Southside Bancshares (SBSI) investor relations material

Executive summary

• Net income for Q2 2025 was $21.8M, down 11.6% year-over-year; diluted EPS was $0.72, down 11.1% from Q2 2024; annualized ROAA was 1.07%.

• Net interest margin rose 9 bps to 2.95% linked quarter; net interest income increased $414K to $54.3M, up 1.2% year-over-year.

• Deposits, net of public and brokered funds, increased $90.1M linked quarter, but total deposits fell 0.3% to $6.63B; noninterest bearing deposits were 20.6% of total.

• Nonperforming assets rose sharply to $32.9M, or 0.39% of total assets, mainly due to a $27.5M restructured commercial real estate loan.

• Texas markets remain healthy, with ongoing job and population growth, but inflation and tariffs create uncertainty.

Financial highlights

• Net income increased $306K or 1.4% compared to Q1; EPS up $0.01 linked quarter.

• Loans as of June 30 were $4.6B, up $34.7M linked quarter but down 1.3% year-over-year.

• Allowance for loan losses was $44.4M, or 0.97% of total loans.

• Noninterest income rose 5.1% to $12.1M; noninterest expense increased 9.8% to $39.3M, including a $1.2M branch demolition charge.

• Efficiency ratio improved to 53.7% from 55.04% last quarter, but up from 52.71% a year ago.

Outlook and guidance

• Loan growth guidance lowered to 3–4% year-over-year for 2025, supported by a solid pipeline exceeding $2.1B.

• Expect noninterest expense to remain around $39M for the remaining quarters of the year.

• Management notes uncertainty from tariffs, inflation, and interest rate risk; ALCO simulations show NII sensitivity to rate changes.

• No material changes in risk factors since the 2024 Form 10-K; management continues to monitor credit, liquidity, and market risks.

• Anticipate continued NIM expansion if net loan growth persists.