South Plains Financial Reports 3.2% Asset Growth, Net Income Decline in Q3 2024

As of September 30, 2024, South Plains Financial, Inc. reported total assets of $4.34 billion, reflecting a 3.2% increase from $4.20 billion at the end of 2023. The company’s cash and cash equivalents rose significantly to $471.2 million, up from $330.2 million at year-end 2023. Total deposits also increased by 2.6% to $3.72 billion, driven by a $69 million rise in interest-bearing deposits and a $24.2 million increase in non-interest-bearing deposits.

For the third quarter of 2024, South Plains Financial recorded net income of $11.2 million, or $0.66 per diluted share, down from $13.5 million, or $0.78 per diluted share, in the same period of 2023. For the nine months ended September 30, 2024, net income totaled $33.2 million, a decrease from $52.4 million in the prior year. The decline in profitability was attributed to lower noninterest income, particularly from mortgage banking activities, which fell by 58.9% to $1.9 million due to a decline in the fair value adjustment of mortgage servicing rights.

Net interest income for the third quarter increased by 4.5% to $37.3 million, supported by a rise in interest income from loans, which reached $51.5 million, up from $46.2 million a year earlier. The net interest margin improved to 3.65%, compared to 3.52% in Q3 2023. However, total noninterest income for the quarter decreased by 13.4% to $10.6 million, primarily due to a significant drop in income from mortgage banking activities.

Total noninterest expense for the third quarter rose to $33.1 million, an increase of 5.2% from the previous year, driven by higher IT and data services expenses related to cloud migration. For the nine months ended September 30, 2024, noninterest expenses decreased by 6.4% to $97.6 million, largely due to reduced salaries and employee benefits.

The company’s allowance for credit losses (ACL) increased slightly to $42.9 million, with net charge-offs for the nine months amounting to $2.6 million, up from $1.4 million in the same period of 2023. Nonaccrual loans rose to $22.6 million, representing 0.74% of total loans held for investment, compared to $3.2 million at the end of 2023.

In terms of strategic developments, South Plains Financial sold Windmark Insurance Agency in April 2023 for $36.1 million, which contributed to a pre-tax gain of $33.8 million for the nine months ended September 30, 2023. The company also repurchased 40,000 shares of common stock for $1.0 million during the third quarter of 2024.

Overall, while South Plains Financial experienced growth in assets and deposits, profitability faced challenges due to declining noninterest income and increased expenses.