☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Texas
|
75-2453320
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
5219 City Bank Parkway
Lubbock, Texas
|
79407
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $1.00 per share
|
SPFI
|
The Nasdaq Stock Market, LLC
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
Emerging growth company ☒
|
Page No.
|
|||
PART I
|
|||
Item 1.
|
5
|
||
Item 1A
|
24
|
||
Item 1B
|
38 | ||
Item 2.
|
38 | ||
Item 3.
|
39 | ||
Item 4.
|
39 | ||
PART II
|
|||
Item 5.
|
39 | ||
Item 6.
|
40 | ||
Item 7.
|
41 | ||
Item 7A.
|
64 | ||
Item 8.
|
65 | ||
Item 9.
|
102 | ||
Item 9A.
|
102 | ||
Item 9B.
|
103 | ||
PART III
|
|||
Item 10.
|
104 | ||
Item 11.
|
104 | ||
Item 12.
|
104 | ||
Item 13.
|
104 | ||
Item 14.
|
104 | ||
PART IV
|
|||
Item 15.
|
105 | ||
Item 16.
|
106
|
||
107 |
● |
our ability to effectively execute our expansion strategy and manage our growth, including identifying and consummating suitable acquisitions;
|
● |
business and economic conditions, particularly those affecting our market areas, as well as the concentration of our business in such market areas;
|
● |
the impact, duration and severity of the ongoing COVID-19 pandemic, the response of governmental authorities to the COVID-19 pandemic and our participation in COVID-19-related government programs such as the
Paycheck Protection Program (the “PPP”) administered by the Small Business Administration (the “SBA”) and created under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”);
|
● |
high concentrations of loans secured by real estate located in our market areas;
|
● |
risks associated with our commercial loan portfolio, including the risk for deterioration in value of the general business assets that secure such loans;
|
● |
potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;
|
● |
risks associated with our agricultural loan portfolio, including the heightened sensitivity to weather conditions, commodity prices, and other factors generally outside the borrowers and our control;
|
● |
risks associated with the sale of crop insurance products, including termination of or substantial changes to the federal crop insurance program;
|
● |
risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;
|
● |
public funds deposits comprising a relatively high percentage of our deposits;
|
● |
potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;
|
● |
our ability to maintain our reputation;
|
● |
our ability to successfully manage our credit risk and the sufficiency of our allowance for loan losses;
|
● |
our ability to attract, hire and retain qualified management personnel;
|
● |
our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;
|
● |
interest rate fluctuations, which could have an adverse effect on our profitability;
|
● |
competition from banks, credit unions and other financial services providers;
|
● |
our ability to keep pace with technological change or difficulties we may experience when implementing new technologies;
|
● |
system failures, service denials, cyber-attacks and security breaches;
|
● |
our ability to maintain effective internal control over financial reporting;
|
● |
employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;
|
● |
increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;
|
● |
our ability to maintain adequate liquidity and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;
|
● |
costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;
|
● |
natural disasters, severe weather, acts of god, acts of war or terrorism, outbreaks of hostilities, public health outbreaks (such as coronavirus), other international or domestic calamities, and other matters
beyond our control;
|
● |
changes in tariffs and trade barriers;
|
● |
compliance with governmental and regulatory requirements, including the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Economic Growth, Regulatory Relief, and Consumer
Protection Act of 2018 (“EGRRCPA”), and others relating to banking, consumer protection, securities and tax matters; and
|
● |
changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including the policies of the Board of Governors
of the Federal Reserve System (“Federal Reserve”) and as a result of initiatives of the Biden administration.
|
Item 1. |
Business
|
Basel III
Minimum
for Capital
Adequacy
Purposes
|
Basel III
Additional
Capital
Conservation
Buffer
|
Basel III
Ratio with
Capital
Conservation
Buffer
|
||||||||||
Total risk based capital (total capital to risk-weighted assets)
|
8.00
|
%
|
2.50
|
%
|
10.50
|
%
|
||||||
Tier 1 risk based capital (tier 1 to risk-weighted assets)
|
6.00
|
%
|
2.50
|
%
|
8.50
|
%
|
||||||
Common equity tier 1 risk based capital (CET1 to risk-weighted assets)
|
4.50
|
%
|
2.50
|
%
|
7.00
|
%
|
||||||
Tier 1 leverage ratio (tier 1 to average assets)
|
4.00
|
%
|
—
|
4.00
|
%
|
● |
assigning exposures secured by single-family residential properties to either a 50% risk weight for first-lien mortgages that meet prudent underwriting standards or a 100% risk weight category for all other
mortgages;
|
● |
providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (increased from 0% under the previous
risk-based capital rules);
|
● |
assigning a 150% risk weight to all exposures that are nonaccrual or 90 days or more past due (increased from 100% under the previous risk-based capital rules), except for those secured by single-family
residential properties, which will be assigned a 100% risk weight, consistent with the previous risk-based capital rules;
|
● |
applying a 150% risk weight instead of a 100% risk weight for certain high-volatility commercial real estate, or HVCRE, loans, or acquisition, development, and construction, or ADC, loans; and
|
● |
applying a 250% risk weight to the portion of mortgage servicing rights and deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks that are not
deducted from CET1 capital (increased from 100% under the previous risk-based capital rules).
|
● |
a CBLR of greater than 9%;
|
● |
total consolidated assets of less than $10 billion;
|
● |
total off-balance sheet exposures (excluding derivatives other than credit derivatives and unconditionally cancelable commitments) of 25% or less of total consolidated assets;
|
● |
total trading assets and trading liabilities of 5% or less of total consolidated assets; and
|
● |
non-advanced approaches institution.
|
● |
Accumulated other comprehensive income, or AOCI;
|
● |
Intangible assets, calculated in accordance with Reporting Instructions, other than mortgage servicing assets; and
|
● |
Deferred tax assets that arise from net operating loss and tax credit carry forwards net of any related valuations allowances.
|
● |
internal policies, procedures and controls designed to implement and maintain the bank’s compliance with all of the requirements of the BSA, the USA PATRIOT Act, the National Defense Authorization Act and
related laws and regulations;
|
● |
systems and procedures for monitoring and reporting suspicious transactions and activities;
|
● |
a designated compliance officer;
|
● |
employee training;
|
● |
an independent audit function to test the AML program;
|
● |
procedures to verify the identity of each customer upon the opening of accounts; and
|
● |
heightened due diligence policies, procedures and controls applicable to certain foreign accounts and relationships.
|
• |
On March 15, 2020, the Federal Reserve issued a statement encouraging banks to use their capital and liquidity buffers to lend to households and businesses impacted by the COVID-19 pandemic. The following
day, the Federal Reserve issued a statement encouraging banks to access the Federal Reserve’s discount window to assist with capital and liquidity management in light of the increased credit needs
of banking customers.
|
• |
The Bank is also typically required by the FRB to maintain in reserves certain amounts of vault cash and/or deposits with the FRB, however, in response to the COVID-19 pandemic, this requirement has been
eliminated until further notice.
|
• |
Section 4013 of the CARES Act provides financial institutions the option to suspend the application of GAAP to any loan modification related to COVID-19 from treatment as a troubled debt restructuring (“TDR”)
for the period between March 1, 2020 and the earlier of (i) 60 days after the end of the national emergency proclamation or (ii) December 31, 2020. Section 541 of the Consolidated Appropriations Act, 2021, amended Section 4013 of the CARES
Act to extend this relief to the earlier of (i) 60 days after the end of the national emergency proclamation or (ii) January 1, 2022. A financial institution may elect to suspend GAAP only for a loan that was not more than 30 days past due
as of December 31, 2019. In addition, the temporary suspension of GAAP does not apply to any adverse impact on the credit of a borrower that is not related to COVID-19. The suspension of GAAP is applicable for the entire term of the
modification, including an interest rate modification, a forbearance agreement, a repayment plan, or other agreement that defers or delays the payment of principal and/or interest. Accordingly, a financial institution that elects to suspend
GAAP should not be required to increase its reported TDRs at the end of the period of relief, unless the loans require further modification after the expiration of that period.
|
Item 1A. |
Risk Factors
|
Item 1B. |
Unresolved Staff Comments
|
Item 2. |
Properties
|
Lubbock/South Plains
|
Dallas/Ft. Worth
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
Lubbock
|
Main Branch
|
Plano
|
Branch
|
|||
Lubbock
|
4th Street Branch
|
Dallas
|
Uptown Branch
|
|||
Lubbock
|
50th and Indiana Branch
|
Forney
|
Branch
|
|||
Lubbock
|
Kingsgate Branch
|
Arlington
|
LPO
|
|||
Lubbock
|
Milwaukee Branch
|
Dallas
|
Hillcrest LPO
|
|||
Lubbock
|
Overton Branch
|
Dallas
|
LPO
|
|||
Lubbock
|
University Branch
|
Ft. Worth
|
LPO
|
|||
Morton
|
Branch
|
Grand Prairie
|
LPO
|
|||
Idalou
|
Branch
|
Southlake
|
LPO
|
|||
Levelland
|
Branch
|
Southlake
|
LPO
|
El Paso
|
Houston
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
El Paso
|
East Branch
|
Houston
|
Branch
|
|||
El Paso
|
West Branch
|
|||||
El Paso
|
Mesa Hills LPO
|
Bryan/College Station
|
Ruidoso/Eastern New Mexico
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
College Station
|
Branch
|
Ruidoso
|
Gateway Branch
|
|||
College Station
|
LPO
|
Ruidoso
|
River Crossing Branch
|
The Permian Basin
|
Other Markets
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
Odessa
|
University Branch
|
Abilene, Texas
|
LPO
|
|||
Odessa
|
Grandview Branch
|
Austin, Texas
|
LPO
|
|||
Midland
|
Branch
|
Beaumont, Texas
|
LPO
|
|||
Kermit
|
Branch
|
Dripping Springs, Texas
|
LPO
|
|||
Fort Stockton
|
Branch
|
|||||
Monahans
|
Branch
|
Item 3. |
Legal Proceedings
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
|
Plan Category
|
Number of Shares to be
Issued Upon Exercise of
Outstanding Awards
|
Weighted-Average
Exercise Price of
Outstanding Awards
|
Number of Shares
Available for
Future Grants
|
|||||||||
Equity compensation plans approved by shareholders(1)
|
1,617,370
|
$
|
14.20
|
1,431,602
|
||||||||
Equity compensation plans not approved by shareholders
|
—
|
—
|
—
|
|||||||||
Total
|
1,617,370
|
$
|
14.20
|
1,431,602
|
(1) |
The number of shares available for future issuance includes 1,431,602 shares available under the Company’s 2019 Equity Incentive Plan (which allows for the issuance of options, as well as various other
stock-based awards).
|
Total Shares
Repurchased
|
Average Price
Paid Per Share
|
Total Dollar Amount
Purchased Pursuant to
Publicly-Announced Plan
|
Maximum Dollar Amount
Remaining Available for
Repurchase Pursuant to
Publicly-Announced Plan
|
|||||||||||||
March 2020
|
—
|
$
|
—
|
$
|
—
|
$
|
10,000,000
|
|||||||||
April 2020
|
4,700
|
13.03
|
61,241
|
9,938,759
|
||||||||||||
November 2020
|
14,335
|
16.22
|
293,703
|
9,706,297
|
||||||||||||
Total
|
19,035
|
Item 6. |
Selected Financial Data
|
As of or for the Year Ended December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Selected Income Statement Data:
|
||||||||||||||||||||
Interest income
|
$
|
138,231
|
$
|
132,942
|
$
|
118,094
|
$
|
104,440
|
$
|
97,220
|
||||||||||
Interest expense
|
15,946
|
28,367
|
22,482
|
15,977
|
14,582
|
|||||||||||||||
Net interest income
|
122,285
|
104,575
|
95,612
|
88,463
|
82,638
|
|||||||||||||||
Provision for loan losses
|
25,570
|
2,799
|
6,901
|
3,966
|
1,968
|
|||||||||||||||
Noninterest income
|
101,603
|
56,633
|
52,121
|
47,389
|
49,896
|
|||||||||||||||
Noninterest expense
|
141,715
|
121,708
|
115,443
|
108,144
|
104,388
|
|||||||||||||||
Income tax expense (benefit)
|
11,250
|
7,481
|
(3,901
|
)
|
107
|
101
|
||||||||||||||
Net income
|
45,353
|
29,220
|
29,290
|
23,635
|
26,077
|
|||||||||||||||
Share and Per Share Data:
|
||||||||||||||||||||
Earnings per share (basic)
|
$
|
2.51
|
$
|
1.74
|
$
|
1.98
|
$
|
1.60
|
$
|
1.75
|
||||||||||
Earnings per share (diluted)
|
2.47
|
1.71
|
1.98
|
1.60
|
1.74
|
|||||||||||||||
Dividends per share
|
0.14
|
0.06
|
2.03
|
0.53
|
0.43
|
|||||||||||||||
Book value per share(1)
|
20.47
|
16.98
|
14.40
|
14.58
|
13.58
|
|||||||||||||||
Tangible book value per share(1)(2)
|
18.97
|
15.46
|
14.40
|
14.58
|
13.58
|
|||||||||||||||
Weighted average common shares outstanding (basic)
|
18,054,373
|
16,818,697
|
14,771,520
|
14,769,086
|
14,932,021
|
|||||||||||||||
Weighted average common shares outstanding (diluted)
|
18,339,033
|
17,040,550
|
14,771,520
|
14,771,520
|
14,997,897
|
|||||||||||||||
Shares outstanding at end of period
|
18,076,364
|
18,036,115
|
14,771,520
|
14,771,520
|
14,771,520
|
|||||||||||||||
Selected Period End Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
300,307
|
$
|
158,099
|
$
|
245,989
|
$
|
294,563
|
$
|
363,400
|
||||||||||
Investment securities
|
803,087
|
707,650
|
338,196
|
284,009
|
324,823
|
|||||||||||||||
Gross loans held for investment
|
2,221,583
|
2,143,623
|
1,957,197
|
1,838,155
|
1,661,186
|
|||||||||||||||
Allowance for loan losses
|
45,553
|
24,197
|
23,126
|
21,461
|
21,174
|
|||||||||||||||
Total assets
|
3,599,160
|
3,237,167
|
2,712,745
|
2,573,375
|
2,500,813
|
|||||||||||||||
Interest-bearing deposits
|
2,057,029
|
1,905,936
|
1,767,387
|
1,678,919
|
1,658,198
|
|||||||||||||||
Noninterest-bearing deposits
|
917,322
|
790,921
|
510,067
|
475,162
|
432,725
|
|||||||||||||||
Total deposits
|
2,974,351
|
2,696,857
|
2,277,454
|
2,154,081
|
2,090,923
|
|||||||||||||||
Borrowings
|
223,532
|
205,030
|
193,100
|
177,830
|
189,196
|
|||||||||||||||
ESOP-owned shares(3)
|
—
|
—
|
58,195
|
57,121
|
49,700
|
|||||||||||||||
Total stockholders’ equity excluding ESOP-owned shares
|
370,048
|
306,182
|
154,580
|
158,206
|
150,019
|
|||||||||||||||
Pro forma total stockholders’ equity(3)
|
370,048
|
306,182
|
212,775
|
215,327
|
199,719
|
As of or for the Year Ended December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on average assets
|
1.31
|
%
|
1.04
|
%
|
1.12
|
%
|
0.93
|
%
|
1.02
|
%
|
||||||||||
Return on average stockholders’ equity(1)
|
13.40
|
%
|
10.94
|
%
|
13.63
|
%
|
11.40
|
%
|
13.30
|
%
|
||||||||||
Net interest margin(4)
|
3.84
|
%
|
3.98
|
%
|
3.94
|
%
|
3.85
|
%
|
3.60
|
%
|
||||||||||
Efficiency ratio(5)
|
62.99
|
%
|
75.29
|
%
|
77.64
|
%
|
77.87
|
%
|
77.01
|
%
|
||||||||||
Pro Forma Information as if a C Corporation:(6)
|
||||||||||||||||||||
Net income
|
45,353
|
29,220
|
20,757
|
17,580
|
19,652
|
|||||||||||||||
Income tax expense
|
11,250
|
7,481
|
4,632
|
6,162
|
6,526
|
|||||||||||||||
Earnings per share (basic)
|
2.51
|
1.74
|
1.41
|
1.19
|
1.32
|
|||||||||||||||
Earnings per share (diluted)
|
2.47
|
1.71
|
1.41
|
1.19
|
1.31
|
|||||||||||||||
Return on average assets
|
1.31
|
%
|
1.04
|
%
|
0.79
|
%
|
0.69
|
%
|
0.77
|
%
|
||||||||||
Return on average stockholders’ equity(1)
|
13.40
|
%
|
10.94
|
%
|
9.66
|
%
|
8.48
|
%
|
10.02
|
%
|
||||||||||
Credit Quality Ratios:
|
||||||||||||||||||||
Nonperforming assets to total assets(7)
|
0.45
|
%
|
0.24
|
%
|
0.34
|
%
|
0.65
|
%
|
0.60
|
%
|
||||||||||
Nonperforming loans to total loans held for investment
|
0.67
|
%
|
0.28
|
%
|
0.36
|
%
|
0.76
|
%
|
0.43
|
%
|
||||||||||
Allowance for loan losses to nonperforming loans(8)
|
304.40
|
%
|
400.28
|
%
|
332.56
|
%
|
154.38
|
%
|
294.29
|
%
|
||||||||||
Allowance for loan losses to total loans held for investment
|
2.05
|
%
|
1.13
|
%
|
1.18
|
%
|
1.17
|
%
|
1.27
|
%
|
||||||||||
Net loan charge-offs to average loans
|
0.18
|
%
|
0.09
|
%
|
0.27
|
%
|
0.21
|
%
|
0.30
|
%
|
||||||||||
Capital Ratios:
|
||||||||||||||||||||
Total stockholders’ equity to total assets(1)
|
10.28
|
%
|
9.46
|
%
|
7.84
|
%
|
8.37
|
%
|
7.99
|
%
|
||||||||||
Tangible common equity to tangible assets(2)
|
9.60
|
%
|
8.69
|
%
|
7.84
|
%
|
8.37
|
%
|
7.99
|
%
|
||||||||||
Common equity tier 1 capital ratio
|
12.96
|
%
|
11.06
|
%
|
9.91
|
%
|
10.78
|
%
|
10.91
|
%
|
||||||||||
Tier 1 leverage ratio
|
10.24
|
%
|
10.74
|
%
|
9.63
|
%
|
10.06
|
%
|
9.56
|
%
|
||||||||||
Tier 1 risk-based capital ratio
|
14.78
|
%
|
12.85
|
%
|
11.98
|
%
|
13.02
|
%
|
13.38
|
%
|
||||||||||
Total risk-based capital ratio
|
19.08
|
%
|
14.88
|
%
|
14.28
|
%
|
15.15
|
%
|
15.69
|
%
|
(1) |
Reflects the Company’s pro forma total stockholders’ equity for years prior to 2019.
|
(2) |
Represents a non-GAAP financial measure. We did not have any goodwill or other intangible assets as of the years ended December 31, 2016 to 2018. See our reconciliation of non-GAAP financial measures to their
most directly comparable GAAP financial measures under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures.”
|
(3) |
In accordance with provisions of the Internal Revenue Code applicable to private companies, prior to our listing on the NASDAQ Global Select Market, the terms of our ESOP provided that ESOP participants had
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. As a result, for the periods prior to our listing on the NASDAQ Global Select Market, the shares of
common stock held by the ESOP are deducted from stockholders’ equity in our consolidated balance sheet. This repurchase right terminated upon the listing of our common stock on the NASDAQ Global Select Market in May 2019.
|
(4) |
Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.
|
(5) |
The efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income on a tax-equivalent basis and noninterest income.
|
(6) |
The Company calculated its pro forma C Corporation net income, return on average assets, return on average stockholders’ equity and earnings per share by adding back its franchise S Corporation tax to net
income, and using tax rates for Federal income taxes of 35.0% prior to January 1, 2018 and 21.0% for January 1, 2018 through May 30, 2018. This calculation reflects only the revocation of the Company’s status as an S Corporation and does
not give effect to any other transaction. As our state income taxes are insignificant, they were not reflected in these calculations.
|
(7) |
Nonperforming assets consist of nonperforming loans plus OREO.
|
(8) |
Nonperforming loans include nonaccrual loans and loans past due 90 days or more.
|
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Year Ended December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans, excluding PPP(1)
|
$
|
2,181,118
|
$
|
116,753
|
5.35
|
%
|
$
|
1,997,783
|
$
|
117,074
|
5.86
|
%
|
||||||||||||
Loans - PPP
|
144,514
|
5,130
|
3.55
|
—
|
—
|
—
|
||||||||||||||||||
Investment securities – taxable
|
547,107
|
11,852
|
2.17
|
317,947
|
8,608
|
2.71
|
||||||||||||||||||
Investment securities – non-taxable
|
158,482
|
4,489
|
2.83
|
37,232
|
1,289
|
3.46
|
||||||||||||||||||
Other interest-earning assets (2)
|
184,262
|
1,100
|
0.60
|
284,031
|
6,412
|
2.26
|
||||||||||||||||||
Total interest-earning assets
|
3,215,483
|
139,324
|
4.33
|
2,636,993
|
133,383
|
5.06
|
||||||||||||||||||
Noninterest-earning assets
|
249,536
|
182,967
|
||||||||||||||||||||||
Total assets
|
$
|
3,465,019
|
$
|
2,819,960
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW, savings and money market deposits
|
$
|
1,653,088
|
$
|
6,337
|
0.38
|
%
|
$
|
1,448,320
|
$
|
16,436
|
1.13
|
%
|
||||||||||||
Time deposits
|
331,623
|
5,557
|
1.68
|
319,811
|
6,055
|
1.89
|
||||||||||||||||||
Short-term borrowings
|
19,404
|
104
|
0.54
|
16,231
|
290
|
1.79
|
||||||||||||||||||
Notes payable & other longer-term borrowings
|
107,045
|
558
|
0.52
|
95,054
|
2,024
|
2.13
|
||||||||||||||||||
Subordinated debt securities
|
38,747
|
2,223
|
5.74
|
26,786
|
1,616
|
6.03
|
||||||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
1,167
|
2.52
|
46,393
|
1,946
|
4.19
|
||||||||||||||||||
Total interest-bearing liabilities
|
$
|
2,196,300
|
$
|
15,946
|
0.73
|
$
|
1,952,595
|
$
|
28,367
|
1.45
|
||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
$
|
888,653
|
$
|
570,428
|
||||||||||||||||||||
Other liabilities
|
41,573
|
29,891
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
930,226
|
600,319
|
||||||||||||||||||||||
Shareholders’ equity
|
338,493
|
267,046
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
3,465,019
|
$
|
2,819,960
|
||||||||||||||||||||
Net interest income
|
$
|
123,378
|
$
|
105,016
|
||||||||||||||||||||
Net interest spread
|
3.61
|
%
|
3.61
|
%
|
||||||||||||||||||||
Net interest margin(3)
|
3.84
|
%
|
3.98
|
%
|
(1) |
Average loan balances include nonaccrual loans and loans held for sale.
|
(2) |
Includes income and average balances for interest-earning deposits at other banks, nonmarketable securities, federal funds sold and other miscellaneous interest-earning assets.
|
(3) |
Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.
|
Year Ended December 31,
|
||||||||||||
2020 over 2019
|
||||||||||||
Change due to:
|
Total
|
|||||||||||
Volume
|
Rate
|
Variance
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans, excluding PPP
|
$
|
10,744
|
$
|
(11,065
|
)
|
$
|
(321
|
)
|
||||
Loans - PPP
|
—
|
5,130
|
5,130
|
|||||||||
Investment securities – taxable
|
6,204
|
(2,960
|
)
|
3,244
|
||||||||
Investment securities – non-taxable
|
4,198
|
(998
|
)
|
3,200
|
||||||||
Other interest-earning assets
|
(2,252
|
)
|
(3,060
|
)
|
(5,312
|
)
|
||||||
Total increase (decrease) in interest income
|
18,894
|
(12,953
|
)
|
5,941
|
||||||||
Interest-bearing liabilities:
|
||||||||||||
NOW, Savings, MMDAs
|
2,324
|
(12,423
|
)
|
(10,099
|
)
|
|||||||
Time deposits
|
224
|
(722
|
)
|
(498
|
)
|
|||||||
Short-term borrowings
|
57
|
(243
|
)
|
(186
|
)
|
|||||||
Notes payable & other borrowings
|
255
|
(1,721
|
)
|
(1,466
|
)
|
|||||||
Subordinated debt securities
|
722
|
(115
|
)
|
607
|
||||||||
Junior subordinated deferrable interest debentures
|
—
|
(779
|
)
|
(779
|
)
|
|||||||
Total increase (decrease) interest expense:
|
3,582
|
(16,003
|
)
|
(12,421
|
)
|
|||||||
Increase (decrease) in net interest income
|
$
|
15,312
|
$
|
3,050
|
$
|
18,362
|
Year Ended
December 31,
|
Increase
|
|||||||||||
2020
|
2019
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Noninterest income:
|
||||||||||||
Service charges on deposit accounts
|
$
|
7,032
|
$
|
8,129
|
$
|
(1,097
|
)
|
|||||
Income from insurance activities
|
7,644
|
7,016
|
628
|
|||||||||
Bank card services and interchange fees
|
10,035
|
8,692
|
1,343
|
|||||||||
Mortgage banking activities
|
65,042
|
25,126
|
39,916
|
|||||||||
Investment commissions
|
1,698
|
1,710
|
(12
|
)
|
||||||||
Fiduciary income
|
3,185
|
2,306
|
879
|
|||||||||
Gain on sale of securities
|
2,318
|
—
|
2,318
|
|||||||||
Other income and fees(1)
|
4,649
|
3,654
|
995
|
|||||||||
Total noninterest income
|
$
|
101,603
|
$
|
56,633
|
$
|
44,970
|
(1) |
Other income and fees includes income and fees associated with the increase in the cash surrender value of life insurance, safe deposit box rental, check printing, collections, wire transfer and other
miscellaneous services.
|
Year Ended
December 31,
|
Increase
|
|||||||||||
2020
|
2019
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Noninterest expense:
|
||||||||||||
Salaries and employee benefits
|
$
|
89,220
|
$
|
75,392
|
$
|
13,828
|
||||||
Occupancy expense, net
|
14,658
|
13,572
|
1,086
|
|||||||||
Professional services
|
6,322
|
7,334
|
(1,012
|
)
|
||||||||
Marketing and development
|
3,088
|
3,017
|
71
|
|||||||||
IT and data services
|
3,574
|
2,830
|
744
|
|||||||||
Bankcard expenses
|
4,253
|
3,346
|
907
|
|||||||||
Appraisal expenses
|
2,782
|
1,625
|
1,157
|
|||||||||
Other expenses(1)
|
17,818
|
14,592
|
3,226
|
|||||||||
Total noninterest expense
|
$
|
141,715
|
$
|
121,708
|
$
|
20,007
|
(1) |
Other expenses include items such as telephone expenses, postage, courier fees, directors’ fees, and insurance.
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||||||||||||||||||||||
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial real estate
|
$
|
663,344
|
29.9
|
%
|
$
|
658,195
|
30.7
|
%
|
$
|
538,037
|
27.5
|
%
|
$
|
506,894
|
27.6
|
%
|
$
|
462,495
|
27.9
|
%
|
||||||||||||||||||||
Commercial – specialized
|
311,686
|
14.0
|
309,505
|
14.4
|
305,022
|
15.6
|
329,119
|
17.9
|
309,279
|
18.6
|
||||||||||||||||||||||||||||||
Commercial – general
|
518,309
|
23.3
|
441,398
|
20.6
|
427,728
|
21.9
|
410,057
|
22.3
|
395,949
|
23.8
|
||||||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
1-4 family residential
|
360,315
|
16.2
|
362,796
|
16.9
|
346,153
|
17.7
|
313,350
|
17.0
|
297,944
|
17.9
|
||||||||||||||||||||||||||||||
Auto loans
|
205,840
|
9.3
|
215,209
|
10.0
|
191,647
|
9.8
|
146,622
|
8.0
|
76,215
|
4.6
|
||||||||||||||||||||||||||||||
Other consumer
|
67,595
|
3.0
|
74,000
|
3.5
|
70,209
|
3.6
|
66,191
|
3.6
|
62,097
|
3.7
|
||||||||||||||||||||||||||||||
Construction
|
94,494
|
4.3
|
82,520
|
3.8
|
78,401
|
4.0
|
65,922
|
3.6
|
57,207
|
3.4
|
||||||||||||||||||||||||||||||
Gross loans
|
2,221,583
|
100.0
|
%
|
2,143,623
|
100.0
|
%
|
1,957,197
|
100.0
|
%
|
1,838,155
|
100.0
|
%
|
1,661,186
|
100.0
|
%
|
|||||||||||||||||||||||||
Allowance for loan losses
|
(45,553
|
)
|
(24,197
|
)
|
(23,126
|
)
|
(21,461
|
)
|
(21,174
|
)
|
||||||||||||||||||||||||||||||
Net loans
|
$
|
2,176,030
|
$
|
2,119,426
|
$
|
1,934,071
|
$
|
1,816,694
|
$
|
1,640,012
|
As of December 31, 2020
|
||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after
Five Years
|
||||||||||||||||||||||||||
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
42,854
|
$
|
49,009
|
$
|
142,558
|
$
|
115,312
|
$
|
27,088
|
$
|
286,523
|
$
|
663,344
|
||||||||||||||
Commercial - specialized
|
14,104
|
90,466
|
57,282
|
28,558
|
11,617
|
109,659
|
311,686
|
|||||||||||||||||||||
Commercial - general
|
16,804
|
34,979
|
241,635
|
43,538
|
14,656
|
166,697
|
518,309
|
|||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
1-4 family residential
|
38,108
|
4,569
|
51,208
|
7,825
|
143,599
|
115,006
|
360,315
|
|||||||||||||||||||||
Auto loans
|
1,603
|
10
|
143,422
|
—
|
60,805
|
—
|
205,840
|
|||||||||||||||||||||
Other consumer
|
4,259
|
1,506
|
36,154
|
128
|
25,529
|
19
|
67,595
|
|||||||||||||||||||||
Construction
|
49,334
|
28,821
|
210
|
1,152
|
1,159
|
13,818
|
94,494
|
|||||||||||||||||||||
Gross loans
|
$
|
167,066
|
$
|
209,360
|
$
|
672,469
|
$
|
196,513
|
$
|
284,453
|
$
|
691,722
|
$
|
2,221,583
|
As of December 31, 2019
|
||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after
Five Years
|
||||||||||||||||||||||||||
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
40,447
|
$
|
47,455
|
$
|
107,589
|
$
|
130,381
|
$
|
27,408
|
$
|
304,915
|
$
|
658,195
|
||||||||||||||
Commercial - specialized
|
35,815
|
98,369
|
51,411
|
46,708
|
12,986
|
64,216
|
309,505
|
|||||||||||||||||||||
Commercial - general
|
31,148
|
34,654
|
82,977
|
67,434
|
27,434
|
197,751
|
441,398
|
|||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
1-4 family residential
|
25,210
|
8,539
|
74,562
|
10,261
|
154,625
|
89,599
|
362,796
|
|||||||||||||||||||||
Auto loans
|
1,561
|
42
|
143,776
|
33
|
69,797
|
—
|
215,209
|
|||||||||||||||||||||
Other consumer
|
3,874
|
2,952
|
37,796
|
235
|
29,077
|
66
|
74,000
|
|||||||||||||||||||||
Construction
|
33,560
|
28,147
|
1,829
|
818
|
—
|
18,166
|
82,520
|
|||||||||||||||||||||
Gross loans
|
$
|
171,615
|
$
|
220,158
|
$
|
499,940
|
$
|
255,870
|
$
|
321,327
|
$
|
674,713
|
$
|
2,143,623
|
As of December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Average loans outstanding(1)
|
$
|
2,325,632
|
$
|
1,997,783
|
$
|
1,921,221
|
$
|
1,790,201
|
$
|
1,689,915
|
||||||||||
Gross loans held for investment outstanding at period end
|
$
|
2,221,583
|
$
|
2,143,623
|
$
|
1,957,197
|
$
|
1,838,155
|
$
|
1,661,186
|
||||||||||
Allowance for loan losses at beginning of the period
|
$
|
24,197
|
$
|
23,126
|
$
|
21,461
|
$
|
21,174
|
$
|
24,220
|
||||||||||
Charge offs:
|
||||||||||||||||||||
Commercial real estate
|
7
|
—
|
1,540
|
18
|
43
|
|||||||||||||||
Commercial – specialized
|
1,162
|
355
|
115
|
173
|
2,429
|
|||||||||||||||
Commercial – general
|
1,811
|
306
|
4,291
|
2,658
|
2,143
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
56
|
436
|
272
|
387
|
63
|
|||||||||||||||
Auto loans
|
1,165
|
1,067
|
972
|
875
|
656
|
|||||||||||||||
Other consumer
|
1,358
|
1,034
|
941
|
1,495
|
1,281
|
|||||||||||||||
Construction
|
—
|
75
|
15
|
—
|
130
|
|||||||||||||||
Total charge-offs
|
5,559
|
3,273
|
8,146
|
5,606
|
6,745
|
|||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial real estate
|
302
|
431
|
1,622
|
103
|
685
|
|||||||||||||||
Commercial – specialized
|
121
|
124
|
87
|
790
|
235
|
|||||||||||||||
Commercial – general
|
210
|
533
|
774
|
567
|
495
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
131
|
61
|
74
|
80
|
5
|
|||||||||||||||
Auto loans
|
192
|
182
|
165
|
149
|
50
|
|||||||||||||||
Other consumer
|
388
|
214
|
188
|
238
|
260
|
|||||||||||||||
Construction
|
1
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total recoveries
|
1,345
|
1,545
|
2,910
|
1,927
|
1,730
|
|||||||||||||||
Net charge-offs
|
(4,214
|
)
|
(1,728
|
)
|
(5,236
|
)
|
(3,679
|
)
|
(5,015
|
)
|
||||||||||
Provision for loan losses
|
25,570
|
2,799
|
6,901
|
3,966
|
1,969
|
|||||||||||||||
Balance at end of period
|
$
|
45,553
|
$
|
24,197
|
$
|
23,126
|
$
|
21,461
|
$
|
21,174
|
||||||||||
Ratio of allowance to period end loans held for investment
|
2.05
|
%
|
1.13
|
%
|
1.18
|
%
|
1.17
|
%
|
1.27
|
%
|
||||||||||
Ratio of net charge-offs to average loans(1)
|
0.18
|
%
|
0.09
|
%
|
0.27
|
%
|
0.21
|
%
|
0.30
|
%
|
(1) |
Average outstanding balances include loans held for sale.
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||||||||||||||||||||||
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial real estate
|
$
|
18,962
|
41.6
|
%
|
$
|
5,049
|
20.9
|
%
|
$
|
5,579
|
24.1
|
%
|
$
|
3,769
|
17.6
|
%
|
$
|
4,049
|
19.1
|
%
|
||||||||||||||||||||
Commercial – specialized
|
5,760
|
12.6
|
2,287
|
9.5
|
2,516
|
10.9
|
2,367
|
11.0
|
3,474
|
16.4
|
||||||||||||||||||||||||||||||
Commercial – general
|
9,227
|
20.3
|
9,609
|
39.7
|
8,173
|
35.3
|
10,151
|
47.3
|
9,589
|
45.3
|
||||||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
1-4 family residential
|
4,646
|
10.2
|
2,093
|
8.6
|
2,249
|
9.6
|
1,787
|
8.3
|
1,555
|
7.4
|
||||||||||||||||||||||||||||||
Auto loans
|
4,226
|
9.3
|
3,385
|
14.0
|
2,994
|
12.9
|
2,068
|
9.7
|
1,272
|
6.0
|
||||||||||||||||||||||||||||||
Other consumer
|
1,671
|
3.7
|
1,341
|
5.5
|
1,192
|
5.2
|
971
|
4.5
|
1,083
|
5.1
|
||||||||||||||||||||||||||||||
Construction
|
1,061
|
2.3
|
433
|
1.8
|
423
|
1.8
|
348
|
1.6
|
152
|
0.7
|
||||||||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
45,553
|
100.0
|
%
|
$
|
24,197
|
100.0
|
%
|
$
|
23,126
|
100.0
|
%
|
$
|
21,461
|
100.0
|
%
|
$
|
21,174
|
100.0
|
%
|
Current
|
30-89 Days
Past Due
|
90+ Days
Past Due
|
Nonaccrual
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Commercial real estate
|
$
|
656,085
|
914
|
34
|
6,311
|
663,344
|
||||||||||||||
Commercial – specialized
|
311,173
|
241
|
—
|
272
|
311,686
|
|||||||||||||||
Commercial – general
|
510,780
|
1,891
|
149
|
5,489
|
518,309
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
355,725
|
2,089
|
906
|
1,595
|
360,315
|
|||||||||||||||
Auto loans
|
205,064
|
738
|
38
|
—
|
205,840
|
|||||||||||||||
Other consumer
|
66,944
|
481
|
119
|
51
|
67,595
|
|||||||||||||||
Construction
|
94,288
|
206
|
—
|
—
|
94,494
|
|||||||||||||||
Total loans
|
$
|
2,200,059
|
$
|
6,560
|
$
|
1,246
|
$
|
13,718
|
$
|
2,221,583
|
Current
|
30-89 Days
Past Due
|
90+ Days
Past Due
|
Nonaccrual
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
657,880
|
$
|
37
|
$
|
116
|
$
|
162
|
$
|
658,195
|
||||||||||
Commercial – specialized
|
307,625
|
708
|
—
|
1,172
|
309,505
|
|||||||||||||||
Commercial – general
|
437,397
|
1,747
|
—
|
2,254
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
359,547
|
1,212
|
932
|
1,105
|
362,796
|
|||||||||||||||
Auto loans
|
213,558
|
1,468
|
183
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,031
|
848
|
121
|
—
|
74,000
|
|||||||||||||||
Construction
|
81,361
|
1,159
|
—
|
—
|
82,520
|
|||||||||||||||
Total loans
|
$
|
2,130,399
|
$
|
7,179
|
$
|
1,352
|
$
|
4,693
|
$
|
2,143,623
|
As of December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Nonaccrual loans
|
$
|
13,718
|
$
|
4,693
|
$
|
6,390
|
$
|
12,704
|
$
|
6,187
|
||||||||||
Past due loans 90 days or more and still accruing
|
1,246
|
1,352
|
564
|
1,197
|
1,008
|
|||||||||||||||
Total nonperforming loans
|
14,964
|
6,045
|
6,954
|
13,901
|
7,195
|
|||||||||||||||
Other real estate owned
|
1,353
|
1,883
|
2,285
|
2,830
|
7,849
|
|||||||||||||||
Total nonperforming assets
|
$
|
16,317
|
$
|
7,928
|
$
|
9,239
|
$
|
16,731
|
$
|
15,044
|
||||||||||
Restructured loans - nonaccrual(1)
|
$
|
88
|
$
|
436
|
$
|
494
|
$
|
549
|
$
|
671
|
||||||||||
Restructured loans - accruing
|
$
|
1,687
|
$
|
1,804
|
$
|
3,351
|
$
|
3,592
|
$
|
7,817
|
||||||||||
Nonperforming loans to gross loans
|
0.67
|
%
|
0.28
|
%
|
0.36
|
%
|
0.76
|
%
|
0.43
|
%
|
||||||||||
Nonperforming assets to total loans and OREO
|
0.73
|
%
|
0.37
|
%
|
0.47
|
%
|
0.91
|
%
|
0.90
|
%
|
||||||||||
Allowance for loan losses to nonperforming loans
|
304.42
|
%
|
400.28
|
%
|
332.56
|
%
|
154.38
|
%
|
294.29
|
%
|
||||||||||
Allowance for loan losses to gross loans
|
2.05
|
%
|
1.13
|
%
|
1.18
|
%
|
1.17
|
%
|
1.27
|
%
|
||||||||||
Nonaccrual loans by category:
|
||||||||||||||||||||
Commercial real estate
|
$
|
6,311
|
$
|
162
|
$
|
217
|
$
|
5,558
|
$
|
662
|
||||||||||
Commercial – specialized
|
272
|
1,172
|
2,550
|
1,587
|
858
|
|||||||||||||||
Commercial – general
|
5,489
|
2,254
|
2,134
|
3,385
|
3,249
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
1,595
|
1,105
|
1,489
|
2,088
|
1,293
|
|||||||||||||||
Auto loans
|
—
|
—
|
—
|
11
|
23
|
|||||||||||||||
Other consumer
|
51
|
—
|
—
|
—
|
7
|
|||||||||||||||
Construction
|
—
|
—
|
—
|
75
|
95
|
|||||||||||||||
Total
|
$
|
13,718
|
$
|
4,693
|
$
|
6,390
|
$
|
12,704
|
$
|
6,187
|
(1) |
Restructured loans, nonaccrual, are included in nonaccrual loans which are a component of nonperforming loans.
|
• |
Restaurant and retail owner-occupied loans totaled $90.5 million (or 4.1% of total loans). The average loan size was $312,000. There was $2.0 million in classified loans, $287,000 in loans past due 30 days or
more, and $1.5 million in nonaccrual loans. The related allowance for loan losses to total restaurant and retail owner-occupied loans was 3.56%. As of December 31, 2020, approximately 2% of these loans were active modifications as a result
of the COVID-19 pandemic. Of these modifications, 31% were for six months of interest-only payments with the remaining 69% being 90-day payment deferrals.
|
• |
Hospitality and assisted living center loans totaled $123.5 million (or 5.6% of total loans), excluding properties under construction. The average loan size was $2.8 million. There was $52.6 million
in classified loans, $495,000 in loans past due 30 days or more, and $2.3 million in nonaccrual loans. The related allowance for loan losses to total hospitality and assisted living center loans was 7.71%.
As of December 31, 2020, approximately 46% of these loans were active modifications as a result of the COVID-19 pandemic. All of these modifications were interest-only periods of 12 months or a combination of a 90-day deferral and nine
months of interest only.
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Commercial real estate
|
$
|
602,250
|
$
|
—
|
$
|
61,094
|
$
|
—
|
$
|
663,344
|
||||||||||
Commercial – specialized
|
303,831
|
—
|
7,855
|
—
|
311,686
|
|||||||||||||||
Commercial – general
|
510,543
|
—
|
7,766
|
—
|
518,309
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
352,930
|
—
|
7,385
|
—
|
360,315
|
|||||||||||||||
Auto loans
|
204,301
|
—
|
1,539
|
—
|
205,840
|
|||||||||||||||
Other consumer
|
67,216
|
—
|
379
|
—
|
67,595
|
|||||||||||||||
Construction
|
94,494
|
—
|
—
|
—
|
94,494
|
|||||||||||||||
Total
|
$
|
2,135,565
|
$
|
—
|
$
|
86,018
|
$
|
—
|
$
|
2,221,583
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
632,641
|
$
|
22,313
|
$
|
3,241
|
$
|
—
|
$
|
658,195
|
||||||||||
Commercial – specialized
|
307,239
|
—
|
2,266
|
—
|
309,505
|
|||||||||||||||
Commercial – general
|
428,155
|
—
|
13,243
|
—
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
356,422
|
—
|
6,374
|
—
|
362,796
|
|||||||||||||||
Auto loans
|
214,363
|
—
|
846
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,716
|
—
|
284
|
—
|
74,000
|
|||||||||||||||
Construction
|
82,520
|
—
|
—
|
—
|
82,520
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2020
|
||||||||||||||||||||
Current
|
$
|
2,130,157
|
$
|
—
|
$
|
69,902
|
$
|
—
|
$
|
2,200,059
|
||||||||||
Past due 30 – 89 days
|
5,259
|
—
|
1,301
|
—
|
6,560
|
|||||||||||||||
Past due 90+ days
|
149
|
—
|
1,097
|
—
|
1,246
|
|||||||||||||||
Nonaccrual
|
—
|
—
|
13,718
|
—
|
13,718
|
|||||||||||||||
Total
|
$
|
2,135,565
|
$
|
—
|
$
|
86,018
|
$
|
—
|
$
|
2,221,583
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Current
|
$
|
2,088,827
|
$
|
22,313
|
$
|
19,259
|
$
|
—
|
$
|
2,130,399
|
||||||||||
Past due 30 – 89 days
|
6,140
|
—
|
1,039
|
—
|
7,179
|
|||||||||||||||
Past due 90+ days
|
89
|
—
|
1,263
|
—
|
1,352
|
|||||||||||||||
Nonaccrual
|
—
|
—
|
4,693
|
—
|
4,693
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
December 31, 2020
|
December 31, 2019
|
|||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Unrealized
Gain/(Loss)
|
Amortized
Cost
|
Fair
Value
|
Unrealized
Gain/(Loss)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
$
|
4,753
|
$
|
3
|
$
|
4,750
|
$
|
4,807
|
$
|
57
|
||||||||||||
State and municipal
|
261,023
|
272,607
|
11,584
|
94,512
|
94,692
|
180
|
||||||||||||||||||
Mortgage-backed securities
|
359,542
|
373,362
|
13,820
|
463,899
|
464,516
|
617
|
||||||||||||||||||
Collateralized mortgage obligations
|
107,175
|
106,715
|
(460
|
)
|
107,443
|
107,289
|
(154
|
)
|
||||||||||||||||
Asset-backed and other amortizing securities
|
31,509
|
33,572
|
2,063
|
35,833
|
36,346
|
513
|
||||||||||||||||||
Other securities
|
12,000
|
12,078
|
78
|
—
|
—
|
—
|
||||||||||||||||||
Total available-for-sale
|
$
|
775,999
|
$
|
803,087
|
$
|
27,088
|
$
|
706,437
|
$
|
707,650
|
$
|
1,213
|
As of December 31, 2020
|
||||||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Ten Years
|
Due after
Ten Years
|
|||||||||||||||||||||||||||||
Amortized
Cost
|
Weighted
Average Yield
|
Amortized
Cost
|
Weighted
Average Yield
|
Amortized
Cost
|
Weighted
Average Yield
|
Amortized
Cost
|
Weighted
Average Yield
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
2.75
|
%
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
$
|
—
|
—
|
%
|
||||||||||||||||
State and municipal
|
1,982
|
11.60
|
3,397
|
2.70
|
14,079
|
2.11
|
241,565
|
2.28
|
||||||||||||||||||||||||
Mortgage-backed securities
|
—
|
—
|
577
|
1.50
|
12,723
|
1.94
|
346,242
|
1.95
|
||||||||||||||||||||||||
Collateralized mortgage obligations
|
—
|
—
|
—
|
—
|
—
|
—
|
107,175
|
0.62
|
||||||||||||||||||||||||
Asset-backed and other amortizing securities
|
—
|
—
|
—
|
—
|
820
|
2.89
|
30,689
|
2.82
|
||||||||||||||||||||||||
Other securities
|
—
|
—
|
—
|
—
|
12,000
|
4.47
|
%
|
—
|
—
|
|||||||||||||||||||||||
Total available-for-sale
|
$
|
6,732
|
5.35
|
%
|
$
|
3,974
|
2.52
|
%
|
$
|
39,622
|
2.78
|
%
|
$
|
725,671
|
1.90
|
%
|
2020
|
2019
|
|||||||||||||||
Average
Balance
|
Weighted
Average Rate
|
Average
Balance
|
Weighted
Average Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest-bearing deposits
|
$
|
888,653
|
—
|
%
|
$
|
570,428
|
—
|
%
|
||||||||
Interest-bearing deposits:
|
||||||||||||||||
NOW and interest-bearing demand accounts
|
329,431
|
0.13
|
266,991
|
0.35
|
||||||||||||
Savings accounts
|
113,681
|
0.09
|
71,754
|
0.20
|
||||||||||||
Money market accounts
|
1,209,976
|
0.48
|
1,109,575
|
1.38
|
||||||||||||
Time deposits
|
331,623
|
1.68
|
319,811
|
1.89
|
||||||||||||
Total interest-bearing deposits
|
1,984,711
|
0.60
|
1,768,131
|
1.27
|
||||||||||||
Total deposits
|
$
|
2,873,364
|
0.41
|
%
|
$
|
2,338,559
|
0.96
|
%
|
(Dollars in thousands)
|
Three
Months
|
Three to
Six Months
|
Six to
12 Months
|
After
12 Months
|
Total
|
|||||||||||||||
$
|
31,359
|
$
|
36,580
|
$
|
57,807
|
$
|
118,737
|
$
|
244,483
|
As of and for the Year
Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
(Dollars in thousands)
|
||||||||
Amount outstanding at year-end
|
$
|
75,000
|
$
|
95,000
|
||||
Weighted average interest rate at year-end
|
0.21
|
%
|
1.64
|
%
|
||||
Maximum month-end balance during the year
|
$
|
170,000
|
$
|
115,000
|
||||
Average balance outstanding during the year
|
$
|
116,517
|
$
|
95,055
|
||||
Weighted average interest rate during the year
|
0.44
|
%
|
2.13
|
%
|
As of and for the Year
Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
(Dollars in thousands)
|
||||||||
Amount outstanding at year-end
|
$
|
—
|
$
|
—
|
||||
Weighted average interest rate at year-end
|
—
|
%
|
—
|
%
|
||||
Maximum month-end balance during the year
|
$
|
—
|
$
|
—
|
||||
Average balance outstanding during the year
|
$
|
1,209
|
$
|
—
|
||||
Weighted average interest rate during the year
|
0.22
|
%
|
—
|
%
|
Name of Trust
|
Issue
Date
|
Amount
of Trust
Preferred
Securities
|
Amount of
Debentures
|
Stated
Maturity Date
of Trust Preferred
Securities and
Debentures(1)
|
Interest Rate of
Trust Preferred
Securities and
Debentures(2)(3)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||
South Plains Financial Capital Trust III
|
2004
|
$
|
10,000
|
$
|
10,310
|
2034
|
3-mo. LIBOR
+ 265 bps; 2.86%
|
||||||||
South Plains Financial Capital Trust IV
|
2005
|
20,000
|
20,619
|
2035
|
33-mo. LIBOR
+ 139 bps; 1.61%
|
||||||||||
South Plains Financial Capital Trust V
|
2007
|
15,000
|
15,464
|
2037
|
3-mo. LIBOR
+ 150 bps; 1.72%
|
||||||||||
Total
|
$
|
45,000
|
$
|
46,393
|
(1) |
May be redeemed at the Company’s option.
|
(2) |
Interest payable quarterly with principal due at maturity.
|
(3) |
Rate as of last reset date, prior to December 31, 2020.
|
Actual
|
Minimum Capital
Requirement with
Capital Buffer
|
Minimum
To be Considered
Well Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
As of December 31, 2020:
|
||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
$
|
473,425
|
19.08
|
%
|
$
|
260,531
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Bank
|
404,138
|
16.29
|
%
|
260,481
|
10.50
|
%
|
$
|
248,077
|
10.00
|
%
|
||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
366,639
|
14.78
|
%
|
210,906
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
372,947
|
15.03
|
%
|
210,866
|
8.50
|
%
|
198,462
|
8.00
|
%
|
|||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
321,639
|
12.96
|
%
|
173,688
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
372,947
|
15.03
|
%
|
173,654
|
7.00
|
%
|
161,250
|
6.50
|
%
|
|||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||
Consolidated
|
366,639
|
10.24
|
%
|
144,347
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
372,947
|
10.42
|
%
|
144,282
|
4.00
|
%
|
178,999
|
5.00
|
%
|
Actual
|
Minimum Capital
Requirement with
Capital Buffer
|
Minimum
To be Considered
Well Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
As of December 31, 2019:
|
||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
$
|
373,684
|
14.88
|
%
|
$
|
263,769
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
Bank
|
368,322
|
14.67
|
%
|
263,702
|
10.50
|
%
|
$
|
251,145
|
10.00
|
%
|
||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
12.85
|
%
|
213,527
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
343,945
|
13.70
|
%
|
213,473
|
8.50
|
%
|
200,916
|
8.00
|
%
|
|||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Consolidated
|
277,835
|
11.06
|
%
|
175,846
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
343,945
|
13.70
|
%
|
175,801
|
7.00
|
%
|
163,244
|
6.50
|
%
|
|||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
10.74
|
%
|
120,219
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
Bank
|
343,945
|
11.45
|
%
|
121,235
|
4.00
|
%
|
150,175
|
5.00
|
%
|
As of December 31, 2020
|
||||||||||||||||||||
Within
One Year
|
One to
Three Years
|
Three to
Five Years
|
After Five
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Time deposits
|
$
|
187,976
|
$
|
128,295
|
$
|
9,220
|
$
|
10
|
$
|
325,501
|
||||||||||
Short-term borrowings
|
26,550
|
—
|
—
|
—
|
26,550
|
|||||||||||||||
Notes payable and other long-term borrowings
|
—
|
—
|
75,000
|
—
|
75,000
|
|||||||||||||||
Subordinated debt securities
|
—
|
—
|
—
|
75,589
|
75,589
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
—
|
—
|
—
|
46,393
|
46,393
|
|||||||||||||||
Operating lease commitments
|
1,644
|
2,774
|
1,604
|
4,613
|
10,635
|
|||||||||||||||
Total contractual obligations
|
$
|
216,170
|
$
|
131,069
|
$
|
85,824
|
$
|
126,605
|
$
|
559,668
|
As of December 31, 2019
|
||||||||||||||||||||
Within
One Year
|
One to
Three Years
|
Three to
Five Years
|
After Five
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Time deposits
|
$
|
217,527
|
$
|
93,029
|
$
|
45,467
|
$
|
—
|
$
|
356,023
|
||||||||||
Short-term borrowings
|
37,165
|
—
|
—
|
—
|
37,165
|
|||||||||||||||
Notes payable and other long-term borrowings
|
20,000
|
—
|
—
|
75,000
|
95,000
|
|||||||||||||||
Subordinated debt securities
|
—
|
—
|
—
|
26,472
|
26,472
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
—
|
—
|
—
|
46,393
|
46,393
|
|||||||||||||||
Operating lease commitments
|
1,613
|
2,687
|
1,721
|
4,367
|
10,388
|
|||||||||||||||
Total contractual obligations
|
$
|
276,305
|
$
|
95,716
|
$
|
47,188
|
$
|
152,232
|
$
|
571,441
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(Dollars in thousands)
|
||||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
417,798
|
$
|
409,969
|
||||
Standby letters of credit
|
10,481
|
10,748
|
||||||
Total
|
$
|
428,279
|
$
|
420,717
|
As of December 31,
|
||||||
2020
|
2019
|
|||||
Change in Interest Rates (Basis Points)
|
Percent Change in
Net Interest Income
|
Percent Change in
Net Interest Income
|
||||
+300
|
5.33
|
(2.44)
|
||||
+200
|
2.90
|
(1.40)
|
||||
+100
|
1.06
|
(0.71)
|
||||
-100
|
(1.24)
|
(0.23)
|
As of December 31,
|
||||||||
2020
|
2019
|
|||||||
(Dollars in thousands)
|
||||||||
Total stockholders’ equity
|
$
|
370,048
|
$
|
306,182
|
||||
Less: Goodwill and other intangibles
|
(27,070
|
)
|
(27,389
|
)
|
||||
Tangible common equity
|
$
|
$ 342,978
|
$
|
278,793
|
||||
Total assets
|
$
|
3,599,160
|
$
|
3,237,167
|
||||
Less: Goodwill and other intangibles
|
(27,070
|
)
|
(27,389
|
)
|
||||
Tangible assets
|
$
|
3,572,090
|
$
|
3,209,778
|
||||
Shares outstanding
|
18,076,364
|
18,036,115
|
||||||
Total stockholders’ equity to total assets
|
10.28
|
%
|
9.46
|
%
|
||||
Tangible common equity to tangible assets
|
9.60
|
%
|
8.69
|
%
|
||||
Book value per share
|
$
|
20.47
|
$
|
16.98
|
||||
Tangible book value per share
|
$
|
18.97
|
$
|
15.46
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8. |
Financial Statements and Supplementary Data
|
Page
|
||
66 | ||
Consolidated Financial Statements:
|
||
67 | ||
68 | ||
70 | ||
71 | ||
72 |
December 31,
|
||||||||
2020
|
2019
|
|||||||
ASSETS
|
(In thousands except per share data)
|
|||||||
Cash and due from banks
|
$
|
76,146
|
$
|
56,246
|
||||
Interest-bearing deposits in banks
|
224,161
|
101,853
|
||||||
Cash and cash equivalents
|
300,307
|
158,099
|
||||||
Securities available for sale
|
803,087
|
707,650
|
||||||
Loans held for sale
|
111,477
|
49,035
|
||||||
Loans held for investment
|
2,221,583
|
2,143,623
|
||||||
Allowance for loan losses
|
(45,553
|
)
|
(24,197
|
)
|
||||
Accrued interest receivable
|
15,233
|
13,924
|
||||||
Premises and equipment, net
|
60,331
|
61,873
|
||||||
Bank-owned life insurance
|
70,731
|
69,397
|
||||||
Goodwill
|
19,508
|
18,757
|
||||||
Intangible assets, net
|
7,562
|
8,632
|
||||||
Mortgage servicing rights
|
9,049
|
2,054
|
||||||
Deferred tax asset, net
|
2,461
|
5,619
|
||||||
Other assets
|
23,384
|
22,701
|
||||||
Total assets
|
$
|
3,599,160
|
$
|
3,237,167
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
917,322
|
$
|
790,921
|
||||
Interest-bearing
|
2,057,029
|
1,905,936
|
||||||
Total deposits
|
2,974,351
|
2,696,857
|
||||||
Short-term borrowings
|
26,550
|
37,165
|
||||||
Accrued expenses and other liabilities
|
31,229
|
29,098
|
||||||
Notes payable & other borrowings
|
75,000
|
95,000
|
||||||
Subordinated debt securities
|
75,589
|
26,472
|
||||||
Junior subordinated deferrable interest debentures
|
46,393
|
46,393
|
||||||
Total liabilities
|
3,229,112
|
2,930,985
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $1 par value, 30,000,000 shares authorized; 18,076,364 issued in 2020 and 18,036,115 issued in 2019
|
18,076
|
18,036
|
||||||
Additional paid-in capital
|
141,112
|
140,492
|
||||||
Retained earnings
|
189,521
|
146,696
|
||||||
Accumulated other comprehensive income
|
21,339
|
958
|
||||||
Total stockholders’ equity
|
370,048
|
306,182
|
||||||
Total liabilities and stockholders’ equity
|
$
|
3,599,160
|
$
|
3,237,167
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
(In thousands except per share data)
|
||||||||
Interest income:
|
||||||||
Loans, including fees
|
$
|
121,733
|
$
|
116,904
|
||||
Securities:
|
||||||||
Taxable
|
12,267
|
8,890
|
||||||
Non taxable
|
3,546
|
1,018
|
||||||
Federal funds sold and interest-bearing deposits in banks
|
685
|
6,130
|
||||||
Total interest income
|
138,231
|
132,942
|
||||||
Interest expense:
|
||||||||
Deposits
|
11,894
|
22,491
|
||||||
Notes payable & other borrowings
|
662
|
2,314
|
||||||
Subordinated debt securities
|
2,223
|
1,616
|
||||||
Junior subordinated deferrable interest debentures
|
1,167
|
1,946
|
||||||
Total interest expense
|
15,946
|
28,367
|
||||||
Net interest income
|
122,285
|
104,575
|
||||||
Provision for loan losses
|
25,570
|
2,799
|
||||||
Net interest income, after provision for loan losses
|
96,715
|
101,776
|
||||||
Noninterest income:
|
||||||||
Service charges on deposit accounts
|
7,032
|
8,129
|
||||||
Income from insurance activities
|
7,644
|
7,016
|
||||||
Net gain on sales of loans
|
63,531
|
23,521
|
||||||
Bank card services and interchange fees
|
10,035
|
8,692
|
||||||
Realized gain on sale of securities
|
2,318
|
—
|
||||||
Investment commissions
|
1,698
|
1,710
|
||||||
Fiduciary fees
|
3,185
|
2,306
|
||||||
Other
|
6,160
|
5,259
|
||||||
Total noninterest income
|
101,603
|
56,633
|
||||||
Noninterest expense:
|
||||||||
Salaries and employee benefits
|
89,220
|
75,392
|
||||||
Occupancy and equipment, net
|
14,658
|
13,572
|
||||||
Professional services
|
6,322
|
7,334
|
||||||
Marketing and development
|
3,088
|
3,017
|
||||||
IT and data services
|
3,574
|
2,830
|
||||||
Bank card expenses
|
4,253
|
3,346
|
||||||
Appraisal expenses
|
2,782
|
1,625
|
||||||
Other
|
17,818
|
14,592
|
||||||
Total noninterest expense
|
141,715
|
121,708
|
||||||
Income before income taxes
|
56,603
|
36,701
|
||||||
Income tax expense
|
11,250
|
7,481
|
||||||
Net income
|
$
|
45,353
|
$
|
29,220
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
(In thousands except per share
data)
|
||||||||
Earnings per share:
|
||||||||
Basic
|
$
|
2.51
|
$
|
1.74
|
||||
Diluted
|
$
|
2.47
|
$
|
1.71
|
||||
Net income
|
$
|
45,353
|
$
|
29,220
|
||||
Other comprehensive income:
|
||||||||
Change in net unrealized gain (loss) on securities available for sale
|
28,193
|
4,025
|
||||||
Change in net gain (loss) on cash flow hedges
|
(76
|
)
|
—
|
|||||
Reclassification adjustment for (gain) loss included in net income
|
(2,318
|
)
|
28
|
|||||
Tax effect
|
(5,418
|
)
|
(852
|
)
|
||||
Other comprehensive income
|
20,381
|
3,201
|
||||||
Comprehensive income
|
$
|
65,734
|
$
|
32,421
|
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
Less:
ESOP
Owned
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Shares
|
Total
|
||||||||||||||||||||||
(In thousands, except share data)
|
||||||||||||||||||||||||||||
Balance at December 31, 2018
|
14,771,520
|
14,772
|
80,412
|
119,834
|
(2,243
|
)
|
(58,195
|
)
|
154,580
|
|||||||||||||||||||
Issuance of common stock, net
|
3,207,000
|
3,207
|
48,185
|
—
|
—
|
—
|
51,392
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
29,220
|
—
|
—
|
29,220
|
|||||||||||||||||||||
Cash dividends:
|
||||||||||||||||||||||||||||
Common - $0.06 per share
|
—
|
—
|
—
|
(1,079
|
)
|
—
|
—
|
(1,079
|
)
|
|||||||||||||||||||
Other comprehensive income, (net of tax)
|
—
|
—
|
—
|
—
|
3,201
|
—
|
3,201
|
|||||||||||||||||||||
Terminated ESOP put option
|
—
|
—
|
—
|
—
|
—
|
58,195
|
58,195
|
|||||||||||||||||||||
Exercise of employee stock options, net of 111,011 shares for cashless exercise and net of 18,894 shares for taxes
|
57,595
|
57
|
(408
|
)
|
—
|
—
|
—
|
(351
|
)
|
|||||||||||||||||||
Stock-based compensation
|
—
|
—
|
853
|
—
|
—
|
—
|
853
|
|||||||||||||||||||||
Share-based liability awards modified to equity awards
|
—
|
—
|
11,450
|
—
|
—
|
—
|
11,450
|
|||||||||||||||||||||
Cumulative change in accounting principle
|
—
|
—
|
—
|
(1,279
|
)
|
—
|
—
|
(1,279
|
)
|
|||||||||||||||||||
Balance at December 31, 2019
|
18,036,115
|
18,036
|
140,492
|
146,696
|
958
|
—
|
306,182
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
45,353
|
—
|
—
|
45,353
|
|||||||||||||||||||||
Cash dividends:
|
||||||||||||||||||||||||||||
Common - $0.14 per share
|
—
|
—
|
—
|
(2,528
|
)
|
—
|
—
|
(2,528
|
)
|
|||||||||||||||||||
Other comprehensive income, (net of tax)
|
—
|
—
|
—
|
—
|
20,381
|
—
|
20,381
|
|||||||||||||||||||||
Exercise of employee stock options, net of 69,855 shares for cashless exercise and net of 17,762 shares for taxes
|
59,284
|
59
|
(378
|
)
|
—
|
—
|
—
|
(319
|
)
|
|||||||||||||||||||
Repurchases of common stock
|
(19,035
|
)
|
(19
|
)
|
(274
|
)
|
—
|
—
|
—
|
(293
|
)
|
|||||||||||||||||
Stock-based compensation
|
—
|
—
|
1,272
|
—
|
—
|
—
|
1,272
|
|||||||||||||||||||||
Balance at December 31, 2020
|
18,076,364
|
$
|
18,076
|
$
|
141,112
|
$
|
189,521
|
$
|
21,339
|
$
|
—
|
$
|
370,048
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
(In thousands except per share data)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
45,353
|
$
|
29,220
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
Provision for loan losses
|
25,570
|
2,799
|
||||||
Depreciation and amortization
|
6,575
|
5,225
|
||||||
Accretion and amortization
|
3,166
|
252
|
||||||
Other (gains) losses, net
|
(2,539
|
)
|
40
|
|||||
Net gain on sales of loans
|
(63,531
|
)
|
(23,521
|
)
|
||||
Proceeds from sales of loans held for sale
|
1,434,173
|
652,216
|
||||||
Loans originated for sale
|
(1,442,913
|
)
|
(640,680
|
)
|
||||
Earnings on bank-owned life insurance
|
(1,334
|
)
|
(1,293
|
)
|
||||
Stock-based compensation
|
1,272
|
853
|
||||||
Change in valuation of mortgage servicing rights
|
2,834
|
548 |
||||||
Net change in:
|
||||||||
Accrued interest receivable and other assets
|
(4,610
|
)
|
321
|
|
||||
Accrued expenses and other liabilities
|
1,611
|
4,504
|
||||||
Net cash from operating activities
|
5,627
|
30,484
|
||||||
Cash flows from investing activities:
|
||||||||
Activity in securities available for sale:
|
||||||||
Purchases
|
(279,727
|
)
|
(489,032
|
)
|
||||
Sales
|
94,514
|
52,495
|
||||||
Maturities, prepayments, and calls
|
114,850
|
139,255
|
||||||
Loan originations and principal collections, net
|
(84,991
|
)
|
5,572
|
|||||
Cash paid for acquisition
|
(687
|
)
|
—
|
|||||
Net cash received in business combinations
|
—
|
78,171
|
||||||
Goodwill adjustment related to litigation settlement
|
460
|
—
|
||||||
Purchases of premises and equipment, net
|
(3,310
|
)
|
(3,997
|
)
|
||||
Proceeds from sales of premises and equipment
|
222
|
208
|
||||||
Proceeds from sales of foreclosed assets
|
2,441
|
3,835
|
||||||
Net cash from investing activities
|
(156,228
|
)
|
(213,493
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
277,494
|
33,227
|
||||||
Net change in short-term borrowings
|
(10,615
|
)
|
19,460
|
|||||
Proceeds from common stock issuance, net
|
—
|
51,392
|
||||||
Proceeds from subordinated debt issuance, net
|
49,070
|
—
|
||||||
Payments to tax authorities for stock-based compensation
|
(319
|
)
|
(351
|
)
|
||||
Proceeds from notes payable and other borrowings
|
75,000
|
—
|
||||||
Payments made on notes payable and other borrowings
|
(95,000
|
)
|
(7,530
|
)
|
||||
Cash dividends on common stock
|
(2,528
|
)
|
(1,079
|
)
|
||||
Payments to repurchase common stock
|
(293
|
)
|
—
|
|||||
Net cash from financing activities
|
292,809
|
95,119
|
||||||
Net change in cash and cash equivalents
|
$
|
142,208
|
$
|
(87,890
|
)
|
|||
Beginning cash and cash equivalents
|
158,099
|
245,989
|
||||||
Ending cash and cash equivalents
|
$
|
300,307
|
$
|
158,099
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid on deposits and borrowed funds
|
$
|
16,116
|
$
|
28,125
|
||||
Income taxes paid
|
13,513
|
6,474
|
||||||
Supplemental schedule of noncash activities:
|
||||||||
Loans transferred to foreclosed assets
|
1,867
|
2,452
|
||||||
Business combination measurement period adjustment
|
1,211
|
—
|
||||||
Additions to mortgage servicing rights
|
9,829 |
1,332 |
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Wholly Owned, Consolidated Subsidiaries:
|
|
City Bank
|
Bank subsidiary
|
Windmark Insurance Agency, Inc.
|
Non-bank subsidiary
|
Ruidoso Retail, Inc.
|
Non-bank subsidiary
|
CB Provence, LLC
|
Non-bank subsidiary
|
CBT Brushy Creek, LLC
|
Non-bank subsidiary
|
CBT Properties, LLC
|
Non-bank subsidiary
|
Wholly Owned, Equity Method Subsidiaries:
|
|
South Plains Financial Capital Trusts (SPFCT) III-V
|
Non-bank subsidiaries
|
2.
|
SECURITIES
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
2020
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
$
|
3
|
$
|
—
|
$
|
4,753
|
||||||||
State and municipal
|
261,023
|
11,704
|
(120
|
)
|
272,607
|
|||||||||||
Mortgage-backed securities
|
359,542
|
14,014
|
(194
|
)
|
373,362
|
|||||||||||
Collateralized mortgage obligations
|
107,175
|
—
|
(460
|
)
|
106,715
|
|||||||||||
Asset-backed and other amortizing securities
|
31,509
|
2,063
|
—
|
33,572
|
||||||||||||
Other securities
|
12,000
|
91
|
(13
|
)
|
12,078
|
|||||||||||
$
|
775,999
|
$
|
27,875
|
$
|
(787
|
)
|
$
|
803,087
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
2019
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
$
|
57
|
$
|
—
|
$
|
4,807
|
||||||||
State and municipal
|
94,512
|
1,091
|
(911
|
)
|
94,692
|
|||||||||||
Mortgage-backed securities
|
463,899
|
3,727
|
(3,110
|
)
|
464,516
|
|||||||||||
Collateralized mortgage obligations
|
107,443
|
15
|
(169
|
)
|
107,289
|
|||||||||||
Asset-backed and other amortizing securities
|
35,833
|
522
|
(9
|
)
|
36,346
|
|||||||||||
$
|
706,437
|
$
|
5,412
|
$
|
(4,199
|
)
|
$
|
707,650
|
Available for Sale
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
Within 1 year
|
$
|
6,731
|
$
|
6,761
|
||||
After 1 year through 5 years
|
3,398
|
3,585
|
||||||
After 5 years through 10 years
|
26,079
|
26,959
|
||||||
After 10 years
|
241,565
|
252,133
|
||||||
Other
|
498,226
|
513,649
|
||||||
$
|
775,999
|
$
|
803,087
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
|||||||||||||||||||
2020
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
State and municipal
|
—
|
120
|
—
|
—
|
—
|
120
|
||||||||||||||||||
Mortgage-backed securities
|
93,482
|
194
|
—
|
—
|
93,482
|
194
|
||||||||||||||||||
Collateralized mortgage obligations
|
106,715
|
460
|
—
|
—
|
106,715
|
460
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
3,486
|
—
|
—
|
—
|
3,486
|
—
|
||||||||||||||||||
Other securities
|
—
|
13
|
—
|
—
|
—
|
13
|
||||||||||||||||||
$
|
203,683
|
$
|
787
|
$
|
—
|
$
|
—
|
$
|
203,683
|
$
|
787
|
2019
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
–
|
$
|
–
|
$
|
—
|
$
|
—
|
$
|
–
|
$
|
–
|
||||||||||||
State and municipal
|
58,389
|
910
|
387
|
1
|
58,776
|
911
|
||||||||||||||||||
Mortgage-backed securities
|
284,120
|
3,071
|
4,661
|
40
|
288,781
|
3,111
|
||||||||||||||||||
Collateralized mortgage obligations
|
60,039
|
168
|
—
|
—
|
60,039
|
168
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
2,661
|
9
|
—
|
—
|
2,661
|
9
|
||||||||||||||||||
$
|
405,209
|
$
|
4,158
|
$
|
5,048
|
$
|
41
|
$
|
410,257
|
$
|
4,199
|
3.
|
LOANS HELD FOR INVESTMENT
|
2020
|
2019
|
|||||||
Commercial real estate
|
$
|
663,344
|
$
|
658,195
|
||||
Commercial - specialized
|
311,686
|
309,505
|
||||||
Commercial - general
|
518,309
|
441,398
|
||||||
Consumer:
|
||||||||
1-4 family residential
|
360,315
|
362,796
|
||||||
Auto loans
|
205,840
|
215,209
|
||||||
Other consumer
|
67,595
|
74,000
|
||||||
Construction
|
94,494
|
82,520
|
||||||
2,221,583
|
2,143,623
|
|||||||
Allowance for loan losses
|
(45,553
|
)
|
(24,197
|
)
|
||||
Loans, net
|
$
|
2,176,030
|
$
|
2,119,426
|
Beginning
Balance
|
Provision for
Loan Losses
|
Charge-offs
|
Recoveries
|
Ending
Balance
|
||||||||||||||||
2020
|
||||||||||||||||||||
Commercial real estate
|
$
|
5,049
|
$
|
13,618
|
$
|
(7
|
)
|
$
|
302
|
$
|
18,962
|
|||||||||
Commercial - specialized
|
2,287
|
4,514
|
(1,162
|
)
|
121
|
5,760
|
||||||||||||||
Commercial - general
|
9,609
|
1,219
|
(1,811
|
)
|
210
|
9,227
|
||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
2,093
|
2,478
|
(56
|
)
|
131
|
4,646
|
||||||||||||||
Auto loans
|
3,385
|
1,814
|
(1,165
|
)
|
192
|
4,226
|
||||||||||||||
Other consumer
|
1,341
|
1,300
|
(1,358
|
)
|
388
|
1,671
|
||||||||||||||
Construction
|
433
|
627
|
—
|
1
|
1,061
|
|||||||||||||||
Total
|
$
|
24,197
|
$
|
25,570
|
$
|
(5,559
|
)
|
$
|
1,345
|
$
|
45,553
|
|||||||||
2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
5,579
|
$
|
(961
|
)
|
$
|
—
|
$
|
431
|
$
|
5,049
|
|||||||||
Commercial - specialized
|
2,516
|
2
|
(355
|
)
|
124
|
2,287
|
||||||||||||||
Commercial - general
|
8,173
|
1,209
|
(306
|
)
|
533
|
9,609
|
||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
2,249
|
219
|
(436
|
)
|
61
|
2,093
|
||||||||||||||
Auto loans
|
2,994
|
1,276
|
(1,067
|
)
|
182
|
3,385
|
||||||||||||||
Other consumer
|
1,192
|
969
|
(1,034
|
)
|
214
|
1,341
|
||||||||||||||
Construction
|
423
|
85
|
(75
|
)
|
—
|
433
|
||||||||||||||
Total
|
$
|
23,126
|
$
|
2,799
|
$
|
(3,273
|
)
|
$
|
1,545
|
$
|
24,197
|
Recorded Investment
|
Allowance for Loan Losses
|
|||||||||||||||
Individually
Evaluated
|
Collectively
Evaluated
|
Individually
Evaluated
|
Collectively
Evaluated
|
|||||||||||||
2020
|
||||||||||||||||
Commercial real estate
|
$
|
6,273
|
$
|
657,071
|
$
|
580
|
$
|
18,382
|
||||||||
Commercial - specialized
|
—
|
311,686
|
—
|
5,760
|
||||||||||||
Commercial - general
|
4,626
|
513,683
|
515
|
8,712
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
2,122
|
358,193
|
—
|
4,646
|
||||||||||||
Auto loans
|
—
|
205,840
|
—
|
4,226
|
||||||||||||
Other consumer
|
—
|
67,595
|
—
|
1,671
|
||||||||||||
Construction
|
—
|
94,494
|
—
|
1,061
|
||||||||||||
Total
|
$
|
13,021
|
$
|
2,208,562
|
$
|
1,095
|
$
|
44,458
|
||||||||
2019
|
||||||||||||||||
Commercial -
|
$
|
299
|
$
|
657,896
|
$
|
—
|
$
|
5,049
|
||||||||
Commercial - specialized
|
573
|
308,932
|
—
|
2,287
|
||||||||||||
Commercial - general
|
1,396
|
440,002
|
525
|
9,084
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
1,899
|
360,897
|
—
|
2,093
|
||||||||||||
Auto loans
|
—
|
215,209
|
—
|
3,385
|
||||||||||||
Other consumer
|
—
|
74,000
|
—
|
1,341
|
||||||||||||
Construction
|
—
|
82,520
|
—
|
433
|
||||||||||||
Total
|
$
|
4,167
|
$
|
2,139,456
|
$
|
525
|
$
|
23,672
|
Unpaid
Contractual
Principal Balance
|
Recorded
Investment
With No Allowance
|
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
Average
Recorded
Investment
|
|||||||||||||||||||
2020
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
6,273
|
$
|
3,673
|
$
|
2,600
|
$
|
6,273
|
$
|
580
|
$
|
3,666
|
||||||||||||
Commercial -specialized
|
—
|
—
|
—
|
—
|
—
|
673
|
||||||||||||||||||
Commercial - general
|
4,626
|
3,364
|
1,262
|
4,626
|
515
|
3,400
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family
|
2,541
|
2,122
|
—
|
2,122
|
—
|
2,155
|
||||||||||||||||||
Auto loans
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
13,440
|
$
|
9,159
|
$
|
3,862
|
$
|
13,021
|
$
|
1,095
|
$
|
9,894
|
||||||||||||
2019
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
754
|
$
|
299
|
$
|
—
|
$
|
299
|
$
|
—
|
$
|
1,059
|
||||||||||||
Commercial specialized
|
573
|
573
|
—
|
573
|
—
|
1,345
|
||||||||||||||||||
Commercial general
|
1,839
|
—
|
1,396
|
1,396
|
525
|
2,173
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family
|
2,318
|
1,899
|
—
|
1,899
|
—
|
2,187
|
||||||||||||||||||
Auto loans
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
5,484
|
$
|
2,771
|
$
|
1,396
|
$
|
4,167
|
$
|
525
|
$
|
6,764
|
30-89 Days
Past Due
|
90 Days or
More Past Due
|
Nonaccrual
|
||||||||||
2020
|
||||||||||||
Commercial real estate
|
$
|
914
|
$
|
34
|
$
|
6,311
|
||||||
Commercial - specialized
|
241
|
—
|
272
|
|||||||||
Commercial - general
|
1,891
|
149
|
5,489
|
|||||||||
Consumer:
|
||||||||||||
1-4 Family residential
|
2,089
|
906
|
1,595
|
|||||||||
Auto loans
|
738
|
38
|
—
|
|||||||||
Other consumer
|
481
|
119
|
51
|
|||||||||
Construction
|
206
|
—
|
—
|
|||||||||
Total
|
$
|
6,560
|
$
|
1,246
|
$
|
13,718
|
||||||
2019
|
||||||||||||
Commercial real estate
|
$
|
37
|
$
|
116
|
$
|
162
|
||||||
Commercial - specialized
|
708
|
—
|
1,172
|
|||||||||
Commercial - general
|
1,747
|
—
|
2,254
|
|||||||||
Consumer:
|
||||||||||||
1-4 Family residential
|
1,212
|
932
|
1,105
|
|||||||||
Auto loans
|
1,468
|
183
|
—
|
|||||||||
Other consumer
|
848
|
121
|
—
|
|||||||||
Construction
|
1,159
|
—
|
—
|
|||||||||
Total
|
$
|
7,179
|
$
|
1,352
|
$
|
4,693
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
2020
|
||||||||||||||||||||
Commercial real estate
|
$
|
602,250
|
$
|
—
|
$
|
61,094
|
$
|
—
|
$
|
663,344
|
||||||||||
Commercial - specialized
|
303,831
|
—
|
7,855
|
—
|
311,686
|
|||||||||||||||
Commercial - general
|
510,543
|
—
|
7,766
|
—
|
518,309
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
352,930
|
—
|
7,385
|
—
|
360,315
|
|||||||||||||||
Auto loans
|
204,301
|
—
|
1,539
|
—
|
205,840
|
|||||||||||||||
Other consumer
|
67,216
|
—
|
379
|
—
|
67,595
|
|||||||||||||||
Construction
|
94,494
|
—
|
—
|
—
|
94,494
|
|||||||||||||||
Total
|
$
|
2,135,565
|
$
|
—
|
$
|
86,018
|
$
|
—
|
$
|
2,221,583
|
||||||||||
2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
632,641
|
$
|
22,313
|
$
|
3,241
|
$
|
—
|
$
|
658,195
|
||||||||||
Commercial - specialized
|
307,239
|
—
|
2,266
|
—
|
309,505
|
|||||||||||||||
Commercial - general
|
428,155
|
—
|
13,243
|
—
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
356,422
|
—
|
6,374
|
—
|
362,796
|
|||||||||||||||
Auto loans
|
214,363
|
—
|
846
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,716
|
—
|
284
|
—
|
74,000
|
|||||||||||||||
Construction
|
82,520
|
—
|
—
|
—
|
82,520
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
4.
|
FORECLOSED ASSETS
|
2020
|
2019
|
|||||||
Beginning balance
|
$
|
1,883
|
$
|
2,285
|
||||
Additions
|
1,867
|
3,469
|
||||||
Sales, net
|
(2,397
|
)
|
(3,871
|
)
|
||||
Current year valuation write-down
|
—
|
—
|
||||||
Ending balance
|
$
|
1,353
|
$
|
1,883
|
2020
|
2019
|
|||||||
Beginning balance
|
$
|
—
|
$
|
325
|
||||
Current year valuation write-down
|
—
|
—
|
||||||
Reductions from sales
|
—
|
(325
|
)
|
|||||
Ending balance
|
$
|
—
|
$
|
—
|
2020
|
2019
|
|||||||
Net gain (loss) on sales
|
$
|
40
|
$
|
(37
|
)
|
|||
Current year valuation write-down
|
—
|
—
|
||||||
Operating expenses, net of rental income
|
(75
|
)
|
(71
|
)
|
||||
Foreclosed assets expense, net
|
$
|
(35
|
)
|
$
|
(108
|
)
|
5.
|
PREMISES AND EQUIPMENT
|
2020
|
2019
|
|||||||
Land
|
$
|
10,825
|
$
|
10,825
|
||||
Buildings and improvements
|
65,840
|
63,972
|
||||||
Furniture and equipment
|
46,443
|
44,460
|
||||||
Construction in process
|
29
|
974
|
||||||
123,137
|
120,231
|
|||||||
Less accumulated depreciation
|
(62,806
|
)
|
(58,358
|
)
|
||||
Premises and equipment, net
|
$
|
60,331
|
$
|
61,873
|
6.
|
GOODWILL AND INTANGIBLES
|
2020
|
2019
|
|||||||
Beginning goodwill
|
$
|
18,757
|
$
|
—
|
||||
Arising from business combinations
|
—
|
18,757
|
||||||
Measurement period acquisition adjustment
|
751
|
—
|
||||||
Ending goodwill
|
$
|
19,508
|
$
|
18,757
|
||||
Amortized intangible assets:
|
||||||||
Customer relationship intangibles
|
$
|
6,679
|
$
|
6,679
|
||||
Less: Accumulated amortization
|
(1,396
|
)
|
(202
|
)
|
||||
5,283
|
6,477
|
|||||||
Other intangibles
|
2,309
|
2,309
|
||||||
Arising from business combinations
|
663
|
—
|
||||||
Less: Accumulated amortization
|
(693
|
)
|
(154
|
)
|
||||
2,279
|
2,155
|
|||||||
Other intangible assets, net
|
$
|
7,562
|
$
|
8,632
|
CDI
|
Other
Intangible
|
Total
|
||||||||||
2021
|
$
|
1,073
|
$
|
594
|
$
|
1,667
|
||||||
2022
|
951
|
595
|
1,546
|
|||||||||
2023
|
830
|
594
|
1,424
|
|||||||||
2024
|
708
|
441
|
1,149
|
|||||||||
2025
|
587
|
55
|
642
|
7.
|
MORTGAGE SERVICING RIGHTS
|
2020
|
2019
|
|||||||
Beginning balance
|
$
|
2,054
|
$
|
1,270
|
||||
Additions
|
9,829
|
1,332
|
||||||
Valuation adjustment, net of amortization
|
(2,834
|
)
|
(548
|
)
|
||||
Ending balance
|
$
|
9,049
|
$
|
2,054
|
2020
|
2019
|
|||||||
Mortgage loans serviced for others
|
$
|
1,203,687
|
$
|
247,326
|
||||
Mortgage servicing right asset as a percentage of serviced mortgage loans
|
1
|
%
|
1
|
%
|
2020
|
2019
|
|||||||
Weighted average constant prepayment rate
|
4.48
|
%
|
5.23
|
%
|
||||
Weighted average discount rate
|
9.72
|
%
|
10.78
|
%
|
||||
Weighted average life in years
|
7.00
|
10.00
|
8.
|
DEPOSITS
|
2021
|
$
|
187,976
|
||
2022
|
83,077
|
|||
2023
|
45,218
|
|||
2024
|
6,293
|
|||
2025
|
2,927
|
|||
Thereafter
|
10
|
|||
$
|
325,501
|
9.
|
BORROWING ARRANGEMENTS
|
2020
|
2019
|
|||||||
Federal funds purchased
|
$
|
26,550
|
$
|
17,165
|
||||
FHLB advances - short-term
|
—
|
20,000
|
||||||
Total
|
$
|
26,550
|
$
|
37,165
|
Issue Date
|
Original
Amount of Advance
|
2020 Balance
|
2019 Balance
|
Maturity Date
|
Interest Rate
at December 31, 2020
|
||||||||||||
2013
|
$
|
20,000
|
$
|
—
|
$
|
20,000
|
2020
|
Fixed; 1.50%
|
|||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 0.19%
|
||||||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 0.19%
|
||||||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 0.23%
|
||||||||||||
$
|
95,000
|
$
|
75,000
|
$
|
95,000
|
Issue Date
|
Amount
of TPS
|
Amount
of
Debentures
|
Stated Maturity
Date
of TPS and
Debentures(1)
|
Interest Rate of
TPS and
Debentures(2)(3)
|
||||||||||
South Plains Financial Capital Trust III
|
2004
|
$
|
10,000
|
$
|
10,310
|
2034
|
3-mo. LIBOR +
265bps; 2.86%
|
|||||||
South Plains Financial Capital Trust IV
|
2005
|
20,000
|
20,619
|
2035
|
3-mo. LIBOR +
139bps; 1.61%
|
|||||||||
South Plains Financial Capital Trust V
|
2007
|
15,000
|
15,464
|
2037
|
3-mo. LIBOR +
150bps; 1.72%
|
|||||||||
Total
|
$
|
45,000
|
$
|
46,393
|
(1) |
May be redeemed five years from the issue date, the Company has no current plans to redeem; (2) Interest payable quarterly with principal due at maturity; (3) Rate as of last reset date.
|
10.
|
EMPLOYEE BENEFITS
|
11.
|
STOCK-BASED COMPENSATION
|
Number
of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Year Ended December 31, 2020
|
||||||||||||||||
Outstanding at beginning of year:
|
1,462,997
|
$
|
13.42
|
$
|
8,212
|
|||||||||||
Granted
|
248,966
|
20.93
|
—
|
|||||||||||||
Exercised
|
(122,207
|
)
|
10.33
|
(1,053
|
)
|
|||||||||||
Forfeited
|
(33,727
|
)
|
17.83
|
(49
|
)
|
|||||||||||
Expired
|
(1,135
|
)
|
16.00
|
(3
|
)
|
|||||||||||
Balance, December 31, 2020
|
1,554,894
|
$
|
14.77
|
5.97
|
$
|
7,107
|
||||||||||
Exercisable at end of period
|
986,088
|
$
|
12.39
|
5.24
|
$
|
6,517
|
||||||||||
Vested at end of period
|
986,088
|
$
|
12.39
|
5.24
|
$
|
6,517
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Expected volatility
|
27.46
|
%
|
24.88% to 31.54%
|
|||||
Expected dividend yield
|
0.70
|
%
|
0.70
|
%
|
||||
Expected term (years)
|
6.2 years
|
0.5 - 7.0 years
|
||||||
Risk-free interest rate
|
1.44
|
%
|
1.46% to 2.63%
|
|||||
Weighted average grant date fair value
|
$
|
5.68
|
$
|
7.98
|
Number
of Shares
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Year Ended December 31, 2020
|
||||||||
Outstanding at beginning of year:
|
81,200
|
$
|
19.46
|
|||||
Granted
|
5,970
|
20.93
|
||||||
Exercised
|
(24,694
|
)
|
19.79
|
|||||
Forfeited
|
—
|
—
|
||||||
Balance, December 31, 2020
|
62,476
|
$
|
19.47
|
12.
|
INCOME TAXES
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Current expense
|
||||||||
Federal
|
$
|
12,590
|
$
|
6,923
|
||||
State
|
248
|
224
|
||||||
Deferred expense
|
||||||||
Federal
|
(1,588
|
)
|
334
|
|||||
Total
|
$
|
11,250
|
$
|
7,481
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Federal statutory rate times financial statement income
|
$
|
11,887
|
$
|
7,707
|
||||
Effect of:
|
||||||||
Tax-exempt income
|
(863
|
)
|
(348
|
)
|
||||
State taxes, net of federal benefit
|
196
|
177
|
||||||
Earnings from bank owned life insurance
|
(280
|
)
|
(272
|
)
|
||||
Non-deductible expenses
|
248
|
190
|
||||||
Other, net
|
62
|
27
|
||||||
Total
|
$
|
11,250
|
$
|
7,481
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Deferred tax assets
|
||||||||
Allowance for loan loss
|
$
|
9,566
|
$
|
5,081
|
||||
Deferred compensation
|
5,215
|
4,669
|
||||||
Other real estate owned
|
251
|
251
|
||||||
Nonaccrual loans
|
59
|
180
|
||||||
Other
|
221
|
162
|
||||||
Total deferred tax assets
|
15,312
|
10,343
|
||||||
Deferred tax liabilities
|
||||||||
Depreciation
|
(2,432
|
)
|
(2,417
|
)
|
||||
Intangibles
|
(847
|
)
|
(924
|
)
|
||||
Prepaid expenses
|
(439
|
)
|
(419
|
)
|
||||
Mortgage servicing rights
|
(1,900
|
)
|
(431
|
)
|
||||
Unrealized gain on available-for-sale securities
|
(5,688
|
)
|
(255
|
)
|
||||
Other
|
(1,545
|
)
|
(278
|
)
|
||||
Total deferred tax liabilities
|
(12,851
|
)
|
(4,724
|
)
|
||||
Net deferred tax asset
|
$
|
2,461
|
$
|
5,619
|
13.
|
RELATED-PARTY TRANSACTIONS
|
14.
|
OFF-BALANCE-SHEET ACTIVITIES, COMMITMENTS AND CONTINGENCIES
|
2020
|
2019
|
|||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
417,798
|
$
|
409,969
|
||||
Standby letters-of-credit
|
10,481
|
10,748
|
2021
|
$
|
1,644
|
||
2022
|
1,517
|
|||
2023
|
1,257
|
|||
2024
|
929
|
|||
2025
|
675
|
|||
Thereafter
|
4,613
|
|||
$
|
10,635
|
15.
|
CAPITAL AND REGULATORY MATTERS
|
Actual
|
Minimum Required
Under BASEL III
Fully Phased-In
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
December 31, 2020:
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
473,425
|
19.08
|
%
|
$
|
260,531
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
404,138
|
16.29
|
%
|
260,481
|
10.50
|
%
|
$
|
248,077
|
10.00
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
366,639
|
14.78
|
%
|
210,906
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
372,947
|
15.03
|
%
|
210,866
|
8.50
|
%
|
198,462
|
8.00
|
%
|
|||||||||||||||
Common Tier 1 (CET1):
|
||||||||||||||||||||||||
Consolidated
|
321,639
|
12.96
|
%
|
173,688
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
372,947
|
15.03
|
%
|
173,654
|
7.00
|
%
|
161,250
|
6.50
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
366,639
|
10.24
|
%
|
144,347
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
372,947
|
10.42
|
%
|
144,282
|
4.00
|
%
|
178,999
|
5.00
|
%
|
December 31, 2019:
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
373,684
|
14.88
|
%
|
$
|
263,769
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
368,322
|
14.67
|
%
|
263,702
|
10.50
|
%
|
$
|
251,145
|
10.00
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
12.85
|
%
|
213,527
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
13.70
|
%
|
213,473
|
8.50
|
%
|
200,916
|
8.00
|
%
|
|||||||||||||||
Common Tier 1 (CET1):
|
||||||||||||||||||||||||
Consolidated
|
277,835
|
11.06
|
%
|
175,846
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
13.70
|
%
|
175,801
|
7.00
|
%
|
163,244
|
6.50
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
10.74
|
%
|
120,219
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
11.45
|
%
|
121,235
|
4.00
|
%
|
150,175
|
5.00
|
%
|
16.
|
DERIVATIVES
|
Interest Rate Contracts
|
Location
|
2020
|
2019
|
|||||||
Change in fair value on interest rate swaps hedging fixed rate loans
|
Interest income
|
$
|
(576
|
)
|
$
|
(520
|
)
|
|||
Change in fair value on fixed rate loans - hedged item
|
Interest income
|
$
|
580
|
$
|
511
|
2020
|
2019
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other liabilities:
|
||||||||||||||||
Interest rate swaps related to fixed rate loans
|
$
|
10,178
|
$
|
927
|
$
|
10,557
|
$
|
351
|
2020
|
2019
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other liabilities:
|
||||||||||||||||
Cash flow swaps related to state and municipal securities
|
$
|
68,485
|
$
|
1,643
|
$
|
—
|
$
|
—
|
||||||||
Included in other assets:
|
||||||||||||||||
Cash flow swaps related to state and municipal securities
|
$
|
55,275
|
$
|
1,618
|
$
|
—
|
$
|
—
|
Location
|
2020
|
2019
|
|||||||
Forward contracts related to mortgage loans held for sale
|
Net gain (loss) on sales of loans
|
$
|
(754
|
)
|
$
|
672
|
|||
Interest rate lock commitments
|
Net gain (loss) on sales of loans
|
$
|
3,409
|
$
|
(249
|
)
|
2020
|
2019
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other assets:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Interest rate lock commitments
|
210,716
|
5,115
|
52,875
|
814
|
||||||||||||
Total included in other assets
|
$
|
210,716
|
$
|
5,115
|
$
|
52,875
|
$
|
814
|
||||||||
Included in other liabilities:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
203,669
|
$
|
1,787
|
$
|
58,948
|
$
|
141
|
||||||||
Interest rate lock commitments
|
—
|
—
|
—
|
—
|
||||||||||||
Total included in other liabilities
|
$
|
203,669
|
$
|
1,787
|
$
|
58,948
|
$
|
141
|
17.
|
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
ASSETS
|
(In thousands except per share data)
|
|||||||
Cash and cash equivalents
|
$
|
67,890
|
$
|
4,181
|
||||
Investment in banking subsidiary
|
421,355
|
372,292
|
||||||
Investment in other subsidiary
|
51
|
51
|
||||||
Other assets
|
4,248
|
3,906
|
||||||
Total assets
|
$
|
493,544
|
$
|
380,430
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Debt
|
$
|
121,982
|
$
|
72,865
|
||||
Accrued expenses and other liabilities
|
1,514
|
1,383
|
||||||
Stockholders’ equity
|
370,048
|
306,182
|
||||||
Total liabilities and stockholders’ equity
|
$
|
493,544
|
$
|
380,430
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Dividends
|
$
|
20,500
|
$
|
10,000
|
||||
Other income
|
115
|
64
|
||||||
ESOP Contribution
|
—
|
(1,800
|
)
|
|||||
Interest expense
|
(3,390
|
)
|
(3,562
|
)
|
||||
Other expense
|
(1,572
|
)
|
(2,221
|
)
|
||||
Income before income tax and undistributed subsidiary income
|
15,653
|
2,481
|
||||||
Income tax (benefit)
|
(1,018
|
)
|
(1,498
|
)
|
||||
Equity in undistributed subsidiary income
|
28,682
|
25,241
|
||||||
Net Income
|
$
|
45,353
|
$
|
29,220
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
45,353
|
$
|
29,220
|
||||
Adjustments:
|
||||||||
Equity in undistributed subsidiary income
|
(28,682
|
)
|
(25,241
|
)
|
||||
Amortization of debt issuance costs
|
47
|
—
|
||||||
Stock based compensation
|
1,272
|
853
|
||||||
Change in other assets
|
(342
|
)
|
(1,601
|
)
|
||||
Change in other liabilities
|
131
|
541
|
||||||
Release of unearned ESOP shares
|
—
|
—
|
||||||
Net cash from operating activities
|
17,779
|
3,772
|
||||||
Cash flows from investing activities:
|
||||||||
Cash paid in business combination
|
—
|
(76,100
|
)
|
|||||
Net cash from investing activities
|
—
|
(76,100
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from long-term borrowings
|
49,070
|
—
|
||||||
Repayments of long-term borrowings
|
—
|
(7,530
|
)
|
|||||
Issuance of common stock
|
—
|
51,392
|
||||||
Payments to tax authorities for stock-based compensation
|
(319
|
)
|
(351
|
)
|
||||
Payments to repurchase common stock
|
(293
|
)
|
—
|
|||||
Share based liability conversion
|
—
|
11,450
|
||||||
Cash dividends on common stock
|
(2,528
|
)
|
(1,079
|
)
|
||||
Net cash from financing activities
|
45,930
|
53,882
|
||||||
Net change in cash and cash equivalents
|
63,709
|
(18,446
|
)
|
|||||
Beginning cash and cash equivalents
|
4,181
|
22,627
|
||||||
Ending cash and cash equivalents
|
$
|
67,890
|
$
|
4,181
|
18.
|
EARNINGS PER SHARE
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Net income
|
$
|
45,353
|
$
|
29,220
|
||||
Weighted average common shares outstanding - basic
|
18,054,373
|
16,818,697
|
||||||
Weighted average common shares outstanding - diluted
|
18,339,033
|
17,040,550
|
||||||
Basic earnings per share
|
$
|
2.51
|
$
|
1.74
|
||||
Diluted earnings per share
|
$
|
2.47
|
$
|
1.71
|
19.
|
SEGMENT INFORMATION
|
Banking
|
Insurance
|
Consolidated
|
||||||||||
2020
|
||||||||||||
Net interest income
|
$
|
122,285
|
$
|
—
|
$
|
122,285
|
||||||
Provision for loan loss
|
(25,570
|
)
|
—
|
(25,570
|
)
|
|||||||
Noninterest income
|
94,010
|
7,593
|
101,603
|
|||||||||
Noninterest expense
|
(135,985
|
)
|
(5,730
|
)
|
(141,715
|
)
|
||||||
Income before income taxes
|
54,740
|
1,863
|
56,603
|
|||||||||
Income tax (expense) benefit
|
(10,804
|
)
|
(446
|
)
|
(11,250
|
)
|
||||||
Net income
|
$
|
43,936
|
$
|
1,417
|
$
|
45,353
|
||||||
Total assets
|
$
|
3,584,828
|
$
|
14,332
|
$
|
3,599,160
|
Banking
|
Insurance
|
Consolidated
|
||||||||||
2019
|
||||||||||||
Net interest income (expense)
|
$
|
104,575
|
$
|
—
|
$
|
104,575
|
||||||
Provision for loan loss
|
(2,799
|
)
|
—
|
(2,799
|
)
|
|||||||
Noninterest income
|
49,834
|
6,799
|
56,633
|
|||||||||
Noninterest expense
|
(117,160
|
)
|
(4,548
|
)
|
(121,708
|
)
|
||||||
Income before income taxes
|
34,450
|
2,251
|
36,701
|
|||||||||
Income tax (expense) benefit
|
(7,097
|
)
|
(384
|
)
|
(7,481
|
)
|
||||||
Net income
|
$
|
27,353
|
$
|
1,867
|
$
|
29,220
|
||||||
Total assets
|
$
|
3,224,396
|
$
|
12,771
|
$
|
3,237,167
|
20.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Gains and (Losses)
on Cash Flow hedges
|
Unrealized Gains
and (Losses) on
Securities Available
for Sale
|
Total
|
||||||||||
2020
|
||||||||||||
Beginning balance
|
$
|
—
|
$
|
958
|
$
|
958
|
||||||
Other comprehensive income (loss) before reclassification
|
(60
|
)
|
22,272
|
22,212
|
||||||||
Amounts reclassified from other comprehensive
|
—
|
(1,831
|
)
|
(1,831
|
)
|
|||||||
Net current period other comprehensive income
|
(60
|
)
|
20,441
|
20,381
|
||||||||
Ending balance
|
$
|
(60
|
)
|
$
|
21,399
|
$
|
21,339
|
2019
|
||||||||||||
Beginning balance
|
$
|
—
|
$
|
(2,243
|
)
|
$
|
(2,243
|
)
|
||||
Other comprehensive income before reclassification
|
—
|
3,179
|
3,179
|
|||||||||
Amounts reclassified from other comprehensive
|
—
|
22
|
22
|
|||||||||
Net current period other comprehensive income
|
—
|
3,201
|
3,201
|
|||||||||
Ending balance
|
$
|
—
|
$
|
958
|
$
|
958
|
21.
|
FAIR VALUE DISCLOSURES
|
● |
Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
|
● |
Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability
(such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
|
● |
Level 3 Inputs - Significant unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions
that market participants would use in pricing the assets or liabilities.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
2020
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
—
|
$
|
4,753
|
$
|
—
|
$
|
4,753
|
||||||||
State and municipal
|
—
|
272,607
|
—
|
272,607
|
||||||||||||
Mortgage-backed securities
|
—
|
373,362
|
—
|
373,362
|
||||||||||||
Collateralized mortgage obligations
|
—
|
106,715
|
—
|
106,715
|
||||||||||||
Asset-backed and other amortizing securities
|
—
|
33,572
|
—
|
33,572
|
||||||||||||
Other securities
|
—
|
12,078
|
—
|
12,078
|
||||||||||||
Loans held for sale (mandatory)
|
—
|
80,174
|
—
|
80,174
|
||||||||||||
Mortgage servicing rights
|
—
|
—
|
9,049
|
9,049
|
||||||||||||
Asset derivatives
|
—
|
6,734
|
—
|
6,734
|
||||||||||||
Liability derivatives
|
—
|
(4,357
|
)
|
—
|
(4,357
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
—
|
—
|
11,926
|
11,926
|
||||||||||||
Other real estate owned
|
—
|
—
|
1,353
|
1,353
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
2019
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
—
|
$
|
4,807
|
$
|
—
|
$
|
4,807
|
||||||||
State and municipal
|
—
|
94,692
|
—
|
94,692
|
||||||||||||
Mortgage-backed securities
|
—
|
464,516
|
—
|
464,516
|
||||||||||||
Collateralized mortgage obligations
|
—
|
107,289
|
—
|
107,289
|
||||||||||||
Asset-backed and other amortizing securities
|
—
|
36,346
|
—
|
36,346
|
||||||||||||
Loans held for sale (mandatory)
|
—
|
32,809
|
—
|
32,809
|
||||||||||||
Mortgage servicing rights
|
—
|
-
|
2,054
|
2,054
|
||||||||||||
Asset derivatives
|
—
|
814
|
—
|
814
|
||||||||||||
Liability derivatives
|
—
|
(492
|
)
|
—
|
(492
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
—
|
—
|
3,642
|
3,642
|
||||||||||||
Other real estate owned
|
—
|
—
|
1,883
|
1,883
|
Fair Value
|
Valuation Techniques
|
Unobservable Inputs
|
Range of Discounts
|
||||||||
2020
|
|||||||||||
Impaired loans
|
$
|
11,926
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
0%-100
|
%
|
|||||
Other real estate owned
|
1,353
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
15%-66
|
%
|
||||||
Mortgage servicing rights
|
9,049
|
Discounted cash flows
|
Conditional prepayment rate
|
4.48
|
%
|
||||||
Discount rate
|
9.72
|
%
|
|||||||||
2019
|
|||||||||||
Impaired loans
|
$
|
3,642
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
0%-100
|
%
|
|||||
Other real estate owned
|
1,883
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
15%-66
|
%
|
||||||
Mortgage servicing rights
|
2,054
|
Discounted cash flows
|
Conditional prepayment rate
|
5.23
|
%
|
||||||
Discount rate
|
10.78
|
%
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
2020
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
300,307
|
$
|
300,307
|
$
|
—
|
$
|
—
|
$
|
300,307
|
||||||||||
Loans, net
|
2,176,030
|
—
|
—
|
2,179,573
|
2,179,573
|
|||||||||||||||
Accrued interest receivable
|
15,233
|
—
|
15,233
|
—
|
15,233
|
|||||||||||||||
Bank-owned life insurance
|
70,731
|
—
|
70,731
|
—
|
70,731
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
2,974,351
|
2,649,830
|
329,609
|
—
|
2,979,439
|
|||||||||||||||
Accrued interest payable
|
2,113
|
—
|
2,113
|
—
|
2,113
|
|||||||||||||||
Notes payable & other borrowings
|
75,000
|
—
|
75,000
|
—
|
75,000
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
—
|
45,690
|
—
|
45,690
|
|||||||||||||||
Subordinated debt securities
|
75,589
|
—
|
76,889
|
—
|
76,889
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
2019
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
158,099
|
$
|
158,099
|
$
|
—
|
$
|
—
|
$
|
158,099
|
||||||||||
Loans, net
|
2,119,426
|
—
|
—
|
2,123,289
|
2,123,289
|
|||||||||||||||
Accrued interest receivable
|
13,924
|
—
|
13,924
|
—
|
13,924
|
|||||||||||||||
Bank-owned life insurance
|
69,397
|
—
|
69,397
|
—
|
69,397
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
2,696,857
|
2,354,999
|
346,194
|
—
|
2,701,193
|
|||||||||||||||
Accrued interest payable
|
2,283
|
—
|
2,283
|
—
|
2,283
|
|||||||||||||||
Notes payable & other borrowings
|
95,000
|
—
|
95,000
|
—
|
95,000
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
—
|
46,393
|
—
|
46,393
|
|||||||||||||||
Subordinated debt securities
|
26,472
|
—
|
26,472
|
—
|
26,472
|
22.
|
BUSINESS COMBINATIONS
|
Cash paid
|
$
|
2,800
|
||
Assets acquired:
|
||||
Premises and equipment, net
|
$
|
8
|
||
Customer list
|
1,800
|
|||
Other intangible assets
|
509
|
|||
Other assets
|
290
|
|||
Total assets acquired
|
$
|
2,607
|
||
Goodwill recorded in acquisition
|
$
|
193
|
Cash paid
|
$
|
687
|
||
Assets acquired:
|
||||
Premises and equipment, net
|
$
|
24
|
||
Customer list
|
512
|
|||
Other intangible assets
|
151
|
|||
Total assets acquired
|
$
|
687
|
||
Goodwill recorded in acquisition
|
$
|
—
|
Cash paid
|
$
|
76,100
|
||
Assets acquired:
|
||||
Cash and cash equivalents
|
$
|
77,903
|
||
Interest-bearing time deposits in banks
|
52,700
|
|||
Federal funds purchased
|
26,468
|
|||
Securities available for sale
|
68,398
|
|||
Loans held for investment
|
195,228
|
|||
Bank-owned life insurance
|
10,932
|
|||
Premises and equipment, net
|
4,132
|
|||
Accrued interest receivable
|
1,114
|
|||
Core deposit intangible
|
6,679
|
|||
Other assets
|
2,648
|
|||
Total assets acquired
|
$
|
446,202
|
||
Liabilities assumed
|
||||
Deposits
|
$
|
386,176
|
||
Accrued interest payable
|
55
|
|||
Deferred tax liability
|
762
|
|||
Other liabilities
|
2,424
|
|||
Total liabilities assumed
|
$
|
389,417
|
||
Net assets acquired
|
$
|
56,785
|
||
Goodwill recorded in acquisition
|
$
|
19,315
|
Item 11. |
Executive Compensation.
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14. |
Principal Accounting Fees and Services.
|
Item 15. |
Exhibits, Financial Statement Schedules.
|
(1) |
The consolidated financial statements, notes thereto and independent auditors’ report thereon, filed as part hereof, are listed in Item 8.
|
(2) |
All financial statement schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
|
(3) |
Exhibits
|
Exhibit No.
|
Description
|
|
Agreement and Plan of Merger by and between South Plains Financial, Inc., SPFI Merger Sub, Inc., City Bank, and West Texas State Bank, dated as of July 25, 2019, (incorporated herein by
reference to Exhibit 2.1 to Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)) (schedules to which have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the SEC upon request).
|
||
Amended and Restated Certificate of Formation of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of South Plains
Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Amended and Restated Bylaws of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form S-1 of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
||
Specimen common stock certificate of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-1 of South Plains Financial,
Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Indenture, dated September 29, 2020, by and between South Plains Financial, Inc. and UMB Bank, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the
Current Report on Form 8-K filed with the SEC on September 30, 2020 (File No. 001-38895)).
|
||
Form of Fixed to Floating Rate Subordinated Note due September 30, 2030 (included as Exhibit A-2 to the Indenture incorporated herein by reference as Exhibit 4.2 hereto).
|
||
Form of Voting Agreement, dated as of July 25, 2019, by and among South Plains Financial, Inc., West Texas State Bank and the shareholders of West Texas State Bank party thereto
(incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)).
|
||
Form of Director Support Agreement, dated as of July 25, 2019, by and among South Plains Financial, Inc. and each non-employee director of West Texas State Bank (incorporated herein by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)).
|
||
Executive Employment Agreement, dated December 18, 2019, by and between South Plains Financial, Inc., City Bank, and Curtis C. Griffith (incorporated herein by reference to Exhibit 10.1
to the Current Report on Form 8-K filed at the SEC on December 19, 2019 (File No. 001-38895)).
|
||
Executive Employment Agreement, dated March 6, 2019, by and between South Plains Financial, Inc. and Cory T. Newsom (incorporated herein by reference to Exhibit 10.4 to the Registration
Statement on Form S-1/A of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form S-1/A of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Stock Option Award Agreement under the South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Registration Statement on
Form S-1/A of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
Form of Restricted Stock Unit Award Agreement under the South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Registration
Statement on Form S-1 of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.9 to the Registration Statement on Form S-1/A of South Plains Financial, Inc. (Registration No.
333-230851) filed April 29, 2019).
|
||
Deferred Compensation Plan Adoption Agreement of Cory T. Newsom (incorporated herein by reference to Exhibit 10.5 to the Registration Statement on Form S-1/A of South Plains Financial,
Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Joint Beneficiary Designation Agreement of Cory Newsom, effective January 1, 2008 (incorporated herein by reference to Exhibit 10.6 to the Registration Statement on Form S-1/A of South
Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Joint Beneficiary Designation Agreement of Cory Newsom, effective April 1, 2014 (incorporated herein by reference to Exhibit 10.7 to the Registration Statement on Form S-1/A of South
Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Board Representation Agreement between South Plains Financial, Inc. and James C. Henry (incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form S-1/A of
South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Note Purchase Agreement, dated as of September 29, 2020, by and among South Plains Financial, Inc. and the Purchasers (incorporated herein by reference to Exhibit 10.1 of the
Current Report on Form 8-K filed on September 30, 2020 (File No. 001-38895)).
|
||
Form of Registration Rights Agreement, dated as of September 29, 2020, by and among South Plains Financial, Inc. and the Purchasers (incorporated herein by reference to Exhibit 10.2 of
the Current Report on Form 8-K filed on September 30, 2020 (File No. 001-38895)).
|
||
21.1*
|
Subsidiaries of South Plains Financial, Inc.
|
|
23.1*
|
Consent of Weaver and Tidwell, LLP.
|
|
31.1*
|
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
31.2*
|
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
32.1**
|
Section 1350 Certification of Chief Executive Officer.
|
|
32.2**
|
Section 1350 Certification of Chief Financial Officer.
|
|
101*
|
The following material from South Plains Financial, Inc.’s Form 10-K for the year ended December 31, 2020, formatted in XBRL (eXtensible Business Reporting Language), filed herewith: (i)
Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Consolidated
Financial Statements.
|
* |
Filed with this Annual Report on Form 10-K.
|
** |
Furnished with this Annual Report on Form 10-K.
|
† |
Indicates a management contract or compensatory plan.
|
Item 16. |
Form 10-K Summary
|
South Plains Financial, Inc.
|
||
Date: March 10, 2021
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
||
Chairman and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Curtis C. Griffith
|
||||
Curtis C. Griffith
|
Director (Chairman); Chief Executive Officer (principal executive officer)
|
March 10, 2021
|
||
/s/ Cory T. Newsom
|
||||
Cory T. Newsom
|
Director and President
|
March 10, 2021
|
||
/s/ Steven B. Crockett
|
||||
Steven B. Crockett
|
Chief Financial Officer and Treasurer (principal financial and accounting officer)
|
March 10, 2021
|
||
/s/ Richard D. Campbell
|
||||
Richard D. Campbell
|
Director
|
March 10, 2021
|
||
/s/ Cynthia B. Keith
|
||||
Cynthia B. Keith
|
Director
|
March 10, 2021
|
||
/s/ Allison S. Navitskas
|
||||
Allison S. Navitskas
|
Director
|
March 10, 2021
|
||
/s/ Noe G. Valles
|
||||
Noe G. Valles
|
Director
|
March 10, 2021
|
||
/s/ Kyle R. Wargo
|
||||
Kyle R. Wargo
|
Director
|
March 10, 2021
|
Entity Name
|
State of Incorporation
|
CB Provence, LLC
|
Texas
|
CBT Brushy Creek, LLC
|
Texas
|
CBT Properties, LLC
|
Texas
|
City Bank
|
Texas
|
Ruidoso Retail, Inc.
|
Texas
|
South Plains Financial Capital Trust III
|
Delaware
|
South Plains Financial Capital Trust IV
|
Delaware
|
South Plains Financial Capital Trust V
|
Delaware
|
Windmark Insurance Agency, Inc.
|
Texas
|
1. |
I have reviewed this Annual Report on Form 10-K of South Plains Financial, Inc. (the “registrant”) for the year ended December 31, 2020 (this “report”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 10, 2021
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
||
Chairman and Chief Executive Officer
|
1. |
I have reviewed this Annual Report on Form 10-K of South Plains Financial, Inc. (the “registrant”) for the year ended December 31, 2020 (this “report”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 10, 2021
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By:
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/s/ Steven B. Crockett
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Steven B. Crockett
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||
Chief Financial Officer
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(1) |
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 10, 2021
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By:
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/s/ Curtis C. Griffith
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Curtis C. Griffith
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||
Chairman and Chief Executive Officer
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(1) |
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 10, 2021
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By:
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/s/ Steven B. Crockett
|
Steven B. Crockett
|
||
Chief Financial Officer
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