UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 23, 2024

South Plains Financial, Inc.
(Exact name of registrant as specified in its charter)

Texas
001-38895
75-2453320
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

5219 City Bank Parkway
Lubbock, Texas
 
79407
(Address of principal executive offices)
 
(Zip Code)

(806) 792-7101
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $1.00 per share
SPFI
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02
Results of Operations and Financial Condition.

On October 23, 2024, South Plains Financial, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2024.  A copy of the Company’s press release covering such announcement and certain other matters is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01
Regulation FD Disclosure.

On October 23, 2024, officers of the Company will have a conference call with respect to the Company’s financial results for the third quarter ended September 30, 2024. An earnings release slide presentation highlighting the Company’s financial results for the third quarter ended September 30, 2024 is furnished as Exhibit 99.2 to this Current Report on Form 8-K. This earnings release slide presentation will also be available on the Company’s website, www.spfi.bank, under the “News & Events” section.

In accordance with General Instruction B.2 of Form 8-K, the information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 furnished herewith, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  The information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 furnished herewith, shall not be incorporated by reference into any filing or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

Item 9.01
Financial Statements and Exhibits.


(d)
Exhibits.


99.1
Press release, dated October 23, 2024, announcing third quarter 2024 financial results of South Plains Financial, Inc.


99.2
Earnings release slide presentation, dated October 23, 2024.


104
Cover Page Interactive Data File (formatted as Inline XBRL).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
SOUTH PLAINS FINANCIAL, INC.
   
Date:  October 23, 2024
By:
/s/ Steven B. Crockett
   
Steven B. Crockett
   
Chief Financial Officer and Treasurer




Exhibit 99.1


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

LUBBOCK, Texas, October 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
 




Exhibit 99.2

 South Plains Financial  Third Quarter 2024  Earnings Presentation  October 23, 2024 
 

 Safe Harbor Statement and Other Disclosures   FORWARD-LOOKING STATEMENTS  This presentation contains, and future oral and written statements of South Plains Financial, Inc. (“South Plains”, “SPFI”, or the “Company”) and City Bank (“City Bank” or the “Bank”) may contain, statements about future events that constitute 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. Forward-looking statements include, but are not limited to: (i) projections and estimates of revenues, expenses, income or loss, earnings or loss per share, and other financial items, (ii) statements of plans, objectives and expectations of South Plains or its management, (iii) statements of future economic performance, and (iv) statements of assumptions underlying such statements. Forward-looking statements should not be relied on because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of South Plains and City Bank. These risks, uncertainties and other factors may cause the actual results, performance, and achievements of South Plains and City Bank to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences 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. Due to these and other possible uncertainties and risks, South Plains 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 presentation. Additional information regarding these factors 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 U.S. Securities and Exchange Commission (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. Further, any forward-looking statement speaks only as of the date on which it is made and South Plains undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by applicable law. All forward-looking statements, express or implied, herein are qualified in their entirety by this cautionary statement.  NON-GAAP FINANCIAL MEASURES  Management believes that certain non-GAAP performance measures used in this presentation provide meaningful information about underlying trends in its business and operations and provide both management and investors a more complete understanding of the Company’s financial position and performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, SPFI’s reported results prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition of the Company as reported under GAAP. Numbers in this presentation may not sum due to rounding.  2 
 

 Today’s Speakers   Curtis C. Griffith Chairman & Chief Executive Officer  Elected to the board of directors of First State Bank of Morton, Texas, in 1972 and employed by it in 1979  Elected Chairman of the First State Bank of Morton board in 1984  Chairman of the Board of City Bank and the Company since 1993  Steven B. Crockett Chief Financial Officer & Treasurer  Appointed Chief Financial Officer in 2015  Previously Controller of City Bank and the Company for 14 and 5 years respectively  Began career in public accounting in 1994 by serving for seven years with a local firm in Lubbock, Texas  Cory T. Newsom President  Entire banking career with the Company focused on lending and operations  Appointed President and Chief Executive Officer of the Bank in 2008  Joined the Board in 2008  3 
 

 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   Diluted earnings per share for the third quarter of 2024 was $0.66, unchanged from the second quarter of 2024   Net interest margin was 3.65% for the third quarter of 2024, compared to 3.63% for the second quarter of 2024   Loans held for investment were $3.04 billion as of September 30, 2024, compared to $3.09 billion as of June 30, 2024  Deposits totaled $3.72 billion as of September 30, 2024, compared to $3.62 billion as of June 30, 2024  Estimated uninsured and uncollateralized deposits at City Bank comprise 25% of total deposits  The Company remains well capitalized with tangible common equity to tangible assets (non-GAAP) of 9.77%, an increase of 33 basis points as compared to the end of the second quarter of 2024  Tangible book value (non-GAAP) per share was $25.75 as of September 30, 2024, compared to $24.15 as of June 30, 2024  4  Loans Held for Investment  (“HFI”) $3.04 B  Average Yield on Loans  6.68%  Net Income   $11.2 M  EPS - Diluted  $0.66  Net Interest Margin (1)  (“NIM”) 3.65%  Total Deposits  $3.72 B  Return on Average Assets (“ROAA”) 1.05%  Efficiency Ratio   68.80%  Source: Company documents  Note: See appendix for the reconciliation of non-GAAP measures to GAAP  (1) Net interest margin is calculated on a tax-equivalent basis (non-GAAP) 
 

 Granular Deposit Base & Ample Liquidity  Total Borrowing Capacity  $1.81 Billion  5  Total Deposit Base Breakdown  Average deposit account size is approximately $36 thousand  City Bank’s percentage of estimated uninsured or uncollateralized deposits is 25% of total deposits  City Bank had $1.81 billion of available borrowing capacity, as follows:  Federal Home Loan Bank of Dallas - $1.15 billion  Federal Reserve Bank of Dallas Discount Window - $664 million  No borrowings utilized from these sources during 3Q'24  Source: Company documents  Data as of September 30, 2024 
 

 Loan Portfolio  3Q'24 Highlights  Loans HFI decreased $56.9 million from Q2’24, 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  An $19 million decrease in consumer auto loans  As of September 30, 2024, loans HFI increased $43.8 million, or 1.5%, from September 30, 2023  The average yield on loans was 6.68% for 3Q'24, compared to 6.60% for 2Q’24.  Total Loans HFI  $ in Millions  6  Source: Company documents    
 

 Attractive Markets Poised for Organic Growth  El Paso Basin  Dallas / Ft. Worth  Population of 865,000+  Adjacent in proximity to Juarez, Mexico’s growing industrial center and an estimated population of 1.5 million people  Home to four universities including The University of Texas at El Paso  Focus on commercial real estate lending  Largest MSA in Texas and fourth largest in the nation  Steadily expanding population that accounts for over 26% of the state’s population  MSA with the largest job growth in 2022 (+5.9%)  Attractive location for companies interested in relocating to more efficient economic environments   Focus on commercial real estate lending  Houston   Second largest MSA in Texas and fifth largest in the nation  Total Non-Farm Employment was up 5.6% in 2022 compared to 2021  Called the “Energy Capital of the World,” the area also boasts the world’s largest medical center and second busiest port in the U.S  Focus on commercial real estate lending  Lubbock Basin  Population in excess of 320,000 with major industries in agribusiness, education, and trade among others  Home of Texas Tech University – enrollment of 40,000 students  Focus on community bank approach and expanding local relationships  7 
 

 Major Metropolitan Market Loan Growth  3Q'24 Highlights  Loans HFI in our major metropolitan markets(1) decreased by $20 million, to $1.05 billion during 3Q’24, primarily due to:  The early payoff of a $17 million residential land development loan  The payoff of a $6 million mortgage finance company loan  Our major metropolitan market loan portfolio represents 34.6% of the Bank’s total loans HFI at September 30, 2024  Total Metropolitan Market(1) Loans  $ in Millions  8  5.00%  Source: Company documents  (1) The Bank defines its “major metropolitan markets” to include Dallas, Houston and El Paso, Texas 
 

 Loan HFI Portfolio  Loan Mix  Loan Portfolio ($ in millions)     Commercial C&D  $   144.8  Residential C&D     212.3  CRE Owner/Occ.  335.4  Other CRE Non Owner/Occ.     579.3  Multi-Family     286.6  C&I     405.6  Agriculture     191.7  1-4 Family     562.4  Auto     253.5  Other Consumer     65.8           Total  $  3,037.4  Fixed vs. Variable Rate   9  Source: Company documents  Data as of September 30, 2024 
 

 Indirect Auto Overview  Indirect Auto Highlights  Indirect auto loans totaled $235.1 million at September 30, 2024, down $19 million from the linked quarter  Management is carefully managing the portfolio  Strong credit quality in the sector, positioned for resiliency across economic cycles(1):  Super Prime Credit (>719): $142.3 million  Prime Credit (719-660): $69.8 million  Near Prime Credit (659-620): $19.6 million  Sub-Prime Credit (619-580): $3.0 million  Deep Sub-Prime Credit (<580): $463 thousand  Loans past due 30+ days: 34 bps of portfolio  Non-car/truck (RV, boat, etc.) < 2% of portfolio  Indirect Auto Credit Breakdown  10  Source: Company documents  Data as of September 30, 2024  (1) Credit score level at origination 
 

 Noninterest Income Overview  Noninterest Income  $ in Millions  3Q'24 Highlights  Noninterest income was $10.6 million for 3Q'24, compared to $12.7 million for 2Q'24; 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 3Q’24  A decrease of $750 thousand in bank card services and interchange revenue mainly as a result of incentives received during 2Q’24  A decrease of $315 thousand in income from investments in Small Business Investment Companies  Partially offset by non-recurring insurance proceeds of $700 thousand received in 3Q’24  11  Source: Company documents  Note: Mortgage servicing rights fair value (“MSR FV”) 
 

 Diversified Revenue Stream  Nine Months Ended September 30, 2024  Total Revenues  $143.3 million  Noninterest Income  $34.8 million  12  Source: Company documents    
 

 Net Interest Income and Margin  Net Interest Income & Margin(1)   $ in Millions  3Q'24 Highlights  Net interest income (“NII”) of $37.3 million, compared to $35.9 million in 2Q’24  3Q'24 NIM increased 2 bps to 3.65% as compared to 3.63% in 2Q’24, primarily due to:  An 8 bps point increase in the yield on loans   Partially offset by a 4 bps increase in the cost of deposits  13  3.54%  Source: Company documents  (1) Net interest margin is calculated on a tax-equivalent basis (non-GAAP) 
 

 Deposit Portfolio  Total Deposits  $ in Millions  3Q'24 Highlights  Total deposits of $3.72 billion at 3Q'24, an increase of $94.8 million from 2Q'24  Cost of interest-bearing deposits increased to 3.36% in 3Q'24 from 3.33% in 2Q'24  Average cost of deposits increased 4 bps to 2.47% in 3Q'24 as compared to 2.43% in 2Q’24  Noninterest-bearing deposits to total deposits was 26.8% at September 30, 2024, compared to 26.3% at June 30, 2024  Strategic initiatives implemented to stabilize noninterest-bearing deposits while also growing core deposits  14  Source: Company documents    
 

 Credit Quality  3Q'24 Highlights  Credit Quality Ratios  Net Charge-Offs to Average Loans  ACL(1) to Total Loans HFI  15  Provision for credit losses of $495 thousand in 3Q’24, compared to $1.8 million in 2Q'24; 3Q’24 provision was largely due to net charge-off activity, partially offset by decreased loan balances  Nonperforming loans totaled $24.7 million at September 30, 2024, and continues to include a $20.0 million nonaccrual multi-family property credit. The loan was modified, with more stringent credit metrics, during 3Q’24 and continues to pay as agreed, with improving credit trends  Source: Company documents  Allowance for Credit Losses (“ACL”)    
 

 Non-Owner Occupied CRE Portfolio  16  Details  NOO CRE was 40.3% of total LHI, compared to 39.9% at June 30, 2024  NOO CRE portfolio is made up of $865.9 million of income producing loans and $357.1 million of construction, acquisition, and development loans  Estimated weighted average LTV of income-producing NOO CRE was 53%  Office NOO CRE loans were 4.6% of total LHI and had a weighted average LTV of 59%  NOO CRE loans past due 90+ days or nonaccrual: 72 basis points of total LHI  NOO CRE(1) Sector Breakdown  Source: Company documents  Data as of September 30, 2024  (1) Non-owner occupied commercial real estate (“NOO CRE”)  NOO CRE Portfolio ($ in millions)  Property Type  Total  Income-producing:   Multi-family  $286.7   Retail  $175.0   Office  $138.6   Hospitality  $63.5   Other  $202.1  Construction, acquisition, and development:   Residential construction  $102.6   Other  $254.5  Total  $1,223.0 
 

 Investment Securities  3Q'24 Highlights  Investment securities totaled $606.9 million, a $15.9 million increase from 2Q’24.  All municipal bonds are in Texas; fair value hedges of $124 million  All MBS, CMO, and Asset Backed securities are U.S. Government or GSE  Duration of the securities portfolio was 6.42 years at September 30, 2024  3Q'24 Securities Composition  $606.9  million  Securities & Cash  $ in Millions  17  Source: Company documents    
 

 Noninterest Expense and Efficiency  Noninterest Expense  $ in Millions  3Q'24 Highlights  Noninterest expense for 3Q'24 increased $556 thousand, or 1.7%, to $33.1 million from 2Q’24, primarily due to:  A rise of $226 thousand in net occupancy expenses, mainly from increased utilities   An increase of $155 thousand in marketing and development expenses   Efficiency ratio of 68.8% in 3Q’24 as compared to 66.7% in 2Q’24  Will continue to manage expenses to drive profitability  18  Source: Company documents    
 

 Balance Sheet Growth and Development  Balance Sheet Highlights  $ in Millions  Tangible Book Value Per Share(1)  19  Source: Company documents  (1) Tangible book value per share is a non-GAAP measure. See appendix for the reconciliation of non-GAAP measures to GAAP    
 

 Strong Capital Base  Common Equity Tier 1 Ratio  Tier 1 Capital to Average Assets Ratio  Total Capital to Risk-Weighted Assets Ratio  20  Source: Company documents  (1) Tangible common equity to tangible assets ratio is a non-GAAP measure. See appendix for the reconciliation of non-GAAP measures to GAAP      Tangible Common Equity to Tangible Assets Ratio(1) 
 

 SPFI’s Core Purpose and Values Align Centered on Relationship-Based Business  Our Core Purpose is:   To use the power of relationships to help people succeed and live better  HELP ALL STAKEHOLDERS SUCCEED  Employees  great benefits and opportunities to grow and make a difference.  Customers  personalized advice and solutions to achieve their goals.  Partners  responsive, trusted win-win partnerships enabling both parties to succeed together.  Shareholders  share in the prosperity and performance of the Bank.  THE POWER OF RELATIONSHIPS  At SPFI, we build lifelong, trusted relationships so you know you always have someone in your corner that understands you, cares about you, and stands ready to help.   LIVE BETTER  We want to help everyone live better.   At the end of the day, we do what we do to help enhance lives. We create a great place to work, help people achieve their goals, and invest generously in our communities because there’s nothing more rewarding than helping people succeed and live better.   21 
 

 Appendix  22 
 

 Non-GAAP Financial Measures  23  For the quarter ended  Source: Company documents  $ in thousands      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     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 
 

 Non-GAAP Financial Measures  24     September 30,  2024     June 30,  2024     March 31,  2024     December 31,  2023     September 30,  2023  For the quarter ended  Source: Company documents  $ in thousands   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     —  —  —  —  —  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  44,243  47,905        Adjusted efficiency ratio     68.80%  66.72%  67.94%  68.71%  65.73% 
 


v3.24.3
Document and Entity Information
Oct. 23, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Oct. 23, 2024
Entity File Number 001-38895
Entity Registrant Name South Plains Financial, Inc.
Entity Central Index Key 0001163668
Entity Incorporation, State or Country Code TX
Entity Tax Identification Number 75-2453320
Entity Address, Address Line One 5219 City Bank Parkway
Entity Address, City or Town Lubbock
Entity Address, State or Province TX
Entity Address, Postal Zip Code 79407
City Area Code 806
Local Phone Number 792-7101
Title of 12(b) Security Common Stock, par value $1.00 per share
Trading Symbol SPFI
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false

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