Southside Bancshares, Inc.

Hello, everyone. Thank you for joining us and welcome to Southside Bank Shares Inc. First Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Lindsay Bales, Senior Vice President, Investor Relations. Lindsay, please go ahead.

Thank you, Rebecca. Good morning, everyone, and welcome to Southside Bank Share's first quarter 2026 earnings call. A transcript of today's call will be posted on southside.com under Investor Relations. During today's call and other disclosures and presentations, I'll remind you forward-looking statements 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 President and CEO Keith Donahoe, CFO Julie Schamburger, and Chief Treasury Officer Sonny Davis. Keith will start us off with his comments on the quarter, then Julie will give an overview of our financial results, and Sonny will end with comments on securities and funding. We will have a Q&A session following Sunny's remarks. I will now turn the call over to Keith.

Thank you, Lindsay, and welcome to today's call. We are pleased to report solid financial results for the first quarter of 26. Highlights include strong linked quarter loan growth of 2.7%, increased earnings per share of 78 cents, improved annualized return on average assets of 110, and an annualized return average tangible common equity of $1,439. Lower funding costs resulted in a $441,000 linked quarter increase in net interest income and an improved MIM of $301. Our funding costs benefited from the February 15th redemption of approximately $93 million of subordinated debt, which had an interest rate of 7.51%. Second quarter funding costs will also benefit from this redemption. First quarter loan growth was driven by strong new loan production combined with lower than expected payoffs. Although we experienced strong first quarter loan growth, we continue to target mid single digits for 2026 loan growth due to an expected return to elevated payoffs for the remainder of the year. New loan production of approximately $431 million compared to 327 million in the prior quarter. Of the new loan production, approximately 240 million funded during the quarter, with the unfunded portion of this quarter's production expected to fund over the next six to nine quarters. Excluding regular amortization and line of credit activity, first quarter payoffs totaled approximately 113 million, and represents the lowest payoff amount during the past four quarters. The single largest payoff during the quarter was the $27.5 million multifamily loan previously included in our non-performing asset category. In mid-February, the borrower successfully refinanced the loan balance with a life insurance company. Additional payoffs during the quarter included an office building, several small retail centers, an industrial warehouse, a skilled nursing facility, and several commercial land loans. Our loan pipeline today totals approximately 1.3 billion, down from a mid-quarter peak of about 2 billion. Despite the reduction, our one but not closed category remains healthy at just over 331 million. The pipeline remains well balanced with approximately 44% term loans and 56% construction and or commercial lines of credit. This is relatively unchanged from the fourth quarter mix. CNI-related opportunities represent approximately 24% of today's total pipeline. This is up slightly from year-end's total of 20%. During the quarter, we migrated four multifamily loans and one office loan to substandard. The two multifamily loans originated as construction loans and are currently experiencing slower lease up and lower rents than originally underwritten. The remaining two multifamily projects originated as term loans and have experienced a decline in occupancy and reduced rental rates. All four credits are supported by experienced real estate borrowers, including equity partners providing financial support. Over the next six to 12 months, we expect successful resolutions either through open market sales or refinances. Despite the substandard increase, credit quality remains strong. During the first quarter, non-performing assets totaled $9.7 million, a decrease of $28.5 million from December 25. The reduction was primarily related to the previously mentioned $27.5 million multifamily loan, which paid off in February. As a percentage of total assets, non-performing assets remain low at 0.11%. Other first quarter activities included replacing our Woodlands Loan Production Office with a full-service branch and a new branch in our fast-growing home market of Tyler. Additionally, we are particularly excited to report the hiring of a 30-year wealth management veteran charged with building out our wealth management team and expanding our platform throughout the Dallas-Wilworth markets. When considering our net income, earnings per share, expanded footprint, and a key hire in our wealth management group, we had an excellent quarter. Overall, the markets we serve remain healthy, and the Texas economy is anticipated to grow faster at a faster pace than the overall projected U.S. growth rate. With that, I'll turn the call over to Julie.