Southside Bancshares, Inc. (NYSE:SBSI) reported fourth-quarter results that came in below earnings expectations, even as revenue slightly exceeded forecasts, leaving the bank’s shares marginally lower following the announcement.
The lender posted net income of $21.0 million for the quarter, equivalent to $0.70 per diluted share, missing the analyst consensus estimate of $0.79 per share. Shares slipped around 0.15% in response.
Quarterly revenue totaled $71.98 million, narrowly ahead of the $71.74 million expected by the market. Net interest income rose 6.6% year on year to $57.2 million, supported mainly by lower funding costs. The tax-equivalent net interest margin improved to 2.98%, up four basis points from the previous quarter.
During the period, Southside reshaped part of its available-for-sale securities portfolio, selling roughly $82 million of lower-yielding municipal bonds and booking a loss of $7.3 million. Most of the proceeds were redeployed into U.S. Agency mortgage-backed securities.
“Linked quarter, net interest income increased $1.5 million, our net interest margin increased four basis points to 2.98% due to lower funding costs during the quarter and deposits, net of public fund and brokered deposits, increased $40.8 million,” said Keith Donahoe, President and Chief Executive Officer of Southside.
Loan balances increased by $52.7 million from the prior quarter to $4.82 billion, representing a 3.4% rise from $4.66 billion at the end of 2024. Asset quality remained solid, with nonperforming assets accounting for 0.45% of total assets.
Looking ahead, Southside plans to redeem $93 million of subordinated notes due in 2030 on February 15, 2026. The notes currently carry an interest rate of 7.51%, and management expects the redemption to provide a positive lift to net interest margin beginning in the first quarter.
For the full year 2025, the bank reported net income of $69.2 million, or $2.29 per diluted share, down 21.8% from $88.5 million, or $2.91 per share, in 2024. The decline was largely driven by losses incurred on the sale of available-for-sale securities.