SOUTH PLAINS FINANCIAL, INC.
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
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, 2026 · Filed Nov 3, 2026
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 2026-06-30; filed 2026-08-06.
0001140361-26-031701
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001140361-26-041807
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 159 previous paragraphs and 203 current paragraphs.
102 unchanged; 56 reworded; 42 added; 1 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 68 previous and 29 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 (42)
Current report
risks relating to the acquisition of BOH Holdings, Inc. (“BOH”) and acquisitions generally, including disruption to current plans and operations, our ability to recognize the expected benefits and synergies of completed acquisitions, and our ability to successfully make and integrate acquisitions, which may include regulatory approvals and conditions;
Current report
risks related to the integration of any other acquired businesses, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, risks related to entering a new geographic market, the time and costs associated with integrating systems, technology platforms, procedures and personnel, the ability to retain key employees and maintain relationships with significant customers, the need for additional capital to finance such transactions, and possible failures in realizing the anticipated benefits from acquisitions;
Current report
potential recession in the United States and our market areas;
Current report
uncertainty or perceived instability in the banking industry as a whole;
Current report
increased competition for deposits and related changes in deposit customer behavior;
Current report
the persistent inflationary pressures in the United States, and its impact on market interest rates, the economy and credit quality;
Current report
adverse changes in customer sentiment, spending, borrowing and savings habits;
Current report
● elevated asset prices;
Current report
business and economic conditions, particularly those affecting our market areas, as well as the concentration of our business in such market areas;
Current report
a deterioration of credit quality;
Current report
the impact of pandemics, epidemics, or any other health-related crisis;
Current report
high concentrations of loans secured by real estate located in our market areas;
Current report
increases in unemployment rates in the United States and our market areas;
Current report
risks associated with our commercial loan portfolio, including the risk for deterioration in value of the general business assets that secure such loans;
Current report
potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;
Current report
risks associated with our agricultural loan portfolio, including the heightened sensitivity to weather conditions, commodity prices, and other factors generally outside the borrowers and our control;
Current report
risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;
Current report
public funds deposits comprising a relatively high percentage of our deposits;
Current report
potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;
Current report
our ability to maintain our reputation;
Current report
our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses;
Current report
our ability to attract, hire and retain qualified management personnel;
Current report
our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;
Current report
interest rate fluctuations, which could have an adverse effect on our profitability;
Current report
competition from banks, credit unions and other financial services providers;
Current report
our ability to keep pace with technological change or difficulties we may experience when implementing new technologies;
Current report
cybersecurity risk, including cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of a cyber attack, could impact the Company’s reputation, increase regulatory oversight, and impact the financial results of the Company;
Current report
our ability to maintain effective internal control over financial reporting;
Current report
employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;
Current report
increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;
Current report
our ability to maintain adequate liquidity and to raise necessary capital to fund our acquisition strategy and operations or to meet increased minimum regulatory capital levels;
Current report
costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;
Current report
severe weather, natural disasters, military conflicts (including the conflicts in the Middle East, the possible expansion of such conflicts and potential geopolitical and economic consequences), acts of terrorism, geopolitical instability, domestic civil unrest or other external events, including as a result of the impact of the policies of the current U.S. presidential administration or Congress;
Current report
uncertainty regarding United States fiscal debt, deficit and budget matters;
Current report
our ability to keep pace with changes in, and the risks related to the development, implementation, use and management of, emerging technologies, including digital assets, artificial intelligence and machine learning;
Current report
compliance with governmental and regulatory requirements, including the Dodd-Frank Act Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (“EGRRCPA”), and others relating to banking, consumer protection, securities and tax matters;
Current report
changes in accounting principles and standards, including those related to loan loss recognition under the current expected credit loss, or CECL, methodology;
Current report
changes in the laws, rules, regulations, interpretations or policies that apply to the Company’s business and operations, and any additional regulations, or repeals that may be forthcoming as a result thereof, which could cause the Company to incur additional costs and adversely affect the Company’s business environment, operations and financial results; and
Current report
our ability to navigate the uncertain impacts of current and future governmental monetary and fiscal policies, including the current and future policies of the Board of Governors of the Federal Reserve System (“Federal Reserve”) and as a result of initiatives of the Trump administration.
Current report
Other income and fees - Other income and fees decreased $353 thousand, or 20.0%, for the three months ended September 30, 2026 as compared to the same period in 2025. The decrease was primarily the result of decreases of $103 thousand in income on sweep accounts and $62 thousand in income from SBIC investments in the third quarter of 2026.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (1)
Previous report
Bank card services and interchange fees - Income from bank card services and interchange fees increased $339 thousand, or 9.0%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily the result of an increased focus on business purchase card activity during the three months ended June 30, 2026 compared to the same period in 2025, in addition to new activity as a result of the BOH acquisition.
Reworded paragraphs (56)
Previous wording
On April 1, 2026, SPFI acquired BOH Holdings, Inc., a Texas corporation (“BOH”) in an all-stock transaction through the merger of BOH with and into SPFI, with SPFI surviving the merger (the “Merger”). Immediately after the Merger, Bank of Houston, a Texas state banking association and wholly-owned subsidiary of BOH, merged with and into City Bank, with City Bank surviving the merger. At March 31, 2026, BOH had approximately $685.0 million in assets, $631.9 million in total gross loans, and $595.6 million in deposits. The total aggregate consideration delivered to holders of BOH common stock was approximately 2.8 million shares of SPFI common stock.
Current wording
On April 1, 2026, SPFI acquired BOH in an all-stock transaction through the merger of BOH with and into SPFI, with SPFI surviving the merger (the “Merger”). Immediately after the Merger, Bank of Houston, a Texas state banking association and wholly-owned subsidiary of BOH, merged with and into City Bank, with City Bank surviving the merger. At March 31, 2026, BOH had approximately $685.0 million in assets, $631.9 million in total gross loans, and $595.6 million in deposits. The total aggregate consideration delivered to holders of BOH common stock was approximately 2.8 million shares of SPFI common stock.
Previous wording
For further information regarding the acquisition of BOH, see Note 2 in the Notes to the Consolidated Financial Statements included in Item 1 of this Report.
Current wording
For further information regarding the BOH acquisition, see Note 2 in the Notes to the Company's consolidated financial statements included in Item 1 of this Report.
Previous wording
We had net income of $19.0 million, or $0.96 per diluted common share, for the three months ended June 30, 2026, compared to net income of $14.6 million, or $0.86 per diluted common share for the three months ended June 30, 2025. Return on average equity (annualized) was 12.17% and return on average assets (annualized) was 1.44% for the three months ended June 30, 2026, compared to 13.05% and 1.34%, respectively, for the three months ended June 30, 2025. Details of the changes in the various components are further discussed below.
Current wording
We had net income of $20.8 million, or $1.06 per diluted common share, for the three months ended September 30, 2026, compared to net income of $16.3 million, or $0.96 per diluted common share for the three months ended September 30, 2025. Return on average equity (annualized) was 13.15% and return on average assets (annualized) was 1.53% for the three months ended September 30, 2026, compared to 13.89% and 1.47%, respectively, for the three months ended September 30, 2025. Details of the changes in the various components are further discussed below.
Previous wording
We had net income of $33.5 million, or $1.82 per diluted common share for the six months ended June 30, 2026, compared to net income of $26.9 million, or $1.58 per diluted common share for the six months ended June 30, 2025. Return on average equity (annualized) was 12.02% and return on average assets (annualized) was 1.38% for the six months ended June 30, 2026, compared to 12.19% and 1.25%, respectively, for the six months ended June 30, 2025. Details of the changes in the various components are further discussed below.
Current wording
We had net income of $54.3 million, or $2.89 per diluted common share for the nine months ended September 30, 2026, compared to net income of $43.2 million, or $2.55 per diluted common share for the nine months ended September 30, 2025. Return on average equity (annualized) was 12.43% and return on average assets (annualized) was 1.43% for the nine months ended September 30, 2026, compared to 12.78% and 1.33%, respectively, for the nine months ended September 30, 2025. Details of the changes in the various components are further discussed below.
Previous wording
Net interest income for the three months ended June 30, 2026 was $50.3 million, compared to $42.5 million for the three months ended June 30, 2025, an increase of $7.8 million, or 18.5%, and was comprised of an increase of $10.9 million in interest income, partially offset by an increase of $3.0 million in interest expense. The growth in interest income was primarily attributable to an increase of $10.2 million in loan interest income, which was a result of growth of $683.0 million in average loans outstanding, partially offset by a decrease of 18 basis points in the yield on loans due to a decline in market interest rates. The $3.0 million increase in interest expense was primarily related to an increase of $709.2 million in average interest-bearing deposits, partially offset by a decrease of 17 basis points in the interest rate paid on these deposits over the same period in 2025. Additionally, average noninterest-bearing demand deposits increased $112.0 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase in loans and deposits was largely attributable to the BOH acquisition.
Current wording
Net interest income for the three months ended September 30, 2026 was $51.5 million, compared to $43.0 million for the three months ended September 30, 2025, an increase of $8.4 million, or 19.6%, and was comprised of an increase of $11.9 million in interest income, partially offset by an increase of $3.4 million in interest expense. The growth in interest income was primarily attributable to an increase of $11.6 million in loan interest income, which was a result of growth of $753.9 million in average loans outstanding, partially offset by a decrease of 17 basis points in the yield on loans due to a decline in market interest rates. The $3.4 million increase in interest expense was primarily related to an increase of $744.1 million in average interest-bearing deposits, partially offset by a decrease of 14 basis points in the interest rate paid on these deposits over the same period in 2025. Additionally, average noninterest-bearing demand deposits increased $99.6 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase in loans and deposits was largely attributable to the BOH acquisition as well as organic growth.
Previous wording
For the three months ended June 30, 2026, net interest margin and net interest spread were 4.00% and 3.15%, respectively, compared to 4.07% and 3.11%, respectively, for the same period in 2025, which reflects the changes in interest income and interest expense discussed above.
Current wording
For the three months ended September 30, 2026, net interest margin and net interest spread were 4.00% and 3.15%, respectively, compared to 4.05% and 3.08%, respectively, for the same period in 2025, which reflects the changes in interest income and interest expense discussed above.
Previous wording
Net interest income for the six months ended June 30, 2026 was $93.2 million, compared to $81.0 million for the six months ended June 30, 2025, an increase of $12.2 million, or 15.0%, and was comprised of an increase of $13.6 million in interest income, partially offset by an increase of $1.4 million in interest expense. The growth in interest income was attributable to increases of $12.3 million in loan interest income and $2.0 million in interest income on other interest-earning assets. The increase in loan interest income resulted from growth of $369.3 million in average loans outstanding as the yield on loans remained flat. The increase in interest income on other interest-earning assets was primarily due to an increase of $186.6 million in average other interest-bearing assets, partially offset by a decline of 59 basis points in the interest rate paid on those assets. The $1.4 million increase in interest expense was primarily related to an increase of $434.5 million in average interest-bearing deposits, partially offset by a 23 basis point decrease in the rate paid on these deposits over the same period in 2025. The increase in interest expense on deposits was partially offset by a reduction of $1.3 million in interest expense as a result of the redemption of $50 million in subordinated debt securities on September 30, 2025. The increase in loans and deposits was largely attributable to the BOH acquisition.
Current wording
Net interest income for the nine months ended September 30, 2026 was $144.7 million, compared to $124.0 million for the nine months ended September 30, 2025, an increase of $20.6 million, or 16.6%, and was comprised of an increase of $25.5 million in interest income, partially offset by an increase of $4.9 million in interest expense. The growth in interest income was largely attributable to increases of $23.9 million in loan interest income and $2.8 million in interest income on other interest-earning assets. The increase in loan interest income resulted from growth of $497.5 million in average loans outstanding, partially offset by a decrease of 6 basis points in the yield on loans. The increase in interest income on other interest-earning assets was primarily due to an increase of $180.6 million in average other interest-bearing assets, partially offset by a decline of 59 basis points in the interest rate paid on those assets based on a reduction in market interest rates during the compared periods. The $4.9 million increase in interest expense was primarily related to an increase of $537.7 million in average interest-bearing deposits, partially offset by a 19 basis point decrease in the rate paid on these deposits over the same period in 2025. The increase in interest expense on deposits was partially offset by a reduction of $1.8 million in interest expense as a result of the redemption of $50 million in subordinated debt securities on September 30, 2025. The increase in loans and deposits was largely attributable to the BOH acquisition as well as organic growth.
Previous wording
For the six months ended June 30, 2026, net interest margin and net interest spread were 4.02% and 3.17%, respectively, compared to 3.94% and 2.99%, respectively, for the same period in 2025, which reflects the changes in interest income and interest expense discussed above.
Current wording
For the nine months ended September 30, 2026, net interest margin and net interest spread were 4.01% and 3.16%, respectively, compared to 3.98% and 3.02%, respectively, for the same period in 2025, which reflects the changes in interest income and interest expense discussed above.
Previous wording
Credit risk is inherent in the business of making loans. We establish an allowance for credit losses (“ACL”) through charges to earnings, which are shown in the consolidated statements of comprehensive income as the provision for credit losses. Credit losses on loans are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to our earnings. The provision for credit losses and the amount of allowance for each period are dependent upon many factors, including loan growth, net charge offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas.
Current wording
Credit risk is inherent in the business of making loans. We establish an allowance for credit losses (“ACL”) through charges to earnings, which are shown in the consolidated statements of comprehensive income (loss) as the provision for credit losses. Credit losses on loans are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter’s expense. This has the effect of creating variability in the amount and frequency of charges to our earnings. The provision for credit losses and the amount of allowance for each period are dependent upon many factors, including loan growth, net charge offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas.
Previous wording
The provision for credit losses for the three months ended June 30, 2026 was $350 thousand, compared to $2.5 million for the three months ended June 30, 2025. The decrease in provision of $2.2 million was primarily attributable to the increase in specific reserves, and increase in loan balances, and several credit quality downgrades that occurred during the second quarter of 2025.
Current wording
The provision for credit lossesfor the three months ended September 30, 2026 was $830 thousand, compared to $500 thousand for the three months ended September 30, 2025. The increase in provision was primarily attributable to loan growth that occurred during the third quarter of 2026 compared to loan contraction experienced in the third quarter of 2025.
Previous wording
The provision for credit losses for the six months ended June 30, 2026 was $610 thousand, compared to $2.9 million for the six months ended June 30, 2025. The decrease in provision of $2.3 million, as noted above, was largely attributable to the increase in specific reserves, and increase in loan balances, and several credit quality downgrades that occurred during the first two quarters of 2025.
Current wording
The provision for credit lossesfor thenine months ended September 30, 2026 was $1.4 million, compared to $3.4 million for the nine months ended September 30, 2025. The decrease in provision was largely attri butable to several credit quality downgrades that occurred during the first two quarters of 2025.
Previous wording
Noninterest income for the three months ended June 30, 2026 was $14.1 million, compared to $12.2 million for the three months ended June 30, 2025, an increase of $2.0 million, or 16.3%. Significant changes in the components of noninterest income are detailed below.
Current wording
Noninterest income for the three months ended September 30, 2026 was $13.8 million, compared to $11.2 million for the three months ended September 30, 2025, an increase of $2.6 million, or 23.7%. 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 $268 thousand, or 12.8%, for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was largely attributable to continued focus on deposit growth and the BOH acquisition.
Current wording
Service charges on deposit accounts - Income from service charges on deposit accounts increased $265 thousand, or 11.7%, for the three months ended September 30, 2026 as compared to the same period in 2025. The increase was largely attributable to continued focus on treasury management, deposit growth, and the BOH acquisition.
Previous wording
Mortgage banking activities - Income from mortgage banking activities increased $1.2 million, or 34.4%, to $4.8 million for the three months ended June 30, 2026 from $3.6 million for the three months ended June 30, 2025. This increase was partially the result of a $515 thousand positive fair value adjustment to our mortgage servicing rights portfolio in the second quarter of 2026 compared to a negative fair value adjustment of $156 thousand in the second quarter of 2025. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which increased during the second quarter of 2026 as compared to decreasing during the second quarter of 2025. Additionally, there was an increase in other mortgage income related to an increase in originations of loans held for sale in the second quarter of 2026 as compared to the same period of 2025.
Current wording
Mortgage banking activities - Income from mortgage banking activities increased $2.3 million, or 89.4%, to $4.9 million for the three months ended September 30, 2026 from $2.6 million for the three months ended September 30, 2025. This increase was partially the result of a $1.6 million positive fair value adjustment to our mortgage servicing rights portfolio in the third quarter of 2026 compared to a negative fair value adjustment of $925 thousand in the third quarter of 2025. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which increased during the third quarter of 2026 as compared to decreasing during the third quarter of 2025. The increase was partially offset by a decrease in other mortgage income related to a decrease in originations of loans held for sale in the third quarter of 2026 as compared to the same period of 2025.
Previous wording
Noninterest income for the six months ended June 30, 2026 was $25.4 million, compared to $22.8 million for the six months ended June 30, 2025, an increase of $2.6 million, or 11.6%. Significant changes in the components of noninterest income are detailed below.
Current wording
Noninterest income for the nine months ended September 30, 2026 was $39.2 million, compared to $34.0 million for the nine months ended September 30, 2025, an increase of $5.3 million, or 15.6%. Significant changes in the components of noninterest income are detailed below.
Previous wording
Mortgage banking activities - Income from mortgage banking activities increased $3.0 million, or 53.3%, to $8.8 million for the six months ended June 30, 2026 from $5.7 million for the six months ended June 30, 2025. This increase was mainly the result of a $765 thousand positive fair value adjustment to our mortgage servicing rights portfolio for the six months ended June 30, 2026 compared to a negative fair value adjustment of $1.7 million for the same period in 2025. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which increased during the first two quarters of 2026 as compared to decreases in the same period within 2025. Additionally, there was an increase in other mortgage income related to an increase in originations of loans held for sale in the first two quarters of 2026 as compared to the same period in the prior year.
Current wording
Mortgage banking activities - Income from mortgage banking activities increased $5.3 million, or 64.5%, to $13.6 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. This increase was mainly the result of a $2.3 million positive fair value adjustment to our mortgage servicing rights portfolio for the nine months ended September 30, 2026 compared to a negative fair value adjustment of $2.7 million for the same period in 2025. The fair value of the mortgage servicing rights portfolio is affected by movements in market interest rates, which increased during the first three quarters of 2026 as compared to decreases in the same period within 2025.
Previous wording
Other income and fees - Other income and fees decreased $1.3 million, or 37.6%, for the six months ended June 30, 2026 as compared to the same period in 2025. The decrease was primarily the result of a decrease of $497 thousand in income from SBIC investments and a decrease of $224 thousand on gains on sales of fixed assets.
Current wording
Other income and fees - Other income and fees decreased $1.6 million, or 31.6%, for the nine months ended September 30, 2026 as compared to the same period in 2025. The decrease was primarily the result of a decreases of $559 thousand in income from SBIC investments, $244 thousand in income on sweep accounts, and $165 thousand on gains on sales of fixed assets in the nine months ended September 30, 2026.
Previous wording
Noninterest expense for the three months ended June 30, 2026 was $39.9 million compared to $33.5 million for the three months ended June 30, 2025, an increase of $6.3 million, or 18.8%. Significant changes in the components of noninterest expense are detailed below. There was a total of $1.1 million of acquisition related expenses recorded in the three months ended June 30, 2026. This total was comprised of $708 thousand in personnel expenses and $343 thousand in data conversion expenses.
Current wording
Noninterest expense for the three months ended September 30, 2026 was $38.1 million compared to $33.0 million for the three months ended September 30, 2025, an increase of $5.0 million, or 15.3%. Significant changes in the components of noninterest expense are detailed below.
Previous wording
Salaries and employee benefits - Salaries and employee benefits increased $4.5 million, or 11.6%, from $39.1 million for the six months ended June 30, 2025 to $43.7 million for the six months ended June 30, 2026. This increase was primarily driven by personnel expenses related to the BOH acquisition - both recurring core and one-time expenses, annual salary adjustments and new lender hires during the last twelve months.
Current wording
Salaries and employee benefits - Salaries and employee benefits increased $3.0 million, or 15.3%, from $19.4 million for the three months ended September 30, 2025 to $22.4 million for the three months ended September 30, 2026. This increase was primarily driven by recurring core personnel expenses related to the BOH acquisition and annual salary adjustments.
Previous wording
Occupancy and equipment, net - Occupancy expenses increased $358 thousand or 9.0%, from $4.0 million for the three months ended June 30, 2025 to $4.3 million for the three months ended June 30, 2026. This increase was primarily related to new costs related to the acquisition of BOH.
Current wording
Occupancy and equipment, net - Occupancy expenses increased $344 thousand or 8.5%, from $4.0 million for the three months ended September 30, 2025 to $4.4 million for the three months ended September 30, 2026. This increase was primarily related to new core costs related to the BOH acquisition.
Previous wording
IT and data services -IT and data services increased $787 thousand or 66.6%, to $2.0 million for the three months ended June 30, 2026 from $1.2 million for the three months ended June 30, 2025. This increase was largely related to the acquisition of BOH, in addition to rising software costs and costs related to the implementation of a new loan origination system.
Current wording
IT and data services -IT and data services increased $451 thousand or 38.1%, to $1.6 million for the three months ended September 30, 2026 from $1.2 million for the three months ended September 30, 2025. This increase was largely related to rising software costs, costs related to the implementation of a new loan origination system, and new core costs related to the BOH acquisition.
Previous wording
Other expenses -Other expenses increased $1.3 million, or 15.5%, from $8.2 million for the six months ended June 30, 2025 to $9.5 million for the six months ended June 30, 2026. This was primarily the result of increases for data conversion expenses related to the BOH acquisition and new core expenses after the acquisition of BOH.
Current wording
Other expenses -Other expenses increased $416 thousand, or 9.3%, from $4.5 million for the three months ended September 30, 2025 to $4.9 million for the three months ended September 30, 2026. This was primarily the result of new core expenses after the BOH acquisition.
Previous wording
Noninterest expense for the six months ended June 30, 2026 was $75.4 million, compared to $66.6 million for the six months ended June 30, 2025, an increase of $8.8 million, or 13.2%. Significant changes in the components of noninterest expense are detailed below. There was a total of $2.6 million of acquisition related expenses recorded in the six months ended June 30, 2026. This total was comprised of $708 thousand in personnel expenses, $1.2 million in professional services expense, and $693 thousand in data conversion expenses.
Current wording
Noninterest expense for the nine months ended September 30, 2026 was $113.5 million, compared to $99.6 million for the nine months ended September 30, 2025, an increase of $13.9 million, or 13.9%. Significant changes in the components of noninterest expense are detailed below. There was a total of $2.6 million of acquisition related expenses recorded in the nine months ended September 30, 2026. This total was comprised of $708 thousand in personnel expenses, $1.2 million in professional services expense, and $693 thousand in data conversion expenses.
Previous wording
Salaries and employee benefits - Salaries and employee benefits increased $3.8 million, or 19.3%, from $19.8 million for the three months ended June 30, 2025 to $23.5 million for the three months ended June 30, 2026. This increase was primarily driven by personnel expenses related to the BOH acquisition - both recurring core and one-time expenses, annual salary adjustments, and new lender hires during the last twelve months.
Current wording
Salaries and employee benefits - Salaries and employee benefits increased $7.5 million, or 12.8%, from $58.6 million for the nine months ended September 30, 2025 to $66.1 million for the nine months ended September 30, 2026. This increase was primarily driven by personnel expenses related to the BOH acquisition - both recurring core and one-time expenses, annual salary adjustments and new lender hires during the last twelve months.
Previous wording
Professional services - Professional services increased $1.2 million, or 33.3% from $3.6 million for the three months ended June 30, 2025 to $4.8 million for the three months ended June 30, 2026. This increase was driven by the $1.2 million of acquisition related expenses in the first quarter of 2026.
Current wording
Professional services - Professional services increased $1.8 million, or 37.7% from $4.9 million for the nine months ended September 30, 2025 to $6.7 million for the nine months ended September 30, 2026. This increase was primarily driven by $1.2 million of BOH acquisition-related expenses in the first quarter of 2026 andan increase in legal fees related to collection efforts on problem loans in the third quarter of 2026.
Previous wording
IT and data services -IT and data services increased $1.0 million, or 42.8%, from $2.3 million for six months ended June 30, 2025 to $3.3 million for the six months ended June 30, 2026. The increase is primarily a result of the acquisition of BOH, additionally, there has been continued rising cost of technology services and new costs related to the implementation of a new loan origination system.
Current wording
IT and data services -IT and data services increased $1.5 million, or 41.2%, from $3.5 million for nine months ended September 30, 2025 to $5.0 million for the nine months ended September 30, 2026. The increase is primarily a result of new core costs related to the BOH acquisition. Additionally, there has been continued rising cost of technology services and new costs related to the implementation of a new loan origination system.
Previous wording
Other expenses -Other expenses increased $1.1 million, or 27.0%, from $4.0 million for the three months ended June 30, 2025 to $5.2 million for the three months ended June 30, 2026. This was primarily the result of increases for data conversion expenses related to the BOH acquisition and new core expenses after the acquisition of BOH.
Current wording
Other expenses -Other expenses increased $1.8 million, or 13.9%, from $13.1 million for the nine months ended September 30, 2025 to $14.9 million for the nine months ended September 30, 2026. This was primarily the result of increases for data conversion expenses related to the BOH acquisition and new core expenses related to the BOH acquisition.
Previous wording
Our total assets increased $910.7 million, or 20.3%, to $5.39 billion at June 30, 2026, compared to $4.48 billion at December 31, 2025. Our loans held for investment increased $626.9 million, or 19.9%, to $3.77 billion at June 30, 2026, compared to $3.14 billion at December 31, 2025. Our securities portfolio decreased $12.1 million, or 2.1%, to $555.4 million at June 30, 2026, compared to $567.5 million at December 31, 2025. Total deposits increased $766.5 million, or 19.8%, to $4.64 billion at June 30, 2026, compared to $3.87 billion at December 31, 2025.
Current wording
Our total assets increased $930.4 million, or 20.8%, to $5.41 billion at September 30, 2026, compared to $4.48 billion at December 31, 2025. Our loans held for investment increased $686.6 million, or 21.8%, to $3.83 billion at September 30, 2026, compared to $3.14 billion at December 31, 2025. Our securities portfolio decreased $49.2 million, or 8.7%, to $518.3 million at September 30, 2026, compared to $567.5 million at December 31, 2025. Total deposits increased $786.6 million, or 20.3%, to $4.66 billion at September 30, 2026, compared to $3.87 billion at December 31, 2025.
Previous wording
Loans held for investment increased $626.9 million, or 19.9%, to $3.77 billion at June 30, 2026, compared to $3.14 billion at December 31, 2025. The increase in loans was primarily a result of an increase of $631.9 million in loans from the BOH acquisition.
Current wording
Loans held for investment increased $686.6 million, or 21.8%, to $3.83 billion at September 30, 2026, compared to $3.14 billion at December 31, 2025. The increase in loans was primarily a result of an increase of $631.9 million in loans from the BOH acquisition and from organic loan growth.
Previous wording
At June 30, 2026, there was $1.94 billion in adjustable rate loans, with $1.23 billion of these loans that mature or reprice in the next twelve months. Of these loans that mature or reprice in the next twelve months, $695.8 million will reprice immediately upon changes in the underlying index rate, with the remaining $532.9 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 September 30, 2026, there was $2.03 billion in adjustable rate loans, with $839.0 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, $787.9 million will reprice immediately upon changes in the underlying index rate, with the remaining $51.1 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.
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 74.6% of our loans were secured by real property as of June 30, 2026, compared to 71.6% as of December 31, 2025. 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 39.2% of loans held for investment as of June 30, 2026 and represented 37.0% of loans held for investment as of December 31, 2025. Further, 95% 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 74.8% of our loans were secured by real property as of September 30, 2026, compared to 71.6% as of December 31, 2025. 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 39.7% of loans held for investment as of September 30, 2026 and represented 37.0% of loans held for investment as of December 31, 2025. 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 increased $267.9 million, or 25.2%, to $1.33 billion as of June 30, 2026 from $1.06 billion as of December 31, 2025. The increase was primarily due to increases broadly across this segment related to the BOH acquisition.
Current wording
Commercial real estate loans increased $299.8 million, or 28.2%, to $1.36 billion as of September 30, 2026 from $1.06 billion as of December 31, 2025. The increase was primarily due to increases broadly across this segment related to the BOH acquisition.
Previous wording
Commercial specialized loans increased $20.0 million, or 4.9%, to $429.4 million as of June 30, 2026 from $409.4 million as of December 31, 2025. The increase was primarily due to increases in loans to finance and investment companies as a result of the BOH acquisition, partially offset by net repayments of $14.0 million in seasonal agricultural-related loans.
Current wording
Comme rcial specialized loans increased $25.7 million, or 6.3%, to $435.1 million as of September 30, 2026 from $409.4 million as of December 31, 2025. The increase was primarily due to increases in loans to finance and investment companies as a result of the BOH acquisition.
Previous wording
Commercial general loans increased $168.1 million, or 25.5%, to $827.5 million as of June 30, 2026 from $659.3 million as of December 31, 2025. The increase was primarily due to increases broadly across this segment related to the BOH acquisition.
Current wording
Commercial general loans increased $176.0 million, or 26.7%, to $835.3 million as of September 30, 2026 from $659.3 million as of December 31, 2025. The increase was primarily due to increases broadly across this segment related to the BOH acquisition.
Previous wording
Consumer and other loans increased $127.8 million, or 14.0%, to $1.04 billion as of June 30, 2026, from $911.1 million as of December 31, 2025. The growth in these loans was primarily a result of an increase of $124.2 million in residential mortgage loans, mostly related to the BOH acquisition. As of June 30, 2026, our consumer loan portfolio was comprised of $714.0 million in 1-4 family residential loans, $263.8 million in auto loans, and $61.1 million in other consumer loans.
Current wording
Consumer and other loans increased $131.6 million, or 14.4%, to $1.04 billion as of September 30, 2026, from $911.1 million as of December 31, 2025. The growth in these loans was primarily a result of an increase of $121.8 million in residential mortgage loans, mostly related to the BOH acquisition. In addition, there was an $11.5 million increase in auto loans. As of September 30, 2026, our consumer loan portfolio was comprised of $711.7 million in 1-4 family residential loans, $270.7 million in auto loans, and $60.3 million in other consumer loans.
Previous wording
Construction loans increased $43.1 million, or 43.1%, to $143.2 million as of June 30, 2026 from $100.1 million as of December 31, 2025. This increase was primarily due to the acquisition of BOH.
Current wording
Construction loans increased $53.6 million, or 53.6%, to $153.7 million as of September 30, 2026 from $100.1 million as of December 31, 2025. This increase was primarily due to the BOHacquisition.
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 $1.48 billion at June 30, 2026 and $1.16 billion at December 31, 2025. 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, 2026, total income-producing commercial real estate property loans totaled $993.6 million and was comprised of $229.8 million of multi-family property loans, $277.2 million of retail property loans, $182.9 million of office property loans, $160.4 in industrial and warehouse loans, $45.6 million in storage facilities loans, $41.5 million in hospitality loans, and $56.2 million in other property loans. Other property loans include types such as RV parks and convenience stores. As of June 30, 2026, total construction, acquisition, and development property loans totaled $482.2 million and was comprised of $143.8 million in residential construction property loans and $338.4 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 57% at June 30, 2026. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approximately 56% at June 30, 2026.
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 $1.52 billion at September 30, 2026 and $1.16 billion at December 31, 2025. 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, 2026, total income-producing commercial real estate property loans totaled $1.04 billion and was comprised of $212.8 million of multi-family property loans, $286.7 million of retail property loans, $186.9 million of office property loans, $194.0 in industrial and warehouse loans, $64.2 million in storage facilities loans, $42.8 million in hospitality loans, and $53.2 million in other property loans. Other property loans include types such as RV parks and convenience stores. As of September 30, 2026, total construction, acquisition, and development property loans totaled $477.4 million and was comprised of $153.7 million in residential construction property loans and $323.6 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 57% at September 30, 2026. The weighted average loan-to-value of nonowner-occupied office commercial real estate loans was approxim ately 55%at September 30, 2026.
Previous wording
Owner-occupied commercial real estate loans totaled $538.9 million at June 30, 2026 and $419.0 million at December 31, 2025.
Current wording
Owner-occupied commercial real estate loans totaled $557.9 million at September 30, 2026 and $419.0 million at December 31, 2025.
Previous wording
The ACL for loans was $53.1 million at June 30, 2026, compared to $45.1 million at December 31, 2025, an increase of $7.9 million, or 17.6%. The increase was largely driven by $8.5 million of ACL recorded for loans acquired in the BOH acquisition and a $350 thousand provision for ACL being recorded during the six months ended June 30, 2026, partially offset by net charge-offs of $878 thousand during the period. 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 $52.8 million at September 30, 2026, compared to $45.1 million at December 31, 2025, an increase of $7.6 million, or 16.9%. The increase was largely driven by $8.5 million of ACL recorded for loans acquired in the BOH acquisition and a $1.4 million provision for ACL being recorded during the nine months ended September 30, 2026, partially offset by net charge-offs of $2.2 million during the period. The Company continues to closely monitor asset quality in light of the current economic environment in the U.S. and our market areas including, among other things, the rising market interest rate environment, the lingering inflationary pressures in the United States, evolving U.S. trade and tariff policies, ongoing military conflicts and geopolitical instability. Accordingly, additional provisions for credit losses may be necessary in future periods.
Previous wording
Net charge-offs totaled $569 thousand and were 0.06% (annualized) of average loans outstanding for the three months ended June 30, 2026, which is comparable to $458 thousand and 0.06% (annualized) for the three months ended June 30, 2025. Net charge-offs totaled $878 thousand and were 0.05% (annualized) of average loans outstanding for the six months ended June 30, 2026, which is comparable to $977 thousand and 0.06% (annualized) for the six months ended June 30, 2025. The allowance for credit losses on loans as a percentage of loans held for investment was 1.41% at June 30, 2026 and 1.44% at December 31, 2025.
Current wording
Net charge-offs totaled $1.3 million and were 0.13% (annualized) of average loans outstanding for the three months ended September 30, 2026, which is comparable to $1.3 million and 0.16% (annualized) for the three months ended September 30, 2025. Net charge-offs totaled $2.2 million and were 0.08% (annualized) of average loans outstanding for the nine months ended September 30, 2026, which is comparable to $2.3 million and 0.10% (annualized) for the nine months ended September 30, 2025. The allowance for credit losses on loans as a percentage of loans held for investment was 1.38% at September 30, 2026 and 1.44% at December 31, 2025.
Showing the first 40 of 56 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
the impacts of tariffs, sanctions, and other trade policies of the United States and its global trading counterparts and the resulting impact on the Company and its customers;
Current report — wording carried from elsewhere
Service charges on deposit accounts - Income from service charges on deposit accounts increased $647 thousand, or 9.9%, to $7.2 million for the nine months ended September 30, 2026 as compared to the same period in 2025. The increase was largely attributable to continued focus on treasury management, deposit growth, and the BOH acquisition.