Overview

• US regional bank's Q2 net income and EPS rose yr/yr after BOH Holdings acquisition

• Company completed BOH Holdings acquisition, boosting loans and deposits in Q2

• Q2 net interest income and noninterest income increased, driven by acquisition and organic growth

Outlook

• Company focused on expanding lending platform in high-growth Texas markets

• South Plains aims to optimize Bank of Houston acquisition and pursue disciplined growth opportunities

• Company says strong balance sheet and healthy loan pipeline position it for continued success

Result Drivers

• BOH ACQUISITION - Q2 results were driven by the acquisition of BOH Holdings, which added approximately $667 mln of interest-earning assets and $611 mln of interest-bearing liabilities

• MORTGAGE AND CARD REVENUE - Noninterest income rose due to higher mortgage banking revenues from improved originations and increased bank card services and interchange revenue from greater customer card usage

• HIGHER OPERATING EXPENSES - Noninterest expense increased due to core operating costs related to the acquisition and higher incentive-based compensation

Company press release: ID:nGNX4zJgqt

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 EPS		$0.96
Q2 Net Income		$19 mln
Q2 Net Interest Income		$50.30 mln
Q2 Net Interest Margin		4.00%

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for South Plains Financial Inc is $48.00, about 8.5% above its July 16 closing price of $44.25

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

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