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

来源: Nasdaq GlobeNewswire / 23 10月 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	%


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

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

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