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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 8-K 
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 27, 2018

Southside Bancshares, Inc.
(Exact Name of Registrant as Specified in its Charter)
Texas
0-12247
75-1848732
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)


1201 S. Beckham Avenue, Tyler, Texas
 
75701
(Address of Principal Executive Offices)
(Zip Code)

Registrant's telephone number, including area code: (903) 531-7111

NA
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
p
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
p
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
p
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
p
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 











ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 27, 2018, Southside Bancshares, Inc. issued a press release announcing financial results for the three and six months ended June 30, 2018. A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated herein by reference.

The information in this Current Report on Form 8-K, including the attached exhibit, is being furnished as provided in General Instruction B.2 to Form 8-K, to the Securities and Exchange Commission and shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Furthermore the information contained in this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(D)
Exhibits.  The following materials are furnished as exhibits to this Current Report on Form 8-K:
Exhibit
Number
 
Description of Exhibit
 
 
 
99.1

 





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
Southside Bancshares, Inc.
 
 
 
Date:  July 27, 2018
By:
/s/ JULIE N. SHAMBURGER
 
 
Julie N. Shamburger
 
 
Senior Executive Vice President and Chief Financial Officer
 
 
(Principal Financial and Accounting Officer)




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


EXHIBIT 99.1
SOUTHSIDE BANCSHARES, INC.
ANNOUNCES FINANCIAL RESULTS FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2018
NASDAQ Global Select Market Symbol - “SBSI”


Tyler, Texas, (July 27, 2018) Southside Bancshares, Inc. (“Southside” or the “Company”) (NASDAQ:SBSI) today reported its financial results for the three and six months ended June 30, 2018.
Southside reported net income of $20.2 million for the three months ended June 30, 2018, an increase of $5.7 million, or 39.5%, compared to $14.5 million for the same period in 2017. Southside reported net income of $36.5 million for the six months ended June 30, 2018, an increase of $7.0 million, or 23.7%, compared to $29.5 million for the same period in 2017.
Earnings per diluted common share increased $0.08, or 16.3%, to $0.57 for the three months ended June 30, 2018, from $0.49 for the same period in 2017. Earnings per diluted common share increased $0.04, or 4.0%, to $1.04 for the six months ended June 30, 2018, from $1.00 for the same period in 2017.
The return on average shareholders’ equity for the six months ended June 30, 2018 was 9.77%, compared to 11.13% for the same period in 2017.  The return on average assets was 1.16% for the six months ended June 30, 2018, compared to 1.06% for the same period in 2017.
“Southside experienced an excellent second quarter highlighted by our financial results and the completion of the Diboll Bancshares, Inc. integration,” stated Lee R. Gibson, President and Chief Executive Officer of Southside. “We reported record net income during the second quarter of $20.2 million, an efficiency ratio below 50% and maintained the net interest margin on a linked quarter basis at 3.19%, notwithstanding a slight reduction in average loans. During the quarter we recorded acquisition costs related to the Diboll transaction of $1.0 million, a $332,000 loss on the sale of available for sale securities and a death benefit of $636,000 in bank owned life insurance income. We expect to realize substantially all of the efficiencies and the associated cost savings of the Diboll integration during the third quarter.”
“During the second quarter loan payoffs exceeded loans funded by $39 million. Our loan pipeline looks promising for the remainder of the year as a number of loans are expected to fund; however, we expect additional payoffs that will offset a portion of the new funding’s. Economic conditions in East Texas remain solid and the Austin and DFW economies, fueled by company relocations and overall population growth, continue to be robust.”
Loans and Deposits
For the six months ended June 30, 2018, total loans decreased by $23.5 million, or 0.7%, to $3.27 billion, compared to December 31, 2017. The net decrease in our loans was comprised primarily of decreases of $19.2 million of commercial real estate loans, $17.8 million of loans to individuals, and $14.0 million of 1-4 family residential loans, partially offset by increases of $16.3 million of commercial loans and $11.4 million of construction loans. Energy loans totaled 1.55% of the loan portfolio at June 30, 2018, compared to 1.50% at December 31, 2017.
Nonperforming assets increased during the six months ended June 30, 2018 by $32.0 million, or 305.1%, to $42.4 million, or 0.68% of total assets, compared to $10.5 million, or 0.16% of total assets at December 31, 2017, primarily due to the addition of two commercial real estate relationships consisting of three loans to nonaccrual status during the first quarter.
During the six months ended June 30, 2018, the allowance for loan losses increased by $4.3 million, or 20.6%, to $25.1 million, or 0.77% of total loans, compared to 0.63% of total loans at December 31, 2017. The increase in the allowance was primarily the result of additional provision recorded on the commercial real estate loans placed on nonaccrual status in the first quarter.
During the six months ended June 30, 2018, deposits, net of brokered deposits, decreased $58.3 million, or 1.3%, compared to December 31, 2017, due primarily to the decrease in public fund deposits of $42.8 million during the six months ended June 30, 2018, compared to December 31, 2017.






Net Interest Income for the Three Months Ended June 30, 2018
Net interest income increased $7.7 million, or 21.7%, to $43.1 million for the three months ended June 30, 2018, compared to $35.4 million for the same period in 2017. The increase in net interest income was the result of a $10.8 million increase in interest income from our loan portfolio, partially offset by an increase in interest expense of $3.1 million associated with interest expense on our deposits, compared to the same period in 2017.
For the three months ended June 30, 2018, our net interest margin (FTE) increased to 3.19%, compared to 3.07% for the same period in 2017. The increase in net interest margin (FTE) was due primarily to an increase in the average balances and mix of earning assets as a direct result of the acquisition of Diboll and an increase in the average yields on earning assets, partially offset by higher average rates paid on interest bearing liabilities. The increase in average rates paid on interest bearing liabilities was primarily due to rising interest rates during 2017 and 2018. For the three months ended June 30, 2018, our net interest spread (FTE) increased slightly to 2.90%, compared to 2.89% for the same period in 2017. The net interest spread (FTE) on a linked quarter basis decreased from 2.95% for the three months ended March 31, 2018, to 2.90% for the three months ended June 30, 2018. The net interest margin (FTE) remained at 3.19% on a linked quarter basis.
Net Interest Income for the Six Months Ended June 30, 2018
Net interest income increased $16.5 million, or 23.4%, to $87.2 million for the six months ended June 30, 2018, compared to $70.7 million for the same period in 2017. The increase in net interest income was the result of a $23.1 million increase in interest income primarily from our loan portfolio, partially offset by an increase in interest expense of $6.6 million associated with interest expense on our deposits, compared to the same period in 2017.
For the six months ended June 30, 2018, our net interest margin (FTE) increased to 3.19%, compared to 3.07% for the same period in 2017. The increase in net interest margin (FTE) was due primarily to an increase in the average balances and mix of earning assets as a direct result of the acquisition of Diboll and an increase in the average yields on earning assets, partially offset by higher average rates paid on interest bearing liabilities. The increase in average rates paid on interest bearing liabilities was primarily due to rising interest rates during 2017 and 2018. For the six months ended June 30, 2018, our net interest spread (FTE) increased slightly to 2.92%, compared to 2.91% for the same period in 2017.
Net Income for the Three Months Ended June 30, 2018
Net income increased $5.7 million, or 39.5%, for the three months ended June 30, 2018, to $20.2 million compared to the same period in 2017. The increase was primarily the result of a $10.8 million increase in interest income and a $1.7 million increase in noninterest income, partially offset by a $3.7 million increase in noninterest expense and a $3.1 million increase in interest expense.
Trust income, deposit services and bank owned life insurance income increased and were partially offset by an increase in net loss on sale of securities and a decrease in gain on sale of loans. The increase in both trust income and deposit services income was largely related to the acquisition of Diboll. The increase in our bank owned life insurance income was due to death benefits recorded for a retired covered officer. In connection with the adoption of Accounting Standards Update 2014-09 (“ASU 2014-09”) revenue recognition guidance effective January 1, 2018, debit card expense and brokerage service expense for the three months ended June 30, 2018, previously reported in ATM and debit card expense and other noninterest expense are now netted with deposit services income and brokerage services income, respectively. Due to the guidance under the modified retrospective method, prior periods have not been adjusted and therefore, are not comparable.
Noninterest expense increased $3.7 million, or 14.6%, for the three months ended June 30, 2018, compared to the same period in 2017. The increase in most of our noninterest expense categories is directly attributable to the integration of Diboll into our operations.
Income tax expense for the three months ended June 30, 2018 remained relatively unchanged although net income increased. This was attributable to the reduced tax rate under the Tax Cuts and Jobs Act resulting in a lower effective tax rate of 14.3% compared to 18.8% for the same period in 2017.





Net Income for the Six Months Ended June 30, 2018
Net income increased $7.0 million, or 23.7%, for the six months ended June 30, 2018, to $36.5 million compared to the same period in 2017. The increase was primarily the result of a $23.1 million increase in interest income, a $1.7 million increase in noninterest income and a $0.9 million decrease in income tax expense, partially offset by a $9.5 million increase in noninterest expense, a $6.6 million increase in interest expense and a $2.6 million increase in provision for loan losses.
Excluding net (loss) gain on sale of securities, noninterest income increased $3.1 million, or 16.3%, for the six months ended June 30, 2018 compared to the same period in 2017. Deposit services and trust income increased and were partially offset by a decrease in gain on sale of loans. The increase in both deposit services income and trust income was largely related to the acquisition of Diboll. With the adoption of ASU 2014-09, debit card expense and brokerage service expense for the six months ended June 30, 2018, previously reported in ATM and debit card expense and other noninterest expense, are now netted with deposit services income and brokerage services income, respectively. Due to the guidance under the modified retrospective method, prior periods have not been adjusted and therefore, are not comparable.
Noninterest expense increased $9.5 million, or 18.6%, for the six months ended June 30, 2018, to $60.9 million, compared to the same period in 2017. The increase in most of our noninterest expense categories was directly attributable to the integration of Diboll into our operations.
The decrease in income tax expense for the six months ended June 30, 2018 was attributable to the reduced tax rate under the Tax Cuts and Jobs Act resulting in a lower effective tax rate of 13.0% compared to 17.8% for the same period in 2017.

Conference Call
Southside's management team will host a conference call to discuss its second quarter 2018 financial results on Friday, July 27, 2018 at 9:00 a.m. CDT.  The call can be accessed by dialing 844-775-2540 and by identifying the conference ID number 7518659 or by identifying “Southside Bancshares, Inc., Second Quarter 2018 Earnings Call.”  To listen to the call via webcast, register at www.southside.com/about/investor-relations.
For those unable to listen to the conference call live, a recording will be available from approximately 3:00 p.m. CDT July 27, 2018 through August 7, 2018 by accessing the company website, www.southside.com/about/investor-relations.

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% and 35% for the three and six months ended June 30, 2018 and 2017, respectively, 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. We believe this measure to be the preferred industry measurement of net interest income and 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 of intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding gains (losses) on sales of available for sale securities 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.

In the following table we present, for the five quarterly periods ended June 30, 2018 and for the six months ended June 30, 2018 and 2017, the reconciliation of net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for the 2018 quarterly and six month periods and a 35% marginal tax rate for the 2017 quarterly and six month periods for interest earned on tax-exempt assets such as municipal loans and investment securities (dollars in thousands), along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE).
Non-GAAP Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
2018
 
2017
 
2018
 
2017
 
 
June 30,
 
Mar. 31,
 
Dec. 31,
 
Sept. 30,
 
June 30,
 
June 30,
 
June 30,
Net interest income (GAAP)
 
$
43,111

 
$
44,133

 
$
38,306

 
$
34,960

 
$
35,424

 
$
87,244

 
$
70,704

Tax equivalent adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
583

 
582

 
1,125

 
1,103

 
1,050

 
1,165

 
2,085

Investment securities (tax-exempt)
 
1,651

 
1,619

 
3,049

 
3,544

 
3,229

 
3,270

 
6,604

Net interest income (FTE) (1)
 
45,345

 
46,334

 
42,480

 
39,607

 
39,703

 
91,679

 
79,393

Noninterest income
 
11,007

 
9,610

 
9,099

 
9,408

 
9,293

 
20,617

 
18,966

Nonrecurring income (2)
 
(304
)
 
827

 
483

 
(627
)
 
75

 
523

 
(47
)
Total revenue
 
$
56,048

 
$
56,771

 
$
52,062

 
$
48,388

 
$
49,071

 
$
112,819

 
$
98,312

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense
 
$
29,274

 
$
31,667

 
$
29,933

 
$
25,007

 
$
25,537

 
$
60,941

 
$
51,395

Pre-tax amortization expense
 
(1,328
)
 
(1,378
)
 
(726
)
 
(388
)
 
(410
)
 
(2,706
)
 
(841
)
Nonrecurring expense (3)
 
(1,287
)
 
(1,178
)
 
(3,479
)
 
(432
)
 
(466
)
 
(2,465
)
 
(483
)
Adjusted noninterest expense
 
$
26,659

 
$
29,111

 
$
25,728

 
$
24,187

 
$
24,661

 
$
55,770

 
$
50,071

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
 
49.54
%
 
53.35
%
 
53.73
%
 
55.30
%
 
55.06
%
 
51.46
%
 
55.87
%
Efficiency ratio (FTE) (1)
 
47.56
%
 
51.28
%
 
49.42
%
 
49.99
%
 
50.26
%
 
49.43
%
 
50.93
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average earning assets
 
$
5,700,133

 
$
5,891,352

 
$
5,395,212

 
$
5,199,349

 
$
5,192,897

 
$
5,795,214

 
$
5,210,871

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
3.03
%
 
3.04
%
 
2.82
%
 
2.67
%
 
2.74
%
 
3.04
%
 
2.74
%
Net interest margin (FTE) (1)
 
3.19
%
 
3.19
%
 
3.12
%
 
3.02
%
 
3.07
%
 
3.19
%
 
3.07
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
2.75
%
 
2.80
%
 
2.60
%
 
2.47
%
 
2.56
%
 
2.77
%
 
2.58
%
Net interest spread (FTE) (1)
 
2.90
%
 
2.95
%
 
2.91
%
 
2.82
%
 
2.89
%
 
2.92
%
 
2.91
%

(1)
These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures.
(2)
Includes net gains and losses on sale of available for sale securities, impairment of investments, other-than-temporary impairment charges and additional bank owned life insurance income realized as a result of the death benefits for a retired covered officer.
(3)
Includes acquisition expenses and foreclosure expenses.

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 reported in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables under Results of Operations.





About Southside Bancshares, Inc.
Southside Bancshares, Inc. is a bank holding company with approximately $6.25 billion in assets as of June 30, 2018, that owns 100% of Southside Bank.  Southside Bank currently has 59 branches in Texas and operates a network of 84 ATMs/ITMs.
To learn more about Southside Bancshares, Inc., please visit our investor relations website at www.southside.com/about/investor-relations.  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 Julie Shamburger at (903) 531-7134, or julie.shamburger@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 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 management’s views as of any subsequent date.  These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “likely,” “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 and estimates about the Company's 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, capital, liquidity, the pace of loan and revenue growth, the Company's ability to sell nonperforming assets, expense reductions, planned operational efficiencies, earnings, successful integration of completed acquisitions and certain market risk disclosures, including the impact of interest rates, tax reform 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.  
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, 2017, under “Part I - Item 1. Forward Looking Information” and "Part I - 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.





 
SOUTHSIDE BANCSHARES, INC.
 
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
2018
 
2017
 
June 30,
 
Mar. 31,
 
Dec. 31,
 
Sept. 30,
 
June 30,
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
78,534

 
$
65,480

 
$
79,171

 
$
57,947

 
$
56,033

Interest earning deposits
138,685

 
183,241

 
111,541

 
120,996

 
175,039

Federal funds sold
14,850

 
14,090

 
7,980

 
5,570

 
4,760

Securities available for sale, at estimated fair value
2,037,994

 
2,062,539

 
1,538,755

 
1,292,072

 
1,397,811

Securities held to maturity, at carrying value
164,276

 
164,847

 
909,506

 
909,844

 
925,538

Federal Home Loan Bank stock, at cost
42,994

 
42,676

 
55,729

 
61,845

 
61,561

Loans held for sale
4,566

 
2,003

 
2,001

 
2,177

 
3,036

Loans
3,270,883

 
3,309,627

 
3,294,356

 
2,682,766

 
2,610,198

Less: Allowance for loan losses
(25,072
)
 
(24,220
)
 
(20,781
)
 
(19,871
)
 
(19,241
)
Net loans
3,245,811

 
3,285,407

 
3,273,575

 
2,662,895

 
2,590,957

Premises & equipment, net
132,578

 
131,625

 
133,640

 
107,099

 
105,938

Goodwill
201,246

 
201,246

 
201,246

 
91,520

 
91,520

Other intangible assets, net
20,287

 
21,615

 
22,993

 
3,379

 
3,767

Bank owned life insurance
97,059

 
100,963

 
100,368

 
99,616

 
99,011

Other assets
71,293

 
97,465

 
61,592

 
69,470

 
63,511

Total assets
$
6,250,173

 
$
6,373,197

 
$
6,498,097

 
$
5,484,430

 
$
5,578,482

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Noninterest bearing deposits
$
1,038,907

 
$
1,055,423

 
$
1,037,401

 
$
781,701

 
$
757,353

Interest bearing deposits
3,469,834

 
3,586,474

 
3,478,046

 
2,782,474

 
2,866,720

Total deposits
4,508,741

 
4,641,897

 
4,515,447

 
3,564,175

 
3,624,073

Other borrowings
784,754

 
779,990

 
1,026,859

 
1,151,639

 
1,186,506

Subordinated notes, net of unamortized debt issuance costs
98,326

 
98,286

 
98,248

 
98,209

 
98,171

Trust preferred subordinated debentures, net of unamortized debt issuance costs
60,243

 
60,242

 
60,241

 
60,240

 
60,238

Other liabilities
46,299

 
46,386

 
43,162

 
54,144

 
62,429

          Total liabilities
5,498,363

 
5,626,801

 
5,743,957

 
4,928,407

 
5,031,417

Shareholders' equity
751,810

 
746,396

 
754,140

 
556,023

 
547,065

Total liabilities and shareholders' equity
$
6,250,173

 
$
6,373,197

 
$
6,498,097

 
$
5,484,430

 
$
5,578,482







 
At or For the Three Months Ended
 
2018
 
2017
 
June 30,
 
Mar. 31,
 
Dec. 31,
 
Sept. 30,
 
June 30,
Income Statement:
 
 
 
 
 
 
 
 
 
Total interest income
$
56,797

 
$
57,194

 
$
50,104

 
$
46,473

 
$
46,009

Total interest expense
13,686

 
13,061

 
11,798

 
11,513

 
10,585

Net interest income
43,111

 
44,133

 
38,306

 
34,960

 
35,424

Provision for loan losses
1,281

 
3,735

 
1,271

 
960

 
1,346

Net interest income after provision for loan losses
41,830

 
40,398

 
37,035

 
34,000

 
34,078

Noninterest income
 
 
 
 
 
 
 
 
 
Deposit services
6,261

 
6,179

 
5,940

 
5,476

 
5,255

Net (loss) gain on sale of securities available for sale
(332
)
 
(827
)
 
(249
)
 
627

 
(75
)
Gain on sale of loans
173

 
115

 
268

 
347

 
505

Trust income
1,931

 
1,760

 
1,156

 
873

 
899

Bank owned life insurance income
1,185

 
632

 
632

 
636

 
635

Brokerage services
506

 
450

 
632

 
561

 
682

Other
1,283

 
1,301

 
720

 
888

 
1,392

Total noninterest income
11,007

 
9,610

 
9,099

 
9,408

 
9,293

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
16,633

 
18,559

 
15,316

 
14,472

 
14,984

Occupancy expense
3,360

 
3,583

 
3,327

 
2,981

 
2,897

Acquisition expense
1,026

 
832

 
3,474

 
405

 
473

Advertising, travel & entertainment
775

 
685

 
601

 
487

 
548

ATM and debit card expense
243

 
346

 
1,049

 
1,024

 
889

Professional fees
952

 
1,070

 
859

 
996

 
1,050

Software and data processing expense
939

 
1,023

 
882

 
732

 
688

Telephone and communications
478

 
538

 
444

 
459

 
476

FDIC insurance
484

 
497

 
442

 
441

 
445

Amortization expense on intangibles
1,328

 
1,378

 
726

 
388

 
410

Other
3,056

 
3,156

 
2,813

 
2,622

 
2,677

Total noninterest expense
29,274

 
31,667

 
29,933

 
25,007

 
25,537

Income before income tax expense
23,563

 
18,341

 
16,201

 
18,401

 
17,834

Income tax expense
3,360

 
2,090

 
5,870

 
3,890

 
3,353

Net income
$
20,203

 
$
16,251

 
$
10,331

 
$
14,511

 
$
14,481

 
 
 
 
 
 
 
 
 
 
Common share data:
 
 
 
Weighted-average basic shares outstanding
35,062

 
35,022

 
31,370

 
29,370

 
29,318

Weighted-average diluted shares outstanding
35,233

 
35,200

 
31,569

 
29,570

 
29,519

Shares outstanding end of period
35,084

 
35,053

 
35,000

 
29,433

 
29,344

Net income per common share
 
 
 
 
 
 
 
 
 
Basic
$
0.58

 
$
0.46

 
$
0.33

 
$
0.49

 
$
0.49

Diluted
0.57

 
0.46

 
0.33

 
0.49

 
0.49

Book value per common share
21.43

 
21.29

 
21.55

 
18.89

 
18.64

Cash dividend paid per common share
0.30

 
0.28

 
0.30

 
0.28

 
0.28

 
 
 
 
 
 
 
 
 
 
Selected Performance Ratios:
 
 
 
 
 
 
 
 
 
Return on average assets
1.30
%
 
1.02
%
 
0.70
%
 
1.03
%
 
1.04
%
Return on average shareholders’ equity
10.79

 
8.75

 
6.52

 
10.38

 
10.70

Average yield on earning assets (FTE) (1)
4.15

 
4.09

 
3.99

 
3.90

 
3.88

Average rate on interest bearing liabilities
1.25

 
1.14

 
1.08

 
1.08

 
0.99

Net interest spread (FTE) (1)
2.90

 
2.95

 
2.91

 
2.82

 
2.89

Net interest margin (FTE) (1)
3.19

 
3.19

 
3.12

 
3.02

 
3.07

Average earning assets to average interest bearing liabilities
130.22

 
127.29

 
124.73

 
123.32

 
121.57

Noninterest expense to average total assets
1.89

 
1.99

 
2.03

 
1.77

 
1.83

Efficiency ratio (FTE) (1)
47.56

 
51.28

 
49.42

 
49.99

 
50.26

(1)
These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures. See “Non-GAAP Financial Measures” for more information, including a reconciliation to GAAP.





 
At or For the
Six Months Ended
 
June 30,
 
2018
 
2017
Income Statement:
 
 
 
Total interest income
$
113,991

 
$
90,897

Total interest expense
26,747

 
20,193

Net interest income
87,244

 
70,704

Provision for loan losses
5,016

 
2,444

Net interest income after provision for loan losses
82,228

 
68,260

Noninterest income
 
 
 
Deposit services
12,440

 
10,369

Net (loss) gain on sale of securities available for sale
(1,159
)
 
247

Gain on sale of loans
288

 
1,206

Trust income
3,691

 
1,789

Bank owned life insurance income
1,817

 
1,269

Brokerage services
956

 
1,229

Other
2,584

 
2,857

Total noninterest income
20,617

 
18,966

Noninterest expense
 
 
 
Salaries and employee benefits
35,192

 
30,991

Occupancy expense
6,943

 
5,760

Acquisition expense
1,858

 
473

Advertising, travel & entertainment
1,460

 
1,131

ATM and debit card expense
589

 
1,816

Professional fees
2,022

 
1,989

Software and data processing expense
1,962

 
1,413

Telephone and communications
1,016

 
1,002

FDIC insurance
981

 
886

Amortization expense on intangibles
2,706

 
841

Other
6,212

 
5,093

Total noninterest expense
60,941

 
51,395

Income before income tax expense
41,904

 
35,831

Income tax expense
5,450

 
6,361

Net income
$
36,454

 
$
29,470

Common share data:
 
 
Weighted-average basic shares outstanding
35,042

 
29,303

Weighted-average diluted shares outstanding
35,217

 
29,511

Net income per common share
 
 
 
Basic
$
1.04

 
$
1.01

Diluted
1.04

 
1.00

Book value per common share
21.43

 
18.64

Cash dividend paid per common share
0.58

 
0.53

 
 
Selected Performance Ratios:
 
 
 
Return on average assets
1.16
%
 
1.06
%
Return on average shareholders’ equity
9.77

 
11.13

Average yield on earning assets (FTE) (1)
4.12

 
3.85

Average yield on interest bearing liabilities
1.20

 
0.94

Net interest spread (FTE) (1)
2.92

 
2.91

Net interest margin (FTE) (1)
3.19

 
3.07

Average earning assets to average interest bearing liabilities
128.72

 
120.80

Noninterest expense to average total assets
1.94

 
1.85

Efficiency ratio (FTE) (1)
49.43

 
50.93

(1)
These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures. See “Non-GAAP Financial Measures” for more information, including a reconciliation to GAAP.





 
Southside Bancshares, Inc.
 
Selected Financial Data (unaudited)
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
2018
 
2017
 
June 30,
 
Mar. 31,
 
Dec. 31,
 
Sept. 30,
 
June 30,
Nonperforming assets:
$
42,423

 
$
42,444

 
$
10,472

 
$
9,119

 
$
9,165

Nonaccrual loans (1)
35,351

 
34,545

 
2,937

 
3,095

 
3,034

Accruing loans past due more than 90 days (1)
7

 
4

 
1

 

 

Restructured loans (2)
5,860

 
5,839

 
5,767

 
5,725

 
5,884

Other real estate owned
1,137

 
2,014

 
1,613

 
298

 
233

Repossessed assets
68

 
42

 
154

 
1

 
14

 
 
 
 
 
 
 
 
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
Nonaccruing loans to total loans
1.08
%
 
1.04
%
 
0.09
%
 
0.12
%
 
0.12
%
Allowance for loan losses to nonaccruing loans
70.92

 
70.11

 
707.56

 
642.04

 
634.18

Allowance for loan losses to nonperforming assets
59.10

 
57.06

 
198.44

 
217.91

 
209.94

Allowance for loan losses to total loans
0.77

 
0.73

 
0.63

 
0.74

 
0.74

Nonperforming assets to total assets
0.68

 
0.67

 
0.16

 
0.17

 
0.16

Net charge-offs to average loans
0.05

 
0.04

 
0.05

 
0.05

 
0.09

 
 
 
 
 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
 
 
 
 
Shareholders’ equity to total assets
12.03

 
11.71

 
11.61

 
10.14

 
9.81

Average shareholders’ equity to average total assets
12.06

 
11.69

 
10.75

 
9.91

 
9.72


(1)
Excludes purchased credit impaired ("PCI") loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated.
(2)
Includes $2.9 million, $2.9 million, $2.9 million, $3.0 million, and $3.0 million in PCI loans restructured as of June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017, and June 30, 2017, respectively.

Loan Portfolio Composition
The following table sets forth loan totals by category for the periods presented:
 
Three Months Ended
 
2018
 
2017
 
June 30,
 
Mar. 31,
 
Dec. 31,
 
Sept. 30,
 
June 30,
Real Estate Loans:
 
 
 
 
 
 
 
 
 
Construction
$
487,286

 
$
474,791

 
$
475,867

 
$
420,497

 
$
386,853

1-4 Family Residential
791,359

 
797,088

 
805,341

 
609,159

 
615,405

Commercial
1,245,936

 
1,285,591

 
1,265,159

 
1,073,646

 
1,033,629

Commercial Loans
282,723

 
281,901

 
266,422

 
166,919

 
172,311

Municipal Loans
345,595

 
342,404

 
345,798

 
322,286

 
305,023

Loans to Individuals
117,984

 
127,852

 
135,769

 
90,259

 
96,977

Total Loans
$
3,270,883

 
$
3,309,627

 
$
3,294,356

 
$
2,682,766

 
$
2,610,198







The “Average Balances with Average Yields and Rates” 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 (dollars in thousands) 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" for more information.
 
Average Balances with Average Yields and Rates
 
(unaudited)
 
Three Months Ended
 
June 30, 2018
 
March 31, 2018
 
Avg Balance
 
Interest
 
Avg Yield/Rate
 
Avg Balance
 
Interest
 
Avg Yield/Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
$
3,285,756

 
$
39,865

 
4.87
%
 
$
3,300,506

 
$
39,401

 
4.84
%
Loans held for sale
1,794

 
19

 
4.25
%
 
1,543

 
11

 
2.89
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Investment securities (taxable) (2)
6,891

 
51

 
2.97
%
 
39,332

 
227

 
2.34
%
Investment securities (tax-exempt) (2)
802,611

 
8,004

 
4.00
%
 
805,091

 
8,000

 
4.03
%
Mortgage-backed and related securities (2)
1,439,810

 
10,210

 
2.84
%
 
1,557,140

 
10,894

 
2.84
%
Total securities
2,249,312

 
18,265

 
3.26
%
 
2,401,563

 
19,121

 
3.23
%
FHLB stock, at cost, and equity investments
54,729

 
411

 
3.01
%
 
67,000

 
414

 
2.51
%
Interest earning deposits
92,291

 
400

 
1.74
%
 
107,488

 
399

 
1.51
%
Federal funds sold
16,251

 
71

 
1.75
%
 
13,252

 
49

 
1.50
%
Total earning assets
5,700,133

 
59,031

 
4.15
%
 
5,891,352

 
59,395

 
4.09
%
Cash and due from banks
75,560

 
 
 
 
 
78,031

 
 
 
 
Accrued interest and other assets
473,142

 
 
 
 
 
493,974

 
 
 
 
Less:  Allowance for loan losses
(24,558
)
 
 
 
 
 
(21,005
)
 
 
 
 
Total assets
$
6,224,277

 
 
 
 
 
$
6,442,352

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
Savings deposits
$
360,340

 
208

 
0.23
%
 
$
353,770

 
184

 
0.21
%
Time deposits
1,175,230

 
4,303

 
1.47
%
 
1,170,024

 
3,895

 
1.35
%
Interest bearing demand deposits
1,981,427

 
4,070

 
0.82
%
 
2,009,154

 
3,372

 
0.68
%
Total interest bearing deposits
3,516,997

 
8,581

 
0.98
%
 
3,532,948

 
7,451

 
0.86
%
FHLB borrowings
692,386

 
3,007

 
1.74
%
 
928,677

 
3,632

 
1.59
%
Subordinated notes, net of unamortized debt issuance costs
98,306

 
1,407

 
5.74
%
 
98,267

 
1,398

 
5.77
%
Trust preferred subordinated debentures, net of unamortized debt issuance costs
60,243

 
658

 
4.38
%
 
60,241

 
569

 
3.83
%
Other borrowings
9,283

 
33

 
1.43
%
 
8,103

 
11

 
0.55
%
Total interest bearing liabilities
4,377,215

 
13,686

 
1.25
%
 
4,628,236

 
13,061

 
1.14
%
Noninterest bearing deposits
1,045,298

 
 
 
 
 
1,016,707

 
 
 
 
Accrued expenses and other liabilities
50,843

 
 
 
 
 
44,015

 
 
 
 
Total liabilities
5,473,356

 
 
 
 
 
5,688,958

 
 
 
 
Shareholders’ equity
750,921

 
 
 
 
 
753,394

 
 
 
 
Total liabilities and shareholders’ equity
$
6,224,277

 
 
 
 
 
$
6,442,352

 
 
 
 
Net interest income (FTE)
 
 
$
45,345

 
 
 
 
 
$
46,334

 
 
Net interest margin (FTE)
 
 
 
 
3.19
%
 
 
 
 
 
3.19
%
Net interest spread (FTE)
 
 
 
 
2.90
%
 
 
 
 
 
2.95
%

(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 June 30, 2018 and March 31, 2018, loans totaling $35.4 million and $34.5 million, 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 with Average Yields and Rates
 
(unaudited)
 
Three Months Ended
 
December 31, 2017
 
September 30, 2017
 
Avg Balance
 
Interest
 
Avg Yield/Rate
 
Avg Balance
 
Interest
 
Avg Yield/Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
$
2,897,444

 
$
34,070

 
4.67
%
 
$
2,657,562

 
$
30,378

 
4.54
%
Loans held for sale
2,285

 
22

 
3.82
%
 
5,060

 
47

 
3.69
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Investment securities (taxable) (2)
51,678

 
237

 
1.82
%
 
11,085

 
58

 
2.08
%
Investment securities (tax-exempt) (2)
775,681

 
9,197

 
4.70
%
 
758,828

 
9,214

 
4.82
%
Mortgage-backed and related securities (2)
1,461,159

 
9,931

 
2.70
%
 
1,550,494

 
10,567

 
2.70
%
Total securities
2,288,518

 
19,365

 
3.36
%
 
2,320,407

 
19,839

 
3.39
%
FHLB stock, at cost, and equity investments
67,127

 
380

 
2.25
%
 
66,994

 
329

 
1.95
%
Interest earning deposits
133,007

 
418

 
1.25
%
 
144,700

 
506

 
1.39
%
Federal funds sold
6,831

 
23

 
1.34
%
 
4,626

 
21

 
1.80
%
Total earning assets
5,395,212

 
54,278

 
3.99
%
 
5,199,349

 
51,120

 
3.90
%
Cash and due from banks
60,590

 
 
 
 
 
53,220

 
 
 
 
Accrued interest and other assets
410,528

 
 
 
 
 
360,073

 
 
 
 
Less:  Allowance for loan losses
(19,963
)
 
 
 
 
 
(19,556
)
 
 
 
 
Total assets
$
5,846,367

 
 
 
 
 
$
5,593,086

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
Savings deposits
$
293,392

 
134

 
0.18
%
 
$
260,860

 
117

 
0.18
%
Time deposits
1,031,008

 
3,178

 
1.22
%
 
988,380

 
2,878

 
1.16
%
Interest bearing demand deposits
1,696,239

 
2,585

 
0.60
%
 
1,562,993

 
2,425

 
0.62
%
Total interest bearing deposits
3,020,639

 
5,897

 
0.77
%
 
2,812,233

 
5,420

 
0.76
%
FHLB borrowings
1,137,373

 
3,935

 
1.37
%
 
1,237,055

 
4,156

 
1.33
%
Subordinated notes, net of unamortized debt issuance costs
98,229

 
1,429

 
5.77
%
 
98,190

 
1,413

 
5.71
%
Trust preferred subordinated debentures, net of unamortized debt issuance costs
60,240

 
532

 
3.50
%
 
60,239

 
520

 
3.42
%
Other borrowings
9,157

 
5

 
0.22
%
 
8,425

 
4

 
0.19
%
Total interest bearing liabilities
4,325,638

 
11,798

 
1.08
%
 
4,216,142

 
11,513

 
1.08
%
Noninterest bearing deposits
846,632

 
 
 
 
 
773,739

 
 
 
 
Accrued expenses and other liabilities
45,613

 
 
 
 
 
48,682

 
 
 
 
Total liabilities
5,217,883

 
 
 
 
 
5,038,563

 
 
 
 
Shareholders’ equity
628,484

 
 
 
 
 
554,523

 
 
 
 
Total liabilities and shareholders’ equity
$
5,846,367

 
 
 
 
 
$
5,593,086

 
 
 
 
Net interest income (FTE)
 
 
$
42,480

 
 
 
 
 
$
39,607

 
 
Net interest margin (FTE)
 
 
 
 
3.12
%
 
 
 
 
 
3.02
%
Net interest spread (FTE)
 
 
 
 
2.91
%
 
 
 
 
 
2.82
%

(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 December 31, 2017 and September 30, 2017, loans totaling $2.9 million and $3.1 million, 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 with Average Yields and Rates
 
(unaudited)
 
Three Months Ended
 
June 30, 2017
 
Avg Balance
 
Interest
 
Avg Yield/Rate
ASSETS
 
 
 
 
 
Loans (1)
$
2,557,093

 
$
29,080

 
4.56
%
Loans held for sale
5,914

 
60

 
4.07
%
Securities:
 
 
 
 
 
Investment securities (taxable) (2)
58,168

 
267

 
1.84
%
Investment securities (tax-exempt) (2)
749,259

 
9,386

 
5.02
%
Mortgage-backed and related securities (2)
1,594,269

 
10,818

 
2.72
%
Total securities
2,401,696

 
20,471

 
3.42
%
FHLB stock, at cost, and equity investments
66,744

 
299

 
1.80
%
Interest earning deposits
156,124

 
364

 
0.94
%
Federal funds sold
5,326

 
14

 
1.05
%
Total earning assets
5,192,897

 
50,288

 
3.88
%
Cash and due from banks
50,961

 
 
 
 
Accrued interest and other assets
358,041

 
 
 
 
Less:  Allowance for loan losses
(18,495
)
 
 
 
 
Total assets
$
5,583,404

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
Savings deposits
$
262,009

 
121

 
0.19
%
Time deposits
1,014,101

 
2,723

 
1.08
%
Interest bearing demand deposits
1,616,036

 
2,294

 
0.57
%
Total interest bearing deposits
2,892,146

 
5,138

 
0.71
%
FHLB borrowings
1,213,016

 
3,551

 
1.17
%
Subordinated notes, net of unamortized debt issuance costs
98,151

 
1,398

 
5.71
%
Trust preferred subordinated debentures, net of unamortized debt issuance costs
60,238

 
494

 
3.29
%
Other borrowings
7,884

 
4

 
0.20
%
Total interest bearing liabilities
4,271,435

 
10,585

 
0.99
%
Noninterest bearing deposits
729,564

 
 
 
 
Accrued expenses and other liabilities
39,819

 
 
 
 
Total liabilities
5,040,818

 
 
 
 
Shareholders’ equity
542,586

 
 
 
 
Total liabilities and shareholders’ equity
$
5,583,404

 
 
 
 
Net interest income (FTE)
 
 
$
39,703

 
 
Net interest margin (FTE)
 
 
 
 
3.07
%
Net interest spread (FTE)
 
 
 
 
2.89
%

(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 June 30, 2017, loans totaling $3.0 million 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 with Average Yields and Rates
 
(unaudited)
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
 
Avg Balance
 
Interest
 
Avg Yield/Rate
 
Avg Balance
 
Interest
 
Avg Yield/Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Loans (1)
$
3,293,090

 
$
79,266

 
4.85
%
 
$
2,553,183

 
$
57,321

 
4.53
%
Loans held for sale
1,669

 
30

 
3.62
%
 
6,466

 
108

 
3.37
%
Securities:
 
 
 
 
 
 
 
 
 
 
 
Investment securities (taxable) (2)
23,022

 
278

 
2.44
%
 
72,262

 
644

 
1.80
%
Investment securities (tax-exempt) (2)
803,844

 
16,004

 
4.01
%
 
764,431

 
19,315

 
5.10
%
Mortgage-backed and related securities (2)
1,498,151

 
21,104

 
2.84
%
 
1,582,455

 
20,863

 
2.66
%
Total securities
2,325,017

 
37,386

 
3.24
%
 
2,419,148

 
40,822

 
3.40
%
FHLB stock, at cost, and equity investments
60,831

 
825

 
2.73
%
 
66,646

 
597

 
1.81
%