• Diluted Earnings Per Share: $0.066, unchanged from the second quarter of 2024.

• Loan Portfolio: Declined by $57 million to $3.04 billion in the third quarter.

• Indirect Auto Portfolio: Declined by $19 million to $235 million at the end of the third quarter.

• Net Interest Income: $37.3 million for the third quarter, up from $35.9 million in the linked quarter.

• Net Interest Margin: 3.65% in the third quarter, up from 3.63% in the linked quarter.

• Deposits: Increased by $95 million to $3.72 billion at September 30, 2024.

• Noninterest Income: $10.6 million in the third quarter, down from $12.7 million in the linked quarter.

• Allowance for Credit Losses: 1.41% of total loans held for investment at September 30, 2024.

• Nonperforming Loans: $24.7 million at the end of the third quarter.

• Tangible Common Equity to Tangible Assets: 9.77% at the end of the third quarter.

• Tangible Book Value Per Share: $25.75 as of September 30, 2024.

• Quarterly Dividend: Increased by 7% to $0.015 per share.

• Warning! GuruFocus has detected 5 Warning Signs with SPFI.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• South Plains Financial Inc (NASDAQ:SPFI) remains well-capitalized with a consolidated common equity tier one risk-based capital ratio of 13.25% and a tier one leverage ratio of 11.76%.

• The company experienced a significant increase in deposits, growing by approximately $95 million or more than 10% annualized in the third quarter.

• SPFI holds a strong market position, being number one in deposit share in the Lubbock market with an 18% share.

• The company has a robust new business production pipeline, the strongest in more than two years, indicating potential for future loan growth.

• SPFI's credit quality remains solid with no adverse trends observed in the third quarter, and a resolution in place for a previously nonaccrual multifamily loan in Houston.

Negative Points

• Loans held for investment declined by approximately $57 million during the third quarter due to loan payoffs and a managed decline in the indirect auto portfolio.

• Noninterest income decreased to $10.6 million from $12.7 million in the previous quarter, primarily due to a decrease in mortgage banking revenues.

• The company's third quarter earnings were negatively impacted by $0.03 per share after tax due to a decrease in the fair value adjustment of mortgage servicing rights.

• The indirect auto loan portfolio continued to decline, dropping by $19 million to $235 million at the end of the third quarter.

• SPFI's nonperforming loans increased slightly to $24.7 million at the end of the third quarter, with a significant portion attributed to a $20 million multifamily loan on nonaccrual.