SOUTHSIDE BANCSHARES, INC.
ANNOUNCES FINANCIAL RESULTS FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018
AND STOCK REPURCHASE PLAN
NASDAQ Global Select Market Symbol - “SBSI”
Tyler, Texas, (October 26, 2018) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three and nine months ended September 30, 2018.
Southside reported net income of $20.3 million for the three months ended September 30, 2018, an increase of $5.8 million, or 39.9%, compared to $14.5 million for the same period in 2017. Southside reported net income of $56.8 million for the nine months ended September 30, 2018, an increase of $12.8 million, or 29.0%, compared to $44.0 million for the same period in 2017.
Earnings per diluted common share increased $0.09, or 18.4%, to $0.58 for the three months ended September 30, 2018, from $0.49 for the same period in 2017. Earnings per diluted common share increased $0.12, or 8.1%, to $1.61 for the nine months ended September 30, 2018, from $1.49 for the same period in 2017.
The return on average shareholders’ equity for the nine months ended September 30, 2018 was 10.06%, compared to 10.87% for the same period in 2017. The return on average assets was 1.21% for the nine months ended September 30, 2018, compared to 1.05% for the same period in 2017.
“Highlights for the quarter included record third quarter net income and an efficiency ratio below 50% for a second consecutive quarter,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “We reported net income of $20.3 million, an efficiency ratio of 48.91% and recorded a slight increase in total loans during the third quarter. We also recorded a $741,000 net loss on the sale of available for sale securities and acquisition costs related to the Diboll transaction of $437,000. These expenses were partially offset by a discrete tax benefit of approximately $800,000 recorded during the third quarter associated with the revision of our deferred taxes as a result of the Tax Cuts and Jobs Act passed in December 2017. At this time, we expect fourth quarter acquisition expense to be minimal.”
“During the third quarter we experienced a slight increase in our loans of $3.6 million. For the nine months ended September 30, 2018, loans decreased $19.8 million, which in part, was responsible for the five basis point decrease in our net interest margin on a linked quarter basis. While we believe our loan pipeline remains solid for the remainder of the year with a number of loans expected to fund, we also expect a number of payoffs in the fourth quarter, which may offset most if not all of the loans funded. Economic conditions in our East Texas markets remain solid and the Austin and DFW markets continue to experience robust economies, driven by company relocations and overall population growth.”
“On October 25, 2018 the Company's Board of Directors approved a Stock Repurchase Plan. The Board authorized the repurchase, from time to time, of up to 1,500,000 shares of common stock in open market purchases and privately negotiated transactions at prevailing market prices. We believe repurchasing shares in a company we know quite well, Southside Bancshares, Inc., at current market prices, is prudent. The Company has no obligation to repurchase any shares under the Stock Repurchase Plan and may suspend or discontinue it at any time.”
Loans and Deposits
For the nine months ended September 30, 2018, total loans decreased by $19.8 million, or 0.6%, to $3.27 billion, compared to December 31, 2017. The net decrease in our loans was comprised of decreases of $46.4 million of commercial real estate loans, $23.2 million of loans to individuals, $14.1 million of 1-4 family residential loans and $1.0 million of municipal loans, partially offset by increases of $56.5 million of commercial loans and $8.4 million of construction loans.
Nonperforming assets increased during the nine months ended September 30, 2018 by $29.2 million, or 278.5%, to $39.6 million, or 0.65% of total assets, compared to $10.5 million, or 0.16% of total assets at December 31, 2017, primarily due to the addition of two commercial real estate relationships consisting of three loans to nonaccrual status during the first quarter.
During the nine months ended September 30, 2018, the allowance for loan losses increased by $5.3 million, or 25.6%, to $26.1 million, or 0.80% of total loans, compared to 0.63% of total loans at December 31, 2017. The increase in the allowance was primarily the result of additional provision recorded on the commercial real estate loans placed on nonaccrual status in the first quarter as well as the increase in the impairments on purchased credit impaired loans acquired in connection with the acquisition of Diboll State Bancshares, Inc. in November 2017.
The following information was filed by Southside Bancshares Inc (SBSI) on Friday, October 26, 2018 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.