Southside Bancshares (SBSI) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $20.5 million, up 11.2% year-over-year, with EPS of $0.68 and return on average tangible common equity of 13.69%.

• For the nine months ended September 30, 2024, net income was $66.7 million, down 3.8% from the prior year, with EPS of $2.20.

• Total assets reached $8.36 billion, loans totaled $4.58 billion, and deposits were $6.44 billion at quarter-end.

• Asset quality remained strong, with nonperforming assets at 0.09% of total assets.

• Shareholders' equity rose 4.1% to $805.3 million, representing 9.6% of total assets.

Financial highlights

• Net interest income for Q3 2024 was $55.5 million, up 4.1% year-over-year; net interest margin (FTE) was 2.95%.

• Noninterest income fell 24.6% in Q3 2024 to $8.2 million, mainly due to losses on securities sales.

• Noninterest expense increased 2.2% in Q3 2024 to $36.3 million, driven by higher salaries and software costs.

• Allowance for loan losses was $44.3 million, or 0.97% of total loans; net charge-offs for Q3 2024 were $0.4 million.

• Efficiency ratio (FTE) improved to 51.90% for Q3 2024.

Outlook and guidance

• Loan growth target for 2024 was reduced from 5% to 3% due to anticipated payoffs and economic headwinds.

• C&I lending expansion is underway, with results expected in 2025 as new hires ramp up.

• Noninterest expense expected to be $37 million in Q4 2024; 2025 expenses likely to rise due to hiring and tech investments.

• Annual effective tax rate estimated at 17.6% for 2024.

• Management expects continued economic headwinds from inflation and interest rate volatility but notes Texas markets remain healthy.