South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q3 2024 Earnings Presentation
24 slides from South Plains Financial's earnings presentation, Oct 23, 2024
Slide 1: South Plains Financial Third Quarter 2024 Earnings Presentation
South Plains Financial Third Quarter 2024 Earnings Presentation October 23, 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”, “SPFI”, or the “Company”) and City Bank (“City Bank” or the “Bank”) may contain, statements about future events t
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: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights Net Income Net Interest Margin (1) Loans Held for Investment Return on Average Assets $11.2 M (“NIM”) 3.65% (“HFI”) $3.04 B (“ROAA”) 1.05% EPS - Diluted Total Deposits Average Yield on Loans Efficiency Ratio $0.66 $3.72 B 6.68% 68.80% ➢ Net income for the third quarter
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.81 Billion Rural Commercial: Markets: FHLB: 47% 80% $1,145 FHLB Discount Retail: Window: 45% $664 Metro Markets: Public 20% Funds: 8% Dollars in millions ✓ Average deposit account size is approximately $
Slide 6: Loan Portfolio
Loan Portfolio Total Loans HFI 3Q'24 Highlights $ in Millions ✓ Loans HFI decreased $56.9 million from Q2’24, $3,094 primarily as a result of: $3,014 $3,012 $3,037 $2,994 o The expected payoff of a $16 million short- term bridge note that was originated in the second quarter of 2024 6.60% 6.68% 6.53
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: Major Metropolitan Market Loan Growth
Major Metropolitan Market Loan Growth (1) Total Metropolitan Market Loans 3Q'24 Highlights $ in Millions ✓ Loans HFI in our major metropolitan markets(1) decreased by $20 million, to $1.05 billion during $1,061.0 $1,068.7 $1,049.0 3Q’24, primarily due to: $1,038.9 $994.8 o The early payoff of a $17
Slide 9: Loan HFI Portfolio
Loan HFI Portfolio Loan Mix Fixed vs. Variable Rate Fixed - Matures over 1 year Other Commercial 25% Fixed - Matures 12mo or less Consumer, 2% C&D, 5% Residential C&D, 7% 8% Variable - Immediately Repricable 46% Auto, 8% Variable - Mature or Reprice 12mo 17% or less Variable - Mature or Reprice over
Slide 10: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights 1.3% 0.2% ✓ Indirect auto loans totaled $235.1 million at September 30, 2024, down $19 million from the linked quarter 8.3% ✓ Management is carefully managing the portfolio ✓ Strong credit quality in the sector, positione
Slide 11: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 3Q'24 Highlights $ in Millions ✓ Noninterest income was $10.6 million for 3Q'24, $14.0 $12.7 compared to $12.7 million for 2Q'24; primarily $12.3 due to: $12.0 $11.4 $10.6 o A decrease of $1.5 million in mortgage banking revenues, mainly from a decrease
Slide 12: Diversified Revenue Stream
Diversified Revenue Stream Nine Months Ended September 30, 2024 Total Revenues Noninterest Income $143.3 million $34.8 million Investment Trust, 6% Services, 4% Other, 17% Net Interest Service Charges on Income, 76% Deposits, 17% Mortgage, 27% Noninterest Income, 24% Interchange Fees, 30% 12 Source:
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin (1) Net Interest Income & Margin 3Q'24 Highlights $ in Millions ✓ Net interest income (“NII”) of $37.3 million, $37.3 $35.7 $35.2 $35.4 $35.9 compared to $35.9 million in 2Q’24 ✓ 3Q'24 NIM increased 2 bps to 3.65% as compared to 3.63% in 2Q’24, primarily due to: o An 8
Slide 14: Deposit Portfolio
Deposit Portfolio Total Deposits 3Q'24 Highlights $ in Millions ✓ Total deposits of $3.72 billion at 3Q'24, an $3,719 increase of $94.8 million from 2Q'24 ✓ Cost of interest-bearing deposits increased to $3,639 3.36% in 3Q'24 from 3.33% in 2Q'24 $3,621 $3,626 $3,625 o Average cost of deposits increa
Slide 15: Credit Quality
Credit Quality Credit Quality Ratios 3Q'24 Highlights ✓ Provision for credit losses of $495 thousand 0.81% 0.76% in 3Q’24, compared to $1.8 million in 2Q'24; 0.57% 0.59% 3Q’24 provision was largely due to net charge-off activity, partially offset by decreased loan balances 0.16% 0.17% 0.14% 0.12% 0.
Slide 16: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio NOO CRE(1) Sector Breakdown Details ✓ NOO CRE was 40.3% of total LHI, compared to Other C&D, 21% Residential Construction, 8% 39.9% at June 30, 2024 Multi-family, 23% ✓ NOO CRE portfolio is made up of $865.9 million of income producing loans and $357.1 million of Oth
Slide 17: Investment Securities
Investment Securities Securities & Cash 3Q'24 Highlights $ in Millions ✓ Investment securities totaled $606.9 million, $471 a $15.9 million increase from 2Q’24. $352 $330 $372 $298 ✓ All municipal bonds are in Texas; fair value hedges of $124 million $585 $623 $600 $591 $607 ✓ All MBS, CMO, and Asse
Slide 18: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 3Q'24 Highlights $34.0 $ in Millions $33.1 112.0% $32.6 ✓ Noninterest expense for 3Q'24 increased $31.9 $556 thousand, or 1.7%, to $33.1 million $32.0 $31.5 102.0% from 2Q’24, primarily due to: $30.6 $30.0 o A rise of $226 thousand in net 92.0%
Slide 19: Balance Sheet Growth and Development
Balance Sheet Growth and Development (1) Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,337 $25.75 $4,186 $24.15 $23.47 $23.56 $3,719 $3,621 $21.07 $2,994 $3,037 $372 $443 Total Assets Total Loans Total Total 3Q23 4Q23 1Q24 2Q24 3Q24 HFI Deposits Stockholders' Equity 30-Sept
Slide 20: Strong Capital Base
Strong Capital Base Tangible Common Equity to Tangible Assets Ratio(1) Common Equity Tier 1 Ratio 13.25% 12.67% 12.61% 9.77% 12.41% 9.22% 9.44% 12.19% 9.21% 8.40% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio 11.8
Slide 21: 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 22: Appendix
South Plains Financial, Inc. Appendix
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Pre-tax, pre-provision income Net income $ 11,212 $ 11,134 $ 10,874 $ 10,324 $ 13,494 Income tax expense 3,094 3,116 3,143 2,787 3,683 Provision for credit losses 49
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Efficiency Ratio Noninterest expense $ 33,128 $ 32,572 $ 31,930 $ 30,597 $ 31,489 Net interest income 37,294 35,888 35,368 35,162 35,689 Tax equivalent yield adjustm
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