Southside Bancshares, Inc. (NASDAQ:SBSI) Q1 2024 Earnings Conference Call April 25, 2024 12:00 PM ET

Company Participants

Lindsey Bailes - VP of IR
Lee Gibson - President and CEO
Julie Shamburger - CFO

Conference Call Participants

Brett Rabatin - Hovde Group
Matt Olney - Stephens
Woody Lay - KBW

Operator

Good day, and thank you for standing by. Welcome to the Southside Bancshares Fourth Quarter 2024 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lindsey Bailes, Vice President, Investor Relations. Please go ahead.

Lindsey Bailes

Thank you, Marvin. Good morning, everyone, and welcome to Southside Bancshares first quarter 2024 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 risk and uncertainties. Factors that could materially change our current forward-looking assumptions are described in our earnings release in 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 first quarter 2024 earnings call. This morning, we reported first quarter net income of $21.5 million, earnings per share of $0.71, a return on average tangible common equity of 15.07%, and continued strong asset quality metric. Linked quarter, loans increased and annualized 4.7%, just slightly below our projected 5% loan growth for 2024. Our loan pipeline is solid, and the markets we serve remain healthy and continue to grow and perform well. Linked quarter, our net interest margin decreased 13 basis points.

During the Q3 of our lower interest rate cash flow swaps, totaling $120 million, matured, and the rate for that funding increased over 4%. Our BTFP funding renewed at a higher rate for an additional year, and we continue to experience deposit pricing pressures. We do not have any additional swaps maturing during 2024. While we anticipate ongoing deposit pricing pressure in the absence of the Fed cutting interest rates, we believe anticipated loan growth will help partially mitigate any further NIM compression.