SOUTHSIDE BANCSHARES, INC. 
By TYLER, Texas, Jan. 28 /PRNewswire-FirstCall/ -- Southside Bancshares, Inc. ("Southside" or the "Company") (Nasdaq: SBSI) today reported its financial results for the three months and year ended December 31, 2009.
Southside reported record net income of $10.4 million for the three months ended December 31, 2009, an increase of $8,000, or 0.1%, when compared to the same period in 2008.
Net income for the year ended December 31, 2009, increased $13.7 million, or 44.6%, to a record $44.4 million from $30.7 million for the same period in 2008.
Diluted earnings per share decreased $0.01, or 1.4%, to $0.69 for the three months ended December 31, 2009, when compared to $0.70 for the same period in 2008. Diluted earnings per share increased $0.90, or 43.7%, to $2.96 for the year ended December 31, 2009, compared to $2.06 for the same period in 2008.
The return on average shareholders' equity for the year ended December 31, 2009, increased to 23.69% compared to 21.44%, for the same period in 2008. The annual return on average assets increased to 1.58% for the year ended December 31, 2009, compared to 1.29% for the same period in 2008.
"We are exceptionally pleased to report record annual net income, earnings per share and cash dividends paid to our shareholders," stated B. G. Hartley, Chairman and Chief Executive Officer of Southside Bancshares, Inc. "In addition, we achieved new deposit and loan highs and organically grew our capital position and capital ratios. Our business plan has always been to have a securities portfolio that complements our balance sheet. During periods of growing loan demand and lower credit costs, our securities portfolio is likely to represent a smaller portion of our income statement. However, 2009 was a year of slack credit demand as well as elevated credit costs. Our business plan is designed such that our investment portfolio performance should help mitigate slower loan growth and higher credit costs. Our management team believes we successfully executed our strategic business plan. Due to the extraordinary volatility in the capital markets, we were able to surpass our goals, transforming 2009 into a truly remarkable and landmark year for Southside."
"As a result of the benchmarks achieved, we are able to make two significant announcements. The Board of Directors has approved a 21.4% increase in the cash dividend, from $0.14 to $0.17 per common stock share. Given the significant achievements in 2009, we believe an increase in the common stock cash dividend is appropriate. We are especially pleased to be in a position to continue increasing the cash dividend throughout several economic cycles."
"In a separate action, the Board of Directors authorized a stock repurchase plan. The Board authorized the purchase of up to $6,000,000 of common stock open market purchases at prevailing market prices to be reassessed on a quarterly basis. 2009 was a year of significant gains on the sales of available for sale securities as we repositioned the investment portfolio and benefited from market dislocation. We believe investing a portion of those revenues in a firm we know quite well, Southside Bancshares, Inc., is prudent."
"As 2009 began, the economy was rapidly contracting. However, the government policies developed in the latter half of 2008 prevented even more serious damage to our financial system. As we entered mid-year, the rapid contraction ceased. Many economists believe the recession ended in the latter part of 2009. However, overall economic growth is likely to be muted by continuing high unemployment and the decline in real estate. We continue to manage the bank prudently and are well aware that the economic recovery could be uneven. The year 2010 could be marked by a dramatic change in several areas, most notably Federal Reserve posture, financial regulation, and health care. As always, we will adjust our strategy as appropriate in order to successfully serve shareholders, employees and our communities."
"Our credit losses during 2009 were concentrated in construction and development loans originated by our Fort Worth acquisition and high yield secondary automobile loans purchased by Southside Financial Group. Our nonperforming assets appeared to stabilize during the fourth quarter as nonperforming assets increased a modest 1.1%. We are fortunate that the East Texas economy has performed significantly better than the national economy. We continue to closely monitor our loan portfolio and proactively work with our borrowers."
"During 2009, we were fortunate that our net interest margin remained solid as we restructured our securities portfolio to prepare for a more normal fixed income environment. The Federal Reserve has signaled they will cease buying agency mortgage-backed securities in the first half of 2010 and are likely to prepare the fixed income market for eventual increases in overnight money market rates sometime during 2010. We are preparing for this eventuality in a number of ways. We continue to issue longer term brokered CDs with call options that Southside controls. Should rates rise, it is likely these brokered CDs will not be called and will continue to be a source of funding until maturity. However, should rates fall, we have the option to call these CDs and replace them with more advantageous funding. Given the uncertainty about the direction of interest rates, we value the flexibility this strategy offers. We continue to evaluate our agency mortgage-backed portfolio. We focus considerable energy on the average coupon of the mortgage-backed portfolio. As rates rise and prepayments slow, the book income of higher coupon bonds is designed to increase along with market interest rates. Finally, we have a moderate allocation of bank qualified municipals in the investment portfolio. That allocation currently offers significant income as well as cash flow surety. Our municipal bonds offer complementary economics to our shorter, high coupon agency mortgage-backed portfolio. As the market returns to a more normal environment, it is unlikely the high security gains experienced throughout 2009 will be repeated in subsequent quarters. However, it is important to note that these gains translated into increased capital through earnings which can support franchise growth and the opportunity to expand our traditional banking services. We are committed to further strengthening our franchise as opportunities become clearer."
"From our roots as a small Texas community bank, 50 years ago, to a $3 billion community bank as of December 31, 2009, we remain dedicated to serving our market areas, employees and shareholders. The strength of our balance sheet, combined with the talent and experience of our employees, provides us a wonderful opportunity to continue building our franchise and assisting our market areas for the next 50 years."
Loan and Deposit Growth
For the three months ended December 31, 2009, total loans increased $17.9 million, or 1.8%, compared to September 30, 2009. For the year ended December 31, 2009, total loans increased $11.0 million, or 1.1%, compared to December 31, 2008. The increase occurred primarily in three categories municipal loans, other real estate loans and loans to individuals.
Nonperforming assets appeared to stabilize during the fourth quarter increasing $246,000, or 1.1%, to $23.5 million, or 0.78%, of total assets, for the three months ended December 31, 2009 when compared to September 30, 2009. This increase is primarily related to construction and development loans, most of which are associated with the acquisition of Fort Worth National Bank and, to a lesser extent, loans to individuals purchased by Southside Financial Group.
During the three months ended December 31, 2009, deposits, net of brokered deposits, increased $48.8 million, or 2.9%, compared to September 30, 2009. When comparing December 31, 2009 to December 31, 2008, deposits, net of brokered deposits, increased $223.0 million, or 14.7%. The year over year increase in deposits is the result of an increase in public fund deposits combined with an overall increase in core deposits. Much of the increase in the public fund deposits is temporary and is expected to roll-off over the next twelve months.
Net Interest Income
Net interest income increased $2.4 million, or 10.7%, to $25.2 million for the three months ended December 31, 2009, when compared to $22.7 million for the same period in 2008. For the three months ended December 31, 2009, when compared to the same period in 2008, our net interest spread increased to 3.62% from 3.49%. The net interest margin remained unchanged at 3.96% for the three months ended December 31, 2009 and December 31, 2008. Compared to the three months ended September 30, 2009, the net interest spread for the three months ended December 31, 2009 increased to 3.62% from 3.35%. The net interest margin for the three months ended December 31, 2009, increased to 3.96% from 3.73% when compared to the three months ended September 30, 2009. While credit spreads for agency mortgage-backed securities tightened during the fourth quarter ended December 31, 2009, the yield curve, the spread between short-term U.S. Treasuries and ten year U.S. Treasuries, increased and the slope remains steep.
Net Income for the Three Months
The increase in net income for the three months ended December 31, 2009, when compared to the same period in 2008, was primarily a result of an increase in security gains, an increase in net interest income, a decrease in provision for loan losses and a decrease in provision for income tax expense which were partially offset by an increase in other-than-temporary impairment losses on the $3 million of Trust Preferred Securities we owned at December 31, 2009 and an increase in noninterest expense.
Noninterest expense increased $3.1 million, or 19.2%, for the three months ended December 31, 2009, compared to the same period in 2008. The increase in noninterest expense was primarily a result of increases in personnel expense, occupancy expense, FDIC insurance expense and other expense. The increase in personnel expense was associated with our overall growth and expansion, an increase in retirement expense and health insurance expense, normal salary increases for existing personnel and an increase in incentive pay, all of which are reflected in salaries and employee benefits which increased a combined $1.6 million, or 16.8%, when compared to the same period in 2008. Occupancy expense increased $248,000, or 17.2%, due to the addition of a new banking facility and the overall bank growth. FDIC insurance premiums increased $485,000, or 174.5%, due to an increase in FDIC insurance premium rates and an increase in deposits, when compared to the same period in 2008. Other expense increased $340,000, or 20.1%, when compared to the same period in 2008. The increase in other expense was primarily due to losses on other real estate and retirement of assets.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $3.0 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 44 banking centers in Texas and operates a network of 48 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," "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 of the effect of the Company's expansion, including expectations of the potential profitability of such expansion, trends in asset quality and earnings from growth, and certain market risk disclosures, including the impact of potential interest rate increases, 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, 2008 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.
At At
December 31, December 31,
2009 2008
---- ----
(dollars in thousands)
(unaudited)
Selected Financial Condition Data
(at end of period):
Total assets $3,024,288 $2,700,238
Loans 1,033,576 1,022,549
Allowance for loan losses 19,896 16,112
Mortgage-backed and related
securities:
Available for sale, at estimated
fair value 1,238,182 1,026,513
Held to maturity, at cost 242,665 157,287
Investment securities:
Available for sale, at estimated
fair value 265,060 278,378
Held to maturity, at cost 1,493 478
Federal Home Loan Bank stock, at
cost 38,629 39,411
Deposits 1,870,421 1,556,131
Long-term obligations 592,830 715,800
Shareholders' equity 202,249 161,089
Nonperforming assets 23,453 15,781
Nonaccrual loans 18,629 14,289
Loans 90 days past due 323 593
Restructured loans 1,972 148
Other real estate owned 1,875 318
Repossessed assets 654 433
Asset Quality Ratios:
Nonaccruing loans to total loans 1.80% 1.40%
Allowance for loan losses to
nonaccruing loans 106.80 112.76
Allowance for loan losses to
nonperforming assets 84.83 102.10
Allowance for loan losses to total
loans 1.92 1.58
Nonperforming assets to total assets 0.78 0.58
Net charge-offs to average loans 1.11 0.74
Capital Ratios:
Shareholders' equity to total assets 6.67 5.95
Average shareholders' equity to
average total assets 6.66 6.04
LOAN PORTFOLIO COMPOSITION
The following table sets forth loan totals by category for the periods presented:
At At
December 31, December 31,
2009 2008
---- ----
(in thousands)
(unaudited)
Real Estate Loans:
Construction $88,566 $120,153
1-4 Family Residential 234,379 238,693
Other 212,731 184,629
Commercial Loans 159,529 165,558
Municipal Loans 150,111 134,986
Loans to Individuals 188,260 178,530
------- -------
Total Loans $1,033,576 $1,022,549
========== ==========
At or for the At or for the
Three Months Years
Ended December 31, Ended December 31,
------------------- --------------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in (dollars in
thousands) thousands)
(unaudited) (unaudited)
Selected
Operating Data:
Total interest
income $37,407 $38,245 $145,193 $136,176
Total interest
expense 12,241 15,505 52,672 60,363
------ ------ ------ ------
Net interest
income 25,166 22,740 92,521 75,813
Provision for
loan losses 5,113 5,339 15,093 13,675
----- ----- ------ ------
Net interest
income after
provision for
loan losses 20,053 17,401 77,428 62,138
------ ------ ------ ------
Noninterest
income
Deposit services 4,634 4,572 17,629 18,395
Gain on sale of
securities
available for
sale 7,033 5,760 33,446 12,334
Total other-
than-temporary
impairment
losses (103) - (5,730) -
Portion of loss
recognized in
other
comprehensive
income (before
taxes) (467) - 2,730 -
---- --- ----- ---
Net impairment
losses
recognized in
earnings (570) - (3,000) -
Gain (loss) on
sale of loans (34) 206 1,240 1,757
Trust income 626 575 2,456 2,465
Bank owned life
insurance income 362 864 1,724 2,246
Other 803 717 3,179 3,105
--- --- ----- -----
Total noninterest
income 12,854 12,694 56,674 40,302
------ ------ ------ ------
Noninterest
expense
Salaries and
employee
benefits 11,342 9,707 42,505 37,228
Occupancy expense 1,688 1,440 6,372 5,704
Equipment expense 476 337 1,718 1,305
Advertising,
travel &
entertainment 795 690 2,344 2,097
ATM and debit
card expense 308 306 1,296 1,211
Director fees 305 249 785 674
Supplies 191 228 863 812
Professional fees 561 625 2,218 1,864
Postage 245 190 872 755
Telephone and
communications 371 265 1,424 1,050
FDIC Insurance 763 278 3,943 966
Other 2,029 1,689 7,290 6,686
----- ----- ----- -----
Total noninterest
expense 19,074 16,004 71,630 60,352
------ ------ ------ ------
Income before
income tax
expense 13,833 14,091 62,472 42,088
Provision for
income tax
expense 3,588 3,851 16,609 11,250
----- ----- ------ ------
Net income 10,245 10,240 45,863 30,838
Less: Net
(income) loss
attributable to
the
noncontrolling
interest 132 129 (1,467) (142)
--- --- ------ ----
Net income
attributable to
parent $10,377 $10,369 $44,396 $30,696
======= ======= ======= =======
Common share data
attributable
to parent:
Weighted-average
basic shares
outstanding 14,948 14,692 14,869 14,588
Weighted-average
diluted shares
outstanding 15,033 14,950 15,004 14,913
Net income per
common share
Basic $0.69 $0.70 $2.98 $2.10
Diluted 0.69 0.70 2.96 2.06
Book value per
common share - - 13.47 10.90
Cash dividend
declared per
common share 0.34 0.19 0.75 0.60
At or for the At or for the
Three Months Years
Ended December 31, Ended December 31,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands) (dollars in thousands)
(unaudited) (unaudited)
Selected Performance
Ratios:
Return on average
assets 1.39% 1.58% 1.58% 1.29%
Return on average
shareholders' equity 19.89 27.85 23.69 21.44
Average yield on
interest earning
assets 5.71 6.50 5.82 6.38
Average yield on
interest bearing
liabilities 2.09 3.01 2.39 3.30
Net interest spread 3.62 3.49 3.43 3.08
Net interest margin 3.96 3.96 3.81 3.64
Average interest
earnings assets to
average interest
bearing liabilities 119.08 118.65 119.37 120.66
Noninterest expense to
average total assets 2.56 2.44 2.55 2.54
Efficiency ratio 54.83 50.71 55.57 54.85
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)
Years Ended
December 31, 2009
-----------------------------------------
AVG AVG
BALANCE INTEREST YIELD
-------- -------- -------
ASSETS
INTEREST EARNING
ASSETS:
Loans (1) (2) $1,021,770 $73,654 7.21%
Loans Held For
Sale 4,098 161 3.93%
Securities:
Investment
Securities
(Taxable)(4) 42,598 1,055 2.48%
Investment
Securities
(Tax-
Exempt)(3)(4) 174,003 12,203 7.01%
Mortgage-backed
and Related
Securities (4) 1,320,766 65,463 4.96%
--------- ------
Total Securities 1,537,367 78,721 5.12%
FHLB stock and
other
investments, at
cost 40,786 235 0.58%
Interest Earning
Deposits 21,243 137 0.64%
Federal Funds
Sold 3,925 17 0.43%
----- ---
Total Interest
Earning Assets 2,629,189 152,925 5.82%
NONINTEREST
EARNING ASSETS:
Cash and Due
From Banks 43,504
Bank Premises
and Equipment 45,231
Other Assets 112,702
Less: Allowance
for Loan Loss (17,622)
-------
Total Assets $2,813,004
==========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
INTEREST BEARING
LIABILITIES:
Savings Deposits $65,896 442 0.67%
Time Deposits 688,854 16,360 2.37%
Interest Bearing
Demand Deposits 573,937 5,880 1.02%
------- -----
Total Interest
Bearing
Deposits 1,328,687 22,682 1.71%
Short-term
Interest
Bearing
Liabilities 209,048 4,696 2.25%
Long-term
Interest
Bearing
Liabilities -
FHLB Dallas 604,425 21,885 3.62%
Long-term Debt
(5) 60,311 3,409 5.65%
------ -----
Total Interest
Bearing
Liabilities 2,202,471 52,672 2.39%
NONINTEREST
BEARING
LIABILITIES:
Demand Deposits 379,991
Other
Liabilities 42,318
------
Total
Liabilities 2,624,780
SHAREHOLDERS'
EQUITY (6) 188,224
-------
Total
Liabilities and
Shareholders'
Equity $2,813,004
==========
NET INTEREST
INCOME $100,253
========
NET INTEREST
MARGIN ON
AVERAGE EARNING
ASSETS 3.81%
====
NET INTEREST
SPREAD 3.43%
====
December 31, 2008
---------------------------------------
AVG AVG
BALANCE INTEREST YIELD
-------- -------- ------
ASSETS
INTEREST
EARNING
ASSETS:
Loans (1) (2) $983,336 $75,445 7.67%
Loans Held For
Sale 2,487 121 4.87%
Securities:
Investment
Securities
(Taxable)(4) 46,537 1,723 3.70%
Investment
Securities
(Tax-
Exempt)(3)(4) 103,608 7,074 6.83%
Mortgage-
backed and
Related
Securities (4) 1,034,406 55,470 5.36%
--------- ------
Total
Securities 1,184,551 64,267 5.43%
FHLB stock and
other
investments,
at cost 31,875 841 2.64%
Interest
Earning
Deposits 1,006 22 2.19%
Federal Funds
Sold 4,039 90 2.23%
----- ---
Total Interest
Earning Assets 2,207,294 140,786 6.38%
NONINTEREST
EARNING
ASSETS:
Cash and Due
From Banks 45,761
Bank Premises
and Equipment 40,449
Other Assets 89,473
Less:
Allowance for
Loan Loss (11,318)
-------
Total Assets $2,371,659
==========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
INTEREST
BEARING
LIABILITIES:
Savings
Deposits $57,587 736 1.28%
Time Deposits 535,921 21,727 4.05%
Interest
Bearing Demand
Deposits 500,955 10,428 2.08%
------- ------
Total Interest
Bearing
Deposits 1,094,463 32,891 3.01%
Short-term
Interest
Bearing
Liabilities 290,895 8,969 3.08%
Long-term
Interest
Bearing
Liabilities -
FHLB Dallas 383,677 14,454 3.77%
Long-term Debt
(5) 60,311 4,049 6.71%
------ -----
Total Interest
Bearing
Liabilities 1,829,346 60,363 3.30%
NONINTEREST
BEARING
LIABILITIES:
Demand Deposits 372,160
Other
Liabilities 26,497
------
Total
Liabilities 2,228,003
SHAREHOLDERS'
EQUITY (6) 143,656
-------
Total
Liabilities
and
Shareholders'
Equity $2,371,659
==========
NET INTEREST
INCOME $80,423
=======
NET INTEREST
MARGIN ON
AVERAGE
EARNING ASSETS 3.64%
====
NET INTEREST
SPREAD 3.08%
====
(1) Interest on loans includes fees on loans that are not material in
amount.
(2) Interest income includes taxable-equivalent adjustments of $3,136 and
$2,446 for the years ended December 31, 2009 and 2008, respectively.
(3) Interest income includes taxable-equivalent adjustments of $4,596 and
$2,164 for the years ended December 31, 2009 and 2008, 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.
(6) Includes average equity of noncontrolling interest of $815 and $487
for the years ended December 31, 2009 and 2008, respectively.
Note: As of December 31, 2009 and 2008, loans totaling $18,629 and 14,289,
respectively, were on nonaccrual status. The 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
December 31, 2009
----------------------------------------
AVG AVG
BALANCE INTEREST YIELD
-------- -------- ------
ASSETS
INTEREST EARNING
ASSETS:
Loans (1) (2) $1,024,695 $18,149 7.03%
Loans Held For Sale 3,790 45 4.71%
Securities:
Investment
Securities
(Taxable)(4) 13,785 45 1.30%
Investment
Securities (Tax-
Exempt)(3)(4) 226,190 4,112 7.21%
Mortgage-backed
and Related
Securities (4) 1,448,318 17,475 4.79%
--------- ------
Total Securities 1,688,293 21,632 5.08%
FHLB stock and
other investments,
at cost 40,623 40 0.39%
Interest Earning
Deposits 11,936 16 0.53%
Federal Funds Sold - - -
--- ---
Total Interest
Earning Assets 2,769,337 39,882 5.71%
NONINTEREST EARNING
ASSETS:
Cash and Due From
Banks 41,882
Bank Premises and
Equipment 46,535
Other Assets 121,286
Less: Allowance
for Loan Loss (18,212)
-------
Total Assets $2,960,828
==========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
INTEREST BEARING
LIABILITIES:
Savings Deposits $68,230 90 0.52%
Time Deposits 747,563 3,763 2.00%
Interest Bearing
Demand Deposits 620,645 1,297 0.83%
------- -----
Total Interest
Bearing Deposits 1,436,438 5,150 1.42%
Short-term
Interest Bearing
Liabilities 288,393 1,341 1.84%
Long-term Interest
Bearing
Liabilities - FHLB
Dallas 540,511 4,927 3.62%
Long-term Debt (5) 60,311 823 5.41%
------ ---
Total Interest
Bearing
Liabilities 2,325,653 12,241 2.09%
NONINTEREST BEARING
LIABILITIES:
Demand Deposits 384,750
Other Liabilities 42,607
------
Total Liabilities 2,753,010
SHAREHOLDERS'
EQUITY (6) 207,818
-------
Total Liabilities
and Shareholders'
Equity $2,960,828
==========
NET INTEREST INCOME $27,641
=======
NET INTEREST MARGIN
ON AVERAGE EARNING
ASSETS 3.96%
====
NET INTEREST SPREAD 3.62%
====
December 31, 2008
---------------------------------------
AVG AVG
BALANCE INTEREST YIELD
-------- -------- ------
ASSETS
INTEREST EARNING
ASSETS:
Loans (1) (2) $993,045 $19,627 7.86%
Loans Held For Sale 1,751 22 5.00%
Securities:
Investment
Securities
(Taxable)(4) 44,848 346 3.07%
Investment
Securities (Tax-
Exempt)(3)(4) 163,918 2,950 7.16%
Mortgage-backed
and Related
Securities (4) 1,184,879 16,594 5.57%
--------- ------
Total Securities 1,393,645 19,890 5.68%
FHLB stock and
other investments,
at cost 40,115 185 1.83%
Interest Earning
Deposits 1,240 - 0.00%
Federal Funds Sold 3,803 11 1.15%
----- ---
Total Interest
Earning Assets 2,433,599 39,735 6.50%
NONINTEREST EARNING
ASSETS:
Cash and Due From
Banks 46,270
Bank Premises and
Equipment 41,383
Other Assets 97,416
Less: Allowance
for Loan Loss (13,254)
-------
Total Assets $2,605,414
==========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
INTEREST BEARING
LIABILITIES:
Savings Deposits $59,743 191 1.27%
Time Deposits 530,239 4,524 3.39%
Interest Bearing
Demand Deposits 527,493 2,296 1.73%
------- -----
Total Interest
Bearing Deposits 1,117,475 7,011 2.50%
Short-term
Interest Bearing
Liabilities 266,416 1,844 2.75%
Long-term Interest
Bearing
Liabilities - FHLB
Dallas 606,905 5,626 3.69%
Long-term Debt (5) 60,311 1,024 6.75%
------ -----
Total Interest
Bearing
Liabilities 2,051,107 15,505 3.01%
NONINTEREST BEARING
LIABILITIES:
Demand Deposits 385,134
Other Liabilities 20,708
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Total Liabilities 2,456,949
SHAREHOLDERS'
EQUITY (6) 148,465
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Total Liabilities
and Shareholders'
Equity $2,605,414
==========
NET INTEREST INCOME $24,230
=======
NET INTEREST MARGIN
ON AVERAGE EARNING
ASSETS 3.96%
====
NET INTEREST SPREAD 3.49%
====
(1) Interest on loans includes fees on loans that are not material in
amount.
(2) Interest income includes taxable-equivalent adjustments of $831 and
$621 for the three months ended December 31, 2009 and 2008,
respectively.
(3) Interest income includes taxable-equivalent adjustments of $1,644 and
$869 for the three months ended December 31, 2009 and 2008,
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.
(6) Includes average equity of noncontrolling interest of $879 and $374
for the three months ended December 31, 2009 and 2008, respectively.
Note: As of December 31, 2009 and 2008, loans totaling $18,629 and
$14,289, respectively, were on nonaccrual status. The policy is to
reverse previously accrued but unpaid interest on nonaccrual loans;
thereafter, interest income is recorded to the extent received when
appropriate.
SOURCE Southside Bancshares, Inc.
