SOUTH PLAINS FINANCIAL (SPFI)·Q4 2025 Earnings Summary
South Plains Financial Beats Q4 as BOH Merger Sets Stage for Houston Expansion
January 26, 2026 · by Fintool AI Agent
South Plains Financial (NASDAQ: SPFI) delivered a solid Q4 2025, beating EPS estimates by 5.3% while closing out a transformative year that saw full-year earnings rise 18% and a strategic merger announced to expand into Houston. Net interest margin held strong at 4.00%, and capital ratios remain well above regulatory minimums.
Did South Plains Financial Beat Earnings?
Yes. SPFI beat EPS estimates and was essentially in-line on revenue:
The EPS beat was driven by stable net interest income at $43.0M and disciplined expense management, with the efficiency ratio improving to 61.0%.
Beat/Miss History
SPFI has beaten or met EPS estimates in 8 consecutive quarters:
*Values retrieved from S&P Global
Ask Fintool AI AgentWhat Changed From Last Quarter?
Key deltas from Q3 2025 to Q4 2025:
The sequential EPS decline from Q3's $0.96 was primarily due to Q3 benefiting from $640K in one-time interest and fees from credit workouts. On an adjusted basis, Q4's performance was largely consistent with the prior quarter's run rate.
Positive drivers:
- Loans HFI grew 3.0% QoQ to $3.14B, driven by multi-family, direct energy, and commercial loans
- Majority of Q4 loan growth funded late in December, providing NII lift into Q1
- Cost of deposits declined 9 bps to 2.01%
- Tangible book value per share increased 3.2% to $29.05
Headwinds:
- Average loan yield declined 13 bps to 6.79% (Q3 had one-time benefits)
- Mortgage banking revenue declined due to typical Q4 seasonality
- Provision for credit losses increased to $1.8M from $500K (driven by loan growth)
Full Year 2025 Performance
SPFI delivered a strong full year 2025 with earnings up 18% and record tangible book value:
Organic loan growth for 2025 came in at 2.9%, in line with management's low-to-mid single digit guidance.
BOH Holdings Merger: Houston Expansion
The headline development for SPFI is the December 1, 2025 announcement of a definitive merger with BOH Holdings, parent of Bank of Houston.
Deal highlights:
Strategic rationale:
- Harris County was #1 fastest-growing county in the U.S. in 2024 and top relocation destination
- Enhances SPFI's position in one of the fastest-growing major U.S. MSAs
- Creates a more balanced, diversified Texas franchise with projected $1B+ Houston loans
- Adds key talent with aligned community banking values — Jim Stein to join SPFI and City Bank boards
The deal requires BOH shareholder approval and regulatory clearance. South Plains will file a Registration Statement on Form S-4 with the SEC.
Ask Fintool AI AgentCapital and Credit Quality
SPFI maintains a fortress balance sheet with capital ratios well above minimums:
Note: Total Capital ratio declined slightly QoQ due to the $50 million subordinated debt redemption in September 2025, which reduced interest expense by $610K per quarter but lowered Tier 2 capital.
Credit quality remains stable:
- NPAs/Assets: 0.32% (down from 0.79% a year ago)
- NPLs/Loans: 0.26% (flat QoQ)
- Net charge-offs: 0.10% annualized (improved from 0.16% in Q3)
- ACL/Loans: 1.44%
The provision increased to $1.8M in Q4 from $500K in Q3, primarily due to organic loan growth rather than credit deterioration.
How Did the Stock React?
SPFI shares rose 0.8% to $41.32 on the earnings release:
*Values retrieved from S&P Global and market data
The muted reaction suggests the beat was largely expected and the stock had already run up 19% over the past year. SPFI trades 8% below its 52-week high with an analyst target price of $44.50, implying 8% upside.
What Did Management Say?
CEO Curtis Griffith delivered a confident outlook for 2026, emphasizing the strategic foundation SPFI has built:
"We delivered strong results for the full year 2025 highlighted by 17.8% diluted earnings per share growth, loan growth in line with our guidance, year-over-year net interest margin expansion of 33 basis points as we continue to closely manage our cost of funds, and grew our tangible book value per share over 14% to $29.05 at the end of 2025."
On the growth strategy and 2026 outlook:
"We have laid the foundation to be a larger community bank which includes making the necessary investments in our technology, systems, and processes so that we can grow efficiently. We continue to look for attractive franchises, like BOH, as we believe we have the capacity to acquire another bank in a similar size range while also selectively recruiting high-quality lenders in our markets."
Key 2026 guidance:
- Loan growth expected to accelerate to mid-to-high single digits (vs. 2.9% in 2025)
- Management has capacity for additional M&A in similar size range to BOH
- Recruited "outstanding lenders" across markets expected to bring new relationships
- BOH merger expected to close early Q2 2026
- Hiring initiative 50% complete; expect to finish 9 lenders over 2-year period
- Quarterly dividend: $0.17 per share (27th consecutive)
Q&A Highlights
On NIM Outlook — CFO Steve Crockett acknowledged pressure ahead but signaled confidence in deposit repricing:
"We're going to do our best to keep NIM in a similar place to where it is today... given how much loan growth we can put on and any additional deposits we may bring on, it'll be a little tough. There's just a lot of competition still out there."
CEO Curtis Griffith added: "We'd be a little bit naive not to think that we have some pressures there."
On M&A Appetite — President Cory Newsom emphasized a disciplined approach while signaling openness to more deals:
"We're not out trying to be a serial acquirer, and we're trying to be very thoughtful about what we're doing... Would we be afraid of something being announced [before BOH closes]? No, we wouldn't be afraid."
Key metrics from Q&A:
On Indirect Auto Portfolio — Management provided enhanced disclosure showing 94% of originations were super prime/prime, with only modest migration to 87.7% currently in those categories. 30+ day past-dues improved to just 19 bps.
President Newsom emphasized: "It ends up being such a non-event for our portfolio... We were really excited to put these numbers out there just so you could see how stable it really is."
On BOH Synergies — Management sees treasury management and wealth/trust services as cross-sell opportunities, though revenue synergies are not baked into deal models. BOH brings ~30% jumbo CDs that SPFI believes can be repriced lower over time.
Ask Fintool AI AgentForward Outlook
Analyst estimates for upcoming quarters:
*Values retrieved from S&P Global
Management guidance themes from the call:
- Loan growth to accelerate to mid-to-high single digit rate in 2026
- BOH merger expected to close early Q2 2026 (pending approvals)
- Capacity for additional M&A while continuing organic hiring
- Non-interest expense expected to trend modestly higher in Q1
- Technology investments ongoing: Abrigo conversion for enhanced credit workflows
Key Risks
Factors to monitor:
- Merger execution risk - BOH shareholder approval and regulatory clearance required
- Interest rate sensitivity - NIM compressed 5 bps QoQ as loan yields declined faster than deposit costs
- CRE concentration - Non-owner occupied CRE at 37% of loans, with 4.5% in office
- Energy exposure - Direct energy loans and Permian Basin economy tied to oil prices
- Mortgage seasonality - Q1 typically weaker for mortgage banking revenue
Ask Fintool AI AgentBottom Line
South Plains Financial delivered a clean Q4 beat with EPS of $0.90 vs $0.86 expected, capping a strong 2025 that saw full-year earnings rise 18% to $3.44 per share. The BOH Holdings merger positions SPFI for enhanced scale in the high-growth Houston market with 11% EPS accretion expected. Management guided for accelerating loan growth to mid-to-high single digits in 2026 and noted capacity for additional M&A. Credit quality remains solid, capital ratios are well above minimums, and the stock offers 8% upside to analyst targets. Key catalysts: BOH merger closing and execution on accelerated growth strategy.
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