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South Plains Financial (SPFI)
:SPFI
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South Plains Financial
(NASDAQ:SPFI)
Rating:70Outperform
Price Target:―
South Plains Financial (SPFI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$564.72M
Dividend Yield1.7%
Average Volume (3M)28.53K
Price to Earnings (P/E)11.6
Beta (1Y)0.78
Revenue Growth8.76%
EPS Growth-18.66%
CountryUS
Employees528
SectorFinancial
Sector Strength83
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.72
Shares Outstanding16,227,688
10 Day Avg. Volume26,066
30 Day Avg. Volume28,529
Financial Highlights & Ratios
PEG Ratio3.73
Price to Book (P/B)1.28
Price to Sales (P/S)0.00
P/FCF Ratio9.60
Enterprise Value/Market Cap0.89
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit2.10
Enterprise Value/Ebitda2.37
Forecast
1Y Price Target
$41.67Price Target Upside19.74% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
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 a high net profit margin and efficient cost management. The balance sheet is robust with no current debt, although the equity ratio suggests moderate leverage. Cash flow operations are stable, with room for improvement in free cash flow conversion.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 |
| 189.30M | 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 |
| -248.73M | -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 | |||
| 56.03M | 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
Neutral
34.80
Price Trends
33.36
Positive
33.94
Positive
34.31
Positive
Market Momentum
0.68
Positive
52.64
Neutral
26.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPFI, the sentiment is Neutral. The current price of 34.8 is below the 20-day moving average (MA) of 34.87, above the 50-day MA of 33.36, and above the 200-day MA of 34.31, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 52.64 is Neutral, neither overbought nor oversold. The STOCH value of 26.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 3 New Risks
1.
The market price of our common stock may be volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. Q4, 2024
2.
Q4, 2024
3.
Risks Related to Our Business Q4, 2024
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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $584.29M | 11.47 | 7.63% | 4.63% | 5.63% | -3.82% | |
70 Outperform | $564.72M | 11.61 | 12.00% | 1.70% | 8.76% | -18.66% | |
68 Neutral | $577.84M | 15.10 | 7.85% | 3.11% | 75.72% | -41.36% | |
66 Neutral | $556.82M | 13.26 | 6.12% | 5.75% | 5.10% | -24.91% | |
65 Neutral | $535.77M | 18.99 | 6.68% | 1.02% | 7.69% | 13.82% | |
65 Neutral | $600.59M | 10.95 | 10.02% | 3.79% | 16.84% | -1.03% | |
64 Neutral | $12.64B | 9.78 | 7.67% | 17015.08% | 12.23% | -6.02% |
* Financial Sector Average
Performance Comparison
SPFI
South Plains Financial
34.80
8.86
34.16%
THFF
First Financial Indiana
50.68
15.18
42.76%
HTBK
Heritage Commerce
9.04
1.31
16.95%
HIFS
Hingham Institution For Savings
245.74
76.84
45.49%
ORRF
Orrstown Financial Services
29.62
4.04
15.79%
TRST
TrustCo Bank
30.72
4.08
15.32%
South Plains Financial Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 5.17%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook with strong deposit growth, improved credit quality, and a solid capital position highlighting strength, while decreased non-interest income, significant loan payoffs, and declining earnings per share present challenges.Q1-2025 Updates
Positive Updates
Strong Deposit Growth
Deposits increased by $171.6 million to $3.79 billion at the end of the first quarter, with a decline in cost of deposits from 229 basis points to 219 basis points.
Improved Credit Quality
Non-performing assets to total assets ratio improved to 16 basis points at the end of the first quarter, down from 58 basis points at year-end 2024.
Advantageous Capital Position
Consolidated common equity tier 1 risk-based capital ratio was 13.59% and tier 1 leverage ratio was 12.04%.
Successful Stock Repurchase
Repurchased 250,000 shares for $8.3 million as part of a $15 million stock repurchase program.
Indirect Auto Loan Portfolio Growth
Indirect auto loan portfolio grew by $7 million to $243 million, with a decline in 30+ days past due loans to 41 basis points from 47 basis points.
Negative Updates
Decrease in Non-Interest Income
Non-interest income decreased from $13.3 million to $10.6 million, primarily due to a $2.8 million decrease in mortgage banking revenues.
Loan Payoff Concerns
Loans in major metropolitan markets decreased by $18 million, with elevated loan payoffs expected to persist into the next quarter.
Decline in Earnings Per Share
Diluted earnings per share were $0.72 compared to $0.96 in the previous quarter, affected by a $0.14 per share after-tax differential in mortgage servicing rights fair value adjustment.
Company Guidance
During the South Plains Financial First Quarter 2025 Earnings Conference Call, the guidance provided highlighted several key metrics and strategic focuses. The company reported strong financials, with a consolidated common equity tier 1 risk-based capital ratio of 13.59% and a tier 1 leverage ratio of 12.04%, signaling robust capital positions. The bank's net interest margin increased to 3.81%, aided by a decline in the cost of deposits, which fell to 219 basis points. The call also noted a $171.6 million increase in deposits, bringing the total to $3.79 billion, and a 2.7% annualized increase in loans held for investment to $3.08 billion. Credit quality improvements were emphasized, with non-performing assets to total assets ratio improving to 16 basis points. The company remains focused on organic growth, selectively adding talent, and capitalizing on market opportunities. Additionally, a $0.15 per share quarterly dividend was announced, alongside a $15 million stock repurchase program, of which $8.3 million was already utilized. The guidance suggested cautious optimism for loan growth in the low- to mid-single-digit range for the year, despite economic uncertainties, particularly related to recent tariff announcements.South Plains Financial Corporate Events
Stock BuybackFinancial Disclosures
South Plains Financial Reports Q1 2025 Financial Results
Neutral
Apr 24, 2025
South Plains Financial, Inc. reported its financial results for the first quarter of 2025, showing a net income of $12.3 million, a decrease from the previous quarter but an increase from the same quarter in the previous year. The company experienced solid deposit growth and improved credit quality, with a net interest margin of 3.81% and a decrease in nonperforming assets. Despite a decrease in noninterest income due to lower mortgage banking revenues, the company maintained strong capital ratios and repurchased $8.3 million worth of shares. The company is positioned to expand in its markets, emphasizing a conservative credit culture and readiness to meet customer needs amid economic uncertainties.
Spark’s Take on SPFI Stock
According to Spark, TipRanks’ AI Analyst, SPFI is a Neutral.
South Plains Financial demonstrates strong profitability and efficient cost management, supporting its financial stability. The technical indicators suggest a bearish trend, while the valuation is reasonable. The earnings call highlighted both opportunities and risks, with strong capital positioning and consistent dividends balancing out EPS declines and loan growth challenges. Overall, the stock is positioned for steady performance, but attention to leverage management and market conditions is advised.
To see Spark’s full report on SPFI stock, click here.
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.