Southside Bancshares (SBSI) investor relations material

Executive summary

• Net income for Q1 2026 was $23.3 million, up 10.8% year-over-year, with EPS of $0.78, up 11.4% linked quarter.

• Loan growth was 2.7% linked quarter, with total loans reaching $4.95 billion, driven by new production and low payoffs.

• Non-performing assets declined to 0.11% of total assets, reflecting improved credit quality.

• Expanded branch footprint and hired a veteran to build out the wealth management team in Dallas-Fort Worth.

• Annualized return on average assets was 1.10%; return on average tangible common equity was 14.39%.

Financial highlights

• Net interest income increased $441,000 or 0.8% linked quarter and 7.1% year-over-year to $57.7 million; NIM (FTE) rose to 3.01%.

• Noninterest income grew 23.2% year-over-year to $12.6 million, with increases in trust fees and swap fee income.

• Noninterest expense rose 9.4% year-over-year and 8.3% linked quarter, mainly from higher salaries, a one-time retirement expense, and loss on sub-debt redemption.

• Allowance for credit losses increased to $49.6 million, but as a percentage of loans, decreased to 0.93%.

• Deposits increased 4.3% year-over-year to $6.87 billion, with brokered and retail deposits offsetting declines in public fund deposits.

Outlook and guidance

• Loan growth for 2026 targeted at mid-single digits, with payoffs expected to rise in coming quarters.

• Non-interest expense projected at ~$40.5 million per quarter for the remainder of 2026, with annual growth expected to stay at or below 7%.

• Efficiency ratio expected to improve in Q2 as one-time expenses subside.

• Anticipate further funding cost savings in Q2 from sub-debt redemption and CD repricing.

• Asset sensitivity expected to benefit NIM if rates remain steady.