South Plains Financial, Inc. Reports Second Quarter 2019 Financial Results

July 25, 2019

LUBBOCK, Texas, July 25, 2019 (GLOBE NEWSWIRE) -- South Plains Financial, Inc. (NASDAQ: SPFI) (“South Plains” or the “Company”), the parent company of City Bank, today reported its results for the quarter ended June 30, 2019. 

 Second Quarter 2019 Highlights

  • Net income for the second quarter of 2019 was $6.1 million, compared to $4.8 million(1) in the first quarter of 2019.
  • Diluted earnings per share were $0.37 for the second quarter of 2019, compared to $0.32 for the first quarter of 2019.
  • Average cost of deposits for the second quarter remained relatively stable at 108 basis points as compared to 105 basis points for the first quarter of 2019.
  • Return on average assets for the second quarter of 2019 was 0.89% annualized, compared to 0.71% in the first quarter of 2019.
  • Book value per share(3) was $16.19 as of June 30, 2019, compared to $14.80 per share as of March 31, 2019.

Subsequent Events

  • On July 25, 2019, the Company announced the entry into a definitive agreement to acquire West Texas State Bank (“WTSB”) for $76.1 million in cash.  The acquisition is expected to close in the fourth quarter of 2019.

Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “I am pleased with our second quarter results as we delivered strong earnings and book value growth from the linked quarter as we execute on our strategy of expanding our position as a premier bank.  We achieved this growth by not compromising on costs and will continue to be vigilant on expenses as we work to scale the Bank, leverage our investment in infrastructure, and improve our profitability.  Another highlight in the quarter was the Bank’s credit quality which remains strong as we actively manage our portfolio to remediate any potential challenges.  Importantly, we will remain disciplined on credit and not sacrifice our strict underwriting standards to drive loan growth in a more competitive environment.” 

Mr. Griffith continued, “Our decision to go public in May was driven by the significant opportunity that we see to grow South Plains through strategic and disciplined M&A given the fragmented community bank market that exists in our core geographic markets.  In fact, there are more than 160 banks with total assets between $250 million and $1 billion in Texas and New Mexico.  We believe that our longstanding presence in West Texas, our culture of emphasizing employees as our most important asset, and our financial commitment to helping and bettering our communities will give us a significant advantage in making South Plains an acquirer of choice.  Proof of our strategy is evident in our announcement this morning of our acquisition of WTSB in a $76.1 million cash transaction.  WTSB is a $429 million asset bank located in Odessa, Texas which, upon closing, will expand our geographic reach into the attractive Permian Basin.”    

Results of Operations, Quarter Ended June 30, 2019

Net Interest Income

Net interest income was $24.8 million for the second quarter of 2019, compared to $23.4 million for the second quarter of 2018 and $24.5 million for the first quarter of 2019. 

Interest income was $32.5 million for the second quarter of 2019, compared to $28.4 million for the second quarter of 2018 and $32.0 million for the first quarter of 2019.  Interest and fees on loans increased by $3.0 million from the second quarter of 2018 due to organic growth of $46.9 million in average loans and an increase of 48 basis points in interest rates. The increase from the linked quarter was the result of $33.8 million more in average interest-earnings assets during the second quarter of 2019, offset by a 4 basis point decrease in the interest rates of those assets.

Interest expense was $7.7 million for the second quarter of 2019, compared to $5.0 million for the second quarter of 2018 and $7.5 million for the first quarter of 2019. The increase from the second quarter of 2018 was due to an increase in the rate paid on interest-bearing liabilities of 49 basis points and growth in the deposit base.  The increase from the linked quarter was due to an increase in the rate paid on interest-bearing liabilities of 5 basis points in the second quarter of 2019.  The average cost of deposits were 108 basis points for the second quarter of 2019, representing a 37 basis point increase from the second quarter of 2018 and a 3 basis point increase from the linked quarter. 

The net interest margin was 3.88% for the second quarter of 2019, compared to 3.98% for the second quarter of 2018 and 3.93% for the first quarter of 2019.  The decreases from the second quarter of 2018 and the linked quarter were due primarily to the impact of higher interest-bearing liabilities costs, offset by increases in the rates on interest-earning assets.

Noninterest Income and Noninterest Expense

Noninterest income was $13.7 million for the second quarter of 2019, compared to $13.0 million for the second quarter of 2018 and $12.1 million for the first quarter of 2019.  The increase in noninterest income for the second quarter of 2019 compared to the second quarter of 2018 was primarily the result of an increase of $255,000 in mortgage banking activities revenue.  The increase from the linked quarter was primarily the result of an increase of $1.8 million in mortgage banking activities revenue due to $22.2 million more in originations for the second quarter of 2019. 

Noninterest expense was $29.9 million for the second quarter of 2019, compared to $28.4 million for the second quarter of 2018 and $30.0 million for the first quarter of 2019. This increase in noninterest expense for the second quarter of 2019 compared to the second quarter of 2018 was primarily driven by $1.2 million in 2019 operating expenses related to the online mortgage and staff acquisition, which closed on November 30, 2018.  The decrease in noninterest expense in second quarter of 2019 compared to the linked quarter was due to a reduction in salaries and employee benefits of $341,000 as we continued to work on operational efficiencies.

Loan Portfolio and Composition

Loans held for investment were $1.94 billion as of June 30, 2019, compared to $1.92 billion as of March 31, 2019 and $1.91 billion as of June 30, 2018.  Loans held for investment increased $20.5 million, or 4.3% annualized, during the second quarter of 2019, compared to the linked quarter, primarily as a result of an increase of $40.4 million in seasonal agricultural production loan fundings.  This growth was offset by two commercial – general relationships, totaling $19.8 million, that paid off during the quarter.  As of June 30, 2019, loans held for investment increased $21.8 million, or 1.1%, from June 30, 2018.  The primary segments of our organic growth for this period were $31.3 million in 1-4 family residential loans and $32.3 million in auto loans.  This growth has been offset by a decline in the commercial – general segment of $43.2 million.  The decline was primarily the result of the payoffs noted above as well as an additional two relationships, totaling $16.0 million, that paid off early in the first quarter of 2019.

Agricultural production loans were $147.7 million at June 30, 2019, compared to $107.3 million at March 31, 2019 and $148.1 million at June 30, 2018.

Deposits and Borrowings

Deposits totaled $2.28 billion as of June 30, 2019, compared to $2.30 billion as of March 31, 2019 and $2.18 billion as of June 30, 2018.  Deposits decreased $23.1 million in the second quarter of 2019 primarily as the result of a planned reduction of $18.7 million in reciprocal deposits.  Deposits increased $98.2 million from June 30, 2018 was the result of the Company’s organic growth. 

Noninterest-bearing deposits were $513.4 million as of June 30, 2019, compared to $497.6 million as of March 31, 2019 and $495.3 million as of June 30, 2018.  Noninterest-bearing deposits represented 22.5%, 21.6%, and 22.7% of total deposits as of June 30, 2019, March 31, 2019, and June 30, 2018, respectively. 

Asset Quality

The provision for loan losses recorded for the second quarter of 2019 was $875,000, compared to $1.5 million for the second quarter of 2018 and $608,000 for the first quarter of 2019.  The allowance for loan losses to loans held for investment was 1.25% at June 30, 2019, compared to 1.22% at March 31, 2019 and 1.13% at June 30, 2018. 

The nonperforming assets to total assets ratio as of June 30, 2019 was 0.37%, compared to 0.37% as of March 31, 2019 and 0.70% at June 30, 2018.

Annualized net charge-offs were 0.02% for the second quarter of 2019, compared to 0.07% for the first quarter of 2019 and 0.38% for the second 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.

Conference Call

As previously announced, South Plains will host a conference call to discuss its second quarter 2019 results today, July 25, 2019 at 9:00am (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 will be available on the Company’s website at https://www.spfi.bank/investor-relations.

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 13692467.  The replay will be available until August 8, 2019. 

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, prior to the listing of our common stock on the NASDAQ, in accordance with applicable provisions of the Internal Revenue Code of 1986, as amended,, the terms of the South Plains Financial, Inc. Employee Stock Ownership Plan (“ESOP”) provided that ESOP participants had the right, for a specified period of time, to require the Company to repurchase shares of the Company’s common stock that were distributed to them by the ESOP. The shares of common stock held by the ESOP were reflected in the Company’s 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 were deducted from shareholders’ equity in the Company’s consolidated balance sheets.  This repurchase right terminated upon the listing of the Company’s common stock on the NASDAQ, which we sometimes refer to as the ESOP Repurchase Right Termination, whereupon our repurchase liability was extinguished and thereafter the ESOP-owned shares are included in shareholders’ equity.

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 its acquisition of WTSB 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.  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
 (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
 June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
Selected Income Statement Data:   
Interest income$32,509$32,004$31,672$30,731$28,408 
Interest expense 7,672 7,458 7,005 5,943 4,969 
Net interest income 24,837 24,546 24,667 24,788 23,439 
Provision for loan losses 875 608 1,168 3,415 1,540 
Noninterest income 13,703 12,075 14,390 13,295 12,968 
Noninterest expense 29,930 30,036 30,498 28,646 28,422 
Income tax expense 1,655 1,204 1,528 1,109 (6,568)
Net income 6,080 4,773 5,863 4,913 13,013 
Net income - pro forma (2) 6,080 4,773 5,863 4,913 5,333 
Per Share Data (Common Stock):   
Net earnings, basic (1) (2) 0.37 0.32 0.40 0.33 0.36 
Net earnings, diluted (1) (2) 0.37 0.32 0.40 0.33 0.36 
Cash dividends declared and paid - - 0.85 - 1.04 
Book value (1) 16.19 14.80 14.40 14.63 14.43 
Weighted average shares outstanding, basic 16,459,366 14,771,520 14,771,520 14,771,520 14,771,520 
Weighted average shares outstanding, dilutive 16,563,543 14,771,558 14,771,520 14,771,520 14,771,520 
Shares outstanding at end of period 17,978,520 14,771,520 14,771,520 14,771,520 14,771,520 

 

 As of and for the quarter ended
 June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
Selected Period End Balance Sheet Data:     
Total assets 2,777,170  2,745,997  2,712,745  2,687,610  2,616,647 
Total loans held for investment 1,935,653  1,915,183  1,957,197  1,968,085  1,913,884 
Allowance for loan losses 24,171  23,381  23,126  21,073  21,715 
Investment securities 263,564  339,051  338,196  398,475  254,517 
Noninterest-bearing deposits 513,383  497,566  510,067  517,000  495,293 
Total deposits 2,281,858  2,304,929  2,277,454  2,261,356  2,183,631 
Total stockholders' equity 291,113  218,565  212,775  216,169  213,096 
Summary Performance Ratios:     
Return on average assets (1) (2) 0.89% 0.71% 0.86% 0.74% 0.84%
Return on average equity (1) (2) 9.57% 8.98% 10.85% 9.08% 9.98%
Net interest margin 3.88% 3.93% 3.89% 4.02% 3.98%
Yield on loans 5.90% 5.84% 5.67% 5.57% 5.42%
Cost of interest-bearing deposits 1.39% 1.34% 1.26% 1.09% 0.92%
Efficiency ratio 77.46% 81.79% 77.88% 74.85% 77.39%
Summary Credit Quality Data:     
Nonperforming loans 7,946  7,937  6,954  7,225  11,774 
Nonperforming loans to total loans held for investment 0.41% 0.41% 0.36% 0.37% 0.62%
Other real estate owned 2,305  2,340  2,285  2,704  6,590 
Nonperforming assets to total assets 0.37% 0.37% 0.34% 0.37% 0.70%
Allowance for loan losses to total loans held for investment 1.25% 1.22% 1.18% 1.07% 1.13%
Net charge-offs to average loans outstanding (annualized) 0.02% 0.07% -0.18% 0.82% 0.38%
Capital Ratios:     
Total stockholders' equity to total assets 10.48% 7.96% 7.84% 8.04% 8.14%
Tangible common equity to tangible assets 10.48% 7.96% 7.84% 8.04% 8.14%
Tier 1 capital to average assets 12.10% 9.70% 9.63% 10.09% 10.23%
Common equity tier 1 to risk-weighted assets 13.31% 10.27% 9.91% 10.03% 10.35%
Total capital to risk-weighted assets 17.75% 14.74% 14.28% 14.29% 14.54%
      
(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)
(Dollars in thousands)
            
 For the Three Months Ended
 June 30, 2019 June 30, 2018
            
   Interest     Interest  
 Average Income   Average Income  
 Balance Expense Yield Balance Expense Yield
Assets           
Loans (1)$1,946,602 $28,635 5.90% $1,899,744 $25,674 5.42%
Debt securities - taxable 248,915  1,754 2.83%  116,455  746 2.57%
Debt securities - nontaxable 31,387  275 3.51%  145,146  1,292 3.57%
Other interest-bearing assets 348,106  1,946 2.24%  231,191  1,014 1.76%
Total interest-earning assets 2,575,010  32,610 5.08%  2,392,536  28,726 4.82%
Noninterest-earning assets 174,944      166,913    
Total assets$2,749,954     $2,559,449    
            
Liabilities & stockholders' equity           
NOW, Savings, MMA's$1,449,169  4,696 1.30% $1,340,158  2,722 0.81%
Time deposits 317,323  1,443 1.82%  310,404  1,074 1.39%
Short-term borrowings 11,085  57 2.06%  16,174  54 1.34%
Notes payable & other long-term borrowings 95,000  561 2.37%  95,000  419 1.77%
Subordinated debt securities 26,472  403 6.11%  20,887  245 4.70%
Junior subordinated deferable interest debentures 46,393  512 4.43%  46,393  455 3.93%
Total interest-bearing liabilities 1,945,442  7,672 1.58%  1,829,016  4,969 1.09%
Demand deposits 516,783      486,943    
Other liabilities 32,890      29,215    
Stockholders' equity 254,839      214,275    
            
Total liabilities & stockholders' equity$2,749,954     $2,559,449    
            
Net interest income  $24,938     $23,757  
Net interest margin (2)    3.88%     3.98%
            
(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.
Average Balances and Yields - (Unaudited)
(Dollars in thousands)
            
 For the Six Months Ended
 June 30, 2019 June 30, 2018
            
   Interest     Interest  
 Average Income   Average Income  
 Balance Expense Yield Balance Expense Yield
Assets           
Loans (1)$1,951,193 $56,776 5.87% $1,863,068 $49,832 5.39%
Debt securities - taxable 279,293  3,863 2.79%  117,361  1,505 2.59%
Debt securities - nontaxable 31,780  561 3.56%  149,803  2,678 3.60%
Other interest-bearing assets 295,858  3,517 2.40%  275,588  2,334 1.71%
Total interest-earning assets 2,558,123  64,717 5.10%  2,405,819  56,349 4.72%
Noninterest-earning assets 175,691      169,902    
Total assets$2,733,813     $2,575,721    
            
Liabilities & stockholders' equity           
NOW, Savings, MMA's$1,459,684  9,230 1.28% $1,350,496  5,131 0.77%
Time deposits 313,505  2,798 1.80%  317,259  2,158 1.37%
Short-term borrowings 16,904  168 2.00%  20,804  126 1.22%
Notes payable & other long-term borrowings 95,000  1,100 2.33%  95,000  777 1.65%
Subordinated debt securities 27,100  809 6.02%  20,887  490 4.73%
Junior subordinated deferable interest debentures 46,393  1,025 4.46%  46,393  852 3.70%
Total interest-bearing liabilities 1,958,585  15,130 1.56%  1,850,838  9,534 1.04%
Demand deposits 508,952      480,468    
Other liabilities 31,022      29,313    
Stockholders' equity 235,255      215,103    
            
Total liabilities & stockholders' equity$2,733,813     $2,575,721    
            
Net interest income  $49,587     $46,815  
Net interest margin (2)    3.91%     3.92%
            
(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
 June 30, 2019 December 31, 2018
  
Assets   
Cash and due from banks$38,302  $47,802 
Interest-bearing deposits in banks 367,064   198,187 
Federal funds sold 2,750   - 
Investment securities 263,564   338,196 
Loans held for sale 38,932   38,382 
Loans held for investment 1,935,653   1,957,197 
Less:  Allowance for loan losses (24,171)  (23,126)
Net loans held for investment 1,911,482   1,934,071 
Premises and equipment, net 59,705   59,787 
Other assets 95,371   96,320 
Total assets$2,777,170  $2,712,745 
    
Liabilities and Stockholders' Equity   
Liabilities   
Noninterest bearing deposits$513,383  $510,067 
Interest-bearing deposits 1,768,475   1,767,387 
Total deposits 2,281,858   2,277,454 
Other Borrowings 106,116   112,705 
Subordinated debt securities 26,472   34,002 
Trust preferred subordinated debentures 46,393   46,393 
Other liabilities 25,218   29,416 
Total liabilities 2,486,057   2,499,970 
Stockholders' Equity   
Common stock 17,979   14,772 
Additional paid-in capital 140,189   80,412 
Retained earnings 129,408   119,835 
Accumulated other comprehensive income (loss) 3,537   (2,244)
Total stockholders' equity 291,113   212,775 
Total liabilities and stockholders' equity$2,777,170  $2,712,745 
    

 

South Plains Financial, Inc.
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands)
 Three Months Ended Six Months Ended
 June 30,
2019
 June 30,
2018
 June 30,
2019
 June 30,
2018
    
Interest income:       
Loans, including fees$28,592 $25,627  $56,690 $49,736 
Other 3,917  2,781   7,823  5,955 
Total Interest income 32,509  28,408   64,513  55,691 
Interest expense:       
Deposits 6,139  3,796   12,028  7,289 
Subordinated debt securities 403  245   809  490 
Trust preferred subordinated debentures 512  455   1,025  852 
Other 618  473   1,268  903 
Total Interest expense 7,672  4,969   15,130  9,534 
Net interest income 24,837  23,439   49,383  46,157 
Provision for loan losses 875  1,540   1,483  2,318 
Net interest income after provision for loan losses 23,962  21,899   47,900  43,839 
Noninterest income:       
Service charges on deposits 1,979  1,861   3,884  3,778 
Income from insurance activities 1,210  1,135   2,960  2,530 
Mortgage banking activities 6,652  6,397   11,518  11,064 
Bank card services and interchange fees 2,071  2,051   4,081  4,009 
Other 1,791  1,524   3,335  3,055 
Total Noninterest income 13,703  12,968   25,778  24,436 
Noninterest expense:       
Salaries and employee benefits 18,784  17,818   37,909  35,419 
Net occupancy expense 3,416  3,391   6,823  6,715 
Professional services 1,611  1,400   3,317  2,829 
Marketing and development 796  760   1,513  1,578 
Other 5,323  5,053   10,404  9,758 
Total noninterest expense 29,930  28,422   59,966  56,299 
Income before income taxes 7,735  6,445   13,712  11,976 
Income tax expense (benefit) 1,655  (6,568)  2,859  (6,538)
Net income$6,080 $13,013  $10,853 $18,514 
        
Pro forma C corp income tax adjustment -  7,680   -  8,533 
Pro forma C corp net income$6,080 $5,333  $10,853 $9,981 
        

 

South Plains Financial, Inc.
Loan Composition
(Unaudited)
(Dollars in thousands)
 As of
 June 30, 2019 December 31, 2018 June 30, 2018
  
Loans:     
Commercial Real Estate$533,680 $538,037 $533,941
Commercial - Specialized 294,188  305,022  305,811
Commercial - General 391,434  427,728  434,645
Consumer:     
1-4 Family Residential 348,569  346,153  317,308
Auto Loans 206,777  191,647  174,454
Other Consumer 71,559  70,209  68,943
Construction 89,446  78,401  78,782
Total loans held for investment$1,935,653 $1,957,197 $1,913,884
      

 

South Plains Financial, Inc.
Deposit Composition
(Unaudited)
(Dollars in thousands)
 As of
 June 30, 2019 December 31, 2018 June 30, 2018
  
Deposits:     
Noninterest-bearing demand deposits$513,383 $510,067 $495,293
NOW & other transaction accounts 259,111  368,806  283,591
MMDA & other savings 1,193,619  1,087,044  1,098,836
Time deposits 315,745  311,537  305,911
Total deposits$2,281,858 $2,277,454 $2,183,631
      


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.