Exhibit 99.1
SOUTHSIDE BANCSHARES, INC.
ANNOUNCES THIRD QUARTER EARNINGS
NASDAQ Global Select Market Symbol - "SBSI"
Tyler, Texas (November 1, 2006) B. G. Hartley, Chairman and Chief Executive
Officer of Southside Bancshares, Inc. ("Southside" or the "Company") is pleased
to report financial results for the three months ended September 30, 2006.
Net income increased to $4,052,000 for the three months ended September 30,
2006, compared to $3,833,000 for the same period in 2005, an increase of
$219,000, or 5.7%. Mr. Hartley stated that Southside is extremely gratified by
the increase in net income for the third quarter of 2006, given the additional
operating expenses associated with opening four branches since September 30,
2005 as well as the challenging interest rate environment over the same period.
De novo branch expansion as well as the investment associated with the regional
lending focus has and will continue to impact short-term net income. It is
management's belief that potential long-term benefits associated with these
internal investments should greatly outweigh the initial costs.
Earnings per fully diluted share were $0.32 for the three months ended September
30, 2006 compared to $0.31 for the same period in 2005, an increase of $0.01 or
3.2%. The return on average shareholders' equity for the three months ended
September 30, 2006 was 14.67% compared to 14.29% for the same period in 2005.
The annual return on average assets was 0.86% for the three months ended
September 30, 2006, compared to 0.88% for the same period in 2005.
As a part of management's continued evaluation of noninterest expense,
department managers completed an evaluation of work flow that identified
opportunities to increase productivity primarily through the use of technology
investments with less personnel expense. In certain departments the evaluations
identified the ability to utilize part-time employees to better staff for peak
customer transaction periods in lieu of full-time employees. In addition,
through normal attrition management is utilizing productivity gains to not
replace all of these positions. The combination of these initiatives resulted in
a reduction of full-time employees. Management estimates the annualized impact
associated with this strategy will be approximately $800,000. Part of this
savings should begin to be reflected in net income during the fourth quarter of
2006 and management believes additional savings may be realized in future
quarters as management continues to implement productivity opportunities.
Southside reported net income of $10,823,000 for the nine months ended September
30, 2006, a decrease of $282,000, or 2.5%, when compared to the same period in
2005. Earnings per fully diluted share were $0.85 for the nine months ended
September 30, 2006, compared to $0.88 for the same period in 2005, a decrease of
$0.03, or 3.4%. The return on average shareholders' equity for the nine months
ended September 30, 2006 was 13.26% compared to 14.17% for the same period in
2005. The annual return on average assets was 0.78% for the nine months ended
September 30, 2006, compared to 0.88% for the same period in 2005.
Loan and Deposit Growth
- -----------------------
Southside's Texas footprint has expanded over the past several years through the
opening of strategically placed branches, which remains a central part of our
business strategy to position for future success. Loan and deposit growth, as
measured in dollars, is detailed below. Another critical portion of Southside's
business strategy is the focus on increasing the number of accounts. Management
believes that consistent success in growing the number of deposit accounts will
continue to provide Southside significant opportunities to enhance fee income as
well as market additional products to these account holders. Our goal is to
become the primary financial provider for these account holders, thereby
creating value from within utilizing this additional organic growth source.
The Company continued to experience solid loan growth during the three months
ended September 30, 2006, as loans increased $17.6 million, or 2.4%, to $741.5
million from $723.9 million at June 30, 2006. During the nine months ended
September 30, 2006, loans increased $61.2 million, or 9.0%, to $741.5 million
from $680.4 million at December 31, 2005. Loan growth during 2006 has occurred
primarily in commercial loans, 1-4 family residential loans, and commercial real
estate loans. The on-going growth in loans is significant given the increasing
competition in the Texas banking market. Additionally, the 2006 loan growth was
accompanied by a 15.0% decrease in nonperforming assets. Loans increased $62.4
million, or 9.2%, to $741.5 million at September 30, 2006 when compared to
$679.2 million at September 30, 2005.
During the three months ended September 30, 2006, deposits increased $15.8
million, or 1.3%, to $1.21 billion from $1.20 billion at June 30, 2006. The
growth in deposits for the three months ended September 30, 2006 was solely the
result of an increase in brokered CDs of $19.5 million. During the nine months
ended September 30, 2006, the Company's deposits increased $100.1 million, or
9.0% to $1.21 billion from $1.11 billion at December 31, 2005. Approximately
$13.6 million of the overall growth in deposits during 2006 resulted from our
expanding branch network and continued market penetration. Price related
competition for deposits has intensified. The Company has attempted to maintain
a disciplined deposit pricing strategy; nevertheless, the current competitive
environment could pressure the net interest margin in the coming quarters. The
remaining $86.5 million of the deposit growth was the result of the Company
issuing callable-brokered certificates of deposits with long-term maturities
where the Company controls numerous call options. Brokered deposits at September
30, 2006 totaled $106.3 million compared to $19.8 million at December 31, 2005.
We believe these callable-brokered CDs offer the Company significant long-term
flexibility. Deposits increased $189.6 million, or 18.6%, to $1.21 billion, at
September 30, 2006 when compared to $1.02 billion at September 30, 2005.
Net Interest Income
- -------------------
Net interest income for both three month periods ended September 30, 2006 and
2005 was $10.4 million. The net interest margin and net interest spread were
impacted by the significant increase in short-term interest rates during 2005
and 2006 combined with significantly smaller increases in long-term interest
rates which resulted in an inverted yield curve, where short-term interest rates
were higher than long-term interest rates. As a result, the Company's net
interest margin and net interest spread decreased to 2.51% and 1.75%,
respectively, for the three months ended September 30, 2006 compared to 2.80%
and 2.25%, respectively for the same period in 2005 and 2.61% and 1.90%,
respectively for the three months ended June 30, 2006. Should the yield curve
remain inverted or invert more, the Company's net interest margin and spread
could come under additional pressure during the remainder of 2006.
Net Income for the Three Months
- -------------------------------
The increase in net income for the three months ended September 30, 2006 was
primarily attributable to an increase in noninterest income and a decrease in
provision for loan losses. Noninterest income, excluding gain on sale of
available for sale securities, increased $582,000, or 10.9%, for the three
months ended September 30, 2006, compared to the same period in 2005. The
increases in noninterest income were primarily results of increases in deposit
services income, gain on sale of loans, and other income, which resulted from
numerous increases. Gain on sale of securities increased $230,000, for the three
months ended September 30, 2006, compared to the same period in 2005. Provision
for loan losses decreased $259,000, or 53.4%, for the three months ended
September 30, 2006, compared to the same period in 2005.
The following items partially offset the increase in net income for the three
months ended September 30, 2006, when compared to the same period in 2005.
Noninterest expense increased primarily as a result of increases in salary and
employee benefits, occupancy expense and other noninterest expense. Salaries and
employee benefits increased $168,000, or 2.5%, during the three months ended
September 30, 2006, when compared to the same period in 2005 due to normal
salary increases and higher staffing levels associated with the Company's
continued branch expansion and regional lending initiative. Occupancy expense
increased $168,000, or 15.9%, for the three months ended September 30, 2006,
compared to the same period in 2005 due primarily to branch expansion. Other
noninterest expense increased $182,000, or 16.5% for the three months ended
September 30, 2006, compared to the same period in 2005, primarily as a result
of increases in computer fees, taxes other than real estate, telephone expense,
bank analysis fees, student loan origination fee and lender fee expense, and
website expense. Income tax expense increased $229,000, or 24.9%, for the three
months ended September 30, 2006, when compared to the same period in 2005.
Income tax expense increased as a result of the decrease in tax-exempt income as
a percentage of pre-tax income for the three months ended September 30, 2006,
when compared to the same period in 2005.
Net Income for the Nine Months
- ------------------------------
The decrease in net income for the nine months ended September 30, 2006 was
primarily attributable to an increase in noninterest expense and income tax
expense. Noninterest expense increased $2.0 million, or 6.1%, for the nine
months ended September 30, 2006, compared to the same period in 2005.
Noninterest expense increased primarily as a result of increases in salary and
employee benefits, occupancy expense, and, other noninterest expense. Salaries
and employee benefits increased $892,000, or 4.3%, during the nine months ended
September 30, 2006, when compared to the same period in 2005 due to normal
salary increases and higher staffing levels associated with the Company's
continued branch expansion and regional lending initiative. Occupancy expense
increased $419,000, or 13.2%, for the nine months ended September 30, 2006,
compared to the same period in 2005 due primarily to branch expansion. Other
noninterest expense increased $320,000, or 9.3% for the nine months ended
September 30, 2006, compared to the same period in 2005, primarily as a result
of increases in computer fees, taxes other than real estate, telephone expense,
bank analysis fees, student loan origination fee expense, and stored value card
expense that were partially offset by decreases in other losses. Income tax
expense increased $310,000, or 12.3%, for the nine months ended September 30,
2006, when compared to the same period in 2005. Income tax expense increased as
a result of the decrease in tax-exempt income as a percentage of pre-tax income
for the nine months ended September 30, 2006 when compared to the same period in
2005.
The following items partially offset the decrease in net income for the nine
months ended September 30, 2006, when compared to the same period in 2005. Net
interest income increased $490,000, or 1.6%, for the nine months ended September
30, 2006 when compared to the same period in 2005. Net interest income increased
as a result of increases in the Company's average interest earning assets during
the nine months of 2006 when compared to the same period in 2005, which more
than offset the decrease in the Company's net interest spread and margin during
the same period. Noninterest income, excluding security gains, increased
$997,000, or 6.3%, for the nine months ended September 30, 2006, when compared
to the same period in 2005. The increases in noninterest income were primarily
results of increases in deposit services income, Trust income, and other income.
Gain on sale of securities available for sale increased $510,000 for the nine
months ended September 30, 2006 compared to the same period in 2005.
About Southside Bancshares, Inc.
- --------------------------------
Southside Bancshares, Inc. is a bank holding company with approximately $1.88
billion in assets that owns 100% of Southside Bank. The bank currently has 34
banking centers in East Texas and operates a network of 39 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 susanh@southside.com.
Forward Looking Statements
- --------------------------
Certain statements of other than historical fact that are contained in this
document and in 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 and the Company's actual results may differ materially
from the results discussed in the forward-looking statements. For example,
discussions of the effect of the Company's expansion, including
expectations of the costs and profitability of such expansion, trends in
asset quality and earnings from growth, and certain market risk disclosures
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, 2005 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 AT AT
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
SELECTED FINANCIAL CONDITION DATA (AT END OF PERIOD) 2006 2005 2005
- ------------------------------------------------------- -------------- -------------- --------------
(dollars in thousands)
(unaudited)
Total assets .......................................... $ 1,881,291 $ 1,783,462 $ 1,733,735
Loans ................................................. 741,534 680,364 679,169
Allowance for loan losses ............................. 7,354 7,090 7,038
Mortgage-backed and related securities:
Available for sale .................................. 656,787 592,435 564,547
Held to maturity .................................... 236,259 229,321 229,113
Investment securities:
Available for sale .................................. 85,679 121,240 109,659
Held to Maturity .................................... 1,349 - -
Federal Home Loan Bank stock, at cost ................. 26,308 28,729 28,444
Deposits .............................................. 1,210,881 1,110,813 1,021,320
Long-term obligations ................................. 164,887 229,032 276,584
Shareholders' equity .................................. 116,649 109,290 105,447
Nonperforming assets .................................. 2,599 3,057 2,309
Nonaccrual loans .................................... 1,213 1,731 1,211
Loans 90 days past due .............................. 625 945 555
Restructured loans .................................. 223 226 242
Other real estate owned ............................. 441 145 121
Repossessed assets .................................. 97 10 180
ASSETS QUALITY RATIOS:
Nonaccruing loans to total loans ...................... 0.16% 0.25% 0.18%
Allowance for loan losses to nonaccruing loans ........ 606.27 409.59 581.17
Allowance for loan losses to nonperforming assets ..... 282.95 231.93 304.81
Allowance for loan losses to total loans .............. 0.99 1.04 1.04
Nonperforming assets to total assets .................. 0.14 0.17 0.13
Net charge-offs to average loans ...................... 0.13 0.20 0.17
CAPITAL RATIOS:
Shareholders' equity to total assets .................. 6.20 6.13 6.08
Average shareholders' equity to average total assets .. 5.91 6.20 6.24
LOAN PORTFOLIO COMPOSITION
The following table sets forth loan totals by category for the periods
presented:
AT AT AT
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
2006 2005 2005
-------------- -------------- --------------
(in thousands)
(unaudited)
Real Estate Loans:
Construction ........................................ $ 35,717 $ 35,765 $ 39,667
1-4 Family Residential .............................. 226,128 199,812 195,342
Other ............................................... 176,636 162,147 162,886
Commercial Loans ...................................... 114,090 91,456 86,280
Municipal Loans ....................................... 100,994 109,003 112,797
Loans to Individuals .................................. 87,969 82,181 82,197
-------------- -------------- --------------
Total Loans ........................................... $ 741,534 $ 680,364 $ 679,169
============== ============== ==============
AT OR FOR THE AT OR FOR THE
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2006 2005 2006 2005
-------------- -------------- -------------- --------------
(dollars in thousands) (dollars in thousands)
(unaudited) (unaudited)
SELECTED OPERATING DATA:
Total interest income .................................... $ 25,101 $ 20,438 $ 71,595 $ 58,602
Total interest expense ................................... 14,739 10,050 40,127 27,624
-------------- -------------- -------------- --------------
Net interest income ...................................... 10,362 10,388 31,468 30,978
Provision for loan losses ................................ 226 485 955 947
-------------- -------------- -------------- --------------
Net interest income after provision for loan losses ...... 10,136 9,903 30,513 30,031
-------------- -------------- -------------- --------------
Noninterest income
Deposit services ....................................... 4,036 3,775 11,452 10,849
Gain (loss) on sale of securities available for sale ... 254 24 478 (32)
Gain on sale of loans .................................. 521 414 1,363 1,433
Trust income ........................................... 423 394 1,230 1,033
Bank owned life insurance income ....................... 260 231 769 673
Other .................................................. 692 536 1,959 1,788
-------------- -------------- -------------- --------------
Total noninterest income ............................. 6,186 5,374 17,251 15,744
-------------- -------------- -------------- --------------
Noninterest expense
Salaries and employee benefits ......................... 6,944 6,776 21,674 20,782
Occupancy expense ...................................... 1,224 1,056 3,598 3,179
Equipment expense ...................................... 239 204 667 624
Advertising, travel & entertainment .................... 366 440 1,290 1,457
ATM expense ............................................ 254 165 699 467
Director fees .......................................... 131 144 443 459
Supplies ............................................... 152 134 504 455
Professional fees ...................................... 373 355 1,006 854
Postage ................................................ 155 149 460 423
Other .................................................. 1,282 1,100 3,776 3,456
-------------- -------------- -------------- --------------
Total noninterest expense ............................ 11,120 10,523 34,117 32,156
-------------- -------------- -------------- --------------
Income before federal tax expense ........................ 5,202 4,754 13,647 13,619
Income tax expense ....................................... 1,150 921 2,824 2,514
-------------- -------------- -------------- --------------
Net income ............................................... $ 4,052 $ 3,833 $ 10,823 $ 11,105
============== ============== ============== ==============
COMMON SHARE DATA:
Weighted-average basic shares outstanding ................ 12,280 12,034 12,239 12,019
Weighted-average diluted shares outstanding .............. 12,755 12,613 12,714 12,638
Net income per common share
Basic .................................................. $ 0.33 $ 0.32 $ 0.88 $ 0.92
Diluted ................................................ 0.32 0.31 0.85 0.88
Book value per common share .............................. - - 9.48 8.72
Cash dividend declared per common share .................. 0.11 0.11 0.33 0.33
SELECTED PERFORMANCE RATIOS:
Return on average assets ................................. 0.86% 0.88% 0.78% 0.88%
Return on average shareholders' equity ................... 14.67 14.29 13.26 14.17
Average yield on interest earning assets ................. 5.81 5.28 5.70 5.25
Average yield on interest bearing liabilities ............ 4.06 3.03 3.79 2.87
Net interest spread ...................................... 1.75 2.25 1.91 2.38
Net interest margin ...................................... 2.51 2.80 2.61 2.89
Average interest earning assets to average interest
bearing liabilities .................................... 123.12 122.41 122.82 121.95
Noninterest expense to average total assets .............. 2.35 2.42 2.47 2.56
Efficiency ratio ......................................... 64.66 62.96 67.12 64.72
AVERAGE BALANCES AND YIELDS
(dollars in thousands)
(unaudited)
Nine Months Ended
--------------------------------------------------------------------------------
September 30, 2006 September 30, 2005
---------------------------------------- ------------------------------------
AVG. AVG. AVG. AVG.
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
----------- ----------- -------- ----------- ----------- --------
ASSETS
- ------
INTEREST EARNING ASSETS:
Loans (1) (2) .................................. $ 713,764 $ 35,564 6.66% $ 650,862 $ 30,043 6.17%
Loans Held for Sale ............................ 4,783 191 5.34% 4,467 160 4.79%
Securities:
Investment Securities (Taxable) (4) ............ 55,865 1,906 4.56% 51,893 1,451 3.74%
Investment Securities (Tax-Exempt) (3) (4) ..... 44,793 2,389 7.13% 69,499 3,691 7.10%
Mortgage-backed Securities (4) ................. 887,269 32,907 4.96% 761,223 25,379 4.46%
Federal Home Loan Bank stock & Other
Investments, at cost .......................... 28,467 1,046 4.91% 27,686 736 3.55%
Interest Earning Deposits ...................... 703 24 4.56% 666 15 3.01%
Federal Funds Sold ............................. 1,038 37 4.77% 1,168 25 2.86%
----------- ----------- ----------- -----------
Total Interest Earning Assets .................. 1,736,682 74,064 5.70% 1,567,464 61,500 5.25%
NONINTEREST EARNING ASSETS:
Cash and Due From Banks ........................ 43,823 41,579
Bank Premises and Equipment .................... 33,420 30,817
Other Assets ................................... 41,307 46,520
Less: Allowance for Loan Loss ............... (7,212) (6,918)
----------- -----------
Total Assets ................................... $ 1,848,020 $ 1,679,462
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
INTEREST BEARING LIABILITIES:
Savings Deposits ............................... $ 50,806 $ 479 1.26% $ 50,868 $ 381 1.00%
Time Deposits .................................. 450,543 14,340 4.26% 347,037 7,871 3.03%
Interest Bearing Demand Deposits ............... 350,740 6,965 2.66% 309,039 3,749 1.62%
Short-term Interest Bearing Liabilities ........ 380,764 12,236 4.30% 266,924 6,810 3.41%
Long-term Interest Bearing Liabilities - FHLB .. 160,517 4,864 4.05% 290,875 7,875 3.62%
Long-term Debt (5) ............................. 20,619 1,243 7.95% 20,619 938 6.00%
----------- ----------- ----------- -----------
Total Interest Bearing Liabilities ............. 1,413,989 40,127 3.79% 1,285,362 27,624 2.87%
NONINTEREST BEARING LIABILITIES:
Demand Deposits ................................ 313,043 274,850
Other Liabilities .............................. 11,827 14,445
----------- -----------
Total Liabilities .............................. 1,738,859 1,574,657
SHAREHOLDERS' EQUITY ........................... 109,161 104,805
----------- -----------
Total Liabilities and
Shareholders' Equity ........................... $ 1,848,020 $ 1,679,462
=========== ===========
NET INTEREST INCOME ............................ $ 33,937 $ 33,876
=========== ===========
NET YIELD ON AVERAGE EARNING ASSETS ............ 2.61% 2.89%
======== ========
NET INTEREST SPREAD ............................ 1.91% 2.38%
======== ========
(1) Interest on loans includes fees on loans which are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $1,710 and $1,713
for the nine months ended September 30, 2006 and 2005, respectively.
(3) Interest income includes taxable-equivalent adjustments of $759 and $1,185
for the nine months ended September 30, 2006 and 2005, respectively.
(4) For the purpose of calculating the average yield, the average balance of
securities is presented at historical cost.
(5) Southside Statutory Trust III
Note: As of September 30, 2006 and 2005, loans totaling $1,213 and $1,211,
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
--------------------------------------------------------------------------------
September 30, 2006 September 30, 2005
---------------------------------------- ------------------------------------
AVG. AVG. AVG. AVG.
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
----------- ----------- -------- ----------- ----------- --------
ASSETS
- ------
INTEREST EARNING ASSETS:
Loans (1) (2) .................................. $ 731,345 $ 12,612 6.84% $ 671,882 $ 10,602 6.26%
Loans Held for Sale ............................ 5,054 74 5.81% 3,791 52 5.44%
Securities:
Investment Securities (Taxable) (4) ............ 48,530 569 4.65% 46,429 473 4.04%
Investment Securities (Tax-Exempt) (3) (4) ..... 44,398 798 7.13% 63,334 1,138 7.13%
Mortgage-backed Securities (4) ................. 912,751 11,521 5.01% 793,412 8,833 4.42%
Federal Home Loan Bank stock & Other
Investments, at cost .......................... 27,309 352 5.11% 28,366 283 3.96%
Interest Earning Deposits ...................... 726 7 3.83% 550 5 3.61%
Federal Funds Sold ............................. 1,718 22 5.08% 1,185 10 3.35%
----------- ----------- ----------- -----------
Total Interest Earning Assets .................. 1,771,831 25,955 5.81% 1,608,949 21,396 5.28%
NONINTEREST EARNING ASSETS:
Cash and Due From Banks ........................ 39,685 41,058
Bank Premises and Equipment .................... 33,197 31,747
Other Assets ................................... 40,230 47,395
Less: Allowance for Loan Loss ............... (7,356) (6,914)
----------- -----------
Total Assets ................................... $ 1,877,587 $ 1,722,235
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
INTEREST BEARING LIABILITIES:
Savings Deposits ............................... $ 51,089 $ 167 1.30% $ 50,857 $ 142 1.11%
Time Deposits .................................. 484,344 5,513 4.52% 361,048 2,981 3.28%
Interest Bearing Demand Deposits ............... 336,778 2,446 2.88% 312,195 1,451 1.84%
Short-term Interest Bearing Liabilities ........ 403,981 4,649 4.57% 310,463 2,721 3.48%
Long-term Interest Bearing Liabilities - FHLB .. 142,352 1,519 4.23% 259,245 2,416 3.70%
Long-term Debt (5) ............................. 20,619 445 8.44% 20,619 339 6.43%
----------- ----------- ----------- -----------
Total Interest Bearing Liabilities ............. 1,439,163 14,739 4.06% 1,314,427 10,050 3.03%
NONINTEREST BEARING LIABILITIES:
Demand Deposits ................................ 315,404 286,088
Other Liabilities .............................. 13,427 15,292
----------- -----------
Total Liabilities .............................. 1,767,994 1,615,807
SHAREHOLDERS' EQUITY ........................... 109,593 106,428
----------- -----------
Total Liabilities and
Shareholders' Equity .......................... $ 1,877,587 $ 1,722,235
=========== ===========
NET INTEREST INCOME ............................ $ 11,216 $ 11,346
=========== ===========
NET YIELD ON AVERAGE EARNING ASSETS ............ 2.51% 2.80%
======== ========
NET INTEREST SPREAD ............................ 1.75% 2.25%
======== ========
(1) Interest on loans includes fees on loans which are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $597 and $582 for
the three months ended September 30, 2006 and 2005, respectively.
(3) Interest income includes taxable-equivalent adjustments of $257 and $376 for
the three months ended September 30, 2006 and 2005, respectively.
(4) For the purpose of calculating the average yield, the average balance of
securities is presented at historical cost.
(5) Southside Statutory Trust III
Note: As of September 30, 2006 and 2005, loans totaling $1,213 and $1,211,
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.