Attached files
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| 8-K - FORM 8-K - SOUTHSIDE BANCSHARES INC | f8k_072211.htm |
Exhibit 99.1
SOUTHSIDE BANCSHARES, INC.
ANNOUNCES NET INCOME FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2011
NASDAQ Global Select Market Symbol - "SBSI"
Tyler, Texas, (July 21, 2011) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ: SBSI) today reported its financial results for the three and six months ended June 30, 2011.
Southside reported net income of $11.0 million for the three months ended June 30, 2011, an increase of $1.8 million, or 19.3%, when compared to the same period in 2010. The gain on sale of available for sale securities decreased to $4.0 million for the three months ended June 30, 2011 from $6.7 million for the same period in 2010, a decrease of $2.7 million, or $1.7 million, net of income tax expense. Net income for the six months ended June 30, 2011 decreased $2.5 million, or 12.2%, to $18.4 million when compared to $20.9 million for the same period in 2010. The gain on sale of available for sale securities decreased $9.2 million, or $6.0 million, net of income tax expense, to $5.8 million for the six months ended June 30, 2011 when compared to $15.0 million for the same period in 2010.
Diluted earnings per common share increased $0.11, or 19.6%, to $0.67 for the three months ended June 30, 2011 when compared to $0.56 for the same period in 2010. For the six months ended June 30, 2011, diluted earnings per common share decreased $0.14, or 11.1%, to $1.12 when compared to $1.26 for the same period in 2010.
The return on average shareholders’ equity for the six months ended June 30, 2011, was 16.63%, representing a decrease when compared to 20.00% for the same period in 2010. The annual return on average assets decreased to 1.22% for the six months ended June 30, 2011 from 1.42% for the same period in 2010.
“We are exceptionally pleased to report Southside’s financial results for the second quarter of 2011,” stated B. G. Hartley, Chairman and Chief Executive Officer of Southside Bancshares, Inc. “The 19.3% increase in net income for the quarter ended June 30, 2011, compared to the second quarter of 2010, was led by an increase in net interest income and a decrease in credit costs resulting from improving credit quality which were partially offset by a decrease in gains on sale of available for sale securities. We are also pleased to report that nonperforming assets, currently 0.50% of assets, continued to decrease, our net interest margin and spread both increased when compared to the same quarter in 2010, deposits continued to increase and our equity to total assets ratio increased. In addition to our financial results, we are pleased to report that we have purchased the remaining 50% interest in Southside Financial Group, LLC, (“SFG”) giving Southside 100% ownership of this entity as of July 15, 2011. During the second quarter the Board approved equity grants in the form of stock options and restrictive stock units to various officers of Southside. These equity grants were consistent with the directives of the shareholder approved Southside Bancshares, Inc. 2009 Incentive Plan. We believe these grants are an important tool in key employee retention. Finally, it is a pleasure to report that our new trust operations center is now fully operational.”
“The purchase of the remaining 50% interest in SFG was a direct result of new regulations adopted as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”). Dodd Frank changed the manner in which we can do business through a non-bank entity. Given the importance of our SFG operations, we determined that purchasing the remaining 50% interest in this company and integrating its operations into Southside Bank would be in the bank’s best interest. This purchase will be immediately accretive to earnings. In addition, SFG is already fully consolidated on our balance sheet and this purchase will not limit or change our ability to allocate capital in order to grow our franchise.”
“The overall economy has unfortunately entered yet another soft patch, as concern over shocks in Japan, sovereign debt in Europe, the U. S. budget deficit and debt ceiling and the U. S. real estate environment, among other issues, has escalated. Interest rates generally fell during the second quarter in response to this uncertain environment. We continue to manage our balance sheet to incorporate these developments. We are keeping our investment balances steady to increasing, as the likelihood of accommodative monetary policy for the near-term seems relatively high. We are also preparing for higher rates through our funding choices, as we continue to issue longer term funding with options that we control. We primarily use callable brokered CDs, as well as advances from the Federal Home Loan Bank, to fulfill our long-term funding needs. Finally, the mortgage-backed securities portion of our investment portfolio has benefited from a decline in mortgage-backed prepayments, which resulted in lower amortization expense and has increased the income generated from our premium mortgage-backed securities investment portfolio. In summary, maintaining our securities balances serves to mitigate interest rate risk should rates remain low or even decline. We monitor the coupons in our mortgage-backed securities and believe our high average mortgage-backed securities coupon helps mitigate the risk of a potential interest rate rise.”
“The environment in which we operate has and will continue to change as a result of economic growth and retrenchment, changes in technology and communication, as well as continued political and regulatory change. We are confident that, when necessary in response to this changing environment, we should be able to refine our business model to effectively serve customers, employees and shareholders. We are monitoring the costs of the services we provide, and will endeavor to ensure that our cost structure is commensurate with the expected revenue of our bank. We are very proud of the Southside team, especially those who will lead us through tomorrow’s challenges. We look forward to continuing the journey and to growing along with the communities we serve.”
Loans and Deposits
For the six months ended June 30, 2011, total loans decreased by $39.1million, or 3.6% when compared to December 31, 2010. During the six months ended June 30, 2011, real estate loans decreased $11.4 million, commercial loans decreased $14.6 million and loans to individuals decreased $17.1 million. Municipal loans increased $4.0 million, partially offsetting these decreases.
Nonperforming assets decreased by $2.0 million, or 11.3%, to $15.7 million, or 0.50% of total assets, for the six months ended June 30, 2011, when compared to December 31, 2010. This decrease is primarily a result of a decrease in nonaccrual and restructured loans.
During the six months ended June 30, 2011, deposits, net of brokered deposits, increased $102.7 million, or 5.2%, compared to December 31, 2010. During this six month period we allowed approximately $30 million of public fund deposits to roll off, which were offset by a business account that experienced a temporary $70 million increase.
Net Interest Income
Net interest income increased $5.2 million, or 26.8%, to $24.6 million for the three months ended June 30, 2011, when compared to $19.4 million for the same period in 2010. For the three months ended June 30, 2011, our net interest spread increased to 3.52% from 2.77% for the same period in 2010. The net interest margin increased to 3.81% for the three months ended June 30, 2011 compared to 3.09% for the same period in 2010. The net interest margin and net interest spread for the three months ended June 30, 2011 increased to 3.81% and 3.52%, respectively, from 3.55% and 3.26% for the three months ended March 31, 2011. The increase in our net interest margin and spread for the quarter and six months ended June 30, 2011 compared to the same period in 2010 is primarily a result of slower prepayments on our mortgage-backed securities during 2011. During the first six months of 2010 prepayments increased significantly due to announcements by Fannie Mae and Freddie Mac that they would repurchase delinquent loans that had not been repurchased for several months and that they would begin repurchasing these delinquent loans in a more timely manner.
Net interest income increased $4.4 million, or 10.3%, to $46.8 million for the six months ended June 30, 2011, when compared to $42.4 million for the same period in 2010. For the six months ended June 30, 2011, our net interest spread increased to 3.39% from 3.08% for the same period in 2010. The net interest margin increased to 3.68% for the six months ended June 30, 2011 compared to 3.41% for the same period in 2010.
Net Income for the Three Months
The increase in net income for the three months ended June 30, 2011, when compared to the same period in 2010, was a result of an increase in net interest income and a decrease in the provision for loan losses which was partially offset by a decrease in gains on the sale of available for sale securities.
Noninterest expense increased $137,000, or 0.8%, for the three months ended June 30, 2011, compared to the same period in 2010.
Net Income for the Six Months
The decrease in net income for the six months ended June 30, 2011, when compared to the same period in 2010, was a result of a decrease in noninterest income that included a decrease in security gains, and an increase in noninterest expense which was partially offset by an increase in net interest income and a decrease in the provision for loan losses.
Noninterest expense increased $1.4 million, or 4.0%, for the six months ended June 30, 2011, compared to the same period in 2010. The increase in noninterest expense was primarily a result of increases in personnel expense associated with our overall growth and expansion, occupancy expense due to added facilities, and FDIC insurance premium increases.
About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $3.1 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 48 banking centers in Texas and operates a network of 50 ATMs.
To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/investor. 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 Susan Hill at (903) 531-7220, or susan.hill@southside.com.
Forward-Looking Statements
Certain statements of other than historical fact that are contained in this document and in other written material, press releases and oral statements issued by or on behalf of the Company, a bank holding company, may be considered to be “forward-looking statements” within the meaning of and subject to the 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 management’s views as of any subsequent date. These statements may include words such as "expect," "estimate," "project," "anticipate," “appear,” "believe," "could," "should," "may," "intend," "probability," "risk," "target," "objective," "plans," "potential,"
and similar expressions. Forward-looking statements are statements with respect to the Company’s 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 about trends in asset quality and earnings and certain market risk disclosures, including the impact of interest rate uncertainty, 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. As a result, actual income gains and losses could materially differ from those that have been estimated.
Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 under “Forward-Looking Information” and Item 1A. “Risk Factors,” and in the Company’s 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.
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At
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At
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At
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June 30,
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December 31,
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June 30,
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2011
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2010
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2010
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(dollars in thousands)
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(unaudited)
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Selected Financial Condition Data (at end of period):
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Total assets
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$ | 3,115,208 | $ | 2,999,621 | $ | 2,966,751 | ||||||
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Loans
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1,038,808 | 1,077,920 | 1,017,452 | |||||||||
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Allowance for loan losses
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19,409 | 20,711 | 19,283 | |||||||||
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Mortgage-backed and related securities:
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Available for sale, at estimated fair value
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1,136,961 | 946,043 | 1,002,478 | |||||||||
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Held to maturity, at cost
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395,728 | 417,862 | 459,677 | |||||||||
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Investment securities:
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Available for sale, at estimated fair value
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302,038 | 299,344 | 251,504 | |||||||||
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Held to maturity, at cost
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1,996 | 1,495 | 1,494 | |||||||||
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Federal Home Loan Bank stock, at cost
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25,524 | 34,712 | 36,096 | |||||||||
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Deposits
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2,239,537 | 2,134,428 | 1,928,704 | |||||||||
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Long-term obligations
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338,290 | 433,790 | 504,393 | |||||||||
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Equity
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244,475 | 215,436 | 219,564 | |||||||||
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Nonperforming assets
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15,703 | 17,709 | 19,723 | |||||||||
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Nonaccrual loans
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13,208 | 14,524 | 15,728 | |||||||||
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Accruing loans past due more than 90 days
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8 | 7 | 19 | |||||||||
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Restructured loans
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1,757 | 2,320 | 2,671 | |||||||||
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Other real estate owned
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412 | 220 | 1,097 | |||||||||
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Repossessed assets
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318 | 638 | 208 | |||||||||
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Asset Quality Ratios:
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Nonaccruing loans to total loans
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1.27 | % | 1.35 | % | 1.55 | % | ||||||
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Allowance for loan losses to nonaccruing loans
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146.95 | 142.60 | 122.60 | |||||||||
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Allowance for loan losses to nonperforming assets
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123.60 | 116.95 | 97.77 | |||||||||
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Allowance for loan losses to total loans
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1.87 | 1.92 | 1.90 | |||||||||
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Nonperforming assets to total assets
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0.50 | 0.59 | 0.66 | |||||||||
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Net charge-offs to average loans
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1.01 | 1.25 | 1.33 | |||||||||
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Capital Ratios:
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Shareholders’ equity to total assets
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7.78 | 7.15 | 7.36 | |||||||||
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Average shareholders’ equity to average total assets
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7.32 | 7.24 | 7.09 | |||||||||
LOAN PORTFOLIO COMPOSITION
The following table sets forth loan totals by category for the periods presented:
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At
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June 30,
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December 31,
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June 30,
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2011
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2010
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2010
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(in thousands)
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(unaudited)
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Real Estate Loans:
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Construction
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$ | 108,851 | $ | 115,094 | $ | 104,866 | ||||||
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1-4 Family Residential
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221,283 | 219,031 | 217,131 | |||||||||
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Other
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193,341 | 200,723 | 204,837 | |||||||||
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Commercial Loans
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134,197 | 148,761 | 156,032 | |||||||||
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Municipal Loans
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200,537 | 196,594 | 155,283 | |||||||||
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Loans to Individuals
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180,599 | 197,717 | 179,303 | |||||||||
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Total Loans
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$ | 1,038,808 | $ | 1,077,920 | $ | 1,017,452 | ||||||
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At or for the
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Three Months
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Six Months
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Ended June 30,
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Ended June 30,
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2011
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2010
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2011
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2010
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(dollars in thousands)
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(dollars in thousands)
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(unaudited)
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(unaudited)
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Selected Operating Data:
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Total interest income
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$ | 33,724 | $ | 30,825 | $ | 65,629 | $ | 65,812 | ||||||||
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Total interest expense
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9,157 | 11,455 | 18,803 | 23,366 | ||||||||||||
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Net interest income
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24,567 | 19,370 | 46,826 | 42,446 | ||||||||||||
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Provision for loan losses
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1,860 | 2,260 | 3,998 | 6,127 | ||||||||||||
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Net interest income after provision for loan losses
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22,707 | 17,110 | 42,828 | 36,319 | ||||||||||||
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Noninterest income
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Deposit services
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4,028 | 4,400 | 7,907 | 8,464 | ||||||||||||
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Gain on sale of securities available for sale
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4,004 | 6,661 | 5,809 | 15,016 | ||||||||||||
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Total other-than-temporary impairment losses
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– | – | – | (39 | ) | |||||||||||
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Portion of loss recognized in other comprehensive
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income (before taxes)
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– | – | – | (36 | )) | |||||||||||
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Net impairment losses recognized in earnings
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– | – | – | (75 | ) | |||||||||||
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Gain on sale of loans
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282 | 399 | 565 | 680 | ||||||||||||
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Trust income
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645 | 561 | 1,296 | 1,091 | ||||||||||||
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Bank owned life insurance income
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261 | 285 | 547 | 570 | ||||||||||||
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Other
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959 | 864 | 2,064 | 1,797 | ||||||||||||
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Total noninterest income
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10,179 | 13,170 | 18,188 | 27,543 | ||||||||||||
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Noninterest expense
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Salaries and employee benefits
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11,622 | 11,215 | 23,313 | 22,157 | ||||||||||||
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Occupancy expense
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1,778 | 1,662 | 3,499 | 3,305 | ||||||||||||
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Equipment expense
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525 | 472 | 1,018 | 909 | ||||||||||||
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Advertising, travel & entertainment
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550 | 544 | 1,103 | 1,081 | ||||||||||||
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ATM and debit card expense
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266 | 212 | 481 | 379 | ||||||||||||
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Director fees
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200 | 216 | 391 | 393 | ||||||||||||
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Supplies
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161 | 206 | 385 | 476 | ||||||||||||
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Professional fees
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457 | 539 | 1,012 | 945 | ||||||||||||
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Postage
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186 | 231 | 365 | 417 | ||||||||||||
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Telephone and communications
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345 | 346 | 682 | 719 | ||||||||||||
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FDIC Insurance
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735 | 689 | 1,498 | 1,368 | ||||||||||||
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Other
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1,291 | 1,647 | 3,101 | 3,282 | ||||||||||||
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Total noninterest expense
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18,116 | 17,979 | 36,848 | 35,431 | ||||||||||||
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Income before income tax expense
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14,770 | 12,301 | 24,168 | 28,431 | ||||||||||||
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Provision for income tax expense
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3,241 | 2,530 | 4,457 | 6,485 | ||||||||||||
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Net income
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11,529 | 9,771 | 19,711 | 21,946 | ||||||||||||
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Less: Net income attributable to the noncontrolling interest
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(493 | ) | (519 | ) | (1,358 | ) | (1,049 | ) | ||||||||
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Net income attributable to Southside Bancshares, Inc.
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$ | 11,036 | $ | 9,252 | $ | 18,353 | $ | 20,897 | ||||||||
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Common share data attributable to Southside Bancshares, Inc:
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Weighted-average basic shares outstanding
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16,439 | 16,605 | 16,432 | 16,573 | ||||||||||||
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Weighted-average diluted shares outstanding
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16,445 | 16,635 | 16,437 | 16,621 | ||||||||||||
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Net income per common share
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Basic
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$ | 0.67 | $ | 0.56 | $ | 1.12 | $ | 1.26 | ||||||||
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Diluted
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0.67 | 0.56 | 1.12 | 1.26 | ||||||||||||
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Book value per common share
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– | – | 14.74 | 13.13 | ||||||||||||
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Cash dividend declared per common share
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0.17 | 0.17 | 0.34 | 0.34 | ||||||||||||
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At or for the
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At or for the
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Three Months
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Six Months
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Ended June 30,
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Ended June 30,
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2011
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2010
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2011
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2010
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(unaudited)
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(unaudited)
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Selected Performance Ratios:
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Return on average assets
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1.44 | % | 1.23 | % | 1.22 | % | 1.42 | % | ||||||||
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Return on average shareholders’ equity
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19.26 | 17.48 | 16.63 | 20.00 | ||||||||||||
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Average yield on interest earning assets
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5.09 | 4.72 | 5.01 | 5.10 | ||||||||||||
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Average yield on interest bearing liabilities
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1.57 | 1.95 | 1.62 | 2.02 | ||||||||||||
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Net interest spread
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3.52 | 2.77 | 3.39 | 3.08 | ||||||||||||
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Net interest margin
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3.81 | 3.09 | 3.68 | 3.41 | ||||||||||||
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Average interest earnings assets to average interest
bearing liabilities
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122.20 | 119.61 | 121.47 | 119.14 | ||||||||||||
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Noninterest expense to average total assets
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2.37 | 2.40 | 2.44 | 2.40 | ||||||||||||
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Efficiency ratio
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54.96 | 63.31 | 57.22 | 58.87 | ||||||||||||
RESULTS OF OPERATIONS
The analysis below shows average interest earning assets and interest bearing liabilities together with the average yield on the interest earning assets and the average cost of the interest bearing liabilities.
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AVERAGE BALANCES AND YIELDS
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(dollars in thousands)
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(unaudited)
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Six Months Ended
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June 30, 2011
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June 30, 2010
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AVG
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AVG
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AVG
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AVG
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BALANCE
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INTEREST
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YIELD
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BALANCE
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INTEREST
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YIELD
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ASSETS
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INTEREST EARNING ASSETS:
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Loans (1) (2)
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$ | 1,059,313 | $ | 36,281 | 6.91 | % | $ | 1,020,908 | $ | 36,779 | 7.26 | % | ||||||||||||
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Loans Held For Sale
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3,106 | 68 | 4.41 | % | 3,735 | 71 | 3.83 | % | ||||||||||||||||
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Securities:
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Investment Securities (Taxable)(4)
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7,058 | 38 | 1.09 | % | 9,373 | 52 | 1.12 | % | ||||||||||||||||
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Investment Securities (Tax-Exempt)(3)(4)
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302,421 | 9,564 | 6.38 | % | 256,041 | 8,702 | 6.85 | % | ||||||||||||||||
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Mortgage-backed and Related Securities (4)
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1,431,390 | 24,607 | 3.47 | % | 1,435,493 | 24,559 | 3.45 | % | ||||||||||||||||
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Total Securities
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1,740,869 | 34,209 | 3.96 | % | 1,700,907 | 33,313 | 3.95 | % | ||||||||||||||||
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FHLB stock and other investments, at cost
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30,390 | 132 | 0.88 | % | 38,629 | 141 | 0.74 | % | ||||||||||||||||
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Interest Earning Deposits
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11,054 | 13 | 0.24 | % | 13,976 | 15 | 0.22 | % | ||||||||||||||||
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Total Interest Earning Assets
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2,844,732 | 70,703 | 5.01 | % | 2,778,155 | 70,319 | 5.10 | % | ||||||||||||||||
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NONINTEREST EARNING ASSETS:
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Cash and Due From Banks
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44,511 | 45,006 | ||||||||||||||||||||||
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Bank Premises and Equipment
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50,514 | 47,708 | ||||||||||||||||||||||
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Other Assets
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120,373 | 120,816 | ||||||||||||||||||||||
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Less: Allowance for Loan Loss
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(19,657 | ) | (19,227 | ) | ||||||||||||||||||||
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Total Assets
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$ | 3,040,473 | $ | 2,972,458 | ||||||||||||||||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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INTEREST BEARING LIABILITIES:
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Savings Deposits
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$ | 83,343 | 118 | 0.29 | % | $ | 73,270 | 167 | 0.46 | % | ||||||||||||||
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Time Deposits
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856,860 | 5,744 | 1.35 | % | 713,164 | 6,954 | 1.97 | % | ||||||||||||||||
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Interest Bearing Demand Deposits
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784,228 | 2,225 | 0.57 | % | 717,638 | 2,617 | 0.74 | % | ||||||||||||||||
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Total Interest Bearing Deposits
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1,724,431 | 8,087 | 0.95 | % | 1,504,072 | 9,738 | 1.31 | % | ||||||||||||||||
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Short-term Interest Bearing Liabilities
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239,179 | 3,434 | 2.90 | % | 301,065 | 3,547 | 2.38 | % | ||||||||||||||||
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Long-term Interest Bearing Liabilities – FHLB Dallas
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317,985 | 5,663 | 3.59 | % | 466,352 | 8,465 | 3.66 | % | ||||||||||||||||
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Long-term Debt (5)
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60,311 | 1,619 | 5.41 | % | 60,311 | 1,616 | 5.40 | % | ||||||||||||||||
|
Total Interest Bearing Liabilities
|
2,341,906 | 18,803 | 1.62 | % | 2,331,800 | 23,366 | 2.02 | % | ||||||||||||||||
|
NONINTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
|
Demand Deposits
|
448,073 | 402,228 | ||||||||||||||||||||||
|
Other Liabilities
|
26,174 | 26,717 | ||||||||||||||||||||||
|
Total Liabilities
|
2,816,153 | 2,760,745 | ||||||||||||||||||||||
|
SHAREHOLDERS’ EQUITY (6)
|
224,320 | 211,713 | ||||||||||||||||||||||
|
Total Liabilities and Shareholders’ Equity
|
$ | 3,040,473 | $ | 2,972,458 | ||||||||||||||||||||
|
NET INTEREST INCOME
|
$ | 51,900 | $ | 46,953 | ||||||||||||||||||||
|
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS
|
3.68 | % | 3.41 | % | ||||||||||||||||||||
|
NET INTEREST SPREAD
|
3.39 | % | 3.08 | % | ||||||||||||||||||||
(1) Interest on loans includes fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $1,948 and $1,648 for the six months ended June 30, 2011 and June 30, 2010, respectively.
(3) Interest income includes taxable-equivalent adjustments of $3,126 and $2,859 for the six months ended June 30, 2011 and June 30, 2010, respectively.
(4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
(5) Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by Fort Worth Bancshares, Inc. to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.
(6) Includes average equity of noncontrolling interest of $1,788 and $1,042 for the six months ended June 30, 2011 and June 30, 2010, respectively.
Note: As of June 30, 2011 and 2010, loans totaling $13,208 and $15,728, respectively, were on nonaccrual status Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.
|
AVERAGE BALANCES AND YIELDS
|
||||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||||||
|
June 30, 2011
|
June 30, 2010
|
|||||||||||||||||||||||
|
AVG
|
AVG
|
AVG
|
AVG
|
|||||||||||||||||||||
|
BALANCE
|
INTEREST
|
YIELD
|
BALANCE
|
INTEREST
|
YIELD
|
|||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||||
|
INTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
|
Loans (1) (2)
|
$ | 1,049,692 | $ | 18,076 | 6.91 | % | $ | 1,016,037 | $ | 18,221 | 7.19 | % | ||||||||||||
|
Loans Held For Sale
|
2,491 | 31 | 4.99 | % | 4,319 | 40 | 3.71 | % | ||||||||||||||||
|
Securities:
|
||||||||||||||||||||||||
|
Investment Securities (Taxable)(4)
|
5,082 | 20 | 1.58 | % | 9,392 | 26 | 1.11 | % | ||||||||||||||||
|
Investment Securities (Tax-Exempt)(3)(4)
|
299,807 | 4,778 | 6.39 | % | 264,345 | 4,494 | 6.82 | % | ||||||||||||||||
|
Mortgage-backed and Related Securities (4)
|
1,466,581 | 13,310 | 3.64 | % | 1,477,593 | 10,282 | 2.79 | % | ||||||||||||||||
|
Total Securities
|
1,771,470 | 18,108 | 4.10 | % | 1,751,330 | 14,802 | 3.39 | % | ||||||||||||||||
|
FHLB stock and other investments, at cost
|
28,317 | 52 | 0.74 | % | 38,194 | 59 | 0.62 | % | ||||||||||||||||
|
Interest Earning Deposits
|
6,101 | 3 | 0.20 | % | 6,675 | 4 | 0.24 | % | ||||||||||||||||
|
Total Interest Earning Assets
|
2,858,071 | 36,270 | 5.09 | % | 2,816,555 | 33,126 | 4.72 | % | ||||||||||||||||
|
NONINTEREST EARNING ASSETS:
|
||||||||||||||||||||||||
|
Cash and Due From Banks
|
43,330 | 42,872 | ||||||||||||||||||||||
|
Bank Premises and Equipment
|
50,655 | 48,219 | ||||||||||||||||||||||
|
Other Assets
|
130,936 | 119,382 | ||||||||||||||||||||||
|
Less: Allowance for Loan Loss
|
(19,266 | ) | (18,649 | ) | ||||||||||||||||||||
|
Total Assets
|
$ | 3,063,726 | $ | 3,008,379 | ||||||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||||||
|
INTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
|
Savings Deposits
|
$ | 85,778 | 58 | 0.27 | % | $ | 75,065 | 84 | 0.45 | % | ||||||||||||||
|
Time Deposits
|
867,694 | 2,943 | 1.36 | % | 692,274 | 3,294 | 1.91 | % | ||||||||||||||||
|
Interest Bearing Demand Deposits
|
778,084 | 1,050 | 0.54 | % | 742,401 | 1,355 | 0.73 | % | ||||||||||||||||
|
Total Interest Bearing Deposits
|
1,731,556 | 4,051 | 0.94 | % | 1,509,740 | 4,733 | 1.26 | % | ||||||||||||||||
|
Short-term Interest Bearing Liabilities
|
259,025 | 1,705 | 2.64 | % | 341,401 | 1,867 | 2.19 | % | ||||||||||||||||
|
Long-term Interest Bearing Liabilities – FHLB Dallas
|
287,903 | 2,587 | 3.60 | % | 443,301 | 4,041 | 3.66 | % | ||||||||||||||||
|
Long-term Debt (5)
|
60,311 | 814 | 5.41 | % | 60,311 | 814 | 5.41 | % | ||||||||||||||||
|
Total Interest Bearing Liabilities
|
2,338,795 | 9,157 | 1.57 | % | 2,354,753 | 11,455 | 1.95 | % | ||||||||||||||||
|
NONINTEREST BEARING LIABILITIES:
|
||||||||||||||||||||||||
|
Demand Deposits
|
465,578 | 412,735 | ||||||||||||||||||||||
|
Other Liabilities
|
27,469 | 27,381 | ||||||||||||||||||||||
|
Total Liabilities
|
2,831,842 | 2,794,869 | ||||||||||||||||||||||
|
SHAREHOLDERS’ EQUITY (6)
|
231,884 | 213,510 | ||||||||||||||||||||||
|
Total Liabilities and Shareholders’ Equity
|
$ | 3,063,726 | $ | 3,008,379 | ||||||||||||||||||||
|
NET INTEREST INCOME
|
$ | 27,113 | $ | 21,671 | ||||||||||||||||||||
|
NET INTEREST MARGIN ON AVERAGE EARNING ASSETS
|
3.81 | % | 3.09 | % | ||||||||||||||||||||
|
NET INTEREST SPREAD
|
3.52 | % | 2.77 | % | ||||||||||||||||||||
(1) Interest on loans includes fees on loans that are not material in amount.
(2) Interest income includes taxable-equivalent adjustments of $977 and $824 for the three months ended June 30, 2011 and June 30, 2010, respectively.
(3) Interest income includes taxable-equivalent adjustments of $1,569 and $1,477 for the three months ended June 30, 2011 and June 30, 2010, respectively.
(4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.
(5) Represents junior subordinated debentures issued by us to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities, Southside Statutory Trust V of $12.5 million of trust preferred securities and junior subordinated debentures issued by Fort Worth Bancshares, Inc. to Magnolia Trust Company I in connection with the issuance by Magnolia Trust Company I of $3.5 million of trust preferred securities.
(6) Includes average equity of noncontrolling interest of $2,068 and $1,235 for the three months ended June 30, 2011 and June 30, 2010, respectively.
Note: As of June 30, 2011 and 2010, loans totaling $13,208 and $15,728, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.