SPFI - Earnings call transcript Q3 2024 | South Plains Financial, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the South Plains Financial, Inc.

Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to turn the conference over to Steve Crockett, Chief Financial Officer and Treasurer of South Plains Financial. Please go ahead.

Steven Crockett

Thank you, operator, and good afternoon, everyone. our call. joining you appreciate earnings conference We With and and CEO; today are Brent our Chairman Curtis Griffith, Cory Officer. the Chief me Bank's here Bates, Credit Newsom, our President; presentation related are events The of spfi.bank. website, our release press and section available the news earnings on and earnings

press those Before we could uncertainties, risks, from everyone harbor see differ and presentation. factors that to like safe to actual Please And not that contain results may materially undertake today's harbor of statements, during such in by as call begin, earnings herein a future release those that forward-looking we call statements do variety I'd cause our law. to forward-looking Any in forward-looking statement are only and remind date. results. this presented anticipated subject statements our to All other comments update safe our except today's duty statements. to any as are earnings are required subject made made of

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

Curtis Griffith

We stretching economic the growth. interest reducing also Reserve to we demonstrate and portfolio continues rate to expect to capitalized afternoon. well market are maintaining loan believe continue is loan credit year building Steve, the normalize. to environment that the third credit We're managing we high our remain I and backdrop, I'm on good stimulate which bank in Against level. you, at quarter the Thank pleased not with and Federal results, discipline our ahead. as growth this our performing liquidity their focused as a chase

growth accelerate confident portfolio optimistic ahead. we in loan loan remain and credit the profile forward, that Looking will in cautiously are see quarters we the of our

million Slide interest $X.XX, adjustment of X like quarter the declined in linked our out tax third the presentation. our quarter of from the share because Loans our by XXXX. in and the investment mortgage We per following $X.XX given share indirect third quarter partially to earnings of is received quarter. the of managed delivered line $XX for a which decline rates proceeds offset of of quarter, to rights, with the after were third impacted MSRs, per the $X.XX for continued gain from the auto negatively held servicing would during that or loan quarter for decrease insurance Turning in I our payoffs portfolio. items: by in approximately by point value from diluted $X.XX earnings decline the fair earnings second

more on million As which been portfolio, the detail, on auto $XX we've the indirect XXXX. pricing than Cory portfolio touch new has in by will more disciplined our declining of loan in course over in resulted

seeing should a stabilize, the for not of from we have into X ahead. we're level this headwind year is believe we quarters. Importantly, the X that to which last optimism Overall, customers to portfolio our beginning the remove seen

standards. loan we ahead. The years, solid, strongest business portfolio have we growth new adverse which has the high in as our no fact, is than quality more positively third seen the as credit that of year the maintain it pipeline credit trends in remains over been In production also loan our X quarter for bodes our

for loan continuing enhancements. agreed, we varying resolution loan last We The economic agreed believe cautiously have a pay remain Overall, place that Houston we on portfolio loan as positive conditions. is our optimistic. includes Additionally, sign. in an to remains is a that quarter well positioned we nonaccrual placed which in credit multifamily on

more Additionally, Reserve's and our basis to helped are in interest in improve having has their market conversations. the lenders customer September sentiment, point Federal positive XX reduction rate

we Federal through over will first which to growth the quarters, rate Reserve loan will economic As accelerate is expected XXXX, believe the continue market half their of reduce improve in coming the to turn growth. interest

Turning deposits. good quarter, in success the growth. to third had driving We deposit

the For quarter. compared increased third deposits more approximately the $XX annualized, or million, XX% to linked quarter, as than

of relationships. in consistency We created know continue which to And customer benefit they as of rely competitor dissatisfaction markets customers a result At mergers, the that with Plains, as customers value on to our we South City our can we on at has and to stability Bank. remain build from number our long-term the our dislocation competitors. respect focused a strive they

deposit as Our strong lead over now also ahead. Lubbock, a XX% our market the which that share, growth which a markets, #X in provide markets, largest to in strong share, our in deposit our hold speaks The $XXX New our our look in positions history. We deposit stable loan South we is Mexico improving of XX% be or deposit where will share Lubbock competitor across June can Texas XX, has community-based satisfaction #X the is strong the the our year and an XXXX. #X hold and in necessary a with at share million we seen competitor nearest franchise market Likewise, #X has in the share. rural XX% in to liquidity many competitor #X Plains customer while

XX.XX%. to growth, XX, ratio that in to common was and was ratio company consolidated well-capitalized. At bank capitalize an X capital equity levels the to also on our minimum Tier excellent XX.XX%, X deemed drive leverage Tier and our the position each we significantly exceed opportunities XXXX, We risk-based are as September the necessary believe be regulatory

held Additionally, for at XX% our stood at loans deposit to investment end. ratio quarter

we to November XX, of to our share. shareholders capital our This bank shareholders returning while consecutive for our dividend to the quarterly Board through be income our increase of our also of quarterly Directors authorized stream to past Given steady be on position, $X.XX quarterly will record growing focused a both XX, as This a XXXX. on remain paid per XXXX, our dividend. week, of October X% dividend XXnd

We also in in program have Board February. which place, a million authorized our stock repurchase $XX

During quarter, repurchased the shares. we XX,XXX

buyback We expect in muted of as being we continued uncertainty share balance price. for well to our the remain as mindful activity that liquidity the more improvement economic as growth our and continued exists

Additionally, we bank interest drop M&A pick to in the coming up on securities rates. expect with losses as the community in sheets bank unrealized decline activity quarters, balance the

are any potential consider even our to closely, continue we have a team hurdle discussions high to the While for watching and meet needs to market deal it.

years. we opportunities are I drive our both we economic that community staying ahead. results not for cultural growth of potential of mistakes we have quality quarter any the conclude, real many ahead for the markets our to and lie repeat that do much and to bank needs peers, the minimal acquisition and demonstrate proactively Any being the opportunity across sense strong a is and South while well-prepared metropolitan want bank First believe, to also to the make credit need fit foremost, is as last there reasonable dilution, back, ensure a as our which would over loan for we conditions challenges. portfolio and have the managed to so third varying be well our excited remain our have organic of earn Plains few created positioned, doing shareholders. To for

the me Cory. call let Now to turn over

Cory Newsom

Thank the Curtis, Slide everyone. you, our declined linked compared by third afternoon, billion million and portfolio $XX the on Starting quarter. in to loan X, $X.XX good as to quarter,

large payoffs experienced of we several Curtis continued as on, As touched decline managed as auto the indirect portfolio. well our

compared quarter. inventories along our disciplined construction late been reduced stabilizing have the yield The having markets Slide This home our of levels of to to and major their believe in managing X our feel inventories. was our portfolio through Houston, end, of third our portfolio. in $XX in of basis Dallas, third Paso good homebuilders large quarter have about up $XX by result We the in loan million, which billion. impacted and a the markets lenders largely points, million that with represented markets to demonstrating scale totaling carefully the At in balances XX. building are X.XX% the still the Additionally, in metropolitan our portfolio year, very achieved. Skipping this growth portfolio, X. X Slide loan and the approximately loan payoffs our quarter, and XX.X% level in metropolitan quarter. Skipping balances to was major the El auto total X.XX% quarter indirect loan Loans $X.XX declined as our in

portfolio third quarter. indirect the of declined million $XX the end at million loan auto $XXX to Our

strong remains portfolio the discussed, of of points the modest the XX due XX have quality credit quality be more credit portfolio the XX-plus Overall, we the its from on a managing maintaining declined. points, at with have basis the carefully past to competitors volumes end higher continue the a spectrum as credit in focus the while days aggressive are As second quarter. rise with basis at we

we forward, expect begin rates as to continue decline portfolio improve. next our over stabilize to industry decline indirect and interest the Looking to in several quarters the volumes

an loan expect could off to the loans seasonally begin elevated pay we For flat payoffs. our growth and to to see fourth of we relatively as typically continue quarter, agriculture be level loan see

our momentum is in building. Importantly, the business underlying

significant of its headwinds and Our the can new customers highest in XXXX. our accelerating. the diminish in growth at business XXXX. activity provides optimistic pipeline, is are to our combined seen since growth more with to optimism loan be This of also pace is middle the for This becoming which beginning level

$XX.X as from MSRs the This Slide quarter. to decrease $XX.X in in of $X.X million third mainly banking the in fair to Turning primarily due compared adjustment $X.X XX. We've in the value mortgage noninterest to of million the decrease income million interest in linked declined as revenues, quarter. was our a quarter, rates a million generated

having to have at business $XXX,XXX nonrecurring in the expense well $XXX,XXX We of the during in second $XXX,XXX trough income running advantage investments breakeven management. experienced investment of take and services business quarter. our in third in purchase card Overall, a positioned mortgage a pace decrease rates eventual received residential of small or mortgage companies. we through insurance also revenue, decrease at We a as effectively proceeds the were and disciplined decline volumes, a the the result the managed pickup volumes by and from incentives quarter, of mainly bank These partially near decreases in of business received cycle decline. of as offset interchange kept the is believe

the while to we XX% that also year-over-year success deposit also team contributed helping In growth that are growth We the quarter, commercial Treasury expansions across our the in markets. through third our our income Treasury made our in demand we than from charge fee experienced to deposit more management meet customer see the have seeing account with management team analysis. we service

income compared was income noninterest quarter, to XX% of third the focus to our as grow For in Continuing the bank XX% now over second like team. I a of the our quarter. call to revenues, Steve. to noninterest turn would remains

Steven Crockett

Thanks, Cory.

earnings diluted quarter, third linked per share the unchanged was For from $X.XX, quarter. the

after quarter of net As adjustment, MSR third Curtis negatively noted, the nonrecurring $X.XX earnings impacted tax our for the by item. per were share revenue

interest $X.X income offset quarter, million in in to loan in million was the decrease quarter, Turning a basis income of the on million increases partially $XX was interest the in comprised The interest to primarily by million. million $XX.X other third Interest loan to loans $XXX,XXX to growth on for in X for the $X.X the loans, $XX.X Net of third Slide average compared XX. due increased linked assets. points yield compared interest-earning as quarter. of in linked income a rise income quarter, of as interest income and

quarter, calculated was as basis, a deposits X.XX% Of higher noninterest-bearing to interest XX.X% due tax-equivalent compared The basis than quarter the of yields margin, in the deposits. that to third in the increase quarter. cost total compared on the X offset more third modestly increased of deposits, linked as loan in our was our X.XX% to through NIM XX.X% rise net note, point our the Our quarter. to to linked primarily in

September at on deposits increased million billion As $XX by outlined to XX. Slide XX, $X.XX

XXX of basis third points linked points basis X Our of deposits average in the cost increase quarter. quarter, an was the from

to Turning XX. Slide

partially XXXX, Our $XXX,XXX recorded to the the losses for decreased an largely X loan to XX, net ratio basis prior point September activity, a of in from total third quarter. allowance X.XX% for was of held increase the for attributable loans by quarter. the end investment during provision credit which of credit We balances losses quarter, was charge-off at offset

in is $XX.X XX% expenses, Our the in to was the million of of quarter. net the to quarter. $XX quarter Over nonperforming loans rise that our $XX.X million $XXX,XXX end from $XX.X third of the marketing increased Slide and totaled slight $XX.X compared second the increase loan primarily quarter, a of third XX, as growth the million on in in and of noninterest third utilities, at discussed. Skipping million the total largely nonaccrual million expenses. linked from quarter, ahead in Curtis a $XXX,XXX the result was increase expense occupancy $XXX,XXX development multifamily

expect quarter, quarter's the flat third Looking noninterest expense be ahead compared to fourth to relatively we the level. to

September to Moving available-for-sale quarter, by income well-capitalized with end driven net an income $X.X second book points of to value million a of share The to XX, XXXX, assets the the comprehensive increased, basis compared at give We of of coupled increased end as of the of to remain XX the per June Tangible Slide accumulated tangible of was the after equity paid. I'll improvement from XX. $XX.X X.XX% for common back primarily increase XXXX. third in as tangible of call to the $XX.XX value other concluding Curtis $XX.XX securities with dividends remarks. fair million as XX, growth quarter.

Curtis Griffith

you, third results. our and quarter continues of Thank as the I'm credit our focused loan very portfolio environment well-capitalized managing proud remain normalize. on conclude, To to Steve. We

be proactive taken conditions. credit have portfolio, continues loan which maintain believe ensure quality We well-positioned our steps to we to we economic varying for the of

in grow to believe We remain South future growth of believe activity what to your I also economic to have I be for time coming continue you for today. optimistic and liquidity take the questions. are open interest we quarters. Operator, loan very bank, again well-positioned advantage please the any accelerating rates continue the on built to for Overall, Plains. Thank we decline as and line will

Operator

first Group. Instructions] from Rabatin [Operator Our is question from Hovde Brett

Brett Rabatin

And how over this perhaps think, Treasury of outlook period a didn't first as your from seasonality one, start and then, the year helped And quite quarter year, rates up didn't decline? fees I any DDA on just DDA. I XX% I but hear Treasury in DDA funds cost helped any Wanted thoughts much on in quarter. deposits, I was the to and how the much catch: year, in linked here on lowering heard,

Cory Newsom

one contributed to and I'll that's And have some is bit. help and the figure things Cory. the being is up to and the requirements this out relationships being in a bank, little and requiring Brett, continue But balances more kick come the going have lending this I on seeing off, really it Hey, Steve's me loans come we deposit we think I to DDA of on from that. with really the relationship outcomes at right we're our here

make we coming But clients our a with in requiring best the us. to that What balances really business we of as and it. the more the and relationships I give I help do want thing, to we lenders think service job right Treasury new Treasury context good is do does to one around have. us really deliver right deliver to done the sure really continue that way have our loans

Steven Crockett

in definitely stress, we would continue to that will But few helps our no this that fact short-term we that, able that is a of as not just would of in of noninterest could overall need. The definitely we what commercial level push occurred Brett, that. got grow just parts and a manage sure were Yes, to say, jump that's see has the we've are down. bearing We lot make to we our to folks But to some we'll you takes deposits for in the be there's a puts of cost cost, in that. some Treasury different see item portfolio. The good that definitely that. and liquidity on to right for on what we as did some We're overpay manage deal. moving continue I'll some real account know, that trying growth there, and increase and side. with noninterest big deposit one mentioned, the a But bearing. be There Steve. as markets. seasonality lenders there Cory and Maybe

Cory Newsom

driving very the job deposit managing And I driven to our focus that wanted fund has growth continue on been good I we on to to been continue the much think numbers this one to company. that focused opportunities a have is as be And were going them. that we've the really of we've of things sure, come shown our our done we've show liquidity make prepared and that. think to way,

Curtis Griffith

Brett, Curtis. this is

job is core think but really said, effect been I also Treasury of just you're for has the of we're And Cory seeing As us. one it, here just around deposits part getting deposits think from in sources, much from that's going other folks seasonality. don't of a that you now. banks other some factor some mentioned and really right I additional business forward. And that. moving

some end as effect in the many toward seasonality more ways, we funds fact, end get of as public In of quarter, first fourth through quarter we'll probably and the as we have get have. the

receipts going some tax You're see to in. come

on You'll also are the beta strong can we to a very post the had beta rates the be very see that bigger on But move want how is of up. number I crops, few doing market we than cognizant but discussions we down. on don't best be, selling the what other as down can farmers things. going going to beta some we the we've did coming know we

So we'll we see do. how well

Brett Rabatin

with results, for good maybe confidence that quarter. of portfolio there and of on kind know thoughts budget it, growth up, taxes loan any where I various know in I about loan waiting about And that how any for yet, done mid-digit, there's with coming the segments the as the reemerge your ask to you focus? 'XX of will stuff. you that probably have fourth all And then election anything might growth, uncertainty will Is point can some double-digit, also about in of I you be this a And flattish to to initiatives year? guidance thereafter. think that, haven't that the Wanted you terms heard see you think but end folks high-single-digit,

Cory Newsom

at be of at the are, the going And and flat be. year. going the think that's I pretty we're you it's way conservative to where to balance through If look we looking

proud Here's the thing that of. so we're

I But And can't look better years. you And budget-wise where you're to in right anything If pipeline of with take to We it, X that's it, tell about. pipeline that to get prior I can stuff what it's now you in that but than our in go seeing start that's Brent? else. probably is of on going looked guidance that our funded have the back seeing to the and that first it give we numbers you may we're or be quality quarter. our at excited I'm most the are today really some really going starting working guys looks start our you're thing affect the going effect. stuff things

Brent Bates

the that, model On And big portfolio, signs that's was have really starting we're for but in reduced balance XX that by down those down environment see for to Indirect contraction also to over as in think a their see to lately, our trends. intentionally contraction. that's to that for right signs substantially, that that contraction a both both categories. slowing sales here side, we've those. been portfolio the in approaching industry seen it's starting And that of we a slowed and last driven our X top months, both homebuilders Brett, contraction of And pricing of our homebuilder now. potentially bottom and indirect inventory we're part

positive 'XX that turn So us. be a for to for could

Brett Rabatin

margin, guys. last you with sneak in would one just it rate without pretty would Any the margin beneficial be the thoughts I seem If on rates could either around cuts? like lower here, one from or to

Curtis Griffith

on to Steve, one? lead you want off that

Steven Crockett

static up improve down. well, think, we've done been be NIM overall I projections, again, glad on margin, a We've to We're of the where just go start. based on on sheet ended as projected, where balance we I'll and Yes. rates to off able quarter. I'm

drastic asset liquid Now, we caveat that growth sensitive sensitive. improvement. to But is The are show wasn't of little asset deposits. a some and a bit liability in been improvement. fairly today, more neutral, paydowns do one the the just It's -- or given you loan we saw project

would of continue from NIM not could just pressure we meaningful that a to try liquidity to there little bit short-term that. overall a to position So be manage that on number. be But where

Cory Newsom

balances we know trying to we fund have challenge of We pipelines place and couple sitting want to like, we a thing for or month make does them. balance that better, in we we to to be it what able be we've pipeline When to that look know fund got you proud look like One really through may that ready trying next trying keep intentionally that we manage to. the of between to tell months, the And our to we're here face. sure can those looks better.

finish line. our as Now, the occasion, that. having But get that you've of and in than that to of to it's good. said really with Texas. one stuff the I And they're be quality got the real, more think good we're all on we're clients we've cognizant And are conversations to

Curtis Griffith

expect a Cory to, growth just really we that will quarter, don't you it, putting and do core core in can thing. alluded I'll negatively believe we loan earn I we out we're think And one we'll for, we'd available philosophy, of and there doing to fourth places, we'll paying. nevertheless, lot because more, loan Steve stockpile, more have we're try we're a earn out growing we're little while this, as up. in in places, do liquidity that bit we little our things, impact a we're to significant money call brokered paying overnight deposits noninterest this to are guess, Brett, see more, lot a loan indicated, we're instead or NIM it coming just other to fund rather some But bearing But than what continue that funds is and having to watch some but just with bit. fund short-term the as shows it's probably, readily putting continuing -- growth deposits that I a well.

be still enhancing income a we're little So by going bit to this. doing

Operator

is KBW. Lay from Woody from The question next

Wood Lay

dive pricing Wanted deeper a bit into deposit trends. little to

So the point betas we us the Could of got XX pre- line basis coming with and Are deposit end towards walk you the through just post-cut? you in what you cut the quarter. trends saw, the were expecting?

Curtis Griffith

Steve, what do you think?

Steven Crockett

Yes, Again, I may be we've up have a few fairly that public not happen arena, rate would days. got so. fund some a quickly. amount in say monthly, reset maybe but our immediately, just it so deposits, catches primarily full They may and

So overall, would October in have think that seen I in through we're today, anticipated. trending I direction the what we've

Cory Newsom

I keep Woody, didn't top them like to it's it mind, did. we to important think a though, the race in of lot

little but will beneficial And the be knew won't next us. point. one it maintain tried think back as be. -- beneficial, cut little so, will would to get, up think, the we I it's start be We down, this helped That's better a And our as to us. the cuts, it way the for as coming first NIM be we cuts I more bit would we it be

Curtis Griffith

paying some But up. our rates out in you going everybody's most badly funds, look see markets. if for they're some basis universe softening on still affect off across of There's are realizing there general cut I competition, apparently, recognize deposits. to that XX are get point some what that they it backed of CD seeing their people need the across and and still We of the is and think

harsh just it quite situation So was. as the not competitive as is

Wood Lay

the on that That's a that then saw prepayment at Did the all? was to payoffs. recognize you the larger in impact of quarter. did boost NIM? helpful. were There any a quick real payoffs fees you elevated And couple NII And

Brent Bates

fees larger on those. didn't we No, have any prepayment

Cory Newsom

at don't think I all.

Wood Lay

then And I to wanted on hit mortgage. lastly, just

think mortgage were it on I if Am quarters, right? the quarter. the So like about see MSR know but outlook looks mortgage impact down we're to past I fees from an for $XXX,XXX you hit X inflection weaker what's adjust thinking do think start about seasonal about over quarters, And that, the I the of I from couple to could a here? we here?

Cory Newsom

right. for We're not stride mortgage. our You're into exactly headed

You're the the holidays stuff slower. coming, and looking with in fourth it quarter, all be will

this we some -- year the having for rates set ability bump. it's closed would at at still factor budget make the big movement and still of a be managing be of lenders see last We just closing the more infrastructure actually I tried the being and careful exactly But when that do do so out said, letting place be believe knew activity people to got we to But little Now, Xst for our see burden to in our the we our expense to a better what's we're budgeted us. We happening. for is a anticipate to stay still good. a of year, year. too without to just mortgage keep bit really it much who it off are than of to year, trying that the for going more to the Xst we've of that we've they side. more of the that coming for loans we're on probably Well, at waiting to going

Curtis Griffith

up, but doing doing they're it the the of It's some rates as the getting we think curve about something. seen end in some business. long do the that interest lot. in still, But course, XX-year of then more move back we're still we're And move a Xs, doing are everybody had business. that team people excitement now I sees talk briefly And they quite threw there, we've who and we've Xs, got and up, and cold lot this out it water on just when are a tough,

Cory Newsom

before we there's much. for some some well cut. the the stuff rates But cheapest And into most do That day on the us opportunities mortgages as we've of that recently stuff as leads were the seen works of construction long-term. there the for some mortgages

do expenses manage on where So We're for thought little it that to we've through now track been coming the fact we're out while. I is what right a coming able that But this back we up. be is so mortgage. would with our it like still we

Operator

The from Joe Raymond from James. is Instructions] next [Operator question Yanchunis

Joseph Yanchunis

to to will I can about Guess, wave circle in next believe you from yields know start year. talked here? So do of I quarter a through you loans back higher you of to quick. robust expect first loans which real pipeline with loan the March come that coming, continue wanted to

Brent Bates

good our getting loans. pricing We're on do. I

We good have rates. that construction. good and segments does benefit with the portfolio But little C&I, Fed bit reprice, between mix of continually we've that. what and a we depends lot CRE, got a of a opportunities, It on from our

Cory Newsom

repricing our from I to yield important some We we'll come I even 'XX. but exactly keep in in lot Brent's on right. books to to though, in think the some of see today, going of of that's cheaper think we're a some in that going have think the stuff on 'XX, loans. improvement the see it's mind, our more we of of and it But

Steven Crockett

year. this far It'll they during on cut. sure. Yes, We depend how benefited for

on loan And stuff back that's that benefits lows. were in was off on, improved stuff amortized overall of when at paid lot yield XXXX rates the portfolio, One a of that the the side. down, all-time the got in their that put indirect as is and

here. those you got again, So, competing factors

'XX, we the loans on books do 'XX, side. we down, 'XX, reprice those right of today. keep spread we're will to we're the yield through commercial we've reprices be the us and into loan got variable stuff to now, at when put where loans on as some the in have Those I'm hopeful going up. beneficial that New neighborhood somewhere out that But can again that

Cory Newsom

on. we stuff one little you give conversations manner, in on lots But behind like very And all credit I'll the very being them we're lenders of to that just We've because been with market a rate. make exist, with with we're curtain. struggling to sure the we putting the -- while our that's thing not we're what careful it, peek is and a reacting Joe, quality. not it's in pressures think out the competitive pretty our we're good really had figure trying not

So improvement. we'll I that some do think see

Joseph Yanchunis

Appreciate you near-term subsequent your CD your about that. coming rates discuss to down. then those have and opportunity Can the trying to expected maturity CD rate the CD to on schedule? answer. or a very down rates cut the rates your That you sense a talked And then in trended reprice get was thorough how just Just markets.

Curtis Griffith

deposits in data, I'll on is a our below anyway. in Steve give guess, But Well, peer way this I percentage little keep of CDs. more in CDs jump you the mind, let our relevant on to

with don't that opportunities yes, for are some. there. out XX-month in CDs have rates cutting we have CDs. X-month, us lot on a just been what putting of So We longer-term do Most have have people of demand been

do We what speaking, some we relatively XX will out you came Steve, months, So there? what the see are. past down that on be repricing in

Steven Crockett

probably and going of most majority The of or year them they're or in are X-month all the less, period. Yes. our less be to are definitely one CDs --

beginning and down. begun So reprice even to to ones in done have we some those the had of earlier year the are reprice,

the rates points. So to drop anywhere XX that to XX just CD a in right after we basis the did from cut timeframe, year X-month Fed

Cory Newsom

weren't we But already high-rate stretch. weren't by market any remember, because above we cutting CDs

Joseph Yanchunis

little for the and to looks you Then you in quarter. you on last bond book. the from here? bond where adding, were What one bit expect trend me, book do It like the added a

Steven Crockett

just increase the fair value not the On increase we actually of the anything. been bond securities. book, add have in the The did should

So we not added any a have while. in little really securities

love would salespeople doing the think there but us anything don't our to quarter. I of during for that, was be All

Curtis Griffith

use for said pros, a how we a cons have will a on bond there to But right comes now, that I'm big position. we would knows election the coming, reposition in a our fairly of we've piece to chunks that. are are with us, right do nobody fairly now, our downward fast We've to I book. municipals forecast too. happen book. the that that their before, out place, to the And it, taking of not chosen are this hedged. as We've show that realize and whole opportunity And bond we're And on us an down. think people analysis got other thing various the the good we've had just think got run I And believe safe time significant depending come we trajectory But to out. what don't even it's we we've way capital now. restructure go who on not do election going knows? in

much, not super literally unless of sit right that liquidity now just going we'll we've short really excess about. things with buyers got. some for to talking here So it's super, been of We're be we've what

Joseph Yanchunis

have question I it. more actually [indiscernible] appreciate one here. I

should As expenses, year? you items normalized we think there are be we be that into large noninterest much will XXXX, it we or about move do thinking pretty a as think about any

Steven Crockett

I over year. -- plus just is personnel seeing inflation. definitely to it's more upgrade. the always be We'll side, a last IT there cost year pressure with gone and I would on available on hope the there's think, always things normalized out what's

And any so, of I'm not significant we'll try aware to of keep item. that that, under Outside control.

Cory Newsom

either. not I'm Yes,

think going I pretty job to be a flat stuff, mean but -- off. doesn't we have think be team manage that it's going still out. And rolling our does much pretty won't that's stuff pretty good of That it'll forward. that other trying be doing stuff I we'll to

Curtis Griffith

economy and And normalization relatively there I'm growth a good picking generally, that We've chunk increments, quality the that in noncore lot migration past put to and cloud to loans and forward gameplan little at we're it on looking operationally we a whole is work, make had huge need to to. was large here We get This some quite little year and in a deposits for we little with looking 'XX, loan not loan and some think a we spread the up manageable put in us a is more. forecast more do actually do use But what up that opportunities. in in we're generally, that products. not the doing of but side them a but got and while, we with some core money in. that the than what technology because we do That's were if and landing do 'XX a soft things for planned chunks. out have

Operator

I'd to Griffith session. back This concludes comments. like Curtis for the turn any the to closing question-and-answer floor

Curtis Griffith

to Thanks, joined everybody on us that operator. And thanks the call afternoon. this

results share long-term to quarter the seen be and many rural #X bank's and we're that strong reiterate, Just those Texas We New do build third our Mexico. our of well. in very think a position #X, demonstrate customers, to holding focus can we continue where across deposit relationships, on our the performing in markets

mentioned set growth of we've seeing very time, liquidity as those pipeline overall, Additionally, both stabilize. several years. The level think times, deposit seen in in we're the from into, the decline are we importantly, customers strongest auto think. reducing for haven't going to loan more headwinds from to business experiencing coming that than we've year been that are been translating ahead, that And new our customers we providing a drive builder indirect our and in had in have strong managed the we X our growth inventories, optimism portfolio we've some we

about thank dedication do customers. for optimistic future. our Especially, to employees pretty bank I'm to together, want our I the the to their and Taken

would time not today. your be without possible for Thanks success Our them. again

Operator

teleconference. today's concludes This

disconnect Thank for this You again you may lines your your participation. time. at

South Plains Financial (SPFI) 23 Oct 242024 Q3 Earnings call transcript