Southside Bancshares, Inc. (NASDAQ:SBSI) Q2 2023 Earnings Conference Call July 25, 2023 12:00 PM ET

Company Participants

Lindsey Bailes - Vice President of Investor Relations

Lee Gibson - President & Chief Executive Officer

Julie Shamburger - Chief Financial Officer

Conference Call Participants

Brady Gailey - KBW

Graham Dick - Piper Sandler

Brett Rabatin - Hovde Group

Matt Olney - Stephens

Operator

Good day, and thank you for standing by. And welcome to Southside Bancshares, Inc. Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to introduce your host for today's call, Lindsey Bailes, Vice President of Investor Relations. Please go ahead.

Lindsey Bailes

Thank you, Justin. Good morning, everyone, and welcome to Southside Bancshares' second quarter 2023 earnings call. A transcript of today's call will be posted on southside.com under Investor Relations.

During today's call and other disclosures and presentations, I will remind you that any forward-looking statements are subject to risks and uncertainties. Factors that could materially change our current forward-looking assumptions are described in our earnings release and our Form 10-K.

Joining me today are Lee Gibson, President and CEO; and Julie Shamburger, CFO. First, Lee will share his comments on the quarter and then Julie will give an overview of our financial results.

I will now turn the call over to Lee.

Lee Gibson

Thank you, Lindsey. Good morning, everyone, and welcome to Southside Bancshares' 2023 second quarter earnings call. This morning, we reported net income of $24.9 million, earnings per share of $0.81, a return on average assets of 1.29%; a return on average tangible common equity of 18.59%; and continued strong asset quality metrics.

During the quarter, we experienced strong loan growth, 80% of which occurred during June. In fact, approximately 52% of the second quarter loan growth occurred in the last two weeks of June. Our loan pipeline remains strong, and we are projecting healthy construction loan advances for the remainder of the year. We are continuing to budget for overall loan growth for 2023 in the high single-digits.

Our net interest margin held in well during the quarter, contracting only 4 basis points. Late second quarter loan growth, along with our interest rate swaps, fair value hedges and Fed term funding should help mitigate most, if not all, any further net interest margin compression during the third quarter. Linked quarter deposits, net of brokered and public fund deposits, increased $73 million or 1.6%.