Southside Bancshares, Inc. (NASDAQ:SBSI)
Q3 2022 Earnings Conference Call
October 25, 2022 12:00 PM ET
Company Participants
Suni Davis - Chief Risk Officer
Lee Gibson - President & Chief Executive Officer
Julie Shamburger - Chief Financial Officer
Conference Call Participants
Brad Milsaps - Piper Sandler
Brady Gailey - KBW
Presentation
Operator
Good day, and thank you for standing by. Welcome to Southside Bancshares, Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and session. [Operator Instructions]
I would now like to hand the conference over to your speaker for today, Suni Davis, Chief Risk Officer. You may begin.
Suni Davis
Thank you, [Tuwanda] (ph). Good morning, everyone and welcome to Southside Bancshares Third Quarter 2022 Earnings call. A transcript of today's call will be posted on southside.com under Investor Relations.
During today's call and in 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' third quarter earnings call for 2022. This morning we reported excellent financial results for this quarter. Highlights for the quarter include, earnings per share of $0.84, a return on average tangible common equity of 19.94%, annualized linked quarter loan growth of 10.1% net of PPP, a linked quarter increase of 6 basis points in our net interest margin and efficiency ratio of 47.42% and continued solid asset quality metrics.
The linked quarter increase in our net interest margin reflected a 48 basis point increase in the average yield on loans, a 10 basis point increase in the average yield on securities, partially offset by 40 basis point increase in the average rate on our interest-bearing liabilities. I want to thank the entire Southside team for their continued contributions and efforts, which made these results possible. We're extremely pleased with our continued strong loan growth during the third quarter 2022.
During our second quarter earnings call in July, we discussed the possibility that $60 million of our second quarter loan growth could be short term and pay-off prior to year-end. That potential pay-off occurred during the third quarter that was actually only $35 million with a longer term refinance on the remaining $25 million. Our loan pipeline remains solid, and we are encouraged about the loan growth prospects for the fourth quarter and beginning 2023. In addition, we are seeing advances in our construction portfolio increasing, as loans that closed several quarters ago are now beginning to fund. Given the outlook for the markets we serve, we continue to estimate loan growth for 2022 net of PPP loans in the mid-teens.