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Southside Bancshares, Inc. Announces Financial Results for the First Quarter Ended March 31, 2025
Source: Nasdaq GlobeNewswire / 29 Apr 2025 05:45:01 America/New_York
- First quarter net income of $21.5 million;
- First quarter earnings per diluted common share of $0.71;
- Annualized return on first quarter average assets of 1.03%;
- Annualized return on first quarter average tangible common equity of 14.14%(1); and
- Nonperforming assets remain low at 0.39% of total assets.
TYLER, Texas, April 29, 2025 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NYSE: SBSI) today reported its financial results for the quarter ended March 31, 2025. Southside reported net income of $21.5 million and earnings per diluted common share of $0.71 for both of the three month periods ended March 31, 2025 and 2024. The annualized return on average shareholders’ equity for the three months ended March 31, 2025 was 10.57%, compared to 11.02% for the same period in 2024. The annualized return on average assets was 1.03% for both of the three month periods ended March 31, 2025 and 2024.
“We are pleased to report financial results for the first quarter ended March 31, 2025, which included earnings per share of $0.71, a return on average assets of 1.03%, and a return on average tangible common equity of 14.14%,” stated Lee R. Gibson, Chief Executive Officer of Southside. “Linked quarter, the net interest margin increased three basis points to 2.86%, net interest income increased $145,000 to $53.9 million, and deposits net of public fund and brokered deposits increased $91.9 million. The linked quarter decrease in total loans was primarily due to payoffs exceeding original projections. Our loan pipeline is solid and we continue to anticipate mid-single-digit loan growth for 2025; however, it will likely be heavily weighted in the last half of the year.”
Operating Results for the Three Months Ended March 31, 2025
Net income was $21.5 million and earnings per diluted common share were $0.71 for both of the three month periods ended March 31, 2025 and 2024. Annualized returns on average assets and average shareholders’ equity for the three months ended March 31, 2025 were 1.03% and 10.57%, respectively, compared to 1.03% and 11.02%, respectively, for the three months ended March 31, 2024. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 57.04% and 55.04%, respectively, for the three months ended March 31, 2025, compared to 57.95% and 55.54%, respectively, for the three months ended March 31, 2024, and 56.08% and 54.00%, respectively, for the three months ended December 31, 2024.
Net interest income for the three months ended March 31, 2025 was $53.9 million, an increase of $0.5 million, or 0.9%, compared to the same period in 2024. Linked quarter, net interest income increased $0.1 million, or 0.3%, compared to $53.7 million for the three months ended December 31, 2024. The increase in net interest income for both periods was due to the decrease in the average rate paid on interest bearing liabilities and the increase in the average balance of our interest earning assets, partially offset by the decrease in the average yield of interest earning assets and the increase in the average balance of our interest bearing liabilities.
Our net interest margin increased to 2.74% for the three months ended March 31, 2025, compared to 2.72% for the same period in 2024, while tax-equivalent net interest margin(1) was 2.86% for both of the three month periods ended March 31, 2025 and 2024. Linked quarter, net interest margin and tax-equivalent net interest margin(1) increased from 2.70% and 2.83%, respectively, for the three months ended December 31, 2024.
Noninterest income was $10.2 million for the three months ended March 31, 2025, an increase of $0.5 million, or 5.1%, compared to $9.7 million for the same period in 2024. The increase was primarily due to increases in gain on sale of loans and trust fees, partially offset by an increase in net loss on sale of securities available for sale (“AFS”). On a linked quarter basis, noninterest income decreased $2.1 million, or 16.8%, compared to the three months ended December 31, 2024. The decrease was primarily due to a decrease in other noninterest income, an increase in net loss on sale of securities AFS and a decrease in deposit services income. The decrease in other noninterest income was due to a decrease in swap fee income for the three months ended March 31, 2025.
Noninterest expense increased $0.2 million, or 0.6%, to $37.1 million for the three months ended March 31, 2025, compared to $36.9 million for the same period in 2024, due to increases in other noninterest expense and professional fees, partially offset by decreases in salaries and employee benefits expense and amortization of intangibles. On a linked quarter basis, noninterest expense decreased by $1.1 million, or 2.8%, compared to the three months ended December 31, 2024, due to decreases in salaries and employee benefits, net occupancy, other noninterest expense and professional fees.
Income tax expense increased $0.1 million, or 2.1%, for the three months ended March 31, 2025, compared to the same period in 2024. On a linked quarter basis, income tax expense increased $0.1 million, or 1.3%. Our effective tax rate (“ETR”) increased to 18.0% for the three months ended March 31, 2025, compared to 17.7% for the three months ended March 31, 2024, and increased from 17.6% for the three months ended December 31, 2024. The higher ETR for the three months ended March 31, 2025 compared to the same period in 2024, was primarily due to an increase in state income tax expense.
Balance Sheet Data
At March 31, 2025, Southside had $8.34 billion in total assets, compared to $8.35 billion at March 31, 2024, and $8.52 billion at December 31, 2024.
Loans at March 31, 2025 were $4.57 billion, a decrease of $10.1 million, or 0.2%, compared to $4.58 billion at March 31, 2024. Linked quarter, loans decreased $94.4 million, or 2.0%, due to decreases of $79.7 million in construction loans, $19.7 million in municipal loans, $2.5 million in commercial real estate loans and $1.9 million in loans to individuals. These decreases were partially offset by increases of $8.5 million in commercial loans and $1.0 million in 1-4 family residential loans.
Securities at March 31, 2025 were $2.74 billion, an increase of $24.2 million, or 0.9%, compared to $2.71 billion at March 31, 2024. Linked quarter, securities decreased $76.9 million, or 2.7%, from $2.81 billion at December 31, 2024.
Deposits at March 31, 2025 were $6.59 billion, an increase of $45.1 million, or 0.7%, compared to $6.55 billion at March 31, 2024. Linked quarter, deposits decreased $63.4 million, or 1.0%, from $6.65 billion at December 31, 2024.
At March 31, 2025, we had 178,840 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 40.0% of total deposits as of March 31, 2025. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 20.8% as of March 31, 2025. Our noninterest bearing deposits represent approximately 20.9% of total deposits. Linked quarter, our cost of interest bearing deposits decreased nine basis points from 2.92% in the prior quarter to 2.83%. Linked quarter, our cost of total deposits decreased five basis points from 2.31% in the prior quarter to 2.26%.
Our cost of interest bearing deposits decreased 14 basis points, from 2.97% for the three months ended March 31, 2024, to 2.83% for the three months ended March 31, 2025. Our cost of total deposits decreased 10 basis points, from 2.36% for the three months ended March 31, 2024, to 2.26% for the three months ended March 31, 2025.
Capital Resources and Liquidity
Our capital ratios and contingent liquidity sources remain solid. During the first quarter ended March 31, 2025, 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. Subsequent to March 31, 2025, and through April 25, 2025, we purchased 196,419 shares of common stock at an average price of $26.82 pursuant to the Stock Repurchase Plan.
As of March 31, 2025, our total available contingent liquidity, net of current outstanding borrowings, was $2.29 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit.
Asset Quality
Nonperforming assets at March 31, 2025 were $32.2 million, or 0.39% of total assets, an increase of $24.2 million, or 303.5%, compared to $8.0 million, or 0.10% of total assets, at March 31, 2024. Linked quarter, nonperforming assets increased $28.6 million, or 797.0%, from $3.6 million at December 31, 2024 due primarily to increases of $27.5 million in restructured loans and $1.1 million in nonaccrual loans. The increase in restructured loans was due to the extension of maturity on a $27.5 million commercial real estate loan to allow for an extended lease up period. Classified loans totaled $67.0 million on March 31, 2025, compared to $48.0 million on December 31, 2024, primarily due to the downgrade of a $17.9 million commercial real estate loan in the first quarter that paid off on April 4, 2025.
The allowance for loan losses totaled $44.6 million, or 0.98% of total loans, at March 31, 2025, compared to $44.9 million, or 0.96% of total loans, at December 31, 2024. The allowance for loan losses was $43.6 million, or 0.95% of total loans, at March 31, 2024. The increase in allowance as a percentage of total loans was primarily due to an increase in economic concerns forecasted in the CECL model, partially offset by a decrease in the loan portfolio due to payoffs.
For the three months ended March 31, 2025, we recorded a provision for credit losses for loans of $42,000, compared to a provision of $1.2 million and $1.6 million for the three months ended March 31, 2024 and December 31, 2024, respectively. Net charge-offs were $0.3 million for the three months ended March 31, 2025 and March 31, 2024, compared to net charge-offs of $1.0 million for the three months ended December 31, 2024.
We recorded a provision for credit losses on off-balance-sheet credit exposures of $0.7 million for the three months ended March 31, 2025, compared to a reversal of provision for credit losses on off-balance-sheet credit exposures $1.1 million and $0.2 million for the three months ended March 31, 2024 and December 31, 2024, respectively. The balance of the allowance for off-balance-sheet credit exposures was $3.8 million and $2.8 million at March 31, 2025 and 2024, respectively, and is included in other liabilities.
Dividend
Southside Bancshares, Inc. declared a first quarter cash dividend of $0.36 per share on February 6, 2025, which was paid on March 6, 2025, to all shareholders of record as of February 20, 2025.
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(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 first quarter ended March 31, 2025 financial results on Tuesday, April 29, 2025 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-conf.media-server.com/register/BI1a8ec95cd2734970adaf83fadfc7f01d 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 that this measure is 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 $8.34 billion in assets as of March 31, 2025, that owns 100% of Southside Bank. Southside Bank currently has 53 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 changes, tax reform, inflation, tariffs, 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, including the impact of changes in interest rates on our financial projections, models and guidance, and general economic and recessionary concerns, as well as the effects of declines in the real estate market, tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), high unemployment and increasing insurance costs, as well as the financial stress on borrowers as a result of the foregoing, 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, and our ability to manage liquidity in a rapidly changing and unpredictable market.
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, 2024, 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 2025 2024 Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, ASSETS Cash and due from banks $ 103,359 $ 91,409 $ 130,147 $ 114,283 $ 96,744 Interest earning deposits 293,364 281,945 333,825 272,469 307,257 Federal funds sold 34,248 52,807 22,325 65,244 65,372 Securities available for sale, at estimated fair value 1,457,939 1,533,894 1,408,437 1,405,944 1,405,221 Securities held to maturity, at net carrying value 1,278,330 1,279,234 1,288,403 1,305,975 1,306,898 Total securities 2,736,269 2,813,128 2,696,840 2,711,919 2,712,119 Federal Home Loan Bank stock, at cost 34,208 33,818 40,291 32,991 27,958 Loans held for sale 903 1,946 768 1,352 756 Loans 4,567,239 4,661,597 4,578,048 4,589,365 4,577,368 Less: Allowance for loan losses (44,623 ) (44,884 ) (44,276 ) (42,407 ) (43,557 ) Net loans 4,522,616 4,616,713 4,533,772 4,546,958 4,533,811 Premises & equipment, net 142,245 141,648 138,811 138,489 139,491 Goodwill 201,116 201,116 201,116 201,116 201,116 Other intangible assets, net 1,531 1,754 2,003 2,281 2,588 Bank owned life insurance 137,962 138,313 137,489 136,903 136,604 Other assets 135,479 142,851 124,876 133,697 130,047 Total assets $ 8,343,300 $ 8,517,448 $ 8,362,263 $ 8,357,702 $ 8,353,863 LIABILITIES AND SHAREHOLDERS' EQUITY Noninterest bearing deposits $ 1,379,641 $ 1,357,152 $ 1,377,022 $ 1,366,924 $ 1,358,827 Interest bearing deposits 5,211,210 5,297,096 5,058,680 5,129,008 5,186,933 Total deposits 6,590,851 6,654,248 6,435,702 6,495,932 6,545,760 Other borrowings and Federal Home Loan Bank borrowings 691,417 808,352 865,856 763,700 770,151 Subordinated notes, net of unamortized debt
issuance costs92,078 92,042 92,006 91,970 93,913 Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,276 60,274 60,273 60,272 60,271 Other liabilities 92,055 90,590 103,172 144,858 95,846 Total liabilities 7,526,677 7,705,506 7,557,009 7,556,732 7,565,941 Shareholders' equity 816,623 811,942 805,254 800,970 787,922 Total liabilities and shareholders' equity $ 8,343,300 $ 8,517,448 $ 8,362,263 $ 8,357,702 $ 8,353,863 Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars and shares in thousands, except per share data)Three Months Ended 2025 2024 Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Income Statement: Total interest and dividend income $ 100,288 $ 101,689 $ 105,703 $ 104,186 $ 102,758 Total interest expense 46,436 47,982 50,239 50,578 49,410 Net interest income 53,852 53,707 55,464 53,608 53,348 Provision for (reversal of) credit losses 758 1,384 2,389 (485 ) 58 Net interest income after provision for (reversal of) credit losses 53,094 52,323 53,075 54,093 53,290 Noninterest income Deposit services 5,829 6,084 6,199 6,157 5,985 Net gain (loss) on sale of securities available for sale (554 ) — (1,929 ) (563 ) (18 ) Gain (loss) on sale of loans 55 138 115 220 (436 ) Trust fees 1,765 1,773 1,628 1,456 1,336 Bank owned life insurance 799 848 857 1,767 784 Brokerage services 1,120 1,054 1,068 1,081 1,014 Other 1,209 2,384 233 1,439 1,059 Total noninterest income 10,223 12,281 8,171 11,557 9,724 Noninterest expense Salaries and employee benefits 22,382 22,960 22,233 21,984 23,113 Net occupancy 3,404 3,629 3,613 3,750 3,362 Advertising, travel & entertainment 924 884 734 795 950 ATM expense 378 378 412 368 325 Professional fees 1,520 1,645 1,206 1,075 1,154 Software and data processing 2,839 2,931 2,951 2,860 2,856 Communications 383 320 423 410 449 FDIC insurance 947 931 939 977 943 Amortization of intangibles 223 249 278 307 337 Other 4,089 4,232 3,543 3,239 3,392 Total noninterest expense 37,089 38,159 36,332 35,765 36,881 Income before income tax expense 26,228 26,445 24,914 29,885 26,133 Income tax expense 4,721 4,659 4,390 5,212 4,622 Net income $ 21,507 $ 21,786 $ 20,524 $ 24,673 $ 21,511 Common Share Data: Weighted-average basic shares outstanding 30,390 30,343 30,286 30,280 30,262 Weighted-average diluted shares outstanding 30,483 30,459 30,370 30,312 30,305 Common shares outstanding end of period 30,410 30,379 30,308 30,261 30,284 Earnings per common share Basic $ 0.71 $ 0.72 $ 0.68 $ 0.81 $ 0.71 Diluted 0.71 0.71 0.68 0.81 0.71 Book value per common share 26.85 26.73 26.57 26.47 26.02 Tangible book value per common share 20.19 20.05 19.87 19.75 19.29 Cash dividends paid per common share 0.36 0.36 0.36 0.36 0.36 Selected Performance Ratios: Return on average assets 1.03 % 1.03 % 0.98 % 1.19 % 1.03 % Return on average shareholders’ equity 10.57 10.54 10.13 12.46 11.02 Return on average tangible common equity (1) 14.14 14.12 13.69 16.90 15.07 Average yield on earning assets (FTE) (1) 5.23 5.24 5.51 5.45 5.38 Average rate on interest bearing liabilities 3.03 3.12 3.28 3.32 3.22 Net interest margin (FTE) (1) 2.86 2.83 2.95 2.87 2.86 Net interest spread (FTE) (1) 2.20 2.12 2.23 2.13 2.16 Average earning assets to average interest bearing liabilities 128.10 129.55 128.51 128.62 127.71 Noninterest expense to average total assets 1.78 1.80 1.73 1.72 1.77 Efficiency ratio (FTE) (1) 55.04 54.00 51.90 52.71 55.54 (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 2025 2024 Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Nonperforming Assets: $ 32,193 $ 3,589 $ 7,656 $ 6,918 $ 7,979 Nonaccrual loans 4,254 3,185 7,254 6,110 7,709 Accruing loans past due more than 90 days — — — — — Restructured loans 27,505 2 — 145 151 Other real estate owned 388 388 388 648 119 Repossessed assets 46 14 14 15 — Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.09 % 0.07 % 0.16 % 0.13 % 0.17 % Ratio of nonperforming assets to: Total assets 0.39 0.04 0.09 0.08 0.10 Total loans 0.70 0.08 0.17 0.15 0.17 Total loans and OREO 0.70 0.08 0.17 0.15 0.17 Ratio of allowance for loan losses to: Nonaccruing loans 1,048.97 1,409.23 610.37 694.06 565.01 Nonperforming assets 138.61 1,250.60 578.32 613.00 545.90 Total loans 0.98 0.96 0.97 0.92 0.95 Net charge-offs (recoveries) to average loans outstanding 0.03 0.08 0.04 0.02 0.03 Capital Ratios: Shareholders’ equity to total assets 9.79 9.53 9.63 9.58 9.43 Common equity tier 1 capital 13.44 13.04 13.07 12.72 12.43 Tier 1 risk-based capital 14.49 14.07 14.12 13.76 13.47 Total risk-based capital 17.01 16.49 16.59 16.16 15.92 Tier 1 leverage capital 9.73 9.67 9.61 9.40 9.22 Period end tangible equity to period end tangible assets (1) 7.54 7.33 7.38 7.33 7.17 Average shareholders’ equity to average total assets 9.75 9.76 9.67 9.52 9.35 (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 2025 2024 Loan Portfolio Composition Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Real Estate Loans: Construction $ 458,101 $ 537,827 $ 585,817 $ 546,040 $ 599,464 1-4 Family Residential 741,432 740,396 755,406 738,037 720,508 Commercial 2,577,229 2,579,735 2,422,612 2,472,771 2,413,345 Commercial Loans 371,643 363,167 358,854 359,807 358,053 Municipal Loans 371,271 390,968 402,041 416,986 427,225 Loans to Individuals 47,563 49,504 53,318 55,724 58,773 Total Loans $ 4,567,239 $ 4,661,597 $ 4,578,048 $ 4,589,365 $ 4,577,368 Summary of Changes in Allowances: Allowance for Securities Held to Maturity Balance at beginning of period $ — $ — $ — $ — $ — Provision for (reversal of) securities held to maturity 64 — — — — Balance at end of period $ 64 $ — $ — $ — $ — Allowance for Loan Losses Balance at beginning of period $ 44,884 $ 44,276 $ 42,407 $ 43,557 $ 42,674 Loans charged-off (613 ) (1,232 ) (773 ) (721 ) (634 ) Recoveries of loans charged-off 310 277 365 444 347 Net loans (charged-off) recovered (303 ) (955 ) (408 ) (277 ) (287 ) Provision for (reversal of) loan losses 42 1,563 2,277 (873 ) 1,170 Balance at end of period $ 44,623 $ 44,884 $ 44,276 $ 42,407 $ 43,557 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 3,141 $ 3,320 $ 3,208 $ 2,820 $ 3,932 Provision for (reversal of) off-balance-sheet credit exposures 652 (179 ) 112 388 (1,112 ) Balance at end of period $ 3,793 $ 3,141 $ 3,320 $ 3,208 $ 2,820 Total Allowance for Credit Losses $ 48,480 $ 48,025 $ 47,596 $ 45,615 $ 46,377 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 March 31, 2025 December 31, 2024 Average Balance Interest Average Yield/Rate (3) Average Balance Interest Average Yield/Rate (3) ASSETS Loans (1) $ 4,625,902 $ 68,160 5.98 % $ 4,604,175 $ 70,155 6.06 % Loans held for sale 752 11 5.93 % 1,562 23 5.86 % Securities: Taxable investment securities (2) 749,155 6,363 3.44 % 784,321 6,949 3.52 % Tax-exempt investment securities (2) 1,134,590 10,253 3.66 % 1,138,271 10,793 3.77 % Mortgage-backed and related securities (2) 1,041,038 13,523 5.27 % 1,031,187 12,043 4.65 % Total securities 2,924,783 30,139 4.18 % 2,953,779 29,785 4.01 % Federal Home Loan Bank stock, at cost, and equity investments 43,285 483 4.53 % 37,078 591 6.34 % Interest earning deposits 319,889 3,370 4.27 % 273,656 3,160 4.59 % Federal funds sold 43,813 478 4.42 % 43,121 508 4.69 % Total earning assets 7,958,424 102,641 5.23 % 7,913,371 104,222 5.24 % Cash and due from banks 89,703 102,914 Accrued interest and other assets 457,948 454,387 Less: Allowance for loan losses (45,105 ) (44,418 ) Total assets $ 8,460,970 $ 8,426,254 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 593,953 1,429 0.98 % $ 594,196 1,456 0.97 % Certificates of deposit 1,336,815 14,406 4.37 % 1,187,800 13,537 4.53 % Interest bearing demand accounts 3,406,342 21,412 2.55 % 3,459,122 23,468 2.70 % Total interest bearing deposits 5,337,110 37,247 2.83 % 5,241,118 38,461 2.92 % Federal Home Loan Bank borrowings 614,897 5,837 3.85 % 572,993 5,557 3.86 % Subordinated notes, net of unamortized debt issuance costs 92,060 932 4.11 % 92,024 945 4.09 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,275 1,014 6.82 % 60,274 1,095 7.23 % Repurchase agreements 75,291 666 3.59 % 80,891 782 3.85 % Other borrowings 33,061 740 9.08 % 61,196 1,142 7.42 % Total interest bearing liabilities 6,212,694 46,436 3.03 % 6,108,496 47,982 3.12 % Noninterest bearing deposits 1,334,933 1,383,204 Accrued expenses and other liabilities 88,450 112,320 Total liabilities 7,636,077 7,604,020 Shareholders’ equity 824,893 822,234 Total liabilities and shareholders’ equity $ 8,460,970 $ 8,426,254 Net interest income (FTE) $ 56,205 $ 56,240 Net interest margin (FTE) 2.86 % 2.83 % Net interest spread (FTE) 2.20 % 2.12 % (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 do not include unrealized gains and losses on AFS securities. (3) Yield/rate includes the impact of applicable derivatives. Note: As of March 31, 2025 and December 31, 2024, loans totaling $4.3 million and $3.2 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, 2024 June 30, 2024 Average Balance Interest Average Yield/Rate (3) Average Balance Interest Average Yield/Rate (3) 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 do not include unrealized gains and losses on AFS securities. (3) Yield/rate includes the impact of applicable derivatives. 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 Average Balance Interest Average Yield/Rate (3) ASSETS Loans (1) $ 4,559,602 $ 68,849 6.07 % Loans held for sale 8,834 18 0.82 % Securities: Taxable investment securities (2) 780,423 6,967 3.59 % Tax-exempt investment securities (2) 1,285,922 13,168 4.12 % Mortgage-backed and related securities (2) 764,713 10,119 5.32 % Total securities 2,831,058 30,254 4.30 % Federal Home Loan Bank stock, at cost, and equity investments 40,063 333 3.34 % Interest earning deposits 380,181 5,202 5.50 % Federal funds sold 62,599 838 5.38 % Total earning assets 7,882,337 105,494 5.38 % Cash and due from banks 114,379 Accrued interest and other assets 441,783 Less: Allowance for loan losses (42,973 ) Total assets $ 8,395,526 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 604,529 1,424 0.95 % Certificates of deposit 941,947 10,341 4.42 % Interest bearing demand accounts 3,634,936 26,433 2.92 % Total interest bearing deposits 5,181,412 38,198 2.97 % Federal Home Loan Bank borrowings 607,033 5,950 3.94 % Subordinated notes, net of unamortized debt issuance costs 93,895 956 4.10 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,270 1,175 7.84 % Repurchase agreements 92,177 967 4.22 % Other borrowings 137,287 2,164 6.34 % Total interest bearing liabilities 6,172,074 49,410 3.22 % Noninterest bearing deposits 1,338,384 Accrued expenses and other liabilities 100,014 Total liabilities 7,610,472 Shareholders’ equity 785,054 Total liabilities and shareholders’ equity $ 8,395,526 Net interest income (FTE) $ 56,084 Net interest margin (FTE) 2.86 % Net interest spread (FTE) 2.16 % (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 do not include unrealized gains and losses on AFS securities. (3) Yield/rate includes the impact of applicable derivatives. Note: As of March 31, 2024, 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.
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 2025 2024 Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Reconciliation of return on average common equity to return on average tangible common equity: Net income $ 21,507 $ 21,786 $ 20,524 $ 24,673 $ 21,511 After-tax amortization expense 176 196 220 243 266 Adjusted net income available to common shareholders $ 21,683 $ 21,982 $ 20,744 $ 24,916 $ 21,777 Average shareholders' equity $ 824,893 $ 822,234 $ 806,230 $ 796,698 $ 785,054 Less: Average intangibles for the period (202,784 ) (203,020 ) (203,288 ) (203,581 ) (203,910 ) Average tangible shareholders' equity $ 622,109 $ 619,214 $ 602,942 $ 593,117 $ 581,144 Return on average tangible common equity 14.14 % 14.12 % 13.69 % 16.90 % 15.07 % Reconciliation of book value per share to tangible book value per share: Common equity at end of period $ 816,623 $ 811,942 $ 805,254 $ 800,970 $ 787,922 Less: Intangible assets at end of period (202,647 ) (202,870 ) (203,119 ) (203,397 ) (203,704 ) Tangible common shareholders' equity at end of period $ 613,976 $ 609,072 $ 602,135 $ 597,573 $ 584,218 Total assets at end of period $ 8,343,300 $ 8,517,448 $ 8,362,263 $ 8,357,702 $ 8,353,863 Less: Intangible assets at end of period (202,647 ) (202,870 ) (203,119 ) (203,397 ) (203,704 ) Tangible assets at end of period $ 8,140,653 $ 8,314,578 $ 8,159,144 $ 8,154,305 $ 8,150,159 Period end tangible equity to period end tangible assets 7.54 % 7.33 % 7.38 % 7.33 % 7.17 % Common shares outstanding end of period 30,410 30,379 30,308 30,261 30,284 Tangible book value per common share $ 20.19 $ 20.05 $ 19.87 $ 19.75 $ 19.29 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) $ 53,852 $ 53,707 $ 55,464 $ 53,608 $ 53,348 Tax-equivalent adjustments: Loans 581 598 608 633 656 Tax-exempt investment securities 1,772 1,935 2,012 2,051 2,080 Net interest income (FTE) (1) 56,205 56,240 58,084 56,292 56,084 Noninterest income 10,223 12,281 8,171 11,557 9,724 Nonrecurring income (2) 554 (25 ) 2,797 (576 ) 18 Total revenue $ 66,982 $ 68,496 $ 69,052 $ 67,273 $ 65,826 Noninterest expense $ 37,089 $ 38,159 $ 36,332 $ 35,765 $ 36,881 Pre-tax amortization expense (223 ) (249 ) (278 ) (307 ) (337 ) Nonrecurring expense (3) (1 ) (919 ) (219 ) 2 17 Adjusted noninterest expense $ 36,865 $ 36,991 $ 35,835 $ 35,460 $ 36,561 Efficiency ratio 57.04 % 56.08 % 53.94 % 54.90 % 57.95 % Efficiency ratio (FTE) (1) 55.04 % 54.00 % 51.90 % 52.71 % 55.54 % Average earning assets $ 7,958,424 $ 7,913,371 $ 7,823,026 $ 7,881,919 $ 7,882,337 Net interest margin 2.74 % 2.70 % 2.82 % 2.74 % 2.72 % Net interest margin (FTE) (1) 2.86 % 2.83 % 2.95 % 2.87 % 2.86 % Net interest spread 2.08 % 1.99 % 2.10 % 2.00 % 2.02 % Net interest spread (FTE) (1) 2.20 % 2.12 % 2.23 % 2.13 % 2.16 % (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, 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. 
