Southside Bancshares (SBSI) Q4 2024 earnings summary

Executive summary

• Full-year 2024 net income increased $1.8 million (2.1%) to $88.5 million, with EPS up $0.09 (3.2%) to $2.91 year-over-year.

• Fourth quarter net income rose $1.3 million (25.8%) to $21.8 million, and EPS increased $0.03 (24.6%) to $0.71 sequentially.

• Annualized return on average assets for Q4 was 1.03%, and return on average tangible common equity was 14.12%.

• Loan growth was strong in December, with an $83.5 million increase in Q4, driven by commercial real estate.

• Wealth management and trust revenues are expected to grow at least 16% in 2025 due to recent strategic hires.

Financial highlights

• Loans ended the year at $4.66 billion, up $137.1 million (3%) year-over-year.

• Deposits increased $218.5 million (3.4%) sequentially, led by public fund deposits; year-end deposits were $6.65 billion, up 1.6% year-over-year.

• Net interest margin (NIM) for Q4 was 2.83%, down 12 bps sequentially and from 2.99% a year ago; Q4 net interest income was $53.7 million, down 1.4% year-over-year and 3.2% sequentially.

• Non-interest income (excluding AFS securities sales) rose $2.2 million (21.6%) sequentially, mainly from swap and mortgage servicing fees; Q4 noninterest income surged 391% year-over-year to $12.3 million.

• Non-interest expense increased $1.8 million (5%) sequentially and 8.5% year-over-year to $38.2 million, including $540,000 in branch closure losses.

Outlook and guidance

• Budgeting mid-single-digit loan growth for 2025, with positive NIM expectations as yield curve normalizes.

• Non-interest expense projected to rise 5.7% in 2025, including a $1 million one-time branch demolition charge.

• Effective tax rate estimated at 17.7% for 2025.

• Anticipates margin expansion mainly in Q2–Q4 2025 as hedges roll off and loan growth materializes.

• Asset quality metrics expected to remain solid, with focus on loan growth and margin improvement.