GlobeNewswire Inc | Jan 28, 2022 06:00AM EST

January 28, 2022

-- Fourth quarter net income of $28.7 million; -- Record annual net income of $113.4 million, an increase of 38.0%, compared to the same period in 2020; -- Annualized linked quarter loan growth, net of Paycheck Protection Program (PPP) loans, of 3.8%; -- Annualized linked quarter deposit growth, net of brokered deposits, of 15.9%; -- Linked quarter net interest margin increased to 3.23%; -- Annualized return on fourth quarter average assets of 1.57%; -- Annualized return on fourth quarter average tangible common equity of 16.80%(1); and -- Nonperforming assets decreased to 0.16% of total assets.

TYLER, Texas, Jan. 28, 2022 (GLOBE NEWSWIRE) -- Southside Bancshares, Inc. (Southside or the Company) (NASDAQ: SBSI) today reported its financial results for the quarter and year ended December31, 2021. Southside reported net income of $28.7 million for the three months ended December 31, 2021, a decrease of $0.9 million, or 3.0%, compared to $29.6 million for the same period in 2020. Earnings per diluted common share were $0.88 for the three months ended December 31, 2021, compared to $0.89 for the same period in 2020. The annualized return on average shareholders equity for the three months ended December 31, 2021 was 12.67%, compared to 13.77% for the same period in 2020.The annualized return on average assets was 1.57% for the three months ended December 31, 2021, compared to 1.64% for the same period in 2020.

We reported exceptional financial results for 2021, thanks to the outstanding performance of the Southside team. Highlights included record net income of $113.4 million, a 1.59% return on average assets, a 17.04% return on average tangible common equity, an increase in our net interest margin to 3.16% and continued strong asset quality, stated Lee R. Gibson, President and Chief Executive Officer of Southside. During 2021, we increased the cash dividend per share 5.4% and reduced the efficiency ratio(1) to 49.03%. In addition, deposits increased $790 million, or 16%, and loans, net of PPP loans, increased $171.2 million, or 5%.

As we enter 2022, we do so with a strong balance sheet, capital levels and credit metrics that we believe position us well for continued success. Our loan pipeline is strong, and we anticipate first quarter payoffs will be significantly less than we experienced during the fourth quarter. We remain encouraged by the continued strong economic conditions in the market areas we serve.

Operating Results for the Three Months Ended December31, 2021

Net income was $28.7 million for the three months ended December 31, 2021, compared to $29.6 million for the same period in 2020, a decrease of $0.9 million, or 3.0%. Earnings per diluted common share were $0.88 and $0.89 for the three months ended December 31, 2021 and 2020, respectively. The decrease in net income was primarily a result of a decrease in the reversal of provision for credit losses and an increase in income tax expense, partially offset by increases in noninterest income and net interest income. Annualized returns on average assets and average shareholders equity for the three months ended December 31, 2021 were 1.57% and 12.67%, respectively, compared to 1.64% and 13.77%, respectively, for thethree months ended December31, 2020. Our efficiency ratio and tax equivalent efficiency ratio(1) were 50.34% and47.61%, respectively, for the three months ended December 31, 2021, compared to 49.86% and 47.36%, respectively, for the three months ended December31, 2020, and 50.64% and 47.92%, respectively, for the three months ended September30, 2021.

Net interest income for the three months ended December 31, 2021 was $49.4 million, compared to $48.7 million for the same period in 2020, an increase of 1.4%. The increase in net interest income compared to the same period in 2020 was due to the decrease in interest expense on our interest bearing liabilities due to the decline in the average balance and overall rate paid on our interest bearing liabilities, partially offset by the decrease in interest income, a result of a decrease in the interest income from PPP loans during the three months ended December 31, 2021. Linked quarter, net interest income increased $1.2 million, or 2.5%, compared to $48.2 million during the three months ended September30, 2021. The increase in net interest income was primarily due to a decrease in the average rate and balance on our interest bearing liabilities.

Our net interest margin and tax equivalent net interest margin(1) increased to 3.01% and 3.23%, respectively, for the three months ended December 31, 2021, compared to3.00% and 3.20%, respectively, for the same period in 2020. Linked quarter, net interest margin increased 5 basis points from 2.96% and tax equivalent net interest margin(1) increased 7 basis points from 3.16% for the three months ended September30, 2021.

Noninterest income was $12.0 million for the three months ended December 31, 2021, an increase of $1.1 million, or 10.2%, compared to $10.9 million for the same period in 2020. The increase was due to increases in net gain on sale of securities available for sale (AFS), deposit services income, brokerage services income and trust fees, partially offset by a decrease in gain on sale of loans. On a linked quarter basis, noninterest income decreased $0.8 million, or 5.9%, compared to the three months ended September30, 2021. The decrease was due to a decrease in net gain on sale of securities AFS.

Noninterest expense was $31.3 million for the three months ended December 31, 2021 and December 31, 2020. On a linked quarter basis, noninterest expense decreased $0.4 million, or 1.4%, compared to the three months ended September30, 2021, due to the $1.1 million loss on the redemption of subordinated notes during the third quarter.

Income tax expense increased $0.5 million for the three months ended December 31, 2021 compared to the same period in 2020. On a linked quarter basis, income tax expense decreased $0.2 million, or 3.3%. Our effective tax rate (ETR) increased to 14.4% for the three months ended December 31, 2021, compared to 12.6% for the three months ended December31, 2020, primarily a result of the increase in the annual ETR. Linked quarter, our ETR decreased slightly from 14.5% for the three months ended September30, 2021, primarily due to a discrete tax benefit recorded in connection with equity award transactions.

Operating Results for the Year Ended December 31, 2021

Net income was $113.4 million for the year ended December 31, 2021, compared to $82.2 million for the same period in 2020, an increase of $31.2 million, or 38.0%. Earnings per diluted common share were $3.47 for the year ended December 31, 2021, compared to $2.47 for the same period in 2020, an increase of 40.5%. The increase in net income was a direct result of a reversal of the provision for credit losses compared to a large increase in the allowance for credit losses for the same period in 2020. Returns on average assets and average shareholders equity for the year ended December 31, 2021 were 1.59% and 12.77%, respectively, compared to 1.14% and 9.91%, respectively, for the year ended December 31, 2020.Our efficiency ratio and tax equivalent efficiency ratio(1) were 51.74% and49.03%, respectively, for the year ended December 31, 2021, compared to 51.85% and 49.36%, respectively, for the year ended December 31, 2020.

Net interest income was $189.6 million for the year ended December 31, 2021, compared to $187.3 million for the same period in 2020, due to the decrease in interest expense on our interest bearing liabilities, partially offset by the decrease in interest income, both primarily a result of an overall decline in interest rates.

Our net interest margin and tax equivalent net interest margin(1) were 2.96% and 3.16%, respectively, for the year ended December 31, 2021, compared to 2.89% and3.07%, respectively, for the same period in 2020. The increase in net interest margin was due to lower average rates and balances on our interest bearing liabilities, partially offset by a lower average yield on our interest earning assets during the year ended December 31, 2021.

Noninterest income was $49.3 million for the year ended December 31, 2021, a decrease of 0.8%, compared to $49.7 million for the same period in 2020. The decrease was due to decreases in net gain on sale of securities AFS and gain on sale of loans, partially offset by increases in deposit services income, other noninterest income, brokerage services income and trust fees.

Noninterest expense was $125.0 million for the year ended December 31, 2021, compared to $123.3 million for the same period in 2020, an increase of $1.7 million, or 1.4%. The increase was the result of increases in salaries and employee benefits, a loss on the redemption of subordinated notes, increases in software and data processing expense and FDIC insurance, partially offset by decreases in other noninterest expense and amortization of intangibles.

Income tax expense increased $6.1 million, or 53.7%, for the year ended December 31, 2021, compared to the same period in 2020. Our ETR was approximately 13.3% and 12.1% for the year ended December 31, 2021 and 2020, respectively. The higher ETR for the year ended December 31, 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 December31, 2021, we had $7.26 billion in total assets, compared to $7.01 billion at December31, 2020 and $7.14 billion at September30, 2021.

Loans at December31, 2021 were $3.65 billion, a decrease of $12.6 million, or 0.3%, compared to $3.66 billion at December31, 2020. Our PPP loans, a component of the commercial loan category, decreased $183.8 million during the year due to forgiveness payments received for loans funded under the Coronavirus Aid, Relief, and Economic Security Act. Excluding PPP loans, total loans increased $171.2 million, or 5.0%, due to increases of $302.4 million in commercial real estate loans, $45.7 million in commercial loans (excluding PPP loans) and $34.1 million in municipal loans. The increases were partially offset by decreases of $134.1 million in construction loans, $68.8 million in 1-4 family residential loans and $8.1 million in loans to individuals. Excluding a $36.5 million decrease in PPP loans during the quarter, linked quarter loans increased $34.0 million, or 1.0%, due to increases of $25.8 million in construction loans, $15.8 million in municipal loans and $11.7 million in commercial loans (excluding PPP loans). This was partially offset by decreases of $9.5 million in 1-4 family loans, $7.0 million in commercial real estate loans and $2.8 million in loans to individuals.

Securities at December31, 2021 were $2.86 billion, an increase of $158.8 million, or 5.9%, compared to $2.70 billion at December31, 2020. Linked quarter, securities increased $9.5 million, or 0.3%, from $2.85 billion at September30, 2021.

Deposits at December31, 2021 were $5.72 billion, an increase of $790.0 million, or 16.0%, compared to $4.93 billion at December31, 2020. Linked quarter, deposits increased $390.7 million, or 7.3%, from $5.33 billion at September30, 2021. During the three months ended December 31, 2021, brokered deposits increased $181.3 million, or 159.8%, associated with funding our cash flow hedge swaps in place of the Federal Home Loan Bank advances to obtain lower cost funding.

Asset Quality

Nonperforming assets at December31, 2021 were $11.6 million, or 0.16% of total assets, a decrease of $5.9 million, or 33.6%, compared to $17.5 million, or 0.25% of total assets, at December31, 2020, and a decrease from $12.4 million, or 0.17% of total assets, at September30, 2021. During the three months ended December 31, 2021, nonaccrual loans decreased $0.5 million, or 15.8%.

The allowance for loan losses decreased to $35.3 million, or 0.97% of total loans, at December31, 2021, compared to $49.0 million, or 1.34% of total loans, at December31, 2020. The decrease was primarily due to an improved economic forecast and improved asset quality. The allowance for loan losses was $38.0 million, or 1.04% of total loans, at September30, 2021. The decrease compared to the end of the third quarter was primarily due to an improved forecast for commercial real estate, as well as the impact of loan payoffs on the allowance.

We recorded a reversal of provision for credit losses for loans of $2.7 million, $5.9 million and $4.4 million for the three month periods ended December31, 2021, 2020, and September30, 2021, respectively. Net charge-offs were $34,000 for the three months ended December 31, 2021, compared to net charge-offs of $0.2million for the three months ended December31, 2020 and $0.5million of net charge-offs for the three months ended September30, 2021. Net charge-offs were $0.8 million for the year ended December 31, 2021, compared to $1.2 million for the year ended December 31, 2020.

We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.7 million for the three months ended December 31, 2021, as compared to a provision of $0.4 million for the three months ended December31, 2020 and a reversal of provision of $0.7 million for the three months ended September30, 2021. For the year ended December 31, 2021, we recorded a reversal of provision of $4.0 million, compared to a provision for credit losses for off-balance-sheet credit exposures of $0.1 million for the year ended December31, 2020. The balance of the allowance for off-balance-sheet credit exposures at December31, 2021 was $2.4 million and is included in other liabilities.

Dividend

Southside Bancshares, Inc. declared a fourth quarter cash dividend of $0.33 and a special cash dividend of $0.06 per share on November 4, 2021, which was paid on December 9, 2021, to all shareholders of record as of November 24, 2021.

_______________

^Refer to ?Non-GAAP Financial Measures? below and to ?Non-GAAP^ Reconciliation? at the end of the financial statement tables in this(1) 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 fourth quarter and year ended December31, 2021 financial results on Friday, January 28, 2022 at 11:00 a.m. CST.The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 5753376 or by identifying Southside Bancshares, Inc., Fourth Quarter and Year End 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. CST January 28, 2022 through 2:00 p.m. CST February 9, 2022 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 $7.26 billion in assets as of December31, 2021, that owns 100% of Southside Bank.Southside Bank currently has 56 branches in Texas and operates a network of 73 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 and related variants 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 Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,ASSETS Cash and due from $ 91,120 $ 83,346 $ 92,047 $ 78,304 $ 87,357 banksInterest earning 110,633 3,787 36,441 29,319 21,051 depositsSecuritiesavailable for sale, 2,764,325 2,753,104 2,766,035 2,546,924 2,587,305 at estimated fairvalueSecurities held tomaturity, at net 90,780 92,479 94,850 98,159 108,998 carrying valueTotal securities 2,855,105 2,845,583 2,860,885 2,645,083 2,696,303 Federal Home Loan 14,375 27,248 28,081 18,754 25,259 Bank stock, at costLoans held for sale 1,684 1,131 2,510 2,615 3,695 Loans 3,645,162 3,647,585 3,642,346 3,716,598 3,657,779 Less: Allowance for (35,273 ) (38,022 ) (42,913 ) (41,454 ) (49,006 )loan lossesNet loans 3,609,889 3,609,563 3,599,433 3,675,144 3,608,773 Premises & 142,509 142,736 142,835 144,628 144,576 equipment, netGoodwill 201,116 201,116 201,116 201,116 201,116 Other intangible 6,895 7,553 8,248 8,978 9,744 assets, netBank owned life 131,232 130,522 116,886 116,209 115,583 insuranceOther assets 95,044 83,106 93,926 78,736 94,770 Total assets $ 7,259,602 $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 LIABILITIES ANDSHAREHOLDERS' EQUITYNoninterest bearing $ 1,644,775 $ 1,596,781 $ 1,501,120 $ 1,383,371 $ 1,354,815 depositsInterest bearing 4,077,552 3,734,874 3,655,047 3,709,272 3,577,507 depositsTotal deposits 5,722,327 5,331,655 5,156,167 5,092,643 4,932,322 Other borrowingsand Federal Home 367,257 679,928 745,151 687,845 855,699 Loan BankborrowingsSubordinated notes,net of unamortized 98,534 98,500 197,312 197,268 197,251 debtissuance costsTrust preferredsubordinateddebentures, net of 60,260 60,259 60,258 60,256 60,255 unamortized debtissuance costsOther liabilities 99,052 87,483 129,120 102,277 87,403 Total liabilities 6,347,430 6,257,825 6,288,008 6,140,289 6,132,930 Shareholders' 912,172 877,866 894,400 858,597 875,297 equityTotal liabilitiesand shareholders' $ 7,259,602 $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 equity

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars and shares in thousands, except per share data)

Three Months Ended 2021 2020 Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,Income Statement:Total interest $ 54,760 $ 55,076 $ 52,586 $ 53,565 $ 56,904 incomeTotal interest 5,359 6,870 6,939 7,262 8,197 expenseNet interest 49,401 48,206 45,647 46,303 48,707 incomeProvision for(reversal of) (3,421 ) (5,071 ) 1,677 (10,149 ) (5,545 )credit lossesNet interestincome afterprovision for 52,822 53,277 43,970 56,452 54,252 (reversal of)credit lossesNoninterest incomeDeposit services 6,855 6,779 6,609 6,125 6,419 Net gain (loss)on sale ofsecurities 463 1,381 15 2,003 (24 )available forsaleGain on sale of 356 299 393 593 848 loansTrust fees 1,586 1,494 1,496 1,383 1,354 Bank owned life 710 637 645 626 655 insuranceBrokerage 907 846 850 780 628 servicesOther 1,134 1,333 925 2,113 1,020 Totalnoninterest 12,011 12,769 10,933 13,623 10,900 incomeNoninterest expenseSalaries andemployee 20,067 19,777 20,004 20,044 19,609 benefitsNet occupancy 3,541 3,532 3,606 3,560 3,795 Advertising,travel & 876 579 475 437 504 entertainmentATM expense 345 311 272 238 290 Professional 849 1,135 1,040 991 986 feesSoftware and 1,454 1,503 1,406 1,312 1,220 data processingCommunications 544 552 612 525 490 FDIC insurance 464 454 435 454 456 Amortization of 658 695 730 766 825 intangiblesLoss onredemption of ? 1,118 ? ? ? subordinatednotesOther 2,536 2,107 2,119 2,907 3,140 Totalnoninterest 31,334 31,763 30,699 31,234 31,315 expenseIncome beforeincome tax 33,499 34,283 24,204 38,841 33,837 expenseIncome tax 4,812 4,977 2,887 4,750 4,265 expenseNet income $ 28,687 $ 29,306 $ 21,317 $ 34,091 $ 29,572 Common Share Data:Weighted-averagebasic shares 32,311 32,465 32,632 32,829 33,055 outstandingWeighted-averagediluted shares 32,487 32,556 32,799 32,937 33,125 outstandingCommon sharesoutstanding end 32,352 32,273 32,675 32,659 32,951 of periodEarnings per common shareBasic $ 0.89 $ 0.90 $ 0.65 $ 1.04 $ 0.89 Diluted 0.88 0.90 0.65 1.04 0.89 Book value per 28.20 27.20 27.37 26.29 26.56 common shareTangible bookvalue per common 21.77 20.74 20.97 19.86 20.16 share ^(1)Cash dividendspaid per common 0.39 0.33 0.33 0.32 0.37 share SelectedPerformance Ratios:Return on 1.57 % 1.61 % 1.20 % 1.99 % 1.64 %average assetsReturn onaverage 12.67 12.89 9.73 15.82 13.77 shareholders?equityReturn onaverage tangible 16.80 17.10 13.13 21.22 18.71 common equity ^(1)Average yield onearning assets 3.55 3.59 3.49 3.67 3.70 (FTE) ^(1)Average rate oninterest bearing 0.46 0.59 0.60 0.64 0.68 liabilitiesNet interestmargin (FTE) ^ 3.23 3.16 3.06 3.20 3.20 (1)Net interestspread (FTE) ^ 3.09 3.00 2.89 3.03 3.02 (1)Average earningassets toaverage interest 141.21 138.86 137.85 135.56 133.56 bearingliabilitiesNoninterestexpense to 1.72 1.75 1.73 1.82 1.74 average totalassetsEfficiency ratio 47.61 47.92 50.31 50.44 47.36 (FTE) ^(1)

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

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands)

Three Months Ended 2021 2020 Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,Nonperforming $ 11,609 $ 12,424 $ 15,269 $ 15,367 $ 17,480 Assets:Nonaccrual 2,536 3,013 5,154 5,314 7,714 loansAccruingloans past ? ? ? ? ? due more than90 daysTroubled debtrestructured 9,073 9,371 9,549 9,641 9,646 loansOther real ? 25 566 412 106 estate ownedRepossessed ? 15 ? ? 14 assets Asset Quality Ratios:Ratio ofnonaccruing loans to:Total loans 0.07 % 0.08 % 0.14 % 0.14 % 0.21 %Ratio ofnonperforming assets to:Total assets 0.16 0.17 0.21 0.22 0.25 Total loans 0.32 0.34 0.42 0.41 0.48 Total loans 0.32 0.34 0.42 0.41 0.48 and OREOTotal loans,excluding PPP 0.32 0.35 0.43 0.44 0.51 loans, andOREORatio ofallowance for loan lossesto:Nonaccruing 1,390.89 1,261.93 832.62 780.09 635.29 loansNonperforming 303.84 306.04 281.05 269.76 280.35 assetsTotal loans 0.97 1.04 1.18 1.12 1.34 Total loans,excluding PPP 0.98 1.06 1.22 1.19 1.42 loansNetcharge-offs(recoveries) ? 0.05 0.01 0.02 0.02 to averageloansoutstanding Capital Ratios:Shareholders?equity to 12.57 12.30 12.45 12.27 12.49 total assetsCommon equitytier 1 14.17 14.07 14.38 14.71 14.68 capitalTier 1risk-based 15.43 15.35 15.71 16.09 16.08 capitalTotalrisk-based 18.15 18.18 20.95 21.52 21.78 capitalTier 1leverage 10.33 10.14 10.21 10.29 9.81 capitalPeriod endtangibleequity to 9.99 9.66 9.82 9.55 9.77 period endtangibleassets^ (1)Averageshareholders?equity to 12.42 12.51 12.38 12.56 11.92 average totalassets

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

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands)

Three Months Ended 2021 2020 Loan Portfolio Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,CompositionReal Estate Loans: Construction $ 447,860 $ 422,095 $ 528,157 $ 605,677 $ 581,941 1-4 Family 651,140 660,689 678,402 700,430 719,952 ResidentialCommercial 1,598,172 1,605,132 1,430,900 1,348,551 1,295,746 Commercial Loans 418,998 443,708 497,513 564,745 557,122 Municipal Loans 443,078 427,259 417,398 406,377 409,028 Loans to Individuals 85,914 88,702 89,976 90,818 93,990 Total Loans $ 3,645,162 $ 3,647,585 $ 3,642,346 $ 3,716,598 $ 3,657,779 Summary of Changes in Allowances:Allowance for Loan LossesBalance at beginning $ 38,022 $ 42,913 $ 41,454 $ 49,006 $ 55,110 of periodLoans charged-off (489 ) (940 ) (527 ) (795 ) (595 )Recoveries of loans 455 437 466 622 402 charged-offNet loans(charged-off) (34 ) (503 ) (61 ) (173 ) (193 )recoveredProvision for(reversal of) loan (2,715 ) (4,388 ) 1,520 (7,379 ) (5,911 )lossesBalance at end of $ 35,273 $ 38,022 $ 42,913 $ 41,454 $ 49,006 period Allowance forOff-Balance-Sheet Credit ExposuresBalance at beginning $ 3,090 $ 3,773 $ 3,616 $ 6,386 $ 6,020 of periodProvision for(reversal of) (706 ) (683 ) 157 (2,770 ) 366 off-balance-sheetcredit exposuresBalance at end of $ 2,384 $ 3,090 $ 3,773 $ 3,616 $ 6,386 periodTotal Allowance for $ 37,657 $ 41,112 $ 46,686 $ 45,070 $ 55,392 Credit Losses

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands)

Year Ended December 31, 2021 2020 Income Statement: Total interest income $ 215,987 $ 231,828 Total interest expense 26,430 44,563 Net interest income 189,557 187,265 Provision for (reversal of) credit losses (16,964 ) 20,201 Net interest income after provision for (reversal of) 206,521 167,064 credit lossesNoninterest income Deposit services 26,368 24,359 Net gain on sale of securities available for sale 3,862 8,257 Gain on sale of loans 1,641 2,772 Trust fees 5,959 5,133 Bank owned life insurance 2,618 2,554 Brokerage services 3,383 2,271 Other 5,505 4,386 Total noninterest income 49,336 49,732 Noninterest expense Salaries and employee benefits 79,892 77,225 Net occupancy 14,239 14,369 Advertising, travel & entertainment 2,367 2,147 ATM expense 1,166 1,018 Professional fees 4,015 4,224 Software and data processing 5,675 4,957 Communications 2,233 1,984 FDIC insurance 1,807 1,124 Amortization of intangibles 2,849 3,617 Loss on redemption of subordinated notes 1,118 ? Other 9,669 12,642 Total noninterest expense 125,030 123,307 Income before income tax expense 130,827 93,489 Income tax expense 17,426 11,336 Net income $ 113,401 $ 82,153 Common Share Data: Weighted-average basic shares outstanding 32,558 33,201 Weighted-average diluted shares outstanding 32,692 33,281 Common shares outstanding end of period 32,352 32,951 Earnings per common share Basic $ 3.48 $ 2.47 Diluted 3.47 2.47 Book value per common share 28.20 26.56 Tangible book value per common share ^(1) 21.77 20.16 Cash dividends paid per common share 1.37 1.30 Selected Performance Ratios: Return on average assets 1.59 % 1.14 %Return on average shareholders? equity 12.77 9.91 Return on average tangible common equity ^(1) 17.04 13.79 Average yield on earning assets (FTE) ^(1) 3.58 3.75 Average rate on interest bearing liabilities 0.57 0.89 Net interest margin (FTE) ^(1) 3.16 3.07 Net interest spread (FTE) ^(1) 3.01 2.86 Average earning assets to average interest bearing 138.39 130.16 liabilitiesNoninterest expense to average total assets 1.75 1.72 Efficiency ratio (FTE) ^(1) 49.03 49.36

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

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands)

Year Ended December 31, 2021 2020 Nonperforming Assets: $ 11,609 $ 17,480 Nonaccrual loans 2,536 7,714 Accruing loans past due more than 90 days ? ? Troubled debt restructured loans 9,073 9,646 Other real estate owned ? 106 Repossessed assets ? 14 Asset Quality Ratios: Ratio of nonaccruing loans to: Total loans 0.07 % 0.21 %Ratio of nonperforming assets to: Total assets 0.16 0.25 Total loans 0.32 0.48 Total loans and OREO 0.32 0.48 Total loans, excluding PPP loans, and OREO 0.32 0.51 Ratio of allowance for loan losses to: Nonaccruing loans 1,390.89 635.29 Nonperforming assets 303.84 280.35 Total loans 0.97 1.34 Total loans, excluding PPP loans 0.98 1.42 Net charge-offs (recoveries) to average loans 0.02 0.03 outstanding Capital Ratios: Shareholders? equity to total assets 12.57 12.49 Common equity tier 1 capital 14.17 14.68 Tier 1 risk-based capital 15.43 16.08 Total risk-based capital 18.15 21.78 Tier 1 leverage capital 10.33 9.81 Period end tangible equity to period end tangible 9.99 9.77 assets^ (1)Average shareholders? equity to average total assets 12.47 11.55

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

Southside Bancshares, Inc.Consolidated Financial Highlights (Unaudited)(Dollars in thousands)

Year Ended December 31,Loan Portfolio Composition 2021 2020 Real Estate Loans: Construction $ 447,860 $ 581,941 1-4 Family Residential 651,140 719,952 Commercial 1,598,172 1,295,746 Commercial Loans 418,998 557,122 Municipal Loans 443,078 409,028 Loans to Individuals 85,914 93,990 Total Loans $ 3,645,162 $ 3,657,779 Summary of Changes in Allowances: Allowance for Loan Losses Balance at beginning of period $ 49,006 $ 24,797 Impact of CECL adoption^ (1) - cumulative effect ? 5,072 adjustmentImpact of CECL adoption - purchased loans with ? 231 credit deteriorationLoans charged-off (2,751 ) (2,854 )Recoveries of loans charged-off 1,980 1,650 Net loans (charged-off) recovered (771 ) (1,204 )Provision for (reversal of) loan losses (12,962 ) 20,110 Balance at end of period $ 35,273 $ 49,006 Allowance for Off-Balance-Sheet Credit Exposures Balance at beginning of period $ 6,386 $ 1,455 Impact of CECL adoption^ (1) ? 4,840 Provision for (reversal of) off-balance-sheet (4,002 ) 91 credit exposuresBalance at end of period $ 2,384 $ 6,386 Total Allowance for Credit Losses $ 37,657 $ 55,392

^We adopted ASU 2016-13, ?Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments? on January 1,^ 2020. ASU 2016-13 replaced the incurred loss model with an expected loss(1) methodology that is referred to as current expected credit losses (?CECL?). Adoption of this guidance on January 1, 2020, resulted in a cumulative-effect adjustment 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 bearing liabilities together with the average yield on the earning assets and the average rate of the interest bearing liabilities for the periods presented. The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures. See Non-GAAP Financial Measures and Non-GAAP Reconciliation for more information.

Three Months Ended December 31, 2021 September 30, 2021 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Loans ^(1) $ 3,668,767 $ 36,740 3.97 % $ 3,662,496 $ 37,744 4.09 %Loans held for 1,980 11 2.20 % 1,640 12 2.90 %saleSecurities: Taxableinvestment 590,104 4,215 2.83 % 532,679 3,853 2.87 %securities ^(2)Tax-exemptinvestment 1,508,196 12,699 3.34 % 1,453,275 12,315 3.36 %securities ^(2)Mortgage-backedand related 650,685 4,394 2.68 % 738,287 4,405 2.37 %securities ^(2)Total securities 2,748,985 21,308 3.08 % 2,724,241 20,573 3.00 %Federal HomeLoan Bank stock,at cost, and 38,832 175 1.79 % 39,786 111 1.11 %equityinvestmentsInterest earning 43,841 22 0.20 % 39,382 24 0.24 %depositsTotal earning 6,502,405 58,256 3.55 % 6,467,545 58,464 3.59 %assetsCash and due 103,126 99,113 from banksAccrued interest 662,654 684,917 and other assetsLess:Allowance (38,317 ) (43,052 ) for loan lossesTotal assets $ 7,229,868 $ 7,208,523 LIABILITIES ANDSHAREHOLDERS? EQUITYSavings accounts $ 624,377 264 0.17 % $ 598,118 249 0.17 %Certificates of 632,150 681 0.43 % 629,718 789 0.50 %depositsInterest bearing 2,558,289 1,289 0.20 % 2,496,037 1,196 0.19 %demand accountsTotal interest 3,814,816 2,234 0.23 % 3,723,873 2,234 0.24 %bearing depositsFederal HomeLoan Bank 609,310 1,758 1.14 % 656,474 1,865 1.13 %borrowingsSubordinatednotes, net of 98,517 1,011 4.07 % 195,204 2,417 4.91 %unamortized debtissuance costsTrust preferredsubordinateddebentures, net 60,259 345 2.27 % 60,258 345 2.27 %of unamortizeddebt issuancecostsRepurchase 21,874 11 0.20 % 21,634 9 0.17 %agreementsTotal interestbearing 4,604,776 5,359 0.46 % 4,657,443 6,870 0.59 %liabilitiesNoninterest 1,637,914 1,551,298 bearing depositsAccrued expensesand other 88,982 97,954 liabilitiesTotal 6,331,672 6,306,695 liabilitiesShareholders? 898,196 901,828 equityTotalliabilities and $ 7,229,868 $ 7,208,523 shareholders?equityNet interest $ 52,897 $ 51,594 income (FTE)Net interest 3.23 % 3.16 %margin (FTE)Net interest 3.09 % 3.00 %spread (FTE)

^(1) ^Interest on loans includes net fees on loans that are not material in amount.^(2) ^For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. ^Note: As of December31, 2021 and September30, 2021, loans totaling $2.5million and $3.0 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, 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 securities 2,607,388 19,153 2.95 % 2,537,774 19,587 3.13 %Federal 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 %depositInterest 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 issuancecostsRepurchase 22,024 11 0.20 % 23,522 11 0.19 %agreementsTotal 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 in amount.^(2) ^For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. ^Note: As of June30, 2021 and March31, 2021, loans totaling $5.2 millionand $5.3 million, respectively, were on nonaccrual status. Our policy is toreverse previously 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 Average Average Balance Interest Yield/ RateASSETS Loans ^(1) $ 3,772,158 $ 39,936 4.21 %Loans held for sale 5,012 36 2.86 %Securities: Taxable investment securities^ (2) 223,753 1,753 3.12 %Tax-exempt investment securities^ (2) 1,298,584 11,413 3.50 %Mortgage-backed and related securities ^(2) 1,082,302 6,693 2.46 %Total securities 2,604,639 19,859 3.03 %Federal Home Loan Bank stock, at cost, and 46,798 199 1.69 %equity investmentsInterest earning deposits 22,938 18 0.31 %Total earning assets 6,451,545 60,048 3.70 %Cash and due from banks 83,228 Accrued interest and other assets 687,894 Less:Allowance for loan losses (55,567 ) Total assets $ 7,167,100 LIABILITIES AND SHAREHOLDERS? EQUITY Savings accounts $ 487,452 201 0.16 %Certificates of deposit 1,011,482 2,320 0.91 %Interest bearing demand accounts 2,186,406 1,117 0.20 %Total interest bearing deposits 3,685,340 3,638 0.39 %Federal Home Loan Bank borrowings 896,484 2,125 0.94 %Subordinated notes, net of unamortized debt 158,692 2,051 5.14 %issuance costsTrust preferred subordinated debentures, net 60,255 360 2.38 %of unamortized debt issuance costsRepurchase agreements 29,595 23 0.31 %Other borrowings 66 ? ? Total interest bearing liabilities 4,830,432 8,197 0.68 %Noninterest bearing deposits 1,381,120 Accrued expenses and other liabilities 101,478 Total liabilities 6,313,030 Shareholders? equity 854,070 Total liabilities and shareholders? equity $ 7,167,100 Net interest income (FTE) $ 51,851 Net interest margin (FTE) 3.20 %Net interest spread (FTE) 3.02 %

^(1) ^Interest on loans includes net fees on loans that are not material in amount.^(2) ^For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. ^Note: As of December31, 2020, loans totaling $7.7 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)

Year Ended December 31, 2021 December 31, 2020 Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Rate RateASSETS Loans ^(1) $ 3,668,149 $ 147,667 4.03 % $ 3,750,657 $ 161,098 4.30 %Loans held for 2,063 56 2.71 % 3,254 104 3.20 %saleSecurities: Taxableinvestment 454,836 13,312 2.93 % 133,785 4,172 3.12 %securities^ (2)Tax-exemptinvestment 1,407,231 47,775 3.39 % 1,201,385 42,228 3.51 %securities^ (2)Mortgage-backedand related 793,300 19,534 2.46 % 1,311,722 34,319 2.62 %securities ^(2)Total securities 2,655,367 80,621 3.04 % 2,646,892 80,719 3.05 %Federal HomeLoan Bank stock,at cost, and 37,549 530 1.41 % 59,439 1,233 2.07 %equityinvestmentsInterest earning 39,426 78 0.20 % 26,202 238 0.91 %depositsTotal earning 6,402,554 228,952 3.58 % 6,486,444 243,392 3.75 %assetsCash and due 94,959 79,677 from banksAccrued interest 670,062 664,511 and other assetsLess:Allowance (43,064 ) (50,807 ) for loan lossesTotal assets $ 7,124,511 $ 7,179,825 LIABILITIES ANDSHAREHOLDERS? EQUITYSavings accounts $ 578,245 953 0.16 % $ 440,346 817 0.19 %Certificates of 663,789 3,635 0.55 % 1,182,938 17,051 1.44 %depositInterest bearing 2,464,670 4,816 0.20 % 2,061,805 6,780 0.33 %demand accountsTotal interest 3,706,704 9,404 0.25 % 3,685,089 24,648 0.67 %bearing depositsFederal HomeLoan Bank 665,384 7,348 1.10 % 1,032,269 11,397 1.10 %borrowingsSubordinatednotes, net of 171,857 8,246 4.80 % 113,736 6,301 5.54 %unamortized debtissuance costsTrust preferredsubordinateddebentures, net 60,258 1,390 2.31 % 60,252 1,829 3.04 %of unamortizeddebt issuancecostsRepurchase 22,257 42 0.19 % 32,890 226 0.69 %agreementsOther borrowings ? ? ? 59,050 162 0.27 %Total interestbearing 4,626,460 26,430 0.57 % 4,983,286 44,563 0.89 %liabilitiesNoninterest 1,516,682 1,277,011 bearing depositsAccrued expensesand other 93,136 90,548 liabilitiesTotal 6,236,278 6,350,845 liabilitiesShareholders? 888,233 828,980 equityTotalliabilities and $ 7,124,511 $ 7,179,825 shareholders?equityNet interest $ 202,522 $ 198,829 income (FTE)Net interest 3.16 % 3.07 %margin (FTE)Net interest 3.01 % 2.86 %spread (FTE)

^(1) ^Interest on loans includes net fees on loans that are not material in amount.^(2) ^For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. ^Note: As of December31, 2021 and 2020, loans totaling $2.5 million and $7.7million, 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 average common equity to return on average tangible common equity, book value per share to tangible book value per share, net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investment securities, along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE) for the applicable periods presented.

Three Months Ended Year Ended 2021 2020 2021 2020 Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, Dec 31,Reconciliation ofreturn on averagecommon equity to return on averagetangible commonequity:Net income $ 28,687 $ 29,306 $ 21,317 $ 34,091 $ 29,572 $ 113,401 $ 82,153 After-tax 520 549 577 605 652 2,251 2,857 amortization expenseAdjusted net incomeavailable to common $ 29,207 $ 29,855 $ 21,894 $ 34,696 $ 30,224 $ 115,652 $ 85,010 shareholders Average shareholders' $ 898,196 $ 901,828 $ 878,795 $ 873,693 $ 854,070 $ 888,233 $ 828,980 equityLess: Averageintangibles for the (208,412 ) (209,097 ) (209,808 ) (210,563 ) (211,354 ) (209,463 ) (212,699 )periodAverage tangible $ 689,784 $ 692,731 $ 668,987 $ 663,130 $ 642,716 $ 678,770 $ 616,281 shareholders' equity Return on averagetangible common 16.80 % 17.10 % 13.13 % 21.22 % 18.71 % 17.04 % 13.79 %equity Reconciliation ofbook value per share to tangible bookvalue per share:Common equity at end $ 912,172 $ 877,866 $ 894,400 $ 858,597 $ 875,297 $ 912,172 $ 875,297 of periodLess: Intangibleassets at end of (208,011 ) (208,669 ) (209,364 ) (210,094 ) (210,860 ) (208,011 ) (210,860 )periodTangible commonshareholders' equity $ 704,161 $ 669,197 $ 685,036 $ 648,503 $ 664,437 $ 704,161 $ 664,437 at end of period Total assets at end $ 7,259,602 $ 7,135,691 $ 7,182,408 $ 6,998,886 $ 7,008,227 $ 7,259,602 $ 7,008,227 of periodLess: Intangibleassets at end of (208,011 ) (208,669 ) (209,364 ) (210,094 ) (210,860 ) (208,011 ) (210,860 )periodTangible assets at $ 7,051,591 $ 6,927,022 $ 6,973,044 $ 6,788,792 $ 6,797,367 $ 7,051,591 $ 6,797,367 end of period Period end tangibleequity to period end 9.99 % 9.66 % 9.82 % 9.55 % 9.77 % 9.99 % 9.77 %tangible assets Common sharesoutstanding end of 32,352 32,273 32,675 32,659 32,951 32,352 32,951 periodTangible book value $ 21.77 $ 20.74 $ 20.97 $ 19.86 $ 20.16 $ 21.77 $ 20.16 per common share Reconciliation ofefficiency ratio toefficiency ratio(FTE), net interestmargin to net interest margin (FTE)and net interestspread to netinterest spread(FTE):Net interest income $ 49,401 $ 48,206 $ 45,647 $ 46,303 $ 48,707 $ 189,557 $ 187,265 (GAAP)Tax equivalent adjustments:Loans 740 722 722 736 717 2,920 2,752 Tax-exempt investment 2,756 2,666 2,412 2,211 2,427 10,045 8,812 securitiesNet interest income 52,897 51,594 48,781 49,250 51,851 202,522 198,829 (FTE) ^(1)Noninterest income 12,011 12,769 10,933 13,623 10,900 49,336 49,732 Nonrecurring income ^ (463 ) (1,381 ) (15 ) (2,003 ) 24 (3,862 ) (8,257 )(2)Total revenue $ 64,445 $ 62,982 $ 59,699 $ 60,870 $ 62,775 $ 247,996 $ 240,304 Noninterest expense $ 31,334 $ 31,763 $ 30,699 $ 31,234 $ 31,315 $ 125,030 $ 123,307 Pre-tax amortization (658 ) (695 ) (730 ) (766 ) (825 ) (2,849 ) (3,617 )expenseNonrecurring expense 8 (888 ) 64 236 (758 ) (580 ) (1,083 )^(3)Adjusted noninterest $ 30,684 $ 30,180 $ 30,033 $ 30,704 $ 29,732 $ 121,601 $ 118,607 expense Efficiency ratio 50.34 % 50.64 % 53.09 % 53.01 % 49.86 % 51.74 % 51.85 %Efficiency ratio 47.61 % 47.92 % 50.31 % 50.44 % 47.36 % 49.03 % 49.36 %(FTE) ^(1) Average earning $ 6,502,405 $ 6,467,545 $ 6,395,251 $ 6,241,434 $ 6,451,545 $ 6,402,554 $ 6,486,444 assets Net interest margin 3.01 % 2.96 % 2.86 % 3.01 % 3.00 % 2.96 % 2.89 %Net interest margin 3.23 % 3.16 % 3.06 % 3.20 % 3.20 % 3.16 % 3.07 %(FTE) ^(1) Net interest spread 2.88 % 2.79 % 2.70 % 2.84 % 2.83 % 2.80 % 2.68 %Net interest spread 3.09 % 3.00 % 2.89 % 3.03 % 3.02 % 3.01 % 2.86 %(FTE) ^(1)

^ ^These amounts are presented on a fully taxable-equivalent basis and are(1) non-GAAP measures.^ ^These adjustments may include net gain or loss on sale of securities(2) available for sale in the periods where applicable.^ ^These adjustments may include loss on redemption of subordinated notes,(3) foreclosure expenses and branch closure expenses, in the periods where applicable.