tiprankstipranks
Trending News
More News >
South Plains Financial Inc (SPFI)
NASDAQ:SPFI
Advertisement

South Plains Financial (SPFI) AI Stock Analysis

Compare
41 Followers

Top Page

SPFI

South Plains Financial

(NASDAQ:SPFI)

Rating:77Outperform
Price Target:
$44.00
â–²(8.64% Upside)
South Plains Financial demonstrates strong financial performance and positive earnings call sentiment, supported by robust cash flow and strategic growth initiatives. Technical indicators show positive momentum, while valuation remains fair. Recent corporate events, including a dividend increase, enhance the stock's attractiveness.

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

South Plains Financial Business Overview & Revenue Model

Company DescriptionSouth Plains Financial (SPFI) is a financial services holding company based in the United States, primarily engaged in providing a range of banking and financial services through its subsidiary, South Plains Bank. The company operates in the banking sector, offering services that include personal and commercial banking, mortgage lending, and treasury management solutions. SPFI is committed to serving the diverse financial needs of its customers across Texas and New Mexico, focusing on community-oriented banking and relationship-based customer service.
How the Company Makes MoneySouth Plains Financial generates revenue through various key streams typical of banking institutions. The primary source of income is net interest income, which is earned from the difference between interest earned on loans and interest paid on deposits. SPFI offers a variety of loan products, including commercial, consumer, and real estate loans, which contribute significantly to its interest income. Additionally, the bank earns non-interest income from services such as transaction fees, wealth management, and mortgage origination fees. Significant partnerships with local businesses and community organizations enhance customer acquisition and retention, further driving the bank's profitability. Overall, SPFI's revenue model is built on both interest-based and fee-based income, supported by a strong community presence.

South Plains Financial Earnings Call Summary

Earnings Call Date:Jul 16, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong loan growth, improved noninterest income, and net interest margin expansion. However, challenges with loan payoffs, a decrease in deposits, and provisions for credit losses present notable headwinds. The bank remains focused on strategic growth through hiring and potential M&A opportunities.
Q2-2025 Updates
Positive Updates
Loan Growth and Yield Improvement
Loans held for investment increased by $23.1 million or 3% annualized to $3.1 billion in the second quarter. The yield on loans increased to 6.99% from 6.67% in the prior quarter.
Noninterest Income Increase
Noninterest income for the second quarter was $12.2 million, up from $10.6 million in the prior quarter, driven by a $1.5 million increase in mortgage banking revenues.
Net Interest Margin Expansion
Net interest margin, calculated on a tax equivalent basis, was 4.07% in the second quarter compared to 3.81% in the linked quarter.
Improvement in Noninterest-Bearing Deposits
Noninterest-bearing deposits increased by $32.3 million, contributing to the ratio of noninterest-bearing deposits to total deposits rising to 26.7% from 25.5%.
Strong Capital Position
The consolidated common equity Tier 1 risk-based capital ratio was 13.86%, and the Tier 1 leverage ratio was 12.12% as of June 30, 2025.
Negative Updates
Challenges with Loan Payoffs
Heightened level of loan payoffs, including $49.1 million from three multifamily property loans, mitigated loan growth and is expected to continue as a headwind.
Decrease in Deposits
Deposits decreased by $53.6 million to $3.74 billion at the end of the second quarter due to the seasonal outflow of public fund deposits.
Indirect Auto Loan Portfolio Decline
The indirect auto loan portfolio decreased to $241 million from $243 million, with consumer spending slowing due to expected tariffs.
Provision for Credit Losses
A $2.5 million provision for credit losses was recorded, attributed to specific reserves, net charge-off activity, increased loan balances, and several credit quality downgrades.
Company Guidance
During the South Plains Financial Second Quarter 2025 Earnings Conference Call, the company provided guidance indicating several key metrics. They reported a net interest margin (NIM) of 4.07%, up from 3.81% in the previous quarter, and net interest income of $42.5 million, compared to $38.5 million in the first quarter. The company's consolidated common equity Tier 1 risk-based capital ratio stood at 13.86%, with a Tier 1 leverage ratio of 12.12% as of June 30, 2025. Loan growth was modest, with loans held for investment increasing by $23.1 million or 3% annualized, reaching $3.1 billion. The yield on loans rose to 6.99% from 6.67% in the prior quarter, aided by a $1.7 million interest recovery. Deposits decreased by $53.6 million to $3.74 billion, while noninterest income increased to $12.2 million from $10.6 million in the previous quarter. The bank's allowance for credit losses was 1.45% of total loans, reflecting a $2.5 million provision for credit losses. The company emphasized its strategy of pursuing both organic growth and mergers and acquisitions (M&A), with a focus on expanding lending capabilities and maintaining a stable, lower-cost funding source.

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 Price40.50
Price Trends
50DMA
38.48
Positive
100DMA
36.51
Positive
200DMA
35.71
Positive
Market Momentum
MACD
0.78
Negative
RSI
61.92
Neutral
STOCH
66.33
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 40.5 is above the 20-day moving average (MA) of 39.60, above the 50-day MA of 38.48, and above the 200-day MA of 35.71, indicating a bullish trend. The MACD of 0.78 indicates Negative momentum. The RSI at 61.92 is Neutral, neither overbought nor oversold. The STOCH value of 66.33 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 32 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
79
Outperform
$767.61M14.497.93%3.59%5.39%8.80%
77
Outperform
$666.35M12.8112.52%1.49%6.07%20.59%
73
Outperform
$710.21M11.3411.08%3.30%20.07%21.46%
73
Outperform
$686.28M15.7610.47%2.92%89.40%-29.07%
73
Outperform
$635.36M16.285.70%5.09%6.63%-19.64%
69
Neutral
$590.85M17.687.82%0.93%6.63%62.84%
68
Neutral
$18.06B11.9710.24%3.74%9.75%1.30%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SPFI
South Plains Financial
40.50
8.23
25.50%
THFF
First Financial Indiana
58.62
18.04
44.46%
HTBK
Heritage Commerce
10.22
1.04
11.33%
HIFS
Hingham Institution For Savings
266.37
25.25
10.47%
ORRF
Orrstown Financial Services
34.97
1.67
5.02%
TRST
TrustCo Bank
39.95
8.44
26.79%

South Plains Financial Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
South Plains Financial Adopts New Bylaws
Neutral
Aug 26, 2025

On August 20, 2025, South Plains Financial, Inc. adopted new bylaws to align with recent changes in the Texas Business Organizations Code. These amendments include a 3% ownership threshold for shareholders to initiate derivative proceedings, electing governance under Section 21.419 of the TBOC, designating specific courts for internal entity claims, and waiving jury trials for such claims.

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.

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.

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: Aug 19, 2025