EXHIBIT 99.1
SOUTHSIDE BANCSHARES, INC.
ANNOUNCES NET INCOME FOR THE
THREE MONTHS AND YEAR ENDED DECEMBER 31, 2013
NASDAQ Global Select Market Symbol - “SBSI”
Tyler, Texas, (February 10, 2014) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three months and year ended December 31, 2013.
Southside reported net income of $12.9 million for the three months ended December 31, 2013, an increase of $4.7 million, or 57.2%, when compared to $8.2 million for the same period in 2012. Net income for the year ended December 31, 2013 increased $7.2 million, or 20.8%, to $41.9 million when compared to $34.7 million for the same period in 2012. During the fourth quarter, the Company recorded $1.1 million in net income to correct the immaterial cumulative effect of an interest income recognition error related to prior years. This was comprised of $1.4 million of additional interest income, a $549,000 loss on sale of securities and a related tax benefit of $186,000. The error related to recognition of income on its municipal bonds purchased at a premium based on amortizing the premium to the earliest call date instead of amortizing the premium to maturity.
Diluted earnings per common share were $0.72 and $0.45 for the three months ended December 31, 2013 and 2012, respectively, an increase of $0.27, or 60.0%, of which $0.06 related to the immaterial prior period error correction discussed above. For the year ended December 31, 2013, diluted earnings per common share increased $0.43, or 22.5%, to $2.34 when compared to $1.91 for the same period in 2012 of which $0.06 related to the immaterial prior period error correction discussed above.
The return on average shareholders’ equity for the year ended December 31, 2013, was 16.79%, compared to 12.83% for the same period in 2012. The return on average assets was 1.24% for the year ended December 31, 2013 compared to 1.05% for the same period in 2012.
“We are extremely pleased to report the progress Southside Bancshares made during 2013 and our financial results,” stated Sam Dawson, President and Chief Executive Officer of Southside Bancshares, Inc. “We continued to enjoy success in our Austin and Fort Worth/Arlington markets during 2013, due in part to the opening of a second branch in Austin and our expanding relationship teams in these markets. For the first time in several years we are seeing a significant amount of new economic activity occurring in our strategically important East Texas markets which contributed to the growth we enjoyed during 2013. All of this translated into loan growth of $88.3 million, or 7.0%, during 2013, which was well diversified among our lending categories. We are especially pleased to report that we ended the year on a strong note as 38% of our loan growth for the year occurred during the fourth quarter. The economic conditions in our markets appear to support, and our lending teams believe, that this fourth quarter momentum may continue in 2014. At the end of the year the overall credit quality in our loan portfolio remained sound as reflected in our asset quality ratios.”
“Our net interest margin and net interest spread increased, on a linked quarter basis, every quarter during 2013, and was one of the primary drivers of our $12.8 million, or 14.4%, increase in net interest income and our $7.2 million, or 20.8%, increase in net income. The increase in our net interest margin and spread during 2013 was a result of a 40 basis point decrease in cost of funds for 2013 compared to 2012, an increase in average loans of $116.3 million and an increase in average higher yielding tax free municipal investments of $290.7 million. The significant reduction in cost of funds was primarily the result of maturing and prepaid higher cost FHLB advances that were replaced with deposits and lower cost FHLB advances.”
“As we look forward to 2014 we are fortunate to serve outstanding economically vibrant Texas markets whose future economic prospects appear strong. Texas continues to experience population and business growth at levels above the national average. Our business plan is designed to capitalize on this growth and positive economic climate. Acquisition activity in Texas has accelerated over the past year and we are actively reviewing strategic acquisition possibilities and hope to participate in this activity during 2014. We look forward to the opportunity to build on these positive results in 2014. Thank you for your continued support.”
Loans and Deposits
For the year ended December 31, 2013, total loans increased by $88.3 million, or 7.0%, when compared to December 31, 2012. During the year ended December 31, 2013, real estate loans other increased $25.8 million, municipal loans increased $24.6 million, real estate loans 1-4 family increased $21.7 million, construction loans increased $11.5 million, loans to individuals increased $7.2 million, and commercial loans decreased $2.4 million.
Nonperforming assets decreased for the year ended December 31, 2013 by $165,000, or 1.1%, to $14.6 million, or 0.42% of total assets, when compared to 0.45% at December 31, 2012.
During the year ended December 31, 2013, deposits, net of brokered deposits, increased $141.0 million, or 6.0%, compared to December 31, 2012. During the year ended December 31, 2013, public fund deposits increased $149.4 million.
Net Interest Income for the Three Months
Net interest income increased $8.4 million, or 40.8%, to $29.0 million for the three months ended December 31, 2013, when compared to $20.6 million for the same period in 2012. For the three months ended December 31, 2013, we recorded the immaterial cumulative effect of a prior period error as disclosed above of $1.4 million of interest income. Our net interest spread increased to 3.91% when compared to 2.88% for the same period in 2012. The net interest margin increased to 4.03% for the three months ended December 31, 2013 compared to 3.09% for the same period in 2012. The reason for the increase in the net interest spread and margin was the increase in the yield on the interest earning assets combined with the decrease in the yield on the interest bearing liabilities of 33 basis points compared to the same period in 2012.
Net Interest Income for the Year
Net interest income increased $12.8 million, or 14.4%, to $101.9 million for the year ended December 31, 2013, when compared to $89.1 million for the same period in 2012 of which $1.4 million related to the immaterial prior period error discussed above. For the year ended December 31, 2013, our net interest spread increased to 3.55% from 3.02% for the same period in 2012. The net interest margin increased to 3.70% for the year ended December 31, 2013, compared to 3.26% for the same period in 2012.
Net Income for the Three Months
Net income increased $4.7 million, or 57.2%, for the three months ended December 31, 2013, to $12.9 million when compared to the same period in 2012. The increase was primarily the result of an increase in interest income of $6.9 million and an increase in bank owned life insurance income related to death benefit proceeds of $1.9 million, which was partially offset by a $5.1 million decrease in gain on sale of securities.
Noninterest expense increased $551,000, or 2.8%, for the three months ended December 31, 2013, compared to the same period in 2012. The increase is due primarily to an increase in the reserve for unfunded commitments, advertising, travel and entertainment, salaries and benefits and FHLB prepayment penalties.
Net Income for the Year
Net income for the year ended December 31, 2013 increased $7.2 million, or 20.8%, to $41.9 million, when compared to $34.7 million for the same period in 2012.
The increase primarily resulted from an increase of $3.9 million in interest income for the year ended December 31, 2013 compared to the same period in 2012. In addition, a decrease in interest expense of $8.9 million, a decrease in provision for loan losses of $2.5 million and a decrease in FHLB advance impairment charges of $2.0 million further contributed to the increase in net income, while partially offset by the decrease in the gain on sale of securities of $9.5 million for the year ended December 31, 2013 compared to the same period in 2012.
Noninterest expense increased $5.6 million, or 7.4%, primarily due to the increase in salaries and employee benefits expense and FHLB prepayment penalties.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $3.4 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 50 banking centers in Texas and operates a network of 49 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.
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,” “likely,” “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, capital, liquidity, growth and earnings and certain market risk disclosures, including the impact of interest rate and other economic 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, 2012 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
December 31,
2013 | | At
December 31,
2012 |
| | |
| | |
| | (dollars in thousands) |
| | (unaudited) |
| Selected Financial Condition Data (at end of period): | | | |
| | | | |
| Total assets | $ | 3,446,585 |
| | $ | 3,237,403 |
|
| Loans | 1,351,273 |
| | 1,262,977 |
|
| Allowance for loan losses | 18,877 |
| | 20,585 |
|
| Mortgage-backed and related securities: | | | |
| Available for sale, at estimated fair value | 840,258 |
| | 806,360 |
|
| Held to maturity, at carrying cost | 275,569 |
| | 245,538 |
|
| Investment securities: | | | |
| Available for sale, at estimated fair value | 337,429 |
| | 617,707 |
|
| Held to maturity, at carrying cost | 391,552 |
| | 1,009 |
|
| Federal Home Loan Bank stock, at cost | 34,065 |
| | 27,889 |
|
| Deposits | 2,527,808 |
| | 2,351,897 |
|
| Long-term obligations | 559,660 |
| | 429,408 |
|
| Shareholders' equity | 260,251 |
| | 257,763 |
|
| Nonperforming assets | 14,552 |
| | 14,717 |
|
| Nonaccrual loans | 8,088 |
| | 10,314 |
|
| Accruing loans past due more than 90 days | 3 |
| | 15 |
|
| Restructured loans | 3,888 |
| | 2,998 |
|
| Other real estate owned | 725 |
| | 686 |
|
| Repossessed assets | 1,848 |
| | 704 |
|
| | | | |
| Asset Quality Ratios: | | | |
| Nonaccruing loans to total loans | 0.60 | % | | 0.82 | % |
| Allowance for loan losses to nonaccruing loans | 233.40 |
| | 199.58 |
|
| Allowance for loan losses to nonperforming assets | 129.72 |
| | 139.87 |
|
| Allowance for loan losses to total loans | 1.40 |
| | 1.63 |
|
| Nonperforming assets to total assets | 0.42 |
| | 0.45 |
|
| Net charge-offs to average loans | 0.77 |
| | 0.74 |
|
| | | | |
| Capital Ratios: | | | |
| Shareholders’ equity to total assets | 7.55 |
| | 7.96 |
|
| Average shareholders’ equity to average total assets | 7.39 |
| | 8.17 |
|
Loan Portfolio Composition
The following table sets forth loan totals by category for the periods presented:
|
| | | | | | | |
| | At
December 31,
2013 | | At
December 31,
2012 |
| | (in thousands) |
| | (unaudited) |
| Real Estate Loans: | | | |
| Construction | $ | 125,219 |
| | $ | 113,744 |
|
| 1-4 Family Residential | 390,499 |
| | 368,845 |
|
| Other | 262,536 |
| | 236,760 |
|
| Commercial Loans | 157,655 |
| | 160,058 |
|
| Municipal Loans | 245,550 |
| | 220,947 |
|
| Loans to Individuals | 169,814 |
| | 162,623 |
|
| Total Loans | $ | 1,351,273 |
| | $ | 1,262,977 |
|
|
| | | | | | | | | | | | | | | |
| | At or For the
Three Months Ended
December 31, | | At or For the
Year Ended
December 31, |
| | |
| | |
| | 2013 | | 2012 | | 2013 | | 2012 |
| | (dollars in thousands) |
| | (unaudited) |
| Selected Operating Data: | | | | | | | |
| Total interest income | $ | 33,319 |
| | $ | 26,398 |
| | $ | 119,906 |
| | $ | 116,020 |
|
| Total interest expense | 4,353 |
| | 5,822 |
| | 17,968 |
| | 26,895 |
|
| Net interest income | 28,966 |
| | 20,576 |
| | 101,938 |
| | 89,125 |
|
| Provision for loan losses | 2,084 |
| | 2,245 |
| | 8,237 |
| | 10,736 |
|
| Net interest income after provision for loan losses | 26,882 |
| | 18,331 |
| | 93,701 |
| | 78,389 |
|
| Noninterest income | | | | | | | |
| Deposit services | 3,898 |
| | 3,940 |
| | 15,560 |
| | 15,433 |
|
| (Loss) gain on sale of securities available for sale | (732 | ) | | 4,395 |
| | 8,472 |
| | 17,966 |
|
| Loss on sale of securities carried at fair value through income | — |
| | — |
| | — |
| | (498 | ) |
| | | | | | | | |
| Total other-than-temporary impairment losses | — |
| | — |
| | (52 | ) | | (21 | ) |
| Portion of loss recognized in other comprehensive income (before taxes) | — |
| | — |
| | 10 |
| | (160 | ) |
| Net impairment losses recognized in earnings | — |
| | — |
| | (42 | ) | | (181 | ) |
| | | | | | | | |
| FHLB advance option impairment charges | — |
| | — |
| | — |
| | (2,031 | ) |
| Gain on sale of loans | 80 |
| | 376 |
| | 770 |
| | 1,119 |
|
| Trust income | 812 |
| | 743 |
| | 3,024 |
| | 2,794 |
|
| Bank owned life insurance income | 2,277 |
| | 330 |
| | 3,122 |
| | 1,110 |
|
| Other | 1,161 |
| | 870 |
| | 4,339 |
| | 4,309 |
|
| Total noninterest income | 7,496 |
| | 10,654 |
| | 35,245 |
| | 40,021 |
|
| Noninterest expense | | | | | | | |
| Salaries and employee benefits | 12,277 |
| | 12,190 |
| | 52,054 |
| | 48,084 |
|
| Occupancy expense | 1,849 |
| | 1,909 |
| | 7,539 |
| | 7,498 |
|
| Advertising, travel & entertainment | 746 |
| | 650 |
| | 2,642 |
| | 2,463 |
|
| ATM and debit card expense | 334 |
| | 246 |
| | 1,328 |
| | 1,063 |
|
| Director fees | 412 |
| | 411 |
| | 1,212 |
| | 1,213 |
|
| Professional fees | 850 |
| | 844 |
| | 2,782 |
| | 2,928 |
|
| Telephone and communications | 311 |
| | 398 |
| | 1,529 |
| | 1,665 |
|
| FDIC insurance | 450 |
| | 431 |
| | 1,713 |
| | 1,744 |
|
| FHLB prepayment penalties | 60 |
| | — |
| | 1,048 |
| | — |
|
| Other | 2,675 |
| | 2,334 |
| | 9,866 |
| | 9,449 |
|
| Total noninterest expense | 19,964 |
| | 19,413 |
| | 81,713 |
| | 76,107 |
|
| Income before income tax expense | 14,414 |
| | 9,572 |
| | 47,233 |
| | 42,303 |
|
| Provision for income tax expense | 1,495 |
| | 1,352 |
| | 5,311 |
| | 7,608 |
|
| Net income | $ | 12,919 |
| | $ | 8,220 |
| | $ | 41,922 |
| | $ | 34,695 |
|
|
| | | | | | | | | | | | | | | |
| Common share data: | | | | |
| Weighted-average basic shares outstanding | 17,903 |
| | 18,138 |
| | 17,872 |
| | 18,193 |
|
| Weighted-average diluted shares outstanding | 17,969 |
| | 18,152 |
| | 17,910 |
| | 18,205 |
|
| Net income per common share | | | | | | | |
| Basic | $ | 0.72 |
| | $ | 0.45 |
| | $ | 2.35 |
| | $ | 1.91 |
|
| Diluted | 0.72 |
| | 0.45 |
| | 2.34 |
| | 1.91 |
|
| Book value per common share | — |
| | — |
| | 14.53 |
| | 14.38 |
|
| Cash dividend paid per common share | 0.31 |
| | 0.53 |
| | 0.91 |
| | 1.11 |
|
|
| | | | | | | | | | | |
| | At or For the
Three Months Ended
December 31, | | At or For the
Year Ended
December 31, |
| | 2013 | | 2012 | | 2013 | | 2012 |
| | (unaudited) | | (unaudited) |
| Selected Performance Ratios: | | | | | | | |
| Return on average assets | 1.45 | % | | 1.00 | % | | 1.24 | % | | 1.05 | % |
| Return on average shareholders’ equity | 20.74 |
| | 11.80 |
| | 16.79 |
| | 12.83 |
|
| Average yield on interest earning assets | 4.55 |
| | 3.85 |
| | 4.26 |
| | 4.13 |
|
| Average yield on interest bearing liabilities | 0.64 |
| | 0.97 |
| | 0.71 |
| | 1.11 |
|
| Net interest spread | 3.91 |
| | 2.88 |
| | 3.55 |
| | 3.02 |
|
| Net interest margin | 4.03 |
| | 3.09 |
| | 3.70 |
| | 3.26 |
|
| Average interest earnings assets to average interest bearing liabilities | 124.14 |
| | 127.80 |
| | 126.10 |
| | 126.58 |
|
| Noninterest expense to average total assets | 2.25 |
| | 2.36 |
| | 2.42 |
| | 2.30 |
|
| Efficiency ratio | 46.89 |
| | 64.75 |
| | 55.59 |
| | 60.59 |
|
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) | | | | |
| | | | | | Years Ended | | | | |
| | December 31, 2013 | | December 31, 2012 |
| | AVG | | | | AVG | | AVG | | | | AVG |
| | BALANCE | | INTEREST | | YIELD | | BALANCE | | INTEREST | | YIELD |
| ASSETS | | | | | | | | | | | |
| INTEREST EARNING ASSETS: | | | | | | | | | | | |
| Loans (1) (2) | $ | 1,296,440 |
| | $ | 77,032 |
| | 5.94 | % | | $ | 1,180,095 |
| | $ | 73,498 |
| | 6.23 | % |
| Loans Held For Sale | 1,137 |
| | 38 |
| | 3.34 | % | | 1,694 |
| | 59 |
| | 3.48 | % |
| Securities: | | | | | | | | | | | |
| Investment Securities (Taxable)(4) | 47,914 |
| | 799 |
| | 1.67 | % | | 35,217 |
| | 519 |
| | 1.47 | % |
| Investment Securities (Tax-Exempt)(3)(4) | 678,000 |
| | 37,310 |
| | 5.50 | % | | 387,284 |
| | 20,552 |
| | 5.31 | % |
| Mortgage-backed and Related Securities (4) | 1,072,601 |
| | 20,085 |
| | 1.87 | % | | 1,413,554 |
| | 32,118 |
| | 2.27 | % |
| Total Securities | 1,798,515 |
| | 58,194 |
| | 3.24 | % | | 1,836,055 |
| | 53,189 |
| | 2.90 | % |
| FHLB stock and other investments, at cost | 31,378 |
| | 182 |
| | 0.58 | % | | 34,191 |
| | 240 |
| | 0.70 | % |
| Interest Earning Deposits | 55,127 |
| | 143 |
| | 0.26 | % | | 20,809 |
| | 37 |
| | 0.18 | % |
| Total Interest Earning Assets | 3,182,597 |
| | 135,589 |
| | 4.26 | % | | 3,072,844 |
| | 127,023 |
| | 4.13 | % |
| NONINTEREST EARNING ASSETS: | | | | | | | | | | | |
| Cash and Due From Banks | 44,013 |
| | | | | | 42,938 |
| | | | |
| Bank Premises and Equipment | 50,766 |
| | | | | | 50,392 |
| | | | |
| Other Assets | 120,725 |
| | | | | | 163,402 |
| | | | |
| Less: Allowance for Loan Loss | (19,007 | ) | | | | | | (19,922 | ) | | | | |
| Total Assets | $ | 3,379,094 |
| | | | | | $ | 3,309,654 |
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Savings Deposits | $ | 108,097 |
| | 142 |
| | 0.13 | % | | $ | 96,854 |
| | 145 |
| | 0.15 | % |
| Time Deposits | 640,608 |
| | 4,700 |
| | 0.73 | % | | 761,030 |
| | 7,256 |
| | 0.95 | % |
| Interest Bearing Demand Deposits | 1,081,475 |
| | 3,337 |
| | 0.31 | % | | 892,798 |
| | 3,440 |
| | 0.39 | % |
| Total Interest Bearing Deposits | 1,830,180 |
| | 8,179 |
| | 0.45 | % | | 1,750,682 |
| | 10,841 |
| | 0.62 | % |
| Short-term Interest Bearing Liabilities | 197,506 |
| | 1,875 |
| | 0.95 | % | | 284,730 |
| | 6,340 |
| | 2.23 | % |
| Long-term Interest Bearing Liabilities – FHLB Dallas | 435,941 |
| | 6,465 |
| | 1.48 | % | | 331,898 |
| | 6,629 |
| | 2.00 | % |
| Long-term Debt (5) | 60,311 |
| | 1,449 |
| | 2.40 | % | | 60,311 |
| | 3,085 |
| | 5.12 | % |
| Total Interest Bearing Liabilities | 2,523,938 |
| | 17,968 |
| | 0.71 | % | | 2,427,621 |
| | 26,895 |
| | 1.11 | % |
| NONINTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Demand Deposits | 560,762 |
| | | | | | 564,007 |
| | | | |
| Other Liabilities | 44,685 |
| | | | | | 47,668 |
| | | | |
| Total Liabilities | 3,129,385 |
| | | | | | 3,039,296 |
| | | | |
| SHAREHOLDERS’ EQUITY | 249,709 |
| | | | | | 270,358 |
| | | | |
| Total Liabilities and Shareholders’ Equity | $ | 3,379,094 |
| | | | | | $ | 3,309,654 |
| | | | |
| NET INTEREST INCOME | | | $ | 117,621 |
| | | | | | $ | 100,128 |
| | |
| NET INTEREST MARGIN ON AVERAGE EARNING ASSETS | | | | | 3.70 | % | | | | | | 3.26 | % |
| NET INTEREST SPREAD | | | | | 3.55 | % | | | | | | 3.02 | % |
(1) Interest on loans includes fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $3,856 and $4,095 for the years ended December 31, 2013 and December 31, 2012, respectively.
(3) Interest income includes taxable-equivalent adjustments of $11,827 and $6,908 for the years ended December 31, 2013 and December 31, 2012, 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.
Note: As of December 31, 2013 and 2012, loans totaling $8,088 and $10,314, respectively, were on nonaccrual status. The 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 |
| | December 31, 2013 | | December 31, 2012 |
| | AVG | | | | AVG | | AVG | | | | AVG |
| | BALANCE | | INTEREST | | YIELD | | BALANCE | | INTEREST | | YIELD |
| ASSETS | | | | | | | | | | | |
| INTEREST EARNING ASSETS: | | | | | | | | | | | |
| Loans (1) (2) | $ | 1,328,571 |
| | $ | 19,501 |
| | 5.82 | % | | $ | 1,241,006 |
| | $ | 18,318 |
| | 5.87 | % |
| Loans Held For Sale | 295 |
| | 3 |
| | 4.03 | % | | 1,625 |
| | 14 |
| | 3.43 | % |
| Securities: | | | | | | | | | | | |
| Investment Securities (Taxable)(4) | 29,409 |
| | 127 |
| | 1.71 | % | | 123,864 |
| | 446 |
| | 1.43 | % |
| Investment Securities (Tax-Exempt)(3)(4) | 729,844 |
| | 12,099 |
| | 6.58 | % | | 523,123 |
| | 6,200 |
| | 4.71 | % |
| Mortgage-backed and Related Securities (4) | 1,125,359 |
| | 6,400 |
| | 2.26 | % | | 1,077,545 |
| | 4,388 |
| | 1.62 | % |
| Total Securities | 1,884,612 |
| | 18,626 |
| | 3.92 | % | | 1,724,532 |
| | 11,034 |
| | 2.55 | % |
| FHLB stock and other investments, at cost | 35,932 |
| | 47 |
| | 0.52 | % | | 31,883 |
| | 50 |
| | 0.62 | % |
| Interest Earning Deposits | 83,339 |
| | 50 |
| | 0.24 | % | | 40,815 |
| | 18 |
| | 0.18 | % |
| Total Interest Earning Assets | 3,332,749 |
| | 38,227 |
| | 4.55 | % | | 3,039,861 |
| | 29,434 |
| | 3.85 | % |
| NONINTEREST EARNING ASSETS: | | | | | | | | | | | |
| Cash and Due From Banks | 42,820 |
| | | | | | 46,006 |
| | | | |
| Bank Premises and Equipment | 51,823 |
| | | | | | 50,206 |
| | | | |
| Other Assets | 117,969 |
| | | | | | 150,679 |
| | | | |
| Less: Allowance for Loan Loss | (19,275 | ) | | | | | | (20,398 | ) | | | | |
| Total Assets | $ | 3,526,086 |
| | | | | | $ | 3,266,354 |
| | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | |
| INTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Savings Deposits | $ | 109,657 |
| | 36 |
| | 0.13 | % | | $ | 100,319 |
| | 37 |
| | 0.15 | % |
| Time Deposits | 664,615 |
| | 1,221 |
| | 0.73 | % | | 661,735 |
| | 1,311 |
| | 0.79 | % |
| Interest Bearing Demand Deposits | 1,131,125 |
| | 840 |
| | 0.29 | % | | 958,004 |
| | 878 |
| | 0.36 | % |
| Total Interest Bearing Deposits | 1,905,397 |
| | 2,097 |
| | 0.44 | % | | 1,720,058 |
| | 2,226 |
| | 0.51 | % |
| Short-term Interest Bearing Liabilities | 230,109 |
| | 120 |
| | 0.21 | % | | 221,927 |
| | 1,463 |
| | 2.62 | % |
| Long-term Interest Bearing Liabilities – FHLB Dallas | 488,956 |
| | 1,775 |
| | 1.44 | % | | 376,373 |
| | 1,535 |
| | 1.62 | % |
| Long-term Debt (5) | 60,311 |
| | 361 |
| | 2.37 | % | | 60,311 |
| | 598 |
| | 3.94 | % |
| Total Interest Bearing Liabilities | 2,684,773 |
| | 4,353 |
| | 0.64 | % | | 2,378,669 |
| | 5,822 |
| | 0.97 | % |
| NONINTEREST BEARING LIABILITIES: | | | | | | | | | | | |
| Demand Deposits | 555,414 |
| | | | | | 574,046 |
| | | | |
| Other Liabilities | 38,727 |
| | | | | | 36,490 |
| | | | |
| Total Liabilities | 3,278,914 |
| | | | | | 2,989,205 |
| | | | |
| SHAREHOLDERS’ EQUITY | 247,172 |
| | | | | | 277,149 |
| | | | |
| Total Liabilities and Shareholders’ Equity | $ | 3,526,086 |
| | | | | | $ | 3,266,354 |
| | | | |
| NET INTEREST INCOME | | | $ | 33,874 |
| | | | | | $ | 23,612 |
| | |
| NET INTEREST MARGIN ON AVERAGE EARNING ASSETS | | | | | 4.03 | % | | | | | | 3.09 | % |
| NET INTEREST SPREAD | | | | | 3.91 | % | | | | | | 2.88 | % |
(1) Interest on loans includes fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $970 and $1,013 for the three months ended December 31, 2013 and December 31, 2012, respectively.
(3) Interest income includes taxable-equivalent adjustments of $3,938 and $2,023 for the three months ended December 31, 2013 and December 31, 2012, 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.
Note: As of December 31, 2013 and 2012, loans totaling $8,088 and $10,314, respectively, were on nonaccrual status. The policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
