• Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2021

    ソース: Nasdaq GlobeNewswire / 26 10 2021 06:00:01   America/New_York

    • Third quarter net income of $29.3 million;
    • Third quarter earnings per diluted common share of $0.90;
    • Annualized linked quarter loan growth, net of Paycheck Protection Program (“PPP”) loans, 7.9%;
    • Annualized linked quarter deposit growth of 13.5%;
    • Linked quarter net interest margin increased to 3.16%;
    • Annualized return on third quarter average assets of 1.61%;
    • Annualized return on third quarter average tangible common equity of 17.10%(1); and
    • Nonperforming assets decreased to 0.17% of total assets.

    TYLER, Texas, Oct. 26, 2021 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter ended September 30, 2021. Southside reported net income of $29.3 million for the three months ended September 30, 2021, an increase of $2.2 million, or 8.2%, compared to $27.1 million for the same period in 2020. Earnings per diluted common share were $0.90 and $0.82 for the three months ended September 30, 2021 and 2020, respectively. The annualized return on average shareholders’ equity for the three months ended September 30, 2021 and 2020 was 12.89%. The annualized return on average assets was 1.61% for the three months ended September 30, 2021, compared to 1.48% for the same period in 2020.

    “We reported outstanding third quarter financial results, highlighted by annualized linked quarter deposit and loan growth, net of PPP loans, of 13.5% and 7.9%, respectively, an increase in our net interest margin to 3.16%, net income of $29.3 million and continued strong asset quality,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “These results could not have been achieved without the tremendous efforts and contributions of the entire Southside team and for this, I am extremely proud and grateful.”

    “On September 30, 2021, we redeemed our 5.5% coupon $100 million subordinated notes due 2026, which will have a positive impact on our net interest margin in the fourth quarter. We expensed $1.1 million during the third quarter in connection with the redemption of the subordinated notes.”

    “Our loan pipeline is strong, however, anticipated payoffs in the fourth quarter will generate some continued headwinds. We remain encouraged by the continued strong economic conditions in the market areas we serve.”

    Operating Results for the Three Months Ended September 30, 2021

    Net income was $29.3 million for the three months ended September 30, 2021, compared to $27.1 million for the same period in 2020, an increase of $2.2 million, or 8.2%. Earnings per diluted common share were $0.90 and $0.82 for the three months ended September 30, 2021 and 2020, respectively. The increase in net income was primarily a result of an increase in noninterest income and net interest income, partially offset by an increase in income tax expense. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2021 were 1.61% and 12.89%, respectively, compared to 1.48% and 12.89, respectively, for the three months ended September 30, 2020. Our efficiency ratio and tax equivalent efficiency ratio(1) were 50.64% and 47.92%, respectively, for the three months ended September 30, 2021, compared to 52.77% and 50.07%, respectively, for the three months ended September 30, 2020, and 53.09% and 50.31%, respectively, for the three months ended June 30, 2021.

    Net interest income for the three months ended September 30, 2021 was $48.2 million, compared to $46.6 million for the same period in 2020, an increase of 3.5%. The increase in net interest income compared to the same period in 2020 was due to the decrease in interest expense on our interest bearing liabilities due to the overall decline in interest rates and a decline in the average balance of our interest bearing liabilities, partially offset by the decrease in interest income, a result of a decrease in the average balance of our interest earning assets during the three months ended September 30, 2021. Linked quarter, net interest income increased $2.6 million, or 5.6%, compared to $45.6 million during the three months ended June 30, 2021. The increase in net interest income is primarily due to an increase in the average yield and balance on our interest earning assets.

    Our net interest margin and tax equivalent net interest margin(1) increased to 2.96% and 3.16%, respectively, for the three months ended September 30, 2021, compared to 2.83% and 3.02%, respectively, for the same period in 2020. Linked quarter, net interest margin and tax equivalent net interest margin(1) increased 10 basis points from 2.86% and 3.06%, respectively, for the three months ended June 30, 2021.

    Noninterest income was $12.8 million for the three months ended September 30, 2021, an increase of $1.6 million, or 14.6%, compared to $11.1 million for the same period in 2020. The increase was due to increases in net gain on sale of securities AFS, deposit services income, brokerage services income and trust fees, partially offset by a decrease in gain on sale of loans. On a linked quarter basis, noninterest income increased $1.8 million, or 16.8%, compared to the three months ended June 30, 2021. The increase was due to an increase in net gain on sale of securities available for sale, other noninterest income and deposit services income.

    Noninterest expense was $31.8 million for the three months ended September 30, 2021, an increase of $0.1 million, or 0.5%, compared to $31.6 million for the same period in 2020, a result of a $1.1 million loss on the redemption of subordinated notes, as well as a $0.4 million increase in salaries and employee benefits and a $0.3 million increase in software and data processing expense, partially offset by a $1.8 million decrease in other noninterest expense. On a linked quarter basis, noninterest expense increased $1.1 million, or 3.5%, compared to the three months ended June 30, 2021, due to the $1.1 million loss on the redemption of subordinated notes during the three months ended September 30, 2021.

    Income tax expense increased $1.2 million for the three months ended September 30, 2021 compared to the same period in 2020. On a linked quarter basis, income tax expense increased $2.1 million, or 72.4%. Our effective tax rate (“ETR”) increased to 14.5% for the three months ended September 30, 2021, compared to 12.3% for the three months ended September 30, 2020. Linked quarter, our ETR increased from 11.9% for the three months ended June 30, 2021. The increase for both periods 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, 2021

    Net income was $84.7 million for the nine months ended September 30, 2021, compared to $52.6 million for the same period in 2020, an increase of $32.1 million, or 61.1%. Earnings per diluted common share were $2.59 for the nine months ended September 30, 2021, compared to $1.58 for the same period in 2020, an increase of 63.9%. The increase in net income was a direct result of a reversal of the provision for credit losses compared to a large build-up in the allowance for credit losses in the same period in 2020. Annualized returns on average assets and average shareholders’ equity for the nine months ended September 30, 2021 were 1.60% and 12.80%, respectively, compared to 0.98% and 8.56%, respectively, for the nine months ended September 30, 2020. Our efficiency ratio and tax equivalent efficiency ratio(1) were 52.23% and 49.53%, respectively, for the nine months ended September 30, 2021, compared to 52.55% and 50.06%, respectively, for the nine months ended September 30, 2020.

    Net interest income was $140.2 million for the nine months ended September 30, 2021, compared to $138.6 million for the same period in 2020, due to the decrease in interest expense on our interest bearing liabilities, partially offset by the decrease in interest income, both primarily a result of an overall decline in interest rates.

    Our net interest margin and tax equivalent net interest margin(1) were 2.94% and 3.14%, respectively, for the nine months ended September 30, 2021, compared to 2.85% and 3.02%, respectively, for the same period in 2020. The increase in net interest margin was due to lower average rates and balances on our interest bearing liabilities, partially offset by a lower average yield on our interest earning assets during the nine months ended September 30, 2021.

    Noninterest income was $37.3 million for the nine months ended September 30, 2021, a decrease of 3.9%, compared to $38.8 million for the same period in 2020. The decrease was due to decreases in net gain on sale of securities AFS and gain on sale of loans, partially offset by increases in deposit services income, other noninterest income, brokerage services income and trust fees.

    Noninterest expense was $93.7 million for the nine months ended September 30, 2021, compared to $92.0 million for the same period in 2020, an increase of $1.7 million, or 1.9%. The increase was the result of increases in salaries and employee benefits, a loss on the redemption of subordinated notes, increases in FDIC insurance and software and data processing expense, partially offset by decreases in other noninterest expense and amortization of intangibles.

    Income tax expense increased $5.5 million, or 78.4%, for the nine months ended September 30, 2021, compared to the same period in 2020. Our ETR was approximately 13.0% and 11.9% for the nine months ended September 30, 2021 and 2020, respectively. The higher ETR for the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.

    Balance Sheet Data

    At September 30, 2021, we had $7.14 billion in total assets, compared to $7.01 billion at December 31, 2020 and $7.19 billion at September 30, 2020.

    Loans at September 30, 2021 were $3.65 billion, a decrease of $142.4 million, or 3.8%, compared to $3.79 billion at September 30, 2020. This decrease was due to a $235.3 million decrease in our PPP loans, a component of the commercial loan category, with a remaining balance of $67.5 million at September 30, 2021, as well as decreases of $188.3 million in construction loans and $77.7 million in 1-4 family residential loans. These decreases were partially offset by increases of $277.9 million in commercial real estate loans, $49.8 million of commercial loans, excluding PPP loans, and $40.0 million in municipal loans. Linked quarter loans increased $5.2 million, or 0.1%, from $3.64 billion at June 30, 2021. The linked quarter net increase in loans consisted of an increase of $174.2 million in commercial real estate loans and $9.9 million of municipal loans. The linked quarter increases were partially offset by decreases of $106.1 million of construction loans, $53.8 million of commercial loans and $17.7 million in 1-4 family loans. The decrease in construction loans was primarily the result of payoffs and completed projects converting to permanent financing. On a linked quarter basis, our PPP loans decreased $64.6 million, or 48.9%, from $132.1 million at June 30, 2021, due to forgiveness payments received from loans funded under the Coronavirus Aid, Relief, and Economic Security Act.

    Securities at September 30, 2021 were $2.85 billion, an increase of $97.0 million, or 3.5%, compared to $2.75 billion at September 30, 2020. Linked quarter, securities decreased $15.3 million, or 0.5%, from $2.86 billion at June 30, 2021.

    Deposits at September 30, 2021 were $5.33 billion, an increase of $228.6 million, or 4.5%, compared to $5.10 billion at September 30, 2020. Linked quarter, deposits increased $175.5 million, or 3.4%, from $5.16 billion at June 30, 2021.

    On March 12, 2020, the Board of the Company increased its authorization under the Stock Repurchase Plan, previously authorized in September 2019, by an additional 1.0 million shares, for a total authorization to repurchase up to 2.0 million shares. During the third quarter ended September 30, 2021, we purchased the remaining 420,204 shares authorized at an average price of $36.74. As of September 30, 2021, there were no authorized shares remaining to be purchased under the Stock Repurchase Plan.

    Asset Quality

    Nonperforming assets at September 30, 2021 were $12.4 million, or 0.17% of total assets, a decrease of $4.4 million, or 26.1%, compared to $16.8 million, or 0.23% of total assets, at September 30, 2020, and a decrease from $15.3 million, or 0.21% of total assets, at June 30, 2021. During the three months ended September 30, 2021, nonaccrual loans decreased $2.1 million, or 41.5%.

    The allowance for loan losses decreased to $38.0 million, or 1.04% of total loans, at September 30, 2021, compared to $55.1 million, or 1.45% of total loans, at September 30, 2020. The decrease was primarily due to an improved economic forecast. The allowance for loan losses was $42.9 million, or 1.18% of total loans, at June 30, 2021.

    We recorded a reversal of provision for credit losses for loans of $4.4 million for both of the three month periods ended September 30, 2021 and 2020, as compared to a provision for credit losses of $1.5 million for the three months ended June 30, 2021. The decrease was primarily due to an improved economic forecast as compared to the end of the second quarter. Net charge-offs were $0.5 million for the three months ended September 30, 2021, compared to net charge-offs of $0.4 million for the three months ended September 30, 2020 and $0.1 million of net charge-offs for the three months ended June 30, 2021. Net charge-offs were $0.7 million for the nine months ended September 30, 2021, compared to $1.0 million for the nine months ended September 30, 2020.

    We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.7 million for the three months ended September 30, 2021, as compared to a reversal of provision of $0.3 million for the three months ended September 30, 2020 and a provision of $0.2 million for the three months ended June 30, 2021. For the nine months ended September 30, 2021, we recorded a reversal of provision of $3.3 million, compared to a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.3 million for the nine months ended September 30, 2020. The balance of the allowance for off-balance-sheet credit exposures at September 30, 2021 was $3.1 million and is included in other liabilities.

    Dividend

    Southside Bancshares, Inc. declared a third quarter cash dividend of $0.33 per share on August 5, 2021, which was paid on September 2, 2021, to all shareholders of record as of August 19, 2021.

    (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, 2021 financial results on Tuesday, October 26, 2021 at 11:00 a.m. CDT. The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 5179572 or by identifying “Southside Bancshares, Inc., Third Quarter 2021 Earnings Call.” To listen to the call via webcast, register at https://investors.southside.com.

    For those unable to listen to the conference call live, a recording will be available from approximately 2:00 p.m. CDT October 26, 2021 through 1:00 p.m. CST November 7, 2021 by accessing the company website, https://investors.southside.com.

    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 $7.14 billion in assets as of September 30, 2021, that owns 100% of Southside Bank. Southside Bank currently has 55 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 e-mail notification of company news, events and stock activity, please register on the E-mail Notification portion of the website. 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, discussions of the effect of our expansion, 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, tax reform, inflation and 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 recent factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the negative impact of the COVID-19 pandemic and related variants on our business, financial position, operations and prospects, including our ability to continue our business activities in certain communities we serve, the duration of the pandemic and its continued effects on financial markets, a reduction in financial transactions and business activities resulting in decreased deposits and reduced loan originations, increases in unemployment rates impacting our borrowers’ ability to repay their loans, our ability to manage liquidity in a rapidly changing and unpredictable market, additional interest rate changes by the Federal Reserve and other government actions in response to the pandemic, including regulations or laws enacted to counter the effects of the COVID-19 pandemic on the economy.

    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, 2020, under “Part I - Item 1. Forward Looking Information” 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
     2021 2020
     Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
    ASSETS         
    Cash and due from banks$83,346  $92,047  $78,304  $87,357  $81,643 
    Interest earning deposits3,787  36,441  29,319  21,051  14,561 
    Securities available for sale, at estimated fair value2,753,104  2,766,035  2,546,924  2,587,305  2,633,519 
    Securities held to maturity, at net carrying value92,479  94,850  98,159  108,998  115,089 
    Total securities2,845,583  2,860,885  2,645,083  2,696,303  2,748,608 
    Federal Home Loan Bank stock, at cost27,248  28,081  18,754  25,259  35,860 
    Loans held for sale1,131  2,510  2,615  3,695  8,686 
    Loans3,647,585  3,642,346  3,716,598  3,657,779  3,789,975 
    Less: Allowance for loan losses(38,022) (42,913) (41,454) (49,006) (55,110)
    Net loans3,609,563  3,599,433  3,675,144  3,608,773  3,734,865 
    Premises & equipment, net142,736  142,835  144,628  144,576  147,169 
    Goodwill201,116  201,116  201,116  201,116  201,116 
    Other intangible assets, net7,553  8,248  8,978  9,744  10,569 
    Bank owned life insurance130,522  116,886  116,209  115,583  114,928 
    Other assets83,106  93,926  78,736  94,770  92,955 
    Total assets$7,135,691  $7,182,408  $6,998,886  $7,008,227  $7,190,960 
              
    LIABILITIES AND SHAREHOLDERS' EQUITY         
    Noninterest bearing deposits$1,596,781  $1,501,120  $1,383,371  $1,354,815  $1,363,228 
    Interest bearing deposits3,734,874  3,655,047  3,709,272  3,577,507  3,739,798 
    Total deposits5,331,655  5,156,167  5,092,643  4,932,322  5,103,026 
    Other borrowings and Federal Home Loan Bank borrowings679,928  745,151  687,845  855,699  994,512 
    Subordinated notes, net of unamortized debt
    issuance costs    		98,500  197,312  197,268  197,251  98,708 
    Trust preferred subordinated debentures, net of unamortized debt issuance costs60,259  60,258  60,256  60,255  60,254 
    Other liabilities87,483  129,120  102,277  87,403  95,312 
    Total liabilities6,257,825  6,288,008  6,140,289  6,132,930  6,351,812 
    Shareholders' equity877,866  894,400  858,597  875,297  839,148 
    Total liabilities and shareholders' equity$7,135,691  $7,182,408  $6,998,886  $7,008,227  $7,190,960 

    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars and shares in thousands, except per share data)

     Three Months Ended
     2021 2020
     Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
    Income Statement:         
    Total interest income$55,076  $52,586  $53,565  $56,904  $55,677 
    Total interest expense6,870  6,939  7,262  8,197  9,091 
    Net interest income48,206  45,647  46,303  48,707  46,586 
    Provision for credit losses(5,071) 1,677  (10,149) (5,545) (4,746)
    Net interest income after provision for credit losses53,277  43,970  56,452  54,252  51,332 
    Noninterest income         
    Deposit services6,779  6,609  6,125  6,419  6,129 
    Net gain (loss) on sale of securities available for sale1,381  15  2,003  (24) 78 
    Gain on sale of loans299  393  593  848  1,071 
    Trust fees1,494  1,496  1,383  1,354  1,253 
    Bank owned life insurance637  645  626  655  680 
    Brokerage services846  850  780  628  564 
    Other1,333  925  2,113  1,020  1,366 
    Total noninterest income12,769  10,933  13,623  10,900  11,141 
    Noninterest expense         
    Salaries and employee benefits19,777  20,004  20,044  19,609  19,344 
    Net occupancy3,532  3,606  3,560  3,795  3,595 
    Advertising, travel & entertainment579  475  437  504  519 
    ATM expense311  272  238  290  271 
    Professional fees1,135  1,040  991  986  961 
    Software and data processing1,503  1,406  1,312  1,220  1,215 
    Communications552  612  525  490  495 
    FDIC insurance454  435  454  456  469 
    Amortization of intangibles695  730  766  825  881 
    Loss on redemption of subordinated notes1,118  —  —  —  — 
    Other2,107  2,119  2,907  3,140  3,866 
    Total noninterest expense31,763  30,699  31,234  31,315  31,616 
    Income before income tax expense34,283  24,204  38,841  33,837  30,857 
    Income tax expense4,977  2,887  4,750  4,265  3,783 
    Net income$29,306  $21,317  $34,091  $29,572  $27,074 
              
    Common Share Data:   
    Weighted-average basic shares outstanding32,465  32,632  32,829  33,055  33,047 
    Weighted-average diluted shares outstanding32,556  32,799  32,937  33,125  33,098 
    Common shares outstanding end of period32,273  32,675  32,659  32,951  33,072 
    Earnings per common share         
    Basic$0.90  $0.65  $1.04  $0.89  $0.82 
    Diluted0.90  0.65  1.04  0.89  0.82 
    Book value per common share27.20  27.37  26.29  26.56  25.37 
    Tangible book value per common share (1)20.74  20.97  19.86  20.16  18.97 
    Cash dividends paid per common share0.33  0.33  0.32  0.37  0.31 
              
    Selected Performance Ratios:         
    Return on average assets1.61% 1.20% 1.99% 1.64% 1.48%
    Return on average shareholders’ equity12.89  9.73  15.82  13.77  12.89 
    Return on average tangible common equity (1)17.10  13.13  21.22  18.71  17.73 
    Average yield on earning assets (FTE) (1)3.59  3.49  3.67  3.70  3.57 
    Average rate on interest bearing liabilities0.59  0.60  0.64  0.68  0.73 
    Net interest margin (FTE) (1)3.16  3.06  3.20  3.20  3.02 
    Net interest spread (FTE) (1)3.00  2.89  3.03  3.02  2.84 
    Average earning assets to average interest bearing liabilities138.86  137.85  135.56  133.56  131.92 
    Noninterest expense to average total assets1.75  1.73  1.82  1.74  1.73 
    Efficiency ratio (FTE) (1)47.92  50.31  50.44  47.36  50.07 

     

    (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
     2021 2020
     Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
    Nonperforming Assets:$12,424  $15,269  $15,367  $17,480  $16,822 
    Nonaccrual loans3,013  5,154  5,314  7,714  5,971 
    Accruing loans past due more than 90 days—  —  —  —  — 
    Troubled debt restructured loans9,371  9,549  9,641  9,646  10,307 
    Other real estate owned25  566  412  106  536 
    Repossessed assets15  —  —  14  8 
              
    Asset Quality Ratios:         
    Ratio of nonaccruing loans to:         
    Total loans0.08% 0.14% 0.14% 0.21% 0.16%
    Ratio of nonperforming assets to:         
    Total assets0.17  0.21  0.22  0.25  0.23 
    Total loans0.34  0.42  0.41  0.48  0.44 
    Total loans and OREO0.34  0.42  0.41  0.48  0.44 
    Total loans, excluding PPP loans, and OREO0.35  0.43  0.44  0.51  0.48 
    Ratio of allowance for loan losses to:         
    Nonaccruing loans1,261.93  832.62  780.09  635.29  922.96 
    Nonperforming assets306.04  281.05  269.76  280.35  327.61 
    Total loans1.04  1.18  1.12  1.34  1.45 
    Total loans, excluding PPP loans1.06  1.22  1.19  1.42  1.58 
    Net charge-offs (recoveries) to average loans outstanding0.05  0.01  0.02  0.02  0.04 
              
    Capital Ratios:         
    Shareholders’ equity to total assets12.30  12.45  12.27  12.49  11.67 
    Common equity tier 1 capital14.07  14.38  14.71  14.68  14.24 
    Tier 1 risk-based capital15.35  15.71  16.09  16.08  15.63 
    Total risk-based capital18.18  20.95  21.52  21.78  19.03 
    Tier 1 leverage capital10.14  10.21  10.29  9.81  9.50 
    Period end tangible equity to period end tangible assets (1)9.66  9.82  9.55  9.77  8.99 
    Average shareholders’ equity to average total assets12.51  12.38  12.56  11.92  11.49 


    (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
     2021 2020
    Loan Portfolio CompositionSep 30, Jun 30, Mar 31, Dec 31, Sep 30,
    Real Estate Loans:         
    Construction$422,095  $528,157  $605,677  $581,941  $610,394 
    1-4 Family Residential660,689  678,402  700,430  719,952  738,343 
    Commercial1,605,132  1,430,900  1,348,551  1,295,746  1,327,233 
    Commercial Loans443,708  497,513  564,745  557,122  629,170 
    Municipal Loans427,259  417,398  406,377  409,028  387,286 
    Loans to Individuals88,702  89,976  90,818  93,990  97,549 
    Total Loans$3,647,585  $3,642,346  $3,716,598  $3,657,779  $3,789,975 
              
    Summary of Changes in Allowances:         
    Allowance for Loan Losses         
    Balance at beginning of period$42,913  $41,454  $49,006  $55,110  $59,868 
    Loans charged-off(940) (527) (795) (595) (718)
    Recoveries of loans charged-off437  466  622  402  361 
    Net loans (charged-off) recovered(503) (61) (173) (193) (357)
    Provision for (reversal of) loan losses(4,388) 1,520  (7,379) (5,911) (4,401)
    Balance at end of period$38,022  $42,913  $41,454  $49,006  $55,110 
              
    Allowance for Off-Balance-Sheet Credit Exposures         
    Balance at beginning of period$3,773  $3,616  $6,386  $6,020  $6,365 
    Provision for (reversal of) off-balance-sheet credit exposures(683) 157  (2,770) 366  (345)
    Balance at end of period$3,090  $3,773  $3,616  $6,386  $6,020 
    Total Allowance for Credit Losses$41,112  $46,686  $45,070  $55,392  $61,130 

    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars in thousands)

     Nine Months Ended
     September 30,
     2021 2020
    Income Statement:   
    Total interest income$161,227  $174,924 
    Total interest expense21,071  36,366 
    Net interest income140,156  138,558 
    Provision for credit losses(13,543) 25,746 
    Net interest income after provision for credit losses153,699  112,812 
    Noninterest income   
    Deposit services19,513  17,940 
    Net gain on sale of securities available for sale3,399  8,281 
    Gain on sale of loans1,285  1,924 
    Trust fees4,373  3,779 
    Bank owned life insurance1,908  1,899 
    Brokerage services2,476  1,643 
    Other4,371  3,366 
    Total noninterest income37,325  38,832 
    Noninterest expense   
    Salaries and employee benefits59,825  57,616 
    Net occupancy10,698  10,574 
    Advertising, travel & entertainment1,491  1,643 
    ATM expense821  728 
    Professional fees3,166  3,238 
    Software and data processing4,221  3,737 
    Communications1,689  1,494 
    FDIC insurance1,343  668 
    Amortization of intangibles2,191  2,792 
    Loss on redemption of subordinated notes1,118  — 
    Other7,133  9,502 
    Total noninterest expense93,696  91,992 
    Income before income tax expense97,328  59,652 
    Income tax expense12,614  7,071 
    Net income$84,714  $52,581 
        
    Common Share Data:   
    Weighted-average basic shares outstanding32,641  33,250 
    Weighted-average diluted shares outstanding32,759  33,331 
    Common shares outstanding end of period32,273  33,072 
    Earnings per common share   
    Basic$2.60  $1.58 
    Diluted2.59  1.58 
    Book value per common share27.20  25.37 
    Tangible book value per common share (1)20.74  18.97 
    Cash dividends paid per common share0.98  0.93 
        
    Selected Performance Ratios:   
    Return on average assets1.60% 0.98%
    Return on average shareholders’ equity12.80  8.56 
    Return on average tangible common equity (1)17.12  12.05 
    Average yield on earning assets (FTE) (1)3.58  3.77 
    Average rate on interest bearing liabilities0.61  0.96 
    Net interest margin (FTE) (1)3.14  3.02 
    Net interest spread (FTE) (1)2.97  2.81 
    Average earning assets to average interest bearing liabilities137.45  129.07 
    Noninterest expense to average total assets1.77  1.71 
    Efficiency ratio (FTE) (1)49.53  50.06 

     

    (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)

     Nine Months Ended
     September 30,
     2021 2020
    Nonperforming Assets:$12,424  $16,822 
    Nonaccrual loans3,013  5,971 
    Accruing loans past due more than 90 days—  — 
    Troubled debt restructured loans9,371  10,307 
    Other real estate owned25  536 
    Repossessed assets15  8 
        
    Asset Quality Ratios:   
    Ratio of nonaccruing loans to:   
    Total loans0.08% 0.16%
    Ratio of nonperforming assets to:   
    Total assets0.17  0.23 
    Total loans0.34  0.44 
    Total loans and OREO0.34  0.44 
    Total loans, excluding PPP loans, and OREO0.35  0.48 
    Ratio of allowance for loan losses to:   
    Nonaccruing loans1,261.93  922.96 
    Nonperforming assets306.04  327.61 
    Total loans1.04  1.45 
    Total loans, excluding PPP loans1.06  1.58 
    Net charge-offs (recoveries) to average loans outstanding0.03  0.04 
        
    Capital Ratios:   
    Shareholders’ equity to total assets12.30  11.67 
    Common equity tier 1 capital14.07  14.24 
    Tier 1 risk-based capital15.35  15.63 
    Total risk-based capital18.18  19.03 
    Tier 1 leverage capital10.14  9.50 
    Period end tangible equity to period end tangible assets (1)9.66  8.99 
    Average shareholders’ equity to average total assets12.48  11.42 

     

    (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 Composition2021 2020
    Real Estate Loans:   
    Construction$422,095  $610,394 
    1-4 Family Residential660,689  738,343 
    Commercial1,605,132  1,327,233 
    Commercial Loans443,708  629,170 
    Municipal Loans427,259  387,286 
    Loans to Individuals88,702  97,549 
    Total Loans$3,647,585  $3,789,975 
        
    Summary of Changes in Allowances:   
    Allowance for Loan Losses   
    Balance at beginning of period$49,006  $24,797 
    Impact of CECL adoption (1) - cumulative effect adjustment—  5,072 
    Impact of CECL adoption - purchased loans with credit deterioration—  231 
    Loans charged-off(2,262) (2,259)
    Recoveries of loans charged-off1,525  1,248 
    Net loans (charged-off) recovered(737) (1,011)
    Provision for (reversal of) loan losses(10,247) 26,021 
    Balance at end of period$38,022  $55,110 
        
    Allowance for Off-Balance-Sheet Credit Exposures   
    Balance at beginning of period$6,386  $1,455 
    Impact of CECL adoption (1)—  4,840 
    Provision for (reversal of) off-balance-sheet credit exposures(3,296) (275)
    Balance at end of period$3,090  $6,020 
    Total Allowance for Credit Losses$41,112  $61,130 


    (1)We adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” on January 1, 2020. ASU 2016-13 replaced the incurred loss model with an expected loss methodology that is referred to as current expected credit losses (“CECL”). Adoption of this guidance on January 1, 2020, resulted in a cumulative-effect adjustment to reduce retained earnings by $7.8 million, net of tax. 

    Southside Bancshares, Inc.
    Average Balances and Average Yields and Rates (Annualized) (Unaudited)
    (Dollars in thousands)

    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.

     Three Months Ended
     September 30, 2021 June 30, 2021
     Average
    Balance    		 Interest Average
    Yield/Rate    		 Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS           
    Loans (1)$3,662,496  $37,744  4.09% $3,706,959  $36,429  3.94%
    Loans held for sale1,640  12  2.90% 1,846  13  2.82%
    Securities:           
    Taxable investment securities (2)532,679  3,853  2.87% 396,504  2,921  2.95%
    Tax-exempt investment securities (2)1,453,275  12,315  3.36% 1,363,678  11,585  3.41%
    Mortgage-backed and related securities (2)738,287  4,405  2.37% 847,206  4,647  2.20%
    Total securities2,724,241  20,573  3.00% 2,607,388  19,153  2.95%
    Federal Home Loan Bank stock, at cost, and equity investments39,786  111  1.11% 35,883  108  1.21%
    Interest earning deposits39,382  24  0.24% 43,175  17  0.16%
    Total earning assets6,467,545  58,464  3.59% 6,395,251  55,720  3.49%
    Cash and due from banks99,113      90,735     
    Accrued interest and other assets684,917      656,245     
    Less: Allowance for loan losses(43,052)     (41,768)    
    Total assets$7,208,523      $7,100,463     
    LIABILITIES AND SHAREHOLDERS’ EQUITY           
    Savings accounts$598,118  249  0.17% $571,907  231  0.16%
    Certificates of deposits629,718  789  0.50% 658,708  936  0.57%
    Interest bearing demand accounts2,496,037  1,196  0.19% 2,459,335  1,172  0.19%
    Total interest bearing deposits3,723,873  2,234  0.24% 3,689,950  2,339  0.25%
    Federal Home Loan Bank borrowings656,474  1,865  1.13% 669,633  1,817  1.09%
    Subordinated notes, net of unamortized debt issuance costs195,204  2,417  4.91% 197,284  2,423  4.93%
    Trust preferred subordinated debentures, net of unamortized debt issuance costs60,258  345  2.27% 60,257  349  2.32%
    Other borrowings21,634  9  0.17% 22,024  11  0.20%
    Total interest bearing liabilities4,657,443  6,870  0.59% 4,639,148  6,939  0.60%
    Noninterest bearing deposits1,551,298      1,485,383     
    Accrued expenses and other liabilities97,954      97,137     
    Total liabilities6,306,695      6,221,668     
    Shareholders’ equity901,828      878,795     
    Total liabilities and shareholders’ equity$7,208,523      $7,100,463     
    Net interest income (FTE)  $51,594      $48,781   
    Net interest margin (FTE)    3.16%     3.06%
    Net interest spread (FTE)    3.00%     2.89%

     

    (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, 2021 and June 30, 2021, loans totaling $3.0 million and $5.2 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, 2021 December 31, 2020
     Average
    Balance    		 Interest Average
    Yield/Rate    		 Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS           
    Loans (1)$3,634,053  $36,754  4.10% $3,772,158  $39,936  4.21%
    Loans held for sale2,803  20  2.89% 5,012  36  2.86%
    Securities:           
    Taxable investment securities (2)295,968  2,323  3.18% 223,753  1,753  3.12%
    Tax-exempt investment securities (2)1,300,991  11,176  3.48% 1,298,584  11,413  3.50%
    Mortgage-backed and related securities (2)940,815  6,088  2.62% 1,082,302  6,693  2.46%
    Total securities2,537,774  19,587  3.13% 2,604,639  19,859  3.03%
    Federal Home Loan Bank stock, at cost, and equity investments35,635  136  1.55% 46,798  199  1.69%
    Interest earning deposits31,169  15  0.20% 22,938  18  0.31%
    Total earning assets6,241,434  56,512  3.67% 6,451,545  60,048  3.70%
    Cash and due from banks86,634      83,228     
    Accrued interest and other assets677,230      687,894     
    Less: Allowance for loan losses(49,240)     (55,567)    
    Total assets$6,956,058      $7,167,100     
    LIABILITIES AND SHAREHOLDERS’ EQUITY           
    Savings accounts$517,182  209  0.16% $487,452  201  0.16%
    Certificates of deposit736,099  1,229  0.68% 1,011,482  2,320  0.91%
    Interest bearing demand accounts2,342,299  1,159  0.20% 2,186,406  1,117  0.20%
    Total interest bearing deposits3,595,580  2,597  0.29% 3,685,340  3,638  0.39%
    Federal Home Loan Bank borrowings727,513  1,908  1.06% 896,484  2,125  0.94%
    Subordinated notes, net of unamortized debt issuance costs197,252  2,395  4.92% 158,692  2,051  5.14%
    Trust preferred subordinated debentures, net of unamortized debt issuance costs60,256  351  2.36% 60,255  360  2.38%
    Other borrowings23,522  11  0.19% 29,661  23  0.31%
    Total interest bearing liabilities4,604,123  7,262  0.64% 4,830,432  8,197  0.68%
    Noninterest bearing deposits1,389,020      1,381,120     
    Accrued expenses and other liabilities89,222      101,478     
    Total liabilities6,082,365      6,313,030     
    Shareholders’ equity873,693      854,070     
    Total liabilities and shareholders’ equity$6,956,058      $7,167,100     
    Net interest income (FTE)  $49,250      $51,851   
    Net interest margin (FTE)    3.20%     3.20%
    Net interest spread (FTE)    3.03%     3.02%

     

    (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, 2021 and December 31, 2020, loans totaling $5.3 million and $7.7 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, 2020
     Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS     
    Loans (1) $3,815,989  $38,842  4.05%
    Loans held for sale3,934  31  3.13%
    Securities:     
    Taxable investment securities (2)145,724  1,175  3.21%
    Tax-exempt investment securities (2)1,295,179  11,418  3.51%
    Mortgage-backed and related securities (2)1,209,913  7,048  2.32%
    Total securities2,650,816  19,641  2.95%
    Federal Home Loan Bank stock, at cost, and equity investments60,528  249  1.64%
    Interest earning deposits17,668  17  0.38%
    Total earning assets6,548,935  58,780  3.57%
    Cash and due from banks80,368     
    Accrued interest and other assets699,351     
    Less: Allowance for loan losses(61,212)    
    Total assets$7,267,442     
    LIABILITIES AND SHAREHOLDERS’ EQUITY     
    Savings accounts$461,895  192  0.17%
    Certificates of deposit1,172,179  3,568  1.21%
    Interest bearing demand accounts2,069,751  1,102  0.21%
    Total interest bearing deposits3,703,825  4,862  0.52%
    Federal Home Loan Bank borrowings1,037,855  2,369  0.91%
    Subordinated notes, net of unamortized debt issuance costs98,686  1,427  5.75%
    Trust preferred subordinated debentures, net of unamortized debt issuance costs60,253  378  2.50%
    Other borrowings63,526  55  0.34%
    Total interest bearing liabilities4,964,145  9,091  0.73%
    Noninterest bearing deposits1,371,748     
    Accrued expenses and other liabilities96,219     
    Total liabilities6,432,112     
    Shareholders’ equity835,330     
    Total liabilities and shareholders’ equity$7,267,442     
    Net interest income (FTE)  $49,689   
    Net interest margin (FTE)    3.02%
    Net interest spread (FTE)    2.84%

     

    (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, 2020, loans totaling $6.0 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, 2021 September 30, 2020
     Average
    Balance    		 Interest Average
    Yield/Rate    		 Average
    Balance    		 Interest Average
    Yield/Rate
    ASSETS           
    Loans (1) $3,667,941  $110,927  4.04% $3,743,437  $121,162  4.32%
    Loans held for sale2,092  45  2.88% 2,664  68  3.41%
    Securities:           
    Taxable investment securities (2)409,251  9,097  2.97% 103,576  2,419  3.12%
    Tax-exempt investment securities (2)1,373,206  35,076  3.42% 1,168,749  30,815  3.52%
    Mortgage-backed and related securities (2)841,361  15,140  2.41% 1,388,754  27,626  2.66%
    Total securities2,623,818  59,313  3.02% 2,661,079  60,860  3.05%
    Federal Home Loan Bank stock, at cost, and equity investments37,116  355  1.28% 63,683  1,034  2.17%
    Interest earning deposits37,939  56  0.20% 27,299  220  1.08%
    Total earning assets6,368,906  170,696  3.58% 6,498,162  183,344  3.77%
    Cash and due from banks92,206      78,484     
    Accrued interest and other assets672,558      656,952     
    Less: Allowance for loan losses(44,664)     (49,208)    
    Total assets$7,089,006      $7,184,390     
    LIABILITIES AND SHAREHOLDERS’ EQUITY           
    Savings accounts$562,699  689  0.16% $424,530  616  0.19%
    Certificates of deposit674,452  2,954  0.59% 1,240,506  14,731  1.59%
    Interest bearing demand accounts2,433,120  3,527  0.19% 2,019,968  5,663  0.37%
    Total interest bearing deposits3,670,271  7,170  0.26% 3,685,004  21,010  0.76%
    Federal Home Loan Bank borrowings684,280  5,590  1.09% 1,077,861  9,272  1.15%
    Subordinated notes, net of unamortized debt issuance costs196,572  7,235  4.92% 98,642  4,250  5.76%
    Trust preferred subordinated debentures, net of unamortized debt issuance costs60,257  1,045  2.32% 60,252  1,469  3.26%
    Other borrowings22,387  31  0.19% 112,851  365  0.43%
    Total interest bearing liabilities4,633,767  21,071  0.61% 5,034,610  36,366  0.96%
    Noninterest bearing deposits1,475,828      1,242,055     
    Accrued expenses and other liabilities94,536      87,170     
    Total liabilities6,204,131      6,363,835     
    Shareholders’ equity884,875      820,555     
    Total liabilities and shareholders’ equity$7,089,006      $7,184,390     
    Net interest income (FTE)  $149,625      $146,978   
    Net interest margin (FTE)    3.14%     3.02%
    Net interest spread (FTE)    2.97%     2.81%

     

    (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, 2021 and 2020, loans totaling $3.0 million and $6.0 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.
    Non-GAAP Reconciliation (Unaudited)
    (Dollars and shares in thousands, except per share data)

    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.

      Three Months Ended Nine Months Ended
      2021 2020 2021 2020
      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 $29,306  $21,317  $34,091  $29,572  $27,074  $84,714  $52,581 
    After-tax amortization expense 549  577  605  652  696  1,731  2,206 
    Adjusted net income available to common shareholders $29,855  $21,894  $34,696  $30,224  $27,770  $86,445  $54,787 
                   
    Average shareholders' equity $901,828  $878,795  $873,693  $854,070  $835,330  $884,875  $820,555 
    Less: Average intangibles for the period (209,097) (209,808) (210,563) (211,354) (212,221) (209,817) (213,150)
    Average tangible shareholders' equity $692,731  $668,987  $663,130  $642,716  $623,109  $675,058  $607,405 
                   
    Return on average tangible common equity 17.10% 13.13% 21.22% 18.71% 17.73% 17.12% 12.05%
                   
    Reconciliation of book value per share to tangible book value per share:              
    Common equity at end of period $877,866  $894,400  $858,597  $875,297  $839,148  $877,866  $839,148 
    Less: Intangible assets at end of period (208,669) (209,364) (210,094) (210,860) (211,685) (208,669) (211,685)
    Tangible common shareholders' equity at end of period $669,197  $685,036  $648,503  $664,437  $627,463  $669,197  $627,463 
                   
    Total assets at end of period $7,135,691  $7,182,408  $6,998,886  $7,008,227  $7,190,960  $7,135,691  $7,190,960 
    Less: Intangible assets at end of period (208,669) (209,364) (210,094) (210,860) (211,685) (208,669) (211,685)
    Tangible assets at end of period $6,927,022  $6,973,044  $6,788,792  $6,797,367  $6,979,275  $6,927,022  $6,979,275 
                   
    Period end tangible equity to period end tangible assets 9.66% 9.82% 9.55% 9.77% 8.99% 9.66% 8.99%
                   
    Common shares outstanding end of period 32,273  32,675  32,659  32,951  33,072  32,273  33,072 
    Tangible book value per common share $20.74  $20.97  $19.86  $20.16  $18.97  $20.74  $18.97 
                   
    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) $48,206  $45,647  $46,303  $48,707  $46,586  $140,156  $138,558 
    Tax equivalent adjustments:              
    Loans 722  722  736  717  688  2,180  2,035 
    Tax-exempt investment securities 2,666  2,412  2,211  2,427  2,415  7,289  6,385 
    Net interest income (FTE) (1) 51,594  48,781  49,250  51,851  49,689  149,625  146,978 
    Noninterest income 12,769  10,933  13,623  10,900  11,141  37,325  38,832 
    Nonrecurring income (2) (1,381) (15) (2,003) 24  (78) (3,399) (8,281)
    Total revenue $62,982  $59,699  $60,870  $62,775  $60,752  $183,551  $177,529 
                   
    Noninterest expense $31,763  $30,699  $31,234  $31,315  $31,616  $93,696  $91,992 
    Pre-tax amortization expense (695) (730) (766) (825) (881  (2,191) (2,792)
    Nonrecurring expense (3) (888) 64  236  (758) (315) (588) (325)
    Adjusted noninterest expense $30,180  $30,033  $30,704  $29,732  $30,420  $90,917  $88,875 
                   
    Efficiency ratio 50.64% 53.09% 53.01% 49.86% 52.77% 52.23% 52.55%
    Efficiency ratio (FTE) (1) 47.92% 50.31% 50.44% 47.36% 50.07% 49.53% 50.06%
                   
    Average earning assets $6,467,545  $6,395,251  $6,241,434  $6,451,545  $6,548,935  $6,368,906  $6,498,162 
                   
    Net interest margin 2.96% 2.86% 3.01% 3.00% 2.83% 2.94% 2.85%
    Net interest margin (FTE) (1) 3.16% 3.06% 3.20% 3.20% 3.02% 3.14% 3.02%
                   
    Net interest spread 2.79% 2.70% 2.84% 2.83% 2.65% 2.77% 2.64%
    Net interest spread (FTE) (1) 3.00% 2.89% 3.03% 3.02% 2.84% 2.97% 2.81%


    (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 in the periods where applicable.
    (3)These adjustments may include loss on redemption of subordinated notes, foreclosure expenses and branch closure expenses, in the periods where applicable.

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