Southside Bancshares, Inc. Announces Third Quarter Earnings

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Schroder Bsc Social Impact Trust Plc	LSE:SBSI	London	Ordinary Share	GB00BF781319	ORD 1P

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	79.00	78.00	80.00	79.00	78.50	78.50	202	08:00:04

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
Trust,ex Ed,religious,charty	1.75M	620k	0.0075	105.33	65.28M

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NASDAQ Global Select Market Symbol - 'SBSI' TYLER, Texas, Nov. 8 /PRNewswire-FirstCall/ -- Southside Bancshares, Inc. ("Southside" or the "Company") today reported its financial results for the three and nine months ended September 30, 2007. Southside reported net income of $3.5 million for the three months ended September 30, 2007, a decrease of $552,000, or 13.6%, when compared to $4.1 million for the same period in 2006. Net income for the nine months ended September 30, 2007, increased $1.0 million to $11.9 million from $10.8 million, or 9.5%, for the same period in 2006. B. G. Hartley, Chairman and Chief Executive Officer, stated, "The third quarter, while not as financially rewarding as comparable quarters, could turn out to be one of the more memorable quarters for Southside. The decrease in third quarter 2007 net income is largely due to an increase in provision for loan losses of $394,000, primarily a result of loan growth during the quarter and a decrease of $128,000 in the gain on sales of securities available for sale. Our earnings for the nine months ended September 30, 2007 remain well ahead of last year as net income increased $1.0 million when compared to the same period in 2006. During the third quarter, we announced the acquisition, through our wholly-owned subsidiary Southside Bank, of a 50 percent interest in Southside Financial Group, LLC. ("SFG"). SFG will buy consumer loans secured by automobiles, primarily through the purchase of existing automobile portfolios from lenders throughout the United States. In addition to our investment in SFG, we issued $35 million of trust preferred securities, through two subsidiary trusts, to fund our acquisition of Fort Worth Bancshares, Inc., which we completed on October 10, 2007. This acquisition expands our footprint into the dynamic markets of Fort Worth, Arlington and Austin and is a tremendous opportunity which should significantly enhance our overall franchise value." "During the third quarter we also opened our sixth full service grocery store branch in our largest market area, the city of Tyler," stated B. G. Hartley. "We continue to make investments with a focus on long-term shareholder value. While some of these investments will negatively impact short-term earnings, we believe the long-term potential franchise value and benefits associated with these investments will significantly outweigh the costs. In summary, we believe this quarter will prove to be a significant and memorable quarter for both our shareholders and Southside." Earnings per fully diluted share decreased $0.04, or 13.3%, to $0.26 for the three months ended September 30, 2007, when compared to $0.30 for the same period in 2006. Earnings per fully diluted share increased $0.07, or 8.6%, to $0.88 for the nine months ended September 30, 2007, compared to $0.81 for the same period in 2006. The return on average shareholders' equity for the nine months ended September 30, 2007 increased to 13.68%, compared to 13.26%, for the same period in 2006. The annual return on average assets increased to 0.86%, for the nine months ended September 30, 2007, compared to 0.78%, for the same period in 2006. Loan and Deposit Growth The Company experienced solid loan growth during the three months ended September 30, 2007, as loans increased $26.8 million, or 3.5%, to $795.6 million from $768.7 million at June 30, 2007. During the third quarter SFG purchased approximately $11.4 million of automobile portfolios which are reflected in loans to individuals. Loan growth during 2007 occurred primarily in construction loans, loans to individuals, commercial loans, and municipal loans. The consistent growth in loans is significant given the increasing competition in the Texas banking markets we serve. Commenting on the loan growth, B. G. Hartley said, "Our footprint in Texas has continued to expand over the past several years through the opening of branches in strategic market areas. Positioning for future success remains a central part of our business strategy. We believe the Fort Worth Bancshares, Inc. and SFG acquisitions dovetail nicely into this strategy, and we expect these acquisitions to result in future loan growth." During the three months ended September 30, 2007, deposits increased $18.0 million, or 1.3%, to $1.35 billion from $1.34 billion at June 30, 2007. The overall growth in deposits during the three months ended September 30, 2007 resulted from our expanding branch network and continued market penetration. Price-related competition for deposits has intensified. While the Company has attempted to maintain a disciplined deposit pricing strategy, the current competitive environment could pressure the net interest margin in the coming quarters. Net Interest Income Net interest income decreased $127,000, or 1.2%, to $10.2 million for the three months ended September 30, 2007, when compared to $10.4 million for the same period in 2006. Net interest income decreased $1.1 million, or 3.6%, to $30.3 for the nine months ended September 30, 2007, when compared to $31.5 million for the same period in 2006. The slight increase in our net interest margin reflects the volume changes combined with the rate changes. The decrease in our net interest spread reflects an increase in the average short-term borrowing rates that exceeded the increase in the yields on the average earning assets. For the three months ended September 30, 2007 when compared to the same period in 2006, the Company's net interest spread decreased to 1.65%, from 1.75%, while during the same periods the net interest margin increased slightly to 2.52% from 2.51%. Compared to the previous quarter, the net interest margin and net interest spread decreased to 2.52% and 1.65%, respectively, for the three months ended September 30, 2007 from 2.57% and 1.71% for the three months ended June 30, 2007. This was due in part to an increase in leverage at a lower net interest margin and spread and the issuance of trust preferred securities in mid August 2007 related to our acquisition in mid October 2007. Net Income for the Three Months and Nine Months The decrease in net income for the three months ended September 30, 2007 was primarily a result of the increase in the provision for loan loss and noninterest expense. The increase in net income for the nine months ended September 30, 2007 was primarily attributable to an increase in noninterest income and a decrease in income tax expense. Noninterest income, excluding gain on sale of available for sale securities, increased $345,000, or 5.8%, and $1.9 million, or 11.1%, for the three and nine months ended September 30, 2007, compared to the same periods in 2006. The increase in noninterest income was primarily the result of increases in deposit services income, trust income, and other income. Income tax expense decreased $174,000, or 15.1%, and $337,000, or 11.9%, for the three and nine months ended September 30, 2007, when compared to the same periods in 2006. The decrease in income tax expense was the result of a one-time state tax credit resulting from a change in Texas tax law during the second quarter ended June 30, 2007, related to the new Texas margin tax. The one-time tax credit was $779,000, which was partially offset by an increase in our estimated margin tax of $183,000, net of federal income tax. Provision for loan losses increased $394,000, or 174.3%, for the three months ended September 30, 2007, compared to the same period in 2006 primarily as a result of the increase in loans and the investment in the automobile loan portfolios. Noninterest expense increased $422,000, or 3.8%, and $117,000, or 0.3%, for the three and nine months ended September 30, 2007, compared to the same periods in 2006. The increase in noninterest expense for the three months ended September 30, 2007 was primarily a result of an increase in salaries and employee benefits of $298,000, or 4.3%, compared to the same period in 2006, primarily the result of an increase in health claims, an increase in salary expense associated with the addition of Southside Financial Group during August, which was partially offset by a decrease in defined benefit expense. About Southside Bancshares, Inc. Southside Bancshares, Inc. is a bank holding company with approximately $1.9 billion in assets that owns 100% of Southside Bank. Southside Bank currently has 36 banking centers in East Texas and operates a network of 41 ATMs. 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 (903) 531-7220, or . Forward-Looking Statements 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 the Company, a bank holding company, may be considered to be "forward-looking statements" within the meaning of and subject to the 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," "intend," "probability," "risk," "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, discussions of the effect of the Company's expansion, including expectations of the costs and profitability of such expansion, trends in asset quality and earnings from growth, and certain market risk disclosures 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. As a result, actual income gains and losses could materially differ from those that have been estimated. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2006 under "Forward-Looking Information" and 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. At At At September 30, December 31, September 30, 2007 2006 2006 (dollars in thousands) (unaudited) Selected Financial Condition Data (at end of period): Total assets $1,904,029 $1,890,976 $ 1,881,291 Loans 795,588 759,147 741,534 Allowance for loan losses 7,668 7,193 7,354 Mortgage-backed and related securities: Available for sale, at estimated fair value 665,244 643,164 656,787 Held to maturity, at cost 197,798 226,162 236,259 Investment securities: Available for sale, at estimated fair value 87,671 98,952 85,679 Held to maturity, at cost 1,354 1,351 1,349 Federal Home Loan Bank stock, at cost 17,004 25,614 26,308 Deposits 1,354,323 1,282,475 1,210,881 Long-term obligations 149,795 149,998 164,887 Shareholders' equity 123,096 110,604 116,649 Nonperforming assets 2,177 2,110 2,599 Nonaccrual loans 1,307 1,333 1,213 Loans 90 days past due 466 128 625 Restructured loans 167 220 223 Other real estate owned 172 351 441 Repossessed assets 65 78 97 Asset Quality Ratios: Nonaccruing loans to total loans 0.16% 0.18% 0.16% Allowance for loan losses to nonaccruing loans 586.69 539.61 606.27 Allowance for loan losses to nonperforming assets 352.23 340.90 282.95 Allowance for loan losses to total loans 0.96 0.95 0.99 Nonperforming assets to total assets 0.11 0.11 0.14 Net charge-offs to average loans 0.08 0.14 0.13 Capital Ratios: Shareholders' equity to total assets 6.47 5.85 6.20 Average shareholders' equity to average total assets 6.28 5.99 5.91 LOAN PORTFOLIO COMPOSITION The following table sets forth loan totals by category for the periods presented: At At At September 30, December 31, September 30, 2007 2006 2006 (in thousands) (unaudited) Real Estate Loans: Construction $ 56,714 $ 39,588 $ 35,717 1-4 Family Residential 225,381 227,354 226,128 Other 178,847 181,047 176,636 Commercial Loans 125,809 118,962 114,090 Municipal Loans 110,084 106,155 100,994 Loans to Individuals 98,753 86,041 87,969 Total Loans $ 795,588 $ 759,147 $ 741,534 At or for the At or for the Three Months Nine Months Ended September 30, Ended September 30, 2007 2006 2007 2006 (dollars in thousands) (dollars in thousands) (unaudited) (unaudited) Selected Operating Data: Total interest income $25,475 $25,101 $75,052 $71,595 Total interest expense 15,240 14,739 44,730 40,127 Net interest income 10,235 10,362 30,322 31,468 Provision for loan losses 620 226 954 955 Net interest income after provision for loan losses 9,615 10,136 29,368 30,513 Noninterest income Deposit services 4,274 4,036 12,472 11,452 Gain on sale of securities available for sale 126 254 561 478 Gain on sale of loans 424 521 1,493 1,363 Trust income 522 423 1,562 1,230 Bank owned life insurance income 273 260 805 769 Other 784 692 2,310 1,959 Total noninterest income 6,403 6,186 19,203 17,251 Noninterest expense Salaries and employee benefits 7,242 6,944 21,644 21,674 Occupancy expense 1,261 1,224 3,619 3,598 Equipment expense 268 239 738 667 Advertising, travel & entertainment 363 366 1,233 1,290 ATM and debit card expense 247 254 743 699 Director fees 126 131 394 443 Supplies 151 152 487 504 Professional fees 413 373 964 1,006 Postage 165 155 468 460 Telephone and communications 193 175 577 529 Other 1,113 1,107 3,367 3,247 Total noninterest expense 11,542 11,120 34,234 34,117 Income before income tax expense 4,476 5,202 14,337 13,647 Provision for income tax expense 976 1,150 2,487 2,824 Net income $3,500 $4,052 $11,850 $10,823 Common share data: Weighted-average basic shares outstanding 13,091 12,896 13,036 12,852 Weighted-average diluted shares outstanding 13,454 13,394 13,437 13,351 Net income per common share Basic $0.27 $0.31 $0.91 $0.84 Diluted 0.26 0.30 0.88 0.81 Book value per common share - - 9.39 9.03 Cash dividend declared per common share 0.12 0.11 0.35 0.33 Selected Performance Ratios: Return on average assets 0.75% 0.86% 0.86% 0.78% Return on average shareholders' 11.75 14.67 13.68 13.26 Average yield on interest earning 6.00 5.81 5.97 5.70 Average yield on interest bearing 4.35 4.06 4.30 3.79 Net interest spread 1.65 1.75 1.67 1.91 Net interest margin 2.52 2.51 2.52 2.61 Average interest earnings assets to average interest 125.22 123.12 124.66 122.82 Noninterest expense to average 2.47 2.35 2.48 2.47 Efficiency ratio 66.45 64.66 66.63 67.12 AVERAGE BALANCES AND YIELDS (dollars in thousands) (unaudited) Nine Months Ended September 30, 2007 September 30, 2006 AVG AVG AVG AVG BALANCE INTEREST YIELD BALANCE INTEREST YIELD ASSETS INTEREST EARNING ASSETS: Loans (1) (2) $770,653 $39,937 6.93% $713,764 $35,564 6.66% Loans Held For Sale Securities: 3,857 149 5.16% 4,783 191 5.34% Investment Securities (Taxable)(4) 54,444 2,004 4.92% 55,865 1,906 4.56% Investment Securities (Tax-Exempt)(3)(4) 41,831 2,221 7.10% 44,793 2,389 7.13% Mortgage-backed and Related Securities (4) 839,505 32,079 5.11% 887,269 32,907 4.96% Total Securities 935,780 36,304 5.19% 987,927 37,202 5.03% Federal Home Loan Bank stock and other investments, at cost 20,071 945 6.29% 28,467 1,046 4.91% Interest Earning Deposits 586 26 5.93% 703 24 4.56% Federal Funds Sold 2,102 80 5.09% 1,038 37 4.77% Total Interest Earning Assets 1,733,049 77,441 5.97% 1,736,682 74,064 5.70% NONINTEREST EARNING ASSETS: Cash and Due From Banks 41,898 43,823 Bank Premises and Equipment 34,374 33,420 Other Assets 43,046 41,307 Less: Allowance for Loan Loss (7,326) (7,212) Total Assets $1,845,041 $1,848,020 LIABILITIES AND SHAREHOLDERS' EQUITY INTEREST BEARING LIABILITIES: Savings Deposits $51,825 505 1.30% $50,806 479 1.26% Time Deposits 547,659 20,055 4.90% 450,543 14,340 4.26% Interest Bearing Demand Deposits 396,075 9,421 3.18% 350,740 6,965 2.66% Total Interest Bearing Deposits 995,559 29,981 4.03% 852,089 21,784 3.42% Short-term Interest Bearing Liabilities 269,344 9,771 4.85% 380,764 12,236 4.30% Long-term Interest Bearing Liabilities - FHLB Dallas 97,662 3,315 4.54% 160,517 4,864 4.05% Long-term Debt (5) 27,662 1,663 8.04% 20,619 1,243 7.95% Total Interest Bearing Liabilities 1,390,227 44,730 4.30% 1,413,989 40,127 3.79% NONINTEREST BEARING LIABILITIES: Demand Deposits 319,854 313,043 Other Liabilities 19,178 11,827 Total Liabilities 1,729,259 1,738,859 SHAREHOLDERS' EQUITY 115,782 109,161 Total Liabilities and Shareholders' Equity $1,845,041 $1,848,020 NET INTEREST INCOME $32,711 $33,937 NET YIELD ON AVERAGE EARNING ASSETS 2.52% 2.61% NET INTEREST SPREAD 1.67% 1.91% (1) Interest on loans includes fees on loans that are not material in amount. (2) Interest income includes taxable-equivalent adjustments of $1,705 and $1,710 for the nine months ended September 30, 2007 and 2006, respectively. (3) Interest income includes taxable-equivalent adjustments of $684 and $759 for the nine months ended September 30, 2007 and 2006, respectively. (4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. (5) Represents junior subordinated debentures issued by Southside Bancshares, Inc. to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities and Southside Statutory Trust V of $12.5 million of trust preferred securities. Note: As of September 30, 2007 and 2006, loans totaling $1,307 and $1,213, 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) Three Months Ended September 30, 2007 September 30, 2006 AVG AVG AVG AVG BALANCE INTEREST YIELD BALANCE INTEREST YIELD ASSETS INTEREST EARNING ASSETS: Loans (1) (2) $ 777,509 $13,678 6.98% $731,345 $12,612 6.84% Loans Held For Sale Securities: 3,804 53 5.53% 5,054 74 5.81% Investment Securities (Taxable)(4) 44,743 552 4.89% 48,530 569 4.65% Investment Securities (Tax-Exempt)(3)(4) 43,679 772 7.01% 44,398 798 7.13% Mortgage-backed and Related Securities (4) 851,985 10,982 5.11% 912,751 11,521 5.01% Total Securities 940,407 12,306 5.19% 1,005,679 12,888 5.08% Federal Home Loan Bank stock and other investments, at cost 17,226 245 5.64% 27,309 352 5.11% Interest Earning Deposits 655 9 5.45% 726 7 3.83% Federal Funds Sold 2,028 28 5.48% 1,718 22 5.08% Total Interest Earning Assets 1,741,629 26,319 6.00% 1,771,831 25,955 5.81% NONINTEREST EARNING ASSETS: Cash and Due From Banks 40,381 39,685 Bank Premises and Equipment 35,204 33,197 Other Assets 42,431 40,230 Less: Allowance for Loan Loss (7,381) (7,356) Total Assets $1,852,264 $1,877,587 LIABILITIES AND SHAREHOLDERS' EQUITY INTEREST BEARING LIABILITIES: Savings Deposits $51,846 171 1.31% $51,089 167 1.30% Time Deposits 561,382 6,983 4.94% 484,344 5,513 4.52% Interest Bearing Demand Deposits 402,884 3,237 3.19% 336,778 2,446 2.88% Total Interest Bearing Deposits 1,016,112 10,391 4.06% 872,211 8,126 3.70% Short-term Interest Bearing Liabilities 247,088 3,049 4.90% 403,981 4,649 4.57% Long-term Interest Bearing Liabilities - FHLB Dallas 86,147 997 4.59% 142,352 1,519 4.23% Long-term Debt(5) 41,518 803 7.67% 20,619 445 8.44% Total Interest Bearing Liabilities 1,390,865 15,240 4.35% 1,439,163 14,739 4.06% NONINTEREST BEARING LIABILITIES: Demand Deposits 323,130 315,404 Other Liabilities 20,134 13,427 Total Liabilities 1,734,129 1,767,994 SHAREHOLDERS' EQUITY 118,135 109,593 Total Liabilities and Shareholders' Equity $1,852,264 $1,877,587 NET INTEREST INCOME $11,079 $11,216 NET YIELD ON AVERAGE EARNING ASSETS 2.52% 2.51% NET INTEREST SPREAD 1.65% 1.75% (1) Interest on loans includes fees on loans that are not material in amount. (2) Interest income includes taxable-equivalent adjustments of $597 for both of the three month periods ended September 30, 2007 and 2006, respectively. (3) Interest income includes taxable-equivalent adjustments of $247 and $257 for the three months ended September 30, 2007 and 2006, respectively. (4) For the purpose of calculating the average yield, the average balance of securities is presented at historical cost. (5) Represents junior subordinated debentures issued by Southside Bancshares, Inc. to Southside Statutory Trust III, IV, and V in connection with the issuance by Southside Statutory Trust III of $20 million of trust preferred securities, Southside Statutory Trust IV of $22.5 million of trust preferred securities and Southside Statutory Trust V of $12.5 million of trust preferred securities. Note: As of September 30, 2007 and 2006, loans totaling $1,307 and $1,213, 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., +1-903-531-7220, Web site: http://www.southside.com/

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SBSI Schroder Bsc Social Impact Trust Plc