SOUTHSIDE BANCSHARES, INC.
ANNOUNCES NET INCOME FOR THE
THREE MONTHS AND YEAR ENDED DECEMBER 31, 2013
NASDAQ Global Select Market Symbol - “SBSI”
Tyler, Texas, (February 10, 2014) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three months and year ended December 31, 2013.
Southside reported net income of $12.9 million for the three months ended December 31, 2013, an increase of $4.7 million, or 57.2%, when compared to $8.2 million for the same period in 2012. Net income for the year ended December 31, 2013 increased $7.2 million, or 20.8%, to $41.9 million when compared to $34.7 million for the same period in 2012. During the fourth quarter, the Company recorded $1.1 million in net income to correct the immaterial cumulative effect of an interest income recognition error related to prior years. This was comprised of $1.4 million of additional interest income, a $549,000 loss on sale of securities and a related tax benefit of $186,000. The error related to recognition of income on its municipal bonds purchased at a premium based on amortizing the premium to the earliest call date instead of amortizing the premium to maturity.
Diluted earnings per common share were $0.72 and $0.45 for the three months ended December 31, 2013 and 2012, respectively, an increase of $0.27, or 60.0%, of which $0.06 related to the immaterial prior period error correction discussed above. For the year ended December 31, 2013, diluted earnings per common share increased $0.43, or 22.5%, to $2.34 when compared to $1.91 for the same period in 2012 of which $0.06 related to the immaterial prior period error correction discussed above.
The return on average shareholders’ equity for the year ended December 31, 2013, was 16.79%, compared to 12.83% for the same period in 2012. The return on average assets was 1.24% for the year ended December 31, 2013 compared to 1.05% for the same period in 2012.
“We are extremely pleased to report the progress Southside Bancshares made during 2013 and our financial results,” stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. “We continued to enjoy success in our Austin and Fort Worth/Arlington markets during 2013, due in part to the opening of a second branch in Austin and our expanding relationship teams in these markets. For the first time in several years we are seeing a significant amount of new economic activity occurring in our strategically important East Texas markets which contributed to the growth we enjoyed during 2013. All of this translated into loan growth of $88.3 million, or 7.0%, during 2013, which was well diversified among our lending categories. We are especially pleased to report that we ended the year on a strong note as 38% of our loan growth for the year occurred during the fourth quarter. The economic conditions in our markets appear to support, and our lending teams believe, that this fourth quarter momentum may continue in 2014. At the end of the year the overall credit quality in our loan portfolio remained sound as reflected in our asset quality ratios.”
“Our net interest margin and net interest spread increased, on a linked quarter basis, every quarter during 2013, and was one of the primary drivers of our $12.8 million, or 14.4%, increase in net interest income and our $7.2 million, or 20.8%, increase in net income. The increase in our net interest margin and spread during 2013 was a result of a 40 basis point decrease in cost of funds for 2013 compared to 2012, an increase in average loans of $116.3 million and an increase in average higher yielding tax free municipal investments of $290.7 million. The significant reduction in cost of funds was primarily the result of maturing and prepaid higher cost FHLB advances that were replaced with deposits and lower cost FHLB advances.”
“As we look forward to 2014 we are fortunate to serve outstanding economically vibrant Texas markets whose future economic prospects appear strong. Texas continues to experience population and business growth at levels above the national average. Our business plan is designed to capitalize on this growth and positive economic climate. Acquisition activity in Texas has accelerated over the past year and we are actively reviewing strategic acquisition possibilities and hope to participate in this activity during 2014. We look forward to the opportunity to build on these positive results in 2014. Thank you for your continued support.”
Loans and Deposits
For the year ended December 31, 2013, total loans increased by $88.3 million, or 7.0%, when compared to December 31, 2012. During the year ended December 31, 2013, real estate loans other increased $25.8 million, municipal loans increased $24.6 million, real estate loans 1-4 family increased $21.7 million, construction loans increased $11.5 million, loans to individuals increased $7.2 million, and commercial loans decreased $2.4 million.
Nonperforming assets decreased for the year ended December 31, 2013 by $165,000, or 1.1%, to $14.6 million, or 0.42% of total assets, when compared to 0.45% at December 31, 2012.
During the year ended December 31, 2013, deposits, net of brokered deposits, increased $141.0 million, or 6.0%, compared to December 31, 2012. During the year ended December 31, 2013, public fund deposits increased $149.4 million.
The following information was filed by Southside Bancshares Inc (SBSI) on Monday, February 10, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.