Exhibit 99.1

Press Release
For Immediate Release

South Plains Financial, Inc. Reports Fourth Quarter and Year End 2019 Financial Results

LUBBOCK, Texas, January 24, 2020 (GLOBE NEWSWIRE) – South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the “Company”), the parent company of City Bank (“City Bank” or the “Bank”), today reported its financial results for the quarter and year ended December 31, 2019.

Fourth Quarter 2019 Highlights


Net income for the fourth quarter of 2019 was $10.1 million, compared to $8.3 million for the third quarter of 2019.

Diluted earnings per share were $0.55 for the fourth quarter of 2019, compared to $0.45 for the third quarter of 2019.

Average cost of deposits for the fourth quarter of 2019 declined 22 basis points to 76 basis points, compared to 98 basis points for the third quarter of 2019.

The efficiency ratio for the fourth quarter of 2019 declined 391 basis points to 69.71%, compared to 73.62% for the third quarter of 2019.

Return on average assets for the fourth quarter of 2019 was 1.32% annualized, compared to 1.18% annualized for the third quarter of 2019.

Book value per share was $16.98 as of December 31, 2019, compared to $16.61 per share as of September 30, 2019.

South Plains completed its acquisition of West Texas State Bank (“WTSB”) on November 12, 2019.  WTSB had $198.4 million in loans, $386.3 million in deposits, and $50.5 million in capital at closing.

2019 Annual Financial Highlights


Net income for the year ended December 31, 2019 was $29.2 million, or $1.69 per diluted share, compared to $20.8 million, or $1.41 per diluted share, for the year ended December 31, 2018.

The efficiency ratio for the year ended December 31, 2019 declined 235 basis points from the year ended December 31, 2018.

Return on average assets was 1.04% and return on average equity was 10.94% for the year ended December 31, 2019, compared to 0.79% and 9.66%, respectively, for the year ended December 31, 2018.

Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “I am very proud of our results as 2019 was a pivotal period in our Company’s 75+ year history highlighted by our initial public offering in May and the closing of our acquisition of WTSB in November.  We believe we are at a clear inflection point in our business as we successfully execute upon our strategy to scale the significant investments in our systems and infrastructure, which continue to have ample room for future growth.  Our fourth quarter 2019 results demonstrate the successful leveraging of our infrastructure, as our efficiency ratio improved by almost 400 basis points to 69.7% and our return on average assets increased by 14 basis points to 1.32%, annualized, as compared to the third quarter of 2019.  While we are pleased with our results, we recognize that this is a journey and know that we have much more to accomplish.   Importantly, our achievements would not be possible without the hard work and dedication of our employees, who I would like to thank for their commitment to the Bank, our customers and the communities in which we work and live.”

1

Mr. Griffith continued, “Looking forward, we are optimistic about the many opportunities that we see to grow the Bank.  The outlook for the Texas economy is robust, as unemployment remains low and economic activity continues to be healthy, which provides a supportive backdrop as we work to accelerate organic loan growth.  Our integration of WTSB is also proceeding smoothly and we have several cross-sell initiatives underway given the demand that we see from the WTSB customer base for our mortgage, wealth management and trust products, which we believe will provide revenue synergies on top of the cost synergies, as previously outlined. Importantly, we have gained significant acquisition experience over the last six months working to integrate WTSB and are developing a process that we expect to use in future acquisitions.  While we still have more work to do to fully integrate WTSB, we are now at a point where we can begin exploring additional M&A opportunities.  M&A will continue to be an important growth driver for the Bank and we see a solid group of potential acquisition candidates across our core markets which would enable South Plains to increase the franchise value of the Bank for the benefit of all of our stakeholders.”
 
Results of Operations, Quarter Ended December 31, 2019
 
Net Interest Income
 
Net interest income was $28.6 million for the fourth quarter of 2019, compared to $24.7 million for the fourth quarter of 2018 and $26.6 million for the third quarter of 2019.
 
Interest income was $34.8 million for the fourth quarter of 2019, compared to $31.7 million for the fourth quarter of 2018 and $33.7 million for the third quarter of 2019.  Interest and fees on loans increased by $2.2 million from the fourth quarter of 2018 due to growth of $110.0 million in average loans, primarily from the WTSB acquisition, and an increase of 12 basis points in interest rates.  The increase from the third quarter of 2019 was the result of an increase of $101.7 million in average loans outstanding during the fourth quarter of 2019, partially offset by a decrease of 12 basis points in interest rates.
 
Interest expense was $6.1 million for the fourth quarter of 2019, compared to $7.0 million for the fourth quarter of 2018 and $7.1 million for the third quarter of 2019.  The decrease from the fourth quarter of 2018 was primarily due to a decrease in the rate paid on interest-bearing liabilities of 21 basis points, partially offset by an increase of $58.6 million in average interest-bearing liabilities.  The decrease from the third quarter of 2019 was primarily due to a decrease in the rate paid on interest-bearing liabilities of 27 basis points, partially offset by an increase of $102.1 million in average interest-bearing liabilities in the fourth quarter of 2019.  The average cost of deposits was 76 basis points for the fourth quarter of 2019, representing a 22 basis point decrease from the fourth quarter of 2018 and a 22 basis point decrease from the third quarter of 2019.  The increase in average interest-bearing liabilities and the decrease in the rate paid on deposits in the fourth quarter of 2019 was primarily due to the WTSB acquisition as well as a general decline in overall rates.
 
The net interest margin was 4.03% for the fourth quarter of 2019, compared to 3.89% for the fourth quarter of 2018 and 4.07% for the third quarter of 2019.
 
2

Noninterest Income and Noninterest Expense
 
Noninterest income was $16.7 million for the fourth quarter of 2019, compared to $14.4 million for the fourth quarter of 2018 and $14.1 million for the third quarter of 2019.  The increase in noninterest income for the fourth quarter of 2019 compared to the fourth quarter of 2018 was primarily the result of an increase of $1.9 million in mortgage banking activities revenue as a result of an increase of $46.0 million in mortgage loan originations.  The increase from the third quarter of 2019 was primarily the result of $1.5 million in annual profit-sharing bonuses related to crop insurance activities recognized in the fourth quarter of 2019. Additionally, for the fourth quarter of 2019, fiduciary income increased $849,000 and $841,000 compared to the fourth quarter of 2018 and the third quarter of 2019, respectively.  The increase was primarily due to new customer acquisition with estate executorship and trust management as the primary services.
 
Noninterest expense was $31.7 million for the fourth quarter of 2019, compared to $30.5 million for the fourth quarter of 2018 and $30.0 million for the third quarter of 2019.  This increase in noninterest expense for the fourth quarter of 2019 compared to the fourth quarter of 2018 was primarily driven by a $1.1 million increase in personnel expense related to the WTSB acquisition.  There was also an increase in variable mortgage expenses, such as appraisal expenses, due to the increased mortgage production during the quarter.  The increase from the third quarter of 2019 was primarily due to the WTSB acquisition, including, among other things, $1.1 million in personnel expense, new occupancy and other noninterest expenses for the branches acquired, $634,000 in legal, accounting and consulting fees, and data processing conversion expenses, and $202,000 in core deposit intangible amortization expense.
 
Loan Portfolio and Composition
 
Loans held for investment were $2.14 billion as of December 31, 2019, compared to $1.96 billion as of September 30, 2019 and $1.96 billion as of December 31, 2018.  The $181.0 million increase during the fourth quarter of 2019 as compared to the third quarter of 2019 was primarily the result of $198.4 million in loans acquired from WTSB, partially offset by $35.6 million in seasonal agricultural production loan net paydowns.  As of December 31, 2019, loans held for investment increased $186.4 million from December 31, 2018.
 
Agricultural production loans were $131.2 million as of December 31, 2019, compared to $166.8 million as of September 30, 2019 and $150.7 million as of December 31, 2018.
 
Deposits and Borrowings
 
Deposits totaled $2.70 billion as of December 31, 2019, compared to $2.29 billion as of September 30, 2019 and $2.28 billion as of December 31, 2018.  Deposits increased $410.9 million in the fourth quarter of 2019, primarily as a result of the assumption of $386.3 million in deposits from the WTSB acquisition.  As of December 31, 2019, deposits increased $419.4 million from December 31, 2018.  This increase is primarily due to the WTSB acquisition noted above.  Additionally, there was a shift in the deposit base with a planned reduction of $105 million in brokered deposits and public fund deposits during 2019.  These reductions were partially offset by growth in both noninterest-bearing and interest-bearing demand deposits, as well as money market accounts.
 
Noninterest-bearing deposits were $790.9 million as of December 31, 2019, compared to $556.2 million as of September 30, 2019 and $510.1 million as of December 31, 2018.  Noninterest-bearing deposits represented 29.3%, 24.3%, and 22.4% of total deposits as of December 31, 2019, September 30, 2019, and December 31, 2018, respectively.  The increase in the fourth quarter of 2019 was primarily attributable to the assumption of $221.5 million in noninterest-bearing deposits from the WTSB acquisition.
 
3

Asset Quality
 
The provision for loan losses recorded for the fourth quarter of 2019 was $896,000, compared to $1.2 million for the fourth quarter of 2018 and $420,000 for the third quarter of 2019.  The allowance for loan losses to loans held for investment was 1.13% as of December 31, 2019, compared to 1.23% as of September 30, 2019 and 1.18% as of December 31, 2018.
 
The nonperforming assets to total assets ratio as of December 31, 2019 was 0.25%, compared to 0.31% as of September 30, 2019 and 0.34% at December 31, 2018.
 
Annualized net charge-offs were 0.17% for the fourth quarter of 2019, compared to 0.08% for the third quarter of 2019 and -0.18% for the fourth quarter of 2018.
 
Conference Call
 
South Plains will host a conference call to discuss its fourth quarter 2019 financial results today, January 24, 2020 at 9 a.m., Eastern Time.  Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call.  A live audio webcast of the conference call will be available on the Company’s website at https://www.spfi.bank/news-events/events.
 
A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed on the investor section of the Company’s website as well as by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671).  The pin to access the telephone replay is 13698071.  The replay will be available until February 7, 2020.
 
About South Plains Financial, Inc.
 
South Plains is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas.  City Bank is one of the largest independent banks in West Texas and has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station Texas markets, and the Ruidoso and Eastern New Mexico markets.  South Plains provides a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas.  Its principal business activities include commercial and retail banking, along with insurance, investment, trust and mortgage services.  Please visit https://www.spfi.bank for more information.
 
Pro Forma Financial Information
 
As a result of the revocation of the Company’s subchapter S corporation election, which was effective May 31, 2018, the net income, return on average assets, return on average shareholders’ equity and earnings per share presented herein may not be comparable for all periods presented herein.  As a result, the Company is disclosing pro forma net income and income tax expense as if the Company’s conversion to a subchapter C corporation had occurred as of January 1, 2018.
 
Additionally, prior to the listing of our common stock on the NASDAQ, in accordance with applicable provisions of the Internal Revenue Code, the terms of the South Plains Financial, Inc. Employee Stock Ownership Plan (“ESOP”) provided that ESOP participants had the right, for a specified period of time, to require us to repurchase shares of our common stock that were distributed to them by the ESOP.  The shares of common stock held by the ESOP were reflected in our consolidated balance sheets as a line item called “ESOP-owned shares” appearing between total liabilities and shareholders’ equity.  As a result, the ESOP-owned shares were deducted from shareholders’ equity in our consolidated balance sheets.  This repurchase right terminated upon the listing of our common stock on the NASDAQ, which we sometimes refer to as the ESOP Repurchase Right Termination, whereupon our repurchase liability was extinguished and thereafter the ESOP-owned shares are included in shareholders’ equity.  As a result, the Company is presenting certain information giving effect to the ESOP Repurchase Right Termination.
 
4

Non-GAAP Financial Measures
 
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”).  These non-GAAP financial measures include Tangible Book Value Per Common Share and Tangible Common Equity to Tangible Assets.  The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance.  These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.
 
We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows.  Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.
 
A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.
 
Available Information
 
The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases).  The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under SEC Regulation FD (Fair Disclosure).  Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.
 
The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this document.
 
5

Forward Looking Statements
 
This press release contains forward-looking statements.  These forward-looking statements reflect South Plains’ current views with respect to, among other things, the integration of its acquisition of WTSB and other future events.  Any statements about South Plains’ expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking.  These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases.  South Plains cautions that the forward-looking statements in this press release are based largely on South Plains’ expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond South Plains’ control.  Additional information regarding these risks and uncertainties to which South Plains’ business and future financial performance are subject is contained in South Plains’ Prospectus filed with the U.S. Securities and Exchange Commission (“SEC”), dated May 8, 2019 (“Prospectus”), and other documents South Plains files with the SEC from time to time.  South Plains urges readers of this press release to review the Risk Factors section of that Prospectus and the Risk Factors section of other documents South Plains files with the SEC from time to time.  Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements due to additional risks and uncertainties of which South Plains is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results.  Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release.  Any forward-looking statements presented herein are made only as of the date of this press release, and South Plains does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, new information, the occurrence of unanticipated events, or otherwise, except as required by law.
 
Contact:
Mikella Newsom, Chief Risk Officer and Secretary
 
(866) 771-3347
 
investors@city.bank
   
Source: South Plains Financial, Inc.

South Plains Financial, Inc.
Consolidated Financial Highlights - (Unaudited)
(Dollars in thousands, except share data)

   
As of and for the quarter ended
 
   
December 31,
2019
   
September
30, 2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
 
Selected Income Statement Data:
                             
Interest income
 
$
34,764
   
$
33,665
   
$
32,509
   
$
32,004
   
$
31,672
 
Interest expense
   
6,140
     
7,097
     
7,672
     
7,458
     
7,005
 
Net interest income
   
28,624
     
26,568
     
24,837
     
24,546
     
24,667
 
Provision for loan losses
   
896
     
420
     
875
     
608
     
1,168
 
Noninterest income
   
16,739
     
14,115
     
13,703
     
12,075
     
14,390
 
Noninterest expense
   
31,713
     
30,028
     
29,930
     
30,036
     
30,498
 
Income tax expense
   
2,644
     
1,977
     
1,655
     
1,204
     
1,528
 
Net income
   
10,110
     
8,258
     
6,080
     
4,773
     
5,863
 
Per Share Data (Common Stock):
                                       
Net earnings, basic
   
0.56
     
0.46
     
0.37
     
0.32
     
0.40
 
Net earnings, diluted
   
0.55
     
0.45
     
0.37
     
0.32
     
0.40
 
Cash dividends declared and paid
   
0.03
     
0.03
     
-
     
-
     
0.85
 
Book value
   
16.98
     
16.61
     
16.19
     
14.80
     
14.40
 
Tangible book value
   
15.46
     
16.47
     
16.19
     
14.80
     
14.40
 
Weighted average shares outstanding, basic
   
18,010,065
     
17,985,429
     
16,459,366
     
14,771,520
     
14,771,520
 
Weighted average shares outstanding, dilutive
   
18,415,656
     
18,363,033
     
16,563,543
     
14,771,558
     
14,771,520
 
Shares outstanding at end of period
   
18,036,115
     
18,004,323
     
17,978,520
     
14,771,520
     
14,771,520
 
 
6

   
As of and for the quarter ended
 
   
December 31,
2019
   
September
30, 2019
   
June 30,
2019
   
March 31,
2019
   
December 31,
2018
 
Selected Period End Balance Sheet Data:
                             
Total assets
   
3,237,167
     
2,795,582
     
2,777,170
     
2,745,997
     
2,712,745
 
Total loans held for investment
   
2,143,623
     
1,962,609
     
1,935,653
     
1,915,183
     
1,957,197
 
Allowance for loan losses
   
24,197
     
24,176
     
24,171
     
23,381
     
23,126
 
Investment securities
   
707,650
     
401,335
     
263,564
     
339,051
     
338,196
 
Noninterest-bearing deposits
   
790,921
     
556,233
     
513,383
     
497,566
     
510,067
 
Total deposits
   
2,696,857
     
2,285,974
     
2,281,858
     
2,304,929
     
2,277,454
 
Total stockholders' equity
   
306,182
     
299,027
     
291,113
     
218,565
     
212,775
 
Summary Performance Ratios:
                                       
Return on average assets
   
1.32
%
   
1.18
%
   
0.89
%
   
0.71
%
   
0.86
%
Return on average equity
   
13.26
%
   
11.10
%
   
9.57
%
   
8.98
%
   
10.85
%
Net interest margin (1)
   
4.03
%
   
4.07
%
   
3.88
%
   
3.93
%
   
3.89
%
Yield on loans
   
5.79
%
   
5.91
%
   
5.90
%
   
5.84
%
   
5.67
%
Cost of interest-bearing deposits
   
1.06
%
   
1.30
%
   
1.39
%
   
1.34
%
   
1.26
%
Efficiency ratio
   
69.71
%
   
73.62
%
   
77.46
%
   
81.79
%
   
77.88
%
Summary Credit Quality Data:
                                       
Nonperforming loans
   
6,314
     
6,456
     
7,946
     
7,937
     
6,954
 
Nonperforming loans to total loans held for investment
   
0.29
%
   
0.33
%
   
0.41
%
   
0.41
%
   
0.36
%
Other real estate owned
   
1,883
     
2,296
     
2,305
     
2,340
     
2,285
 
Nonperforming assets to total assets
   
0.25
%
   
0.31
%
   
0.37
%
   
0.37
%
   
0.34
%
Allowance for loan losses to total loans held for investment
   
1.13
%
   
1.23
%
   
1.25
%
   
1.22
%
   
1.18
%
Net charge-offs to average loans outstanding (annualized)
   
0.17
%
   
0.08
%
   
0.02
%
   
0.07
%
   
-0.18
%
Capital Ratios:
                                       
Total stockholders' equity to total assets
   
9.46
%
   
10.70
%
   
10.48
%
   
7.96
%
   
7.84
%
Tangible common equity to tangible assets
   
8.69
%
   
10.62
%
   
10.48
%
   
7.96
%
   
7.84
%
Tier 1 capital to average assets
   
10.74
%
   
12.17
%
   
12.10
%
   
9.70
%
   
9.63
%
Common equity tier 1 to risk-weighted assets
   
11.14
%
   
13.10
%
   
13.31
%
   
10.27
%
   
9.91
%
Total capital to risk-weighted assets
   
14.99
%
   
17.38
%
   
17.75
%
   
14.74
%
   
14.28
%

(1) -
Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

7

South Plains Financial, Inc.
Average Balances and Yields - (Unaudited)
(Dollars in thousands)

   
For the Three Months Ended
 
   
December 31, 2019
   
December 31, 2018
 
                                     
   
Average
Balance
   
Interest
Income
Expense
   
Yield
   
Average
Balance
   
Interest
Income
Expense
   
Yield
 
Assets
                                   
Loans (1)
 
$
2,095,238
   
$
30,602
     
5.79
%
 
$
1,985,243
   
$
28,366
     
5.67
%
Debt securities - taxable
   
426,074
     
2,789
     
2.60
%
   
332,370
     
2,204
     
2.63
%
Debt securities - nontaxable
   
52,376
     
442
     
3.35
%
   
32,260
     
285
     
3.50
%
Other interest-bearing assets
   
259,829
     
1,064
     
1.62
%
   
176,259
     
921
     
2.07
%
                                                 
Total interest-earning assets
   
2,833,517
     
34,897
     
4.89
%
   
2,526,132
     
31,776
     
4.99
%
Noninterest-earning assets
   
199,350
                     
174,688
                 
                                                 
Total assets
 
$
3,032,867
                   
$
2,700,820
                 
                                                 
Liabilities & stockholders' equity
                                               
NOW, Savings, MMA's
 
$
1,474,187
     
3,149
     
0.85
%
 
$
1,449,121
     
4,341
     
1.19
%
Time deposits
   
336,859
     
1,687
     
1.99
%
   
309,687
     
1,261
     
1.62
%
Short-term borrowings
   
18,650
     
64
     
1.36
%
   
15,334
     
71
     
1.84
%
Notes payable & other long-term borrowings
   
95,000
     
401
     
1.67
%
   
95,000
     
536
     
2.24
%
Subordinated debt securities
   
26,472
     
403
     
6.04
%
   
23,453
     
311
     
5.26
%
Junior subordinated deferrable interest debentures
   
46,393
     
436
     
3.73
%
   
46,393
     
485
     
4.15
%
                                                 
Total interest-bearing liabilities
   
1,997,561
     
6,140
     
1.22
%
   
1,938,988
     
7,005
     
1.43
%
Demand deposits
   
708,306
                     
508,867
                 
Other liabilities
   
24,395
                     
38,493
                 
Stockholders' equity
   
302,605
                     
214,472
                 
                                                 
Total liabilities & stockholders' equity
 
$
3,032,867
                   
$
2,700,820
                 
                                                 
Net interest income
         
$
28,757
                   
$
24,771
         
Net interest margin (2)
                   
4.03
%
                   
3.89
%

(1)
Average loan balances include nonaccrual loans and loans held for sale.
(2)
Net interest margin is calculated as the annualized net income, on a fully tax-equivalent basis, divided by average interest-earning assets.

8

South Plains Financial, Inc.
Average Balances and Yields - (Unaudited)
(Dollars in thousands)

   
For the Twelve Months Ended
 
   
December 31, 2019
         
December 31, 2018
       
                                     
   
Average
Balance
   
Interest
Income
Expense
   
Yield
   
Average
Balance
   
Interest
Income
Expense
   
Yield
 
Assets
                                   
Loans (1)
 
$
1,997,783
   
$
117,074
     
5.86
%
 
$
1,921,221
   
$
105,897
     
5.51
%
Debt securities - taxable
   
317,947
     
8,608
     
2.71
%
   
209,631
     
5,392
     
2.57
%
Debt securities - nontaxable
   
37,232
     
1,289
     
3.46
%
   
101,778
     
3,635
     
3.57
%
Other interest-bearing assets
   
284,031
     
6,412
     
2.26
%
   
218,777
     
4,120
     
1.88
%
                                                 
Total interest-earning assets
   
2,636,993
     
133,383
     
5.06
%
   
2,451,407
     
119,044
     
4.86
%
Noninterest-earning assets
   
182,967
                     
172,489
                 
                                                 
Total assets
 
$
2,819,960
                   
$
2,623,896
                 
                                                 
Liabilities & stockholders' equity
                                               
NOW, Savings, MMA's
 
$
1,448,321
     
16,436
     
1.13
%
 
$
1,386,171
     
13,005
     
0.94
%
Time deposits
   
319,811
     
6,055
     
1.89
%
   
313,298
     
4,556
     
1.45
%
Short-term borrowings
   
16,231
     
290
     
1.79
%
   
18,334
     
265
     
1.45
%
Notes payable & other long-term borrowings
   
95,000
     
2,024
     
2.13
%
   
95,000
     
1,786
     
1.88
%
Subordinated debt securities
   
26,786
     
1,616
     
6.03
%
   
21,529
     
1,046
     
4.86
%
Junior subordinated deferrable interest debentures
   
46,393
     
1,946
     
4.19
%
   
46,393
     
1,824
     
3.93
%
                                                 
Total interest-bearing liabilities
   
1,952,542
     
28,367
     
1.45
%
   
1,880,725
     
22,482
     
1.20
%
Demand deposits
   
570,427
                     
495,808
                 
Other liabilities
   
29,945
                     
32,535
                 
Stockholders' equity
   
267,046
                     
214,828
                 
                                                 
Total liabilities & stockholders' equity
 
$
2,819,960
                   
$
2,623,896
                 
                                                 
Net interest income
         
$
105,016
                   
$
96,562
         
Net interest margin (2)
                   
3.98
%
                   
3.94
%

(1)
Average loan balances include nonaccrual loans and loans held for sale.
(2)
Net interest margin is calculated as the annualized net income, on a fully tax-equivalent basis, divided by average interest-earning assets.
 
9

South Plains Financial, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
 
   
As of
 
   
December 31, 2019
   
December 31, 2018
 
             
Assets
           
Cash and due from banks
 
$
56,246
   
$
47,802
 
Interest-bearing deposits in banks
   
101,853
     
198,187
 
Investment securities
   
707,650
     
338,196
 
Loans held for sale
   
49,035
     
38,382
 
Loans held for investment
   
2,143,623
     
1,957,197
 
Less:  Allowance for loan losses
   
(24,197
)
   
(23,126
)
Net loans held for investment
   
2,119,426
     
1,934,071
 
Premises and equipment, net
   
61,873
     
59,787
 
Intangible assets
   
27,389
     
-
 
Other assets
   
113,695
     
96,320
 
Total assets
 
$
3,237,167
   
$
2,712,745
 
                 
Liabilities and Stockholders' Equity
               
Liabilities
               
Noninterest bearing deposits
 
$
790,921
   
$
510,067
 
Interest-bearing deposits
   
1,905,936
     
1,767,387
 
Total deposits
   
2,696,857
     
2,277,454
 
Other borrowings
   
132,165
     
112,705
 
Subordinated debt securities
   
26,472
     
34,002
 
Trust preferred subordinated debentures
   
46,393
     
46,393
 
Other liabilities
   
29,098
     
29,416
 
Total liabilities
   
2,930,985
     
2,499,970
 
Stockholders' Equity
               
Common stock
   
18,036
     
14,772
 
Additional paid-in capital
   
140,492
     
80,412
 
Retained earnings
   
146,696
     
119,834
 
Accumulated other comprehensive income (loss)
   
958
     
(2,243
)
Total stockholders' equity
   
306,182
     
212,775
 
Total liabilities and stockholders' equity
 
$
3,237,167
   
$
2,712,745
 

10

South Plains Financial, Inc.
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands)

   
Three Months Ended
   
Twelve Months Ended
 
   
December 31,
2019
   
December 31,
2018
   
December 31,
2019
   
December 31,
2018
 
                         
Interest income:
                       
Loans, including fees
 
$
30,562
   
$
28,322
   
$
116,904
   
$
105,710
 
Other
   
4,202
     
3,350
     
16,038
     
12,384
 
Total Interest income
   
34,764
     
31,672
     
132,942
     
118,094
 
Interest expense:
                               
Deposits
   
4,836
     
5,602
     
22,491
     
17,561
 
Subordinated debt securities
   
403
     
311
     
1,616
     
1,046
 
Trust preferred subordinated debentures
   
436
     
485
     
1,946
     
1,824
 
Other
   
465
     
607
     
2,314
     
2,051
 
Total Interest expense
   
6,140
     
7,005
     
28,367
     
22,482
 
Net interest income
   
28,624
     
24,667
     
104,575
     
95,612
 
Provision for loan losses
   
896
     
1,168
     
2,799
     
6,901
 
Net interest income after provision for loan losses
   
27,728
     
23,499
     
101,776
     
88,711
 
Noninterest income:
                               
Service charges on deposits
   
2,145
     
2,056
     
8,130
     
7,813
 
Income from insurance activities
   
2,941
     
3,136
     
7,015
     
7,128
 
Mortgage banking activities
   
6,617
     
4,717
     
25,126
     
21,384
 
Bank card services and interchange fees
   
2,419
     
2,735
     
8,692
     
8,845
 
Other
   
2,617
     
1,746
     
7,669
     
6,951
 
Total Noninterest income
   
16,739
     
14,390
     
56,632
     
52,121
 
Noninterest expense:
                               
Salaries and employee benefits
   
19,348
     
18,315
     
75,392
     
71,778
 
Net occupancy expense
   
3,263
     
3,468
     
13,572
     
13,571
 
Professional services
   
2,165
     
2,431
     
7,334
     
6,734
 
Marketing and development
   
742
     
801
     
3,017
     
3,050
 
Other
   
6,195
     
5,483
     
22,392
     
20,310
 
Total noninterest expense
   
31,713
     
30,498
     
121,707
     
115,443
 
Income before income taxes
   
12,754
     
7,391
     
36,701
     
25,389
 
Income tax expense (benefit)
   
2,644
     
1,528
     
7,480
     
(3,901
)
Net income
 
$
10,110
   
$
5,863
   
$
29,221
   
$
29,290
 
                                 
Pro forma C corp income tax adjustment
   
-
     
-
     
-
     
8,533
 
Pro forma C corp net income
 
$
10,110
   
$
5,863
   
$
29,221
   
$
20,757
 
 
11

South Plains Financial, Inc.
Loan Composition
(Unaudited)
(Dollars in thousands)
 
   
As of
 
   
December 31,
2019
   
December 31,
2018
 
             
Loans:
           
Commercial Real Estate
 
$
658,195
   
$
538,037
 
Commercial - Specialized
   
309,505
     
305,022
 
Commercial - General
   
441,398
     
427,728
 
Consumer:
               
1-4 Family Residential
   
362,796
     
346,153
 
Auto Loans
   
215,209
     
191,647
 
Other Consumer
   
74,000
     
70,209
 
Construction
   
82,520
     
78,401
 
Total loans held for investment
 
$
2,143,623
   
$
1,957,197
 

South Plains Financial, Inc.
Deposit Composition
(Unaudited)
(Dollars in thousands)

   
As of
 
   
December 31,
2019
   
December 31,
2018
 
             
Deposits:
           
Noninterest-bearing demand deposits
 
$
790,921
   
$
510,067
 
NOW & other transaction accounts
   
318,379
     
368,806
 
MMDA & other savings
   
1,231,534
     
1,087,044
 
Time deposits
   
356,023
     
311,537
 
Total deposits
 
$
2,696,857
   
$
2,277,454
 

12

South Plains Financial, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands)

   
As of
 
   
December 31,
2019
   
December 31,
2018
 
             
Tangible common equity
           
Total common stockholders' equity
 
$
306,182
   
$
212,775
 
Less:  goodwill and other intangibles
   
(27,389
)
   
-
 
                 
Tangible common equity
 
$
278,793
   
$
212,775
 
                 
Tangible assets
               
Total assets
 
$
3,237,167
   
$
2,712,745
 
Less:  goodwill and other intangibles
   
(27,389
)
   
-
 
                 
Tangible assets
 
$
3,209,778
   
$
2,712,745
 
                 
Shares outstanding
   
18,036,115
     
14,771,520
 
                 
Total stockholders' equity to total assets
   
9.46
%
   
7.84
%
Tangible common equity to tangible assets
   
8.69
%
   
7.84
%
Book value per share
 
$
16.98
   
$
14.40
 
Tangible book value per share
 
$
15.46
   
$
14.40
 
 

13


The following information was filed by South Plains Financial, Inc. (SPFI) on Friday, January 24, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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