Southside Bancshares tops earnings estimates despite revenue miss

Southside Bancshares (NYSE:SBSI) reported second-quarter results that exceeded earnings expectations but fell short of revenue forecasts, as stronger profitability offset softer-than-anticipated top-line performance.

Shares edged 0.15% higher in premarket trading following the earnings release, with investors responding positively to the company’s improved profitability and continued asset quality.

Earnings outperform Wall Street forecasts

The regional bank posted adjusted earnings of $0.90 per share for the second quarter, exceeding analysts’ consensus estimate of $0.86 by $0.04.

Quarterly revenue totaled $71.33 million, below the market expectation of $74.7 million for the period ended June 30, 2026.

Net income increased 23.0% year-on-year to $26.8 million, compared with $21.8 million in the same quarter of 2025.

Interest income and expense control support results

Net interest income rose 5.7% from a year earlier to $57.3 million, while noninterest income increased 15.3% to $14.0 million.

At the same time, noninterest expenses declined 1.5% year-on-year to $38.7 million, reflecting continued cost discipline.

“We are pleased to report solid financial results for the second quarter ended June 30, 2026, which include earnings per share of $0.90, a return on average assets of 1.23% and a return on average tangible common equity of 16.09%,” said Keith Donahoe, President and Chief Executive Officer.

“Although linked quarter loan growth was modest at $3.4 million, we had strong production during the quarter and expect to meet our mid-single digit loan growth for the year.”

Loan portfolio expands while deposits decline

Southside’s loan portfolio continued to grow during the quarter, with total loans increasing 7.6% year-on-year to $4.95 billion.

Total deposits stood at $6.17 billion at quarter end, down 7.0% from $6.63 billion a year earlier, primarily reflecting lower brokered deposits.

Meanwhile, the bank’s net interest margin narrowed slightly to 2.80%, compared with 2.82% in the corresponding quarter last year.

Asset quality remains a key strength

The lender continued to report solid credit metrics during the quarter.

Nonperforming assets represented just 0.11% of total assets, a significant improvement from 0.39% a year earlier.

The allowance for loan losses finished the quarter at 0.92% of total loans, highlighting the bank’s continued focus on maintaining a strong credit profile.

Southside Bancshares stock price