Yahoo Finance South Plains Financial Inc (SPFI) (Q1 2024) Earnings Call Transcript Highlights: Key Financial ...
Net Interest Margin: Stabilized at 3.56%, up from 3.52% in the linked quarter.
Loan Portfolio Yield: Increased to 6.53%, up 24 basis points from the linked quarter.
Net Interest Income: $35.4 million, slightly up from $35.2 million in the linked quarter.
Noninterest Income: Rose to $11.4 million from $9.1 million in the linked quarter.
Quarterly Dividend: Increased to $0.14 per share, an 8% increase.
Stock Repurchase Program: Authorized a $10 million stock repurchase program.
Diluted Earnings Per Share (EPS): $0.64, up from $0.61 in the linked quarter and $0.53 year-over-year.
Noninterest Expense: Increased to $31.9 million from $30.6 million in the linked quarter.
Allowance for Credit Losses: Ratio to total loans held for investment steady at 1.4%.
Nonperforming Loans: Decreased to $3.4 million from $5.2 million at the end of 2023.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the magnitude of fees expected from the treasury platform and its impact on DDA this quarter? A: Cory Newsom, President & Director, mentioned that the treasury platform's impact on DDA wasn't significant this quarter as they were resetting pricing. He estimated a 10-15% increase in fees moving forward. Curtis Griffith, CEO, added that while they can't provide a precise figure, they expect a substantial increase in charges related to customer accounts by the end of Q2.
Q: What is your appetite for buybacks versus M&A, and what are the right capital levels for the current environment? A: Curtis Griffith, CEO, explained that the priority is ensuring sufficient capital for organic growth, followed by buybacks, dividends, and keeping some capital for potential acquisitions. He believes buying their own stock offers more immediate benefits to shareholders than acquisitions under the current conditions.
Q: With the pipeline improving, do you still see mid-single digit loan growth as achievable? A: Cory Newsom, President & Director, expressed confidence in achieving low single-digit loan growth, citing strong production in various loan segments and an improving pipeline.
Q: Could you provide more details on the watch list credits that were exited? Were they concentrated in any particular segments? A: Cory Newsom, President & Director, indicated that the exited credits were a mix, with the largest being a multi-family credit. They continue to proactively manage the portfolio to maintain high credit quality.
Q: What are your expectations for net interest margin in the coming quarters? A: Steven Crockett, CFO & Treasurer, noted that excluding interest recoveries, they anticipate a slight decline in net interest margin in the next quarter. However, they expect it to potentially expand in the latter half of the year as loan yields increase and lower rate loans are replaced.
Q: Can you quantify the success of the refreshed treasury management approach in terms of increased fee income or non-interest bearing deposits over the next few years? A: Cory Newsom, President & Director, emphasized that while increased fee income is expected, the focus is more on growing non-interest bearing deposits. They are strategically positioning treasury management early in client discussions to enhance both fee income and deposit growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
