South Plains Financial First Quarter 2025 Earnings Presentation April 24, 2025 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-l ...

South Plains Financial (SPFI) Q1 2025 Earnings Call April 24, 2025 05:00 PM ET Company Participants Steven Crockett - CFO & TreasurerCurtis Griffith - Chairman & CEOCory Newsom - Director and PresidentWoody Lay - Vice PresidentBrent Bates - CCOJoseph Yanchunis - Senior Equity Research Associate Operator Good afternoon, ladies and gentlemen, and welcome to the South Plains Financial First Quarter twenty twenty five Earnings Conference Call. During today's presentation, all parties will be in a listen only mo ...

Financial Performance - Net interest income for Q1 2025 was $38.5 million, unchanged from Q4 2024, and up from $35.4 million in Q1 2024[4] - Net income for Q1 2025 was $12.3 million, down from $16.5 million in Q4 2024, but up from $10.9 million in Q1 2024[6] - Noninterest income for Q1 2025 was $10.6 million, down from $13.3 million in Q4 2024, primarily due to a decrease in mortgage banking revenues[8] - Noninterest expense increased to $33.0 million in Q1 2025, compared to $29.9 million in Q4 2024, largely due to higher personnel expenses[9] - Basic net earnings per share for Q1 2025 were $0.75, compared to $1.01 in Q4 2024, a decrease of 25.7%[26] - Net income for Q1 2025 was $12,294,000, down 25.5% from $16,497,000 in Q4 2024[26] - The pre-tax, pre-provision income for the quarter ended March 31, 2025, was $16,122,000, down from $21,919,000 for the quarter ended December 31, 2024, a decrease of 26.5%[34] Asset and Loan Growth - Loans held for investment increased to $3.08 billion as of March 31, 2025, a 2.7% annualized increase from Q4 2024[10] - Total assets increased to $4,405,209,000 in Q1 2025 from $4,232,239,000 in Q4 2024, reflecting a growth of 4.1%[26] - Total loans held for investment rose to $3,075,860,000 in Q1 2025, up from $3,055,054,000 in Q4 2024, an increase of 0.7%[26] - As of March 31, total assets amounted to $4,405,209,000, compared to $4,423,232,000 as of December 31[30] - Net loans held for investment were $3,032,892,000, a decrease from $3,011,817,000[30] - Total assets as of March 31, 2025, were $4,405,209,000, an increase from $4,232,239,000 as of December 31, 2024, indicating a growth of 4.07%[34] Deposit Trends - Total deposits rose to $3.79 billion, a 4.7% increase from $3.62 billion at the end of Q4 2024[11] - Total deposits as of March 31, 2025, were $3,792,519,000, up from $3,620,876,000 as of December 31, 2024, indicating a growth of 4.74%[34] - Demand deposits decreased to $934,775 thousand from $958,334 thousand year-over-year[28] Nonperforming Assets and Credit Quality - Nonperforming assets to total assets ratio improved to 0.16% as of March 31, 2025, down from 0.58% at the end of Q4 2024[14] - Nonperforming loans decreased significantly to $6,467,000 in Q1 2025 from $24,023,000 in Q4 2024, a reduction of 73.1%[26] - The provision for credit losses for the quarter ended March 31, 2025, was $420,000, a significant decrease from $1,200,000 for the quarter ended December 31, 2024[34] Equity and Book Value - The tangible book value per share increased to $26.05 as of March 31, 2025, up from $25.40 at the end of Q4 2024[6] - Book value per share increased to $27.33 as of March 31, 2025, from $26.67 as of December 31, 2024, reflecting a growth of 2.47%[34] - Tangible common equity increased to $422,859,000 as of March 31, 2025, from $417,914,000 as of December 31, 2024, marking a rise of 0.47%[34] - The total stockholders' equity to total assets ratio was 10.07% as of March 31, 2025, compared to 10.37% as of December 31, 2024, showing a decline of 0.30 percentage points[34] Interest Income and Expense - Interest income for Q1 2025 was $59,922,000, a decrease of 2.3% from $61,324,000 in Q4 2024[26] - Total interest income reached $59,922,258, up from $58,727,000, indicating a year-over-year increase of about 2.03%[31] - Total interest-earning assets increased to $4,125,130 thousand, generating interest income of $60,142 thousand, with a yield of 5.91%[28] - Total interest-bearing liabilities rose to $2,854,619 thousand, with interest expense of $21,395 thousand, resulting in an average yield of 3.04%[28] Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to enhance service offerings and operational efficiency[31]

Core Viewpoint - South Plains Financial, Inc. reported strong first quarter results for 2025, showcasing solid deposit growth, improved margins, and loan growth in line with expectations, while maintaining a conservative credit culture [3][4][6]. Financial Performance - Net interest income for Q1 2025 was $38.5 million, unchanged from Q4 2024 and up from $35.4 million in Q1 2024 [4][26]. - Net interest margin increased to 3.81% in Q1 2025 from 3.75% in Q4 2024 and 3.56% in Q1 2024 [4][27]. - Interest income was $59.9 million in Q1 2025, down from $61.3 million in Q4 2024 but up from $58.7 million in Q1 2024 [5][26]. - Net income for Q1 2025 was $12.3 million, compared to $16.5 million in Q4 2024 and $10.9 million in Q1 2024 [6][26]. - Diluted earnings per share were $0.72 in Q1 2025, down from $0.96 in Q4 2024 and up from $0.64 in Q1 2024 [6][26]. Asset Quality - The ratio of nonperforming assets to total assets improved to 0.16% as of March 31, 2025, down from 0.58% at the end of Q4 2024 and 0.10% in Q1 2024 [14][27]. - The provision for credit losses was $420,000 in Q1 2025, down from $1.2 million in Q4 2024 and $830,000 in Q1 2024 [12][26]. Loan and Deposit Growth - Loans held for investment increased to $3.08 billion as of March 31, 2025, up from $3.06 billion at the end of Q4 2024 and $3.01 billion in Q1 2024 [10][26]. - Total deposits reached $3.79 billion as of March 31, 2025, compared to $3.62 billion at the end of Q4 2024 and $3.64 billion in Q1 2024, reflecting a 4.7% increase from the previous quarter [11][26]. Capital and Shareholder Returns - Book value per share increased to $27.33 as of March 31, 2025, compared to $26.67 at the end of Q4 2024 [15][26]. - The company repurchased 250,000 shares for $8.3 million in Q1 2025, with approximately $7 million remaining under the share repurchase program [3][6].

Group 1 - South Plains Financial (NASDAQ: SPFI) is a local bank headquartered in Lubbock, Texas, with total assets of $4.2 billion [1] - The article anticipates the bank's performance in 2024, although Q1 earnings have yet to be reported [1] - The focus of the investment group European Small Cap Ideas is on high-quality small-cap investment opportunities, emphasizing capital gains and dividend income [1] Group 2 - The investment group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio [1] - Weekly updates and educational content are provided to enhance understanding of European investment opportunities [1] - An active chat room is available for discussions regarding the latest developments in portfolio holdings [1]

Core Viewpoint - South Plains Financial, Inc. will release its first quarter 2025 financial results on April 24, 2025, after market close, followed by a conference call to discuss the results [1] Group 1: Financial Results Announcement - The financial results for the first quarter of 2025 will be announced after market close on April 24, 2025 [1] - A conference call and webcast will take place at 5:00 p.m. ET on the same day to discuss the financial results [1] Group 2: Participation Details - Investors and analysts can join the call by dialing 1-877-407-9716 or 1-201-493-6779 for international callers, approximately 10 minutes before the call starts [2] - A live audio webcast will be available on the company's website [2] Group 3: Replay Information - A replay of the conference call will be accessible within two hours after the call concludes, available through the company's website and by dialing 1-844-512-2921 or 1-412-317-6671 for international callers [3] - The replay will be available until May 8, 2025, with a pin code of 13752910 for telephone access [3] Group 4: Company Overview - South Plains Financial, Inc. is the parent company of City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas [4] - City Bank is one of the largest independent banks in West Texas, with operations in various Texas markets and Ruidoso, New Mexico [4] - The company offers a wide range of commercial and consumer financial services, including banking, investment, trust, and mortgage services [4]

Core Viewpoint - South Plains Financial, Inc. demonstrates its commitment to corporate responsibility and community impact through its 2024 Community Impact Report, highlighting significant contributions to local communities and stakeholders [1][3]. Company Overview - South Plains Financial, Inc. is the parent company of City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas, and is one of the largest independent banks in West Texas [5]. - The company provides a wide range of financial services, including commercial and retail banking, investment, trust, and mortgage services [5]. Community Contributions - The company provided over $400 million in loans for small businesses, farms, and community development during the year ended December 31, 2024 [7]. - Employees volunteered more than 4,200 hours to 184 organizations, showcasing the company's commitment to community service [7]. - City Bank was recognized as the group of the year by the South Plains Food Bank, serving over 57,000 individuals annually [7]. - The company partnered with EverFi to provide 1,257 hours of learning to more than 500 students in Texas and New Mexico [7]. Leadership Perspective - Curtis Griffith, Chairman and CEO, emphasized the importance of doing business ethically and the company's core purpose of using relationships to help people succeed and improve their lives [2].

Dividends and Stock Repurchase - The Company paid dividends of $0.13, $0.14, $0.15, and $0.15 per common share in the first, second, third, and fourth quarters of 2024, respectively[271]. - The Company approved a stock repurchase program on February 21, 2024, allowing for the purchase of up to $10.0 million of its outstanding shares[274]. - A new stock repurchase program was approved on February 21, 2025, permitting the purchase of up to $15.0 million of outstanding shares[278]. - Cash dividends declared increased to $0.56 per share in 2024 from $0.52 per share in 2023[454]. - Cash dividends paid on common stock increased to $9.154 million in 2024 from $8.745 million in 2023[458]. Financial Performance - Net income decreased to $49,717 thousand in 2024 compared to $62,745 thousand in 2023, reflecting a decline of 20.8%[452]. - Net interest income after provision for credit losses rose to $142,798 thousand in 2024, up from $135,137 thousand in 2023, an increase of 5.0%[449]. - Noninterest income dropped to $48,072 thousand in 2024 from $79,226 thousand in 2023, a decline of 39.3%[449]. - Total noninterest expense decreased to $127,578 thousand in 2024 from $134,946 thousand in 2023, a reduction of 5.5%[449]. - Total assets increased to $4,232,239 thousand in 2024 from $4,204,793 thousand in 2023, representing a growth of 0.65%[446]. - Total deposits slightly decreased to $3,620,876 thousand in 2024 from $3,626,153 thousand in 2023, a decrease of 0.2%[446]. Credit Losses and Allowance for Credit Losses - The Company adopted a new accounting method for the allowance for credit losses effective January 1, 2023, in accordance with Accounting Standards Codification Topic 326[433]. - The provision for credit losses was $4.3 million in 2024, down from $4.610 million in 2023[458]. - The allowance for credit losses on loans increased from $42.4 million in 2023 to $43.2 million in 2024, reflecting a rise of approximately 1.9%[547]. - The total allowance for credit losses (ACL) as of December 31, 2024, was $43,237 million, compared to $42,356 million at the end of 2023, reflecting a year-over-year increase of approximately 2%[551]. - The Company’s credit quality indicators show a significant number of loans categorized as substandard, indicating potential weaknesses in repayment prospects[556]. Loan Portfolio and Performance - As of December 31, 2024, the Company's loan portfolio totaled $3.1 billion, with an allowance for credit losses (ACL) of $43.2 million[442]. - Total loans held for investment rose from $3.01 billion in 2023 to $3.06 billion in 2024, an increase of about 1.4%[541]. - The commercial real estate loans increased from $1.08 billion in 2023 to $1.12 billion in 2024, marking a growth of approximately 3.5%[541]. - The total past-due loans as of December 31, 2024, amounted to $22,102 million, with $7,928 million classified as 30-89 days past due and $1,921 million as 90 days or more past due[555]. - The company closely monitors substandard accruing loans over $1 million, with a focus on mitigating credit exposure[561]. Stockholder Equity and Retained Earnings - Total stockholders' equity rose to $438,949 thousand in 2024 from $407,114 thousand in 2023, an increase of 7.8%[446]. - Retained earnings increased to $385,827 thousand in 2024 from $345,264 thousand in 2023, an increase of 11.7%[454]. Securities and Investments - The amortized cost of available-for-sale securities decreased from $704.8 million in 2023 to $669.0 million in 2024, a decline of approximately 5%[537]. - The fair value of available-for-sale securities also decreased from $622.8 million in 2023 to $577.2 million in 2024, representing a decline of about 7.3%[537]. - The fair value of securities with unrealized losses at year-end 2024 was $575.5 million, with total unrealized losses of $91.8 million[540]. Employee Compensation and Stock Plans - The Company recorded stock-based compensation expense of $2.3 million in 2024, slightly up from $2.2 million in 2023[614]. - The total intrinsic value of options exercised in 2024 was $3.3 million, compared to $1.8 million in 2023[611]. - The Company maintains the 2023 Employee Stock Purchase Plan (ESPP) allowing eligible employees to purchase shares at a 15% discount from the lesser of fair market value on the first or last day of each six-month offering period, starting August 1, 2024[615]. - Stock-based compensation expense related to the ESPP was $53 thousand for the year ended December 31, 2024[615]. Miscellaneous - The Company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[432]. - The Company’s management applies a dual credit risk rating methodology to estimate each loan's probability of default and loss given default[442]. - The Company has a diversified loan portfolio to manage risks associated with economic fluctuations, with a focus on both loan type and geography[542].

Core Viewpoint - South Plains Financial, Inc. has announced a new stock repurchase program allowing for the repurchase of up to $15.0 million of its common stock, set to conclude on February 21, 2026, unless terminated or extended earlier by the Board [1][2]. Company Overview - South Plains Financial, Inc. is the bank holding company for City Bank, which is headquartered in Lubbock, Texas, and is one of the largest independent banks in West Texas, with operations in various Texas markets and Ruidoso, New Mexico [3]. - The company offers a wide range of financial services, including commercial and retail banking, investment, trust, and mortgage services, primarily targeting small and medium-sized businesses and individuals [3]. Stock Repurchase Program Details - The stock repurchase program allows the company to buy back shares through open market purchases and privately negotiated transactions, adhering to legal requirements under the Securities Exchange Act of 1934 [2]. - The extent and timing of repurchases will depend on various factors, including stock performance, market conditions, regulatory requirements, and availability of funds [2]. - The company retains the discretion to begin, suspend, or terminate repurchases at any time without prior notice, and there is no obligation to repurchase a specific number of shares [2].

Core Viewpoint - South Plains Financial (SPFI) shows a promising earnings outlook with analysts raising their earnings estimates, indicating potential for continued stock momentum [1][2]. Estimate Revisions - The trend in estimate revisions reflects growing analyst optimism about the company's earnings prospects, which is expected to positively influence the stock price [2]. - For the current quarter, the earnings estimate is $0.65 per share, representing a +1.56% change from the previous year, with a 10.17% increase in consensus estimates over the last 30 days [4]. - For the full year, the earnings estimate is $2.85 per share, showing a -2.4% change from the previous year, but the consensus estimate has risen by 5.56% due to two upward revisions [5]. Zacks Rank - South Plains Financial holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in raising earnings estimates, which historically correlates with stock outperformance [3][6]. - Stocks with Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [6]. Investment Outlook - The stock has increased by 5.5% over the past four weeks due to strong estimate revisions, suggesting further upside potential, making it a candidate for portfolio addition [7].