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South Plains Financial (SPFI)
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South Plains Financial (SPFI) AI Stock Analysis

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SPFI

South Plains Financial

(NASDAQ:SPFI)

Rating:74Outperform
Price Target:
$46.00
â–²(15.32%Upside)
South Plains Financial is well-positioned with strong financial fundamentals and positive growth indicators. The company's financial performance, supported by robust cash flow and efficient cost management, is a key strength. Technical analysis suggests bullish momentum, although short-term caution is warranted due to overbought signals. Valuation is fair, with a reasonable P/E ratio and modest dividend yield. The recent earnings call and corporate events further bolster the stock's outlook, balancing strategic growth with existing challenges.

South Plains Financial (SPFI) vs. SPDR S&P 500 ETF (SPY)

South Plains Financial Business Overview & Revenue Model

Company DescriptionSouth Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company operates 25 full-service banking locations; and 15 loan production offices located throughout Texas and Eastern New Mexico. South Plains Financial, Inc. was founded in 1941 and is headquartered in Lubbock, Texas.
How the Company Makes MoneySouth Plains Financial makes money through various revenue streams centered around traditional banking and financial services. The primary sources of revenue include interest income from loans and leases, which constitutes a significant portion of their earnings. Additionally, the company generates non-interest income through service charges on deposit accounts, mortgage banking fees, and wealth management services. The bank fosters local relationships to drive growth in both its lending and deposit-taking activities. Strategic partnerships with financial service providers also enhance its product offerings, contributing to its revenue model by attracting a diverse clientele and expanding its market presence.

South Plains Financial Earnings Call Summary

Earnings Call Date:Jul 16, 2025
(Q2-2025)
|
% Change Since: 8.51%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive aspects, such as loan growth, improved loan yields, increased noninterest income, and a strong capital position. However, these positives were balanced by challenges like high loan payoffs, a decline in metro loan balances, and increased provisions for credit losses. The sentiment is balanced as strong financial performance is offset by these challenges.
Q2-2025 Updates
Positive Updates
Loan Growth Achieved
Loans held for investment increased by $23.1 million or 3% annualized to $3.1 billion in the second quarter.
Improved Loan Yield
Yield on loans was 6.99% in the second quarter, compared to 6.67% in the previous quarter, boosted by a 23 basis point increase due to a one-time interest recovery.
Noninterest Income Increase
Noninterest income was $12.2 million in the second quarter, up from $10.6 million in the previous quarter, primarily due to a $1.5 million increase in mortgage banking revenues.
Net Interest Margin Improvement
Net interest margin increased to 4.07% in the second quarter, compared to 3.81% in the previous quarter, aided by a one-time interest recovery.
Deposit Growth
Noninterest-bearing deposits increased by $32.3 million, contributing to an improved deposit mix and a decline in deposit costs.
Strong Capital Position
Common equity Tier 1 risk-based capital ratio was 13.86%, and the Tier 1 leverage ratio was 12.12%, indicating a strong capital foundation.
Negative Updates
High Loan Payoffs
The bank experienced a heightened level of loan payoffs, including $49.1 million from three multifamily property loans, which mitigated loan growth.
Decline in Major Metro Loan Balances
Loans in major metropolitan markets decreased by $26 million due to loan payoffs exceeding new production.
Provision for Credit Losses
A $2.5 million provision for credit losses was recorded, attributed to increased specific reserves, net charge-off activity, and credit quality downgrades.
Indirect Auto Loan Portfolio Decline
Indirect auto loan portfolio modestly decreased to $241 million from $243 million, with potential headwinds from consumer spending changes due to expected tariffs.
Company Guidance
During the South Plains Financial Second Quarter 2025 Earnings Conference Call, the company provided guidance indicating robust financial health and strategic growth plans. The bank achieved a net interest margin of 4.07% in Q2, with net interest income increasing to $42.5 million from $38.5 million in the previous quarter. Loan yields grew to 6.99%, driven partly by a $1.7 million interest recovery, though excluding this, the yield was 6.76%. The bank's consolidated common equity Tier 1 risk-based capital ratio stood at 13.86%, and the Tier 1 leverage ratio was 12.12%, signaling strong capitalization. Noninterest income rose to $12.2 million, fueled by mortgage banking revenues. South Plains continues to focus on organic growth, expanding lending capabilities, and exploring M&A opportunities, while maintaining liquidity through community-based deposits, which account for a stable funding source. Despite headwinds from loan payoffs, they anticipate loan growth to be flat to low single digits in Q3, with new hires poised to drive future growth.

South Plains Financial Financial Statement Overview

Summary
South Plains Financial exhibits strong financial health with notable revenue growth and robust profit margins. The company's balance sheet shows conservative leverage and impressive return on equity. Cash flow is particularly strong, with effective cash generation relative to income. Overall, the company is well-positioned financially with a positive growth trajectory.
Income Statement
78
Positive
South Plains Financial has demonstrated strong revenue growth, with a TTM (Trailing-Twelve-Months) revenue of $283.45M. The Gross Profit Margin is robust at approximately 66.2%, indicating efficiency in managing costs relative to revenue. The Net Profit Margin stands at about 18%, reflecting solid profitability. Revenue growth from the previous year is notable, with an increase from $248.52M to $283.45M, indicating a healthy upward trajectory. The EBIT and EBITDA Margins are also strong, at 22.9% and 25.2% respectively, showcasing effective operational management.
Balance Sheet
75
Positive
The company maintains a stable financial position with a Debt-to-Equity Ratio of 0.25, suggesting conservative leverage. The Return on Equity is impressive at 11.5%, highlighting effective use of shareholder capital. The Equity Ratio is approximately 10.1%, indicating a moderate level of equity financing relative to total assets. However, the equity ratio suggests some reliance on liabilities, which could pose risks in adverse market conditions.
Cash Flow
82
Very Positive
Operating Cash Flow is strong at $66.32M in the TTM, providing a solid foundation for financial flexibility. The Free Cash Flow has shown growth, with a TTM value of $62.30M compared to previous periods. The Operating Cash Flow to Net Income Ratio is approximately 1.3, demonstrating effective conversion of income into cash. The Free Cash Flow to Net Income Ratio is also healthy at about 1.2, indicating good cash generation relative to profits.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue283.10M248.51M231.94M227.51M235.58M
Gross Profit185.00M171.62M211.86M216.16M194.06M
EBITDA69.80M85.83M80.12M79.56M63.18M
Net Income49.72M62.74M58.24M58.61M45.35M
Balance Sheet
Total Assets4.23B4.20B3.94B3.90B3.60B
Cash, Cash Equivalents and Short-Term Investments627.32M514.02M936.59M1.21B1.10B
Total Debt110.35M110.17M122.35M122.17M223.53M
Total Liabilities3.79B3.80B3.59B3.49B3.24B
Stockholders Equity438.95M407.11M357.01M407.43M370.05M
Cash Flow
Free Cash Flow56.03M53.86M119.12M93.35M2.32M
Operating Cash Flow59.38M58.54M123.59M96.27M5.63M
Investing Cash Flow-13.93M-143.38M-408.86M-159.84M-156.23M
Financing Cash Flow-16.53M180.11M33.33M250.08M292.81M

South Plains Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price39.89
Price Trends
50DMA
36.70
Positive
100DMA
34.80
Positive
200DMA
35.21
Positive
Market Momentum
MACD
1.29
Negative
RSI
60.27
Neutral
STOCH
75.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPFI, the sentiment is Positive. The current price of 39.89 is above the 20-day moving average (MA) of 38.10, above the 50-day MA of 36.70, and above the 200-day MA of 35.21, indicating a bullish trend. The MACD of 1.29 indicates Negative momentum. The RSI at 60.27 is Neutral, neither overbought nor oversold. The STOCH value of 75.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$663.60M12.787.93%4.13%5.39%8.80%
79
Outperform
$609.18M14.896.12%5.26%5.14%-24.91%
76
Outperform
$687.09M16.3113.01%2.78%89.36%-29.07%
74
Outperform
$647.32M12.8912.52%1.48%6.07%20.59%
73
Outperform
$656.64M10.7911.08%3.57%20.07%21.46%
69
Neutral
$539.18M16.307.82%1.02%6.63%62.84%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SPFI
South Plains Financial
39.21
7.06
21.96%
THFF
First Financial Indiana
55.41
12.32
28.59%
HTBK
Heritage Commerce
9.58
-0.44
-4.39%
HIFS
Hingham Institution For Savings
246.61
8.89
3.74%
ORRF
Orrstown Financial Services
35.22
1.96
5.89%
TRST
TrustCo Bank
34.89
2.08
6.34%

South Plains Financial Corporate Events

Dividends
South Plains Financial Increases Quarterly Dividend by 7%
Positive
Jul 18, 2025

On July 17, 2025, South Plains Financial, Inc. announced a 7% increase in its quarterly cash dividend, raising it to $0.16 per share of common stock. This dividend will be paid on August 11, 2025, to shareholders recorded by July 28, 2025, reflecting the company’s commitment to delivering value to its stakeholders.

The most recent analyst rating on (SPFI) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on South Plains Financial stock, see the SPFI Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
South Plains Financial Reports Strong Q2 2025 Results
Positive
Jul 16, 2025

South Plains Financial, Inc. reported strong financial results for the second quarter of 2025, with net income rising to $14.6 million, up from $12.3 million in the previous quarter and $11.1 million in the same quarter of 2024. The company achieved a net interest margin of 4.07% and saw growth in net interest income, driven by increased loan interest income and a recovery of interest from a previously nonaccrual loan. Despite a decrease in total deposits from the previous quarter, the company experienced year-over-year growth in deposits, supported by organic growth in retail and commercial deposits. The company is strategically focused on expanding its lending platform and has recruited experienced lenders to enhance its market presence.

The most recent analyst rating on (SPFI) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on South Plains Financial stock, see the SPFI Stock Forecast page.

Executive/Board ChangesShareholder Meetings
South Plains Financial Shareholders Approve Key Proposals
Neutral
May 23, 2025

South Plains Financial, Inc. held its 2025 Annual Meeting of Shareholders virtually on May 20, 2025. During the meeting, shareholders approved four key proposals, including the election of two Class III directors, the ratification of Forvis Mazars, LLP as the independent accounting firm, and the approval of executive compensation and its advisory vote frequency. The company decided to hold annual advisory votes on executive compensation until at least 2031.

The most recent analyst rating on (SPFI) stock is a Buy with a $43.00 price target. To see the full list of analyst forecasts on South Plains Financial stock, see the SPFI Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 19, 2025