Southside Bancshares (SBSI) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $21.5 million, with diluted EPS of $0.71, unchanged from Q1 2024.

• Annualized ROAA was 1.03% and return on average equity was 10.57%.

• Total assets decreased 2.0% to $8.34 billion; loans declined 2.0% to $4.57 billion, mainly due to CRE payoffs.

• Nonperforming assets rose to $32.2 million or 0.39% of total assets, primarily from a $27.5 million restructured commercial real estate loan.

• Shareholders' equity increased 0.6% to $816.6 million, representing 9.8% of total assets.

Financial highlights

• Net interest income was $53.9 million, up 0.9% year-over-year and 0.3% sequentially; net interest margin increased to 2.86% sequentially.

• Noninterest income grew 5.1% year-over-year to $10.2 million, but fell 16.8% sequentially.

• Noninterest expense was $37.1 million, up 0.6% year-over-year but down 2.8% sequentially, mainly from lower salaries and benefits.

• Allowance for loan losses was $44.6 million or 0.98% of total loans.

• Net charge-offs were $0.3 million, flat year-over-year and down from $1.0 million sequentially.

Outlook and guidance

• Management maintains mid-single-digit loan growth guidance for 2025, expecting growth to be weighted toward the second half.

• Net interest margin is expected to improve as CDs reprice lower and new swaps are added.

• Non-interest expense projected to rise to ~$39 million in Q2 due to a one-time branch demolition charge.

• Annual effective tax rate estimated at 18% for 2025.

• Interest rate risk and net interest income are closely monitored; a 200 bps rate drop could decrease net interest income by 1.81%.