South Plains Financial (SPFI) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $12.3M ($0.72 per diluted share), down from $16.5M in Q4 2024 but up from $10.9M ($0.64 per share) in Q1 2024, with improved credit quality and robust capital levels.

• Tangible book value per share rose to $26.05 from $25.40 at year-end and $23.56 a year ago.

• Deposits increased to $3.79B, up 4.7% sequentially and 4.2% year-over-year.

• Loan portfolio quality improved, with nonperforming assets to total assets at 0.16%, down from 0.58% at year-end.

• The company repurchased 250,000 shares for $8.3M and declared a $0.15/share dividend for Q2 2025.

Financial highlights

• Net interest income was $38.5M, flat sequentially but up 8.9% year-over-year, with net interest margin rising to 3.81% from 3.75% in Q4 2024 and 3.56% in Q1 2024.

• Noninterest income was $10.6M, down from $13.3M in Q4 2024 and $11.4M in Q1 2024, mainly due to lower mortgage banking revenues.

• Noninterest expense rose to $33.0M, up from $29.9M in Q4 2024 and $31.9M in Q1 2024, driven by higher personnel costs.

• Provision for credit losses was $420K, down from $1.2M in Q4 2024 and $830K in Q1 2024.

• Loans held for investment grew to $3.08B, up $20.8M sequentially and $64.1M year-over-year, led by commercial real estate and commercial loans.

Outlook and guidance

• Management expects continued focus on relationship-based loan growth in Texas and Eastern New Mexico, with cautious optimism amid economic uncertainty.

• Noninterest expense in Q1 is expected to be a good run rate for the rest of the year.

• Anticipate some outflow of public fund deposits in Q2 due to seasonality.

• Focus remains on conservative credit culture and maintaining strong credit quality.

• Management will continue to manage expenses to drive profitability.