Southside Bancshares Reports Steady Earnings Amid Loan Growth and Asset Management

Ticker: SBSI

Date: January 31, 2020

Quarterly Financial Snapshot

Southside Bancshares, Inc. (NASDAQ: SBSI) has unveiled its financial results for the fourth quarter and the year ended December 31, 2019. The highlights include a net income of $17.3 million, translating to an earnings per share (EPS) of $0.51. While this represents a slight decline of $46,000, or 0.3%, from the same period last year, the EPS consensus was met, showcasing the company?s resilience in a competitive landscape.

Loan Growth and Nonperforming Assets

In a noteworthy display of growth, Southside reported a linked quarter increase in loans of $68.3 million, or 2.0%, bringing total loans to a robust $3.57 billion. This is particularly impressive when you consider the revenue forecast had anticipated more modest growth. Moreover, the company reported a decrease in nonperforming assets as a percentage of total assets, down from 0.45% to 0.26%. This is a significant earnings surprise that reflects effective asset management and prudent lending practices.

Return Metrics and Yearly Review

For the fourth quarter, the annualized return on average assets slipped to 1.03%, down from 1.14% in the previous year. Meanwhile, the annualized return on average shareholders? equity dipped to 8.42% from 9.30%. While these figures hint at some tightening on profitability, they are still indicative of a solid year overall. The company?s EPS increased by 4.3% for the year, reaching $2.20, which is a commendable feat in today?s economic climate.

Looking Ahead

President Lee R. Gibson expressed optimism about the company?s future, highlighting a loan growth of 7.7% and a dramatic reduction in nonaccrual loans by 86.1%. This indicates a strong operational foundation as Southside navigates the complexities of the financial landscape. As peers in the banking sector grapple with regulatory challenges and market fluctuations, Southside's strategic focus on loan quality and asset management could serve as a model for sustained growth.