South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q1 2023 Earnings Presentation
23 slides from South Plains Financial's earnings presentation, Apr 27, 2023
Slide 1: South Plains Financial First Quarter 2023 Earnings Presentation
South Plains Financial First Quarter 2023 Earnings Presentation April 27, 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: First Quarter 2023 Highlights
First Quarter 2023 Highlights Deposit Growth Organic Loan Growth Net Income Net Interest Margin (1) 12.0% Annualized 5.9% Annualized $9.2 M (“NIM”) 3.75% Uninsured Deposits Loans Held for Investment EPS - Diluted Average Yield on Loans 17% (“HFI”) $2.79 B $0.53 5.78% South Plains’ Granular, Core Dep
Slide 5: Granular Deposit Base & Ample Liquidity
Granular Deposit Base & Ample Liquidity Total Deposit Base Total Borrowing Capacity Breakdown $1.75 Billion Commercial: Rural 43% Markets: FHLB 82% Discount FHLB: Window: $988 Retail: $586 45% FRB - Public BTFP: Funds: Metro $172 12% Markets: 18% Numbers in millions ✓ Average deposit account size is
Slide 6: Loan Portfolio 1Q’23 Highlights
Loan Portfolio Total Loans HFI 1Q’23 Highlights $ in Millions ✓ Loans HFI increased $40.6 million from 4Q’22, $2,789 primarily due to organic net loan growth $2,748 $2,690 $2,580 o Organic net loan growth was driven by 5.78% increases in commercial real estate loans and $2,454 residential mortgage l
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 1Q’23 Highlights $ in Millions ✓ Loans HFI in our Dallas, Houston and El Paso metro markets increased 5.0% annualized in 1Q'23 as compared to 4Q'22 ✓ Loans HFI increased 16.2% in 1Q’23 as $889.8 $878.8 compared to 1Q’22 in these metro markets and $84
Slide 9: Loan HFI Portfolio
Loan HFI Portfolio Loan Mix Fixed vs. Variable Rate at 3/31/23 Other Fixed - Matures over 1 year Consumer, Commercial 3% C&D, 6% 25% Fixed - Matures 12mo or less Auto, 12% Residential C&D, 9% 7% Variable - Immediately 46% Repricable 16% Variable - Mature or Reprice 12mo or less Variable - Mature or
Slide 10: CRE Portfolio
CRE Portfolio CRE Sector Breakdown Office Highlights ✓ Office is 5.8% of total loans HFI ✓ 32% is owner-occupied Convenience Store, 4% ✓ Average loan size is $755 thousand Other, 14% Multifamily, 17% ✓ Medical offices comprise 13% Office - Owner Occ, 5% Warehouse, 17% Restaurant, 7% CRE Portfolio ($
Slide 11: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights 1.7% 0.2% ✓ Indirect auto loans totaled $300.3 million ✓ Disciplined underwriting approach to 8.8% selectively grow indirect auto lending portfolio ✓ Strong credit quality in sector positioned for 28.1% resiliency across
Slide 12: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 1Q'23 Highlights $ in Millions $25.0 $23.7 ✓ Noninterest income of $10.7 million, compared to $12.7 million in 4Q'22, primarily $20.9 due to: $18.8 $20.0 o A decrease of $1.4 million in income based on the seasonality of insurance activities $15.0 o Mor
Slide 13: Diversified Revenue Stream
Diversified Revenue Stream Three Months Ended March 31, 2023 Total Revenues Noninterest Income $45 million $10.7 million Other, 13% Investment Services, 4% Trust, 6% Mortgage, 21% Net Interest Income, 76% Noninterest Interchange Income, 24% Insurance, 13% Fees, 28% Service Charges on Deposits, 16% S
Slide 14: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin 1Q'23 Highlights $ in Millions ✓ Net interest income (“NII”) of $34.3 million, compared to $36.3 million in 4Q'22 $37.1 $36.3 $35.1 $34.3 ✓ 1Q'23 NIM of 3.75%, a decrease of 13 bps compared to 4Q'22: $29.9 o NIM compression was a result of
Slide 15: Deposit Portfolio
Deposit Portfolio Total Deposits 1Q'23 Highlights $ in Millions ✓ Total deposits of $3.51 billion at 1Q'23, an increase of $101 million from 4Q'22 $3,450 $3,460 $3,508 o Growth in deposits was driven by our $3,426 $3,406 strategic focus on liquidity and occurred predominately in public fund deposits
Slide 16: Credit Quality
Credit Quality Credit Quality Ratios 1Q'23 Highlights ✓ The Company recorded a provision for credit losses of $1.0 million in 1Q’23, compared to 0.49% $248 thousand in 4Q’22, and a negative 0.33% 0.31% provision of $2.1 million for 1Q’22 0.29% 0.28% 0.27% 0.20% 0.20% 0.20% 0.19% ✓ Continued to large
Slide 17: Investment Securities
Investment Securities Securities & Cash 1Q'23 Highlights $ in Millions ✓ Investment securities totaled $698.6 million $529 at 3/31/2023, a decrease of $3.1 million from $376 $330 12/31/2022 $235 $328 ✓ All municipal bonds are in Texas $793 $764 $711 $702 $699 ✓ All MBS, CMO, and Asset Backed securit
Slide 18: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 1Q'23 Highlights $ in Millions ✓ Noninterest expense for 1Q'23 decreased $40.0 $37.9 1.1% from 4Q'22 primarily due to: $38.0 $37.4 92.0% o Declines in professional services, $36.0 $36.0 marketing, and occupancy expense, partially offset by an in
Slide 19: Balance Sheet Growth and Development
Balance Sheet Growth and Development Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $4,058 $4,000 $20.49 $3,508 $20.19 $3,450 $2,789 $19.57 $19.50 $2,454 $18.61 $387 $368 Total Assets Total Loans Total Total 1Q22 2Q22 3Q22 4Q22 1Q23 HFI Deposits Stockholders' Equity 31-Mar-22 3
Slide 20: Strong Capital Base
Strong Capital Base Tangible Common Equity to Tangible Assets Ratio Common Equity Tier 1 Ratio 9.11% 12.86% 8.60% 8.50% 8.54% 12.24% 11.81% 11.92% 11.67% 8.00% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio 11.22%
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 t
Slide 22: Appendix
South Plains Financial, Inc. Appendix
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 Pre-tax, pre-provision income Net income $ 9,244 $ 12,621 $ 15,458 $ 15,883 $ 14,278 Income tax expense 2,391 3,421 3,962 4,001 3,527 Provision for credit losses 1,010 2
South Plains Financial — Q1 2023 Earnings Presentation on 6ix