South Plains Financial (SPFI) Q4 2024 earnings summary

Executive summary

• Full year 2024 net income was $49.7M with diluted EPS of $2.92, down from $3.62 in 2023 due to the absence of a $22.9M one-time gain from a subsidiary sale.

• Q4 2024 net income rose to $16.5M, up from $11.2M in Q3 2024 and $10.3M in Q4 2023, with diluted EPS of $0.96.

• Achieved 1.4% organic loan growth for 2024, with major metro market loans growing 1.8% to $1.06B, representing 34.6% of total loans.

• Net interest margin expanded to 3.75% in Q4, up 10 bps sequentially, as cost of funds declined.

• Ended 2024 with ROAA of 1.17% and efficiency ratio of 65.07%.

Financial highlights

• Q4 2024 net interest income was $38.5M, up from $37.3M in Q3; NIM rose to 3.75% from 3.65%.

• Noninterest income for Q4 was $13.3M, up from $10.6M in Q3, driven by a $3.5M increase in mortgage servicing rights fair value.

• Noninterest expense for Q4 2024 was $29.9M, down from $33.1M in Q3, mainly due to lower personnel and mortgage commission costs; Q4 efficiency ratio improved to 57.5%.

• Loans held for investment grew to $3.06B at year-end 2024, up from $3.01B at year-end 2023.

• Deposits totaled $3.62B at year-end 2024, down $94.8M sequentially due to liquidity management and seasonal factors.

Outlook and guidance

• Management expects low to mid-single digit loan growth for 2025, with Q1 loan growth likely flat due to seasonal agricultural payoffs.

• Deposit pricing is falling, supporting margin expansion into 2025.

• Non-interest expense anticipated to return to Q3 levels in Q1 2025 as one-time Q4 benefits subside.

• Net interest margin expected to remain stable or improve slightly, contingent on loan growth and interest rate environment.

• Management will continue to focus on expense management to drive profitability.