South Plains Financial (SPFI) Q2 2025 earnings summary

Executive summary

• Net income rose to $14.6M in Q2 2025, up from $12.3M in Q1 2025 and $11.1M in Q2 2024, with EPS increasing to $0.86 from $0.72 sequentially and $0.66 year-over-year.

• Margin expansion was achieved as cost of funds declined and credit quality remained solid, despite elevated loan payoffs.

• Loan growth continued, supported by a healthy pipeline, experienced lender recruitment, and a focus on both organic growth and selective M&A.

• Efficiency ratio improved to 61.11% from 66.9% sequentially.

• Texas and New Mexico markets continue to show healthy economic growth, supporting optimism for future loan and deposit growth.

Financial highlights

• Net interest income was $42.5M, up from $38.5M in Q1 2025 and $35.9M in Q2 2024; net interest margin improved to 4.07% (3.90% excluding a $1.7M one-time gain).

• Loans held for investment increased by $23.1M (3% annualized) to $3.1B compared to the linked quarter.

• Noninterest income was $12.2M, up from $10.6M sequentially, but down from $12.7M year-over-year, driven by mortgage banking revenues.

• Noninterest expense was $33.5M, up from $33.0M in Q1 2025 and $32.6M in Q2 2024, due to higher personnel and professional service costs.

• Provision for credit losses increased to $2.5M, up from $420K in Q1 2025 and $1.8M in Q2 2024, reflecting increased specific reserves.

Outlook and guidance

• Loan growth is expected to be flat to low single digits in Q3, with full-year 2025 trending to the lower end of low to mid-single-digit range.

• Management plans to accelerate loan growth by expanding the lending platform and adding experienced commercial lenders.

• Loan yield expected to stabilize near current levels, pending FOMC rate changes.

• NIM expected to see some expansion, with focus on managing deposit costs and exception-based pricing.

• Management continues to monitor credit quality amid economic uncertainty, including elevated interest rates and inflationary pressures.