Southside Bancshares, Inc. (NASDAQ:SBSI) Q1 2023 Earnings Conference Call April 25, 2023 12:00 PM ET
Company Participants
Lindsey Bailes - Vice President of Investor Relations
Lee Gibson - President and Chief Executive Officer
Julie Shamburger - Chief Financial Officer
Conference Call Participants
Brett Rabatin - Hovde Group LLC
Brady Gailey - Keefe, Bruyette & Woods Inc.
Matt Olney - Stephens Inc.
Operator
Good day, ladies and gentlemen, and thank you for standing by. Welcome to Southside Bancshares, Incorporated First 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]
At this time, I would like to turn the conference over to Ms. Lindsey Bailes, Vice President of Investor Relations. Ms. Bailes, please begin.
Lindsey Bailes
Thank you, Howard. Good morning, everyone, and welcome to Southside Bancshares' first 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
Good morning, everyone, and welcome to Southside Bancshares' first quarter earnings call for 2023. This morning, we reported net income of $26 million, earnings per share of $0.83, a return on average assets of 1.38%, a return on average tangible common equity of 19.36% and continued strong asset quality metrics.
On a linked quarter basis, our loan growth was less than originally anticipated. This was due to anticipated first quarter loan closing delays now expected to close in the second quarter and a few payoffs. During the quarter, we also lost loan opportunities due to our underwriting requiring lower leverage than our competitors. That said, we have no plans to change our time tested credit underwriting standards. Because of our healthy pipeline, loans we anticipate funding during the second quarter projected construction loan advances and the markets we serve, we are still budgeting for overall loan growth for 2023 in the high-single digits.
Increased competition for deposits largely accounted for the 19 basis point decrease in our net interest margin. Pricing competition from both financial institutions and U.S. Treasury Bills required us to adjust our pricing more than originally anticipated. Additionally, as uncertainty in the banking industry unfolded, we implemented measures to further enhance our already very solid liquidity position by maintaining additional cash at Fed at a very small spread and pledging additional securities at Fed increasing availability there.