Southside Bancshares (SBSI) investor relations material

Executive summary

• Net income for Q1 2026 was $23.3 million, up 10.8% year-over-year, with EPS of $0.78, a 9.9% increase from Q1 2025, and annualized ROAA of 1.10%.

• Linked quarter loan growth was 2.7%, with total loans reaching $4.95 billion.

• Total assets grew 3.4% to $8.80 billion from December 31, 2025, driven by increases in loans and securities.

• Nonperforming assets dropped 74.6% to $9.7 million, representing 0.11% of total assets, reflecting improved credit quality.

• Expanded branch footprint and hired a veteran to build out the wealth management team.

Financial highlights

• Net interest income increased 7.1% year-over-year to $57.7 million, with net interest margin (FTE) up to 3.01% from 2.86% year-over-year.

• Noninterest income grew 23.2% year-over-year to $12.6 million, led by higher trust fees, BOLI income, and other fee income.

• Noninterest expense rose 9.4% to $40.6 million, mainly due to higher salaries, benefits, and a one-time retirement expense.

• Allowance for credit losses was $46.0 million, or 0.93% of total loans.

• Securities portfolio grew 6.1% to $2.87 billion, mainly from $313.5 million in MBS purchases.

Outlook and guidance

• Loan growth for 2026 targeted at mid-single digits, with payoffs expected to rise in coming quarters.

• Non-interest expense expected at ~$40.5 million per quarter for the remainder of 2026.

• Management expects further funding cost savings in Q2 2026 following the February redemption of $93 million in subordinated notes with a 7.51% rate.

• Deposit growth expected to pick up in Q2, but at least half of loan growth will be funded with wholesale sources.

• Anticipates improvement in efficiency ratio in Q2 and positive NIM impact if rates remain steady.