Southside Bancshares(SBSI) - 2025 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2025, net income was $4,913,000, a decrease of 76.1% compared to $20,524,000 for the same period in 2024[12] - Net income for the nine months ended September 30, 2025, was $48,233,000, compared to $66,708,000 for the same period in 2024, reflecting a decrease of approximately 27.6%[16] - Earnings per common share for the nine months ended September 30, 2025, was $1.59, down from $2.20 in 2024, reflecting a decrease of 27.73%[12] - Pre-tax income decreased by 79.5% to $5.1 million for the three months ended September 30, 2025, compared to $24.9 million for the same period in 2024[200] - The return on average assets for the nine months ended September 30, 2025, was 0.77%, down from 1.06% in 2024, while the return on average shareholders' equity was 7.89%, compared to 11.19% in 2024[226] Income and Expenses - Total interest and dividend income for the nine months ended September 30, 2025, was $300,746,000, down 3.9% from $312,647,000 in 2024[12] - Noninterest income for the three months ended September 30, 2025, showed a loss of $11,990,000, compared to a gain of $8,171,000 in the same period of 2024[12] - Total noninterest expense for the nine months ended September 30, 2025, was $113,880,000, an increase of 4.3% from $108,978,000 in 2024[12] - Total noninterest expense for the three months ended September 30, 2025, was $37.53 million, an increase of 3.3% from $36.33 million in 2024[191] - Salaries and employee benefits expense rose by 2.6% to $22.80 million for the three months ended September 30, 2025, compared to $22.23 million in 2024[191] Assets and Liabilities - Total assets increased to $8.35 billion as of September 30, 2025, compared to $8.34 billion in 2024, reflecting a growth of 0.02%[175] - Cash and cash equivalents at the end of the period were $466,912 for September 30, 2025, compared to $486,297 for the same date in 2024, indicating a decrease of 2.4%[17] - Total loans as of September 30, 2025, amounted to $4,765,289,000, an increase from $4,661,597,000 as of December 31, 2024[43] - The allowance for loan losses as of September 30, 2025, was $45,294,000, compared to $44,884,000 as of December 31, 2024[43] - Total shareholders' equity as of September 30, 2025, was $834,850,000, an increase from $805,254,000 as of September 30, 2024, representing a growth of about 3.2%[15] Credit Quality - The provision for credit losses for the nine months ended September 30, 2025, was $2,472,000, an increase from $1,962,000 in 2024[12] - Nonaccrual loans increased to $7,955 as of September 30, 2025, compared to $3,185 on December 31, 2024[56] - Total nonperforming assets reached $35,608 as of September 30, 2025, up from $3,589 on December 31, 2024[56] - The allowance for loan losses increased by $410,000, or 0.9%, to $45.3 million, representing 0.95% of total loans as of September 30, 2025[214] - Loan charge-offs for the nine months ended September 30, 2025, were $3.1 million, compared to $2.1 million for the same period in 2024, while recoveries were $1.1 million versus $1.2 million[215] Investment Securities - The total amortized cost of available-for-sale (AFS) investment securities was $1.31 billion, with an estimated fair value of $1.29 billion, reflecting a gross unrealized loss of $28.5 million[28] - The total gross unrealized losses for AFS investment securities amounted to $28.5 million as of September 30, 2025[31] - The company reported a net gain on the sale of available-for-sale securities of $24,949,000 for the nine months ended September 30, 2025, compared to a gain of $2,510,000 in the same period of 2024[16] - There was a net realized loss of $24.9 million from the AFS securities portfolio for the nine months ended September 30, 2025[35] - The cumulative amount of fair value hedging adjustments associated with MBS hedging relationships was a gain of $610,000 as of September 30, 2025, compared to a gain of $1.1 million as of December 31, 2024[88] Capital and Funding - Common Equity Tier 1 capital for the Company was $743.8 million, or 12.97% of risk-weighted assets, exceeding the minimum requirement of 4.50%[224] - The Tier 2 capital for the Company includes $239.6 million of qualified subordinated debt as of September 30, 2025[220] - The company has $2.3 billion available for additional funding from FHLB, collateralized by securities and loans[70] - The weighted average interest rate on other borrowings decreased to 4.8% during the period ended September 30, 2025, from 5.7% in the previous period[66] - The company issued $150 million in fixed-to-floating rate subordinated notes on August 14, 2025, maturing on August 15, 2035[74] Taxation - The effective tax rate (ETR) for the three months ended September 30, 2025, was 3.7%, a decrease from 17.6% in the same period of 2024[117] - The net deferred tax asset decreased to $30.6 million at September 30, 2025, from $34.5 million at December 31, 2024[116] Future Outlook - The company plans to open a new traditional branch location at Bellwood Park in Tyler, Texas, in 2026[230] - Management believes the Company met all capital adequacy requirements under the Basel III Capital Rules as of September 30, 2025[225]