Document

EX-99.1 2 ex991er093022.htm EX-99.1 Document

EXHIBIT 99.1

SOUTHSIDE BANCSHARES, INC.

ANNOUNCES FINANCIAL RESULTS FOR THE

THIRD QUARTER ENDED SEPTEMBER 30, 2022

•Third quarter net income of $27.0 million;

•Linked quarter loan growth, net of Paycheck Protection Program (“PPP”) loans, of 2.6%;

•Linked quarter net interest margin increased to 3.15% and net interest margin (FTE) increased to 3.36%(1);

•Annualized return on third quarter average assets of 1.43%;

•Annualized return on third quarter average tangible common equity of 19.94%(1); and

•Nonperforming assets remained low at 0.16% of total assets.

Tyler, Texas (October 25, 2022) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the quarter ended September 30, 2022. Southside reported net income of $27.0 million for the three months ended September 30, 2022, a decrease of $2.4 million, or 8.0%, compared to $29.3 million for the same period in 2021. Earnings per diluted common share decreased $0.06, or 6.7%, to $0.84 for the three months ended September 30, 2022, from $0.90 for the same period in 2021. The annualized return on average shareholders’ equity for the three months ended September 30, 2022 was 14.23%, compared to 12.89% for the same period in 2021. The annualized return on average assets was 1.43% for the three months ended September 30, 2022, compared to 1.61% for the same period in 2021.

“Third quarter financial results for 2022 were highlighted by net income of $27.0 million, earnings per diluted common share of $0.84, annualized linked quarter loan growth of 10.1% and a 34.5% annualized linked quarter growth in net interest income,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “Our asset quality remained strong and our tax-equivalent net interest margin increased six basis points to 3.36%. Continued migration into Texas from other states, job growth and company relocations has mitigated much of the impact of higher costs associated with inflation and higher interest rates. Overall, we believe that the long-term economic conditions and growth prospects in the markets we serve remain solid.”

Operating Results for the Three Months Ended September 30, 2022

Net income was $27.0 million for the three months ended September 30, 2022, compared to $29.3 million for the same period in 2021, a decrease of $2.4 million, or 8.0%. Earnings per diluted common share were $0.84 and $0.90 for the three months ended September 30, 2022 and 2021, respectively. The decrease in net income was primarily a result of an increase in provision for credit losses, a decrease in noninterest income and an increase in noninterest expense, partially offset by an increase in net interest income and a decrease in income tax expense. For the three months ended September 30, 2022, Southside recorded a provision for credit losses of $1.5 million, compared to a reversal of provision for credit losses of $5.1 million for the same period in 2021. Annualized returns on average assets and average shareholders’ equity for the three months ended September 30, 2022 were 1.43% and 14.23%, respectively, compared to 1.61% and 12.89%, respectively, for the three months ended September 30, 2021. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 50.09% and 47.42%, respectively, for the three months ended September 30, 2022, compared to 50.64% and 47.92%, respectively, for the three months ended September 30, 2021, and 50.61% and 47.74%, respectively, for the three months ended June 30, 2022.

Net interest income for the three months ended September 30, 2022 was $55.5 million, compared to $48.2 million for the same period in 2021, an increase of 15.2%. The increase in net interest income compared to the same period in 2021 was due to the increase in interest income, a result of the increase in the average yield and the average balance of interest earning assets, partially offset by an increase in interest expense on our interest bearing liabilities due to higher interest rates, the change in the mix of our interest bearing liabilities and a decrease in the interest income from PPP loans. Linked quarter, net interest income increased $4.4 million, or 8.7%, compared to $51.1 million during the three months ended June 30, 2022. The increase in net interest income was primarily due to an increase in the average yield and balance of interest earning assets, which more than offset the increase in the average rate paid and balance of interest bearing liabilities.

Our net interest margin and tax-equivalent net interest margin(1) increased to 3.15% and 3.36%, respectively, for the three months ended September 30, 2022, compared to 2.96% and 3.16%, respectively, for the same period in 2021. Linked quarter, net interest margin increased eight basis points from 3.07% and tax-equivalent net interest margin(1) increased six basis points from 3.30% for the three months ended June 30, 2022.

Noninterest income was $10.3 million for the three months ended September 30, 2022, a decrease of $2.5 million, or 19.6%, compared to $12.8 million for the same period in 2021. The decrease was due to a net loss on sale of securities available for sale (“AFS”) of $0.1 million for the three months ended September 30, 2022, compared to a net gain of $1.4 million for the

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same period in 2021 and decreases in deposit services income, gain on sale of loans, brokerage services income and other noninterest income. On a linked quarter basis, noninterest income increased $1.2 million, or 12.9%, compared to the three months ended June 30, 2022. The increase was due to a $2.1 million decrease in net loss on sale of securities AFS, partially offset by a decrease in brokerage services and deposit services income.

Noninterest expense increased $1.7 million, or 5.4%, to $33.5 million for the three months ended September 30, 2022, compared to $31.8 million for the same period in 2021. The primary increase was in salaries and employee benefits. Several additional expense categories increased, including other noninterest expense, net occupancy expense, professional fees, software and data processing expense and advertising, travel and entertainment expense, however when combined, such expenses were partially offset by the loss on the redemption of subordinated notes recorded in the third quarter of 2021. On a linked quarter basis, noninterest expense increased $1.4 million, or 4.2%, compared to the three months ended June 30, 2022, primarily due to an increase in salaries and employee benefits.

Income tax expense decreased $1.1 million, or 22.1%, for the three months ended September 30, 2022, compared to the same period in 2021. On a linked quarter basis, income tax expense increased $0.6 million, or 17.5%. Our effective tax rate (“ETR”) decreased to 12.6% for the three months ended September 30, 2022, compared to 14.5% for the three months ended September 30, 2021, and increased from 11.5% for the three months ended June 30, 2022.

Operating Results for the Nine Months Ended September 30, 2022

Net income was $77.4 million for the nine months ended September 30, 2022, compared to $84.7 million for the same period in 2021, a decrease of $7.4 million, or 8.7%. Earnings per diluted common share were $2.39 for the nine months ended September 30, 2022, compared to $2.59 for the same period in 2021, a decrease of 7.7%. The decrease in net income was largely driven by an increase in provision for credit losses, a decrease in noninterest income, and an increase in noninterest expense, partially offset by the increase in net interest income and the decrease in income tax expense. For the nine months ended September 30, 2022, we had a provision for credit losses of $1.2 million, compared to a reversal of provision for credit losses of $13.5 million for the same period in 2021. Annualized returns on average assets and average shareholders’ equity for the nine months ended September 30, 2022 were 1.42% and 12.92%, respectively, compared to 1.60% and 12.80%, respectively, for the nine months ended September 30, 2021. Our efficiency ratio and tax-equivalent efficiency ratio(1) were 50.46% and 47.76%, respectively, for the nine months ended September 30, 2022, compared to 52.23% and 49.53%, respectively, for the nine months ended September 30, 2021.

Net interest income was $155.5 million for the nine months ended September 30, 2022, compared to $140.2 million for the same period in 2021, due to the increase in interest income, a result of the increase in the average yield and balance of our interest earning assets, partially offset by the increase in interest expense on our interest bearing liabilities due to the increase in interest rates, the change in the mix of our interest bearing liabilities and a decrease in the interest income from PPP loans.

Our net interest margin and tax-equivalent net interest margin(1) were 3.08% and 3.29%, respectively, for the nine months ended September 30, 2022, compared to 2.94% and 3.14%, respectively, for the same period in 2021. The increase in net interest margin was due to higher average balances and yields on our interest earning assets during the nine months ended September 30, 2022.

Noninterest income was $30.1 million for the nine months ended September 30, 2022, a decrease of 19.4%, compared to $37.3 million for the same period in 2021. The decrease was due to the net loss on sale of securities AFS of $3.8 million for the nine months ended September 30, 2022, compared to a net gain of $3.4 million for the same period in 2021 and a decrease in gain on sale of loans, partially offset by an increase in other noninterest income.

Noninterest expense was $96.8 million for the nine months ended September 30, 2022, compared to $93.7 million for the same period in 2021, an increase of $3.1 million, or 3.3%. The primary increase was in salaries and employee benefits. Several additional expense categories increased, including software and data processing expense, advertising, travel and entertainment expense and net occupancy expense, however when combined, such expenses were partially offset by the loss on the redemption of subordinated notes recorded in the third quarter of 2021.

Income tax expense decreased $2.3 million, or 18.2%, for the nine months ended September 30, 2022, compared to the same period in 2021. Our ETR was approximately 11.8% and 13.0% for the nine months ended September 30, 2022 and 2021, respectively. The lower ETR for the nine months ended September 30, 2022, as compared to the same period in 2021, was primarily due to an increase in tax-exempt income as a percentage of pre-tax income.

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Balance Sheet Data

At September 30, 2022, we had $7.45 billion in total assets, compared to $7.26 billion at December 31, 2021 and $7.14 billion at September 30, 2021.

Loans at September 30, 2022 were $4.06 billion, an increase of $415.9 million, or 11.4%, compared to $3.65 billion at September 30, 2021. Our PPP loans, a component of the commercial loan category, decreased $67.2 million over that same period due to forgiveness payments received for loans funded under the Coronavirus Aid, Relief, and Economic Security Act. Excluding PPP loans, total loans increased $483.1 million, or 13.5%, due to increases of $296.8 million in commercial real estate loans, $132.3 million in construction loans, $57.0 million in commercial loans (excluding PPP loans) and $22.0 million in municipal loans. The increases were partially offset by decreases of $14.0 million in 1-4 family residential loans and $10.9 million in loans to individuals. Excluding a $2.7 million decrease in PPP loans during the quarter, linked quarter loans increased $103.1 million, or 2.6%, due to increases of $67.2 million in commercial real estate loans, $33.9 million in construction loans, $7.2 million in commercial loans (excluding PPP loans), and $6.0 million in 1-4 family residential loans. These increases were partially offset by decreases of $8.0 million in municipal loans and $3.1 million in loans to individuals.

Securities at September 30, 2022 were $2.58 billion, a decrease of $269.8 million, or 9.5%, compared to $2.85 billion at September 30, 2021. Linked quarter, securities decreased $241.3 million, or 8.6%, from $2.82 billion at June 30, 2022, a result of sales of securities, principal payments and an increase in the unrealized losses in the portfolio that more than offset purchases during the quarter. During the third quarter, we transferred additional municipal securities and U.S. Agency MBS with fair values of approximately $41.8 million and $28.4 million, respectively, to held to maturity (“HTM”). All transfers from AFS to HTM were at the fair market value on the date of transfer. There was no impact to the income statement as a result of these transfers.

Deposits at September 30, 2022 were $6.18 billion, an increase of $849.5 million, or 15.9%, compared to $5.33 billion at September 30, 2021. Linked quarter, deposits decreased $67.3 million, or 1.1%, from $6.25 billion at June 30, 2022. During the three months ended September 30, 2022, brokered deposits increased $102.3 million, or 15.5%, compared to June 30, 2022, due to an increase in the brokered CD category, and increased $648.5 million, or 571.4%, compared to September 30, 2021, primarily due to funding our cash flow hedge swaps in place of the Federal Home Loan Bank advances to obtain lower cost funding.

On March 1, 2022, our board of directors approved a Stock Repurchase Plan, authorizing the repurchase, from time to time, of up to 1.0 million shares of the Company’s outstanding common stock. Repurchases may be carried out in open market purchases, privately negotiated transactions or pursuant to any trading plan that might be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. The Company has no obligation to repurchase any shares under the Stock Repurchase Plan and may suspend or discontinue the plan at any time. During the third quarter ended September 30, 2022, we purchased 8,613 shares of common stock at an average price of $35.93 pursuant to the Stock Repurchase Plan, resulting in 685,201 authorized shares remaining. Subsequent to September 30, 2022, there have been no additional purchases.

Asset Quality

Nonperforming assets at September 30, 2022 were $11.7 million, or 0.16% of total assets, a decrease of $0.7 million, or 5.7%, compared to $12.4 million, or 0.17% of total assets, at September 30, 2021, and a slight decrease from $11.8 million, or 0.16% of total assets, at June 30, 2022.

The allowance for loan losses decreased to $36.5 million, or 0.90% of total loans, at September 30, 2022, compared to $38.0 million, or 1.04% of total loans, at September 30, 2021. The decrease was primarily due to improved asset quality, offset slightly by continued economic uncertainty related to inflation and recessionary concerns. The allowance for loan losses was $35.4 million, or 0.89% of total loans, at June 30, 2022.

We recorded a provision for credit losses for loans of $1.3 million and a reversal of provision of $4.4 million for the three month periods ended September 30, 2022 and 2021, respectively, compared to a reversal of provision of $0.1 million for the three months ended June 30, 2022. Net charge-offs were $0.2 million for the three months ended September 30, 2022, compared to net charge-offs of $0.5 million for the three months ended September 30, 2021 and net recoveries of $37,000 for the three months ended June 30, 2022. Net charge-offs were $0.2 million for the nine months ended September 30, 2022, compared to net charge-offs of $0.7 million for the nine months ended September 30, 2021.

We recorded a provision for credit losses for off-balance-sheet credit exposures of $0.2 million and a reversal of provision of $0.7 million for the three month periods ended September 30, 2022 and 2021, respectively, compared to a reversal of provision of $0.5 million for the three months ended June 30, 2022. For the nine months ended September 30, 2022 and 2021, we recorded reversals of provision of $0.3 million and $3.3 million, respectively. The balance of the allowance for off-balance-sheet credit exposures at September 30, 2022 was $2.1 million and is included in other liabilities.

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Dividend

Southside Bancshares, Inc. declared a third quarter cash dividend of $0.34 per share on August 4, 2022, which was paid on September 1, 2022, to all shareholders of record as of August 18, 2022.

_______________

(1) Refer to “Non-GAAP Financial Measures” below and to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for more information and for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

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Conference Call

Southside's management team will host a conference call to discuss its third quarter ended September 30, 2022 financial results on Tuesday, October 25, 2022 at 11:00 a.m. CDT. The conference call can be accessed by webcast, for listen-only mode, on the company website, https://investors.southside.com.

Those interested in participating in the question and answer session, or others who prefer to call-in, can register at https://register.vevent.com/register/BId92908286bbf41b5b784e887de1d8551 to receive the dial-in number and unique code to access the conference call seamlessly. While not required, it is recommended that those wishing to participate register 10 minutes prior to the conference call to ensure a more efficient registration process.

For those unable to attend the live event, a webcast recording will be available on the company website, https://investors.southside.com, for at least 30 days, beginning approximately two hours following the conference call.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include the following fully taxable-equivalent measures (“FTE”): (i) Net interest income (FTE), (ii) net interest margin (FTE), (iii) net interest spread (FTE), and (iv) efficiency ratio (FTE), which include the effects of taxable-equivalent adjustments using a federal income tax rate of 21% to increase tax-exempt interest income to a tax-equivalent basis. Interest income earned on certain assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments.

Net interest income (FTE), net interest margin (FTE) and net interest spread (FTE). Net interest income (FTE) is a non-GAAP measure that adjusts for the tax-favored status of net interest income from certain loans and investments and is not permitted under GAAP in the consolidated statements of income. We believe this measure to be the preferred industry measurement of net interest income and that it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread (FTE) is the difference in the average yield on average earning assets on a tax-equivalent basis and the average rate paid on average interest bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

Efficiency ratio (FTE). The efficiency ratio (FTE) is a non-GAAP measure that provides a measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. The ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense, excluding amortization expense on intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding net gain (loss) on sale of securities available for sale and certain nonrecurring impairments. The most directly comparable financial measure calculated in accordance with GAAP is our efficiency ratio.

These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. Whenever we present a non-GAAP financial measure in an SEC filing, we are also required to present the most directly comparable financial measure calculated and presented in accordance with GAAP and reconcile the differences between the non-GAAP financial measure and such comparable GAAP measure.

Management believes adjusting net interest income, net interest margin and net interest spread to a fully taxable-equivalent basis is a standard practice in the banking industry as these measures provide useful information to make peer comparisons. Tax-equivalent adjustments are reflected in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables.

A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

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About Southside Bancshares, Inc.

Southside Bancshares, Inc. is a bank holding company with approximately $7.45 billion in assets as of September 30, 2022, that owns 100% of Southside Bank. Southside Bank currently has 56 branches in Texas and operates a network of 75 ATMs/ITMs.

To learn more about Southside Bancshares, Inc., please visit our investor relations website at https://investors.southside.com. 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 Julie Shamburger at (903) 531-7134, or julie.shamburger@southside.com.

Forward-Looking Statements

Certain statements of other than historical fact that are contained in this press release and in other written materials, documents and oral statements issued by or on behalf of the Company 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 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 of the effect of our expansion, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, the Company's 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, tax reform, inflation, the impacts related to or resulting from Russia’s invasion of Ukraine and 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, higher interest rates and general economic and recessionary concerns, 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, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve.

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, 2021, under “Part I - Item 1. Forward Looking Information” 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.

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Southside Bancshares, Inc.

Consolidated Financial Summary (Unaudited)

(Dollars in thousands)


	As of
	2022						2021
	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,
ASSETS
Cash and due from banks	$	110,620	$	111,099	$	90,399	$	91,120	$	83,346
Interest earning deposits	3,476		12,910		72,158		110,633		3,787
Federal funds sold	81,031		48,280		24,550		—		—
Securities available for sale, at estimated fair value	1,424,562		1,733,354		2,065,984		2,764,325		2,753,104
Securities held to maturity, at net carrying value	1,151,205		1,083,672		474,319		90,780		92,479
Total securities	2,575,767		2,817,026		2,540,303		2,855,105		2,845,583
Federal Home Loan Bank stock, at cost	12,887		13,726		3,757		14,375		27,248
Loans held for sale	421		815		1,576		1,684		1,131
Loans	4,063,495		3,963,041		3,800,916		3,645,162		3,647,585
Less: Allowance for loan losses	(36,506)		(35,449)		(35,524)		(35,273)		(38,022)
Net loans	4,026,989		3,927,592		3,765,392		3,609,889		3,609,563
Premises & equipment, net	142,653		142,772		142,880		142,509		142,736
Goodwill	201,116		201,116		201,116		201,116		201,116
Other intangible assets, net	5,137		5,687		6,273		6,895		7,553
Bank owned life insurance	133,394		132,675		131,923		131,232		130,522
Other assets	160,256		192,363		138,788		95,044		83,106
Total assets	$	7,453,747	$	7,606,061	$	7,119,115	$	7,259,602	$	7,135,691

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest bearing deposits	$	1,759,959	$	1,735,488	$	1,630,056	$	1,644,775	$	1,596,781
Interest bearing deposits	4,421,200		4,512,921		4,440,343		4,077,552		3,734,874
Total deposits	6,181,159		6,248,409		6,070,399		5,722,327		5,331,655
Other borrowings and Federal Home Loan Bank borrowings	318,252		212,179		34,067		367,257		679,928
Subordinated notes, net of unamortized debt issuance costs	98,639		98,604		98,569		98,534		98,500
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,264		60,262		60,261		60,260		60,259
Other liabilities	87,797		254,825		71,578		99,052		87,483
Total liabilities	6,746,111		6,874,279		6,334,874		6,347,430		6,257,825
Shareholders' equity	707,636		731,782		784,241		912,172		877,866
Total liabilities and shareholders' equity	$	7,453,747	$	7,606,061	$	7,119,115	$	7,259,602	$	7,135,691

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Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars and shares in thousands, except per share data)


	Three Months Ended
	2022									2021
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
Income Statement:
Total interest income	$	66,880		$	57,100		$	53,873		$	54,760		$	55,076
Total interest expense	11,365			6,022			4,967			5,359			6,870
Net interest income	55,515			51,078			48,906			49,401			48,206
Provision for (reversal of) credit losses	1,494			(633)			294			(3,421)			(5,071)
Net interest income after provision for (reversal of) credit losses	54,021			51,711			48,612			52,822			53,277
Noninterest income
Deposit services	6,241			6,496			6,628			6,855			6,779
Net gain (loss) on sale of securities available for sale	(99)			(2,177)			(1,543)			463			1,381
Gain on sale of loans	109			208			178			356			299
Trust fees	1,407			1,520			1,494			1,586			1,494
Bank owned life insurance	720			720			691			710			637
Brokerage services	701			1,098			809			907			846
Other	1,190			1,232			2,468			1,134			1,333
Total noninterest income	10,269			9,097			10,725			12,011			12,769
Noninterest expense
Salaries and employee benefits	21,368			20,329			19,969			20,067			19,777
Net occupancy	3,847			3,654			3,656			3,541			3,532

Advertising, travel & entertainment	789			716			737			876			579
ATM expense	317			356			281			345			311
Professional fees	1,412			1,147			927			849			1,135
Software and data processing	1,736			1,739			1,631			1,454			1,503
Communications	497			509			503			544			552
FDIC insurance	485			477			472			464			454
Amortization of intangibles	550			586			622			658			695
Loss on redemption of subordinated notes	—			—			—			—			1,118
Other	2,463			2,593			2,397			2,536			2,107
Total noninterest expense	33,464			32,106			31,195			31,334			31,763
Income before income tax expense	30,826			28,702			28,142			33,499			34,283
Income tax expense	3,875			3,297			3,146			4,812			4,977
Net income	$	26,951		$	25,405		$	24,996		$	28,687		$	29,306

Common Share Data:
Weighted-average basic shares outstanding	32,112			32,119			32,357			32,311			32,465
Weighted-average diluted shares outstanding	32,221			32,251			32,537			32,487			32,556
Common shares outstanding end of period	32,127			32,108			32,294			32,352			32,273
Earnings per common share
Basic	$	0.84		$	0.79		$	0.77		$	0.89		$	0.90
Diluted	0.84			0.79			0.77			0.88			0.90
Book value per common share	22.03			22.79			24.28			28.20			27.20
Tangible book value per common share (1)	15.61			16.35			17.86			21.77			20.74
Cash dividends paid per common share	0.34			0.34			0.34			0.39			0.33

Selected Performance Ratios:
Return on average assets	1.43		%	1.42		%	1.40		%	1.57		%	1.61		%
Return on average shareholders’ equity	14.23			13.33			11.42			12.67			12.89
Return on average tangible common equity (1)	19.94			18.62			15.20			16.80			17.10
Average yield on earning assets (FTE) (1)	4.00			3.66			3.53			3.55			3.59
Average rate on interest bearing liabilities	0.92			0.52			0.44			0.46			0.59
Net interest margin (FTE) (1)	3.36			3.30			3.22			3.23			3.16
Net interest spread (FTE) (1)	3.08			3.14			3.09			3.09			3.00
Average earning assets to average interest bearing liabilities	142.83			144.54			141.93			141.21			138.86
Noninterest expense to average total assets	1.77			1.79			1.75			1.72			1.75
Efficiency ratio (FTE) (1)	47.42			47.74			48.15			47.61			47.92

(1)Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Page-8

Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars in thousands)


	Three Months Ended
	2022									2021
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
Nonperforming Assets:	$	11,717		$	11,815		$	11,455		$	11,609		$	12,424
Nonaccrual loans	3,039			3,119			2,357			2,536			3,013
Accruing loans past due more than 90 days	—			—			—			—			—
Troubled debt restructured loans	8,481			8,568			9,098			9,073			9,371
Other real estate owned	162			128			—			—			25
Repossessed assets	35			—			—			—			15

Asset Quality Ratios:
Ratio of nonaccruing loans to:
Total loans	0.07		%	0.08		%	0.06		%	0.07		%	0.08		%
Ratio of nonperforming assets to:
Total assets	0.16			0.16			0.16			0.16			0.17
Total loans	0.29			0.30			0.30			0.32			0.34
Total loans and OREO	0.29			0.30			0.30			0.32			0.34
Total loans, excluding PPP loans, and OREO	0.29			0.30			0.30			0.32			0.35
Ratio of allowance for loan losses to:
Nonaccruing loans	1,201.25			1,136.55			1,507.17			1,390.89			1,261.93
Nonperforming assets	311.56			300.03			310.12			303.84			306.04
Total loans	0.90			0.89			0.93			0.97			1.04
Total loans, excluding PPP loans	0.90			0.90			0.94			0.98			1.06
Net charge-offs (recoveries) to average loans outstanding	0.02			—			—			—			0.05

Capital Ratios:
Shareholders’ equity to total assets	9.49			9.62			11.02			12.57			12.30
Common equity tier 1 capital	12.98			12.83			13.67			14.17			14.07
Tier 1 risk-based capital	14.07			13.94			14.86			15.43			15.35
Total risk-based capital	16.50			16.38			17.50			18.15			18.18
Tier 1 leverage capital	10.09			10.34			10.39			10.33			10.14
Period end tangible equity to period end tangible assets (1)	6.92			7.10			8.35			9.99			9.66
Average shareholders’ equity to average total assets	10.02			10.64			12.28			12.42			12.51

(1)Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Page-9

Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars in thousands)


	Three Months Ended
	2022						2021
Loan Portfolio Composition	Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,
Real Estate Loans:
Construction	$	554,345	$	520,484	$	490,166	$	447,860	$	422,095
1-4 Family Residential	646,692		640,706		647,837		651,140		660,689
Commercial	1,901,921		1,834,734		1,722,577		1,598,172		1,605,132
Commercial Loans	433,538		428,974		401,144		418,998		443,708
Municipal Loans	449,219		457,239		455,155		443,078		427,259
Loans to Individuals	77,780		80,904		84,037		85,914		88,702
Total Loans	$	4,063,495	$	3,963,041	$	3,800,916	$	3,645,162	$	3,647,585

Summary of Changes in Allowances:
Allowance for Loan Losses
Balance at beginning of period	$	35,449	$	35,524	$	35,273	$	38,022	$	42,913


Loans charged-off	(686)		(479)		(555)		(489)		(940)
Recoveries of loans charged-off	449		516		540		455		437
Net loans (charged-off) recovered	(237)		37		(15)		(34)		(503)
Provision for (reversal of) loan losses	1,294		(112)		266		(2,715)		(4,388)
Balance at end of period	$	36,506	$	35,449	$	35,524	$	35,273	$	38,022






Allowance for Off-Balance-Sheet Credit Exposures
Balance at beginning of period	$	1,891	$	2,412	$	2,384	$	3,090	$	3,773

Provision for (reversal of) off-balance-sheet credit exposures	200		(521)		28		(706)		(683)
Balance at end of period	$	2,091	$	1,891	$	2,412	$	2,384	$	3,090
Total Allowance for Credit Losses	$	38,597	$	37,340	$	37,936	$	37,657	$	41,112

Page-10

Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars in thousands)


	Nine Months Ended
	September 30,
	2022			2021
Income Statement:
Total interest income	$	177,853		$	161,227
Total interest expense	22,354			21,071
Net interest income	155,499			140,156
Provision for (reversal of) credit losses	1,155			(13,543)
Net interest income after provision for (reversal of) credit losses	154,344			153,699
Noninterest income
Deposit services	19,365			19,513
Net gain on sale of securities available for sale	(3,819)			3,399
Gain on sale of loans	495			1,285
Trust fees	4,421			4,373
Bank owned life insurance	2,131			1,908
Brokerage services	2,608			2,476
Other	4,890			4,371
Total noninterest income	30,091			37,325
Noninterest expense
Salaries and employee benefits	61,666			59,825
Net occupancy	11,157			10,698

Advertising, travel & entertainment	2,242			1,491
ATM expense	954			821
Professional fees	3,486			3,166
Software and data processing	5,106			4,221
Communications	1,509			1,689
FDIC insurance	1,434			1,343
Amortization of intangibles	1,758			2,191
Loss on redemption of subordinated notes	—			1,118
Other	7,453			7,133
Total noninterest expense	96,765			93,696
Income before income tax expense	87,670			97,328
Income tax expense	10,318			12,614
Net income	$	77,352		$	84,714

Common Share Data:
Weighted-average basic shares outstanding	32,195			32,641
Weighted-average diluted shares outstanding	32,341			32,759
Common shares outstanding end of period	32,127			32,273
Earnings per common share
Basic	$	2.40		$	2.60
Diluted	2.39			2.59
Book value per common share	22.03			27.20
Tangible book value per common share (1)	15.61			20.74
Cash dividends paid per common share	1.02			0.98

Selected Performance Ratios:
Return on average assets	1.42		%	1.60		%
Return on average shareholders’ equity	12.92			12.80
Return on average tangible common equity (1)	17.74			17.12
Average yield on earning assets (FTE) (1)	3.74			3.58
Average rate on interest bearing liabilities	0.63			0.61
Net interest margin (FTE) (1)	3.29			3.14
Net interest spread (FTE) (1)	3.11			2.97
Average earning assets to average interest bearing liabilities	143.10			137.45
Noninterest expense to average total assets	1.77			1.77
Efficiency ratio (FTE) (1)	47.76			49.53

Page-11

Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars in thousands)


	Nine Months Ended
	September 30,
	2022			2021
Nonperforming Assets:	$	11,717		$	12,424
Nonaccrual loans	3,039			3,013
Accruing loans past due more than 90 days	—			—
Troubled debt restructured loans	8,481			9,371
Other real estate owned	162			25
Repossessed assets	35			15

Asset Quality Ratios:
Ratio of nonaccruing loans to:
Total loans	0.07		%	0.08		%
Ratio of nonperforming assets to:
Total assets	0.16			0.17
Total loans	0.29			0.34
Total loans and OREO	0.29			0.34
Total loans, excluding PPP loans, and OREO	0.29			0.35
Ratio of allowance for loan losses to:
Nonaccruing loans	1,201.25			1,261.93
Nonperforming assets	311.56			306.04
Total loans	0.90			1.04
Total loans, excluding PPP loans	0.90			1.06
Net charge-offs (recoveries) to average loans outstanding	0.01			0.03

Capital Ratios:
Shareholders’ equity to total assets	9.49			12.30
Common equity tier 1 capital	12.98			14.07
Tier 1 risk-based capital	14.07			15.35
Total risk-based capital	16.50			18.18
Tier 1 leverage capital	10.09			10.14
Period end tangible equity to period end tangible assets (1)	6.92			9.66
Average shareholders’ equity to average total assets	10.97			12.48

Page-12

Southside Bancshares, Inc.

Consolidated Financial Highlights (Unaudited)

(Dollars in thousands)


	Nine Months Ended
	September 30,
Loan Portfolio Composition	2022		2021
Real Estate Loans:
Construction	$	554,345	$	422,095
1-4 Family Residential	646,692		660,689
Commercial	1,901,921		1,605,132
Commercial Loans	433,538		443,708
Municipal Loans	449,219		427,259
Loans to Individuals	77,780		88,702
Total Loans	$	4,063,495	$	3,647,585

Summary of Changes in Allowances:
Allowance for Loan Losses
Balance at beginning of period	$	35,273	$	49,006


Loans charged-off	(1,720)		(2,262)
Recoveries of loans charged-off	1,505		1,525
Net loans (charged-off) recovered	(215)		(737)
Provision for (reversal of) loan losses	1,448		(10,247)
Balance at end of period	$	36,506	$	38,022

Allowance for Off-Balance-Sheet Credit Exposures
Balance at beginning of period	$	2,384	$	6,386

Provision for (reversal of) off-balance-sheet credit exposures	(293)		(3,296)
Balance at end of period	$	2,091	$	3,090
Total Allowance for Credit Losses	$	38,597	$	41,112

Page-13

Southside Bancshares, Inc.

Average Balances and Average Yields and Rates (Annualized) (Unaudited)

(Dollars in thousands)

The tables that follow show 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 for the periods presented. The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” for more information.


	Three Months Ended
	September 30, 2022						June 30, 2022
	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
ASSETS
Loans (1)	$	4,012,547	$	45,992	4.55	%	$	3,847,614	$	39,088	4.07	%
Loans held for sale	606		7		4.58	%	1,776		18		4.07	%
Securities:
Taxable investment securities (2)	626,136		4,896		3.10	%	617,603		4,632		3.01	%
Tax-exempt investment securities (2)	1,750,952		14,455		3.28	%	1,653,871		13,599		3.30	%
Mortgage-backed and related securities (2)	520,501		4,770		3.64	%	417,057		3,238		3.11	%
Total securities	2,897,589		24,121		3.30	%	2,688,531		21,469		3.20	%
Federal Home Loan Bank stock, at cost, and equity investments	24,013		101		1.67	%	17,663		77		1.75	%
Interest earning deposits	18,664		105		2.23	%	77,894		125		0.64	%
Federal funds sold	46,106		269		2.31	%	37,343		79		0.85	%
Total earning assets	6,999,525		70,595		4.00	%	6,670,821		60,856		3.66	%
Cash and due from banks	102,840						100,231
Accrued interest and other assets	433,532						446,136
Less: Allowance for loan losses	(35,706)						(35,895)
Total assets	$	7,500,191					$	7,181,293
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	685,947	481		0.28	%	$	670,187	326		0.20	%
Certificates of deposits	588,212		1,452		0.98	%	518,104		578		0.45	%
Interest bearing demand accounts	3,164,961		5,954		0.75	%	3,175,385		3,360		0.42	%
Total interest bearing deposits	4,439,120		7,887		0.70	%	4,363,676		4,264		0.39	%
Federal Home Loan Bank borrowings	173,838		1,078		2.46	%	55,990		224		1.60	%
Subordinated notes, net of unamortized debt issuance costs	98,621		1,004		4.04	%	98,586		1,000		4.07	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,263		669		4.40	%	60,262		471		3.13	%
Repurchase agreements	30,530		54		0.70	%	30,055		18		0.24	%
Other borrowings	98,174		673		2.72	%	6,549		45		2.76	%
Total interest bearing liabilities	4,900,546		11,365		0.92	%	4,615,118		6,022		0.52	%
Noninterest bearing deposits	1,746,245						1,702,985
Accrued expenses and other liabilities	101,881						98,870
Total liabilities	6,748,672						6,416,973
Shareholders’ equity	751,519						764,320
Total liabilities and shareholders’ equity	$	7,500,191					$	7,181,293
Net interest income (FTE)			$	59,230					$	54,834
Net interest margin (FTE)					3.36	%					3.30	%
Net interest spread (FTE)					3.08	%					3.14	%

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

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

Note: As of September 30, 2022 and June 30, 2022, loans totaling $3.0 million and $3.1 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.

Page-14

Southside Bancshares, Inc.

Average Balances and Average Yields and Rates (Annualized) (Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31, 2022						December 31, 2021
	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
ASSETS
Loans (1)	$	3,703,980	$	35,625	3.90	%	$	3,668,767	$	36,740	3.97	%
Loans held for sale	928		8		3.50	%	1,980		11		2.20	%
Securities:
Taxable investment securities (2)	644,706		4,608		2.90	%	590,104		4,215		2.83	%
Tax-exempt investment securities (2)	1,563,185		12,683		3.29	%	1,508,196		12,699		3.34	%
Mortgage-backed and related securities (2)	566,941		4,017		2.87	%	650,685		4,394		2.68	%
Total securities	2,774,832		21,308		3.11	%	2,748,985		21,308		3.08	%
Federal Home Loan Bank stock, at cost, and equity investments	20,677		113		2.22	%	38,832		175		1.79	%
Interest earning deposits	44,642		24		0.22	%	43,841		22		0.20	%
Federal funds sold	8,651		4		0.19	%	—		—		—
Total earning assets	6,553,710		57,082		3.53	%	6,502,405		58,256		3.55	%
Cash and due from banks	107,144						103,126
Accrued interest and other assets	607,235						662,654
Less: Allowance for loan losses	(35,636)						(38,317)
Total assets	$	7,232,453					$	7,229,868
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	652,394	273		0.17	%	$	624,377	264		0.17	%
Certificates of deposit	563,599		594		0.43	%	632,150		681		0.43	%
Interest bearing demand accounts	3,097,966		2,370		0.31	%	2,558,289		1,289		0.20	%
Total interest bearing deposits	4,313,959		3,237		0.30	%	3,814,816		2,234		0.23	%
Federal Home Loan Bank borrowings	122,783		366		1.21	%	609,310		1,758		1.14	%
Subordinated notes, net of unamortized debt issuance costs	98,552		998		4.11	%	98,517		1,011		4.07	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,261		356		2.40	%	60,259		345		2.27	%
Repurchase agreements	21,494		10		0.19	%	21,874		11		0.20	%
Other borrowings	467		—		—		—		—		—
Total interest bearing liabilities	4,617,516		4,967		0.44	%	4,604,776		5,359		0.46	%
Noninterest bearing deposits	1,642,973						1,637,914
Accrued expenses and other liabilities	84,009						88,982
Total liabilities	6,344,498						6,331,672
Shareholders’ equity	887,955						898,196
Total liabilities and shareholders’ equity	$	7,232,453					$	7,229,868
Net interest income (FTE)			$	52,115					$	52,897
Net interest margin (FTE)					3.22	%					3.23	%
Net interest spread (FTE)					3.09	%					3.09	%

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

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

Note: As of March 31, 2022 and December 31, 2021, loans totaling $2.4 million and $2.5 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.

Page-15

Southside Bancshares, Inc.

Average Balances and Average Yields and Rates (Annualized) (Unaudited)

(Dollars in thousands)


	Three Months Ended
	September 30, 2021
	Average Balance		Interest		Average Yield/Rate
ASSETS
Loans (1)	$	3,662,496	$	37,744	4.09	%
Loans held for sale	1,640		12		2.90	%
Securities:
Taxable investment securities (2)	532,679		3,853		2.87	%
Tax-exempt investment securities (2)	1,453,275		12,315		3.36	%
Mortgage-backed and related securities (2)	738,287		4,405		2.37	%
Total securities	2,724,241		20,573		3.00	%
Federal Home Loan Bank stock, at cost, and equity investments	39,786		111		1.11	%
Interest earning deposits	39,382		24		0.24	%

Total earning assets	6,467,545		58,464		3.59	%
Cash and due from banks	99,113
Accrued interest and other assets	684,917
Less: Allowance for loan losses	(43,052)
Total assets	$	7,208,523
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	598,118	249		0.17	%
Certificates of deposit	629,718		789		0.50	%
Interest bearing demand accounts	2,496,037		1,196		0.19	%
Total interest bearing deposits	3,723,873		2,234		0.24	%
Federal Home Loan Bank borrowings	656,474		1,865		1.13	%
Subordinated notes, net of unamortized debt issuance costs	195,204		2,417		4.91	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,258		345		2.27	%
Repurchase agreements	21,634		9		0.17	%

Total interest bearing liabilities	4,657,443		6,870		0.59	%
Noninterest bearing deposits	1,551,298
Accrued expenses and other liabilities	97,954
Total liabilities	6,306,695
Shareholders’ equity	901,828
Total liabilities and shareholders’ equity	$	7,208,523
Net interest income (FTE)			$	51,594
Net interest margin (FTE)					3.16	%
Net interest spread (FTE)					3.00	%

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

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

Note: As of September 30, 2021, loans totaling $3.0 million 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.

Page-16

Southside Bancshares, Inc.

Average Balances and Average Yields and Rates (Annualized) (Unaudited)

(Dollars in thousands)


	Nine Months Ended
	September 30, 2022						September 30, 2021
	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
ASSETS
Loans (1)	$	3,855,844	$	120,705	4.19	%	$	3,667,941	$	110,927	4.04	%
Loans held for sale	1,102		33		4.00	%	2,092		45		2.88	%
Securities:
Taxable investment securities (2)	629,413		14,136		3.00	%	409,251		9,097		2.97	%
Tax-exempt investment securities (2)	1,656,691		40,737		3.29	%	1,373,206		35,076		3.42	%
Mortgage-backed and related securities (2)	501,330		12,025		3.21	%	841,361		15,140		2.41	%
Total securities	2,787,434		66,898		3.21	%	2,623,818		59,313		3.02	%
Federal Home Loan Bank stock, at cost, and equity investments	20,796		291		1.87	%	37,116		355		1.28	%
Interest earning deposits	46,972		254		0.72	%	37,939		56		0.20	%
Federal funds sold	30,837		352		1.53	%	—		—		—
Total earning assets	6,742,985		188,533		3.74	%	6,368,906		170,696		3.58	%
Cash and due from banks	103,390						92,206
Accrued interest and other assets	492,173						672,558
Less: Allowance for loan losses	(35,746)						(44,664)
Total assets	$	7,302,802					$	7,089,006
LIABILITIES AND SHAREHOLDERS’ EQUITY
Savings accounts	$	669,632	1,080		0.22	%	$	562,699	689		0.16	%
Certificates of deposit	556,728		2,624		0.63	%	674,452		2,954		0.59	%
Interest bearing demand accounts	3,146,350		11,684		0.50	%	2,433,120		3,527		0.19	%
Total interest bearing deposits	4,372,710		15,388		0.47	%	3,670,271		7,170		0.26	%
Federal Home Loan Bank borrowings	117,724		1,668		1.89	%	684,280		5,590		1.09	%
Subordinated notes, net of unamortized debt issuance costs	98,587		3,002		4.07	%	196,572		7,235		4.92	%
Trust preferred subordinated debentures, net of unamortized debt issuance costs	60,262		1,496		3.32	%	60,257		1,045		2.32	%
Repurchase agreements	27,393		82		0.40	%	22,387		31		0.19	%
Other borrowings	35,421		718		2.71	%	—		—		—
Total interest bearing liabilities	4,712,097		22,354		0.63	%	4,633,767		21,071		0.61	%
Noninterest bearing deposits	1,697,779						1,475,828
Accrued expenses and other liabilities	92,161						94,536
Total liabilities	6,502,037						6,204,131
Shareholders’ equity	800,765						884,875
Total liabilities and shareholders’ equity	$	7,302,802					$	7,089,006
Net interest income (FTE)			$	166,179					$	149,625
Net interest margin (FTE)					3.29	%					3.14	%
Net interest spread (FTE)					3.11	%					2.97	%

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

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

Note: As of September 30, 2022 and 2021, loans totaling $3.0 million and $3.0 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.

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Southside Bancshares, Inc.

Non-GAAP Reconciliation (Unaudited)

(Dollars and shares in thousands, except per share data)

The following tables set forth the reconciliation of return on average common equity to return on average tangible common equity, book value per share to tangible book value per share, net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investment securities, along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE) for the applicable periods presented.


	Three Months Ended															Nine Months Ended
	2022									2021						2022			2021
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Sep 30,			Sep 30,
Reconciliation of return on average common equity to return on average tangible common equity:
Net income	$	26,951		$	25,405		$	24,996		$	28,687		$	29,306		$	77,352		$	84,714
After-tax amortization expense	435			463			491			520			549			1,389			1,731
Adjusted net income available to common shareholders	$	27,386		$	25,868		$	25,487		$	29,207		$	29,855		$	78,741		$	86,445

Average shareholders' equity	$	751,519		$	764,320		$	887,955		$	898,196		$	901,828		$	800,765		$	884,875
Less: Average intangibles for the period	(206,591)			(207,163)			(207,774)			(208,412)			(209,097)			(207,172)			(209,817)
Average tangible shareholders' equity	$	544,928		$	557,157		$	680,181		$	689,784		$	692,731		$	593,593		$	675,058

Return on average tangible common equity	19.94		%	18.62		%	15.20		%	16.80		%	17.10		%	17.74		%	17.12		%

Reconciliation of book value per share to tangible book value per share:
Common equity at end of period	$	707,636		$	731,782		$	784,241		$	912,172		$	877,866		$	707,636		$	877,866
Less: Intangible assets at end of period	(206,253)			(206,803)			(207,389)			(208,011)			(208,669)			(206,253)			(208,669)
Tangible common shareholders' equity at end of period	$	501,383		$	524,979		$	576,852		$	704,161		$	669,197		$	501,383		$	669,197

Total assets at end of period	$	7,453,747		$	7,606,061		$	7,119,115		$	7,259,602		$	7,135,691		$	7,453,747		$	7,135,691
Less: Intangible assets at end of period	(206,253)			(206,803)			(207,389)			(208,011)			(208,669)			(206,253)			(208,669)
Tangible assets at end of period	$	7,247,494		$	7,399,258		$	6,911,726		$	7,051,591		$	6,927,022		$	7,247,494		$	6,927,022

Period end tangible equity to period end tangible assets	6.92		%	7.10		%	8.35		%	9.99		%	9.66		%	6.92		%	9.66		%

Common shares outstanding end of period	32,127			32,108			32,294			32,352			32,273			32,127			32,273
Tangible book value per common share	$	15.61		$	16.35		$	17.86		$	21.77		$	20.74		$	15.61		$	20.74

Reconciliation of efficiency ratio to efficiency ratio (FTE), net interest margin to net interest margin (FTE) and net interest spread to net interest spread (FTE):
Net interest income (GAAP)	$	55,515		$	51,078		$	48,906		$	49,401		$	48,206		$	155,499		$	140,156
Tax-equivalent adjustments:
Loans	742			762			745			740			722			2,249			2,180
Tax-exempt investment securities	2,973			2,994			2,464			2,756			2,666			8,431			7,289
Net interest income (FTE) (1)	59,230			54,834			52,115			52,897			51,594			166,179			149,625
Noninterest income	10,269			9,097			10,725			12,011			12,769			30,091			37,325
Nonrecurring income (2)	99			2,177			706			(463)			(1,381)			2,982			(3,399)
Total revenue	$	69,598		$	66,108		$	63,546		$	64,445		$	62,982		$	199,252		$	183,551

Noninterest expense	$	33,464		$	32,106		$	31,195		$	31,334		$	31,763		$	96,765		$	93,696
Pre-tax amortization expense	(550)			(586)			(622)			(658)			(695)			(1,758)			(2,191)
Nonrecurring expense (3)	87			39			22			8			(888)			148			(588)
Adjusted noninterest expense	$	33,001		$	31,559		$	30,595		$	30,684		$	30,180		$	95,155		$	90,917

Efficiency ratio	50.09		%	50.61		%	50.71		%	50.34		%	50.64		%	50.46		%	52.23		%
Efficiency ratio (FTE) (1)	47.42		%	47.74		%	48.15		%	47.61		%	47.92		%	47.76		%	49.53		%

Average earning assets	$	6,999,525		$	6,670,821		$	6,553,710		$	6,502,405		$	6,467,545		$	6,742,985		$	6,368,906

Net interest margin	3.15		%	3.07		%	3.03		%	3.01		%	2.96		%	3.08		%	2.94		%
Net interest margin (FTE) (1)	3.36		%	3.30		%	3.22		%	3.23		%	3.16		%	3.29		%	3.14		%

Net interest spread	2.87		%	2.91		%	2.89		%	2.88		%	2.79		%	2.90		%	2.77		%
Net interest spread (FTE) (1)	3.08		%	3.14		%	3.09		%	3.09		%	3.00		%	3.11		%	2.97		%

(1)These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures.

(2)These adjustments may include net gain or loss on sale of securities available for sale and other investment income or loss in the periods where applicable.

(3)These adjustments may include loss on redemption of subordinated notes, foreclosure expenses and branch closure expenses, in the periods where applicable.

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