unamortized debt issuance costs		98,517				1,011		4.07	%			195,204				2,417		4.91	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs		60,259				345		2.27	%			60,258				345		2.27	%
Repurchase agreements		21,874				11		0.20	%			21,634				9		0.17	%
Total interest bearing liabilities		4,604,776				5,359		0.46	%			4,657,443				6,870		0.59	%
Noninterest bearing deposits		1,637,914										1,551,298
Accrued expenses and other liabilities		88,982										97,954
Total liabilities		6,331,672										6,306,695
Shareholders’ equity		898,196										901,828
Total liabilities and shareholders’ equity	$	7,229,868									$	7,208,523
Net interest income (FTE)					$	52,897									$	51,594
Net interest margin (FTE)								3.23	%									3.16	%
Net interest spread (FTE)								3.09	%									3.00	%

(1)	Interest on loans includes net fees on loans that are not material in amount.
(2)	For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Note: As of December 31, 2021 and September 30, 2021, loans totaling $2.5 million and $3.0 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)

	Three Months Ended
	June 30, 2021										March 31, 2021
	Average Balance				Interest			Average Yield/Rate			Average Balance				Interest			Average Yield/Rate
ASSETS
Loans (1)	$	3,706,959			$	36,429		3.94	%		$	3,634,053			$	36,754		4.10	%
Loans held for sale		1,846				13		2.82	%			2,803				20		2.89	%
Securities:
Taxable investment securities (2)		396,504				2,921		2.95	%			295,968				2,323		3.18	%
Tax-exempt investment securities (2)		1,363,678				11,585		3.41	%			1,300,991				11,176		3.48	%
Mortgage-backed and related securities (2)		847,206				4,647		2.20	%			940,815				6,088		2.62	%
Total securities		2,607,388				19,153		2.95	%			2,537,774				19,587		3.13	%
Federal Home Loan Bank stock, at cost, and equity investments		35,883				108		1.21	%			35,635				136		1.55	%
Interest earning deposits		43,175				17		0.16	%			31,169				15		0.20	%
Total earning assets		6,395,251				55,720		3.49	%			6,241,434				56,512		3.67	%
Cash and due from banks		90,735										86,634
Accrued interest and other assets		656,245										677,230
Less:  Allowance for loan losses		(41,768	)									(49,240	)
Total assets	$	7,100,463									$	6,956,058
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	571,907				231		0.16	%		$	517,182				209		0.16	%
Certificates of deposit		658,708				936		0.57	%			736,099				1,229		0.68	%
Interest bearing demand accounts		2,459,335				1,172		0.19	%			2,342,299				1,159		0.20	%
Total interest bearing deposits		3,689,950				2,339		0.25	%			3,595,580				2,597		0.29	%
Federal Home Loan Bank borrowings		669,633				1,817		1.09	%			727,513				1,908		1.06	%
Subordinated notes, net of unamortized debt issuance costs		197,284				2,423		4.93	%			197,252				2,395		4.92	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs		60,257				349		2.32	%			60,256				351		2.36	%
Repurchase agreements		22,024				11		0.20	%			23,522				11		0.19	%
Total interest bearing liabilities		4,639,148				6,939		0.60	%			4,604,123				7,262		0.64	%
Noninterest bearing deposits		1,485,383										1,389,020
Accrued expenses and other liabilities		97,137										89,222
Total liabilities		6,221,668										6,082,365
Shareholders’ equity		878,795										873,693
Total liabilities and shareholders’ equity	$	7,100,463									$	6,956,058
Net interest income (FTE)					$	48,781									$	49,250
Net interest margin (FTE)								3.06	%									3.20	%
Net interest spread (FTE)								2.89	%									3.03	%

(1)	Interest on loans includes net fees on loans that are not material in amount.
(2)	For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Note: As of June 30, 2021 and March 31, 2021, loans totaling $5.2 million and $5.3 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)

	Three Months Ended
	December 31, 2020
	Average Balance				Interest			Average Yield/Rate
ASSETS
Loans (1)	$	3,772,158			$	39,936		4.21	%
Loans held for sale		5,012				36		2.86	%
Securities:
Taxable investment securities (2)		223,753				1,753		3.12	%
Tax-exempt investment securities (2)		1,298,584				11,413		3.50	%
Mortgage-backed and related securities (2)		1,082,302				6,693		2.46	%
Total securities		2,604,639				19,859		3.03	%
Federal Home Loan Bank stock, at cost, and equity investments		46,798				199		1.69	%
Interest earning deposits		22,938				18		0.31	%
Total earning assets		6,451,545				60,048		3.70	%
Cash and due from banks		83,228
Accrued interest and other assets		687,894
Less:  Allowance for loan losses		(55,567	)
Total assets	$	7,167,100
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	487,452				201		0.16	%
Certificates of deposit		1,011,482				2,320		0.91	%
Interest bearing demand accounts		2,186,406				1,117		0.20	%
Total interest bearing deposits		3,685,340				3,638		0.39	%
Federal Home Loan Bank borrowings		896,484				2,125		0.94	%
Subordinated notes, net of unamortized debt issuance costs		158,692				2,051		5.14	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs		60,255				360		2.38	%
Repurchase agreements		29,595				23		0.31	%
Other borrowings		66				—		—
Total interest bearing liabilities		4,830,432				8,197		0.68	%
Noninterest bearing deposits		1,381,120
Accrued expenses and other liabilities		101,478
Total liabilities		6,313,030
Shareholders’ equity		854,070
Total liabilities and shareholders’ equity	$	7,167,100
Net interest income (FTE)					$	51,851
Net interest margin (FTE)								3.20	%
Net interest spread (FTE)								3.02	%

(1)	Interest on loans includes net fees on loans that are not material in amount.
(2)	For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Note: As of December 31, 2020, loans totaling $7.7 million were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)

	Year Ended
	December 31, 2021										December 31, 2020
	Average Balance				Interest			Average Yield/Rate			Average Balance				Interest			Average Yield/Rate
ASSETS
Loans (1)	$	3,668,149			$	147,667		4.03	%		$	3,750,657			$	161,098		4.30	%
Loans held for sale		2,063				56		2.71	%			3,254				104		3.20	%
Securities:
Taxable investment securities (2)		454,836				13,312		2.93	%			133,785				4,172		3.12	%
Tax-exempt investment securities (2)		1,407,231				47,775		3.39	%			1,201,385				42,228		3.51	%
Mortgage-backed and related securities (2)		793,300				19,534		2.46	%			1,311,722				34,319		2.62	%
Total securities		2,655,367				80,621		3.04	%			2,646,892				80,719		3.05	%
Federal Home Loan Bank stock, at cost, and equity investments		37,549				530		1.41	%			59,439				1,233		2.07	%
Interest earning deposits		39,426				78		0.20	%			26,202				238		0.91	%
Total earning assets		6,402,554				228,952		3.58	%			6,486,444				243,392		3.75	%
Cash and due from banks		94,959										79,677
Accrued interest and other assets		670,062										664,511
Less:  Allowance for loan losses		(43,064	)									(50,807	)
Total assets	$	7,124,511									$	7,179,825
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	578,245				953		0.16	%		$	440,346				817		0.19	%
Certificates of deposit		663,789				3,635		0.55	%			1,182,938				17,051		1.44	%
Interest bearing demand accounts		2,464,670				4,816		0.20	%			2,061,805				6,780		0.33	%
Total interest bearing deposits		3,706,704				9,404		0.25	%			3,685,089				24,648		0.67	%
Federal Home Loan Bank borrowings		665,384				7,348		1.10	%			1,032,269				11,397		1.10	%
Subordinated notes, net of unamortized debt issuance costs		171,857				8,246		4.80	%			113,736				6,301		5.54	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs		60,258				1,390		2.31	%			60,252				1,829		3.04	%
Repurchase agreements		22,257				42		0.19	%			32,890				226		0.69	%
Other borrowings		—				—		—				59,050				162		0.27	%
Total interest bearing liabilities		4,626,460				26,430		0.57	%			4,983,286				44,563		0.89	%
Noninterest bearing deposits		1,516,682										1,277,011
Accrued expenses and other liabilities		93,136										90,548
Total liabilities		6,236,278										6,350,845
Shareholders’ equity		888,233										828,980
Total liabilities and shareholders’ equity	$	7,124,511									$	7,179,825
Net interest income (FTE)					$	202,522									$	198,829
Net interest margin (FTE)								3.16	%									3.07	%
Net interest spread (FTE)								3.01	%									2.86	%

(1)	Interest on loans includes net fees on loans that are not material in amount.
(2)	For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Note: As of December 31, 2021 and 2020, loans totaling $2.5 million and $7.7 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

Southside Bancshares, Inc.
Non-GAAP Reconciliation (Unaudited)
(Dollars and shares in thousands, except per share data)

The following tables set forth the reconciliation of return on average common equity to return on average tangible common equity, book value per share to tangible book value per share, net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investment securities, along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE) for the applicable periods presented.

		Three Months Ended																				Year Ended
			2021																2020				2021				2020
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,				Dec 31,				Dec 31,
Reconciliation of return on average common equity to return on average tangible common equity:
Net income		$	28,687			$	29,306			$	21,317			$	34,091			$	29,572			$	113,401			$	82,153
After-tax amortization expense			520				549				577				605				652				2,251				2,857
Adjusted net income available to common shareholders		$	29,207			$	29,855			$	21,894			$	34,696			$	30,224			$	115,652			$	85,010
Average shareholders' equity		$	898,196			$	901,828			$	878,795			$	873,693			$	854,070			$	888,233			$	828,980
Less: Average intangibles for the period			(208,412	)			(209,097	)			(209,808	)			(210,563	)			(211,354	)			(209,463	)			(212,699	)
Average tangible shareholders' equity		$	689,784			$	692,731			$	668,987			$	663,130			$	642,716			$	678,770			$	616,281
Return on average tangible common equity			16.80	%			17.10	%			13.13	%			21.22	%			18.71	%			17.04	%			13.79	%
Reconciliation of book value per share to tangible book value per share:
Common equity at end of period		$	912,172			$	877,866			$	894,400			$	858,597			$	875,297			$	912,172			$	875,297
Less: Intangible assets at end of period			(208,011	)			(208,669	)			(209,364	)			(210,094	)			(210,860	)			(208,011	)			(210,860	)
Tangible common shareholders' equity at end of period		$	704,161			$	669,197			$	685,036			$	648,503			$	664,437			$	704,161			$	664,437
Total assets at end of period		$	7,259,602			$	7,135,691			$	7,182,408			$	6,998,886			$	7,008,227			$	7,259,602			$	7,008,227
Less: Intangible assets at end of period			(208,011	)			(208,669	)			(209,364	)			(210,094	)			(210,860	)			(208,011	)			(210,860	)
Tangible assets at end of period		$	7,051,591			$	6,927,022			$	6,973,044			$	6,788,792			$	6,797,367			$	7,051,591			$	6,797,367
Period end tangible equity to period end tangible assets			9.99	%			9.66	%			9.82	%			9.55	%			9.77	%			9.99	%			9.77	%
Common shares outstanding end of period			32,352				32,273				32,675				32,659				32,951				32,352				32,951
Tangible book value per common share		$	21.77			$	20.74			$	20.97			$	19.86			$	20.16			$	21.77			$	20.16
Reconciliation of efficiency ratio to efficiency ratio (FTE), net interest margin to net interest margin (FTE) and net interest spread to net interest spread (FTE):
Net interest income (GAAP)		$	49,401			$	48,206			$	45,647			$	46,303			$	48,707			$	189,557			$	187,265
Tax equivalent adjustments:
Loans			740				722				722				736				717				2,920				2,752
Tax-exempt investment securities			2,756				2,666				2,412				2,211				2,427				10,045				8,812
Net interest income (FTE) (1)			52,897				51,594				48,781				49,250				51,851				202,522				198,829
Noninterest income			12,011				12,769				10,933				13,623				10,900				49,336				49,732
Nonrecurring income (2)			(463	)			(1,381	)			(15	)			(2,003	)			24				(3,862	)			(8,257	)
Total revenue		$	64,445			$	62,982			$	59,699			$	60,870			$	62,775			$	247,996			$	240,304
Noninterest expense		$	31,334			$	31,763			$	30,699			$	31,234			$	31,315			$	125,030			$	123,307
Pre-tax amortization expense			(658	)			(695	)			(730	)			(766	)			(825	)			(2,849	)			(3,617	)
Nonrecurring expense (3)			8				(888	)			64				236				(758	)			(580	)			(1,083	)
Adjusted noninterest expense		$	30,684			$	30,180			$	30,033			$	30,704			$	29,732			$	121,601			$	118,607
Efficiency ratio			50.34	%			50.64	%			53.09	%			53.01	%			49.86	%			51.74	%			51.85	%
Efficiency ratio (FTE) (1)			47.61	%			47.92	%			50.31	%			50.44	%			47.36	%			49.03	%			49.36	%
Average earning assets		$	6,502,405			$	6,467,545			$	6,395,251			$	6,241,434			$	6,451,545			$	6,402,554			$	6,486,444
Net interest margin			3.01	%			2.96	%			2.86	%			3.01	%			3.00	%			2.96	%			2.89	%
Net interest margin (FTE) (1)			3.23	%			3.16	%			3.06	%			3.20	%			3.20	%			3.16	%			3.07	%
Net interest spread			2.88	%			2.79	%			2.70	%			2.84	%			2.83	%			2.80	%			2.68	%
Net interest spread (FTE) (1)			3.09	%			3.00	%			2.89	%			3.03	%			3.02	%			3.01	%			2.86	%

(1)	These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures.
(2)	These adjustments may include net gain or loss on sale of securities available for sale in the periods where applicable.
(3)	These adjustments may include loss on redemption of subordinated notes, foreclosure expenses and branch closure expenses, in the periods where applicable.

FAQ

What were Southside Bancshares' earnings for the fourth quarter of 2021?

The fourth quarter net income was $28.7 million.

How much did Southside Bancshares earn for the year ended December 31, 2021?

Southside Bancshares reported a record annual net income of $113.4 million.

What was the loan growth for Southside Bancshares in 2021?

The loan growth was 5% for the year, excluding Paycheck Protection Program loans.

What is the efficiency ratio for Southside Bancshares in 2021?

The efficiency ratio for the year was 51.74%.

What was the annualized return on average assets for Southside Bancshares in 2021?

The annualized return on average assets was 1.59% for the year.