Exhibit 99.2
South Plains Financial Earnings Presentation First Quarter, 2022 1
Safe Harbor Statement and Other Disclosures FORWARD-LOOKING STATEMENTS This presentation contains, and future oral and written statements of South Plains Financial, Inc. (“South Plains” or the “Company”) and City Bank (“City Bank” or the “Bank”) may contain, statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to, among other things, the ongoing COVID-19 pandemic, future events and South Plains’ financial performance. 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. Forward-looking statements include, but are not limited to: (i) projections and estimates of revenues, expenses, income or loss, earnings or loss per share, and other financial items, (ii) statements of plans, objectives and expectations of South Plains or its management, (iii) statements of future economic performance, and (iv) statements of assumptions underlying such statements. Forward-looking statements should not be relied on because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of South Plains and City Bank. These risks, uncertainties and other factors may cause the actual results, performance, and achievements of South Plains and City Bank to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences include, but are not limited to, local, regional, national and international economic conditions, the extent of the impact of the COVID-19 pandemic (and any current or future variant thereof), including the impact of actions taken by governmental and regulatory authorities in response to such pandemic, such as the Coronavirus Aid, Relief, and Economic Security Act and subsequent related legislations, and the programs established thereunder, and City Bank’s participation in such programs, volatility of the financial markets, fluctuations in market interest rates, regulatory considerations, competition and market expansion opportunities, changes in non-interest expenditures or in the anticipated benefits of such expenditures, the receipt of required regulatory approvals, changes in non-performing assets and charge-offs, adequacy of loan loss reserves, changes in tax laws, current or future litigation, regulatory examinations or other legal and/or regulatory actions, the impact of any tariffs, terrorist threats and attacks, acts of war or threats thereof or other pandemics. Due to these and other possible uncertainties and risks, South Plains can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this presentation. For more information about these factors, please see South Plains’ reports filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”), including South Plains’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Further, any forward-looking statement speaks only as of the date on which it is made and South Plains undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements, express or implied, herein are qualified in their entirety by this cautionary statement. NON-GAAP FINANCIAL MEASURES Management believes that certain non-GAAP performance measures used in this presentation provide meaningful information about underlying trends in its business and operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, SPFI’s reported results prepared in accordance with GAAP. Numbers in this presentation may not sum due to rounding. 2
Today’s Speakers 3 Curtis C. Griffith Chairman & Chief Executive Officer Elected to the board of directors of First State Bank of Morton, Texas, in 1972 and employed by it in 1979 Elected Chairman of the First State Bank of Morton board in 1984 Chairman of the Board of City Bank and the Company since 1993 Steven B. Crockett Chief Financial Officer & Treasurer Appointed Chief Financial Officer in 2015 Previously Controller of City Bank and the Company for 14 and 5 years respectively Began career in public accounting in 1994 by serving for seven years with a local firm in Lubbock, Texas Cory T. Newsom President Entire banking career with the Company focused on lending and operations Appointed President and Chief Executive Officer of the Bank in 2008 Joined the Board in 2008
$4.0 Billion in Total Assets as of March 31, 2022 Parent company of City Bank, a leading Texas-based community bank headquartered in Lubbock, TX First Quarter 2022 Highlights 4 One of the largest independent banks headquartered in West Texas New Mexico Texas Dallas Bryan / College Station Houston Midland Odessa El Paso Lubbock Ruidoso San Antonio Ft. Worth Austin Albuquerque Santa Fe City Bank Branch Locations Net income of $14.3 million, compared to $14.6 million in 4Q’21 and $15.2 million in 1Q’21 Diluted earnings per share of $0.78, compared to $0.79 in 4Q’21 and $0.82 in 1Q’21 Pre-tax, pre-provision income (non-GAAP) of $15.7 million, compared to $18.2 million in 4Q’21 and $19.0 million in 1Q’21 Average cost of deposits was 23 bps, unchanged as compared to 4Q’21 and decreased as compared to 29 bps in 1Q’21 Net interest margin, calculated on a tax-equivalent basis, of 3.33%, compared to 3.50% in 4Q’21 and 3.52% in 1Q’21 Loans held for investment (“HFI”) grew $16.1 million, or 0.7%, during the first quarter of 2022 as compared to December 31, 2021 Nonperforming assets to total assets were 0.33%, compared to 0.30% at 12/31/21 and 0.42% at 3/31/21 Efficiency ratio was 70.30%, compared to 66.07% in 4Q’21 and 65.76% in 1Q’21 Tangible book value (non-GAAP) per share was $20.49, compared to $21.51 per share as of 12/31/21 and $19.28 per share as of 3/31/21 Return on average assets (annualized) of 1.47%, compared to 1.50% in 4Q’21 and 1.66% in 1Q’21 NASDAQ: SPFI 1Q'22 Highlights Note: Tangible book value per share is a non-GAAP measures. See appendix for the reconciliation to GAAP Source: Company documents
Loan Portfolio 5 1Q'22 Highlights Total loans HFI increased by $16.1 million compared to 4Q’21, primarily due to: $27.9 million organic net loan growth – largest growth in land development and construction loans, commercial retail loans, and consumer loans SBA forgiveness and repayments of $11.8 million in Paycheck Protection Program (“PPP”) loans Loans HFI increased $211.0 million, from 1Q’21 1Q'22 yield on loans, ex-PPP, of 4.74%; a decrease of 7 bps compared to 4Q’21, excluding PPP loans Total Loans HFI $ in Millions Source: Company documents
Loan HFI Portfolio 6 Loan Mix Loan Portfolio ($ in millions) 3/31/22 Commercial C&D $ 111.4 Residential C&D 228.8 CRE Owner/Occ. 248.3 Other CRE Non Owner/Occ. 441.5 Multi-Family 138.9 C&I 397.8 Agriculture 151.1 1-4 Family 378.4 Auto 255.7 Other Consumer 73.3 PPP 28.4 Total $ 2,453.6 Source: Company documents Fixed vs. Variable Rate at 3/31/22
Mortgage Banking Overview 7 Mortgage Banking Activity $ in Millions 1Q'22 Highlights Mortgage loan originations decreased 25% in 1Q'22 compared to 4Q’21 Slowdown anticipated, after record volume in 2020 and 2021, due to increase in mortgage interest rates beginning in 4Q’21 There has been a reduction in the number of mortgage originators in 2022 Mortgage servicing rights – a positive fair value adjustment of $4.5 million in 1Q'22, compared to $400 thousand in 4Q’21. Increase driven by rise in mortgage rates, causing a longer estimated life and a reduction in the prepayment rate Source: Company documents
Noninterest Income 8 Noninterest Income $ in Millions 1Q'22 Highlights Noninterest income of $23.7 million, compared to $22.9 million in 4Q’21; the improvement is primarily due to: $1.2 million increase in mortgage banking activities revenue $869 thousand increase in income from an investment in Small Business Investment Company (“SBIC”) Partially offset by a seasonal decrease of $598 thousand from insurance activities Source: Company documents
Diversified Revenue Stream Three Months Ended March 31, 2022 9 Total Revenues $53.7 million Noninterest Income $23.7 million Source: Company documents
Net Interest Income and Margin 10 Net Interest Income & Margin $ in Millions 1Q'22 Highlights Net interest income of $29.9 million, compared to $31.4 million in 4Q’21 1Q'22 net interest margin (“NIM”), calculated on a tax-equivalent basis, of 3.33% and a decrease of 17 bps compared to 4Q’21: 4 bps of yield recognized in 4Q’21 on several large payoffs Excess liquidity - $86 million growth in average deposits negatively affected NIM 8 bps Source: Company documents
Deposit Portfolio 11 Total Deposits $ in Millions 1Q'22 Highlights Total Deposits of $3.45 billion at 1Q'22, an increase of roughly $110 million from 4Q’21 Largest increase was experienced in personal accounts Cost of interest-bearing deposits declined in 1Q'22 to 34 bps from 35 bps in 4Q’21 Noninterest-bearing deposits represented 32.8% of deposits in 1Q'22, compared to 32.1% in 4Q’21 Source: Company documents
Credit Quality 12 1Q'22 Highlights Credit Quality Ratios The Company recorded a negative provision for loan loss of $2.1 million in 1Q’22, compared to no provision for loan loss in 4Q’21. The Company experienced improving credit metrics in the portfolio during the first quarter of 2022, specifically in the hotel segment, direct energy segment, and other Permian Basin-related credits Ratio of Allowance for Loan Losses (“ALLL”) to Loans HFI was 1.62% at 3/31/22 Net Charge-Offs to Average Loans ALLL to Total Loans HFI Source: Company documents
Direct Energy Select Loan Industry Concentration Detail 13 As of March 31, 2022 Hospitality Total operating hospitality loans of $116 million* No hotels under construction, with no unfunded commitments 82% of balances are to limited service hotels 33% of operating hospitality classified; <1.0% is nonaccrual; none are 30 days or more past due ALLL on operating hospitality is 6.9%* * Does not include loans reported in construction and development Total direct energy loans of $122 million 94% support services, 6% upstream Nearly 100% are located in Permian and Palo Duro Basins 5% of energy sector classified; <1.0% is 30 days or more past due ALLL on energy sector is 1.3% Hotels by Geography Source: Company documents Energy Support Services by Type
Investment Securities 14 1Q'22 Highlights Investment Securities totaled $793.4 million at 3/31/2022, an increase of $68.9 million from 4Q’21 All municipal bonds are in Texas All MBS, CMO, and Asset Backed securities are U.S. Government or GSE 1Q'22 Securities Composition $752.6 million Securities & Cash $ in Millions Source: Company documents
Noninterest Expense and Efficiency 15 Noninterest Expense $ in Millions 1Q'22 Highlights Noninterest expense for 1Q’22 increased $913 thousand from 1Q’21 primarily due to: Additional commercial lenders hired as part of planned initiative An increase of $712 thousand in legal expenses An increase of $247 thousand in travel, meals, and entertainment Partially offset by lower mortgage commissions and other variable mortgage-based expenses due to the reduction in mortgage loan originations. Source: Company documents
Balance Sheet Highlights $ in Millions Balance Sheet Growth and Development 16 Tangible Book Value Per Share Note: Tangible book value per share is a non-GAAP measure. See appendix for the reconciliation to GAAP Source: Company documents
Strong Capital Base 17 Tangible Common Equity to Tangible Assets Ratio Common Equity Tier 1 Ratio Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio Source: Company documents Note: Tangible common equity to tangible assets is a non-GAAP measure. See appendix for the reconciliation to GAAP
Appendix 18
Non-GAAP Financial Measures Unaudited $ in Thousands As of and for the quarter ended Pre-Tax, Pre-Provision Income Net income $14,278 $14,614 $15,190 $13,650 $15,160 Income tax expense 3,527 3,631 3,716 3,422 3,738 Provision for loan losses (2,085) - - (2,007) 89 Pre-tax, pre-provision income $15,720 $18,245 $18,906 $15,065 $18,987 As of the quarter ended March 31, 2022 December 31, September 30, June 30, 2021 2021 2021 March 31, 2021 Tangible common equity Total common stockholders' equity $387,068 $407,427 $398,276 $392,815 $374,671 Less: goodwill and other intangibles (25,011) (25,403) (25,804) (26,226) (26,648) Tangible common equity $362,057 $382,024 $372,472 $366,589 $348,023 Tangible assets Total assets $3,999,744 $3,901,855 $3,774,175 $3,712,915 3,732,894 Less: goodwill and other intangibles (25,011) (25,403) (25,804) (26,226) (26,648) Tangible assets $3,974,733 $3,876,452 $3,748,371 $3,686,689 $3,706,246 Shares outstanding 17,673,407 17,760,243 17,824,094 18,014,398 18,053,229 Total stockholders' equity to total assets 9.68% 10.44% 10.55% 10.58% 10.04% Tangible common equity to tangible assets 9.11% 9.85% 9.94% 9.94% 9.39% Book value per share $21.90 $22.94 $22.34 $21.81 $20.75 Tangible book value per share $20.49 $21.51 $20.90 $20.35 $19.28 Source: Company documents 19