South Plains Financial (SPFI) Q3 2026 Earnings Call: EPS Reaches $1.06, NIM Holds at 4.00%
Source Tradingkey
Key Takeaways
- South Plains Financial reported Q3 2026 net income of $20.8 million, up from $19.0 million in Q2, while diluted EPS increased to $1.06 from $0.96.
- Loans held for investment rose approximately $60 million to $3.83 billion, representing 6.3% annualized organic growth despite two large payoffs. Management remains confident in full-year mid-single-digit loan growth.
- Tax-equivalent net interest margin held at 4.00%. Deposit costs declined 1 basis point to 2.07%, while the loan yield fell to 6.75% from 6.81%.
- Non-interest expense decreased $1.8 million to $38.1 million, helping the efficiency ratio improve to 58.1% from 61.6%. Q3 expenses included approximately $875,000 related to CEO Curtis Griffith’s retirement.
- Non-performing loans increased to 0.40% of total loans, mainly due to acquired Bank of Houston credits. Management said the largest affected credit returned to performing status after quarter-end.
- Griffith will retire as CEO at year-end but remain Chairman of South Plains Financial and City Bank. President Corey Newsom is set to assume the CEO role.
Key Financial Data
| Metric | Q3 2026 | Q2 2026 / Change | Commentary |
|---|---|---|---|
| Net income | $20.8 million | $19.0 million | Higher linked-quarter earnings |
| Diluted EPS | $1.06 | $0.96 | Near-record EPS, according to management |
| Return on average assets | 1.53% | — | Improved during the quarter |
| Net interest income | $51.5 million | Up $1.1 million | Supported by a $53 million increase in average interest-earning assets |
| Tax-equivalent NIM | 4.00% | Stable | Management aims to maintain the current range |
| Loans held for investment | $3.83 billion | Up approximately $60 million | 6.3% annualized organic growth |
| Loan yield | 6.75% | 6.81% | New originations were generally priced in the upper-6% range |
| Total deposits | $4.66 billion | Up $20 million | Core deposit growth offset reductions in higher-cost, non-core funding |
| Non-interest-bearing deposits | $1.18 billion | 25.3% of deposits vs. 24.8% | Deposit mix improved |
| Cost of deposits | 2.07% | Down 1 basis point | Continued funding optimization |
| Non-interest income | $13.8 million | $14.1 million | Lower card and interchange revenue |
| Non-interest expense | $38.1 million | Down $1.8 million | Lower personnel, mortgage commission and acquisition-related costs |
| Efficiency ratio | 58.1% | 61.6% | Improved operating efficiency |
| Allowance for credit losses / loans | 1.38% | 1.41% | Q3 loan-loss provision was $1.0 million |
| Non-performing loans / loans | 0.40% | Increased | Primarily Bank of Houston acquired loans |
| Tangible common equity / tangible assets | 10.32% | — | Management described capital as strong |
| Common equity Tier 1 ratio | 14.2% | — | Supports organic growth and potential acquisitions |
| Tangible book value per share | $29.23 | $29.60 | Affected by a $25.5 million decline in accumulated other comprehensive income |
Business and Operating Performance
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