Southside Bancshares, Inc.

Hello, everyone. Thank you for joining us and welcome to Southside Bancshares, Inc. Third 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 1 again. I will now hand the conference over to Lindsey Bailes, Senior Vice President, Investor Relations. Lindsey, please go ahead.

Thank you, Melissa. Good morning, everyone, and welcome to Southside Bancshares' third quarter 2026 earnings call. A transcript of today's call will be posted on Southside.com under Investor Relations. During today's call and in other presentations and disclosures, I'll remind you 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 our Form 10-K. Joining me today are President and CEO Keith Donahoe, CFO Julie Shamburger, and Chief Treasury Officer Sunny Davis. Keith will start us off with his comments on the quarter, then Julie will give an overview of our financial results, and Sunny 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, Lindsey, and welcome to today's call. Third quarter results are highlighted by 93 cents earnings per share, a 127 return on average asset, a 1631 return on average tangible common equity, and a 302 tangible equivalent net interest margin. Our tax equivalent net interest margin benefited from improved loan and security yields and flat funding costs during the quarter. We expect the September Fed rate increase to be accretive to fourth quarter loan yields as approximately 55% of our loan book will reprice over the next 90 days. Third quarter new loan production was strong but largely offset by payoffs resulting in a relatively flat loan balance during the quarter. Recognizing that commercial real estate originations may slow with recent rate increases, and our expectation of continued payoffs, we are moderating our loan growth guidance to low to mid single digits for 2026. Third quarter new loan production totaled approximately $400 million of which $276 million funded during the quarter. Excluding regular amortization and line of credit activity, third quarter payoffs totaled $281 million. This was down slightly from second quarter payoffs totaling $297 million. Third quarter payoffs were heavily weighted towards CRE and include four multifamily loans accounting for just over half of our payoffs. On a positive note, these payoffs resulted in a $15 million decrease in classified assets for the quarter. Our loan pipeline totals $1.2 billion today, down from the second quarter levels of $1.4 billion. We've issued term sheets on approximately $222 million of this pipeline with $99 million in the closing process. Commercial construction loans and commercial lines of credit represent approximately 56% of the pipeline, while full funding term loans represent approximately 44%, a change from second quarter pipeline when term loans made up approximately 52% of the total pipeline. C&I loans, including owner-occupied real estate loans, increased approximately 5% during the quarter and now represent 18% of our total loan portfolio, up from 16% at year-end 2025. In addition, C&I opportunities represent approximately 24% of today's total pipeline. Other notable third quarter items include a newly hired director of treasury management, and the start of the second branch construction project. The new start is located south of Fort Worth in Burleson, Texas, and expands our commitment to the greater Fort Worth market. Additionally, the Celina Prosper construction project continues to move forward with completion expected in the second quarter of 2027. When considering our net income, earnings per share and other financial results, we had an excellent quarter. Overall, the markets we serve remain healthy, and the Texas economy is anticipated to grow at a faster pace than the overall U.S. growth rate. With that, I look forward to answering questions, and I'll turn the call over to Julie.