South Plains Financial, Inc. Reports First Quarter 2021 Financial Results

April 27, 2021

LUBBOCK, Texas, April 27, 2021 (GLOBE NEWSWIRE) -- South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the “Company”), the parent company of City Bank (“City Bank” or the “Bank”), today reported its financial results for the quarter ended March 31, 2021.

First Quarter 2021 Highlights

  • Net income for the first quarter of 2021 was $15.2 million, compared to $15.9 million for the fourth quarter of 2020 and $7.1 million for the first quarter of 2020.
  • Diluted earnings per share for the first quarter of 2021 was $0.82, compared to $0.87 for the fourth quarter of 2020 and $0.38 for the first quarter of 2020.
  • Pre-tax, pre-provision income (non-GAAP) for the first quarter of 2021 was $19.0 million, compared to $20.0 million for the fourth quarter of 2020 and $15.1 million for the first quarter of 2020.
  • Average cost of deposits for the first quarter of 2021 decreased to 29 basis points, compared to 31 basis points for the fourth quarter of 2020 and 65 basis points for the first quarter of 2020.
  • The provision for loan losses for the first quarter of 2021 was $89,000, compared to $141,000 for the fourth quarter of 2020 and $6.2 million for the first quarter of 2020.
  • Nonperforming assets to total assets were 0.42% at March 31, 2021, compared to 0.45% at December 31, 2020 and 0.28% at March 31, 2020.
  • The adjusted (non-GAAP) efficiency ratio for the first quarter of 2021 was 65.76%, compared to 64.19% for the fourth quarter of 2020 and 69.10% for the first quarter of 2020.
  • Return on average assets for the first quarter of 2021 was 1.66% annualized, compared to 1.76% annualized for the fourth quarter of 2020 and 0.89% annualized for the first quarter of 2020.
  • Tangible book value (non-GAAP) per share was $19.28 as of March 31, 2021, compared to $18.97 per share as of December 31, 2020 and $16.54 per share as of March 31, 2020.

Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “Through the first quarter of 2021 our local Texas markets continued to recover as the pace of business has started to accelerate, real estate volumes remained strong, and the price of oil continued to rise. We are seeing these improved trends in our customers’ demand for credit and expect loan growth to reaccelerate to a low single digit rate through 2021, excluding Paycheck Protection Program (“PPP”) loans, before returning to mid-single digit growth in 2022 as we continue to expand in our metropolitan markets of Dallas-Fort Worth, Houston and El Paso. Importantly, we will remain disciplined and will not sacrifice our credit standards as we grow the Bank. This discipline has served us well during the COVID-19 pandemic, as can be seen in the credit metrics of our loan portfolio, as our active loan modifications declined to 2.1% of our loan portfolio in the first quarter of 2021 from 2.9% in the fourth quarter of 2020. We remain confident in the credit quality of our loan portfolio and the reserves for loan losses that we have.”

Mr. Griffith continued, “We believe the Bank’s financial position is strong as we have remained disciplined on core expenses as our mortgage volumes have grown, maintained strong liquidity, and are implementing a thoughtful capital allocation strategy to ensure a steady return of capital to our shareholders. During the first quarter of 2021, we continued to repurchase shares under our $10 million share repurchase program and last week our board of directors authorized a 40% increase in our quarterly dividend to $0.07 per share. We also remain committed to our employees, customers and the communities that we serve. Along these lines, we launched our first corporate sustainability report in February 2021 which outlines our commitment to a diverse workforce and board of directors, our goal to reduce our carbon footprint, and our ongoing support to our local communities through increasing employee and Bank engagement. We understand that this is a journey and are excited with the many ways ahead where we can make a positive impact.”

Results of Operations, Quarter Ended March 31, 2021

Net Interest Income

Net interest income was $29.5 million for the first quarter of 2021, compared to $30.4 million for the fourth quarter of 2020 and $30.2 million for the first quarter of 2020. The net interest margin was 3.52% for the first quarter of 2021, compared to 3.64% for the fourth quarter of 2020 and 4.13% for the first quarter of 2020. The average yield on loans was 5.07% for the first quarter of 2021, compared to 5.10% for the fourth quarter of 2020 and 5.76% for the first quarter of 2020. The average cost of deposits was 29 basis points for the first quarter of 2021, representing a two basis point decrease from the fourth quarter of 2020 and a 36 basis point decrease from the first quarter of 2020.

Interest income was $33.0 million for the first quarter of 2021, compared to $34.0 million for the fourth quarter of 2020 and $35.7 million for the first quarter of 2020. Interest income decreased $1.0 million in the first quarter of 2021 from the fourth quarter of 2020 due to lower loan rates and less purchase discount accretion, partially offset by additional fees on Small Business Administration (“SBA”) PPP loans. Interest income decreased by $2.8 million from the first quarter of 2020 primarily due to lower interest rates on loans, securities, and other interest-earning assets, partially offset by growth in average loans, principally from our origination of PPP loans. During the first quarter of 2021, the Company recognized $2.5 million in PPP related SBA fees. At March 31, 2021, there was $5.1 million of deferred fees that have not been accreted to income, the majority of which are expected to be recognized as PPP loans continue to be forgiven by the SBA over the next several quarters.

Interest expense was $3.4 million for the first quarter of 2021, compared to $3.6 million for the fourth quarter of 2020 and $5.5 million for the first quarter of 2020. The decrease in interest expense from the fourth quarter of 2020 was primarily due to lower interest rates paid on interest-bearing deposits, partially offset by growth in average interest-bearing liabilities. The decrease from the first quarter of 2020 was primarily due to lower interest rates paid on interest-bearing liabilities, partially offset by growth in average interest-bearing liabilities. The increase in average interest-bearing liabilities was largely due to growth in deposits and the issuance of $50 million in subordinated notes in September 2020.

Noninterest Income and Noninterest Expense

Noninterest income was $26.5 million for the first quarter of 2021, compared to $26.2 million for the fourth quarter of 2020 and $18.9 million for the first quarter of 2020. The increase from the fourth quarter of 2020 was primarily due to a $1.3 million positive fair value adjustment to the Company’s mortgage servicing rights and a decrease of $1.0 million in income from insurance activities, due to typical seasonality for insurance. The increase in noninterest income for the first quarter of 2021 as compared to the first quarter of 2020 was primarily due to growth of $10.1 million in mortgage banking activities revenue as a result of an additional $219.5 million in mortgage loan originations and a $1.3 million increase in the fair value of the Company’s mortgage servicing rights. This increase was partially offset by a gain on sale of securities of $2.3 million in the first quarter of 2020.

Noninterest expense was $37.1 million for the first quarter of 2021, compared to $36.5 million for the fourth quarter of 2020 and $34.0 million for the first quarter of 2020. The increase from the fourth quarter of 2020 was primarily the result of an increase of $1.2 million in personnel expense related to higher health insurance costs and a change to the lender incentive compensation plan. This increase was partially offset by the decrease of $331 thousand in marketing and business development expense after it had been elevated for the Company’s Permian Basin branches in the fourth quarter of 2020. The increase in noninterest expense for the first quarter of 2021 as compared to the first quarter of 2020 was primarily driven by a $3.5 million increase in personnel expense. This increase was predominantly related to an additional $3.0 million in commissions paid on the higher volume of mortgage loan originations and a rise of $1.0 million in salary and other personnel expenses to support mortgage activities. There was a reduction in other noninterest expenses of $658 thousand during the first quarter of 2021, primarily due to $331 thousand in data conversion expenses and $300 thousand in computer equipment purchased in connection with upgrading the equipment at branches acquired by the Company in November 2019 through the Company’s acquisition of West Texas State Bank as well as at existing branches incurred during the first quarter of 2020.

Loan Portfolio and Composition

Loans held for investment were $2.24 billion as of March 31, 2021, compared to $2.22 billion as of December 31, 2020 and $2.11 billion as of March 31, 2020. The $21.1 million increase during the first quarter of 2021 as compared to the fourth quarter of 2020 was primarily the result of organic net growth of $46.5 million, partially offset by seasonal repayments of $25.4 million in agricultural operating loans. Additionally, there was a net increase of $3.5 million in PPP loans as the Company funded $77.6 million in new PPP loans, partially offset by payments of $74.1 million on PPP loans, during the first quarter of 2021. As of March 31, 2021, loans held for investment increased $133.9 million from March 31, 2020, largely attributable to outstanding PPP loans of $173.5 million as of March 31, 2021, partially offset by the slower loan demand and accelerated repayments experienced during 2020.

Agricultural production loans were $80.5 million as of March 31, 2021, compared to $105.9 million as of December 31, 2020 and $96.8 million as of March 31, 2020. The decrease from the fourth quarter of 2020 is due to typical seasonal repayments on these agricultural production loans.

Deposits and Borrowings

Deposits totaled $3.16 billion as of March 31, 2021, compared to $2.97 billion as of December 31, 2020 and $2.67 billion as of March 31, 2020. Deposits increased $30.5 million, or 1.0%, in the first quarter of 2021 from December 31, 2020. As of March 31, 2021, deposits increased $277.5 million, or 10.3%, from March 31, 2020. The increase in deposits since March 31, 2020 is primarily a result of organic growth as well as existing customers depositing funds received from PPP loan advances, stimulus checks, and generally maintaining higher liquidity in response to the ongoing COVID-19 pandemic.

Noninterest-bearing deposits were $962.2 million as of March 31, 2021, compared to $917.3 million as of December 31, 2020 and $740.9 million as of March 31, 2020. Noninterest-bearing deposits represented 30.5% of total deposits as of March 31, 2021. The change in noninterest-bearing deposit balances at March 31, 2021 compared to December 31, 2020 was an increase of $181.3 million, or 6.1%. The change in noninterest-bearing deposit balances at March 31, 2021 compared to March 31, 2020 was an increase of $489.8 million, or 18.4%. The changes from both compared periods is primarily a result of organic growth as well as existing customers increasing their balances.

The Bank prepaid $50.0 million of advances from the Federal Home Loan Bank of Dallas in March 2021 and there was no related prepayment fee.

Asset Quality

As part of the Bank’s efforts to support its customers and protect the Bank as a result of the COVID-19 pandemic, the Bank has provided borrowers relief by offering varying forms of loan modifications including 90-day payment deferrals, 6-month interest only terms, or in certain select cases periods of longer than 6 months of interest only. As of March 31, 2021, total active loan modifications attributed to COVID-19 were $46.9 million, or 2.1% of the Company’s loan portfolio, down from $64.1 million, or 2.9% of the Company’s loan portfolio, at December 31, 2020. Approximately 95% of these active modified loans at March 31, 2021 are in the hotel portfolio.

The provision for loan losses recorded for the first quarter of 2021 was $89 thousand compared to $141 thousand for the fourth quarter of 2020 and $6.2 million for the first quarter of 2020. The decrease from the first quarter of 2020 is primarily due to the general improvement in the economy, a decline in the amount of loans that are actively under a modification, and a decrease in outstanding loan balances. There is continued uncertainty from the ongoing COVID-19 pandemic and the full extent of the impact on the economy and the Bank’s customers remains unknown at this time. Accordingly, additional provisions for loan losses may be necessary in future periods.

The allowance for loan losses to loans held for investment was 2.01% as of March 31, 2021, compared to 2.05% as of December 31, 2020 and 1.38% as of March 31, 2020. The allowance for loan losses to non-PPP loans held for investment was 2.18% as of March 31, 2021.

The nonperforming assets to total assets ratio as of March 31, 2021 was 0.42%, compared to 0.45% as of December 31, 2020 and 0.28% at March 31, 2020. Annualized net charge-offs were 0.11% for the first quarter of 2021, compared to 0.11% for the fourth quarter of 2020 and 0.25% for the first quarter of 2020.

Conference Call

South Plains will host a conference call to discuss its first quarter 2021 financial results today, April 27, 2021 at 5:00 p.m., Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call and conference materials will be available on the Company’s website at https://www.spfi.bank/news-events/events.

A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed on the investor section of the Company’s website as well as by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671). The pin to access the telephone replay is 13718209. The replay will be available until May 11, 2021.

About South Plains Financial, Inc.

South Plains is the bank holding company for City Bank, a Texas state-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, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. 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.

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, Tangible Common Equity to Tangible Assets, Adjusted Efficiency Ratio, and Pre-Tax, Pre-Provision Income. 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.

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. 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.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

Available Information

The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this document.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to, among other things, the ongoing COVID-19 pandemic and other future events. 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. Factors that could cause such changes include, but are not limited to, general economic conditions, the extent of the impact of the COVID-19 pandemic on our customers, changes in interest rates, regulatory considerations, competition and market expansion opportunities, changes in non-interest expenditures or in the anticipated benefits of such expenditures, and changes in applicable laws and regulations. Additional information regarding these risks and uncertainties to which South Plains’ business and future financial performance are subject is contained in South Plains’ most recent Annual Report on Form 10-K on file with the SEC, 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 our most recent Annual Report on Form 10-K, as well as the “Risk Factors” section of other documents South Plains files or furnishes with the SEC from time to time, which are available on the SEC’s website, www.sec.gov. 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. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Contact:Mikella Newsom, Chief Risk Officer and Secretary
 (866) 771-3347
 investors@city.bank

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,
2021
 December 31,
2020
 September 30,
2020
 June 30,
2020
 March 31,
2020
Selected Income Statement Data:              
Interest income$32,982  $33,984  $34,503  $34,007  $35,737 
Interest expense 3,438   3,619   3,230   3,559   5,538 
Net interest income 29,544   30,365   31,273   30,448   30,199 
Provision for loan losses 89   141   6,062   13,133   6,234 
Noninterest income 26,500   26,172   31,660   24,896   18,875 
Noninterest expense 37,057   36,504   35,993   35,207   34,011 
Income tax expense 3,738   3,968   4,147   1,389   1,746 
Net income 15,160   15,924   16,731   5,615   7,083 
Per Share Data (Common Stock):              
Net earnings, basic 0.84   0.88   0.93   0.31   0.39 
Net earnings, diluted 0.82   0.87   0.92   0.31   0.38 
Cash dividends declared and paid 0.05   0.05   0.03   0.03   0.03 
Book value 20.75   20.47   19.52   18.64   18.10 
Tangible book value 19.28   18.97   18.00   17.06   16.54 
Weighted average shares outstanding, basic 18,069,186   18,053,467   18,059,174   18,061,705   18,043,105 
Weighted average shares outstanding, dilutive 18,511,120   18,366,129   18,256,161   18,224,630   18,461,922 
Shares outstanding at end of period 18,053,229   18,076,364   18,059,174   18,059,174   18,056,014 
Selected Period End Balance Sheet Data:              
Cash and cash equivalents 413,406   300,307   290,885   256,101   136,062 
Investment securities 777,208   803,087   726,329   730,674   734,791 
Total loans held for investment 2,242,676   2,221,583   2,288,234   2,331,716   2,108,805 
Allowance for loan losses 45,019   45,553   46,076   40,635   29,074 
Total assets 3,732,894   3,599,160   3,542,666   3,584,532   3,216,563 
Interest-bearing deposits 2,193,427   2,057,029   2,037,743   2,006,984   1,924,902 
Noninterest-bearing deposits 962,205   917,322   906,059   940,853   740,946 
Total deposits 3,155,632   2,974,351   2,943,802   2,947,837   2,665,848 
Borrowings 164,553   223,532   204,704   252,430   185,265 
Total stockholders’ equity 374,671   370,048   352,568   336,534   326,890 
Summary Performance Ratios:              
Return on average assets 1.66%   1.76%   1.88%   0.64%   0.89% 
Return on average equity 16.51%   17.53%   19.32%   6.81%   9.00% 
Net interest margin (1) 3.52%   3.64%   3.82%   3.79%   4.13% 
Yield on loans 5.07%   5.10%   5.08%   5.06%   5.76% 
Cost of interest-bearing deposits 0.41%   0.45%   0.50%   0.56%   0.91% 
Efficiency ratio 65.76%   64.19%   56.90%   63.28%   69.10% 
Summary Credit Quality Data:              
Nonperforming loans 14,316   14,965   15,006   10,472   7,112 
Nonperforming loans to total loans held for investment 0.64%   0.67%   0.66%   0.45%   0.34% 
Other real estate owned 1,377   1,353   1,336   1,335   1,944 
Nonperforming assets to total assets 0.42%   0.45%   0.46%   0.33%   0.28% 
Allowance for loan losses to total loans held for investment 2.01%   2.05%   2.01%   1.74%   1.38% 
Net charge-offs to average loans outstanding (annualized) 0.11%   0.11%   0.10%   0.27%   0.25% 
                    


 As of and for the quarter ended
 March 31
2021
 December 31,
2020
 September 30,
2020
 June 30,
2020
 March 31,
2020
Capital Ratios:              
Total stockholders’ equity to total assets 10.04%   10.28%   9.95%   9.39%   10.16% 
Tangible common equity to tangible assets 9.39%   9.60%   9.25%   8.66%   9.37% 
Common equity tier 1 to risk-weighted assets 13.23%   12.96%   12.49%   10.47%   11.24% 
Tier 1 capital to average assets 10.35%   10.24%   10.01%   9.60%   10.34% 
Total capital to risk-weighted assets 19.24%   19.08%   18.67%   14.32%   15.23% 


(1)Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.


South Plains Financial, Inc.

Average Balances and Yields - (Unaudited)
(Dollars in thousands)

 For the Three Months Ended
 March 31, 2021 March 31, 2020
    
 Average
Balance
 Interest
Income
Expense
 Yield Average
Balance
 Interest
Income
Expense
 Yield
Assets                 
Loans, excluding PPP (1)$2,163,114 $26,283  4.93% $2,167,015 $31,055  5.76%
Loans - PPP 179,498  2,998  6.77%  -  -  0.00%
Debt securities - taxable 545,994  2,432  1.81%  560,677  3,592  2.58%
Debt securities - nontaxable 216,695  1,481  2.77%  78,933  501  2.55%
Other interest-bearing assets 330,233  100  0.12%  151,133  734  1.95%
                  
Total interest-earning assets 3,435,534  33,294  3.93%  2,957,758  35,882  4.88%
Noninterest-earning assets 269,612        250,659      
                  
Total assets$3,705,146       $3,208,417      
                  
Liabilities & stockholders’ equity                 
NOW, Savings, MMA’s$1,807,963  1,104  0.25% $1,545,937  2,656  0.69%
Time deposits 324,381  1,053  1.32%  353,471  1,627  1.85%
Short-term borrowings 25,022  4  0.06%  30,744  93  1.22%
Notes payable & other long-term borrowings 74,444  35  0.19%  96,209  357  1.49%
Subordinated debt securities 75,635  1,019  5.46%  26,472  404  6.14%
Junior subordinated deferrable interest debentures 46,393  223  1.95%  46,393  401  3.48%
                  
Total interest-bearing liabilities 2,353,838  3,438  0.59%  2,099,226  5,538  1.06%
Demand deposits 935,345        765,637      
Other liabilities 43,604        27,152      
Stockholders’ equity 372,359        316,402      
                  
Total liabilities & stockholders’ equity$3,705,146       $3,208,417      
                  
Net interest income   $29,856       $30,344   
Net interest margin (2)       3.52%        4.13%


(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 by average interest-earning assets.


South Plains Financial, Inc.

Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)

 As of
 March 31,
2021
 December 31,
2020
      
Assets     
Cash and due from banks$65,204  $76,146 
Interest-bearing deposits in banks 348,202   224,161 
Federal funds sold -    
Investment securities 777,208   803,087 
Loans held for sale 125,792   111,477 
Loans held for investment 2,242,676   2,221,583 
Less:  Allowance for loan losses (45,019)  (45,553)
Net loans held for investment 2,197,657   2,176,030 
Premises and equipment, net 59,211   60,331 
Goodwill 19,508   19,508 
Intangible assets 7,140   7,562 
Other assets 132,972   120,858 
Total assets$3,732,894  $3,599,160 
      
Liabilities and Stockholders’ Equity Liabilities     
Noninterest bearing deposits$962,205  $917,322 
Interest-bearing deposits 2,193,427   2,057,029 
Total deposits 3,155,632   2,974,351 
Other borrowings 42,525   101,550 
Subordinated debt securities 75,635   75,589 
Trust preferred subordinated debentures 46,393   46,393 
Other liabilities 38,038   31,229 
Total liabilities 3,358,223   3,229,112 
Stockholders’ Equity     
Common stock 18,053   18,076 
Additional paid-in capital 140,633   141,112 
Retained earnings 203,777   189,521 
Accumulated other comprehensive income (loss) 12,208   21,339 
Total stockholders’ equity 374,671   370,048 
Total liabilities and stockholders’ equity$3,732,894  $3,599,160 
        

South Plains Financial, Inc.
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands)

 Three Months Ended
 March 31,
2021
 March 31,
2020
        
Interest income:       
Loans, including fees$29,280  $31,015 
Other 3,702   4,722 
Total Interest income 32,982   35,737 
Interest expense:       
Deposits 2,157   4,283 
Subordinated debt securities 1,019   404 
Trust preferred subordinated debentures 223   401 
Other 39   450 
Total Interest expense 3,438   5,538 
Net interest income 29,544   30,199 
Provision for loan losses 89   6,234 
Net interest income after provision for loan losses 29,455   23,965 
Noninterest income:       
Service charges on deposits 1,573   1,983 
Income from insurance activities 1,112   1,159 
Mortgage banking activities 18,816   8,753 
Bank card services and interchange fees 2,642   2,238 
Net gain on sale of securities -   2,318 
Other 2,357   2,424 
Total Noninterest income 26,500   18,875 
Noninterest expense:       
Salaries and employee benefits 24,318   20,810 
Net occupancy expense 3,565   3,600 
Professional services 1,573   1,572 
Marketing and development 568   768 
Other 7,033   7,261 
Total noninterest expense 37,057   34,011 
Income before income taxes 18,898   8,829 
Income tax expense 3,738   1,746 
Net income$15,160  $7,083 
        

South Plains Financial, Inc.
Loan Composition
(Unaudited)
(Dollars in thousands)

 As of
 March 31,
2021
 December 31,
2020
        
Loans:       
Commercial Real Estate$673,985  $663,344 
Commercial - Specialized 279,389   311,686 
Commercial - General 531,303   518,309 
Consumer:       
1-4 Family Residential 362,571   360,315 
Auto Loans 219,977   205,840 
Other Consumer 67,644   67,595 
Construction 107,807   94,494 
Total loans held for investment$2,242,676  $2,221,583 
        

South Plains Financial, Inc.
Deposit Composition
(Unaudited)
(Dollars in thousands)

 As of
 March 31,
2021
 December 31,
2020
        
Deposits:       
Noninterest-bearing demand deposits$962,205  $917,322 
NOW & other transaction accounts 348,156   332,829 
MMDA & other savings 1,520,943   1,398,699 
Time deposits 324,328   325,501 
Total deposits$3,155,632  $2,974,351 
        

South Plains Financial, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands)

 As of and for the quarter ended
 March 31,
2021
 December 31,
2020
 September 30,
2020
 June 30,
2020
 March 31,
2020
Efficiency ratio              
Noninterest expense$37,057  $36,504  $35,993  $35,207  $34,011 
               
Net interest income$29,544  $30,365  $31,273  $30,448  $30,199 
Tax equivalent yield adjustment 312   336   322   290   145 
Noninterest income 26,500   26,172   31,660   24,896   18,875 
Total income$56,356  $56,873  $63,255  $55,634  $49,219 
               
Efficiency ratio 65.76%   64.19%   56.90%   63.28%   69.10% 
               
Noninterest expense$37,057  $36,504  $35,993  $35,207  $34,011 
Less:  net loss on sale of securities -   -   -   -   - 
Adjusted noninterest expense$37,057  $36,504  $35,993  $35,207  $34,011 
               
Total income$56,356  $56,873  $63,255  $55,634  $49,219 
Less:  net gain on sale of securities -   -   -   -   (2,318)
Adjusted total income$56,356  $56,873  $63,255  $55,634  $46,901 
               
Adjusted efficiency ratio 65.76%   64.19%   56.90%   63.28%   72.52% 
               
Pre-tax, pre-provision income              
Net income$15,160  $15,924  $16,731  $5,615  $7,083 
Income tax expense 3,738   3,968   4,147   1,389   1,746 
Provision for loan losses 89   141   6,062   13,133   6,234 
               
Pre-tax, pre-provision income$18,987  $20,033  $26,940  $20,137  $15,063 
                    

South Plains Financial, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands)

 As of
 March 31,
2021
 December 31,
2020
 September 30,
2020
 June 30,
2020
 March 31,
2020
Tangible common equity              
Total common stockholders’ equity$374,671  $370,048  $ 352,568  $ 336,534  $ 326,890 
Less:  goodwill and other intangibles (26,648)  (27,070)   (27,502)   (28,414)   (28,181)
               
Tangible common equity$348,023  $342,978  $ 325,066  $ 308,120  $ 298,709 
               
Tangible assets              
Total assets$3,732,894  $3,599,160  $ 3,542,666  $ 3,584,532  $ 3,216,563 
Less:  goodwill and other intangibles (26,648)  (27,070)   (27,502)   (28,414)   (28,181)
               
Tangible assets$3,706,246  $3,572,090  $ 3,515,164  $ 3,556,118  $ 3,188,382 
               
Shares outstanding 18,053,229   18,076,364    18,059,174    18,059,174    18,056,014 
               
Total stockholders’ equity to total assets 10.04%   10.28%    9.95%    9.39%    10.16% 
Tangible common equity to tangible assets 9.39%   9.60%    9.25%    8.66%    9.37% 
Book value per share$20.75  $20.47  $ 19.52  $ 18.64  $ 18.10 
Tangible book value per share$19.28  $18.97  $ 18.00  $ 17.06  $ 16.54