• South Plains Financial, Inc. Reports Third Quarter 2024 Financial Results

    ソース: Nasdaq GlobeNewswire / 23 10 2024 16:10:48   America/New_York

    LUBBOCK, Texas, Oct. 23, 2024 (GLOBE NEWSWIRE) -- South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the “Company”), the parent company of City Bank (“City Bank” or the “Bank”), today reported its financial results for the quarter ended September 30, 2024.

    Third Quarter 2024 Highlights

    • Net income for the third quarter of 2024 was $11.2 million, compared to $11.1 million for the second quarter of 2024 and $13.5 million for the third quarter of 2023.
    • Diluted earnings per share for the third quarter of 2024 was $0.66, compared to $0.66 for the second quarter of 2024 and $0.78 for the third quarter of 2023.
    • Average cost of deposits for the third quarter of 2024 was 247 basis points, compared to 243 basis points for the second quarter of 2024 and 207 basis points for the third quarter of 2023.
    • Net interest margin, calculated on a tax-equivalent basis, was 3.65% for the third quarter of 2024, compared to 3.63% for the second quarter of 2024 and 3.52% for the third quarter of 2023.
    • Nonperforming assets to total assets were 0.59% at September 30, 2024, compared to 0.57% at June 30, 2024 and 0.12% at September 30, 2023.
    • Return on average assets for the third quarter of 2024 was 1.05% annualized, compared to 1.07% annualized for the second quarter of 2024 and 1.27% annualized for the third quarter of 2023.
    • Tangible book value (non-GAAP) per share was $25.75 as of September 30, 2024, compared to $24.15 as of June 30, 2024 and $21.07 as of September 30, 2023.
    • The consolidated total risk-based capital ratio, Common Equity Tier 1 risk-based capital ratio, and Tier 1 leverage ratio at September 30, 2024 were 17.61%, 13.25%, and 11.76%, respectively. These ratios significantly exceeded the minimum regulatory levels necessary to be deemed “well-capitalized”.

    Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “I’m pleased with our third quarter results, which I believe demonstrate that the Bank is performing at a high level. We remain well capitalized and focused on managing our loan portfolio as the credit environment continues to normalize. Against this backdrop, we are maintaining our credit discipline and not stretching to chase loan growth. We are also building liquidity as we expect the Federal Reserve to continue reducing their market interest rate to stimulate economic growth looking to the year ahead. Importantly, we are seeing a level of optimism from our customers that we have not seen over the last seven to eight quarters and our new business production pipeline is the strongest that it has been in more than two years. Looking forward, we remain confident in the credit profile of our loan portfolio and are cautiously optimistic that we will see loan growth accelerate in the quarters ahead. Additionally, we are beginning to see deposit cost pressures ease, which we expect will be supportive of our net interest margin as well as continued deposit growth.”

    Results of Operations, Quarter Ended September 30, 2024

    Net Interest Income

    Net interest income was $37.3 million for the third quarter of 2024, compared to $35.9 million for the second quarter of 2024 and $35.7 million for the third quarter of 2023. Net interest margin, calculated on a tax-equivalent basis, was 3.65% for the third quarter of 2024, compared to 3.63% for the second quarter of 2024 and 3.52% for the third quarter of 2023. The average yield on loans was 6.68% for the third quarter of 2024, compared to 6.60% for the second quarter of 2024 and 6.10% for the third quarter of 2023. The average cost of deposits was 247 basis points for the third quarter of 2024, which is 4 basis points higher than the second quarter of 2024 and 40 basis points higher than the third quarter of 2023.

    Interest income was $61.6 million for the third quarter of 2024, compared to $59.2 million for the second quarter of 2024 and $56.5 million for the third quarter of 2023. Interest income increased $2.4 million in the third quarter of 2024 from the second quarter of 2024, which was primarily comprised of an increase of $934 thousand in loan interest income and an increase of $1.5 million in interest income on other interest-earning assets. The growth in loan interest income was due to a rise of 8 basis points in the yield on loans, partially offset by a decrease in average loans of $12.7 million. The increase in interest income on other interest-earning assets was predominately a result of increased liquidity from growth in deposits and a net decrease in loans during the third quarter. Interest income increased $5.1 million in the third quarter of 2024 compared to the third quarter of 2023. This increase was primarily due to an increase of average loans of $64.2 million and higher market interest rates during the period, resulting in growth of $5.3 million in loan interest income.

    Interest expense was $24.3 million for the third quarter of 2024, compared to $23.3 million for the second quarter of 2024 and $20.8 million for the third quarter of 2023. Interest expense increased $1.0 million compared to the second quarter of 2024 and increased $3.5 million compared to the third quarter of 2023. The $1.0 million increase was primarily as a result of growth in average interest-bearing deposits of $64.4 million. The $3.5 million increase was primarily as a result of growth in average interest-bearing deposits of $111.2 million and a 43 basis point increase in the cost of interest-bearing liabilities.

    Noninterest Income and Noninterest Expense

    Noninterest income was $10.6 million for the third quarter of 2024, compared to $12.7 million for the second quarter of 2024 and $12.3 million for the third quarter of 2023. The decrease from the second quarter of 2024 was primarily due to a decrease of $1.5 million in mortgage banking revenues, mainly from a decrease of $1.4 million in the fair value adjustment of the mortgage servicing rights assets as interest rates that affect the value declined in the third quarter of 2024. Additionally, there was a decrease of $750 thousand in bank card services and interchange revenue mainly as a result of incentives received during the second quarter of 2024 and a decrease of $315 thousand in income from investments in Small Business Investment Companies. The decrease in noninterest income for the third quarter of 2024 as compared to the third quarter of 2023 was primarily due to a decrease of $2.7 million in mortgage banking activities revenue mainly from a decline of $2.7 million in the fair value adjustment of the mortgage servicing rights assets as interest rates that affect the value declined in the third quarter of 2024. Further, there was approximately $700 thousand in insurance proceeds received for property damage in the third quarter of 2024, which affected other noninterest income in both period comparisons.

    Noninterest expense was $33.1 million for the third quarter of 2024, compared to $32.6 million for the second quarter of 2024 and $31.5 million for the third quarter of 2023. The $556 thousand increase from the second quarter of 2024 was largely the result of a rise of $226 thousand in net occupancy expenses, primarily from increased utilities, growth of $155 thousand in marketing and development expenses, and smaller increases in other noninterest expenses - including operational and fraud losses, losses on disposal of fixed assets, settlements, and charitable donations. These increases were partially offset by a decrease of $432 thousand in personnel costs as there was an additional $350 thousand in accrued expense in the second quarter related to incentive-based compensation. The increase in noninterest expense for the third quarter of 2024 as compared to the third quarter of 2023 was largely the result of an increase of $274 thousand in IT and data services related to the Company’s cloud project, an increase of $247 thousand in professional services mainly from legal expenses, and smaller increases in other noninterest expenses - including losses on disposal of fixed assets, settlements, and charitable donations.

    Loan Portfolio and Composition

    Loans held for investment were $3.04 billion as of September 30, 2024, compared to $3.09 billion as of June 30, 2024 and $2.99 billion as of September 30, 2023. The $56.9 million, or 1.8%, decrease during the third quarter of 2024 as compared to the second quarter of 2024 occurred primarily as a result of the expected payoff of a $16 million short-term bridge note that was originated in the second quarter of 2024, the early payoff of a $17 million residential land development loan, and an $18 million decrease in consumer auto loans. As of September 30, 2024, loans held for investment increased $43.8 million, or 1.5%, from September 30, 2023, primarily attributable to strong organic loan growth, occurring mainly in multi-family property loans, direct-energy loans, and single-family property loans, partially offset by decreases in consumer auto loans and construction, land, and development loans.

    Deposits and Borrowings

    Deposits totaled $3.72 billion as of September 30, 2024, compared to $3.62 billion as of June 30, 2024 and $3.62 billion as of September 30, 2023. Deposits increased by $94.8 million, or 2.6%, in the third quarter of 2024 from June 30, 2024. As of September 30, 2024, deposits increased $98.7 million, or 2.7%, from September 30, 2023. Noninterest-bearing deposits were $998.5 million as of September 30, 2024, compared to $951.6 million as of June 30, 2024 and $1.05 billion as of September 30, 2023. Noninterest-bearing deposits represented 26.9% of total deposits as of September 30, 2024. The quarterly change in total deposits was mainly due to organic growth in both noninterest-bearing and interest-bearing deposits. The year-over-year increase in total deposits was primarily the result of organic growth in interest-bearing deposits, given the overall focus in the banking industry on improving liquidity, partially offset by a decline in noninterest-bearing deposits.

    Asset Quality

    The Company recorded a provision for credit losses in the third quarter of 2024 of $495 thousand, compared to $1.8 million in the second quarter of 2024 and a negative provision of $700 thousand in the third quarter of 2023. The provision during the third quarter of 2024 was largely attributable to net charge-off activity, partially offset by decreased loan balances.

    The ratio of allowance for credit losses to loans held for investment was 1.41% as of September 30, 2024, compared to 1.40% as of June 30, 2024 and 1.41% as of September 30, 2023.

    The ratio of nonperforming assets to total assets was 0.59% as of September 30, 2024, compared to 0.57% as of June 30, 2024 and 0.12% as of September 30, 2023. The previously disclosed $20.0 million multi-family property credit, which was placed on nonaccrual status in the second quarter of 2024 after the maturity date was accelerated, was subsequently modified during the third quarter. The modification included more stringent credit metrics. Although the loan remains in nonaccrual status, the loan continues to pay as agreed and is showing improving credit trends. Annualized net charge-offs were 0.11% for the third quarter of 2024, compared to 0.10% for the second quarter of 2024 and 0.05% for the third quarter of 2023.

    Capital

    Book value per share increased to $27.04 at September 30, 2024, compared to $25.45 at June 30, 2024. The change was primarily driven by $8.9 million of net income after dividends paid and an increase in accumulated other comprehensive income (“AOCI”) of $16.6 million. The increase in AOCI was attributed to the after-tax increase in fair value of our available for sale securities, net of fair value hedges, as a result of decreases in long-term market interest rates during the period. Tangible common equity to tangible assets (non-GAAP) increased 33 basis points to 9.77% in the third quarter of 2024.

    Conference Call

    South Plains will host a conference call to discuss its third quarter 2024 financial results today, October 23, 2024, at 5:00 p.m., Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call and conference materials will be available on the Company’s website at https://www.spfi.bank/news-events/events.

    A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed on the investor section of the Company’s website as well as by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671). The pin to access the telephone replay is 13749147. The replay will be available until November 6, 2024.

    About South Plains Financial, Inc.

    South Plains is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas. City Bank is one of the largest independent banks in West Texas and has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. South Plains provides a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas. Its principal business activities include commercial and retail banking, along with investment, trust and mortgage services. Please visit https://www.spfi.bank for more information.

    Non-GAAP Financial Measures

    Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Pre-Tax, Pre-Provision Income. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

    We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

    A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

    Available Information

    The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

    The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this document.

    Forward Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to future events and South Plains’ financial performance. Any statements about South Plains’ expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. South Plains cautions that the forward-looking statements in this press release are based largely on South Plains’ expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond South Plains’ control. Factors that could cause such changes include, but are not limited to, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; potential recession in the United States and our market areas; the impacts related to or resulting from bank failures and any continuation of uncertainty in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response thereto; increased competition for deposits in our market areas and related changes in deposit customer behavior; the impact of changes in market interest rates, whether due to the current elevated interest rate environment or future reductions in interest rates and a resulting decline in net interest income; the resurgence of elevated levels of inflation or inflationary pressures, in the United States and our market areas; the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; increases in unemployment rates in the United States and our market areas; declines in commercial real estate values and prices; uncertainty regarding United States fiscal debt, deficit and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events; the impact of changes in U.S. presidential administrations or Congress; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential increased regulatory requirements and costs related to the transition and physical impacts of climate change; current or future litigation, regulatory examinations or other legal and/or regulatory actions; and changes in applicable laws and regulations. Additional information regarding these risks and uncertainties to which South Plains’ business and future financial performance are subject is contained in South Plains’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of such documents, and other documents South Plains files or furnishes with the SEC from time to time, which are available on the SEC’s website, www.sec.gov. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements due to additional risks and uncertainties of which South Plains is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results. Due to these and other possible uncertainties and risks, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Any forward-looking statements presented herein are made only as of the date of this press release, and South Plains does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, new information, the occurrence of unanticipated events, or otherwise, except as required by applicable law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

    Contact:Mikella Newsom, Chief Risk Officer and Secretary
     (866) 771-3347
     investors@city.bank
      

    Source: South Plains Financial, Inc.

     
    South Plains Financial, Inc.
    Consolidated Financial Highlights - (Unaudited)
    (Dollars in thousands, except share data)
     
     As of and for the quarter ended
     September 30,
    2024
     June 30,
    2024
     March 31,
    2024
     December 31,
    2023
     September 30,
    2023
    Selected Income Statement Data:              
    Interest income$61,640  $59,208  $58,727  $57,236  $56,528 
    Interest expense 24,346   23,320   23,359   22,074   20,839 
    Net interest income 37,294   35,888   35,368   35,162   35,689 
    Provision for credit losses 495   1,775   830   600   (700)
    Noninterest income 10,635   12,709   11,409   9,146   12,277 
    Noninterest expense 33,128   32,572   31,930   30,597   31,489 
    Income tax expense 3,094   3,116   3,143   2,787   3,683 
    Net income 11,212   11,134   10,874   10,324   13,494 
    Per Share Data (Common Stock):              
    Net earnings, basic$0.68  $0.68  $0.66  $0.63  $0.80 
    Net earnings, diluted 0.66   0.66   0.64   0.61   0.78 
    Cash dividends declared and paid 0.14   0.14   0.13   0.13   0.13 
    Book value 27.04   25.45   24.87   24.80   22.39 
    Tangible book value (non-GAAP) 25.75   24.15   23.56   23.47   21.07 
    Weighted average shares outstanding, basic 16,386,079   16,425,360   16,429,919   16,443,908   16,842,594 
    Weighted average shares outstanding, dilutive 17,056,959   16,932,077   16,938,857   17,008,892   17,354,182 
    Shares outstanding at end of period 16,386,627   16,424,021   16,431,755   16,417,099   16,600,442 
    Selected Period End Balance Sheet Data:              
    Cash and cash equivalents$471,167  $298,006  $371,939  $330,158  $352,424 
    Investment securities 606,889   591,031   599,869   622,762   584,969 
    Total loans held for investment 3,037,375   3,094,273   3,011,799   3,014,153   2,993,563 
    Allowance for credit losses 42,886   43,173   42,174   42,356   42,075 
    Total assets 4,337,659   4,220,936   4,218,993   4,204,793   4,186,440 
    Interest-bearing deposits 2,720,880   2,672,948   2,664,397   2,651,952   2,574,361 
    Noninterest-bearing deposits 998,480   951,565   974,174   974,201   1,046,253 
    Total deposits 3,719,360   3,624,513   3,638,571   3,626,153   3,620,614 
    Borrowings 110,307   110,261   110,214   110,168   122,493 
    Total stockholders’ equity 443,122   417,985   408,712   407,114   371,716 
    Summary Performance Ratios:              
    Return on average assets (annualized) 1.05%  1.07%  1.04%  0.99%  1.27%
    Return on average equity (annualized) 10.36%  10.83%  10.72%  10.52%  14.01%
    Net interest margin (1) 3.65%  3.63%  3.56%  3.52%  3.52%
    Yield on loans 6.68%  6.60%  6.53%  6.29%  6.10%
    Cost of interest-bearing deposits 3.36%  3.33%  3.27%  3.14%  2.93%
    Efficiency ratio 68.80%  66.72%  67.94%  68.71%  65.34%
    Summary Credit Quality Data:              
    Nonperforming loans$24,693  $23,452  $3,380  $5,178  $4,783 
    Nonperforming loans to total loans held for investment 0.81%  0.76%  0.11%  0.17%  0.16%
    Other real estate owned 973   755   862   912   242 
    Nonperforming assets to total assets 0.59%  0.57%  0.10%  0.14%  0.12%
    Allowance for credit losses to total loans held for investment 1.41%  1.40%  1.40%  1.41%  1.41%
    Net charge-offs to average loans outstanding (annualized) 0.11%  0.10%  0.13%  0.08%  0.05%
                        


     As of and for the quarter ended
     September 30
    2024
     June 30,
    2024
     March 31,
    2024
     December 31,
    2023
     September 30,
    2023
    Capital Ratios:              
    Total stockholders’ equity to total assets 10.22%  9.90%  9.69%  9.68%  8.88%
    Tangible common equity to tangible assets (non-GAAP) 9.77%  9.44%  9.22%  9.21%  8.40%
    Common equity tier 1 to risk-weighted assets 13.25%  12.61%  12.67%  12.41%  12.19%
    Tier 1 capital to average assets 11.76%  11.81%  11.51%  11.33%  11.13%
    Total capital to risk-weighted assets 17.61%  16.86%  17.00%  16.74%  16.82%

    (1)   Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

     
    South Plains Financial, Inc.
    Average Balances and Yields - (Unaudited)
    (Dollars in thousands)
     
     For the Three Months Ended
     September 30, 2024 September 30, 2023
        
     Average
    Balance
     Interest Yield/Rate Average
    Balance
     Interest Yield/Rate
    Assets                 
    Loans$3,069,900 $51,513  6.68% $3,005,699 $46,250  6.10%
    Debt securities - taxable 524,641  5,300  4.02%  561,068  5,422  3.83%
    Debt securities - nontaxable 154,806  1,016  2.61%  159,577  1,054  2.62%
    Other interest-bearing assets 336,887  4,032  4.76%  325,201  4,031  4.92%
                      
    Total interest-earning assets 4,086,234  61,861  6.02%  4,051,545  56,757  5.56%
    Noninterest-earning assets 172,922        177,216      
                      
    Total assets$4,259,156       $4,228,761      
                      
    Liabilities & stockholders’ equity                 
    NOW, Savings, MMDA’s$2,247,299  18,143  3.21% $2,223,014  16,061  2.87%
    Time deposits 431,307  4,510  4.16%  344,395  2,904  3.35%
    Short-term borrowings 3  -  0.00%  3  -  0.00%
    Notes payable & other long-term borrowings -  -  0.00%  -  -  0.00%
    Subordinated debt 63,891  835  5.20%  76,077  1,012  5.28%
    Junior subordinated deferrable interest debentures 46,393  858  7.36%  46,393  862  7.37%
                      
    Total interest-bearing liabilities 2,788,893  24,346  3.47%  2,689,882  20,839  3.07%
    Demand deposits 976,048        1,071,175      
    Other liabilities 63,661        85,713      
    Stockholders’ equity 430,554        381,991      
                      
    Total liabilities & stockholders’ equity$4,259,156       $4,228,761      
                      
    Net interest income   $37,515       $35,918   
    Net interest margin (2)       3.65%        3.52%
                        

    (1)   Average loan balances include nonaccrual loans and loans held for sale.
    (2)   Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

     
    South Plains Financial, Inc.
    Average Balances and Yields - (Unaudited)
    (Dollars in thousands)
     
     For the Nine Months Ended
     September 30, 2024 September 30, 2023
                
     Average
    Balance
     Interest Yield/Rate Average
    Balance
     Interest Yield/Rate
    Assets                 
    Loans$3,055,679 $151,031  6.60% $2,892,887 $128,724  5.95%
    Debt securities - taxable 537,425  16,096  4.00%  574,159  16,027  3.73%
    Debt securities - nontaxable 155,489  3,062  2.63%  194,492  3,870  2.66%
    Other interest-bearing assets 287,192  10,052  4.68%  212,384  7,010  4.41%
                      
    Total interest-earning assets 4,035,785  180,241  5.97%  3,873,922  155,631  5.37%
    Noninterest-earning assets 176,230        183,149      
                      
    Total assets$4,212,015       $4,057,071      
                      
    Liabilities & stockholders’ equity                 
    NOW, Savings, MMDA’s$2,251,569  53,792  3.19% $2,090,250  38,529  2.46%
    Time deposits 399,646  12,153  4.06%  309,250  6,239  2.70%
    Short-term borrowings 3  -  0.00%  111  5  6.02%
    Notes payable & other long-term borrowings -  -  0.00%  -  -  0.00%
    Subordinated debt 63,845  2,505  5.24%  76,031  3,037  5.34%
    Junior subordinated deferrable interest debentures 46,393  2,575  7.41%  46,393  2,402  6.92%
                      
    Total interest-bearing liabilities 2,761,456  71,025  3.44%  2,522,035  50,212  2.66%
    Demand deposits 964,829        1,085,345      
    Other liabilities 68,458        74,865      
    Stockholders’ equity 417,272        374,826      
                      
    Total liabilities & stockholders’ equity$4,212,015       $4,057,071      
                      
    Net interest income   $109,216       $105,419   
    Net interest margin (2)       3.61%        3.64%
                        

    (1)   Average loan balances include nonaccrual loans and loans held for sale.
    (2)   Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

     
    South Plains Financial, Inc.
    Consolidated Balance Sheets
    (Unaudited)
    (Dollars in thousands)
     
     As of
     September 30,
    2024
     December 31,
    2023
          
    Assets     
    Cash and due from banks$60,863  $62,821 
    Interest-bearing deposits in banks 410,304   267,337 
    Securities available for sale 606,889   622,762 
    Loans held for sale 11,389   14,499 
    Loans held for investment 3,037,375   3,014,153 
    Less:  Allowance for credit losses (42,886)  (42,356)
    Net loans held for investment 2,994,489   2,971,797 
    Premises and equipment, net 53,323   55,070 
    Goodwill 19,315   19,315 
    Intangible assets 1,882   2,429 
    Mortgage servicing rights 24,573   26,569 
    Other assets 154,632   162,194 
    Total assets$4,337,659  $4,204,793 
          
    Liabilities and Stockholders’ Equity     
    Noninterest-bearing deposits$998,480  $974,201 
    Interest-bearing deposits 2,720,880   2,651,952 
    Total deposits 3,719,360   3,626,153 
    Subordinated debt 63,914   63,775 
    Junior subordinated deferrable interest debentures 46,393   46,393 
    Other liabilities 64,870   61,358 
    Total liabilities 3,894,537   3,797,679 
    Stockholders’ Equity     
    Common stock 16,386   16,417 
    Additional paid-in capital 97,367   97,107 
    Retained earnings 371,782   345,264 
    Accumulated other comprehensive income (loss) (42,413)  (51,674)
    Total stockholders’ equity 443,122   407,114 
    Total liabilities and stockholders’ equity$4,337,659  $4,204,793 


     
    South Plains Financial, Inc.
    Consolidated Statements of Income
    (Unaudited)
    (Dollars in thousands)
     
     Three Months Ended Nine Months Ended
     September 30,
    2024
     September 30,
    2023
     September 30,
    2024
     September 30,
    2023
                
    Interest income:           
    Loans, including fees$51,505 $46,242  $151,008 $128,703
    Other 10,135  10,286   28,567  26,094
    Total interest income 61,640  56,528   179,575  154,797
    Interest expense:           
    Deposits 22,653  18,965   65,945  44,768
    Subordinated debt 835  1,012   2,505  3,037
    Junior subordinated deferrable interest debentures 858  862   2,575  2,402
    Other -  -   -  5
    Total interest expense 24,346  20,839   71,025  50,212
    Net interest income 37,294  35,689   108,550  104,585
    Provision for credit losses 495  (700)  3,100  4,010
    Net interest income after provision for credit losses 36,799  36,389   105,450  100,575
    Noninterest income:           
    Service charges on deposits 2,023  1,840   5,785  5,286
    Income from insurance activities 28  30   92  1,478
    Mortgage banking activities 1,890  4,602   9,232  12,146
    Bank card services and interchange fees 3,302  3,157   10,415  10,156
    Gain on sale of subsidiary   290     33,778
    Other 3,392  2,358   9,229  7,236
    Total noninterest income 10,635  12,277   34,753  70,080
    Noninterest expense:           
    Salaries and employee benefits 18,767  18,709   56,954  61,400
    Net occupancy expense 4,255  4,111   12,204  12,246
    Professional services 1,807  1,560   5,028  4,924
    Marketing and development 1,015  853   2,629  2,573
    Other 7,284  6,256   20,815  23,206
    Total noninterest expense 33,128  31,489   97,630  104,349
    Income before income taxes 14,306  17,177   42,573  66,306
    Income tax expense 3,094  3,683   9,353  13,885
    Net income$11,212 $13,494  $33,220 $52,421


     
    South Plains Financial, Inc.
    Loan Composition
    (Unaudited)
    (Dollars in thousands)
     
     As of
     September 30,
    2024
     December 31,
    2023
          
    Loans:     
    Commercial Real Estate$1,120,448 $1,081,056
    Commercial - Specialized 406,255  372,376
    Commercial - General 526,448  517,361
    Consumer:     
    1-4 Family Residential 562,401  534,731
    Auto Loans 253,509  305,271
    Other Consumer 65,789  74,168
    Construction 102,525  129,190
    Total loans held for investment$3,037,375 $3,014,153


     
    South Plains Financial, Inc.
    Deposit Composition
    (Unaudited)
    (Dollars in thousands)
     
     As of
     September 30,
    2024
     December 31,
    2023
          
    Deposits:     
    Noninterest-bearing deposits$998,480 $974,201
    NOW & other transaction accounts 496,176  562,066
    MMDA & other savings 1,780,337  1,722,170
    Time deposits 444,367  367,716
    Total deposits$3,719,360 $3,626,153


     
    South Plains Financial, Inc.
    Reconciliation of Non-GAAP Financial Measures (Unaudited)
    (Dollars in thousands)
     
     For the quarter ended
     September 30,
    2024
     June 30,
    2024
     March 31,
    2024
     December 31,
    2023
     September 30,
    2023
    Pre-tax, pre-provision income                  
    Net income$11,212  $11,134  $10,874  $10,324  $13,494 
    Income tax expense 3,094   3,116   3,143   2,787   3,683 
    Provision for credit losses 495   1,775   830   600   (700)
    Pre-tax, pre-provision income$14,801  $16,025  $14,847  $13,711  $16,477 


    Efficiency Ratio              
    Noninterest expense$33,128  $32,572  $31,930  $30,597  $31,489 
                   
    Net interest income 37,294   35,888   35,368   35,162   35,689 
    Tax equivalent yield adjustment 221   223   223   225   229 
    Noninterest income 10,635   12,709   11,409   9,146   12,277 
    Total income 48,150   48,820   47,000   44,533   48,195 
                   
    Efficiency ratio 68.80%  66.72%  67.94%  68.71%  65.34%
                   
    Noninterest expense$33,128  $32,572  $31,930  $30,597  $31,489 
    Less: Subsidiary transaction and related expenses              
    Less:  net loss on sale of securities              
    Adjusted noninterest expense 33,128   32,572   31,930   30,597   31,489 
                   
    Total income 48,150   48,820   47,000   44,533   48,195 
    Less:  gain on sale of subsidiary             (290)
    Adjusted total income 48,150   48,820   47,000   44,533   47,905 
                   
    Adjusted efficiency ratio 68.80%  66.72%  67.94%  68.71%  65.73%


     As of
     September 30,
    2024
     June 30,
    2024
     March 31,
    2024
     December 31,
    2023
     September 30,
    2023
    Tangible common equity              
    Total common stockholders’ equity$443,122  $417,985  $408,712  $407,114  $371,716 
    Less:  goodwill and other intangibles (21,197)  (21,379)  (21,562)  (21,744)  (21,936)
                   
    Tangible common equity$421,925  $396,606  $387,150  $385,370  $349,780 
                   
    Tangible assets              
    Total assets$4,337,659  $4,220,936  $4,218,993  $4,204,793  $4,186,440 
    Less:  goodwill and other intangibles (21,197)  (21,379)  (21,562)  (21,744)  (21,936)
                   
    Tangible assets$4,316,462  $4,199,557  $4,197,431  $4,183,049  $4,164,504 
                   
    Shares outstanding 16,386,627   16,424,021   16,431,755   16,417,099   16,600,442 
                   
    Total stockholders’ equity to total assets 10.22%  9.90%  9.69%  9.68%  8.88%
    Tangible common equity to tangible assets 9.77%  9.44%  9.22%  9.21%  8.40%
    Book value per share$27.04  $25.45  $24.87  $24.80  $22.39 
    Tangible book value per share$25.75  $24.15  $23.56  $23.47  $21.07 

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