South Plains Financial, Inc. · NASDAQ:SPFI
South Plains Financial — Q4 2022 Earnings Presentation
22 slides from South Plains Financial's earnings presentation, Jan 26, 2023
Slide 1: South Plains Financial Fourth Quarter and Year-End 2022 Earnings Presentation
South Plains Financial Fourth Quarter and Year-End 2022 Earnings Presentation January 26, 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: Fourth Quarter and Full Year 2022 Highlights
Fourth Quarter and Full Year 2022 Highlights Fourth Quarter 2022 Organic Loan Growth Net Income Return on Average Assets Net Interest Margin (1) 8.6% Annualized $12.6 M (“ROAA”) 1.27% (“NIM”) 3.88% Loans Held for Investment EPS - Diluted Efficiency Ratio Average Yield on Loans (“HFI”) $2.75 B $0.71
Slide 5: Loan Portfolio
Loan Portfolio Total Loans HFI 4Q'22 Highlights $ in Millions ✓ Loans HFI increased $57.7 million from 3Q’22, $2,748 primarily due to organic net loan growth $2,690 $2,580 o Organic net loan growth remained relationship-focused, occurring primarily in $2,438 $2,454 5.59% commercial real estate loans
Slide 6: Attractive Markets Poised for Organic Growth
Attractive Markets Poised for Organic Growth ✓ Largest metropolitan statistical area (“MSA”) in ✓ Population of 865,000+ people Texas. Steadily expanding population that accounts for over 26% of the state’s population ✓ Adjacent in proximity to Juarez, Mexico’s growing industrial center and an estim
Slide 7: Metropolitan Loan Growth
Metropolitan Loan Growth Total Metropolitan Loans 4Q'22 Highlights $ in Millions ✓ Loans HFI in our Dallas, Houston and El Paso metro markets increased 13.9% annualized in 4Q’22 as compared to 3Q’22 $878.8 ✓ Loans HFI increased 19.2% in 2022 as $849.3 compared to 2021 in our MSA’s and represent $819
Slide 8: Loan HFI Portfolio
Loan HFI Portfolio Loan Mix Fixed vs. Variable Rate at 12/31/22 Other Fixed - Matures over 1 year Consumer, Commercial 3% C&D, 5% 25% Fixed - Matures 12mo or less Auto, 12% Residential C&D, 10% 7% Variable - Immediately 45% Repricable 17% Variable - Mature or Reprice CRE 12mo or less 1-4 Family, Own
Slide 9: Indirect Auto Overview
Indirect Auto Overview Indirect Auto Credit Breakdown Indirect Auto Highlights ✓ Indirect auto loans totaled $296.9 million at 3% the end of 4Q’22 ✓ Disciplined underwriting approach to 19% selectively grow indirect auto lending portfolio ✓ Strong credit quality in sector positioned for resiliency a
Slide 10: Mortgage Banking Overview
Mortgage Banking Overview Mortgage Banking Activity 4Q'22 Highlights $ in Millions ✓ Mortgage loan originations decreased 17.7% $458 in 4Q'22 compared to 3Q’22 as the $435 residential mortgage market continued to $400 $379 $374 slow during the fourth quarter primarily due to $369 higher market inter
Slide 11: Noninterest Income Overview
Noninterest Income Overview Noninterest Income 4Q'22 Highlights $ in Millions $25.0 $23.7 ✓ Noninterest income of $12.7 million, $22.9 $23.0 compared to $20.9 million in 3Q’22, was $20.9 primarily a result of the seasonal decline of $21.0 $2.0 million in insurance activity and a $18.8 decrease of $3
Slide 12: Diversified Revenue Stream
Diversified Revenue Stream Twelve Months Ended December 31, 2022 Total Revenues Noninterest Income $214.6 million $76.1 million Other, 13% Investment Services, 2% Trust, 3% Net Interest Income, 65% Mortgage, 41% Insurance, 14% Noninterest Income, 35% Service Charges Interchange on Deposits, 9% Fees,
Slide 13: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Margin 4Q'22 Highlights $ in Millions ✓ Net interest income (“NII”) of $36.3 million, compared to $35.1 million in 3Q’22 $37.1 $36.3 $35.1 ✓ 4Q’22 NIM of 3.88%, an increase of 18 bps $31.4 compared to 3Q’22: $29.9 o $74.4 million growth in average
Slide 14: Deposit Portfolio
Deposit Portfolio Total Deposits 4Q'22 Highlights $ in Millions ✓ Total deposits of $3.41 billion at 4Q'22, a decrease of $54.1 million from 3Q’22 $3,450 $3,426 $3,460 $3,406 $3,341 o Decrease was attributable to increased competition for deposits amid overall deposit outflows in the United States b
Slide 15: Credit Quality
Credit Quality Credit Quality Ratios 4Q'22 Highlights ✓ The Company recorded a provision for loan losses in 4Q’22 of $248 thousand, compared to a negative 0.49% provision of $782 thousand in 3Q’22, due to 0.43% increases in loan balances during the period 0.30% 0.33% 0.31% 0.28% 0.29% 0.20% 0.20% 0.
Slide 16: Investment Securities
Investment Securities Securities & Cash 4Q'22 Highlights $ in Millions ✓ Investment Securities totaled $701.7 million $487 $529 $376 at 12/31/2022, a decrease of $10 million $330 from 9/30/2022 $235 o Includes a decrease of $11.7 million in $725 $793 $764 $711 $702 the unrealized loss on available f
Slide 17: Noninterest Expense and Efficiency
Noninterest Expense and Efficiency Noninterest Expense 4Q'22 Highlights $ in Millions ✓ Noninterest expense for 4Q’22 decreased $40 .0 $37.9 $4.7 million from 3Q’22 primarily due to: $38 .0 $37.4 92.0% $36.1 $36.0 $36 .0 o Decline of $4.2 million in personnel expense - $1.8 million decrease in $34 .
Slide 18: Balance Sheet Growth and Development
Balance Sheet Growth and Development Balance Sheet Highlights Tangible Book Value Per Share $ in Millions $3,944 $3,902 $3,406 $3,341 $21.51 $2,748 $20.49 $2,438 $19.50 $19.57 $18.61 $407 $357 Total Assets Total Loans Total Total 4Q21 1Q22 2Q22 3Q22 4Q22 HFI Deposits Stockholders' Equity 31-Dec-21 3
Slide 19: Strong Capital Base
Strong Capital Base Tangible Common Equity to Tangible Assets Ratio Common Equity Tier 1 Ratio 9.85% 9.11% 8.60% 8.50% 12.91% 12.86% 8.00% 12.24% 11.67% 11.81% 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio 11.03%
Slide 20: 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 21: Appendix
South Plains Financial, Inc. Appendix
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures For the quarter ended December 31, September 30, June 30, March 31, December 31, 2022 2022 2022 2022 2021 Pre-tax, pre-provision income Net income $ 12,621 $ 15,458 $ 15,883 $ 14,278 $ 14,614 Income tax expense 3,421 3,962 4,001 3,527 3,631 Provision for loan losses 248 (
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