South Plains Financial, Inc. (SPFI) | Investment Case

1. Company Snapshot

1.a. Company Description

South 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.

Show Full description

1.b. Last Insights on SPFI

South Plains Financial's recent performance was driven by strong Q3 earnings, surpassing estimates with $0.66 per share, compared to $0.65 expected and $0.78 a year ago. The company's financial results showed a solid quarter, with key metrics aligning with Wall Street estimates. Additionally, the formation of a hammer chart indicates potential support for the stock, and strong agreement among analysts in revising earnings estimates higher enhances the stock's potential for a turnaround.

1.c. Company Highlights

Last Price	38.93
Change Percentage	-0.89%
Open	39.1
Previous Close	39.28
Market Cap ( Millions)	633
Volume	39021
Year High	42.38
Year Low	30.01
M A 50	37.73
M A 200	36.53

FCF Yield	10.78%
Dividend Yield	1.59%
ROE	13.16%
Debt / Equity	12.66%
Net Debt / EBIDTA	5.51%
Price To Book	1.32
Price Earnings Ratio	10.59
Price To FCF	9.27
Price To sales	2.42
EV / EBITDA	7.94

2. South Plains Financial's Q3 Earnings: A Strong Foundation for Growth

South Plains Financial reported a robust third quarter 2025, with earnings per share (EPS) of $0.96, surpassing analyst estimates of $0.87. The bank's net interest income expanded to $43 million, up from $42.5 million in the linked quarter, driven by a solid yield on loans of 6.92%. The bank's noninterest expense was $33 million, a decrease of $581,000 from the linked quarter, demonstrating effective cost management. As Curtis Griffith, Chairman and CEO, stated, "We're firmly positioned to accelerate asset growth through organic growth and accretive M&A opportunities."

Publication Date: Oct -28

📋 Highlights

Loan Portfolio and Credit Quality

The bank's loan portfolio decreased by $45.5 million to $3.05 billion in the third quarter, primarily due to a decline in multifamily property loans. However, the bank is actively recruiting lenders to grow its lending platform by up to 20%. The credit quality of the loan portfolio improved, with strong past due ratios and low charge-off activity. The bank's indirect auto portfolio has shown a migration of credit scores downwards, but the bank is cautious about lower-end credit scores and has less than 2% of its portfolio in subprime or deep subprime loans.

Growth Initiatives and Valuation

South Plains Financial is focused on reaccelerating organic loan growth and expanding through accretive M&A opportunities. The bank plans to increase its lending team by up to 20% next year, with 40 lenders as the base. With a Price-to-Tangible Book Value (P/TBV) of 1.26, the bank's valuation appears reasonable. The Dividend Yield is 1.68%, providing a relatively stable return for investors. Analysts estimate next year's revenue growth at 5.3%, indicating a moderate growth trajectory.

Outlook and Conclusion

The bank's strong financial position, growing earnings power, and strategic initiatives position it for long-term success. With a focus on organic loan growth and accretive M&A opportunities, South Plains Financial is well-equipped to drive value for its shareholders. As the bank continues to execute on its growth plans, investors can expect a steady increase in returns, supported by a reasonable valuation and a stable dividend yield.

3. NewsRoom

KBRA Comments on South Plains Financial, Inc.'s Proposed Acquisition of BOH Holdings, Inc.

Dec -04

Source: businesswire.com

South Plains Financial, Inc. Deepens its Commitment to the Houston Market with the Acquisition of BOH Holdings, Inc.

Dec -01

Source: globenewswire.com

South Plains Financial (SPFI) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -24

Source: zacks.com

South Plains Financial, Inc. (SPFI) Q3 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

South Plains Financial (SPFI) Q3 Earnings and Revenues Surpass Estimates

Oct -23

Source: zacks.com

South Plains Financial, Inc. Declares Quarterly Cash Dividend

Oct -16

Source: globenewswire.com

South Plains Financial, Inc. Announces Third Quarter 2025 Earnings Call

Oct -09

Source: globenewswire.com

6 Upcoming Dividend Increases

Jul -24

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.40%)

6. Segments

Banking and Related Activities

Expected Growth: 7.4%

South Plains Financial, Inc.'s 7.4% growth in Banking and Related Activities is driven by increasing loan demand, expansion into new markets, and a strong focus on digital banking. Additionally, the company's strategic acquisitions and cost-cutting initiatives have improved operational efficiency, contributing to the segment's growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions for businesses, including commercial loans, cash management, and treasury services.

Wealth Management

Provides investment and wealth management services, including financial planning, investment management, and trust services.

Mortgage Lending

Offers mortgage loans for purchasing or refinancing homes, including conventional, FHA, VA, and USDA loans.

Insurance Services

Provides insurance products, including life insurance, long-term care insurance, and annuities.

Investment Services

Offers investment products, including brokerage services, investment advice, and retirement accounts.

8. South Plains Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

South Plains Financial, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

South Plains Financial, Inc. has a large customer base, but customers have significant bargaining power due to the availability of alternative financial institutions.

Bargaining Power Of Suppliers

South Plains Financial, Inc. has a diversified supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

While there are barriers to entry in the financial services industry, new entrants can still pose a threat to South Plains Financial, Inc. through innovative products and services.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	21.57%
Debt Cost	6.72%
Equity Weight	78.43%
Equity Cost	6.72%
WACC	6.72%
Leverage	27.50%

11. Quality Control: South Plains Financial, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Enterprise Bancorp

A-Score: 6.5/10

Value: 6.3

Growth: 5.3

Quality: 6.7

Yield: 4.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

South Plains Financial

A-Score: 6.3/10

Value: 6.6

Growth: 5.9

Quality: 6.6

Yield: 4.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Investar Holding

A-Score: 6.1/10

Value: 6.3

Growth: 6.0

Quality: 5.9

Yield: 4.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

United Bancorp

A-Score: 6.0/10

Value: 4.4

Growth: 4.9

Quality: 4.5

Yield: 10.0

Momentum: 6.5

Volatility: 6.0

1-Year Total Return ->

QCR Holdings

A-Score: 5.7/10

Value: 6.3

Growth: 8.3

Quality: 7.6

Yield: 0.0

Momentum: 4.5

Volatility: 7.3

1-Year Total Return ->

Customers Bancorp

A-Score: 5.0/10

Value: 6.5

Growth: 6.8

Quality: 3.8

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-8.66%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.72%

South Plains Financial, Inc. - US83946P1075

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SPFI

1.c. Company Highlights

Average Quality

Stable Momentum

Average Yield

Earnings Beats

Revenues Beats

Fairly Valued

Better Quality

Higher Growth

Revenues Miss

Average Growth

Strong Momentum

Medium Volatility

2. South Plains Financial's Q3 Earnings: A Strong Foundation for Growth

Loan Portfolio and Credit Quality

Growth Initiatives and Valuation

Outlook and Conclusion

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.40%)

6. Segments

Banking and Related Activities

Expected Growth: 7.4%

7. Detailed Products

Consumer Banking

Commercial Banking

Wealth Management

Mortgage Lending

Insurance Services

Investment Services

8. South Plains Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: South Plains Financial, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

38.93$

Current Price

38.93$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA