South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q3 2023 Earnings Presentation
25 slides from South Plains Financial's earnings presentation, Oct 24, 2023
Slide 1: South Plains Financial Third Quarter 2023 Earnings Presentation
South Plains Financial Third Quarter 2023 Earnings Presentation October 24, 2023
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: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights Deposit Growth Organic Loan Growth Net Income Net Interest Margin (1) 1.3% 1.9% annualized $13.5 M (“NIM”) 3.52% Uninsured / Uncollaterized Loans Held for Investment EPS - Diluted Average Yield on Loans Deposits 16% (“HFI”) $2.99 B $0.78 6.10% ➢ Diluted earnings per sha
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.89 Billion Rural Commercial: FHLB Markets: 47% Discount 81% FHLB: Window: $1,094 $612 Retail: 44% Metro Markets: Public 19% FRB - BTFP: Funds: 9% Dollars in millions $179 ✓ Average deposit account size i
Slide 6: Loan Portfolio
Loan Portfolio Total Loans HFI 3Q'23 Highlights $ in Millions ✓ Loans HFI increased $14.5 million from 2Q'23, $2,979 $2,993 primarily in commercial real estate loans, residential mortgage loans, seasonal agricultural $2,748 $2,789 loans, and energy loans $2,690 o Partially offset by $16.5 million in
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 3Q'23 Highlights $ in Millions ✓ Loans HFI in our Dallas, Houston and El Paso metro markets increased by $40.0 million, or 16.8% annualized, to $994.8 million in 3Q’23, as compared to $954.8 million in Q2’23. $994.8 $954.8 ✓ Major metropolitan market
Slide 9: Loan HFI Portfolio
Loan HFI Portfolio Loan Mix Fixed vs. Variable Rate Other Commercial Fixed - Matures over 1 year Consumer, 3% C&D, 6% 25% Fixed - Matures 12mo or less Residential 8% Variable - Immediately Repricable Auto, 11% C&D, 8% 46% 16% Variable - Mature or Reprice 12mo or less CRE Variable - Mature or Reprice
Slide 10: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights 0.3% ✓ Indirect auto loans totaled $296.1 million 1.4% ✓ Management anticipates a modest reduction of the portfolio over time with improving yields as 8.6% monthly principal amortization is redeployed into higher rate loa
Slide 11: CRE Portfolio
CRE Portfolio CRE Sector Breakdown Office Loan Details ✓ 6.2% of total loans HFI Convenience Store, 4% ✓ 30% is owner-occupied Office - Owner Occ, 5% Other, 15% ✓ Average loan size is $878 thousand Restaurant, 5% Multifamily, ✓ Medical offices comprise 11% of office loans 20% Hotel, 6% CRE Portfolio
Slide 12: CRE Analysis
CRE Analysis (000's) as of 9/30/2023 Hospitality Office Retail Multi-Family Industrial C Store Restaurant Mini-Storage Segment Total Balance $63,336 $190,561 $178,953 $282,655 $209,507 $42,901 $62,702 $25,615 Segment to Total Loans 2.12% 6.38% 5.99% 9.47% 7.02% 7.02% 2.10% 0.86% Average Balance $2,8
Slide 13: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 3Q'23 Highlights $ in Millions $60.0 ✓ Noninterest income of $12.3 million, compared to $47.1 million in 2Q'23, primarily $50.0 due to: $47.1 o The $33.5 million gain on sale of Windmark being booked in the second $40.0 quarter of 2023 o Bank card servi
Slide 14: Diversified Revenue Stream
Diversified Revenue Stream Nine Months Ended September 30, 2023 Total Revenues Noninterest Income $174.7 million $70.1 million Service Charges Interchange on Deposits, 2% Insurance, Fees, 8% 3% Trust, 2% Investment Services, 14% Noninterest Income, 40% Mortgage, 17% Net Interest Gain on Sale of Inco
Slide 15: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin 3Q'23 Highlights $ in Millions ✓ Net interest income (“NII”) of $35.7 million, compared to $34.6 million in 2Q’23 $36.3 $35.7 $35.1 $34.6 $34.3 ✓ 3Q'23 NIM of 3.52%, a decrease of 13 bps compared to 2Q'23 ✓ Interest income increased $6.0 mi
Slide 16: Deposit Portfolio
Deposit Portfolio Total Deposits 3Q'23 Highlights $ in Millions ✓ Total deposits of $3.64 billion at 3Q'23, an increase of $67.8 million from 2Q’23 $3,575 $3,620 $3,461 $3,508 $3,406 o Mainly the result of an increase of $71 million in brokered deposits ✓ Cost of interest-bearing deposits increased
Slide 17: Credit Quality
Credit Quality Credit Quality Ratios 3Q'23 Highlights 0.71% ✓ The Company recorded a negative provision for credit losses of $0.7 million, compared to 0.51% $3.7 million in 2Q’23 0.29% 0.28% 0.27% o The negative provision was largely 0.20% 0.20% 0.19% 0.12% 0.16% attributable to a reduction of $1.3
Slide 18: Investment Securities
Investment Securities Securities & Cash 3Q'23 Highlights $ in Millions ✓ Investment securities totaled $585.0 million, $330 $328 a decrease of $43.1 million from 2Q’23 $235 $296 $354 o Includes an increase of $30.9 million in the unrealized loss on available for sale $711 $702 $699 securities during
Slide 19: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 3Q'23 Highlights $45.0 $ in Millions 112.0% ✓ Noninterest expense for 3Q’23 decreased $9 million from 2Q'23 primarily due to: $40.5 102.0% $40.0 o $4.5 million in personnel and $37.4 transaction expenses as part of the 92.0% Windmark sale plus r
Slide 20: Balance Sheet Growth and Development
Balance Sheet Growth and Development Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,186 $3,993 $3,642 $21.82 $3,461 $2,993 $21.07 $2,690 $20.19 $19.57 $18.61 $342 $372 Total Assets Total Loans Total Total 3Q22 4Q22 1Q23 2Q23 3Q23 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 8.96% 8.50% 8.54% 12.11% 12.19% 8.40% 11.92% 11.67% 11.81% 8.00% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 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 September 30, June 30, March 31, December 31, September 30, 2023 2023 2023 2022 2022 Pre-tax, pre-provision income Net income $ 13,494 $ 29,683 $ 9,244 $ 12,621 $ 15,458 Income tax expense 3,683 7,811 2,391 3,421 3,962 Provision for credit losses (70
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures As of and for the quarter ended September 30, 2023 Efficiency Ratio Noninterest expense $ 31,489 Net interest income $ 35,689 Tax equivalent yield adjustment 229 Noninterest income 12,277 Total income $ 48,195 Efficiency ratio 65.34% Noninterest expense $ 31,489 Less: Win
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