Southside Bancshares Reports $21.5 Million Net Income and 4.7% Loan Growth in First Quarter 2024

2024-04-26

Southside Bancshares recently held its First Quarter 2024 Earnings Call, which featured key participants such as Lindsey Bailes, Lee Gibson, Julie Shamburger, Brett Rabatin, Matt Olney, and Wood Lay. During the meeting, the company announced a net income of $21.5 million for the first quarter, with earnings per share amounting to $0.71 and a return on average tangible common equity of 15.07%. Moreover, there was a notable 4.7% increase in linked quarter loans.

Lee Gibson addressed the factors contributing to the decline in net interest margin, citing the maturity of lower interest rate cash flow swaps, rising funding rates, and pressures on deposit pricing. In line with the newly introduced 5-year strategic plan, Southside Bancshares rolled out initiatives centered around revenue growth, cost containment, and expense reductions, with expected annualized cost savings of around $3.5 million.

Looking towards the future, the company aims to counter further net interest margin compression through anticipated loan growth. The call also delved into discussions regarding loan growth drivers, adjustments in the allowance for credit losses, nonperforming assets, and the securities portfolio. The company's expense reductions primarily targeted personnel-related costs, with anticipated savings from ongoing cost containment efforts in the forthcoming quarters.

Speakers at the meeting provided insights on income tax expenses, effective tax rates, the impact of the Fed's interest rate cuts, long-term interest rates, and factors influencing the margin moving forward. Core fees were also discussed, highlighting the decline in deposit fees and overdraft fees, alongside the influence of tax returns on overdraft fees. The 5-year strategic plan encompassed cost containment strategies, revenue opportunities, an emphasis on IT, and potential stock buybacks in the second quarter.

Southside Bancshares outlined its intention to offer updates on its initiatives and progress on a quarterly basis, with the subsequent earnings call slated for July to report second-quarter results. Although not explicitly mentioned in the text, the company's President and CEO likely plays a pivotal role in steering the strategic direction and overall performance of Southside Bancshares.