Third Quarter 2025 Highlights
Net income for the third quarter of 2025 was $16.3 million, compared to $14.6 million for the second quarter of 2025 and $11.2 million for the third quarter of 2024.
Diluted earnings per share for the third quarter of 2025 was $0.96, compared to $0.86 for the second quarter of 2025 and $0.66 for the third quarter of 2024.
Average cost of deposits for the third quarter of 2025 was 210 basis points, compared to 214 basis points for the second quarter of 2025 and 247 basis points for the third quarter of 2024.
Net interest margin, on a tax-equivalent basis, was 4.05% for the third quarter of 2025, compared to 4.07% for the second quarter of 2025 and 3.65% for the third quarter of 2024.
Return on average assets for the third quarter of 2025 was 1.47%, compared to 1.34% for the second quarter of 2025 and 1.05% for the third quarter of 2024.
Tangible book value (non-GAAP) per share was $28.14 as of September 30, 2025, compared to $26.70 as of June 30, 2025 and $25.75 as of September 30, 2024.
The consolidated total risk-based capital ratio, common equity tier 1 risk-based capital ratio, and tier 1 leverage ratio at September 30, 2025 were 17.34%, 14.41%, and 12.37%, respectively.
Curtis Griffith, South Plains' Chairman and Chief Executive Officer, commented, "We delivered strong third quarter results highlighted by solid earnings growth as we continued to experience net interest income expansion supported by our low cost, community-based deposit franchise. The credit quality of our loan portfolio also continued to improve as did our return on average assets. Our results demonstrate the strong foundation that we have purposefully built. We have added exceptional talent across the Bank while also making the necessary investments in our technology platform that positions South Plains to efficiently scale our operations as we grow. I believe the Bank is firmly positioned to accelerate our asset growth through both organic expansion and accretive M&A opportunities. While we have been experiencing higher than normal paydowns which has proved a headwind to loan growth, we expect an acceleration in growth next year aided by the expansion of our lending platform where we expect to further increase our lending team by up to 20%. We continue to engage in discussions with potential target banks in our core markets although we are only interested in acquiring a bank that fits our conservative nature and overall culture, and meets our strict criteria for a deal. As a result, we will only do a deal that makes sense for the Bank and our shareholders."
Results of Operations, Quarter Ended September 30, 2025
Net Interest Income
Net interest income was $43.0 million for the third quarter of 2025, compared to $42.5 million for the second quarter of 2025 and $37.3 million for the third quarter of 2024. Net interest margin, calculated on a tax-equivalent basis, was 4.05% for the third quarter of 2025, compared to 4.07% for the second quarter of 2025 and 3.65% for the third quarter of 2024. The average yield on loans was 6.92% for the third quarter of 2025, compared to 6.99% for the second quarter of 2025 and 6.68% for the third quarter of 2024. The average cost of deposits was 210 basis points for the third quarter of 2025, which is 4 basis points lower than the second quarter of 2025 and 37 basis points lower than the third quarter of 2024. Loan interest income for the third quarter of 2025 included $640 thousand in interest and fees recognized related to the resolution of credit workouts. This amount positively impacted the net interest margin by 6 basis points and the loan yield by 8 basis points during the third quarter of 2025. There was a recovery of $1.7 million in interest during the second quarter of 2025, related to the full repayment of a loan that had previously been on nonaccrual. This recovery positively impacted the net interest margin by 17 basis points and the loan yield by 23 basis points during the second quarter of 2025.
Interest income was $64.5 million for the third quarter of 2025, compared to $64.1 million for the second quarter of 2025 and $61.6 million for the third quarter of 2024. Interest income increased $385 thousand in the third quarter of 2025 from the second quarter of 2025, which was primarily comprised of an increase of $343 thousand in interest income on other earning assets. The increase in interest income on other earning assets was mainly due to an increase of $32.8 million in average other interest-earning assets during the third quarter of 2025. Interest income increased $2.9 million in the third quarter of 2025 compared to the third quarter of 2024. This increase was primarily due to the $640 thousand of loan interest and fees and an increase of average loans of $23.6 million and higher loan interest rates during the period, resulting in growth of $2.4 million in loan interest income.
Interest expense was $21.5 million for the third quarter of 2025, compared to $21.6 million for the second quarter of 2025 and $24.3 million for the third quarter of 2024. Interest expense decreased $131 thousand compared to the second quarter of 2025 and decreased $2.8 million compared to the third quarter of 2024. The $2.8 million decrease was primarily a result of a 49 basis point decline in the cost of interest-bearing deposits, partially offset by an increase of $71.5 million in average interest-bearing deposits in the third quarter of 2025 as compared to the third quarter of 2024.
Noninterest Income and Noninterest Expense
Noninterest income was $11.2 million for the third quarter of 2025, compared to $12.2 million for the second quarter of 2025 and $10.6 million for the third quarter of 2024. The decrease from the second quarter of 2025 was primarily due to a decrease of $1.0 million in mortgage banking revenues, mainly as a result of the change in the fair value adjustment of the mortgage servicing rights assets, a write-down of $925 thousand in the third quarter of 2025 compared to a write-down of $156 thousand in the second quarter of 2025, as interest rates that affect the value declined in the third quarter of 2025. The increase in noninterest income for the third quarter of 2025 as compared to the third quarter of 2024 was primarily due to an increase of $685 thousand in mortgage banking revenues, mainly as a result of the change in the fair value adjustment of the mortgage servicing rights assets, a write-down of $925 thousand in the third quarter of 2025 compared to a write-down of $2.1 million in the third quarter of 2024, as interest rates that affect the value declined in the third quarter of 2025.
Noninterest expense was $33.0 million for the third quarter of 2025, compared to $33.5 million for the second quarter of 2025 and $33.1 million for the third quarter of 2024. The $519 thousand decrease from the second quarter of 2025 was largely the result of a decrease of $581 thousand in professional service expenses related primarily to consulting on technology projects and initiatives. The $104 thousand decrease in noninterest expense for the third quarter of 2025 as compared to the third quarter of 2024 was largely the result of a decrease in professional service expenses of $514 thousand and a decrease of $258 thousand in other noninterest expenses, partially offset by an increase of $616 thousand in personnel expenses, mainly a result of annual salary adjustments. The $514 thousand decrease in professional service expense was mainly due to higher legal expense as well as consulting related to technology projects in the third quarter of 2024.
Loan Portfolio and Composition
Loans held for investment were $3.05 billion as of September 30, 2025, compared to $3.10 billion as of June 30, 2025 and $3.04 billion as of September 30, 2024. The decrease of $45.5 million, or 1.5%, during the third quarter of 2025 as compared to the second quarter of 2025 occurred primarily as a result of a decrease of $46.5 million in multi-family property loans mainly due to the payoff of two loans totaling $39.6 million, partially offset by organic loan growth. As of September 30, 2025, loans held for investment were essentially unchanged as compared to September 30, 2024.
Deposits and Borrowings
Deposits totaled $3.88 billion as of September 30, 2025, compared to $3.74 billion as of June 30, 2025 and $3.72 billion as of September 30, 2024. Deposits increased by $142.2 million, or 3.8%, in the third quarter of 2025 from June 30, 2025. Deposits increased by $161.8 million, or 4.3%, at September 30, 2025 as compared to September 30, 2024. Noninterest-bearing deposits were $1.05 billion as of September 30, 2025, compared to $998.8 million as of June 30, 2025 and $998.5 million as of September 30, 2024. Noninterest-bearing deposits represented 27.0% of total deposits as of September 30, 2025. The quarterly and year-over-year changes in total deposits were due to organic growth in both retail and commercial deposits.
On September 30, 2025, the Company redeemed $50 million in subordinated debt. The subordinated debt was at the end of the initial five-year fixed rate period. After the expiration of the fixed rate period, the subordinated debt would have reset quarterly at a higher variable interest rate as well as being subject to a reduction in regulatory capital treatment.
Asset Quality
The Company recorded a provision for credit losses in the third quarter of 2025 of $500 thousand, compared to $2.5 million in the second quarter of 2025 and $495 thousand in the third quarter of 2024. The decrease in provision for the third quarter of 2025 as compared to the second quarter of 2025 was largely attributable to a decrease in specific reserves, decreased loan balances, and overall improved credit quality.
The ratio of allowance for credit losses to loans held for investment was 1.45% as of September 30, 2025, compared to 1.45% as of June 30, 2025 and 1.41% as of September 30, 2024.
The ratio of nonperforming assets to total assets was 0.26% as of September 30, 2025, compared to 0.25% as of June 30, 2025 and 0.59% as of September 30, 2024. Annualized net charge-offs were 0.16% for the third quarter of 2025, compared to 0.06% for the second quarter of 2025 and 0.11% for the third quarter of 2024.
Capital
Book value per share increased to $29.41 at September 30, 2025, compared to $27.98 at June 30, 2025. The change was primarily driven by $13.7 million of net income after dividends paid and by an increase in accumulated other comprehensive income of $9.1 million. The ratio of tangible common equity to tangible assets (non-GAAP) increased 27 basis points to 10.25% at September 30, 2025.
Conference Call
South Plains will host a conference call to discuss its third quarter 2025 financial results today, October 23, 2025, at 5:00 p.m., Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call and conference materials will be available on the Company's website at https://www.spfi.bank/news-events/events.
A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed on the investor section of the Company's website as well as by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671). The pin to access the telephone replay is 13756126. The replay will be available until November 6, 2025.
About South Plains Financial, Inc.
South Plains is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas. City Bank is one of the largest independent banks in West Texas and has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. South Plains provides a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas. Its principal business activities include commercial and retail banking, along with investment, trust and mortgage services. Please visit https://www.spfi.bank for more information.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures include Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Pre-Tax, Pre-Provision Income. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company's financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.
We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.
A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.
Available Information
The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the "SEC"). Accordingly, investors should monitor the Company's web site, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts.
The information contained on, or that may be accessed through, the Company's web site is not incorporated by reference into, and is not a part of, this document.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains' current views with respect to future events and South Plains' financial performance. Any statements about South Plains' expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. South Plains cautions that the forward-looking statements in this press release are based largely on South Plains' expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond South Plains' control. Factors that could cause such changes include, but are not limited to, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; slower economic growth rates or potential recession in the United States and our market areas; the impacts related to or resulting from uncertainty in the banking industry as a whole; increased competition for deposits in our market areas among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; changes in unemployment rates in the United States and our market areas; adverse changes in customer spending, borrowing and savings habits; declines in commercial real estate values and prices; a deterioration of the credit rating for U.S. long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events, including as a result of the policies of the current U.S. presidential administration or Congress; the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential costs related to the impacts of climate change; current or future litigation, regulatory examinations or other legal and/or regulatory actions; and changes in applicable laws and regulations. Additional information regarding these risks and uncertainties to which South Plains' business and future financial performance are subject is contained in South Plains' most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of such documents, and other documents South Plains files or furnishes with the SEC from time to time, which are available on the SEC's website, www.sec.gov. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements due to additional risks and uncertainties of which South Plains is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results. Due to these and other possible uncertainties and risks, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Any forward-looking statements presented herein are made only as of the date of this press release, and South Plains does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, new information, the occurrence of unanticipated events, or otherwise, except as required by applicable law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.
Contact:
Mikella Newsom, Chief Risk Officer and Secretary
(866) 771-3347
Source: South Plains Financial, Inc.
South Plains Financial, Inc.Consolidated Financial Highlights - (Unaudited)(Dollars in thousands, except share data)
As of and for the quarter ended
September 30,2025
June 30,2025
March 31,2025
December 31,2024
September 30,2024
Selected Income Statement Data:
Interest income
$
64,520
$
64,135
$
59,922
$
61,324
$
61,640
Interest expense
21,501
21,632
21,395
22,776
24,346
Net interest income
43,019
42,503
38,527
38,548
37,294
Provision for credit losses
500
2,500
420
1,200
495
Noninterest income
11,165
12,165
10,625
13,319
10,635
Noninterest expense
33,024
33,543
33,030
29,948
33,128
Income tax expense
4,342
4,020
3,408
4,222
3,094
Net income
16,318
14,605
12,294
16,497
11,212
Per Share Data (Common Stock):
Net earnings, basic
$
1.00
$
0.90
$
0.75
$
1.01
$
0.68
Net earnings, diluted
0.96
0.86
0.72
0.96
0.66
Cash dividends declared and paid
0.16
0.15
0.15
0.15
0.14
Book value
29.41
27.98
27.33
26.67
27.04
Tangible book value (non-GAAP)
28.14
26.70
26.05
25.40
25.75
Weighted average shares outstanding, basic
16,241,695
16,231,627
16,415,862
16,400,361
16,386,079
Weighted average shares outstanding, dilutive
16,990,546
16,886,993
17,065,599
17,161,646
17,056,959
Shares outstanding at end of period
16,247,839
16,230,475
16,235,647
16,455,826
16,386,627
Selected Period End Balance Sheet Data:
Cash and cash equivalents
$
635,046
$
470,496
$
536,300
$
359,082
$
471,167
Investment securities
571,138
570,000
571,527
577,240
606,889
Total loans held for investment
3,053,503
3,098,978
3,075,860
3,055,054
3,037,375
Allowance for credit losses
44,125
45,010
42,968
43,237
42,886
Total assets
4,479,437
4,363,674
4,405,209
4,232,239
4,337,659
Interest-bearing deposits
2,831,642
2,740,179
2,826,055
2,685,366
2,720,880
Noninterest-bearing deposits
1,049,501
998,759
966,464
935,510
998,480
Total deposits
3,881,143
3,738,938
3,792,519
3,620,876
3,719,360
Borrowings
60,493
111,799
110,400
110,354
110,307
Total stockholders' equity
477,802
454,074
443,743
438,949
443,122
Summary Performance Ratios:
Return on average assets (annualized)
1.47
%
1.34
%
1.16
%
1.53
%
1.05
%
Return on average equity (annualized)
13.89
%
13.05
%
11.30
%
14.88
%
10.36
%
Net interest margin(1)
4.05
%
4.07
%
3.81
%
3.75
%
3.65
%
Yield on loans
6.92
%
6.99
%
6.67
%
6.69
%
6.68
%
