TYLER, Texas, May 1, 2014 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. ("Southside" or the "Company") (Nasdaq:SBSI) today reported its financial results for the three months ended March 31, 2014.
Southside reported net income of $8.2 million for the three months ended March 31, 2014, a decrease of $818,000, or 9.0%, when compared to $9.0 million for the same period in 2013. Diluted earnings per common share were $0.44 and $0.48 for the three months ended March 31, 2014 and 2013, respectively, a decrease of $0.04, or 8.3%.
The return on average shareholders' equity for the three months ended March 31, 2014, was 12.44%, compared to 14.19% for the same period in 2013. The return on average assets was 0.96% for the three months ended March 31, 2014 compared to 1.14% for the same period in 2013.
"We are pleased to report our financial results for the quarter ended March 31, 2014," stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. "During the first quarter of 2014, our net interest income increased 30.0% as our net interest margin improved 61 basis points to 3.93% when compared to the first quarter 2013. We are pleased with our cost containment efforts that resulted in a slight decrease in total noninterest expense. During the first quarter of 2014, our provision for loan losses increased due in part to unusually low provision expense during the first quarter of 2013 and an increase in the level of charge-offs in the consumer portfolio during first quarter 2014 that appear to have since normalized. We are pleased to report at March 31, 2014, our nonperforming asset totals reflected a decrease of $2.7 million from December 31, 2013, of which approximately 76% of the decrease occurred in the consumer portfolio. In addition, our ratio of nonperforming assets to total assets decreased to 0.32% at the end of the quarter."
"We continued to experience solid loan growth and believe this rate of growth should increase as the year continues. The dynamic Texas markets we serve provide our banking professionals and Southside significant growth opportunities. We look forward to building on these financial results during the balance of 2014 and further enhancing our franchise."
Loans and Deposits
For the three months ended March 31, 2014, total loans increased by $19.1 million, or 1.4%, when compared to December 31, 2013. During the three months ended March 31, 2014, other real estate loans increased $10.3 million, construction loans increased $10.0 million, 1-4 family real estate loans increased $5.3 million, loans to individuals increased $2.0 million, municipal loans decreased $5.4 million, and commercial loans decreased $3.1 million.
Nonperforming assets decreased during the first three months of 2014 by $2.7 million, or 20.0%, to $10.9 million, or 0.32% of total assets, when compared to 0.39% at December 31, 2013.
During the three months ended March 31, 2014, deposits, net of brokered deposits, increased $38.0 million, or 1.5%, compared to December 31, 2013. During this three-month period, public fund deposits increased $15.6 million.
Net Interest Income for the Three Months
Net interest income increased $6.4 million, or 30.0%, to $27.9 million for the three months ended March 31, 2014, when compared to $21.5 million for the same period in 2013. For the three months ended March 31, 2014, our net interest spread increased to 3.80% when compared to 3.14% for the same period in 2013. The net interest margin increased to 3.93% for the three months ended March 31, 2014 compared to 3.32% for the same period in 2013. The reason for the increase in the net interest spread and margin was the increase in the yield on the interest earning assets combined with the decrease in the yield on the interest bearing liabilities of 21 basis points compared to the same period in 2013.
Net Income for the Three Months
Net income decreased $818,000, or 9.0%, for the three months ended March 31, 2014, to $8.2 million when compared to the same period in 2013. The decrease was primarily the result of a decrease in noninterest income of $4.4 million and an increase in provision for loan losses of $3.6 million, which was partially offset by a $5.7 million increase in interest income, a $754,000 decrease in interest expense and a $688,000 decrease in provision for income tax expense.
Noninterest expense decreased $137,000, or 0.7%, for the three months ended March 31, 2014, compared to the same period in 2013.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $3.4 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 50 banking centers in Texas and operates a network of 49 ATMs.
To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/investor. 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 Susan Hill at (903) 531-7220, or firstname.lastname@example.org.
Certain statements of other than historical fact that are contained in this document and in other written material, press releases and oral statements issued by or on behalf of the Company, a bank holding company, may be considered to be "forward-looking statements" within the meaning of and subject to the 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, estimates, intentions and 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, growth and earnings and certain market risk disclosures, including the impact of interest rate and other economic uncertainty, 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. As a result, actual income gains and losses could materially differ from those that have been estimated.
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, 2013 under "Forward-Looking Information" and 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.
| March 31, |
| December 31, |
| March 31, |
|(dollars in thousands)|
|Selected Financial Condition Data (at end of period):|
|Total assets||$ 3,434,344||$ 3,445,663||$ 3,312,283|
|Allowance for loan losses||18,787||18,877||18,542|
|Available for sale, at estimated fair value||915,061||840,258||905,107|
|Held to maturity, at carrying value||265,627||275,569||234,245|
|Available for sale, at estimated fair value||259,662||337,429||685,794|
|Held to maturity, at carrying value||390,889||391,552||1,009|
|Federal Home Loan Bank stock, at cost||27,331||34,065||25,415|
|Accruing loans past due more than 90 days||—||3||2|
|Other real estate owned||476||726||584|
|Asset Quality Ratios:|
|Nonaccruing loans to total loans||0.43%||0.60%||0.67%|
|Allowance for loan losses to nonaccruing loans||320.11||233.40||216.36|
|Allowance for loan losses to nonperforming assets||172.53||138.74||147.38|
|Allowance for loan losses to total loans||1.37||1.40||1.45|
|Nonperforming assets to total assets||0.32||0.39||0.38|
|Net charge-offs to average loans||1.26||0.82||0.81|
|Shareholders' equity to total assets||7.90||7.53||7.73|
|Average shareholders' equity to average total assets||7.70||7.39||8.04|
|Loan Portfolio Composition|
|The following table sets forth loan totals by category for the periods presented:|
| March 31, |
| December 31, |
| March 31, |
|Real Estate Loans:|
|Construction||$ 135,237||$ 125,219||$ 119,326|
|1-4 Family Residential||395,809||390,499||376,421|
|Loans to Individuals||171,841||169,814||166,629|
|Total Loans||$ 1,370,393||$ 1,351,273||$ 1,281,647|
|At or For the|
| Three Months Ended |
|(dollars in thousands)|
|Selected Operating Data:|
|Total interest income||$ 32,239||$ 26,561|
|Total interest expense||4,347||5,101|
|Net interest income||27,892||21,460|
|Provision for loan losses||4,133||492|
|Net interest income after provision for loan losses||23,759||20,968|
|Net gain on sale of securities available for sale||11||4,345|
|Total other-than-temporary impairment losses||—||(52)|
|Portion of loss recognized in other comprehensive income (before taxes)||—||10|
|Net impairment losses recognized in earnings||—||(42)|
|Gain on sale of loans||80||319|
|Bank owned life insurance income||314||254|
|Total noninterest income||5,806||10,240|
|Salaries and employee benefits||13,102||13,209|
|Advertising, travel & entertainment||543||641|
|ATM and debit card expense||317||381|
|Software and data processing expense||501||543|
|Telephone and communications||278||451|
|Total noninterest expense||20,182||20,319|
|Income before income tax expense||9,383||10,889|
|Provision for income tax expense||1,159||1,847|
|Net income||$ 8,224||$ 9,042|
|Common share data:|
|Weighted-average basic shares outstanding||18,818||18,752|
|Weighted-average diluted shares outstanding||18,902||18,773|
|Net income per common share|
|Basic||$ 0.44||$ 0.48|
|Book value per common share||14.42||13.66|
|Cash dividend paid per common share||0.21||0.20|
|At or For the|
| Three Months Ended |
|Selected Performance Ratios:|
|Return on average assets||0.96%||1.14%|
|Return on average shareholders' equity||12.44||14.19|
|Average yield on interest earning assets||4.46||4.01|
|Average yield on interest bearing liabilities||0.66||0.87|
|Net interest spread||3.80||3.14|
|Net interest margin||3.93||3.32|
|Average interest earnings assets to average interest bearing liabilities||123.66||126.82|
|Noninterest expense to average total assets||2.35||2.56|
RESULTS OF OPERATIONS
The analysis below shows average interest earning assets and interest bearing liabilities together with the average yield on the interest earning assets and the average cost of the interest bearing liabilities.
|AVERAGE BALANCES AND YIELDS|
|(dollars in thousands)|
|Three Months Ended|
|March 31, 2014||March 31, 2013|
|INTEREST EARNING ASSETS:|
|Loans (1) (2)||$ 1,364,571||$ 19,375||5.76%||$ 1,267,371||$ 18,628||5.96%|
|Loans Held For Sale||425||5||4.77%||2,266||16||2.86%|
|Investment Securities (Taxable)(4)||26,436||123||1.89%||90,231||364||1.64%|
|Investment Securities (Tax-Exempt)(3)(4)||643,343||8,842||5.57%||513,349||6,672||5.27%|
|Mortgage-backed Securities (4)||1,148,259||7,682||2.71%||1,039,671||3,936||1.54%|
|FHLB stock and other investments, at cost||31,619||70||0.90%||26,912||65||0.98%|
|Interest Earning Deposits||69,392||43||0.25%||66,487||43||0.26%|
|Total Interest Earning Assets||3,284,045||36,140||4.46%||3,006,287||29,724||4.01%|
|NONINTEREST EARNING ASSETS:|
|Cash and Due From Banks||45,991||48,660|
|Bank Premises and Equipment||52,286||50,128|
|Less: Allowance for Loan Loss||(18,648)||(20,003)|
|Total Assets||$ 3,484,776||$ 3,214,637|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|INTEREST BEARING LIABILITIES:|
|Savings Deposits||$ 111,687||35||0.13%||$ 104,420||36||0.14%|
|Interest Bearing Demand Deposits||1,255,678||918||0.30%||1,061,190||872||0.33%|
|Total Interest Bearing Deposits||2,004,911||2,116||0.43%||1,787,854||2,070||0.47%|
|Short-term Interest Bearing Liabilities||89,440||71||0.32%||154,291||1,250||3.29%|
|Long-term Interest Bearing Liabilities – FHLB Dallas||501,066||1,808||1.46%||368,003||1,419||1.56%|
|Long-term Debt (5)||60,311||352||2.37%||60,311||362||2.43%|
|Total Interest Bearing Liabilities||2,655,728||4,347||0.66%||2,370,459||5,101||0.87%|
|NONINTEREST BEARING LIABILITIES:|
|Total Liabilities and Shareholders' Equity||$ 3,484,776||$ 3,214,637|
|NET INTEREST INCOME||$ 31,793||$ 24,623|
|NET INTEREST MARGIN ON AVERAGE EARNING ASSETS||3.93%||3.32%|
|NET INTEREST SPREAD||3.80%||3.14%|
|(1) Interest on loans includes net fees on loans that are not material in amount.|
|(2) Interest income includes taxable-equivalent adjustments of $1,017 and $979 for the three months ended March 31, 2014 and 2013, respectively.|
|(3) Interest income includes taxable-equivalent adjustments of $2,884 and $2,184 for the three months ended March 31, 2014 and 2013, respectively.|
|(4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.|
|(5) Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by FWBS to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.|
|Note: As of March 31, 2014 and 2013, loans on nonaccrual status totaled $5,869 and $8,570, respectively. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.|
CONTACT: Susan Hill (903)531-7220 email@example.com
Source:Southside Bancshares, Inc.