South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the
“Company”), the parent company of City Bank (“City Bank” or the
“Bank”), today reported its financial results for the quarter ended
September 30, 2021.
Third Quarter 2021 Highlights
- Net income for the third quarter of
2021 was $15.2 million, compared to $13.7 million for the second
quarter of 2021 and $16.7 million for the third quarter of
2020.
- Diluted earnings per share for the
third quarter of 2021 was $0.82, compared to $0.74 for the second
quarter of 2021 and $0.92 for the third quarter of 2020.
- Average cost of deposits for the
third quarter of 2021 decreased to 25 basis points, compared to 27
basis points for the second quarter of 2021 and 34 basis points for
the third quarter of 2020.
- The Company did not record a
provision for loan losses in the third quarter of 2021, compared to
a negative provision for loan losses of $2.0 million for the second
quarter of 2021 and provision for loan losses of $6.1 million for
the third quarter of 2020.
- Loans held for investment grew
$125.6 million, or 5.5%, during the third quarter of 2021 as
compared to June 30, 2021.
- Nonperforming assets to total
assets were 0.32% at September 30, 2021, compared to 0.37% at June
30, 2021 and 0.46% at September 30, 2020.
- Return on average assets for the
third quarter of 2021 was 1.61% annualized, compared to 1.46%
annualized for the second quarter of 2021 and 1.88% annualized for
the third quarter of 2020.
- Tangible book value (non-GAAP) per
share was $20.90 as of September 30, 2021, compared to $20.35 per
share as of June 30, 2021 and $18.00 per share as of September 30,
2020.
Curtis Griffith, South Plains’ Chairman and
Chief Executive Officer, commented, “I am very pleased with our
team’s performance again in the third quarter and would like to
thank our employees for their hard work as they continue to deliver
outstanding service to our customers which continues to translate
into strong results for the Bank. This can be seen in our financial
performance as we grew loans by 5.5% in the third quarter of 2021
and have benefited from a strong Texas economy. We are also
benefiting from our plan to grow our lending team by more than 30%
over a two-year timeframe, as the lenders who we have recruited
have begun growing their loan portfolios. In fact, we are seeing an
acceleration in activity in several of our key markets, like
Houston, where we have recently hired a new market leader. We
expect to continue redeploying our excess liquidity into higher
yielding loans, which we believe will drive an acceleration to net
interest income and offset the eventual decline in mortgage revenue
as activity normalizes in future periods. We remain very optimistic
with what the future holds for South Plains and continue to see our
shares trading below intrinsic value. As a result, we were
aggressive in the third quarter having repurchased approximately
190,000 shares under our previously-announced $10 million share
repurchase plan.”
Results of Operations, Quarter Ended September 30,
2021
Net Interest Income
Net interest income was $31.2 million for the
third quarter of 2021, compared to $29.6 million for the second
quarter of 2021 and $31.3 million for the third quarter of 2020.
Net interest margin was 3.58% for the third quarter of 2021,
compared to 3.42% for the second quarter of 2021 and 3.82% for the
third quarter of 2020. The average yield on loans was 4.99% for the
third quarter of 2021, compared to 4.97% for the second quarter of
2021 and 5.08% for the third quarter of 2020. The average cost of
deposits was 25 basis points for the third quarter of 2021,
representing a two basis point decrease from the second quarter of
2021 and a 9 basis point decrease from the third quarter of
2020.
Interest income was $34.4 million for the third
quarter of 2021, compared to $33.0 million for the second quarter
of 2021 and $34.5 million for the third quarter of 2020. Interest
income increased $1.4 million in the third quarter of 2021 from the
second quarter of 2021 due primarily to an increase of $1.5 million
in loan interest income as a result of the growth of $82.9 million
in average loans outstanding during the third quarter of 2021. In
the third quarter of 2021, interest and fees on Small Business
Administration (“SBA”) Paycheck Protection Program (“PPP”) loans
declined $405 thousand compared to the second quarter of 2021, as
the average balance of PPP loans decreased $70.3 million during the
third quarter of 2021 due to PPP loan forgiveness payments received
from the SBA during the quarter. Interest income was flat in the
third quarter of 2021 compared to the third quarter of 2020 as
average interest-earning assets were $199.2 million higher and the
related yield was 26 basis points lower in the third quarter of
2021. During the third quarter of 2021, the Company recognized $1.7
million in deferred PPP-related SBA fees. At September 30, 2021,
the Company had $2.9 million of deferred PPP fees that have not
been accreted to income, the majority of which are expected to be
recognized as PPP loans continue to be forgiven by the SBA over the
next several quarters.
Interest expense was $3.3 million for the third
quarter of 2021, compared to $3.4 million for the second quarter of
2021 and $3.2 million for the third quarter of 2020. Interest
expense declined 4.8% as compared to the second quarter of 2021 as
a result of lower average interest-bearing deposits and a reduction
in interest rates on these deposits. Interest expense was
consistent as compared to the third quarter of 2020, with a
reduction in interest rates on interest-bearing deposits offset by
an increase in the overall cost of long-term borrowings. The
increase in the cost of long-term borrowings was due to the
issuance of $50 million in subordinated notes at the end of the
third quarter of 2020.
Noninterest Income and Noninterest Expense
Noninterest income was $25.8 million for the
third quarter of 2021, compared to $22.3 million for the second
quarter of 2021 and $31.7 million for the third quarter of 2020.
The growth from the second quarter of 2021 was primarily due to the
seasonal increase of $2.6 million in income from insurance
activities and an increase of $1.1 million in mortgage banking
activities revenue. The growth in mortgage banking revenues was
mainly the result of an increase of $470 thousand in the fair value
adjustment to the Company’s mortgage servicing rights as mortgage
interest rates began to rise in September 2021. The decrease in
noninterest income for the third quarter of 2021 as compared to the
third quarter of 2020 was primarily due to a decline of $6.6
million in mortgage banking activities revenue as a result a
reduction of $75 million in interest rate lock commitments and a
decline in gain on sale margins. This decrease was partially offset
by increases in income from insurance activities and bank card
services and interchange fees as compared to the third quarter of
2020.
Noninterest expense was $38.1 million for the
third quarter of 2021, compared to $36.8 million for the second
quarter of 2021 and $36.0 million for the third quarter of 2020.
The growth from the second quarter of 2021 was primarily the result
of an increase of $739 thousand in personnel expense due to the
payment of an additional $1.2 million in commissions on insurance
activities and a reduction in mortgage commissions related to an
decline in mortgage production. There was also a $397 thousand
increase net occupancy expense from the second quarter of 2021,
primarily the result of higher repairs and maintenance expense
related to several projects, additional rent expense as the Company
has increased leased space at several locations, and higher
seasonal utility costs. The increase in noninterest expense for the
third quarter of 2021 as compared to the third quarter of 2020 was
primarily driven by a $444 thousand increase in personnel expense,
which is reflective of the Company’s stated initiative of growing
its loan officer capacity. There were also smaller increases in
mortgage related expenses, bank card expenses, technology costs,
and travel related expenses as compared to the third quarter of
2020.
As part of the Bank’s information technology
roadmap, management is implementing a process to begin
transitioning the Company’s computing and data storage to the
cloud, which is expected to deliver increased security, more
seamless maintenance, and lower costs. The Bank is also refocusing
its advertising to digital media to improve new customer lead
generation. The Bank’s technology initiatives are expected to
modestly add to noninterest expense and started in the third
quarter of 2021.
Loan Portfolio and Composition
Loans held for investment were $2.43 billion as
of September 30, 2021, compared to $2.30 billion as of June 30,
2021 and $2.29 billion as of September 30, 2020. The $125.6
million, or 5.5%, increase during the third quarter of 2021 as
compared to the second quarter of 2021 was primarily the result of
organic net loan growth of $177.6 million, partially offset by a
decrease from SBA forgiveness and repayments of $52.0 million in
PPP loans during the third quarter of 2021. The organic loan growth
remained relationship-focused and occurred in a majority of loan
segments, with the largest volume growth in multifamily properties,
agricultural production loans, and direct energy loans. As of
September 30, 2021, loans held for investment increased $140.8
million, or 6.2%, from September 30, 2020, attributable to organic
loan growth experienced in each quarter of 2021, partially offset
by SBA forgiveness or repayments, net of originations, of $149.6
million on PPP loans.
Agricultural production loans were $119.3
million as of September 30, 2021, compared to $96.2 million as of
June 30, 2021 and $133.9 million as of September 30, 2020. The
increase from the second quarter of 2021 is due to typical seasonal
funding on these agricultural production loans. The decrease from
the third quarter of 2020 is primarily due to the loss of several
large agricultural loan customers.
Deposits and Borrowings
Deposits totaled $3.21 billion as of September
30, 2021, compared to $3.16 billion as of June 30, 2021 and $2.94
billion as of September 30, 2020. Deposits increased by $53.8
million, or 1.7%, in the third quarter of 2021 from June 30, 2021.
The largest increase in deposits in the third quarter of 2021 was
experienced in non-personal demand accounts. As of September 30,
2021, deposits increased $268.4 million, or 9.1%, from September
30, 2020. The increase in deposits since September 30, 2020 is
primarily a result of organic growth as well as existing customers
depositing funds received from PPP loan advances, stimulus checks,
and generally maintaining higher liquidity in response to the
ongoing COVID-19 pandemic.
Noninterest-bearing deposits were $1.05 billion
as of September 30, 2021, compared to $998.9 million as of June 30,
2021 and $906.1 million as of September 30, 2020.
Noninterest-bearing deposits represented 32.8% of total deposits as
of September 30, 2021. The change in noninterest-bearing deposit
balances at September 30, 2021 compared to June 30, 2021 was an
increase of $55.3 million, or 5.5%. The change in
noninterest-bearing deposit balances at September 30, 2021 compared
to September 30, 2020 was an increase of $148.2 million, or 16.4%.
The changes from both compared periods is primarily a result of
organic growth as well as existing customers increasing their
deposit balances.
Asset Quality
As part of the Bank’s efforts to support its
customers and protect the Bank as a result of the COVID-19
pandemic, the Bank has provided borrowers impacted by the COVID-19
pandemic with relief by offering varying forms of loan
modifications including 90-day payment deferrals, 6-month interest
only terms, or in certain select cases periods of longer than 6
months of interest only. As of September 30, 2021, total active
loan modifications attributed to COVID-19 were $16.4 million, or
0.7% of the Company’s loan portfolio, down from $36.6 million, or
1.6% of the Company’s loan portfolio, at June 30, 2021.
Approximately 97% of these active modified loans at September 30,
2021 are in the hotel portfolio and have original modified terms
that extended up to 18 months. We expect that these remaining
modified loans will return to full payment status at the end of
their respective modification periods.
The Company did not record a provision for loan
losses in the third quarter of 2021, compared to a negative
provision for loan losses of $2.0 million for the second quarter of
2021 and a provision for loan losses of $6.1 million for the third
quarter of 2020. While the Company experienced growth in the loan
portfolio and classified loans increased by 7% in the third quarter
of 2021, the Company determined that no provision for loan losses
was necessary in the third quarter of 2021 in light of the
continued general improvement in the economy and a decline in the
amount of loans that are actively under a modification. This
increase in classified loans resulted from one credit, which was
resolved in the fourth quarter of 2021 with no loss to the Company.
There is continued uncertainty from the ongoing COVID-19 pandemic
and the full extent of the impact on the economy and the Bank’s
customers remains unknown at this time. Accordingly, additional
provisions for loan losses may be necessary in future periods.
The ratio of allowance for loan losses to loans
held for investment was 1.76% as of September 30, 2021, compared to
1.87% as of June 30, 2021 and 2.01% as of September 30, 2020. The
ratio of allowance for loan losses to non-PPP loans held for
investment was 1.81% as of September 30, 2021.
The ratio of nonperforming assets to total
assets as of September 30, 2021 was 0.32%, compared to 0.37% as of
June 30, 2021 and 0.46% at September 30, 2020. Annualized net
charge-offs were 0.03% for the third quarter of 2021, compared to
0.01% for the second quarter of 2021 and 0.10% for the third
quarter of 2020.
Conference Call
South Plains will host a conference call to
discuss its third quarter 2021 financial results today, October 26,
2021, 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
13723541. The replay will be available until November 9, 2021.
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 insurance, 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 Common 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, among other things, the
ongoing COVID-19 pandemic and other future events. 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, the extent of the impact
of the COVID-19 pandemic on our customers, changes in interest
rates, 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 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 |
|
September 30,2021 |
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
Selected Income
Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
34,438 |
|
|
$ |
33,016 |
|
|
$ |
32,982 |
|
|
$ |
33,984 |
|
|
$ |
34,503 |
|
Interest expense |
|
3,260 |
|
|
|
3,423 |
|
|
|
3,438 |
|
|
|
3,619 |
|
|
|
3,230 |
|
Net interest income |
|
31,178 |
|
|
|
29,593 |
|
|
|
29,544 |
|
|
|
30,365 |
|
|
|
31,273 |
|
Provision for loan losses |
|
- |
|
|
|
(2,007 |
) |
|
|
89 |
|
|
|
141 |
|
|
|
6,062 |
|
Noninterest income |
|
25,791 |
|
|
|
22,250 |
|
|
|
26,500 |
|
|
|
26,172 |
|
|
|
31,660 |
|
Noninterest expense |
|
38,063 |
|
|
|
36,778 |
|
|
|
37,057 |
|
|
|
36,504 |
|
|
|
35,993 |
|
Income tax expense |
|
3,716 |
|
|
|
3,422 |
|
|
|
3,738 |
|
|
|
3,968 |
|
|
|
4,147 |
|
Net income |
|
15,190 |
|
|
|
13,650 |
|
|
|
15,160 |
|
|
|
15,924 |
|
|
|
16,731 |
|
Per Share Data (Common
Stock): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings, basic |
|
0.85 |
|
|
|
0.76 |
|
|
|
0.84 |
|
|
|
0.88 |
|
|
|
0.93 |
|
Net earnings, diluted |
|
0.82 |
|
|
|
0.74 |
|
|
|
0.82 |
|
|
|
0.87 |
|
|
|
0.92 |
|
Cash dividends declared and
paid |
|
0.09 |
|
|
|
0.07 |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.03 |
|
Book value |
|
22.34 |
|
|
|
21.81 |
|
|
|
20.75 |
|
|
|
20.47 |
|
|
|
19.52 |
|
Tangible book value |
|
20.90 |
|
|
|
20.35 |
|
|
|
19.28 |
|
|
|
18.97 |
|
|
|
18.00 |
|
Weighted average shares
outstanding, basic |
|
17,931,660 |
|
|
|
18,039,553 |
|
|
|
18,069,186 |
|
|
|
18,053,467 |
|
|
|
18,059,174 |
|
Weighted average shares
outstanding, dilutive |
|
18,464,183 |
|
|
|
18,553,050 |
|
|
|
18,511,120 |
|
|
|
18,366,129 |
|
|
|
18,256,161 |
|
Shares outstanding at end of
period |
|
17,824,094 |
|
|
|
18,014,398 |
|
|
|
18,053,229 |
|
|
|
18,076,364 |
|
|
|
18,059,174 |
|
Selected Period End
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
327,600 |
|
|
|
383,949 |
|
|
|
413,406 |
|
|
|
300,307 |
|
|
|
290,885 |
|
Investment securities |
|
752,562 |
|
|
|
777,613 |
|
|
|
777,208 |
|
|
|
803,087 |
|
|
|
726,329 |
|
Total loans held for
investment |
|
2,429,041 |
|
|
|
2,303,462 |
|
|
|
2,242,676 |
|
|
|
2,221,583 |
|
|
|
2,288,234 |
|
Allowance for loan losses |
|
42,768 |
|
|
|
42,963 |
|
|
|
45,019 |
|
|
|
45,553 |
|
|
|
46,076 |
|
Total assets |
|
3,774,175 |
|
|
|
3,712,915 |
|
|
|
3,732,894 |
|
|
|
3,599,160 |
|
|
|
3,542,666 |
|
Interest-bearing deposits |
|
2,157,981 |
|
|
|
2,159,554 |
|
|
|
2,193,427 |
|
|
|
2,057,029 |
|
|
|
2,037,743 |
|
Noninterest-bearing
deposits |
|
1,054,264 |
|
|
|
998,941 |
|
|
|
962,205 |
|
|
|
917,322 |
|
|
|
906,059 |
|
Total deposits |
|
3,212,245 |
|
|
|
3,158,495 |
|
|
|
3,155,632 |
|
|
|
2,974,351 |
|
|
|
2,943,802 |
|
Borrowings |
|
122,121 |
|
|
|
125,965 |
|
|
|
164,553 |
|
|
|
223,532 |
|
|
|
204,704 |
|
Total stockholders’
equity |
|
398,276 |
|
|
|
392,815 |
|
|
|
374,671 |
|
|
|
370,048 |
|
|
|
352,568 |
|
Summary Performance
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.61 |
% |
|
|
1.46 |
% |
|
|
1.66 |
% |
|
|
1.76 |
% |
|
|
1.88 |
% |
Return on average equity |
|
15.24 |
% |
|
|
14.27 |
% |
|
|
16.51 |
% |
|
|
17.53 |
% |
|
|
19.32 |
% |
Net interest margin (1) |
|
3.58 |
% |
|
|
3.42 |
% |
|
|
3.52 |
% |
|
|
3.64 |
% |
|
|
3.82 |
% |
Yield on loans |
|
4.99 |
% |
|
|
4.97 |
% |
|
|
5.07 |
% |
|
|
5.10 |
% |
|
|
5.08 |
% |
Cost of interest-bearing
deposits |
|
0.37 |
% |
|
|
0.40 |
% |
|
|
0.41 |
% |
|
|
0.45 |
% |
|
|
0.50 |
% |
Efficiency ratio |
|
66.45 |
% |
|
|
70.52 |
% |
|
|
65.76 |
% |
|
|
64.19 |
% |
|
|
56.90 |
% |
Summary Credit Quality
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
10,895 |
|
|
|
12,538 |
|
|
|
14,316 |
|
|
|
14,964 |
|
|
|
15,006 |
|
Nonperforming loans to total
loans held for investment |
|
0.45 |
% |
|
|
0.54 |
% |
|
|
0.64 |
% |
|
|
0.67 |
% |
|
|
0.66 |
% |
Other real estate owned |
|
1,081 |
|
|
|
1,146 |
|
|
|
1,377 |
|
|
|
1,353 |
|
|
|
1,336 |
|
Nonperforming assets to total
assets |
|
0.32 |
% |
|
|
0.37 |
% |
|
|
0.42 |
% |
|
|
0.45 |
% |
|
|
0.46 |
% |
Allowance for loan losses to
total loans held for investment |
|
1.76 |
% |
|
|
1.87 |
% |
|
|
2.01 |
% |
|
|
2.05 |
% |
|
|
2.01 |
% |
Net charge-offs to average loans
outstanding (annualized) |
|
0.03 |
% |
|
|
0.01 |
% |
|
|
0.11 |
% |
|
|
0.11 |
% |
|
|
0.10 |
% |
|
As of and for the quarter ended |
|
September 302021 |
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
Capital
Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity to total assets |
|
10.55 |
% |
|
|
10.58 |
% |
|
|
10.04 |
% |
|
|
10.28 |
% |
|
|
9.95 |
% |
Tangible common equity to
tangible assets |
|
9.94 |
% |
|
|
9.94 |
% |
|
|
9.39 |
% |
|
|
9.60 |
% |
|
|
9.25 |
% |
Common equity tier 1 to
risk-weighted assets |
|
12.68 |
% |
|
|
13.14 |
% |
|
|
13.23 |
% |
|
|
12.96 |
% |
|
|
12.49 |
% |
Tier 1 capital to average
assets |
|
10.83 |
% |
|
|
10.54 |
% |
|
|
10.35 |
% |
|
|
10.24 |
% |
|
|
10.01 |
% |
Total capital to risk-weighted
assets |
|
18.21 |
% |
|
|
18.95 |
% |
|
|
19.24 |
% |
|
|
19.08 |
% |
|
|
18.67 |
% |
(1) Net interest margin is calculated as the
annual net interest income, on a fully tax-equivalent basis,
divided by average interest-earning assets.
South Plains Financial, Inc.Average
Balances and Yields - (Unaudited)(Dollars in
thousands)
|
For the Three Months Ended |
|
September 30, 2021 |
|
September 30, 2020 |
|
|
|
|
|
AverageBalance |
|
InterestIncomeExpense |
|
Yield |
|
AverageBalance |
|
InterestIncomeExpense |
|
Yield |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, excluding PPP (1) |
$ |
2,365,010 |
|
$ |
28,947 |
|
|
4.86 |
% |
|
$ |
2,195,507 |
|
$ |
29,162 |
|
|
5.28 |
% |
Loans - PPP |
|
86,645 |
|
|
1,872 |
|
|
8.57 |
% |
|
|
212,337 |
|
|
1,602 |
|
|
3.00 |
% |
Debt securities - taxable |
|
531,620 |
|
|
2,309 |
|
|
1.72 |
% |
|
|
525,301 |
|
|
2,613 |
|
|
1.98 |
% |
Debt securities -
nontaxable |
|
221,026 |
|
|
1,468 |
|
|
2.64 |
% |
|
|
187,400 |
|
|
1,343 |
|
|
2.85 |
% |
Other interest-bearing
assets |
|
284,369 |
|
|
151 |
|
|
0.21 |
% |
|
|
168,922 |
|
|
105 |
|
|
0.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
3,488,670 |
|
|
34,747 |
|
|
3.95 |
% |
|
|
3,289,467 |
|
|
34,825 |
|
|
4.21 |
% |
Noninterest-earning
assets |
|
259,641 |
|
|
|
|
|
|
|
|
247,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
3,748,311 |
|
|
|
|
|
|
|
$ |
3,536,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW, Savings, MMA’s |
$ |
1,820,677 |
|
|
1,005 |
|
|
0.22 |
% |
|
$ |
1,695,476 |
|
|
1,213 |
|
|
0.28 |
% |
Time deposits |
|
330,161 |
|
|
1,025 |
|
|
1.23 |
% |
|
|
322,535 |
|
|
1,304 |
|
|
1.61 |
% |
Short-term borrowings |
|
725 |
|
|
- |
|
|
0.00 |
% |
|
|
12,080 |
|
|
3 |
|
|
0.10 |
% |
Notes payable & other
long-term borrowings |
|
- |
|
|
- |
|
|
0.00 |
% |
|
|
95,870 |
|
|
65 |
|
|
0.27 |
% |
Subordinated debt
securities |
|
75,728 |
|
|
1,013 |
|
|
5.31 |
% |
|
|
26,472 |
|
|
403 |
|
|
6.06 |
% |
Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
217 |
|
|
1.86 |
% |
|
|
46,393 |
|
|
242 |
|
|
2.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
2,273,684 |
|
|
3,260 |
|
|
0.57 |
% |
|
|
2,198,826 |
|
|
3,230 |
|
|
0.58 |
% |
Demand deposits |
|
1,035,910 |
|
|
|
|
|
|
|
|
944,420 |
|
|
|
|
|
|
Other liabilities |
|
43,171 |
|
|
|
|
|
|
|
|
49,008 |
|
|
|
|
|
|
Stockholders’ equity |
|
395,546 |
|
|
|
|
|
|
|
|
344,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities &
stockholders’ equity |
$ |
3,748,311 |
|
|
|
|
|
|
|
$ |
3,536,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
31,487 |
|
|
|
|
|
|
|
$ |
31,595 |
|
|
|
Net interest margin (2) |
|
|
|
|
|
|
|
3.58 |
% |
|
|
|
|
|
|
|
|
3.82 |
% |
(1) Average loan balances include nonaccrual
loans and loans held for sale.(2) Net interest margin is calculated
as the annualized net income, on a fully tax-equivalent basis,
divided by average interest-earning assets.
South Plains Financial, Inc.Average
Balances and Yields - (Unaudited)(Dollars in
thousands)
|
For the Nine Months Ended |
|
September 30, 2021 |
|
September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
AverageBalance |
|
InterestIncomeExpense |
|
Yield |
|
AverageBalance |
|
InterestIncomeExpense |
|
Yield |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, excluding PPP (1) |
$ |
2,246,650 |
|
$ |
82,314 |
|
|
4.90 |
% |
|
$ |
2,188,988 |
|
$ |
89,041 |
|
|
5.43 |
% |
Loans - PPP |
|
141,040 |
|
|
7,147 |
|
|
6.78 |
% |
|
|
127,880 |
|
|
2,678 |
|
|
2.80 |
% |
Debt securities - taxable |
|
540,380 |
|
|
7,118 |
|
|
1.76 |
% |
|
|
544,650 |
|
|
9,285 |
|
|
2.28 |
% |
Debt securities -
nontaxable |
|
219,242 |
|
|
4,414 |
|
|
2.69 |
% |
|
|
142,158 |
|
|
3,037 |
|
|
2.85 |
% |
Other interest-bearing
assets |
|
328,412 |
|
|
373 |
|
|
0.15 |
% |
|
|
164,936 |
|
|
963 |
|
|
0.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
3,475,724 |
|
|
101,366 |
|
|
3.90 |
% |
|
|
3,168,612 |
|
|
105,004 |
|
|
4.43 |
% |
Noninterest-earning
assets |
|
261,449 |
|
|
|
|
|
|
|
|
248,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
3,737,173 |
|
|
|
|
|
|
|
$ |
3,417,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW, Savings, MMA’s |
$ |
1,834,113 |
|
|
3,259 |
|
|
0.24 |
% |
|
$ |
1,630,524 |
|
|
5,199 |
|
|
0.43 |
% |
Time deposits |
|
326,862 |
|
|
3,114 |
|
|
1.27 |
% |
|
|
334,189 |
|
|
4,361 |
|
|
1.74 |
% |
Short-term borrowings |
|
10,725 |
|
|
5 |
|
|
0.06 |
% |
|
|
19,758 |
|
|
102 |
|
|
0.69 |
% |
Notes payable & other
long-term borrowings |
|
26,188 |
|
|
38 |
|
|
0.19 |
% |
|
|
117,726 |
|
|
518 |
|
|
0.59 |
% |
Subordinated debt
securities |
|
75,682 |
|
|
3,044 |
|
|
5.38 |
% |
|
|
26,472 |
|
|
1,210 |
|
|
6.11 |
% |
Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
661 |
|
|
1.90 |
% |
|
|
46,393 |
|
|
937 |
|
|
2.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
2,319,963 |
|
|
10,121 |
|
|
0.58 |
% |
|
|
2,175,062 |
|
|
12,327 |
|
|
0.76 |
% |
Demand deposits |
|
991,331 |
|
|
|
|
|
|
|
|
870,606 |
|
|
|
|
|
|
Other liabilities |
|
41,996 |
|
|
|
|
|
|
|
|
40,579 |
|
|
|
|
|
|
Stockholders’ equity |
|
383,883 |
|
|
|
|
|
|
|
|
330,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities &
stockholders’ equity |
$ |
3,737,173 |
|
|
|
|
|
|
|
$ |
3,417,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
91,245 |
|
|
|
|
|
|
|
$ |
92,677 |
|
|
|
Net interest margin (2) |
|
|
|
|
|
|
|
3.51 |
% |
|
|
|
|
|
|
|
|
3.91 |
% |
(1) Average loan balances include nonaccrual
loans and loans held for sale.(2) Net interest margin is calculated
as the annualized net 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 |
|
September 30,2021 |
|
December 31,2020 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and due from banks |
$ |
62,638 |
|
|
$ |
76,146 |
|
Interest-bearing deposits in banks |
|
264,962 |
|
|
|
224,161 |
|
Federal funds sold |
|
— |
|
|
|
— |
|
Investment securities |
|
752,562 |
|
|
|
803,087 |
|
Loans held for sale |
|
90,880 |
|
|
|
111,477 |
|
Loans held for investment |
|
2,429,041 |
|
|
|
2,221,583 |
|
Less: Allowance for loan losses |
|
(42,768 |
) |
|
|
(45,553 |
) |
Net loans held for investment |
|
2,386,273 |
|
|
|
2,176,030 |
|
Premises and equipment, net |
|
59,056 |
|
|
|
60,331 |
|
Goodwill |
|
19,508 |
|
|
|
19,508 |
|
Intangible assets |
|
6,296 |
|
|
|
7,562 |
|
Other assets |
|
132,000 |
|
|
|
120,858 |
|
Total assets |
$ |
3,774,175 |
|
|
$ |
3,599,160 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
Liabilities |
|
|
|
|
|
Noninterest bearing deposits |
$ |
1,054,264 |
|
|
$ |
917,322 |
|
Interest-bearing deposits |
|
2,157,981 |
|
|
|
2,057,029 |
|
Total deposits |
|
3,212,245 |
|
|
|
2,974,351 |
|
Other borrowings |
|
- |
|
|
|
101,550 |
|
Subordinated debt securities |
|
75,728 |
|
|
|
75,589 |
|
Trust preferred subordinated debentures |
|
46,393 |
|
|
|
46,393 |
|
Other liabilities |
|
41,533 |
|
|
|
31,229 |
|
Total liabilities |
|
3,375,899 |
|
|
|
3,229,112 |
|
Stockholders’ Equity |
|
|
|
|
|
Common stock |
|
17,824 |
|
|
|
18,076 |
|
Additional paid-in capital |
|
136,402 |
|
|
|
141,112 |
|
Retained earnings |
|
229,737 |
|
|
|
189,521 |
|
Accumulated other comprehensive income (loss) |
|
14,313 |
|
|
|
21,339 |
|
Total stockholders’ equity |
|
398,276 |
|
|
|
370,048 |
|
Total liabilities and stockholders’ equity |
$ |
3,774,175 |
|
|
$ |
3,599,160 |
|
South Plains Financial,
Inc.Consolidated Statements of
Income(Unaudited)(Dollars in
thousands)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30,2021 |
|
September 30,2020 |
|
September 30,2021 |
|
September 30,2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
30,818 |
|
$ |
30,724 |
|
$ |
89,458 |
|
|
$ |
91,600 |
Other |
|
3,620 |
|
|
3,779 |
|
|
10,978 |
|
|
|
12,647 |
Total Interest income |
|
34,438 |
|
|
34,503 |
|
|
100,436 |
|
|
|
104,247 |
Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
2,030 |
|
|
2,517 |
|
|
6,373 |
|
|
|
9,560 |
Subordinated debt securities |
|
1,013 |
|
|
403 |
|
|
3,044 |
|
|
|
1,210 |
Trust preferred subordinated
debentures |
|
217 |
|
|
242 |
|
|
661 |
|
|
|
937 |
Other |
|
- |
|
|
68 |
|
|
43 |
|
|
|
620 |
Total Interest expense |
|
3,260 |
|
|
3,230 |
|
|
10,121 |
|
|
|
12,327 |
Net interest income |
|
31,178 |
|
|
31,273 |
|
|
90,315 |
|
|
|
91,920 |
Provision for loan
losses |
|
- |
|
|
6,062 |
|
|
(1,918 |
) |
|
|
25,429 |
Net interest income after
provision for loan losses |
|
31,178 |
|
|
25,211 |
|
|
92,233 |
|
|
|
66,491 |
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
1,851 |
|
|
1,749 |
|
|
5,023 |
|
|
|
5,171 |
Income from insurance
activities |
|
3,794 |
|
|
3,303 |
|
|
6,146 |
|
|
|
5,484 |
Mortgage banking activities |
|
14,802 |
|
|
21,409 |
|
|
47,329 |
|
|
|
48,117 |
Bank card services and
interchange fees |
|
3,045 |
|
|
2,608 |
|
|
8,760 |
|
|
|
7,190 |
Other |
|
2,299 |
|
|
2,591 |
|
|
7,283 |
|
|
|
7,151 |
Total Noninterest income |
|
25,791 |
|
|
31,660 |
|
|
74,541 |
|
|
|
75,431 |
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
24,116 |
|
|
23,672 |
|
|
71,811 |
|
|
|
66,103 |
Net occupancy expense |
|
3,896 |
|
|
3,710 |
|
|
10,960 |
|
|
|
10,896 |
Professional services |
|
1,388 |
|
|
1,177 |
|
|
4,483 |
|
|
|
4,710 |
Marketing and development |
|
777 |
|
|
615 |
|
|
2,157 |
|
|
|
2,189 |
Other |
|
7,886 |
|
|
6,819 |
|
|
22,487 |
|
|
|
21,313 |
Total noninterest expense |
|
38,063 |
|
|
35,993 |
|
|
111,898 |
|
|
|
105,211 |
Income before income
taxes |
|
18,906 |
|
|
20,878 |
|
|
54,876 |
|
|
|
36,711 |
Income tax expense (benefit) |
|
3,716 |
|
|
4,147 |
|
|
10,876 |
|
|
|
7,282 |
Net income |
$ |
15,190 |
|
$ |
16,731 |
|
$ |
44,000 |
|
|
$ |
29,429 |
South Plains Financial, Inc.Loan
Composition(Unaudited)(Dollars in
thousands)
|
As of |
|
September 30,2021 |
|
December 31,2020 |
|
|
|
|
|
|
Loans: |
|
|
|
|
|
Commercial Real Estate |
$ |
746,775 |
|
$ |
663,344 |
Commercial - Specialized |
|
390,394 |
|
|
311,686 |
Commercial - General |
|
452,776 |
|
|
518,309 |
Consumer: |
|
|
|
|
|
1-4 Family Residential |
|
387,167 |
|
|
360,315 |
Auto Loans |
|
239,397 |
|
|
205,840 |
Other Consumer |
|
69,079 |
|
|
67,595 |
Construction |
|
143,453 |
|
|
94,494 |
Total loans held for
investment |
$ |
2,429,041 |
|
$ |
2,221,583 |
South Plains Financial, Inc.Deposit
Composition(Unaudited)(Dollars in
thousands)
|
As of |
|
September 30,2021 |
|
December 31,2020 |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest-bearing demand
deposits |
$ |
1,054,264 |
|
$ |
917,322 |
NOW & other transaction
accounts |
|
359,177 |
|
|
332,829 |
MMDA & other savings |
|
1,464,376 |
|
|
1,398,699 |
Time deposits |
|
334,428 |
|
|
325,501 |
Total
deposits |
$ |
3,212,245 |
|
$ |
2,974,351 |
South Plains Financial,
Inc.Reconciliation of Non-GAAP Financial Measures
(Unaudited)(Dollars in thousands)
|
As of and for the quarter ended |
|
September 30,2021 |
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
Pre-tax, pre-provision
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
15,190 |
|
$ |
13,650 |
|
|
$ |
15,160 |
|
$ |
15,924 |
|
$ |
16,731 |
Income tax expense |
|
3,716 |
|
|
3,422 |
|
|
|
3,738 |
|
|
3,968 |
|
|
4,147 |
Provision for loan losses |
|
- |
|
|
(2,007 |
) |
|
|
89 |
|
|
141 |
|
|
6,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
income |
$ |
18,906 |
|
$ |
15,065 |
|
|
$ |
18,987 |
|
$ |
20,033 |
|
$ |
26,940 |
South Plains Financial,
Inc.Reconciliation of Non-GAAP Financial Measures
(Unaudited)(Dollars in thousands)
|
As of |
|
September 30,2021 |
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
Tangible common
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common stockholders’ equity |
$ |
398,276 |
|
|
$ |
392,815 |
|
|
$ |
374,671 |
|
|
$ |
370,048 |
|
|
$ |
352,568 |
|
Less: goodwill and other
intangibles |
|
(25,804 |
) |
|
|
(26,226 |
) |
|
|
(26,648 |
) |
|
|
(27,070 |
) |
|
|
(27,502 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common
equity |
$ |
372,472 |
|
|
$ |
366,589 |
|
|
$ |
348,023 |
|
|
$ |
342,978 |
|
|
$ |
325,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
3,774,175 |
|
|
$ |
3,712,915 |
|
|
$ |
3,732,894 |
|
|
$ |
3,599,160 |
|
|
$ |
3,542,666 |
|
Less: goodwill and other
intangibles |
|
(25,804 |
) |
|
|
(26,226 |
) |
|
|
(26,648 |
) |
|
|
(27,070 |
) |
|
|
(27,502 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
assets |
$ |
3,748,371 |
|
|
$ |
3,686,689 |
|
|
$ |
3,706,246 |
|
|
$ |
3,572,090 |
|
|
$ |
3,515,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
17,824,094 |
|
|
|
18,014,398 |
|
|
|
18,053,229 |
|
|
|
18,076,364 |
|
|
|
18,059,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity to
total assets |
|
10.55 |
% |
|
|
10.58 |
% |
|
|
10.04 |
% |
|
|
10.28 |
% |
|
|
9.95 |
% |
Tangible common equity to
tangible assets |
|
9.94 |
% |
|
|
9.94 |
% |
|
|
9.39 |
% |
|
|
9.60 |
% |
|
|
9.25 |
% |
Book value per share |
$ |
22.34 |
|
|
$ |
21.81 |
|
|
$ |
20.75 |
|
|
$ |
20.47 |
|
|
$ |
19.52 |
|
Tangible book value per
share |
$ |
20.90 |
|
|
$ |
20.35 |
|
|
$ |
19.28 |
|
|
$ |
18.97 |
|
|
$ |
18.00 |
|
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