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].
South Plains Financial(SPFI) - 2024 Q4 - Annual Report