SBSI · Southside Bancshares, Inc.

Southside Bancshares delivered solid Q1 2026 results with net income of $23.3 million, up 8.1% year-over-year, driven by net interest income growth to $57.7 million (up 7.1% YoY) from lower funding costs and favorable asset mix shifts, alongside a 23.2% surge in noninterest income to $12.6 million fueled by trust fees and other income. Linked quarter, NII edged up 0.8% to $57.7 million as tax-equivalent NIM expanded 3 basis points to 3.01%, aided by an 8 basis point drop in interest-bearing deposit costs to 2.65%. CEO Keith Donahoe highlighted loan growth of 2.7% linked quarter to $4.95 billion, primarily in construction and commercial real estate loans. Noninterest expense rose 9.4% YoY to $40.6 million due to higher salaries, subordinated note redemption loss, and software costs, yielding efficiency ratios of 56.44% (GAAP) and 54.98% (FTE), slightly improved from Q1 2025. Asset quality strengthened markedly with nonperforming assets dropping 74.6% linked quarter to 0.11% of assets after payoff of a $27.5 million restructured CRE loan. Provision for loan losses was $1.0 million, up from minimal prior periods, with allowance steady at 0.93% of loans amid improved economic forecasts. Balance sheet expanded to $8.80 billion in assets, with deposits stable at $6.87 billion and uninsured deposits at 38.4% (21.9% excluding affiliates/public funds). Capital position remains solid with no share repurchases; 0.8 million shares authorized remain. Management anticipates further funding cost relief in Q2 post February redemption of $93 million 7.51% subordinated notes. A $0.36 quarterly dividend was paid, underscoring commitment to shareholders.