Southside Bancshares, Inc. (SBSI): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Southside Bancshares, Inc. (SBSI) in this late-2025 environment, and honestly, the regional banking landscape is a tightrope walk right now. It's all about navigating increased regulatory pressure while capitalizing on Texas's unrelenting economic momentum. SBSI, with estimated 2025 total assets around $7.8 billion and projected Net Income of $85 million, sits right where new Basel III capital rules meet the intense demand for digital banking. We need to map the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) factors driving their near-term risks-like the escalating cybersecurity budget-and their opportunities, such as the strong Texas job growth fueling loan demand.

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Political factors

Increased regulatory scrutiny on mid-sized banks post-2023 failures.

You're watching the regulatory environment closely, and you should be. The 2023 bank failures in the US created a lasting shift toward intense supervisory scrutiny, even for regional banks like Southside Bancshares, Inc. (SBSI). While SBSI's $8.38 billion in total assets as of Q3 2025 means it falls well below the $100 billion threshold for the most stringent new rules, the supervisory bar for all banks has been raised.

The Fed and FDIC are focusing on liquidity risk management, especially for institutions with a high proportion of uninsured deposits. For SBSI, 36.9% of its total deposits were uninsured as of Q3 2025. That's a key vulnerability the regulators are watching, even if it drops to 21.7% when excluding affiliate and public collateralized deposits. The regulators want to see robust contingency funding plans that account for the speed of modern deposit runs.

Plus, credit quality is under the microscope. SBSI's nonperforming assets (NPA) rose to $35.6 million, or 0.42% of total assets, in Q3 2025, primarily driven by a single restructured commercial real estate (CRE) loan. This single instance shows a heightened sensitivity to asset quality in the current environment. One restructured loan can move the needle for a bank of this size.

Pressure from the Federal Reserve (Fed) on capital adequacy and liquidity rules.

The good news is that SBSI is largely insulated from the most burdensome parts of the proposed Basel III Endgame reforms. The Federal Reserve's revised proposal, following intense industry pushback, is set to exempt banks with assets between $100 billion and $250 billion from the new operational and credit risk capital frameworks.

For SBSI, with its $8.38 billion in assets, the primary regulatory pressure point is the requirement to reflect unrealized gains and losses on available-for-sale (AFS) securities in regulatory capital (Accumulated Other Comprehensive Income, or AOCI). This is a direct lesson from the 2023 failures. SBSI proactively addressed this in Q3 2025 by selling approximately $325 million of lower-yielding AFS securities, which resulted in a one-time $24.4 million net loss, but it cleans up the balance sheet for future interest rate volatility.

The bank's capital position remains exceptionally strong, giving it a solid buffer against any unexpected regulatory tightening:

Honestly, a CET1 ratio of 12.97% is a huge strength. It gives management the flexibility to increase its share repurchase authorization by 1.0 million shares in October 2025 without defintely stressing capital.

Potential for shifting tax policies impacting corporate earnings in 2026.

The political risk around US tax policy for 2026 has significantly decreased, which is a massive relief for corporate planning. The 'One Big Beautiful Bill Act' (OBBBA), passed in July 2025, made permanent many of the expiring individual tax provisions from the 2017 Tax Cuts and Jobs Act (TCJA).

While the corporate tax rate of 21% was not part of the sunset provisions, the legislative action signals a period of tax stability. A reversion to the pre-TCJA corporate rate of 35% is now highly unlikely, removing the biggest single tax risk for corporate earnings.

For SBSI, this stability is key to maintaining its low effective tax rate. The company's effective tax rate in the past 12 months (ending October 2025) was already low at 16.95%. Continued stability in the corporate tax code allows for clearer forecasting of net income and better capital allocation decisions.

Geopolitical stability affecting Texas's energy and manufacturing sectors.

Texas's political and economic stability is a core driver of SBSI's loan portfolio health. The state is the largest exporting state in the US, with its economic fate tied to global trade and energy policy. Geopolitical tensions, particularly those affecting global trade and oil supply, translate directly to credit risk for SBSI's commercial customers.

The Texas energy sector remains robust, with the US Energy Information Administration (EIA) projecting continued increases in US crude oil production through 2026. Texas oil production is expected to be a steady 5.8 million barrels per day. However, global oversupply concerns place a structural cap on sustained high oil prices, which can pressure smaller energy-related borrowers.

On the manufacturing side, which is a growing part of the Texas economy, the outlook is positive but cautious:

• Texas factory activity expanded at a markedly faster pace in November 2025.
• The production index rose 15 points to 20.5, indicating a notable pickup in output growth.
• The new orders index increased to 4.8 from -1.7, showing stronger demand.

So, while the Texas economy is showing strength, its reliance on global trade (especially with Mexico) makes it vulnerable to sudden changes in US tariff policy. The risk is less about domestic stability and more about protectionist trade policies disrupting the supply chains of SBSI's commercial and industrial (C&I) clients.

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Economic factors

Federal Reserve interest rate policy directly impacting Net Interest Margin (NIM).

The Federal Reserve's monetary policy is the single biggest near-term driver of Southside Bancshares, Inc.'s (SBSI) profitability, specifically its Net Interest Margin (NIM). NIM is the core profit engine for any bank-it is the difference between the interest earned on loans and the interest paid on deposits.

As of late 2025, the Fed has shifted toward an easing cycle, having reduced its target for the federal funds rate to a range of 3.75% to 4.00% in October 2025. This move, following a period of aggressive hikes, signals a potential stabilization in funding costs. To be fair, SBSI's NIM has been under pressure, decreasing slightly to 2.94% in the third quarter of 2025, down from 2.95% in the second quarter. This is notably below the typical 3.5% to 4.5% range for community banks. The risk is that the yield on earning assets (loans) will fall faster than the cost of deposits, squeezing that margin further, even as the Fed cuts rates.

Here's the quick math on the NIM challenge:

• Q3 2025 NIM: 2.94%
• Q2 2025 NIM: 2.95%
• Community Bank Average 2025: 3.5%-4.5%

Texas's strong job growth and migration fueling loan demand, especially commercial real estate.

Texas's economy continues to be a massive tailwind for SBSI's lending book. The state's employment growth is outpacing the rest of the US, growing at 2.2% compared to the national 1.6%. This sustained job creation, coupled with continued interstate migration, directly fuels demand for commercial real estate (CRE) loans, which are a focus for SBSI.

The bank is capitalizing on this, evidenced by total loans increasing by $163.4 million in the third quarter of 2025 alone. The CRE market, especially in tech and energy-centric cities like Houston and Austin, remains resilient, driving demand for new and modernized office and industrial spaces. SBSI's loan pipeline was over $2.1 billion in Q2 2025, showing strong market engagement. That kind of loan growth is defintely a key opportunity.

Inflationary pressures stabilizing, but still affecting operational costs and wage growth.

While the Federal Reserve's actions have moderated the worst of the inflationary environment, cost pressures are still impacting the bank's non-interest expenses. US headline inflation (CPI) was 3.0% in September 2025, and the core PCE inflation is projected to be around 2.1% for the full year 2025.

For SBSI, this translates into higher operational costs, particularly for technology, compliance, and labor. While overall wage growth is moderating nationally, the competition for specialized talent in the Texas financial and tech sectors remains fierce, forcing up salary and benefits expenses. Texas businesses in construction and service sectors are also facing higher input prices, which pressures the margins of some of SBSI's commercial clients.

Housing market slowdown risk in Texas metropolitan areas affecting mortgage origination volume.

The Texas housing market is showing clear signs of strain, which presents a risk to SBSI's mortgage origination and residential lending portfolio. In the first quarter of 2025, inventory jumped 30.7% year-over-year, while closed sales declined 1.5%. The statewide median home price is projected to reach $343,800 by year-end 2025, but with sales slowing and prices moderating, the volume of high-margin mortgage origination is at risk.

However, the national forecast for total mortgage origination volume is actually bullish, projected to increase 28% to 6.5 million loans in 2025, driven by lower expected mortgage rates averaging around 6.4%. This national trend might partially offset the local Texas slowdown, but the increased inventory and longer time-to-close (median time stretching to 105 days in Q1 2025) still mean more cautious underwriting is required.

SBSI's projected 2025 Net Income is estimated around $85 million.

Despite the mixed economic signals-a tight NIM but robust loan demand-the consensus outlook for Southside Bancshares remains cautiously optimistic. While one analyst forecast pegs 2025 earnings at $70,019,000, the company is targeting or is estimated to achieve a full-year Net Income of around $85 million. This target relies heavily on successfully managing the cost of funds and realizing the full yield on the $2.1 billion loan pipeline.

What this estimate hides is the volatility seen in Q3 2025, where a significant loss on the sale of available-for-sale securities pushed quarterly net income down to just $4.9 million. Management's ability to execute on its loan growth strategy and keep nonperforming assets in check will be crucial to hitting the $85 million mark.

Next step: Operations should model a 10-basis-point NIM compression scenario to stress-test the $85 million Net Income projection by the end of the week.

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Social factors

Growing demand for digital-first banking and personalized service among younger customers

The shift toward digital-first banking is not a future trend; it's a current reality you must navigate. Across the US, approximately 77\% of consumers prefer to manage their bank accounts using a mobile app or a computer, and that preference is even stronger among Millennials, hitting around 80\%. This means your traditional branch network of 53 branches and 70-73 ATMs/ITMs, while a physical asset, is increasingly viewed as a supplemental service, not the primary interaction point.

The real opportunity lies in personalizing the digital experience, especially for younger customers who are less brand-loyal. Digital banking users in the United States are projected to reach nearly 216.8 million by the end of 2025, so the stakes are high. Southside Bank needs to move beyond basic mobile check deposit and start offering sophisticated tools-like AI-powered budgeting and financial literacy resources-to capture and retain this segment. Honestly, your digital platform is where the next deposit account is won or lost.

Demographic shift in Texas favoring diverse, urban populations requiring tailored products

Texas remains one of the fastest-growing states, a huge advantage for a regional bank like Southside Bancshares. The state's population growth is projected to add 2.1 million people by 2031, which is a massive influx of potential customers. However, this growth is heavily concentrated in urban and suburban ring counties, and it is fundamentally changing the customer profile.

The non-Hispanic white population is the only major ethnic group projected to decline, while the Hispanic population will continue to be the largest, and the Asian population is the fastest-growing in percentage terms. Plus, the 65-and-over demographic is the fastest-growing age group in Texas. This means a one-size-fits-all product strategy is defintely obsolete. You need tailored mortgage products for diverse first-time homebuyers and specialized wealth management services for an aging, affluent demographic.

Here's the quick math on the shifting market:

Increased public focus on local community reinvestment and social impact of banking

As a community-focused financial institution, Southside Bank's reputation is directly tied to its social impact. The public, especially in the wake of recent market volatility, is paying closer attention to how banks fulfill their Community Reinvestment Act (CRA) obligations. Southside Bank has a strong track record, having earned eight consecutive 'Outstanding' CRA Performance Evaluation ratings spanning over 20 years.

This commitment is quantifiable. The bank's equity investments, which include Community Reinvestment Act funds, were approximately \$9.5 million as of June 30, 2024. Furthermore, the company supports community engagement by providing full-time employees with 20 volunteer Paid Time Off (PTO) hours each year. This is a significant social capital asset that must be actively marketed to differentiate the bank from larger, national competitors who often struggle to maintain a local connection.

Talent war for skilled financial and technology employees in the competitive Texas market

The rapid growth of the Texas economy has created a fierce talent war, particularly for specialized roles in finance and technology. Southside Bancshares employs approximately 820-824 people, and retaining and upskilling this workforce is critical. The cost of replacing a key commercial lender or a senior software developer in a high-growth market like Dallas/Fort Worth is substantial.

The firm's strategy, as noted by executives, is to leverage potential talent acquisition from out-of-state bank mergers. This is a smart, opportunistic move to gain experienced staff without engaging in a costly bidding war for local talent. Still, the core challenge remains: you need to continuously hire for high-demand areas.

• Focus hiring on commercial lending teams.
• Increase recruitment for technology and data roles.
• Use bank consolidations to acquire experienced talent pools.

What this estimate hides is the internal training cost required to keep your existing staff competitive against FinTechs and larger banks. Investing in upskilling your current team is just as important as external hiring.

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Technological factors

High investment required to fend off FinTech and large national bank digital offerings.

The core technological challenge for Southside Bancshares, Inc. (SBSI) is the defensive capital expenditure required to maintain parity with national banks and the nimbler FinTech (financial technology) sector. You are not just competing with other regional banks; you are competing with the digital experience offered by giants like JPMorgan Chase and pure-play online lenders.

This reality is directly visible in the company's noninterest expense line. SBSI's noninterest expense for the full year 2024 was $147.1 million, an increase of 4.7% from 2023, and a portion of this growth is explicitly tied to technology. Specifically, the 'Software and data processing expense' line item has been trending up due to new software contracts and rising renewal costs.

Here's the quick math: Based on the Q1 2024 software and data processing run-rate of $2.856 million, the projected annual spend for this core technology area in 2025 is estimated to be around $11.995 million, assuming a conservative 5% increase in this critical area. This is a non-negotiable cost of doing business today. The investment is necessary to support key digital initiatives already underway, such as the new online account opening system and the recently implemented loan origination platform, which are essential for customer acquisition and retention.

• Maintain digital parity with national competitors.
• Fund new software contracts and renewal cost increases.
• Protect the $8.34 billion in total assets from digital disruption.

Need for advanced AI/ML for fraud detection and loan underwriting efficiency.

The integration of Artificial Intelligence (AI) and Machine Learning (ML) is no longer a futuristic concept; it is a critical efficiency and risk management tool for 2025. For a bank like Southside, this technology is vital in two areas: reducing fraud losses and speeding up the loan process to capture more market share.

Industry data shows that AI-driven fraud detection can reduce fraud-related costs by 30% to 50%, a significant saving that directly impacts the bottom line. With the commercial loan platform rolling out in 2024, incorporating ML for automated credit assessment and risk scoring is the next logical step to maximize that investment. Furthermore, in the US mortgage sector, one in three homebuyers is already using AI tools in the process by 2025, setting a clear customer expectation for speed. If your loan underwriting takes 47 days-the US average-while competitors automate 80% of the process, you are losing business.

The table below maps the two most immediate AI/ML opportunities to their financial impact:

Accelerated adoption of cloud infrastructure to improve scalability and reduce legacy system costs.

Cloud migration is an imperative for regional banks looking to shed the high cost and rigidity of legacy, on-premises core systems. The global public cloud market in the Banking, Financial Services, and Insurance (BFSI) sector is expected to reach $92.73 billion in 2025. This is not just for the mega-banks; small and medium financial organizations in North America are projected to allocate over 50% of their tech budgets to cloud services in 2025.

For Southside Bancshares, the move to a hybrid or multi-cloud strategy (using a mix of private and public cloud vendors) is the only way to achieve true scalability for new digital products without massive upfront capital expenditure (CapEx). It shifts costs from CapEx to a more flexible operational expenditure (OpEx) model. This flexibility is crucial for managing the cost of new software contracts, which are already increasing the data processing expense line. The cloud provides the necessary computing power to run the complex AI/ML models needed for advanced fraud and underwriting, something legacy systems struggle to handle efficiently.

Cybersecurity risks escalating, requiring continuous, significant budget allocation.

Cybersecurity is the single largest area of budget increase for US banks in 2025, and for good reason. The threat landscape is escalating rapidly, driven by the rise of AI-enabled fraud-as-a-service operations. Global cybersecurity spending is forecast to reach $212 billion in 2025, a 15% jump from the previous year.

For regional banks like SBSI, the risk is acute. A survey of US bank executives with assets similar to Southside's shows that 88% plan to increase IT spending by at least 10% in 2025, with 86% citing cybersecurity as their biggest area of budget increase. The projected global damages from cybercrime are expected to hit $10.5 trillion annually by 2025, making a breach a catastrophic financial event. Therefore, continuous, significant budget allocation for advanced security services, cloud/AI protections, and talent acquisition is defintely required to protect the company's customer data and reputation. The cost of a breach far outweighs the cost of prevention. The focus must be on new defense systems that unify bot detection and fraud prevention, moving beyond older Virtual Private Networks (VPNs) to more comprehensive Secure Web Gateways (SWGs).

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Legal factors

Impending compliance with the Basel III Endgame proposals increasing capital requirements.

The good news for Southside Bancshares, Inc. is that the most onerous aspects of the Basel III Endgame proposals-the sweeping regulatory changes designed to increase bank capital-will not directly apply to you. The proposal, which begins its transition period in July 2025, primarily targets banks with over $100 billion in total consolidated assets. Since Southside Bancshares, Inc. operates with total assets of approximately $8.38 billion as of November 2025, you fall well below this threshold.

Still, you can't ignore the systemic impact. The affected large banks are estimated to face an aggregate 16% increase in Common Equity Tier 1 capital requirements. This increased cost of capital for competitors could indirectly shift market dynamics, potentially creating opportunities for regional banks like Southside Bancshares, Inc. to gain market share in certain lending areas, or it could simply raise the overall compliance bar for the entire industry. The regulatory environment is defintely getting tougher for everyone, even if the direct rule doesn't hit you yet.

Rigorous enforcement of the Community Reinvestment Act (CRA) in their Texas footprint.

The Community Reinvestment Act (CRA) remains a critical legal factor, especially with the federal banking agencies issuing a final rule to modernize the regulations in late 2023. For Southside Bancshares, Inc., whose operations are concentrated across 53 branches in East, North, Central, and Southeast Texas, compliance is localized and highly visible.

The Bank currently holds a satisfactory CRA rating, which is the baseline for continued expansion and merger/acquisition activity in the high-growth Texas market. The new rules, effective in 2025, emphasize expanded access to credit and banking services in low- and moderate-income communities, and they now include activities associated with online and branchless banking. This means your digital strategy is now explicitly part of your CRA assessment area.

Here's a quick look at the CRA compliance situation:

• Current CRA Rating: Satisfactory.
• Branch Footprint: 53 locations across Texas.
• New Focus: Expanded assessment areas to include online/mobile banking activities.

Ongoing litigation risk related to data privacy and consumer protection laws.

While specific material litigation against Southside Bancshares, Inc. is not widely reported in 2025, the overall litigation risk for regional banks related to data privacy and consumer protection is spiking. The banking industry saw a 64 percent increase in ransomware attacks targeting banks in 2023, and the resulting cyber incidents inevitably lead to lawsuits.

The key legal risks you must actively manage now center on consumer data tracking and credit reporting accuracy:

• Pixel Litigation: Banks nationwide are facing lawsuits for using tracking technologies (like website pixels) that allegedly share customer data with third parties like Google or Facebook without explicit consent.
• Fair Credit Reporting Act (FCRA): Courts are increasing the burden on 'furnishers' of credit information, like Southside Bank, requiring them to investigate customer disputes that are 'objectively and readily verifiable.' This raises the operational cost of compliance for your loan servicing and credit reporting teams.
• SEC Disclosure Rule: Public companies, including Southside Bancshares, Inc., are now required to disclose material cyber incidents within four business days, creating a tight legal and operational timeline during a crisis.

New accounting standards (e.g., CECL) requiring higher loan loss provisioning.

The Current Expected Credit Losses (CECL) accounting standard requires banks to estimate and reserve for all expected losses over the life of a loan, rather than waiting for a loss to be probable. This dramatically increases the volatility and management judgment in your loan loss provisioning. Your Allowance for Loan Losses (ALL) is directly tied to your economic forecast models.

The 2025 fiscal year data clearly shows this volatility. For the three months ended September 30, 2025, Southside Bancshares, Inc. recorded a provision for credit losses for loans of $1.7 million, which is a significant jump from the $0.7 million recorded in the second quarter of 2025 and the mere $42,000 in the first quarter of 2025. This fluctuation is a direct result of management adjusting the economic forecasts used in the CECL model.

Here's the quick math on the CECL impact in 2025, showing how quickly the provision can change based on economic outlook:

What this estimate hides is the underlying reason: the ALL percentage decreased in Q3 2025, despite the high provision, primarily due to an improved commercial real estate forecast in the CECL model. Conversely, the increase in Q2 2025 was driven by an increase in economic uncertainty. This is the new reality: your financial statements are now highly sensitive to economic outlooks.

Southside Bancshares, Inc. (SBSI) - PESTLE Analysis: Environmental factors

You need to understand that for a Texas-focused regional bank like Southside Bancshares, Inc. (SBSI), Environmental factors are less about direct carbon emissions and more about physical risk and investor perception. The near-term focus is squarely on climate-related credit risk in the loan book, especially given the volatility of Texas weather, and managing growing stakeholder demands for transparency.

Here's the quick math: SBSI's total assets are estimated to be around $8.38 billion for the 2025 fiscal year, based on the September 30, 2025, balance sheet. That size puts them squarely in the crosshairs of new regulatory burdens, but still small enough to maintain a strong, local relationship-banking model. They defintely need to balance that compliance cost with their digital investment.

Next step: Finance: Draft a 12-month capital expenditure plan by Friday, prioritizing Basel III compliance technology and core digital platform upgrades.

Increased stakeholder demand for transparent Environmental, Social, and Governance (ESG) reporting

Investor and public pressure for clear ESG (Environmental, Social, and Governance) disclosures is no longer a niche issue; it's a mainstream expectation. While SBSI's trailing twelve-month revenue of approximately $236.35 million as of Q3 2025 keeps them below the revenue thresholds for some of the most stringent new state-level mandates, like California's SB 261, the pressure comes from institutional investors. These large investors operate globally and apply a single standard to all their holdings.

The bank has already responded by adopting an 'Environmental Policy Statement,' signaling a formal commitment to environmental stewardship. However, the current disclosures remain high-level, focusing on general community involvement rather than hard environmental metrics. To meet evolving expectations and maintain a strong valuation, SBSI must move from policy statements to measurable, auditable data on their operational and financed emissions.

• Investor Focus: Institutional investors increasingly use ESG scores to screen for long-term risk and capital allocation.
• Current Disclosure: Focuses on community, including $17 million in community development loans originated in 2024.
• Near-Term Action: Develop a plan to calculate and disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions for their 53 branches and 70 ATMs/ITMs across Texas.

Federal Reserve guidance urging banks to assess climate-related financial risks in loan portfolios

The regulatory landscape for climate risk is shifting rapidly, but the immediate pressure on SBSI is nuanced. In a late 2025 development, the Federal Reserve, FDIC, and OCC rescinded the specific 'Principles for Climate-Related Financial Risk Management' framework. This framework was explicitly aimed at large financial institutions with over $100 billion in total assets, meaning SBSI was never directly in scope for that particular guidance.

But, the core expectation remains: all supervised institutions, regardless of size, must consider and appropriately address all material financial risks. For a bank with $8.38 billion in assets concentrated in Texas, physical climate risk is absolutely a material risk. The rescission simply means the Fed won't provide a prescriptive, climate-specific checklist, forcing SBSI to integrate these risks into their existing enterprise risk management (ERM) framework without a clear regulatory template.

Exposure to extreme weather events in Texas (hurricanes, droughts) impacting loan collateral values

The most tangible environmental threat to SBSI is the physical risk posed by Texas's extreme weather. The bank's entire footprint-East Texas, Southeast Texas, Dallas/Fort Worth, and Austin-is prone to hurricanes, severe storms, and prolonged droughts.

This risk directly impacts the quality of their loan collateral, particularly in their commercial real estate and residential mortgage portfolios. The July 2025 severe storms and flooding in Texas, which prompted the FDIC to issue regulatory relief, serve as a fresh reminder of this credit risk. Nonperforming assets (NPA) at SBSI were already at $35.6 million, or 0.42% of total assets, as of September 30, 2025. While this ratio is still low, a single major weather event could cause a sharp spike in defaults, particularly among borrowers whose income or property value is compromised.

Pressure to finance green energy projects and reduce carbon footprint in operations

The pressure to finance green energy is a strategic opportunity for SBSI, not yet a compliance burden. While global banks financed only $0.89 of low-carbon energy for every $1.00 of fossil fuels in 2024, the Texas market is a massive, growing hub for both traditional energy and renewables.

SBSI's current public-facing environmental efforts focus on operational efficiency and community development. They need to decide if they will proactively build a dedicated green financing portfolio to capture this growth. Right now, their commitment is qualitative. A clear, quantifiable target for financing renewable energy projects within their Texas footprint would be a strong signal to the market, especially given the state's significant wind and solar capacity. Without a stated target, they risk missing out on a major growth area and falling behind peers who are starting to publish Energy Supply Banking Ratios (ESBRs).