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South Plains Financial Inc (SPFI)
NASDAQ:SPFI
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South Plains Financial
(NASDAQ:SPFI)
63Neutral
South Plains Financial (SPFI) vs. S&P 500 (SPY)
Market Cap
$510.23M
Dividend Yield1.89%
Average Volume (3M)44.52K
Price to Earnings (P/E)10.6
Beta (1Y)0.80
Revenue Growth13.74%
EPS Growth-18.39%
CountryUS
Employees528
SectorFinancial
Sector Strength86
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.92
Shares Outstanding16,485,647
10 Day Avg. Volume63,600
30 Day Avg. Volume44,520
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.81
Price to Cash Flow (P/CF)32.20
P/FCF Ratio6.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$45.00Price Target Upside46.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
South Plains Financial Business Overview & Revenue Model
Company DescriptionSouth Plains Financial, Inc. (SPFI) is a financial holding company headquartered in Lubbock, Texas. It operates primarily through its banking subsidiary, City Bank, which provides a broad range of commercial and consumer financial services. The company's operations are concentrated in the banking sector, offering products such as personal and business banking, mortgage lending, and wealth management services. South Plains Financial serves individual clients, small to medium-sized businesses, and agricultural enterprises across Texas and Eastern New Mexico.
How the Company Makes MoneySouth Plains Financial generates revenue primarily through its banking operations. The key revenue streams include interest income from loans and securities, as well as non-interest income from service charges, fees, and wealth management services. Interest income is derived from the interest charged on various loans, such as commercial, real estate, and consumer loans. Non-interest income is obtained from sources like deposit account service charges, mortgage banking activities, and investment advisory fees. The company benefits from its strategic presence in Texas and New Mexico, leveraging strong local economies and relationships with individual and business clients. Additionally, SPFI may engage in partnerships with other financial institutions and service providers to enhance its product offerings and customer reach.
South Plains Financial Financial Statement Overview
Summary
South Plains Financial demonstrates strong profitability with high margins and effective cost management. The balance sheet is stable, yet slightly leveraged by industry standards. Cash flow operations are reliable, though improvements in free cash flow conversion could enhance financial flexibility.Income Statement
South Plains Financial shows a solid performance with a consistent gross profit margin of 100% due to its banking operations. The net profit margin for the latest period is approximately 20.6%, indicating strong profitability. However, the revenue growth rate from 2023 to 2024 is relatively modest at 14.2%, and EBIT margin is notably high at approximately 98.4%, reflecting efficient cost management. Despite a decrease in EBITDA reporting, the company maintains a steady financial trajectory.75
Positive
Balance Sheet
The company's balance sheet is robust with no current debt, indicating a strong financial position. The equity ratio stands at 10.4%, suggesting a stable equity base relative to total assets. Return on Equity (ROE) is 11.3%, showcasing effective use of equity to generate profits. However, the low equity ratio may indicate moderate leverage in the context of typical banking industry standards, which could pose risks if economic conditions worsen.70
Positive
Cash Flow
South Plains Financial demonstrates stable cash flow operations with a healthy operating cash flow to net income ratio of 1.19. The free cash flow growth rate from 2023 to 2024 is 10.2%, reflecting positive cash management. However, the free cash flow to net income ratio is slightly lower at 1.19, indicating some room for improvement in converting income into free cash flow. Overall, cash flow management appears steady but could benefit from enhancements in free cash generation.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 240.90M | 210.95M | 214.62M | 219.23M | 221.57M | Gross Profit |
| 240.90M | 210.95M | 214.62M | 219.23M | 221.57M | EBIT |
| 237.12M | 79.42M | 95.84M | 73.12M | 56.60M | EBITDA |
| 0.00 | 0.00 | 80.12M | 91.55M | 0.00 | Net Income Common Stockholders |
| 49.72M | 62.74M | 58.24M | 58.61M | 45.35M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 631.35M | 952.92M | 936.59M | 1.21B | 1.10B | Total Assets |
| 4.23B | 4.20B | 3.94B | 3.90B | 3.60B | Total Debt |
| 110.35M | 110.17M | 122.35M | 122.17M | 223.53M | Net Debt |
| -54.11M | -219.99M | -112.53M | -364.65M | -76.78M | Total Liabilities |
| 3.79B | 3.80B | 3.59B | 122.17M | 223.53M | Stockholders Equity |
| 438.95M | 407.11M | 357.01M | 407.43M | 370.05M |
| Cash Flow | Free Cash Flow | |||
| 59.38M | 53.86M | 119.12M | 93.35M | 2.32M | Operating Cash Flow |
| 59.38M | 58.54M | 123.59M | 96.27M | 5.63M | Investing Cash Flow |
| -13.93M | -143.38M | -408.86M | -159.84M | -156.23M | Financing Cash Flow |
| -16.53M | 180.11M | 33.33M | 250.08M | 292.81M |
South Plains Financial Technical Analysis
Negative
30.73
Price Trends
33.81
Negative
35.13
Negative
33.79
Negative
Market Momentum
-0.30
Negative
44.74
Neutral
45.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPFI, the sentiment is Negative. The current price of 30.73 is below the 20-day moving average (MA) of 32.51, below the 50-day MA of 33.81, and below the 200-day MA of 33.79, indicating a bearish trend. The MACD of -0.30 indicates Negative momentum. The RSI at 44.74 is Neutral, neither overbought nor oversold. The STOCH value of 45.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPFI.
South Plains Financial Risk Analysis
South Plains Financial disclosed 31 risk factors in its most recent earnings report. South Plains Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
South Plains Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $524.18M | 10.74 | 7.39% | 5.22% | 6.97% | -16.70% | |
70 Outperform | $506.38M | 10.67 | 8.78% | 4.35% | 13.46% | -21.20% | |
68 Neutral | $508.91M | 12.54 | 5.95% | 6.30% | 3.35% | -37.36% | |
64 Neutral | $13.37B | 9.30 | 9.39% | 4.85% | 16.11% | -8.85% | |
63 Neutral | $510.23M | 10.60 | 11.75% | 1.89% | 13.74% | -18.39% | |
62 Neutral | $477.34M | 17.04 | 6.68% | 1.14% | 7.69% | 13.82% | |
60 Neutral | $513.19M | 17.80 | 5.64% | 3.52% | 62.98% | -45.76% |
* Financial Sector Average
Performance Comparison
SPFI
South Plains Financial
30.73
5.89
23.71%
THFF
First Financial Indiana
42.72
8.59
25.17%
HTBK
Heritage Commerce
8.26
0.76
10.13%
HIFS
Hingham Institution For Savings
220.20
56.90
34.84%
ORRF
Orrstown Financial Services
26.16
1.82
7.48%
TRST
TrustCo Bank
27.56
2.42
9.63%
South Plains Financial Earnings Call Summary
Earnings Call Date: Jan 24, 2025 | % Change Since: -11.52% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive growth in underlying loan demand and noninterest income, alongside a strong capital position and consistent dividend policy. However, challenges such as a decrease in diluted earnings per share and flat loan growth expectations were noted, balancing the overall sentiment.Highlights
Strong Underlying Loan Demand
The company is experiencing strong underlying loan demand, which is expected to translate into growth as payoffs return to normal levels. The new business pipeline is at its highest level since mid-2022.
Increase in Net Interest Margin
Net interest margin increased by 10 basis points to 3.75% in the fourth quarter, driven by a decline in the cost of deposits.
Noninterest Income Growth
Noninterest income increased to $13.3 million from $10.6 million in the linked quarter, primarily due to a $3.1 million increase in mortgage banking revenues.
Strong Capital Position
The company's consolidated common equity Tier 1 risk-based capital ratio was 13.53% and the Tier 1 leverage ratio was 12.04% at year-end.
Consistent Dividend and Potential Buyback
A $0.15 per share quarterly dividend was authorized, marking the 23rd consecutive quarter of dividend payments, along with a $10 million stock repurchase program.
Lowlights
Decrease in Diluted Earnings Per Share
Diluted earnings per share for the full year decreased to $2.92 from $3.62 in 2023.
Challenges in Loan Growth
Despite optimism, loan growth is expected to be relatively flat in the first quarter of 2025 due to continued elevated payoffs and seasonal agricultural loan paydowns.
Lower Tangible Book Value
Tangible book value per share decreased to $25.40 as of December 31, 2024, from $25.75 as of September 30, 2024, primarily due to a decrease in accumulated other comprehensive income.
Company Guidance
In the South Plains Financial, Inc. Q4 2024 earnings call, the company provided guidance reflecting a cautiously optimistic outlook for 2025. The executives highlighted the achievement of a diluted earnings per share of $2.92 for the full year, despite a decrease from $3.62 in 2023 due to a $22.9 million one-time gain from the sale of their insurance subsidiary the previous year. They reported a 1.4% growth in their loan portfolio, with expectations of low to mid-single-digit loan growth in 2025. The net interest margin increased by 10 basis points to 3.75%, aided by a decline in deposit costs. Their community-based deposit franchise held steady at $3.6 billion, and the company maintained strong credit quality with a return on average assets of 1.17% and an efficiency ratio of 65.1%. Looking forward, they anticipate an increase in M&A activity and have a $10 million stock repurchase program in place, with the possibility of authorizing another share repurchase plan to provide flexibility in volatile market conditions.South Plains Financial Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
South Plains Financial Announces Dividend and Positive Outlook
Positive
Jan 24, 2025
On January 23, 2025, South Plains Financial, Inc. announced a quarterly cash dividend of $0.15 per share to be paid on February 18, 2025. The company’s financial results for Q4 and 2024 showed a net income increase to $16.5 million for Q4 2024, with a diluted earnings per share of $0.96. Despite a decrease in full-year net income from $62.7 million in 2023 to $49.7 million in 2024, the company reported a positive outlook with a strong new business production pipeline and expected loan growth in 2025, aided by falling deposit pricing.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.