South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the
“Company”), the parent company of City Bank, today reported its
results as of and for the quarter ended March 31, 2019.
First Quarter 2019 Financial
Highlights
- Net income for the first quarter of 2019 increased to $4.8
million, compared to $4.6 million(1) in the first quarter of
2018.
- Diluted earnings per share were $0.32 for the first quarter of
2019, compared to $0.31(1) for the first quarter of 2018.
- Net interest margin(2) was 3.93%, compared to 3.87% in the
first quarter of 2018.
- Deposit growth of $27.5 million, or 1.2%, for the three months
ended March 31, 2019.
- Return on average assets was 0.71% annualized.
- Book value per share(3) of $14.80 for the first quarter of
2019, compared to $14.59 per share for the quarter ended March 31,
2018.
- Total stockholders’ equity to total assets(3) was 7.96%.
Curtis Griffith, South Plains’ Chairman and
Chief Executive Officer, stated, “The first quarter was a good
start to the year for South Plains as we delivered improved
earnings, year-over-year, in what is typically our lowest earnings
quarter of the year given seasonality in our agricultural lending
segment. Additionally, we maintained a relentless focus on
expense reduction in the first quarter of 2019 as we work to drive
efficiencies through the Bank and improve our profitability while
delivering the outstanding customer service that our customers are
accustomed to and which differentiates South Plains in our local
markets. Looking forward, we continue to see opportunities to
further reduce our cost structure over the balance of the year as
we work to achieve an efficiency ratio more in-line with our
peers. Credit quality also remained strong in all of our
markets and while competition lowered our overall growth in loans,
demand increased through the end of the quarter and has remained on
an improving trend through the second quarter of 2019.”
“We are also extremely pleased with our recent
successful initial public offering when our Company’s common stock
began trading on the NASDAQ Global Select Market under the ticker
symbol “SPFI” on May 9th,” continued Mr. Griffith. “We issued
3,207,000 shares, including the overallotment option, generating
net proceeds of approximately $51.4 million. We were
delighted with the strong support that we received from investors
during the IPO process and with the quality of our new
shareholders. Our public listing is an important milestone in
our Company’s more than 75 year history and we believe it will
position South Plains to seek attractive acquisition opportunities
in our core markets of West Texas. We would like to thank our
employees, customers and legacy shareholders for their trust and
confidence, and we look forward to their continued support as we
begin our next chapter as a public company.”
Results of Operations, Quarter Ended March 31,
2019
Net Interest Income
Net interest income totaled $24.5 million for the first quarter
of 2019, an increase of $1.8 million from $22.7 million for
the first quarter of 2018.
Interest income totaled $32.0 million for the first quarter of
2019, an increase of $4.7 million from $27.3 million in the same
period in 2018. Interest and fees on loans increased by $4.0
million from the first quarter of 2018 due to organic growth of
$129.4 million in average loans and an increase of 48 basis points
in interest rates.
Interest expense was $7.5 million for the first quarter of 2019
compared to $4.6 million in the prior year period. The
increase from the first quarter of 2018 was due to an increase in
the rate paid on interest-bearing liabilities of 54 basis points
and growth in the deposit base. The average cost of deposits
were 105 basis points for the first quarter of 2019, representing a
39 basis point increase from the first quarter of 2018.
The net interest margin for the first quarter of 2019 was 3.93%,
an increase of 6 basis points from the first quarter of 2018.
The increase from the prior year period was due primarily to the
impact of higher interest-earning asset rates, offset by increases
in the cost of interest-bearing liabilities.
Noninterest Income and Noninterest Expense
Noninterest income totaled $12.1 million for the first quarter
of 2019, compared to $11.5 million for the first quarter of
2018. The increase in noninterest income was primarily the
result of an increase of $349 thousand on the net gains on loans
sold from an increase of $12.0 million in the origination of
mortgage loans held for sale.
The primary components of noninterest income for the first
quarter of 2019 were $4.9 million in revenue from mortgage banking
activities and $2.0 million in bank card services and interchange
fees.
Noninterest expense totaled $30.0 million in the first quarter
of 2019, an increase of $2.1 million from $27.9 million in the
prior year period. This increase in noninterest expense was
primarily driven by $1.4 million in 2019 operating expenses related
to the online mortgage and staff acquisition, which closed on
November 30, 2018.
During the quarter, the Company incurred $115,000 of after-tax
legal expenses in connection with the initial public offering and
related activities.
The primary components of noninterest expense for the first
quarter of 2019 were $19.1 million in salaries and employee
benefits, $3.4 million in net occupancy expense, and $1.7 million
in professional services.
Loan Portfolio and Composition
Loans held for investment were $1.9 billion as of March 31,
2019, compared to $2.0 billion as of December 31, 2018 and
$1.8 billion as of March 31, 2018. Loans held for
investment as of March 31, 2019 decreased $42.0 million, or 2.1%,
from December 31, 2018, as a result of a net reduction of $43.4
million in seasonal annual paydowns on agricultural productions
loans. As of March 31, 2019, loans held for investment
increased $91.0 million, or 5.0%, from March 31, 2018. The
primary segments of our organic growth for this period were $50.1
million in 1-4 family residential loans and $41.8 million in auto
loans.
Agricultural production loans were $107.3 million at March 31,
2019, compared to $150.7 million at December 31, 2018 and $106.8
million at March 31, 2018.
Deposits and Borrowings
Deposits totaled $2.3 billion as of March 31, 2019, compared to
$2.3 billion as of December 31, 2018 and $2.2 billion as of March
31, 2018. Deposits increased $27.5 million in the first
quarter of 2019 and increased $145.6 million from March 31, 2018 as
a result of the Company’s organic growth.
Noninterest-bearing deposits were $497.6 million as of March 31,
2019, compared to $510.1 million as of December 31, 2018 and $468.3
million as of March 31, 2018. Noninterest-bearing deposits
represented 21.6%, 22.4%, and 21.7% of total deposits as of March
31, 2019, December 31, 2018, and March 31, 2018,
respectively.
Subordinated debt securities declined to $26.5 million at March
31, 2019 from $34.0 million as of December 31, 2018. This
decline was the result of the redemption in January 2019 of the
$7.5 million remaining securities that were issued by the Company
in 2014.
Asset Quality
The provision for loan losses recorded for the first quarter of
2019 was $608 thousand, compared to $778 thousand for the first
quarter of 2018. The allowance for loan losses to loans held for
investment was 1.22% at March 31, 2019 compared to 1.18% at
December 31, 2018 and 1.20% at March 31, 2018.
The nonperforming assets to total assets ratio as of March 31,
2019 was 0.37%, compared to 0.34% as of December 31, 2018 and 0.55%
at March 31, 2018.
Annualized net charge-offs were 0.07% for the first quarter of
2019, compared to 0.06% for the first quarter of 2018.
(1) The Company’s S Corporation revocation was effective May 31,
2018. Net income, return on average assets, return on average
shareholders’ equity and earnings per share for periods prior to
the revocation are presented herein as if we had converted to a C
Corporation as of January 1, 2018. The tax adjustment is
calculated by adding back its franchise S Corporation tax to net
income, and using tax rates for Federal income taxes of 21.0%. This
calculation reflects only the revocation of the Company’s status as
an S Corporation and does not give effect to any other
transaction.
(2) Net interest margin is calculated as the annual net interest
income, on a fully tax-equivalent basis, divided by average
interest-earning assets.
(3) Amounts are presented giving effect to the ESOP Repurchase
Right Termination. See Pro Forma Financial Information below
for further details.
About South Plains Financial, Inc.
South Plains is the bank holding company for City Bank, a Texas
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 and El Paso markets, as
well as in the Greater Houston, and College Station Texas markets,
and the Ruidoso and Eastern New Mexico markets. 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 insurance, investment, trust and
mortgage services. Please visit https://www.spfi.bank for
more information.
Pro Forma Financial Information
As a result of the revocation of the Company’s S corporation
election, the net income and earnings per share data presented
herein may not be comparable for all periods presented herein. As a
result, the Company is disclosing pro forma net income, income tax
expense, and earnings per share as if the Company’s conversion to a
C corporation had occurred as of January 1, 2018.
Additionally, in accordance with applicable provisions of the
Internal Revenue Code, the terms of the South Plains Financial,
Inc. Employee Stock Ownership Plan (“ESOP”) currently provide that
ESOP participants have the right, for a specified period of time,
to require us to repurchase shares of our common stock that are
distributed to them by the ESOP. The shares of common stock held by
the ESOP are reflected in our consolidated balance sheets as a line
item called ‘‘ESOP owned shares’’ appearing between total
liabilities and shareholders’ equity. As a result, the ESOP-owned
shares are deducted from shareholders’ equity in our consolidated
balance sheets. This repurchase right terminated upon the listing
of our common stock on the NASDAQ, which we sometimes refer to as
the ESOP Repurchase Right Termination, whereupon our repurchase
liability will be extinguished and thereafter the ESOP-owned shares
will not be deducted from shareholders’ equity. We have
disclosed the pro forma balance sheet as of March 31, 2019 to
reflect the ESOP Repurchase Right Termination.
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 Common Share and Tangible Common
Equity to Tangible Assets. 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. 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.
Reconciliation of non-GAAP financial measures, to GAAP financial
measures are provided at the end of this press release.
Forward Looking Statements
This press release contains forward-looking statements. These
forward-looking statements reflect South Plains’ current views with
respect to, among other things, the completion of the initial
public offering of its common stock. 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. Additional information regarding these risks and
uncertainties to which South Plains’ business and future financial
performance are subject is contained in South Plains’ Prospectus
filed with the U.S. Securities and Exchange Commission (“SEC”)
dated May 8, 2019 (“Prospectus”), and other documents South Plains
files with the SEC from time to time. South Plains urges readers of
this press release to review the Risk Factors section of that
Prospectus and the Risk Factors section of other documents South
Plains files with the SEC from time to time. 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, 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 law.
Contact: |
Mikella Newsom, Chief Risk
Officer and Secretary |
|
mnewsom@city.bank |
|
(806) 792-7101 |
|
|
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 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
March 31, 2018 |
|
Selected Income Statement Data: |
|
|
|
|
|
Interest income |
$ |
32,004 |
|
$ |
31,672 |
|
$ |
30,731 |
|
$ |
28,408 |
|
$ |
27,283 |
|
Interest expense |
|
7,458 |
|
|
7,005 |
|
|
5,943 |
|
|
4,969 |
|
|
4,565 |
|
Net interest income |
|
24,546 |
|
|
24,667 |
|
|
24,788 |
|
|
23,439 |
|
|
22,718 |
|
Provision for loan losses |
|
608 |
|
|
1,168 |
|
|
3,415 |
|
|
1,540 |
|
|
778 |
|
Noninterest income |
|
12,075 |
|
|
14,390 |
|
|
13,295 |
|
|
12,968 |
|
|
11,468 |
|
Noninterest expense |
|
30,036 |
|
|
30,498 |
|
|
28,646 |
|
|
28,422 |
|
|
27,877 |
|
Income tax expense |
|
1,204 |
|
|
1,528 |
|
|
1,109 |
|
|
(6,568 |
) |
|
30 |
|
Net income |
|
4,773 |
|
|
5,863 |
|
|
4,913 |
|
|
13,013 |
|
|
5,501 |
|
Net income - pro forma (2) |
|
4,773 |
|
|
5,863 |
|
|
4,913 |
|
|
5,333 |
|
|
4,648 |
|
Per Share Data: |
|
|
|
|
|
Net earnings, diluted (1) (2) |
|
0.32 |
|
|
0.40 |
|
|
0.33 |
|
|
0.36 |
|
|
0.31 |
|
Cash dividends declared and paid, dilutive |
|
- |
|
|
0.85 |
|
|
- |
|
|
1.04 |
|
|
0.15 |
|
Book value, dilutive
(1) |
|
14.80 |
|
|
14.40 |
|
|
14.63 |
|
|
14.43 |
|
|
14.59 |
|
Selected Period End Balance Sheet Data: |
|
|
|
|
|
Total assets |
|
2,745,997 |
|
|
2,712,745 |
|
|
2,687,610 |
|
|
2,616,647 |
|
|
2,585,134 |
|
Total loans held for investment |
|
1,915,183 |
|
|
1,957,197 |
|
|
1,968,085 |
|
|
1,913,884 |
|
|
1,824,157 |
|
Allowance for loan losses |
|
23,381 |
|
|
23,126 |
|
|
21,073 |
|
|
21,715 |
|
|
21,969 |
|
Investment securities |
|
339,051 |
|
|
338,196 |
|
|
398,475 |
|
|
254,517 |
|
|
258,328 |
|
Noninterest-bearning deposits |
|
497,566 |
|
|
510,067 |
|
|
517,000 |
|
|
495,293 |
|
|
468,290 |
|
Total deposits |
|
2,304,929 |
|
|
2,277,454 |
|
|
2,261,356 |
|
|
2,183,631 |
|
|
2,159,321 |
|
Total stockholders' equity |
|
218,565 |
|
|
212,775 |
|
|
216,169 |
|
|
213,096 |
|
|
215,453 |
|
Summary Performance Ratios: |
|
|
|
|
|
Return on average assets |
|
0.71 |
% |
|
0.86 |
% |
|
0.74 |
% |
|
2.04 |
% |
|
0.86 |
% |
Return on average assets - pro forma |
|
0.71 |
% |
|
0.86 |
% |
|
0.74 |
% |
|
0.84 |
% |
|
0.73 |
% |
Return on average equity |
|
8.98 |
% |
|
10.85 |
% |
|
9.08 |
% |
|
24.36 |
% |
|
10.33 |
% |
Return on average equity - pro forma |
|
8.98 |
% |
|
10.85 |
% |
|
9.08 |
% |
|
9.98 |
% |
|
8.73 |
% |
Net interest
margin |
|
3.93 |
% |
|
3.89 |
% |
|
4.02 |
% |
|
3.98 |
% |
|
3.87 |
% |
Yield on
loans |
|
5.84 |
% |
|
5.67 |
% |
|
5.57 |
% |
|
5.42 |
% |
|
5.36 |
% |
Cost of interest-bearing
deposits |
|
1.34 |
% |
|
1.26 |
% |
|
1.09 |
% |
|
0.92 |
% |
|
0.84 |
% |
Efficiency ratio |
|
81.79 |
% |
|
77.88 |
% |
|
74.85 |
% |
|
77.39 |
% |
|
80.74 |
% |
Summary Credit Quality Data: |
|
|
|
|
|
Nonperforming loans |
|
7,937 |
|
|
6,954 |
|
|
7,225 |
|
|
11,774 |
|
|
11,460 |
|
Nonperforming loans to total loans held for
investment |
|
0.41 |
% |
|
0.36 |
% |
|
0.37 |
% |
|
0.62 |
% |
|
0.63 |
% |
Other real estate owned |
|
2,340 |
|
|
2,285 |
|
|
2,704 |
|
|
6,590 |
|
|
2,683 |
|
Nonperforming assets to total assets |
|
0.37 |
% |
|
0.34 |
% |
|
0.37 |
% |
|
0.70 |
% |
|
0.55 |
% |
Allowance for loan losses to total loans held for
investment |
|
1.22 |
% |
|
1.18 |
% |
|
1.07 |
% |
|
1.13 |
% |
|
1.20 |
% |
Net charge-offs to
average loans outstanding (annualized) |
|
0.07 |
% |
|
-0.18 |
% |
|
0.82 |
% |
|
0.38 |
% |
|
0.06 |
% |
Capital Ratios: |
|
|
|
|
|
Total stockholders' equity to total assets |
|
7.96 |
% |
|
7.84 |
% |
|
8.04 |
% |
|
8.14 |
% |
|
8.33 |
% |
Tangible common equity to tangible assets |
|
7.96 |
% |
|
7.84 |
% |
|
8.04 |
% |
|
8.14 |
% |
|
8.33 |
% |
Tier 1 capital to average assets |
|
9.70 |
% |
|
9.63 |
% |
|
10.09 |
% |
|
10.23 |
% |
|
10.19 |
% |
Common equity tier 1 to risk-weighted assets |
|
10.27 |
% |
|
9.91 |
% |
|
10.03 |
% |
|
10.35 |
% |
|
11.00 |
% |
Total capital to risk-weighted assets |
|
14.74 |
% |
|
14.28 |
% |
|
14.29 |
% |
|
14.54 |
% |
|
15.41 |
% |
|
(1) - Reflects the ESOP Repurchase Right Termination. |
(2) - Assumes the Company's S Coporation revocation was effective
at the beginning of each period prior to May 31, 2018. The
Federal tax rate used was 35.0% for periods prior to January 1,
2018 and 21.0% for periods after January 1, 2018. |
|
South Plains Financial, Inc. |
Average Balances and Yields |
(Unaudited) |
For the Three Months Ended |
|
March 31, 2019 |
|
March 31, 2018 |
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
Interest |
|
|
|
Average |
|
Income |
|
|
|
Average |
|
Income |
|
|
|
Balance |
|
Expense |
|
Yield |
|
Balance |
|
Expense |
|
Yield |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Loans (1) |
$ |
1,955,783 |
|
$ |
28,141 |
|
5.84 |
% |
|
$ |
1,826,391 |
|
$ |
24,158 |
|
5.36 |
% |
Debt securities - taxable |
|
309,670 |
|
|
2,109 |
|
2.76 |
% |
|
|
118,267 |
|
|
759 |
|
2.60 |
% |
Debt securities -
nontaxable |
|
32,172 |
|
|
286 |
|
3.61 |
% |
|
|
154,460 |
|
|
1,386 |
|
3.64 |
% |
Other interest-bearing
assets |
|
243,610 |
|
|
1,571 |
|
2.62 |
% |
|
|
319,984 |
|
|
1,320 |
|
1.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
2,541,235 |
|
|
32,107 |
|
5.12 |
% |
|
|
2,419,102 |
|
|
27,623 |
|
4.63 |
% |
Noninterest-earning
assets |
|
176,437 |
|
|
|
|
|
|
172,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
2,717,672 |
|
|
|
|
|
$ |
2,591,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
NOW, Savings, MMA's |
$ |
1,470,199 |
|
|
4,534 |
|
1.25 |
% |
|
$ |
1,360,833 |
|
|
2,409 |
|
0.72 |
% |
Time deposits |
|
309,687 |
|
|
1,355 |
|
1.77 |
% |
|
|
324,113 |
|
|
1,084 |
|
1.36 |
% |
Short-term borrowings |
|
22,722 |
|
|
111 |
|
1.98 |
% |
|
|
25,434 |
|
|
72 |
|
1.15 |
% |
Notes payable & other
long-term borrowings |
|
95,000 |
|
|
539 |
|
2.30 |
% |
|
|
95,000 |
|
|
358 |
|
1.53 |
% |
Subordinated debt
securities |
|
27,727 |
|
|
406 |
|
5.94 |
% |
|
|
20,887 |
|
|
245 |
|
4.76 |
% |
Junior subordinated deferable
interest debentures |
|
46,393 |
|
|
513 |
|
4.48 |
% |
|
|
46,393 |
|
|
397 |
|
3.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,971,728 |
|
|
7,458 |
|
1.53 |
% |
|
|
1,872,660 |
|
|
4,565 |
|
0.99 |
% |
Demand deposits |
|
501,120 |
|
|
|
|
|
|
473,993 |
|
|
|
|
Other liabilities |
|
29,153 |
|
|
|
|
|
|
29,410 |
|
|
|
|
Stockholders' equity |
|
215,671 |
|
|
|
|
|
|
215,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities &
stockholders' equity |
$ |
2,717,672 |
|
|
|
|
|
$ |
2,591,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
24,649 |
|
|
|
|
|
$ |
23,058 |
|
|
Net interest margin (2) |
|
|
|
|
3.93 |
% |
|
|
|
|
|
3.87 |
% |
|
(1) Average loan balances include nonaccrual loans and loans held
for sale. |
(2) Net interest margin is calculated as the annualized net income,
on a fully tax-equivalent basis, divided byaverage interest-earning
assets. |
|
South Plains
Financial, Inc. and Subsidiaries |
Consolidated
Balance Sheets |
(Unaudited) |
(Dollars in
thousands, except per share data) |
|
March 31, |
|
December 31, |
|
Pro Forma March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
ASSETS |
|
|
|
Cash and due from banks |
$ |
37,632 |
|
|
$ |
47,802 |
|
|
$ |
37,632 |
|
Interest-bearing deposits in
banks |
|
301,778 |
|
|
|
198,187 |
|
|
|
301,778 |
|
Cash and cash equivalents |
|
339,410 |
|
|
|
245,989 |
|
|
|
339,410 |
|
Securities available for
sale |
|
339,051 |
|
|
|
338,196 |
|
|
|
339,051 |
|
Loans held for sale |
|
21,447 |
|
|
|
38,382 |
|
|
|
21,447 |
|
Loans held for investment |
|
1,915,183 |
|
|
|
1,957,197 |
|
|
|
1,915,183 |
|
Allowance for loan losses |
|
(23,381 |
) |
|
|
(23,126 |
) |
|
|
(23,381 |
) |
Accrued interest receivable |
|
9,962 |
|
|
|
12,957 |
|
|
|
9,962 |
|
Premises and equipment, net |
|
59,572 |
|
|
|
59,787 |
|
|
|
59,572 |
|
Bank-owned life insurance |
|
57,499 |
|
|
|
57,172 |
|
|
|
57,499 |
|
Other assets |
|
27,254 |
|
|
|
26,191 |
|
|
|
27,254 |
|
|
|
|
|
|
|
Total assets |
$ |
2,745,997 |
|
|
$ |
2,712,745 |
|
|
$ |
2,745,997 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
Noninterest-bearing |
$ |
497,566 |
|
|
$ |
510,067 |
|
|
$ |
497,566 |
|
Interest-bearing |
|
1,807,363 |
|
|
|
1,767,387 |
|
|
|
1,807,363 |
|
|
|
|
|
|
|
Total deposits |
|
2,304,929 |
|
|
|
2,277,454 |
|
|
|
2,304,929 |
|
Short-term borrowings |
|
18,915 |
|
|
|
17,705 |
|
|
|
18,915 |
|
Accrued expenses and other
liabilities |
|
35,723 |
|
|
|
29,416 |
|
|
|
35,723 |
|
Notes payable & other
borrowings |
|
95,000 |
|
|
|
95,000 |
|
|
|
95,000 |
|
Subordinated debt securities |
|
26,472 |
|
|
|
34,002 |
|
|
|
26,472 |
|
Junior subordinated deferrable
interest debentures |
|
46,393 |
|
|
|
46,393 |
|
|
|
46,393 |
|
|
|
|
|
|
|
Total liabilities |
|
2,527,432 |
|
|
|
2,499,970 |
|
|
|
2,527,432 |
|
|
|
|
|
|
|
Commitments and contingent
liabilities |
|
|
|
|
|
ESOP owned shares |
|
58,195 |
|
|
|
58,195 |
|
|
|
- |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Common stock, $1.00 par value per share, 30,000,000 |
|
|
|
|
|
shares authorized; 14,771,520 issued and outstanding |
|
14,772 |
|
|
14,772 |
|
|
|
14,772 |
|
Additional paid-in capital |
|
80,412 |
|
|
|
80,412 |
|
|
|
80,412 |
|
Retained earnings |
|
123,328 |
|
|
|
119,834 |
|
|
|
123,328 |
|
Accumulated other comprehensive income (loss) |
|
53 |
|
|
|
(2,243 |
) |
|
|
53 |
|
|
|
218,565 |
|
|
|
212,775 |
|
|
|
218,565 |
|
Less ESOP owned shares |
|
58,195 |
|
|
|
58,195 |
|
|
|
- |
|
Total stockholder' equity |
|
160,370 |
|
|
|
154,580 |
|
|
|
218,565 |
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
2,745,997 |
|
|
$ |
2,712,745 |
|
|
$ |
2,745,997 |
|
|
|
|
|
|
|
South
Plains Financial, Inc. and Subsidiaries |
Consolidated Statements of Income |
(Unaudited) |
(Dollars
in thousands, except per share data) |
|
Three Months Ended March 31, |
|
|
|
|
|
Pro Forma |
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
Interest income: |
|
|
|
|
|
Loans, including fees |
$ |
28,098 |
|
|
$ |
24,109 |
|
|
$ |
24,109 |
|
Securities: |
|
|
|
|
|
Taxable |
|
2,176 |
|
|
|
795 |
|
|
|
795 |
|
Non taxable |
|
225 |
|
|
|
1,095 |
|
|
|
1,095 |
|
Federal funds sold and interest-bearing deposits in banks |
|
1,505 |
|
|
|
1,284 |
|
|
|
1,284 |
|
|
|
|
|
|
|
Total interest income |
|
32,004 |
|
|
|
27,283 |
|
|
|
27,283 |
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
|
5,889 |
|
|
|
3,493 |
|
|
|
3,493 |
|
Notes payable & other borrowings |
|
650 |
|
|
|
430 |
|
|
|
430 |
|
Subordinated debt securities |
|
406 |
|
|
|
245 |
|
|
|
245 |
|
Junior subordinated deferrable interest debentures |
|
513 |
|
|
|
397 |
|
|
|
397 |
|
|
|
|
|
|
|
Total interest expense |
|
7,458 |
|
|
|
4,565 |
|
|
|
4,565 |
|
|
|
|
|
|
|
Net interest income |
|
24,546 |
|
|
|
22,718 |
|
|
|
22,718 |
|
Provision for loan losses |
|
608 |
|
|
|
778 |
|
|
|
778 |
|
|
|
|
|
|
|
Net interest income, after provision for loan losses |
|
23,938 |
|
|
|
21,940 |
|
|
|
21,940 |
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
Service charges on deposit accounts |
|
1,905 |
|
|
|
1,917 |
|
|
|
1,917 |
|
Income from insurance activities |
|
1,750 |
|
|
|
1,395 |
|
|
|
1,395 |
|
Net gain on sales of loans |
|
4,660 |
|
|
|
4,311 |
|
|
|
4,311 |
|
Bank card services and interchange fees |
|
2,010 |
|
|
|
1,958 |
|
|
|
1,958 |
|
Investment commissions |
|
333 |
|
|
|
450 |
|
|
|
450 |
|
Other |
|
1,417 |
|
|
|
1,437 |
|
|
|
1,437 |
|
|
|
|
|
|
|
Total noninterest income |
|
12,075 |
|
|
|
11,468 |
|
|
|
11,468 |
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
Salaries and employee benefits |
|
19,125 |
|
|
|
17,601 |
|
|
|
17,601 |
|
Occupancy and equipment, net |
|
3,407 |
|
|
|
3,324 |
|
|
|
3,324 |
|
Professional services |
|
1,706 |
|
|
|
1,429 |
|
|
|
1,429 |
|
Marketing and development |
|
717 |
|
|
|
818 |
|
|
|
818 |
|
IT and data services |
|
693 |
|
|
|
550 |
|
|
|
550 |
|
Bank card expenses |
|
724 |
|
|
|
664 |
|
|
|
664 |
|
Appraisal expenses |
|
323 |
|
|
|
285 |
|
|
|
285 |
|
Other |
|
3,341 |
|
|
|
3,206 |
|
|
|
3,206 |
|
|
|
|
|
|
|
Total noninterest expense |
|
30,036 |
|
|
|
27,877 |
|
|
|
27,877 |
|
|
|
|
|
|
|
Income before income
taxes |
|
5,977 |
|
|
|
5,531 |
|
|
|
5,531 |
|
Income tax expense |
|
1,204 |
|
|
|
30 |
|
|
|
883 |
|
|
|
|
|
|
|
Net income |
$ |
4,773 |
|
|
$ |
5,501 |
|
|
$ |
4,648 |
|
|
|
|
|
|
|
South
Plains Financial, Inc. and Subsidiaries |
Loan
Portfolio Composition |
(Unaudited) |
(Dollars
in thousands, except per share data) |
|
As of |
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
|
|
Loans: |
|
|
|
|
|
Commercial Real Estate |
$ |
528,598 |
|
$ |
538,037 |
|
$ |
526,339 |
Commercial - Specialized |
|
258,975 |
|
|
305,022 |
|
|
273,805 |
Commercial - General |
|
413,093 |
|
|
427,728 |
|
|
418,426 |
Consumer: |
|
|
|
|
|
1-4 Family Residential |
|
354,981 |
|
|
346,153 |
|
|
304,906 |
Auto Loans |
|
200,366 |
|
|
191,647 |
|
|
158,534 |
Other Consumer |
|
71,939 |
|
|
70,209 |
|
|
66,722 |
Construction |
|
87,231 |
|
|
78,401 |
|
|
75,425 |
Total loans held for
investment |
$ |
1,915,183 |
|
$ |
1,957,197 |
|
$ |
1,824,157 |
|
|
|
|
|
|
|
|
|
South
Plains Financial, Inc. and Subsidiaries |
Deposit
Composition |
(Unaudited) |
(Dollars
in thousands, except per share data) |
|
As of |
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
|
(Dollars in thousands except share data) |
Deposits: |
|
|
|
|
|
Noninterest-bearing demand deposits |
$ |
497,566 |
|
$ |
510,067 |
|
$ |
468,290 |
NOW & other transaction
accounts |
|
285,962 |
|
|
277,041 |
|
|
281,873 |
MMDA & other savings |
|
1,204,702 |
|
|
1,178,809 |
|
|
1,087,044 |
Time deposits |
|
316,699 |
|
|
311,537 |
|
|
322,114 |
Total
deposits |
$ |
2,304,929 |
|
$ |
2,277,454 |
|
$ |
2,159,321 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Our accounting and reporting policies conform to GAAP and the
prevailing practices in the banking industry. However, we also
evaluate our performance based on certain additional financial
measures discussed in this press release as being non-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. Non-GAAP financial
measures do not include operating and other statistical measures or
ratios or statistical measures calculated using exclusively either
financial measures calculated in accordance with GAAP, operating
measures or other measures that are not non-GAAP financial measures
or both.
The non-GAAP financial measures that we discuss in this press
release should not be considered in isolation or as a substitute
for the most directly comparable or other financial measures
calculated in accordance with GAAP. Moreover, the manner in which
we calculate the non-GAAP financial measures that we discuss in
this press release may differ from that of other companies
reporting measures with similar names. It is important to
understand how other banking organizations calculate their
financial measures with names similar to the non-GAAP financial
measures we have discussed in this press release when comparing
such non-GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value per
share is a non-GAAP measure generally used by investors, financial
analysts and investment bankers to evaluate financial institutions.
The most directly comparable GAAP financial measure for tangible
book value per common share is book value per common share. We
believe that the tangible book value per common share measure is
important to many investors in the marketplace who are interested
in changes from period to period in book value per common share
exclusive of changes in intangible assets. Goodwill and other
intangible assets have the effect of increasing total book value
while not increasing our tangible book value.
As we did not have any goodwill or other intangible assets for
the periods presented, our tangible book value per common share for
such periods ended was the same as our respective book value per
common share.
Tangible Common Equity to Tangible Assets. Tangible common
equity to tangible assets is a non-GAAP measure generally used by
investors, financial analysts and investment bankers to evaluate
financial institutions. We calculate tangible common equity, as
described above, and tangible assets as total assets less goodwill,
core deposit intangibles and other intangible assets, net of
accumulated amortization. The most directly comparable GAAP
financial measure for tangible common equity to tangible assets is
total common shareholders’ equity to total assets. We believe that
this measure is important to many investors in the marketplace who
are interested in the relative changes from period to period of
tangible common equity to tangible assets, each exclusive of
changes in intangible assets. Goodwill and other intangible assets
have the effect of increasing both total shareholders’ equity and
assets while not increasing our tangible common equity or tangible
assets.
As we did not have any goodwill or other intangible assets for
the periods presented, our tangible common equity to tangible
assets for such periods ended was the same as our respective common
shareholders’ equity to total assets.
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