SOUTHSIDE BANCSHARES INC

For the period ended Dec 31, 2023. Filed Feb 27, 2024.

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FY2023 · Filed Feb 27, 2024

SBSI$35.09+0.0%Stored close · as of Nov 10, 2026

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Contents

Item 8. Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	December 31, 2023	December 31, 2022
ASSETS
Cash and due from banks	$122,021	$106,143
Interest earning deposits	391,719	9,276
Federal funds sold	46,770	83,833
Total cash and cash equivalents	560,510	199,252
Securities:
Securities AFS, at estimated fair value (amortized cost of $1,332,467 and $1,387,874, respectively)	1,296,294	1,299,014
Securities HTM (estimated fair value of $1,166,162 and $1,149,156, respectively)	1,307,053	1,326,729
FHLB stock, at cost	11,936	9,190
Equity investments	9,691	11,181
Loans held for sale	10,894	667
Loans:
Loans	4,524,510	4,147,691
Less: Allowance for loan losses	(42,674)	(36,515)
Net loans	4,481,836	4,111,176
Premises and equipment, net	138,950	141,256
Operating lease ROU assets	14,837	15,314
Goodwill	201,116	201,116
Other intangible assets, net	2,925	4,622
Interest receivable	50,489	49,350
Deferred tax asset, net	30,426	34,695
BOLI	136,330	133,911
Other assets	31,627	21,163
Total assets	$8,284,914	$7,558,636
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest bearing	$1,390,407	$1,671,562
Interest bearing	5,159,274	4,526,457
Total deposits	6,549,681	6,198,019
Other borrowings	509,820	221,153
FHLB borrowings	212,648	153,358
Subordinated notes, net of unamortized debt issuance costs	93,877	98,674
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,270	60,265
Operating lease liabilities	16,704	17,070
Other liabilities	68,626	64,100
Total liabilities	7,511,626	6,812,639
Off-balance-sheet arrangements, commitments and contingencies (Note 17)
Shareholders’ equity:
Common stock: ($1.25 par value, 80,000,000 shares authorized, 38,039,706 shares issued at December 31, 2023 and 38,000,822 shares issued at December 31, 2022)	47,550	47,501
Paid-in capital	788,840	784,545
Retained earnings	282,355	239,610
Treasury stock: (shares at cost, 7,790,276 at December 31, 2023 and 6,454,192 at December 31, 2022)	(231,995)	(188,203)
AOCI	(113,462)	(137,456)
Total shareholders’ equity	773,288	745,997
Total liabilities and shareholders’ equity	$8,284,914	$7,558,636

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

	Years Ended December 31,
	2023	2022	2021
Interest income:
Loans	$244,803	$170,410	$144,803
Taxable investment securities	31,186	18,940	13,312
Tax-exempt investment securities	54,629	45,001	37,730
MBS	19,450	16,639	19,534
FHLB stock and equity investments	1,185	503	530
Other interest earning assets	8,488	1,488	78
Total interest income	359,741	252,981	215,987
Interest expense:
Deposits	108,157	29,075	9,404
FHLB borrowings	6,777	3,291	7,348
Subordinated notes	3,920	4,015	8,246
Trust preferred subordinated debentures	4,504	2,397	1,390
Other borrowings	21,356	1,862	42
Total interest expense	144,714	40,640	26,430
Net interest income	215,027	212,341	189,557
Provision for (reversal of) credit losses	9,154	3,241	(16,964)
Net interest income after provision for credit losses	205,873	209,100	206,521
Noninterest income:
Deposit services	25,497	25,843	26,368
Net gain (loss) on sale of securities AFS	(15,976)	(3,819)	3,862
Net gain on sale of equity securities	5,058	—	—
Gain on sale of loans	563	531	1,641
Trust fees	5,910	5,992	5,959
BOLI	5,823	2,647	2,618
Brokerage services	3,305	3,335	3,383
Other	5,654	6,328	5,505
Total noninterest income	35,834	40,857	49,336
Noninterest expense:
Salaries and employee benefits	85,625	82,633	79,892
Net occupancy	14,694	15,130	14,239
Advertising, travel & entertainment	4,093	3,430	2,367
ATM expense	1,351	1,314	1,166
Professional fees	5,351	4,959	4,015
Software and data processing	9,395	6,847	5,675
Communications	1,469	1,896	2,233
FDIC insurance	3,558	1,945	1,807
Amortization of intangibles	1,697	2,273	2,849
Loss on redemption of subordinated notes	—	—	1,118
Other	13,345	9,899	9,669
Total noninterest expense	140,578	130,326	125,030
Income before income tax expense	101,129	119,631	130,827
Income tax expense	14,437	14,611	17,426
Net income	$86,692	$105,020	$113,401
Earnings per common share – basic	$2.82	$3.27	$3.48
Earnings per common share – diluted	$2.82	$3.26	$3.47
Cash dividends paid per common share	$1.42	$1.40	$1.37

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended December 31,
	2023	2022	2021
Net income	$86,692	$105,020	$113,401
Other comprehensive income (loss):
Securities AFS and transferred securities:
Change in unrealized holding gain (loss) on AFS securities during the period	28,782	(179,684)	(37,199)
Change in net unrealized loss on securities transferred from AFS to HTM	—	(125,175)	—
Reclassification adjustment for amortization related to AFS and HTM debt securities	8,004	4,968	1,363
Reclassification adjustment for net (gain) loss on sale of AFS securities, included in net income	15,976	3,819	(3,862)
Derivatives:
Change in net unrealized gain (loss) on effective cash flow hedge interest rate swap derivatives	1,222	44,757	13,648
Reclassification adjustment of net (gain) loss related to derivatives designated as cash flow hedges	(24,544)	(3,638)	6,395
Retirement plans:
Amortization of net actuarial loss, included in net periodic benefit cost	756	895	1,264
Effect of settlement recognition	(16)	—	—
Change in net actuarial gain (loss)	192	4,487	6,524
Other comprehensive income (loss), before tax	30,372	(249,571)	(11,867)
Income tax (expense) benefit related to items of other comprehensive income (loss)	(6,378)	52,410	2,492
Other comprehensive income (loss), net of tax	23,994	(197,161)	(9,375)
Comprehensive income (loss)	$110,686	$(92,141)	$104,026

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share amounts)

	Common Stock	Paid In Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Total Shareholders’Equity
Balance at December 31, 2020	$47,419	$771,511	$111,208	$(123,921)	$69,080	$875,297
Net income	—	—	113,401	—	—	113,401
Other comprehensive income (loss)	—	—	—	—	(9,375)	(9,375)
Issuance of common stock for dividend reinvestment plan (34,150 shares)	42	1,311	—	—	—	1,353
Purchase of common stock (938,484 shares)	—	—	—	(34,148)	—	(34,148)
Stock compensation expense	—	3,020	—	—	—	3,020
Net issuance of common stock under employee stock plans (305,212 shares)	—	4,659	(227)	2,761	—	7,193
Cash dividends paid on common stock ($1.37 per share)	—	—	(44,569)	—	—	(44,569)
Balance at December 31, 2021	47,461	780,501	179,813	(155,308)	59,705	912,172
Net income	—	—	105,020	—	—	105,020
Other comprehensive income (loss)	—	—	—	—	(197,161)	(197,161)
Issuance of common stock for dividend reinvestment plan (31,853 shares)	40	1,193	—	—	—	1,233
Purchase of common stock (923,775 shares)	—	—	—	(33,841)	—	(33,841)
Stock compensation expense	—	3,221	—	—	—	3,221
Net issuance of common stock under employee stock plans (86,500 shares)	—	(370)	(287)	946	—	289
Cash dividends paid on common stock ($1.40 per share)	—	—	(44,936)	—	—	(44,936)
Balance at December 31, 2022	47,501	784,545	239,610	(188,203)	(137,456)	745,997
Net income	—	—	86,692	—	—	86,692
Other comprehensive income (loss)	—	—	—	—	23,994	23,994
Issuance of common stock for dividend reinvestment plan (38,884 shares)	49	1,175	—	—	—	1,224
Purchase of common stock (1,435,193 shares)	—	—	—	(45,074)	—	(45,074)
Stock compensation expense	—	3,552	—	—	—	3,552
Net issuance of common stock under employee stock plans (99,109 shares)	—	(432)	(365)	1,282	—	485
Cash dividends paid on common stock ($1.42 per share)	—	—	(43,582)	—	—	(43,582)
Balance at December 31, 2023	$47,550	$788,840	$282,355	$(231,995)	$(113,462)	$773,288

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2023	2022	2021
OPERATING ACTIVITIES:
Net income	$86,692	$105,020	$113,401
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and net amortization	10,577	11,105	11,421
Securities premium amortization (discount accretion), net	4,523	18,261	22,770
Loan (discount accretion) premium amortization, net	400	(52)	(829)
Provision for (reversal of) credit losses	9,154	3,241	(16,964)
Stock compensation expense	3,552	3,221	3,020
Deferred tax expense (benefit)	(2,110)	(89)	4,752
Net (gain) loss on sale of AFS securities	15,976	3,819	(3,862)
Net gain on sale of equity securities	(5,058)	—	—
Loss on impairment of investments	—	38	—
Net loss on premises and equipment	342	576	324
Gross proceeds from sales of loans held for sale	17,161	23,774	45,803
Gross originations of loans held for sale	(19,295)	(22,757)	(43,792)
Net (gain) loss on OREO	(61)	(40)	(174)
(Gain on purchase) loss on redemption of subordinated notes	(587)	—	1,118
Net change in:
Interest receivable	(1,139)	(10,205)	(437)
Other assets	37,874	(5,447)	(2,672)
Interest payable	7,422	1,378	(2,257)
Other liabilities	(85,559)	94,674	24,482
Net cash provided by (used in) operating activities	79,864	226,517	156,104
INVESTING ACTIVITIES:
Securities AFS:
Purchases	(2,046,010)	(708,307)	(692,675)
Sales	1,125,414	460,765	160,498
Maturities, calls and principal repayments	960,614	107,787	315,455
Securities HTM:
Purchases	—	(1,632)	—
Maturities, calls and principal repayments	22,563	12,002	18,304
Proceeds from sales of equity securities	6,679	—	—
Proceeds from redemption of FHLB stock and equity investments	36,919	46,812	32,174
Purchases of FHLB stock and equity investments	(39,796)	(40,967)	(21,221)
Net loan paydowns (originations)	(388,304)	(503,647)	11,891
Purchases of premises and equipment	(6,904)	(9,301)	(8,365)
Proceeds from (purchases of) BOLI	951	—	(13,000)
Proceeds from sales of premises and equipment	430	1,365	1,861
Net proceeds from sales of OREO	203	220	816
Proceeds from sales of repossessed assets	168	124	254
Net cash provided by (used in) investing activities	(327,073)	(634,779)	(194,008)
(continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	Years Ended December 31,
	2023	2022	2021
FINANCING ACTIVITIES:
Net change in deposits	351,551	475,629	789,968
Net change in other borrowings	288,667	197,934	47
Proceeds from FHLB borrowings	2,019,000	3,321,000	14,998,118
Repayment of FHLB borrowings	(1,959,710)	(3,511,680)	(15,486,607)
Net proceeds from issuance of subordinated notes	—	—	(95)
Purchase/redemption of subordinated notes	(4,365)	—	(100,011)
Proceeds from stock option exercises	1,082	790	7,672
Cash paid to tax authority related to tax withholding on share-based awards	(597)	(501)	(479)
Purchase of common stock	(44,803)	(33,708)	(34,148)
Proceeds from the issuance of common stock for dividend reinvestment plan	1,224	1,233	1,353
Cash dividends paid	(43,582)	(44,936)	(44,569)
Net cash provided by (used in) financing activities	608,467	405,761	131,249
Net increase (decrease) in cash and cash equivalents	361,258	(2,501)	93,345
Cash and cash equivalents at beginning of period	199,252	201,753	108,408
Cash and cash equivalents at end of period	$560,510	$199,252	$201,753
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION:
Interest paid	$137,292	$39,262	$28,687
Income taxes paid	$15,750	$11,950	$10,750
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Loans transferred to other repossessed assets and real estate through foreclosure	$226	$465	$740
Loans transferred from held for investment to held for sale	$8,093	$—	$—
Transfer of AFS to HTM securities	$—	$1,369,639	$—
Unsettled trades to purchase securities	$—	$—	$(18,995)
Unsettled trades to repurchase common stock	$—	$(133)	$—

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