Download PDF

1. Company Snapshot

1.a. Company Description

Southside Bancshares, Inc.operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations.Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit.


The company's loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate.It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services.As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc.


was founded in 1960 and is headquartered in Tyler, Texas.

Show Full description

1.b. Last Insights on SBSI

Recent drivers behind Southside Bancshares, Inc.'s performance include: * Weak loan growth in the third quarter, which may recover due to the current local economy conditions (Source: "Southside Bancshares: Earnings Outlook Remains Positive, Maintaining A Buy Rating" on October 27, 2024). * Interest rate cuts, which may pressure the bank's margin. * The company's decision to transfer its listing to the New York Stock Exchange (NYSE) from the Nasdaq Global Select Market, which may not have a significant impact on its operations. * The declaration of a regular quarterly cash dividend of $0.36 per common share, which may be a positive signal to investors. * The company's focus on restructuring its securities, which may lift its margin.

1.c. Company Highlights

2. Bank's Q3 Earnings: A Mixed Bag

The bank reported a net income of $4.9 million, a significant decrease of 77.5% compared to the previous quarter. Diluted earnings per share (EPS) were $0.16, down $0.56 from the previous quarter. However, the actual EPS came out at $0.8, beating estimates of $0.72. The net interest margin decreased by 1 basis point due to the issuance of subordinated debt, while net interest income increased by $1.45 million. Loans stood at $4.77 billion, a 3.5% increase from the previous quarter.

Publication Date: Nov -23

📋 Highlights
  • Securities Repositioning:: Sold $325M in lower-yielding muni securities, booking a $24.4M net loss to enhance future net interest income and balance sheet flexibility.
  • Net Interest Income Impact:: Linked quarter net interest income increased $1.45M, while net interest margin decreased 1 basis point due to subordinated debt issuance.
  • Loan Production & Pipeline:: Third quarter new loans totaled $500M, with a $1.8B loan pipeline (42% term loans, 58% construction/C&I lines), rebounding from a mid-quarter dip.
  • Net Income Decline:: Q3 net income fell $16.9M (77.5%) to $4.9M, with loans rising 3.5% to $4.77B at a 6.7% average funding rate.
  • Q4 NIM Outlook:: Anticipates slight net interest margin improvement in Q4 from $325M securities sales and $600M CD repricing, offset by 7% subordinated debt impact.

Loan Growth and Pipeline

The bank's loan pipeline rebounded to $1.8 billion after dipping mid-quarter, with 42% term loans and 58% construction and/or commercial lines of credit. New loan production totaled $500 million, with $281 million funded during the quarter. The average rate of loans funded during the third quarter was approximately 6.7%. According to Lee Gibson, the company feels good about pull-through, with a 25% to 30% success rate.

Net Interest Margin Outlook

Lee Gibson expects the net interest margin to be up slightly in the fourth quarter, driven by the full impact of the $325 million security sales restructuring and repricing of over $600 million of CDs. The only headwind is the full impact of the 7% subordinated debt. This is a positive sign, as the bank continues to optimize its balance sheet.

Valuation and Dividend Yield

The bank's Price-to-Tangible Book Value (P/TBV) is not directly available, but the Price-to-Book Ratio (P/B Ratio) is 0.11, indicating potentially undervalued shares. The Dividend Yield is 4.94%, which is attractive for income investors. Analysts estimate revenue growth at 5.3% next year, which could support the stock price.

Strategic Developments

The bank is expanding its wealth management business into metro markets, starting with Fort Worth. Trust fees have seen a steady increase over the past year, and Lee Gibson anticipates double-digit revenue growth in East Texas next year. This diversification strategy could drive long-term growth.

Leadership Transition

Lee Gibson announced his retirement at the end of the year, and Keith Donahoe will take over as the new leader, with Julie Shamburger as CFO. This transition is expected to bring new perspectives and strategies to the bank, potentially driving future growth.

3. NewsRoom

Card image cap

Ensign Peak Advisors Inc Has $573,000 Stock Holdings in Southside Bancshares, Inc. $SBSI

Dec -01

Source: defenseworld.net

Card image cap

Southside Bancshares, Inc. Announces Dual Listing on NYSE Texas

Nov -24

Source: globenewswire.com

Card image cap

Southside Bancshares, Inc. Declares Cash Dividend

Nov -06

Source: globenewswire.com

Card image cap

Southside Bancshares, Inc. $SBSI Shares Bought by Hantz Financial Services Inc.

Nov -06

Source: defenseworld.net

Card image cap

Head-To-Head Survey: Southside Bancshares (NYSE:SBSI) vs. Pinnacle Bank (OTCMKTS:PBNK)

Nov -01

Source: defenseworld.net

Card image cap

Southside Bancshares, Inc. (SBSI) Q3 2025 Earnings Call Transcript

Oct -24

Source: seekingalpha.com

Card image cap

Southside Bancshares (SBSI) Surpasses Q3 Earnings and Revenue Estimates

Oct -24

Source: zacks.com

Card image cap

Southside Bancshares, Inc. Announces Financial Results for the Third Quarter Ended September 30, 2025

Oct -24

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Banking and Related Activities

Expected Growth: 8%

Southside Bancshares, Inc.'s 8% growth in Banking and Related Activities is driven by strategic expansion into new markets, increased commercial lending, and a rise in non-interest income from fee-based services. Additionally, effective cost management and a strong deposit base have contributed to the growth.

7. Detailed Products

Commercial Loans

Southside Bancshares, Inc. offers a range of commercial loans to businesses, including term loans, lines of credit, and construction loans, to support their growth and expansion plans.

Consumer Loans

The company provides consumer loans, including personal loans, auto loans, and home equity loans, to individuals for various personal financial needs.

Mortgage Loans

Southside Bancshares, Inc. offers mortgage loans to individuals and families to purchase or refinance a home.

Deposit Services

The company provides a range of deposit services, including checking and savings accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs).

Treasury Management Services

Southside Bancshares, Inc. offers treasury management services, including cash management, wire transfer services, and account reconciliation, to help businesses manage their cash flow and optimize their financial operations.

Wealth Management Services

The company provides wealth management services, including investment management, trust services, and financial planning, to individuals and families.

8. Southside Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Southside Bancshares, Inc. is medium due to the presence of alternative financial institutions and digital banking platforms.

Bargaining Power Of Customers

The bargaining power of customers is low for Southside Bancshares, Inc. as customers have limited negotiating power and the bank has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Southside Bancshares, Inc. as the bank relies on a few large suppliers for its technology and infrastructure needs.

Threat Of New Entrants

The threat of new entrants is low for Southside Bancshares, Inc. due to the high barriers to entry in the banking industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for Southside Bancshares, Inc. due to the presence of several established banks and financial institutions in the market, leading to intense competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.18%
Debt Cost 4.33%
Equity Weight 46.82%
Equity Cost 6.66%
WACC 5.42%
Leverage 113.57%

11. Quality Control: Southside Bancshares, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Parke Bancorp

A-Score: 6.6/10

Value: 8.0

Growth: 4.4

Quality: 6.0

Yield: 7.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Unity Bancorp

A-Score: 6.3/10

Value: 6.6

Growth: 7.4

Quality: 6.4

Yield: 3.0

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Community West

A-Score: 6.2/10

Value: 5.7

Growth: 3.8

Quality: 6.6

Yield: 6.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Southside Bancshares

A-Score: 6.0/10

Value: 6.2

Growth: 5.6

Quality: 5.8

Yield: 8.0

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Heritage Commerce

A-Score: 6.0/10

Value: 3.9

Growth: 3.7

Quality: 7.3

Yield: 9.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
German American Bancorp

A-Score: 5.8/10

Value: 6.2

Growth: 4.8

Quality: 5.6

Yield: 5.0

Momentum: 4.5

Volatility: 8.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.59$

Current Price

30.59$

Potential

-0.00%

Expected Cash-Flows