Southside Bancshares, Inc. Announces First Quarter Earnings

Nasdaq National Market Symbol - 'SBSI'



Apr 19, 2001, 01:00 ET from Southside Bancshares, Inc.

    TYLER, Texas, April 19 /PRNewswire/ -- B. G. Hartley, Chairman and Chief
 Executive Officer of Southside Bancshares, Inc. (Nasdaq:   SBSI), reported
 financial results for the quarter ended March 31, 2001.
     "We are pleased to report net income increased $48,000 or 2.0% to
 $2,490,000 for the first quarter ended March 31, 2001 compared to $2,442,000
 for the same period in 2000," stated B. G. Hartley.  The increase in net
 income for the quarter ended March 31, 2001 was primarily attributable to an
 increase in noninterest income.  The increase in noninterest income was
 primarily a result of gains on sales of securities available for sale and
 increased deposit fee income.  These increases were partially offset by a
 cumulative effect of a change in accounting principle, an increase in the
 provision for loan losses, as well as an increase in noninterest expense and a
 reduction in net interest income due to additional interest expense associated
 with calling brokered CDs.
     Earnings per diluted share were $0.29 and $0.31 for the quarters ended
 March 31, 2001 and 2000, respectively, a decrease of $0.02.  The decrease was
 a result of the dilutive effect of the convertible trust preferred securities
 issued in November 2000.
     The annualized return on average shareholders' equity for the quarter
 ended March 31, 2001 was 17.47% compared to 25.55% for the same period in
 2000.  The annualized return on average assets was 0.85% for the quarter ended
 March 31, 2001 compared to 0.97% for the same period in 2000.
     During March 2001, the Company notified CD holders that $24.6 million of
 brokered CDs were being called April 12, 2001.  The Company recorded
 $195,000 of additional interest expense associated with the call of the CDs
 during the first quarter ended March 31, 2001.  Gains on sales of securities
 were used to offset this expense.  During April 2001, the Company notified CD
 holders that the remaining $30.0 million of brokered CDs will be called May
 24, 2001.  An additional $357,000 of expense will be incurred during the
 second quarter ending June 30, 2001, associated with the call of the brokered
 CDs.  The combined $54.6 million of long-term brokered CDs called had an
 average yield of approximately 8.19%.  These CDs have been replaced with long-
 term advances from the FHLB at an average rate of approximately 5.40% and an
 average life of approximately 4.9 years.  As a result, the Company's interest
 expense on this $54.6 million will decline after the CDs are called.  The
 Company estimates the reduction in interest expense, net of tax, should be
 approximately $4.4 million spread over the life of the FHLB funding obtained.
     On January 1, 2001, Southside adopted Financial Accounting Standard
 No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
 (FAS133).  As allowed by FAS133, at the date of initial application of this
 statement, Southside transferred held to maturity securities into the
 available for sale category and the trading category.  The effect of adopting
 FAS133 is shown as a cumulative effect of a change in accounting principle and
 reduced net income by $994,000 (net of taxes) during the first quarter of
 2001.  In order to offset the effect of adopting FAS133, Southside sold the
 securities transferred into the trading category along with previously
 existing available for sale securities which resulted in realized gains of
 $1.8 million or an after tax gain of $1.2 million.  These separate
 transactions allowed Southside to reposition the investment portfolio while
 having a positive impact of $302,000 or $199,000 (net of taxes) on
 consolidated net income for the first quarter of 2001.
     "We are looking forward to the remainder of 2001," stated B. G. Hartley.
 "Our stock repurchase plan was successful during the first quarter as 180,000
 shares were purchased at a cost of $1.6 million.  We expect to continue the
 stock repurchase program in the second quarter.  Even with the dilutive effect
 of the convertible trust preferred, based on current projections, we estimate
 the 2001 earnings per diluted share should exceed 2000.  We are also pleased
 to report Southside opened its sixteenth full service branch in Lindale, Texas
 on April 18, 2001."
     At March 31, 2001, assets totaled $1.2 billion compared to $1.0 billion at
 March 31, 2000, an increase of $174.3 million or 17.2%.  Net loans increased
 $89.1 million or 22.3% from $399.1 million at March 31, 2000 to $488.1 million
 at March 31, 2001.  Investments and mortgage-backed securities increased
 $96.0 million or 18.9% from $507.1 million at March 31, 2000 to $603.1 million
 at March 31, 2001.  Deposits increased $128.5 million or 21.6% from $595.2
 million at March 31, 2000 to $723.6 million at March 31, 2001.  Advances from
 the Federal Home Loan Bank of Dallas increased $19.6 million or 5.9% from
 $334.5 million at March 31, 2000 to $354.1 million at March 31, 2001.
 Shareholders' equity totaled $58.9 million or 4.96% of assets at
 March 31, 2001 as compared to $39.0 million or 3.85% of assets at
 March 31, 2000, an increase of $19.9 million or 51.1%.
     Southside Bancshares, Inc. is a $1.2 billion holding company that owns
 100% of Southside Bank.  The bank currently has sixteen locations in East
 Texas.
     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 may be considered to be "forward-looking
 statements" as that term is defined in the Private Securities Litigation
 Reform Act of 1995.  These statements may include words such as "expect,"
 "estimate," "project," "anticipate," "should," "intend," "probability,"
 "risk," "target," "objective," and similar expressions.  Forward-looking
 statements are subject to significant risks and uncertainties and the
 Company's actual results may differ materially from the results discussed in
 the forward-looking statements.  Other factors that could cause actual results
 to differ materially from forward-looking statements include, but are not
 limited to general economic conditions, either nationally or in the State of
 Texas, legislation or regulatory changes which adversely affect the businesses
 in which the Company is engaged, changes in the interest rate environment
 which reduce interest margins, significant increases in competition in the
 banking and financial services industry, changes in consumer spending,
 borrowing and saving habits, technological changes, the Company's ability to
 increase market share and control expenses, the effect of compliance with
 legislation or regulatory changes, the effect of changes in accounting
 policies and practices and the costs and effects of unanticipated litigation.
 
 
                                                        At               At
                                                     March 31,         Dec. 31,
                                                      2001              2000
                                                     (dollars in thousands)
                                                           (unaudited)
     Selected Financial Condition Data
     (at end of period):
 
     Total assets                                 $1,186,757        $1,151,881
     Loans, net of reserve for loan losses           488,108           476,402
     Mortgage-backed and related securities          477,934           412,247
     Investment securities                           125,134           161,285
     Deposits                                        723,614           720,605
     Long-term obligations                           242,802           216,595
     Shareholders' equity                             58,874            51,695
     Nonperforming assets                              2,062             2,477
 
 
                                                           At or for the
                                                         Three Months Ended
                                                              March 31,
                                                       2001              2000
                                                      (dollars in thousands)
                                                            (unaudited)
     Selected Operating Data:
     Total interest income                           $20,410           $17,533
     Total interest expense                           13,094            10,130
     Net interest income                               7,316             7,403
     Provision for loan losses                           460               405
     Net interest income after provisions
      for loan losses                                  6,856             6,998
     Total non-interest income                         4,666             2,192
     Total non-interest expense                        6,856             6,022
     Income before federal tax expense                 4,666             3,168
     Income tax expense                                1,182               726
     Income before cumulative effect of change in
      accounting principle                             3,484             2,442
     Cumulative effect of change in accounting
      principle, net of tax                             (994)              ---
     Net income                                       $2,490            $2,442
 
     Common Share Data:
     Net income per common share:
       Basic - before cumulative effect of
        change in Accounting principle                   .46               .32
       Basic                                             .33               .32
       Diluted - before cumulative effect of
        change in Accounting principle                   .39               .31
       Diluted                                           .29               .31
     Book value per common share                        7.90              5.13
     Cash dividend declared per common share            0.06              0.05
 
     Selected Performance Ratios:
     Return on average assets                           0.85%             0.97%
     Return on average shareholders' equity            17.47             25.55
     Net interest spread                                2.32              2.73
     Net interest margin (net interest and dividend
      income to average interest earning assets)        3.14              3.40
     Average interest earning assets to average
      interest bearing liabilities                    117.29            115.81
     Non-interest expense to average total assets       2.35              2.38
     Efficiency ratio (non-interest expense to net
      interest income and non-interest income)         67.16             60.92
     Asset Quality Ratios:
     Nonaccruing loans to total loans                   0.14              0.16
     Allowance for loan losses to nonaccruing loans   803.99            768.57
     Allowance for loan losses to
      nonperforming assets                            263.58            255.51
     Allowance for loan losses to total loans           1.10              1.20
     Nonperforming assets to total assets               0.17              0.19
     Net charge-offs to average loans                   0.05              0.14
     Capital Ratios:
     Shareholders' equity to total assets               4.96              3.85
     Average shareholders' equity to
      average total assets                              4.88              3.79
 
 

SOURCE Southside Bancshares, Inc.
    TYLER, Texas, April 19 /PRNewswire/ -- B. G. Hartley, Chairman and Chief
 Executive Officer of Southside Bancshares, Inc. (Nasdaq:   SBSI), reported
 financial results for the quarter ended March 31, 2001.
     "We are pleased to report net income increased $48,000 or 2.0% to
 $2,490,000 for the first quarter ended March 31, 2001 compared to $2,442,000
 for the same period in 2000," stated B. G. Hartley.  The increase in net
 income for the quarter ended March 31, 2001 was primarily attributable to an
 increase in noninterest income.  The increase in noninterest income was
 primarily a result of gains on sales of securities available for sale and
 increased deposit fee income.  These increases were partially offset by a
 cumulative effect of a change in accounting principle, an increase in the
 provision for loan losses, as well as an increase in noninterest expense and a
 reduction in net interest income due to additional interest expense associated
 with calling brokered CDs.
     Earnings per diluted share were $0.29 and $0.31 for the quarters ended
 March 31, 2001 and 2000, respectively, a decrease of $0.02.  The decrease was
 a result of the dilutive effect of the convertible trust preferred securities
 issued in November 2000.
     The annualized return on average shareholders' equity for the quarter
 ended March 31, 2001 was 17.47% compared to 25.55% for the same period in
 2000.  The annualized return on average assets was 0.85% for the quarter ended
 March 31, 2001 compared to 0.97% for the same period in 2000.
     During March 2001, the Company notified CD holders that $24.6 million of
 brokered CDs were being called April 12, 2001.  The Company recorded
 $195,000 of additional interest expense associated with the call of the CDs
 during the first quarter ended March 31, 2001.  Gains on sales of securities
 were used to offset this expense.  During April 2001, the Company notified CD
 holders that the remaining $30.0 million of brokered CDs will be called May
 24, 2001.  An additional $357,000 of expense will be incurred during the
 second quarter ending June 30, 2001, associated with the call of the brokered
 CDs.  The combined $54.6 million of long-term brokered CDs called had an
 average yield of approximately 8.19%.  These CDs have been replaced with long-
 term advances from the FHLB at an average rate of approximately 5.40% and an
 average life of approximately 4.9 years.  As a result, the Company's interest
 expense on this $54.6 million will decline after the CDs are called.  The
 Company estimates the reduction in interest expense, net of tax, should be
 approximately $4.4 million spread over the life of the FHLB funding obtained.
     On January 1, 2001, Southside adopted Financial Accounting Standard
 No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
 (FAS133).  As allowed by FAS133, at the date of initial application of this
 statement, Southside transferred held to maturity securities into the
 available for sale category and the trading category.  The effect of adopting
 FAS133 is shown as a cumulative effect of a change in accounting principle and
 reduced net income by $994,000 (net of taxes) during the first quarter of
 2001.  In order to offset the effect of adopting FAS133, Southside sold the
 securities transferred into the trading category along with previously
 existing available for sale securities which resulted in realized gains of
 $1.8 million or an after tax gain of $1.2 million.  These separate
 transactions allowed Southside to reposition the investment portfolio while
 having a positive impact of $302,000 or $199,000 (net of taxes) on
 consolidated net income for the first quarter of 2001.
     "We are looking forward to the remainder of 2001," stated B. G. Hartley.
 "Our stock repurchase plan was successful during the first quarter as 180,000
 shares were purchased at a cost of $1.6 million.  We expect to continue the
 stock repurchase program in the second quarter.  Even with the dilutive effect
 of the convertible trust preferred, based on current projections, we estimate
 the 2001 earnings per diluted share should exceed 2000.  We are also pleased
 to report Southside opened its sixteenth full service branch in Lindale, Texas
 on April 18, 2001."
     At March 31, 2001, assets totaled $1.2 billion compared to $1.0 billion at
 March 31, 2000, an increase of $174.3 million or 17.2%.  Net loans increased
 $89.1 million or 22.3% from $399.1 million at March 31, 2000 to $488.1 million
 at March 31, 2001.  Investments and mortgage-backed securities increased
 $96.0 million or 18.9% from $507.1 million at March 31, 2000 to $603.1 million
 at March 31, 2001.  Deposits increased $128.5 million or 21.6% from $595.2
 million at March 31, 2000 to $723.6 million at March 31, 2001.  Advances from
 the Federal Home Loan Bank of Dallas increased $19.6 million or 5.9% from
 $334.5 million at March 31, 2000 to $354.1 million at March 31, 2001.
 Shareholders' equity totaled $58.9 million or 4.96% of assets at
 March 31, 2001 as compared to $39.0 million or 3.85% of assets at
 March 31, 2000, an increase of $19.9 million or 51.1%.
     Southside Bancshares, Inc. is a $1.2 billion holding company that owns
 100% of Southside Bank.  The bank currently has sixteen locations in East
 Texas.
     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 may be considered to be "forward-looking
 statements" as that term is defined in the Private Securities Litigation
 Reform Act of 1995.  These statements may include words such as "expect,"
 "estimate," "project," "anticipate," "should," "intend," "probability,"
 "risk," "target," "objective," and similar expressions.  Forward-looking
 statements are subject to significant risks and uncertainties and the
 Company's actual results may differ materially from the results discussed in
 the forward-looking statements.  Other factors that could cause actual results
 to differ materially from forward-looking statements include, but are not
 limited to general economic conditions, either nationally or in the State of
 Texas, legislation or regulatory changes which adversely affect the businesses
 in which the Company is engaged, changes in the interest rate environment
 which reduce interest margins, significant increases in competition in the
 banking and financial services industry, changes in consumer spending,
 borrowing and saving habits, technological changes, the Company's ability to
 increase market share and control expenses, the effect of compliance with
 legislation or regulatory changes, the effect of changes in accounting
 policies and practices and the costs and effects of unanticipated litigation.
 
 
                                                        At               At
                                                     March 31,         Dec. 31,
                                                      2001              2000
                                                     (dollars in thousands)
                                                           (unaudited)
     Selected Financial Condition Data
     (at end of period):
 
     Total assets                                 $1,186,757        $1,151,881
     Loans, net of reserve for loan losses           488,108           476,402
     Mortgage-backed and related securities          477,934           412,247
     Investment securities                           125,134           161,285
     Deposits                                        723,614           720,605
     Long-term obligations                           242,802           216,595
     Shareholders' equity                             58,874            51,695
     Nonperforming assets                              2,062             2,477
 
 
                                                           At or for the
                                                         Three Months Ended
                                                              March 31,
                                                       2001              2000
                                                      (dollars in thousands)
                                                            (unaudited)
     Selected Operating Data:
     Total interest income                           $20,410           $17,533
     Total interest expense                           13,094            10,130
     Net interest income                               7,316             7,403
     Provision for loan losses                           460               405
     Net interest income after provisions
      for loan losses                                  6,856             6,998
     Total non-interest income                         4,666             2,192
     Total non-interest expense                        6,856             6,022
     Income before federal tax expense                 4,666             3,168
     Income tax expense                                1,182               726
     Income before cumulative effect of change in
      accounting principle                             3,484             2,442
     Cumulative effect of change in accounting
      principle, net of tax                             (994)              ---
     Net income                                       $2,490            $2,442
 
     Common Share Data:
     Net income per common share:
       Basic - before cumulative effect of
        change in Accounting principle                   .46               .32
       Basic                                             .33               .32
       Diluted - before cumulative effect of
        change in Accounting principle                   .39               .31
       Diluted                                           .29               .31
     Book value per common share                        7.90              5.13
     Cash dividend declared per common share            0.06              0.05
 
     Selected Performance Ratios:
     Return on average assets                           0.85%             0.97%
     Return on average shareholders' equity            17.47             25.55
     Net interest spread                                2.32              2.73
     Net interest margin (net interest and dividend
      income to average interest earning assets)        3.14              3.40
     Average interest earning assets to average
      interest bearing liabilities                    117.29            115.81
     Non-interest expense to average total assets       2.35              2.38
     Efficiency ratio (non-interest expense to net
      interest income and non-interest income)         67.16             60.92
     Asset Quality Ratios:
     Nonaccruing loans to total loans                   0.14              0.16
     Allowance for loan losses to nonaccruing loans   803.99            768.57
     Allowance for loan losses to
      nonperforming assets                            263.58            255.51
     Allowance for loan losses to total loans           1.10              1.20
     Nonperforming assets to total assets               0.17              0.19
     Net charge-offs to average loans                   0.05              0.14
     Capital Ratios:
     Shareholders' equity to total assets               4.96              3.85
     Average shareholders' equity to
      average total assets                              4.88              3.79
 
 SOURCE  Southside Bancshares, Inc.