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CST: 13/11/2019 19:38:31   

Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2019

19 Days ago

  • Third quarter net income was $19.8 million and earnings per diluted common share were $0.58
  • Linked quarter loans increased $39.8 million, or 1.1%, to $3.50 billion from $3.46 billion
  • Third quarter annualized return on average shareholders’ equity of 9.78% and return on average tangible common equity of 13.96% (1)
  • Third quarter annualized return on average assets of 1.23%
  • Linked quarter nonperforming assets as a percent of total assets decreased from 0.46% to 0.45%

TYLER, Texas, Oct. 25, 2019 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the quarter ended September 30, 2019. Southside reported net income of $19.8 million for the three months ended September 30, 2019, a decrease of $0.5 million, or 2.5%, compared to $20.3 million for the same period in 2018. Earnings per diluted common share of $0.58 for the three months ended September 30, 2019 remained unchanged when compared to the same period in 2018. The annualized return on average shareholders’ equity for the three months ended September 30, 2019 was 9.78%, compared to 10.61% for the same period in 2018. The annualized return on average assets was 1.23% for the three months ended September 30, 2019, compared to 1.30% for the same period in 2018.

“I am extremely pleased to report that Southside had an excellent third quarter highlighted by a linked quarter increase in loans of $39.8 million, a 6.4% increase in linked quarter net income and a 5.5% increase in linked quarter diluted earnings per share of $0.03 per share,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “The loan growth in the third quarter was partially offset by several large prepayments.”

“The increase in our linked quarter net income during the third quarter was largely due to a decrease in provision for loan losses of $1.5 million from the prior quarter. Our net interest margin decreased on a linked quarter basis from 3.17% for the second quarter to 3.03% for the third quarter. Most of the growth in average loans and securities was funded by higher cost FHLB advances. In addition, prepayments on mortgage backed securities increased, resulting in an increase in amortization expense.”

“Economic conditions in our East Texas markets remain solid while economic conditions in our DFW and Austin markets continue to be strong. During the third quarter, we received regulatory approval to open our retail in-store branch in Kingwood, Texas. We look forward to opening this branch during the fourth quarter in this high growth market.”

“On September 5, 2019, the Company’s Board of Directors approved a Stock Repurchase Plan, authorizing the repurchase, from time to time, of up to 1 million shares of the Company’s outstanding common stock. During the third quarter we did not purchase any shares of our common stock. During the fourth quarter through October 23rd, we have purchased 25,615 shares at an average price of $33.47.”

Operating Results for the Three Months Ended September 30, 2019

Net income was $19.8 million for the three months ended September 30, 2019 compared with $20.3 million for the same period in 2018, a decrease of $0.5 million, or 2.5%. Earnings per diluted common share of $0.58 for the three months ended September 30, 2019 remained unchanged when compared to the same period in 2018. The decrease in net income was largely driven by the increase in income tax expense, partially offset by an increase in noninterest income. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2019 were 1.23% and 9.78%, respectively. Our efficiency ratio (FTE) was 50.53% (1) for the three months ended September 30, 2019, an improvement from 51.44% for the three months ended June 30, 2019.

Net interest income for each of the three months ended September 30, 2019 and 2018 was $42.4 million. Linked quarter, net interest income decreased $0.8 million, or 1.8%, compared with $43.1 million during the three months ended June 30, 2019. The decrease in net interest income for the linked quarter was due to the increase in interest expense on our interest bearing liabilities, a result of an increase in average interest bearing liabilities during the three months ended September 30, 2019.

Our tax equivalent net interest margin was 3.03% for the three months ended September 30, 2019 compared with 3.14% for the same period in 2018. The decrease was due to a 24 basis point increase in the average cost on interest bearing liabilities which more than offset the 10 basis point increase in the yield on interest earning assets. Our tax equivalent net interest margin decreased 14 basis points compared to 3.17% for the three months ended June 30, 2019. This decrease was due to a decrease in average yield on interest earning assets of 14 basis points and the increase in average interest bearing liabilities.

Noninterest income was $11.1 million for the three months ended September 30, 2019, an increase of 10.9%, compared with $10.0 million for the same period in 2018. The increase was primarily due to an increase in net gain on sale of securities and deposit services income. On a linked quarter basis, noninterest income decreased $0.1 million, or 1.3%, primarily due to the decrease in net gain on sale of securities.

Noninterest expense was $29.0 million for each of the three months ended September 30, 2019 and 2018. On a linked quarter basis, noninterest expense decreased $0.7 million, or 2.3%, compared to the three months ended June 30, 2019, primarily due to decreases in other noninterest expense and FDIC insurance, partially offset by an increase in salaries and employee benefits.

Income tax expense increased $1.5 million for the three months ended September 30, 2019 compared to the same period in 2018. On a linked quarter basis, income tax expense increased $0.1 million. Our effective tax rate (“ETR”) increased to 15.6% for the three months ended September 30, 2019 compared to 9.7% for the three months ended September 30, 2018 and decreased compared to 16.1% for the three months ended June 30, 2019. The higher ETR for the three months ended September 30, 2019, as compared to the same period in 2018, was primarily due to a discrete tax benefit of approximately $800,000 recorded in 2018 associated with the remeasurement of our net deferred tax asset and a decrease in tax-exempt income as a percentage of pre-tax income for the three months ended September 30, 2019.

Operating Results for the Nine Months Ended September 30, 2019

Net income was $57.2 million for the nine months ended September 30, 2019 compared with $56.8 million for the same period in 2018, an increase of $0.5 million, or 0.8%. Net income per diluted common share was $1.69 for the nine months ended September 30, 2019 compared with $1.61 for the same period in 2018, an increase of 5.0%. The increase in net income was largely driven by increases in interest income and noninterest income, as well as the decrease in provision for loan losses and noninterest expense, partially offset by an increase in interest expense and income tax expense. Annualized returns on average assets and average shareholders’ equity for the nine months ended September 30, 2019 were 1.21% and 9.93%, respectively. Our efficiency ratio (FTE) was 51.85% (1) for the nine months ended September 30, 2019.

Net interest income for the nine months ended September 30, 2019 was $126.6 million compared to $129.7 million during the same period in 2018, a decrease of $3.0 million, or 2.3%. The decrease in net interest income was due to an increase in interest expense, a result of the higher funding costs of our interest bearing liabilities. The increase in interest expense was partially offset by the increase in interest income on our interest earning assets, a result of higher rates and a shift in the mix of earning assets.

Our tax equivalent net interest margin was 3.09% for the nine months ended September 30, 2019 compared with 3.17% for the same period in 2018. The decrease was primarily due to the higher rates paid on interest bearing liabilities.

Noninterest income was $31.9 million for the nine months ended September 30, 2019, an increase of 4.1%, compared with $30.6 million for the same period in 2018. The increase was primarily due to an increase in net gain on sale of securities and deposit services income, partially offset by decreases in trust fees, bank owned life insurance, other noninterest income and gain on sale of loans.

Noninterest expense was $88.4 million for the nine months ended September 30, 2019 compared with $89.9 million for the same period in 2018, a decrease of $1.6 million, or 1.7%. The decrease was primarily due to a decrease in acquisition expense, amortization of intangibles and FDIC insurance, partially offset by increases in salaries and employee benefits, professional fees and software and data processing expense.

Income tax expense increased $2.7 million for the nine months ended September 30, 2019 compared to the same period in 2018. Our ETR was approximately 15.3% and 11.9% for the nine months ended September 30, 2019 and 2018, respectively. The higher ETR for the nine months ended September 30, 2019, as compared to the same period in 2018, was primarily due to a discrete tax benefit of approximately $800,000 recorded in 2018 associated with the remeasurement of our net deferred tax asset and a decrease in tax-exempt income as a percentage of pre-tax income for the nine months ended September 30, 2019.

Balance Sheet Data

At September 30, 2019, we had $6.54 billion in total assets compared with $6.12 billion at December 31, 2018 and $6.37 billion at June 30, 2019.

Loans at September 30, 2019 were $3.50 billion, an increase of $187.1 million, or 5.6%, compared with $3.31 billion at December 31, 2018. Linked quarter loans increased $39.8 million, or 1.1%, from $3.46 billion at June 30, 2019. The linked quarter net increase in our loans consisted of increases of $41.5 million of construction loans, $10.6 million of 1-4 family residential loans, $9.9 million of municipal loans and $0.2 million of loans to individuals, partially offset by decreases of $14.9 million of commercial real estate loans and $7.4 million of commercial loans.

Securities at September 30, 2019 were $2.38 billion, an increase of $229.0 million, or 10.6%, compared with $2.15 billion at December 31, 2018. Linked quarter securities increased $145.5 million, or 6.5%, from $2.24 billion at June 30, 2019.

Deposits at September 30, 2019 were $4.49 billion, an increase of $65.7 million, or 1.5%, compared with $4.43 billion at December 31, 2018. Linked quarter deposits increased $11.5 million, or 0.3%, from $4.48 billion at June 30, 2019 primarily due to an increase in brokered deposits, partially offset by decreases in public fund deposits.

Asset Quality

Nonperforming assets at September 30, 2019 were $29.7 million, or 0.45% of total assets, a decrease of $13.2 million, or 30.7%, compared to $42.9 million, or 0.70% of total assets, at December 31, 2018, and an increase of $0.4 million, or 1.3%, from $29.4 million, or 0.46% of total assets, at June 30, 2019. During the three months ended September 30, 2019, our nonaccrual loans increased $0.8 million, or 4.7%.

The allowance for loan losses decreased to $25.1 million, or 0.72% of total loans at September 30, 2019 compared to $27.0 million, or 0.82% of total loans at December 31, 2018 due to a partial reversal of provision after $1.2 million in charge-offs associated with three large nonaccrual commercial real estate loans sold during the first quarter of 2019. The allowance for loan losses at June 30, 2019 was $24.7 million, or 0.71% of total loans.

For each of the three months ended September 30, 2019 and 2018, we recorded provision for loan losses of $1.0 million compared with $2.5 million for the three months ended June 30, 2019. The provision for loan losses for the nine months ended September 30, 2019 was $2.6 million compared with $6.0 million for the nine months ended September 30, 2018.

Net charge-offs were $0.6 million for the three months ended September 30, 2019 compared with a net recovery of $45,000 for the three months ended September 30, 2018 and $2.0 million net charge-offs for the three months ended June 30, 2019. Net charge-offs were $4.5 million for the nine months ended September 30, 2019 compared with $0.7 million for the nine months ended September 30, 2018.

Dividend

Southside Bancshares, Inc. declared a third quarter cash dividend of $0.31 per share on August 8, 2019, which was paid on September 5, 2019, to all shareholders of record as of August 22, 2019.

_______________
(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.


Conference Call

Southside's management team will host a conference call to discuss its third quarter ended September 30, 2019 financial results on Friday, October 25, 2019 at 9:00 a.m. CDT. The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 6568586 or by identifying “Southside Bancshares, Inc., Third Quarter 2019 Earnings Call.” To listen to the call via webcast, register at http://investors.southside.com.

For those unable to listen to the conference call live, a recording will be available from approximately 12:00 p.m. CDT October 25, 2019 through November 6, 2019 by accessing the company website, http://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% for the nine months ended September 30, 2019 and 2018 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. We believe this measure to be the preferred industry measurement of net interest income and 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 $6.54 billion in assets as of September 30, 2019, that owns 100% of Southside Bank. Southside Bank currently has 59 branches in Texas and operates a network of 81 ATMs/ITMs.

To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/about/investor-relations. 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 Bibby at (903) 630-7965, or lindsey.bibby@southside.com.

Forward-Looking Statements

Certain statements of other than historical fact that are contained in this press release and in other written material, 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,” “likely,” “intend,” “probability,” “risk,” “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 and estimates about the Company's 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 about trends in asset quality, capital, liquidity, the pace of loan and revenue growth, the Company's ability to sell nonperforming assets, expense reductions, planned operational efficiencies, earnings, successful integration of completed acquisitions and certain market risk disclosures, including the impact of interest rates, tax reform 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.

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, 2018, under “Part I - Item 1. Forward Looking Information” and "Part I - Item 1A. Risk Factors" 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
  2019   2018
  Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,
ASSETS                  
Cash and due from banks $ 92,300     $ 77,319     $ 81,981     $ 87,375     $ 85,103  
Interest earning deposits 22,524     54,642     184,612     23,884     70,685  
Federal funds sold     560     3,350     9,460     18,284  
Securities available for sale, at estimated fair value 2,240,381     2,088,787     1,876,255     1,989,436     1,939,277  
Securities held to maturity, at carrying value 140,955     147,091     147,431     162,931     163,365  
Total securities 2,381,336     2,235,878     2,023,686     2,152,367     2,102,642  
Federal Home Loan Bank stock, at cost 45,039     44,718     35,269     32,583     32,291  
Loans held for sale 1,000     1,812     384     601     954  
Loans 3,499,917     3,460,143     3,305,110     3,312,799     3,274,524  
Less: Allowance for loan losses (25,129 )   (24,705 )   (24,155 )   (27,019 )   (26,092 )
Net loans 3,474,788     3,435,438     3,280,955     3,285,780     3,248,432  
Premises & equipment, net 141,683     140,105     138,290     135,972     133,939  
Goodwill 201,116     201,116     201,116     201,116     201,116  
Other intangible assets, net 14,391     15,471     16,600     17,779     19,009  
Bank owned life insurance 99,916     99,294     98,704     98,160     97,611  
Other assets 67,982     66,517     152,249     78,417     95,288  
Total assets $ 6,542,075     $ 6,372,870     $ 6,217,196     $ 6,123,494     $ 6,105,354  
                   
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Noninterest bearing deposits $ 1,038,695     $ 1,028,861     $ 1,038,116     $ 994,680     $ 1,033,572  
Interest bearing deposits 3,452,072     3,450,395     3,529,777     3,430,350     3,519,940  
Total deposits 4,490,767     4,479,256     4,567,893     4,425,030     4,553,512  
Other borrowings and Federal Home Loan Bank borrowings 988,577     849,821     628,498     755,875     570,242  
Subordinated notes, net of unamortized debt issuance costs 98,532     98,490     98,448     98,407     98,366  
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,249     60,248     60,247     60,246     60,244  
Other liabilities 93,497     97,290     104,077     52,645     70,484  
Total liabilities 5,731,622     5,585,105     5,459,163     5,392,203     5,352,848  
Shareholders' equity 810,453     787,765     758,033     731,291     752,506  
Total liabilities and shareholders' equity $ 6,542,075     $ 6,372,870     $ 6,217,196     $ 6,123,494     $ 6,105,354  



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

  Three Months Ended
  2019   2018
  Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,
Income Statement:                  
Total interest income $ 60,555     $ 60,672     $ 59,027     $ 58,022     $ 57,152  
Total interest expense 18,182     17,541     17,902     15,612     14,742  
Net interest income 42,373     43,131     41,125     42,410     42,410  
Provision for loan losses 1,005     2,506     (918 )   2,446     975  
Net interest income after provision for loan losses 41,368     40,625     42,043     39,964     41,435  
Noninterest income                  
Deposit services 6,753     6,652     5,986     6,325     6,317  
Net gain (loss) on sale of securities available for sale 42     416     256     61     (741 )
Gain on sale of loans 131     181     93     101     303  
Trust fees 1,523     1,520     1,541     1,573     1,568  
Bank owned life insurance 622     559     544     554     552  
Brokerage services 555     477     517     499     532  
Other 1,485     1,449     601     1,021     1,491  
Total noninterest income 11,111     11,254     9,538     10,134     10,022  
Noninterest expense                  
Salaries and employee benefits 18,388     17,891     18,046     17,823     17,628  
Net occupancy 3,430     3,289     3,175     3,475     3,396  
Acquisition expense             118     437  
Advertising, travel & entertainment 593     733     847     786     648  
ATM expense 232     246     180     250     251  
Professional fees 1,192     1,069     1,314     1,189     824  
Software and data processing 1,116     1,086     1,076     1,057     977  
Communications 480     489     487     477     354  
FDIC insurance     437     422     455     435  
Amortization of intangibles 1,080     1,129     1,179     1,228     1,279  
Other 2,515     3,331     2,901     3,338     2,733  
Total noninterest expense 29,026     29,700     29,627     30,196     28,962  
Income before income tax expense 23,453     22,179     21,954     19,902     22,495  
Income tax expense 3,661     3,569     3,137     2,521     2,192  
Net income $ 19,792     $ 18,610     $ 18,817     $ 17,381     $ 20,303  
                   
Common Share Data:      
Weighted-average basic shares outstanding 33,773     33,726     33,697     34,611     35,114  
Weighted-average diluted shares outstanding 33,901     33,876     33,846     34,748     35,288  
Common shares outstanding end of period 33,795     33,749     33,718     33,725     35,160  
Net income per common share                  
Basic $ 0.59     $ 0.55     $ 0.56     $ 0.50     $ 0.58  
Diluted 0.58     0.55     0.56     0.50     0.58  
Book value per common share 23.98     23.34     22.48     21.68     21.40  
Tangible book value per common share (1) 17.60     16.92     16.02     15.19     15.14  
Cash dividends paid per common share 0.31     0.31     0.30     0.32     0.30  
                   
Selected Performance Ratios:                  
Return on average assets 1.23 %   1.20 %   1.21 %   1.14 %   1.30 %
Return on average shareholders’ equity 9.78     9.68     10.35     9.30     10.61  
Return on average tangible common equity (1) 13.96     14.12     15.44     13.95     15.70  
Average yield on earning assets (FTE) (1) 4.28     4.42     4.33     4.32     4.18  
Average rate on interest bearing liabilities 1.60     1.61     1.62     1.46     1.36  
Net interest spread (FTE) (1) 2.68     2.81     2.71     2.86     2.82  
Net interest margin (FTE) (1) 3.03     3.17     3.07     3.21     3.14  
Average earning assets to average interest bearing liabilities 128.33     128.99     127.70     131.07     131.12  
Noninterest expense to average total assets 1.80     1.91     1.91     1.98     1.86  
Efficiency ratio (FTE) (1) 50.53     51.44     53.66     52.18     48.91  
  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
  2019   2018
  Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,
Nonperforming Assets: $ 29,747     $ 29,363     $ 38,111     $ 42,906     $ 39,638  
Nonaccrual loans (1) 17,148     16,376     17,691     35,770     32,526  
Accruing loans past due more than 90 days (1)         7,927          
Restructured loans (2) 11,683     11,918     11,490     5,930     5,699  
Other real estate owned 912     1,069     978     1,206     1,413  
Repossessed assets 4         25          
                   
Asset Quality Ratios:                  
Nonaccruing loans to total loans 0.49 %   0.47 %   0.54 %   1.08 %   0.99 %
Allowance for loan losses to nonaccruing loans 146.54     150.86     136.54     75.54     80.22  
Allowance for loan losses to nonperforming assets 84.48     84.14     63.38     62.97     65.83  
Allowance for loan losses to total loans 0.72     0.71     0.73     0.82     0.80  
Nonperforming assets to total assets 0.45     0.46     0.61     0.70     0.65  
Net charge-offs (recoveries) to average loans 0.07     0.23     0.24     0.18     (0.01 )
                   
Capital Ratios:                  
Shareholders’ equity to total assets 12.39     12.36     12.19     11.94     12.33  
Common equity tier 1 capital 14.19     14.02     14.38     14.77     15.90  
Tier 1 risk-based capital 15.61     15.46     15.88     16.29     17.43  
Total risk-based capital 18.65     18.52     19.06     19.59     20.75  
Tier 1 leverage capital 10.46     10.48     10.18     10.64     11.06  
Period end tangible equity to period end tangible assets (3) 9.40     9.28     9.01     8.68     9.05  
Average shareholders’ equity to average total assets 12.54     12.36     11.70     12.23     12.28  
  1. Excludes purchased credit impaired ("PCI") loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated.
  2. Includes $0.8 million, $0.8 million, $0.7 million, $3.1 million and $3.2 million in PCI loans restructured as of September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018 and September 30, 2018, respectively.
  3. 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.



Loan Portfolio Composition

The following table sets forth loan totals by category for the periods presented (in thousands):

  Three Months Ended
  2019   2018
  Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,
Real Estate Loans:                  
Construction $ 621,040     $ 579,565     $ 603,411     $ 507,732     $ 484,254  
1-4 Family Residential 792,638     782,073     786,198     794,499     791,274  
Commercial 1,236,307     1,251,248     1,104,378     1,194,118     1,218,714  
Commercial Loans 382,077     389,521     367,995     356,649     322,873  
Municipal Loans 366,906     357,028     343,026     353,370     344,792  
Loans to Individuals 100,949     100,708     100,102     106,431     112,617  
Total Loans $ 3,499,917     $ 3,460,143     $ 3,305,110     $ 3,312,799     $ 3,274,524  



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

  Nine Months Ended
  September 30,
  2019   2018
Income Statement:      
Total interest income $ 180,254     $ 171,143  
Total interest expense 53,625     41,489  
Net interest income 126,629     129,654  
Provision for loan losses 2,593     5,991  
Net interest income after provision for loan losses 124,036     123,663  
Noninterest income      
Deposit services 19,391     18,757  
Net gain (loss) on sale of securities available for sale 714     (1,900 )
Gain on sale of loans 405     591  
Trust fees 4,584     5,259  
Bank owned life insurance 1,725     2,369  
Brokerage services 1,549     1,488  
Other 3,535     4,075  
Total noninterest income 31,903     30,639  
Noninterest expense      
Salaries and employee benefits 54,325     52,820  
Net occupancy 9,894     10,339  
Acquisition expense     2,295  
Advertising, travel & entertainment 2,173     2,108  
ATM expense 658     840  
Professional fees 3,575     2,846  
Software and data processing 3,278     2,939  
Communications 1,456     1,370  
FDIC insurance 859     1,416  
Amortization of intangibles 3,388     3,985  
Other 8,747     8,945  
Total noninterest expense 88,353     89,903  
Income before income tax expense 67,586     64,399  
Income tax expense 10,367     7,642  
Net income $ 57,219     $ 56,757  
       
Common Share Data:      
Weighted-average basic shares outstanding 33,732     35,066  
Weighted-average diluted shares outstanding 33,878     35,241  
Common shares outstanding end of period 33,795     35,160  
Net income per common share      
Basic $ 1.70     $ 1.62  
Diluted 1.69     1.61  
Book value per common share 23.98     21.40  
Tangible book value per common share (1) 17.60     15.14  
Cash dividends paid per common share 0.92     0.88  
       
Selected Performance Ratios:      
Return on average assets 1.21 %   1.21 %
Return on average shareholders’ equity 9.93     10.06  
Return on average tangible common equity (1) 14.47     15.05  
Average yield on earning assets (FTE) (1) 4.34     4.14  
Average rate on interest bearing liabilities 1.61     1.25  
Net interest spread (FTE) (1) 2.73     2.89  
Net interest margin (FTE) (1) 3.09     3.17  
Average earning assets to average interest bearing liabilities 128.34     129.51  
Noninterest expense to average total assets 1.87     1.91  
Efficiency ratio (FTE) (1) 51.85     49.26  
  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,
  2019   2018
Nonperforming Assets: $ 29,747     $ 39,638  
Nonaccrual loans (1) 17,148     32,526  
Accruing loans past due more than 90 days (1)      
Restructured loans (2) 11,683     5,699  
Other real estate owned 912     1,413  
Repossessed assets 4      
       
Asset Quality Ratios:      
Nonaccruing loans to total loans 0.49 %   0.99 %
Allowance for loan losses to nonaccruing loans 146.54     80.22  
Allowance for loan losses to nonperforming assets 84.48     65.83  
Allowance for loan losses to total loans 0.72     0.80  
Nonperforming assets to total assets 0.45     0.65  
Net charge-offs (recoveries) to average loans 0.18     0.03  
       
Capital Ratios:      
Shareholders’ equity to total assets 12.39     12.33  
Common equity tier 1 capital 14.19     15.90  
Tier 1 risk-based capital 15.61     17.43  
Total risk-based capital 18.65     20.75  
Tier 1 leverage capital 10.46     11.06  
Period end tangible equity to period end tangible assets (3) 9.40     9.05  
Average shareholders’ equity to average total assets 12.21     12.01  
  1. Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated.
  2. Includes $0.8 million and $3.2 million in PCI loans restructured as of September 30, 2019 and September 30, 2018, respectively.
  3. 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.



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.

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

  Three Months Ended
  September 30, 2019   June 30, 2019
  Average Balance   Interest   Average Yield/Rate   Average Balance   Interest   Average Yield/Rate
ASSETS                      
Loans (1) $ 3,477,187     $ 43,780     5.00 %   $ 3,387,323     $ 43,559     5.16 %
Loans held for sale 2,497     26     4.13 %   1,965     21     4.29 %
Securities:                      
Taxable investment securities (2) 3,000     26     3.44 %   3,000     27     3.61 %
Tax-exempt investment securities (2) 555,835     5,328     3.80 %   459,996     4,513     3.94 %
Mortgage-backed and related securities (2) 1,660,331     12,569     3.00 %   1,680,109     13,246     3.16 %
Total securities 2,219,166     17,923     3.20 %   2,143,105     17,786     3.33 %
Federal Home Loan Bank stock, at cost, and equity investments 57,108     422     2.93 %   52,311     440     3.37 %
Interest earning deposits 26,746     206     3.06 %   66,017     411     2.50 %
Federal funds sold             3,365     39     4.65 %
Total earning assets 5,782,704     62,357     4.28 %   5,654,086     62,256     4.42 %
Cash and due from banks 73,815             78,757          
Accrued interest and other assets 570,657             534,835          
Less: Allowance for loan losses (24,938 )           (24,838 )        
Total assets $ 6,402,238             $ 6,242,840          
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Savings accounts $ 367,615     270     0.29 %   $ 365,205     262     0.29 %
Certificates of deposits 1,118,410     6,011     2.13 %   1,119,464     5,861     2.10 %
Interest bearing demand accounts 1,966,764     5,085     1.03 %   1,969,593     5,334     1.09 %
Total interest bearing deposits 3,452,789     11,366     1.31 %   3,454,262     11,457     1.33 %
Federal Home Loan Bank borrowings 881,088     4,647     2.09 %   755,748     3,899     2.07 %
Subordinated notes, net of unamortized debt issuance costs 98,511     1,425     5.74 %   98,469     1,410     5.74 %
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,248     685     4.51 %   60,247     718     4.78 %
Other borrowings 13,401     59     1.75 %   14,530     57     1.57 %
Total interest bearing liabilities 4,506,037     18,182     1.60 %   4,383,256     17,541     1.61 %
Noninterest bearing deposits 1,020,325             1,014,746          
Accrued expenses and other liabilities 72,923             73,494          
Total liabilities 5,599,285             5,471,496          
Shareholders’ equity 802,953             771,344          
Total liabilities and shareholders’ equity $ 6,402,238             $ 6,242,840          
Net interest income (FTE)     $ 44,175             $ 44,715      
Net interest margin (FTE)         3.03 %           3.17 %
Net interest spread (FTE)         2.68 %           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, 2019 and June 30, 2019, loans totaling $17.1 million and $16.4 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, 2019   December 31, 2018
  Average Balance   Interest   Average Yield/Rate   Average Balance   Interest   Average Yield/Rate
ASSETS                      
Loans (1) $ 3,296,665     $ 42,210     5.19 %   $ 3,289,840     $ 41,320     4.98 %
Loans held for sale 611     7     4.65 %   633     8     5.01 %
Securities:                      
Taxable investment securities (2) 3,000     28     3.79 %   13,066     103     3.13 %
Tax-exempt investment securities (2) 659,187     5,732     3.53 %   722,162     7,828     4.30 %
Mortgage-backed and related securities (2) 1,647,564     12,474     3.07 %   1,434,982     10,394     2.87 %
Total securities 2,309,751     18,234     3.20 %   2,170,210     18,325     3.35 %
Federal Home Loan Bank stock, at cost, and equity investments 53,764     355     2.68 %   44,304     393     3.52 %
Interest earning deposits 64,690     386     2.42 %   36,098     411     4.52 %
Federal funds sold 7,635     47     2.50 %   16,967     97     2.27 %
Total earning assets 5,733,116     61,239     4.33 %   5,558,052     60,554     4.32 %
Cash and due from banks 83,147             79,544          
Accrued interest and other assets 513,738             452,257          
Less: Allowance for loan losses (27,060 )           (26,231 )        
Total assets $ 6,302,941             $ 6,063,622          
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Savings accounts $ 360,664     258     0.29 %   $ 361,407     257     0.28 %
Certificates of deposit 1,154,203     5,697     2.00 %   1,123,101     5,170     1.83 %
Interest bearing demand accounts 1,982,891     5,286     1.08 %   1,968,786     4,908     0.99 %
Total interest bearing deposits 3,497,758     11,241     1.30 %   3,453,294     10,335     1.19 %
Federal Home Loan Bank borrowings 816,389     4,457     2.21 %   612,134     3,066     1.99 %
Subordinated notes, net of unamortized debt issuance costs 98,428     1,400     5.77 %   98,385     1,431     5.77 %
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,246     729     4.91 %   60,245     699     4.60 %
Other borrowings 16,788     75     1.81 %   16,405     81     1.96 %
Total interest bearing liabilities 4,489,609     17,902     1.62 %   4,240,463     15,612     1.46 %
Noninterest bearing deposits 986,343             1,034,556          
Accrued expenses and other liabilities 89,768             47,234          
Total liabilities 5,565,720             5,322,253          
Shareholders’ equity 737,221             741,369          
Total liabilities and shareholders’ equity $ 6,302,941             $ 6,063,622          
Net interest income (FTE)     $ 43,337             $ 44,942      
Net interest margin (FTE)         3.07 %           3.21 %
Net interest spread (FTE)         2.71 %           2.86 %
  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, 2019 and December 31, 2018, loans totaling $17.7 million and $35.8 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, 2018
  Average Balance   Interest   Average Yield/Rate
ASSETS          
Loans (1) $ 3,286,664     $ 40,396     4.88 %
Loans held for sale 1,841     25     5.39 %
Securities:          
Taxable investment securities (2) 4,285     36     3.33 %
Tax-exempt investment securities (2) 795,397     8,132     4.06 %
Mortgage-backed and related securities (2) 1,418,114     10,086     2.82 %
Total securities 2,217,796     18,254     3.27 %
Federal Home Loan Bank stock, at cost, and equity investments 54,216     377     2.76 %
Interest earning deposits 77,977     414     2.11 %
Federal funds sold 16,072     77     1.90 %
Total earning assets 5,654,566     59,543     4.18 %
Cash and due from banks 78,623          
Accrued interest and other assets 477,737          
Less: Allowance for loan losses (25,646 )        
Total assets $ 6,185,280          
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Savings accounts $ 362,405     258     0.28 %
Certificates of deposit 1,173,672     4,744     1.60 %
Interest bearing demand accounts 1,953,904     4,495     0.91 %
Total interest bearing deposits 3,489,981     9,497     1.08 %
Federal Home Loan Bank borrowings 654,153     3,108     1.88 %
Subordinated notes, net of unamortized debt issuance costs 98,346     1,423     5.74 %
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,244     684     4.50 %
Other borrowings 9,651     30     1.23 %
Total interest bearing liabilities 4,312,375     14,742     1.36 %
Noninterest bearing deposits 1,064,797          
Accrued expenses and other liabilities 48,699          
Total liabilities 5,425,871          
Shareholders’ equity 759,409          
Total liabilities and shareholders’ equity $ 6,185,280          
Net interest income (FTE)     $ 44,801      
Net interest margin (FTE)         3.14 %
Net interest spread (FTE)         2.82 %
  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, 2018, loans totaling $32.5 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, 2019   September 30, 2018
  Average Balance   Interest   Average Yield/Rate   Average Balance   Interest   Average Yield/Rate
ASSETS                      
Loans (1) $ 3,387,719     $ 129,549     5.11 %   $ 3,290,925     $ 119,662     4.86 %
Loans held for sale 1,698     54     4.25 %   1,727     55     4.26 %
Securities:                      
Taxable investment securities (2) 3,000     81     3.61 %   16,707     314     2.51 %
Tax-exempt investment securities (2) 557,961     15,573     3.73 %   800,998     24,136     4.03 %
Mortgage-backed and related securities (2) 1,662,715     38,289     3.08 %   1,471,179     31,190     2.83 %
Total securities 2,223,676     53,943     3.24 %   2,288,884     55,640     3.25 %
Federal Home Loan Bank stock, at cost, and equity investments 54,407     1,217     2.99 %   58,601     1,202     2.74 %
Interest earning deposits 52,345     1,003     2.56 %   92,477     1,213     1.75 %
Federal funds sold 3,639     86     3.16 %   15,202     197     1.73 %
Total earning assets 5,723,484     185,852     4.34 %   5,747,816     177,969     4.14 %
Cash and due from banks 78,539             77,407          
Accrued interest and other assets 538,248             481,279          
Less: Allowance for loan losses (25,604 )           (23,753 )        
Total assets $ 6,314,667             $ 6,282,749          
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Savings accounts $ 364,520     790     0.29 %   $ 358,870     650     0.24 %
Certificates of deposit 1,130,561     17,569     2.08 %   1,173,000     12,942     1.48 %
Interest bearing demand accounts 1,973,024     15,705     1.06 %   1,981,293     11,937     0.81 %
Total interest bearing deposits 3,468,105     34,064     1.31 %   3,513,163     25,529     0.97 %
Federal Home Loan Bank borrowings 817,978     13,003     2.13 %   757,399     9,747     1.72 %
Subordinated notes, net of unamortized debt issuance costs 98,470     4,235     5.75 %   98,307     4,228     5.75 %
Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,247     2,132     4.73 %   60,242     1,911     4.24 %
Other borrowings 14,894     191     1.71 %   9,018     74     1.10 %
Total interest bearing liabilities 4,459,694     53,625     1.61 %   4,438,129     41,489     1.25 %
Noninterest bearing deposits 1,007,263             1,042,432          
Accrued expenses and other liabilities 76,963             47,591          
Total liabilities 5,543,920             5,528,152          
Shareholders’ equity 770,747             754,597          
Total liabilities and shareholders’ equity $ 6,314,667             $ 6,282,749          
Net interest income (FTE)     $ 132,227             $ 136,480      
Net interest margin (FTE)         3.09 %           3.17 %
Net interest spread (FTE)         2.73 %           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, 2019 and 2018, loans totaling $17.1 million and $32.5 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.



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.

Southside Bancshares, Inc.
Non-GAAP Reconciliation (Unaudited)
(Dollars and shares in thousands, except per share data)

    Three Months Ended   Nine Months Ended
    2019   2018   2019   2018
    Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,   Sept. 30,   Sept. 30,
Reconciliation of return on average common equity to return on average tangible common equity:                            
Net income   $ 19,792     $ 18,610     $ 18,817     $ 17,381     $ 20,303     $ 57,219     $ 56,757  
After-tax amortization expense   853     892     931     970     1,010     2,677     3,148  
Adjusted net income available to common shareholders   $ 20,645     $ 19,502     $ 19,748     $ 18,351     $ 21,313     $ 59,896     $ 59,905  
Average shareholders' equity   $ 802,953     $ 771,344     $ 737,221     $ 741,369     $ 759,409     $ 770,747     $ 754,597  
Less: Average intangibles for the period   (216,169 )   (217,266 )   (218,438 )   (219,645 )   (220,956 )   (217,283 )   (222,325 )
  Average tangible shareholders' equity   $ 586,784     $ 554,078     $ 518,783     $ 521,724     $ 538,453     $ 553,464     $ 532,272  
Return on average tangible common equity   13.96 %   14.12 %   15.44 %   13.95 %   15.70 %   14.47 %   15.05 %
Reconciliation of book value per share to tangible book value per share:                            
Common equity at end of period   $ 810,453     $ 787,765     $ 758,033     $ 731,291     $ 752,506     $ 810,453     $ 752,506  
Less: Intangible assets at end of period   (215,507 )   (216,587 )   (217,716 )   (218,895 )   (220,125 )   (215,507 )   (220,125 )
Tangible common shareholders' equity at end of period   $ 594,946     $ 571,178     $ 540,317     $ 512,396     $ 532,381     $ 594,946     $ 532,381  
Total assets at end of period   $ 6,542,075     $ 6,372,870     $ 6,217,196     $ 6,123,494     $ 6,105,354     $ 6,542,075     $ 6,105,354  
Less: Intangible assets at end of period   (215,507 )   (216,587 )   (217,716 )   (218,895 )   (220,125 )   (215,507 )   (220,125 )
Tangible assets at end of period   $ 6,326,568     $ 6,156,283     $ 5,999,480     $ 5,904,599     $ 5,885,229     $ 6,326,568     $ 5,885,229  
Period end tangible equity to period end tangible assets   9.40 %   9.28 %   9.01 %   8.68 %   9.05 %   9.40 %   9.05 %
Common shares outstanding end of period   33,795     33,749     33,718     33,725     35,160     33,795     35,160  
Tangible book value per common share   $ 17.60     $ 16.92     $ 16.02     $ 15.19     $ 15.14     $ 17.60     $ 15.14  
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)   $ 42,373     $ 43,131     $ 41,125     $ 42,410     $ 42,410     $ 126,629     $ 129,654  
Tax equivalent adjustments:                            
Loans   641     598     598     599     590     1,837     1,755  
Tax-exempt investment securities   1,161     986     1,614     1,933     1,801     3,761     5,071  
Net interest income (FTE) (1)   44,175     44,715     43,337     44,942     44,801     132,227     136,480  
Noninterest income   11,111     11,254     9,538     10,134     10,022     31,903     30,639  
Nonrecurring income (2)   (42 )   (557 )   171     (66 )   741     (428 )   1,264  
Total revenue   $ 55,244     $ 55,412     $ 53,046     $ 55,010     $ 55,564     $ 163,702     $ 168,383  
Noninterest expense   $ 29,026     $ 29,700     $ 29,627     $ 30,196     $ 28,962     $ 88,353     $ 89,903  
Pre-tax amortization expense   (1,080 )   (1,129 )   (1,179 )   (1,228 )   (1,279 )   (3,388 )   (3,985 )
Nonrecurring expense (3)   (33 )   (67 )   18     (264 )   (507 )   (82 )   (2,972 )
Adjusted noninterest expense   $ 27,913     $ 28,504     $ 28,466     $ 28,704     $ 27,176     $ 84,883     $ 82,946  
Efficiency ratio   52.23 %   52.95 %   56.00 %   54.70 %   51.11 %   53.69 %   51.34 %
Efficiency ratio (FTE) (1)   50.53 %   51.44 %   53.66 %   52.18 %   48.91 %   51.85 %   49.26 %
Average earning assets   $ 5,782,704     $ 5,654,086     $ 5,733,116     $ 5,558,052     $ 5,654,566     $ 5,723,484     $ 5,747,816  
Net interest margin   2.91 %   3.06 %   2.91 %   3.03 %   2.98 %   2.96 %   3.02 %
Net interest margin (FTE) (1)   3.03 %   3.17 %   3.07 %   3.21 %   3.14 %   3.09 %   3.17 %
Net interest spread   2.55 %   2.69 %   2.56 %   2.68 %   2.65 %   2.60 %   2.73 %
Net interest spread (FTE) (1)   2.68 %   2.81 %   2.71 %   2.86 %   2.82 %   2.73 %   2.89 %
  1. These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures.
  2. These adjustments may include net gain and loss on sale of securities available for sale, loss on fair value hedge, other-than-temporary impairment charges and additional bank owned life insurance income realized as a result of the death benefits for a retired covered officer, in the periods where applicable.
  3. These adjustments may include acquisition expenses, foreclosure expenses and branch closure expenses, in the periods where applicable.

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