Southside Bancshares(SBSI)2023-04-25 19:04Financial Data and Key Metrics Changes - The company reported net income of 0.83, with a return on average assets of 1.38% and a return on average tangible common equity of 19.36% [18][25] - Net interest income decreased by 997,000 or 9.3% [38] - The tax equivalent net interest margin decreased to 3.21 from 3.40, and the tax equivalent net spread decreased by 33 basis points to 2.62 [32][33] Business Line Data and Key Metrics Changes - The loan portfolio remained consistent at 359.8 million or 5.8% on a linked quarter basis, with over half of the decrease attributed to brokered deposits [27] - The allowance for loan losses as a percentage of total loans was 0.87%, slightly down from 0.88% at the end of the previous quarter [29] Market Data and Key Metrics Changes - The company experienced a 19 basis point decrease in net interest margin due to increased competition for deposits [20] - As of March 31, 2023, 73.5% of deposits were FDIC insured and fully collateralized, with an average balance of 119.9 million or 4.6% on a linked quarter basis, driven by purchases of three-month treasury bills [28] Company Strategy and Development Direction - The company plans to maintain its credit underwriting standards despite losing some loan opportunities due to stringent requirements [19] - The management anticipates high single-digit loan growth for 2023, supported by a healthy pipeline and projected construction loan advances [19][62] - The company is focused on enhancing its liquidity position and managing interest rate risk through the Fed's new bank term funding program [21][31] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about intense competition for deposits, which is expected to continue [8] - The company is monitoring the economy closely, with increasing chances of a recession, but remains optimistic about the health and growth of the markets it serves [23] - Management indicated that deposit growth will be challenging, with expectations of static deposits being a win in the current environment [50] Other Important Information - The company purchased 457,394 shares of common stock at an average price of 61.9 million from $88.9 million in the previous quarter [30] Q&A Session Summary Question: What is the outlook for loan growth and deposit growth? - Management anticipates high single-digit loan growth for the entire year of 2023, but deposit growth is expected to be challenging due to competition [62] Question: Can you provide details on the securities bought and sold during the quarter? - The company sold primarily municipal and mortgage-backed securities and purchased T-bills, with a focus on managing duration risk [37] Question: What is the current status of the share repurchase program? - The company has approximately 400,000 shares left for repurchase and does not anticipate changes to the current buyback strategy [51][52]