Southside Bancshares Inc. (NASDAQ:SBSI) Q1 2019 Earnings Conference Call Transcript

Apr 26, 2019 • 10:00 am ET

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Southside Bancshares Inc. (NASDAQ:SBSI) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Southside Bancshares' Inc First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today's conference is being recorded.

I would now like to introduce your host for this conference call. Lindsey Bib, you may begin.

Executive
Lindsey Bibby

Thank you, Kevin. Good morning, everyone, and welcome to Southside Bancshares first quarter 2019 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 presentation, I will remind you that any forward-looking statements made are subject to risk and uncertainty. 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, Senior Executive Vice President and CFO. Our agenda today is as follows; first, you'll hear Julie discuss an overview of our financial results, including loan loss provision and an update on our non-performing assets. Then, Lee will share his comments on the quarter, including financial performance and an update on our securities portfolio.

I will now turn the call over to Julie.

Executive
Julie N. Shamburger

Thank you, Lindsey. Good morning, everyone and welcome to Southside Bancshares first quarter 2019 earnings call. We are pleased to report net income of $18.8 million for the first quarter, an increase of $1.4 million, or 8.3% on a linked-quarter basis and $2.6 million, or 15.8% compared to the same period in 2018. For the quarter ended March 31, 2019, our diluted earnings per share increased $0.10 or 21.7% to $0.56 per share compared to the same period in 2018 and increased $0.06 per share or 12% on a linked-quarter basis.

During the first quarter, we experienced a decrease in loans of $7.7 million or 0.2% on a linked-quarter basis. During the first quarter, we sold three commercial real estate loans that totaled approximately $16.7 million that were placed in non-accrual status during the first quarter of 2018. In connection with the sale, we charged off $1.2 million and recorded a partial reversal of loan loss provision. Total non-performing assets decreased $4.8 million or 11.2% to $38.1 million or 0.61% of total assets at March 31, 2019 compared to $42.9 million or 0.7% of total assets at December 31, 2018.

Non-accrual loans decreased $18.1 million or 50.5%, primarily a result of the loan sale previously mentioned. Restructured loans increased $5.6 million, due to the restructure of a commercial real estate loan. Additionally, during the first quarter, our accruing loans past due 90 days or more included a $7.9 million loan relationship that was in the process of collection and subsequently paid off in full on April 15, 2019. The allowance for loan loss decreased by $2.9 million on a linked-quarter basis, primarily driven by the charge off related to the non-accrual loans sold in the first