Southside Bancshares(SBSI) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2024, was $20,524,000, up 11.7$18,449,000 in the same period of 2023[9]. - Earnings per common share (basic and diluted) for the three months ended September 30, 2024, were both $0.68, compared to$0.60 in the same period of 2023, representing a 13.3% increase[8]. - Net income for the nine months ended September 30, 2024, was $66,708,000, compared to$69,376,000 for the same period in 2023, indicating a decrease of about 3.8%[12]. - The company reported a comprehensive income of $12,979,000 for the three months ended September 30, 2024, compared to a loss of$20,835,000 in the same period of 2023[9]. - Pre-tax income for the three months ended September 30, 2024, was $24.9 million, an increase from$21.6 million in the same period of 2023, representing a growth of 15.5%[125]. Asset and Liability Management - Total assets increased to $8,362,263 thousand as of September 30, 2024, compared to$8,284,914 thousand at December 31, 2023, reflecting a growth of 0.94%[6]. - Total liabilities increased to $7,557,009 thousand from$7,511,626 thousand, reflecting a growth of 0.61%[7]. - Total deposits decreased to $6,435,702 thousand from$6,549,681 thousand, representing a decline of 1.74%[7]. - Total shareholders' equity increased to $805,254 thousand, up from$773,288 thousand, marking a growth of 4.13%[7]. - The allowance for loan losses increased to $44,276 thousand from$42,674 thousand, indicating a rise of 3.76%[6]. Loan and Deposit Activity - Net loans rose to $4,533,772 thousand, up from$4,481,836 thousand, indicating an increase of 1.16%[6]. - The net change in deposits for the nine months ended September 30, 2024, was $(114,005,000), a decrease from$151,446,000 in the same period of 2023[14]. - Total loans increased to $4,578,048 million, with a current period gross charge-off of$2,128 million[49]. - Loans to individuals reached $22,792 million, a slight increase from$15,520 million, reflecting a growth of 46.8%[50]. - The total amount of pass watch loans in commercial real estate was $24,300 million, down from$34,424 million, a decrease of 29.5%[50]. Interest Income and Expense - Total interest income for the three months ended September 30, 2024, was $105,703,000, an increase of 13.9$93,078,000 in the same period of 2023[8]. - Total interest expense for Q3 2024 increased by $10.4 million, or 26.2$50.2 million compared to $39.8 million in Q3 2023[107]. - Net interest income after provision for credit losses increased to$53,075,000 for the three months ended September 30, 2024, compared to $46,286,000 in the prior year, reflecting a growth of 14.9$8,171,000, a decrease of 24.5% from $10,836,000 in the same period of 2023[8]. - Total noninterest expense for the three months ended September 30, 2024, was$36,332,000, an increase of 2.2% from $35,553,000 in the same period of 2023[8]. - Salaries and employee benefits increased by 4.7$22.23 million for the three months ended September 30, 2024, compared to $21.24 million in 2023[122]. - Other noninterest income decreased by 35.4$2,731 million for the three months ended September 30, 2024, compared to $4,227 million in 2023[121]. - Total noninterest expense increased by 3.4$108,978 million for the nine months ended September 30, 2024, compared to $105,395 million in 2023[123]. Credit Quality and Loan Losses - The provision for credit losses for the three months ended September 30, 2024, was$2,389,000, down from $6,987,000 in the same period of 2023, indicating improved credit quality[8]. - Nonperforming assets totaled$7,656 million as of September 30, 2024, compared to $4,001 million, indicating a significant increase[53]. - The allowance for loan losses at the end of the period was$44,276 million, up from $42,674 million at the beginning of the nine months ended September 30, 2024, representing an increase of approximately 3.75$2.6 million for the nine months ended September 30, 2024, down from $6.7 million in the same period of 2023[131]. Capital and Liquidity - The company has additional funding capacity of approximately$1.80 billion from FHLB, collateralized by securities, FHLB stock, and nonspecified loans[63]. - The Common Equity Tier 1 capital ratio was 13.07% for the consolidated entity as of September 30, 2024, significantly above the required 4.50%[137]. - Total capital ratio was 16.59% for the consolidated entity, exceeding the required 8.00%[137]. - The effective tax rate (ETR) for the three months ended September 30, 2024, was 17.6%, compared to 14.5% for the same period in 2023[125]. - Liquidity investments represented 10.8% of total assets as of September 30, 2024, up from 8.9% at December 31, 2023[141]. Market and Economic Conditions - Economic conditions in Texas markets remain positive despite inflation and interest rate fluctuations, supported by job and population growth[97]. - Estimated uninsured deposits were 35.9% of total deposits as of September 30, 2024, indicating a significant portion of deposits without insurance[98]. - The company opened a loan production office in The Woodlands, Greater North Houston area, on September 3, 2024, as part of its market expansion strategy[143]. - The company closed a traditional branch location in Jasper in May 2024 due to proximity to another branch, indicating a strategic consolidation of operations[143]. - The company has access to approximately $1.80 billion in additional funding from FHLB, collateralized by securities and loans[141].