SOUTH PLAINS FINANCIAL, INC.
For the period ended Sep 30, 2025. Filed Nov 6, 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.
Sep 30, 2025 · Filed Nov 6, 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 2025-06-30; filed 2025-08-05.
0001140361-25-028837
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001140361-25-040668
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 162 previous paragraphs and 160 current paragraphs.
104 unchanged; 52 reworded; 4 added; 5 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 66 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 (4)
Current report
Professional services - Professional services decreased $514 thousand, or 28.4% from $1.8 million for the three months ended September 30, 2024 to $1.3 million for the three months ended September 30, 2025. This decrease was primarily driven by decreases in legal fees.
Current report
Loans held for investment decreased $1.6 million, or 0.1%, to $3.05 billion at September 30, 2025, compared to $3.06 billion at December 31, 2024. The decrease in loans was primarily a result of a decrease of $46.5 million in multi-family property loans mainly due to the payoff of two loans totaling $39.6 million, partially offset by organic loan growth.
Current report
Nonperforming loans were $9.7 million at September 30, 2025, as compared to $24.0 million at December 31, 2024. This decrease is mainly due to the nonaccrual changes noted above.
Current report
On September 29, 2020, the Company issued $50.0 million in subordinated notes. Proceeds were reduced by approximately $926 thousand in debt issuance costs. These notes had a maturity date of September 2030 with a fixed rate of 4.50% for the first five years. On August 25, 2025, the Company notified holders (the “Redemption Notice”) of these notes that it had elected to redeem all of these outstanding notes effective on September 30, 2025 (the “Redemption Date”). Each of these notes were redeemed pursuant to the terms of the Indenture, dated as of September 29, 2020, between the Company and UMB Bank, National Association, as trustee for these notes (the “Trustee”), at the Redemption Price totaling $50.0 million in aggregate principal amount, plus accrued and unpaid interest (the “Redemption Price”). As provided in the Redemption Notice, on the Redemption Date, the Trustee paid the relevant Redemption Price to the holders of these notes appearing on the books and records of the Trustee on the Redemption Date. The notes ceased to represent the right to payment of principal and interest upon the payment to the holders of the notes by the Trustee representing the Redemption Price. The Company received all necessary regulatory approvals for the redemption of these notes.
Removed paragraphs (5)
Previous report
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 report
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 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.
Previous report
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 report
On September 29, 2020, the Company issued $50.0 million in subordinated notes. Proceeds were reduced by approximately $926 thousand in debt issuance costs. These notes have a maturity date of September 2030 with a fixed rate of 4.50% for the first five years. After the expiration of the fixed rate period, these notes will reset quarterly at a variable rate equal to the then current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York, plus 438 basis points. These notes pay interest semi-annually, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations.
Reworded paragraphs (52)
Previous wording
The Company maintains an Internet web site atwww.spfi.bank. The Company makes available, free of charge, on its web site (underwww.spfi.bank/financials-filings/sec-filings ) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (underwww.spfi.bank/corporate-governance/documents-charters ) links to the Company’s Code of Conduct and the charters for its board committees. In addition, the SEC maintains an Internet site (atwww.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Current wording
The Company maintains an Internet web site at www.spfi.bank. The Company makes available, free of charge, on its web site (underwww.spfi.bank/financials-filings/sec-filings ) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (underwww.spfi.bank/corporate-governance/documents-charters ) links to the Company’s Code of Conduct and the charters for its board committees. In addition, the SEC maintains an Internet site (atwww.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Previous 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.
Current wording
We had net income of $16.3 million, or $0.96 per diluted common share, for the three months ended September 30, 2025, compared to net income of $11.2 million, or $0.66 per diluted common share for the three months ended September 30, 2024. Return on average equity (annualized) was 13.89% and return on average assets (annualized) was 1.47% for the three months ended September 30, 2025, compared to 10.36% and 1.05%, respectively, for the three months ended September 30, 2024.
Previous wording
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 wording
We had net income of $43.2 million, or $2.55 per diluted common share for the nine months ended September 30, 2025, compared to net income of $33.2 million, or $1.96 per diluted common share for the nine months ended September 30, 2024. Return on average equity (annualized) was 12.78% and return on average assets (annualized) was 1.33% for the nine months ended September 30, 2025, compared to 10.63% and 1.05%, respectively, for the nine months ended September 30, 2024.
Previous 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.
Current wording
Net interest income for the three months ended September 30, 2025 was $43.0 million, compared to $37.3 million for the three months ended September 30, 2024, an increase of $5.7 million, or 15.4%, and was comprised of an increase of $2.9 million in interest income and a decrease of $2.8 million in interest expense. The growth in interest income was primarily attributable to an increase of $2.4 million in loan interest income, which was a result of growth of $23.6 million in average loans outstanding and an increase of 24 basis points in the yield on loans. The $2.8 million decrease in interest expense was primarily related to a 49 basis point decrease in the interest rate paid on interest-bearing deposits over the same period in 2024, partially offset by an increase of $71.5 million in average interest-bearing deposits. Additionally, average noninterest-bearing demand deposits increased $34.1 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Previous 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.
Current wording
For the three months ended September 30, 2025, net interest margin and net interest spread were 4.05% and 3.08%, respectively, compared to 3.65% and 2.55%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above.
Previous wording
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 wording
Net interest income for the nine months ended September 30, 2025 was $124.0 million, compared to $108.6 million for the nine months ended September 30, 2024, an increase of $15.5 million, or 14.3%, and was comprised of an increase of $9.0 million in interest income and a decrease of $6.5 million in interest expense. The growth in interest income was attributable to increases of $7.4 million in loan interest income and $3.6 million in interest income on other interest-earning assets, partially offset by a decrease of $2.0 million in interest income on securities. The increase in loan interest income resulted from growth of $31.9 million in average loans outstanding and an increase of 26 basis points in the yield on loans, which includes approximately $2.4 million of loan interest and fees that were recognized during the second and third quarters of 2025 related to full repayment of loans that had previously been on nonaccrual and/or in a workout status. The increase in interest income on other interest-earning assets was primarily due to an increase of $157.3 million in average other interest-bearing assets, partially offset by a decline of 56 basis points in the interest rate paid on those assets. The decrease in interest income on securities was primarily due to a decline of $1.0 million in the interest recorded on fair value hedges on municipal securities as the indexed market rate declined during the last four months of 2024. The $6.5 million decrease in interest expense was primarily related to a 41 basis point decrease in the rate paid on interest-bearing deposits over the same period in 2024, partially offset by an increase of $102.0 million in average interest-bearing deposits.
Previous wording
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 wording
For the nine months ended September 30, 2025, net interest margin and net interest spread were 3.98% and 3.02%, respectively, compared to 3.61% and 2.53%, respectively, for the same period in 2024, which reflects the changes in interest income and interest expense discussed above. The loan interest and fee items noted above positively affected net interest margin and net interest spread by approximately 8 basis points.
Previous wording
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 wording
The Company recorded a provision for credit losses of $500 thousand for the three months ended September 30, 2025, which was comparable to $495 thousand for the three months ended September 30, 2024.
Previous wording
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 wording
The Company recorded a provision for credit losses of $3.4 million for the nine months ended September 30, 2025, compared to $3.1 million for the nine months ended September 30, 2024. The increase in provision of $300 thousand was largely attributable to an increase in provision for off-balance sheet credit exposures, compared to the same period in 2024, as the utilization of unfunded commitments had increased.
Previous 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.
Current wording
Noninterest income for the three months ended September 30, 2025 was $11.2 million, compared to $10.6 million for the three months ended September 30, 2024, an increase of $530 thousand, or 5.0%. 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 $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.
Current wording
Service charges on deposit accounts - Income from service charges on deposit accounts increased $243 thousand, or 12.0%, for the three months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily the result of a continued focus on growing treasury management services and an increase in customer overdraft fees during the three months ended September 30, 2025 compared to the same period in 2024.
Previous 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.
Current wording
Mortgage banking activities - Income from mortgage banking activities increased $685 thousand, or 36.2%, to $2.6 million for the three months ended September 30, 2025 from $1.9 million for the three months ended September 30, 2024. This increase was mainly the result of a $925 thousand negative fair value adjustment to our mortgage servicing rights portfolio in the third quarter of 2025 compared to a negative fair value adjustment of $2.1 million in the third 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 third quarter of 2025 as compared to the same period of 2024. This increase was partially offset by decreases in other mortgage income related to a decline in originations of loans held for sale in the third quarter of 2025 as compared to the same period of 2024.
Previous 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.
Current wording
Other income and fees - Other income and fees decreased $652 thousand, or 27.0% for the three months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of a net decrease of $590 thousand recognized for property insurance proceeds during the third quarter of 2024 as compared to the same period in 2025.
Previous wording
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 wording
Noninterest income for the nine months ended September 30, 2025 was $34.0 million, compared to $34.8 million for the nine months ended September 30, 2024, a decrease of $798 thousand, or 2.3%. 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 $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 wording
Service charges on deposit accounts - Income from service charges on deposit accounts increased $720 thousand, or 12.4%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily the result of a continued focus on growing treasury management services, which began building during 2024, and an increase in customer overdraft fees during the nine months ended September 30, 2025 compared to the same period in 2024.
Previous wording
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 wording
Mortgage banking activities - Income from mortgage banking activities decreased $938 thousand, or 10.2%, to $8.3 million for the nine months ended September 30, 2025 from $9.2 million for the nine months ended September 30, 2024. This decrease was mainly the result of a decline in mortgage loan originations of $18.6 million, or 8.3%, in the current year period as compared to the prior year period.
Previous wording
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 wording
Other income and fees - Other income and fees decreased $805 thousand, or 13.5%, for the nine months ended September 30, 2025 as compared to the same period in 2024. The decrease was primarily the result of a decrease of $490 thousand in income from SBIC investments and a net decrease of $611 thousand recognized for property insurance proceeds, partially offset by increases in income from sweep accounts and gains on sales of fixed assets.
Previous wording
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 wording
Noninterest expense for the three months ended September 30, 2025 was $33.0 million compared to $33.1 million for the three months ended September 30, 2024, a decrease of $104 thousand, or 0.3%. Significant changes in the components of noninterest expense are detailed below.
Previous 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.
Current wording
Salaries and employee benefits - Salaries and employee benefits increased $646 thousand, or 3.4%, from $18.8 million for the three months ended September 30, 2024 to $19.4 million for the three months ended September 30, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.
Previous wording
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 wording
Other expenses -Other expenses decreased $258 thousand, or 5.8%, from $4.4 million for the three months ended September 30, 2024 to $4.2 million for the three months ended September 30, 2025. This was primarily the result of a decrease of $179 thousand in the ineffective portion of fair value hedges.
Previous 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.
Current wording
Noninterest expense for the nine months ended September 30, 2025 was $99.6 million, compared to $97.6 million for the nine months ended September 30, 2024, an increase of $2.0 million, or 2.0%. Significant changes in the components of noninterest expense are detailed below.
Previous wording
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.
Current wording
Salaries and employee benefits - Salaries and employee benefits increased $1.6 million, or 2.8%, from $57.0 million for the nine months ended September 30, 2024 to $58.6 million for the nine months ended September 30, 2025. This increase was primarily driven by annual salary adjustments, which became effective in January of 2025.
Previous wording
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 wording
IT and data services -IT and data services increased $361 thousand, or 11.4%, from $3.2 million for nine months ended September 30, 2024 to $3.5 million for the nine months ended September 30, 2025. The increase is primarily a result of the continued rising cost of technology services.
Previous 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.
Current wording
Our total assets increased $247.2 million, or 5.8%, to $4.48 billion at September 30, 2025, compared to $4.23 billion at December 31, 2024. Our gross loans held for investment decreased $1.6 million, or 0.1%, to $3.05 billion at September 30, 2025, compared to $3.06 billion at December 31, 2024. Our securities portfolio decreased $6.1 million, or 1.1%, to $571.1 million at September 30, 2025, compared to $577.2 million at December 31, 2024. Total deposits increased $260.3 million, or 7.2%, to $3.88 billion at September 30, 2025, compared to $3.62 billion at December 31, 2024.
Previous 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.
Current wording
At September 30, 2025, there was $1.57 billion in adjustable rate loans, with $875.0 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, $603.0 million will reprice immediately upon changes in the underlying index rate, with the remaining $272.0 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 September 30, 2025, there is $192.9 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 73.5% 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.
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 72.7% of our loans were secured by real property as of September 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 37.2% of loans held for investment as of September 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 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.
Current wording
Commercial real estate loans decreased $83.1 million, or 7.4%, to $1.04 billion as of September 30, 2025 from $1.12 billion as of December 31, 2024. The decrease was primarily driven by decreases of $105.4 million in multi-family loans and $30.3 million in hospitality loans, partially offset by increases in residential and commercial land development loans and other commercial real estate loans.
Previous 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.
Current wording
Commercial specialized loans decreased $11.2 million, or 2.9%, to $377.8 million as of September 30, 2025 from $389.0 million as of December 31, 2024. This decrease was primarily due to net repayments of $9.2 million in seasonal agricultural-related loans and a decrease of $9.3 million in loans to finance and investment companies, partially offset by an increase of $7.3 million in energy sector loans.
Previous 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.
Current wording
Commercial general loans increased $71.9 million, or 12.9%, to $629.3 million as of September 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 $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.
Current wording
Consumer and other loans increased $26.8 million, or 3.0%, to $912.6 million as of September 30, 2025, from $885.8 million as of December 31, 2024. The growth in these loans was primarily a result of an increase of $26.2 million in residential mortgage loans. As of September 30, 2025, our consumer loan portfolio was comprised of $592.6 million in 1-4 family residential loans, $256.3 million in auto loans, and $63.7 million in other consumer loans.
Previous 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.
Current wording
Construction loans decreased $5.9 million, or 5.7%, to $98.0 million as of September 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 $1.19 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.
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 $1.13 billion at September 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 September 30, 2025, total income-producing commercial real estate property loans totaled $771.3 million and was comprised of $210.5 million of multi-family property loans, $187.9 million of retail property loans, $144.3 million of office property loans, $30.7 million in hospitality loans, and $197.9 million in industrial and other property loans. Industrial and other property loans include types such as industrial, warehouse, mini-storage, and convenience stores. As of September 30, 2025, total construction, acquisition, and development property loans totaled $362.5 million and was comprised of $98.0 million in residential construction property loans and $264.5 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 September 30, 2025. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 58% at September 30, 2025.
Previous wording
Owner-occupied commercial real estate loans totaled $413.3 million at June 30, 2025 and $366.8 million at December 31, 2024.
Current wording
Owner-occupied commercial real estate loans totaled $410.5 million at September 30, 2025 and $366.8 million at December 31, 2024.
Previous 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.
Current wording
The ACL for loans was $44.1 million at September 30, 2025, compared to $43.2 million at December 31, 2024, an increase of $888 thousand, or 2.1%. The increase is a result of a provision for credit losses on loans of $3.2 million being recorded during the nine months ended September 30, 2025, partially offset by net charge-offs of $2.3 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, 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 $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.
Current wording
Net charge-offs totaled $1.3 million and were 0.16% (annualized) of average loans outstanding for the three months ended September 30, 2025, compared to $887 thousand and 0.11% (annualized) for the three months ended September 30, 2024. The increase in net charge-offs in the third quarter of 2025 was primarily the result of a $541 thousand charge-off of a multi-family property loan in the third quarter of 2025. Net charge-offs totaled $2.3 million and were 0.10% (annualized) of average loans outstanding for the nine months ended September 30, 2025, compared to $2.6 million and 0.11% (annualized) for the nine months ended September 30, 2024. The decrease in net charge-offs for the nine months ended September 30, 2025 was primarily the result of a decrease of $586 thousand in net charge-offs of general commercial loans, partially offset by an increase of $497 thousand in net charge-offs of commercial real estate loans in the first three 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 September 30, 2025 and 1.42% at December 31, 2024.
Previous wording
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 wording
Specific reserves for individually evaluated loans totaled $147 thousand at September 30, 2025 as compared to $552 thousand at December 31, 2024.
Previous 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.
Current wording
At September 30, 2025, our total nonaccrual loans were $8.5 million, or 0.28% 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. Any 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 September 30, 2025 to cover any probable loss. This decrease of $13.6 million was predominantly due to a $19.0 million loan, which was previously on nonaccrual, that was repaid in full during the second quarter of 2025. This decrease was partially offset with three loans totaling $7.8 million being placed on nonaccrual status during the second and third quarters of 2025.
Previous wording
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.
Current wording
Classified loans include loans graded as substandard or doubtful. At September 30, 2025, classified loans totaled $45.8 million, a decrease of $3.3 million from the total of $49.1 million at December 31, 2024. This change includes the payoff of a $19.0 million multi-family property loan during the second quarter of 2025, partially offset with other activity. The Company collected a $31.8 million multi-family property loan that was classified during the second quarter of 2025 and collected during the third quarter of 2025.
Previous 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.
Current wording
Our securities portfolio decreased $6.1 million, or 1.1%, to $571.1 million at September 30, 2025, compared to $577.2 million at December 31, 2024. The decrease was primarily due to $20.8 million in maturities, prepayments and calls, net of purchases, partially offset by a $16.7 million increase in the fair value of securities available for sale at September 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 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.
Current wording
Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At September 30, 2025, the fair value of the Company’s securities available for sale was $75.0 million lower than the amortized cost. At September 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.
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Previous report — wording carried elsewhere
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.