Southside Bancshares Inc (NYSE: SBSI)

Southside Bancshares Inc., also known as SBSI, operates in the banking industry, with its subsidiary, Southside Bank, offering a range of financial services to individuals, businesses, municipal entities, and non-profit organizations. The company's headquarters are located in Tyler, Texas, and it has a presence in East Texas, Southeast Texas, and the greater Dallas-Fort Worth, Austin, and Houston areas, with 55 branches and 38 drive-thru facilities.

Southside Bancshares Inc. generates revenue primarily through consumer and commercial loans, deposit accounts, wealth management, and trust services. Its consumer loan services include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer-related loans. Commercial loan services include short-term working capital loans for inventory and accounts receivable, short- and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans.

The company's wealth management and trust services include investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services, primarily for individuals and, to a lesser extent, partnerships and corporations. Additionally, Southside Bank offers retirement and employee benefit accounts, including IRAs, 401(k) plans, and profit-sharing plans.

Southside Bancshares Inc. has a long history of serving its communities, with a presence in East Texas dating back to 1960. Its commitment to community banking and local decision-making has helped the company build strong relationships with its customers and establish a reputation for reliability and trust. The company's employees are valued and provided with a comprehensive benefits package, including 15-30 days of annual paid time off, sick leave, participation in its employee stock ownership plan (ESOP), and a 401(k) match for eligible employees. Southside Bancshares Inc. is committed to creating a diverse and inclusive workforce.

As a bank holding company, Southside Bancshares Inc. is regulated by the Federal Reserve, the Texas Department of Banking (TDB), and the Federal Deposit Insurance Corporation (FDIC). It is subject to comprehensive regulation, examination, and supervision by these regulatory bodies and is also subject to various federal and state laws and regulations, including the Bank Holding Company Act of 1956, the Gramm-Leach-Bliley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The banking industry is highly competitive, with financial institutions such as credit unions, fintech companies, consumer finance companies, insurance companies, brokerage companies, and other financial institutions competing for market share. Despite the competition, Southside Bancshares Inc. has a strong competitive position in its market areas.

Southside Bancshares Inc. is a well-capitalized institution, with a total risk-based capital ratio of 12.11% as of December 31, 2023. The company's capital adequacy is subject to the prompt corrective action regulations, which require the FDIC to rate insured depository institutions based on their capital categories. The company's capital plan is subject to review and approval by the FDIC, and failure to meet capital guidelines may subject the company to a variety of enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC, and the appointment of a conservator or receiver.

Southside Bank is subject to the regulations of the Financial Crimes Enforcement Network (FinCEN), which implements the Bank Secrecy Act, as amended by the USA PATRIOT Act and the Anti-Money Laundering Act of 2020. The company is required to establish an anti-money laundering program, including adoption of written procedures and an ongoing employee training program, designation of a compliance officer, and auditing of the program. Southside Bank is also subject to federal and state laws for maintaining the security and confidentiality of customer information. The company is required to have an information security program to safeguard the confidentiality and security of customer information and to ensure proper disposal. In the event of a security breach, the company is required to notify individuals and regulators within a specified timeframe.

Southside Bank and its institution-affiliated parties are subject to potential civil and criminal penalties for violations of law, regulations, or written orders of a government agency. Violations can include failure to timely file required reports, filing false or misleading information, or submitting inaccurate reports. Civil penalties may be as high as $1,000,000 a day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years.