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Southside Bancshares, Inc. Announces Net Income for the Three and Nine Months Ended September 30, 2014

TYLER, Texas, Oct. 24, 2014 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. ("Southside" or the "Company") (Nasdaq:SBSI) today reported its financial results for the three and nine months ended September 30, 2014.

Southside reported net income of $6.1 million for the three months ended September 30, 2014, a decrease of $2.8 million, or 31.4%, when compared to $8.9 million for the same period in 2013. Net income for the nine months ended September 30, 2014 decreased $4.2 million, or 14.6%, to $24.8 million when compared to $29.0 million for the same period in 2013.

Diluted earnings per common share were $0.32 and $0.47 for the three months ended September 30, 2014 and 2013, respectively, a decrease of $0.15, or 31.9%. For the nine months ended September 30, 2014, diluted earnings per common share decreased $0.23, or 14.9% to $1.31 when compared to $1.54 for the same period in 2013.

The return on average shareholders' equity for the nine months ended September 30, 2014 was 11.92%, compared to 15.47% for the same period in 2013. The return on average assets was 0.97% for the nine months ended September 30, 2014 compared to 1.16% for the same period in 2013.

"We are pleased to report the financial results for the quarter and nine months ended September 30, 2014," stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. "During the third quarter, we experienced meaningful loan growth, including significant loan growth in commercial real estate of $60.7 million. Most of this growth was in our Austin and Fort Worth market areas. We also enjoyed growth in our municipal, construction and commercial loan portfolios during the quarter. Nonperforming assets to total assets decreased to 0.29% at the end of the quarter from 0.42% at June 30, 2014."

"We are extremely gratified that our shareholders overwhelmingly approved the issuance of additional shares of our common stock to acquire OmniAmerican Bancorp, Inc. at the shareholders meeting on October 14, 2014, and we are pleased that OmniAmerican's stockholders have also approved the acquisition. We look forward to strategically expanding Southside's franchise in the growing and dynamic greater Fort Worth market area with the closing of the OmniAmerican merger once we receive final regulatory approvals."

"On October 3, 2014, we announced that we intended to sell all of our subprime automobile loans purchased by our wholly-owned subsidiary, SFG Finance, LLC ("SFG"), as well as the repossessed assets SFG holds and we were endeavoring to complete such a sale in the fourth quarter of 2014. As a result of this decision, we transferred all SFG loans to loans held for sale at September 30, 2014 and recorded a write down on our investment in SFG. The transfer of $74.8 million of SFG loans, to held for sale and the write down of the Company's investment in SFG at September 30, 2014, resulted in a loss of approximately $2.3 million, net of tax. Loan growth during the third quarter more than offset the transfer of loans at September 30, 2014 to loans held for sale. In addition, the transfer to held for sale of our SFG loans in September resulted in a reduction in interest income of approximately $685,000, net of tax."

"Exiting the subprime automobile market, combined with our pending merger with OmniAmerican Bancorp, Inc., will enable us to focus our attention on integration and further organic growth in our commercial loan and commercial real estate loan portfolios. Continued cost containment efforts resulted in a decrease in total noninterest expense for the quarter and nine months ended September 30, 2014, which included approximately $465,000 and $1.1 million, respectively, of merger-related expenses associated with the pending acquisition of OmniAmerican Bancorp."

Loans and Deposits

For the nine months ended September 30, 2014, total loans increased by $47.4 million, or 3.5%, when compared to December 31, 2013. During the nine months ended September 30, 2014, other real estate loans increased $70.0 million, construction loans increased $52.9 million, municipal loans increased $10.8 million, commercial loans increased $4.7 million, 1-4 family real estate loans increased $4.4 million, and loans to individuals decreased $95.4 million. Loans to individuals decreased as a direct result of the subprime automobile loans transferred to held for sale.

Nonperforming assets decreased during the nine months of 2014 by $3.7 million, or 27.5%, to $9.9 million, or 0.29% of total assets, when compared to 0.39% at December 31, 2013, partially due to approximately $2.1 million in nonperforming subprime loans transferred into loans held for sale at September 30, 2014.

During the nine months ended September 30, 2014, the allowance for loan losses decreased $5.5 million, or 28.9%, to $13.4 million, or 0.96% of total loans, when compared to 1.40% at December 31, 2013. The $5.5 million decrease was due to the subprime automobile loans transferred to held for sale. The decrease in the allowance as a percentage of total loans was due to the shift in the risk characteristics of the loan portfolio during the nine months ended September 30, 2014.

During the nine months ended September 30, 2014, deposits, net of brokered deposits, decreased $53.3 million, or 2.2%, compared to December 31, 2013, due to the decrease in public fund deposits of $98.0 million for the nine months ended September 30, 2014.

Net Interest Income for the Three Months

Net interest income decreased $921,000, or 3.5%, to $25.7 million for the three months ended September 30, 2014, when compared to $26.6 million for the same period in 2013. The decrease in net interest income was primarily the result of the decrease in average interest earning assets of $119.0 million, compared to the same period in 2013. For the three months ended September 30, 2014, our net interest spread increased to 3.65% when compared to 3.59% for the same period in 2013. The net interest margin increased to 3.80% for the three months ended September 30, 2014 compared to 3.72% 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 which more than offset the slight increase in the yield on the interest bearing liabilities compared to the same period in 2013.

Net Interest Income for the Nine Months

Net interest income increased $8.5 million, or 11.6%, to $81.5 million for the nine months ended September 30, 2014, when compared to $73.0 million for the same period in 2013. For the nine months ended September 30, 2014, our net interest spread increased to 3.75% from 3.42% for the same period in 2013. The net interest margin increased to 3.89% for the nine months ended September 30, 2014, compared to 3.58% for the same period in 2013.

Net Income for the Three Months

Net income decreased $2.8 million, or 31.4%, for the three months ended September 30, 2014, to $6.1 million when compared to the same period in 2013. The decrease was primarily the result of an increase in provision for loan losses of $1.2 million due to the write down and transfer of SFG purchased loans to held for sale, the impairment charge of $2.2 million on our investment in SFG, a decrease in interest income of $1.0 million due to the transfer of SFG loans to held for sale and $465,000 of merger-related expense associated with the pending acquisition of OmniAmerican, which was partially offset by an increase in net gain on sale of available for sale securities of $1.3 million.

Net Income for the Nine Months

Net income for the nine months ended September 30, 2014 decreased $4.2 million, or 14.6%, to $24.8 million, when compared to $29.0 million for the same period in 2013. This decrease was due to a decrease in net gain on sale of available for sale securities of $7.5 million, a $5.5 million increase in provision for loan losses and the impairment charge of $2.2 million on our investment in SFG. These decreases were partially offset by an increase in net interest income of $8.5 million, and decreases in noninterest expense of $1.1 million and provision for income tax expense of $2.1 million.

Noninterest expense decreased $1.1 million, or 1.8%, for the nine months ended September 30, 2014, compared to the same period in 2013, primarily due to decreases in FHLB prepayment fees, salary and employee benefit expense and occupancy expense, which were partially offset by an increase in professional fees associated with the pending OmniAmerican merger.

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 susan.hill@southside.com.

Forward-Looking Statements

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, the pace of loan growth, 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. In addition, with respect to the pending acquisition of OmniAmerican Bancorp, including future financial and operating results, Southside's and OmniAmerican's plans, objectives, expectations and intentions, the expected timing of completion of the merger and other statements are not historical facts. Among the key factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the following: (i) the risk that a regulatory approval that may be required for the proposed mergers is not obtained or is obtained subject to conditions that are not anticipated; (ii) the risk that a condition to the closing of the mergers may not be satisfied; (iii) the timing to consummate the proposed merger; (iv) the risk that the businesses will not be integrated successfully; (v) the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; (vi) disruption from the transaction making it more difficult to maintain relationships with customers, employees or vendors; (vii) the diversion of management time on merger-related issues; and (viii) liquidity risk affecting Southside's and OmniAmerican's abilities to meet its obligations when they come due.

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.

Additional Information About the Proposed Merger and Where to Find It

This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger between Southside and OmniAmerican, on September 5, 2014, Southside filed with the SEC a joint proxy statement/prospectus of Southside and OmniAmerican which also constitutes a definitive prospectus for Southside. Southside and OmniAmerican delivered the definitive joint proxy statement/prospectus to their respective shareholders or stockholders on or about September 11, 2014. On September 16, 2014, each of Southside and OmniAmerican filed a Current Report on Form 8-K, which also constitutes additional definitive proxy statement materials for OmniAmerican and a definitive prospectus for Southside, that contained supplemental proxy statement materials. SOUTHSIDE AND OMNIAMERICAN URGE INVESTORS AND SECURITY HOLDERS TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders may obtain (when available) copies of all documents filed with the SEC regarding the merger, free of charge, at the SEC's website (www.sec.gov). You may also obtain these documents, free of charge, from (i) Southside's website (www.southside.com) under the tab "Investor Relations," and then under the tab "Documents"; (ii) Southside upon written request to Corporate Secretary, P.O. Box 8444, Tyler, Texas 75711; (iii) OmniAmerican's website (www.omniamerican.com) under the tab "Investor Relations," and then under the tab "SEC Filings"; or (iv) OmniAmerican upon written request to Keishi High at 1320 South University Drive, Suite 900, Fort Worth, Texas 76107.

At At At
September 30, December 31, September 30,
2014 2013 2013
(dollars in thousands)
(unaudited)
Selected Financial Condition Data (at end of period):
Total assets $ 3,368,031 $ 3,445,663 $ 3,469,623
Loans 1,398,674 1,351,273 1,317,568
Allowance for loan losses 13,415 18,877 19,356
Loans held for sale 75,436 151 496
Mortgage-backed securities:
Available for sale, at estimated fair value 674,529 840,258 861,845
Held to maturity, at carrying value 256,528 275,569 293,712
Investment securities:
Available for sale, at estimated fair value 321,221 337,429 363,640
Held to maturity, at carrying value 389,529 391,552 392,208
Federal Home Loan Bank stock, at cost 24,435 34,065 32,781
Deposits 2,443,564 2,527,808 2,408,366
Long-term obligations 536,315 559,660 528,450
Shareholders' equity 291,109 259,518 240,957
Nonperforming assets 9,864 13,606 13,653
Nonaccrual loans 4,685 8,088 8,370
Accruing loans past due more than 90 days 1 3 2
Restructured loans 4,388 3,888 3,802
Other real estate owned 383 726 740
Repossessed assets 407 901 739
Asset Quality Ratios:
Nonaccruing loans to total loans 0.33% 0.60% 0.64%
Allowance for loan losses to nonaccruing loans 286.34 233.40 231.25
Allowance for loan losses to nonperforming assets 136.00 138.74 141.77
Allowance for loan losses to total loans 0.96 1.40 1.47
Nonperforming assets to total assets 0.29 0.39 0.39
Net charge-offs to average loans 1.65 0.82 0.77
Capital Ratios:
Shareholders' equity to total assets 8.64 7.53 6.94
Average shareholders' equity to average total assets 8.12 7.39 7.53

Loan Portfolio Composition

The following table sets forth loan totals by category for the periods presented:

At At At
September 30, December 31, September 30,
2014 2013 2013
(in thousands)
(unaudited)
Real Estate Loans:
Construction $ 178,127 $ 125,219 $ 126,922
1-4 Family Residential 394,889 390,499 387,964
Other 332,519 262,536 252,827
Commercial Loans 162,356 157,655 153,019
Municipal Loans 256,319 245,550 223,063
Loans to Individuals 74,464 169,814 173,773
Total Loans $ 1,398,674 $ 1,351,273 $ 1,317,568
At or For the At or For the
Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
(dollars in thousands)
(unaudited)
Selected Operating Data:
Total interest income $ 29,840 $ 30,811 $ 94,165 $ 86,587
Total interest expense 4,120 4,170 12,697 13,615
Net interest income 25,720 26,641 81,468 72,972
Provision for loan losses 4,868 3,640 11,651 6,153
Net interest income after provision for loan losses 20,852 23,001 69,817 66,819
Noninterest income
Deposit services 3,860 4,005 11,292 11,662
Net gain (loss) on sale of securities available for sale 1,151 (142) 1,660 9,204
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)
Impairment of investment (2,239) (2,239)
Gain on sale of loans 108 130 269 690
Trust income 798 759 2,340 2,212
Bank owned life insurance income 320 327 941 845
Other 1,021 1,334 3,077 3,178
Total noninterest income 5,019 6,413 17,340 27,749
Noninterest expense
Salaries and employee benefits 12,798 13,167 38,992 39,777
Occupancy expense 1,773 1,922 5,313 5,690
Advertising, travel & entertainment 489 599 1,637 1,896
ATM and debit card expense 327 310 946 994
Professional fees 1,132 730 3,363 1,932
Software and data processing expense 543 528 1,530 1,515
Telephone and communications 292 383 890 1,218
FDIC insurance 437 433 1,319 1,263
FHLB prepayment fees 988
Other 2,226 2,192 6,635 6,476
Total noninterest expense 20,017 20,264 60,625 61,749
Income before income tax expense 5,854 9,150 26,532 32,819
(Benefit) provision for income tax expense (243) 257 1,754 3,816
Net income $ 6,097 $ 8,893 $ 24,778 $ 29,003
Common share data:
Weighted-average basic shares outstanding 18,864 18,772 18,838 18,756
Weighted-average diluted shares outstanding 18,965 18,824 18,932 18,790
Net income per common share
Basic $ 0.32 $ 0.47 $ 1.32 $ 1.54
Diluted 0.32 0.47 1.31 1.54
Book value per common share 15.39 12.83
Cash dividend paid per common share 0.22 0.20 0.64 0.60
At or For the At or For the
Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
(unaudited) (unaudited)
Selected Performance Ratios:
Return on average assets 0.72% 1.03% 0.97% 1.16%
Return on average shareholders' equity 8.41 15.01 11.92 15.47
Average yield on interest earning assets 4.32 4.23 4.42 4.16
Average yield on interest bearing liabilities 0.67 0.64 0.67 0.74
Net interest spread 3.65 3.59 3.75 3.42
Net interest margin 3.80 3.72 3.89 3.58
Average interest earnings assets to average interest bearing liabilities 128.27 125.40 126.45 126.82
Noninterest expense to average total assets 2.38 2.34 2.37 2.48
Efficiency ratio 55.05 54.43 53.94 59.17

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)
(unaudited)
Nine Months Ended
September 30, 2014 September 30, 2013
AVG AVG AVG AVG
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
ASSETS
INTEREST EARNING ASSETS:
Loans (1) (2) $ 1,384,269 $ 56,849 5.49% $ 1,285,612 $ 57,531 5.98%
Loans Held For Sale 682 12 2.35% 1,421 35 3.29%
Securities:
Investment Securities (Taxable)(4) 33,943 476 1.87% 54,150 672 1.66%
Investment Securities (Tax-Exempt)(3)(4) 666,084 27,488 5.52% 660,537 25,211 5.10%
Mortgage-backed Securities (4) 1,057,683 21,309 2.69% 1,054,822 13,685 1.73%
Total Securities 1,757,710 49,273 3.75% 1,769,509 39,568 2.99%
FHLB stock and other investments, at cost 28,597 144 0.67% 29,843 135 0.60%
Interest Earning Deposits 49,850 96 0.26% 45,620 93 0.27%
Total Interest Earning Assets 3,221,108 106,374 4.42% 3,132,005 97,362 4.16%
NONINTEREST EARNING ASSETS:
Cash and Due From Banks 42,780 44,416
Bank Premises and Equipment 53,012 50,409
Other Assets 126,457 121,650
Less: Allowance for Loan Loss (18,435) (18,917)
Total Assets $ 3,424,922 $ 3,329,563
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST BEARING LIABILITIES:
Savings Deposits $ 115,633 101 0.12% $ 107,571 106 0.13%
Time Deposits 604,881 3,244 0.72% 632,518 3,479 0.74%
Interest Bearing Demand Deposits 1,215,800 2,631 0.29% 1,064,743 2,497 0.31%
Total Interest Bearing Deposits 1,936,314 5,976 0.41% 1,804,832 6,082 0.45%
Short-term Interest Bearing Liabilities 53,604 353 0.88% 186,520 1,755 1.26%
Long-term Interest Bearing Liabilities – FHLB Dallas 497,076 5,303 1.43% 418,074 4,690 1.50%
Long-term Debt (5) 60,311 1,065 2.36% 60,311 1,088 2.41%
Total Interest Bearing Liabilities 2,547,305 12,697 0.67% 2,469,737 13,615 0.74%
NONINTEREST BEARING LIABILITIES:
Demand Deposits 570,854 562,545
Other Liabilities 28,765 46,693
Total Liabilities 3,146,924 3,078,975
SHAREHOLDERS' EQUITY 277,998 250,588
Total Liabilities and Shareholders' Equity $ 3,424,922 $ 3,329,563
NET INTEREST INCOME $ 93,677 $ 83,747
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS 3.89% 3.58%
NET INTEREST SPREAD 3.75% 3.42%
(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $3,025 and $2,886 for the nine months ended September 30, 2014 and 2013, respectively.
(3) Interest income includes taxable-equivalent adjustments of $9,184 and $7,889 for the nine months ended September 30, 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 the issuance of junior subordinated debentures.

Note: As of September 30, 2014 and 2013, loans on nonaccrual status totaled $4,685 and $8,370, 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.

AVERAGE BALANCES AND YIELDS
(dollars in thousands)
(unaudited)
Three Months Ended
September 30, 2014 September 30, 2013
AVG AVG AVG AVG
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
ASSETS
INTEREST EARNING ASSETS:
Loans (1)(2) $ 1,416,061 $ 18,172 5.09% $ 1,300,606 $ 19,581 5.97%
Loans Held For Sale 1,277 4 1.24% 702 7 3.96%
Securities:
Investment Securities (Taxable) (4) 43,951 210 1.90% 33,128 139 1.66%
Investment Securities (Tax-Exempt)(3)(4) 698,438 9,614 5.46% 773,187 9,819 5.04%
Mortgage-backed Securities (4) 902,406 6,070 2.67% 1,087,403 5,069 1.85%
Total Securities 1,644,795 15,894 3.83% 1,893,718 15,027 3.15%
FHLB stock and other investments, at cost 26,123 36 0.55% 33,472 36 0.43%
Interest Earning Deposits 45,726 31 0.27% 24,472 15 0.24%
Total Interest Earning Assets 3,133,982 34,137 4.32% 3,252,970 34,666 4.23%
NONINTEREST EARNING ASSETS:
Cash and Due From Banks 39,533 40,344
Bank Premises and Equipment 53,626 50,879
Other Assets 132,724 109,716
Less: Allowance for Loan Loss (18,029) (18,667)
Total Assets $ 3,341,836 $ 3,435,242
LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST BEARING LIABILITIES:
Savings Deposits $ 118,745 32 0.11% $ 109,789 35 0.13%
Time Deposits 573,893 1,011 0.70% 660,771 1,199 0.72%
Interest Bearing Demand Deposits 1,168,888 833 0.28% 1,052,529 777 0.29%
Total Interest Bearing Deposits 1,861,526 1,876 0.40% 1,823,089 2,011 0.44%
Short-term Interest Bearing Liabilities 39,146 226 2.29% 254,256 116 0.18%
Long-term Interest Bearing Liabilities – FHLB Dallas 482,241 1,659 1.36% 456,448 1,679 1.46%
Long-term Debt (5) 60,311 359 2.36% 60,311 364 2.39%
Total Interest Bearing Liabilities 2,443,224 4,120 0.67% 2,594,104 4,170 0.64%
NONINTEREST BEARING LIABILITIES:
Demand Deposits 578,866 568,023
Other Liabilities 32,058 38,048
Total Liabilities 3,054,148 3,200,175
SHAREHOLDERS' EQUITY 287,688 235,067
Total Liabilities and Shareholders' Equity $ 3,341,836 $ 3,435,242
NET INTEREST INCOME $ 30,017 $ 30,496
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS 3.80% 3.72%
NET INTEREST SPREAD 3.65% 3.59%
(1) Interest on loans includes net fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $1,008 and $963 for the three months ended September 30, 2014 and 2013, respectively.
(3) Interest income includes taxable-equivalent adjustments of $3,289 and $2,892 for the three months ended September 30, 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 the issuance of junior subordinated debentures.

Note: As of September 30, 2014 and 2013, loans on nonaccrual status totaled $4,685 and $8,370, 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 susan.hill@southside.com

Source:Southside Bancshares, Inc.

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