South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q4 2023 Earnings Presentation
25 slides from South Plains Financial's earnings presentation, Jan 26, 2024
Slide 1: South Plains Financial Fourth Quarter and Year-End 2023 Earnings Presentation
South Plains Financial Fourth Quarter and Year-End 2023 Earnings Presentation January 26, 2024
Slide 2: Safe Harbor Statement and Other Disclosures
Safe Harbor Statement and Other Disclosures FORWARD-LOOKING STATEMENTS This presentation contains, and future oral and written statements of South Plains Financial, Inc. (“South Plains” or the “Company” or “SPFI”) and City Bank (“City Bank” or the “Bank”) may contain, statements about future events
Slide 3: Today’s Speakers
Today’s Speakers ▪ Elected to the board of directors of First State Bank of Morton, Texas, in 1972 and employed by it in 1979 Curtis C. Griffith ▪ Elected Chairman of the First State Bank of Morton board Chairman & Chief Executive in 1984 Officer ▪ Chairman of the Board of City Bank and the Company
Slide 4: Fourth Quarter and Full Year 2023 Highlights
Fourth Quarter and Full Year 2023 Highlights Fourth Quarter 2023 Organic Loan Growth Net Income Return on Average Assets Net Interest Margin (1) 2.8% Annualized $10.3 M (“ROAA”) 0.99% (“NIM”) 3.52% Loans Held for Investment EPS - Diluted Efficiency Ratio Average Yield on Loans (“HFI”) $3.01 B $0.61
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.83 Billion Rural Commercial: Markets: FHLB FHLB: Discount 46% 81% $1,105 Window: Retail: $595 45% Metro Markets: Public 19% FRB - BTFP: Funds: 9% Dollars in millions $134 ✓ Average deposit account size i
Slide 6: Loan Portfolio
Loan Portfolio Total Loans HFI 4Q'23 Highlights $ in Millions ✓ Loans HFI increased $20.6 million from 3Q'23, $2,979 $2,993 $3,014 primarily in commercial real estate loans $2,789 o Partially offset by a reduction in consumer $2,748 auto loans 6.29% ✓ Loans HFI increased $266.1 million from 4Q'22 6.
Slide 7: Attractive Markets Poised for Organic Growth
Attractive Markets Poised for Organic Growth ✓ Largest MSA in Texas and fourth largest in the ✓ Population of 865,000+ nation ✓ Adjacent in proximity to Juarez, Mexico’s ✓ Steadily expanding population that accounts for growing industrial center and an estimated over 26% of the state’s population po
Slide 8: Metropolitan Loan Growth
Metropolitan Loan Growth Total Metropolitan Loans 4Q'23 Highlights $ in Millions ✓ Loans HFI in our Dallas, Houston and El Paso metro markets increased by $44.2 million, or 17.8% annualized, to $1.04 billion in 4Q'23, as compared to $994.8 million in Q3’23 $1,039.0 $994.8 ✓ Major metropolitan market
Slide 9: Loan HFI Portfolio
Loan HFI Portfolio Loan Mix Fixed vs. Variable Rate Fixed - Matures over 1 year Other Commercial Consumer, 2% C&D, 7% 25% Fixed - Matures 12mo or less 8% Variable - Immediately Repricable 45% Residential Variable - Mature or Reprice 12mo Auto, 10% C&D, 8% 16% or less Variable - Mature or Reprice ove
Slide 10: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights 1.5% 0.4% ✓ Indirect auto loans totaled $286.4 million ✓ Management is carefully managing the portfolio; yields are improving as a portion of monthly 8.2% principal amortization is redeployed into higher rate loans ✓ Duri
Slide 11: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 4Q'23 Highlights $ in Millions ✓ Noninterest income declined $3.1 million $60.0 compared to 3Q'23, primarily due to: $50.0 o A decrease of $2.9 million in mortgage $47.1 banking revenues; mainly due to a change of $2.2 million in the fair value $40.0 ad
Slide 12: Diversified Revenue Stream
Diversified Revenue Stream Twelve Months Ended December 31, 2023 Total Revenues Noninterest Income $219.0 million $79.2 million Service Charges on Deposits, 9% Insurance, Investment 2% Services, 2% Trust, 3% Interchange Fees, 17% Noninterest Income, 36% Net Interest Mortgage, 17% Income, 64% Gain on
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin 4Q'23 Highlights $ in Millions ✓ Net interest income (“NII”) of $35.2 million, compared to $35.7 million in 3Q’23 $36.3 $35.7 $34.6 $35.2 $34.3 o The decrease in NII was primarily the result of a reduction of $50.0 million in average nonint
Slide 14: Deposit Portfolio
Deposit Portfolio Total Deposits 4Q'23 Highlights $ in Millions ✓ Total deposits of $3.63 billion at 4Q'23, an increase of $5.5 million from 3Q'23 $3,575 $3,621 $3,626 $3,508 $3,406 ✓ Cost of interest-bearing deposits increased to 3.14% in 4Q'23 from 2.93% in 3Q'23 o Average cost of deposits increas
Slide 15: Credit Quality
Credit Quality Credit Quality Ratios 4Q'23 Highlights 0.71% ✓ The Company recorded a provision for credit 0.51% losses of $0.6 million, compared to a negative provision of $0.7 million in 3Q'23 0.28% 0.27% 0.20% 0.19% o The provision during the fourth quarter 0.16% 0.14% 0.17% 0.12% of 2023 was larg
Slide 16: CRE Portfolio
CRE Portfolio CRE Sector Breakdown Office Loan Details ✓ 6.3% of total loans HFI Convenience Store, 4% ✓ 30% is owner-occupied Office - Owner Occ, 5% Other, 14% ✓ Average loan size is $882 thousand Restaurant, 6% Multifamily, ✓ Medical offices comprise 11% of office loans 20% Hotel, 6% Office - Non-
Slide 17: CRE Analysis
CRE Analysis (000's) as of 12/31/2023 Hospitality Office Retail Multi-Family Industrial C Store Restaurant Mini-Storage Segment Total Balance $63,504 $193,629 $176,564 $293,150 $219,370 $42,493 $67,396 $28,174 Segment to Total Loans 2.11% 6.42% 5.86% 9.73% 7.28% 1.41% 2.24% 0.93% Average Balance $2,
Slide 18: Investment Securities
Investment Securities Securities & Cash 4Q'23 Highlights $ in Millions ✓ Investment securities totaled $622.8 million, an increase of $37.8 million from 3Q’23, $235 $328 $296 $352 $330 primarily from a reduction of $46.7 million in the unrealized loss on available for sale securities as interest rat
Slide 19: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 4Q'23 Highlights $45.0 $ in Millions 112.0% ✓ Noninterest expense for 4Q'23 decreased $0.9 million to $30.6 million from 3Q'23 $40.5 $40.0 102.0% primarily due to: o A reduction of $732 thousand in 92.0% personnel costs, which predominately $35.
Slide 20: Balance Sheet Growth and Development
Balance Sheet Growth and Development Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,205 $23.47 $3,944 $3,626 $3,406 $3,014 $21.82 $2,748 $21.07 $20.19 $19.57 $357 $407 Total Assets Total Loans Total Total 4Q22 1Q23 2Q23 3Q23 4Q23 HFI Deposits Stockholders' Note: Tangible boo
Slide 21: Strong Capital Base
Strong Capital Base Tangible Common Equity to Tangible Assets Ratio Common Equity Tier 1 Ratio 9.21% 8.96% 12.41% 12.11% 12.19% 11.81% 11.92% 8.50% 8.54% 8.40% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio 11.67%
Slide 22: SPFI’s Core Purpose and Values Align
SPFI’s Core Purpose and Values Align Centered on Relationship-Based Business THE POWER OF RELATIONSHIPS At SPFI, we build lifelong, trusted relationships so you know you always have someone in your corner that understands you, cares about you, and stands ready to help. Our Core Purpose is: To use th
Slide 23: Appendix
South Plains Financial, Inc. Appendix
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Pre-tax, pre-provision income Net income $ 10,324 $ 13,494 $ 29,683 $ 9,244 $ 12,621 Income tax expense 2,787 3,683 7,811 2,391 3,421 Provision for credit losses 600
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Efficiency Ratio Noninterest expense $ 30,597 $ 31,489 $ 40,499 $ 32,361 $ 32,708 Net interest income 35,162 35,689 34,581 34,315 36,322 Tax equivalent yield adjustme
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