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
June 30, 2023.
Second Quarter 2023 Highlights
- Net income for the second quarter
of 2023 was $29.7 million, compared to $9.2 million for the first
quarter of 2023 and $15.9 million for the second quarter of
2022.
- Diluted earnings per share for the
second quarter of 2023 was $1.71, compared to $0.53 for the first
quarter of 2023 and $0.88 for the second quarter of 2022.
- Excluding one-time gains net of
charges related to the sale of Windmark ($22.9 million net of tax)
and the loss from repositioning of the securities portfolio ($2.7
million net of tax), second quarter 2023 diluted earnings per share
was $0.55
- Deposits grew $66.5 million, or
1.9%, to $3.57 billion during the second quarter of 2023, as
compared to March 31, 2023; an estimated 16% of deposits at June
30, 2023 were uninsured or uncollateralized.
- Average cost of deposits for the
second quarter of 2023 was 169 basis points, compared to 136 basis
points for the first quarter of 2023 and 27 basis points for the
second quarter of 2022.
- Net interest margin, calculated on
a tax-equivalent basis, was 3.65% for the second quarter of 2023,
compared to 3.75% for the first quarter of 2023.
- Loans held for investment grew
$190.4 million, or 6.8%, during the second quarter of 2023,
compared to March 31, 2023.
- Provision for credit losses was
$3.7 million in the second quarter of 2023, compared to $1.0
million in the first quarter of 2023 and no provision for the
second quarter of 2022.
- Nonperforming assets to total
assets were 0.51% at June 30, 2023, compared to 0.19% at March 31,
2023 and 0.20% at June 30, 2022.
- Return on average assets for the
second quarter of 2023 was 2.97% annualized, compared to 0.95%
annualized for the first quarter of 2023 and 1.60% annualized for
the second quarter of 2022.
- Tangible book value (non-GAAP) per
share was $21.82 as of June 30, 2023, compared to $20.19 as of
March 31, 2023 and $19.50 as of June 30, 2022.
- Liquidity - available borrowing
capacity of $1.82 billion through the Federal Home Loan Bank of
Dallas, the Federal Reserve’s Discount Window, and access to the
Federal Reserve’s Bank Term Funding Program at June 30, 2023.
- Capital - total risk-based capital
ratio – 16.75%, Tier 1 risk-based capital ratio – 13.37%, Common
Equity Tier 1 risk-based capital ratio – 12.11%, and Tier 1
leverage ratio - 11.68%, all at June 30, 2023 and significantly
exceeding the minimum regulatory levels necessary to be deemed
“well-capitalized.”
- As previously announced, on April
1, 2023, the sale of City Bank’s formerly wholly owned subsidiary,
Windmark Insurance Agency, Inc. (“Windmark”) to Alliant Insurance
Services in an all cash transaction was completed.
Curtis Griffith, South Plains’ Chairman and
Chief Executive Officer, commented, “Our second quarter results
demonstrate the strength of the Bank and the resiliency of our
markets as we maintained core deposits while our non-interest
bearing deposits remained relatively steady, which is quite an
accomplishment in this challenging environment. Additionally, we
were able to maintain our net interest margin at March’s level of
3.65% through the second quarter as higher loan yields are
offsetting the rise in our cost of funds. We have also maintained a
strong liquidity and capital position which was further bolstered
by the sale of Windmark in April. Given the large one-time gain
that was recognized, we made the strategic decision to sell $56
million of securities having recorded a realized loss of $3.4
million. We believe this was a tax efficient transaction which will
boost our earnings in future quarters as we have reinvested the
proceeds into higher yielding loans through the quarter. While we
continue to deliver strong results, we believe our shares are
trading below intrinsic value. As a result, our board of directors
authorized a $15 million stock repurchase program in May and we
subsequently bought back approximately 113,000 shares during the
remainder of the quarter.”
Results of Operations, Quarter Ended June 30,
2023
Net Interest Income
Net interest income was $34.6 million for the
second quarter of 2023, compared to $34.3 million for the first
quarter of 2023 and $37.1 million for the second quarter of 2022.
Net interest margin, calculated on a tax-equivalent basis, was
3.65% for the second quarter of 2023, compared to 3.75% for the
first quarter of 2023 and 4.02% for the second quarter of 2022. The
average yield on loans was 5.94% for the second quarter of 2023,
compared to 5.78% for the first quarter of 2023 and 5.57% for the
second quarter of 2022. The average cost of deposits was 169 basis
points for the second quarter of 2023, which is 33 basis points
higher than the first quarter of 2023 and 142 basis points higher
than the second quarter of 2022.
Interest income was $50.8 million for the second
quarter of 2023, compared to $47.4 million for the first quarter of
2023 and $40.8 million for the second quarter of 2022. Interest
income increased $3.4 million in the second quarter of 2023 from
the first quarter of 2023, which was mainly comprised of an
increase of $3.3 million in loan interest income. The growth in
loan interest income was primarily due to an increase of $115.2
million in average loans outstanding and the rising short-term
interest rate environment, as the yield on loans rose 16 basis
points. Interest income increased $10.1 million in the second
quarter of 2023 compared to the second quarter of 2022. This
increase was primarily due to an increase of average loans of
$344.8 million and higher market interest rates during the period,
partially offset by $4.4 million of interest income received
related to four credits for the recovery of interest on previously
charged-off credits, purchase discount principal recovery, and
prepayment penalties during the second quarter of 2022.
Interest expense was $16.2 million for the
second quarter of 2023, compared to $13.1 million for the first
quarter of 2023 and $3.6 million for the second quarter of 2022.
Interest expense increased $3.1 million compared to the first
quarter of 2023 and $12.6 million compared to the second quarter of
2022, primarily as a result of significantly rising short-term
interest rates on interest-bearing liabilities, with the increase
being mainly comprised of interest expense on deposits.
Additionally, interest-bearing deposits have grown during both of
the period comparisons.
Noninterest Income and Noninterest Expense
Noninterest income was $47.1 million for the
second quarter of 2023, compared to $10.7 million for the first
quarter of 2023 and $18.8 million for the second quarter of 2022.
The increase from the first quarter of 2023 was primarily due to
the $33.5 million gain on sale of Windmark and an increase of $3.0
million in mortgage banking activities revenue, partially offset by
a reduction of $1.4 million in income from insurance activities due
to the sale of Windmark. The increase in mortgage banking
activities revenues was mainly the result of a $400 thousand fair
value write-up of the mortgage servicing rights portfolio compared
to the write-down of $2.0 million in the first quarter of 2023 and
an increase of $45.9 million in mortgage loans originated for sale.
Additionally, bank card services and interchange revenue increased
$1.1 million for the second quarter of 2023 compared to the first
quarter of 2022 mainly as a result of continued growth in customer
card usage and incentives received during the period. The increase
in noninterest income for the second quarter of 2023 as compared to
the second quarter of 2022 was primarily due to the $33.5 million
gain on sale of Windmark noted above, partially offset by a
reduction of $1.5 million in income from insurance activities due
to the sale of Windmark and a decrease of $3.4 million in mortgage
banking revenues as originations of mortgage loans held for sale
declined $74.5 million.
Noninterest expense was $40.5 million for the
second quarter of 2023, compared to $32.4 million for the first
quarter of 2023 and $36.1 million for the second quarter of 2022.
The $8.1 million increase from the first quarter of 2023 was
largely the result of $4.5 million in personnel and transaction
expenses as part of the Windmark sale plus related incentive
compensation and a $3.4 million loss on the sale of securities. The
increase in noninterest expense for the second quarter of 2023 as
compared to the second quarter of 2022 was primarily driven by the
$4.5 million in Windmark transaction and related personnel
expenses, the $3.4 million loss on sale of securities, partially
offset by a reduction of $1.1 million in mortgage personnel costs
due to the decline in mortgage loan originations and a decrease of
$759 thousand in legal expenses incurred largely as a result of a
vendor dispute, which was resolved and accounted for by the end of
2022.
Loan Portfolio and Composition
Loans held for investment were $2.98 billion as
of June 30, 2023, compared to $2.79 billion as of March 31, 2023
and $2.58 billion as of June 30, 2022. The $190.4 million, or 6.8%,
increase during the second quarter of 2023 as compared to the first
quarter of 2023 remained relationship-focused and occurred
primarily in commercial real estate loans, residential mortgage
loans, seasonal agricultural loans, and energy loans. As of June
30, 2023, loans held for investment increased $398.6 million, or
15.4% year over year, from June 30, 2022, primarily attributable to
strong organic loan growth.
Deposits and Borrowings
Deposits totaled $3.57 billion as of June 30,
2023, compared to $3.51 billion as of March 31, 2023 and $3.43
billion as of June 30, 2022. Deposits increased by $66.5 million,
or 1.9%, in the second quarter of 2023 from March 31, 2023. As of
June 30, 2023, deposits increased $148.7 million, or 4.3% year over
year, from June 30, 2022. Noninterest-bearing deposits were $1.10
billion as of June 30, 2023, compared to $1.11 billion as of March
31, 2023 and $1.20 billion as of June 30, 2022. Noninterest-bearing
deposits represented 30.8% of total deposits as of June 30, 2023.
The quarterly growth in deposits was mainly the result of an
increase of $81 million in brokered deposits, partially offset by a
reduction of $67 million in our public fund deposits. The
year-over-year increase in deposits is primarily a result of the
noted growth in the second quarter of 2023 and the overall focus on
liquidity.
Asset Quality
The Company recorded a provision for credit
losses in the second quarter of 2023 of $3.7 million, compared to
$1.0 million in the first quarter of 2023 and no provision in the
second quarter of 2022. The provision during the second quarter of
2023 was largely attributable to growth in loans held for
investment and an increase of $1.3 million in specific reserves.
The change in specific reserves was primarily related to a $13.3
million previously-classified relationship that was placed on
nonaccrual in May 2023. Classified loans declined $3.5 million
during the second quarter of 2023 to $67.4 from $70.9 million at
March 31, 2023.
The ratio of allowance for credit losses to
loans held for investment was 1.45% as of June 30, 2023, compared
to 1.42% as of March 31, 2023 and 1.54% as of June 30, 2022.
The ratio of nonperforming assets to total
assets as of June 30, 2023 was 0.51%, compared to 0.19% as of March
31, 2023 and 0.20% at June 30, 2022. Annualized net charge-offs
(recoveries) were 0.05% for the second quarter of 2023, compared to
0.09% for the first quarter of 2023 and (0.02)% for the second
quarter of 2022. The increase in nonperforming assets was a result
of the $13.3 million relationship noted above.
Capital
Book value per share increased to $23.13 at June
30, 2023, compared to $21.57 at March 31, 2023. The growth was
driven by an increase of $27.5 million of net income after
dividends paid, partially offset by $2.5 million in share
repurchases.
Conference Call
South Plains will host a conference call to
discuss its second quarter 2023 financial results today, July 25,
2023, 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
13739671. The replay will be available until August 8, 2023.
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, general
economic conditions, potential recession in the United States and
our market areas, the impacts related to or resulting from recent
bank failures and any continuation of the recent 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 and related changes in
deposit customer behavior, changes in market interest rates, the
persistence of the current inflationary environment 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, the effects
of declines in housing prices in the United States and our market
areas, increases in unemployment rates in the United States and our
market areas, declines in commercial real estate prices,
uncertainty regarding United States fiscal debt and budget matters,
severe weather, natural disasters, acts of war or terrorism or
other external events, regulatory considerations, competition and
market expansion opportunities, changes in non-interest
expenditures or in the anticipated benefits of such expenditures,
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, and other
documents South Plains files with the SEC from time to time. South
Plains urges readers of this press release to review the “Risk
Factors” section of our most recent Annual Report on Form 10-K, as
well as the “Risk Factors” section of 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 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 |
| |
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income |
$ |
50,821 |
|
$ |
47,448 |
|
$ |
46,228 |
|
$ |
41,108 |
|
$ |
40,752 |
| Interest expense |
|
16,240 |
|
|
13,133 |
|
|
9,906 |
|
|
6,006 |
|
|
3,647 |
| Net interest income |
|
34,581 |
|
|
34,315 |
|
|
36,322 |
|
|
35,102 |
|
|
37,105 |
| Provision for credit
losses |
|
3,700 |
|
|
1,010 |
|
|
248 |
|
|
(782) |
|
|
- |
| Noninterest income |
|
47,112 |
|
|
10,691 |
|
|
12,676 |
|
|
20,937 |
|
|
18,835 |
| Noninterest expense |
|
40,499 |
|
|
32,361 |
|
|
32,708 |
|
|
37,401 |
|
|
36,056 |
| Income tax expense |
|
7,811 |
|
|
2,391 |
|
|
3,421 |
|
|
3,962 |
|
|
4,001 |
| Net income |
|
29,683 |
|
|
9,244 |
|
|
12,621 |
|
|
15,458 |
|
|
15,883 |
| Per Share Data (Common
Stock): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings, basic |
|
1.74 |
|
|
0.54 |
|
|
0.74 |
|
|
0.89 |
|
|
0.91 |
| Net earnings, diluted |
|
1.71 |
|
|
0.53 |
|
|
0.71 |
|
|
0.86 |
|
|
0.88 |
| Cash dividends declared and
paid |
|
0.13 |
|
|
0.13 |
|
|
0.12 |
|
|
0.12 |
|
|
0.11 |
| Book value |
|
23.13 |
|
|
21.57 |
|
|
20.97 |
|
|
20.03 |
|
|
20.91 |
| Tangible book value
(non-GAAP) |
|
21.82 |
|
|
20.19 |
|
|
19.57 |
|
|
18.61 |
|
|
19.50 |
| Weighted average shares
outstanding, basic |
|
17,048,432 |
|
|
17,046,713 |
|
|
17,007,914 |
|
|
17,286,531 |
|
|
17,490,706 |
| Weighted average shares
outstanding, dilutive |
|
17,386,515 |
|
|
17,560,756 |
|
|
17,751,674 |
|
|
17,901,899 |
|
|
18,020,548 |
| Shares outstanding at end of
period |
|
16,952,072 |
|
|
17,062,572 |
|
|
17,027,197 |
|
|
17,064,640 |
|
|
17,417,094 |
| Selected Period End
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
295,581 |
|
|
328,002 |
|
|
234,883 |
|
|
329,962 |
|
|
375,690 |
| Investment securities |
|
628,093 |
|
|
698,579 |
|
|
701,711 |
|
|
711,412 |
|
|
763,943 |
| Total loans held for
investment |
|
2,979,063 |
|
|
2,788,640 |
|
|
2,748,081 |
|
|
2,690,366 |
|
|
2,580,493 |
| Allowance for credit
losses |
|
43,137 |
|
|
39,560 |
|
|
39,288 |
|
|
39,657 |
|
|
39,785 |
| Total assets |
|
4,150,129 |
|
|
4,058,049 |
|
|
3,944,063 |
|
|
3,992,690 |
|
|
3,974,724 |
| Interest-bearing deposits |
|
2,473,755 |
|
|
2,397,115 |
|
|
2,255,942 |
|
|
2,198,464 |
|
|
2,230,105 |
| Noninterest-bearing
deposits |
|
1,100,767 |
|
|
1,110,939 |
|
|
1,150,488 |
|
|
1,262,072 |
|
|
1,195,732 |
| Total deposits |
|
3,574,522 |
|
|
3,508,054 |
|
|
3,406,430 |
|
|
3,460,536 |
|
|
3,425,837 |
| Borrowings |
|
122,447 |
|
|
122,400 |
|
|
122,354 |
|
|
122,307 |
|
|
122,261 |
| Total stockholders’
equity |
|
392,029 |
|
|
367,964 |
|
|
357,014 |
|
|
341,799 |
|
|
364,222 |
| Summary Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on average assets
(annualized) |
|
2.97% |
|
|
0.95% |
|
|
1.27% |
|
|
1.53% |
|
|
1.60% |
| Return on average equity
(annualized) |
|
31.33% |
|
|
10.34% |
|
|
14.33% |
|
|
17.37% |
|
|
16.96% |
| Net interest margin (1) |
|
3.65% |
|
|
3.75% |
|
|
3.88% |
|
|
3.70% |
|
|
4.02% |
| Yield on loans |
|
5.94% |
|
|
5.78% |
|
|
5.59% |
|
|
5.12% |
|
|
5.57% |
| Cost of interest-bearing
deposits |
|
2.45% |
|
|
2.03% |
|
|
1.52% |
|
|
0.82% |
|
|
0.42% |
| Efficiency ratio |
|
49.39% |
|
|
71.42% |
|
|
66.35% |
|
|
66.38% |
|
|
64.11% |
| Summary Credit Quality
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nonperforming loans |
|
21,039 |
|
|
7,579 |
|
|
7,790 |
|
|
7,834 |
|
|
7,889 |
| Nonperforming loans to total
loans held for investment |
|
0.71% |
|
|
0.27% |
|
|
0.28% |
|
|
0.29% |
|
|
0.31% |
| Other real estate owned |
|
249 |
|
|
202 |
|
|
169 |
|
|
37 |
|
|
59 |
| Nonperforming assets to total
assets |
|
0.51% |
|
|
0.19% |
|
|
0.20% |
|
|
0.20% |
|
|
0.20% |
| Allowance for credit losses to
total loans held for investment |
|
1.45% |
|
|
1.42% |
|
|
1.43% |
|
|
1.47% |
|
|
1.54% |
| Net charge-offs (recoveries) to
average loans outstanding (annualized) |
|
0.05% |
|
|
0.09% |
|
|
0.09% |
|
|
(0.10)% |
|
|
(0.02)% |
| |
As of and for the quarter ended |
|
|
June 302023 |
March 31,2023 |
December 31,2022 |
September 30,2022 |
June 30,2022 |
| Capital
Ratios: |
|
|
|
|
|
| Total stockholders’ equity to
total assets |
9.45% |
9.07% |
9.05% |
8.56% |
9.16% |
| Tangible common equity to
tangible assets (non-GAAP) |
8.96% |
8.54% |
8.50% |
8.00% |
8.60% |
| Common equity tier 1 to
risk-weighted assets |
12.11% |
11.92% |
11.81% |
11.67% |
12.24% |
| Tier 1 capital to average
assets |
11.68% |
11.22% |
11.03% |
10.95% |
10.93% |
| Total capital to risk-weighted
assets |
16.75% |
16.70% |
16.58% |
16.46% |
17.32% |
(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 |
| |
June 30, 2023 |
|
June 30, 2022 |
| |
|
|
|
| |
AverageBalance |
|
Interest |
|
Yield/Rate |
|
AverageBalance |
|
Interest |
|
Yield/Rate |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans |
$ |
2,894,087 |
|
$ |
42,872 |
|
5.94% |
|
$ |
2,549,264 |
|
$ |
35,420 |
|
5.57% |
| Debt securities - taxable |
|
575,983 |
|
|
5,365 |
|
3.74% |
|
|
637,814 |
|
|
3,538 |
|
2.22% |
| Debt securities -
nontaxable |
|
210,709 |
|
|
1,403 |
|
2.67% |
|
|
217,023 |
|
|
1,439 |
|
2.66% |
| Other interest-bearing
assets |
|
149,996 |
|
|
1,484 |
|
3.97% |
|
|
329,869 |
|
|
658 |
|
0.80% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total interest-earning
assets |
|
3,830,775 |
|
|
51,124 |
|
5.35% |
|
|
3,733,970 |
|
|
41,055 |
|
4.41% |
| Noninterest-earning
assets |
|
182,752 |
|
|
|
|
|
|
|
238,575 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
assets |
$ |
4,013,527 |
|
|
|
|
|
|
$ |
3,972,545 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities &
stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOW, Savings, MMDA’s |
$ |
2,059,182 |
|
|
12,484 |
|
2.43% |
|
$ |
1,903,452 |
|
|
1,357 |
|
0.29% |
| Time deposits |
|
299,358 |
|
|
1,949 |
|
2.61% |
|
|
334,819 |
|
|
960 |
|
1.15% |
| Short-term borrowings |
|
325 |
|
|
5 |
|
6.17% |
|
|
4 |
|
|
- |
|
0.00% |
| Notes payable & other
long-term borrowings |
|
- |
|
|
- |
|
0.00% |
|
|
- |
|
|
- |
|
0.00% |
| Subordinated debt |
|
76,031 |
|
|
1,013 |
|
5.34% |
|
|
75,845 |
|
|
1,013 |
|
5.36% |
| Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
789 |
|
6.82% |
|
|
46,393 |
|
|
317 |
|
2.74% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total interest-bearing
liabilities |
|
2,481,289 |
|
|
16,240 |
|
2.63% |
|
|
2,360,513 |
|
|
3,647 |
|
0.62% |
| Demand deposits |
|
1,075,514 |
|
|
|
|
|
|
|
1,171,454 |
|
|
|
|
|
| Other liabilities |
|
76,727 |
|
|
|
|
|
|
|
64,933 |
|
|
|
|
|
| Stockholders’ equity |
|
379,997 |
|
|
|
|
|
|
|
375,645 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities &
stockholders’ equity |
$ |
4,013,527 |
|
|
|
|
|
|
$ |
3,972,545 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
|
$ |
34,884 |
|
|
|
|
|
|
$ |
37,408 |
|
|
| Net interest margin (2) |
|
|
|
|
|
|
3.65% |
|
|
|
|
|
|
|
4.02% |
(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 Six Months Ended |
| |
June 30, 2023 |
|
June 30, 2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
AverageBalance |
|
Interest |
|
Yield/Rate |
|
AverageBalance |
|
Interest |
|
Yield/Rate |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans |
$ |
2,836,482 |
|
$ |
82,474 |
|
5.86% |
|
$ |
2,515,934 |
|
$ |
64,799 |
|
5.19% |
| Debt securities - taxable |
|
580,705 |
|
|
10,605 |
|
3.68% |
|
|
579,243 |
|
|
5,892 |
|
2.05% |
| Debt securities -
nontaxable |
|
211,950 |
|
|
2,815 |
|
2.68% |
|
|
217,672 |
|
|
2,887 |
|
2.67% |
| Other interest-bearing
assets |
|
155,976 |
|
|
2,979 |
|
3.85% |
|
|
398,670 |
|
|
862 |
|
0.44% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total interest-earning
assets |
|
3,785,113 |
|
|
98,873 |
|
5.27% |
|
|
3,711,519 |
|
|
74,440 |
|
4.04% |
| Noninterest-earning
assets |
|
186,114 |
|
|
|
|
|
|
|
250,376 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
assets |
$ |
3,971,227 |
|
|
|
|
|
|
$ |
3,961,895 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities &
stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NOW, Savings, MMDA’s |
$ |
2,023,869 |
|
|
22,468 |
|
2.24% |
|
$ |
1,920,609 |
|
|
2,268 |
|
0.24% |
| Time deposits |
|
291,677 |
|
|
3,335 |
|
2.31% |
|
|
336,962 |
|
|
1,939 |
|
1.16% |
| Short-term borrowings |
|
165 |
|
|
5 |
|
6.11% |
|
|
4 |
|
|
- |
|
0.00% |
| Notes payable & other
long-term borrowings |
|
- |
|
|
- |
|
0.00% |
|
|
- |
|
|
- |
|
0.00% |
| Subordinated debt |
|
76,008 |
|
|
2,025 |
|
5.37% |
|
|
75,822 |
|
|
2,025 |
|
5.39% |
| Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
1,540 |
|
6.69% |
|
|
46,393 |
|
|
548 |
|
2.38% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total interest-bearing
liabilities |
|
2,438,112 |
|
|
29,373 |
|
2.43% |
|
|
2,379,790 |
|
|
6,780 |
|
0.57% |
| Demand deposits |
|
1,092,429 |
|
|
|
|
|
|
|
1,137,771 |
|
|
|
|
|
| Other liabilities |
|
69,443 |
|
|
|
|
|
|
|
57,887 |
|
|
|
|
|
| Stockholders’ equity |
|
371,243 |
|
|
|
|
|
|
|
386,447 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities &
stockholders’ equity |
$ |
3,971,227 |
|
|
|
|
|
|
$ |
3,961,895 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
|
$ |
69,500 |
|
|
|
|
|
|
$ |
67,660 |
|
|
| Net interest margin (2) |
|
|
|
|
|
|
3.70% |
|
|
|
|
|
|
|
3.68% |
(1) Average loan balances include nonaccrual
loans and loans held for sale.(2) Net interest margin is calculated
as the annualized net interest income, on a fully tax-equivalent
basis, divided by average interest-earning assets.
South Plains Financial,
Inc.Consolidated Balance
Sheets(Unaudited)(Dollars in
thousands)
| |
As of |
| |
June 30,2023 |
|
December 31,2022 |
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
| Cash and due from banks |
$ |
64,497 |
|
$ |
61,613 |
| Interest-bearing deposits in
banks |
|
231,084 |
|
|
173,270 |
| Securities available for
sale |
|
628,093 |
|
|
701,711 |
| Loans held for sale |
|
22,158 |
|
|
30,403 |
| Loans held for investment |
|
2,979,063 |
|
|
2,748,081 |
| Less: Allowance for
credit losses |
|
(43,137) |
|
|
(39,288) |
| Net loans held for
investment |
|
2,935,926 |
|
|
2,708,793 |
| Premises and equipment,
net |
|
56,416 |
|
|
56,337 |
| Goodwill |
|
19,315 |
|
|
19,508 |
| Intangible assets |
|
2,834 |
|
|
4,349 |
| Mortgage servicing assets |
|
26,658 |
|
|
27,474 |
| Other assets |
|
163,148 |
|
|
160,605 |
| Total assets |
$ |
4,150,129 |
|
$ |
3,944,063 |
| |
|
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
|
| Noninterest-bearing
deposits |
$ |
1,100,767 |
|
$ |
1,150,488 |
| Interest-bearing deposits |
|
2,473,755 |
|
|
2,255,942 |
| Total deposits |
|
3,574,522 |
|
|
3,406,430 |
| Subordinated debt |
|
76,054 |
|
|
75,961 |
| Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
46,393 |
| Other liabilities |
|
61,131 |
|
|
58,265 |
| Total liabilities |
|
3,758,100 |
|
|
3,587,049 |
| Stockholders’
Equity |
|
|
|
|
|
| Common stock |
|
16,952 |
|
|
17,027 |
| Additional paid-in
capital |
|
111,133 |
|
|
112,834 |
| Retained earnings |
|
325,772 |
|
|
292,261 |
| Accumulated other
comprehensive income (loss) |
|
(61,828) |
|
|
(65,108) |
| Total stockholders’
equity |
|
392,029 |
|
|
357,014 |
| Total liabilities and
stockholders’ equity |
$ |
4,150,129 |
|
$ |
3,944,063 |
South Plains Financial,
Inc.Consolidated Statements of
Income(Unaudited)(Dollars in
thousands)
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
42,864 |
|
$ |
35,419 |
|
$ |
82,461 |
|
$ |
64,797 |
| Other |
|
7,957 |
|
|
5,333 |
|
|
15,808 |
|
|
9,035 |
| Total interest income |
|
50,821 |
|
|
40,752 |
|
|
98,269 |
|
|
73,832 |
| Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
14,433 |
|
|
2,317 |
|
|
25,803 |
|
|
4,207 |
| Subordinated debt |
|
1,013 |
|
|
1,013 |
|
|
2,025 |
|
|
2,025 |
| Junior subordinated deferrable
interest debentures |
|
789 |
|
|
317 |
|
|
1,540 |
|
|
548 |
| Other |
|
5 |
|
|
- |
|
|
5 |
|
|
- |
| Total interest expense |
|
16,240 |
|
|
3,647 |
|
|
29,373 |
|
|
6,780 |
| Net interest income |
|
34,581 |
|
|
37,105 |
|
|
68,896 |
|
|
67,052 |
| Provision for credit
losses |
|
3,700 |
|
|
- |
|
|
4,710 |
|
|
(2,085) |
| Net interest income after
provision for credit losses |
|
30,881 |
|
|
37,105 |
|
|
64,186 |
|
|
69,137 |
| Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposits |
|
1,745 |
|
|
1,612 |
|
|
3,446 |
|
|
3,385 |
| Income from insurance
activities |
|
37 |
|
|
1,577 |
|
|
1,448 |
|
|
3,147 |
| Mortgage banking activities |
|
5,258 |
|
|
8,669 |
|
|
7,544 |
|
|
22,306 |
| Bank card services and
interchange fees |
|
4,043 |
|
|
3,478 |
|
|
6,999 |
|
|
6,700 |
| Gain on sale of subsidiary |
|
33,488 |
|
|
— |
|
|
33,488 |
|
|
— |
| Other |
|
2,541 |
|
|
3,499 |
|
|
4,878 |
|
|
6,994 |
| Total noninterest income |
|
47,112 |
|
|
18,835 |
|
|
57,803 |
|
|
42,532 |
| Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
23,437 |
|
|
21,990 |
|
|
42,691 |
|
|
44,693 |
| Net occupancy expense |
|
4,303 |
|
|
4,033 |
|
|
8,135 |
|
|
7,770 |
| Professional services |
|
1,716 |
|
|
2,647 |
|
|
3,364 |
|
|
5,272 |
| Marketing and development |
|
784 |
|
|
758 |
|
|
1,720 |
|
|
1,478 |
| Other |
|
10,259 |
|
|
6,628 |
|
|
16,950 |
|
|
14,767 |
| Total noninterest expense |
|
40,499 |
|
|
36,056 |
|
|
72,860 |
|
|
73,980 |
| Income before income
taxes |
|
37,494 |
|
|
19,884 |
|
|
49,129 |
|
|
37,689 |
| Income tax expense |
|
7,811 |
|
|
4,001 |
|
|
10,202 |
|
|
7,528 |
| Net income |
$ |
29,683 |
|
$ |
15,883 |
|
$ |
38,927 |
|
$ |
30,161 |
South Plains Financial, Inc.Loan
Composition(Unaudited)(Dollars in
thousands)
| |
As of |
| |
June 30,2023 |
|
December 31,2022 |
|
|
|
|
|
|
|
| Loans: |
|
|
|
|
|
| Commercial Real Estate |
$ |
1,006,909 |
|
$ |
919,358 |
| Commercial - Specialized |
|
355,252 |
|
|
327,513 |
| Commercial - General |
|
551,096 |
|
|
484,783 |
| Consumer: |
|
|
|
|
|
|
1-4 Family Residential |
|
522,472 |
|
|
460,124 |
|
Auto Loans |
|
318,126 |
|
|
321,476 |
|
Other Consumer |
|
79,795 |
|
|
81,308 |
| Construction |
|
145,413 |
|
|
153,519 |
| Total loans held for
investment |
$ |
2,979,063 |
|
$ |
2,748,081 |
South Plains Financial, Inc.Deposit
Composition(Unaudited)(Dollars in
thousands)
| |
As of |
| |
June 30,2023 |
|
December 31,2022 |
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
| Noninterest-bearing
deposits |
$ |
1,100,767 |
|
$ |
1,150,488 |
| NOW & other transaction
accounts |
|
400,779 |
|
|
350,910 |
| MMDA & other savings |
|
1,751,029 |
|
|
1,618,833 |
| Time deposits |
|
321,947 |
|
|
286,199 |
| Total
deposits |
$ |
3,574,522 |
|
$ |
3,406,430 |
South Plains Financial,
Inc.Reconciliation of Non-GAAP Financial Measures
(Unaudited)(Dollars in thousands)
| |
For the quarter ended |
| |
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
Pre-tax, pre-provision income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
29,683 |
|
$ |
9,244 |
|
$ |
12,621 |
|
$ |
15,458 |
|
$ |
15,883 |
| Income tax expense |
|
7,811 |
|
|
2,391 |
|
|
3,421 |
|
|
3,962 |
|
|
4,001 |
| Provision for credit
losses |
|
3,700 |
|
|
1,010 |
|
|
248 |
|
|
-782 |
|
|
— |
| Pre-tax, pre-provision
income |
$ |
41,194 |
|
$ |
12,645 |
|
$ |
16,290 |
|
$ |
18,638 |
|
$ |
19,884 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency
Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense |
$ |
40,499 |
|
$ |
32,361 |
|
$ |
32,708 |
|
$ |
37,401 |
|
$ |
36,056 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
34,581 |
|
|
34,315 |
|
|
36,322 |
|
|
35,102 |
|
|
37,105 |
| Tax equivalent yield
adjustment |
|
303 |
|
|
302 |
|
|
299 |
|
|
301 |
|
|
303 |
| Noninterest income |
|
47,112 |
|
|
10,691 |
|
|
12,676 |
|
|
20,937 |
|
|
18,835 |
| Total income |
|
81,996 |
|
|
45,308 |
|
|
49,297 |
|
|
56,340 |
|
|
56,243 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio |
|
49.39% |
|
|
71.42% |
|
|
66.35% |
|
|
66.38% |
|
|
64.11% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense |
$ |
40,499 |
|
$ |
32,361 |
|
$ |
32,708 |
|
$ |
37,401 |
|
$ |
36,056 |
| Less: Windmark transaction and
related expenses |
|
(4,532) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| Less: net loss on sale
of securities |
|
(3,409) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| Adjusted noninterest
expense |
|
32,558 |
|
|
32,361 |
|
|
32,708 |
|
|
37,401 |
|
|
36,056 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total income |
|
81,996 |
|
|
45,308 |
|
|
49,297 |
|
|
56,340 |
|
|
56,243 |
| Less: gain on sale of
Windmark |
|
(33,488) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| Adjusted total income |
|
48,508 |
|
|
45,308 |
|
|
49,297 |
|
|
56,340 |
|
|
56,243 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted efficiency ratio |
|
67.12% |
|
|
71.42% |
|
|
66.35% |
|
|
66.38% |
|
|
64.11% |
| |
As of |
| |
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
|
Tangible common equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total common stockholders’
equity |
$ |
392,029 |
|
$ |
367,964 |
|
$ |
357,014 |
|
$ |
341,799 |
|
$ |
364,222 |
| Less: goodwill and other
intangibles |
|
(22,149) |
|
|
(23,496) |
|
|
(23,857) |
|
|
(24,228) |
|
|
(24,620) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tangible common
equity |
$ |
369,880 |
|
$ |
344,468 |
|
$ |
333,157 |
|
$ |
317,571 |
|
$ |
339,602 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tangible
assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
4,150,129 |
|
$ |
4,058,049 |
|
$ |
3,944,063 |
|
$ |
3,992,690 |
|
$ |
3,974,724 |
| Less: goodwill and other
intangibles |
|
(22,149) |
|
|
(23,496) |
|
|
(23,857) |
|
|
(24,228) |
|
|
(24,620) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tangible
assets |
$ |
4,127,980 |
|
$ |
4,034,553 |
|
$ |
3,920,206 |
|
$ |
3,968,462 |
|
$ |
3,950,104 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares outstanding |
|
16,952,072 |
|
|
17,062,572 |
|
|
17,027,197 |
|
|
17,064,640 |
|
|
17,417,094 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total stockholders’ equity to
total assets |
|
9.45% |
|
|
9.07% |
|
|
9.05% |
|
|
8.56% |
|
|
9.16% |
| Tangible common equity to
tangible assets |
|
8.96% |
|
|
8.54% |
|
|
8.50% |
|
|
8.00% |
|
|
8.60% |
| Book value per share |
$ |
23.13 |
|
$ |
21.57 |
|
$ |
20.97 |
|
$ |
20.03 |
|
$ |
20.91 |
| Tangible book value per
share |
$ |
21.82 |
|
$ |
20.19 |
|
$ |
19.57 |
|
$ |
18.61 |
|
$ |
19.50 |
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From May 2023 to May 2024
