South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q1 2024 Earnings Presentation
25 slides from South Plains Financial's earnings presentation, Apr 25, 2024
Slide 1: South Plains Financial First Quarter 2024 Earnings Presentation
South Plains Financial First Quarter 2024 Earnings Presentation April 25, 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: First Quarter 2024 Highlights
First Quarter 2024 Highlights Net Income Net Interest Margin (1) Loans Held for Investment Return on Average Assets $10.9 M (“NIM”) 3.56% (“HFI”) $3.01 B (“ROAA”) 1.04% EPS - Diluted Deposit Growth Average Yield on Loans Efficiency Ratio $0.64 1.4% annualized 6.53% 67.94% ➢ Net income for the first
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.75 Billion Rural Commercial: Markets: FHLB: 46% 81% $1,127 FHLB Retail: Discount 45% Window: $620 Metro Markets: Public 19% Funds: 9% Dollars in millions ✓ Average deposit account size is approximately $
Slide 6: Loan Portfolio 1Q’24 Highlights
Loan Portfolio Total Loans HFI 1Q’24 Highlights $ in Millions ✓ Loans HFI were flat at March 31, 2024 as compared to the end of 2023: $2,994 $3,014 $3,012 $2,979 o Growth was primarily in multi-family and $2,789 6.53% single-family property loans and general 6.29% commercial loans 6.10% o Decreases
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 Total Metropolitan Loans 1Q’24 Highlights $ in Millions ✓ Loans HFI in our major metropolitan markets(1) increased by $22.1 million, or 8.5% annualized, to $1.06 billion during 1Q’24, as compared to $1,061.0 $1.04 billion at the end of 4Q’23 $1,038.9 $994.8 ✓ Ou
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 46% Residential Variable - Mature or Reprice 12mo Auto, 10% C&D, 8% 17% or less Variable - Mature or Reprice ove
Slide 10: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights 1.4% 0.5% ✓ Indirect auto loans totaled $273.4 million ✓ Management is carefully managing the portfolio; yields are improving as a portion of monthly 8.4% principal amortization is redeployed into higher rate loans ✓ Duri
Slide 11: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 1Q’24 Highlights $ in Millions ✓ Noninterest income was $11.4 million for 1Q’24, $60.0 compared to $9.1 million for 4Q’23, primarily due to an increase of $2.3 million in mortgage $47.1 $50.0banking revenues: o 1Q’24 MSR FV adjustment - $55 thousand $40
Slide 12: Diversified Revenue Stream
Diversified Revenue Stream Three Months Ended March 31, 2024 Total Revenues Noninterest Income $46.8 million $11.4 million Investment Trust, 7% Services, Service Charges on 4% Deposits, 16% Other, 12% Net Interest Income, 76% Interchange Noninterest Fees, 27% Mortgage, 35% Income, 24% 12 Source: Com
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin 1Q’24 Highlights $ in Millions ✓ Net interest income (“NII”) of $35.4 million, compared to $35.2 million in 4Q’23 $35.7 $35.2 $35.4 $34.6 $34.3 o The increase in NII was primarily the result of $667 thousand in interest recoveries on loans
Slide 14: Deposit Portfolio 1Q’24 Highlights
Deposit Portfolio Total Deposits 1Q’24 Highlights $ in Millions ✓ Total deposits of $3.64 billion at 1Q’24, an increase of $12.4 million from 4Q'23 $3,575 $3,621 $3,626 $3,639 $3,508 ✓ Cost of interest-bearing deposits increased to 3.27% in 1Q’24 from 3.14% in 4Q'23 o Average cost of deposits increa
Slide 15: Credit Quality
Credit Quality Credit Quality Ratios 1Q’24 Highlights 0.71% ✓ Provision for credit losses of $830 thousand, 0.51% compared to $600 thousand in 4Q'23 o The provision during 1Q’24 was largely 0.27% 0.19% 0.17% attributable to net charge-off activity 0.12% 0.16% 0.14% 0.10% 0.11% during the quarter. 1Q
Slide 16: CRE Portfolio
CRE Portfolio CRE(1) Sector Breakdown Office Loan Details Convenience Store, 4% ✓ 6.6% of total loans HFI Office - Owner Occ, 6% Other, 14% Restaurant, 5% ✓ 32% is owner-occupied Hotel, 5% Multi-family, 21% ✓ Average loan size is $897 thousand Warehouse, 19% ✓ Medical offices comprise 11% of office
Slide 17: CRE Analysis
CRE Analysis (000's) as of 3/31/2024 Hospitality Office Retail Multi-Family Industrial C Store Restaurant Mini-Storage Segment Total Balance $60,922 $201,354 $176,817 $301,870 $228,758 $42,196 $71,121 $30,363 Segment to Total Loans 2.03% 6.71% 5.89% 10.06% 7.62% 1.41% 2.37% 1.01% Average Balance $3,
Slide 18: Investment Securities
Investment Securities Securities & Cash 1Q’24 Highlights $ in Millions ✓ Investment securities totaled $599.9 million, $328 flat from 4Q’23. $296 $352 $330 $372 ✓ All municipal bonds are in Texas; fair value hedges of $124 million $699 $628 $623 $585 $600 ✓ All MBS, CMO, and Asset Backed securities
Slide 19: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 1Q’24 Highlights $45.0 $ in Millions 112.0% ✓ Noninterest expense for 1Q’24 increased $1.3 million to $31.9 million from 4Q'23 $40.5 $40.0 102.0% primarily due to: o A rise of $1.0 million in personnel 92.0% costs, which predominately came $35.0
Slide 20: Balance Sheet Growth and Development
Balance Sheet Growth and Development Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,219 $23.56 $23.47 $4,058 $3,639 $3,508 $3,012 $2,789 $21.82 $21.07 $20.19 $368 $409 Total Assets Total Loans Total Total 1Q23 2Q23 3Q23 4Q23 1Q24 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 12.67% 12.41% 9.21% 9.22% 12.11% 12.19% 8.96% 11.92% 8.54% 8.40% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 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 March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 Pre-tax, pre-provision income Net income $ 10,874 $ 10,324 $ 13,494 $ 29,683 $ 9,244 Income tax expense 3,143 2,787 3,683 7,811 2,391 Provision for credit losses 830 600
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended March 31, December 31, September 30, June 30, March 31, 2024 2023 2023 2023 2023 Efficiency Ratio Noninterest expense $ 31,930 $ 30,597 $ 31,489 $ 40,499 $ 32,361 Net interest income 35,368 35,162 35,689 34,581 34,315 Tax equivalent yield adjustment
South Plains Financial — Q1 2024 Earnings Presentation on 6ix