Southside Bancshares (SBSI) Q3 2026 Earnings Call: NIM Rises to 3.02%, Loan Growth Outlook Lowered
Source Tradingkey
Key Takeaways
- Southside Bancshares reported Q3 2026 net income of $28 million and diluted EPS of $0.93, up 4.2% and 3.3%, respectively, from the prior quarter.
- Tax-equivalent net interest margin increased 12 basis points sequentially to 3.02%, supported by higher loan and securities yields and flat funding costs.
- Loans ended the quarter at $4.96 billion. Strong production was largely offset by payoffs, prompting management to lower its 2026 loan growth guidance to the low- to mid-single-digit range.
- New loan production totaled approximately $400 million, with $276 million funded. Payoffs totaled $281 million, excluding regular amortization and line-of-credit activity.
- Deposits fell $155.6 million, or 2.5%, mainly because public fund deposits declined by $200.2 million. Wholesale funding increased $334.3 million to $1.7 billion.
- Management expects the September Federal Reserve rate increase to support Q4 loan yields because approximately 55% of the loan portfolio will reprice within 90 days, although deposit and wholesale funding costs are also expected to rise.
Key Financial Data
| Metric | Q3 2026 | Sequential change / context |
|---|---|---|
| Net income | $28 million | Up $1.1 million, or 4.2% |
| Diluted EPS | $0.93 | Up $0.03, or 3.3% |
| Return on average assets | 1.27% | — |
| Return on average tangible common equity | 16.31% | — |
| Tax-equivalent net interest margin | 3.02% | Up 12 basis points from 2.90% |
| Tax-equivalent net interest spread | 2.36% | Up 10 basis points from 2.26% |
| Net interest income | — | Up $3 million, or 5.2% |
| Loans | $4.96 billion | Slight sequential increase |
| Securities portfolio | $2.83 billion | Up $49.3 million, or 1.8% |
| Deposits | — | Down $155.6 million, or 2.5% |
| Nonperforming assets / total assets | 0.18% | NPAs increased $6 million sequentially |
| Allowance for credit losses | $50.4 million | Up from $49.3 million |
| Allowance for loan losses / total loans | 0.94% | Up 2 basis points |
| Noninterest expense | $39 million | Up $346,000, or 0.9% |
| Fully taxable-equivalent efficiency ratio | 51.55% | Improved from 52.96% |
Business and Operating Performance
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