South Plains Financial reports Q2 net income up 31% to $19.0M, raises dividend 6%

South Plains Financial reported net income of $19.0 million for Q2 2026, up 31% from Q1 2026 and 30% from Q2 2025. Diluted earnings per share were $0.96, compared to $0.85 in Q1 2026 and $0.86 in Q2 2025. The improvement reflects the Bank of Houston acquisition completed April 1, 2026, which added $685 million in assets, $631.9 million in loans, and $595.6 million in deposits.

South Plains completed the acquisition of BOH Holdings (Bank of Houston) effective April 1, 2026. The transaction added $685 million in assets, $631.9 million in loans, and $595.6 million in deposits. The company issued 2.8 million shares at $41.90 per share as consideration. Management noted the acquisition strengthened the company's position in Houston, one of Texas' most attractive banking markets, and contributed to Q2 2026's sequential earnings growth.

Chairman and CEO Curtis Griffith announced he will retire as Chief Executive Officer at year-end 2026 after four decades with the company. He will continue serving as Chairman of South Plains and City Bank. President Cory Newsom is positioned to succeed him as CEO, reflecting what management describes as years of succession planning. The transition is framed as ensuring continuity while the company pursues growth in high-growth Texas markets.

Net interest margin declined to 4.00% in Q2 2026 from 4.04% in Q1 2026 and 4.07% in Q2 2025. The average cost of deposits increased to 208 basis points in Q2 2026 from 197 basis points in Q1 2026, driven by the higher cost of deposits from the Bank of Houston acquisition. The average yield on loans declined to 6.81% from 6.83% in Q1 2026 and 6.99% in Q2 2025.

Nonperforming assets to total assets increased to 0.19% at June 30, 2026 from 0.13% at March 31, 2026, though improved from 0.25% a year earlier. The provision for credit losses was $350 thousand in Q2 2026, down from $2.5 million in Q2 2025. Annualized net charge-offs were 0.06% for Q2 2026. The allowance for credit losses to loans held for investment was 1.41% at June 30, 2026.

The company completed its acquisition of BOH Holdings and Bank of Houston effective April 1, 2026. The transaction added $631.9 million in loans and $595.6 million in deposits, strengthening the company's presence in Houston, one of the fastest-growing metropolitan areas in the U.S. Management characterized the deal as 11% accretive to earnings per share with tangible book value earnback under 3 years. Note: these figures were previously disclosed in the company's Apr 28, 2026 8-K.

Loans held for investment increased to $3.77 billion from $3.10 billion quarter-over-quarter, while deposits grew to $4.64 billion from $4.03 billion. The majority of the growth came from the Bank of Houston acquisition, with $35.4 million of organic loan growth and $17.4 million of organic deposit growth during the quarter.

Net interest margin declined 4 basis points to 4.00% in the second quarter from 4.04% in the first quarter. The cost of interest-bearing deposits increased to 2.74% from 2.64%, and the cost of total deposits rose to 2.08% from 1.97%, reflecting continued pressure on deposit pricing in a competitive environment.

Nonperforming assets increased to 0.19% of total assets from 0.13% in the prior quarter. Classified loans rose to $80.3 million from $43.3 million, predominantly from acquired Bank of Houston loans, which management noted were in line with expectations at closing and are being actively worked by the credit team.

South Plains Financial declared a quarterly cash dividend of $0.18 per share on its common stock. Shareholders of record as of July 27, 2026 will receive payment on August 10, 2026.