SOUTH PLAINS FINANCIAL, INC.
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
SPFI$42.45-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001140361-25-017542
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001140361-25-028837
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 162 current paragraphs.
98 unchanged; 48 reworded; 13 added; 5 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 63 previous and 66 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Net interest income for the six months ended June 30, 2025 was $81.0 million, compared to $71.3 million for the six months ended June 30, 2024, an increase of $9.8 million, or 13.7%, and was comprised of an increase of $6.1 million in interest income and a decrease of $3.7 million in interest expense. The growth in interest income was attributable to increases of $5.0 million in loan interest income and $2.6 million in interest income on other interest-earning assets, partially offset by a decrease of $1.4 million in interest income on securities. The increase in loan interest income resulted from growth of $36.0 million in average loans outstanding and an increase of 27 basis points in the yield on loans, which included the $1.7 million loan interest recovery noted above. The increase in interest income on other interest-earning assets was primarily due to an increase of $134.7 million in average other interest-bearing assets, partially offset by a decline of 50 basis points in theinterest rate paid on those assets. The decrease in interest income on securities was primarily due to a decline in the interest recorded on fair value hedges on municipal securities as the indexed market rate declined during the last half of 2024. The $3.7 million decrease in interest expense was primarily related to a 37 basis point decrease in the rate paid on interest-bearing deposits over the same period in 2024, partially offset by an increase of $117.3 million in average interest-bearing deposits.
Current report
For the six months ended June 30, 2025, net interest margin and net interest spread were 3.94% and 2.99%, respectively, compared to 3.60% and 2.52%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above. The loan interest recovery noted above positively affected net interest margin and net interest spreadby 8 basis points.
Current report
The Company recorded a provision for credit losses of $2.5 million for the three months ended June 30, 2025, compared to $1.8 million for the three months ended June 30, 2024. The increase in provision of $700 thousand was largely attributable to an increase in specific reserves during the three months ended June 30, 2025.
Current report
The Company recorded a provision for credit losses for the six months ended June 30, 2025 of $2.9 million, compared to $2.6 million for the six months ended June 30, 2024. The increase in provision of $300 thousand was largely attributable to an increase in specific reserves, partially offset by a decrease in net charge-offs for the six months ended June 30, 2025, compared to the same period in 2024.
Current report
Noninterest income for the six months ended June 30, 2025 was $22.8 million, compared to $24.1 million for the six months ended June 30, 2024, a decrease of $1.3 million, or 5.5%. Significant changes in the components of noninterest income are detailed below.
Current report
Mortgage banking activities - Income from mortgage banking activities decreased $1.6 million, or 22.1%, to $5.7 million for the six months ended June 30, 2025 from $7.3 million for the six months ended June 30, 2024. This decrease was mainly the result of a decline of $1.1 million in the fair value adjustment of the mortgage servicing rights assets as interest rates that affect thefair value rose during the first half of 2024 compared to interest rates falling in the first half of 2025. Additionally, mortgage loan originations declined $14.4 million, or 9.5%, in the current year period as compared to the prior year period.
Current report
Other income and fees - Other income and fees decreased $153 thousand, or 4.3%, for the six months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of a decrease of $463 thousand in income from SBIC investments, partially offset by increases in income from sweep accounts and gains on sales of fixed assets.
Current report
Other expenses -Other expenses increased $159 thousand, or 4.1%, from $3.9 million for the three months ended June 30, 2024 to $4.1 million for the three months ended June 30, 2025. This was primarily the result of an increase of $110 thousand in the ineffective portion of fair value hedges.
Current report
Noninterest expense for the six months ended June 30, 2025 was $66.6 million, compared to $64.5 million for the six months ended June 30, 2024, an increase of $2.1 million, or 3.2%. Significant changes in the components of noninterest expense are detailed below.
Current report
Professional services - Professional services increased $383 thousand, or 11.9% from $3.2 million for the six months ended June 30, 2024 to $3.6 million for the six months ended June 30, 2025. This increase was primarily driven by consulting services related to the Company’s lending platform duringthe first two quarters of 2025.
Current report
IT and data services -IT and data services increased $269 thousand, or 13.0%, from $2.1 million for six months ended June 30, 2024 to $2.3 million for the six months ended June 30, 2025. The increase is primarily a result of the continued rising cost of technology services.
Current report
Specific reserves for individually evaluated loans totaled $1.1 million at June 30, 2025 as compared to $552 thousand at December 31, 2024. There were several credit quality downgrades during the second quarter of 2025 which necessitated the additional reserves.
Current report
Classified loans include loans graded as substandard or doubtful. At June 30, 2025, classified loans totaled $66.9 million, an increase of $17.8 million from the total of $49.1 million at December 31, 2024. This was primarily the result of the downgrade of a $32 million multi-family property loan, partially offset by the payoff ofa $19 million multi-family property loan during the second quarter of 2025.
Removed paragraphs (5)
Previous report
Recent Developments
Previous report
New Stock Repurchase Program
Previous report
As previously announced, on February 21, 2025, SPFI’s board of directors (the “Board”) approved a new stock repurchase program for up to $15.0 million of the outstanding shares of the Company’s common stock (the “Stock Repurchase Program”). The Stock Repurchase Program began when announced and has an expiration date of February 21, 2026, subject to earlier termination or extension of the Stock Repurchase Program by the Board or the $15.0 million designated for the Stock Repurchase Program are depleted.
Previous report
The $2.0 million decrease in interest expense for the three months ended March 31, 2025 was primarily related to a 35 basis point decrease in the rate paid on interest-bearing liabilities over the same period in 2024. This decrease in rate was primarily a result of lower short-term interest rates paid on deposits, which decreased by 34 basis points compared to the prior year period.
Previous report
The provision for credit losses for the three months ended March 31, 2025 was $420 thousand, compared to $830 thousand for the three months ended March 31, 2024. During the first quarter of 2025, the provision for credit losses for loans was $250 thousand and the provision for credit losses on off-balance sheet credit exposures was $170 thousand. The provision for credit losses on loans was predominantly the result of $519 thousand in net charge-offs during the first quarter of 2025 and loan growth during the quarter, partially offset by improved credit quality. The ACL as a percentage of loans held for investment was 1.40% at March 31, 2025 and 1.42% at December 31, 2024.
Reworded paragraphs (48)
Previous wording
The following discussion and analysis of our financial condition and results of operations for the periods covered by this Quarterly Report on Form 10-Q (this “Form 10-Q”) and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”), on March 7, 2025. Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to “we,” “our,” “us” and “the Company” refer to South Plains Financial, Inc., a Texas corporation, our wholly-owned banking subsidiary, City Bank, a Texas banking association and our other consolidated subsidiaries. References in this Form 10-Q to the “Bank” refer to City Bank.
Current wording
The following discussion and analysis of our financial condition and results of operations for the periods covered by this Quarterly Report on Form 10-Q (this “Form 10-Q”) and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”), on March 7, 2025. Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to “we,” “our,” “us” and “the Company” refer to South Plains Financial, Inc., a Texas corporation, our wholly-owned banking subsidiary, City Bank, a Texas banking association, and our other consolidated subsidiaries. References in this Form 10-Q to the “Bank” refer to City Bank.
Previous wording
We had net income of $12.3 million, or $0.72 per diluted common share, for the three months ended March 31, 2025, compared to net income of $10.9 million, or $0.64 per diluted common share, for the three months ended March 31, 2024. Return on average equity (annualized) was 11.30% and return on average assets (annualized) was 1.16% for the three months ended March 31, 2025, compared to 10.72% and 1.04%, respectively, for the three months ended March 31, 2024. The increase in net income of $1.4 million was primarily the result of an increase of $3.2 million in net interest income, partially offset by a decrease in noninterest income of $0.8 million and an increase of $1.1 million in noninterest expense.
Current wording
We had net income of $14.6 million, or $0.86 per diluted common share, for the three months ended June 30, 2025, compared to net income of $11.1 million, or $0.66 per diluted common share for the three months ended June 30, 2024. Return on average equity (annualized) was 13.05% and return on average assets (annualized) was 1.34% for the three months ended June 30, 2025, compared to 10.83% and 1.07%, respectively, for the three months ended June 30, 2024.
Previous wording
The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. For purposes of this table, interest income, net interest margin and net interest spread are shown on a fully tax-equivalent basis.
Current wording
The following tables present, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin. For purposes of this table, interest income, net interest margin and net interest spread are shown on a fully tax-equivalent basis.
Previous wording
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volume and rate have been allocated to volume.
Current wording
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following tables set forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volume and rate have been allocated to volume.
Previous wording
Net interest income for the three months ended March 31, 2025 was $38.5 million, compared to $35.4 million for the three months ended March 31, 2024, an increase of $3.2 million, or 8.9%. The increase in net interest income was comprised of an increase of $1.2 million, or 2.0%, in interest income and a decrease of $2.0 million, or 8.4%, in interest expense. The growth in interest income was attributable to an increase of $1.6 million in loan interest income, partially offset by a decrease of $829 thousand in interest income from securities. The increase in loan interest income was mainly due to growth of $60.0 million in average loans outstanding and a 14 basis point increase in the yield on loans. The decrease in interest income on securities was primarily due to a decrease of $46.8 million in average securities outstanding and a 23 basis point decline in the yield on securities.
Current wording
Net interest income for the three months ended June 30, 2025 was $42.5 million, compared to $35.9 million for the three months ended June 30, 2024, an increase of $6.6 million, or 18.4%, and was comprised of an increase of $4.9 million in interest income and a decrease of $1.7 million in interest expense. The growth in interest income was primarily attributable to an increase of $3.3 million in loan interest income, which was a result of growth of $12.0 million in average loans outstanding and an increase of 39 basis points in the yield on loans. The $3.3 million increase in loan interest income included a recovery of $1.7 million in interest during the second quarter of 2025, related to a full repayment of a loan that had previously been on nonaccrual. This recovery positively impacted the net interest margin by 17 basis points and the loan yield by 23 basis points during the second quarter of 2025. The $1.7 million decrease in interest expense was primarily related to a 42 basis point decrease in theinterest rate paid on interest-bearing deposits over the same period in 2024, partially offset by an increase of $151.3 million in average interest-bearing deposits. Additionally, average noninterest-bearing demand deposits increased $30.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.
Previous wording
For the three months ended March 31, 2025, net interest margin and net interest spread were 3.81% and 2.87%, respectively, compared to 3.56% and 2.50%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above.
Current wording
For the three months ended June 30, 2025, net interest margin and net interest spread were 4.07% and 3.11%, respectively, compared to 3.63% and 2.54%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above. The loan interest recovery noted above positively affected net interest margin and net interest spreadby 17 basis points.
Previous wording
While interest income remains the largest single component of total revenues, noninterest income is an important contributing component. The largest portion of our noninterest income is associated with our mortgage banking activities. Other sources of noninterest income include service charges on deposit accounts, bank card services and interchange fees.
Current wording
While interest income remains the largest single component of total revenues, noninterest income is an important contributing component. The largest portion of our noninterest income is associated with our mortgage banking activities. Other sources of noninterest income include service charges on deposit accounts, and bank card services and interchange fees.
Previous wording
Noninterest income for the three months ended March 31, 2025 was $10.6 million, compared to $11.4 million for the three months ended March 31, 2024, a decrease of $0.8 million, or 6.9%. Significant changes in the components of noninterest income are detailed below.
Current wording
Noninterest income for the three months ended June 30, 2025 was $12.2 million, compared to $12.7 million for the three months ended June 30, 2024, a decrease of$544 thousand, or 4.3%. Significant changes in the components of noninterest income are detailed below.
Previous wording
Service charges on deposit accounts - Income from service charges on deposit accounts increased $328 thousand, or 18.1%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily the result of treasury management initiatives taken to drive growth throughout 2024.
Current wording
Service charges on deposit accounts - Income from service charges on deposit accounts increased $149 thousand, or 7.6%, for the three months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily the result of treasury management initiatives taken to drive growth throughout 2024.
Previous wording
Bank card services and interchange fees - Income from bank card services and interchange fees increased $318 thousand, or 10.4%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily the result of $315 thousand of incentives and rebates, typically recorded in second quarter each year, but earned earlier in 2025.
Current wording
Bank card services and interchange fees - Income from bank card services and interchange fees decreased $281 thousand, or 6.9%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of $315 thousand of incentives and rebates, which were recorded in second quarter of 2024, compared to being recorded in the first quarter in 2025.
Previous wording
Mortgage banking activities - Income from mortgage banking activities decreased $1.8 million, or 46.4%, to $2.1 million for the three months ended March 31, 2025 from $3.9 million for the three months ended March 31, 2024. This decrease was primarily due to a $1.6 million negative fair value adjustment to our mortgage servicing rights portfolio in the first quarter of 2025 compared to a positive fair value adjustment of $55 thousand in the first quarter of 2024. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which declined during the first quarter of 2025 as compared to increasing during the first quarter of 2024.
Current wording
Mortgage banking activities - Income from mortgage banking activities increased $209 thousand, or 6.2%, to $3.6 million for the three months ended June 30, 2025 from $3.4 million for the three months ended June 30, 2024. This increase was mainly the result of a $156 thousand negative fair value adjustment to our mortgage servicing rights portfolio in the second quarter of 2025 compared to a negative fair value adjustment of $680 thousand in the second quarter of 2024. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which declined less during the second quarter of 2025 as compared to the same period of 2024. This increase was partially offset by a decrease in net gain on sales of loans of $133 thousand and a decline of $10.0 million in originations of loans held for sale in the second quarter of 2025 as compared to the same period of 2024.
Previous wording
Other income and fees - Other income and fees increased $418 thousand, or 29.8%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily the result of an increase of $246 thousand in income from sweep accounts.
Current wording
Other income and fees - Other income and fees decreased $571 thousand, or 26.7%, for the three months ended June 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of a decrease of $523 thousand in income from SBIC investments.
Previous wording
Noninterest expense for the three months ended March 31, 2025 was $33.0 million compared to $31.9 million for the three months ended March 31, 2024, an increase of $1.1 million, or 3.4%. Significant changes in the components of noninterest expense are detailed below.
Current wording
Noninterest expense for the three months ended June 30, 2025 was $33.5 million compared to $32.6 million for the three months ended June 30, 2024, an increase of $1.0 million, or 3.0%. Significant changes in the components of noninterest expense are detailed below.
Previous wording
Salaries and employee benefits - Salaries and employee benefits increased $453 thousand, or 2.4%, from $19.0 million for the three months ended March 31, 2024 to $19.4 million for the three months ended March 31, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.
Current wording
Salaries and employee benefits - Salaries and employee benefits increased $509 thousand, or 2.7%, from $19.2 million for the three months ended June 30, 2024 to $19.7 million for the three months ended June 30, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.
Previous wording
Professional services - Professional services increased $247 thousand, or 16.7% from $1.5 million for the three months ended March 31, 2024 to $1.7 million for the three months ended March 31, 2025. This increase was primarily driven by consulting services related to the Company's lending platform during first quarter of 2025.
Current wording
Professional services - Professional services increased $136 thousand, or 7.8% from $1.7 million for the three months ended June 30, 2024 to $1.9 million for the three months ended June 30, 2025. This increase was primarily driven by consulting services related to the Company’s lending platform during the second quarter of 2025.
Previous wording
Our total assets increased $173.0 million, or 4.1%, to $4.41 billion at March 31, 2025, compared to $4.23 billion at December 31, 2024. Our loans held for investment increased $20.8 million, or 0.7%, to $3.08 billion at March 31, 2025, compared to $3.06 billion at December 31, 2024. Our securities portfolio decreased $5.7 million, or 1.0%, to $571.5 million at March 31, 2025, compared to $577.2 million at December 31, 2024. Total deposits increased $171.6 million, or 4.7%, to $3.79 billion at March 31, 2025, compared to $3.62 billion at December 31, 2024.
Current wording
Our total assets increased $131.4 million, or 3.1%, to $4.36 billion at June 30, 2025, compared to $4.23 billion at December 31, 2024. Our gross loans held for investment increased $43.9 million, or 1.4%, to $3.10 billion at June 30, 2025, compared to $3.06 billion at December 31, 2024. Our securities portfolio decreased $7.2 million, or 1.3%, to $570.0 million at June 30, 2025, compared to $577.2 million at December 31, 2024. Total deposits increased $118.1 million, or 3.3%, to $3.74 billion at June 30, 2025, compared to $3.62 billion at December 31, 2024.
Previous wording
Loans held for investment increased $20.8 million, or 0.7%, to $3.08 billion at March 31, 2025, compared to $3.06 billion at December 31, 2024. The organic loan growth remained relationship focused and occurred primarily in residential and commercial land development loans, other commercial real estate loans, restaurant and retail loans, energy loans, and consumer auto loans, offset by decreases in seasonal agricultural-related loans and hospitality loans.
Current wording
Loans held for investment increased $43.9 million, or 1.4%, to $3.10 billion at June 30, 2025, compared to $3.06 billion at December 31, 2024. The growth in loans remained relationship-focused and occurred broadly across the portfolio, partially offset by decrease in multi-family property loans and hospitality loans.
Previous wording
At March 31, 2025, there was $1.6 billion in adjustable rate loans, with $895.3 million of these loans that mature or reprice in the next twelve months. Of these loans that mature or reprice in the next twelve months, $581.1 million will reprice immediately upon changes in the underlying index rate, with the remaining $314.2 million being subject to rate ceilings, floors above the current index, or a future repricing date. The Wall Street Journal prime rate is the predominate index used by the Bank.
Current wording
At June 30, 2025, there was $1.58 billion in adjustable rate loans, with $897.9 million of these loans that mature or reprice in the next twelve months. Of these loans that mature or reprice in the next twelve months, $573.0 million will reprice immediately upon changes in the underlying index rate, with the remaining $324.9 million being subject to rate floors above the current index or a future repricing date. The Wall Street Journal prime rate is the predominate index used by the Bank. Further as of June 30, 2025, there is $207.3 million of fixed rate loans that mature in the next twelve months.
Previous wording
The Bank is primarily involved in real estate, commercial, agricultural and consumer lending activities with customers throughout Texas and Eastern New Mexico. We have a collateral concentration, as 73.7% of our loans were secured by real property as of March 31, 2025, compared to 73.7% as of December 31, 2024. We believe that these loans are not concentrated in any one single property type and that they are geographically dispersed throughout the areas we serve. Although the Bank has diversified portfolios, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the markets in which it operates, which consist primarily of agribusiness, wholesale/retail, oil and gas and related businesses, healthcare industries and institutions of higher education. Commercial real estate loans and residential construction loans represent 40.0% of loans held for investment as of March 31, 2025 and represented 40.1% as of December 31, 2024. Further, 97% of the total dollar amount of these loans are secured by collateral located in the state of Texas.
Current wording
The Bank is primarily involved in real estate, commercial, agricultural and consumer lending activities with customers throughout Texas and Eastern New Mexico. We have a collateral concentration, as 73.5% of our loans were secured by real property as of June 30, 2025, compared to 73.7% as of December 31, 2024. We believe that these loans are not concentrated in any one single property type and that they are geographically dispersed throughout the areas we serve. Although the Bank has diversified portfolios, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the markets in which it operates, which consist primarily of agribusiness, wholesale/retail, oil and gas and related businesses, healthcare industries and institutions of higher education. Commercial real estate loans and residential construction loans represent 38.3% of loans held for investment as of June 30, 2025 and represented 40.1% of loans held for investment as of December 31, 2024. Further, 96% of the total dollar amount of these loans are secured by collateral located in the state of Texas.
Previous wording
Commercial Real Estate. Our commercial real estate portfolio includes loans for commercial property that is owned by real estate investors, construction loans to build owner-occupied properties, and loans to developers of commercial real estate investment properties and residential developments. Commercial real estate loans are subject to underwriting standards and processes similar to our commercial loans. These loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing our real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.
Current wording
Commercial Real Estate. Our commercial real estate portfolio includes loans for commercial property that is owned by real estate investors, construction loans to build owner-occupied properties, and loans to developers of commercial real estate investment properties and residential developments. Residential construction loans are broken out separately below. Commercial real estate loans are subject to underwriting standards and processes similar to our commercial loans. These loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the property securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing our real estate portfolio are diversified by type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.
Previous wording
Commercial real estate loans increased $7.7 million, or 0.7%, to $1.13 billion as of March 31, 2025 from $1.12 billion as of December 31, 2024. The increase was primarily driven by increases in residential and commercial land development loans and other commercial loans, partially offset by decreases in hospitality loans and multi-family loans.
Current wording
Commercial real estate loans decreased $33.8 million, or 3.0%, to $1.09 billion as of June 30, 2025 from $1.12 billion as of December 31, 2024. The decrease was primarily driven by decreases of $58.9 million in multi-family loans and $22.6 million in hospitality loans, partially offset by increases in residential and commercial land development loans and other commercial loans.
Previous wording
Commercial specialized loans decreased $22.2 million, or 5.7%, to $366.8 million as of March 31, 2025 from $389.0 million as of December 31, 2024. This decrease was primarily due to net repayments of $23.8 million in seasonal agricultural-related loans.
Current wording
Commercial specialized loans decreased $9.9 million, or 2.5%, to $379.1 million as of June 30, 2025 from $389.0 million as of December 31, 2024. This decrease was primarily due to net repayments of $18.7 million in seasonal agricultural-related loans, partially offset by an increase in energy sector loans. Operating agriculture loans were slower to fund up in the second quarterof 2025 as compared to the second quarter of 2024.
Previous wording
Commercial general loans increased $27.3 million, or 4.9%, to $584.7 million as of March 31, 2025 from $557.4 million as of December 31, 2024. The increase was primarily due to increases in loans to companies in the restaurant and retail industry, loans for goods and services, and construction and other commercial loans.
Current wording
Commercial general loans increased $63.6 million, or 11.4%, to $620.9 million as of June 30, 2025 from $557.4 million as of December 31, 2024. The increase was primarily due to increases broadly across this segment.
Previous wording
Consumer and other loans increased $9.7 million, or 1.1%, to $895.5 million as of March 31, 2025 from $885.8 million as of December 31, 2024. The increase in these loans was primarily a result of a $7.2 million increase in auto loans. As of March 31, 2025, our consumer loan portfolio was comprised of $569.8 million in 1-4 family residential loans, $261.6 million in auto loans, and $64.1 million in other consumer loans.
Current wording
Consumer and other loans increased $25.9 million, or 2.9%, to $911.7 million as of June 30, 2025, from $885.8 million as of December 31, 2024. The growth in these loans was a result of increases of $3.7 million in consumer auto loans and $23.5 million in residential mortgage loans, partially offset by a decrease of $1.3 million in other consumer loans. As of June 30, 2025, our consumer loan portfolio was comprised of $589.9 million in 1-4 family residential loans, $258.2 million in auto loans, and $63.6 million in other consumer loans. The consumer auto loan portfolio experienced growth in the first quarter of 2025 before beginning to decline in the second quarter of 2025 as new loan originations have slowed due to economic pressures and uncertainties.
Previous wording
Construction loans decreased $1.8 million, or 1.7%, to $102.0 million as of March 31, 2025 from $103.9 million as of December 31, 2024.
Current wording
Construction loans decreased $1.9 million, or 1.8%, to $102.0 million as of June 30, 2025 from $103.9 million as of December 31, 2024.
Previous wording
The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.23 billion at March 31, 2025 and $1.22 billion at December 31, 2024. Nonowner-occupied commercial real estate loans are made up of income-producing commercial real estate property loans and construction, acquisition, and development property loans. As of March 31, 2025, total income-producing commercial real estate property loans totaled $878.0 million and was comprised of $309.6 million of multi-family property loans, $183.8 million of retail property loans, $141.2 million of office property loans, $39.2 million in hospitality loans, and $204.2 million in other property loans. Other property loans include types such as industrial, warehouse, mini-storage, and convenience stores. As of March 31, 2025, total construction, acquisition, and development property loans totaled $350.9 million and was comprised of $102.0 million in residential construction property loans and $248.8 million of commercial construction and other land development loans. The weighted average loan-to-value of income-producing nonowner-occupied commercial real estate loans was approximately 55% at March 31, 2025. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 58% at March 31, 2025.
Current wording
The commercial real estate and construction categories comprise the Company’s nonowner-occupied real estate loans. Total nonowner-occupied real estate loans were $1.19 billion at June 30, 2025 and $1.22 billion at December 31, 2024. Nonowner-occupied commercial real estate loans are made up of income-producing commercial real estate property loans and construction, acquisition, and development property loans. As of June 30, 2025, total income-producing commercial real estate property loans totaled $830.9 million and was comprised of $257.0 million of multi-family property loans, $182.6 million of retail property loans, $138.4 million of office property loans, $38.4 million in hospitality loans, and $214.4 million in other property loans. Other property loans include types such as industrial, warehouse, mini-storage, and convenience stores. As of June 30, 2025, total construction, acquisition, and development property loans totaled $356.4 million and was comprised of $101.9 million in residential construction property loans and $254.5 million of commercial construction and other land development loans. The weighted average loan-to-value of income-producing nonowner-occupied commercial real estate loans was approximately 55% at June 30, 2025. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 58% at June 30, 2025.
Previous wording
Owner occupied commercial real estate loans totaled $380.4 million at March 31, 2025 and $366.8 million at December 31, 2024.
Current wording
Owner-occupied commercial real estate loans totaled $413.3 million at June 30, 2025 and $366.8 million at December 31, 2024.
Previous wording
The ACL for loans was $43.0 million at March 31, 2025, compared to $43.2 million at December 31, 2024, a decrease of $269 thousand, or 0.6%. The decrease is the result of $519 thousand in net charge-offs during the first quarter of 2025, partially offset by a $250 thousand provision for credit losses on loans recorded in March 2025. The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the uncertain impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts, the prolonged elevated interest rate environment and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.
Current wording
The ACL for loans was $45.0 million at June 30, 2025, compared to $43.2 million at December 31, 2024, an increase of $1.8 million, or 4.1%. The increase is primarily a result of a provision for credit losses on loans of $2.8 million being recorded during the six months ended June 30, 2025 largely attributable to growth of $43.9 million in loans held for investment and an increase in specific reserves, partially offset by net charge-offs of $1.0 million during the period. The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, stronger than expected employment data in recent periods, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.
Previous wording
Net charge-offs totaled $519 thousand and were 0.07% (annualized) of average loans outstanding for the three months ended March 31, 2025, compared to $947 thousand and 0.13% (annualized) for the three months ended March 31, 2024. The decrease in net charge-offs in the first quarter of 2025 was primarily the result of a decrease of $288 thousand in general commercial net charge-offs in the first quarter of 2025 compared to the same period in 2024. The ACL for loans as a percentage of loans held for investment was 1.40% at March 31, 2025 and 1.42% at December 31, 2024.
Current wording
Net charge-offs totaled $458 thousand and were 0.06% (annualized) of average loans outstanding for the three months ended June 30, 2025, compared to $776 thousand and 0.10% (annualized) for the three months ended June 30, 2024. The decrease in net charge-offs in the second quarter of 2025 was primarily the result of a decrease of $297 thousand in general commercial net charge-offs in the second quarter of 2025 compared to the same period in 2024, mainly from several larger recoveries. Net charge-offs totaled $1.0 million and were 0.06% (annualized) of average loans outstanding for the six months ended June 30, 2025, compared to $1.7 million and 0.11% (annualized) for the six months ended June 30, 2024. The decrease in net charge-offs for the six months ended June 30, 2025 was primarily the result of a decrease of $362 thousand in charge-offs and an increase of $223 thousand in recoveries of general commercial loans in the first two quarters of 2025 compared to the same period in 2024. The allowance for credit losses on loans as a percentage of loans held for investment was 1.45% at June 30, 2025 and 1.42% at December 31, 2024.
Previous wording
At March 31, 2025, our total nonaccrual loans were $1.9 million, or 0.06% of total loans held for investment, as compared to $22.1 million, or 0.72% of total loans held for investment, at December 31, 2024. These loans within this amount that exceeded $250 thousand were specifically analyzed and specific valuation allowances were established as necessary and included in the ACL for loans as of March 31, 2025 to cover any probable loss.
Current wording
At June 30, 2025, our total nonaccrual loans were $7.8 million, or 0.25% of total loans held for investment, as compared to $22.1 million, or 0.72% of total loans held for investment, at December 31, 2024. These loans within this amount that exceeded $250 thousand were specifically analyzed and specific valuation allowances were established as necessary and included in the ACL for loans as of June 30, 2025 to cover any probable loss.
Previous wording
Nonperforming loans were $6.5 million at March 31, 2025 and $24.0 million at December 31, 2024. This decrease of $17.5 million is predominantly due to a $19.0 million credit that was placed back on accrual status at the end of the first quarter of 2025, based on sustained payment performance and improved credit structure. This credit was repaid in full subsequent to March 31, 2025.
Current wording
Nonperforming loans were $10.5 million at June 30, 2025 and $24.0 million at December 31, 2024. This decrease of $13.5 million is predominantly due to a $19.0 million credit that was repaid in full during the second quarter of 2025. This decrease was partially offset with two credits totaling $5.5 million being placed on nonaccrual status during the second quarter of 2025.
Previous wording
Total securities at March 31, 2025 were $571.5 million, representing a decrease of $5.7 million, or 1.0%, compared to $577.2 million at December 31, 2024. The decrease was primarily due to $10.6 million in maturities, prepayments and calls, partially offset by a $5.6 million increase in the unrealized gain/loss at March 31, 2025 as compared to December 31, 2024.
Current wording
Our securities portfolio decreased $7.2 million, or 1.3%, to $570.0 million at June 30, 2025, compared to $577.2 million at December 31, 2024. The decrease was primarily due to $10.2 million in maturities, prepayments and calls, net of purchases, partially offset by a $4.3 million increase in the fair value ofsecurities available for sale at June 30, 2025 as compared to December 31, 2024.
Previous wording
Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At March 31, 2025, the fair value of the Company’s available for sale securities was $86.1 million lower than the amortized cost. At March 31, 2025, the Company evaluated whether the decline in fair value has resulted from credit losses or other factors. Within this evaluation, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agency, and adverse conditions specifically related to the security, among other factors. Based on management’s evaluation no unrealized losses on securities were determined to be due to credit loss. Additionally, we anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not probable that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity, thus no ACL or losses have been recognized or realized in the consolidated financial statements for securities in the portfolio.
Current wording
Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At June 30, 2025, the fair value of the Company’ssecurities available for sale was $87.5 million lower than the amortized cost. At June 30, 2025, the Company evaluated whether the decline in fair value has resulted from credit losses or other factors. Within this evaluation, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agency, and adverse conditions specifically related to the security, among other factors. Based on management’s evaluation no unrealized losses on securities were determined to be due to credit loss. Additionally, we anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities and it is not probable that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity, thus no ACL or losses have been recognized or realized in the consolidated financial statements for securities in the portfolio.
Previous wording
Total deposits at March 31, 2025 were $3.79 billion, representing an increase of $171.6 million, or 4.7%, compared to $3.62 billion at December 31, 2024. The increase in deposits was mainly due to a seasonal increase of $70.2 million in public fund deposits and organic growth in retail and commercial deposits. As of March 31, 2025, 25.5% of total deposits were comprised of noninterest-bearing demand accounts, 62.9% of interest-bearing non-maturity accounts and 11.6% of time deposits.
Current wording
Total deposits at June 30, 2025 were $3.74 billion, representing an increase of $118.1 million, or 3.3%, compared to $3.62 billion at December 31, 2024. The increase since December 31, 2024 consisted of increases of $54.8 million in interest-bearing deposits and $63.3 million in non-interest-bearing deposits. As of June 30, 2025, 26.7% of total deposits were comprised of noninterest-bearing demand accounts, 62.0% of interest-bearing non-maturity accounts and 11.3% of time deposits.
Previous wording
The estimated amount of uninsured deposits as of March 31, 2025 was $1.3 billion. This represented approximately 35% of total deposits and excludes collateralized public fund deposits.
Current wording
The estimated amount of uninsured deposits as of June 30, 2025 was $1.33 billion. This represented approximately 36% of total deposits. Excluding collateralized public fund deposits, uninsured and uncollateralized deposits was 28% as of June 30, 2025.
Previous wording
In addition to deposits, we utilize advances from the FHLB and other borrowings as a supplementary funding source to finance our operations.
Current wording
In addition to deposits, we may utilize advances from the FHLB and other borrowings as a supplementary funding source to finance our operations.
Previous wording
FHLB Advances. The FHLB allows us to borrow, both short and long-term, on a blanket floating lien status collateralized by first mortgage loans and commercial real estate loans as well as FHLB stock. At March 31, 2025 and December 31, 2024, we had total remaining borrowing capacity from the FHLB of $1.13 billion and $1.11 billion, respectively, with no outstanding balance. We had no FHLB borrowings during the three months ended March 31, 2025 or 2024.
Current wording
FHLB Advances. The FHLB allows us to borrow, both short and long-term, on a blanket floating lien status collateralized by first mortgage loans and commercial real estate loans as well as FHLB stock. At June 30, 2025 and December 31, 2024, we had total remaining borrowing capacity from the FHLB of $1.29 billion and $1.11 billion, respectively, with no outstanding balance. We had no FHLB borrowings during the three and six months ended June 30, 2025 or 2024.
Previous wording
The Company may use FHLB letters of credit to pledge to certain public deposits. The outstanding balance of FHLB letters of credit was $75.0 million at March 31, 2025 and December 31, 2024.
Current wording
The Company may use FHLB letters of credit to pledge to certain public deposits. There was no outstanding balance of FHLB letters of credit at June 30, 2025, The outstanding balance at December 31, 2024 was $75.0 million.
Previous wording
Federal Reserve Bank of Dallas. The Bank has a line of credit with the Federal Reserve Bank of Dallas (the “FRB”). The amount of the line is determined on a monthly basis by the FRB. The line is collateralized by a blanket floating lien on all agriculture, commercial and consumer loans. The amount of the line was $655.9 million and $654.0 million at March 31, 2025 and December 31, 2024, respectively, with no outstanding balance. We had no long-term FRB borrowings during the three months ended March 31, 2025 or 2024.
Current wording
Federal Reserve Bank of Dallas. The Bank has a line of credit with the Federal Reserve Bank of Dallas (the “FRB”). The amount of the line is determined on a monthly basis by the FRB. The line is collateralized by a blanket floating lien on all agriculture, commercial and consumer loans. The amount of the line was $668.2 million and $654.0 million at June 30, 2025 and December 31, 2024, respectively, with no outstanding balance. We had no FRB borrowings during the three and six months ended June 30, 2025 or 2024.
Previous wording
Lines of Credit. The Bank has uncollateralized lines of credit with multiple banks as a source of funding for liquidity management. The total amount of the lines was $140.0 million as of March 31, 2025 and December 31, 2024. The lines were not used, other than testing during the three months ended March 31, 2025 or the three months ended March 31, 2024.
Current wording
Lines of Credit. The Bank has uncollateralized lines of credit with multiple banks as a source of funding for liquidity management. The total amount of the lines was $138.6 million and $140.0 million as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, we had $1.4 million in short-term borrowings. There were no short-term borrowings as of December 31, 2024.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We had net income of $26.9 million, or $1.58 per diluted common share for the six months ended June 30, 2025, compared to net income of $22.0 million, or $1.30 per diluted common share for the six months ended June 30, 2024. Return on average equity (annualized) was 12.19% and return on average assets (annualized) was 1.25% for the six months ended June 30, 2025, compared to 10.78% and 1.06%, respectively, for the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Service charges on deposit accounts - Income from service charges on deposit accounts increased $477 thousand, or 12.7%, for the six months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily the result of treasury management initiatives taken to drive growth throughout 2024.
Current report — wording carried from elsewhere
Salaries and employee benefits - Salaries and employee benefits increased $1.0 million, or 2.5%, from $38.2 million for the six months ended June 30, 2024 to $39.1 million for the six months ended June 30, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.