T. L. Arnold, Jr.
About T. L. Arnold, Jr.
Chief Credit Officer of Southside Bancshares, Inc. and Southside Bank; advisory director of Southside Bank. Age 61; BBA from the University of Texas at Arlington; >40 years banking experience; joined Southside in Dec 2014 via the OmniAmerican acquisition, served as EVP/Senior Credit Officer until Mar 2019, then CCO . Company performance and incentive alignment: 2024 EPS and ROATCE exceeded targets (EPS $2.98 vs $2.66; ROATCE 15.25% vs 13.77%), NPAs/total assets improved to 0.04% leading to 118.5% of AIP target payout for Arnold . Southside’s 2024 net income was $88.5M, ROATCE 14.92%, with TSR of 105.10 vs peer group 131.64, framing pay-versus-performance context .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Southside Bank | Executive Vice President, Senior Credit Officer | Dec 2014 – Mar 2019 | Senior credit leadership following OmniAmerican acquisition |
| Southside Bancshares/Southside Bank | Chief Credit Officer | Mar 2019 – present | Enterprise-wide credit oversight; advisory director of Southside Bank |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| William Mann Community Development Corporation | Board of Directors | — | Community development governance |
| Meals on Wheels of Tarrant County | Volunteer involvement | — | Community engagement |
Fixed Compensation
Multi-year compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $335,000 | $357,167 | $386,000 |
| Stock Awards (grant-date fair value) | $83,730 | $87,114 | $144,771 |
| Non-Equity Incentive Plan (AIP) | $145,711 | $108,371 | $182,963 |
| All Other Compensation | $18,169 | $19,132 | $19,892 |
| Total | $582,710 | $571,784 | $733,626 |
2024 fixed items:
| Item | Amount |
|---|---|
| Base salary | $386,000 |
| 401(k) match | $13,800 |
| ESOP contribution | $6,092 |
| Club dues | $0 (not provided for Arnold) |
| All other compensation total | $19,892 |
2024 salary adjustments: Arnold received a 3.1% base salary increase for 2024 reflecting role, tenure, performance, and market benchmarking .
Performance Compensation
2024 AIP structure and outcomes:
| Metric | Weighting | Target | Actual 2024 | Payout basis | Payout |
|---|---|---|---|---|---|
| EPS | 40% | $2.66 | $2.98 (adjusted for net securities losses) | Straight-line | 111.7% |
| ROATCE | 15% | 13.77% | 15.25% | Straight-line | 108.9% |
| NPAs / Total Assets | 20% | 0.05% | 0.04% | Straight-line | 125.0% |
| Qualitative scorecard | 25% | Above target | Above target | Committee assessment | 130% |
| Total payout vs target | — | — | — | Weighted aggregate | 118.5% |
| Total payout (USD) | — | — | — | — | $182,963 |
2024 equity awards (50% RSUs / 50% PSUs):
| Award type | Grant date | Shares (target) | Threshold | Maximum | Grant-date fair value |
|---|---|---|---|---|---|
| RSU | 2/1/2024 | 2,354 | — | — | $72,386 |
| PSU (ROATCE vs KRX peers) | 2/1/2024 | 2,354 | 1,177 | 3,531 | $72,386 |
Vesting mechanics:
- RSUs vest in three equal annual installments beginning on the first anniversary of grant; accelerated upon death/disability and upon qualifying CIC conditions if awards are not assumed (or double-trigger if assumed) .
- PSUs cliff-vest on the third anniversary; earned 0–150% based on ROATCE percentile vs KBW Nasdaq Regional Bank Index (KRX) with straight-line interpolation; pro-rata treatment and target/actual performance rules under retirement, death/disability, and CIC as specified .
Equity Ownership & Alignment
Ownership and outstanding awards (as of relevant dates):
| Item | Amount |
|---|---|
| Beneficial ownership (total shares) | 31,340; includes 15,171 owned individually, 1,632 ESOP vested shares, and 14,537 options exercisable within 60 days |
| Ownership as % of outstanding shares | Less than 1% (30,409,265 shares outstanding) |
| Stock ownership guideline | Other Executive Officers: 0.5x base salary required; Arnold stock deemed held 21,218, >100% of requirement (compliant) as of Mar 19, 2025 |
| Anti-hedging / anti-pledging | Company policy prohibits hedging, short sales, and pledging of Company stock |
Unvested awards detail (12/31/2024):
| Grant year | RSUs unvested (shares) | PSUs unearned (max basis shares) | Notes |
|---|---|---|---|
| 2022 | 381 | 1,710 | RSUs vest annually over 3 years; PSUs 3-year period ending 12/31/2024 |
| 2023 | 819 | 1,842 | PSUs 3-year period ending 12/31/2025 |
| 2024 | 2,468 | 3,702 | PSUs 3-year period ending 12/31/2026 |
Options outstanding (exercisable):
| Grant | Exercisable | Exercise price | Expiration |
|---|---|---|---|
| 11/23/2016 | 3,420 | $37.28 | 11/23/2026 |
| 6/18/2018 | 4,750 | $34.50 | 6/18/2028 |
| 11/21/2019 | 6,367 | $34.83 | 11/21/2029 |
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Effective Apr 28, 2014; auto-renews annually; current term through Apr 28, 2027 |
| Severance (no CIC) | Lump sum: monthly salary × months remaining in term (24–36 months), plus pro-rata bonus (actual for Arnold) on termination date; immediate vesting/exercisability of equity awards; other benefits per plan |
| Severance (CIC + termination) | Lump sum: monthly salary × months remaining in term, plus additional 1× base salary if termination occurs within 2 years post-CIC; pro-rata target bonus; equity acceleration per award terms (double-trigger if awards assumed) |
| Non-compete / non-solicit | One-year post-termination non-compete and non-solicitation covenants (Arnold) |
| Clawback | Compensation Recoupment Policy aligned with NYSE/SEC Rule 10D-1; recovery for restatements and misconduct |
| Anti-hedging/pledging | Prohibits hedging, short sales, and pledging of Company securities |
| Section 16 compliance | One late Form 4 filed on Feb 9, 2024 for grant and tax withholding entries |
Related party transactions:
- Arnold’s sister, Toni Brooks, is employed by Southside Bank; 2024 compensation $130,156 (loans/transactions governed under Regulation O; board oversight per conflict policy) .
Investment Implications
- Pay-for-performance alignment is solid: AIP weights credit quality (NPAs), profitability (EPS, ROATCE), and qualitative strategic goals; 2024 overachievement yielded 118.5% of target payout, consistent with improved credit metrics and profitability . Equity mix includes PSUs tied to ROATCE vs KRX, promoting longer-term value creation and risk-adjusted returns .
- Retention risk appears contained: multi-year employment term through 2027, double-trigger CIC severance, and multi-year RSU/PSU vesting support continuity; ownership policy compliance (>100%) and anti-pledging reduce misalignment risk .
- Trading signals: Near-term vesting events (annual RSU tranches each February; PSU cliffs in 2025–2026) could create periodic selling windows, but anti-hedging/pledging constraints and insider policy oversight mitigate pressure; note one late Form 4 (administrative) .
- Governance considerations: presence of a related party employment warrants ongoing monitoring, but transactions adhere to Regulation O and board review; broader say-on-pay support (94% in 2024) and formal clawback policy strengthen shareholder protections .