Key Highlights

  • Diluted EPS of USD 0.93 beat the consensus estimate of USD 0.79 and compared with USD 0.16 a year earlier.
  • Revenue of USD 76.14 million topped the consensus estimate of USD 72.67 million, built on tax-equivalent interest income plus fees.
  • Net interest income rose 8.2% to USD 60.3 million, and Margin widened to 2.92% from 2.81%.
  • Nonperforming Assets fell 58.6% from year end to USD 15.8 million, or 0.18% of total assets.

Southside Bancshares, Inc. (NYSE:SBSI) reported third quarter 2026 Diluted Earnings per Share of USD 0.93, above the consensus estimate of USD 0.79 and well ahead of USD 0.16 in the same quarter of 2025. Net Income reached USD 28.0 million compared with USD 4.9 million, a gain of USD 23.1 million. Revenue, calculated as tax-equivalent net interest income of USD 62.4 million plus noninterest income of USD 13.7 million, came to USD 76.14 million, above the consensus estimate of USD 72.67 million.

The year over year comparison is flattered by the prior period, which carried a USD 24.4 million net loss on sales of available for sale securities. No such sales occurred in the latest quarter, so noninterest income swung to USD 13.7 million from a negative USD 12.0 million.

Margin, Funding Mix and Expense Detail

Net interest income on a GAAP basis rose to USD 60.3 million from USD 55.7 million. Interest income increased 4.9% to USD 106.9 million while interest expense edged up 0.9% to USD 46.6 million. Net interest margin was 2.92%, and the tax-equivalent margin, a non-GAAP measure, was 3.02% against 2.94%. The cost of interest bearing deposits fell 37 basis points to 2.45%.

Deposits dropped 12.4% since year end to USD 6.01 billion, driven by a USD 617.8 million decline in brokered deposits and a USD 240.4 million decline in public fund balances. Wholesale funding filled the gap, with FHLB borrowings of USD 800.8 million versus USD 211.1 million and other borrowings of USD 894.6 million versus USD 208.7 million. Noninterest expense was USD 39.0 million, up from USD 37.5 million, and the provision for Credit losses was USD 747,000 against USD 1.1 million.

Credit Quality, Capital and Risk Disclosures

Loans grew 2.9% from year end to USD 4.96 billion, led by a USD 65.3 million rise in commercial loans. Nonperforming assets declined mainly because a USD 27.5 million restructured Commercial Real Estate Loan paid off in the first quarter. One USD 5.2 million commercial real estate loan was past due more than 90 days at quarter end and paid in full on October 1, 2026. Nonaccruing loans stood at 0.21% of total loans.

The consolidated Common Equity Tier 1 ratio was 13.12% and the Tier 1 ratio was 14.08%. Shareholders equity was USD 842.9 million, with accumulated other comprehensive loss widening to USD 149.8 million from USD 95.6 million. The company's risk language cites Interest Rate Yield Curve shifts, tariffs and trade policy, commercial real estate conditions and credit quality as factors that can affect the margin and asset values. Estimated uninsured deposits were 41.8% of the total.

Funding and Credit Items to Follow

Four readings sit at the center of the next report. Net interest margin at 2.92% and the tax-equivalent figure of 3.02% show how funding costs interact with asset yields. The deposit base of USD 6.01 billion, with brokered balances down 91.9% this year, shows how much borrowing of USD 1.70 billion across FHLB and other sources remains in the mix.

Credit markers include the 0.18% nonperforming asset ratio and the 0.21% nonaccruing loan ratio. On capital, the 13.12% Common Equity Tier 1 ratio and the quarterly Cash Dividend of USD 0.37 per share, up from USD 0.36, give reference points alongside loan growth of 2.9% so far in 2026.