SOUTHSIDE BANCSHARES, INC.
ANNOUNCES FINANCIAL RESULTS FOR THE
THREE MONTHS AND YEAR ENDED DECEMBER 31, 2014
NASDAQ Global Select Market Symbol - “SBSI”
Tyler, Texas, (March 2, 2015) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three months and year ended December 31, 2014.
Southside reported a net loss of $3.9 million for the three months ended December 31, 2014, a decrease of $16.1 million, or 132.4%, when compared to net income of $12.2 million for the same period in 2013. The net loss for the fourth quarter is a result of recording approximately $14.8 million of merger-related expenses in connection with the acquisition of OmniAmerican Bancorp, Inc. (“Omni”) and a loss of approximately $4.5 million due to the completion of the sale of subprime automobile loans purchased by SFG Finance, LLC (“SFG”). The merger-related expenses primarily consisted of stock compensation expense, increased professional fees and expenses to cancel software contracts. Net income for the year ended December 31, 2014 decreased $20.4 million, or 49.4%, to $20.8 million when compared to $41.2 million for the same period in 2013. The decrease in net income during the year ended December 31, 2014 is primarily attributable to merger expenses related to the Omni acquisition, the loss related to the sale of the SFG loans and repossessed assets and a decrease in the gain on the sale of securities available for sale of $5.6 million.
Diluted (losses) earnings per common share were $(0.20) and $0.65 for the three months ended December 31, 2014 and 2013, respectively, a decrease of $0.85, or 130.8%. For the year ended December 31, 2014, diluted earnings per common share decreased $1.10, or 50.2% to $1.09 when compared to $2.19 for the same period in 2013.
The return on average shareholders’ equity for the year ended December 31, 2014 was 7.24%, compared to 16.50% for the same period in 2013. The return on average assets was 0.60% for the year ended December 31, 2014 when compared to 1.22% for the same period in 2013.
“During the fourth quarter we completed the acquisition of Omni and the sale of the subprime automobile loans purchased by our wholly-owned subsidiary SFG, including the repossessed assets SFG held,” stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. “We recorded merger-related expense of approximately $14.8 million during the quarter, comprised primarily of $8.9 million of post combination expense for the acceleration of unvested Omni stock options and restricted stock, $2.7 million of investment banking expenses and $2.6 million of expense to cancel Omni software contracts. In addition, during the fourth quarter we recorded an additional loss from the completion of the sale of the SFG subprime automobile loans and repossessed assets of approximately $4.5 million comprised primarily of $2.4 million due to a reduction in the selling price for the SFG loans, $516,000 of additional impairment, $500,000 for a reserve and approximately $500,000 associated with severance packages.”
“With our Omni merger now complete, we look forward to focusing our attention in 2015 on strategically growing our franchise in the greater Fort Worth market area along with our other key markets in the greater Austin area and East Texas. In addition to a focus on integration efforts related to the merger in the first quarter of the year we will concentrate on further organic growth in our commercial loan and commercial real estate loan portfolios. Cost containment efforts as a result of the merger and other bank wide initiatives will also be a major focus area during 2015. Some of our operation areas are being streamlined or further automated to create additional cost efficiencies or to provide enhanced customer service levels.”
“We believe the Texas markets we serve continue to offer significant opportunities to grow our franchise despite the decrease in oil prices. Prices for West Texas Intermediate Crude have decreased from over $100 per barrel last summer to approximately $50 per barrel. Historically, Southside and Omni have never been large energy lenders. At December 31, 2014, we had approximately $40 million of energy-related loans representing approximately 1.8% of total loans. In addition, the markets we serve appear to be less directly impacted by the decline in oil prices than other markets in Texas. However, we are aware that the longer oil prices remain at these levels, the greater the likelihood there may be some residual effects in our market areas. On a positive note for Texas consumers, low oil prices translate to lower gasoline prices and Texas is a large state where daily vehicle use is essential and prevalent. As a result, as long as oil prices remain at these levels, Texas consumers will benefit from the resulting reduced gasoline prices.”
“We are pleased to report that in January 2015, SBSI was included in the S&P SmallCap 600. We are excited about Southside’s prospects and plans for 2015 and believe they will provide an even stronger foundation for our growing franchise in the coming years.”
The following information was filed by Southside Bancshares Inc (SBSI) on Tuesday, March 3, 2015 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.