Southside Bancshares (SBSI) investor relations material

Executive summary

• Net income for Q3 was $4.9 million, down over 76% year-over-year, mainly due to a $24.4 million net loss on sale of AFS securities and higher noninterest expenses, with proceeds funding loan growth and reinvestment in higher-yielding assets.

• For the nine months ended September 30, 2025, net income was $48.2 million, a 27.7% decrease from the prior year, driven by lower noninterest income and higher expenses.

• Loan growth was robust, with a $163 million increase linked quarter and $500 million in new loan production, much of it closing late in the quarter.

• Deposits increased $329.6 million sequentially, driven by brokered and commercial/retail deposits.

• Announced CEO retirement at year-end, with succession plan in place.

Financial highlights

• Net interest income for Q3 was $55.7 million, up 0.5% year-over-year and 2.7% linked quarter; net interest margin was 2.94%, down 1 basis point year-over-year.

• Diluted EPS was $0.16 for Q3, down from $0.68 year-over-year and $0.56 linked quarter.

• Noninterest income (excluding securities loss) rose 22.8% year-over-year in Q3 to $12.4 million, mainly from trust fees.

• Noninterest expense increased 3.3% year-over-year in Q3 to $37.5 million, but fell 4.4% linked quarter due to lower branch and software costs.

• Allowance for credit losses was $48.5 million, or 0.95% of total loans, at September 30, 2025.

Outlook and guidance

• Management expects net interest margin and net interest income to improve in Q4, benefiting from securities restructuring and loan growth.

• Noninterest expense projected around $38 million for Q4.

• Anticipate double-digit trust fee growth in 2026 and expansion of wealth management into metro markets.

• Management expects at least two Fed rate cuts in 2026, with potential for more depending on economic conditions.

• Plans to open a new branch in Tyler, Texas in 2026.