On October 24, 2023, South Plains Financial Inc. (SPFI, Financial), the parent company of City Bank, released its financial results for the third quarter ended September 30, 2023. The report highlights a robust performance with a significant rise in net interest income despite the continued pressure on funding costs.
Financial Performance Highlights
SPFI's net interest income for Q3 2023 was $35.7 million, up from $34.6 million in Q2 2023 and $35.1 million in Q3 2022. The average yield on loans increased to 6.10% in Q3 2023, up from 5.94% in Q2 2023 and 5.12% in Q3 2022. The company's interest income also saw a substantial increase, reaching $56.5 million in Q3 2023, up from $50.8 million in Q2 2023 and $41.1 million in Q3 2022.
Noninterest income was $12.3 million for Q3 2023, compared to $47.1 million for Q2 2023 and $20.9 million for Q3 2022. The decrease from Q2 2023 was primarily due to the $33.5 million gain on the sale of Windmark Insurance Agency, Inc. in Q2 2023.
Loan Portfolio and Deposits
Loans held for investment were $2.99 billion as of September 30, 2023, compared to $2.98 billion as of June 30, 2023, and $2.69 billion as of September 30, 2022. Deposits totaled $3.62 billion as of September 30, 2023, compared to $3.57 billion as of June 30, 2023, and $3.46 billion as of September 30, 2022.
Asset Quality and Capital
The company recorded a negative provision for credit losses in Q3 2023 of $0.7 million, compared to $3.7 million in Q2 2023 and a negative provision of $0.8 million in Q3 2022. The ratio of nonperforming assets to total assets as of September 30, 2023, was 0.12%, compared to 0.51% as of June 30, 2023, and 0.20% at September 30, 2022.
Book value per share decreased to $22.39 at September 30, 2023, compared to $23.13 at June 30, 2023. The decrease was primarily driven by a decrease in accumulated other comprehensive income and by $9.3 million in share repurchases.
South Plains Financial Inc. continues to deliver solid growth and strong credit metrics, providing a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas.
