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Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2024
ソース: Nasdaq GlobeNewswire / 24 10 2024 05:45:01 America/New_York
- Third quarter net income of $20.5 million;
- Third quarter earnings per diluted common share of $0.68;
- Annualized return on third quarter average assets of 0.98%;
- Annualized return on third quarter average tangible common equity of 13.69%(1); and
- Nonperforming assets remain low at 0.09% of total assets.
TYLER, Texas, Oct. 24, 2024 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter ended September 30, 2024. Southside reported net income of $20.5 million for the three months ended September 30, 2024, an increase of $2.1 million, or 11.2%, compared to $18.4 million for the same period in 2023. Earnings per diluted common share increased $0.08, or 13.3%, to $0.68 for the three months ended September 30, 2024, from $0.60 for the same period in 2023. The annualized return on average shareholders’ equity for the three months ended September 30, 2024, was 10.13%, compared to 9.50% for the same period in 2023. The annualized return on average assets was 0.98% for the three months ended September 30, 2024, compared to 0.93% for the same period in 2023.
“Third quarter financial results were highlighted by a linked quarter $1.86 million increase in net interest income, a linked quarter eight basis point increase in our net interest margin to 2.95%, earnings per share of $0.68, a 13.69% return on average tangible equity(1), and continued strong asset quality,” stated Lee R. Gibson, Chief Executive Officer of Southside. “During the quarter we sold $28 million of lower yielding municipal securities, unwound the related fair value swaps and recorded a loss of $1.9 million. The proceeds were reinvested in higher yielding agency mortgage-backed securities. In addition, we recorded an impairment charge of $868,000 on the sale of approximately $10 million of available for sale (“AFS”) municipal securities and the unwind of the related fair value swaps on October 1.”
Operating Results for the Three Months Ended September 30, 2024
Net income was $20.5 million for the three months ended September 30, 2024, compared to $18.4 million for the same period in 2023, an increase of $2.1 million, or 11.2%. Earnings per diluted common share were $0.68 and $0.60 for the three months ended September 30, 2024 and 2023, respectively. The increase in net income was a result of the increase in net interest income and the decrease in provision for credit losses, partially offset by the decrease in noninterest income and increases in noninterest expense and income tax expense. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2024 were 0.98% and 10.13%, respectively, compared to 0.93% and 9.50%, respectively, for the three months ended September 30, 2023. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 53.94% and 51.90%, respectively, for the three months ended September 30, 2024, compared to 54.86% and 52.29%, respectively, for the three months ended September 30, 2023, and 54.90% and 52.71%, respectively, for the three months ended June 30, 2024.
Net interest income for the three months ended September 30, 2024 was $55.5 million, an increase of $2.2 million, or 4.1%, from the same period in 2023. The increase in net interest income was due to the increases in the average balance and the average yield of interest earning assets, partially offset by increases in the average rate paid on our interest bearing liabilities and average balance of our interest bearing liabilities. Linked quarter, net interest income increased $1.9 million, or 3.5%, compared to $53.6 million during the three months ended June 30, 2024, largely due to the increase in the average yield on our interest earning assets and the decrease in the average rate paid on our interest bearing liabilities, partially offset by the decrease in the average balance of interest earning assets.
Our net interest margin and tax-equivalent net interest margin(1) decreased to 2.82% and 2.95%, respectively, for the three months ended September 30, 2024, compared to 2.85% and 3.02%, respectively, for the same period in 2023. Linked quarter, net interest margin and tax-equivalent net interest margin(1) increased from 2.74% and 2.87%, respectively for the three months ended June 30, 2024.
Noninterest income was $8.2 million for the three months ended September 30, 2024, a decrease of $2.7 million, or 24.6%, compared to $10.8 million for the same period in 2023. The decrease was due to a net loss on sale of securities AFS and decreases in other noninterest income and deposit services income, partially offset by an increase in brokerage services income. On a linked quarter basis, noninterest income decreased $3.4 million, or 29.3%, compared to the three months ended June 30, 2024. The decrease was primarily due to an increase in net loss on sale of securities AFS and decreases in other noninterest income and bank owned life insurance income related to a $1.0 million death benefit realized in the second quarter of 2024. The decrease in other noninterest income for both periods was primarily due to an impairment charge of $868,000 on the sale of approximately $10 million of AFS municipal securities and the unwind of the related fair value swaps on October 1.
Noninterest expense increased $0.8 million, or 2.2%, to $36.3 million for the three months ended September 30, 2024, compared to $35.6 million for the same period in 2023, due to increases in salaries and employee benefits and software and data processing expense, partially offset by decreases in advertising, travel and entertainment expense, professional fees, net occupancy expense and amortization of intangibles. On a linked quarter basis, noninterest expense increased by $0.6 million, or 1.6%, compared to the three months ended June 30, 2024, due to increases in other noninterest expense, salaries and employee benefits expense and professional fees.
Income tax expense increased $1.3 million, or 40.7%, for the three months ended September 30, 2024, compared to the same period in 2023. On a linked quarter basis, income tax expense decreased $0.8 million, or 15.8%. Our effective tax rate (“ETR”) increased to 17.6% for the three months ended September 30, 2024, compared to 14.5% for the three months ended September 30, 2023, and increased slightly from 17.4% for the three months ended June 30, 2024. The higher ETR for the three months ended September 30, 2024 compared to the same period in 2023, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.
Operating Results for the Nine Months Ended September 30, 2024
Net income was $66.7 million for the nine months ended September 30, 2024, compared to $69.4 million for the same period in 2023, a decrease of $2.7 million, or 3.8%. Earnings per diluted common share were $2.20 for the nine months ended September 30, 2024, compared to $2.24 for the same period in 2023, a decrease of 1.8%. The decrease in net income was primarily a result of the decrease in noninterest income and increases in noninterest expense and income tax expense, partially offset by the decrease in provision for credit losses and the increase in net interest income. Returns on average assets and average shareholders’ equity for the nine months ended September 30, 2024 were 1.06% and 11.19%, respectively, compared to 1.20% and 12.21%, respectively, for the nine months ended September 30, 2023. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 55.56% and 53.35%, respectively, for the nine months ended September 30, 2024, compared to 53.99% and 51.44%, respectively, for the nine months ended September 30, 2023.
Net interest income was $162.4 million for the nine months ended September 30, 2024, compared to $160.5 million for the same period in 2023, an increase of $1.9 million, or 1.2%, due to increases in the average balance and the average yield of interest earning assets, partially offset by increases in the average rate paid on our interest bearing liabilities and average balance of our interest bearing liabilities.
Our net interest margin and tax-equivalent net interest margin(1) were 2.76% and 2.90%, respectively, for the nine months ended September 30, 2024, compared to 2.95% and 3.13%, respectively, for the same period in 2023.
Noninterest income was $29.5 million for the nine months ended September 30, 2024, a decrease of $3.9 million, or 11.6%, compared to $33.3 million for the same period in 2023. The decrease was due to decreases in the net gain on sale of equity securities, other noninterest income and deposit services income and a loss on sale of loans, partially offset by a decrease in net loss on sale of securities AFS and an increase in brokerage services income. The decrease in other noninterest income was primarily due to an impairment charge of $868,000 on the sale of approximately $10 million of AFS municipal securities and the unwind of the related fair value swaps on October 1.
Noninterest expense was $109.0 million for the nine months ended September 30, 2024, compared to $105.4 million for the same period in 2023, an increase of $3.6 million, or 3.4%. The increase was primarily due to increases in salaries and employee benefits and software and data processing expense, partially offset by decreases in professional fees, net occupancy expense, advertising, travel and entertainment expense, and amortization of intangibles.
Income tax expense increased $2.0 million, or 16.3%, for the nine months ended September 30, 2024, compared to the same period in 2023. Our ETR was approximately 17.6% and 15.0% for the nine months ended September 30, 2024 and 2023, respectively. The higher ETR for the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.
Balance Sheet Data
At September 30, 2024, Southside had $8.36 billion in total assets, compared to $8.28 billion at December 31, 2023 and $7.97 billion at September 30, 2023.
Loans at September 30, 2024 were $4.58 billion, an increase of $157.4 million, or 3.6%, compared to $4.42 billion at September 30, 2023. Linked quarter, loans decreased $11.3 million, or 0.2%, due to decreases of $50.2 million in commercial real estate loans, $14.9 million in municipal loans, $2.4 million in loans to individuals and $1.0 million in commercial loans. These decreases were partially offset by increases of $39.8 million in construction loans and $17.4 million in 1-4 family residential loans.
Securities at September 30, 2024 were $2.70 billion, an increase of $53.4 million, or 2.0%, compared to $2.64 billion at September 30, 2023. Linked quarter, securities decreased $15.1 million, or 0.6%, from $2.71 billion at June 30, 2024.
Deposits at September 30, 2024 were $6.44 billion, an increase of $86.1 million, or 1.4%, compared to $6.35 billion at September 30, 2023. Linked quarter, deposits decreased $60.2 million, or 0.9%, from $6.50 billion at June 30, 2024.
At September 30, 2024, we had 179,214 total deposit accounts with an average balance of $32,000. Our estimated uninsured deposits were 35.9% as of September 30, 2024. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 19.2% as of September 30, 2024. Our noninterest bearing deposits represent approximately 21.4% of total deposits. Linked quarter, our cost of interest bearing deposits remained consistent at 3.01%. Linked quarter, our cost of total deposits decreased one basis point from 2.39% in the prior quarter to 2.38%.
Our cost of interest bearing deposits increased 83 basis points, from 2.16% for the nine months ended September 30, 2023, to 2.99% for the nine months ended September 30, 2024. Our cost of total deposits increased 75 basis points, from 1.62% for the nine months ended September 30, 2023, to 2.37% for the nine months ended September 30, 2024.
Capital Resources and Liquidity
Our capital ratios and contingent liquidity sources remain solid. During the third quarter ended September 30, 2024, 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. We have not purchased any common stock pursuant to the Stock Repurchase Plan subsequent to September 30, 2024.
As of September 30, 2024, our total available contingent liquidity, net of current outstanding borrowings, was $2.23 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit.
Asset Quality
Nonperforming assets at September 30, 2024 were $7.7 million, or 0.09% of total assets, an increase of $3.3 million, or 74.8%, compared to $4.4 million, or 0.05% of total assets, at September 30, 2023. Linked quarter, nonperforming assets increased $0.7 million, or 10.7%, from $6.9 million at June 30, 2024 due primarily to an increase of $1.1 million, or 18.7%, in nonaccrual loans, partially offset by decreases of $0.1 million in restructured loans and $0.3 million in other real estate owned.
The allowance for loan losses totaled $44.3 million, or 0.97% of total loans, at September 30, 2024, compared to $42.4 million, or 0.92% of total loans, at June 30, 2024. The increase in the allowance as a percentage of total assets was primarily due to the increased economic concerns forecasted in the CECL model specific to office and multifamily markets in metro areas. The allowance for loan losses was $41.8 million, or 0.94% of total loans, at September 30, 2023.
For the three months ended September 30, 2024, we recorded a provision for credit losses for loans of $2.3 million, compared to a provision of $6.3 million for the three months ended September 30, 2023, and a reversal of provision of $0.9 million for the three months ended June 30, 2024. Net charge-offs were $0.4 million for the three months ended September 30, 2024, compared to net charge-offs of $0.9 million and $0.3 million for the three months ended September 30, 2023 and June 30, 2024, respectively. Net charge-offs were $1.0 million for the nine months ended September 30, 2024, compared to net charge-offs of $1.5 million for the nine months ended September 30, 2023.
We recorded a provision for credit losses on off-balance-sheet credit exposures of $0.1 million for the three months ended September 30, 2024, compared to $0.6 million and $0.4 million for the three months ended September 30, 2023 and June 30, 2024, respectively. We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.6 million for the nine months ended September 30, 2024, compared to a provision for credit losses on off-balance-sheet credit exposures of $0.2 million for the nine months ended September 30, 2023. The balance of the allowance for off-balance-sheet credit exposures was $3.3 million and $3.9 million at September 30, 2024 and 2023, respectively, and is included in other liabilities.
Dividend
Southside Bancshares, Inc. declared a third quarter cash dividend of $0.36 per share on August 8, 2024, which was paid on September 5, 2024, to all shareholders of record as of August 22, 2024.
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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 third quarter ended September 30, 2024 financial results on Thursday, October 24, 2024 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.vevent.com/register/BIe280e5ecbf444a68a5836f1e27caa8a9 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 this measure to be 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 $8.36 billion in assets as of September 30, 2024, that owns 100% of Southside Bank. Southside Bank currently has 54 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 increases, tax reform, inflation, 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 and general economic and recessionary concerns, 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, our ability to manage liquidity in a rapidly changing and unpredictable market, labor shortages and changes in interest rates by the Federal Reserve.
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, 2023, 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 2024 2023 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, ASSETS Cash and due from banks $ 130,147 $ 114,283 $ 96,744 $ 122,021 $ 105,601 Interest earning deposits 333,825 272,469 307,257 391,719 106,094 Federal funds sold 22,325 65,244 65,372 46,770 114,128 Securities available for sale, at estimated fair value 1,408,437 1,405,944 1,405,221 1,296,294 1,335,560 Securities held to maturity, at net carrying value 1,288,403 1,305,975 1,306,898 1,307,053 1,307,886 Total securities 2,696,840 2,711,919 2,712,119 2,603,347 2,643,446 Federal Home Loan Bank stock, at cost 40,291 32,991 27,958 11,936 12,778 Loans held for sale 768 1,352 756 10,894 1,382 Loans 4,578,048 4,589,365 4,577,368 4,524,510 4,420,633 Less: Allowance for loan losses (44,276 ) (42,407 ) (43,557 ) (42,674 ) (41,760 ) Net loans 4,533,772 4,546,958 4,533,811 4,481,836 4,378,873 Premises & equipment, net 138,811 138,489 139,491 138,950 139,473 Goodwill 201,116 201,116 201,116 201,116 201,116 Other intangible assets, net 2,003 2,281 2,588 2,925 3,295 Bank owned life insurance 137,489 136,903 136,604 136,330 135,737 Other assets 124,876 133,697 130,047 137,070 130,545 Total assets $ 8,362,263 $ 8,357,702 $ 8,353,863 $ 8,284,914 $ 7,972,468 LIABILITIES AND SHAREHOLDERS' EQUITY Noninterest bearing deposits $ 1,377,022 $ 1,366,924 $ 1,358,827 $ 1,390,407 $ 1,431,285 Interest bearing deposits 5,058,680 5,129,008 5,186,933 5,159,274 4,918,286 Total deposits 6,435,702 6,495,932 6,545,760 6,549,681 6,349,571 Other borrowings and Federal Home Loan Bank borrowings 865,856 763,700 770,151 722,468 608,038 Subordinated notes, net of unamortized debt
issuance costs92,006 91,970 93,913 93,877 93,838 Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,273 60,272 60,271 60,270 60,269 Other liabilities 103,172 144,858 95,846 85,330 132,157 Total liabilities 7,557,009 7,556,732 7,565,941 7,511,626 7,243,873 Shareholders' equity 805,254 800,970 787,922 773,288 728,595 Total liabilities and shareholders' equity $ 8,362,263 $ 8,357,702 $ 8,353,863 $ 8,284,914 $ 7,972,468 Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars and shares in thousands, except per share data)Three Months Ended 2024 2023 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Income Statement: Total interest income $ 105,703 $ 104,186 $ 102,758 $ 98,939 $ 93,078 Total interest expense 50,239 50,578 49,410 44,454 39,805 Net interest income 55,464 53,608 53,348 54,485 53,273 Provision for (reversal of) credit losses 2,389 (485 ) 58 2,281 6,987 Net interest income after provision for (reversal of) credit losses 53,075 54,093 53,290 52,204 46,286 Noninterest income Deposit services 6,199 6,157 5,985 6,305 6,479 Net gain (loss) on sale of securities available for sale (1,929 ) (563 ) (18 ) (10,386 ) 11 Gain (loss) on sale of loans 115 220 (436 ) 178 96 Trust fees 1,628 1,456 1,336 1,431 1,522 Bank owned life insurance 857 1,767 784 2,602 790 Brokerage services 1,068 1,081 1,014 944 760 Other 233 1,439 1,059 1,427 1,178 Total noninterest income 8,171 11,557 9,724 2,501 10,836 Noninterest expense Salaries and employee benefits 22,233 21,984 23,113 21,152 21,241 Net occupancy 3,613 3,750 3,362 3,474 3,796 Advertising, travel & entertainment 734 795 950 1,127 1,062 ATM expense 412 368 325 318 358 Professional fees 1,206 1,075 1,154 1,315 1,472 Software and data processing 2,951 2,860 2,856 2,644 2,432 Communications 423 410 449 435 359 FDIC insurance 939 977 943 892 902 Amortization of intangibles 278 307 337 370 407 Other 3,543 3,239 3,392 3,456 3,524 Total noninterest expense 36,332 35,765 36,881 35,183 35,553 Income before income tax expense 24,914 29,885 26,133 19,522 21,569 Income tax expense 4,390 5,212 4,622 2,206 3,120 Net income $ 20,524 $ 24,673 $ 21,511 $ 17,316 $ 18,449 Common Share Data: Weighted-average basic shares outstanding 30,286 30,280 30,262 30,235 30,502 Weighted-average diluted shares outstanding 30,370 30,312 30,305 30,276 30,543 Common shares outstanding end of period 30,308 30,261 30,284 30,249 30,338 Earnings per common share Basic $ 0.68 $ 0.81 $ 0.71 $ 0.57 $ 0.60 Diluted 0.68 0.81 0.71 0.57 0.60 Book value per common share 26.57 26.47 26.02 25.56 24.02 Tangible book value per common share 19.87 19.75 19.29 18.82 17.28 Cash dividends paid per common share 0.36 0.36 0.36 0.37 0.35 Selected Performance Ratios: Return on average assets 0.98 % 1.19 % 1.03 % 0.85 % 0.93 % Return on average shareholders’ equity 10.13 12.46 11.02 9.31 9.50 Return on average tangible common equity (1) 13.69 16.90 15.07 13.10 13.17 Average yield on earning assets (FTE) (1) 5.51 5.45 5.38 5.30 5.15 Average rate on interest bearing liabilities 3.28 3.32 3.22 3.04 2.84 Net interest margin (FTE) (1) 2.95 2.87 2.86 2.99 3.02 Net interest spread (FTE) (1) 2.23 2.13 2.16 2.26 2.31 Average earning assets to average interest bearing liabilities 128.51 128.62 127.71 131.65 133.24 Noninterest expense to average total assets 1.73 1.72 1.77 1.73 1.79 Efficiency ratio (FTE) (1) 51.90 52.71 55.54 50.86 52.29 (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 2024 2023 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Nonperforming Assets: $ 7,656 $ 6,918 $ 7,979 $ 4,001 $ 4,381 Nonaccrual loans 7,254 6,110 7,709 3,889 4,316 Accruing loans past due more than 90 days — — — — — Restructured loans — 145 151 13 15 Other real estate owned 388 648 119 99 50 Repossessed assets 14 15 — — — Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.16 % 0.13 % 0.17 % 0.09 % 0.10 % Ratio of nonperforming assets to: Total assets 0.09 0.08 0.10 0.05 0.05 Total loans 0.17 0.15 0.17 0.09 0.10 Total loans and OREO 0.17 0.15 0.17 0.09 0.10 Ratio of allowance for loan losses to: Nonaccruing loans 610.37 694.06 565.01 1,097.30 967.56 Nonperforming assets 578.32 613.00 545.90 1,066.58 953.21 Total loans 0.97 0.92 0.95 0.94 0.94 Net charge-offs (recoveries) to average loans outstanding 0.04 0.02 0.03 0.11 0.08 Capital Ratios: Shareholders’ equity to total assets 9.63 9.58 9.43 9.33 9.14 Common equity tier 1 capital 13.07 12.72 12.43 12.28 12.27 Tier 1 risk-based capital 14.12 13.76 13.47 13.32 13.31 Total risk-based capital 16.59 16.16 15.92 15.73 15.71 Tier 1 leverage capital 9.61 9.40 9.22 9.39 9.61 Period end tangible equity to period end tangible assets (1) 7.38 7.33 7.17 7.04 6.75 Average shareholders’ equity to average total assets 9.67 9.52 9.35 9.13 9.76 (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 2024 2023 Loan Portfolio Composition Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Real Estate Loans: Construction $ 585,817 $ 546,040 $ 599,464 $ 789,744 $ 720,515 1-4 Family Residential 755,406 738,037 720,508 696,738 689,492 Commercial 2,422,612 2,472,771 2,413,345 2,168,451 2,117,306 Commercial Loans 358,854 359,807 358,053 366,893 385,816 Municipal Loans 402,041 416,986 427,225 441,168 441,512 Loans to Individuals 53,318 55,724 58,773 61,516 65,992 Total Loans $ 4,578,048 $ 4,589,365 $ 4,577,368 $ 4,524,510 $ 4,420,633 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 42,407 $ 43,557 $ 42,674 $ 41,760 $ 36,303 Loans charged-off (773 ) (721 ) (634 ) (1,572 ) (1,262 ) Recoveries of loans charged-off 365 444 347 284 378 Net loans (charged-off) recovered (408 ) (277 ) (287 ) (1,288 ) (884 ) Provision for (reversal of) loan losses 2,277 (873 ) 1,170 2,202 6,341 Balance at end of period $ 44,276 $ 42,407 $ 43,557 $ 42,674 $ 41,760 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 3,208 $ 2,820 $ 3,932 $ 3,853 $ 3,207 Provision for (reversal of) off-balance-sheet credit exposures 112 388 (1,112 ) 79 646 Balance at end of period $ 3,320 $ 3,208 $ 2,820 $ 3,932 $ 3,853 Total Allowance for Credit Losses $ 47,596 $ 45,615 $ 46,377 $ 46,606 $ 45,613 Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, 2024 2023 Income Statement: Total interest income $ 312,647 $ 260,802 Total interest expense 150,227 100,260 Net interest income 162,420 160,542 Provision for (reversal of) credit losses 1,962 6,873 Net interest income after provision for (reversal of) credit losses 160,458 153,669 Noninterest income Deposit services 18,341 19,192 Net gain (loss) on sale of securities available for sale (2,510 ) (5,590 ) Net gain on sale of equity securities — 5,058 Gain (loss) on sale of loans (101 ) 385 Trust fees 4,420 4,479 Bank owned life insurance 3,408 3,221 Brokerage services 3,163 2,361 Other 2,731 4,227 Total noninterest income 29,452 33,333 Noninterest expense Salaries and employee benefits 67,330 64,473 Net occupancy 10,725 11,220 Advertising, travel & entertainment 2,479 2,966 ATM expense 1,105 1,033 Professional fees 3,435 4,036 Software and data processing 8,667 6,751 Communications 1,282 1,034 FDIC insurance 2,859 2,666 Amortization of intangibles 922 1,327 Other 10,174 9,889 Total noninterest expense 108,978 105,395 Income before income tax expense 80,932 81,607 Income tax expense 14,224 12,231 Net income $ 66,708 $ 69,376 Common Share Data: Weighted-average basic shares outstanding 30,276 30,862 Weighted-average diluted shares outstanding 30,332 30,916 Common shares outstanding end of period 30,308 30,338 Earnings per common share Basic $ 2.20 $ 2.25 Diluted 2.20 2.24 Book value per common share 26.57 24.02 Tangible book value per common share 19.87 17.28 Cash dividends paid per common share 1.08 1.05 Selected Performance Ratios: Return on average assets 1.06 % 1.20 % Return on average shareholders’ equity 11.19 12.21 Return on average tangible common equity (1) 15.20 16.98 Average yield on earning assets (FTE) (1) 5.45 4.97 Average rate on interest bearing liabilities 3.27 2.49 Net interest margin (FTE) (1) 2.90 3.13 Net interest spread (FTE) (1) 2.18 2.48 Average earning assets to average interest bearing liabilities 128.28 134.94 Noninterest expense to average total assets 1.74 1.84 Efficiency ratio (FTE) (1) 53.35 51.44 (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)Nine Months Ended September 30, 2024 2023 Nonperforming Assets: $ 7,656 $ 4,381 Nonaccrual loans 7,254 4,316 Accruing loans past due more than 90 days — — Restructured loans — 15 Other real estate owned 388 50 Repossessed assets 14 — Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.16 % 0.10 % Ratio of nonperforming assets to: Total assets 0.09 0.05 Total loans 0.17 0.10 Total loans and OREO 0.17 0.10 Ratio of allowance for loan losses to: Nonaccruing loans 610.37 967.56 Nonperforming assets 578.32 953.21 Total loans 0.97 0.94 Net charge-offs (recoveries) to average loans outstanding 0.03 0.05 Capital Ratios: Shareholders’ equity to total assets 9.63 9.14 Common equity tier 1 capital 13.07 12.27 Tier 1 risk-based capital 14.12 13.31 Total risk-based capital 16.59 15.71 Tier 1 leverage capital 9.61 9.61 Period end tangible equity to period end tangible assets (1) 7.38 6.75 Average shareholders’ equity to average total assets 9.51 9.81 (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)Nine Months Ended September 30, Loan Portfolio Composition 2024 2023 Real Estate Loans: Construction $ 585,817 $ 720,515 1-4 Family Residential 755,406 689,492 Commercial 2,422,612 2,117,306 Commercial Loans 358,854 385,816 Municipal Loans 402,041 441,512 Loans to Individuals 53,318 65,992 Total Loans $ 4,578,048 $ 4,420,633 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 42,674 $ 36,515 Loans charged-off (2,128 ) (2,632 ) Recoveries of loans charged-off 1,156 1,170 Net loans (charged-off) recovered (972 ) (1,462 ) Provision for (reversal of) loan losses 2,574 6,707 Balance at end of period $ 44,276 $ 41,760 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 3,932 $ 3,687 Provision for (reversal of) off-balance-sheet credit exposures (612 ) 166 Balance at end of period $ 3,320 $ 3,853 Total Allowance for Credit Losses $ 47,596 $ 45,613
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 September 30, 2024 June 30, 2024 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate 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 is presented at historical cost.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 December 31, 2023 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate ASSETS Loans (1) $ 4,559,602 $ 68,849 6.07 % $ 4,473,618 $ 67,886 6.02 % Loans held for sale 8,834 18 0.82 % 1,858 27 5.77 % Securities: Taxable investment securities (2) 780,423 6,967 3.59 % 852,023 7,970 3.71 % Tax-exempt investment securities (2) 1,285,922 13,168 4.12 % 1,456,187 15,688 4.27 % Mortgage-backed and related securities (2) 764,713 10,119 5.32 % 581,548 6,865 4.68 % Total securities 2,831,058 30,254 4.30 % 2,889,758 30,523 4.19 % Federal Home Loan Bank stock, at cost, and equity investments 40,063 333 3.34 % 24,674 296 4.76 % Interest earning deposits 380,181 5,202 5.50 % 150,763 2,054 5.41 % Federal funds sold 62,599 838 5.38 % 93,149 1,286 5.48 % Total earning assets 7,882,337 105,494 5.38 % 7,633,820 102,072 5.30 % Cash and due from banks 114,379 110,380 Accrued interest and other assets 441,783 374,120 Less: Allowance for loan losses (42,973 ) (41,822 ) Total assets $ 8,395,526 $ 8,076,498 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 604,529 1,424 0.95 % $ 610,453 1,432 0.93 % Certificates of deposit 941,947 10,341 4.42 % 910,759 9,691 4.22 % Interest bearing demand accounts 3,634,936 26,433 2.92 % 3,469,120 24,498 2.80 % Total interest bearing deposits 5,181,412 38,198 2.97 % 4,990,332 35,621 2.83 % Federal Home Loan Bank borrowings 607,033 5,950 3.94 % 262,709 1,430 2.16 % Subordinated notes, net of unamortized debt issuance costs 93,895 956 4.10 % 93,859 965 4.08 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,270 1,175 7.84 % 60,269 1,195 7.87 % Repurchase agreements 92,177 967 4.22 % 96,622 1,008 4.14 % Other borrowings 137,287 2,164 6.34 % 294,683 4,235 5.70 % Total interest bearing liabilities 6,172,074 49,410 3.22 % 5,798,474 44,454 3.04 % Noninterest bearing deposits 1,338,384 1,424,961 Accrued expenses and other liabilities 100,014 115,388 Total liabilities 7,610,472 7,338,823 Shareholders’ equity 785,054 737,675 Total liabilities and shareholders’ equity $ 8,395,526 $ 8,076,498 Net interest income (FTE) $ 56,084 $ 57,618 Net interest margin (FTE) 2.86 % 2.99 % Net interest spread (FTE) 2.16 % 2.26 % (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 is presented at historical cost.Note: As of March 31, 2024 and December 31, 2023, loans totaling $7.7 million and $3.9 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, 2023 Average Balance Interest Average Yield/Rate ASSETS Loans (1) $ 4,396,184 $ 64,758 5.84 % Loans held for sale 1,537 26 6.71 % Securities: Taxable investment securities (2) 912,789 8,731 3.79 % Tax-exempt investment securities (2) 1,510,044 16,232 4.26 % Mortgage-backed and related securities (2) 442,908 4,426 3.96 % Total securities 2,865,741 29,389 4.07 % Federal Home Loan Bank stock, at cost, and equity investments 22,363 265 4.70 % Interest earning deposits 37,891 535 5.60 % Federal funds sold 94,441 1,253 5.26 % Total earning assets 7,418,157 96,226 5.15 % Cash and due from banks 106,348 Accrued interest and other assets 400,850 Less: Allowance for loan losses (36,493 ) Total assets $ 7,888,862 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 622,246 1,458 0.93 % Certificates of deposit 949,894 9,443 3.94 % Interest bearing demand accounts 3,189,048 20,050 2.49 % Total interest bearing deposits 4,761,188 30,951 2.58 % Federal Home Loan Bank borrowings 230,184 1,174 2.02 % Subordinated notes, net of unamortized debt issuance costs 93,817 962 4.07 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,268 1,178 7.75 % Repurchase agreements 104,070 1,048 4.00 % Other borrowings 317,913 4,492 5.61 % Total interest bearing liabilities 5,567,440 39,805 2.84 % Noninterest bearing deposits 1,441,738 Accrued expenses and other liabilities 109,490 Total liabilities 7,118,668 Shareholders’ equity 770,194 Total liabilities and shareholders’ equity $ 7,888,862 Net interest income (FTE) $ 56,421 Net interest margin (FTE) 3.02 % Net interest spread (FTE) 2.31 % (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 is presented at historical cost.Note: As of September 30, 2023, loans totaling $4.3 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.
Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, 2024 September 30, 2023 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate ASSETS Loans (1) $ 4,589,621 $ 211,635 6.16 % $ 4,241,676 $ 179,545 5.66 % Loans held for sale 3,721 53 1.90 % 1,620 69 5.69 % Securities: Taxable investment securities (2) 785,422 21,126 3.59 % 843,846 23,216 3.68 % Tax-exempt investment securities (2) 1,237,884 37,754 4.07 % 1,587,656 48,880 4.12 % Mortgage-backed and related securities (2) 827,396 33,179 5.36 % 433,335 12,585 3.88 % Total securities 2,850,702 92,059 4.31 % 2,864,837 84,681 3.95 % Federal Home Loan Bank stock, at cost, and equity investments 40,565 1,488 4.90 % 25,071 889 4.74 % Interest earning deposits 320,371 13,105 5.46 % 60,623 2,310 5.09 % Federal funds sold 57,265 2,347 5.47 % 75,499 2,838 5.03 % Total earning assets 7,862,245 320,687 5.45 % 7,269,326 270,332 4.97 % Cash and due from banks 108,325 105,885 Accrued interest and other assets 440,340 406,160 Less: Allowance for loan losses (43,096 ) (36,564 ) Total assets $ 8,367,814 $ 7,744,807 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 602,450 4,368 0.97 % $ 645,415 4,201 0.87 % Certificates of deposit 1,016,812 34,618 4.55 % 845,851 21,215 3.35 % Interest bearing demand accounts 3,518,906 76,210 2.89 % 3,005,449 47,120 2.10 % Total interest bearing deposits 5,138,168 115,196 2.99 % 4,496,715 72,536 2.16 % Federal Home Loan Bank borrowings 610,893 18,893 4.13 % 281,260 5,347 2.54 % Subordinated notes, net of unamortized debt issuance costs 92,631 2,829 4.08 % 96,753 2,955 4.08 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,271 3,526 7.81 % 60,266 3,309 7.34 % Repurchase agreements 87,811 2,821 4.29 % 89,282 2,423 3.63 % Other borrowings 139,306 6,962 6.68 % 362,684 13,690 5.05 % Total interest bearing liabilities 6,129,080 150,227 3.27 % 5,386,960 100,260 2.49 % Noninterest bearing deposits 1,342,945 1,506,431 Accrued expenses and other liabilities 99,758 91,784 Total liabilities 7,571,783 6,985,175 Shareholders’ equity 796,031 759,632 Total liabilities and shareholders’ equity $ 8,367,814 $ 7,744,807 Net interest income (FTE) $ 170,460 $ 170,072 Net interest margin (FTE) 2.90 % 3.13 % Net interest spread (FTE) 2.18 % 2.48 % (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 is presented at historical cost.Note: As of September 30, 2024 and 2023, loans totaling $7.3 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.
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 Nine Months Ended 2024 2023 2024 2023 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30, Reconciliation of return on average common equity to return on average tangible common equity: Net income $ 20,524 $ 24,673 $ 21,511 $ 17,316 $ 18,449 $ 66,708 $ 69,376 After-tax amortization expense 220 243 266 292 322 728 1,048 Adjusted net income available to common shareholders $ 20,744 $ 24,916 $ 21,777 $ 17,608 $ 18,771 $ 67,436 $ 70,424 Average shareholders' equity $ 806,230 $ 796,698 $ 785,054 $ 737,675 $ 770,194 $ 796,031 $ 759,632 Less: Average intangibles for the period (203,288 ) (203,581 ) (203,910 ) (204,267 ) (204,658 ) (203,592 ) (205,096 ) Average tangible shareholders' equity $ 602,942 $ 593,117 $ 581,144 $ 533,408 $ 565,536 $ 592,439 $ 554,536 Return on average tangible common equity 13.69 % 16.90 % 15.07 % 13.10 % 13.17 % 15.20 % 16.98 % Reconciliation of book value per share to tangible book value per share: Common equity at end of period $ 805,254 $ 800,970 $ 787,922 $ 773,288 $ 728,595 $ 805,254 $ 728,595 Less: Intangible assets at end of period (203,119 ) (203,397 ) (203,704 ) (204,041 ) (204,411 ) (203,119 ) (204,411 ) Tangible common shareholders' equity at end of period $ 602,135 $ 597,573 $ 584,218 $ 569,247 $ 524,184 $ 602,135 $ 524,184 Total assets at end of period $ 8,362,263 $ 8,357,702 $ 8,353,863 $ 8,284,914 $ 7,972,468 $ 8,362,263 $ 7,972,468 Less: Intangible assets at end of period (203,119 ) (203,397 ) (203,704 ) (204,041 ) (204,411 ) (203,119 ) (204,411 ) Tangible assets at end of period $ 8,159,144 $ 8,154,305 $ 8,150,159 $ 8,080,873 $ 7,768,057 $ 8,159,144 $ 7,768,057 Period end tangible equity to period end tangible assets 7.38 % 7.33 % 7.17 % 7.04 % 6.75 % 7.38 % 6.75 % Common shares outstanding end of period 30,308 30,261 30,284 30,249 30,338 30,308 30,338 Tangible book value per common share $ 19.87 $ 19.75 $ 19.29 $ 18.82 $ 17.28 $ 19.87 $ 17.28 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) $ 55,464 $ 53,608 $ 53,348 $ 54,485 $ 53,273 $ 162,420 $ 160,542 Tax-equivalent adjustments: Loans 608 633 656 680 674 1,897 2,044 Tax-exempt investment securities 2,012 2,051 2,080 2,453 2,474 6,143 7,486 Net interest income (FTE) (1) 58,084 56,292 56,084 57,618 56,421 170,460 170,072 Noninterest income 8,171 11,557 9,724 2,501 10,836 29,452 33,333 Nonrecurring income (2) 2,797 (576 ) 18 8,376 (11 ) 2,239 (1,006 ) Total revenue $ 69,052 $ 67,273 $ 65,826 $ 68,495 $ 67,246 $ 202,151 $ 202,399 Noninterest expense $ 36,332 $ 35,765 $ 36,881 $ 35,183 $ 35,553 $ 108,978 $ 105,395 Pre-tax amortization expense (278 ) (307 ) (337 ) (370 ) (407 ) (922 ) (1,327 ) Nonrecurring expense (3) (219 ) 2 17 22 17 (200 ) 56 Adjusted noninterest expense $ 35,835 $ 35,460 $ 36,561 $ 34,835 $ 35,163 $ 107,856 $ 104,124 Efficiency ratio 53.94 % 54.90 % 57.95 % 53.30 % 54.86 % 55.56 % 53.99 % Efficiency ratio (FTE) (1) 51.90 % 52.71 % 55.54 % 50.86 % 52.29 % 53.35 % 51.44 % Average earning assets $ 7,823,026 $ 7,881,919 $ 7,882,337 $ 7,633,820 $ 7,418,157 $ 7,862,245 $ 7,269,326 Net interest margin 2.82 % 2.74 % 2.72 % 2.83 % 2.85 % 2.76 % 2.95 % Net interest margin (FTE) (1) 2.95 % 2.87 % 2.86 % 2.99 % 3.02 % 2.90 % 3.13 % Net interest spread 2.10 % 2.00 % 2.02 % 2.10 % 2.14 % 2.04 % 2.31 % Net interest spread (FTE) (1) 2.23 % 2.13 % 2.16 % 2.26 % 2.31 % 2.18 % 2.48 % (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, net gain on sale of equity securities, 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.
