Southside Bancshares, Inc. Announces Third Quarter Earnings; NASDAQ National Market Symbol - 'SBSI'

TYLER, Texas, Nov. 2  /PRNewswire-FirstCall/ -- B. G. Hartley, Chairman and Chief Executive Officer of Southside Bancshares, Inc. (NASDAQ:SBIB), reported financial results for the third quarter ended September 30, 2005.

For the third quarter ended September 30, 2005 Southside reported net income of $3,833,000, compared to $4,233,000 for the same period in 2004.  The decrease in net income of $400,000, or 9.4%, is primarily a result of an increase in provision for loan losses of $485,000, or $320,000 net of tax and a reduction in income from the sale of available for sale securities of $351,000 or, $232,000 net of tax.  The increase in provision for loan losses is primarily due to one recovery received during the third quarter ended September 30, 2004 of $299,000, or $197,000, net of tax, which offset the provision for losses that would have been required during that quarter. Earnings per fully diluted share were $0.32 for the third quarter ended September 30, 2005 compared to $0.35 for the same period in 2004.

Southside reported net income of $11,105,000 for the nine months ended September 30, 2005 compared to $12,399,000 for the same period in 2004.  The decrease in net income of $1,294,000, or 10.4%, is a direct result of a reduction in income from the sale of available for sale securities, net of tax, of $1.6 million when comparing the nine months ended September 30, 2005, to the same period in 2004.  When comparing the nine months ended September 30, 2005 with the same period in 2004, net income, excluding losses or gains on sales of available for sale securities, reflected an increase of $343,000, or 3.2%.  Earnings per fully diluted share were $0.92 for the nine months ended September 30, 2005, compared to $1.02 for the same period in 2004, a decrease of $0.10, or 9.8%.  Earnings per fully diluted share attributable to the sale of securities were $0.13 for the nine months ended September 30, 2004 compared to zero for the same period in 2005.

The annualized return on average shareholders' equity for the nine months ended September 30, 2005 was 14.17% compared to 15.94% for the same period in 2004.  The annualized return on average assets was 0.88% for the nine months ended September 30, 2005, compared to 1.11% for the same period in 2004.

The Company continued to experience solid loan growth during the third quarter ended September 30, 2005, as loans, net of unearned discount, increased $19.9 million or 3.0%.  During the nine months ended September 30, 2005, loans, net of unearned discount, increased $55.2 million or 8.8% from December 31, 2004.  Loan growth during 2005 was actually stronger than reported due to the sale of $6.2 million of student loans during the second quarter ended June 30, 2005.  Asset quality improved as non-performing assets decreased $1.2 million, or 34.5%, to $2.3 million at September 30, 2005 when compared to $3.5 million at December 31, 2004.  We believe that the Company's asset quality ratios as reported in this earnings release remain sound.

We are pleased to report deposits continued to increase during the third quarter ended September 30, 2005 by $15.0 million.  Overall during 2005, deposits increased $80.3 million, or 8.5%, to $1.0 billion at September 30, 2005 when compared to December 31, 2004.  We are gratified deposits continue to grow at an excellent pace as a result of our expanding branch network and continued market penetration.

In the fourth quarter Southside anticipates opening its 31st banking center in Palestine, Texas, approximately 50 miles southwest of Tyler.  The addition of the banking center in Palestine should complement and enhance Southside's southern expansion efforts which already includes banking centers in Jacksonville and Bullard.  Southside has also purchased property in Gun Barrel City where it plans to open a branch facility in the future.  While continued branch expansion has and will continue to impact short-term earnings, the Company believes the potential long-term benefits to the Company greatly outweigh the short-term expense.

The decrease in net income for the three months ended September 30, 2005, when compared to the same period in 2004, was primarily attributable to an increase in noninterest expense of $528,000, or 5.3%, an increase in provision for loan losses of $485,000, or 100% and a decrease in income from the sale of available for sale securities of $351,000, or 93.6%.  Noninterest expense increased primarily as a result of a $443,000, or 7.0% increase in salaries and employee benefits due to higher staffing levels, salary increases and increases in retirement expense.

The following items partially offset the decrease in net income for the quarter ended September 30, 2005, when compared to the same period in 2004. Net interest income of $10.4 million for the third quarter 2005, increased $240,000, or 2.4%, over the third quarter 2004.  Average total interest earning assets, the primary factor in net interest income growth, increased $181.4 million, or 12.7% from the third quarter 2004, to $1.6 billion for the third quarter 2005.  This more than offset the decrease in the Company's net interest margin to 2.80% and net interest spread to 2.25% during the third quarter ended September 30, 2005, when compared to 3.10% and 2.66%, respectively, for the same period in 2004.  Noninterest income, excluding gains on sales of securities, was $5.4 million for the third quarter 2005, an increase of $563,000, or 11.8%, over the third quarter 2004.  The increase was primarily a result of an increase in deposit services fee income.  Provision for federal tax expense of $921,000 for the third quarter 2005, decreased $161,000, or 14.9%, from third quarter 2004 as a result of a decrease in taxable income.  The effective tax rate as a percentage of pre-tax income was 19.4% for the quarter ended September 30, 2005 compared to 20.4% for the quarter ended September 30, 2004.  The decrease in the effective tax rate was due to the decrease in taxable income as a percentage of total income.

The decrease to net income during the nine months ended September 30, 2005, when compared to the same period in 2004 was primarily attributable to a decrease in gains on available for sale securities of $2.5 million, or 101.3% and an increase in noninterest expense of $2.2 million, or 7.4%.  The decrease in net income for the nine months ended September 30, 2005, when compared to the same period in 2004, was partially offset by an increase in net interest income of $1.9 million, or 6.4%, an increase in noninterest income, excluding security gains, of $1.3 million, or 9.3%, and a decrease in federal income tax expense of $620,000, or 19.8%.

Southside Bancshares, Inc. is a $1.7 billion holding company that owns 100% of Southside Bank.  The bank currently has thirty banking centers in East Texas.

To learn more about Southside Bancshares, Inc., please visit our investor relations website at http://www.southside.com/investor .  Our investor relations site provides a detailed overview of our activities, financial information, and historical stock price data.  To receive e-mail notification of company news, events, and stock activity, please register on the E-mail Notification portion of the website.  Questions or comments may be directed to Susan Hill at [phone], or 

Certain statements of other than historical fact that are contained in this document and in written material, press releases and oral statements issued by or on behalf of Southside Bancshares, Inc., (the "Company") a bank holding company, may be considered to be "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may include words such as "expect," "estimate," "project," "anticipate," "believe," "could," "should," "may," "intend," "probability," "risk," "target," "objective," "plans," "potential," and similar expressions. Forward-looking statements are subject to significant risks and uncertainties and the Company's actual results may differ materially from the results discussed in the forward-looking statements.  For example, certain market risk disclosures 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.  As a result, actual income gains and losses could materially differ from those that have been estimated. Other factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to general economic conditions, either globally, nationally, in the State of Texas, or in the specific markets in which the Company operates, legislation or regulatory changes which adversely affect the businesses in which the Company is engaged, adverse changes in Government Sponsored Enterprises (the "GSE") status or financial condition impacting the GSE guarantees or ability to pay or issue debt, economic or other disruptions caused by acts of terrorism in the United States, Europe or other areas or military actions in Iraq, Afghanistan or other areas, changes in the interest rate yield curve such as flat, inverted or steep yield curves, or interest rate environment which impact interest margins and may impact prepayments on the mortgage-backed securities portfolio, changes impacting the leverage strategy, significant increases in competition in the banking and financial services industry, changes in consumer spending, borrowing and saving habits, technological changes, the Company's ability to increase market share and control expenses, the effect of changes in federal or state tax laws, the effect of compliance with legislation or regulatory changes, the effect of changes in accounting policies and practices and the costs and effects of unanticipated litigation.

                                             At          At          At
                                         Sept. 30,    Dec. 31,    Sept. 30,
                                            2005        2004         2004
                                               (dollars in thousands)
                                                    (unaudited)
  Selected Financial Condition Data
    (at end of period)

  Total assets                           $1,733,735  $1,619,643  $1,541,671
  Loans, net of unearned discount           679,169     624,019     615,255
  Allowance for loan losses                   7,038       6,942       6,816
  Mortgage-backed and related
   securities:
    Available for sale                      564,547     479,475     415,933
    Held to maturity                        229,113     241,058     247,256
  Investment securities available for sale  109,659     133,535     128,655
  Marketable equity securities available
   for sale                                  29,321      26,819      24,818
  Deposits                                1,021,320     940,986     905,935
  Long-term obligations                     276,584     351,287     317,688
  Shareholders' equity                      105,447     104,697     106,600
  Nonperforming assets                        2,309       3,523       2,060
    Nonaccrual loans                          1,211       2,248       1,185
    Loans 90 days past due                      555         827         252
    Restructured loans                          242         193         179
    Other real estate owned                     121         214         436
    Repossessed assets                          180          41           8

  Assets Quality Ratios:
  Nonaccruing loans to total loans             0.18%       0.36%       0.19%
  Allowance for loan losses to
   nonaccruing loans                         581.17      308.81      575.19
  Allowance for loan losses to
   nonperforming assets                      304.81      197.05      330.87
  Allowance for loan losses to total loans     1.04        1.11        1.11
  Nonperforming assets to total assets         0.13        0.22        0.13
  Net charge-offs to average loans             0.17        0.07        0.03

  Capital Ratios:
  Shareholders' equity to total assets         6.08        6.46        6.91
  Average shareholders' equity to
   average total assets                        6.24        6.98        6.98



  LOAN PORTFOLIO COMPOSITION

  The following table sets forth loan totals net of unearned discount by
  category for the periods presented:

                                            At          At          At
                                          Sept. 30,   Dec. 31,    Sept. 30,
                                            2005        2004        2004
                                              (dollars in thousands)
                                                   (unaudited)
  Real Estate Loans:
    Construction                           $39,667     $32,877     $42,922
    1-4 Family Residential                 195,342     168,784     163,319
    Other                                  162,886     153,998     142,400
  Commercial Loans                          86,280      80,808      76,461
  Municipal Loans                          112,797     103,963     103,210
  Loans to Individuals                      82,197      83,589      86,943
  Total Loans                             $679,169    $624,019    $615,255



                                          At or for the     At or for the
                                          Three Months        Nine Months
                                             Ended              Ended
                                          September 30,     September 30,
                                          2005     2004     2005     2004
                                           (dollars in       (dollars in
                                            thousands)        thousands)
                                           (unaudited)       (unaudited)
  Selected Operating Data:
  Total interest income                  $20,438  $17,163  $58,602  $49,215
  Total interest expense                  10,050    7,015   27,624   20,106
  Net interest income                     10,388   10,148   30,978   29,109
  Provision for loan losses                  485      ---      947      525
  Net interest income after provision
   for loan losses                         9,903   10,148   30,031   28,584
  Non-interest income
    Deposit services                       3,775    3,476   10,849   10,424
    Gain (loss) on sale of securities
     available for sale                       24      375      (32)   2,449
    Gain on sale of loans                    414      371    1,433    1,258
    Trust income                             394      320    1,033      894
    Bank owned life insurance                231      184      673      628
    Other                                    536      436    1,788    1,227
      Total non-interest income            5,374    5,162   15,744   16,880
  Non-interest expense
    Salaries and employee benefits         6,776    6,333   20,782   19,133
    Net occupancy expense                  1,056    1,072    3,179    3,099
    Equipment expense                        204      189      624      549
    Advertising, travel & entertainment      440      385    1,457    1,308
    ATM expense                              165      112      467      479
    Director fees                            144      145      459      438
    Supplies                                 134      145      455      428
    Professional fees                        193      344      583      783
    Postage                                  149      140      423      416
    Other                                  1,262    1,130    3,727    3,298
      Total non-interest expense          10,523    9,995   32,156   29,931
  Income before federal tax expense        4,754    5,315   13,619   15,533
  Income tax expense                         921    1,082    2,514    3,134
  Net income                              $3,833   $4,233  $11,105  $12,399

  Common Share Data:
  Weighted-average basic shares
   outstanding                            11,459   11,504   11,446   11,483
  Weighted-average diluted shares
   outstanding                            12,011   12,170   12,035   12,155
  Net income per common share
    Basic                                  $0.34    $0.37    $0.97    $1.08
    Diluted                                 0.32     0.35     0.92     1.02
  Book value per common share                ---      ---     9.15     9.25
  Cash dividend declared per common share   0.11     0.10     0.33     0.30

  Selected Performance Ratios:
  Return on average assets                  0.88%    1.10%    0.88%    1.11%
  Return on average shareholders' equity   14.29    16.16    14.17    15.94
  Average yield on interest earning assets  5.28     5.06     5.25     5.02
  Average yield on interest bearing
   liabilities                              3.03     2.40     2.87     2.37
  Net interest spread                       2.25     2.66     2.38     2.65
  Net interest margin                       2.80     3.10     2.89     3.08
  Average interest earning assets to
   average interest bearing liabilities   122.41   122.57   121.95   122.29
  Non-interest expense to average total
   assets                                   2.42     2.60     2.56     2.69
  Efficiency ratio                         62.96    62.45    64.72    64.35



                                             AVERAGE BALANCES AND YIELDS
                                               (dollars in thousands)
                                                    (unaudited)
                                                 Nine Months Ended
                                                September 30, 2005

                                               AVG.                    AVG.
                                             BALANCE      INTEREST    YIELD
  ASSETS

  INTEREST EARNING ASSETS:
  Loans (A) (B)                              $650,862     $30,043     6.17%
  Loans Held for Sale                           4,467         160     4.79%
  Securities:
  Investment Securities (Taxable) (D)          51,893       1,451     3.74%
  Investment Securities (Tax-Exempt) (C)(D)    69,499       3,691     7.10%
  Mortgage-backed Securities (D)              761,223      25,379     4.46%
  Marketable Equity Securities                 27,686         736     3.55%
  Interest Earning Deposits                       666          15     3.01%
  Federal Funds Sold                            1,168          25     2.86%
  Total Interest Earning Assets             1,567,464      61,500     5.25%

  NONINTEREST EARNING ASSETS:
  Cash and Due From Banks                      41,579
  Bank Premises and Equipment                  30,817
  Other Assets                                 46,520
    Less:  Allowance for Loan Loss             (6,918)
  Total Assets                             $1,679,462

  LIABILITIES AND SHAREHOLDERS' EQUITY

  INTEREST BEARING LIABILITIES:
  Savings Deposits                            $50,868        $381     1.00%
  Time Deposits                               347,037       7,871     3.03%
  Interest Bearing Demand Deposits            309,039       3,749     1.62%
  Short-term Interest Bearing
   Liabilities                                266,924       6,810     3.41%
  Long-term Interest Bearing
   Liabilities - FHLB Dallas                  290,875       7,875     3.62%
  Long-term Debt (E)                           20,619         938     6.00%
  Total Interest Bearing Liabilities        1,285,362      27,624     2.87%

  NONINTEREST BEARING LIABILITIES:
  Demand Deposits                             274,850
  Other Liabilities                            14,445
  Total Liabilities                         1,574,657

  SHAREHOLDERS' EQUITY                        104,805
  Total Liabilities and
  Shareholders' Equity                     $1,679,462

  NET INTEREST INCOME                                     $33,876
  NET YIELD ON AVERAGE EARNING ASSETS                                 2.89%

  NET INTEREST SPREAD                                                 2.38%

   (A) Loans are shown net of unearned discount.  Interest on loans includes
       fees on loans which are not material in amount.
   (B) Interest income includes taxable-equivalent adjustments of $1,713 and
       $1,625 for the nine months ended September 30, 2005 and 2004,
       respectively.
   (C) Interest income includes taxable-equivalent adjustments of $1,185 and
       $1,255 for the nine months ended September 30, 2005 and 2004,
       respectively.
   (D) For the purpose of calculating the average yield, the average balance
       of securities is presented at historical cost.
   (E) Southside Statutory Trust III

   Note: As of September 30, 2005 and 2004, loans totaling $1,211 and
         $1,185, respectively, were on nonaccrual status.  The policy is to
         reverse previously accrued but unpaid interest on nonaccrual loans;
         thereafter, interest income is recorded to the extent received when
         appropriate.



                                             AVERAGE BALANCES AND YIELDS
                                                (dollars in thousands)
                                                     (unaudited)
                                                   Nine Months Ended
                                                   September 30, 2004

                                               AVG.                   AVG.
                                             BALANCE     INTEREST    YIELD
  ASSETS

  INTEREST EARNING ASSETS:
  Loans (A) (B)                              $600,222     $27,428     6.10%
  Loans Held for Sale                           3,190         134     5.61%
  Securities:
  Investment Securities (Taxable) (D)          44,863         741     2.21%
  Investment Securities (Tax-Exempt)(C)(D)     75,383       4,006     7.10%
  Mortgage-backed Securities (D)              628,673      19,401     4.12%
  Marketable Equity Securities                 24,010         320     1.78%
  Interest Earning Deposits                       652           5     1.02%
  Federal Funds Sold                            8,638          60     0.93%
  Total Interest Earning Assets             1,385,631      52,095     5.02%

  NONINTEREST EARNING ASSETS:
  Cash and Due From Banks                      37,900
  Bank Premises and Equipment                  30,639
  Other Assets                                 39,701
    Less:  Allowance for Loan Loss             (6,524)
  Total Assets                             $1,487,347

  LIABILITIES AND SHAREHOLDERS' EQUITY

  INTEREST BEARING LIABILITIES:
  Savings Deposits                            $48,091        $152     0.42%
  Time Deposits                               319,160       5,761     2.41%
  Interest Bearing Demand Deposits            279,930       1,311     0.63%
  Short-term Interest Bearing
   Liabilities                                175,668       4,758     3.62%
  Long-term Interest Bearing
   Liabilities - FHLB Dallas                  289,587       7,460     3.44%
  Long-term Debt (E)                           20,619         664     4.23%
  Total Interest Bearing Liabilities        1,133,055      20,106     2.37%

  NONINTEREST BEARING LIABILITIES:
  Demand Deposits                             240,652
  Other Liabilities                             9,757
  Total Liabilities                         1,383,464

  SHAREHOLDERS' EQUITY                        103,883
  Total Liabilities and
  Shareholders' Equity                     $1,487,347

  NET INTEREST INCOME                                     $31,989
  NET YIELD ON AVERAGE EARNING ASSETS                                 3.08%

  NET INTEREST SPREAD                                                 2.65%

   (A) Loans are shown net of unearned discount.  Interest on loans includes
       fees on loans which are not material in amount.
   (B) Interest income includes taxable-equivalent adjustments of $1,713 and
       $1,625 for the nine months ended September 30, 2005 and 2004,
       respectively.
   (C) Interest income includes taxable-equivalent adjustments of $1,185 and
       $1,255 for the nine months ended September 30, 2005 and 2004,
       respectively.
   (D) For the purpose of calculating the average yield, the average balance
       of securities is presented at historical cost.
   (E) Southside Statutory Trust III

   Note: As of September 30, 2005 and 2004, loans totaling $1,211 and
         $1,185, respectively, were on nonaccrual status.  The policy is to
         reverse previously accrued but unpaid interest on nonaccrual loans;
         thereafter, interest income is recorded to the extent received when
         appropriate.



                                            AVERAGE BALANCES AND YIELDS
                                               (dollars in thousands)
                                                    (unaudited)
                                                   Quarter Ended
                                                 September 30, 2005

                                               AVG.                    AVG.
                                             BALANCE      INTEREST    YIELD
  ASSETS

  INTEREST EARNING ASSETS:
  Loans (A) (B)                              $671,882     $10,602     6.26%
  Loans Held for Sale                           3,791          52     5.44%
  Securities:
  Investment Securities (Taxable) (D)          46,429         473     4.04%
  Investment Securities (Tax-Exempt) (C) (D)   63,334       1,138     7.13%
  Mortgage-backed Securities (D)              793,412       8,833     4.42%
  Marketable Equity Securities                 28,366         283     3.96%
  Interest Earning Deposits                       550           5     3.61%
  Federal Funds Sold                            1,185          10     3.35%
  Total Interest Earning Assets             1,608,949      21,396     5.28%

  NONINTEREST EARNING ASSETS:
  Cash and Due From Banks                      41,058
  Bank Premises and Equipment                  31,747
  Other Assets                                 47,395
    Less:  Allowance for Loan Loss             (6,914)
  Total Assets                             $1,722,235

  LIABILITIES AND SHAREHOLDERS' EQUITY

  INTEREST BEARING LIABILITIES:
  Savings Deposits                            $50,857        $142     1.11%
  Time Deposits                               361,048       2,981     3.28%
  Interest Bearing Demand Deposits            312,195       1,451     1.84%
  Short-term Interest Bearing
   Liabilities                                310,463       2,721     3.48%
  Long-term Interest Bearing
   Liabilities - FHLB Dallas                  259,245       2,416     3.70%
  Long-term Debt (E)                           20,619         339     6.43%
  Total Interest Bearing Liabilities        1,314,427      10,050     3.03%

  NONINTEREST BEARING LIABILITIES:
  Demand Deposits                             286,088
  Other Liabilities                            15,292
  Total Liabilities                         1,615,807

  SHAREHOLDERS' EQUITY                        106,428
  Total Liabilities and
  Shareholders' Equity                     $1,722,235

  NET INTEREST INCOME                                     $11,346
  NET YIELD ON AVERAGE EARNING ASSETS                                 2.80%

  NET INTEREST SPREAD                                                 2.25%

   (A) Loans are shown net of unearned discount.  Interest on loans
       includes fees on loans which are not material in amount.
   (B) Interest income includes taxable-equivalent adjustments of $582 and
       $557 for the third quarter ended September 30, 2005 and 2004,
       respectively.
   (C) Interest income includes taxable-equivalent adjustments of $376 and
       $429 for the third quarter ended September 30, 2005 and 2004,
       respectively.
   (D) For the purpose of calculating the average yield, the average
       balance of securities is presented at historical cost.
   (E) Southside Statutory Trust III

   Note: As of September 30, 2005 and 2004, loans totaling $1,211 and
         $1,185, respectively, were on nonaccrual status.  The policy is to
         reverse previously accrued but unpaid interest on nonaccrual loans;
         thereafter, interest income is recorded to the extent received when
         appropriate.


                                           AVERAGE BALANCES AND YIELDS
                                              (dollars in thousands)
                                                    (unaudited)
                                                   Quarter Ended
                                                September 30, 2004

                                             AVG.                      AVG.
                                            BALANCE      INTEREST     YIELD
  ASSETS

  INTEREST EARNING ASSETS:
  Loans (A) (B)                              $611,003      $9,247     6.02%
  Loans Held for Sale                           4,067          45     4.40%
  Securities:
  Investment Securities (Taxable) (D)          41,896         244     2.32%
  Investment Securities (Tax-Exempt) (C) (D)   73,639       1,327     7.17%
  Mortgage-backed Securities (D)              670,539       7,157     4.25%
  Marketable Equity Securities                 24,556         123     1.99%
  Interest Earning Deposits                       573           1     0.69%
  Federal Funds Sold                            1,304           5     1.53%
  Total Interest Earning Assets             1,427,577      18,149     5.06%

  NONINTEREST EARNING ASSETS:
  Cash and Due From Banks                      37,728
  Bank Premises and Equipment                  30,674
  Other Assets                                 40,766
    Less:  Allowance for Loan Loss             (6,690)
  Total Assets                             $1,530,055

  LIABILITIES AND SHAREHOLDERS' EQUITY

  INTEREST BEARING LIABILITIES:
  Savings Deposits                            $49,015         $57     0.46%
  Time Deposits                               319,338       1,966     2.45%
  Interest Bearing Demand Deposits            277,401         488     0.70%
  Short-term Interest Bearing
   Liabilities                                196,669       1,696     3.43%
  Long-term Interest Bearing
   Liabilities - FHLB Dallas                  301,677       2,569     3.39%
  Long-term Debt (E)                           20,619         239     4.54%
  Total Interest Bearing Liabilities        1,164,719       7,015     2.40%

  NONINTEREST BEARING LIABILITIES:
  Demand Deposits                             252,296
  Other Liabilities                             8,834
  Total Liabilities                         1,425,849

  SHAREHOLDERS' EQUITY                        104,206
  Total Liabilities and
  Shareholders' Equity                     $1,530,055

  NET INTEREST INCOME                                     $11,134
  NET YIELD ON AVERAGE EARNING ASSETS                                 3.10%

  NET INTEREST SPREAD                                                 2.66%

   (A) Loans are shown net of unearned discount.  Interest on loans
       includes fees on loans which are not material in amount.
   (B) Interest income includes taxable-equivalent adjustments of $582 and
       $557 for the third quarter ended September 30, 2005 and 2004,
       respectively.
   (C) Interest income includes taxable-equivalent adjustments of $376 and
       $429 for the third quarter ended September 30, 2005 and 2004,
       respectively.
   (D) For the purpose of calculating the average yield, the average
       balance of securities is presented at historical cost.
   (E) Southside Statutory Trust III

   Note: As of September 30, 2005 and 2004, loans totaling $1,211 and
         $1,185, respectively, were on nonaccrual status.  The policy is to
         reverse previously accrued but unpaid interest on
         nonaccrual loans; thereafter, interest income is recorded to the
         extent received when appropriate.


DATASOURCE: Southside Bancshares, Inc.



CONTACT:  Susan Hill of Southside Bancshares, Inc., [phone], or

 



Web site:  http://www.southside.com/

http://www.southside.com/investor 

Copyright