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Get filing alertsSouthside Bancshares reports Q2 net income of $26.8M, exits brokered deposits
Filed July 24, 2026 · Period ending July 24, 2026 · ~1 min read
Key Changes
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high
Q2 2026 net income of $26.8M ($0.90/share) up 23% year-over-year, with 1.23% ROA and 16.09% return on tangible equity, driven by higher net interest income and lower credit costs.
Exhibit 99.1 view on EDGAR → -
high
Deposits fell 10.3% sequentially to $6.17B as the bank exited 99.4% of brokered deposits ($777.9M reduction), cutting total deposit costs 19 basis points to 1.94% but compressing net interest margin to 2.80%.
Exhibit 99.1 view on EDGAR → -
high
Net interest income of $57.3M up 5.7% year-over-year but down 0.6% sequentially; net interest margin compressed to 2.80% from 2.91% in Q1 2026 despite lower funding costs.
Exhibit 99.1 view on EDGAR → -
medium
Nonperforming assets remained low at $9.8M (0.11% of assets), down 70.2% year-over-year following Q1 payoff of a $27.5M restructured commercial real estate loan; $24K provision reversal in Q2.
Exhibit 99.1 view on EDGAR → -
low
Quarterly dividend of $0.36 per share declared and paid in Q2 2026, consistent with prior quarters.
Exhibit 99.1 view on EDGAR →
Summary
Southside Bancshares reported solid second quarter 2026 results with net income of $26.8 million, up 23% year-over-year, reflecting improved profitability and stable credit quality. The bank executed a significant balance sheet repositioning during the quarter, exiting nearly all brokered deposits (down $777.9 million, or 99.4%) and reducing total deposits by 10.3% to $6.17 billion. This shift lowered the cost of total deposits by 19 basis points to 1.94%, though the net interest margin still compressed to 2.80% from 2.91% in the prior quarter as lower asset yields offset the funding cost improvement.
Asset quality remained strong with nonperforming assets at just 0.11% of total assets, down sharply from 0.39% a year earlier following the first quarter payoff of a large restructured commercial real estate loan. The $24,000 provision reversal in Q2 signals continued confidence in credit performance. For retail holders, the key question is whether the margin compression stabilizes as the deposit mix shift completes and whether the bank can grow core commercial and retail deposits to replace the exited brokered funding without sacrificing profitability.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
Second quarter net income of $26.8 million;
•Second quarter earnings per diluted common share of $0.90;
•Annualized return on second quarter average assets of 1.23%;
•Annualized return on second quarter average shareholders’ equity of 12.33% and average tangible common equity(1) of 16.09%;
Southside reported second quarter 2026 net income of $26.8 million, or $0.90 per diluted share, representing a 1.23% annualized return on average assets and 16.09% return on average tangible common equity. Compared to Q2 2025, net income increased $5.0 million (23.0%) and earnings per share rose $0.18 (25.0%), driven by higher net interest income and noninterest income, lower noninterest expense, and reduced provision for credit losses.
Added in current filing · view on EDGAR →
Net interest income for the three months ended June 30, 2026 was $57.3 million, an increase of $3.1 million, or 5.7%, compared to the same period in 2025. The increase in net interest income was primarily due to an increase in average balance of our interest earning assets and a decrease in the average rate paid on our interest bearing liabilities, partially offset by an increase in the average balance and mix of our interest bearing liabilities and a decrease in the average yield of our interest earning assets. Linked quarter, net interest income decreased $0.4 million, or 0.6%, compared to $57.7 million for the three months ended March 31, 2026
Net interest income for Q2 2026 was $57.3 million, up 0.6% year-over-year due to higher average earning assets and lower funding costs, but down 0.6% sequentially from Q1 2026's $57.7 million. The net interest margin compressed to 2.80% (2.90% tax-equivalent) from 2.91% (3.01% tax-equivalent) in Q1 2026, reflecting increased funding costs and lower asset yields despite growth in earning assets.
Added in current filing · view on EDGAR →
Deposits at June 30, 2026 were $6.17 billion, a decrease of $462.6 million, or 7.0%, compared to $6.63 billion at June 30, 2025, primarily due to a decrease of $602.1 million in brokered deposits and a decrease of $49.9 million in public funds deposits, offset by an increase of $189.4 million in retail deposits. Linked quarter, deposits decreased $705.1 million, or 10.3%, compared to $6.87 billion at March 31, 2026, primarily due to a decrease in brokered deposits of $777.9 million, or 99.4%, and a decrease in public fund deposits of $20.7 million, or 1.8%, partially offset by an increase in commercial and retail deposits of $93.5 million, or 1.9%.
Total deposits fell to $6.17 billion at June 30, 2026, down 10.3% from the prior quarter, driven by a near-complete exit from brokered deposits (down $777.9 million, or 99.4%) and a modest decline in public funds, partially offset by $93.5 million growth in commercial and retail deposits. The cost of interest bearing deposits decreased 16 basis points sequentially to 2.49%, and the cost of total deposits fell 19 basis points to 1.94%, reflecting the shift away from higher-cost brokered funding.
Added in current filing · view on EDGAR →
Nonperforming assets at June 30, 2026 were $9.8 million, or 0.11% of total assets, an increase of $0.1 million, or 0.7%, from $9.7 million, or 0.11% of total assets, at March 31, 2026. Nonperforming assets decreased $23.1 million, or 70.2%, compared to $32.9 million, or 0.39% of total assets, at June 30, 2025, due primarily to a decrease of $27.5 million in restructured loans. The decrease in restructured loans was due to the payoff of a $27.5 million restructured commercial real estate loan in the first quarter that was originally restructured with an extension of maturity in the first quarter of 2025 to allow for an extended lease up period.
Nonperforming assets remained low at $9.8 million, or 0.11% of total assets, at June 30, 2026, down 70.2% from $32.9 million a year earlier, primarily due to the payoff of a $27.5 million restructured commercial real estate loan in Q1 2026. The allowance for loan losses was $45.6 million (0.92% of total loans), and the company recorded a $24,000 reversal of provision for credit losses in Q2 2026, reflecting stable credit quality.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 27, 2026 · How we verify