Core Viewpoint - South Plains Financial (NASDAQ: SPFI) has shown strong performance over the past year, with a 32% increase in stock value, and a notable 10% rise following better-than-expected Q2 earnings [1] Financial Performance - The company reported Q2 earnings that exceeded expectations, contributing to the recent stock price surge [1] M&A Considerations - Management has indicated that the company is exploring potential mergers and acquisitions (M&A) as part of its growth strategy [1]

Core Viewpoint - South Plains Financial (SPFI) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and showing an increase from $0.66 per share a year ago, representing an earnings surprise of +11.69% [1][2] Financial Performance - The company achieved revenues of $54.67 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.74%, compared to $48.6 million in the same quarter last year [2] - Over the last four quarters, South Plains Financial has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - South Plains Financial shares have increased approximately 5.4% since the beginning of the year, while the S&P 500 has gained 6.2% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future due to unfavorable estimate revisions prior to the earnings release [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.81 on revenues of $52.85 million, and for the current fiscal year, it is $3.08 on revenues of $206.15 million [7] - The outlook for the industry, specifically the Banks - Southeast sector, is favorable, ranking in the top 25% of over 250 Zacks industries, which historically outperforms the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - For the second quarter, diluted earnings per share increased to $0.86 from $0.72 in the linked quarter [20] - Net interest income rose to $42.5 million compared to $38.5 million in the linked quarter [20] - The net interest margin (NIM) improved to 4.07% from 3.81% in the linked quarter, positively impacted by a one-time interest recovery [21] Business Line Data and Key Metrics Changes - Loans held for investment increased by $23.1 million, or 3% annualized, to $3.1 billion in the second quarter [12] - The yield on loans increased to 6.99% from 6.67% in the linked quarter, boosted by a one-time interest recovery [12] - Non-interest income grew to $12.2 million from $10.6 million in the linked quarter, primarily due to increased mortgage banking revenues [18] Market Data and Key Metrics Changes - Loans in major metropolitan markets decreased by $26 million to $1.01 billion, with heightened loan payoffs exceeding new loan production [16] - The indirect auto loan portfolio modestly decreased to $241 million from $243 million in the linked quarter, reflecting changes in consumer spending behavior [17] Company Strategy and Development Direction - The company is pursuing a strategy focused on both organic growth and mergers and acquisitions (M&A) to increase bank assets [7][9] - The organic growth strategy emphasizes expanding lending capabilities and enhancing core deposit growth [8] - The company remains interested in accretive acquisitions but has not yet found suitable opportunities that meet its criteria [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic growth in Texas and the potential for loan growth to reaccelerate [16] - The company is cautiously optimistic about maintaining resilient economic growth across Texas markets in the second half of 2025 [18] - Management highlighted the importance of proactive management of the loan portfolio to address challenges and maintain credit quality [5] Other Important Information - The consolidated common equity Tier one risk-based capital ratio was 13.86% as of June 30, 2025, indicating a strong capital position [10] - The company recorded a provision for credit losses of $2.5 million in the second quarter, largely due to increased specific reserves and net charge-off activity [23] Q&A Session Summary Question: Loan pipeline and growth outlook - Management indicated that loan growth is expected to be flat to low single digits for the third quarter due to higher loan payoffs, but they feel good about the pipeline and originations [27][28] Question: Balance between hiring and M&A - Management confirmed that they intend to continue hiring new lenders even if they find suitable M&A opportunities, emphasizing the importance of relationship banking [30][31] Question: Increase in specific reserves - The increase in specific reserves was attributed to several loans entering non-accrual status and a conservative approach to credit quality management [32][33] Question: Margin outlook and deposit costs - Management discussed the potential for NIM expansion and the impact of deposit pricing on overall margins, indicating a focus on managing costs effectively [38][39] Question: M&A environment and valuation expectations - Management noted that buyer expectations are a significant impediment to M&A activity, but they are actively looking for opportunities that align with their culture and financial criteria [44][45] Question: Mortgage banking performance - Management indicated that mortgage banking performance has been flat but remains profitable, with a focus on maintaining relationships during challenging times [50][51] Question: Non-interest bearing deposits growth - The growth in non-interest bearing deposits was attributed to improved treasury management solutions and a focus on relationship building with existing customers [63][64]

Financial Data and Key Metrics Changes - For the second quarter, diluted earnings per share increased to $0.86 from $0.72 in the linked quarter [21] - Net interest income rose to $42.5 million compared to $38.5 million in the linked quarter [21] - The net interest margin (NIM) improved to 4.07% from 3.81% in the linked quarter, positively impacted by a one-time interest recovery [22][24] Business Line Data and Key Metrics Changes - Loans held for investment increased by $23.1 million, or 3% annualized, to $3.1 billion in the second quarter [14] - The yield on loans rose to 6.99% from 6.67% in the linked quarter, boosted by a one-time interest recovery [14] - Non-interest income increased to $12.2 million from $10.6 million in the linked quarter, primarily due to higher mortgage banking revenues [19] Market Data and Key Metrics Changes - Loans in major metropolitan markets decreased by $26 million to $1.01 billion, driven by higher loan payoffs exceeding new loan production [17] - The indirect auto loan portfolio modestly decreased to $241 million from $243 million in the linked quarter, reflecting changes in consumer spending behavior [18] Company Strategy and Development Direction - The company is pursuing a strategy focused on both organic growth and mergers and acquisitions (M&A) to increase bank assets [8][10] - The organic growth strategy emphasizes expanding lending capabilities and enhancing deposit growth [9] - The company remains interested in accretive acquisitions but is cautious and selective, ensuring any deal aligns with its culture and financial goals [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic growth in Texas and the potential for loan growth to reaccelerate [17] - The company is closely monitoring the impact of expected tariffs on the local economy and consumer behavior [19] - Management believes the bank is well-capitalized and positioned to weather potential economic headwinds [12][13] Other Important Information - The allowance for credit losses to total loans held for investment ratio was 1.45%, reflecting a slight increase from the prior quarter [24] - The tangible common equity to tangible assets ratio was 9.98%, indicating a strong capital position [20] Q&A Session Summary Question: Loan pipeline and growth expectations - Management indicated that loan growth is expected to be flat to low single digits in the third quarter due to higher loan payoffs [28][29] Question: Balance between hiring and M&A - Management confirmed that hiring efforts will continue regardless of M&A opportunities, emphasizing the importance of building relationships [31] Question: Increase in specific reserves - The increase in specific reserves was attributed to several loans entering non-accrual status, not just one large credit [33][34] Question: Margin outlook and deposit costs - Management noted that while deposit costs are declining, the outlook for net interest margin remains stable [40][41] Question: M&A environment and valuation expectations - Management highlighted that buyer expectations are a significant impediment to M&A activity, but the regulatory environment has improved [46][47] Question: Mortgage banking performance - Management expects mortgage banking performance to remain flat but is confident in maintaining profitability [50] Question: Non-interest bearing deposits growth - The growth in non-interest bearing deposits was attributed to improved treasury management solutions and relationship management [65][66] Question: Hiring strategy and expense growth - Management acknowledged that hiring will impact expenses in the short term but views it as essential for long-term growth [68]

Financial Performance - Net income for the second quarter of 2025 was $146 million, compared to $123 million for the first quarter of 2025[6] - Diluted earnings per share for the second quarter of 2025 was $086, compared to $072 for the first quarter of 2025[6] - Net Interest Margin (NIM) was 407% for the second quarter of 2025, compared to 381% for the first quarter of 2025[6] - Total deposits reached $374 billion as of June 30, 2025, a decrease of $536 million from the previous quarter[6, 44] - Tangible book value per share (non-GAAP) was $2670 as of June 30, 2025, compared to $2605 as of March 31, 2025[6] Loan Portfolio - Loans Held for Investment (HFI) were $310 billion as of June 30, 2025, compared to $308 billion as of March 31, 2025[6] - The average yield on loans was 699% for the second quarter of 2025, compared to 667% for the first quarter of 2025[6] - Major metropolitan market loan portfolio represents 327% of the Bank's total loans HFI at June 30, 2025[18] Noninterest Income and Expense - Noninterest income was $122 million for the second quarter of 2025, compared to $106 million for the first quarter of 2025[35] - Efficiency ratio was 6111% in the second quarter of 2025, as compared to 669% in the first quarter of 2025[6, 68]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) The company achieved solid Q2 2025 results, marked by steady margin expansion, loan growth, and strong capital, with key financial metrics showing significant improvements [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Curtis Griffith, Chairman and CEO, highlighted solid Q2 2025 results, characterized by steady margin expansion, continued loan growth despite payoffs, and healthy capital levels. The company is pursuing a strategy to expand lending capabilities and recruit experienced commercial lenders - Solid Q2 results were driven by steady margin expansion, continued loan growth despite high payoffs, and healthy capital levels[3](index=3&type=chunk) - The company is pursuing a strategy to increase bank assets by expanding lending capabilities and adding experienced commercial lenders, having recruited several in the Dallas market during Q2[3](index=3&type=chunk) - The community-based deposit franchise continues to provide a stable, lower-cost funding source for loan growth[3](index=3&type=chunk) [Key Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The second quarter of 2025 saw significant improvements in net income, diluted EPS, net interest margin, and return on average assets, alongside a decrease in the average cost of deposits and an increase in tangible book value per share Key Financial Metrics (Q2 2025 vs Q1 2025 vs Q2 2024) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net income ($ millions) | 14.6 | 12.3 | 11.1 | | Diluted earnings per share ($) | 0.86 | 0.72 | 0.66 | | Average cost of deposits (bps) | 214 | 219 | 243 | | Net interest margin (tax-equivalent, %) | 4.07 | 3.81 | 3.63 | | Return on average assets (%) | 1.34 | 1.16 | 1.07 | | Tangible book value (non-GAAP) per share ($) | 26.70 | 26.05 | 24.15 | - As of June 30, 2025, consolidated capital ratios were strong: total risk-based capital ratio at **18.17%**, common equity tier 1 risk-based capital ratio at **13.86%**, and tier 1 leverage ratio at **12.12%**[6](index=6&type=chunk) [Detailed Financial Performance](index=1&type=section&id=Results%20of%20Operations%2C%20Quarter%20Ended%20June%2030%2C%202025) This section details the company's financial performance, highlighting significant growth in net interest income and margin, alongside changes in noninterest income and expenses [Net Interest Income](index=1&type=section&id=Net%20Interest%20Income) Net interest income and net interest margin showed significant growth quarter-over-quarter and year-over-year, driven by increased loan interest income, a loan recovery, and a decrease in the average cost of deposits Net Interest Income and Margin Trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net Interest Income ($ millions) | 42.5 | 38.5 | 35.9 | +10.4% | +18.4% | | Net Interest Margin (tax-equivalent, %) | 4.07 | 3.81 | 3.63 | +26 bps | +44 bps | | Average Yield on Loans (%) | 6.99 | 6.67 | 6.60 | +32 bps | +39 bps | | Average Cost of Deposits (bps) | 214 | 219 | 243 | -5 bps | -29 bps | - A **$1.7 million** recovery in interest from a fully repaid nonaccrual loan positively impacted net interest margin by **17 basis points** and loan yield by **23 basis points** during Q2 2025[4](index=4&type=chunk)[5](index=5&type=chunk) - Interest income increased **$4.2 million** QoQ, primarily from a **$3.3 million** increase in loan interest income (due to the **$1.7 million** recovery and **$20.0 million** growth in average loans) and an **$888 thousand** increase in interest income on other earning assets[5](index=5&type=chunk) - Interest expense increased **$237 thousand** QoQ due to a **$21.2 million** increase in average interest-bearing deposits, but decreased **$1.7 million** YoY due to a **42 basis point** decline in the cost of interest-bearing deposits[7](index=7&type=chunk) [Noninterest Income and Noninterest Expense](index=2&type=section&id=Noninterest%20Income%20and%20Noninterest%20Expense) Noninterest income increased quarter-over-quarter primarily due to mortgage banking revenues, while noninterest expense saw a slight increase driven by personnel and professional service costs Noninterest Income and Expense Trends | Metric | Q2 2025 ($ millions) | Q1 2025 ($ millions) | Q2 2024 ($ millions) | QoQ Change | YoY Change | | :------------------ | :------------------- | :------------------- | :------------------- | :--------- | :--------- | | Noninterest Income | 12.2 | 10.6 | 12.7 | +15.1% | -4.3% | | Noninterest Expense | 33.5 | 33.0 | 32.6 | +1.6% | +3.0% | - The QoQ increase in noninterest income was primarily due to a **$1.5 million** increase in mortgage banking revenues, largely from a **$1.4 million** fair value adjustment of mortgage servicing rights[8](index=8&type=chunk) - The QoQ increase in noninterest expense was mainly due to a **$267 thousand** increase in personnel expenses and **$144 thousand** in professional service expenses[9](index=9&type=chunk) [Balance Sheet and Credit Quality Overview](index=2&type=section&id=Balance%20Sheet%20and%20Credit%20Quality%20Overview) This section provides an overview of the company's balance sheet, detailing loan portfolio growth, deposit trends, asset quality metrics, and strengthened capital levels [Loan Portfolio and Composition](index=2&type=section&id=Loan%20Portfolio%20and%20Composition) Loans held for investment showed modest growth quarter-over-quarter and year-over-year, driven by organic growth across the portfolio despite significant multi-family loan payoffs Loans Held for Investment | Period | Amount ($ billions) | QoQ Change | YoY Change | | :------------- | :------------------ | :--------- | :--------- | | Jun 30, 2025 | 3.10 | +0.7% | +0.2% | | Mar 31, 2025 | 3.08 | | | | Jun 30, 2024 | 3.09 | | | - The **$23.1 million** (**3.0%** annualized) increase in loans held for investment during Q2 2025 was primarily from organic growth, partially offset by a **$52.6 million** decrease in multi-family property loans due to payoffs[10](index=10&type=chunk) [Deposits and Borrowings](index=2&type=section&id=Deposits%20and%20Borrowings) Total deposits experienced a slight quarterly decrease due to seasonal public fund outflows but showed healthy year-over-year growth driven by organic retail and commercial deposits. Noninterest-bearing deposits increased QoQ Total Deposits | Period | Amount ($ billions) | QoQ Change | YoY Change | | :------------- | :------------------ | :--------- | :--------- | | Jun 30, 2025 | 3.74 | -1.4% | +3.2% | | Mar 31, 2025 | 3.79 | | | | Jun 30, 2024 | 3.62 | | | - The quarterly decrease of **$53.6 million** in deposits was mainly due to a seasonal **$73.7 million** decrease in public fund deposits, partially offset by organic growth in retail and commercial deposits[11](index=11&type=chunk) - Noninterest-bearing deposits increased to **$998.8 million** as of June 30, 2025, representing **26.7%** of total deposits[11](index=11&type=chunk) [Asset Quality](index=2&type=section&id=Asset%20Quality) The provision for credit losses increased significantly quarter-over-quarter, attributed to higher specific reserves, net charge-offs, increased loan balances, and credit quality downgrades. Nonperforming assets to total assets remained low, and net charge-offs decreased YoY Credit Quality Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | QoQ Change | YoY Change | | :-------------------------------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Provision for credit losses ($ millions) | 2.5 | 0.42 | 1.8 | +495% | +40.8% | | Allowance for credit losses to loans held for investment (%) | 1.45 | 1.40 | 1.40 | +5 bps | +5 bps | | Nonperforming assets to total assets (%) | 0.25 | 0.16 | 0.57 | +9 bps | -32 bps | | Annualized net charge-offs (%) | 0.06 | 0.07 | 0.10 | -1 bps | -4 bps | - The Q2 2025 provision for credit losses was largely attributable to an increase in specific reserves, net charge-off activity, increased loan balances, and several credit quality downgrades[12](index=12&type=chunk) [Capital](index=2&type=section&id=Capital) Capital levels strengthened during the quarter, with increases in book value per share and tangible common equity to tangible assets, primarily driven by net income after dividends Capital Metrics | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | Book value per share ($) | 27.98 | 27.33 | 25.45 | | Tangible book value (non-GAAP) per share ($) | 26.70 | 26.05 | 24.15 | | Tangible common equity to tangible assets (non-GAAP) (%) | 9.98 | 9.64 | 9.44 | | Common equity tier 1 risk-based capital ratio (%) | 13.86 | 13.59 | 12.61 | | Total risk-based capital ratio (%) | 18.17 | 17.93 | 16.86 | | Tier 1 leverage ratio (%) | 12.12 | 12.04 | 11.81 | - The increase in book value per share was primarily driven by **$12.2 million** of net income after dividends paid, partially offset by a **$2.3 million** decrease in accumulated other comprehensive income[14](index=14&type=chunk) [Corporate and Legal Information](index=3&type=section&id=Corporate%20and%20Legal%20Information) This section provides corporate details, including conference call information, company overview, non-GAAP measure explanations, investor information access, forward-looking statements, and contact details [Conference Call Details](index=3&type=section&id=Conference%20Call) South Plains Financial, Inc. hosted a conference call on July 16, 2025, to discuss Q2 2025 financial results, with replay options available until July 30, 2025 - A conference call to discuss Q2 2025 financial results was held on July 16, 2025, at **5:00 p.m. Eastern Time**[15](index=15&type=chunk) - A live audio webcast and conference materials are available on the Company's website at https://www.spfi.bank/news-events/events[15](index=15&type=chunk) - A replay of the call is available until July 30, 2025, via telephone (**1-844-512-2921**, pin **13754259**) and on the investor section of the Company's website[16](index=16&type=chunk) [About South Plains Financial, Inc.](index=3&type=section&id=About%20South%20Plains%20Financial%2C%20Inc.) South Plains Financial, Inc. is the bank holding company for City Bank, a Texas state-chartered bank operating across West Texas, Dallas, El Paso, Greater Houston, Permian Basin, College Station, and Ruidoso, New Mexico, offering commercial and consumer financial services - South Plains Financial, Inc. is the bank holding company for City Bank, headquartered in Lubbock, Texas[17](index=17&type=chunk) - City Bank operates in West Texas, Dallas, El Paso, Greater Houston, the Permian Basin, College Station, Texas markets, and the Ruidoso, New Mexico market[17](index=17&type=chunk) - The company provides a wide range of commercial and consumer financial services, including commercial and retail banking, investment, trust, and mortgage services[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures like Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Pre-Tax, Pre-Provision Income to provide a more complete understanding of its financial position and performance, noting they are supplemental and not GAAP substitutes - Non-GAAP financial measures used include Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Pre-Tax, Pre-Provision Income[18](index=18&type=chunk) - These measures are considered supplemental and are not a substitute for GAAP financial measures, nor are they necessarily comparable to similarly titled measures from other companies[18](index=18&type=chunk)[19](index=19&type=chunk) - A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of the press release[20](index=20&type=chunk) [Available Information](index=3&type=section&id=Available%20Information) South Plains Financial, Inc. routinely posts important investor information on its website, including press releases and SEC filings, as a means of disclosing material non-public information in compliance with Regulation FD - The Company routinely posts important information for investors on its website (www.spfi.bank/news-events/press-releases)[21](index=21&type=chunk) - The website is used as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD[21](index=21&type=chunk) [Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section contains cautionary statements regarding forward-looking information, highlighting various known and unknown risks and uncertainties that could cause actual results to differ materially from expectations, and emphasizes that the company does not undertake to update these statements - This press release contains forward-looking statements subject to known and unknown risks and uncertainties that are beyond South Plains' control[23](index=23&type=chunk) - Factors that could cause changes include economic conditions, banking industry uncertainty, interest rate fluctuations, inflation, cyber incidents, and regulatory actions[23](index=23&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the Company does not undertake any obligation to update or revise them, except as required by applicable law[23](index=23&type=chunk) [Contact Information](index=4&type=section&id=Contact) Contact details for investor inquiries are provided, including the Chief Risk Officer and Secretary, Mikella Newsom - For investor inquiries, contact Mikella Newsom, Chief Risk Officer and Secretary, at (**866) 771-3347** or investors@city.bank[24](index=24&type=chunk) [Detailed Financial Statements and Reconciliations](index=5&type=section&id=Financial%20Tables) This section presents detailed financial statements, including consolidated highlights, average balances and yields, balance sheets, income statements, loan and deposit compositions, and non-GAAP reconciliations [Consolidated Financial Highlights](index=5&type=section&id=Consolidated%20Financial%20Highlights%20-%20%28Unaudited%29) This table provides a summary of key income statement, per share, balance sheet, performance ratios, and credit quality data for recent quarters, offering a quick overview of the company's financial trends Selected Income Statement Data (Q2 2025 vs Q1 2025 vs Q2 2024) | Metric | Q2 2025 ($k) | Q1 2025 ($k) | Q2 2024 ($k) | | :---------------------- | :----------- | :----------- | :----------- | | Interest income | 64,135 | 59,922 | 59,208 | | Interest expense | 21,632 | 21,395 | 23,320 | | Net interest income | 42,503 | 38,527 | 35,888 | | Provision for credit losses | 2,500 | 420 | 1,775 | | Noninterest income | 12,165 | 10,625 | 12,709 | | Noninterest expense | 33,543 | 33,030 | 32,572 | | Net income | 14,605 | 12,294 | 11,134 | Per Share Data (Q2 2025 vs Q1 2025 vs Q2 2024) | Metric | Q2 2025 ($) | Q1 2025 ($) | Q2 2024 ($) | | :-------------------------------- | :---------- | :---------- | :---------- | | Net earnings, diluted | 0.86 | 0.72 | 0.66 | | Cash dividends declared and paid | 0.15 | 0.15 | 0.14 | | Book value | 27.98 | 27.33 | 25.45 | | Tangible book value (non-GAAP) | 26.70 | 26.05 | 24.15 | Summary Performance and Credit Quality Ratios (Q2 2025 vs Q1 2025 vs Q2 2024) | Metric | Q2 2025 (%) | Q1 2025 (%) | Q2 2024 (%) | | :-------------------------------------------------- | :---------- | :---------- | :---------- | | Return on average assets (annualized) | 1.34 | 1.16 | 1.07 | | Net interest margin | 4.07 | 3.81 | 3.63 | | Efficiency ratio | 61.11 | 66.90 | 66.72 | | Nonperforming assets to total assets | 0.25 | 0.16 | 0.57 | | Allowance for credit losses to total loans held for investment | 1.45 | 1.40 | 1.40 | | Net charge-offs to average loans outstanding (annualized) | 0.06 | 0.07 | 0.10 | [Average Balances and Yields (Quarterly)](index=7&type=section&id=Average%20Balances%20and%20Yields%20-%20%28Unaudited%29%20%28Quarterly%29) This table details average balances, interest income/expense, and yields/rates for interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2025, and 2024, illustrating the components of net interest income Average Balances and Yields (Q2 2025 vs Q2 2024) | Metric | Q2 2025 Average Balance ($k) | Q2 2025 Interest ($k) | Q2 2025 Yield/Rate (%) | Q2 2024 Average Balance ($k) | Q2 2024 Interest ($k) | Q2 2024 Yield/Rate (%) | | :--------------------------- | :--------------------------- | :-------------------- | :--------------------- | :--------------------------- | :-------------------- | :--------------------- | | Loans | 3,094,558 | 53,894 | 6.99 | 3,082,601 | 50,579 | 6.60 | | Total interest-earning assets | 4,212,086 | 64,356 | 6.13 | 3,997,282 | 59,431 | 5.98 | | NOW, Savings, MMDA's | 2,326,779 | 15,890 | 2.74 | 2,221,427 | 17,652 | 3.20 | | Total interest-bearing liabilities | 2,875,918 | 21,632 | 3.02 | 2,724,446 | 23,320 | 3.44 | | Net interest income | | 42,724 | | | 36,111 | | | Net interest margin | | | 4.07 | | | 3.63 | [Average Balances and Yields (Year-to-Date)](index=8&type=section&id=Average%20Balances%20and%20Yields%20-%20%28Unaudited%29%20%28Six%20Months%29) This table presents average balances, interest income/expense, and yields/rates for interest-earning assets and interest-bearing liabilities for the six months ended June 30, 2025, and 2024, providing a year-to-date perspective on interest rate dynamics Average Balances and Yields (YTD Q2 2025 vs YTD Q2 2024) | Metric | YTD Q2 2025 Average Balance ($k) | YTD Q2 2025 Interest ($k) | YTD Q2 2025 Yield/Rate (%) | YTD Q2 2024 Average Balance ($k) | YTD Q2 2024 Interest ($k) | YTD Q2 2024 Yield/Rate (%) | | :------------------------------- | :------------------------------- | :------------------------ | :------------------------- | :------------------------------- | :------------------------ | :------------------------- | | Loans | 3,084,563 | 104,471 | 6.83 | 3,048,569 | 99,519 | 6.56 | | Total interest-earning assets | 4,168,609 | 124,498 | 6.02 | 4,010,562 | 118,381 | 5.94 | | NOW, Savings, MMDA's | 2,314,562 | 31,401 | 2.74 | 2,253,704 | 35,649 | 3.18 | | Total interest-bearing liabilities | 2,865,271 | 43,027 | 3.03 | 2,747,738 | 46,679 | 3.42 | | Net interest income | | 81,471 | | | 71,702 | | | Net interest margin | | | 3.94 | | | 3.60 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets%20%28Unaudited%29) This table presents the consolidated balance sheet data for South Plains Financial, Inc. as of June 30, 2025, and December 31, 2024, showing changes in assets, liabilities, and stockholders' equity Consolidated Balance Sheet (Jun 30, 2025 vs Dec 31, 2024) | Metric | Jun 30, 2025 ($k) | Dec 31, 2024 ($k) | | :--------------------------- | :---------------- | :---------------- | | Cash and due from banks | 60,400 | 54,114 | | Interest-bearing deposits in banks | 410,096 | 304,968 | | Securities available for sale | 570,000 | 577,240 | | Loans held for investment | 3,098,978 | 3,055,054 | | Total assets | 4,363,674 | 4,232,239 | | Noninterest-bearing deposits | 998,759 | 935,510 | | Interest-bearing deposits | 2,740,179 | 2,685,366 | | Total deposits | 3,738,938 | 3,620,876 | | Total liabilities | 3,909,600 | 3,793,290 | | Total stockholders' equity | 454,074 | 438,949 | [Consolidated Statements of Income](index=10&type=section&id=Consolidated%20Statements%20of%20Income%20%28Unaudited%29) This table provides the consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing interest income, interest expense, noninterest income, noninterest expense, and net income Consolidated Statements of Income (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($k) | Q2 2024 ($k) | | :---------------------- | :----------- | :----------- | | Total interest income | 64,135 | 59,208 | | Total interest expense | 21,632 | 23,320 | | Net interest income | 42,503 | 35,888 | | Provision for credit losses | 2,500 | 1,775 | | Total noninterest income | 12,165 | 12,709 | | Total noninterest expense | 33,543 | 32,572 | | Net income | 14,605 | 11,134 | Consolidated Statements of Income (YTD Q2 2025 vs YTD Q2 2024) | Metric | YTD Q2 2025 ($k) | YTD Q2 2024 ($k) | | :---------------------- | :--------------- | :--------------- | | Total interest income | 124,057 | 117,935 | | Total interest expense | 43,027 | 46,679 | | Net interest income | 81,030 | 71,256 | | Provision for credit losses | 2,920 | 2,605 | | Total noninterest income | 22,790 | 24,118 | | Total noninterest expense | 66,573 | 64,502 | | Net income | 26,899 | 22,008 | [Loan Composition](index=11&type=section&id=Loan%20Composition) This table breaks down the loan portfolio by category as of June 30, 2025, and December 31, 2024, showing the distribution across commercial, consumer, and construction loans Loan Composition (Jun 30, 2025 vs Dec 31, 2024) | Loan Category | Jun 30, 2025 ($k) | Dec 31, 2024 ($k) | | :---------------------- | :---------------- | :---------------- | | Commercial Real Estate | 1,085,309 | 1,119,063 | | Commercial - Specialized | 379,068 | 388,955 | | Commercial - General | 620,934 | 557,371 | | 1-4 Family Residential | 589,935 | 566,400 | | Auto Loans | 258,193 | 254,474 | | Other Consumer | 63,589 | 64,936 | | Construction | 101,950 | 103,855 | | Total loans held for investment | 3,098,978 | 3,055,054 | [Deposit Composition](index=11&type=section&id=Deposit%20Composition) This table outlines the composition of deposits by type as of June 30, 2025, and December 31, 2024, distinguishing between interest-bearing and noninterest-bearing accounts Deposit Composition (Jun 30, 2025 vs Dec 31, 2024) | Deposit Type | Jun 30, 2025 ($k) | Dec 31, 2024 ($k) | | :--------------------------- | :---------------- | :---------------- | | Noninterest-bearing deposits | 998,759 | 935,510 | | NOW & other transaction accounts | 1,244,023 | 498,718 | | MMDA & other savings | 1,072,010 | 1,741,988 | | Time deposits | 424,146 | 444,660 | | Total deposits | 3,738,938 | 3,620,876 | [Reconciliation of Non-GAAP Financial Measures](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20%28Unaudited%29) This table provides a reconciliation of non-GAAP financial measures, including Pre-tax, Pre-provision income, Tangible common equity, and Tangible assets, to their most directly comparable GAAP measures for various periods Pre-tax, Pre-provision income (Q2 2025 vs Q1 2025 vs Q2 2024) | Metric | Q2 2025 ($k) | Q1 2025 ($k) | Q2 2024 ($k) | | :-------------------------- | :----------- | :----------- | :----------- | | Net income | 14,605 | 12,294 | 11,134 | | Income tax expense | 4,020 | 3,408 | 3,116 | | Provision for credit losses | 2,500 | 420 | 1,775 | | Pre-tax, pre-provision income | 21,125 | 16,122 | 16,025 | Tangible Common Equity and Assets (Jun 30, 2025 vs Mar 31, 2025 vs Jun 30, 2024) | Metric | Jun 30, 2025 ($k) | Mar 31, 2025 ($k) | Jun 30, 2024 ($k) | | :------------------------------------ | :---------------- | :---------------- | :---------------- | | Total common stockholders' equity | 454,074 | 443,743 | 417,985 | | Less: goodwill and other intangibles | (20,732) | (20,884) | (21,379) | | Tangible common equity | 433,342 | 422,859 | 396,606 | | Total assets | 4,363,674 | 4,405,209 | 4,220,936 | | Less: goodwill and other intangibles | (20,732) | (20,884) | (21,379) | | Tangible assets | 4,342,942 | 4,384,325 | 4,199,557 | Per Share and Ratio Data (Jun 30, 2025 vs Mar 31, 2025 vs Jun 30, 2024) | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | Book value per share | $27.98 | $27.33 | $25.45 | | Tangible book value per share | $26.70 | $26.05 | $24.15 | | Tangible common equity to tangible assets | 9.98% | 9.64% | 9.44% |

Core Viewpoint - South Plains Financial, Inc. reported solid financial results for the second quarter of 2025, characterized by margin expansion, loan growth, and healthy capital levels, positioning the company to capitalize on future opportunities [3][4][6]. Financial Performance - Net interest income for Q2 2025 was $42.5 million, up from $38.5 million in Q1 2025 and $35.9 million in Q2 2024 [4][27]. - Net interest margin increased to 4.07% in Q2 2025, compared to 3.81% in Q1 2025 and 3.63% in Q2 2024 [4][28]. - Interest income rose to $64.1 million in Q2 2025, a $4.2 million increase from Q1 2025, driven by a $3.3 million rise in loan interest income [5][27]. - Net income for Q2 2025 was $14.6 million, compared to $12.3 million in Q1 2025 and $11.1 million in Q2 2024 [6][27]. Loan Portfolio and Deposits - Loans held for investment increased to $3.10 billion as of June 30, 2025, reflecting a 3.0% annualized growth from Q1 2025 [11][27]. - Total deposits were $3.74 billion as of June 30, 2025, a decrease of 1.4% from Q1 2025 but an increase of 3.2% year-over-year [12][27]. Asset Quality - The provision for credit losses in Q2 2025 was $2.5 million, up from $420 thousand in Q1 2025, indicating increased reserves due to credit quality downgrades [13][27]. - The ratio of nonperforming assets to total assets was 0.25% as of June 30, 2025, compared to 0.16% in Q1 2025 [15][27]. Capital Position - Book value per share increased to $27.98 as of June 30, 2025, from $27.33 in Q1 2025 [16][27]. - The total risk-based capital ratio was 18.17% as of June 30, 2025, indicating a strong capital position [6][28].

Core Viewpoint - South Plains Financial (SPFI) is expected to report quarterly earnings of $0.77 per share, a 16.7% increase year-over-year, with revenues projected at $51.7 million, reflecting a 6.4% growth compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised 2.4% lower in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Financial Metrics - The consensus estimate for the 'Efficiency ratio' is 64.7%, down from 66.7% a year ago [5]. - 'Nonperforming Loans' are expected to reach $7.70 million, a significant decrease from $23.45 million reported in the same quarter last year [5]. - 'Net Interest Margin (FTE)' is forecasted at 3.8%, up from 3.6% in the same quarter of the previous year [5]. - 'Average Balance - Total interest-earning assets' is estimated at $4.15 billion, compared to $4.00 billion reported last year [6]. - 'Net Interest Income' is projected at $39.59 million, an increase from $35.89 million reported in the same quarter last year [6][7]. - 'Total Noninterest Income' is expected to be $12.11 million, slightly down from $12.71 million a year ago [7]. Stock Performance - Over the past month, shares of South Plains Financial have returned +2.7%, while the Zacks S&P 500 composite has changed by +4.1% [7]. - Currently, SPFI holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the overall market in the near future [7].

Core Viewpoint - South Plains Financial, Inc. will release its second quarter 2025 financial results on July 16, 2025, after market close, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the second quarter of 2025 will be announced after market close on July 16, 2025 [1]. - A conference call and webcast will be held at 5:00 p.m. ET on the same day to discuss the financial results [1]. Group 2: Participation Details - Investors and analysts can participate in 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 July 30, 2025, with a pin code of 13754259 for telephone access [3]. Group 4: Company Overview - South Plains Financial, Inc. is the parent company of City Bank, headquartered in Lubbock, Texas, and is one of the largest independent banks in West Texas [4]. - The Company operates in various Texas markets and provides a range of commercial and consumer financial services [4].

Core Viewpoint - South Plains Financial (SPFI) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2025, South Plains Financial is projected to earn $3.14 per share, reflecting a 7.5% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for South Plains Financial has risen by 10%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of South Plains Financial to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].