Southside Bancshares, Inc.

Good day, and thank you for standing by, and welcome to Southside Bank Shares, Inc. Second Quarter 2024 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sunny Davis, Chief Risk Officer. Please go ahead.

Thank you, Justin. Good morning, everyone, and welcome to Southside Bankshare's second quarter 2024 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 presentations, I will remind you that any forward-looking statements are subject to risk and uncertainties. Factors that could materially change our current forward-looking assumptions are described in our earnings release and Form 10-K. Joining me today are Lee Gibson, CEO, and Julie Schamburger, CFO. First, Lee will share his comments on the quarter, and then Julie will give an overview of our financial results. I will now turn the call over to Lee.

Thank you, Sunny. Good morning, everyone. This morning we reported second quarter net income of $24.7 million. earnings per share of 81 cents, a return on average tangible common equity of 16.9%, and continued strong asset quality metrics. Length quarter, our net interest margin increased one basis point to 2.87%. During the quarter, we sold approximately $93 million of lower coupon municipal securities, unwound the related fair value swaps, and reinvested most of the proceeds in higher yielding agency mortgage-backed securities. We estimate the payback of the loss on the sale of securities will be less than one year. Linked quarter, loans increased an annualized 1.1% as we experienced a few payoffs. Our loan pipeline remains solid, and we continue to target 5% loan growth for 2024. Since last quarter, we have continued implementing initiatives associated with our five-year strategic plan. One of the initiatives is to carefully examine additional revenue as well as cost containment opportunities. Attrition and a slight reduction in workforce resulted in additional cost savings of approximately $600,000. Repricing of services in our wealth management and trust department will result in additional revenue of approximately $500,000. We are executing on an initiative to expand C&I lending in our metropolitan markets to further diversify our loan portfolio, increase revenue, and grow deposits. We've hired a lead C&I relationship manager in the Houston area and expect to add additional CNI team members in the coming months. The $600,000 in cost saves and $500,000 in added revenue are estimated to more than cover the expense associated with this initial CNI expansion phase in the Houston area. We continue to evaluate expenses as well as revenue opportunities, and we'll update you on any further progress in future quarters. the markets we serve remain healthy and continue to grow and perform well. I look forward to answering your questions following Julie's remarks. I will now turn the call over to Julie.