South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q2 2024 Earnings Presentation
24 slides from South Plains Financial's earnings presentation, Jul 18, 2024
Slide 1: South Plains Financial Second Quarter 2024 Earnings Presentation
South Plains Financial Second Quarter 2024 Earnings Presentation July 18, 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: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights Net Income Net Interest Margin (1) Loans Held for Investment Return on Average Assets $11.1 M (“NIM”) 3.63% (“HFI”) $3.09 B (“ROAA”) 1.07% EPS - Diluted Total Deposits Average Yield on Loans Efficiency Ratio $0.66 $3.62 B 6.60% 66.72% ➢ Net income for the second quarte
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.77 Billion Rural Commercial: Markets: 81% FHLB: FHLB 47% $1,087 Discount Retail: Window: 45% $679 Metro Markets: Public 19% Funds: 8% Dollars in millions ✓ Average deposit account size is approximately $
Slide 6: Loan Portfolio
Loan Portfolio Total Loans HFI 2Q'24 Highlights $ in Millions ✓ Loans HFI increased $82.5 million from Q1’24: $3,094 o Occurred primarily in direct-energy loans, $2,994 $3,014 $3,012 $2,979 seasonal agricultural-related loans, and single-family property loans o Partially offset by decreases in consu
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 2Q'24 Highlights $ in Millions ✓ Loans HFI in our major metropolitan markets(1) increased by $8 million, to $1.07 billion during $1,061.0 $1,068.7 2Q'24 $1,038.9 $994.8 ✓ Our major metropolitan market loan portfolio $954.8 rep
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, 5% 24% Fixed - Matures 12mo or less Residential C&D, 8% 8% Variable - Immediately Repricable 44% Auto, 9% Variable - Mature or Reprice 12mo 19% or less CRE Variable - Mature or Reprice
Slide 10: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights ✓ Indirect auto loans totaled $253.7 million at June 1.3% 0.4% 30, 2024 ✓ Management is carefully managing the portfolio; 8.5% yields are improving as a portion of monthly principal amortization is redeployed into higher
Slide 11: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 2Q'24 Highlights $ in Millions ✓ Noninterest income was $12.7 million for 2Q'24, $60.0 compared to $11.4 million for 1Q'24; change was primarily due to: $47.1 $50.0 o Increase of $1.0 million in bank card services and interchange from continued $40.0 gr
Slide 12: Diversified Revenue Stream
Diversified Revenue Stream Six Months Ended June 30, 2024 Total Revenues Noninterest Income $48.6 million $24.1 million Investment Trust, 6% Services, 4% Other, Service Charges on 15% Deposits, 16% Net Interest Income, 74% Mortgage, 30% Noninterest Income, 26% Interchange Fees, 29% 12 Source: Compan
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin (1) 2Q'24 Highlights Net Interest Income & Margin $ in Millions ✓ Net interest income (“NII”) of $35.9 million, $35.7 $35.4 $35.9 compared to $35.4 million in 1Q'24 $34.6 $35.2 ✓ 2Q'24 NIM increased 7 bps to 3.63% as compared to 3.56% in 1Q’24 as the in yield on loans
Slide 14: Deposit Portfolio
Deposit Portfolio Total Deposits 2Q'24 Highlights $ in Millions ✓ Total deposits of $3.62 billion at 2Q'24, a decrease of $14.1 million from 1Q'24 $3,575 $3,621 $3,626 $3,639 $3,625 ✓ Cost of interest-bearing deposits increased to 3.33% in 2Q'24 from 3.27% in 1Q'24 o Average cost of deposits was rel
Slide 15: Credit Quality
Credit Quality Credit Quality Ratios 2Q'24 Highlights 0.76% 0.71% ✓ Provision for credit losses of $1.8 million in 0.57% 2Q’24, compared to $830 thousand in 0.51% 1Q'24; increase attributable to net charge-off activity, increased loan balances and higher nonperforming loans. 0.16% 0.14% 0.17% 0.12%
Slide 16: Non-Owner Occupied CRE Portfolio
Non-Owner Occupied CRE Portfolio NOO CRE(1) Sector Breakdown Details Other C&D, 22% ✓ NOO CRE was 39.9% of total LHI at June 30, 2024, compared to 40.1% at March 31, 2024 Residential… Multi-family, 23% ✓ NOO CRE portfolio is made up of $852.4 Other Income million of income producing loans and $381.0
Slide 17: Investment Securities
Investment Securities Securities & Cash 2Q'24 Highlights $ in Millions ✓ Investment securities totaled $591.0 million, a $8.8 million decrease from 1Q’24. $296 $330 $372 $352 $298 ✓ All municipal bonds are in Texas; fair value hedges of $124 million $628 $585 $623 $600 $591 ✓ All MBS, CMO, and Asset
Slide 18: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 2Q'24 Highlights $45.0 $ in Millions 112.0% ✓ Noninterest expense for 2Q'24 increased $40.5 $642 thousand to $32.6 million from 1Q'24 $40.0 102.0% primarily due to: o A rise of $436 thousand in mortgage 92.0% commission expense as loan $35.0 ori
Slide 19: Balance Sheet Growth and Development
Balance Sheet Growth and Development (1) Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,221 $24.15 $4,150 $3,624 $23.47 $23.56 $3,574 $3,094 $2,979 $21.82 $21.07 $392 $418 Total Assets Total Loans Total Total 2Q23 3Q23 4Q23 1Q24 2Q24 HFI Deposits Stockholders' Equity 30-Jun-
Slide 20: Strong Capital Base
Strong Capital Base Tangible Common Equity to Tangible Assets Ratio(1) Common Equity Tier 1 Ratio 12.67% 12.61% 12.41% 9.22% 9.44% 12.11% 12.19% 9.21% 8.96% 8.40% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio 11.6
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 June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Pre-tax, pre-provision income Net income $ 11,134 $ 10,874 $ 10,324 $ 13,494 $ 29,683 Income tax expense 3,116 3,143 2,787 3,683 7,811 Provision for credit losses 1,775 8
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Efficiency Ratio Noninterest expense $ 32,572 $ 31,930 $ 30,597 $ 31,489 $ 40,499 Net interest income 35,888 35,368 35,162 35,689 34,581 Tax equivalent yield adjustment 2
South Plains Financial — Q2 2024 Earnings Presentation on 6ix