South Plains Financial, Inc.

What they do

The company provides commercial and consumer banking, along with investment, trust, and mortgage services, through 24 full-service branches and 7 loan production offices across Texas and New Mexico. Its primary markets include Lubbock, Dallas, El Paso, Houston, Bryan/College Station, the Permian Basin, and Ruidoso.

Revenue drivers

• Net interest income — The primary revenue source, driven by the spread between interest earned on loans and investments and interest paid on deposits. Q2 2026 net interest income was $50.3 million.
• Commercial lending — Loans to small and medium-sized businesses, a key component of the loan portfolio. As of December 31, 2025, gross loans held for investment totaled $3.14 billion.
• Deposit taking — Core funding base with $3.87 billion in deposits at year-end 2025. Q2 2026 average cost of deposits was 208 basis points.
• Mortgage services — Mortgage loan origination through 7 loan production offices, contributing fee income and supporting customer relationships.

Recent performance

Net income for Q2 2026 was $19.0 million, with diluted EPS of $0.96, up from $14.5 million and $0.85 in Q1 2026. Net interest margin on a tax-equivalent basis was 4.00% in Q2 2026. Tangible book value per share was $29.57 as of June 30, 2026. The company completed the BOH Holdings acquisition on April 1, 2026, adding $685.0 million in assets. Full-year 2025 net income was $58.5 million, with diluted EPS of $3.44.

Strategy

Management plans to expand its lending platform in high-growth Texas markets, attract experienced bankers, and optimize the Bank of Houston acquisition. The company pursues disciplined growth opportunities, leveraging its relationship-based banking model and strong capital position. It also continues to repurchase shares under a $15.0 million program authorized in February 2025. Leadership transition is underway, with Curtis Griffith retiring as CEO at year-end 2026 and Cory Newsom set to lead.

Risks

• Interest rate risk — Changes in market interest rates could compress net interest margin if deposit costs rise faster than loan yields.
• Geographic concentration — The loan and deposit base is heavily concentrated in Texas and New Mexico, making results sensitive to local economic conditions.
• Acquisition integration risk — The BOH acquisition may fail to achieve expected synergies or may introduce unknown liabilities, including credit quality issues.
• Real estate concentration — A high concentration of loans secured by real estate in the company's markets could lead to losses if property values decline.

Outlook

Management expects continued profitability, stable credit quality, and successful integration of Bank of Houston. With a strong balance sheet and healthy loan pipeline, the company believes it is well positioned for growth. Guidance includes ongoing focus on deposit costs and net interest margin, with the BOH acquisition expected to contribute to earnings in future quarters.