Earnings

South Plains Financial Loan Growth Accelerates to 6.3% Annualized

The Tip Desk · November 8, 2026 · 3 min read

Net interest income reached $51.5 million as organic loans rose 6.3% annualized and the tax-equivalent margin held at 4.00%.

South Plains Financial, Inc. (SPFI), the parent of City Bank, reported net income of $20.8 million for the quarter ended September 30, 2026, up from $19.0 million in the second quarter, with diluted earnings of $1.06 a share.

Net interest income was $51.5 million, after a $1.4 million sequential increase in interest income that the company tied to a $53.4 million rise in average interest-bearing assets. The tax-equivalent net interest margin held at 4.00%, matching the second quarter after a 4 basis-point compression from 4.04% in the first quarter. Average cost of deposits declined 1 basis point to 207 basis points. Average loan yield was 6.75%.

Loans held for investment increased $59.7 million, or 6.3% annualized, to $3.83 billion at September 30, 2026 from $3.77 billion at June 30, 2026. The company said the increase was organic growth net of a $25 million early payoff that was fully secured by the borrower’s deposit account. President Cory Newsom said annualized loan growth accelerating to 6.3% was consistent with the company’s expectations and that the loan pipeline remained healthy.

Deposits rose $20.1 million to $4.66 billion. Noninterest-bearing deposits were $1.18 billion, or 25.3% of total deposits.

Noninterest income was $13.8 million, down from $14.1 million in the second quarter, primarily from a $568 thousand drop in bank card services and interchange revenue after second-quarter incentives. Noninterest expense fell to $38.1 million from $39.9 million, mainly from $1.1 million lower personnel expenses after $710 thousand of second-quarter acquisition-related costs and $326 thousand lower mortgage commissions. The efficiency ratio improved to 58.12% from 61.59% in the second quarter.

The provision for credit losses increased to $830 thousand from $350 thousand, which the company attributed to higher net charge-offs and increased loan balances. Annualized net charge-offs rose to 0.13% of average loans from 0.06% in the second quarter. Nonperforming assets to total assets increased to 0.31% from 0.19%, with nonperforming loans at $15.3 million, or 0.40% of loans held for investment. The allowance for credit losses to loans held for investment declined to 1.38% from 1.41%.

Return on average assets rose to 1.53% from 1.44% in the second quarter. Common equity tier 1 risk-based capital was 14.20%.

Tangible book value per share declined to $29.23 from $29.60 at June 30, 2026, as a $25.5 million after-tax decline in accumulated other comprehensive income from higher long-term rates more than offset $17.4 million of net income after dividends.

Chairman and Chief Executive Officer Curtis Griffith said he would retire as chief executive officer at year-end and continue as chairman. Newsom, named the next chief executive officer, said the company continues to see opportunities to recruit experienced bankers as industry consolidation creates disruption across its markets.

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