SOUTHSIDE BANCSHARES INC
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
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.
Mar 31, 2026 · Filed Apr 30, 2026
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 2025-09-30; filed 2025-10-28.
0000705432-25-000207
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0000705432-26-000079
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 182 previous paragraphs and 170 current paragraphs.
99 unchanged; 60 reworded; 11 added; 15 removed; 8 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 14 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 (11)
Current report
•changes in trade, monetary, and fiscal policies and laws, including actual changes in interest rates and the Fed Funds rate and changes in international trade policies, tariffs and treaties affecting imports and exports, and their related impacts on macroeconomic conditions, customer behavior, funding costs and loan and securities portfolios;
Current report
Net income was $23.3 million for the three months ended March 31, 2026, compared to $21.5 million for the same period in 2025, an increase of $1.8 million, or 8.1%. The increase in net income was due to a $3.8 million increase in net interest income, and a $2.4 million increase in noninterest income, partially offset by a $3.5 million increase in noninterest expense, a $652,000 increase in provision for credit losses and a $319,000 increase in income tax expense. Earnings per diluted common share were $0.78 for the three months ended March 31, 2026, compared to $0.71 for the same period in 2025, an increase of $0.07, or 9.9%.
Current report
Our deposits increased $9.3 million, or 0.1%, and remained relatively unchanged from $6.87 billion at December 31, 2025. Brokered deposits increased $110.7 million, or 16.5%, partially offset by decreases in retail deposits of $82.0 million, or 1.6%, and public fund deposits of $19.4 million, or 1.7%. The decrease in retail deposits of $82.0 million consists of $53.1 million of noninterest bearing deposits and $28.9 million of interest bearing deposits.
Current report
Total FHLB borrowings increased $104.8 million, or 49.6%, to $315.9 million at March 31, 2026 from $211.1 million at December 31, 2025.
Current report
Other borrowings increased $146.9 million, or 70.4%, to $355.5 million at March 31, 2026, from $208.7 million at December 31, 2025, due to a $155.0 million increase in FRDW borrowings.
Current report
Cash and cash equivalents decreased to 4.4% of total assets at March 31, 2026, compared to 4.6% at December 31, 2025.
Current report
The 23.2% increase in noninterest income for the three months ended March 31, 2026, when compared to the same period in 2025, was due to increases in all noninterest income categories, however, the primary increases occurred in other noninterest income, trust fees and a decrease in net loss on sale of AFS securities.
Current report
Retirement expense, included in salaries and employee benefits, increased $440,000, or 52.7%, for the three months ended March 31, 2026, when compared to the same period in 2025. This increase was primarily due to an increase in our split dollar expense related to the execution of a new split dollar agreement with an executive officer.
Current report
Software and data processing expense increased for the three months ended March 31, 2026, when compared to the same period in 2025, due to new software contracts and increases in existing contract renewal costs.
Current report
Loss on redemption of subordinated notes consisted of the remaining unamortized discount of $601,000 and debt issuance costs of $190,000 associated with the notes at the time of redemption on February 15, 2026.
Current report
Other noninterest expense increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to increases in online banking expense, printing and supplies expense, losses on disposal of fixed assets, ATM losses, advantage check card losses and trust expense.
Removed paragraphs (15)
Previous report
Our cost of interest bearing deposits decreased 16 basis points, from 2.99% for the nine months ended September 30, 2024 to 2.83% for the nine months ended September 30, 2025. Our cost of total deposits decreased 11 basis points, from 2.37% for the nine months ended September 30, 2024 to 2.26% for the nine months ended September 30, 2025.
Previous report
Net income was $4.9 million for the three months ended September 30, 2025, compared to $20.5 million for the same period in 2024, a decrease of $15.6 million, or 76.1%. The decrease in net income was largely driven by a $20.2 million decrease in noninterest income and, to a lesser extent, a $1.2 million increase in noninterest expense, partially offset by a $4.2 million decrease in income tax expense, a $1.3 million decrease in provision for credit losses and a $254,000 increase in net interest income. Net loss on sale of AFS securities, included in noninterest income, was $24.4 million for the three months ended September 30, 2025, compared to a net loss of $1.9 million for the same period in 2024. Earnings per diluted common share were $0.16 for the three months ended September 30, 2025, compared to $0.68 for the same period in 2024, a decrease of $0.52, or 76.5%.
Previous report
During the nine months ended September 30, 2025, our net income decreased $18.5 million, or 27.7%, to $48.2 million from $66.7 million for the same period in 2024. The decrease in net income was largely driven by a $19.1 million decrease in noninterest income and, to a lesser extent, a $4.9 million increase in noninterest expense and a $510,000 increase in provision for credit losses, partially offset by a $4.6 million decrease in income tax expense and a $1.4 million increase in net interest income. Net loss on sale of AFS securities, included in noninterest income, was $24.9 million for the nine months ended September 30, 2025, compared to a net loss of $2.5 million for the same period in 2024. Earnings per diluted common share decreased $0.61, or 27.7%, to $1.59 for the nine months ended September 30, 2025, compared to $2.20 for the same period in 2024.
Previous report
Our deposits increased $307.3 million, or 4.6%, to $6.96 billion at September 30, 2025 from $6.65 billion at December 31, 2024, primarily due to an increase in brokered deposits of $152.9 million, or 20.6%, and retail deposits of $319.1 million, or 6.8%, partially offset by a decrease in public fund deposits of $164.7 million, or 13.4%. The increase in retail deposits of $319.1 million consist of $56.6 million of noninterest bearing deposits and $262.5 million of interest bearing deposits.
Previous report
Total FHLB borrowings decreased $630.6 million, or 86.2%, to $101.3 million at September 30, 2025 from $731.9 million at December 31, 2024.
Previous report
Other borrowings increased $22.9 million, or 30.0%, to $99.4 million at September 30, 2025, from $76.4 million at December 31, 2024.
Previous report
During the three months ended September 30, 2025, we restructured a portion of the securities portfolio to enhance future earnings by selling primarily lower yielding long duration municipal securities and, to a lesser extent, MBS. During the third quarter, we sold $106.3 million of MBS and $217.8 million of municipal securities, which resulted in a net realized loss of $24.4 million. During the nine months ended September 30, 2025, we replaced $182 million of maturing short-term U.S. Treasury Bills to collateralize public fund deposits as needed and purchased $368 million in lower premium, 5.50% to 6.50% coupon MBS.
Previous report
At September 30, 2025, securities as a percentage of assets totaled 30.5%, compared to 33.0% at December 31, 2024, due to a $257.3 million, or 9.1%, decrease in securities. Cash and cash equivalents increased to 5.6% of total assets at September 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 report
Net interest income was $163.8 million for the nine months ended September 30, 2025, compared to $162.4 million for the same period in 2024, an increase of $1.4 million, or 0.9%. The increase in net interest income for the nine months ended September 30, 2025 was due to decreases in the average rate paid on and average balance of our interest bearing liabilities and a change in the mix of our interest earning assets, partially offset by the decrease in the average yield of interest earning assets. Total interest income decreased $11.9 million, or 3.8%, to $300.7 million for the nine months ended September 30, 2025, compared to $312.6 million for the same period in 2024. Total interest expense decreased $13.3 million, or 8.9%, to $136.9 million for the nine months ended September 30, 2025, compared to $150.2 million for the same period in 2024. Our net interest margin and net interest margin (FTE), a non-GAAP measure, increased to 2.79% and 2.92%, respectively, for the nine months ended September 30, 2025, compared to 2.76% and 2.90%, respectively, for the same period in 2024, and our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.12% and 2.24%, respectively, compared to 2.04% and 2.18%, respectively, for the same period in 2024. See “Non-GAAP Financial Measures” for more information and for a reconciliation to GAAP.
Previous report
The decrease in total interest income was attributable to the decrease in the average yield on earning assets to 5.25% for the nine months ended September 30, 2025 from 5.45% for the same period in 2024, partially offset by a change in the mix of our interest earning assets when compared to the same period in 2024. The decrease in total interest expense for the nine months ended September 30, 2025 was 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 $44.0 million, or 0.7%, when compared to the same period in 2024.
Previous report
The 246.7% decrease in noninterest income for the three months ended September 30, 2025, when compared to the same period in 2024, was due to an increase in net loss on sale of securities AFS, partially offset by increases in other noninterest income, gain on sale of loans and trust fees. The 64.8% decrease in noninterest income for the nine months ended September 30, 2025, when compared to the same period in 2024, was due to an increase in net loss on sale of securities AFS and a decrease in BOLI income, partially offset by increases in other noninterest income, gain on sale of loans and trust fees.
Previous report
Retirement expense, included in salaries and employee benefits, decreased $24,000, or 2.6%, and $94,000, or 3.4%, for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024. This decrease was due to decreases in our split dollar expense, post-retirement benefits expense and deferred compensation expense, partially offset by an increase in 401(k) matching expense.
Previous report
Professional fees increased for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, due to increases in managed services, audit, consulting and legal fees.
Previous report
Other noninterest expense increased for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, primarily due to an increase in non-service cost of the Retirement Plan as a result of the amortization method change from average life expectancy to average future service in the first quarter of 2025 and a one-time charge of $1.2 million on the demolition of an old branch facility following completion of the new branch during the second quarter of 2025, partially offset by a decrease in repossessed asset expense.
Previous report
In April 2020, the FDIC, Federal Reserve, and the Office of the Comptroller of the Currency issued supplemental instructions allowing banking organizations that implement CECL before the end of 2020, the option to delay for two years an estimate of the CECL methodologies’ effect on regulatory capital, relative to the incurred loss methodologies effect on capital, followed by a three-year transition period. We elected to adopt the five-year transition option, and as of December 31, 2024, the CECL impact on regulatory capital was fully phased and there is no longer a transitional amount.
Reworded paragraphs (60)
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, 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 factors that could cause future results to differ materially from those anticipated by our forward-looking statements include general economic conditions in our markets, including 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, 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 materiall…
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, 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 factors that could cause future results to differ materially from those anticipated by our forward-looking statements include general economic conditions in our markets, including higher energy and gas prices, the impact of changes in interest rates on our financial projections, models and guidance, 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 in…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
•legislative, tax and regulatory changes including overdraft and late fee caps (if implemented), including those that impact the money supply and inflation;
Current wording
•legislative, tax and regulatory changes, including those that impact the money supply, trade, immigration and inflation;
Previous wording
•technological changes, including potential cyber-security incidents and other disruptions, or innovations to the financial services industry, including as a result of the increased telework environment;
Current wording
•technological changes, including potential cyber-security incidents and other disruptions, developments in AI, or innovations to the financial services industry, including as a result of the increased telework environment;
Previous wording
•our ability to identify and address cyber-security risks such as data security breaches, malware, “denial of service” attacks, “hacking” and identity theft, which may be exacerbated by developments in generative artificial intelligence and which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
Current wording
•our ability to identify and address cyber-security risks such as data security breaches, malware, “denial of service” attacks, “hacking” and identity theft, which may be exacerbated by developments in generative AI and which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption or damage of our systems, increased costs, significant losses, or adverse effects to our reputation;
Previous wording
•credit risks of borrowers, including any increase in those risks due to changing economic conditions;
Current wording
•credit risks of borrowers, including any increase in those risks due to changing economic conditions, including inflation, tariffs and immigration policies;
Previous wording
•risks related to fluctuations in the price per barrel of crude oil;
Current wording
•risks related to fluctuations in the price per barrel of crude oil, including as a result of recent conflict in the Middle East;
Previous wording
Continued tariff announcements and ongoing tariff negotiations have caused some uncertainty related to 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 positive outlook. Overall, the Texas markets we serve remain healthy and continue to report both job and population growth.
Current wording
Ongoing tariff negotiations and conflict in the Middle East have caused some uncertainty related to inflation levels, energy and gas prices, and their impact on interest rates and the overall economy. While it is too early to discern the likely outcome of these tariff negotiations and military conflicts, the current economic conditions and growth prospects for our markets continue to reflect a solid and overall positive outlook. Higher inflation levels, including higher energy and gas prices, and interest rate fluctuations could have a negative impact on both our consumer and commercial borrowers in the future. Overall, however, the Texas markets we serve remain healthy.
Previous wording
Our deposits were $6.96 billion at September 30, 2025, an increase of $307.3 million, or 4.6%, from December 31, 2024. At September 30, 2025, we had 179,097 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 36.9% of total deposits as of September 30, 2025. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 21.7% of total deposits as of September 30, 2025.
Current wording
Our deposits were $6.87 billion at March 31, 2026, a slight increase of $9.3 million, or 0.1%, from December 31, 2025. At March 31, 2026, we had 178,823 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 38.4% of total deposits as of March 31, 2026. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 21.9% of total deposits as of March 31, 2026.
Previous wording
Our noninterest bearing deposits represent approximately 20.3% of total deposits. During the three months ended September 30, 2025, our cost of interest bearing deposits decreased 19 basis points to 2.82% from 3.01% for the three months ended September 30, 2024. Our cost of total deposits for the third quarter of 2025 decreased 13 basis points to 2.25% from 2.38% for the three months ended September 30, 2024.
Current wording
Our noninterest bearing deposits represent approximately 20.0% of total deposits. During the three months ended March 31, 2026, our cost of interest bearing deposits decreased 18 basis points to 2.65% from 2.83% for the three months ended March 31, 2025. Our cost of total deposits for the first quarter of 2026 decreased 13 basis points to 2.13% from 2.26% for the three months ended March 31, 2025.
Previous wording
Our total assets decreased $134.3 million, or 1.6%, to $8.38 billion at September 30, 2025 from $8.52 billion at December 31, 2024. Our securities portfolio decreased by $257.3 million, or 9.1%, to $2.56 billion at September 30, 2025, compared to $2.81 billion at December 31, 2024. The decrease in the securities portfolio was primarily due to decreases in municipal securities and U.S. Treasury securities during the nine months ended September 30, 2025. Our FHLB stock decreased $24.5 million, or 72.3%, to $9.4 million from $33.8 million at December 31, 2024, due to the decrease in our FHLB borrowings during the nine months ended September 30, 2025.
Current wording
Our total assets increased $287.6 million, or 3.4%, to $8.80 billion at March 31, 2026 from $8.51 billion at December 31, 2025. Our securities portfolio increased by $164.3 million, or 6.1%, to $2.87 billion at March 31, 2026, compared to $2.70 billion at December 31, 2025. The increase in the securities portfolio was primarily due to an increase in MBS during the three months ended March 31, 2026. Our FHLB stock increased $2.3 million, or 16.4%, to $16.4 million from $14.1 million at December 31, 2025, due to the increase in our FHLB borrowings during the three months ended March 31, 2026.
Previous wording
Loans at September 30, 2025 were $4.77 billion, an increase of $103.7 million, or 2.2%, compared to $4.66 billion at December 31, 2024, due to increases of $109.0 million in commercial real estate loans and $66.8 million in commercial loans. These increases were partially offset by decreases of $37.6 million in municipal loans, $18.3 million in construction loans, $10.3 million in 1-4 family residential loans and $5.8 million in loans to individuals. Loans held for sale decreased $1.4 million, or 74.5%, to $497,000 at September 30, 2025 from $1.9 million at December 31, 2024.
Current wording
Loans at March 31, 2026 were $4.95 billion, an increase of $128.2 million, or 2.7%, compared to $4.82 billion at December 31, 2025, due to increases of $93.2 million in construction loans, $40.6 million in commercial real estate loans and $12.2 million in commercial loans. These increases were partially offset by decreases of $9.6 million in municipal loans, $7.1 million in 1-4 family residential loans and $1.2 million in loans to individuals. Loans held for sale increased $146,000, or 11.0%, to $1.5 million at March 31, 2026 from $1.3 million at December 31, 2025.
Previous wording
Our nonperforming assets at September 30, 2025 increased $32.0 million, or 892.1%, to $35.6 million and represented 0.42% of total assets, compared to $3.6 million, or 0.04% of total assets, at December 31, 2024, due primarily to an increase of $27.5 million in restructured loans. The increase in restructured loans was due to the extension of maturity of a $27.5 million commercial real estate loan to allow for an extended lease up period during the first quarter of 2025. Nonaccruing loans increased $4.8 million, or 149.8%, to $8.0 million, and the ratio of nonaccruing loans to total loans was 0.17% and 0.07% for September 30, 2025 and December 31, 2024, respectively. The increase in nonaccrual loans compared to December 31, 2024 was primarily due to a $3.7 million increase in commercial loans and a $1.1 million increase in commercial real estate loans. Repossessed assets were $24,000 at September 30, 2025, compared to $14,000 at December 31, 2024. There was $128,000 of OREO at September 30, 2025 and $388,000 at December 31, 2024.
Current wording
Our nonperforming assets at March 31, 2026 decreased $28.5 million, or 74.6%, to $9.7 million and represented 0.11% of total assets, compared to $38.2 million, or 0.45% of total assets, at December 31, 2025, primarily due to a decrease of $27.5 million in restructured loans. The decrease in restructured loans was due to the payoff of a $27.5 million restructured commercial real estate loan in the first quarter that was originally restructured with an extension of maturity in the first quarter of 2025 to allow for an extended lease up period. Nonaccruing loans decreased $927,000, or 8.8%, to $9.6 million, and the ratio of nonaccruing loans to total loans was 0.19% and 0.22% for March 31, 2026 and December 31, 2025, respectively. Repossessed assets were $7,000 at March 31, 2026, compared to no repossessed assets at December 31, 2025. There was $128,000 of OREO at March 31, 2026 and $248,000 at December 31, 2025.
Previous wording
Our subordinated notes, net of unamortized debt issuance costs, increased $147.6 million, or 160.3%, to $239.6 million at September 30, 2025 from $92.0 million at December 31, 2024, a result of the issuance of $150.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes during the third quarter of 2025.
Current wording
Our subordinated notes, net of unamortized debt issuance costs, decreased $92.1 million, or 38.4%, to $147.5 million at March 31, 2026 from $239.7 million at December 31, 2025, as a result of the full redemption of $100.0 million in aggregate principal amount of 3.875% fixed-to-floating rate subordinated notes during the first quarter of 2026. Refer to “Note 7 – Long-term Debt” in our consolidated financial statements included in this report for a detailed description of the terms of the redemption of the subordinated notes.
Previous wording
Our total shareholders’ equity at September 30, 2025 increased 2.8%, or $22.9 million, to $834.9 million, or 10.0% 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 $48.2 million, other comprehensive income of $16.8 million, stock compensation expense of $2.4 million, common stock issued under our dividend reinvestment plan of $739,000 and net issuance of common stock under employee stock plans of $111,000, partially offset by cash dividends paid of $32.7 million and repurchases of $12.7 million of our common stock pursuant to our Stock Repurchase Plan.
Current wording
Our total shareholders’ equity at March 31, 2026 increased 0.9%, or $7.2 million, to $854.9 million, or 9.7% of total assets, compared to $847.6 million, or 10.0% of total assets, at December 31, 2025. The increase in shareholders’ equity was the result of net income of $23.3 million, stock compensation expense of $1.6 million and common stock issued under our dividend reinvestment plan of $233,000, partially offset by cash dividends paid of $10.7 million, other comprehensive loss of $7.0 million and net issuance of common stock under employee stock plans of $172,000.
Previous wording
Determining the appropriate size of the balance sheet is one of the critical decisions any bank makes. Our balance sheet is not merely the result of a series of micro-decisions, but rather the size is controlled based on the economics of assets compared to the economics of funding and funding sources. Changing interest rate environments and economic conditions require that we monitor the interest rate sensitivity of the assets, the funding driving our growth and closely align ALCO objectives accordingly.
Current wording
Determining the appropriate size of the balance sheet is one of the critical decisions any bank makes. Our balance sheet is not merely the result of a series of micro-decisions, but rather the size is controlled based on the economics of assets compared to the economics of funding and funding sources. Changing interest rate environments and economic conditions require that we monitor the interest rate sensitivity of our assets, the funding driving our growth and closely align ALCO objectives accordingly.
Previous wording
We ended the third quarter of 2025 with approximately $382.2 million in available liquidity from the FRDW, in addition to the approximately $2.30 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 September 30, 2025, the estimated deposits, without insurance or collateral, to total deposits, excluding affiliate deposits (Southside-owned deposits) was 21.7%, or $1.51 billion.
Current wording
We ended the first quarter of 2026 with approximately $384.4 million in available liquidity from the FRDW, in addition to the approximately $2.22 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, 2026, the estimated deposits, without insurance or collateral, to total deposits, excluding affiliate deposits (Southside-owned deposits) was 21.9%, or $1.51 billion.
Previous wording
During the nine months ended September 30, 2025, we entered into additional $250 million cash flow hedge interest rate swap contracts, while $180 million cash flow hedge interest rate swap contracts matured. At September 30, 2025, brokered deposits of $760 million and FHLB advances of $100 million were hedged with our $860 million of cash flow swaps. As of September 30, 2025, a pre-tax unrealized gain of $858,000 was recognized in other comprehensive income, and there was no ineffective portion of these hedges. In connection with $860.0 million and $790.0 million of the agreements outstanding at September 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 3.47% with a remaining average weighted maturity of 1.5 years at September 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.
Current wording
From time to time, we may enter into certain interest rate swap contracts with third parties using specific variable rate, as well as short-term (generally three months or less) fixed rate borrowings designated as cash flow hedges under ASC Topic 815. At March 31, 2026, we had swap contracts covering $385 million in brokered deposits and $230 million in FRDW borrowings for a total of $615 million of cash flow hedges. We expect the cash flows from swap contracts to be highly effective in hedging the variability in future cash flows attributable to fluctuations in the underlying SOFR rate. At March 31, 2026, these contracts reflected a weighted average of 3.78% with a remaining average weighted maturity of 1.5 years. During the three months ended March 31, 2026, $245 million cash flow hedge interest rate swap contracts matured. As of March 31, 2026, a pre-tax unrealized gain of $1.7 million was recognized in other comprehensive income, and there was no ineffective portion of these hedges. At December 31, 2025, the outstanding balance of cash flow hedges was $860 million. 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 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.
Current wording
We continue to evaluate the lowest cost wholesale funding sources and will utilize either brokered deposits, FHLB advances, FRDW borrowings, or any combination of the three funding sources to minimize interest expense while also 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, corporate securities. Although the securities 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
Our securities portfolio decreased 9.1% from $2.81 billion at December 31, 2024 to $2.56 billion at September 30, 2025, with decreases in municipal securities, U.S. Treasury Bills and corporate bonds, partially offset by an increase in U.S. Agency MBS. The decrease in the securities portfolio was due to sales of securities, maturities and principal payments during the nine months ended September 30, 2025, which more than offset securities purchased.
Current wording
Our securities portfolio increased $164.3 million, or 6.1%, from $2.70 billion at December 31, 2025 to $2.87 billion at March 31, 2026, with an increase in U.S. Agency MBS, partially offset by decreases in corporate bonds and municipal securities. As a result, securities totaled 32.6% of assets at March 31, 2026, compared to 31.8% at December 31, 2025. The increase in the U.S. Agency MBS was due to the purchase of $313.5 million of low premium and discounted MBS with coupons ranging from 4.50% to 5.50%. The net increase in the total securities portfolio was due to securities purchased during the three months ended March 31, 2026, which more than offset maturities, principal payments, net amortization and the decrease in the fair value of the portfolio.
Previous wording
Our FHLB borrowings decreased 86.2%, or $630.6 million, to $101.3 million at September 30, 2025 from $731.9 million at December 31, 2024. As of September 30, 2025 and December 31, 2024, we had no borrowings from the FRDW.
Current wording
Our FHLB borrowings increased $104.8 million, or 49.6%, to $315.9 million at March 31, 2026 from $211.1 million at December 31, 2025. As of March 31, 2026 and December 31, 2025, we had $265.0 million and $110.0 million, respectively, in borrowings from the FRDW.
Previous wording
As of September 30, 2025, our total wholesale funding as a percentage of deposits, not including brokered deposits, decreased to 16.4% from 24.9% at December 31, 2024.
Current wording
As of March 31, 2026, our total wholesale funding as a percentage of deposits, not including brokered deposits, increased to 22.4% from 16.0% at December 31, 2025.
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 $192.7 million in brokered CDs at September 30, 2025, of which $80.0 million are related to our cash flow hedges, an increase from $115.7 million at December 31, 2024. At September 30, 2025, our brokered CDs had a weighted average cost of 436 basis points and remaining maturities of less than 11 months. Our brokered non-maturity deposits increased to $703.0 million at September 30, 2025, of which $680.0 million are related to our cash flow hedges, from $627.1 million at December 31, 2024, with a weighted average cost of 364 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 $24.1 million in brokered CDs at March 31, 2026, of which $10.0 million are related to our cash flow hedges, an increase from $19.8 million at December 31, 2025. At March 31, 2026, our brokered CDs had a weighted average cost of 368 basis points and remaining maturities of less than a month. Our brokered non-maturity deposits increased to $758.8 million at March 31, 2026, of which $375.0 million are related to our cash flow hedges, from $652.4 million at December 31, 2025, with a weighted average cost of 376 and 359 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
At September 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 39% of the funding source, of which approximately 86% is swapped at a fixed rate, providing protection from rising interest rates.
Current wording
At March 31, 2026, the majority of the securities portfolio was funded by non-maturity deposits, some of which are included in wholesale funding that accounts for approximately 47% of the funding source, of which approximately 45% is swapped at a fixed rate, providing protection from rising interest rates.
Previous wording
We have partial term fair value hedges for certain of our fixed rate callable AFS municipal securities and 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 September 30, 2025, $56.2 million in hedging instruments were used to hedge municipal securities with a carrying amount of $51.2 million are included in our AFS securities portfolio in our consolidated balance sheets, representing approximately 20.6% of the AFS municipal portfolio. As of September 30, 2025,$201.0 million in hedging instruments were used to hedge a layer of the closed portfolio of AFS MBS with a carrying value of $315.2 million, or 32.2% 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
We have partial term fair value hedges for certain of our fixed rate callable AFS municipal securities and partial term fair value hedges of fixed rate AFS MBS 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, 2026, $24.1 million in hedging instruments were used to hedge municipal securities with a carrying amount of $20.7 million included in our AFS securities portfolio in our consolidated balance sheets, representing approximately 12.0% of the AFS municipal portfolio. As of March 31, 2026,$234.0 million in hedging instruments were used to hedge a layer of the closed portfolio of AFS MBS with a carrying value of $980.8 million, or 67.3% of the AFS MBS portfolio. 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 laws, regulations or government policies may also have a material impact on our results of operations. See “Part I - Item 1A. Risk Factors – Risks Related to Our Business” in the 2024 Form 10-K for further discussion of these risks.
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, inflation, 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. See “Part I - Item 1A. Risk Factors – Risks Related to Our Business” in the 2025 Form 10-K for further discussion of these risks.
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 third quarter of 2025, the Federal Reserve reduced the target federal funds rate by 25 basis points to 4.00% to 4.25%. 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 last four months of 2025, the Federal Reserve reduced the target federal funds rate by 75 basis points to 3.50% to 3.75%. During the three months ended March 31, 2026, the Federal Reserve held the target federal funds rate steady. If the federal funds rate remains elevated or is not further reduced, it may negatively impact our net interest income.
Previous wording
Net interest income for the three months ended September 30, 2025 increased $254,000, or 0.5%, compared to the same period in 2024. The increase in net interest income 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 our interest earning assets. Total interest income decreased $3.8 million, or 3.6%, to $101.9 million for the three months ended September 30, 2025, compared to $105.7 million during the same period in 2024. Total interest expense decreased $4.1 million, or 8.1%, to $46.2 million for the three months ended September 30, 2025, compared to $50.2 million for the same period in 2024. Our net interest margin and our net interest margin (FTE), a non-GAAP measure, both decreased by one basis point to 2.81% and 2.94%, respectively, for the three months ended September 30, 2025, compared to 2.82% and 2.95%, respectively, for the same period in 2024. Our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.14% and 2.26%, respectively, for the three months ended September 30, 2025, compared to 2.10% and 2.23%, 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 March 31, 2026 increased $3.8 million, or 7.1%, compared to the same period in 2025. The increase in net interest income was primarily due to a decrease in the average rate paid on our interest bearing liabilities and an increase in the volume and change in the mix of our interest earning assets, partially offset by an increase in the average balance of our interest bearing liabilities. Total interest income increased $2.0 million, or 2.0%, to $102.3 million for the three months ended March 31, 2026, compared to $100.3 million during the same period in 2025. Total interest expense decreased $1.9 million, or 4.0%, to $44.6 million for the three months ended March 31, 2026, compared to $46.4 million for the same period in 2025. Our net interest margin and our net interest margin (FTE), a non-GAAP measure, both increased to 2.91% and 3.01%, respectively, for the three months ended March 31, 2026, compared to 2.74% and 2.86%, respectively, for the same period in 2025. Our net interest spread and net interest spread (FTE), also a non-GAAP measure, increased to 2.28% and 2.38%, respectively, for the three months ended March 31, 2026, compared to 2.08% and 2.20%, respectively, for the same period in 2025. See “Non-GAAP Financial Measures” for more information and a reconciliation to GAAP.
Previous wording
The decrease in total interest income for the three months ended September 30, 2025, was attributable to a decrease in the average yield on interest earning assets to 5.27% for the three months ended September 30, 2025, compared to 5.51% for the same period in 2024, partially offset by a $31.5 million, or 0.4%, 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 September 30, 2025, was primarily attributable to the decrease in interest rates on our interest bearing liabilities to 3.01% for the three months ended September 30, 2025 from 3.28% for the same period in 2024.
Current wording
The increase in total interest income for the three months ended March 31, 2026, was attributable to an increase in the average balance of and a change in the mix of our interest earning assets when compared to the same period in 2025. The decrease in total interest expense for the three months ended March 31, 2026, was primarily attributable to the decrease in interest rates on our interest bearing liabilities to 2.88% for the three months ended March 31, 2026 from 3.03% for the same period in 2025, partially offset by an increase in the average balance of our interest bearing liabilities of $69.8 million, or 1.1%, for the three months ended March 31, 2026, compared to the same period in 2025.
Previous wording
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 three months ended September 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 wording
The following table presents 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 three months ended March 31, 2026 and 2025. 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.
Previous wording
Note: As of September 30, 2025 and 2024, loans totaling $8.0 million and $7.3 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 March 31, 2026 and 2025, loans totaling $9.6 million and $4.3 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
During the three and nine months ended September 30, 2025, we sold MBS and municipal securities that resulted in a net loss on sale of AFS securities of $24.4 million and $24.9 million, respectively. During the three and nine months ended September 30, 2024, we sold municipal securities that resulted in a net loss on sale of AFS securities of $1.9 million and $2.5 million, respectively.
Current 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.
Previous wording
Gain on sale of loans increased for the three months ended September 30, 2025, when compared to the same period in 2024, due to an increase in the volume of loans sold. The increase in gain on sale of loans for the nine months ended September 30, 2025, when compared to the same period in 2024, was due to the $412,000 net loss on the sale of a commercial real estate loan relationship during the first quarter of 2024.
Current wording
Gain on sale of loans increased for the three months ended March 31, 2026, when compared to the same period in 2025, due to an increase in the volume of loans sold.
Previous wording
Trust fees increased for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, due to an increase in accounts under management and fee repricing.
Current wording
Trust fees increased for the three months ended March 31, 2026, when compared to the same periods in 2025, due to an increase in accounts under management and to a lesser extent, fee repricing.
Previous wording
The decrease in BOLI income for the nine months ended September 30, 2025, when compared to the same period 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 wording
The increase in BOLI income for the three months ended March 31, 2026, when compared to the same period in 2025, was primarily due to the purchase of a new policy for $5.5 million late in the fourth quarter of 2025 and to a lesser extent, a death benefit of $47,000 realized in the first quarter of 2026 for a former covered officer.
Previous wording
Brokerage services income increased for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, due to an increase in assets under management.
Current wording
Brokerage services income increased for the three months ended March 31, 2026, when compared to the same period in 2025, due to an increase in assets under management.
Previous wording
Other noninterest income increased for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, partially due to an impairment loss in the third quarter of 2024 of $868,000 for AFS securities. Additionally, the increase for the three months ended September 30, 2025 was also due to increases in swap fee income, mortgage servicing fee income and deluxe income, partially offset by a decrease in equity investment income. The additional increase for the nine months ended September 30, 2025 was also due to increases in swap fee income, deluxe income and merchant services income, partially offset by the gain recognized on the repurchase of our subordinated notes at a discount during the second quarter of 2024.
Current wording
Other noninterest income increased for the three months ended March 31, 2026, when compared to the same period in 2025, due to increases in swap fee income, mortgage servicing fee income, merchant services income and letter of credit fees, partially offset by a decrease in equity investment income.
Previous wording
The increase in noninterest expense for the three and nine months ended September 30, 2025, when compared to the same periods in 2024, was primarily due to increases in advertising, travel and entertainment, professional fees, other noninterest expense, and to a lesser extent, salaries and employee benefits expense, partially offset by decreases in communications expense and amortization of intangibles.
Current wording
The increase in noninterest expense for the three months ended March 31, 2026, when compared to the same period in 2025, was primarily due to increases in salaries and employee benefits expense, loss on redemption of subordinated notes, other noninterest expense and software and data processing expense.
Previous wording
Salaries and employee benefits expense increased during the three and nine months ended September 30, 2025, compared to the same periods in 2024, due to increases in direct salary expense and health insurance expense, partially offset by a decrease in retirement expense.
Current wording
Salaries and employee benefits expense increased during the three months ended March 31, 2026, compared to the same period in 2025, due to increases in direct salary expense, retirement expense and health insurance expense.
Previous wording
For the three and nine months ended September 30, 2025, direct salary expense increased $399,000, or 2.1%, and $48,000, or 0.1%, respectively, when compared to the same periods in 2024, primarily due to normal salary increases effective in the first quarter of 2025.
Current wording
For the three months ended March 31, 2026, direct salary expense increased $1.4 million, or 7.4%, when compared to the same period in 2025, primarily due to normal salary increases effective in the first quarter of 2026 and an increase in stock compensation expense.
Previous wording
Health and life insurance expense, included in salaries and employee benefits, increased $196,000, or 8.7%, and $173,000, or 2.7%, for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, due to increases in health claims expense and plan administration cost. We have a self-insured health plan which is supplemented with a stop loss policy.
Current wording
Health and life insurance expense, included in salaries and employee benefits, increased $70,000, or 3.5%, for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to premiums for a new short-term disability policy. We have a self-insured health plan which is supplemented with a stop loss policy.
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Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Year-to-Date Analysis of Changes in Interest Income and Interest Expense
Previous report — wording carried 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):
Previous report — wording carried 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.
Previous report — wording carried 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 nine months ended September 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.
Previous report — wording carried elsewhere
(1)Interest on loans includes net fees on loans that are not material in amount.
Previous report — wording carried elsewhere
(2)For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
Previous report — wording carried elsewhere
Note: As of September 30, 2025 and 2024, loans totaling $8.0 million and $7.3 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 report — wording carried elsewhere
When determining the appropriate allowance for credit losses on our loan portfolio, our commercial construction and real estate loans, commercial loans and municipal loans utilize the probability of default/loss given default discounted cash flow approach.