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Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2024

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Southside Bancshares reported strong Q3 2024 financial results with net income of $20.5 million, an 11.2% increase from Q3 2023. Earnings per diluted share rose to $0.68, up 13.3% year-over-year. The company achieved a net interest margin of 2.95% and return on average tangible equity of 13.69%. Net interest income increased by $2.2 million to $55.5 million. Asset quality remained strong with nonperforming assets at just 0.09% of total assets. Total assets reached $8.36 billion, with loans at $4.58 billion and deposits at $6.44 billion. The company declared a quarterly cash dividend of $0.36 per share.

Southside Bancshares ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un utile netto di 20,5 milioni di dollari, un aumento dell'11,2% rispetto al terzo trimestre del 2023. L'utile per azione diluita è salito a 0,68 dollari, in crescita del 13,3% su base annua. L'azienda ha raggiunto un margine di interesse netto del 2,95% e un ritorno sul capitale tangibile medio del 13,69%. Il reddito da interessi netti è aumentato di 2,2 milioni di dollari, arrivando a 55,5 milioni di dollari. La qualità degli attivi è rimasta solida, con attivi non performanti che rappresentano appena lo 0,09% del totale degli attivi. Gli attivi totali hanno raggiunto 8,36 miliardi di dollari, con prestiti per 4,58 miliardi di dollari e depositi per 6,44 miliardi di dollari. L'azienda ha dichiarato un dividendo in contante trimestrale di 0,36 dollari per azione.

Southside Bancshares informó resultados financieros sólidos en el tercer trimestre de 2024, con un ingreso neto de 20.5 millones de dólares, un aumento del 11.2% en comparación con el tercer trimestre de 2023. Las ganancias por acción diluidas aumentaron a 0.68 dólares, un incremento del 13.3% interanual. La empresa alcanzó un margen de interés neto del 2.95% y un retorno sobre el capital tangible promedio del 13.69%. Los ingresos por intereses netos crecieron en 2.2 millones de dólares, llegando a 55.5 millones de dólares. La calidad de los activos se mantuvo fuerte, con activos no rentables representando solo el 0.09% del total de activos. Los activos totales alcanzaron los 8.36 mil millones de dólares, con préstamos por 4.58 mil millones de dólares y depósitos por 6.44 mil millones de dólares. La empresa declaró un dividendo en efectivo trimestral de 0.36 dólares por acción.

Southside Bancshares는 2024년 3분기 경영 실적이 강력하다고 보고하며, 순이익은 2050만 달러로, 2023년 3분기 대비 11.2% 증가했다고 발표했습니다. 희석 주당 순이익은 0.68 달러로, 전년 대비 13.3% 상승했습니다. 회사는 2.95%의 순이자 마진과 13.69%의 평균 실질 자본 수익률을 달성했습니다. 순이자 수익은 220만 달러 늘어 5550만 달러에 도달했습니다. 자산 품질은 여전히 견고하며, 부실 자산은 총 자산의 0.09%에 불과합니다. 총 자산은 83억 6000만 달러에 달하며, 대출금은 45억 8000만 달러, 예금은 64억 4000만 달러입니다. 회사는 주당 0.36 달러의 분기 현금 배당금을 선언했습니다.

Southside Bancshares a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec un revenu net de 20,5 millions de dollars, soit une augmentation de 11,2 % par rapport au troisième trimestre 2023. Le bénéfice par action diluée a augmenté à 0,68 dollar, en hausse de 13,3 % d'une année sur l'autre. L'entreprise a atteint une marge d'intérêt nette de 2,95 % et un retour sur le capital tangible moyen de 13,69 %. Le revenu d'intérêts nets a augmenté de 2,2 millions de dollars pour atteindre 55,5 millions de dollars. La qualité des actifs est restée solide, avec des actifs non performants représentant seulement 0,09 % du total des actifs. Le total des actifs a atteint 8,36 milliards de dollars, avec des prêts de 4,58 milliards de dollars et des dépôts de 6,44 milliards de dollars. L'entreprise a déclaré un dividende en espèces trimestriel de 0,36 dollar par action.

Southside Bancshares berichtete über starke Finanzergebnisse im 3. Quartal 2024 mit einem Nettogewinn von 20,5 Millionen Dollar, was einem Anstieg von 11,2 % im Vergleich zum 3. Quartal 2023 entspricht. Der Gewinn pro verwässerter Aktie stieg auf 0,68 Dollar, was einem Anstieg von 13,3 % im Vergleich zum Vorjahr entspricht. Das Unternehmen erreichte eine Nettozinsmarge von 2,95 % und eine Rendite auf das durchschnittlich einbehaltene Eigenkapital von 13,69 %. Die Zinserträge erhöhten sich um 2,2 Millionen Dollar auf 55,5 Millionen Dollar. Die Vermögensqualität blieb stark, mit notleidenden Krediten, die nur 0,09 % der Gesamtaktiva ausmachten. Die Gesamtsumme der Aktiva erreichte 8,36 Milliarden Dollar, wobei die Kredite 4,58 Milliarden Dollar und die Einlagen 6,44 Milliarden Dollar betrugen. Das Unternehmen erklärte eine vierteljährliche Bar-Dividende von 0,36 Dollar pro Aktie.

Positive
  • Net income increased 11.2% YoY to $20.5 million
  • Earnings per share grew 13.3% to $0.68
  • Net interest income rose 4.1% to $55.5 million
  • Return on average tangible equity reached 13.69%
  • Total loans increased 3.6% YoY to $4.58 billion
Negative
  • Noninterest income decreased 24.6% YoY to $8.2 million
  • $1.9 million loss on sale of securities
  • $868,000 impairment charge on municipal securities
  • Nonperforming assets increased 74.8% YoY to $7.7 million
  • Linked quarter deposits decreased 0.9% to $6.44 billion

Insights

The Q3 2024 results show solid performance with $20.5 million net income, up 11.2% year-over-year. Key highlights include a 13.3% increase in EPS to $0.68 and improved ROA of 0.98%. The bank's net interest margin expanded 8 basis points to 2.95% quarter-over-quarter, despite challenging rate environment.

Asset quality remains strong with nonperforming assets at just 0.09% of total assets. The bank maintains robust capital ratios and $2.23 billion in available contingent liquidity. Notable is the conservative uninsured deposit ratio of 19.2% excluding affiliate and collateralized public funds, indicating strong deposit base stability.

Strategic portfolio management was evident with the sale of lower-yielding securities and reinvestment in higher-yielding assets, though this resulted in a $1.9 million loss. The increased loan loss provisions reflect prudent risk management given economic concerns in office and multifamily markets.

  • Third quarter net income of $20.5 million;
  • Third quarter earnings per diluted common share of $0.68;
  • Annualized return on third quarter average assets of 0.98%;
  • Annualized return on third quarter average tangible common equity of 13.69%(1); and
  • Nonperforming assets remain low at 0.09% of total assets. 

TYLER, Texas, Oct. 24, 2024 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter ended September 30, 2024. Southside reported net income of $20.5 million for the three months ended September 30, 2024, an increase of $2.1 million, or 11.2%, compared to $18.4 million for the same period in 2023. Earnings per diluted common share increased $0.08, or 13.3%, to $0.68 for the three months ended September 30, 2024, from $0.60 for the same period in 2023. The annualized return on average shareholders’ equity for the three months ended September 30, 2024, was 10.13%, compared to 9.50% for the same period in 2023. The annualized return on average assets was 0.98% for the three months ended September 30, 2024, compared to 0.93% for the same period in 2023. 

“Third quarter financial results were highlighted by a linked quarter $1.86 million increase in net interest income, a linked quarter eight basis point increase in our net interest margin to 2.95%, earnings per share of $0.68, a 13.69% return on average tangible equity(1), and continued strong asset quality,” stated Lee R. Gibson, Chief Executive Officer of Southside. “During the quarter we sold $28 million of lower yielding municipal securities, unwound the related fair value swaps and recorded a loss of $1.9 million. The proceeds were reinvested in higher yielding agency mortgage-backed securities. In addition, we recorded an impairment charge of $868,000 on the sale of approximately $10 million of available for sale (“AFS”) municipal securities and the unwind of the related fair value swaps on October 1.” 

Operating Results for the Three Months Ended September 30, 2024 

Net income was $20.5 million for the three months ended September 30, 2024, compared to $18.4 million for the same period in 2023, an increase of $2.1 million, or 11.2%. Earnings per diluted common share were $0.68 and $0.60 for the three months ended September 30, 2024 and 2023, respectively. The increase in net income was a result of the increase in net interest income and the decrease in provision for credit losses, partially offset by the decrease in noninterest income and increases in noninterest expense and income tax expense. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2024 were 0.98% and 10.13%, respectively, compared to 0.93% and 9.50%, respectively, for the three months ended September 30, 2023. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 53.94% and 51.90%, respectively, for the three months ended September 30, 2024, compared to 54.86% and 52.29%, respectively, for the three months ended September 30, 2023, and 54.90% and 52.71%, respectively, for the three months ended June 30, 2024. 

Net interest income for the three months ended September 30, 2024 was $55.5 million, an increase of $2.2 million, or 4.1%, from the same period in 2023. The increase in net interest income was due to the increases in the average balance and the average yield of interest earning assets, partially offset by increases in the average rate paid on our interest bearing liabilities and average balance of our interest bearing liabilities. Linked quarter, net interest income increased $1.9 million, or 3.5%, compared to $53.6 million during the three months ended June 30, 2024, largely due to the increase in the average yield on our interest earning assets and the decrease in the average rate paid on our interest bearing liabilities, partially offset by the decrease in the average balance of interest earning assets. 

Our net interest margin and tax-equivalent net interest margin(1) decreased to 2.82% and 2.95%, respectively, for the three months ended September 30, 2024, compared to 2.85% and 3.02%, respectively, for the same period in 2023. Linked quarter, net interest margin and tax-equivalent net interest margin(1) increased from 2.74% and 2.87%, respectively for the three months ended June 30, 2024. 

Noninterest income was $8.2 million for the three months ended September 30, 2024, a decrease of $2.7 million, or 24.6%, compared to $10.8 million for the same period in 2023. The decrease was due to a net loss on sale of securities AFS and decreases in other noninterest income and deposit services income, partially offset by an increase in brokerage services income. On a linked quarter basis, noninterest income decreased $3.4 million, or 29.3%, compared to the three months ended June 30, 2024. The decrease was primarily due to an increase in net loss on sale of securities AFS and decreases in other noninterest income and bank owned life insurance income related to a $1.0 million death benefit realized in the second quarter of 2024. The decrease in other noninterest income for both periods was primarily due to an impairment charge of $868,000 on the sale of approximately $10 million of AFS municipal securities and the unwind of the related fair value swaps on October 1. 

Noninterest expense increased $0.8 million, or 2.2%, to $36.3 million for the three months ended September 30, 2024, compared to $35.6 million for the same period in 2023, due to increases in salaries and employee benefits and software and data processing expense, partially offset by decreases in advertising, travel and entertainment expense, professional fees, net occupancy expense and amortization of intangibles. On a linked quarter basis, noninterest expense increased by $0.6 million, or 1.6%, compared to the three months ended June 30, 2024, due to increases in other noninterest expense, salaries and employee benefits expense and professional fees. 

Income tax expense increased $1.3 million, or 40.7%, for the three months ended September 30, 2024, compared to the same period in 2023. On a linked quarter basis, income tax expense decreased $0.8 million, or 15.8%. Our effective tax rate (“ETR”) increased to 17.6% for the three months ended September 30, 2024, compared to 14.5% for the three months ended September 30, 2023, and increased slightly from 17.4% for the three months ended June 30, 2024. The higher ETR for the three months ended September 30, 2024 compared to the same period in 2023, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income. 

Operating Results for the Nine Months Ended September 30, 2024 

Net income was $66.7 million for the nine months ended September 30, 2024, compared to $69.4 million for the same period in 2023, a decrease of $2.7 million, or 3.8%. Earnings per diluted common share were $2.20 for the nine months ended September 30, 2024, compared to $2.24 for the same period in 2023, a decrease of 1.8%. The decrease in net income was primarily a result of the decrease in noninterest income and increases in noninterest expense and income tax expense, partially offset by the decrease in provision for credit losses and the increase in net interest income. Returns on average assets and average shareholders’ equity for the nine months ended September 30, 2024 were 1.06% and 11.19%, respectively, compared to 1.20% and 12.21%, respectively, for the nine months ended September 30, 2023. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 55.56% and 53.35%, respectively, for the nine months ended September 30, 2024, compared to 53.99% and 51.44%, respectively, for the nine months ended September 30, 2023. 

Net interest income was $162.4 million for the nine months ended September 30, 2024, compared to $160.5 million for the same period in 2023, an increase of $1.9 million, or 1.2%, due to increases in the average balance and the average yield of interest earning assets, partially offset by increases in the average rate paid on our interest bearing liabilities and average balance of our interest bearing liabilities. 

Our net interest margin and tax-equivalent net interest margin(1) were 2.76% and 2.90%, respectively, for the nine months ended September 30, 2024, compared to 2.95% and 3.13%, respectively, for the same period in 2023. 

Noninterest income was $29.5 million for the nine months ended September 30, 2024, a decrease of $3.9 million, or 11.6%, compared to $33.3 million for the same period in 2023. The decrease was due to decreases in the net gain on sale of equity securities, other noninterest income and deposit services income and a loss on sale of loans, partially offset by a decrease in net loss on sale of securities AFS and an increase in brokerage services income. The decrease in other noninterest income was primarily due to an impairment charge of $868,000 on the sale of approximately $10 million of AFS municipal securities and the unwind of the related fair value swaps on October 1. 

Noninterest expense was $109.0 million for the nine months ended September 30, 2024, compared to $105.4 million for the same period in 2023, an increase of $3.6 million, or 3.4%. The increase was primarily due to increases in salaries and employee benefits and software and data processing expense, partially offset by decreases in professional fees, net occupancy expense, advertising, travel and entertainment expense, and amortization of intangibles. 

Income tax expense increased $2.0 million, or 16.3%, for the nine months ended September 30, 2024, compared to the same period in 2023. Our ETR was approximately 17.6% and 15.0% for the nine months ended September 30, 2024 and 2023, respectively. The higher ETR for the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income. 

Balance Sheet Data 

At September 30, 2024, Southside had $8.36 billion in total assets, compared to $8.28 billion at December 31, 2023 and $7.97 billion at September 30, 2023. 

Loans at September 30, 2024 were $4.58 billion, an increase of $157.4 million, or 3.6%, compared to $4.42 billion at September 30, 2023. Linked quarter, loans decreased $11.3 million, or 0.2%, due to decreases of $50.2 million in commercial real estate loans, $14.9 million in municipal loans, $2.4 million in loans to individuals and $1.0 million in commercial loans. These decreases were partially offset by increases of $39.8 million in construction loans and $17.4 million in 1-4 family residential loans. 

Securities at September 30, 2024 were $2.70 billion, an increase of $53.4 million, or 2.0%, compared to $2.64 billion at September 30, 2023. Linked quarter, securities decreased $15.1 million, or 0.6%, from $2.71 billion at June 30, 2024. 

Deposits at September 30, 2024 were $6.44 billion, an increase of $86.1 million, or 1.4%, compared to $6.35 billion at September 30, 2023. Linked quarter, deposits decreased $60.2 million, or 0.9%, from $6.50 billion at June 30, 2024. 

At September 30, 2024, we had 179,214 total deposit accounts with an average balance of $32,000. Our estimated uninsured deposits were 35.9% as of September 30, 2024. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 19.2% as of September 30, 2024. Our noninterest bearing deposits represent approximately 21.4% of total deposits. Linked quarter, our cost of interest bearing deposits remained consistent at 3.01%. Linked quarter, our cost of total deposits decreased one basis point from 2.39% in the prior quarter to 2.38%

Our cost of interest bearing deposits increased 83 basis points, from 2.16% for the nine months ended September 30, 2023, to 2.99% for the nine months ended September 30, 2024. Our cost of total deposits increased 75 basis points, from 1.62% for the nine months ended September 30, 2023, to 2.37% for the nine months ended September 30, 2024. 

Capital Resources and Liquidity 

Our capital ratios and contingent liquidity sources remain solid. During the third quarter ended September 30, 2024, we did not purchase any common stock pursuant to our Stock Repurchase Plan. Under this plan, repurchases of our outstanding common stock may be carried out in open market purchases, privately negotiated transactions or pursuant to any trading plan that might be adopted in accordance with Rule 10b5-1 of The Securities Exchange Act of 1934, as amended. The Company has no obligation to repurchase any shares under the Stock Repurchase Plan and may modify, suspend or discontinue the plan at any time. We have not purchased any common stock pursuant to the Stock Repurchase Plan subsequent to September 30, 2024. 

As of September 30, 2024, our total available contingent liquidity, net of current outstanding borrowings, was $2.23 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit. 

Asset Quality 

Nonperforming assets at September 30, 2024 were $7.7 million, or 0.09% of total assets, an increase of $3.3 million, or 74.8%, compared to $4.4 million, or 0.05% of total assets, at September 30, 2023. Linked quarter, nonperforming assets increased $0.7 million, or 10.7%, from $6.9 million at June 30, 2024 due primarily to an increase of $1.1 million, or 18.7%, in nonaccrual loans, partially offset by decreases of $0.1 million in restructured loans and $0.3 million in other real estate owned. 

The allowance for loan losses totaled $44.3 million, or 0.97% of total loans, at September 30, 2024, compared to $42.4 million, or 0.92% of total loans, at June 30, 2024. The increase in the allowance as a percentage of total assets was primarily due to the increased economic concerns forecasted in the CECL model specific to office and multifamily markets in metro areas. The allowance for loan losses was $41.8 million, or 0.94% of total loans, at September 30, 2023. 

For the three months ended September 30, 2024, we recorded a provision for credit losses for loans of $2.3 million, compared to a provision of $6.3 million for the three months ended September 30, 2023, and a reversal of provision of $0.9 million for the three months ended June 30, 2024. Net charge-offs were $0.4 million for the three months ended September 30, 2024, compared to net charge-offs of $0.9 million and $0.3 million for the three months ended September 30, 2023 and June 30, 2024, respectively. Net charge-offs were $1.0 million for the nine months ended September 30, 2024, compared to net charge-offs of $1.5 million for the nine months ended September 30, 2023. 

We recorded a provision for credit losses on off-balance-sheet credit exposures of $0.1 million for the three months ended September 30, 2024, compared to $0.6 million and $0.4 million for the three months ended September 30, 2023 and June 30, 2024, respectively. We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.6 million for the nine months ended September 30, 2024, compared to a provision for credit losses on off-balance-sheet credit exposures of $0.2 million for the nine months ended September 30, 2023. The balance of the allowance for off-balance-sheet credit exposures was $3.3 million and $3.9 million at September 30, 2024 and 2023, respectively, and is included in other liabilities. 

Dividend 

Southside Bancshares, Inc. declared a third quarter cash dividend of $0.36 per share on August 8, 2024, which was paid on September 5, 2024, to all shareholders of record as of August 22, 2024. 

_______________ 

(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 third quarter ended September 30, 2024 financial results on Thursday, October 24, 2024 at 11:00 a.m. CDT. The conference call can be accessed by webcast, for listen-only mode, on the company website, https://investors.southside.com, under Events. 

Those interested in participating in the question and answer session, or others who prefer to call-in, can register at https://register.vevent.com/register/BIe280e5ecbf444a68a5836f1e27caa8a9 to receive the dial-in number and unique code to access the conference call seamlessly. While not required, it is recommended that those wishing to participate, register 10 minutes prior to the conference call to ensure a more efficient registration process. 

For those unable to attend the live event, a webcast recording will be available on the company website, https://investors.southside.com, for at least 30 days, beginning approximately two hours following the conference call. 

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 $8.36 billion in assets as of September 30, 2024, that owns 100% of Southside Bank. Southside Bank currently has 54 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 email notification of company news, events and stock activity, please register on the website under Resources and Investor Email Alerts. 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, 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 and our expectations regarding rate increases, tax reform, inflation, the impacts related to or resulting from 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 significant factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, interest rate fluctuations and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, labor shortages and changes in interest rates by the Federal Reserve. 

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, 2023, under “Part I - Item 1. Forward Looking Information” and “Part I - Item 1A. Risk Factors” 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
  2024   2023 
 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
ASSETS         
Cash and due from banks$130,147  $114,283  $96,744  $122,021  $105,601 
Interest earning deposits 333,825   272,469   307,257   391,719   106,094 
Federal funds sold 22,325   65,244   65,372   46,770   114,128 
Securities available for sale, at estimated fair value 1,408,437   1,405,944   1,405,221   1,296,294   1,335,560 
Securities held to maturity, at net carrying value 1,288,403   1,305,975   1,306,898   1,307,053   1,307,886 
Total securities 2,696,840   2,711,919   2,712,119   2,603,347   2,643,446 
Federal Home Loan Bank stock, at cost 40,291   32,991   27,958   11,936   12,778 
Loans held for sale 768   1,352   756   10,894   1,382 
Loans 4,578,048   4,589,365   4,577,368   4,524,510   4,420,633 
Less: Allowance for loan losses (44,276)  (42,407)  (43,557)  (42,674)  (41,760)
Net loans 4,533,772   4,546,958   4,533,811   4,481,836   4,378,873 
Premises & equipment, net 138,811   138,489   139,491   138,950   139,473 
Goodwill 201,116   201,116   201,116   201,116   201,116 
Other intangible assets, net 2,003   2,281   2,588   2,925   3,295 
Bank owned life insurance 137,489   136,903   136,604   136,330   135,737 
Other assets 124,876   133,697   130,047   137,070   130,545 
Total assets$8,362,263  $8,357,702  $8,353,863  $8,284,914  $7,972,468 
          
LIABILITIES AND SHAREHOLDERS' EQUITY         
Noninterest bearing deposits$1,377,022  $1,366,924  $1,358,827  $1,390,407  $1,431,285 
Interest bearing deposits 5,058,680   5,129,008   5,186,933   5,159,274   4,918,286 
Total deposits 6,435,702   6,495,932   6,545,760   6,549,681   6,349,571 
Other borrowings and Federal Home Loan Bank borrowings 865,856   763,700   770,151   722,468   608,038 
Subordinated notes, net of unamortized debt
issuance costs
 92,006   91,970   93,913   93,877   93,838 
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,273   60,272   60,271   60,270   60,269 
Other liabilities 103,172   144,858   95,846   85,330   132,157 
Total liabilities 7,557,009   7,556,732   7,565,941   7,511,626   7,243,873 
Shareholders' equity 805,254   800,970   787,922   773,288   728,595 
Total liabilities and shareholders' equity$8,362,263  $8,357,702  $8,353,863  $8,284,914  $7,972,468 

  

 
Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars and shares in thousands, except per share data)
 
 Three Months Ended
  2024   2023 
 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
Income Statement:         
Total interest income$105,703  $104,186  $102,758  $98,939  $93,078 
Total interest expense 50,239   50,578   49,410   44,454   39,805 
Net interest income 55,464   53,608   53,348   54,485   53,273 
Provision for (reversal of) credit losses 2,389   (485)  58   2,281   6,987 
Net interest income after provision for (reversal of) credit losses 53,075   54,093   53,290   52,204   46,286 
Noninterest income         
Deposit services 6,199   6,157   5,985   6,305   6,479 
Net gain (loss) on sale of securities available for sale (1,929)  (563)  (18)  (10,386)  11 
Gain (loss) on sale of loans 115   220   (436)  178   96 
Trust fees 1,628   1,456   1,336   1,431   1,522 
Bank owned life insurance 857   1,767   784   2,602   790 
Brokerage services 1,068   1,081   1,014   944   760 
Other 233   1,439   1,059   1,427   1,178 
Total noninterest income 8,171   11,557   9,724   2,501   10,836 
Noninterest expense         
Salaries and employee benefits 22,233   21,984   23,113   21,152   21,241 
Net occupancy 3,613   3,750   3,362   3,474   3,796 
Advertising, travel & entertainment 734   795   950   1,127   1,062 
ATM expense 412   368   325   318   358 
Professional fees 1,206   1,075   1,154   1,315   1,472 
Software and data processing 2,951   2,860   2,856   2,644   2,432 
Communications 423   410   449   435   359 
FDIC insurance 939   977   943   892   902 
Amortization of intangibles 278   307   337   370   407 
Other 3,543   3,239   3,392   3,456   3,524 
Total noninterest expense 36,332   35,765   36,881   35,183   35,553 
Income before income tax expense 24,914   29,885   26,133   19,522   21,569 
Income tax expense 4,390   5,212   4,622   2,206   3,120 
Net income$20,524  $24,673  $21,511  $17,316  $18,449 
          
Common Share Data:   
Weighted-average basic shares outstanding 30,286   30,280   30,262   30,235   30,502 
Weighted-average diluted shares outstanding 30,370   30,312   30,305   30,276   30,543 
Common shares outstanding end of period 30,308   30,261   30,284   30,249   30,338 
Earnings per common share         
Basic$0.68  $0.81  $0.71  $0.57  $0.60 
Diluted 0.68   0.81   0.71   0.57   0.60 
Book value per common share 26.57   26.47   26.02   25.56   24.02 
Tangible book value per common share 19.87   19.75   19.29   18.82   17.28 
Cash dividends paid per common share 0.36   0.36   0.36   0.37   0.35 
          
Selected Performance Ratios:         
Return on average assets 0.98%  1.19%  1.03%  0.85%  0.93%
Return on average shareholders’ equity 10.13   12.46   11.02   9.31   9.50 
Return on average tangible common equity (1) 13.69   16.90   15.07   13.10   13.17 
Average yield on earning assets (FTE) (1) 5.51   5.45   5.38   5.30   5.15 
Average rate on interest bearing liabilities 3.28   3.32   3.22   3.04   2.84 
Net interest margin (FTE) (1) 2.95   2.87   2.86   2.99   3.02 
Net interest spread (FTE) (1) 2.23   2.13   2.16   2.26   2.31 
Average earning assets to average interest bearing liabilities 128.51   128.62   127.71   131.65   133.24 
Noninterest expense to average total assets 1.73   1.72   1.77   1.73   1.79 
Efficiency ratio (FTE) (1) 51.90   52.71   55.54   50.86   52.29 

(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
  2024   2023 
 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
Nonperforming Assets:$7,656  $6,918  $7,979  $4,001  $4,381 
Nonaccrual loans 7,254   6,110   7,709   3,889   4,316 
Accruing loans past due more than 90 days              
Restructured loans    145   151   13   15 
Other real estate owned 388   648   119   99   50 
Repossessed assets 14   15          
          
Asset Quality Ratios:         
Ratio of nonaccruing loans to:         
Total loans 0.16%  0.13%  0.17%  0.09%  0.10%
Ratio of nonperforming assets to:         
Total assets 0.09   0.08   0.10   0.05   0.05 
Total loans 0.17   0.15   0.17   0.09   0.10 
Total loans and OREO 0.17   0.15   0.17   0.09   0.10 
Ratio of allowance for loan losses to:         
Nonaccruing loans 610.37   694.06   565.01   1,097.30   967.56 
Nonperforming assets 578.32   613.00   545.90   1,066.58   953.21 
Total loans 0.97   0.92   0.95   0.94   0.94 
Net charge-offs (recoveries) to average loans outstanding 0.04   0.02   0.03   0.11   0.08 
          
Capital Ratios:         
Shareholders’ equity to total assets 9.63   9.58   9.43   9.33   9.14 
Common equity tier 1 capital 13.07   12.72   12.43   12.28   12.27 
Tier 1 risk-based capital 14.12   13.76   13.47   13.32   13.31 
Total risk-based capital 16.59   16.16   15.92   15.73   15.71 
Tier 1 leverage capital 9.61   9.40   9.22   9.39   9.61 
Period end tangible equity to period end tangible assets (1) 7.38   7.33   7.17   7.04   6.75 
Average shareholders’ equity to average total assets 9.67   9.52   9.35   9.13   9.76 

(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
  2024   2023 
Loan Portfolio CompositionSep 30, Jun 30, Mar 31, Dec 31, Sep 30,
Real Estate Loans:         
Construction$585,817  $546,040  $599,464  $789,744  $720,515 
1-4 Family Residential 755,406   738,037   720,508   696,738   689,492 
Commercial 2,422,612   2,472,771   2,413,345   2,168,451   2,117,306 
Commercial Loans 358,854   359,807   358,053   366,893   385,816 
Municipal Loans 402,041   416,986   427,225   441,168   441,512 
Loans to Individuals 53,318   55,724   58,773   61,516   65,992 
Total Loans$4,578,048  $4,589,365  $4,577,368  $4,524,510  $4,420,633 
          
Summary of Changes in Allowances:         
Allowance for Loan Losses         
Balance at beginning of period$42,407  $43,557  $42,674  $41,760  $36,303 
Loans charged-off (773)  (721)  (634)  (1,572)  (1,262)
Recoveries of loans charged-off 365   444   347   284   378 
Net loans (charged-off) recovered (408)  (277)  (287)  (1,288)  (884)
Provision for (reversal of) loan losses 2,277   (873)  1,170   2,202   6,341 
Balance at end of period$44,276  $42,407  $43,557  $42,674  $41,760 
          
Allowance for Off-Balance-Sheet Credit Exposures         
Balance at beginning of period$3,208  $2,820  $3,932  $3,853  $3,207 
Provision for (reversal of) off-balance-sheet credit exposures 112   388   (1,112)  79   646 
Balance at end of period$3,320  $3,208  $2,820  $3,932  $3,853 
Total Allowance for Credit Losses$47,596  $45,615  $46,377  $46,606  $45,613 

  

 
Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)
 
 Nine Months Ended
 September 30,
  2024   2023 
Income Statement:   
Total interest income$312,647  $260,802 
Total interest expense 150,227   100,260 
Net interest income 162,420   160,542 
Provision for (reversal of) credit losses 1,962   6,873 
Net interest income after provision for (reversal of) credit losses 160,458   153,669 
Noninterest income   
Deposit services 18,341   19,192 
Net gain (loss) on sale of securities available for sale (2,510)  (5,590)
Net gain on sale of equity securities    5,058 
Gain (loss) on sale of loans (101)  385 
Trust fees 4,420   4,479 
Bank owned life insurance 3,408   3,221 
Brokerage services 3,163   2,361 
Other 2,731   4,227 
Total noninterest income 29,452   33,333 
Noninterest expense   
Salaries and employee benefits 67,330   64,473 
Net occupancy 10,725   11,220 
Advertising, travel & entertainment 2,479   2,966 
ATM expense 1,105   1,033 
Professional fees 3,435   4,036 
Software and data processing 8,667   6,751 
Communications 1,282   1,034 
FDIC insurance 2,859   2,666 
Amortization of intangibles 922   1,327 
Other 10,174   9,889 
Total noninterest expense 108,978   105,395 
Income before income tax expense 80,932   81,607 
Income tax expense 14,224   12,231 
Net income$66,708  $69,376 
Common Share Data:   
Weighted-average basic shares outstanding 30,276   30,862 
Weighted-average diluted shares outstanding 30,332   30,916 
Common shares outstanding end of period 30,308   30,338 
Earnings per common share   
Basic$2.20  $2.25 
Diluted 2.20   2.24 
Book value per common share 26.57   24.02 
Tangible book value per common share 19.87   17.28 
Cash dividends paid per common share 1.08   1.05 
    
Selected Performance Ratios:   
Return on average assets 1.06%  1.20%
Return on average shareholders’ equity 11.19   12.21 
Return on average tangible common equity (1) 15.20   16.98 
Average yield on earning assets (FTE) (1) 5.45   4.97 
Average rate on interest bearing liabilities 3.27   2.49 
Net interest margin (FTE) (1) 2.90   3.13 
Net interest spread (FTE) (1) 2.18   2.48 
Average earning assets to average interest bearing liabilities 128.28   134.94 
Noninterest expense to average total assets 1.74   1.84 
Efficiency ratio (FTE) (1) 53.35   51.44 

(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)
 
 Nine Months Ended
 September 30,
  2024   2023 
Nonperforming Assets:$7,656  $4,381 
Nonaccrual loans 7,254   4,316 
Accruing loans past due more than 90 days     
Restructured loans    15 
Other real estate owned 388   50 
Repossessed assets 14    
    
Asset Quality Ratios:   
Ratio of nonaccruing loans to:   
Total loans 0.16%  0.10%
Ratio of nonperforming assets to:   
Total assets 0.09   0.05 
Total loans 0.17   0.10 
Total loans and OREO 0.17   0.10 
Ratio of allowance for loan losses to:   
Nonaccruing loans 610.37   967.56 
Nonperforming assets 578.32   953.21 
Total loans 0.97   0.94 
Net charge-offs (recoveries) to average loans outstanding 0.03   0.05 
    
Capital Ratios:   
Shareholders’ equity to total assets 9.63   9.14 
Common equity tier 1 capital 13.07   12.27 
Tier 1 risk-based capital 14.12   13.31 
Total risk-based capital 16.59   15.71 
Tier 1 leverage capital 9.61   9.61 
Period end tangible equity to period end tangible assets (1) 7.38   6.75 
Average shareholders’ equity to average total assets 9.51   9.81 

(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)
 
 Nine Months Ended
 September 30,
Loan Portfolio Composition 2024   2023 
Real Estate Loans:   
Construction$585,817  $720,515 
1-4 Family Residential 755,406   689,492 
Commercial 2,422,612   2,117,306 
Commercial Loans 358,854   385,816 
Municipal Loans 402,041   441,512 
Loans to Individuals 53,318   65,992 
Total Loans$4,578,048  $4,420,633 
    
Summary of Changes in Allowances:   
Allowance for Loan Losses   
Balance at beginning of period$42,674  $36,515 
Loans charged-off (2,128)  (2,632)
Recoveries of loans charged-off 1,156   1,170 
Net loans (charged-off) recovered (972)  (1,462)
Provision for (reversal of) loan losses 2,574   6,707 
Balance at end of period$44,276  $41,760 
    
Allowance for Off-Balance-Sheet Credit Exposures   
Balance at beginning of period$3,932  $3,687 
Provision for (reversal of) off-balance-sheet credit exposures (612)  166 
Balance at end of period$3,320  $3,853 
Total Allowance for Credit Losses$47,596  $45,613 


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.  

Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)
 
 Three Months Ended
 September 30, 2024 June 30, 2024
 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate
ASSETS           
Loans (1)$4,613,028  $72,493 6.25% $4,595,980  $70,293 6.15%
Loans held for sale 871   11 5.02%  1,489   24 6.48%
Securities:           
Taxable investment securities (2) 791,914   7,150 3.59%  783,856   7,009 3.60%
Tax-exempt investment securities (2) 1,174,445   11,825 4.01%  1,254,097   12,761 4.09%
Mortgage-backed and related securities (2) 886,325   11,976 5.38%  830,504   11,084 5.37%
Total securities 2,852,684   30,951 4.32%  2,868,457   30,854 4.33%
Federal Home Loan Bank stock, at cost, and equity investments 41,159   582 5.63%  40,467   573 5.69%
Interest earning deposits 281,313   3,798 5.37%  300,047   4,105 5.50%
Federal funds sold 33,971   488 5.71%  75,479   1,021 5.44%
Total earning assets 7,823,026   108,323 5.51%  7,881,919   106,870 5.45%
Cash and due from banks 100,578       110,102     
Accrued interest and other assets 455,091       424,323     
Less: Allowance for loan losses (42,581)      (43,738)    
Total assets$8,336,114      $8,372,606     
LIABILITIES AND SHAREHOLDERS’ EQUITY           
Savings accounts$598,116   1,490 0.99% $604,753   1,454 0.97%
Certificates of deposit 1,087,613   12,647 4.63%  1,020,099   11,630 4.59%
Interest bearing demand accounts 3,409,911   24,395 2.85%  3,513,068   25,382 2.91%
Total interest bearing deposits 5,095,640   38,532 3.01%  5,137,920   38,466 3.01%
Federal Home Loan Bank borrowings 618,708   6,488 4.17%  606,851   6,455 4.28%
Subordinated notes, net of unamortized debt issuance costs 91,988   937 4.05%  92,017   936 4.09%
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,273   1,180 7.79%  60,271   1,171 7.81%
Repurchase agreements 83,297   899 4.29%  88,007   955 4.36%
Other borrowings 137,482   2,203 6.37%  143,169   2,595 7.29%
Total interest bearing liabilities 6,087,388   50,239 3.28%  6,128,235   50,578 3.32%
Noninterest bearing deposits 1,344,165       1,346,274     
Accrued expenses and other liabilities 98,331       101,399     
Total liabilities 7,529,884       7,575,908     
Shareholders’ equity 806,230       796,698     
Total liabilities and shareholders’ equity$8,336,114      $8,372,606     
Net interest income (FTE)  $58,084     $56,292  
Net interest margin (FTE)    2.95%     2.87%
Net interest spread (FTE)    2.23%     2.13%

(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 September 30, 2024 and June 30, 2024, loans totaling $7.3 million and $6.1 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
 March 31, 2024 December 31, 2023
 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate
ASSETS           
Loans (1)$4,559,602  $68,849 6.07% $4,473,618  $67,886 6.02%
Loans held for sale 8,834   18 0.82%  1,858   27 5.77%
Securities:           
Taxable investment securities (2) 780,423   6,967 3.59%  852,023   7,970 3.71%
Tax-exempt investment securities (2) 1,285,922   13,168 4.12%  1,456,187   15,688 4.27%
Mortgage-backed and related securities (2) 764,713   10,119 5.32%  581,548   6,865 4.68%
Total securities 2,831,058   30,254 4.30%  2,889,758   30,523 4.19%
Federal Home Loan Bank stock, at cost, and equity investments 40,063   333 3.34%  24,674   296 4.76%
Interest earning deposits 380,181   5,202 5.50%  150,763   2,054 5.41%
Federal funds sold 62,599   838 5.38%  93,149   1,286 5.48%
Total earning assets 7,882,337   105,494 5.38%  7,633,820   102,072 5.30%
Cash and due from banks 114,379       110,380     
Accrued interest and other assets 441,783       374,120     
Less: Allowance for loan losses (42,973)      (41,822)    
Total assets$8,395,526      $8,076,498     
LIABILITIES AND SHAREHOLDERS’ EQUITY           
Savings accounts$604,529   1,424 0.95% $610,453   1,432 0.93%
Certificates of deposit 941,947   10,341 4.42%  910,759   9,691 4.22%
Interest bearing demand accounts 3,634,936   26,433 2.92%  3,469,120   24,498 2.80%
Total interest bearing deposits 5,181,412   38,198 2.97%  4,990,332   35,621 2.83%
Federal Home Loan Bank borrowings 607,033   5,950 3.94%  262,709   1,430 2.16%
Subordinated notes, net of unamortized debt issuance costs 93,895   956 4.10%  93,859   965 4.08%
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,270   1,175 7.84%  60,269   1,195 7.87%
Repurchase agreements 92,177   967 4.22%  96,622   1,008 4.14%
Other borrowings 137,287   2,164 6.34%  294,683   4,235 5.70%
Total interest bearing liabilities 6,172,074   49,410 3.22%  5,798,474   44,454 3.04%
Noninterest bearing deposits 1,338,384       1,424,961     
Accrued expenses and other liabilities 100,014       115,388     
Total liabilities 7,610,472       7,338,823     
Shareholders’ equity 785,054       737,675     
Total liabilities and shareholders’ equity$8,395,526      $8,076,498     
Net interest income (FTE)  $56,084     $57,618  
Net interest margin (FTE)    2.86%     2.99%
Net interest spread (FTE)    2.16%     2.26%

(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 March 31, 2024 and December 31, 2023, loans totaling $7.7 million and $3.9 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
 September 30, 2023
 Average Balance Interest Average Yield/Rate
ASSETS     
Loans (1) $4,396,184  $64,758 5.84%
Loans held for sale 1,537   26 6.71%
Securities:     
Taxable investment securities (2) 912,789   8,731 3.79%
Tax-exempt investment securities (2) 1,510,044   16,232 4.26%
Mortgage-backed and related securities (2) 442,908   4,426 3.96%
Total securities 2,865,741   29,389 4.07%
Federal Home Loan Bank stock, at cost, and equity investments 22,363   265 4.70%
Interest earning deposits 37,891   535 5.60%
Federal funds sold 94,441   1,253 5.26%
Total earning assets 7,418,157   96,226 5.15%
Cash and due from banks 106,348     
Accrued interest and other assets 400,850     
Less: Allowance for loan losses (36,493)    
Total assets$7,888,862     
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Savings accounts$622,246   1,458 0.93%
Certificates of deposit 949,894   9,443 3.94%
Interest bearing demand accounts 3,189,048   20,050 2.49%
Total interest bearing deposits 4,761,188   30,951 2.58%
Federal Home Loan Bank borrowings 230,184   1,174 2.02%
Subordinated notes, net of unamortized debt issuance costs 93,817   962 4.07%
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,268   1,178 7.75%
Repurchase agreements 104,070   1,048 4.00%
Other borrowings 317,913   4,492 5.61%
Total interest bearing liabilities 5,567,440   39,805 2.84%
Noninterest bearing deposits 1,441,738     
Accrued expenses and other liabilities 109,490     
Total liabilities 7,118,668     
Shareholders’ equity 770,194     
Total liabilities and shareholders’ equity$7,888,862     
Net interest income (FTE)  $56,421  
Net interest margin (FTE)    3.02%
Net interest spread (FTE)    2.31%

(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 September 30, 2023, loans totaling $4.3 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)
 
 Nine Months Ended
 September 30, 2024 September 30, 2023
 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate
ASSETS           
Loans (1)$4,589,621  $211,635 6.16% $4,241,676  $179,545 5.66%
Loans held for sale 3,721   53 1.90%  1,620   69 5.69%
Securities:           
Taxable investment securities (2) 785,422   21,126 3.59%  843,846   23,216 3.68%
Tax-exempt investment securities (2) 1,237,884   37,754 4.07%  1,587,656   48,880 4.12%
Mortgage-backed and related securities (2) 827,396   33,179 5.36%  433,335   12,585 3.88%
Total securities 2,850,702   92,059 4.31%  2,864,837   84,681 3.95%
Federal Home Loan Bank stock, at cost, and equity investments 40,565   1,488 4.90%  25,071   889 4.74%
Interest earning deposits 320,371   13,105 5.46%  60,623   2,310 5.09%
Federal funds sold 57,265   2,347 5.47%  75,499   2,838 5.03%
Total earning assets 7,862,245   320,687 5.45%  7,269,326   270,332 4.97%
Cash and due from banks 108,325       105,885     
Accrued interest and other assets 440,340       406,160     
Less: Allowance for loan losses (43,096)      (36,564)    
Total assets$8,367,814      $7,744,807     
LIABILITIES AND SHAREHOLDERS’ EQUITY           
Savings accounts$602,450   4,368 0.97% $645,415   4,201 0.87%
Certificates of deposit 1,016,812   34,618 4.55%  845,851   21,215 3.35%
Interest bearing demand accounts 3,518,906   76,210 2.89%  3,005,449   47,120 2.10%
Total interest bearing deposits 5,138,168   115,196 2.99%  4,496,715   72,536 2.16%
Federal Home Loan Bank borrowings 610,893   18,893 4.13%  281,260   5,347 2.54%
Subordinated notes, net of unamortized debt issuance costs 92,631   2,829 4.08%  96,753   2,955 4.08%
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,271   3,526 7.81%  60,266   3,309 7.34%
Repurchase agreements 87,811   2,821 4.29%  89,282   2,423 3.63%
Other borrowings 139,306   6,962 6.68%  362,684   13,690 5.05%
Total interest bearing liabilities 6,129,080   150,227 3.27%  5,386,960   100,260 2.49%
Noninterest bearing deposits 1,342,945       1,506,431     
Accrued expenses and other liabilities 99,758       91,784     
Total liabilities 7,571,783       6,985,175     
Shareholders’ equity 796,031       759,632     
Total liabilities and shareholders’ equity$8,367,814      $7,744,807     
Net interest income (FTE)  $170,460     $170,072  
Net interest margin (FTE)    2.90%     3.13%
Net interest spread (FTE)    2.18%     2.48%

(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 September 30, 2024 and 2023, loans totaling $7.3 million and $4.3 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. 

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. 

 
Southside Bancshares, Inc.
Non-GAAP Reconciliation (Unaudited)
(Dollars and shares in thousands, except per share data)
 
  Three Months Ended Nine Months Ended
   2024   2023   2024   2023 
  Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30,
Reconciliation of return on average common equity to return on average tangible common equity:              
Net income $20,524  $24,673  $21,511  $17,316  $18,449  $66,708  $69,376 
After-tax amortization expense  220   243   266   292   322   728   1,048 
Adjusted net income available to common shareholders $20,744  $24,916  $21,777  $17,608  $18,771  $67,436  $70,424 
               
Average shareholders' equity $806,230  $796,698  $785,054  $737,675  $770,194  $796,031  $759,632 
Less: Average intangibles for the period  (203,288)  (203,581)  (203,910)  (204,267)  (204,658)  (203,592)  (205,096)
Average tangible shareholders' equity $602,942  $593,117  $581,144  $533,408  $565,536  $592,439  $554,536 
               
Return on average tangible common equity  13.69%  16.90%  15.07%  13.10%  13.17%  15.20%  16.98%
               
Reconciliation of book value per share to tangible book value per share:              
Common equity at end of period $805,254  $800,970  $787,922  $773,288  $728,595  $805,254  $728,595 
Less: Intangible assets at end of period  (203,119)  (203,397)  (203,704)  (204,041)  (204,411)  (203,119)  (204,411)
Tangible common shareholders' equity at end of period $602,135  $597,573  $584,218  $569,247  $524,184  $602,135  $524,184 
               
Total assets at end of period $8,362,263  $8,357,702  $8,353,863  $8,284,914  $7,972,468  $8,362,263  $7,972,468 
Less: Intangible assets at end of period  (203,119)  (203,397)  (203,704)  (204,041)  (204,411)  (203,119)  (204,411)
Tangible assets at end of period $8,159,144  $8,154,305  $8,150,159  $8,080,873  $7,768,057  $8,159,144  $7,768,057 
               
Period end tangible equity to period end tangible assets  7.38%  7.33%  7.17%  7.04%  6.75%  7.38%  6.75%
               
Common shares outstanding end of period  30,308   30,261   30,284   30,249   30,338   30,308   30,338 
Tangible book value per common share $19.87  $19.75  $19.29  $18.82  $17.28  $19.87  $17.28 
               
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) $55,464  $53,608  $53,348  $54,485  $53,273  $162,420  $160,542 
Tax-equivalent adjustments:              
Loans  608   633   656   680   674   1,897   2,044 
Tax-exempt investment securities  2,012   2,051   2,080   2,453   2,474   6,143   7,486 
Net interest income (FTE) (1)  58,084   56,292   56,084   57,618   56,421   170,460   170,072 
Noninterest income  8,171   11,557   9,724   2,501   10,836   29,452   33,333 
Nonrecurring income (2)  2,797   (576)  18   8,376   (11)  2,239   (1,006)
Total revenue $69,052  $67,273  $65,826  $68,495  $67,246  $202,151  $202,399 
                             
Noninterest expense $36,332  $35,765  $36,881  $35,183  $35,553  $108,978  $105,395 
Pre-tax amortization expense  (278)  (307)  (337)  (370)  (407)  (922)  (1,327)
Nonrecurring expense (3)  (219)  2   17   22   17   (200)  56 
Adjusted noninterest expense $35,835  $35,460  $36,561  $34,835  $35,163  $107,856  $104,124 
                             
Efficiency ratio  53.94%  54.90%  57.95%  53.30%  54.86%  55.56%  53.99%
Efficiency ratio (FTE) (1)  51.90%  52.71%  55.54%  50.86%  52.29%  53.35%  51.44%
                             
Average earning assets $7,823,026  $7,881,919  $7,882,337  $7,633,820  $7,418,157  $7,862,245  $7,269,326 
                             
Net interest margin  2.82%  2.74%  2.72%  2.83%  2.85%  2.76%  2.95%
Net interest margin (FTE) (1)  2.95%  2.87%  2.86%  2.99%  3.02%  2.90%  3.13%
                             
Net interest spread  2.10%  2.00%  2.02%  2.10%  2.14%  2.04%  2.31%
Net interest spread (FTE) (1)  2.23%  2.13%  2.16%  2.26%  2.31%  2.18%  2.48%

(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, net gain on sale of equity securities, BOLI income related to death benefits realized and other investment income or loss in the periods where applicable.
(3)   These adjustments may include foreclosure expenses and branch closure expenses, in the periods where applicable.


FAQ

What was Southside Bancshares (SBSI) earnings per share in Q3 2024?

Southside Bancshares reported earnings per diluted share of $0.68 for Q3 2024, up from $0.60 in Q3 2023.

What was SBSI's net interest margin in Q3 2024?

The tax-equivalent net interest margin was 2.95% for Q3 2024, compared to 3.02% in Q3 2023.

How much was Southside Bancshares' Q3 2024 dividend?

Southside Bancshares declared a third quarter cash dividend of $0.36 per share, paid on September 5, 2024.

What was SBSI's total asset value as of September 30, 2024?

Southside Bancshares had total assets of $8.36 billion as of September 30, 2024.

Southside Bancshares Inc

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