South Plains Financial, Inc.

Good afternoon, ladies and gentlemen, and welcome to the South Plains Financial First Quarter 2025 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to Steve Crockett, Chief Financial Officer and Treasurer of South Plains Financial. Please go ahead.

Thank you, operator, and good afternoon, everyone. We appreciate you joining our earnings conference call. With me here today are Curtis Griffith, our chairman and CEO, Corey Newsome, our president, and Brent Bates, the bank's chief credit officer. The related earnings press release and earnings presentation are available on the news and events section of our website, spfi.bank. Before we begin, I'd like to remind everyone that any forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those anticipated future results. Please see our safe harbor statements in our earnings press release and in our earnings presentation. All comments expressed or implied made during today's call are subject to those safe harbor statements. Any forward-looking statements made during this call are made only as of today's date, and we do not undertake any duty to update such forward-looking statements except as required by law. Additionally, during today's call, we may discuss certain non-GAAP financial measures, which we believe are useful in evaluating our performance. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures can also be found in our earnings press release and in the earnings presentation. Curtis, let me hand it over to you.

Thank you, Steve, and good afternoon. Starting on slide four of our presentation, We delivered strong first quarter results highlighted by solid deposit growth, healthy margin expansion as our cost of funds continued to improve, and loan growth, which was in line with our expectations. Additionally, the credit quality of our loan portfolio continued to strengthen in the quarter, which is a testament to our conservative culture and proactive approach to managing credit. This can be seen in our non-performing assets total assets ratio, which improved to 16 basis points at the end of the first quarter, down from 58 basis points at year-end 2024. We often say on these calls that we will never sacrifice credit quality to grow the bank. That is a core pillar of our culture, and we have been working hard for many years to position the bank to perform well through an economic downturn. We have continued to enhance the capabilities of our credit group, fostered a strong partnership between our production and credit teams, and have worked proactively to stay ahead of potential challenges. We believe the credit quality of our portfolio is strong and that we are in an advantageous position relative to some of our peers, especially given the uncertainty created by the new administration's recent tariff announcements, which certainly raises the possibility of a national recession during the year. Texas will not be immune from the effects of a recession, though we believe the state's pro-business and low-tax environment will continue to support economic growth above that of the broader U.S. economy. Our business is also more insulated from the proposed tariffs, given that our lending is focused more on commercial real estate than C&I loans that are dependent on manufacturing and industrial production. Importantly, we believe we have the liquidity, capital, and team to take advantage of opportunities that can come in times of economic difficulties. In fact, we have refocused our efforts of adding lenders that fit our culture and can bring relationships to the bank. Looking forward, we will continue to selectively add to our team across both our major metropolitan and rural markets as we position the bank for continued organic growth over the medium term. We believe that we are in a strong position to capitalize on opportunities to drive growth as the bank and the company each significantly exceed the minimum regulatory capital levels necessary to be deemed well-capitalized. At March 31, 2025, our consolidated common equity Tier 1 risk-based capital ratio was 13.59%, and our Tier 1 leverage ratio was 12.04%. We have the capital to support our customers as they continue to expand their businesses. Given our capital position, we remain focused on both growing the bank while also returning a steady stream of income to our shareholders through our quarterly dividend. As previously announced this past week, our Board of Directors authorized a 15 cents per share quarterly dividend which will be our 24th consecutive quarterly dividend. We also continue to believe that our shares are trading below their intrinsic value and do not reflect the many growth opportunities that lie ahead to further build the bank. As a result, and as previously announced, our board authorized a $15 million stock repurchase program in February. and we spent $8.3 million to repurchase 250,000 shares in the first quarter. We have approximately $7 million of capacity remaining under the program, which continues to provide flexibility during volatile market environments as we have been experiencing. Looking forward, we will continue to balance our buyback with liquidity for growth as well as being mindful of the continued economic uncertainty that exists. Turning briefly to M&A, we had expected community bank M&A activity to pick up this year, but the current general uncertainty has made both buyers and sellers reluctant to make major decisions. That said, a more prolonged downturn could reduce seller expectations to more reasonable levels and serve as a catalyst to drive more deals. Our focus remains on growing the bank organically, and we believe our liquidity, Capital, people, and the credit quality of our loan portfolio uniquely positions us to support our customers and gain market share. While economic growth may slow through the rest of the year, we remain focused on expanding our lending platform and working to bring long-term customer relationships to Citibank. Now let me turn the call over to Corey.