South Plains Financial (SPFI) AI Stock Analysis

Compare

37 Followers

SPFI Dividends

Top Page

South Plains Financial

(NASDAQ:SPFI)

70Outperform

South Plains Financial exhibits strong financial performance with high profitability and a robust balance sheet. Technical indicators show a neutral to slightly bearish trend, while valuation metrics suggest the stock is fairly priced. The earnings call highlights strengths in deposit growth and credit quality but also points out challenges such as declining non-interest income and earnings per share. Overall, the company is well-positioned for growth, though vigilance in managing leverage and cash flow remains important.

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

Market Cap

$547.30M

Dividend Yield1.69%

Average Volume (3M)44.32K

Price to Earnings (P/E)11.3

Beta (1Y)0.79

Revenue Growth8.76%

EPS Growth-18.66%

CountryUS

Employees528

SectorFinancial

Sector Strength87

IndustryBanks - Regional

Share Statistics

EPS (TTM)3.00

Shares Outstanding16,235,647

10 Day Avg. Volume27,913

30 Day Avg. Volume44,324

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.13

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.57

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$41.67

Price Target Upside23.61% 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 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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Positive

Last Price33.71

Price Trends

50DMA

32.96

Positive

100DMA

34.34

Positive

200DMA

33.97

Positive

Market Momentum

MACD

0.21

Negative

RSI

64.65

Neutral

STOCH

92.65

Negative

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 33.71 is above the 20-day moving average (MA) of 32.11, above the 50-day MA of 32.96, and below the 200-day MA of 33.97, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 64.65 is Neutral, neither overbought nor oversold. The STOCH value of 92.65 is Negative, 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRST	77 Outperform	$580.86M	11.41	7.63%	4.74%	5.63%	-3.82%
SPFI	70 Outperform	$547.30M	11.25	12.00%	1.69%	8.76%	-18.66%
ORRF	68 Neutral	$584.58M	15.30	7.85%	3.09%	75.72%	-41.36%
HTBK	66 Neutral	$556.96M	13.26	6.12%	5.73%	5.10%	-24.91%
THFF	65 Neutral	$582.95M	10.63	10.02%	3.71%	16.84%	-1.03%
Sector *	63 Neutral	$12.46B	9.55	8.14%	17103.96%	12.70%	-4.66%
HIFS	61 Neutral	$544.10M	19.28	6.68%	0.99%	7.69%	13.82%

* Financial Sector Average

Performance Comparison

SPFI

South Plains Financial

33.71

7.59

29.06%

THFF

First Financial Indiana

49.40

13.51

37.64%

HTBK

Heritage Commerce

9.04

1.27

16.34%

HIFS

Hingham Institution For Savings

249.56

74.82

42.82%

ORRF

Orrstown Financial Services

29.97

4.38

17.12%

TRST

TrustCo Bank

30.45

4.06

15.38%

South Plains Financial Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 1.87%|

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.