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Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2021
Source: Nasdaq GlobeNewswire / 26 Oct 2021 06:00:01 America/New_York
- Third quarter net income of $29.3 million;
- Third quarter earnings per diluted common share of $0.90;
- Annualized linked quarter loan growth, net of Paycheck Protection Program (“PPP”) loans, 7.9%;
- Annualized linked quarter deposit growth of 13.5%;
- Linked quarter net interest margin increased to 3.16%;
- Annualized return on third quarter average assets of 1.61%;
- Annualized return on third quarter average tangible common equity of 17.10%(1); and
- Nonperforming assets decreased to 0.17% of total assets.
TYLER, Texas, Oct. 26, 2021 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter ended September 30, 2021. Southside reported net income of $29.3 million for the three months ended September 30, 2021, an increase of $2.2 million, or 8.2%, compared to $27.1 million for the same period in 2020. Earnings per diluted common share were $0.90 and $0.82 for the three months ended September 30, 2021 and 2020, respectively. The annualized return on average shareholders’ equity for the three months ended September 30, 2021 and 2020 was 12.89%. The annualized return on average assets was 1.61% for the three months ended September 30, 2021, compared to 1.48% for the same period in 2020.
“We reported outstanding third quarter financial results, highlighted by annualized linked quarter deposit and loan growth, net of PPP loans, of 13.5% and 7.9%, respectively, an increase in our net interest margin to 3.16%, net income of $29.3 million and continued strong asset quality,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “These results could not have been achieved without the tremendous efforts and contributions of the entire Southside team and for this, I am extremely proud and grateful.”
“On September 30, 2021, we redeemed our 5.5% coupon $100 million subordinated notes due 2026, which will have a positive impact on our net interest margin in the fourth quarter. We expensed $1.1 million during the third quarter in connection with the redemption of the subordinated notes.”
“Our loan pipeline is strong, however, anticipated payoffs in the fourth quarter will generate some continued headwinds. We remain encouraged by the continued strong economic conditions in the market areas we serve.”
Operating Results for the Three Months Ended September 30, 2021
Net income was $29.3 million for the three months ended September 30, 2021, compared to $27.1 million for the same period in 2020, an increase of $2.2 million, or 8.2%. Earnings per diluted common share were $0.90 and $0.82 for the three months ended September 30, 2021 and 2020, respectively. The increase in net income was primarily a result of an increase in noninterest income and net interest income, partially offset by an increase in income tax expense. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2021 were 1.61% and 12.89%, respectively, compared to 1.48% and 12.89, respectively, for the three months ended September 30, 2020. Our efficiency ratio and tax equivalent efficiency ratio(1) were 50.64% and 47.92%, respectively, for the three months ended September 30, 2021, compared to 52.77% and 50.07%, respectively, for the three months ended September 30, 2020, and 53.09% and 50.31%, respectively, for the three months ended June 30, 2021.
Net interest income for the three months ended September 30, 2021 was $48.2 million, compared to $46.6 million for the same period in 2020, an increase of 3.5%. The increase in net interest income compared to the same period in 2020 was due to the decrease in interest expense on our interest bearing liabilities due to the overall decline in interest rates and a decline in the average balance of our interest bearing liabilities, partially offset by the decrease in interest income, a result of a decrease in the average balance of our interest earning assets during the three months ended September 30, 2021. Linked quarter, net interest income increased $2.6 million, or 5.6%, compared to $45.6 million during the three months ended June 30, 2021. The increase in net interest income is primarily due to an increase in the average yield and balance on our interest earning assets.
Our net interest margin and tax equivalent net interest margin(1) increased to 2.96% and 3.16%, respectively, for the three months ended September 30, 2021, compared to 2.83% and 3.02%, respectively, for the same period in 2020. Linked quarter, net interest margin and tax equivalent net interest margin(1) increased 10 basis points from 2.86% and 3.06%, respectively, for the three months ended June 30, 2021.
Noninterest income was $12.8 million for the three months ended September 30, 2021, an increase of $1.6 million, or 14.6%, compared to $11.1 million for the same period in 2020. The increase was due to increases in net gain on sale of securities AFS, deposit services income, brokerage services income and trust fees, partially offset by a decrease in gain on sale of loans. On a linked quarter basis, noninterest income increased $1.8 million, or 16.8%, compared to the three months ended June 30, 2021. The increase was due to an increase in net gain on sale of securities available for sale, other noninterest income and deposit services income.
Noninterest expense was $31.8 million for the three months ended September 30, 2021, an increase of $0.1 million, or 0.5%, compared to $31.6 million for the same period in 2020, a result of a $1.1 million loss on the redemption of subordinated notes, as well as a $0.4 million increase in salaries and employee benefits and a $0.3 million increase in software and data processing expense, partially offset by a $1.8 million decrease in other noninterest expense. On a linked quarter basis, noninterest expense increased $1.1 million, or 3.5%, compared to the three months ended June 30, 2021, due to the $1.1 million loss on the redemption of subordinated notes during the three months ended September 30, 2021.
Income tax expense increased $1.2 million for the three months ended September 30, 2021 compared to the same period in 2020. On a linked quarter basis, income tax expense increased $2.1 million, or 72.4%. Our effective tax rate (“ETR”) increased to 14.5% for the three months ended September 30, 2021, compared to 12.3% for the three months ended September 30, 2020. Linked quarter, our ETR increased from 11.9% for the three months ended June 30, 2021. The increase for both periods was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.
Operating Results for the Nine Months Ended September 30, 2021
Net income was $84.7 million for the nine months ended September 30, 2021, compared to $52.6 million for the same period in 2020, an increase of $32.1 million, or 61.1%. Earnings per diluted common share were $2.59 for the nine months ended September 30, 2021, compared to $1.58 for the same period in 2020, an increase of 63.9%. The increase in net income was a direct result of a reversal of the provision for credit losses compared to a large build-up in the allowance for credit losses in the same period in 2020. Annualized returns on average assets and average shareholders’ equity for the nine months ended September 30, 2021 were 1.60% and 12.80%, respectively, compared to 0.98% and 8.56%, respectively, for the nine months ended September 30, 2020. Our efficiency ratio and tax equivalent efficiency ratio(1) were 52.23% and 49.53%, respectively, for the nine months ended September 30, 2021, compared to 52.55% and 50.06%, respectively, for the nine months ended September 30, 2020.
Net interest income was $140.2 million for the nine months ended September 30, 2021, compared to $138.6 million for the same period in 2020, due to the decrease in interest expense on our interest bearing liabilities, partially offset by the decrease in interest income, both primarily a result of an overall decline in interest rates.
Our net interest margin and tax equivalent net interest margin(1) were 2.94% and 3.14%, respectively, for the nine months ended September 30, 2021, compared to 2.85% and 3.02%, respectively, for the same period in 2020. The increase in net interest margin was due to lower average rates and balances on our interest bearing liabilities, partially offset by a lower average yield on our interest earning assets during the nine months ended September 30, 2021.
Noninterest income was $37.3 million for the nine months ended September 30, 2021, a decrease of 3.9%, compared to $38.8 million for the same period in 2020. The decrease was due to decreases in net gain on sale of securities AFS and gain on sale of loans, partially offset by increases in deposit services income, other noninterest income, brokerage services income and trust fees.
Noninterest expense was $93.7 million for the nine months ended September 30, 2021, compared to $92.0 million for the same period in 2020, an increase of $1.7 million, or 1.9%. The increase was the result of increases in salaries and employee benefits, a loss on the redemption of subordinated notes, increases in FDIC insurance and software and data processing expense, partially offset by decreases in other noninterest expense and amortization of intangibles.
Income tax expense increased $5.5 million, or 78.4%, for the nine months ended September 30, 2021, compared to the same period in 2020. Our ETR was approximately 13.0% and 11.9% for the nine months ended September 30, 2021 and 2020, respectively. The higher ETR for the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.
Balance Sheet Data
At September 30, 2021, we had $7.14 billion in total assets, compared to $7.01 billion at December 31, 2020 and $7.19 billion at September 30, 2020.
Loans at September 30, 2021 were $3.65 billion, a decrease of $142.4 million, or 3.8%, compared to $3.79 billion at September 30, 2020. This decrease was due to a $235.3 million decrease in our PPP loans, a component of the commercial loan category, with a remaining balance of $67.5 million at September 30, 2021, as well as decreases of $188.3 million in construction loans and $77.7 million in 1-4 family residential loans. These decreases were partially offset by increases of $277.9 million in commercial real estate loans, $49.8 million of commercial loans, excluding PPP loans, and $40.0 million in municipal loans. Linked quarter loans increased $5.2 million, or 0.1%, from $3.64 billion at June 30, 2021. The linked quarter net increase in loans consisted of an increase of $174.2 million in commercial real estate loans and $9.9 million of municipal loans. The linked quarter increases were partially offset by decreases of $106.1 million of construction loans, $53.8 million of commercial loans and $17.7 million in 1-4 family loans. The decrease in construction loans was primarily the result of payoffs and completed projects converting to permanent financing. On a linked quarter basis, our PPP loans decreased $64.6 million, or 48.9%, from $132.1 million at June 30, 2021, due to forgiveness payments received from loans funded under the Coronavirus Aid, Relief, and Economic Security Act.
Securities at September 30, 2021 were $2.85 billion, an increase of $97.0 million, or 3.5%, compared to $2.75 billion at September 30, 2020. Linked quarter, securities decreased $15.3 million, or 0.5%, from $2.86 billion at June 30, 2021.
Deposits at September 30, 2021 were $5.33 billion, an increase of $228.6 million, or 4.5%, compared to $5.10 billion at September 30, 2020. Linked quarter, deposits increased $175.5 million, or 3.4%, from $5.16 billion at June 30, 2021.
On March 12, 2020, the Board of the Company increased its authorization under the Stock Repurchase Plan, previously authorized in September 2019, by an additional 1.0 million shares, for a total authorization to repurchase up to 2.0 million shares. During the third quarter ended September 30, 2021, we purchased the remaining 420,204 shares authorized at an average price of $36.74. As of September 30, 2021, there were no authorized shares remaining to be purchased under the Stock Repurchase Plan.
Asset Quality
Nonperforming assets at September 30, 2021 were $12.4 million, or 0.17% of total assets, a decrease of $4.4 million, or 26.1%, compared to $16.8 million, or 0.23% of total assets, at September 30, 2020, and a decrease from $15.3 million, or 0.21% of total assets, at June 30, 2021. During the three months ended September 30, 2021, nonaccrual loans decreased $2.1 million, or 41.5%.
The allowance for loan losses decreased to $38.0 million, or 1.04% of total loans, at September 30, 2021, compared to $55.1 million, or 1.45% of total loans, at September 30, 2020. The decrease was primarily due to an improved economic forecast. The allowance for loan losses was $42.9 million, or 1.18% of total loans, at June 30, 2021.
We recorded a reversal of provision for credit losses for loans of $4.4 million for both of the three month periods ended September 30, 2021 and 2020, as compared to a provision for credit losses of $1.5 million for the three months ended June 30, 2021. The decrease was primarily due to an improved economic forecast as compared to the end of the second quarter. Net charge-offs were $0.5 million for the three months ended September 30, 2021, compared to net charge-offs of $0.4 million for the three months ended September 30, 2020 and $0.1 million of net charge-offs for the three months ended June 30, 2021. Net charge-offs were $0.7 million for the nine months ended September 30, 2021, compared to $1.0 million for the nine months ended September 30, 2020.
We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.7 million for the three months ended September 30, 2021, as compared to a reversal of provision of $0.3 million for the three months ended September 30, 2020 and a provision of $0.2 million for the three months ended June 30, 2021. For the nine months ended September 30, 2021, we recorded a reversal of provision of $3.3 million, compared to a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.3 million for the nine months ended September 30, 2020. The balance of the allowance for off-balance-sheet credit exposures at September 30, 2021 was $3.1 million and is included in other liabilities.
Dividend
Southside Bancshares, Inc. declared a third quarter cash dividend of $0.33 per share on August 5, 2021, which was paid on September 2, 2021, to all shareholders of record as of August 19, 2021.
(1) Refer to “Non-GAAP Financial Measures” below and to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for more information and for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. Conference Call
Southside's management team will host a conference call to discuss its third quarter ended September 30, 2021 financial results on Tuesday, October 26, 2021 at 11:00 a.m. CDT. The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 5179572 or by identifying “Southside Bancshares, Inc., Third Quarter 2021 Earnings Call.” To listen to the call via webcast, register at https://investors.southside.com.
For those unable to listen to the conference call live, a recording will be available from approximately 2:00 p.m. CDT October 26, 2021 through 1:00 p.m. CST November 7, 2021 by accessing the company website, https://investors.southside.com.
Non-GAAP Financial Measures
Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include the following fully taxable-equivalent measures (“FTE”): (i) Net interest income (FTE), (ii) net interest margin (FTE), (iii) net interest spread (FTE), and (iv) efficiency ratio (FTE), which include the effects of taxable-equivalent adjustments using a federal income tax rate of 21% to increase tax-exempt interest income to a tax-equivalent basis. Interest income earned on certain assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments.
Net interest income (FTE), net interest margin (FTE) and net interest spread (FTE). Net interest income (FTE) is a non-GAAP measure that adjusts for the tax-favored status of net interest income from certain loans and investments and is not permitted under GAAP in the consolidated statements of income. We believe this measure to be the preferred industry measurement of net interest income and that it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread (FTE) is the difference in the average yield on average earning assets on a tax-equivalent basis and the average rate paid on average interest bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.
Efficiency ratio (FTE). The efficiency ratio (FTE) is a non-GAAP measure that provides a measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. The ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense, excluding amortization expense on intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding net gain (loss) on sale of securities available for sale and certain nonrecurring impairments. The most directly comparable financial measure calculated in accordance with GAAP is our efficiency ratio.
These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. Whenever we present a non-GAAP financial measure in an SEC filing, we are also required to present the most directly comparable financial measure calculated and presented in accordance with GAAP and reconcile the differences between the non-GAAP financial measure and such comparable GAAP measure.
Management believes adjusting net interest income, net interest margin and net interest spread to a fully taxable-equivalent basis is a standard practice in the banking industry as these measures provide useful information to make peer comparisons. Tax-equivalent adjustments are reflected in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables.
A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $7.14 billion in assets as of September 30, 2021, that owns 100% of Southside Bank. Southside Bank currently has 55 branches in Texas and operates a network of 73 ATMs/ITMs.
To learn more about Southside Bancshares, Inc., please visit our investor relations website at https://investors.southside.com. 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 Lindsey Bailes at (903) 630-7965, or lindsey.bailes@southside.com.
Forward-Looking Statements
Certain statements of other than historical fact that are contained in this press release and in other written materials, documents and oral statements issued by or on behalf of the Company may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor 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,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “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 our expansion, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, the Company's ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates, tax reform, inflation and other economic factors 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. Accordingly, our results could materially differ from those that have been estimated. The most recent factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the negative impact of the COVID-19 pandemic and related variants on our business, financial position, operations and prospects, including our ability to continue our business activities in certain communities we serve, the duration of the pandemic and its continued effects on financial markets, a reduction in financial transactions and business activities resulting in decreased deposits and reduced loan originations, increases in unemployment rates impacting our borrowers’ ability to repay their loans, our ability to manage liquidity in a rapidly changing and unpredictable market, additional interest rate changes by the Federal Reserve and other government actions in response to the pandemic, including regulations or laws enacted to counter the effects of the COVID-19 pandemic on the economy.
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, 2020, under “Part I - Item 1. Forward Looking Information” 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.
Southside Bancshares, Inc.
Consolidated Financial Summary (Unaudited)
(Dollars in thousands)As of 2021 2020 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, ASSETS Cash and due from banks $ 83,346 $ 92,047 $ 78,304 $ 87,357 $ 81,643 Interest earning deposits 3,787 36,441 29,319 21,051 14,561 Securities available for sale, at estimated fair value 2,753,104 2,766,035 2,546,924 2,587,305 2,633,519 Securities held to maturity, at net carrying value 92,479 94,850 98,159 108,998 115,089 Total securities 2,845,583 2,860,885 2,645,083 2,696,303 2,748,608 Federal Home Loan Bank stock, at cost 27,248 28,081 18,754 25,259 35,860 Loans held for sale 1,131 2,510 2,615 3,695 8,686 Loans 3,647,585 3,642,346 3,716,598 3,657,779 3,789,975 Less: Allowance for loan losses (38,022 ) (42,913 ) (41,454 ) (49,006 ) (55,110 ) Net loans 3,609,563 3,599,433 3,675,144 3,608,773 3,734,865 Premises & equipment, net 142,736 142,835 144,628 144,576 147,169 Goodwill 201,116 201,116 201,116 201,116 201,116 Other intangible assets, net 7,553 8,248 8,978 9,744 10,569 Bank owned life insurance 130,522 116,886 116,209 115,583 114,928 Other assets 83,106 93,926 78,736 94,770 92,955 Total assets $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 LIABILITIES AND SHAREHOLDERS' EQUITY Noninterest bearing deposits $ 1,596,781 $ 1,501,120 $ 1,383,371 $ 1,354,815 $ 1,363,228 Interest bearing deposits 3,734,874 3,655,047 3,709,272 3,577,507 3,739,798 Total deposits 5,331,655 5,156,167 5,092,643 4,932,322 5,103,026 Other borrowings and Federal Home Loan Bank borrowings 679,928 745,151 687,845 855,699 994,512 Subordinated notes, net of unamortized debt
issuance costs98,500 197,312 197,268 197,251 98,708 Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,259 60,258 60,256 60,255 60,254 Other liabilities 87,483 129,120 102,277 87,403 95,312 Total liabilities 6,257,825 6,288,008 6,140,289 6,132,930 6,351,812 Shareholders' equity 877,866 894,400 858,597 875,297 839,148 Total liabilities and shareholders' equity $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars and shares in thousands, except per share data)Three Months Ended 2021 2020 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Income Statement: Total interest income $ 55,076 $ 52,586 $ 53,565 $ 56,904 $ 55,677 Total interest expense 6,870 6,939 7,262 8,197 9,091 Net interest income 48,206 45,647 46,303 48,707 46,586 Provision for credit losses (5,071 ) 1,677 (10,149 ) (5,545 ) (4,746 ) Net interest income after provision for credit losses 53,277 43,970 56,452 54,252 51,332 Noninterest income Deposit services 6,779 6,609 6,125 6,419 6,129 Net gain (loss) on sale of securities available for sale 1,381 15 2,003 (24 ) 78 Gain on sale of loans 299 393 593 848 1,071 Trust fees 1,494 1,496 1,383 1,354 1,253 Bank owned life insurance 637 645 626 655 680 Brokerage services 846 850 780 628 564 Other 1,333 925 2,113 1,020 1,366 Total noninterest income 12,769 10,933 13,623 10,900 11,141 Noninterest expense Salaries and employee benefits 19,777 20,004 20,044 19,609 19,344 Net occupancy 3,532 3,606 3,560 3,795 3,595 Advertising, travel & entertainment 579 475 437 504 519 ATM expense 311 272 238 290 271 Professional fees 1,135 1,040 991 986 961 Software and data processing 1,503 1,406 1,312 1,220 1,215 Communications 552 612 525 490 495 FDIC insurance 454 435 454 456 469 Amortization of intangibles 695 730 766 825 881 Loss on redemption of subordinated notes 1,118 — — — — Other 2,107 2,119 2,907 3,140 3,866 Total noninterest expense 31,763 30,699 31,234 31,315 31,616 Income before income tax expense 34,283 24,204 38,841 33,837 30,857 Income tax expense 4,977 2,887 4,750 4,265 3,783 Net income $ 29,306 $ 21,317 $ 34,091 $ 29,572 $ 27,074 Common Share Data: Weighted-average basic shares outstanding 32,465 32,632 32,829 33,055 33,047 Weighted-average diluted shares outstanding 32,556 32,799 32,937 33,125 33,098 Common shares outstanding end of period 32,273 32,675 32,659 32,951 33,072 Earnings per common share Basic $ 0.90 $ 0.65 $ 1.04 $ 0.89 $ 0.82 Diluted 0.90 0.65 1.04 0.89 0.82 Book value per common share 27.20 27.37 26.29 26.56 25.37 Tangible book value per common share (1) 20.74 20.97 19.86 20.16 18.97 Cash dividends paid per common share 0.33 0.33 0.32 0.37 0.31 Selected Performance Ratios: Return on average assets 1.61 % 1.20 % 1.99 % 1.64 % 1.48 % Return on average shareholders’ equity 12.89 9.73 15.82 13.77 12.89 Return on average tangible common equity (1) 17.10 13.13 21.22 18.71 17.73 Average yield on earning assets (FTE) (1) 3.59 3.49 3.67 3.70 3.57 Average rate on interest bearing liabilities 0.59 0.60 0.64 0.68 0.73 Net interest margin (FTE) (1) 3.16 3.06 3.20 3.20 3.02 Net interest spread (FTE) (1) 3.00 2.89 3.03 3.02 2.84 Average earning assets to average interest bearing liabilities 138.86 137.85 135.56 133.56 131.92 Noninterest expense to average total assets 1.75 1.73 1.82 1.74 1.73 Efficiency ratio (FTE) (1) 47.92 50.31 50.44 47.36 50.07 (1) Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Three Months Ended 2021 2020 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Nonperforming Assets: $ 12,424 $ 15,269 $ 15,367 $ 17,480 $ 16,822 Nonaccrual loans 3,013 5,154 5,314 7,714 5,971 Accruing loans past due more than 90 days — — — — — Troubled debt restructured loans 9,371 9,549 9,641 9,646 10,307 Other real estate owned 25 566 412 106 536 Repossessed assets 15 — — 14 8 Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.08 % 0.14 % 0.14 % 0.21 % 0.16 % Ratio of nonperforming assets to: Total assets 0.17 0.21 0.22 0.25 0.23 Total loans 0.34 0.42 0.41 0.48 0.44 Total loans and OREO 0.34 0.42 0.41 0.48 0.44 Total loans, excluding PPP loans, and OREO 0.35 0.43 0.44 0.51 0.48 Ratio of allowance for loan losses to: Nonaccruing loans 1,261.93 832.62 780.09 635.29 922.96 Nonperforming assets 306.04 281.05 269.76 280.35 327.61 Total loans 1.04 1.18 1.12 1.34 1.45 Total loans, excluding PPP loans 1.06 1.22 1.19 1.42 1.58 Net charge-offs (recoveries) to average loans outstanding 0.05 0.01 0.02 0.02 0.04 Capital Ratios: Shareholders’ equity to total assets 12.30 12.45 12.27 12.49 11.67 Common equity tier 1 capital 14.07 14.38 14.71 14.68 14.24 Tier 1 risk-based capital 15.35 15.71 16.09 16.08 15.63 Total risk-based capital 18.18 20.95 21.52 21.78 19.03 Tier 1 leverage capital 10.14 10.21 10.29 9.81 9.50 Period end tangible equity to period end tangible assets (1) 9.66 9.82 9.55 9.77 8.99 Average shareholders’ equity to average total assets 12.51 12.38 12.56 11.92 11.49 (1) Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Three Months Ended 2021 2020 Loan Portfolio Composition Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Real Estate Loans: Construction $ 422,095 $ 528,157 $ 605,677 $ 581,941 $ 610,394 1-4 Family Residential 660,689 678,402 700,430 719,952 738,343 Commercial 1,605,132 1,430,900 1,348,551 1,295,746 1,327,233 Commercial Loans 443,708 497,513 564,745 557,122 629,170 Municipal Loans 427,259 417,398 406,377 409,028 387,286 Loans to Individuals 88,702 89,976 90,818 93,990 97,549 Total Loans $ 3,647,585 $ 3,642,346 $ 3,716,598 $ 3,657,779 $ 3,789,975 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 42,913 $ 41,454 $ 49,006 $ 55,110 $ 59,868 Loans charged-off (940 ) (527 ) (795 ) (595 ) (718 ) Recoveries of loans charged-off 437 466 622 402 361 Net loans (charged-off) recovered (503 ) (61 ) (173 ) (193 ) (357 ) Provision for (reversal of) loan losses (4,388 ) 1,520 (7,379 ) (5,911 ) (4,401 ) Balance at end of period $ 38,022 $ 42,913 $ 41,454 $ 49,006 $ 55,110 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 3,773 $ 3,616 $ 6,386 $ 6,020 $ 6,365 Provision for (reversal of) off-balance-sheet credit exposures (683 ) 157 (2,770 ) 366 (345 ) Balance at end of period $ 3,090 $ 3,773 $ 3,616 $ 6,386 $ 6,020 Total Allowance for Credit Losses $ 41,112 $ 46,686 $ 45,070 $ 55,392 $ 61,130 Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, 2021 2020 Income Statement: Total interest income $ 161,227 $ 174,924 Total interest expense 21,071 36,366 Net interest income 140,156 138,558 Provision for credit losses (13,543 ) 25,746 Net interest income after provision for credit losses 153,699 112,812 Noninterest income Deposit services 19,513 17,940 Net gain on sale of securities available for sale 3,399 8,281 Gain on sale of loans 1,285 1,924 Trust fees 4,373 3,779 Bank owned life insurance 1,908 1,899 Brokerage services 2,476 1,643 Other 4,371 3,366 Total noninterest income 37,325 38,832 Noninterest expense Salaries and employee benefits 59,825 57,616 Net occupancy 10,698 10,574 Advertising, travel & entertainment 1,491 1,643 ATM expense 821 728 Professional fees 3,166 3,238 Software and data processing 4,221 3,737 Communications 1,689 1,494 FDIC insurance 1,343 668 Amortization of intangibles 2,191 2,792 Loss on redemption of subordinated notes 1,118 — Other 7,133 9,502 Total noninterest expense 93,696 91,992 Income before income tax expense 97,328 59,652 Income tax expense 12,614 7,071 Net income $ 84,714 $ 52,581 Common Share Data: Weighted-average basic shares outstanding 32,641 33,250 Weighted-average diluted shares outstanding 32,759 33,331 Common shares outstanding end of period 32,273 33,072 Earnings per common share Basic $ 2.60 $ 1.58 Diluted 2.59 1.58 Book value per common share 27.20 25.37 Tangible book value per common share (1) 20.74 18.97 Cash dividends paid per common share 0.98 0.93 Selected Performance Ratios: Return on average assets 1.60 % 0.98 % Return on average shareholders’ equity 12.80 8.56 Return on average tangible common equity (1) 17.12 12.05 Average yield on earning assets (FTE) (1) 3.58 3.77 Average rate on interest bearing liabilities 0.61 0.96 Net interest margin (FTE) (1) 3.14 3.02 Net interest spread (FTE) (1) 2.97 2.81 Average earning assets to average interest bearing liabilities 137.45 129.07 Noninterest expense to average total assets 1.77 1.71 Efficiency ratio (FTE) (1) 49.53 50.06 (1) Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, 2021 2020 Nonperforming Assets: $ 12,424 $ 16,822 Nonaccrual loans 3,013 5,971 Accruing loans past due more than 90 days — — Troubled debt restructured loans 9,371 10,307 Other real estate owned 25 536 Repossessed assets 15 8 Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.08 % 0.16 % Ratio of nonperforming assets to: Total assets 0.17 0.23 Total loans 0.34 0.44 Total loans and OREO 0.34 0.44 Total loans, excluding PPP loans, and OREO 0.35 0.48 Ratio of allowance for loan losses to: Nonaccruing loans 1,261.93 922.96 Nonperforming assets 306.04 327.61 Total loans 1.04 1.45 Total loans, excluding PPP loans 1.06 1.58 Net charge-offs (recoveries) to average loans outstanding 0.03 0.04 Capital Ratios: Shareholders’ equity to total assets 12.30 11.67 Common equity tier 1 capital 14.07 14.24 Tier 1 risk-based capital 15.35 15.63 Total risk-based capital 18.18 19.03 Tier 1 leverage capital 10.14 9.50 Period end tangible equity to period end tangible assets (1) 9.66 8.99 Average shareholders’ equity to average total assets 12.48 11.42 (1) Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. Southside Bancshares, Inc.
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, Loan Portfolio Composition 2021 2020 Real Estate Loans: Construction $ 422,095 $ 610,394 1-4 Family Residential 660,689 738,343 Commercial 1,605,132 1,327,233 Commercial Loans 443,708 629,170 Municipal Loans 427,259 387,286 Loans to Individuals 88,702 97,549 Total Loans $ 3,647,585 $ 3,789,975 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 49,006 $ 24,797 Impact of CECL adoption (1) - cumulative effect adjustment — 5,072 Impact of CECL adoption - purchased loans with credit deterioration — 231 Loans charged-off (2,262 ) (2,259 ) Recoveries of loans charged-off 1,525 1,248 Net loans (charged-off) recovered (737 ) (1,011 ) Provision for (reversal of) loan losses (10,247 ) 26,021 Balance at end of period $ 38,022 $ 55,110 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 6,386 $ 1,455 Impact of CECL adoption (1) — 4,840 Provision for (reversal of) off-balance-sheet credit exposures (3,296 ) (275 ) Balance at end of period $ 3,090 $ 6,020 Total Allowance for Credit Losses $ 41,112 $ 61,130 (1) We adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” on January 1, 2020. ASU 2016-13 replaced the incurred loss model with an expected loss methodology that is referred to as current expected credit losses (“CECL”). Adoption of this guidance on January 1, 2020, resulted in a cumulative-effect adjustment to reduce retained earnings by $7.8 million, net of tax. Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)The tables that follow show average earning assets and interest bearing liabilities together with the average yield on the earning assets and the average rate of the interest bearing liabilities for the periods presented. The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” for more information.
Three Months Ended September 30, 2021 June 30, 2021 Average
BalanceInterest Average
Yield/RateAverage
BalanceInterest Average
Yield/RateASSETS Loans (1) $ 3,662,496 $ 37,744 4.09 % $ 3,706,959 $ 36,429 3.94 % Loans held for sale 1,640 12 2.90 % 1,846 13 2.82 % Securities: Taxable investment securities (2) 532,679 3,853 2.87 % 396,504 2,921 2.95 % Tax-exempt investment securities (2) 1,453,275 12,315 3.36 % 1,363,678 11,585 3.41 % Mortgage-backed and related securities (2) 738,287 4,405 2.37 % 847,206 4,647 2.20 % Total securities 2,724,241 20,573 3.00 % 2,607,388 19,153 2.95 % Federal Home Loan Bank stock, at cost, and equity investments 39,786 111 1.11 % 35,883 108 1.21 % Interest earning deposits 39,382 24 0.24 % 43,175 17 0.16 % Total earning assets 6,467,545 58,464 3.59 % 6,395,251 55,720 3.49 % Cash and due from banks 99,113 90,735 Accrued interest and other assets 684,917 656,245 Less: Allowance for loan losses (43,052 ) (41,768 ) Total assets $ 7,208,523 $ 7,100,463 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 598,118 249 0.17 % $ 571,907 231 0.16 % Certificates of deposits 629,718 789 0.50 % 658,708 936 0.57 % Interest bearing demand accounts 2,496,037 1,196 0.19 % 2,459,335 1,172 0.19 % Total interest bearing deposits 3,723,873 2,234 0.24 % 3,689,950 2,339 0.25 % Federal Home Loan Bank borrowings 656,474 1,865 1.13 % 669,633 1,817 1.09 % Subordinated notes, net of unamortized debt issuance costs 195,204 2,417 4.91 % 197,284 2,423 4.93 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,258 345 2.27 % 60,257 349 2.32 % Other borrowings 21,634 9 0.17 % 22,024 11 0.20 % Total interest bearing liabilities 4,657,443 6,870 0.59 % 4,639,148 6,939 0.60 % Noninterest bearing deposits 1,551,298 1,485,383 Accrued expenses and other liabilities 97,954 97,137 Total liabilities 6,306,695 6,221,668 Shareholders’ equity 901,828 878,795 Total liabilities and shareholders’ equity $ 7,208,523 $ 7,100,463 Net interest income (FTE) $ 51,594 $ 48,781 Net interest margin (FTE) 3.16 % 3.06 % Net interest spread (FTE) 3.00 % 2.89 % (1) Interest on loans includes net fees on loans that are not material in amount. (2) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. Note: As of September 30, 2021 and June 30, 2021, loans totaling $3.0 million and $5.2 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)Three Months Ended March 31, 2021 December 31, 2020 Average
BalanceInterest Average
Yield/RateAverage
BalanceInterest Average
Yield/RateASSETS Loans (1) $ 3,634,053 $ 36,754 4.10 % $ 3,772,158 $ 39,936 4.21 % Loans held for sale 2,803 20 2.89 % 5,012 36 2.86 % Securities: Taxable investment securities (2) 295,968 2,323 3.18 % 223,753 1,753 3.12 % Tax-exempt investment securities (2) 1,300,991 11,176 3.48 % 1,298,584 11,413 3.50 % Mortgage-backed and related securities (2) 940,815 6,088 2.62 % 1,082,302 6,693 2.46 % Total securities 2,537,774 19,587 3.13 % 2,604,639 19,859 3.03 % Federal Home Loan Bank stock, at cost, and equity investments 35,635 136 1.55 % 46,798 199 1.69 % Interest earning deposits 31,169 15 0.20 % 22,938 18 0.31 % Total earning assets 6,241,434 56,512 3.67 % 6,451,545 60,048 3.70 % Cash and due from banks 86,634 83,228 Accrued interest and other assets 677,230 687,894 Less: Allowance for loan losses (49,240 ) (55,567 ) Total assets $ 6,956,058 $ 7,167,100 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 517,182 209 0.16 % $ 487,452 201 0.16 % Certificates of deposit 736,099 1,229 0.68 % 1,011,482 2,320 0.91 % Interest bearing demand accounts 2,342,299 1,159 0.20 % 2,186,406 1,117 0.20 % Total interest bearing deposits 3,595,580 2,597 0.29 % 3,685,340 3,638 0.39 % Federal Home Loan Bank borrowings 727,513 1,908 1.06 % 896,484 2,125 0.94 % Subordinated notes, net of unamortized debt issuance costs 197,252 2,395 4.92 % 158,692 2,051 5.14 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,256 351 2.36 % 60,255 360 2.38 % Other borrowings 23,522 11 0.19 % 29,661 23 0.31 % Total interest bearing liabilities 4,604,123 7,262 0.64 % 4,830,432 8,197 0.68 % Noninterest bearing deposits 1,389,020 1,381,120 Accrued expenses and other liabilities 89,222 101,478 Total liabilities 6,082,365 6,313,030 Shareholders’ equity 873,693 854,070 Total liabilities and shareholders’ equity $ 6,956,058 $ 7,167,100 Net interest income (FTE) $ 49,250 $ 51,851 Net interest margin (FTE) 3.20 % 3.20 % Net interest spread (FTE) 3.03 % 3.02 % (1) Interest on loans includes net fees on loans that are not material in amount. (2) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. Note: As of March 31, 2021 and December 31, 2020, loans totaling $5.3 million and $7.7 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)Three Months Ended September 30, 2020 Average
BalanceInterest Average
Yield/RateASSETS Loans (1) $ 3,815,989 $ 38,842 4.05 % Loans held for sale 3,934 31 3.13 % Securities: Taxable investment securities (2) 145,724 1,175 3.21 % Tax-exempt investment securities (2) 1,295,179 11,418 3.51 % Mortgage-backed and related securities (2) 1,209,913 7,048 2.32 % Total securities 2,650,816 19,641 2.95 % Federal Home Loan Bank stock, at cost, and equity investments 60,528 249 1.64 % Interest earning deposits 17,668 17 0.38 % Total earning assets 6,548,935 58,780 3.57 % Cash and due from banks 80,368 Accrued interest and other assets 699,351 Less: Allowance for loan losses (61,212 ) Total assets $ 7,267,442 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 461,895 192 0.17 % Certificates of deposit 1,172,179 3,568 1.21 % Interest bearing demand accounts 2,069,751 1,102 0.21 % Total interest bearing deposits 3,703,825 4,862 0.52 % Federal Home Loan Bank borrowings 1,037,855 2,369 0.91 % Subordinated notes, net of unamortized debt issuance costs 98,686 1,427 5.75 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,253 378 2.50 % Other borrowings 63,526 55 0.34 % Total interest bearing liabilities 4,964,145 9,091 0.73 % Noninterest bearing deposits 1,371,748 Accrued expenses and other liabilities 96,219 Total liabilities 6,432,112 Shareholders’ equity 835,330 Total liabilities and shareholders’ equity $ 7,267,442 Net interest income (FTE) $ 49,689 Net interest margin (FTE) 3.02 % Net interest spread (FTE) 2.84 % (1) Interest on loans includes net fees on loans that are not material in amount. (2) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. Note: As of September 30, 2020, loans totaling $6.0 million were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Southside Bancshares, Inc.
Average Balances and Average Yields and Rates (Annualized) (Unaudited)
(Dollars in thousands)Nine Months Ended September 30, 2021 September 30, 2020 Average
BalanceInterest Average
Yield/RateAverage
BalanceInterest Average
Yield/RateASSETS Loans (1) $ 3,667,941 $ 110,927 4.04 % $ 3,743,437 $ 121,162 4.32 % Loans held for sale 2,092 45 2.88 % 2,664 68 3.41 % Securities: Taxable investment securities (2) 409,251 9,097 2.97 % 103,576 2,419 3.12 % Tax-exempt investment securities (2) 1,373,206 35,076 3.42 % 1,168,749 30,815 3.52 % Mortgage-backed and related securities (2) 841,361 15,140 2.41 % 1,388,754 27,626 2.66 % Total securities 2,623,818 59,313 3.02 % 2,661,079 60,860 3.05 % Federal Home Loan Bank stock, at cost, and equity investments 37,116 355 1.28 % 63,683 1,034 2.17 % Interest earning deposits 37,939 56 0.20 % 27,299 220 1.08 % Total earning assets 6,368,906 170,696 3.58 % 6,498,162 183,344 3.77 % Cash and due from banks 92,206 78,484 Accrued interest and other assets 672,558 656,952 Less: Allowance for loan losses (44,664 ) (49,208 ) Total assets $ 7,089,006 $ 7,184,390 LIABILITIES AND SHAREHOLDERS’ EQUITY Savings accounts $ 562,699 689 0.16 % $ 424,530 616 0.19 % Certificates of deposit 674,452 2,954 0.59 % 1,240,506 14,731 1.59 % Interest bearing demand accounts 2,433,120 3,527 0.19 % 2,019,968 5,663 0.37 % Total interest bearing deposits 3,670,271 7,170 0.26 % 3,685,004 21,010 0.76 % Federal Home Loan Bank borrowings 684,280 5,590 1.09 % 1,077,861 9,272 1.15 % Subordinated notes, net of unamortized debt issuance costs 196,572 7,235 4.92 % 98,642 4,250 5.76 % Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,257 1,045 2.32 % 60,252 1,469 3.26 % Other borrowings 22,387 31 0.19 % 112,851 365 0.43 % Total interest bearing liabilities 4,633,767 21,071 0.61 % 5,034,610 36,366 0.96 % Noninterest bearing deposits 1,475,828 1,242,055 Accrued expenses and other liabilities 94,536 87,170 Total liabilities 6,204,131 6,363,835 Shareholders’ equity 884,875 820,555 Total liabilities and shareholders’ equity $ 7,089,006 $ 7,184,390 Net interest income (FTE) $ 149,625 $ 146,978 Net interest margin (FTE) 3.14 % 3.02 % Net interest spread (FTE) 2.97 % 2.81 % (1) Interest on loans includes net fees on loans that are not material in amount. (2) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. Note: As of September 30, 2021 and 2020, loans totaling $3.0 million and $6.0 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Southside Bancshares, Inc.
Non-GAAP Reconciliation (Unaudited)
(Dollars and shares in thousands, except per share data)The following tables set forth the reconciliation of return on average common equity to return on average tangible common equity, book value per share to tangible book value per share, net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investment securities, along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE) for the applicable periods presented.
Three Months Ended Nine Months Ended 2021 2020 2021 2020 Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30, Reconciliation of return on average common equity to return on average tangible common equity: Net income $ 29,306 $ 21,317 $ 34,091 $ 29,572 $ 27,074 $ 84,714 $ 52,581 After-tax amortization expense 549 577 605 652 696 1,731 2,206 Adjusted net income available to common shareholders $ 29,855 $ 21,894 $ 34,696 $ 30,224 $ 27,770 $ 86,445 $ 54,787 Average shareholders' equity $ 901,828 $ 878,795 $ 873,693 $ 854,070 $ 835,330 $ 884,875 $ 820,555 Less: Average intangibles for the period (209,097 ) (209,808 ) (210,563 ) (211,354 ) (212,221 ) (209,817 ) (213,150 ) Average tangible shareholders' equity $ 692,731 $ 668,987 $ 663,130 $ 642,716 $ 623,109 $ 675,058 $ 607,405 Return on average tangible common equity 17.10 % 13.13 % 21.22 % 18.71 % 17.73 % 17.12 % 12.05 % Reconciliation of book value per share to tangible book value per share: Common equity at end of period $ 877,866 $ 894,400 $ 858,597 $ 875,297 $ 839,148 $ 877,866 $ 839,148 Less: Intangible assets at end of period (208,669 ) (209,364 ) (210,094 ) (210,860 ) (211,685 ) (208,669 ) (211,685 ) Tangible common shareholders' equity at end of period $ 669,197 $ 685,036 $ 648,503 $ 664,437 $ 627,463 $ 669,197 $ 627,463 Total assets at end of period $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 $ 7,135,691 $ 7,190,960 Less: Intangible assets at end of period (208,669 ) (209,364 ) (210,094 ) (210,860 ) (211,685 ) (208,669 ) (211,685 ) Tangible assets at end of period $ 6,927,022 $ 6,973,044 $ 6,788,792 $ 6,797,367 $ 6,979,275 $ 6,927,022 $ 6,979,275 Period end tangible equity to period end tangible assets 9.66 % 9.82 % 9.55 % 9.77 % 8.99 % 9.66 % 8.99 % Common shares outstanding end of period 32,273 32,675 32,659 32,951 33,072 32,273 33,072 Tangible book value per common share $ 20.74 $ 20.97 $ 19.86 $ 20.16 $ 18.97 $ 20.74 $ 18.97 Reconciliation of efficiency ratio to efficiency ratio (FTE), net interest margin to net interest margin (FTE) and net interest spread to net interest spread (FTE): Net interest income (GAAP) $ 48,206 $ 45,647 $ 46,303 $ 48,707 $ 46,586 $ 140,156 $ 138,558 Tax equivalent adjustments: Loans 722 722 736 717 688 2,180 2,035 Tax-exempt investment securities 2,666 2,412 2,211 2,427 2,415 7,289 6,385 Net interest income (FTE) (1) 51,594 48,781 49,250 51,851 49,689 149,625 146,978 Noninterest income 12,769 10,933 13,623 10,900 11,141 37,325 38,832 Nonrecurring income (2) (1,381 ) (15 ) (2,003 ) 24 (78 ) (3,399 ) (8,281 ) Total revenue $ 62,982 $ 59,699 $ 60,870 $ 62,775 $ 60,752 $ 183,551 $ 177,529 Noninterest expense $ 31,763 $ 30,699 $ 31,234 $ 31,315 $ 31,616 $ 93,696 $ 91,992 Pre-tax amortization expense (695 ) (730 ) (766 ) (825 ) (881 (2,191 ) (2,792 ) Nonrecurring expense (3) (888 ) 64 236 (758 ) (315 ) (588 ) (325 ) Adjusted noninterest expense $ 30,180 $ 30,033 $ 30,704 $ 29,732 $ 30,420 $ 90,917 $ 88,875 Efficiency ratio 50.64 % 53.09 % 53.01 % 49.86 % 52.77 % 52.23 % 52.55 % Efficiency ratio (FTE) (1) 47.92 % 50.31 % 50.44 % 47.36 % 50.07 % 49.53 % 50.06 % Average earning assets $ 6,467,545 $ 6,395,251 $ 6,241,434 $ 6,451,545 $ 6,548,935 $ 6,368,906 $ 6,498,162 Net interest margin 2.96 % 2.86 % 3.01 % 3.00 % 2.83 % 2.94 % 2.85 % Net interest margin (FTE) (1) 3.16 % 3.06 % 3.20 % 3.20 % 3.02 % 3.14 % 3.02 % Net interest spread 2.79 % 2.70 % 2.84 % 2.83 % 2.65 % 2.77 % 2.64 % Net interest spread (FTE) (1) 3.00 % 2.89 % 3.03 % 3.02 % 2.84 % 2.97 % 2.81 % (1) These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures. (2) These adjustments may include net gain or loss on sale of securities available for sale in the periods where applicable. (3) These adjustments may include loss on redemption of subordinated notes, foreclosure expenses and branch closure expenses, in the periods where applicable.