Southside Bancshares Inc. (NASDAQ:SBSI) Q4 2016 Earnings Conference Call - Final Transcript

Jan 27, 2017 • 10:00 am ET


Southside Bancshares Inc. (NASDAQ:SBSI) Q4 2016 Earnings Conference Call - Final Transcript


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Lee Gibson

income resulting in record earnings highlighted our financial performance during 2016. During the year, we added $125 million in loans, and we were successful in significantly improving our asset quality with nonperforming assets to total assets decreasing over 50% to 0.27% at year end.

We continue to experience bottom-line results in our cost containment efforts during 2016, resulting in a 52% efficiency ratio during the fourth quarter. Our goal is for this ratio to average 50% or less during 2017.

In early December, with our stock price up over 65% year-to-date, we issued common stock, netting $76 million of additional capital for future growth and potential acquisitions.

We are excited about our prospects for 2017 and look forward to a year filled with additional opportunities. Our loan pipeline is strong, and we believe loan growth during 2017 will be more consistent. Solid asset quality, loan concentration levels below regulatory guidelines, and additional capital provide a balance sheet well-positioned to lend into the growing dynamic markets we serve.

The DFW and Austin economies remain very healthy and the prospects for 2017 continue to look promising. DFW is projected to lead the U.S. in total job growth during 2017, and Austin's job growth projections remain solid.

It appears we are beginning 2017 with an administration bent on reducing regulation and an interest rate environment that is potentially more net interest margin friendly. This potential new interest rate environment, along with projected loan growth, should improve our net interest margin over time.

On the acquisition front, we are receiving more inbound calls from sellers in our areas of interest. The additional capital we raised coupled with our currency level positions us well for the right opportunity.

At this time, we will conclude our prepared remarks and open the lines for your questions.