SOUTHSIDE BANCSHARES INC
For the period ended Jun 30, 2025. Filed Jul 25, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 25, 2025
SBSI$34.08-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0000705432-25-000078
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-25.
0000705432-25-000144
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 182 current paragraphs.
106 unchanged; 59 reworded; 10 added; 2 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 14 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
•legislative, tax and regulatory changes including overdraft and late fee caps (if implemented), including those that impact the money supply and inflation;
Current report
Our cost of interest bearing deposits decreased 16 basis points, from 2.99% for the six months ended June 30, 2024 to 2.83% for the six months ended June 30, 2025. Our cost of total deposits decreased 11 basis points, from 2.37% for the six months ended June 30, 2024 to 2.26% for the six months ended June 30, 2025.
Current report
Net income was $21.8 million for the three months ended June 30, 2025, compared to $24.7 million for the same period in 2024, a decrease of $2.9 million, or 11.6%. The $3.5 million increase in noninterest expense and the $1.1 million increase in the provision for credit losses was partially offset by the $658,000 increase in net interest income, the $588,000 increase in noninterest income and the $493,000 decrease in income tax expense. Earnings per diluted common share were $0.72 for the three months ended June 30, 2025, compared to $0.81 for the same period in 2024, a decrease of 11.1%.
Current report
During the six months ended June 30, 2025, our net income decreased $2.9 million, or 6.2%, to $43.3 million from $46.2 million for the same period in 2024. The decrease in net income was primarily a result of the $3.7 million increase in noninterest expense, the $1.8 million increase in the provision for credit losses, partially offset by the $1.2 million increase in net interest income, the $1.1 million increase in noninterest income and the $394,000 decrease in income tax expense. Earnings per diluted common share decreased $0.10, or 6.6%, to $1.42 for the six months ended June 30, 2025, compared to $1.52 for the same period in 2024.
Current report
Net interest income was $108.1 million for the six months ended June 30, 2025, compared to $107.0 million for the same period in 2024, an increase of $1.2 million, or 1.1%. The increase in net interest income for the six months ended June 30, 2025 was due to decreases in the average rate paid on and average balance of our interest bearing liabilities, partially offset by the decrease in the average yield of interest earning assets. Total interest income decreased $8.1 million, or 3.9%, to $198.9 million for the six months ended June 30, 2025, compared to $206.9 million for the same period in 2024. Total interest expense decreased $9.3 million, or 9.3%, to $90.7 million for the six months ended June 30, 2025, compared to $100.0 million for the same period in 2024. Our net interest margin and net interest margin (FTE), a non-GAAP measure, increased to 2.78% and 2.91%, respectively, for the six months ended June 30, 2025, compared to 2.73% and 2.87%, respectively, for the same period in 2024, and our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.11% and 2.23%, respectively, compared to 2.01% and 2.15%, respectively, for the same period in 2024. See “Non-GAAP Financial Measures” for more information and for a reconciliation to GAAP.
Current report
The decrease in total interest income was attributable to the decrease in the average yield on earning assets to 5.24% for the six months ended June 30, 2025 from 5.42% for the same period in 2024. The decrease in total interest expense for the six months ended June 30, 2025 was primarily attributable to the decrease in interest rates on our interest bearing liabilities to 3.01% from 3.27% for the same period in 2024 and a decrease in the average balance of our interest bearing liabilities of $63.9 million, or 1.0%, when compared to the same period in 2024.
Current report
The decrease in BOLI income for the three and six months ended June 30, 2025, when compared to the same periods in 2024, was primarily due to a death benefit of $962,000 realized in the second quarter of 2024 for a former covered officer.
Current report
Other noninterest income increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to an increase in swap fee income, partially offset by the gain recognized on the repurchase of our subordinated notes at a discount during the second quarter of 2024. Other noninterest income increased for the six months ended June 30,
Current report
Advertising, travel and entertainment expense increased during the three and six months ended June 30, 2025, compared to the same period in 2024, due to increases in media advertising, meals and entertainment and travel related expenses.
Current report
ATM expense increased for the three and six months ended June 30, 2025, when compared to the same periods in 2024, due to an increase in ATM maintenance costs.
Removed paragraphs (2)
Previous report
•the effect of changes in federal or state tax laws;
Previous report
Net income was $21.5 million for both of the three month periods ended March 31, 2025 and 2024. The $700,000 increase in the provision for credit losses, the $208,000 increase in noninterest expense and the $99,000 increase in income tax expense, was offset by the $504,000 increase in net interest income and the $499,000 increase in noninterest income. Earnings per diluted common share was $0.71 for both of the three month periods ended March 31, 2025 and 2024.
Reworded paragraphs (59)
Previous wording
Certain statements of other than historical fact that are contained in this report may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “target,” “objective,” “plans,” “potential,” and similar expressions. Forward-looking statements are statements with respect to our beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause our actual results to differ materially from the results discussed in the forward-looking statements. For example, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, our ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates and our expectations regarding rate changes, tax reform, inflation, the impacts related to or resulting from other economic factors are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future. Accordingly, our results could materially differ from those that have been estimated. The most significant factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, interest rate fluctuations and general economic and recessionary concerns, as well as the effects of declines in the real estate market, tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains and decreased demand for other banking products and services), high unemployment and increasing insurance costs, as well as the financial stress to borrowers as a result of the foregoing, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations and our ability to manage liquidity in a rapidly changing and unpredictable market. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are …
Excerpt shortened here; the source contains the full paragraph.
Current wording
Certain statements of other than historical fact that are contained in this report may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “target,” “objective,” “plans,” “potential,” and similar expressions. Forward-looking statements are statements with respect to our beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause our actual results to differ materially from the results discussed in the forward-looking statements. For example, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, our ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates and our expectations regarding rate changes, tax reform, inflation, the impacts related to or resulting from other economic factors are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future. Accordingly, our results could materially differ from those that have been estimated. The most significant factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, interest rate fluctuations, including the impact of changes in interest rates on our financial projections, models and guidance, and general economic and recessionary concerns, as well as the effects of declines in the real estate market, tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains and decreased demand for other banking products and services), high unemployment and increasing insurance costs, as well as the financial stress to borrowers as a result of the foregoing, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations and our ability to manage liquidity in a rapidly changing and unpredictable market. Other factors that could cause ac…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
•general (i) political conditions, including, without limitation, governmental action and uncertainty resulting from U.S. and global political trends and (ii) economic conditions, either globally, nationally, in the State of Texas, or in the specific markets in which we operate, including, without limitation, the deterioration of the commercial real estate, residential real estate, construction and development, energy, oil and gas, credit or liquidity markets, which could cause an adverse change in our net interest margin, or a decline in the value of our assets, which could result in realized losses, as well as the risk of an economic slowdown or recession;
Current wording
•general (i) political conditions, including, without limitation, governmental action and uncertainty resulting from U.S. and global political trends and (ii) economic conditions, either globally, nationally, in the State of Texas, or in the specific markets in which we operate, including, without limitation, the deterioration of the commercial real estate, residential real estate, construction and development, energy, oil and gas, credit or liquidity markets, which could cause an adverse change in our net interest margin, or a decline in the value of our assets, which could result in realized losses, as well as the risks of an economic slowdown or recession and the effects of inflationary pressures, changes in interest rates, tariffs or trade wars (including reduced consumer spending, supply chain issues and adverse impacts to credit quality) and the related financial stress on borrowers and changes to customer behavior and credit risk as a result of the foregoing;
Previous wording
•current or future legislation, regulatory changes or changes in monetary or fiscal policy that adversely affect the businesses in which we or our customers or our borrowers are engaged, including the impact of the Dodd-Frank Act, the Federal Reserve’s actions to manage interest rates, the capital requirements promulgated by the Basel Committee, the CARES Act, the Economic Aid Act, tariffs, trade policies and/or disputes and other regulatory responses to economic conditions;
Current wording
•current or future legislation, regulatory changes or changes in monetary or fiscal policy that adversely affect the businesses in which we or our customers or our borrowers are engaged, including the Federal Reserve’s actions to manage interest rates, tariffs, trade policies, supply chain disruptions, immigration policies and/or disputes and other regulatory responses to economic conditions;
Previous wording
•potential impacts of the adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto;
Current wording
•potential impacts of the adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto (including increases in the cost of our deposit insurance assessments);
Previous wording
•the potential implementation under the new presidential administration of a regulatory reform agenda that is different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies;
Current wording
•the implementation under the presidential administration of a regulatory reform agenda that is different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies;
Previous wording
•changes in consumer spending, borrowing and saving habits, including as a result of inflation, tariffs, fluctuating interest rates and recessionary concerns;
Current wording
•changes in consumer spending, borrowing and saving habits, including as a result of inflation, tariffs, supply chain disruptions, fluctuating interest rates and recessionary concerns;
Previous wording
Recent tariff announcements and the ongoing negotiations have caused some uncertainty related to the economy and inflation prospects. While it is too early to discern the likely outcome of these negotiations, the current economic conditions and growth prospects for our markets continue to reflect a solid and overall positive outlook. Higher inflation levels and higher interest rates could have a negative impact on both our consumer and commercial borrowers. Currently, however, the Texas markets we serve continue to remain healthy due to both job and population growth.
Current wording
Continued tariff announcements and ongoing tariff negotiations have caused some uncertainty related to potential inflation levels and its impact on the overall economy. While it is too early to discern the likely outcome of these tariff announcements and negotiations, the current economic conditions and growth prospects for our markets continue to reflect a solid and overall positive outlook. Overall, the Texas markets we serve remain healthy and continue to report both job and population growth.
Previous wording
Our deposits were $6.59 billion at March 31, 2025, a decrease of $63.4 million, or 1.0%, from December 31, 2024. At March 31, 2025, we had 178,840 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 40.0% of total deposits as of March 31, 2025. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 20.8% of total deposits as of March 31, 2025.
Current wording
Our deposits were $6.63 billion at June 30, 2025, a decrease of $22.3 million, or 0.3%, from December 31, 2024. At June 30, 2025, we had 178,970 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 38.5% of total deposits as of June 30, 2025. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 21.1% of total deposits as of June 30, 2025.
Previous wording
Our noninterest bearing deposits represent approximately 20.9% of total deposits. During the three months ended March 31, 2025, our cost of interest bearing deposits decreased 14 basis points from 2.97% for the three months ended March 31, 2024 to 2.83%. Our cost of total deposits for the first quarter of 2025 decreased 10 basis points from 2.36% for the three months ended March 31, 2024 to 2.26%.
Current wording
Our noninterest bearing deposits represent approximately 20.6% of total deposits. During the three months ended June 30, 2025, our cost of interest bearing deposits decreased 19 basis points to 2.82% from 3.01% for the three months ended June 30, 2024. Our cost of total deposits for the second quarter of 2025 decreased 13 basis points to 2.26% from 2.39% for the three months ended June 30, 2024.
Previous wording
Our total assets decreased $174.1 million, or 2.0%, to $8.34 billion at March 31, 2025 from $8.52 billion at December 31, 2024. Our securities portfolio decreased by $76.9 million, or 2.7%, to $2.74 billion at March 31, 2025, compared to $2.81 billion at December 31, 2024. The decrease in the securities portfolio was due to decreases in U.S. Treasury securities, MBS and municipal securities during the three months ended March 31, 2025. Our FHLB stock increased $390,000, or 1.2%, to $34.2 million from $33.8 million at December 31, 2024.
Current wording
Our total assets decreased $177.5 million, or 2.1%, to $8.34 billion at June 30, 2025 from $8.52 billion at December 31, 2024. Our securities portfolio decreased by $83.1 million, or 3.0%, to $2.73 billion at June 30, 2025, compared to $2.81 billion at December 31, 2024. The decrease in the securities portfolio was due to decreases in U.S. Treasury securities, MBS and municipal securities during the six months ended June 30, 2025. Our FHLB stock decreased $9.4 million, or 27.9%, to $24.4 million from $33.8 million at December 31, 2024, due to the decrease in our FHLB borrowings during the six months ended June 30, 2025.
Previous wording
Loans at March 31, 2025 were $4.57 billion, a decrease of $94.4 million, or 2.0%, compared to December 31, 2024, due to decreases of $79.7 million in construction loans, $19.7 million in municipal loans, $2.5 million in commercial real estate loans and $1.9 million in loans to individuals. These decreases were partially offset by increases of $8.5 million in commercial loans and $1.0 million in 1-4 family residential loans. Loans held for sale decreased $1.0 million, or 53.6%, to $903,000 at March 31, 2025 from $1.9 million at December 31, 2024.
Current wording
Loans at June 30, 2025 were $4.60 billion, a decrease of $59.7 million, or 1.3%, compared to $4.66 billion at December 31, 2024, due to decreases of $67.4 million in construction loans, $27.2 million in municipal loans, $4.5 million in loans to individuals and $4.3 million in 1-4 family residential loans. These decreases were partially offset by increases of $26.3 million in commercial real estate loans and $17.4 million in commercial loans. Loans held for sale decreased $1.5 million, or 78.0%, to $428,000 at June 30, 2025 from $1.9 million at December 31, 2024.
Previous wording
Our nonperforming assets at March 31, 2025 increased $28.6 million, or 797.0%, to $32.2 million and represented 0.39% of total assets, compared to $3.6 million, or 0.04% of total assets, at December 31, 2024. Nonaccruing loans increased $1.1 million, or 33.6%, to $4.3 million, and the ratio of nonaccruing loans to total loans was 0.09% and 0.07% for March 31, 2025 and December 31, 2024, respectively. There were $27.5 million in restructured loans as of March 31, 2025, compared to $2,000 at December 31, 2024. The increase in restructured loans was due to the extension of maturity on a $27.5 million commercial real estate loan to allow for an extended lease up period. Repossessed assets were $46,000 at March 31, 2025, compared to $14,000 at December 31, 2024. There was $388,000 of OREO at March 31, 2025 and December 31, 2024.
Current wording
Our nonperforming assets at June 30, 2025 increased $29.3 million, or 816.9%, to $32.9 million and represented 0.39% of total assets, compared to $3.6 million, or 0.04% of total assets, at December 31, 2024. Nonaccruing loans increased $1.8 million, or 56.9%, to $5.0 million, and the ratio of nonaccruing loans to total loans was 0.11% and 0.07% for June 30, 2025 and December 31, 2024, respectively. There were $27.5 million in restructured loans as of June 30, 2025, compared to $2,000 at December 31, 2024. The increase in restructured loans was due to the extension of maturity in the first quarter of 2025 on a $27.5 million commercial real estate loan to allow for an extended lease up period. Repossessed assets were $19,000 at June 30, 2025, compared to $14,000 at December 31, 2024. There was $380,000 of OREO at June 30, 2025 and $388,000 at December 31, 2024.
Previous wording
Our deposits decreased $63.4 million, or 1.0%, with a balance of $6.59 billion at March 31, 2025 from $6.65 billion at December 31, 2024, primarily due to a decrease in brokered deposits of $196.7 million, or 26.5%, partially offset by an increase in public fund, commercial and retail deposits.
Current wording
Our deposits decreased $22.3 million, or 0.3%, to $6.63 billion at June 30, 2025 from $6.65 billion at December 31, 2024, primarily due to a decrease in brokered deposits of $135.7 million, or 18.3%, and a decrease in public fund deposits of $68.5 million, or 5.9%, partially offset by an increase in commercial and retail deposits.
Previous wording
Total FHLB borrowings decreased $120.2 million, or 16.4%, to $611.7 million at March 31, 2025 from $731.9 million at December 31, 2024.
Current wording
Total FHLB borrowings decreased $220.4 million, or 30.1%, to $511.5 million at June 30, 2025 from $731.9 million at December 31, 2024.
Previous wording
Other borrowings increased $3.3 million, or 4.3%, to $79.7 million at March 31, 2025, from $76.4 million at December 31, 2024.
Current wording
Other borrowings increased $23.4 million, or 30.6%, to $99.8 million at June 30, 2025, from $76.4 million at December 31, 2024.
Previous wording
Our total shareholders’ equity at March 31, 2025 increased 0.6%, or $4.7 million, to $816.6 million, or 9.8% of total assets, compared to $811.9 million, or 9.5% of total assets, at December 31, 2024. The increase in shareholders’ equity was the result of net income of $21.5 million, stock compensation expense of $914,000 and common stock issued under our dividend reinvestment plan of $264,000, partially offset by cash dividends paid of $10.9 million, other comprehensive loss of $6.9 million and net issuance of common stock under employee stock plans of $148,000.
Current wording
Our total shareholders’ equity at June 30, 2025 decreased 0.6%, or $4.7 million, to $807.2 million, or 9.7% of total assets, compared to $811.9 million, or 9.5% of total assets, at December 31, 2024. The decrease in shareholders’ equity was the result of cash dividends paid of $21.8 million, other comprehensive loss of $16.6 million and repurchases of $11.9 million of our common stock pursuant to our Stock Repurchase Plan, partially offset by net income of $43.3 million, stock compensation expense of $1.6 million, common stock issued under our dividend reinvestment plan of $514,000, and net issuance of common stock under employee stock plans of $145,000.
Previous wording
We ended the first quarter of 2025 with approximately $425.2 million in available liquidity from the FRDW, in addition to the approximately $1.79 billion available from the credit line with FHLB due primarily to the blanket lien on our loan portfolio and to a lesser extent, securities available as collateral. At March 31, 2025, the estimated deposits, without insurance or collateral, to total deposits, excluding affiliate deposits (Southside-owned deposits) was 20.8%, or $1.37 billion.
Current wording
We ended the second quarter of 2025 with approximately $383.6 million in available liquidity from the FRDW, in addition to the approximately $1.87 billion available from the credit line with FHLB due primarily to the blanket lien on our loan portfolio and to a lesser extent, securities available as collateral. At June 30, 2025, the estimated deposits, without insurance or collateral, to total deposits, excluding affiliate deposits (Southside-owned deposits) was 21.1%, or $1.40 billion.
Previous wording
In connection with $680.0 million of our wholesale funds, the Bank has entered into various variable rate agreements and fixed or variable rate short-term pay agreements with an interest rate tied to SOFR. In connection with $680.0 million and $790.0 million of the agreements outstanding at March 31, 2025 and December 31, 2024, respectively, the Bank also entered into various interest rate swap contracts that are treated as cash flow hedges under ASC Topic 815, “Derivatives and Hedging” that are expected to be effective in hedging the variability in future cash flows at 3.26% with a remaining average weighted maturity of 1.7 years at March 31, 2025. Refer to “Note 9 – Derivative Financial Instruments and Hedging Activities” in our consolidated financial statements included in this report for a detailed description of our hedging policy and methodology related to derivative instruments.
Current wording
During the six months ended June 30, 2025, we entered into an additional $200 million cash flow hedge interest rate swap contracts, while $180 million cash flow hedge interest rate swap contracts matured. At June 30, 2025, brokered deposits of $530 million and FHLB advances of $280 million were hedged with our $810 million of cash flow swaps. As of June 30, 2025, a pre-tax unrealized gain of $2.5 million was recognized in other comprehensive income, and there was no ineffective portion of these hedges. In connection with $810.0 million and $790.0 million of the agreements outstanding at June 30, 2025 and December 31, 2024, respectively, the Bank also entered into various interest rate swap contracts that are treated as cash flow hedges under ASC Topic 815, “Derivatives and Hedging” that are expected to be effective in hedging the variability in future cash flows at 3.52% with a remaining average weighted maturity of 1.7 years at June 30, 2025. Refer to “Note 9 – Derivative Financial Instruments and Hedging Activities” in our consolidated financial statements included in this report for a detailed description of our hedging policy and methodology related to derivative instruments.
Previous wording
We utilize wholesale funding and securities to enhance overall profitability, to determine the appropriate leverage of our capital and to determine acceptable levels of credit, interest rate and liquidity risk consistent with prudent capital management. This balance sheet strategy currently consists of borrowing funds from the brokered market, FHLB and the FRDW. These funds are invested primarily in U.S. agency MBS and long-term municipal securities and to a lesser extent, U.S. Treasury Bills and corporate securities. Although the securities purchased often carry lower yields than loans, these securities generally (i) increase the overall quality of our assets because of either the implicit or explicit guarantees of the U.S. Government, and the guarantees of the municipalities, (ii) are more liquid than individual loans and (iii) may be used to collateralize our borrowings or other obligations.
Current wording
We continue to evaluate the lowest cost wholesale funding sources and will utilize either brokered deposits, FHLB advances or FRDW borrowings, or a combination of the three funding sources in addition to utilizing cash flow hedges to mitigate the impacts of interest rate movements. Wholesale funding and securities are utilized to enhance overall profitability, to determine the appropriate leverage of our capital and to determine acceptable levels of credit, interest rate and liquidity risk consistent with prudent capital management. Wholesale funds are invested primarily in U.S. agency MBS and long-term municipal securities and to a lesser extent, U.S. Treasury Bills and corporate securities. Although the securities purchased often carry lower yields than loans, these securities generally (i) increase the overall quality of our assets because of either the implicit or explicit guarantees of the U.S. Government and the guarantees of the municipalities, (ii) are more liquid than individual loans and (iii) may be used to collateralize our borrowings or other obligations.
Previous wording
With respect to funding sources, we primarily utilize deposits and to a lesser extent wholesale funding to achieve our strategy of minimizing cost while achieving overall interest rate risk objectives as well as the liability management objectives of the ALCO. Our primary wholesale funding sources are FHLB, brokered deposits and borrowings from the FRDW. Our FHLB borrowings decreased 16.4%, or $120.2 million, to $611.7 million at March 31, 2025 from $731.9 million at December 31, 2024. As of March 31, 2025 and December 31, 2024, we had no borrowings from the FRDW.
Current wording
Our FHLB borrowings decreased 30.1%, or $220.4 million, to $511.5 million at June 30, 2025 from $731.9 million at December 31, 2024. As of June 30, 2025, we had $30.0 million in borrowings from the FRDW. We had no borrowings from the FRDW at December 31, 2024.
Previous wording
As of March 31, 2025, our total wholesale funding as a percentage of deposits, not including brokered deposits, decreased to 19.2% from 24.9% at December 31, 2024.
Current wording
As of June 30, 2025, our total wholesale funding as a percentage of deposits, not including brokered deposits, decreased to 19.1% from 24.9% at December 31, 2024.
Previous wording
Our brokered deposits may consist of CDs and non-maturity deposits which may be raised quickly with terms tailored to our funding needs. We had $54.6 million in brokered CDs at March 31, 2025, compared to $115.7 million at December 31, 2024. At March 31, 2025, our brokered CDs had a weighted average cost of 429 basis points and remaining maturities of less than 3 months. Our brokered non-maturity deposits decreased to $491.5 million at March 31, 2025, of which $370.0 million are related to our cash flow hedges, from $627.1 million at December 31, 2024, with a weighted average cost of 368 and 321 basis points, respectively. Our wholesale funding policy currently allows for maximum brokered deposits of the lesser of $1.05 billion, or 12% of total assets. Potential higher interest expense and lack of customer loyalty are risks associated with the use of brokered deposits.
Current wording
Our brokered deposits may consist of CDs and non-maturity deposits which may be raised quickly with terms tailored to our funding needs. We had $134.3 million in brokered CDs at June 30, 2025, of which $80.0 million are related to our cash flow hedges, from $115.7 million at December 31, 2024. At June 30, 2025, our brokered CDs had a weighted average cost of 437 basis points and remaining maturities of less than 10 months. Our brokered non-maturity deposits decreased to $472.9 million at June 30, 2025, of which $450.0 million are related to our cash flow hedges, from $627.1 million at December 31, 2024, with a weighted average cost of 350 and 321 basis points, respectively. Our wholesale funding policy currently allows for maximum brokered deposits of the lesser of $1.05 billion, or 12% of total assets. Potential higher interest expense and lack of customer loyalty are risks associated with the use of brokered deposits.
Previous wording
During the three months ended March 31, 2025, we entered into an additional $50 million cash flow hedge interest rate swap contract while $160 million cash flow hedge interest rate swap contracts matured. At March 31, 2025, FHLB advances of $310 million and brokered deposits of $370 million were hedged with our $680 million of cash flow swaps. As of March 31, 2025, a pre-tax unrealized gain of $5.3 million was recognized in other comprehensive income, and there was no ineffective portion of these hedges. We continue to evaluate the lowest cost wholesale funding sources and will utilize either brokered deposits, FHLB advances or FRDW borrowings, or a combination of the three funding sources in addition to utilizing cash flow hedges to mitigate the impacts of interest rate movements. At March 31, 2025, the majority of the securities portfolio was funded by non-maturity deposits, some of which are included in wholesale funding that accounts for approximately 42% of the funding source, of which approximately 59% is swapped at a fixed rate, providing protection from rising interest rates.
Current wording
At June 30, 2025, the majority of the securities portfolio was funded by non-maturity deposits, some of which are included in wholesale funding that accounts for approximately 41% of the funding source, of which approximately 71% is swapped at a fixed rate, providing protection from rising interest rates.
Previous wording
Our securities portfolio decreased 2.7% from $2.81 billion at December 31, 2024 to $2.74 billion at March 31, 2025. The decrease in the securities portfolio was due to maturities, principal payments and sales of securities during the three months ended March 31, 2025, which more than offset securities purchased.
Current wording
Our securities portfolio decreased 3.0% from $2.81 billion at December 31, 2024 to $2.73 billion at June 30, 2025. The decrease in the securities portfolio was due to maturities, principal payments and sales of securities during the six months ended June 30, 2025, which more than offset securities purchased.
Previous wording
During the three months ended March 31, 2025, we continued to adjust the composition of the securities portfolio as all categories in the portfolio decreased. The decrease was attributable to maturities and principal repayments in most categories and sales of MBS, partially offset by purchases of U.S. Agency MBS and U.S. Treasury Bills. During the three months ended March 31, 2025, we replaced $97.9 million of maturing short-term U.S. Treasury Bills to collateralize public fund deposits and $120.8 million in low premium, 6.0% coupon MBS. We sold $119.6 million of MBS during the three months ended March 31, 2025, which resulted in a net realized loss of $554,000.
Current wording
During the six months ended June 30, 2025, we adjusted the composition of the securities portfolio as all categories in the portfolio decreased. The decrease was attributable to maturities, calls and principal repayments in most categories and sales of U.S. Agency MBS, which were partially offset by purchases of U.S. Agency MBS, U.S. Treasury Bills and a corporate subordinated debenture. During the six months ended June 30, 2025, we replaced $132.5 million of maturing short-term U.S. Treasury Bills to collateralize public fund deposits and purchased $171.3 million in low premium, 6.0% coupon MBS. We sold $119.6 million of MBS during the six months ended June 30, 2025, which resulted in a net realized loss of $554,000.
Previous wording
At March 31, 2025, securities as a percentage of assets totaled 32.8%, compared to 33.0% at December 31, 2024, due to a $76.9 million, or 2.7%, decrease in securities, while cash and cash equivalents increased to 5.2% of total assets at March 31, 2025, compared to 5.0% at December 31, 2024. Our balance sheet management strategy is dynamic and is continually evaluated as market conditions warrant.
Current wording
At June 30, 2025, securities as a percentage of assets totaled 32.7%, compared to 33.0% at December 31, 2024, due to an $83.1 million, or 3.0%, decrease in securities and cash and cash equivalents decreased to 4.7% of total assets at June 30, 2025, compared to 5.0% at December 31, 2024. Our balance sheet management strategy is dynamic and is continually evaluated as market conditions warrant.
Previous wording
During 2022, we entered into partial term fair value hedges for certain of our fixed rate callable AFS municipal securities. During 2024, we entered into partial term fair value hedges of fixed rate AFS MBS and fixed rate municipal loans using the portfolio layer method. The instruments are designated as fair value hedges as the changes in the fair value of the interest rate swap are expected to partially offset changes in the fair value of the hedged item attributable to changes in the SOFR swap rate, the designated benchmark interest rate. As of March 31, 2025, hedged municipal securities with a carrying amount of $289.9 million are included in our AFS securities portfolio in our consolidated balance sheets representing approximately 72% of the AFS municipal portfolio. As of March 31, 2025,$134.0 million in hedging instruments were used to hedge a layer of the closed portfolio of AFS MBS with a carrying value of $420.1 million, or 46% of the AFS MBS portfolio, and$155.0 million in hedging instruments were used to hedge a layer of the closed portfolio of municipal loans. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for us making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value.
Current wording
During 2022, we entered into partial term fair value hedges for certain of our fixed rate callable AFS municipal securities. During 2024, we entered into partial term fair value hedges of fixed rate AFS MBS and fixed rate municipal loans using the portfolio layer method. The instruments are designated as fair value hedges as the changes in the fair value of the interest rate swap are expected to partially offset changes in the fair value of the hedged item attributable to changes in the SOFR swap rate, the designated benchmark interest rate. As of June 30, 2025, hedged municipal securities with a carrying amount of $279.9 million are included in our AFS securities portfolio in our consolidated balance sheets, representing approximately 72% of the AFS municipal portfolio. As of June 30, 2025,$164.0 million in hedging instruments were used to hedge a layer of the closed portfolio of AFS MBS with a carrying value of $395.1 million, or 43% of the AFS MBS portfolio, and$155.0 million in hedging instruments were used to hedge a layer of the closed portfolio of municipal loans. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for us making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value.
Previous wording
Our results of operations are dependent primarily on net interest income, which is the difference between the interest income earned on assets (loans and investments) and interest expense due on our funding sources (deposits and borrowings) during a particular period. Results of operations are also affected by our noninterest income, provision for credit losses, noninterest expenses and income tax expense. General economic and competitive conditions, particularly changes in interest rates, changes in interest rate yield curves, prepayment rates of MBS and loans, repricing of loan relationships, government policies and actions of regulatory authorities also significantly affect our results of operations. Future changes in applicable law, regulations or government policies may also have a material impact on us.
Current wording
Our results of operations are dependent primarily on net interest income, which is the difference between the interest income earned on assets (loans and investments) and interest expense due on our funding sources (deposits and borrowings) during a particular period. Results of operations are also affected by our noninterest income, provision for credit losses, noninterest expenses and income tax expense. General economic and competitive conditions, particularly changes in interest rates, changes in interest rate yield curves, prepayment rates of MBS and loans, repricing of loan relationships, government policies and actions of regulatory authorities also significantly affect our results of operations. Future changes in applicable laws, regulations or government policies may also have a material impact on our results of operations.
Previous wording
Net interest income is one of the principal sources of a financial institution’s earnings stream and represents the difference or spread between interest and fee income generated from interest earning assets and the interest expense paid on interest bearing liabilities. Fluctuations in interest rates or interest rate yield curves, as well as repricing characteristics and volume and changes in the mix of interest earning assets and interest bearing liabilities, materially impact net interest income. During the first quarter of 2025, the federal funds rate remained unchanged at 4.25% to 4.50%. If the federal funds rate remains elevated, it may negatively impact our net interest income.
Current wording
Net interest income is one of the principal sources of a financial institution’s earnings stream and represents the difference or spread between interest and fee income generated from interest earning assets and the interest expense paid on interest bearing liabilities. Fluctuations in interest rates or interest rate yield curves, as well as repricing characteristics and volume and changes in the mix of interest earning assets and interest bearing liabilities, materially impact net interest income. During the six months ended June 30, 2025, the federal funds rate remained unchanged at 4.25% to 4.50%. If the federal funds rate remains elevated, it may negatively impact our net interest income.
Previous wording
Net interest income for the three months ended March 31, 2025, increased $504,000, or 0.9%, compared to the same period in 2024. The increase in net interest income for the three months ended March 31, 2025, was due to the decrease in the average rate paid on our interest bearing liabilities and the increase in the average balance of our interest earning assets, partially offset by the decrease in the average yield of interest earning assets and the increase in the average balance of our interest bearing liabilities. Total interest income decreased $2.5 million, or 2.4%, to $100.3 million for the three months ended March 31, 2025, compared to $102.8 million during the same period in 2024. Total interest expense decreased $3.0 million, or 6.0%, to $46.4 million for the three months ended March 31, 2025, compared to $49.4 million for the same period in 2024. Our net interest margin increased to 2.74% compared to 2.72% for the same period in 2024, and our net interest margin (FTE), a non-GAAP measure, was 2.86% for both of the three month periods ended March 31, 2025 and 2024. Our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.08% and 2.20%, respectively, compared to 2.02% and 2.16%, respectively, for the same period in 2024. See “Non-GAAP Financial Measures” for more information and a reconciliation to GAAP.
Current wording
Net interest income for the three months ended June 30, 2025 increased $658,000, or 1.2%, compared to the same period in 2024. The increase in net interest income was due to decreases in the average rate paid on and average balance of our interest bearing liabilities, partially offset by decreases in the average yield of and average balance of our interest earning assets. Total interest income decreased $5.6 million, or 5.4%, to $98.6 million for the three months ended June 30, 2025, compared to $104.2 million during the same period in 2024. Total interest expense decreased $6.3 million, or 12.4%, to $44.3 million for the three months ended June 30, 2025, compared to $50.6 million for the same period in 2024. Our net interest margin and our net interest margin (FTE), a non-GAAP measure, increased to 2.82% and 2.95%, respectively, for the three months ended June 30, 2025, compared to 2.74% and 2.87%, respectively, for the same period in 2024. Our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.15% and 2.27%, respectively, for the three months ended June 30, 2025, compared to 2.00% and 2.13%, respectively, for the same period in 2024. See “Non-GAAP Financial Measures” for more information and a reconciliation to GAAP.
Previous wording
The following table presents on a fully taxable-equivalent basis, a non-GAAP measure, the net change in net interest income and sets forth the dollar amount of increase (decrease) in the average volume of interest earning assets and interest bearing liabilities and from changes in yields/rates. Volume/Yield/Rate variances (change in volume times change in yield/rate) have been allocated to amounts attributable to changes in volumes and to changes in yields/rates in proportion to the amounts directly attributable to those changes (in thousands). The comparison between the quarters includes an additional change factor that shows the effect of the difference in the number of days in each period for assets and liabilities that accrue interest based upon the actual number of days in the period.
Current wording
The following table presents on a fully taxable-equivalent basis, a non-GAAP measure, the net change in net interest income and sets forth the dollar amount of increase (decrease) in the average volume of interest earning assets and interest bearing liabilities and changes in yields/rates. Volume/Yield/Rate variances (change in volume times change in yield/rate) have been allocated to amounts attributable to changes in volumes and to changes in yields/rates in proportion to the amounts directly attributable to those changes (in thousands). The comparison between the quarters includes an additional change factor that shows the effect of the difference in the number of days in each period for assets and liabilities that accrue interest based upon the actual number of days in the period.
Previous wording
The decrease in total interest income for the three months ended March 31, 2025, was attributable to a decrease in the average yield on interest earning assets to 5.23% from 5.38% for the three months ended March 31, 2025, compared to the same period in 2024, partially offset by a $76.1 million, or 1.0%, increase in the average balance of interest earning assets when compared to the same period in 2024. The decrease in total interest expense for the three months ended March 31, 2025, was primarily attributable to the decrease in interest rates on our interest bearing liabilities to 3.03% from 3.22% for the same period in 2024, partially offset by an increase in the average balance of our interest bearing liabilities of $40.6 million, or 0.7%, for the three months ended March 31, 2025, compared to the same period in 2024. The increase in average earning assets was primarily the result of the increase in MBS and loans, partially offset by decreases in tax-exempt investment securities, interest earning deposits, taxable investment securities and federal funds sold.
Current wording
The decrease in total interest income for the three months ended June 30, 2025, was attributable to a decrease in the average yield on interest earning assets to 5.25% for the three months ended June 30, 2025, compared to 5.45% for the same period in 2024, and a $172.1 million, or 2.2%, decrease in the average balance of interest earning assets when compared to the same period in 2024. The decrease in total interest expense for the three months ended June 30, 2025, was primarily attributable to the decrease in interest rates on our interest bearing liabilities to 2.98% for the three months ended June 30, 2025 from 3.32% for the same period in 2024, and a decrease in the average balance of our interest bearing liabilities of $167.0 million, or 2.7%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease in average interest bearing liabilities was primarily the result of decreases in FHLB borrowings and other borrowings.
Previous wording
Note: As of March 31, 2025 and 2024, loans totaling $4.3 million and $7.7 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Current wording
Note: As of June 30, 2025 and 2024, loans totaling $5.0 million and $6.1 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
Previous wording
The 5.1% increase in noninterest income for the three months ended March 31, 2025, when compared to the same period in 2024, was primarily due to increases in gain on sale of loans and trust fees, partially offset by an increase in net loss on sale of securities AFS.
Current wording
The 5.1% increase in noninterest income for the three months ended June 30, 2025, when compared to the same period in 2024, was primarily due to a decrease in net loss on sale of securities AFS and increases in other noninterest income and trust fees, partially offset by a decrease in BOLI income. The 5.1% increase in noninterest income for the six months ended June 30, 2025, when compared to the same period in 2024, was primarily due to increases in trust fees, other noninterest income and gain on sale of loans, partially offset by a decrease in BOLI income.
Previous wording
During the three months ended March 31, 2025, we sold MBS that resulted in a net loss on sale of AFS securities of $554,000. During the three months ended March 31, 2024, we sold municipal securities that resulted in a net loss on sale of AFS securities of $18,000.
Current wording
During the six months ended June 30, 2025, we sold MBS that resulted in a net loss on sale of AFS securities of $554,000. During the three and six months ended June 30, 2024, we sold municipal securities that resulted in a net loss on sale of AFS securities of $563,000 and $581,000, respectively.
Previous wording
Gain on sale of loans increased for the three months ended March 31, 2025, when compared to the same period in 2024, due to the $512,000 loss on the sale of a commercial real estate loan relationship during the first quarter of 2024.
Current wording
The decrease in gain on sale of loans for the three months ended June 30, 2025 and the increase for the six months ended June 30, 2025, when compared to the same periods in 2024, was primarily due to a $100,000 recovery in the second quarter of 2024 related to the $512,000 loss on the sale of a commercial real estate loan relationship during the first quarter of 2024.
Previous wording
Trust fees increased for the three months ended March 31, 2025, when compared to the same period in 2024, due to an increase in accounts under management and fee repricing.
Current wording
Trust fees increased for the three and six months ended June 30, 2025, when compared to the same periods in 2024, due to an increase in accounts under management and fee repricing.
Previous wording
Brokerage services income increased for the three months ended March 31, 2025, when compared to the same period in 2024, due to an increase in assets under management.
Current wording
Brokerage services income increased for the three and six months ended June 30, 2025, when compared to the same periods in 2024, due to an increase in assets under management.
Previous wording
Other noninterest income increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to increases in equity investment income, swap fee income and check order income, partially offset by a decrease in mortgage servicing fee income.
Current wording
2025, when compared to the same period in 2024, primarily due to increases in swap fee income and equity investment income, partially offset by a decrease in mortgage servicing fee income and the gain recognized on the repurchase of our subordinated notes at a discount during the second quarter of 2024.
Previous wording
The increase in noninterest expense for the three months ended March 31, 2025, when compared to the same period in 2024, was due to increases in other noninterest expense and professional fees, partially offset by decreases in salaries and employee benefits expense and amortization of intangibles.
Current wording
The increase in noninterest expense for the three months ended June 30, 2025, when compared to the same period in 2024, was primarily due to increases in other noninterest expense, professional fees, salaries and employee benefits expense and advertising, travel and entertainment. The increase in noninterest expense for the six months ended June 30, 2025, when compared to the same period in 2024, was primarily due to increases in other noninterest expense and professional fees, partially offset by a decrease in salaries and employee benefits expense.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
Year-to-Date Analysis of Changes in Interest Income and Interest Expense
Current report — wording carried from elsewhere
The following table presents on a fully taxable-equivalent basis, a non-GAAP measure, the net change in net interest income and sets forth the dollar amount of increase (decrease) in the average volume of interest earning assets and interest bearing liabilities and changes in yields/rates. Volume/Yield/Rate variances (change in volume times change in yield/rate) have been allocated to amounts attributable to changes in volumes and to changes in yields/rates in proportion to the amounts directly attributable to those changes (in thousands):
Current report — wording carried from elsewhere
(1)Interest yields on loans and securities that are nontaxable for federal income tax purposes are presented on a fully taxable-equivalent basis. See “Non-GAAP Financial Measures” for more information and for a reconciliation to GAAP.
Current report — wording carried from elsewhere
The “Average Balances with Average Yields and Rates” table that follows shows average earning assets and interest bearing liabilities together with the average yield on the earning assets and the average rate of the interest bearing liabilities (dollars in thousands) for the six months ended June 30, 2025 and 2024. The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures. See “Non-GAAP Financial Measures” for more information, and for a reconciliation to GAAP.
Current report — wording carried from elsewhere
(1)Interest on loans includes net fees on loans that are not material in amount.
Current report — wording carried from elsewhere
(2)For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Current report — wording carried from elsewhere
Note: As of June 30, 2025 and 2024, loans totaling $5.0 million and $6.1 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.