• 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%; and
• Nonperforming assets remain low at 0.11% of total assets.

Southside Bancshares, Inc. (“Southside” or the “Company”) (NYSE: SBSI) today reported its financial results for the quarter ended June 30, 2026.

“We are pleased to report solid financial results for the second quarter ended June 30, 2026, which include earnings per share of $0.90, a return on average assets of 1.23% and a return on average tangible common equity of 16.09%,” stated Keith Donahoe, President and Chief Executive Officer of Southside. “We recorded an increase in noninterest income and a decrease in noninterest expense, resulting in an increase in linked quarter net income of $3.6 million, or 15.4%. Linked quarter funding costs increased resulting in a decrease in net interest income of $355,000 to $57.3 million. Asset quality metrics remain solid with the nonperforming assets to total assets ratio at 0.11%. Although linked quarter loan growth was modest at $3.4 million, we had strong production during the quarter and expect to meet our mid-single digit loan growth for the year.”

Operating Results for the Three Months Ended June 30, 2026

Net income was $26.8 million for the three months ended June 30, 2026, compared to $21.8 million for the same period in 2025, an increase of $5.0 million, or 23.0%. Earnings per diluted common share were $0.90 for the three months ended June 30, 2026, compared to $0.72 for the same period in 2025, an increase of $0.18, or 25.0%. The increase in net income was due to increases in net interest income and noninterest income and decreases in noninterest expense and provision for credit losses, partially offset by an increase in income tax expense. Annualized returns on average assets and average shareholders’ equity for the three months ended June 30, 2026 were 1.23% and 12.33%, respectively, compared to 1.07% and 10.73%, respectively, for the three months ended June 30, 2025. Our efficiency ratio and tax-equivalent efficiency ratio⁽¹⁾ were 54.42% and 52.96%, respectively, for the three months ended June 30, 2026, compared to 55.67% and 53.70%, respectively, for the three months ended June 30, 2025, and 56.44% and 54.98%, respectively, for the three months ended March 31, 2026.

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, due to an increase in the average balance and mix of our of interest bearing liabilities and a decrease in the average yield of our interest earning assets, partially offset by an increase in the average balance of our interest earning assets.

Our net interest margin and tax-equivalent net interest margin⁽¹⁾ decreased to 2.80% and 2.90%, respectively, for the three months ended June 30, 2026, compared to 2.91% and 3.01%, respectively, for the three months ended March 31, 2026, and from 2.82% and 2.95%, respectively, for the same period in 2025.

Noninterest income was $14.0 million for the three months ended June 30, 2026, an increase of $1.9 million, or 15.3%, compared to $12.1 million for the same period in 2025, due to increases in bank owned life insurance (“BOLI”) income, trust fees, other noninterest income, deposit services and brokerage services income. On a linked quarter basis, noninterest income increased $1.4 million, or 11.2%, compared to the three months ended March 31, 2026, primarily due to increases in BOLI income, deposit services, other noninterest income and trust fees during the three months ended June 30, 2026.

Noninterest expense decreased $0.6 million, or 1.5%, to $38.7 million for the three months ended June 30, 2026, compared to $39.3 million for the same period in 2025, primarily due to a decrease in other noninterest expense, partially offset by increases in salaries and employee benefits and professional fees. On a linked quarter basis, noninterest expense decreased by $1.9 million, or 4.7%, compared to the three months ended March 31, 2026. The decrease was due to decreases in salaries and employee benefits expense and loss on redemption of subordinated notes.

Income tax expense increased $1.0 million, or 21.7%, for the three months ended June 30, 2026, compared to the same period in 2025. On a linked quarter basis, income tax expense increased $0.7 million, or 13.9%. Our effective tax rate (“ETR”) decreased slightly to 17.6% for the three months ended June 30, 2026, compared to 17.8% for both of the three-month periods ended June 30, 2025 and March 31, 2026. The marginally lower ETR for the three months ended June 30, 2026 compared to the same period in 2025 and the three months ended March 31, 2026, was partially due to a decrease in state income tax expense as a percentage of pre-tax income as well as a discrete tax benefit recorded in connection with equity award transactions.

Operating Results for the Six Months Ended June 30, 2026

Net income was $50.1 million for the six months ended June 30, 2026, compared to $43.3 million for the same period in 2025, an increase of $6.8 million, or 15.6%. Earnings per diluted common share were $1.68 for the six months ended June 30, 2026, compared to $1.42 for the same period in 2025, an increase of $0.26, or 18.3%. The increase in net income was due to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, income tax expense and provision for credit losses. Returns on average assets and average shareholders’ equity for the six months ended June 30, 2026 were 1.16% and 11.65%, respectively, compared to 1.05% and 10.65%, respectively, for the six months ended June 30, 2025. Our efficiency ratio and tax-equivalent efficiency ratio⁽¹⁾ were 55.43% and 53.97%, respectively, for the six months ended June 30, 2026, compared to 56.34% and 54.36%, respectively, for the six months ended June 30, 2025.

Net interest income was $115.0 million for the six months ended June 30, 2026, compared to $108.1 million for the same period in 2025, an increase of $6.9 million, or 6.4%, due to an increase in the average balance of our interest earning assets and a decrease in the average rate paid on our interest bearing liabilities, partially offset by a decrease in the yield on our interest earning assets and an increase in the average balance and mix of our interest bearing liabilities.

Our net interest margin and tax-equivalent net interest margin⁽¹⁾ increased to 2.86% and 2.95%, respectively, for the six months ended June 30, 2026, compared to 2.78% and 2.91%, respectively, for the same period in 2025.

Noninterest income was $26.6 million for the six months ended June 30, 2026, compared to $22.4 million for the same period in 2025, an increase of $4.2 million, or 18.9%. There were increases to all noninterest income categories, however, the primary increases occurred in other noninterest income, trust fees, BOLI income and a decrease in net loss on sale of securities available for sale (“AFS”) securities.

Noninterest expense was $79.3 million for the six months ended June 30, 2026, compared to $76.3 million for the same period in 2025, an increase of $2.9 million, or 3.8%. The increase was primarily due to increases in salaries and employee benefits expense and loss on redemption of subordinated notes, partially offset by a decrease in other noninterest expense.

Income tax expense increased $1.3 million, or 14.2%, for the six months ended June 30, 2026, compared to the same period in 2025. Our ETR was approximately 17.7% and 17.9% for the six months ended June 30, 2026 and 2025, respectively. The marginally lower ETR for the six months ended June 30, 2026, as compared to the same period in 2025, was partially due to a decrease in state income tax expense as a percentage of pre-tax income as well as a discrete tax benefit recorded in connection with equity award transactions.

Balance Sheet Data

At June 30, 2026, Southside had $8.76 billion in total assets, compared to $8.51 billion at December 31, 2025 and $8.34 billion at June 30, 2025.

Loans at June 30, 2026 were $4.95 billion, an increase of $347.6 million, or 7.6%, compared to $4.60 billion at June 30, 2025. Linked quarter, loans increased $3.4 million, or 0.1%, due to increases of $21.5 million in commercial owner-occupied loans, $20.5 million in municipal loans and $10.6 million in commercial loans. These increases were partially offset by decreases of $41.7 million in construction loans, $4.0 million in commercial real estate loans, $2.3 million in loans to individuals and $1.2 million in 1-4 family residential loans.

Securities at June 30, 2026 were $2.78 billion, an increase of $51.7 million, or 1.9%, compared to $2.73 billion at June 30, 2025. Linked quarter, securities decreased $86.3 million, or 3.0%, from $2.87 billion at March 31, 2026.

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%.

At June 30, 2026, we had 178,853 total deposit accounts with an average balance of $34,000. Our estimated uninsured deposits were 42.8% of total deposits as of June 30, 2026. When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 24.9% as of June 30, 2026. Our noninterest bearing deposits represent approximately 22.8% of total deposits. Linked quarter, our cost of interest bearing deposits decreased 16 basis points from 2.65% in the prior quarter to 2.49%. Linked quarter, our cost of total deposits decreased 19 basis points from 2.13% in the prior quarter to 1.94%.

Our cost of interest bearing deposits decreased 26 basis points, from 2.83% for the six months ended June 30, 2025, to 2.57% for the six months ended June 30, 2026. Our cost of total deposits decreased 22 basis points, from 2.26% for the six months ended June 30, 2025, to 2.04% for the six months ended June 30, 2026.

Capital Resources and Liquidity

Our capital ratios and contingent liquidity sources remain solid. During the second quarter ended June 30, 2026, we did not repurchase any common stock, pursuant to our Stock Repurchase Plan (the “Plan”). Under the Plan, repurchases of our outstanding common stock may be carried out in open market purchases, privately negotiated transactions or pursuant to any trading plan that might be adopted in accordance with Rule 10b5-1 of The Securities Exchange Act of 1934, as amended. The Company has no obligation to repurchase any shares under the Plan and may modify, suspend or discontinue the Plan at any time. As of June 30, 2026, approximately 0.8 million authorized shares remained available for repurchase pursuant to the Plan. We have not repurchased any common stock pursuant to the Plan subsequent to June 30, 2026.

As of June 30, 2026, our total available contingent liquidity, net of current outstanding borrowings, was $1.99 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit.

Asset Quality

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. Classified loans totaled $260.1 million on June 30, 2026, compared to $290.8 million at March 31, 2026 and $176.9 million at December 31, 2025.

The allowance for loan losses totaled $45.6 million, or 0.92% of total loans, at June 30, 2026, compared to $46.0 million, or 0.93% of total loans, at March 31, 2026. The allowance for loan losses was $44.4 million, or 0.97% of total loans, at June 30, 2025. The decrease in allowance as a percentage of total loans compared to June 30, 2025 was primarily due to a decrease in multifamily construction loans as well as a reduction in reserves on individually evaluated loans.

For the three months ended June 30, 2026, we recorded a reversal of provision for credit losses for loans of $24,000, compared to a provision for credit losses of $0.7 million and $1.0 million for the three months ended June 30, 2025 and March 31, 2026, respectively. Net charge-offs were $0.3 million for the three months ended June 30, 2026, compared to net charge-offs of $0.9 million and $0.2 million for the three months ended June 30, 2025 and March 31, 2026, respectively. We recorded a provision for credit losses for loans of $1.0 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively. Net charge-offs were $0.5 million for the six months ended June 30, 2026, compared to net charge-offs of $1.2 million for the six months ended June 30, 2025.

We recorded a provision for credit losses on off-balance-sheet credit exposures of $0.1 million for the three months ended June 30, 2026, compared to a reversal of $19,000 and provision of $0.4 million for the three months ended June 30, 2025 and March 31, 2026, respectively. The balance of the allowance for off-balance-sheet credit exposures was $3.7 million and $3.8 million at June 30, 2026 and 2025, respectively, and is included in other liabilities. We recorded a provision for credit losses for off-balance-sheet credit exposures of $0.5 million and $0.6 million for the six months ended June 30, 2026 and 2025, respectively.

Dividend

Southside Bancshares, Inc. declared a second quarter cash dividend of $0.36 per share on May 6, 2026, which was paid on June 1, 2026, to all shareholders of record as of May 18, 2026.

Conference Call

Southside's management team will host a conference call to discuss its second quarter ended June 30, 2026 financial results on Friday, July 24, 2026 at 11:00 a.m. CDT. The conference call can be accessed by webcast, for listen-only mode, on the company website, https://investors.southside.com, under Events.

Those interested in participating in the question and answer session, or others who prefer to call-in, can register at https://events.q4inc.com/analyst/842475033?pwd=7c9ZzbJF to receive the dial-in number and unique code to access the conference call seamlessly. While not required, it is recommended that those wishing to participate, register 10 minutes prior to the conference call to ensure a more efficient registration process.

For those unable to attend the live event, a webcast recording will be available on the company website, https://investors.southside.com, for at least 30 days, beginning approximately two hours following the conference call.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include return on average tangible common equity and the following fully taxable-equivalent measures (“FTE”): (i) Net interest income (FTE), (ii) net interest margin (FTE), (iii) net interest spread (FTE), and (iv) efficiency ratio (FTE), which include the effects of taxable-equivalent adjustments using a federal income tax rate of 21% to increase tax-exempt interest income to a tax-equivalent basis. Interest income earned on certain assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments.

Return on average tangible common equity. Return on average tangible common equity is a non-GAAP measure that calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently.

Net interest income (FTE), net interest margin (FTE) and net interest spread (FTE). Net interest income (FTE) is a non-GAAP measure that adjusts for the tax-favored status of net interest income from certain loans and investments and is not permitted under GAAP in the consolidated statements of income. We believe that this measure is the preferred industry measurement of net interest income and that it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread (FTE) is the difference in the average yield on average earning assets on a tax-equivalent basis and the average rate paid on average interest bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

Efficiency ratio (FTE). The efficiency ratio (FTE) is a non-GAAP measure that provides a measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. The ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this ratio by dividing noninterest expense, excluding amortization expense on intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding net gain (loss) on sale of securities available for sale and certain nonrecurring impairments. The most directly comparable financial measure calculated in accordance with GAAP is our efficiency ratio.

These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently. Whenever we present a non-GAAP financial measure in an SEC filing, we are also required to present the most directly comparable financial measure calculated and presented in accordance with GAAP and reconcile the differences between the non-GAAP financial measure and such comparable GAAP measure.

Management believes that (i) adjusting return on average shareholders’ equity for the impact of intangible assets and their related amortization and (ii) adjusting net interest income, net interest margin and net interest spread to a fully taxable-equivalent basis are standard practices in the banking industry as these measures provide useful information to make peer comparisons. Tax-equivalent adjustments are reflected in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables.

A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

About Southside Bancshares, Inc.

Southside Bancshares, Inc. is a bank holding company with approximately $8.76 billion in assets as of June 30, 2026, that owns 100% of Southside Bank. Southside Bank currently has 55 branches in Texas and operates a network of 71 ATMs/ITMs.

To learn more about Southside Bancshares, Inc., please visit our investor relations website at https://investors.southside.com. Our investor relations site provides a detailed overview of our activities, financial information and historical stock price data. To receive email notification of company news, events and stock activity, please register on the website under Resources and Investor Email Alerts. Questions or comments may be directed to Lindsey Bailes at (903) 630-7965, or lindsey.bailes@southside.com.

Forward-Looking Statements

Certain statements of other than historical fact that are contained in this press release and in other written materials, documents and oral statements issued by or on behalf of the Company may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “target,” “objective,” “plans,” “potential,” and similar expressions. Forward-looking statements are statements with respect to the Company’s beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause the Company's actual results to differ materially from the results discussed in the forward-looking statements. For example, trends in asset quality, capital, liquidity, the Company's ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates and our expectations regarding rate changes, tax reform, inflation, tariffs, the impacts related to or resulting from other economic factors are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future. Accordingly, our results could materially differ from those that have been estimated. The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include: general economic conditions in our markets, including the ongoing impact of higher inflation levels, including higher energy and gas prices, interest rate fluctuations, including the impact of changes in interest rates on our financial projections, models and guidance, as well as the effects of declines in the real estate market, tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), high unemployment and increasing insurance costs, as well as the financial stress to borrowers as a result of the foregoing, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, and our ability to manage liquidity in a rapidly changing and unpredictable market; the extensive regulations the Company is subject to and legislative and regulatory changes; the Company’s ability to successfully execute its business strategy; including risks related to potential acquisitions; the Company’s ability to innovate, to anticipate the needs of our current and future customers and to manage increased or expanded competition from banks and other financial service providers in its markets; the Company’s ability to effectively manage information technology systems, including third party vendors, cyber or data privacy incidents or other failures, outages, disruptions or security breaches; the Company’s ability to use technology to provide products and services to its customers, including the use of artificial intelligence, adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments, including in the context of regulatory examinations and related findings and actions; negative press and social media attention with respect to the banking industry or the Company, in particular; claims, litigation or regulatory investigations and actions that the Company may become subject to; the failure to identify, attract and retain key personnel and other employees and to engage in adequate succession planning; the Company’s recent executive transition; and the additional risks included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, under “Part I - Item 1. Forward Looking Information” and “Part I - Item 1A. Risk Factors” and in the Company’s other filings with the Securities and Exchange Commission. The Company disclaims any obligation to update any factors or to announce publicly the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.