SPFI - Earnings call 4 2023 | South Plains Financial, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the South Plains Financial, Inc. Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Steve Crockett, Chief Financial Officer and Treasurer of South Plains Financial. Mr. sir. ahead, go please Crockett,

Steven Crockett

Officer; Thank & related you, participation here We your presentation on Credit Chief morning, are Brent available President; Bates, are our section press and our earnings release of good Chief our Executive and in Chairman me Griffith, everyone. Newsom, conference website, our Curtis and Events The appreciate spfi.bank. Officer. our operator, News Cory earnings call. today earnings the With and

of today's everyone statements. uncertainties remind materially those to safe statements cause to this anticipated factors like call or to forward-looking statement I'd harbor begin, to our the from future call we those could contain All safe in X that that harbor a earnings made comments are may Please Before differ that press results actual presentation. our variety subject during results. and subject are of risks, see earnings Slide release on other

herein as by law. to are statements, required update as Any duty forward-looking except made such any date, statements of and do undertake only presented forward-looking not we today's

Additionally, useful discuss most performance. can evaluating and in be measures, certain reconciliation presentation. during to A in measures these found of non-GAAP our our comparable we believe GAAP call, earnings release today's the we which may measures in are also non-GAAP the earnings

you. me let over it Curtis, to hand

Curtis Griffith

income full growth results good results. will fourth today's Steve XXXX review year our I as our the a call, of our financial Cory initiatives allocation our our drive on will more and loan of will an priorities. On and with discuss ahead. Steve, to morning. well the portfolio review you, well year capital fee detailed deposit as in update Thank highlights as provide quarter then conclude as briefly

during our for thanking by industry. our start and customers our commitment the efforts to and for employees extremely like would challenging an to both their bank I year

hard without not their be work. success dedication possible would Our and

we a combined presentation, and benefit for delivered driven earnings Texas expansion platform, to as our a full year economy of the X Slide by business with the growth resilient X.X% in-migration favorable lending on climate. shown As from continues loan our of

If expect interest to we and XXXX. second growth moderate half Reserve accelerate their we look rate, to inflation begins the benchmark economic to reduce as to continues the Federal of

Looking at grew dislocation deposit year, significant impressive which that the failures the past quarter. back occurred of in the following the Bank our Valley franchise community-based given Silicon Signature modestly, Bank first and is

year, grew the deposits excluding with our the which our combined For deposits demonstrates strong franchise resilience of X%, customer our core brokered full $X.XX relationships. billion, to

XX% end, quarter and At of in metropolitan our of Houston markets Paso. XX% our rural our major with Dallas, were deposits markets in El

only deposit average balance approximately estimated being XX% uninsured of deposits $XX,XXX an total account our or our is uncollateralized. Additionally, with

remained as portfolio since ended of the our we of quality the classified year. the have remained at fourth our also start the loan the as quarter credit The loans through strong lowest level pandemic

as for assets we our year XXXX. with the average Lastly, return full to compared the on for full XXXX year X.XX% X.XX% increased

in April reinvest a subsidiary a we of $XX.X loss $XX also investment higher-yielding that The We million. for tax-efficient to million gain sell at manner us Insurance in proceeds our positioned Windmark gain of the a pre-tax sale strategically Crop loans. and into securities completed of recorded those

million XXXX. fourth position, XXX,XXX has the in liquidity repurchased XXX,XXX been Given stock shares Directors which May, We program Board and and a exhausted. our $XX capital strong our of during in total repurchase authorized quarter a of shares

in the Board open has our year, shares our the value, intrinsic below have our been believed aggressive buying that traded and have market. During we stock

transactions and to maintain power. will interest, in more and will we to M&A is area the and becoming our liquidity we expectations as are watch see realistic. our opportunities continue an sellers' ahead, earnings bank of market place year for expand take believe the to you Looking the

recovery to volumes interest led pick rates securities the year up. in the will probability deal in decline of also end at The portfolios, bank we see the which that a will increase

we excess liquidity, culture, at makes base shareholders. will acquiring with be interested and the in the for valuation only us bank However, sense deposit a right and stable our a that

In our we dividend. the steady growth of remain meantime, quarterly income shareholders our organic a stream on focused while returning to through

XXth dividend consecutive Board announced Our a authorized will be quarterly Directors for This to XX, XX, per on share paid of shareholders week. on XXXX be as XXXX. February quarterly of $X.XX again dividend record January last our

the Cory. over turn to call I'll Now

Cory Newsom

Starting everyone. million and for real increased linked $XX an held in portfolio. commercial hello, was in quarter. estate primarily partially during the indirect to investment auto loans and annualized quarter Thank demand as you, by on approximate offset compared Slide $XX.X was the X, our decline million Curtis, X.X% or Loan

reinvesting compared we're previous yield indirect focus managing credit while higher-yielding As with calls, carefully our into our as on portfolio in to a principal amortization the we've of fourth loans. was X.X% linked portfolio's in the portion the said on monthly quality auto loan maintaining the The quarter on portfolio a X.XX% quarter.

price We environment to interest account loans the for that higher we the combined pressure are our deposit in rate on new continue upward with costs. operating to

annualized as by El in quarter. to grew Dallas, of Paso XX.X% billion we major X, compared million Slide markets linked $X.XX the our to loans to $XX metropolitan and Houston Skipping or

portfolio. a remain we'll bring culture We in though to business we for continue auto more decline our remain well expected markets our community mode bank the be and selective. fit our offset as can extremely the an that as hiring paydowns who metro markets than important we source of in as to new experienced look growth indirect the in good and Our loan lenders

remains X. we healthy as with growth, to and we our what economic who we do to markets we Slide in loans Demand to solid selective Turning be continue experience across underwrite. continue though business

rate as interest lower loans result, low XXXX, and/or experience though loan many growth resets. continue As to rate to we income expect we continue to a single-digit for growth principal repayments expect deliver

of the cut the to repricing in expect we elevated, the interest begin loan net in this market half rates to which yields given XXXX, the begins majority NIM, even remain benefit liquidity will believe and third Fed in lower accelerating will income, of fourth our interest While the quarters. we second if

of loan on have we Though now ]. More In [ brought renewed to our comp noninterest-bearing on deposit to have our also need deposits. balances. always with growth plants carry the and in these effort lenders growth, drive their true emphasis a type core these specifically, our value deposits incentive deposit balances of and plan, weight deliver we more conjunction while focus part had stabilizing an deposits as noninterest-bearing

focused requirements whole the putting also originations We're much liquidity are agreements. we on the to on said, deposit in getting covenants of profitability loan maintenance centered and Better loan new relationship. at better

team, we've as made much getting our always we've this, improved our these real the targeted product area better capabilities covenants. negotiating we have While is last over progress Treasury and we're management where our another year.

senior We're we both I'm U.S. improve from thus to deposit our group. allowing history. level During top quarter, and follows financial to income. product we that bank in business, we this in with which the this ever have talent team as excited the and treasury drive to X our management executive sure better we the we head the fourth right of today, us continue have a so several of with people align the which a recruited needs, additions doing growth products job also making unmatched is fee a treasury than customer's to

million million to to the a to rights $XX.X mortgage mortgage quarter in income $X.X noninterest banking Turning in a the was generated million decline in to adjustment This servicing our decline the in portfolio. $X.X We as revenues, fourth largely XX. includes Slide value $X.X compared million which third quarter. market of decline fair due

aggressively maintaining we've months a managed as our volumes last over decreased expense have the base profitability. Importantly, on mortgage with focus banking XX

than fee has been experienced to downturn in decades, to in as rates our And capabilities most we've While maintaining the beginning volumes while second treasury I quarter. X expect [indiscernible] more management mentioned, impact this continue eventual originations decline. mortgage initiatives in for begin income mortgage to severe lawsuits our the the we negligible as in mortgage

fourth the XXXX. as of the quarter For of noninterest compared to quarter, revenues XX% was bank third income in XX%

we strong I'm through accelerating to we're the To the confident cost loan standing the stabilize that remain pressures are order conclude, and of our XXXX. have growth. noninterest-bearing franchise still we aggressively I'm not manage and deposits results income we and while I well grow will position our about deposit said, advantage to we us addressing need That the take positioned. believe and through ahead. move excited opportunities demand plan, quarter. fee people fourth deposit current right delivered as We in to environment to improving

now Steve. turn call to the will over I

Steven Crockett

Thanks, Cory.

recorded our per the the share $X.XX, earnings was the $X.XX $XXX,XXX diluted quarter share asset earnings write-down $X.X a after in share at as million quarter. rights on impact mortgage quarter. servicing per quarter, linked linked quarter our the For compares write-up of value The to in a fourth compared the to We during which current per was fair $X.XX tax.

interest Net was $XX.X million quarter. million XX. the as quarter Slide fourth linked compared $XX.X income to Turning the for for to

in resulting in due loan loan interest expense million interest-bearing the our interest interest-earning in $X.X in basis income in the points by liquidity in on to other rates The on and short-term loan by increase in third production rates the as $X.X quarter. fourth interest rise portfolio fourth new lifted the rise decrease combined in a with average in rise the quarter, investable quarter, liabilities declined income on was the the Our in a yield interest of loan $XXX,XXX offset XX million assets increase loan income.

to a deposits. loan in interest balances quarter the the tax offset decline our noninterest-bearing X.XX% net in Our the deposits the yields calculated rise loan fourth at held linked on and in basis quarter. cost as equivalent steady of compared and margin Higher

basis As our was in the outlined increase fourth points XXX of on points Slide an quarter, XX deposits the basis average quarter. of linked cost from XX,

be our steady relationships, the maintaining deposit which we've with franchise to rising the core fourth interest quarter. proactive in rate decrease only a deposit slight funding Overall, cost. in to the has to the led Given our through in year, remain continues environment had rise

deposit initiatives stabilize deposit core our As balances Cory while growth. touched place also driving on, designed we put in noninterest-bearing to

we expect to trough our NIM. XXXX. costs, initiatives to half That expect on upward the through we these we We which continued modestly pressure our first the have deposit move In pressure meantime, expect through will an XXXX. said, to NIM impact of begin as

Slide to Turning XX.

charge-off net XXXX, provision a quarter, loan quarter. fourth attributable ratio which for total in quarter. for credit unchanged recorded to We prior XX, activity organic Our as was largely investment Allowance from the Credit at December is of which the $XXX,XXX the in of end our well was for X.XX% Losses losses the as loans to growth held

Skipping ahead to XX. Slide

Our costs to million The we fourth was quarter $XX.X largely the million noninterest to lower as expense $XXX,XXX as linked continue decrease mortgage to compared quarter. in the due $XX.X in was mortgage in through decline spring the the mortgage expense volumes. That selling volume through the XXXX would said, rise through manage of first half season. modestly expect we increase as to noninterest

remain accumulated fourth fourth per increase our in after impacted end from December $XX.XX X.X% equity to Slide largely as other ahead tangible September end compared million largely value quarter. Moving the quarter quarter. income, $XX.X increase in by of increased The at X.XX% tangible fourth third positively to by impact AOCI, was of the decreases or increase due rates paid. net We of at well $X.X to as dividends driven in the during book common the Tangible long-term to capitalized an to of earnings AOCI assets of million the of net the of $XX.XX with the AOCI comprehensive XXXX. XXXX, was XX, XX. and of XX share in market interest quarter, income

for Curtis the turn to back I'll call concluding remarks.

Curtis Griffith

conclude, I'm the year. our very over performance To of Steve. proud you, Thank past

that franchise loan Our to community-based remained contributed growth resilient, in our high-quality our deposit drive earnings XXXX. to lenders continue while growth strong

as for reposition a provided well securities of a our which capital strategic portion Windmark, sold repurchases share as also portfolio. of We

we as we enter more bank but have we is know to do. The XXXX, well very operating much

a will we that will balances, place provide outlined, loan in reprice grow loan second core Cory the XXXX, economy of Texas to portion an growth looking in initiatives for believe have and our liquidity This deposits and see drive to improved healthy levels. expect already when noninterest-bearing As stabilize the growth. from half our fee deposit of we acceleration income portfolio we meaningful

portfolio. loans We competitor in positioned expect attractive new limited fund we will add liquidity high-quality to and our our to markets to loans be believe customers be and to well

quarter. second focus we remain year expect starting in to delivering We value also our as fee our improve to We ahead shareholders. the optimistic income on the on

Operator, please time Thank for questions. line for any your again open the you today.

Operator

Instructions]. [Operator

Graham question Sandler. Piper is coming today from first Our from Dick

Graham Dick

I that low I banks I like, growth you in And what growth. just which year in but metro been pretty metro guess, for last metro-focused quarters full definitely to wanted growth, your sounds I little a is loan aligns than the well, up between which the slower. has the the there with, start community see it strong, Texas. of single-digit frame to with in pretty headquartered your heard on sort X or XXXX, is because then the and some guidance guess, also markets markets you markets the of different for XX% for

faster hear payoffs single-digit play then there? would So to growth? like are grow low that the I community banking maybe differently doing you loans into how also might And what just to

Curtis Griffith

is Yes. this Graham, Curtis.

it's I some the of we're of hires It still those here growth forward of of of a done last of 'XX. markets, out result some and great making what the couple rural little to all little a going think lot let -- activity, going but a too. and that to our Brent in Bates kind of I'm to is fruition. he of good in markets getting that's more kind that in a we've it's seeing kind coming years some get challenging to growth, the in on here sees elaborate more

Brent Bates

portfolio, year And our good pullback first the closer this is think and the our I seeing to construction. of predominantly that the some to see real what still see activity year Last and projects year, Brent. then clients second half residential And our expecting X% strong from in half is the 'XX, metro construction of is markets saw rural growth construction in first half advances tailwinds we a This industrial some portfolio, year. even markets. we're multifamily the our on which in still in in in existing still we're out and from

was. So low be than expect single-digit I would realistic, and smooth much I period more of XXXX It's 'XX growth think the attainable to definitely a is 'XX, growth for

Cory Newsom

Graham, is this Cory.

keep I other to we're we're in think the thing what much to is mind wanting we've about selective got fund. more being

for on. now of some on of We think transactions we've that a the clients. just So right us at had it's right opportunities or some we to the look number don't time passed for of those

So and we little we pulled -- have selectively just a back bit, that. we're okay with

Graham Dick

given trends sense, an helpful, I bit environment but slightly first margin guess to rate to little makes is give a Brent. was where definitely it this a margin quarter-over-quarter. know you'd there. like should and you're mean, bit, I a start flat moving that's the going if the And I it trough better that year. in idea was just for get willing the half said guys the trough. an calling you maybe forward just I maybe the for you still below be is idea it Yes, of seems X.XXs], see get And wondering Just that the quarter-over-quarter. that competitive saw little we to or out year, obviously, level? trying very to [ flat low of

Steven Crockett

were that flat during we -- continued increase cost able rate let to quarter. down, overall slow continue I deposit slow that I'll increase pressure, do then to prepared the during Curtis I'll and keep in for growth but growth Steve. start, or did of to jump we're the Graham, fortunate that mean to as well. while still -- quarter I'll fourth were Yes. see we We side. Cory this We is and pricing it has we that down. of deposits on the particularly did did the

and little do hope down some far, then like on other some the not the relief you looking little up of they're when back X messages treasury specifically, Yes, look but they in depending pulling just rates. ours be year bit there market like it we seems rates, of and a headed of so inside bit, will kind what a on first at mixed weeks been with the

hopeful So A is. to put something to there, is that today. X mean, or NIM drop, X it but I to would try so, X, it we're we close hate number drop. point like X to everything be where of unrealistic, out any we where we keep a are but X basis can that close I bit not it specific can to to keep do to going to little

Cory Newsom

the throughout felt start -- Graham, in we sensitive deposits minor less changes that I that though, to company. quarter thing, think less comfortable is this making one first the rate-sensitive

And at take the willing comfortable that really start we finally to a says incremental, board. lot think the really reductions I feel doing to are and it's be Those to and rate across to start kind fact a start to finally fact making we're of small it that's looking think the start says about that minor if so lot when going I going a that. you you some while showing. for But think that

Graham Dick

No, I the absolutely, definitely stand with does. And here NIM. just guess

, of pressure towards that's the back that the is guess, So one of that rate is is correctly? half I hear happen, to the the some half because Curtis, the year, weighted trough going fixed repricing I in did

Steven Crockett

half we definitely We that that repricing will 'XX. get of to have more occur second the of as

some we get along, accelerates the but a have as going half. more it to We second lot

Curtis Griffith

here current up two down. our significant things, penny in it of scheme time they lines rates a went there out This be that as are does but point. most and little ag pay in a notes there move the renew at that because the we they'll is were in those right it big be 'XX. things and priced of drawing of will up or of our But start they a operating there, rates, when number, XXXX, and there not is year current One it's other again loans priced drop And do and through at higher-yielding some now.

Graham Dick

Okay.

then makes servicing the the to And adjustments got housekeeping. sense. want last I Okay. That just is one mortgage make right correctly. sure more I just

the $X.X X compared the that $XXX,XXX said negative is quarter, this last was what the was to delta number there is write-up, X.X which -- a quarter that's you mark -- really the between the So mark quarters, right? million

Cory Newsom

Yes. Yes.

Operator

next Group. Brett Rabatin Our coming from today from is Hovde question

Brett Rabatin

the deposit And stabilizing little talked I that bit And you the terms maybe maybe bit just strategy? bit And a to then come be talk the of to hopeful go a a to on of DDA, entails talk that? about achieve going of about through you you're initiatives. Wanted growth from? product in and to treasury you're little part that deposits quite or know possibly stabilization what you first a guys that. Can about DDA. of How management just expect where for

Cory Newsom

Yes.

So this Brett, is Cory.

this So a that, sit treasury's tell to I conversation. talked we'd It's like mean bit. I immediate got you about a quarter-over-quarter change. we've here We happen. just mean our quite had going sales and to not

You trend deposit we is on gathering. term require and Lot to chase making is that more it relationships that emphasis mean? relationships. initiative going back an chases know to lending long sure that much the I the and trying what the do of way we're what around come -- specifically the our overall we

had a the when the but of deposit historically were type about So -- past, bit never of have in we picky the always forefront at we've relationships, always looked we deposits. our as lenders

real. that back requiring really we incorporating full accounts, we like continue things mean, up it, that, the the delivery the on that around. But have, talked we I Now really we've the side, and in that changed treasury when about come loan want operating of step to we tweak get we're really that the covenants all into focus treasury to I continuing mean, leadership till we it's way there.

And we've continuing than staff we're education better on focused with been. to our team. and our enhance are lenders ever We our

all mean we're but So at to a I to deposit that's drive sticky, initiative. [indiscernible] we mean build the the which in profitability really it's it's us, looking it focus do which ultimately continuing help the not every our that day sprint. in a that I long right deposits, mean think day, the core of ones us relationships. ones I way, I that ones value will -- are which mean, it's and marathon

Brett Rabatin

I helpful. That's appreciate that. Okay.

year would incentive indicated, The or ask piece, mortgage you was otherwise aside of managed points other about forward. going and from year, they've are drive some past that thing relative to wanted down, mortgage the Obviously, some I going expenses in but which this the 'XX been expenses revert well as probably 'XX? should inflationary to compensation pressure maybe the there that

Steven Crockett

Brett, this is Steve.

piece earlier, some our specifically we year, but during working some our So initiatives we've increased transition we'll some been that -- in that technology during previously of is have other some did about one the expenses. on particular, we 'XX, of didn't cloud talk the to

Some that of on different the that was of infrastructure depreciation it built things and and seeing some year. start current more during just would being was we some out

I absent -- on noninterest whole warrant we're again, of outside QX just volume don't expense, far to always inflationary of looking some there's as I probably should that closer little drastically of a think would as mortgage, changing we bit increase mean the be that. items. and to other a don't there's the lot a I think But that, production pressures number.

don't about that million think think I fourth definitely versus we a quarter be little we'll we'll more $XX.X go-forward at probably what see I a basis. than but $XX.X down on million. was high, bit were quite

Cory Newsom

Cory, is This though.

of place expense we've we nimble I That's to the with are managed do. mortgage we getting much always fact along could I go we kind in Steve And side the that very -- but said to of think manage mortgage we mean picking in it way last was the anticipate been we're up the net months. geared zero. would proud capabilities up our the what we to actually of though, half. number for second I like basically XX sure saying, I from a keep do make the through keep mean focus managed because

we'll Now in second be sure of of the year. half advantage like got to really place right we that productions we the the the making step in feel that take

Curtis Griffith

this Brett, I'm not a Yes, excuse. again, more you this And giving is reason an is Curtis. one quick point.

so As we team our doing me have remember so grown that, real market people toughest for years I talent added XX and to to probably banking is of what in high-quality the that in which hardest the is to and is doing this, we're bring get we cost keep do. personnel to the what people them know on doing, The going that we're be to to thing is right it them. and

time, extra just to of over there's it. lenders, revenue So it's for to to to going and going little lose it sight -- have there right we've but not generate the if across not come do people sectors, doesn't all a of got right good it tightness we're cheap, And still lot us. a that's just

Brett Rabatin

one. helpful. I in That's Okay. If last could sneak one

geography in and that metro able your to to franchises mentioned about, you has it look markets. what strategy deposit to some you'd a guys M&A from they're the your perspective from the a some be to and you maybe evolved, bank you'll guys buy you now to deal platform? activity funded are makes be bring a just will what's optimistic from somewhat guys You do talk to and rural platform. that here that community about sounds maybe versus Can strategy guys Can more M&A for add here, call, looking talk would see sense like folks' you're

Curtis Griffith

Well, stick I'll what I said. with

with like going stable #X failures I It's back in make because that a I for, base -- seen right we're culture think script makes right that's what in. to look try that. of with we Excess doesn't bank we've valuation front deposit us a part and too the in know that that there, sense. believe fit the is a -- and the we're and we liquidity, that to call, looking the a that got not me, culture, recorded many

you're base, Well, looking and almost you liquidity markets. look at you're stable at in definition deposit Texas, excess rural me, more to by

are quite right. think now the I people too. So other you're some looking And way that's

For we've up. -- banks so long, interested they smaller seen they that in in pick and now weren't communities, out didn't

that. acquirers. the having yes, we So, right in to Lubbock deal. difficulties if and seen close as right of down along, we've watching what make a it anywhere right the of one we've still and we other had I'll years, the got one believe past after it work. some we But and to discussions. a leave got can believe few the here our the and couple in right We're we've want market kind size we just road to We're people, well, the phone Permian capital as at the well, of some -- we've all go also have don't of that calls. in seen we've then we from doing comes means going not But the that

Cory Newsom

We people had Brett, this always thing are about we discussions back you talked have. the is deposits. went when kind to even interesting that some we these recognize of 'XX, value of in the Cory. that though that It's around That's rural the fact this. of starting public

] value the us just position are We better puts have kind deposits. always think of seen the I of when do community-minded their at lead rural we're we very it. focused and that I on lot a that think than [ ones at focus some in changing and But of the other that a these markets. it of we're being good rural And probably very looking

Curtis Griffith

headquarters no smaller have to bank, understand you If the hometown our that our markets, of matter markets. in well you're always really to all been have do you that's be in and going are, philosophy those smaller to where have your

Operator

is your from mute. phone Our from coming Raymond Joe, perhaps is Instructions]. next question on Yanchunis James. Joe [Operator

Mark coming KBW. Shutley Our from from question is next

Mark Shutley

priorities the for So on of you sort that sort of authorization near 'XX. expect buyback coming? I authorization. you the still do a current And the list continued guys and you the know new buyback, this as as top quarter favor as finished far Do the of

Curtis Griffith

It's be by the Board. going decision a to

right were it. clearly, We'll look hard thing 'XX. think time we I at at in a the the doing take

in In where we'll will to Board the we And fact, probably our it February be meeting. be year. discussed decide we for think ought

we going we'll level reauthorize discussion today, now as the sure. to something for investment right at it, we yes, any collectively that if we're that but out is long a think of we trading firm give have levels you then But good I have a our shareholders' real As makes it for on metrics I that a capital and do, there. money, can't be topic think

be in be Obviously, priorities money, to long got bashful good existing we guess things, know value think a about organic going we [ we're a because And want as not to a doing that. going get paying we're of about it's it's we've a shares. the year. steady powder to deal have came terms our dry to if it. of as do ] right buyback for going we to think growth during there, M&A, for we'd same And the we're But do capital dividend. is do the that along tier keep plenty of some sure to chance in on And for I we'll to

Mark Shutley

Apologies Great. those margin assumptions think you you And one That's What you are this, XXXX. the are all missed but NIM think using if for Steve. that projections. for maybe rate about cut the helpful. when when just I about

Steven Crockett

Yes.

quarter, of early moving I rate first this one. of now, kind kind is So be point, one But cuts it's end then second fourth third the X baked later, of got would at now, first just as a quarter got think the the we've in first we've quarter, in of the right quarter when and second right again, and of target.

that's [ that -- again, of So on shift sometimes, to just ]. some got the know day-to-day more but at baking viewpoint this X can I have X in [indiscernible], up we're but maybe point, kind people

Operator

James. from Next coming question from is Yanchunis Joe Raymond

Joseph Yanchunis

are to that, Sorry you about able me? hear

Curtis Griffith

Go can. Yes, Joe. We ahead.

Joseph Yanchunis

Perfect.

you deposit assuming on what of piggyback kind So what's cut? point way model question, sensitivity are about rate XX kind basis rate just to of the off think as down? And a your that, we that betas

Steven Crockett

point here of I got tied So point we as I'll -- I sensitive. do rate XX here. the are reprice start of we've we say, but basis me, to liability deposit have -- the close got at definitely full that increase most -- point our the think down fund XX% a The book within the don't a to of XX XX public the basis we've so. a on X% book side, deposits our -- front is decline. But drop, as or mean, accounts and in the basis short-term of those days that to and would around for majority I I about I'd about that -- X got some had net about have we're full deposit to XX, level. down XX then indexed other X% a far XX that don't we've brokered sorry, interest of income decline

Curtis Griffith

this increasing on us be balances be that on Curtis, to will Joe, This CD for the things helpful one out have is there. continued we our reluctant very of is

been haven't or any of that. specials We any running

are in able accounts be we will rates of transaction quickly. So deposits our fairly and to adjust the bulk those

certainly rate. using treasury because the to that we rates and can management talked we fact as on factor that we're be the in that one adjust treasury those small move do in trying management, it in move very our increments earnings certainly as to we'll side, Another you To aggressive will can -- decline. touched extent credit

Joseph Yanchunis

for here. one me last And that. appreciate I

it's throughout As the remained pretty strong asset qualities, quarter. December

move So tailwind. be of hit landing the next as we reserve relief that somewhat would for about year, through is potential think we start you, which year some and we could this soft to the a see if a we there

curious thoughts year-over-year kind of of the provisioning kind Just of in your credit outlook.

Brent Bates

the we the is of this We're that Brent. mean the we work hard. exiting quarter some, have quarter I it's I Joe, credits a deteriorated. because normalizing of occasional just the We're mean, during -- accomplished up few. working at still repairing and wound downgrading past seeing of dues some, end where was

there. we model, So modeling effect in that today and depends And rise the and moves having still we in on it than in the more really out our have activity economy of and we're through still seeing I some are how the economy. kind think the overall of some of coming stress all rate long-term

reassess right course, If we still volatility don't it. in chance time, we're we're to of of see economy. in bit that little a still But now, going at some kind of thinking, point of a there's the overall

So when some we would out I away a guess, move we, reversal there. of from potential thinking that see process, there's

Cory Newsom

our relief. standpoint, I see think if rate we start you enough from seeing

enough that growth that going from quickly is standpoint. pick to probably to up a we're offset volume pretty going Our

this. I -- we while So say would

dependent for we that like are we're where drive relief to see trying upon earnings. not that, While would in -- the we to

Curtis Griffith

that can on just you And in little I think everybody night. are better that reserve. conservative It at side lets us a it. justify metrics always count the do there about on what's sleep it end difficulties We usually We're problems something, spot when our well. just start -- said, in not because Brent right seeing we're that But let huge as we then. don't portfolio. working doesn't leaning we fester

look as we election that as to the If overall stay this in as we get is a would reserve purely some speaking that any in into we the that need world be And after the say, the know an growth But coming there in we related still up what going that. of keeping adjustments to So out, to And unknowns additional moving there's and them use I got like is we is don't organic do one the really of myself, I out Cory enough would for improvement November. economy. mathematics hope lot said, pull possible, conservative will. 'XX it indicate will will the reasonably there.

So we're cautious the err going just to side. on

Cory Newsom

to underpromise know we going you always and and can. conservative over-deliver Joe, whenever we're we're

Operator

session. for end We've any the like our back to floor of over reached Curtis turn to comments. the question-and-answer I'd closing further

Curtis Griffith

Thanks, operator. you Thank joining this morning. for of all call our

us growth bank improved one those we just entering a time. fee We solid that's You've think to of in and drive deposit more opportunities year. real 'XX highlight to a going position. growth good We have income treasury team. core few are discuss an the during management the in and we for think both some heard We do have

remixing our loan last Texas portfolios single-digit with net securities expect is growth. handle months, as what solid. of is we loans. if some growth challenging well a breaking remains the of on portfolio And going credit to begin several does And we're has low into and loan our as come but to most going positioned to mortgage We interest there volumes. touched remain importantly, economy times, out I And some remain we've multiple coupled are the loan higher-yielding for we're over be gradual buildup drive healthy, that. we'll loose income getting for been financing getting we needs down, rates that positioned start the of think a improving to And certainly quality

for excited I'm year thank we time again all We your Thanks. hope today, and the So ahead. to soon. see you for you

Operator

Thank conclude you. That today's does teleconference.

your have You you at a thank We may your day. lines this time, disconnect participation and wonderful for today.

South Plains Financial (SPFI) 26 Jan 242023 Q4 Earnings call transcript