GlobeNewswire Inc | Jul 23, 2021 06:00AM EDT

July 23, 2021

-- Second quarter net income of $21.3 million; -- Second quarter earnings per diluted common share of $0.65; -- Annualized linked quarter deposit growth of 5.0%; -- Annualized return on second quarter average assets of 1.20%; -- Annualized return on second quarter average tangible common equity of 13.13%(1); and -- Nonperforming assets decreased to 0.21% of total assets.

TYLER, Texas, July 23, 2021 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (Southside or the Company) (NASDAQ: SBSI) today reported its financial results for the quarter ended June30, 2021. Southside reported net income of $21.3 million for the three months ended June 30, 2021, a decrease of $0.2 million, or 1.1%, compared to $21.6 million for the same period in 2020. Earnings per diluted common share were $0.65 for the three months ended June 30, 2021 and 2020. The annualized return on average shareholders equity for the three months ended June 30, 2021 was 9.73%, compared to 10.82% for the same period in 2020. The annualized return on average assets was 1.20% for the three months ended June 30, 2021, compared to 1.17% for the same period in 2020.

We reported solid results during the second quarter, highlighted by continued strong asset quality metrics and 5% annualized linked quarter deposit growth, stated Lee R. Gibson, President and Chief Executive Officer of Southside.

Loan growth, net of Paycheck Protection Program (PPP), was partially offset by higher than anticipated loan payoffs. For the six months ended, annualized loan growth was 4%. We are encouraged about loan growth for the second half of the year as our loan pipeline continues to remain healthy.

On September 30, 2021, we anticipate the redemption of our 5.5% coupon $100 million sub debt issue, pending regulatory approval.

We are pleased by the continued strong economic conditions in the market areas we serve.

Operating Results for the Three Months Ended June30, 2021

Net income was $21.3 million for the three months ended June 30, 2021, compared to $21.6 million for the same period in 2020, a decrease of $0.2 million, or 1.1%. Earnings per diluted common share were $0.65 for the three months ended June 30, 2021 and 2020. The decrease in net income was a result of a decrease in net interest income, a decrease in noninterest income, and an increase in noninterest expense, partially offset by a decrease in the provision for credit losses. Annualized returns on average assets and average shareholders equity for the three months ended June 30, 2021 were 1.20% and 9.73%, respectively.Our efficiency ratio and tax equivalent efficiency ratio(1) were 53.09% and50.31%, respectively, for the three months ended June 30, 2021, compared to 53.01% and 50.44%, respectively, for the three months ended March31, 2021.

Net interest income for the three months ended June 30, 2021 was $45.6 million, compared to $47.3 million for the same period in 2020, a decrease of 3.4%. The decrease in net interest income compared to the same period in 2020 was due to the decrease in interest income, a result of a decrease in the average yield on our interest earning assets during the three months ended June 30, 2021, partially offset by the decrease in interest expense on our interest bearing liabilities due to the overall decline in interest rates. Linked quarter, net interest income decreased $0.7 million, or 1.4%, compared to $46.3 million during the three months ended March31, 2021. The decrease in interest income is due to a decrease in the average yield, partially offset by a decline in interest expense.

Our net interest margin and tax equivalent net interest margin(1) increased to 2.86% and 3.06%, respectively, for the three months ended June 30, 2021, compared to2.84% and 3.02%, respectively, for the same period in 2020. Linked quarter net interest margin decreased 15 basis points from 3.01% and tax equivalent net interest margin(1) decreased 14 basis points from 3.20% for the three months ended March31, 2021.

Noninterest income was $10.9 million for the three months ended June 30, 2021, a decrease of $1.3 million, or 10.3%, compared to $12.2 million for the same period in 2020. On a linked quarter basis, noninterest income decreased $2.7 million, or 19.7%, compared to the three months ended March31, 2021. The decrease for both periods was due to a decrease in net gain on sale of securities available for sale, gain on sale of loans and other noninterest income, partially offset by an increase in deposit services income, brokerage services income and trust fees.

Noninterest expense was $30.7 million for the three months ended June 30, 2021, an increase of $0.8 million, or 2.8%, compared to $29.9 million for the same period in 2020. On a linked quarter basis, noninterest expense decreased $0.5 million, or 1.7%, compared to the three months ended March31, 2021.

Income tax expense increased $0.1 million for the three months ended June 30, 2021 compared to the same period in 2020. On a linked quarter basis, income tax expense decreased $1.9 million, or 39.2%. Our effective tax rate (ETR) increased to 11.9% for the three months ended June 30, 2021, compared to 11.5% for the three months ended June30, 2020. Linked quarter, our ETR decreased compared to 12.2% for the three months ended March31, 2021, primarily due to an increase in tax-exempt income as a percentage of pre-tax income.

Operating Results for the Six Months Ended June 30, 2021

Net income was $55.4 million for the six months ended June 30, 2021, compared to $25.5 million for the same period in 2020, an increase of $29.9 million, or 117.2%. Earnings per diluted common share were $1.69 for the six months ended June 30, 2021, compared to $0.76 for the same period in 2020, an increase of 122.4%. The increase in net income was a direct result of a reversal of the provision for credit losses compared to a large build-up in the allowance for credit losses in the same period in 2020. Annualized returns on average assets and average shareholders equity for the six months ended June 30, 2021 were 1.59% and 12.75%, respectively.Our efficiency ratio and tax equivalent efficiency ratio(1) were 53.05% and50.38%, respectively, for the six months ended June 30, 2021, compared to 52.44% and 50.06%, respectively, for the six months ended June 30, 2020.

Net interest income was $92.0 million for the six months ended June 30, 2021 and June 30, 2020, with the decrease in interest income offset by the decrease in interest expense on our interest bearing liabilities, both a result of an overall decline in interest rates.

Our net interest margin and tax equivalent net interest margin(1) were 2.93% and 3.13%, respectively, for the six months ended June 30, 2021, compared to 2.86% and3.02%, respectively, for the same period in 2020. The increase in net interest margin was due to lower funding costs, partially offset by a decrease in interest income due to a lower average yield and balance on our interest earning assets during the six months ended June 30, 2021.

Noninterest income was $24.6 million for the six months ended June 30, 2021, a decrease of 11.3%, compared to $27.7 million for the same period in 2020. The decrease was due to the decrease in net gain on sale of securities available for sale, partially offset by increases in other noninterest income, deposit services income, brokerage services income and trust fees.

Noninterest expense was $61.9 million for the six months ended June 30, 2021, compared to $60.4 million for the same period in 2020, an increase of $1.6 million, or 2.6%. The increase was the result of increases in salaries and employee benefits and FDIC insurance, partially offset by decreases in other noninterest expense and amortization of intangibles.

Income tax expense increased $4.3 million, or 132.3%, for the six months ended June 30, 2021, compared to the same period in 2020. Our ETR was approximately 12.1% and 11.4% for the six months ended June 30, 2021 and 2020, respectively. The higher ETR for the six months ended June 30, 2021, as compared to the same period in 2020, was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income.

Balance Sheet Data

At June30, 2021, we had $7.18 billion in total assets, compared to $7.01 billion at December31, 2020 and $7.33 billion at June30, 2020.

Loans at June30, 2021 were $3.64 billion, a decrease of $210.2 million, or 5.5%, compared to $3.85 billion at June30, 2020. This decrease was primarily due to a $167.4 million decrease in our PPP loans, a component of the commercial loan category, with a remaining balance of $132.1 million at June30, 2021, as well as decreases of $83.4 million in 1-4 family residential loans, $42.6 million in construction loans, and $6.8 million in loans to individuals. These decreases were partially offset by increases of $40.0 million in municipal loans and $24.4 million in commercial real estate loans. Linked quarter loans decreased $74.3 million, or 2.0%, from $3.72 billion at March31, 2021. The linked quarter net decrease in loans consisted primarily of decreases of $77.5 million of construction loans, $67.2 million of commercial loans and $22.0 million in 1-4 family loans. The decreases for the linked quarter were partially offset by increases of $82.3 million in commercial real estate loans and $11.0 million of municipal loans. On a linked quarter basis, our PPP loans decreased $88.8 million, or 40.2%, from $220.9 million at March31, 2021, due to forgiveness payments received from loans funded under the Coronavirus Aid, Relief, and Economic Security Act.

Securities at June30, 2021 were $2.86 billion, an increase of $61.0 million, or 2.2%, compared to $2.80 billion at June30, 2020. Linked quarter, securities increased $215.8 million, or 8.2%, from $2.65 billion at March31, 2021. The increase for the linked quarter was due to the purchase of municipal bonds and to a lesser extent, an increase in the estimated fair value of the securities portfolio at June30, 2021, when compared to March31, 2021.

Deposits at June30, 2021 were $5.16 billion, an increase of $85.6 million, or 1.7%, compared to $5.07 billion at June30, 2020. Linked quarter, deposits increased $63.5 million, or 1.2%, from $5.09 billion at March31, 2021. The increase for both periods was largely driven by PPP loan disbursements deposited into our commercial accounts and stimulus checks deposited during the six months ended June 30, 2021.

Asset Quality

Nonperforming assets at June30, 2021 were $15.3 million, or 0.21% of total assets, a decrease of $2.3 million, or 13.2%, compared to $17.6 million, or 0.24% of total assets, at June30, 2020, and a decrease from $15.4 million, or 0.22% of total assets, at March31, 2021. During the three months ended June 30, 2021, nonaccrual loans decreased $0.2 million, or 3.0%.

The allowance for loan losses decreased to $42.9 million, or 1.18% of total loans, at June30, 2021, compared to $59.9 million, or 1.55% of total loans, at June30, 2020. The decrease was primarily due to an improved economic forecast since the second quarter of 2020 and its effect on macroeconomic factors used in the CECL model. The allowance for loan losses was $41.5 million, or 1.12% of total loans, at March31, 2021.

For the three months ended June 30, 2021, we recorded a provision for credit losses for loans of $1.5 million, compared to a provision for credit losses for loans of $6.3 million for the three months ended June 30, 2020 and a reversal of provision for credit losses of $7.4 million for the three months ended March31, 2021. The increase in the provision for the second quarter was primarily due to a decline in the downside scenario of the economic forecast and its effect on macroeconomic factors used in the CECL model. Net charge-offs were $0.1million for the three months ended June 30, 2021, compared to net charge-offs of $0.1 million for the three months ended June30, 2020 and $0.2 million of net charge-offs for the three months ended March31, 2021. Net charge-offs were $0.2 million for the six months ended June 30, 2021, compared to $0.7 million for the six months ended June 30, 2020.

For the three months ended June 30, 2021, we recorded a provision for credit losses for off-balance-sheet credit exposures of $0.2 million and reversals of provision of $1.1 million and $2.8 million for the three months ended June30, 2020 and March31, 2021, respectively. For the six months ended June 30, 2021, we recorded a reversal of provision of $2.6 million, compared to a provision for credit losses for off-balance-sheet credit exposures of $0.1 million for the six months ended June30, 2020. The balance of the allowance for off-balance-sheet credit exposures at June30, 2021 was $3.8 million and is included in other liabilities.

Dividend

Southside Bancshares, Inc. declared a second quarter cash dividend of $0.33 per share on May 6, 2021, which was paid on June 3, 2021, to all shareholders of record as of May 20, 2021.

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(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.

Conference Call

Southside's management team will host a conference call to discuss its second quarter ended June30, 2021 financial results on Friday, July 23, 2021 at 11:00 a.m. CDT.The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 7053989 or by identifying Southside Bancshares, Inc., Second Quarter 2021 Earnings Call.To listen to the call via webcast, register at https://investors.southside.com.

For those unable to listen to the conference call live, a recording will be available from approximately 2:00 p.m. CDT July 23, 2021 through 2:00 p.m. CDT August 4, 2021 by accessing the company website, https://investors.southside.com.

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.

About Southside Bancshares, Inc.

Southside Bancshares, Inc. is a bank holding company with approximately $7.18 billion in assets as of June30, 2021, that owns 100% of Southside Bank.Southside Bank currently has 55 branches in Texas and operates a network of 76 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 Lindsey Bailes at (903) 630-7965, or lindsey.bailes@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 managements 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 Companys 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 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 recent factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the negative impact of the COVID-19 pandemic on our business, financial position, operations and prospects, including our ability to continue our business activities in certain communities we serve, the duration of the pandemic and its continued effects on financial markets, a reduction in financial transactions and business activities resulting in decreased deposits and reduced loan originations, increases in unemployment rates impacting our borrowers ability to repay their loans, our ability to manage liquidity in a rapidly changing and unpredictable market, additional interest rate changes by the Federal Reserve and other government actions in response to the pandemic, including regulations or laws enacted to counter the effects of the COVID-19 pandemic on the economy.

Additional information concerning the Company and its business, including additional factors that could materially affect the Companys financial results, is included in the Companys Annual Report on Form 10-K for the year ended December31, 2020, under Part I - Item 1. Forward Looking Information and in the Companys 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.

Southside Bancshares, Inc.Consolidated Financial Summary (Unaudited)(Dollars in thousands) As of 2021 2020 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,ASSETS Cash and due from $ 92,047 $ 78,304 $ 87,357 $ 81,643 $ 81,271 banksInterest earning 36,441 29,319 21,051 14,561 19,535 depositsSecuritiesavailable for sale, 2,766,035 2,546,924 2,587,305 2,633,519 2,679,521 at estimated fairvalueSecurities held tomaturity, at net 94,850 98,159 108,998 115,089 120,384 carrying valueTotal securities 2,860,885 2,645,083 2,696,303 2,748,608 2,799,905 Federal Home Loan 28,081 18,754 25,259 35,860 55,689 Bank stock, at costLoans held for sale 2,510 2,615 3,695 8,686 3,392 Loans 3,642,346 3,716,598 3,657,779 3,789,975 3,852,571 Less: Allowance for (42,913 ) (41,454 ) (49,006 ) (55,110 ) (59,868 ) loan lossesNet loans 3,599,433 3,675,144 3,608,773 3,734,865 3,792,703 Premises & 142,835 144,628 144,576 147,169 147,715 equipment, netGoodwill 201,116 201,116 201,116 201,116 201,116 Other intangible 8,248 8,978 9,744 10,569 11,450 assets, netBank owned life 116,886 116,209 115,583 114,928 114,248 insuranceOther assets 93,926 78,736 94,770 92,955 102,587 Total assets $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 $ 7,329,611 LIABILITIES ANDSHAREHOLDERS' EQUITYNoninterest bearing $ 1,501,120 $ 1,383,371 $ 1,354,815 $ 1,363,228 $ 1,398,179 depositsInterest bearing 3,655,047 3,709,272 3,577,507 3,739,798 3,672,365 depositsTotal deposits 5,156,167 5,092,643 4,932,322 5,103,026 5,070,544

Other borrowingsand Federal Home 745,151 687,845 855,699 994,512 1,165,463 Loan BankborrowingsSubordinated notes,net of unamortized 197,312 197,268 197,251 98,708 98,663 debtissuance costsTrust preferredsubordinateddebentures, net of 60,258 60,256 60,255 60,254 60,253 unamortized debtissuance costsOther liabilities 129,120 102,277 87,403 95,312 117,083 Total liabilities 6,288,008 6,140,289 6,132,930 6,351,812 6,512,006 Shareholders' 894,400 858,597 875,297 839,148 817,605 equityTotal liabilitiesand shareholders' $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 $ 7,329,611 equity

Southside Bancshares, Inc. Consolidated Financial Highlights (Unaudited)(Dollars and shares in thousands, except per share data) Three Months Ended 2021 2020 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Income Statement:Total interest $ 52,586 $ 53,565 $ 56,904 $ 55,677 $ 58,495 incomeTotal interest 6,939 7,262 8,197 9,091 11,224 expenseNet interest 45,647 46,303 48,707 46,586 47,271 incomeProvision for 1,677 (10,149 ) (5,545 ) (4,746 ) 5,245 credit lossesNet interestincome after 43,970 56,452 54,252 51,332 42,026 provision forcredit lossesNoninterest incomeDeposit services 6,609 6,125 6,419 6,129 5,532 Net gain (loss)on sale ofsecurities 15 2,003 (24 ) 78 2,662 available forsaleGain on sale of 393 593 848 1,071 683 loansTrust fees 1,496 1,383 1,354 1,253 1,221 Bank owned life 645 626 655 680 650 insuranceBrokerage 850 780 628 564 499 servicesOther 925 2,113 1,020 1,366 946 Totalnoninterest 10,933 13,623 10,900 11,141 12,193 incomeNoninterest expenseSalaries andemployee 20,004 20,044 19,609 19,344 18,629 benefitsNet occupancy 3,606 3,560 3,795 3,595 3,668 Advertising,travel & 475 437 504 519 292 entertainmentATM expense 272 238 290 271 233 Professional 1,040 991 986 961 1,082 feesSoftware and 1,406 1,312 1,220 1,215 1,295 data processingCommunications 612 525 490 495 506 FDIC insurance 435 454 456 469 174 Amortization of 730 766 825 881 931 intangiblesOther 2,119 2,907 3,140 3,866 3,046 Totalnoninterest 30,699 31,234 31,315 31,616 29,856 expenseIncome beforeincome tax 24,204 38,841 33,837 30,857 24,363 expenseIncome tax 2,887 4,750 4,265 3,783 2,809 expenseNet income $ 21,317 $ 34,091 $ 29,572 $ 27,074 $ 21,554 Common Share Data:Weighted-averagebasic shares 32,632 32,829 33,055 33,047 33,016 outstandingWeighted-averagediluted shares 32,799 32,937 33,125 33,098 33,083 outstandingCommon sharesoutstanding end 32,675 32,659 32,951 33,072 33,032 of periodEarnings per common shareBasic $ 0.65 $ 1.04 $ 0.89 $ 0.82 $ 0.65 Diluted 0.65 1.04 0.89 0.82 0.65 Book value per 27.37 26.29 26.56 25.37 24.75 common shareTangible bookvalue per common 20.97 19.86 20.16 18.97 18.32 share ^(1)Cash dividendspaid per common 0.33 0.32 0.37 0.31 0.31 share SelectedPerformance Ratios:Return on 1.20 % 1.99 % 1.64 % 1.48 % 1.17 %average assetsReturn onaverage 9.73 15.82 13.77 12.89 10.82 shareholders?equityReturn onaverage tangible 13.13 21.22 18.71 17.73 15.24 common equity ^(1)Average yield onearning assets 3.49 3.67 3.70 3.57 3.69 (FTE) ^(1)Average rate oninterest bearing 0.60 0.64 0.68 0.73 0.87 liabilitiesNet interestmargin (FTE) ^ 3.06 3.20 3.20 3.02 3.02 (1)Net interestspread (FTE) ^ 2.89 3.03 3.02 2.84 2.82 (1)Average earningassets toaverage interest 137.85 135.56 133.56 131.92 129.03 bearingliabilitiesNoninterestexpense to 1.73 1.82 1.74 1.73 1.63 average totalassetsEfficiency ratio 50.31 50.44 47.36 50.07 48.29 (FTE) ^(1)^(1) Refer to ?Non-GAAP Reconciliation? at the end of the financial statementtables in this Earnings Release for a reconciliation of this non-GAAP financialmeasure to the nearest GAAP financial measure.

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands) Three Months Ended 2021 2020 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,Nonperforming $ 15,269 $ 15,367 $ 17,480 $ 16,822 $ 17,600 Assets:Nonaccrual loans 5,154 5,314 7,714 5,971 5,639 Accruing loanspast due more ? ? ? ? ? than 90 daysTroubled debtrestructured 9,549 9,641 9,646 10,307 11,367 loansOther real 566 412 106 536 586 estate ownedRepossessed ? ? 14 8 8 assets Asset Quality Ratios:Ratio ofnonaccruing loans to:Total loans 0.14 % 0.14 % 0.21 % 0.16 % 0.15 %Ratio ofnonperforming assets to:Total assets 0.21 0.22 0.25 0.23 0.24 Total loans 0.42 0.41 0.48 0.44 0.46 Total loans and 0.42 0.41 0.48 0.44 0.46 OREOTotal loans,excluding PPP 0.43 0.44 0.51 0.48 0.50 loans, and OREORatio ofallowance for loan losses to:Nonaccruing 832.62 780.09 635.29 922.96 1,061.68 loansNonperforming 281.05 269.76 280.35 327.61 340.16 assetsTotal loans 1.18 1.12 1.34 1.45 1.55 Total loans,excluding PPP 1.22 1.19 1.42 1.58 1.68 loansNet charge-offs(recoveries) to 0.01 0.02 0.02 0.04 0.01 average loansoutstanding Capital Ratios: Shareholders?equity to total 12.45 12.27 12.49 11.67 11.15 assetsCommon equity 14.38 14.71 14.68 14.24 13.68 tier 1 capitalTier 1risk-based 15.71 16.09 16.08 15.63 15.06 capitalTotal risk-based 20.95 21.52 21.78 19.03 18.51 capitalTier 1 leverage 10.21 10.29 9.81 9.50 9.05 capitalPeriod endtangible equityto period end 9.82 9.55 9.77 8.99 8.50 tangible assets^(1)Averageshareholders?equity to 12.38 12.56 11.92 11.49 10.86 average totalassets

^(1)Refer to the ?Non-GAAP Reconciliation? at the end of the financialstatement tables in this Earnings Release for a reconciliation of this non-GAAPfinancial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands) Three Months Ended 2021 2020Loan Portfolio Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,CompositionReal Estate Loans: Construction $ 528,157 $ 605,677 $ 581,941 $ 610,394 $ 570,801 1-4 Family 678,402 700,430 719,952 738,343 761,815 ResidentialCommercial 1,430,900 1,348,551 1,295,746 1,327,233 1,406,541 Commercial Loans 497,513 564,745 557,122 629,170 639,162 Municipal Loans 417,398 406,377 409,028 387,286 377,428 Loans to Individuals 89,976 90,818 93,990 97,549 96,824 Total Loans $ 3,642,346 $ 3,716,598 $ 3,657,779 $ 3,789,975 $ 3,852,571 Summary of Changes in Allowances:Allowance for Loan LossesBalance at beginning $ 41,454 $ 49,006 $ 55,110 $ 59,868 $ 53,638 of periodLoans charged-off (527 ) (795 ) (595 ) (718 ) (546 ) Recoveries of loans 466 622 402 361 436 charged-offNet loans(charged-off) (61 ) (173 ) (193 ) (357 ) (110 ) recoveredProvision for(reversal of) loan 1,520 (7,379 ) (5,911 ) (4,401 ) 6,340 lossesBalance at end of $ 42,913 $ 41,454 $ 49,006 $ 55,110 $ 59,868 period Allowance forOff-Balance-Sheet Credit ExposuresBalance at beginning $ 3,616 $ 6,386 $ 6,020 $ 6,365 $ 7,460 of periodProvision for(reversal of) 157 (2,770 ) 366 (345 ) (1,095 ) off-balance-sheetcredit exposuresBalance at end of $ 3,773 $ 3,616 $ 6,386 $ 6,020 $ 6,365 periodTotal Allowance for $ 46,686 $ 45,070 $ 55,392 $ 61,130 $ 66,233 Credit Losses

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands) Six Months Ended June 30, 2021 2020Income Statement: Total interest income $ 106,151 $ 119,247 Total interest expense 14,201 27,275 Net interest income 91,950 91,972 Provision for credit losses (8,472 ) 30,492 Net interest income after provision for credit losses 100,422 61,480 Noninterest income Deposit services 12,734 11,811 Net gain on sale of securities available for sale 2,018 8,203 Gain on sale of loans 986 853 Trust fees 2,879 2,526 Bank owned life insurance 1,271 1,219 Brokerage services 1,630 1,079 Other 3,038 2,000 Total noninterest income 24,556 27,691 Noninterest expense Salaries and employee benefits 40,048 38,272 Net occupancy 7,166 6,979 Advertising, travel & entertainment 912 1,124 ATM expense 510 457 Professional fees 2,031 2,277 Software and data processing 2,718 2,522 Communications 1,137 999 FDIC insurance 889 199 Amortization of intangibles 1,496 1,911 Other 5,026 5,636 Total noninterest expense 61,933 60,376 Income before income tax expense 63,045 28,795 Income tax expense 7,637 3,288 Net income $ 55,408 $ 25,507 Common Share Data: Weighted-average basic shares outstanding 32,730 33,353 Weighted-average diluted shares outstanding 32,860 33,445 Common shares outstanding end of period 32,675 33,032 Earnings per common share Basic $ 1.69 $ 0.76 Diluted 1.69 0.76 Book value per common share 27.37 24.75 Tangible book value per common share ^(1) 20.97 18.32 Cash dividends paid per common share 0.65 0.62 Selected Performance Ratios: Return on average assets 1.59 % 0.72 %Return on average shareholders? equity 12.75 6.31 Return on average tangible common equity ^(1) 17.13 9.06 Average yield on earning assets (FTE) ^(1) 3.58 3.87 Average rate on interest bearing liabilities 0.62 1.08 Net interest spread (FTE) ^(1) 2.96 2.79 Net interest margin (FTE) ^(1) 3.13 3.02 Average earning assets to average interest bearing 136.72 127.66 liabilitiesNoninterest expense to average total assets 1.78 1.70 Efficiency ratio (FTE) ^(1) 50.38 50.06 ^(1)Refer to ?Non-GAAP Reconciliation? at the end of the financial statementtables in this Earnings Release for a reconciliation of this non-GAAP financialmeasure to the nearest GAAP financial measure.

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands) Six Months Ended June 30, 2021 2020Nonperforming Assets: $ 15,269 $ 17,600 Nonaccrual loans 5,154 5,639 Accruing loans past due more than 90 days ? ? Troubled debt restructured loans 9,549 11,367 Other real estate owned 566 586 Repossessed assets ? 8 Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.14 % 0.15 %Ratio of nonperforming assets to: Total assets 0.21 0.24 Total loans 0.42 0.46 Total loans and OREO 0.42 0.46 Total loans, excluding PPP loans, and OREO 0.43 0.50 Ratio of allowance for loan losses to: Nonaccruing loans 832.62 1,061.68 Nonperforming assets 281.05 340.16 Total loans 1.18 1.55 Total loans, excluding PPP loans 1.22 1.68 Net charge-offs (recoveries) to average loans 0.01 0.04 outstanding Capital Ratios: Shareholders? equity to total assets 12.45 11.15 Common equity tier 1 capital 14.38 13.68 Tier 1 risk-based capital 15.71 15.06 Total risk-based capital 20.95 18.51 Tier 1 leverage capital 10.21 9.05 Period end tangible equity to period end tangible 9.82 8.50 assets^ (1)Average shareholders? equity to average total assets 12.47 11.38 ^(1)Refer to the ?Non-GAAP Reconciliation? at the end of the financialstatement tables in this Earnings Release for a reconciliation of this non-GAAPfinancial measure to the nearest GAAP financial measure.

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands) Six Months Ended June 30,Loan Portfolio Composition 2021 2020Real Estate Loans: Construction $ 528,157 $ 570,801 1-4 Family Residential 678,402 761,815 Commercial 1,430,900 1,406,541 Commercial Loans 497,513 639,162 Municipal Loans 417,398 377,428 Loans to Individuals 89,976 96,824 Total Loans $ 3,642,346 $ 3,852,571 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 49,006 $ 24,797 Impact of CECL adoption^ (1) - cumulative ? 5,072 effect adjustmentImpact of CECL adoption - purchased loans with ? 231 credit deteriorationLoans charged-off (1,322 ) (1,541 )Recoveries of loans charged-off 1,088 887 Net loans (charged-off) recovered (234 ) (654 )Provision for (reversal of) loan losses (5,859 ) 30,422 Balance at end of period $ 42,913 $ 59,868 Allowance for Off-Balance-Sheet Credit ExposuresBalance at beginning of period $ 6,386 $ 1,455 Impact of CECL adoption^ (1) ? 4,840 Provision for (reversal of) off-balance-sheet (2,613 ) 70 credit exposuresBalance at end of period $ 3,773 $ 6,365 Total Allowance for Credit Losses $ 46,686 $ 66,233 ^(1)We adopted ASU 2016-13, ?Financial Instruments - Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments? on January 1,2020. ASU 2016-13 replaced the incurred loss model with an expected lossmethodology that is referred to as current expected credit losses (?CECL?).Adoption of this guidance on January 1, 2020, resulted in a cumulative-effectadjustment to reduce retained earnings by $7.8 million, net of tax.

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 bearingliabilities together with the average yield on the earning assets and theaverage rate of the interest bearing liabilities for the periods presented. Theinterest and related yields presented are on a fully taxable-equivalent basisand are therefore non-GAAP measures. See ?Non-GAAP Financial Measures? and?Non-GAAP Reconciliation? for more information. Three Months Ended June 30, 2021 March 31, 2021 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Loans ^(1) $ 3,706,959 $ 36,429 3.94 % $ 3,634,053 $ 36,754 4.10 %Loans held for 1,846 13 2.82 % 2,803 20 2.89 %saleSecurities: Taxableinvestment 396,504 2,921 2.95 % 295,968 2,323 3.18 %securities ^(2)Tax-exemptinvestment 1,363,678 11,585 3.41 % 1,300,991 11,176 3.48 %securities ^(2)Mortgage-backedand related 847,206 4,647 2.20 % 940,815 6,088 2.62 %securities ^(2) Total 2,607,388 19,153 2.95 % 2,537,774 19,587 3.13 %securitiesFederal HomeLoan Bank stock,at cost, and 35,883 108 1.21 % 35,635 136 1.55 %equityinvestmentsInterest earning 43,175 17 0.16 % 31,169 15 0.20 %depositsTotal earning 6,395,251 55,720 3.49 % 6,241,434 56,512 3.67 %assetsCash and due 90,735 86,634 from banksAccrued interest 656,245 677,230 and other assetsLess:Allowance (41,768 ) (49,240 ) for loan lossesTotal assets $ 7,100,463 $ 6,956,058 LIABILITIES ANDSHAREHOLDERS? EQUITYSavings accounts $ 571,907 231 0.16 % $ 517,182 209 0.16 %Certificates of 658,708 936 0.57 % 736,099 1,229 0.68 %depositsInterest bearing 2,459,335 1,172 0.19 % 2,342,299 1,159 0.20 %demand accountsTotal interest 3,689,950 2,339 0.25 % 3,595,580 2,597 0.29 %bearing depositsFederal HomeLoan Bank 669,633 1,817 1.09 % 727,513 1,908 1.06 %borrowingsSubordinatednotes, net of 197,284 2,423 4.93 % 197,252 2,395 4.92 %unamortized debtissuance costsTrust preferredsubordinateddebentures, net 60,257 349 2.32 % 60,256 351 2.36 %of unamortizeddebt issuancecostsOther borrowings 22,024 11 0.20 % 23,522 11 0.19 %Total interestbearing 4,639,148 6,939 0.60 % 4,604,123 7,262 0.64 %liabilitiesNoninterest 1,485,383 1,389,020 bearing depositsAccrued expensesand other 97,137 89,222 liabilitiesTotal 6,221,668 6,082,365 liabilitiesShareholders? 878,795 873,693 equityTotalliabilities and $ 7,100,463 $ 6,956,058 shareholders?equityNet interest $ 48,781 $ 49,250 income (FTE)Net interest 3.06 % 3.20 %margin (FTE)Net interest 2.89 % 3.03 %spread (FTE)

^(1)Interest on loans includes net fees on loans that are not material inamount.^(2)For the purpose of calculating the average yield, the average balance ofsecurities is presented at historical cost.

Note: As of June30, 2021 and March31, 2021, loans totaling $5.2 million and$5.3 million, respectively, were on nonaccrual status. Our policy is to reversepreviously accrued but unpaid interest on nonaccrual loans; thereafter,interest income is recorded to the extent received when appropriate.

Southside Bancshares, Inc.Average Balances and Average Yields and Rates (Annualized) (Unaudited)(Dollars in thousands) Three Months Ended December 31, 2020 September 30, 2020 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Loans ^(1) $ 3,772,158 $ 39,936 4.21 % $ 3,815,989 $ 38,842 4.05 %Loans held for 5,012 36 2.86 % 3,934 31 3.13 %saleSecurities: Taxableinvestment 223,753 1,753 3.12 % 145,724 1,175 3.21 %securities ^(2)Tax-exemptinvestment 1,298,584 11,413 3.50 % 1,295,179 11,418 3.51 %securities ^(2)Mortgage-backedand related 1,082,302 6,693 2.46 % 1,209,913 7,048 2.32 %securities ^(2) Total 2,604,639 19,859 3.03 % 2,650,816 19,641 2.95 %securitiesFederal HomeLoan Bank stock,at cost, and 46,798 199 1.69 % 60,528 249 1.64 %equityinvestmentsInterest earning 22,938 18 0.31 % 17,668 17 0.38 %depositsTotal earning 6,451,545 60,048 3.70 % 6,548,935 58,780 3.57 %assetsCash and due 83,228 80,368 from banksAccrued interest 687,894 699,351 and other assetsLess:Allowance (55,567 ) (61,212 ) for loan lossesTotal assets $ 7,167,100 $ 7,267,442 LIABILITIES ANDSHAREHOLDERS? EQUITYSavings accounts $ 487,452 201 0.16 % $ 461,895 192 0.17 %Certificates of 1,011,482 2,320 0.91 % 1,172,179 3,568 1.21 %depositInterest bearing 2,186,406 1,117 0.20 % 2,069,751 1,102 0.21 %demand accountsTotal interest 3,685,340 3,638 0.39 % 3,703,825 4,862 0.52 %bearing depositsFederal HomeLoan Bank 896,484 2,125 0.94 % 1,037,855 2,369 0.91 %borrowingsSubordinatednotes, net of 158,692 2,051 5.14 % 98,686 1,427 5.75 %unamortized debtissuance costsTrust preferredsubordinateddebentures, net 60,255 360 2.38 % 60,253 378 2.50 %of unamortizeddebt issuancecostsOther borrowings 29,661 23 0.31 % 63,526 55 0.34 %Total interestbearing 4,830,432 8,197 0.68 % 4,964,145 9,091 0.73 %liabilitiesNoninterest 1,381,120 1,371,748 bearing depositsAccrued expensesand other 101,478 96,219 liabilitiesTotal 6,313,030 6,432,112 liabilitiesShareholders? 854,070 835,330 equityTotalliabilities and $ 7,167,100 $ 7,267,442 shareholders?equityNet interest $ 51,851 $ 49,689 income (FTE)Net interest 3.20 % 3.02 %margin (FTE)Net interest 3.02 % 2.84 %spread (FTE)

^(1)Interest on loans includes net fees on loans that are not material inamount.^(2)For the purpose of calculating the average yield, the average balance ofsecurities is presented at historical cost.

Note: As of December31, 2020 and September30, 2020, loans totaling $7.7million and $6.0 million, respectively, were on nonaccrual status. Our policyis to reverse previously accrued but unpaid interest on nonaccrual loans;thereafter, interest income is recorded to the extent received whenappropriate.

Southside Bancshares, Inc.Average Balances and Average Yields and Rates (Annualized) (Unaudited)(Dollars in thousands) Three Months Ended June 30, 2020 Average Average Balance Interest Yield/ RateASSETS Loans ^(1) $ 3,826,383 $ 39,766 4.18 %Loans held for sale 3,213 28 3.50 %Securities: Taxable investment securities^ (2) 94,247 732 3.12 %Tax-exempt investment securities^ (2) 1,320,772 11,560 3.52 %Mortgage-backed and related securities ^ 1,359,941 9,044 2.67 %(2) Total securities 2,774,960 21,336 3.09 %Federal Home Loan Bank stock, at cost, 67,582 360 2.14 %and equity investmentsInterest earning deposits 24,097 23 0.38 %Total earning assets 6,696,235 61,513 3.69 %Cash and due from banks 78,326 Accrued interest and other assets 660,411 Less:Allowance for loan losses (55,908 ) Total assets $ 7,379,064 LIABILITIES AND SHAREHOLDERS? EQUITY Savings accounts $ 426,420 187 0.18 %Certificates of deposit 1,187,665 4,817 1.63 %Interest bearing demand accounts 2,013,770 1,225 0.24 %Total interest bearing deposits 3,627,855 6,229 0.69 %Federal Home Loan Bank borrowings 1,197,097 2,929 0.98 %Subordinated notes, net of unamortized 98,641 1,412 5.76 %debt issuance costsTrust preferred subordinated debentures, 60,252 491 3.28 %net of unamortized debt issuance costsOther borrowings 205,724 163 0.32 %Total interest bearing liabilities 5,189,569 11,224 0.87 %Noninterest bearing deposits 1,310,651 Accrued expenses and other liabilities 77,431 Total liabilities 6,577,651 Shareholders? equity 801,413 Total liabilities and shareholders? $ 7,379,064 equityNet interest income (FTE) $ 50,289 Net interest margin (FTE) 3.02 %Net interest spread (FTE) 2.82 %

^(1)Interest on loans includes net fees on loans that are not material inamount.^(2)For the purpose of calculating the average yield, the average balance ofsecurities is presented at historical cost.

Note: As of June30, 2020, loans totaling $5.6 million were on nonaccrualstatus. Our policy is to reverse previously accrued but unpaid interest onnonaccrual loans; thereafter, interest income is recorded to the extentreceived when appropriate.

Southside Bancshares, Inc.Average Balances and Average Yields and Rates (Annualized) (Unaudited)(Dollars in thousands) Six Months Ended June 30, 2021 June 30, 2020 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Loans ^(1) $ 3,670,708 $ 73,183 4.02 % $ 3,706,763 $ 82,320 4.47 %Loans held for 2,321 33 2.87 % 2,022 37 3.68 %saleSecurities: Taxableinvestment 346,514 5,244 3.05 % 82,270 1,244 3.04 %securities^ (2)Tax-exemptinvestment 1,332,507 22,761 3.44 % 1,104,839 19,397 3.53 %securities^ (2)Mortgage-backedand related 893,752 10,735 2.42 % 1,479,157 20,578 2.80 %securities ^(2) Total 2,572,773 38,740 3.04 % 2,666,266 41,219 3.11 %securitiesFederal HomeLoan Bank stock,at cost, and 35,760 244 1.38 % 65,279 785 2.42 %equityinvestmentsInterest earning 37,205 32 0.17 % 32,167 203 1.27 %depositsTotal earning 6,318,767 112,232 3.58 % 6,472,497 124,564 3.87 %assetsCash and due 88,696 77,533 from banksAccrued interest 666,280 635,540 and other assetsLess:Allowance (45,483 ) (43,141 ) for loan lossesTotal assets $ 7,028,260 $ 7,142,429 LIABILITIES ANDSHAREHOLDERS? EQUITYSavings accounts $ 544,696 440 0.16 % $ 405,642 424 0.21 %Certificates of 697,190 2,165 0.63 % 1,275,046 11,163 1.76 %depositInterest bearing 2,401,140 2,331 0.20 % 1,994,803 4,561 0.46 %demand accountsTotal interest 3,643,026 4,936 0.27 % 3,675,491 16,148 0.88 %bearing depositsFederal HomeLoan Bank 698,413 3,725 1.08 % 1,098,083 6,903 1.26 %borrowingsSubordinatednotes, net of 197,268 4,818 4.93 % 98,619 2,823 5.76 %unamortized debtissuance costsTrust preferredsubordinateddebentures, net 60,256 700 2.34 % 60,252 1,091 3.64 %of unamortizeddebt issuancecostsOther borrowings 22,769 22 0.19 % 137,785 310 0.45 %Total interestbearing 4,621,732 14,201 0.62 % 5,070,230 27,275 1.08 %liabilitiesNoninterest 1,437,468 1,176,496 bearing depositsAccrued expensesand other 92,802 82,617 liabilitiesTotal 6,152,002 6,329,343 liabilitiesShareholders? 876,258 813,086 equityTotalliabilities and $ 7,028,260 $ 7,142,429 shareholders?equityNet interest $ 98,031 $ 97,289 income (FTE)Net interest 3.13 % 3.02 %margin (FTE)Net interest 2.96 % 2.79 %spread (FTE)^(1)Interest on loans includes net fees on loans that are not material inamount.^(2)For the purpose of calculating the average yield, the average balance ofsecurities is presented at historical cost.

Note: As of June30, 2021 and 2020, loans totaling $5.2 million and $5.6million, respectively, were on nonaccrual status. Our policy is to reversepreviously accrued but unpaid interest on nonaccrual loans; thereafter,interest income is recorded to the extent received when appropriate.

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 averagecommon equity to return on average tangible common equity, book value per shareto tangible book value per share, net interest income to net interest incomeadjusted to a fully taxable-equivalent basis assuming a 21% marginal tax ratefor interest earned on tax-exempt assets such as municipal loans and investmentsecurities, along with the calculation of total revenue, adjusted noninterestexpense, efficiency ratio (FTE), net interest margin (FTE) and net interestspread (FTE) for the applicable periods presented. Three Months Ended Six Months Ended 2021 2020 2021 2020 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Jun 30, Jun 30,Reconciliation ofreturn on averagecommon equity to return on averagetangible commonequity:Net income $ 21,317 $ 34,091 $ 29,572 $ 27,074 $ 21,554 $ 55,408 $ 25,507 After-tax 577 605 652 696 735 1,182 1,510 amortization expenseAdjusted net incomeavailable to common $ 21,894 $ 34,696 $ 30,224 $ 27,770 $ 22,289 $ 56,590 $ 27,017 shareholders Average $ 878,795 $ 873,693 $ 854,070 $ 835,330 $ 801,413 $ 876,258 $ 813,086 shareholders' equityLess: Averageintangibles for the (209,808 ) (210,563 ) (211,354 ) (212,221 ) (213,135 ) (210,183 ) (213,620 ) periodAverage tangible $ 668,987 $ 663,130 $ 642,716 $ 623,109 $ 588,278 $ 666,075 $ 599,466 shareholders' equity Return on averagetangible common 13.13 % 21.22 % 18.71 % 17.73 % 15.24 % 17.13 % 9.06 %equity Reconciliation ofbook value per share to tangible bookvalue per share:Common equity at end $ 894,400 $ 858,597 $ 875,297 $ 839,148 $ 817,605 $ 894,400 $ 817,605 of periodLess: Intangibleassets at end of (209,364 ) (210,094 ) (210,860 ) (211,685 ) (212,566 ) (209,364 ) (212,566 ) periodTangible commonshareholders' equity $ 685,036 $ 648,503 $ 664,437 $ 627,463 $ 605,039 $ 685,036 $ 605,039 at end of period Total assets at end $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,190,960 $ 7,329,611 $ 7,182,408 $ 7,329,611 of periodLess: Intangibleassets at end of (209,364 ) (210,094 ) (210,860 ) (211,685 ) (212,566 ) (209,364 ) (212,566 ) periodTangible assets at $ 6,973,044 $ 6,788,792 $ 6,797,367 $ 6,979,275 $ 7,117,045 $ 6,973,044 $ 7,117,045 end of period Period end tangibleequity to period end 9.82 % 9.55 % 9.77 % 8.99 % 8.50 % 9.82 % 8.50 %tangible assets Common sharesoutstanding end of 32,675 32,659 32,951 33,072 33,032 32,675 33,032 periodTangible book value $ 20.97 $ 19.86 $ 20.16 $ 18.97 $ 18.32 $ 20.97 $ 18.32 per common share Reconciliation ofefficiency ratio toefficiency ratio(FTE), net interestmargin to net interest margin(FTE) and netinterest spread tonet interest spread(FTE):Net interest income $ 45,647 $ 46,303 $ 48,707 $ 46,586 $ 47,271 $ 91,950 $ 91,972 (GAAP)Tax equivalent adjustments:Loans 722 736 717 688 679 1,458 1,347 Tax-exemptinvestment 2,412 2,211 2,427 2,415 2,339 4,623 3,970 securitiesNet interest income 48,781 49,250 51,851 49,689 50,289 98,031 97,289 (FTE) ^(1)Noninterest income 10,933 13,623 10,900 11,141 12,193 24,556 27,691 Nonrecurring income (15 ) (2,003 ) 24 (78 ) (2,662 ) (2,018 ) (8,203 ) ^(2)Total revenue $ 59,699 $ 60,870 $ 62,775 $ 60,752 $ 59,820 $ 120,569 $ 116,777 Noninterest expense $ 30,699 $ 31,234 $ 31,315 $ 31,616 $ 29,856 $ 61,933 $ 60,376 Pre-tax amortization (730 ) (766 ) (825 ) (881 ) (931 ) (1,496 ) (1,911 ) expenseNonrecurring expense 64 236 (758 ) (315 ) (39 ) 300 (10 ) ^(3)Adjusted noninterest $ 30,033 $ 30,704 $ 29,732 $ 30,420 $ 28,886 $ 60,737 $ 58,455 expense Efficiency ratio 53.09 % 53.01 % 49.86 % 52.77 % 50.85 % 53.05 % 52.44 %Efficiency ratio 50.31 % 50.44 % 47.36 % 50.07 % 48.29 % 50.38 % 50.06 %(FTE) ^(1) Average earning $ 6,395,251 $ 6,241,434 $ 6,451,545 $ 6,548,935 $ 6,696,235 $ 6,318,767 $ 6,472,497 assets Net interest margin 2.86 % 3.01 % 3.00 % 2.83 % 2.84 % 2.93 % 2.86 %Net interest margin 3.06 % 3.20 % 3.20 % 3.02 % 3.02 % 3.13 % 3.02 %(FTE) ^(1) Net interest spread 2.70 % 2.84 % 2.83 % 2.65 % 2.64 % 2.77 % 2.62 %Net interest spread 2.89 % 3.03 % 3.02 % 2.84 % 2.82 % 2.96 % 2.79 %(FTE) ^(1)^(1)These amounts are presented on a fully taxable-equivalent basis andare non-GAAP measures.^(2)These adjustments may include net gain or loss on sale of securitiesavailable for sale in the periods where applicable.^(3)These adjustments may include foreclosure expenses and branch closureexpenses, in the periods where applicable.