Company News: Page (1) of 1 - 07/21/11 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook

Southside Bancshares, Inc. Announces Net Income for the Three and Six Months Ended June 30, 2011

(July 21, 2011)

TYLER, Texas, July 21, 2011 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. ("Southside" or the "Company") (Nasdaq:SBSI) today reported its financial results for the three and six months ended June 30, 2011.



Southside reported net income of $11.0 million for the three months ended June 30, 2011, an increase of $1.8 million, or 19.3%, when compared to the same period in 2010. The gain on sale of available for sale securities decreased to $4.0 million for the three months ended June 30, 2011 from $6.7 million for the same period in 2010, a decrease of $2.7 million, or $1.7 million, net of income tax expense. Net income for the six months ended June 30, 2011 decreased $2.5 million, or 12.2%, to $18.4 million when compared to $20.9 million for the same period in 2010. The gain on sale of available for sale securities decreased $9.2 million, or $6.0 million, net of income tax expense, to $5.8 million for the six months ended June 30, 2011 when compared to $15.0 million for the same period in 2010.



Diluted earnings per common share increased $0.11, or 19.6%, to $0.67 for the three months ended June 30, 2011 when compared to $0.56 for the same period in 2010. For the six months ended June 30, 2011, diluted earnings per common share decreased $0.14, or 11.1%, to $1.12 when compared to $1.26 for the same period in 2010.


The return on average shareholders' equity for the six months ended June 30, 2011, was 16.63%, representing a decrease when compared to 20.00% for the same period in 2010. The annual return on average assets decreased to 1.22% for the six months ended June 30, 2011 from 1.42% for the same period in 2010.




"We are exceptionally pleased to report Southside's financial results for the second quarter of 2011," stated B. G. Hartley, Chairman and Chief Executive Officer of Southside Bancshares, Inc. "The 19.3% increase in net income for the quarter ended June 30, 2011, compared to the second quarter of 2010, was led by an increase in net interest income and a decrease in credit costs resulting from improving credit quality which were partially offset by a decrease in gains on sale of available for sale securities. We are also pleased to report that nonperforming assets, currently 0.50% of assets, continued to decrease, our net interest margin and spread both increased when compared to the same quarter in 2010, deposits continued to increase and our equity to total assets ratio increased. In addition to our financial results, we are pleased to report that we have purchased the remaining 50% interest in Southside Financial Group, LLC, ("SFG") giving Southside 100% ownership of this entity as of July 15, 2011. During the second quarter the Board approved equity grants in the form of stock options and restrictive stock units to various officers of Southside. These equity grants were consistent with the directives of the shareholder approved Southside Bancshares, Inc. 2009 Incentive Plan. We believe these grants are an important tool in key employee retention. Finally, it is a pleasure to report that our new trust operations center is now fully operational."



"The purchase of the remaining 50% interest in SFG was a direct result of new regulations adopted as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act ("Dodd Frank"). Dodd Frank changed the manner in which we can do business through a non-bank entity. Given the importance of our SFG operations, we determined that purchasing the remaining 50% interest in this company and integrating its operations into Southside Bank would be in the bank's best interest. This purchase will be immediately accretive to earnings. In addition, SFG is already fully consolidated on our balance sheet and this purchase will not limit or change our ability to allocate capital in order to grow our franchise."



"The overall economy has unfortunately entered yet another soft patch, as concern over shocks in Japan, sovereign debt in Europe, the U. S. budget deficit and debt ceiling and the U. S. real estate environment, among other issues, has escalated. Interest rates generally fell during the second quarter in response to this uncertain environment. We continue to manage our balance sheet to incorporate these developments. We are keeping our investment balances steady to increasing, as the likelihood of accommodative monetary policy for the near-term seems relatively high. We are also preparing for higher rates through our funding choices, as we continue to issue longer term funding with options that we control. We primarily use callable brokered CDs, as well as advances from the Federal Home Loan Bank, to fulfill our long-term funding needs. Finally, the mortgage-backed securities portion of our investment portfolio has benefited from a decline in mortgage-backed prepayments, which resulted in lower amortization expense and has increased the income generated from our premium mortgage-backed securities investment portfolio. In summary, maintaining our securities balances serves to mitigate interest rate risk should rates remain low or even decline. We monitor the coupons in our mortgage-backed securities and believe our high average mortgage-backed securities coupon helps mitigate the risk of a potential interest rate rise."



"The environment in which we operate has and will continue to change as a result of economic growth and retrenchment, changes in technology and communication, as well as continued political and regulatory change. We are confident that, when necessary in response to this changing environment, we should be able to refine our business model to effectively serve customers, employees and shareholders. We are monitoring the costs of the services we provide, and will endeavor to ensure that our cost structure is commensurate with the expected revenue of our bank. We are very proud of the Southside team, especially those who will lead us through tomorrow's challenges. We look forward to continuing the journey and to growing along with the communities we serve."



Loans and Deposits



For the six months ended June 30, 2011, total loans decreased by $39.1 million, or 3.6% when compared to December 31, 2010. During the six months ended June 30, 2011, real estate loans decreased $11.4 million, commercial loans decreased $14.6 million and loans to individuals decreased $17.1 million. Municipal loans increased $4.0 million, partially offsetting these decreases.



Nonperforming assets decreased by $2.0 million, or 11.3%, to $15.7 million, or 0.50% of total assets, for the six months ended June 30, 2011, when compared to December 31, 2010. This decrease is primarily a result of a decrease in nonaccrual and restructured loans.



During the six months ended June 30, 2011, deposits, net of brokered deposits, increased $102.7 million, or 5.2%, compared to December 31, 2010. During this six month period we allowed approximately $30 million of public fund deposits to roll off, which were offset by a business account that experienced a temporary $70 million increase. 



Net Interest Income



Net interest income increased $5.2 million, or 26.8%, to $24.6 million for the three months ended June 30, 2011, when compared to $19.4 million for the same period in 2010. For the three months ended June 30, 2011, our net interest spread increased to 3.52% from 2.77% for the same period in 2010. The net interest margin increased to 3.81% for the three months ended June 30, 2011 compared to 3.09% for the same period in 2010. The net interest margin and net interest spread for the three months ended June 30, 2011 increased to 3.81% and 3.52%, respectively, from 3.55% and 3.26% for the three months ended March 31, 2011. The increase in our net interest margin and spread for the quarter and six months ended June 30, 2011 compared to the same period in 2010 is primarily a result of slower prepayments on our mortgage-backed securities during 2011. During the first six months of 2010 prepayments increased significantly due to announcements by Fannie Mae and Freddie Mac that they would repurchase delinquent loans that had not been repurchased for several months and that they would begin repurchasing these delinquent loans in a more timely manner.



Net interest income increased $4.4 million, or 10.3%, to $46.8 million for the six months ended June 30, 2011, when compared to $42.4 million for the same period in 2010. For the six months ended June 30, 2011, our net interest spread increased to 3.39% from 3.08% for the same period in 2010. The net interest margin increased to 3.68% for the six months ended June 30, 2011 compared to 3.41% for the same period in 2010.



Net Income for the Three Months



The increase in net income for the three months ended June 30, 2011, when compared to the same period in 2010, was a result of an increase in net interest income and a decrease in the provision for loan losses which was partially offset by a decrease in gains on the sale of available for sale securities.



Noninterest expense increased $137,000, or 0.8%, for the three months ended June 30, 2011, compared to the same period in 2010. 



Net Income for the Six Months



The decrease in net income for the six months ended June 30, 2011, when compared to the same period in 2010, was a result of a decrease in noninterest income that included a decrease in security gains, and an increase in noninterest expense which was partially offset by an increase in net interest income and a decrease in the provision for loan losses.



Noninterest expense increased $1.4 million, or 4.0%, for the six months ended June 30, 2011, compared to the same period in 2010. The increase in noninterest expense was primarily a result of increases in personnel expense associated with our overall growth and expansion, occupancy expense due to added facilities, and FDIC insurance premium increases.



About Southside Bancshares, Inc.



Southside Bancshares, Inc. is a bank holding company with approximately $3.1 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 48 banking centers in Texas and operates a network of 50 ATMs. 



To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/investor. Our investor relations site provides a detailed overview of our activities, financial information and historical stock price data. To receive e-mail notification of company news, events and stock activity, please register on the E-mail Notification portion of the website. Questions or comments may be directed to Susan Hill at (903) 531-7220, or susan.hill@southside.com.



The Southside Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9555



Forward-Looking Statements



Certain statements of other than historical fact that are contained in this document and in other written material, press releases and oral statements issued by or on behalf of the Company, a bank holding company, may be considered to be "forward-looking statements" within the meaning of and subject to the 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," "intend," "probability," "risk," "target," "objective," "plans," "potential," and similar expressions. Forward-looking statements are statements with respect to the Company's 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 the Company's actual results to differ materially from the results discussed in the forward-looking statements. For example, discussions about trends in asset quality and earnings and certain market risk disclosures, including the impact of interest rate uncertainty, 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. As a result, actual income gains and losses could materially differ from those that have been estimated. 



Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 under "Forward-Looking Information" and Item 1A. "Risk Factors," and in the Company's other filings with the Securities and Exchange Commission. The Company disclaims any obligation to update any factors or to announce publicly the result of revisions to any of the forward-looking statements included herein to reflect future events or developments. 
















































































































































































































































































































 

At

June 30,

2011

At

December 31,

2010

At

June 30,

2010

 

(dollars in thousands)

 

(unaudited)

 

 

 

 

Selected Financial Condition Data (at end of period):

 

 

 

 

 

 

 

Total assets 

 $ 3,115,208

 $ 2,999,621

 $ 2,966,751

Loans 

1,038,808

1,077,920

1,017,452

Allowance for loan losses 

19,409

20,711

19,283

Mortgage-backed and related securities:

 

 

 

 Available for sale, at estimated fair value 

1,136,961

946,043

1,002,478

 Held to maturity, at cost 

395,728

417,862

459,677

Investment securities:

 

 

 

 Available for sale, at estimated fair value 

302,038

299,344

251,504

 Held to maturity, at cost 

1,996

1,495

1,494

Federal Home Loan Bank stock, at cost 

25,524

34,712

36,096

Deposits 

2,239,537

2,134,428

1,928,704

Long-term obligations 

338,290

433,790

504,393

Equity 

244,475

215,436

219,564

Nonperforming assets 

15,703

17,709

19,723

 Nonaccrual loans 

13,208

14,524

15,728

 Accruing loans past due more than 90 days 

8

7

19

 Restructured loans 

1,757

2,320

2,671

 Other real estate owned 

412

220

1,097

 Repossessed assets 

318

638

208

 

 

 

 

Asset Quality Ratios:

 

 

 

Nonaccruing loans to total loans 

1.27%

1.35%

1.55%

Allowance for loan losses to nonaccruing loans 

146.95

142.60

122.60

Allowance for loan losses to nonperforming assets 

123.60

116.95

97.77

Allowance for loan losses to total loans 

1.87

1.92

1.90

Nonperforming assets to total assets 

0.50

0.59

0.66

Net charge-offs to average loans 

1.01

1.25

1.33

 

 

 

 

Capital Ratios:

 

 

 

Shareholders' equity to total assets 

7.78

7.15

7.36

Average shareholders' equity to average total assets 

7.32

7.24

7.09

 

 

 

 

LOAN PORTFOLIO COMPOSITION

 

The following table sets forth loan totals by category for the periods presented:

 

 

At

June 30,

2011

At

December 31,

2010

At

June 30,

2010

 

(in thousands)

 

(unaudited)

Real Estate Loans:

 

 

 

 Construction 

 $ 108,851

 $ 115,094

 $ 104,866

 1-4 Family Residential 

221,283

219,031

217,131

 Other 

193,341

200,723

204,837

Commercial Loans 

134,197

148,761

156,032

Municipal Loans 

200,537

196,594

155,283

Loans to Individuals 

180,599

197,717

179,303

Total Loans 

 $ 1,038,808

 $ 1,077,920

 $ 1,017,452





















































































































































































































































































































































































 

 

 

 

 

 

 

At or for the

Three Months

Ended June 30,

At or for the

Six Months 

Ended June 30,

 

2011

2010

2011

2010

 

(dollars in thousands)

(dollars in thousands)

 

(unaudited)

(unaudited)

 

 

 

 

 

Selected Operating Data:

 

 

 

 

Total interest income

 $ 33,724

 $ 30,825

 $ 65,629

 $ 65,812

Total interest expense

9,157

11,455

18,803

23,366

Net interest income

24,567

19,370

46,826

42,446

Provision for loan losses

1,860

2,260

3,998

6,127

Net interest income after provision for loan losses

22,707

17,110

42,828

36,319

Noninterest income

 

 

 

 

Deposit services

4,028

4,400

7,907

8,464

Gain on sale of securities available for sale

4,004

6,661

5,809

15,016

 

 

 

 

 

Total other-than-temporary impairment losses




(39)

Portion of loss recognized in other comprehensive income (before taxes)




(36)

Net impairment losses recognized in earnings




(75)

 

 

 

 

 

Gain on sale of loans

282

399

565

680

Trust income

645

561

1,296

1,091

Bank owned life insurance income

261

285

547

570

Other

959

864

2,064

1,797

Total noninterest income

10,179

13,170

18,188

27,543

Noninterest expense

 

 

 

 

Salaries and employee benefits

11,622

11,215

23,313

22,157

Occupancy expense

1,778

1,662

3,499

3,305

Equipment expense

525

472

1,018

909

Advertising, travel & entertainment

550

544

1,103

1,081

ATM and debit card expense

266

212

481

379

Director fees

200

216

391

393

Supplies

161

206

385

476

Professional fees

457

539

1,012

945

Postage

186

231

365

417

Telephone and communications

345

346

682

719

FDIC Insurance

735

689

1,498

1,368

Other

1,291

1,647

3,101

3,282

Total noninterest expense

18,116

17,979

36,848

35,431

Income before income tax expense

14,770

12,301

24,168

28,431

Provision for income tax expense

3,241

2,530

4,457

6,485

Net income

11,529

9,771

19,711

21,946

 Less: Net income attributable to the noncontrolling interest

(493)

(519)

(1,358)

(1,049)

Net income attributable to Southside Bancshares, Inc.

 $ 11,036

 $ 9,252

 $ 18,353

 $ 20,897

 

 

 

 

 

Common share data attributable to Southside Bancshares, Inc:

 

 

 

 

Weighted-average basic shares outstanding

16,439

16,605

16,432

16,573

Weighted-average diluted shares outstanding

16,445

16,635

16,437

16,621

Net income per common share

 

 

 

 

Basic

 $ 0.67

 $ 0.56

 $ 1.12

 $ 1.26

Diluted

0.67

0.56

1.12

1.26

Book value per common share



14.74

13.13

Cash dividend declared per common share

0.17

0.17

0.34

0.34


















































































































 

 

 

 

 

 

 

 

 

 

At or for the

Three Months

Ended June 30,

At or for the

Six Months

Ended June 30,

 

2011

2010

2011

2010

 

(unaudited)

(unaudited)

 

 

 

 

 

Selected Performance Ratios:

 

 

 

 

Return on average assets

1.44%

1.23%

1.22%

1.42%

Return on average shareholders' equity

19.26

17.48

16.63

20.00

Average yield on interest earning assets

5.09

4.72

5.01

5.10

Average yield on interest bearing liabilities

1.57

1.95

1.62

2.02

Net interest spread

3.52

2.77

3.39

3.08

Net interest margin

3.81

3.09

3.68

3.41

Average interest earnings assets to average interest bearing liabilities 

122.20

119.61

121.47

119.14

Noninterest expense to average total assets

2.37

2.40

2.44

2.40

Efficiency ratio

54.96

63.31

57.22

58.87

















































































































































































































































































































































































































 

 

RESULTS OF OPERATIONS

 

The analysis below shows average interest earning assets and interest bearing liabilities together with the average yield on the interest earning assets and the average cost of the interest bearing liabilities.

 

 

 

 

 

 

 

 

AVERAGE BALANCES AND YIELDS

 

(dollars in thousands)

 

(unaudited)

 

Six Months Ended

 

June 30, 2011

June 30, 2010

 

AVG

BALANCE



INTEREST

AVG

YIELD

AVG

BALANCE



INTEREST

AVG

YIELD

ASSETS

 

 

 

 

 

 

INTEREST EARNING ASSETS:

 

 

 

 

 

 

Loans (1) (2)

 $ 1,059,313

 $ 36,281

6.91%

 $ 1,020,908

 $ 36,779

7.26%

Loans Held For Sale

3,106

68

4.41%

3,735

71

3.83%

Securities:

 

 

 

 

 

 

 Investment Securities (Taxable)(4)

7,058

38

1.09%

9,373

52

1.12%

 Investment Securities (Tax-Exempt)(3)(4)

302,421

9,564

6.38%

256,041

8,702

6.85%

 Mortgage-backed and Related Securities (4)

1,431,390

24,607

3.47%

1,435,493

24,559

3.45%

 Total Securities

1,740,869

34,209

3.96%

1,700,907

33,313

3.95%

FHLB stock and other investments, at cost

30,390

132

0.88%

38,629

141

0.74%

Interest Earning Deposits

11,054

13

0.24%

13,976

15

0.22%

Total Interest Earning Assets

2,844,732

70,703

5.01%

2,778,155

70,319

5.10%

NONINTEREST EARNING ASSETS:

 

 

 

 

 

 

Cash and Due From Banks

44,511

 

 

45,006

 

 

Bank Premises and Equipment

50,514

 

 

47,708

 

 

Other Assets

120,373

 

 

120,816

 

 

Less: Allowance for Loan Loss

(19,657)

 

 

(19,227)

 

 

Total Assets

 $ 3,040,473

 

 

 $ 2,972,458

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

INTEREST BEARING LIABILITIES:

 

 

 

 

 

 

Savings Deposits

 $ 83,343

118

0.29%

 $ 73,270

167

0.46%

Time Deposits

856,860

5,744

1.35%

713,164

6,954

1.97%

Interest Bearing Demand Deposits

784,228

2,225

0.57%

717,638

2,617

0.74%

Total Interest Bearing Deposits

1,724,431

8,087

0.95%

1,504,072

9,738

1.31%

Short-term Interest Bearing Liabilities

239,179

3,434

2.90%

301,065

3,547

2.38%

Long-term Interest Bearing Liabilities – FHLB Dallas

317,985

5,663

3.59%

466,352

8,465

3.66%

Long-term Debt (5)

60,311

1,619

5.41%

60,311

1,616

5.40%

Total Interest Bearing Liabilities

2,341,906

18,803

1.62%

2,331,800

23,366

2.02%

NONINTEREST BEARING LIABILITIES:

 

 

 

 

 

 

Demand Deposits

448,073

 

 

402,228

 

 

Other Liabilities

26,174

 

 

26,717

 

 

Total Liabilities

2,816,153

 

 

2,760,745

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY (6)

224,320

 

 

211,713

 

 

Total Liabilities and Shareholders' Equity

 $ 3,040,473

 

 

 $ 2,972,458

 

 

NET INTEREST INCOME

 

 $ 51,900

 

 

 $ 46,953

 

NET INTEREST MARGIN ON AVERAGE EARNING ASSETS

 

 

3.68%

 

 

3.41%

NET INTEREST SPREAD

 

 

3.39%

 

 

3.08%


(1) Interest on loans includes fees on loans that are not material in amount.



(2) Interest income includes taxable-equivalent adjustments of $1,948 and $1,648 for the six months ended June 30, 2011 and June 30, 2010, respectively.



(3) Interest income includes taxable-equivalent adjustments of $3,126 and $2,859 for the six months ended June 30, 2011 and June 30, 2010, respectively.



(4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.



(5) Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by Fort Worth Bancshares, Inc. to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.



(6) Includes average equity of noncontrolling interest of $1,788 and $1,042 for the six months ended June 30, 2011 and June 30, 2010, respectively.



Note: As of June 30, 2011 and 2010, loans totaling $13,208 and $15,728, 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.
























































































































































































 

 

 

AVERAGE BALANCES AND YIELDS

 

(dollars in thousands)

 

(unaudited)

 

Three Months Ended

 

June 30, 2011

June 30, 2010

 

AVG

BALANCE



INTEREST

AVG

YIELD

AVG

BALANCE



INTEREST

AVG

YIELD

ASSETS

 

 

 

 

 

 

INTEREST EARNING ASSETS:

 

 

 

 

 

 

Loans (1) (2)

 $ 1,049,692

 $ 18,076

6.91%

 $ 1,016,037

 $ 18,221

7.19%

Loans Held For Sale

2,491

31

4.99%

4,319

40

3.71%

Securities:

 

 

 

 

 

 

 Investment Securities (Taxable)(4)

5,082

20

1.58%

9,392

26

1.11%

 Investment Securities (Tax-Exempt)(3)(4)

299,807

4,778

6.39%

264,345

4,494

6.82%

 Mortgage-backed and Related Securities (4)

1,466,581

13,310

3.64%

1,477,593

10,282

2.79%

 Total Securities

1,771,470

18,108

4.10%

1,751,330

14,802

3.39%

FHLB stock and other investments, at cost

28,317

52

0.74%

38,194

59

0.62%

Interest Earning Deposits

6,101

3

0.20%

6,675

4

0.24%

Total Interest Earning Assets

2,858,071

36,270

5.09%

2,816,555

33,126

4.72%

NONINTEREST EARNING ASSETS:

 

 

 

 

 

 

Cash and Due From Banks

43,330

 

 

42,872

 

 

Bank Premises and Equipment

50,655

 

 

48,219

 

 

Other Assets

130,936

 

 

119,382

 

 

Page: 1


Related Keywords: EARNINGS, BANKINGMac, OS9, OSX, Japan, Inc., Financial, Life Insurance, Wall Street, Business Services, Business, Family, Other,

HOT THREADS on DMN Forums
Content-type: text/html  Rss  Add to Google Reader or
Homepage    Add to My AOL  Add to Excite MIX  Subscribe in
NewsGator Online 
Real-Time - what users are saying - Right Now!

Our Privacy Policy --- @ Copyright, 2015 Digital Media Online, All Rights Reserved