SOUTHSIDE BANCSHARES, INC.2021
ANNUAL REPORT
INTEGRITY | TEAMWORK | INNOVATION | EXCELLENCE | ACCOUNTABILITY
TYLER
FORT WORTH
AUSTIN
HOUSTON
TABLE OF
CONTENTS
A Letter From CEO Lee R. Gibson
2021 Financial Highlights
Community: More Than a Neighborhood
Innovation: Forward-Thinking Solutions Today
Service: Exceeding Customer Expectations
Southside Bank Location Map
Southside Bancshares, Inc.
Board Members
Officers
Form 10-K
4
6
8
10
12
14
16
20
4
A LETTER FROM CEO
Lee R. Gibson
Dear Fellow Shareholders,
Highlights for 2021 included:
For several years, we have focused on
addressing the challenges and opportunities
presented by the unprecedented pace of
change and disruption in our industry. This
led to rethinking almost everything we do with
the ultimate goal of meeting the changing
expectations, behaviors and preferences of our
customers. As a result, our customer delivery
systems are more digitally enabled. This solid
foundation allowed Southside to remain resilient
and prosper during 2021 when faced with the
ongoing pandemic and the historic Winter
Storm Uri. Before I continue, I want to recognize
and thank the entire Southside team for their
extraordinary contributions and efforts during
2021, without which the following results would
not have been possible.
• Record net income of $113.4 million, a 38%
increase;
• Record earnings per diluted common share of
$3.47, a 40.5% increase;
• A 1.59% return on average assets and 17.04%
return on tangible common equity;
• An increase in the net interest margin to 3.16%;
• A 16% increase in deposits and a 5% increase
in loans, net of Paycheck Protection Program
(PPP) loans;
• Continued strong asset quality metrics; and
• A 5.4% increase in the cash dividend per
common share.
2021 ANNUAL REPORT 5
Embracing change is what motivates us to
adopt new technologies, drives our operational
efficiencies and fuels our success. We will
continue to invest in our digital platforms
emphasizing speed, security, convenience and
simplicity. Our focus is on offering products and
services for our customers when, where and how
they want them delivered.
Moving forward, we expect the banking industry
will be focused in more customer-driven ways
through the delivery channels they prefer, and
the utilization of digital tools will be even more
important. In order to move more efficiently,
strategically and effectively towards the future,
we established a group in 2021 solely focused
on innovation. This group has and will continue
to collaborate with all areas of the Bank and
focus on two primary initiatives: enhancing the
customer experience and increasing efficiencies
throughout the organization.
As noted earlier, Southside had a record year
in 2021, with net income of $113.4 million and
earnings per diluted common share of $3.47.
Our longstanding conservative credit approach
combined with our overarching strategy to
align with strong borrowers allowed us to grow
our loan portfolio, net of PPP loans, while
simultaneously managing our asset quality. We
maintained our culture of expense discipline
as our efficiency ratio improved, decreasing to
49.03%.
We navigated the unfavorable interest rate
environment better than most of our peers as
our net interest margin increased to 3.16%, from
3.07% in 2020. During the past two years, we
strategically replaced $700 million of our more
interest rate sensitive funding sources, Federal
Home Loan Bank (FHLB) advances and brokered
deposits, with lower cost non-maturity deposits
that have increased $1.7 billion, or 51%. This
level of growth was driven by the unprecedented
level of government stimulus and PPP loan
proceeds remaining in the Bank. At December
31, 2021, 95% of our remaining FHLB advances
and brokered deposits were swapped at a fixed
rate. As short-term interest rates are expected to
increase during 2022, we expect to benefit from
the proactive funding measures we have taken
during the past two years.
Dividends remain our preferred source of capital
return, and in 2021 we declared regular cash
dividends of $1.31 per share and a special
dividend of $0.06 per share. Together they
represent $1.37 in total, a 5.4% increase.
It is a privilege to be in a position to earn our
stakeholders’ trust and to improve the lives
of our customers and the well-being of our
communities. It is a responsibility that we at
Southside do not take lightly. Our expanded
disclosure and attention to Environmental, Social
and Governance (ESG) standards continued in
2021. Providing more detailed disclosure about
our performance in this area is becoming more
important as the focus on ESG becomes more
prominent.
We are fortunate to serve what many consider
some of the best markets in the country. The
economic conditions in our markets remain
strong, bolstered by continued company
relocations and existing company expansions
combined with population growth resulting from
continued migration from other states. We look
forward to expanding our Texas franchise in 2022
through organic growth, and we will continue to
evaluate acquisition opportunities as they arise.
Our financial results continue to reflect our
focused discipline and execution of our business
strategy. Given the positive economic conditions
in our markets, our strong balance sheet, capital
position, core earnings and asset quality, we are
excited about the prospects for 2022.
Thank you for being a shareholder and for your
continued support.
LEE R. GIBSON
President and Chief Executive Officer
6
FINANCIAL
Highlights
Dollars in thousands except per share amounts
NET INCOME
2021
$113,401
2020
$82,153
PER SHARE DATA
PERFORMANCE RATIOS
Earnings Per Common Share (Basic)
2021
$3.48
2020
$2.47
Earnings per Common Share (Diluted)
2021
$3.47
2020
$2.47
Cash Dividends Paid per Common Share
2021
$1.37
2020
$1.30
Book Value per Common Share
2021
$28.20
2020
$26.56
Return on Average Assets
2021
1.59%
2020
1.14%
Return on Average Shareholders’ Equity
2021
12.77%
2020
9.91%
2021 ANNUAL REPORT Cash Dividends Paid per Common Share
7
PERFORMANCE RATIOS
BALANCE SHEET DATA
Loans
2021
$3,645,162
Securities
2021
$2,855,105
Total Assets
2021
$7,259,602
2020
$3,657,779
2020
$2,696,303
2020
$7,008,227
Dividend Payout Ratio (Diluted)
2021
39.48%
2020
52.63%
Net Interest Margin (GAAP)
2021
2.96%
Net Interest Margin*
2021
3.16%
2020
2.89%
2020
3.07%
Interest Bearing Deposits
2021
$4,077,552
Total Deposits
2021
$5,722,327
Other Borrowings
2021
$367,257
Long-Term Debt
2021
$158,794
2020
$3,577,507
2020
$4,932,322
2020
$855,699
2020
$257,506
Noninterest Bearing Deposits
Total Shareholders’ Equity
2021
$1,644,775
2020
$1,354,815
2021
$912,172
2020
$875,297
*A non-GAAP measure. See "Non-GAAP Financial Measures" for more information and a reconciliation to GAAP in our Form 10-K.
8
COMMUNITY:
More Than a
Neighborhood
For Southside, being a community bank has
never been defined simply by location. It’s all
about people. We’re committed not only to
supporting our fellow community members
through financial services, but also by investing
in organizations and programs making a
positive impact. Throughout 2021, we continued
to find ways to help strengthen the communities
we proudly serve.
Southside sponsored the remodel of the
Children’s Center at CHRISTUS Trinity Mother
Frances Hospital in Tyler to provide a beautiful
and comfortable space for patients. Upgrades
were made to the entire children’s wing of the
hospital, including the patient rooms, playroom
and nurses' station. Southside’s executive
leadership team visited the facility to express
gratitude for the hospital staff and everything
they do to care for children and families from
Tyler and surrounding communities.
The Bank participated in two major events to
promote autism awareness and support. This
included serving as the presenting sponsor for
the 10th annual Tyler Run for Autism, which is
dedicated to supporting children with autism
with critical medical treatments in East Texas.
More than 500 participants joined in on race
day, including many Southside employees, to
support the worthy mission.
Team members from our North Texas region
volunteered at the Fort Worth Autism Speaks
Walk. The Autism Speaks Walk is the world’s
largest autism fundraising event dedicated
to improving the lives of people with autism.
Southside also sponsored the Fort Worth event,
which was a huge success.
Recognizing our dedication to community,
Angelina Beautiful/Clean of Angelina County
presented Southside with the Beautification
Award for our Chestnut Village branch in Lufkin.
This honor is given to organizations that go
above and beyond to invest in the beautification
of the community. The Chestnut Village branch
received a complete remodel in 2020 with major
upgrades to both the exterior and interior.
2021 ANNUAL REPORT 9
In addition to annual support of nonprofits
like Salvation Army and United Way, the Bank
remained committed to education through
our internship program. The 2021 college
interns spent the summer serving in various
departments, including Commercial Credit,
Operations, and Training and Development.
Each intern was provided with skills training and
mentorship to help prepare them for their future
careers.
While giving back to our
communities, Southside
also builds a community
of support within our
own team.
The Bank was recognized as the longest
tenured company in East Texas to partner with
Marketplace Chaplains. Our partnership began
in 1990, and we now have over 35 chaplains
serving team members across all regions.
Southside Bank was founded on the real
meaning of community, and we continue to put
people first in everything we do.
10
INNOVATION:
Forward-Thinking
Solutions Today
Serving as one of Southside’s core values,
innovation remains at the forefront of our
strategy for success. In 2021, we continued
to implement new technologies and improve
existing services to provide even greater value
for customers. Our team members worked
diligently to execute numerous major initiatives,
including the following accomplishments.
Account Opening Upgrades
Southside made several enhancements to our
digital account opening platform that customers
utilize when opening deposit accounts or
applying for a loan online. We upgraded the
design of the account opening system to match
Southside’s modern aesthetic and updated the
automated customer emails to create a more
seamless application experience.
We also added the option for current business
account holders to apply for business accounts
through online banking instead of visiting a
branch. This process makes it much faster and
more convenient for business owners to open
additional checking or savings accounts with
Southside.
Electronic Invoices
As supporting small businesses remains a
priority, Southside introduced a new payment
solution. Utilizing the platform, businesses can
quickly create and email professional invoices
to their clients.
Clients can pay invoices via debit card, credit
card or electronic bank transfer. A major
advantage to small business owners, all
payments are then deposited directly into their
Southside business checking account. They
can gain access to detailed reports and easily
track which clients have opened invoices and
made payments.
Contactless Payment
Southside introduced new personal and
business debit card designs complete with
contactless payment technology. Contactless
payment provides an added layer of security
and gives customers the option to make
in-person payments without touching the
terminal. Customers can simply tap or wave
their debit card near the machine to pay at
participating merchants.
2021 ANNUAL REPORT 11
Digital Signatures
Website Refresh
Digital solutions remain top of mind, and Southside
added signature pads at our branches to create
a faster and easier loan opening experience
for customers. Now, customers’ signatures are
captured electronically instead of being required to
sign physical documents.
Teller Capture System
Southside officially converted to a new teller
capture system, which converts paper checks and
other documents into digital images. The system
created multiple new efficiencies for frontline team
members as they serve customers in our branches.
With a focus on increasing search engine ranking
and driving website traffic, southside.com received
a fresh look. The updated website features a
new homepage design, as well as reorganized
header and footer menus to create a better user
experience. As digital experiences become
increasingly important, Southside continues to
optimize the website and will introduce a full
redesign in 2022.
12
SERVICE:
Exceeding Customer
Expectations
Southside aims to make banking as convenient as
possible. In support of this commitment, the Bank
expanded the drive-thru at our South Broadway
location in Tyler. The three additional drive-thru
lanes opened in November to accommodate
even more customers at the high-traffic branch.
Customers also have access to a deposit-taking
ATM 24/7 and Interactive Teller Machines (ITMs).
In 2021, Southside introduced 10 new ITM
locations and now operates 32 ITMs across
our markets. ITMs provide an efficient banking
experience with extended hours of operation.
Customers can utilize an ITM to withdraw and
deposit cash 24/7, deposit checks, make loan
payments, and transfer funds between accounts.
In addition to making transactions, customers can
speak to a live Southside Bank teller for assistance
in English or Spanish.
As Southside Bank continues to progress and
evolve, we don’t lose sight of the real reason we do
what we do: our customers.
Since Southside first opened our doors, customers
have been at the center of everything we do. We
strive not only to meet all our customers’ financial
needs, but to provide a level of excellence and
personal service they can’t find anywhere else.
In April, the Bank opened a new location at 1800
Post Oak Blvd., Ste. 300 in Houston. Expanding
Southside’s footprint in the Houston area, the
office primarily serves the commercial loan market.
The team of commercial lending officers brings
years of lending experience and knowledge, as
well as extensive involvement in the community.
Supporting small businesses impacted by the
COVID-19 pandemic remained very important to
Southside. The Small Business Administration
(SBA) Paycheck Protection Program (PPP) was
expanded for a second round of loans, and
Southside accepted applications to assist more
businesses in need. During the first half of 2021,
Southside originated $112.3 million of additional
PPP loans.
Building strong customer relationships and
serving as their bank of choice is essential. The
Bank has made it a priority to train and license
additional team members to serve in the dual role
of Branch Manager and Mortgage Loan Officer. By
expanding the managers’ capabilities to include
mortgage loans, customers can meet all their
financial needs at each Southside location with
local bankers they know and trust.
2021 ANNUAL REPORT 13
14
SOUTHSIDE BANK
Across the Map
We were founded in Texas in 1960 and
still proudly serve here today. Southside
operates 56 branches throughout East,
North, Central and Southeast Texas. We also
have a network of 73 local ATMs/ITMs, and
are affiliated with more than 55,000 ATMs
across the nation.
NEW MEXICO
Austin
290
183
35
183
MEXICO
2021 ANNUAL REPORT 15
OKLAHOMA
ARKANSAS
Lindale
20
20
Tyler
35W
820
Fort Worth
30
20
35W
Fort Worth
69
Tyler
LOUISIANA
183
Austin
Austin
290
35
183
16
2021 ANNUAL REPORT
SOUTHSIDE BANCSHARES, INC.
Board of Directors
John R. (Bob) Garrett
Chairman of the Board
Donald W. Thedford
Vice Chairman of the Board
17
Lawrence L.
Anderson, MD
S. Elaine
Anderson, CPA
Michael J.
Bosworth
Herbert C.
Buie
Patricia A.
Callan
Shannon
Dacus
Alton L.
Frailey
Lee R. Gibson, CPA
President & CEO
George H. (Trey)
Henderson, III
Melvin B.
Lovelady, CPA
Tony K.
Morgan, CPA
John F.
Sammons, Jr.
H. J.
Shands, III
William
Sheehy
Preston L.
Smith
18
OFFICERS OF SOUTHSIDE BANCSHARES, INC.
Lee R. Gibson, CPA
President and
Chief Executive Officer
Julie N. Shamburger, CPA
Chief Financial Officer
Tim Alexander
Chief Lending Officer
Brian K. McCabe
Chief Operations Officer
Suni Davis, CPA
Chief Risk Officer
T. L. Arnold
Chief Credit Officer
Anne Martinez
Executive Vice President
and Senior Loan Review
Officer
Lindsey Bailes, CPA
Vice President
and Investor Relations
Officer
Vonna Crowley, CRCM
Senior Vice President
and Compliance Officer
Erin Byers
Senior Vice President
and Loan Review Officer
Sandi Hegwood, CPA, CIA
Senior Vice President
and Chief Audit Executive
Katherine Clover, CPA, CIA
Vice President
and Senior Internal Auditor
April Pugh, CPA
Senior Vice President
and Controller
Misty de Wet, CPA
Vice President
and Senior Internal Auditor
Trent Wilson
Vice President
and Loan Review Officer
Austin Fleet
Assistant Vice President
and Internal Auditor
Adam McElroy, CPA, CIA
Assistant Vice President
and Internal Auditor
Mary McLarry
Corporate Secretary
DIRECTORS OF SOUTHSIDE BANK
Tim Alexander*
Chief Lending Officer
Lawrence L.
Anderson, MD
Retired Physician
S. Elaine
Anderson, CPA
Retired Healthcare Executive
Healthcare Consultant
T. L. Arnold*
Chief Credit Officer
Michael J. Bosworth
President
Bosworth & Associates
Peter M. Boyd*
Sr. Executive Vice President
Herbert C. Buie
Retired CEO
and Business Owner
Patricia A. Callan
Principal
Callan Consulting
Tim Carter
Retired Banker
Shannon Dacus
President and Owner
The Dacus Firm
Alton L. Frailey
President
Alton L. Frailey &
Associates, LLC.
John R. (Bob) Garrett
Chairman of the Board
President
Fair Oil Company
Lee R. Gibson, CPA
President and
Chief Executive Officer
George T. Hall*
Retired Banker
George H. (Trey)
Henderson, III
Owner
Henderson Mineral, Inc.
Melvin B.
Lovelady, CPA
Retired Officer and
Shareholder
Henry & Peters, PC
Brian K. McCabe*
Chief Operations Officer
Tony K. Morgan, CPA
Retired Accounting Partner
John F. Sammons, Jr.
Chairman and CEO
Mid-States Services, Inc.
Julie N.
Shamburger, CPA*
Chief Financial Officer
H. J. Shands, III
Retired Banker
William Sheehy
Retired Attorney
Preston L. Smith
President
PSI Production, Inc.
Donald W. Thedford
Vice Chairman of the Board
President
Don’s TV & Appliance, Inc.
Lonny R. Uzzell*
Market President, East Texas
John F. Walker, MD*
Retired Physician
H. Andy Wall*
Retired Banker
*Advisory Directors
2021 ANNUAL REPORT 19
OFFICERS OF SOUTHSIDE BANK
Lee R. Gibson, CPA
President and Chief Executive Officer
Julie N. Shamburger, CPA
Chief Financial Officer
Tim Alexander
Chief Lending Officer
Brian K. McCabe
Chief Operations Officer
T. L. Arnold
Chief Credit Officer
Suni Davis, CPA
Chief Risk Officer
Cindy Blackstone
Chief Retail Officer
Faye Bond
Chief Innovation Officer
Carlos Renteria
Chief Information Security Officer
EAST TEXAS
CENTRAL TEXAS
NORTH TEXAS
SOUTHEAST TEXAS
Regional President
Jared Green
Regional President
Jim Alfred
Regional President
Mark Drennan
Regional President
Jared Green
Market President,
East Texas
Lonny R. Uzzell
Market President,
Austin
Keith Donahoe
Senior Executive
Vice President
Peter M. Boyd
Executive
Vice President
Phyllis Milstead
Executive
Vice Presidents
Joel Adams
Pam Cunningham
Kim Partin, CPA, CTFA
Michael Phea
Leigh Anne Rozell
Greg Sims
Executive
Vice Presidents
Mark Cundiff
Lynn Davis
Christopher Katri
Ron Veitenheimer
CRE Capital
Markets President
Patrick Ramsier
Market President,
Southeast Texas
Codie Jenkins
Market President,
Lufkin
Malcolm Deason
Executive
Vice Presidents
Brad Browder, CFA
Joe (Trey) Denman, III
Ernest King, CPA
20
2021
Form 10-K
2021 ANNUAL REPORT © 2022 Southside Bancshares, Inc. All Rights Reserved. C0322B
CONTACT INFORMATION
Southside Bancshares, Inc.
Post Office Box 1079
Tyler, TX 75710-1079
903.531.7111
MEDIA INQUIRIES
pr@southside.com
INVESTOR INQUIRIES
ir@southside.com