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Southside Bancshares, Inc. Announces Financial Results for the Second Quarter Ended June 30, 2025

• Second quarter net income of $21.8 million;

• Second quarter earnings per diluted common share of $0.72;

• Tax-equivalent net interest margin⁽¹⁾ linked quarter increased nine basis points to 2.95%;

• Annualized return on second quarter average assets of 1.07%;

• Annualized return on second quarter average tangible common equity of 14.38%⁽¹⁾; and

• Nonperforming assets remain low at 0.39% of total assets.

TYLER, Texas, July 25, 2025 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (鈥淪outhside鈥� or the 鈥淐ompany鈥�) (NYSE: SBSI) today reported its financial results for the quarter ended June听30, 2025. Southside reported net income of $21.8 million for the three months ended June 30, 2025, a decrease of $2.9 million, or 11.6%, compared to $24.7 million for the same period in 2024. Earnings per diluted common share decreased $0.09, or 11.1%, to $0.72 for the three months ended June 30, 2025, from $0.81 for the same period in 2024. The annualized return on average shareholders鈥� equity for the three months ended June 30, 2025 was 10.73%, compared to 12.46% for the same period in 2024.听The annualized return on average assets was 1.07% for the three months ended June 30, 2025, compared to 1.19% for the same period in 2024.

鈥淲e reported excellent financial results for the second quarter ended June 30, 2025, which included earnings per share of $0.72, a return on average assets of 1.07%, and a return on average tangible common equity of 14.38%,鈥� stated Lee R. Gibson, Chief Executive Officer of Southside. 鈥淟inked quarter, the net interest margin⁽¹⁾ increased nine basis points to 2.95%, net interest income increased $414,000 to $54.3 million, and deposits net of public fund and brokered deposits increased $90.1 million. The linked quarter total loans increased $35 million, while average loans decreased $106 million due primarily to heavy payoffs during the first two months of the quarter. Total loan growth during the month of June was $104 million. Our loan pipeline is solid and we currently anticipate three to four percent loan growth for all of 2025. During the quarter we expensed $1.2 million related to the write-off and demolition of an existing branch that was replaced with a new building.鈥�

Operating Results for the Three Months Ended June听30, 2025

Net income was $21.8 million for the three months ended June 30, 2025, compared to $24.7 million for the same period in 2024, a decrease of $2.9 million, or 11.6%. Earnings per diluted common share were $0.72 for the three months ended June 30, 2025, compared to $0.81 for the same period in 2024, a decrease of 11.1%. The decrease in net income was a result of increases in noninterest expense and provision for credit losses, partially offset by increases in net interest income and noninterest income and a decrease in income tax expense. Annualized returns on average assets and average shareholders鈥� equity for the three months ended June 30, 2025 were 1.07% and 10.73%, respectively, compared to 1.19% and 12.46%, respectively, for the听three months ended June听30, 2024. Our efficiency ratio and tax-equivalent efficiency ratio⁽¹⁾ were 55.67% 补苍诲听53.70%, respectively, for the three months ended June 30, 2025, compared to 54.90% and 52.71%, respectively, for the three months ended June听30, 2024, and 57.04% and 55.04%, respectively, for the three months ended March听31, 2025.

Net interest income for the three months ended June 30, 2025 was $54.3 million, an increase of $0.7听尘颈濒濒颈辞苍, or 1.2%, compared to the same period in 2024. The increase in net interest income was due to decreases in the average rate paid on and average balance of our interest bearing liabilities, partially offset by decreases in the average yield of and average balance of our interest earning assets. Linked quarter, net interest income increased $0.4听尘颈濒濒颈辞苍, or 0.8%, compared to $53.9 million for the three months ended March听31, 2025, due to the decrease in the average balance of interest bearing liabilities, the increase in the average yield on our interest earning assets and the decrease in the rate paid on interest bearing liabilities, partially offset by the decrease in the average balance of our interest earning assets.

Our net interest margin and tax-equivalent net interest margin⁽¹⁾ increased to 2.82% and 2.95%, respectively, for the three months ended June 30, 2025, compared to听2.74% and 2.87%, respectively, for the same period in 2024. Linked quarter, net interest margin and tax-equivalent net interest margin⁽¹⁾ increased from 2.74% and 2.86%, respectively, for the three months ended March听31, 2025.

Noninterest income was $12.1 million for the three months ended June 30, 2025, an increase of $0.6 million, or 5.1%, compared to $11.6 million for the same period in 2024. The increase was primarily due to a decrease in net loss on sale of securities available for sale (鈥淎FS鈥�) and increases in other noninterest income and trust fees, partially offset by a decrease in bank owned life insurance income (鈥淏OLI鈥�). On a linked quarter basis, noninterest income increased $1.9 million, or 18.8%, compared to the three months ended March听31, 2025. The increase was primarily due to an increase in other noninterest income, a decrease in net loss on sale of securities AFS, and increases in deposit services income, trust income and brokerage services income. The increase in other noninterest income was primarily due to an increase in swap fee income for the three months ended June 30, 2025.

Noninterest expense increased $3.5 million, or 9.8%, to $39.3 million for the three months ended June 30, 2025, compared to $35.8 million for the same period in 2024, primarily due to increases in other noninterest expense, professional fees and salaries and employee benefits expense. On a linked quarter basis, noninterest expense increased by $2.2 million, or 5.8%, compared to the three months ended March听31, 2025, due to increases in other noninterest expense and net occupancy expense. The increase in other noninterest expense was primarily due to a one-time charge of $1.2 million on the demolition of an old branch facility following completion of the new branch during the three months ended June 30, 2025.

Income tax expense decreased $0.5 million, or 9.5%, for the three months ended June 30, 2025, compared to the same period in 2024. On a linked quarter basis, income tax expense remained the same at $4.7 million. Our effective tax rate (鈥淓TR鈥�) increased slightly to 17.8% for the three months ended June 30, 2025, compared to 17.4% for the three months ended June听30, 2024, and decreased slightly from 18.0% for the three months ended March听31, 2025. The higher ETR for the three months ended June 30, 2025 compared to the same period in 2024, was primarily due to an increase in state income tax expense.

Operating Results for the Six Months Ended June 30, 2025

Net income was $43.3 million for the six months ended June 30, 2025, compared to $46.2 million for the same period in 2024, a decrease of $2.9 million, or 6.2%. Earnings per diluted common share were $1.42 for the six months ended June 30, 2025, compared to $1.52 for the same period in 2024, a decrease of 6.6%. The decrease in net income was a result of increases in noninterest expense and provision for credit losses, partially offset by increases in net interest income and noninterest income and a decrease in income tax expense. Returns on average assets and average shareholders鈥� equity for the six months ended June 30, 2025 were 1.05% and 10.65%, respectively, compared to 1.11% and 11.74%, respectively, for the six months ended June 30, 2024.听Our efficiency ratio and tax-equivalent efficiency ratio⁽¹⁾ were 56.34% 补苍诲听54.36%, respectively, for the six months ended June 30, 2025, compared to 56.41% and 54.11%, respectively, for the six months ended June 30, 2024.

Net interest income was $108.1 million for the six months ended June 30, 2025, compared to $107.0 million for the same period in 2024, an increase of $1.2 million, or 1.1%, due to decreases in the average rate paid on and average balance of our interest bearing liabilities, partially offset by the decrease in the average yield of interest earning assets.

Our net interest margin and tax-equivalent net interest margin⁽¹⁾ were 2.78% and 2.91%, respectively, for the six months ended June 30, 2025, compared to 2.73% 补苍诲听2.87%, respectively, for the same period in 2024.

Noninterest income was $22.4 million for the six months ended June 30, 2025, an increase of $1.1 million, or 5.1%, compared to $21.3 million for the same period in 2024. The increase was primarily due to increases in trust fees, other noninterest income and gain on sale of loans, partially offset by a decrease in BOLI income.

Noninterest expense was $76.3 million for the six months ended June 30, 2025, compared to $72.6 million for the same period in 2024, an increase of $3.7 million, or 5.1%. The increase was primarily due to increases in other noninterest expense and professional fees, partially offset by a decrease in salaries and employee benefits expense.

Income tax expense decreased $0.4 million, or 4.0%, for the six months ended June 30, 2025, compared to the same period in 2024. Our ETR was approximately 17.9% and 17.6% for the six months ended June 30, 2025 and 2024, respectively. The higher ETR for the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to an increase in state income tax expense.

Balance Sheet Data

At June听30, 2025, Southside had $8.34 billion in total assets, compared to $8.52 billion at December听31, 2024 and $8.36 billion at June听30, 2024.

Loans at June听30, 2025 were $4.60 billion, an increase of $12.6 million, or 0.3%, compared to $4.59 billion at June听30, 2024. Linked quarter, loans increased $34.7 million, or 0.8%, due to increases of $28.8 million in commercial real estate loans, $12.3 million in construction loans and $9.0 million in commercial loans. These increases were partially offset by decreases of $7.5 million in municipal loans, $5.3 million in 1-4 family residential loans and $2.5 million in loans to individuals.

Securities at June听30, 2025 were $2.73 billion, an increase of $18.1 million, or 0.7%, compared to $2.71 billion at June听30, 2024. Linked quarter, securities decreased $6.2 million, or 0.2%, from $2.74 billion at March听31, 2025.

Deposits at June听30, 2025 were $6.63 billion, an increase of $136.0 million, or 2.1%, compared to $6.50 billion at June听30, 2024. Linked quarter, deposits increased $41.1 million, or 0.6%, from $6.59 billion at March听31, 2025.

At June听30, 2025, we had 178,970 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 38.5% of total deposits as of June听30, 2025. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 21.1% as of June听30, 2025. Our noninterest bearing deposits represent approximately 20.6% of total deposits. Linked quarter, our cost of interest bearing deposits decreased one basis point from 2.83% in the prior quarter to 2.82%. Linked quarter, our cost of total deposits remained at 2.26%.

Our cost of interest bearing deposits decreased 16 basis points, from 2.99% for the six months ended June 30, 2024, to 2.83% for the six months ended June 30, 2025. Our cost of total deposits decreased 11 basis points, from 2.37% for the six months ended June 30, 2024, to 2.26% for the six months ended June 30, 2025.

Capital Resources and Liquidity

Our capital ratios and contingent liquidity sources remain solid. During the second quarter ended June听30, 2025, we purchased 424,435 shares of the Company鈥檚 common stock at an average price of $28.13 per share, 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 June听30, 2025, and through July 23, 2025, we purchased 2,443 shares of common stock at an average price of $30.29 pursuant to the Stock Repurchase Plan.

As of June听30, 2025, our total available contingent liquidity, net of current outstanding borrowings, was $2.33 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit.

Asset Quality

Nonperforming assets at June听30, 2025 were $32.9 million, or 0.39% of total assets, an increase of $26.0 million, or 375.7%, compared to $6.9 million, or 0.08% of total assets, at June听30, 2024, due primarily to an increase of $27.4 million in restructured loans. The increase in restructured loans was due to the extension of maturity in the first quarter of 2025 on a $27.5 million commercial real estate loan to allow for an extended lease up period. Linked quarter, nonperforming assets increased $0.7 million, or 2.2%, from $32.2 million at March听31, 2025.

The allowance for loan losses totaled $44.4 million, or 0.97% of total loans, at June听30, 2025, compared to $44.6 million, or 0.98% of total loans, at March听31, 2025. The allowance for loan losses was $42.4 million, or 0.92% of total loans, at June听30, 2024. The increase in allowance as a percentage of total loans compared to June 30, 2024 was primarily due to an increase in economic uncertainty forecasted in the CECL model.

For the three months ended June 30, 2025, we recorded a provision for credit losses for loans of $0.7 million, compared to a reversal of provision of $0.9 million and a provision of $42,000 for the three months ended June听30, 2024 and March听31, 2025, respectively. Net charge-offs were $0.9 million for the three months ended June 30, 2025, compared to net charge-offs of $0.3 million for the three months ended June听30, 2024 and March听31, 2025. Net charge-offs were $1.2 million for the six months ended June 30, 2025, compared to net charge-offs of $0.6 million for the six months ended June 30, 2024.

We recorded a reversal of provision for credit losses on off-balance-sheet credit exposures of $19,000 for the three months ended June听30, 2025, compared to provision for losses on off-balance-sheet credit exposures of $0.4听尘颈濒濒颈辞苍 and $0.7听尘颈濒濒颈辞苍 for the three months ended June听30, 2024 and March听31, 2025, respectively. We recorded a provision for losses on off-balance-sheet credit exposures of $0.6听尘颈濒濒颈辞苍 for the six months ended June 30, 2025, compared to a reversal of provision for credit losses on off-balance-sheet credit exposures of $0.7 million for the six months ended June 30, 2024. The balance of the allowance for off-balance-sheet credit exposures was $3.8 million and $3.2 million at June听30, 2025 and 2024, respectively, and is included in other liabilities.

Dividend

Southside Bancshares, Inc. declared a second quarter cash dividend of $0.36 per share on May 8, 2025, which was paid on June 5, 2025, to all shareholders of record as of May 22, 2025.

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Conference Call

Southside's management team will host a conference call to discuss its second quarter ended June听30, 2025 financial results on Friday, July 25, 2025 at 11:00 a.m. CDT.听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/BIad8374913fda48e3a6a27e230e7c4225 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 (鈥淕AAP鈥�) 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 (鈥淔TE鈥�): (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).听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 鈥淎verage Balances with Average Yields and Rates鈥� 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 June听30, 2025, that owns 100% of Southside Bank.听Southside Bank currently has 53 branches in Texas and operates a network of 71 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.听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 [email protected].

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 鈥渇orward-looking statements鈥� within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995.听These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management鈥檚 views as of any subsequent date.听These statements may include words such as 鈥渆xpect,鈥� 鈥渆stimate,鈥� 鈥減roject,鈥� 鈥渁nticipate,鈥� 鈥渁ppear,鈥� 鈥渂elieve,鈥� 鈥渃ould,鈥� 鈥渟hould,鈥� 鈥渕ay,鈥� 鈥渕ight,鈥� 鈥渨ill,鈥� 鈥渨ould,鈥� 鈥渟eek,鈥� 鈥渋ntend,鈥� 鈥減robability,鈥� 鈥渞isk,鈥� 鈥済oal,鈥� 鈥渢arget,鈥� 鈥渙bjective,鈥� 鈥減lans,鈥� 鈥減otential,鈥� and similar expressions.听Forward-looking statements are statements with respect to the Company鈥檚 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.听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.听By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future.听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 to 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鈥檚 financial results, is included in the Company鈥檚 Annual Report on Form 10-K for the year ended December听31, 2024, under 鈥淧art I - Item 1. Forward Looking Information鈥� and 鈥淧art I - Item 1A. Risk Factors鈥� and in the Company鈥檚 other filings with the Securities and Exchange Commission.听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.

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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 鈥淣on-GAAP Financial Measures鈥� and 鈥淣on-GAAP Reconciliation鈥� for more information.

Note: As of June听30, 2025 and March听31, 2025, loans totaling $5.0 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.

Note: As of December听31, 2024 and September听30, 2024, loans totaling $3.2 million and $7.3 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.

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Note: As of June听30, 2024, loans totaling $6.1 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.

Note: As of June听30, 2025 and 2024, loans totaling $5.0 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.

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.