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Southside Bancshares (SBSI) Margin Compression Challenges Bullish Growth And Valuation Narratives

Simply Wall St·01/30/2026 00:42:58
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Southside Bancshares (SBSI) has wrapped up FY 2025 with fourth quarter revenue of US$62.2 million and basic EPS of US$0.70, alongside trailing twelve month revenue of US$234.0 million and EPS of US$2.30. Over recent periods the company has seen quarterly revenue move from US$64.6 million in Q4 2024 to US$62.2 million in Q4 2025, with basic EPS shifting from US$0.72 to US$0.70, setting a measured backdrop for the latest FY 2025 report and the bank’s 29.6% net profit margin. For investors, the balance between this profitability profile and expectations for future revenue and earnings growth will be central to how the results land.

See our full analysis for Southside Bancshares.

With the headline numbers on the table, the next step is to see how this earnings print lines up against the prevailing growth and valuation narratives that have been building around Southside Bancshares over the past year.

Curious how numbers become stories that shape markets? Explore Community Narratives

NYSE:SBSI Revenue & Expenses Breakdown as at Jan 2026
NYSE:SBSI Revenue & Expenses Breakdown as at Jan 2026

29.6% net margin, but five year earnings trend is weaker

  • Over the last 12 months, Southside Bancshares earned US$69.22 million on US$233.99 million of revenue, giving a 29.6% net profit margin compared with a 34.7% margin a year earlier and an average earnings decline of about 7.5% per year over five years.
  • Bears focus on that 7.5% annual earnings decline and the lower margin, yet those points sit alongside:
    • Quarterly net income in FY 2025 mostly around US$21 million, with Q4 at US$20.99 million and three of the four quarters near that level.
    • Trailing twelve month EPS of US$2.30, which is still backed by what the analysis describes as high quality earnings despite the longer term decline.

DCF fair value of US$65.62 vs US$32.31 share price

  • The shares are reported at US$32.31 compared with a DCF fair value estimate of about US$65.62, while the stock trades on a 14x P/E versus 10.2x for peers and 11.7x for the US Banks industry.
  • What stands out for the bullish view is the mix of an indicated 50.8% gap to DCF fair value and richer P/E:
    • Supporters point to forecast revenue growth of about 13.5% a year and earnings growth around 16.9% as reasons the market might accept a higher multiple than peer and industry averages.
    • Critics highlight that the same stock with a 29.6% margin and a five year earnings decline around 7.5% per year is already on a premium P/E, which challenges the idea that the discount to DCF alone tells the full story.
Have analysts already priced in too much future growth, or does that gap to DCF fair value still leave room for upside for a patient holder? 📊 Read the full Southside Bancshares Consensus Narrative.

4.46% dividend yield alongside loan and asset quality trends

  • The company pays a 4.46% dividend yield on top of US$4,765.29 million of loans in Q3 2025, with non performing loans reported at US$35.46 million in that quarter versus US$3.19 million a year earlier in Q4 2024.
  • Income focused investors weighing the bullish case often balance that 4.46% yield against asset quality signals:
    • Non performing loans have been listed at US$31.76 million in Q1 2025, US$32.51 million in Q2 2025 and US$35.46 million in Q3 2025, all above the US$7.25 million level in Q3 2024 and US$3.19 million in Q4 2024.
    • At the same time, quarterly net income figures between roughly US$20.51 million and US$21.80 million in most recent quarters support the idea that the bank has been able to fund that dividend from ongoing profitability.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Southside Bancshares's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Southside Bancshares pairs a 29.6% net margin and 4.46% dividend yield with a five year earnings decline, a premium P/E and rising non performing loans.

If you want payout income without leaning into those pressures, check out our these 1813 dividend stocks with yields > 3% to find companies where the yield and fundamentals work more cleanly together.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.