☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Texas
|
75-2453320
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
5219 City Bank Parkway
Lubbock, Texas
|
79407
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $1.00 per share
|
SPFI
|
The Nasdaq Stock Market, LLC
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
Emerging growth company ☒
|
Page No.
|
||
PART I
|
||
Item 1.
|
5
|
|
Item 1A
|
21 | |
Item 1B
|
47
|
|
Item 2.
|
47 | |
Item 3.
|
48 | |
Item 4.
|
49 | |
PART II
|
||
Item 5.
|
49 | |
Item 6.
|
49 | |
Item 7.
|
51 | |
Item 8.
|
75 | |
77 |
||
78 |
||
80 |
||
81 |
||
82 |
||
Item 9.
|
111 | |
Item 9A.
|
111 | |
Item 9B.
|
112 | |
PART III
|
||
Item 10.
|
113 | |
Item 11.
|
113 | |
Item 12.
|
113 | |
Item 13.
|
113 | |
Item 14.
|
113 | |
PART IV
|
||
Item 15.
|
114 | |
Item 16.
|
115 | |
116 |
● |
our ability to effectively execute our expansion strategy and manage our growth, including identifying and consummating suitable acquisitions, including the acquisition and integration of West Texas State Bank;
|
● |
business and economic conditions, particularly those affecting our market areas, as well as the concentration of our business in such market areas;
|
● |
high concentrations of loans secured by real estate located in our market areas;
|
● |
risks associated with our commercial loan portfolio, including the risk for deterioration in value of the general business assets that secure such loans;
|
● |
potential changes in the prices, values and sales volumes of commercial and residential real estate securing our real estate loans;
|
● |
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;
|
● |
risks associated with the sale of crop insurance products, including termination of or substantial changes to the federal crop insurance program;
|
● |
risks related to the significant amount of credit that we have extended to a limited number of borrowers and in a limited geographic area;
|
● |
public funds deposits comprising a relatively high percentage of our deposits;
|
● |
potential impairment on the goodwill we have recorded or may record in connection with business acquisitions;
|
● |
our ability to maintain our reputation;
|
● |
our ability to successfully manage our credit risk and the sufficiency of our allowance for loan losses;
|
● |
our ability to attract, hire and retain qualified management personnel;
|
● |
our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;
|
● |
interest rate fluctuations, which could have an adverse effect on our profitability;
|
● |
competition from banks, credit unions and other financial services providers;
|
● |
our ability to keep pace with technological change or difficulties we may experience when implementing new technologies;
|
● |
system failures, service denials, cyber-attacks and security breaches;
|
● |
our ability to maintain effective internal control over financial reporting;
|
● |
employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;
|
● |
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;
|
● |
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;
|
● |
costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;
|
● |
natural disasters, severe weather, acts of god, acts of war or terrorism, outbreaks of hostilities, public health outbreaks (such as coronavirus), other international or
domestic calamities, and other matters beyond our control;
|
● |
tariffs and trade barriers;
|
● |
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 (“EGRRCPA”), and others relating to banking, consumer protection, securities and tax matters; and
|
● |
changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including the policies of the Board of Governors of
the Federal Reserve System (“Federal Reserve”) and as a result of initiatives of the Trump administration.
|
Basel III
Minimum
for Capital
Adequacy
Purposes
|
Basel III
Additional
Capital
Conservation
Buffer
|
Basel III
Ratio with
Capital
Conservation
Buffer
|
||||||||||
Total risk based capital (total capital to risk-weighted assets)
|
8.00
|
%
|
2.50
|
%
|
10.50
|
%
|
||||||
Tier 1 risk based capital (tier 1 to risk-weighted assets)
|
6.00
|
%
|
2.50
|
%
|
8.50
|
%
|
||||||
Common equity tier 1 risk based capital (CET1 to risk-weighted assets)
|
4.50
|
%
|
2.50
|
%
|
7.00
|
%
|
||||||
Tier 1 leverage ratio (tier 1 to average assets)
|
4.00
|
%
|
—
|
4.00
|
%
|
● |
assigning exposures secured by single-family residential properties to either a 50% risk weight for first-lien mortgages that meet prudent underwriting standards
or a 100% risk weight category for all other mortgages;
|
● |
providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (increased from 0% under the previous
risk-based capital rules);
|
● |
assigning a 150% risk weight to all exposures that are nonaccrual or 90 days or more past due (increased from 100% under the previous risk-based capital rules),
except for those secured by single-family residential properties, which will be assigned a 100% risk weight, consistent with the previous risk-based capital rules;
|
● |
applying a 150% risk weight instead of a 100% risk weight for certain high-volatility commercial real estate, or HVCRE, loans, or acquisition, development, and construction, or ADC, loans; and
|
● |
applying a 250% risk weight to the portion of mortgage servicing rights and deferred tax assets arising from temporary differences that could not be realized
through net operating loss carrybacks that are not deducted from CET1 capital (increased from 100% under the previous risk-based capital rules).
|
● |
a CBLR of greater than 9%;
|
● |
total consolidated assets of less than $10 billion;
|
● |
total off-balance sheet exposures (excluding derivatives other than credit derivatives and unconditionally cancelable commitments) of 25% or less of total consolidated assets;
|
● |
total trading assets and trading liabilities of 5% or less of total consolidated assets; and
|
● |
non-advanced approaches institution.
|
● |
Accumulated other comprehensive income, or AOCI;
|
● |
Intangible assets, calculated in accordance with Reporting Instructions, other than mortgage servicing assets; and
|
● |
Deferred tax assets that arise from net operating loss and tax credit carry forwards net of any related valuations allowances.
|
● |
internal policies, procedures and controls designed to implement and maintain the bank’s compliance with all of the requirements of the USA PATRIOT Act, the Bank
Secrecy Act (“BSA”) and related laws and regulations;
|
● |
systems and procedures for monitoring and reporting suspicious transactions and activities;
|
● |
a designated compliance officer;
|
● |
employee training;
|
● |
an independent audit function to test the AML program;
|
● |
procedures to verify the identity of each customer upon the opening of accounts; and
|
● |
heightened due diligence policies, procedures and controls applicable to certain foreign accounts and relationships.
|
● |
difficulties in integrating the operations, management, products and services, technologies, existing contracts, accounting processes and personnel of the target
and realizing the anticipated synergies of the combined businesses;
|
● |
difficulties in supporting and transitioning customers of the target;
|
● |
diversion of financial and management resources from existing operations;
|
● |
assumption of nonperforming loans;
|
● |
the price we pay or other resources that we devote may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or
other resources to another opportunity;
|
● |
entering new markets or areas in which we have limited or no experience;
|
● |
potential loss of key personnel and customers from either our business or the target’s business;
|
● |
assumption of unanticipated problems or latent liabilities of the target; and
|
● |
inability to generate sufficient revenue to offset acquisition costs.
|
● |
prepare and distribute periodic reports, proxy statements and other shareholder communications in compliance with the federal securities laws and rules;
|
● |
expand the roles and duties of our Board and committees thereof;
|
● |
maintain an internal audit function;
|
● |
institute more comprehensive financial reporting and disclosure compliance procedures;
|
● |
involve and retain to a greater degree outside counsel and accountants in the activities listed above;
|
● |
enhance our investor relations function;
|
● |
establish new internal policies, including those relating to trading in our securities and disclosure controls and procedures;
|
● |
retain additional personnel;
|
● |
comply with NASDAQ listing standards; and
|
● |
comply with the Sarbanes-Oxley Act.
|
● |
changes in governmental economic and monetary policies;
|
● |
the Code, and banking and credit regulations;
|
● |
national, state and local economic growth rates;
|
● |
employment rates; and
|
● |
population trends.
|
● |
actual or anticipated variations in our quarterly or annual results of operations;
|
● |
recommendations by industry and securities analysts;
|
● |
operating and stock price performance of other companies that investors deem comparable to us;
|
● |
news reports relating to trends, concerns and other issues in the financial services industry generally;
|
● |
conditions in the banking industry such as credit quality and monetary policies;
|
● |
perceptions in the marketplace regarding us or our competitors;
|
● |
fluctuations in the stock price and operating results of our competitors;
|
● |
domestic and international economic factors unrelated to our performance;
|
● |
general market conditions and, in particular, developments related to market conditions for the financial services industry;
|
● |
new technology used, or services offered, by competitors; and
|
● |
changes in government regulations.
|
Lubbock/South Plains
|
Dallas
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
Lubbock
|
Main Branch
|
Plano
|
Branch
|
|||
Lubbock
|
4th Street Branch
|
Dallas
|
Uptown Branch
|
|||
Lubbock
|
50th and Indiana Branch
|
Forney
|
Branch
|
|||
Lubbock
|
Kingsgate Branch
|
Arlington
|
LPO
|
|||
Lubbock
|
Milwaukee Branch
|
Dallas
|
Hillcrest LPO
|
|||
Lubbock
|
Overton Branch
|
Allen
|
LPO
|
|||
Lubbock
|
University Branch
|
Celina
|
LPO
|
|||
Morton
|
Branch
|
Grand Prairie
|
LPO
|
|||
Springlake
|
Branch
|
Southlake
|
LPO
|
|||
Idalou
|
Branch
|
|||||
Levelland
|
Branch
|
El Paso
|
Houston
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
El Paso
|
East Branch
|
Houston
|
Branch
|
|||
El Paso
|
West Branch
|
|||||
El Paso
|
Mesa Hills LPO
|
Bryan/College Station
|
Ruidoso/Eastern New Mexico
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
College Station
|
Branch
|
Ruidoso
|
Gateway Branch
|
|||
College Station
|
LPO
|
Ruidoso
|
River Crossing Branch
|
The Permian Basin
|
Other Markets
|
|||||
Location
|
Branch or LPO
|
Location
|
Branch or LPO
|
|||
Odessa
|
University Branch
|
Abilene, Texas
|
LPO
|
|||
Odessa
|
Grandview Branch
|
Austin, Texas
|
LPO
|
|||
Midland
|
Branch
|
Beaumont, Texas
|
LPO
|
|||
Kermit
|
Branch
|
Dripping Springs, Texas
|
LPO
|
|||
Fort Stockton
|
Branch
|
|||||
Monahans
|
Branch
|
Item 5.
|
Plan Category
|
Number of Shares to be
Issued Upon Exercise of
Outstanding Awards
|
Weighted-Average
Exercise Price of
Outstanding Awards
|
Number of Shares
Available for
Future Grants
|
|||||||||
Equity compensation plans approved by shareholders(1)
|
1,544,197
|
$
|
$ 12.72
|
568,303
|
||||||||
Equity compensation plans not approved by shareholders
|
—
|
—
|
—
|
|||||||||
Total
|
1,544,197
|
$
|
12.72
|
568,303
|
(1) |
The number of shares available for future issuance includes 568,303 shares available under the Company’s 2019 Equity Incentive Plan (which allows for the issuance of options, as well as various other stock-based
awards).
|
As of or for the Year Ended December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Selected Income Statement Data:
|
||||||||||||||||||||
Interest income
|
$
|
132,942
|
$
|
118,094
|
$
|
104,440
|
$
|
97,220
|
$
|
95,033
|
||||||||||
Interest expense
|
28,367
|
22,482
|
15,977
|
14,582
|
13,543
|
|||||||||||||||
Net interest income
|
104,575
|
95,612
|
88,463
|
82,638
|
81,490
|
|||||||||||||||
Provision for loan losses
|
2,799
|
6,901
|
3,966
|
1,968
|
781
|
|||||||||||||||
Noninterest income
|
56,633
|
52,121
|
47,389
|
49,896
|
39,630
|
|||||||||||||||
Noninterest expense
|
121,708
|
115,443
|
108,144
|
104,388
|
97,293
|
|||||||||||||||
Income tax expense (benefit)
|
7,481
|
(3,901
|
)
|
107
|
101
|
114
|
||||||||||||||
Net income
|
29,220
|
29,290
|
23,635
|
26,077
|
22,932
|
|||||||||||||||
Share and Per Share Data:
|
||||||||||||||||||||
Earnings per share (basic)
|
$
|
1.74
|
$
|
1.98
|
$
|
1.60
|
$
|
1.75
|
$
|
1.53
|
||||||||||
Earnings per share (diluted)
|
1.71
|
1.98
|
1.60
|
1.74
|
1.52
|
|||||||||||||||
Dividends per share
|
0.06
|
2.03
|
0.53
|
0.43
|
0.48
|
|||||||||||||||
Book value per share(1)
|
16.98
|
14.40
|
14.58
|
13.58
|
12.33
|
|||||||||||||||
Tangible book value per share(1)(2)
|
15.46
|
14.40
|
14.58
|
13.58
|
12.33
|
|||||||||||||||
Weighted average common shares outstanding (basic)
|
16,818,697
|
14,771,520
|
14,769,086
|
14,932,021
|
14,963,288
|
|||||||||||||||
Weighted average common shares outstanding (diluted)
|
17,040,550
|
14,771,520
|
14,771,520
|
14,997,897
|
15,092,592
|
|||||||||||||||
Shares outstanding at end of period
|
18,036,115
|
14,771,520
|
14,771,520
|
14,771,520
|
15,028,830
|
|||||||||||||||
Selected Period End Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
158,099
|
$
|
245,989
|
$
|
294,563
|
$
|
363,400
|
$
|
360,503
|
||||||||||
Investment securities
|
707,650
|
338,196
|
284,009
|
324,823
|
331,322
|
|||||||||||||||
Gross loans held for investment
|
2,143,623
|
1,957,197
|
1,838,155
|
1,661,186
|
1,679,314
|
|||||||||||||||
Allowance for loan losses
|
24,197
|
23,126
|
21,461
|
21,174
|
24,220
|
|||||||||||||||
Total assets
|
3,237,167
|
2,712,745
|
2,573,375
|
2,500,813
|
2,536,865
|
|||||||||||||||
Interest-bearing deposits
|
1,905,936
|
1,767,387
|
1,678,919
|
1,658,198
|
1,713,476
|
|||||||||||||||
Noninterest-bearing deposits
|
790,921
|
510,067
|
475,162
|
432,725
|
413,777
|
|||||||||||||||
Total deposits
|
2,696,857
|
2,277,454
|
2,154,081
|
2,090,923
|
2,127,253
|
|||||||||||||||
Borrowings
|
205,030
|
193,100
|
177,830
|
189,196
|
206,418
|
|||||||||||||||
ESOP-owned shares
|
—
|
58,195
|
57,121
|
49,700
|
39,867
|
|||||||||||||||
Total stockholders’ equity excluding ESOP-owned shares
|
306,182
|
154,580
|
158,206
|
150,019
|
145,372
|
|||||||||||||||
Pro forma total stockholders’ equity(3)
|
306,182
|
212,775
|
215,327
|
199,719
|
185,239
|
As of or for the Year Ended December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on average assets
|
1.04
|
%
|
1.12
|
%
|
0.93
|
%
|
1.02
|
%
|
0.95
|
%
|
||||||||||
Return on average stockholders’ equity(1)
|
10.94
|
%
|
13.63
|
%
|
11.40
|
%
|
13.30
|
%
|
13.00
|
%
|
||||||||||
Net interest margin(4)
|
3.98
|
%
|
3.94
|
%
|
3.85
|
%
|
3.60
|
%
|
3.78
|
%
|
||||||||||
Efficiency ratio(5)
|
75.29
|
%
|
77.64
|
%
|
77.87
|
%
|
77.01
|
%
|
78.33
|
%
|
||||||||||
Pro Forma Information as if a C Corporation:(6)
|
||||||||||||||||||||
Net income
|
29,220
|
20,757
|
17,580
|
19,652
|
17,073
|
|||||||||||||||
Income tax expense (benefit)
|
7,481
|
4,632
|
6,162
|
6,526
|
5,973
|
|||||||||||||||
Earnings per share (basic)
|
1.74
|
1.41
|
1.19
|
1.32
|
1.14
|
|||||||||||||||
Earnings per share (diluted)
|
1.71
|
1.41
|
1.19
|
1.31
|
1.13
|
|||||||||||||||
Return on average assets
|
1.04
|
%
|
0.79
|
%
|
0.69
|
%
|
0.77
|
%
|
0.71
|
%
|
||||||||||
Return on average stockholders’ equity(1)
|
10.94
|
%
|
9.66
|
%
|
8.48
|
%
|
10.02
|
%
|
9.68
|
%
|
||||||||||
Credit Quality Ratios:
|
||||||||||||||||||||
Nonperforming assets to total assets(7)
|
0.24
|
%
|
0.34
|
%
|
0.65
|
%
|
0.60
|
%
|
0.65
|
%
|
||||||||||
Nonperforming loans to total loans held for investment
|
0.28
|
0.36
|
0.76
|
0.43
|
0.52
|
|||||||||||||||
Allowance for loan losses to nonperforming loans(8)
|
400.28
|
332.56
|
154.38
|
294.29
|
275.07
|
|||||||||||||||
Allowance for loan losses to total loans held for investment
|
1.13
|
1.18
|
1.17
|
1.27
|
1.44
|
|||||||||||||||
Net loan charge-offs to average loans
|
0.09
|
0.27
|
0.21
|
0.30
|
0.27
|
|||||||||||||||
Capital Ratios:
|
||||||||||||||||||||
Total stockholders’ equity to total assets(1)
|
9.46
|
%
|
7.84
|
%
|
8.37
|
%
|
7.99
|
%
|
7.30
|
%
|
||||||||||
Tangible common equity to tangible assets(2)
|
8.69
|
7.84
|
8.37
|
7.99
|
7.30
|
|||||||||||||||
Common equity tier 1 capital ratio
|
11.06
|
9.91
|
10.78
|
10.91
|
9.96
|
|||||||||||||||
Tier 1 leverage ratio
|
11.37
|
9.63
|
10.06
|
9.56
|
9.34
|
|||||||||||||||
Tier 1 risk-based capital ratio
|
12.85
|
11.98
|
13.02
|
13.38
|
12.41
|
|||||||||||||||
Total risk-based capital ratio
|
14.88
|
14.28
|
15.15
|
15.69
|
14.79
|
(1) |
Reflects the Company’s pro forma total stockholders’ equity.
|
(2) |
Represents a non-GAAP financial measure. We did not have any goodwill or other intangible assets as of the years ended December 31, 2015 to 2018. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures.”
|
(3) |
In accordance with provisions of the Internal Revenue Code applicable to private companies, prior to our listing on the NASDAQ Global Select Market, the terms of our ESOP provided that ESOP participants had the
right, for a specified period of time, to require us to repurchase shares of our common stock that are distributed to them by the ESOP. As a result, for the periods prior to our listing on the NASDAQ Global Select Market, the shares of
common stock held by the ESOP are deducted from stockholders’ equity in our consolidated balance sheet. This repurchase right terminated upon the listing of our common stock on the NASDAQ Global Select Market in May 2019.
|
(4) |
Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.
|
(5) |
The efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income on a tax-equivalent basis and noninterest income.
|
(6) |
The Company calculates its pro forma C Corporation net income, return on average assets, return on average stockholders’ equity and earnings per share by adding back its franchise S Corporation tax to net
income, and using tax rates for Federal income taxes of 35.0% prior to January 1, 2018 and 21.0% after January 1, 2018. This calculation reflects only the revocation of the Company’s status as an S Corporation and does not give effect to
any other transaction. As our state income taxes are insignificant, they are not reflected in these calculations.
|
(7) |
Nonperforming assets consist of nonperforming loans plus OREO.
|
(8) |
Nonperforming loans include nonaccrual loans and loans past due 90 days or more.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2019
|
2018
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Total loans(1)
|
$
|
1,997,783
|
$
|
117,074
|
5.86
|
%
|
$
|
1,921,221
|
$
|
105,897
|
5.51
|
%
|
||||||||||||
Investment securities – taxable
|
317,947
|
8,608
|
2.71
|
209,631
|
5,392
|
2.57
|
||||||||||||||||||
Investment securities – non-taxable
|
37,232
|
1,289
|
3.46
|
101,778
|
3,635
|
3.57
|
||||||||||||||||||
Other interest-earning assets (2)
|
284,031
|
6,412
|
2.26
|
218,777
|
4,120
|
1.88
|
||||||||||||||||||
Total interest-earning assets
|
2,636,993
|
133,383
|
5.06
|
2,451,407
|
119,044
|
4.86
|
||||||||||||||||||
Noninterest-earning assets
|
182,967
|
172,489
|
||||||||||||||||||||||
Total assets
|
$
|
2,819,960
|
$
|
2,623,896
|
||||||||||||||||||||
Liabilities and Shareholders’ Equity:
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW, savings and money market deposits
|
$
|
1,448,320
|
$
|
16,436
|
1.13
|
%
|
$
|
1,386,171
|
$
|
13,005
|
0.94
|
%
|
||||||||||||
Time deposits
|
319,811
|
6,055
|
1.89
|
313,298
|
4,556
|
1.45
|
||||||||||||||||||
Short-term borrowings
|
16,231
|
290
|
1.79
|
18,334
|
265
|
1.45
|
||||||||||||||||||
Notes payable & other longer-term borrowings
|
95,054
|
2,024
|
2.13
|
95,000
|
1,786
|
1.88
|
||||||||||||||||||
Subordinated debt securities
|
26,786
|
1,616
|
6.03
|
21,529
|
1,046
|
4.86
|
||||||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
1,946
|
4.19
|
46,393
|
1,824
|
3.93
|
||||||||||||||||||
Total interest-bearing liabilities
|
$
|
1,952,595
|
$
|
28,367
|
1.45
|
$
|
1,880,725
|
$
|
22,482
|
1.20
|
||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing deposits
|
$
|
570,428
|
$
|
495,808
|
||||||||||||||||||||
Other liabilities
|
29,891
|
32,535
|
||||||||||||||||||||||
Total noninterest-bearing liabilities
|
600,319
|
528,343
|
||||||||||||||||||||||
Shareholders’ equity
|
267,046
|
214,828
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
2,819,960
|
$
|
2,623,896
|
||||||||||||||||||||
Net interest income
|
$
|
105,016
|
$
|
96,562
|
||||||||||||||||||||
Net interest spread
|
3.61
|
%
|
3.66
|
%
|
||||||||||||||||||||
Net interest margin(3)
|
3.98
|
%
|
3.94
|
%
|
(1) |
Average loan balances include nonaccrual loans and loans held for sale.
|
(2) |
Includes income and average balances for interest-earning deposits at other banks, nonmarketable securities, federal funds sold and other miscellaneous interest-earning assets.
|
(3) |
Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.
|
Year Ended December 31,
|
||||||||||||
2019 over 2018
|
||||||||||||
Change due to:
|
Total
|
|||||||||||
Volume
|
Rate
|
Variance
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans
|
$
|
4,220
|
$
|
6,957
|
$
|
11,177
|
||||||
Investment securities – taxable
|
2,786
|
430
|
3,216
|
|||||||||
Investment securities – non-taxable
|
(2,305
|
)
|
(41
|
)
|
(2,346
|
)
|
||||||
Other interest-earning assets
|
1,229
|
1,063
|
2,292
|
|||||||||
Total increase (decrease) in interest income
|
5,930
|
8,409
|
14,339
|
|||||||||
Interest-bearing liabilities:
|
||||||||||||
NOW, Savings, MMDAs
|
583
|
2,848
|
3,431
|
|||||||||
Time deposits
|
95
|
1,404
|
1,499
|
|||||||||
Short-term borrowings
|
(30
|
)
|
55
|
25
|
||||||||
Notes payable & other borrowings
|
1
|
237
|
238
|
|||||||||
Subordinated debt securities
|
255
|
315
|
570
|
|||||||||
Junior subordinated deferrable interest debentures
|
—
|
122
|
122
|
|||||||||
Total increase (decrease) interest expense:
|
904
|
4,981
|
5,885
|
|||||||||
Increase (decrease) in net interest income
|
$
|
5,026
|
$
|
3,428
|
$
|
8,454
|
Year Ended
December 31,
|
Increase
|
|||||||||||
2019
|
2018
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Noninterest income:
|
||||||||||||
Service charges on deposit accounts
|
$
|
8,130
|
$
|
7,813
|
$
|
317
|
||||||
Income from insurance activities
|
7,015
|
7,128
|
(113
|
)
|
||||||||
Bank card services and interchange fees
|
8,692
|
8,845
|
(153
|
)
|
||||||||
Mortgage banking activities
|
25,126
|
21,384
|
3,742
|
|||||||||
Investment commissions
|
1,709
|
1,779
|
(70
|
)
|
||||||||
Fiduciary income
|
2,306
|
1,441
|
865
|
|||||||||
Other income and fees(1)
|
3,654
|
3,731
|
(77
|
)
|
||||||||
Total noninterest income
|
$
|
56,632
|
$
|
52,121
|
$
|
4,511
|
(1) |
Other income and fees includes income and fees associated with the increase in the cash surrender value of life insurance, safe deposit box rental, check printing, collections, wire transfer and other
miscellaneous services.
|
Year Ended
December 31,
|
Increase
|
|||||||||||
2019
|
2018
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Noninterest expense:
|
||||||||||||
Salaries and employee benefits
|
$
|
75,392
|
$
|
71,778
|
$
|
3,614
|
||||||
Occupancy expense, net
|
13,572
|
13,571
|
1
|
|||||||||
Professional services
|
7,334
|
6,734
|
600
|
|||||||||
Marketing and development
|
3,017
|
3,050
|
(33
|
)
|
||||||||
IT and data services
|
2,830
|
2,233
|
597
|
|||||||||
Bankcard expenses
|
3,346
|
2,743
|
603
|
|||||||||
Appraisal expenses
|
1,625
|
1,353
|
272
|
|||||||||
Other expenses(1)
|
14,591
|
13,981
|
610
|
|||||||||
Total noninterest expense
|
$
|
121,707
|
$
|
115,443
|
$
|
6,264
|
(1) |
Other expenses include items such as telephone expenses, postage, courier fees, directors’ fees, and insurance.
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||||||||||||||
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial real estate
|
$
|
658,195
|
30.7
|
%
|
$
|
538,037
|
27.5
|
%
|
$
|
506,894
|
27.6
|
%
|
$
|
462,495
|
27.9
|
%
|
$
|
490,938
|
29.3
|
%
|
||||||||||||||||||||
Commercial – specialized
|
309,505
|
14.4
|
305,022
|
15.6
|
329,119
|
17.9
|
309,279
|
18.6
|
329,561
|
19.6
|
||||||||||||||||||||||||||||||
Commercial – general
|
441,398
|
20.6
|
427,728
|
21.9
|
410,057
|
22.3
|
395,949
|
23.8
|
395,938
|
23.6
|
||||||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
1-4 family residential
|
362,796
|
16.9
|
346,153
|
17.7
|
313,350
|
17.0
|
297,944
|
17.9
|
291,099
|
17.3
|
||||||||||||||||||||||||||||||
Auto loans
|
215,209
|
10.0
|
191,647
|
9.8
|
146,622
|
8.0
|
76,215
|
4.6
|
66,710
|
4.0
|
||||||||||||||||||||||||||||||
Other consumer
|
74,000
|
3.5
|
70,209
|
3.6
|
66,191
|
3.6
|
62,097
|
3.7
|
64,057
|
3.8
|
||||||||||||||||||||||||||||||
Construction
|
82,520
|
3.8
|
78,401
|
4.0
|
65,922
|
3.6
|
57,207
|
3.4
|
41,011
|
2.4
|
||||||||||||||||||||||||||||||
Gross loans
|
2,143,623
|
100.0
|
%
|
1,957,197
|
100.0
|
%
|
1,838,155
|
100.0
|
%
|
1,661,186
|
100.0
|
%
|
1,679,314
|
100.0
|
%
|
|||||||||||||||||||||||||
Allowance for loan losses
|
(24,197
|
)
|
(23,126
|
)
|
(21,461
|
)
|
(21,174
|
)
|
(24,220
|
)
|
||||||||||||||||||||||||||||||
Net loans
|
$
|
2,119,426
|
$
|
1,934,071
|
$
|
1,816,694
|
$
|
1,640,012
|
$
|
1,655,094
|
As of December 31, 2019
|
||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after
Five Years
|
||||||||||||||||||||||||||
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
40,447
|
$
|
47,455
|
$
|
107,589
|
$
|
130,381
|
$
|
27,408
|
$
|
304,915
|
$
|
658,195
|
||||||||||||||
Commercial - specialized
|
35,815
|
98,369
|
51,411
|
46,708
|
12,986
|
64,216
|
309,505
|
|||||||||||||||||||||
Commercial - general
|
31,148
|
34,654
|
82,977
|
67,434
|
27,434
|
197,751
|
441,398
|
|||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
1-4 family residential
|
25,210
|
8,539
|
74,562
|
10,261
|
154,625
|
89,599
|
362,796
|
|||||||||||||||||||||
Auto loans
|
1,561
|
42
|
143,776
|
33
|
69,797
|
—
|
215,209
|
|||||||||||||||||||||
Other consumer
|
3,874
|
2,952
|
37,796
|
235
|
29,077
|
66
|
74,000
|
|||||||||||||||||||||
Construction
|
33,560
|
28,147
|
1,829
|
818
|
—
|
18,166
|
82,520
|
|||||||||||||||||||||
Gross loans
|
$
|
171,615
|
$
|
220,158
|
$
|
499,940
|
$
|
255,870
|
$
|
321,327
|
$
|
674,713
|
$
|
2,143,623
|
As of December 31, 2018
|
||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after
Five Years
|
||||||||||||||||||||||||||
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Fixed
Rate
|
Adjustable
Rate
|
Total
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Commercial real estate
|
$
|
45,345
|
$
|
34,071
|
$
|
127,377
|
$
|
81,068
|
$
|
8,380
|
$
|
241,796
|
$
|
538,037
|
||||||||||||||
Commercial - specialized
|
13,446
|
132,050
|
64,373
|
31,684
|
8,166
|
55,303
|
305,022
|
|||||||||||||||||||||
Commercial - general
|
27,669
|
37,546
|
69,210
|
63,962
|
11,148
|
218,193
|
427,728
|
|||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||
1-4 family residential
|
20,772
|
9,302
|
63,141
|
15,455
|
163,841
|
73,642
|
346,153
|
|||||||||||||||||||||
Auto loans
|
1,176
|
—
|
120,008
|
—
|
70,463
|
—
|
191,647
|
|||||||||||||||||||||
Other consumer
|
3,399
|
1,734
|
35,432
|
127
|
29,377
|
140
|
70,209
|
|||||||||||||||||||||
Construction
|
30,582
|
23,642
|
6,975
|
4,591
|
—
|
12,611
|
78,401
|
|||||||||||||||||||||
Gross loans
|
$
|
142,389
|
$
|
238,345
|
$
|
486,516
|
$
|
196,887
|
$
|
291,375
|
$
|
601,685
|
$
|
1,957,197
|
As of December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Average loans outstanding(1)
|
$
|
1,997,783
|
$
|
1,921,221
|
$
|
1,790,201
|
$
|
1,689,915
|
$
|
1,655,441
|
||||||||||
Gross loans held for investment outstanding at period end
|
$
|
2,143,623
|
$
|
1,957,197
|
$
|
1,838,155
|
$
|
1,661,186
|
$
|
1,679,314
|
||||||||||
Allowance for loan losses at beginning of the period
|
$
|
23,126
|
$
|
21,461
|
$
|
21,174
|
$
|
24,220
|
$
|
27,940
|
||||||||||
Charge offs:
|
||||||||||||||||||||
Commercial real estate
|
—
|
1,540
|
18
|
43
|
3,554
|
|||||||||||||||
Commercial – specialized
|
355
|
115
|
173
|
2,429
|
493
|
|||||||||||||||
Commercial – general
|
306
|
4,291
|
2,658
|
2,143
|
1,685
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
436
|
272
|
387
|
63
|
667
|
|||||||||||||||
Auto loans
|
1,067
|
972
|
875
|
656
|
370
|
|||||||||||||||
Other consumer
|
1,034
|
941
|
1,495
|
1,281
|
1,424
|
|||||||||||||||
Construction
|
75
|
15
|
—
|
130
|
—
|
|||||||||||||||
Total charge-offs
|
3,273
|
8,146
|
5,606
|
6,745
|
8,193
|
|||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial real estate
|
431
|
1,622
|
103
|
685
|
2,463
|
|||||||||||||||
Commercial – specialized
|
124
|
87
|
790
|
235
|
42
|
|||||||||||||||
Commercial – general
|
533
|
774
|
567
|
495
|
833
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
61
|
74
|
80
|
5
|
77
|
|||||||||||||||
Auto loans
|
182
|
165
|
149
|
50
|
93
|
|||||||||||||||
Other consumer
|
214
|
188
|
238
|
260
|
183
|
|||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
1
|
|||||||||||||||
Total recoveries
|
1,545
|
2,910
|
1,927
|
1,730
|
3,692
|
|||||||||||||||
Net charge-offs
|
(1,728
|
)
|
(5,236
|
)
|
(3,679
|
)
|
(5,015
|
)
|
(4,501
|
)
|
As of December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Provision for loan losses
|
2,799
|
6,901
|
3,966
|
1,969
|
781
|
|||||||||||||||
Balance at end of period
|
$
|
24,197
|
$
|
23,126
|
$
|
21,461
|
$
|
21,174
|
$
|
24,220
|
||||||||||
Ratio of allowance to period end loans held for investment
|
1.13
|
%
|
1.18
|
%
|
1.17
|
%
|
1.27
|
%
|
1.44
|
%
|
||||||||||
Ratio of net charge-offs to average loans(1)
|
0.09
|
%
|
0.27
|
%
|
0.21
|
%
|
0.30
|
%
|
0.27
|
%
|
(1) |
Average outstanding balances include loans held for sale.
|
As of December 31,
|
||||||||||||||||||||||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||||||||||||||
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
Amount
|
% of
Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial real estate
|
$
|
5,049
|
20.9
|
%
|
$
|
5,579
|
24.1
|
%
|
$
|
3,769
|
17.6
|
%
|
$
|
4,049
|
19.1
|
%
|
$
|
8,457
|
34.9
|
%
|
||||||||||||||||||||
Commercial – specialized
|
2,287
|
9.5
|
2,516
|
10.9
|
2,367
|
11.0
|
3,474
|
16.4
|
3,411
|
14.1
|
||||||||||||||||||||||||||||||
Commercial – general
|
9,609
|
39.7
|
8,173
|
35.3
|
10,151
|
47.3
|
9,589
|
45.3
|
9,117
|
37.7
|
||||||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||||||
1-4 family residential
|
2,093
|
8.6
|
2,249
|
9.6
|
1,787
|
8.3
|
1,555
|
7.4
|
1,619
|
6.6
|
||||||||||||||||||||||||||||||
Auto loans
|
3,385
|
14.0
|
2,994
|
12.9
|
2,068
|
9.7
|
1,272
|
6.0
|
715
|
3.0
|
||||||||||||||||||||||||||||||
Other consumer
|
1,341
|
5.5
|
1,192
|
5.2
|
971
|
4.5
|
1,083
|
5.1
|
752
|
3.1
|
||||||||||||||||||||||||||||||
Construction
|
433
|
1.8
|
423
|
1.8
|
348
|
1.6
|
152
|
0.7
|
149
|
0.6
|
||||||||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
24,197
|
100.0
|
%
|
$
|
23,126
|
100.0
|
%
|
$
|
21,461
|
100.0
|
%
|
$
|
21,174
|
100.0
|
%
|
$
|
24,220
|
100.0
|
%
|
Current
|
30-89 Days
Past Due
|
90+ Days
Past Due
|
Nonaccrual
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
657,880
|
37
|
116
|
162
|
658,195
|
||||||||||||||
Commercial – specialized
|
307,625
|
708
|
—
|
1,172
|
309,505
|
|||||||||||||||
Commercial – general
|
437,397
|
1,747
|
—
|
2,254
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
359,547
|
1,212
|
932
|
1,105
|
362,796
|
|||||||||||||||
Auto loans
|
213,558
|
1,468
|
183
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,031
|
848
|
121
|
—
|
74,000
|
|||||||||||||||
Construction
|
81,361
|
1,159
|
—
|
—
|
82,520
|
|||||||||||||||
Total loans
|
$
|
2,130,399
|
$
|
7,179
|
$
|
1,352
|
$
|
4,693
|
$
|
2,143,623
|
Current
|
30-89 Days
Past Due
|
90+ Days
Past Due
|
Nonaccrual
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2018
|
||||||||||||||||||||
Commercial real estate
|
$
|
536,072
|
$
|
1,748
|
$
|
—
|
$
|
217
|
$
|
538,037
|
||||||||||
Commercial – specialized
|
301,480
|
992
|
—
|
2,550
|
305,022
|
|||||||||||||||
Commercial – general
|
422,969
|
2,625
|
—
|
2,134
|
427,728
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
342,613
|
1,611
|
440
|
1,489
|
346,153
|
|||||||||||||||
Auto loans
|
190,772
|
825
|
50
|
—
|
191,647
|
|||||||||||||||
Other consumer
|
69,252
|
883
|
74
|
—
|
70,209
|
|||||||||||||||
Construction
|
78,401
|
—
|
—
|
—
|
78,401
|
|||||||||||||||
Total loans
|
$
|
1,941,559
|
$
|
8,684
|
$
|
564
|
$
|
6,390
|
$
|
1,957,197
|
As of December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Nonaccrual loans
|
$
|
4,693
|
$
|
6,390
|
$
|
12,704
|
$
|
6,187
|
$
|
8,046
|
||||||||||
Past due loans 90 days or more and still accruing
|
1,352
|
564
|
1,197
|
1,008
|
759
|
|||||||||||||||
Total nonperforming loans
|
6,045
|
6,954
|
13,901
|
7,195
|
8,805
|
|||||||||||||||
Other real estate owned
|
1,883
|
2,285
|
2,830
|
7,849
|
7,681
|
|||||||||||||||
Total nonperforming assets
|
$
|
7,928
|
$
|
9,239
|
$
|
16,731
|
$
|
15,044
|
$
|
16,486
|
||||||||||
Restructured loans - nonaccrual(1)
|
$
|
436
|
$
|
494
|
$
|
549
|
$
|
671
|
$
|
2,386
|
||||||||||
Restructured loans - accruing
|
$
|
1,804
|
$
|
3,351
|
$
|
3,592
|
$
|
7,817
|
$
|
9,906
|
||||||||||
Nonperforming loans to gross loans
|
0.28
|
%
|
0.36
|
%
|
0.76
|
%
|
0.43
|
%
|
0.52
|
%
|
||||||||||
Nonperforming assets to total loans and OREO
|
0.37
|
%
|
0.47
|
%
|
0.91
|
%
|
0.90
|
%
|
0.98
|
%
|
||||||||||
Allowance for loan losses to nonperforming loans
|
400.28
|
%
|
332.56
|
%
|
154.38
|
%
|
294.29
|
%
|
275.07
|
%
|
||||||||||
Allowance for loan losses to gross loans
|
1.13
|
%
|
1.18
|
%
|
1.17
|
%
|
1.27
|
%
|
1.44
|
%
|
||||||||||
Nonaccrual loans by category:
|
||||||||||||||||||||
Commercial real estate
|
$
|
162
|
$
|
217
|
$
|
5,558
|
$
|
662
|
$
|
4,858
|
||||||||||
Commercial – specialized
|
1,172
|
2,550
|
1,587
|
858
|
1,110
|
|||||||||||||||
Commercial – general
|
2,254
|
2,134
|
3,385
|
3,249
|
553
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
1,105
|
1,489
|
2,088
|
1,293
|
1,475
|
|||||||||||||||
Auto loans
|
—
|
—
|
11
|
23
|
46
|
|||||||||||||||
Other consumer
|
—
|
—
|
—
|
7
|
4
|
|||||||||||||||
Construction
|
—
|
—
|
75
|
95
|
—
|
|||||||||||||||
Total
|
$
|
4,693
|
$
|
6,390
|
$
|
12,704
|
$
|
6,187
|
$
|
8,046
|
(1) |
Restructured loans, nonaccrual, are included in nonaccrual loans which are a component of nonperforming loans.
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
632,641
|
$
|
22,313
|
$
|
3,241
|
$
|
—
|
$
|
658,195
|
||||||||||
Commercial – specialized
|
307,239
|
—
|
2,266
|
—
|
309,505
|
|||||||||||||||
Commercial – general
|
428,155
|
—
|
13,243
|
—
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
356,422
|
—
|
6,374
|
—
|
362,796
|
|||||||||||||||
Auto loans
|
214,363
|
—
|
846
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,716
|
—
|
284
|
—
|
74,000
|
|||||||||||||||
Construction
|
82,520
|
—
|
—
|
—
|
82,520
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2018
|
||||||||||||||||||||
Commercial real estate
|
$
|
514,249
|
$
|
17,300
|
$
|
6,488
|
$
|
—
|
$
|
538,037
|
||||||||||
Commercial – specialized
|
301,289
|
—
|
3,733
|
—
|
305,022
|
|||||||||||||||
Commercial – general
|
415,675
|
1,449
|
10,604
|
—
|
427,728
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
340,836
|
—
|
5,317
|
—
|
346,153
|
|||||||||||||||
Auto loans
|
191,435
|
—
|
212
|
—
|
191,647
|
|||||||||||||||
Other consumer
|
70,075
|
—
|
134
|
—
|
70,209
|
|||||||||||||||
Construction
|
78,401
|
—
|
—
|
—
|
78,401
|
|||||||||||||||
Total
|
$
|
1,911,960
|
$
|
18,749
|
$
|
26,488
|
$
|
—
|
$
|
1,957,197
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Current
|
$
|
2,088,827
|
$
|
22,313
|
$
|
19,259
|
$
|
—
|
$
|
2,130,399
|
||||||||||
Past due 30 – 89 days
|
6,140
|
—
|
1,039
|
—
|
7,179
|
|||||||||||||||
Past due 90+ days
|
89
|
—
|
1,263
|
—
|
1,352
|
|||||||||||||||
Nonaccrual
|
—
|
—
|
4,693
|
—
|
4,693
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
||||||||||
December 31, 2018
|
||||||||||||||||||||
Current
|
$
|
1,905,405
|
$
|
18,749
|
$
|
17,405
|
$
|
—
|
$
|
1,941,559
|
||||||||||
Past due 30-89 days
|
6,499
|
—
|
2,185
|
—
|
8,684
|
|||||||||||||||
Past due 90+ days
|
56
|
—
|
508
|
—
|
564
|
|||||||||||||||
Nonaccrual
|
—
|
—
|
6,390
|
—
|
6,390
|
|||||||||||||||
Total
|
$
|
1,911,960
|
$
|
18,749
|
$
|
26,488
|
$
|
—
|
$
|
1,957,197
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Unrealized
Gain/(Loss)
|
Amortized
Cost
|
Fair
Value
|
Unrealized
Gain/(Loss)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
$
|
4,807
|
$
|
57
|
$
|
84,765
|
$
|
84,707
|
$
|
(58
|
)
|
|||||||||||
State and municipal
|
94,512
|
94,692
|
180
|
32,205
|
32,310
|
105
|
||||||||||||||||||
Mortgage-backed securities
|
463,899
|
464,516
|
617
|
184,267
|
182,256
|
(2,011
|
)
|
|||||||||||||||||
Collateralized mortgage obligations
|
107,443
|
107,289
|
(154
|
)
|
—
|
—
|
—
|
|||||||||||||||||
Asset-backed and other amortizing securities
|
35,833
|
36,346
|
513
|
39,799
|
38,923
|
(876
|
)
|
|||||||||||||||||
Total available-for-sale
|
$
|
706,437
|
$
|
707,650
|
$
|
1,213
|
$
|
341,036
|
$
|
338,196
|
$
|
(2,840
|
)
|
As of December 31, 2019
|
||||||||||||||||||||||||||||||||
Due in
One Year or Less
|
Due after One Year
Through Five Years
|
Due after Five Years
Through Ten Years
|
Due after
Ten Years
|
|||||||||||||||||||||||||||||
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||||||||||
U.S. government and agencies
|
$
|
—
|
—
|
$
|
4,750
|
2.75
|
$
|
—
|
—
|
$
|
—
|
—
|
||||||||||||||||||||
State and municipal
|
470
|
4.00
|
1,028
|
1.71
|
14,206
|
2.08
|
78,808
|
2.90
|
||||||||||||||||||||||||
Mortgage-backed securities
|
—
|
—
|
1,009
|
1.60
|
23,513
|
2.18
|
439,377
|
2.56
|
||||||||||||||||||||||||
Collateralized mortgage obligations
|
—
|
—
|
—
|
—
|
—
|
—
|
107,443
|
2.26
|
||||||||||||||||||||||||
Asset-backed and other amortizing securities
|
—
|
—
|
—
|
—
|
—
|
—
|
35,833
|
2.82
|
||||||||||||||||||||||||
Total available-for-sale
|
$
|
470
|
4.00
|
%
|
$
|
6,787
|
2.42
|
%
|
$
|
37,719
|
2.15
|
%
|
$
|
661,461
|
2.56
|
%
|
As of December 31,
|
||||||||||||||||
2019
|
2018
|
|||||||||||||||
Average
Balance
|
Weighted
Average Rate
|
Average
Balance
|
Weighted
Average
Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Noninterest-bearing deposits
|
$
|
570,428
|
—
|
$
|
495,808
|
—
|
||||||||||
Interest-bearing deposits:
|
||||||||||||||||
NOW and interest-bearing demand accounts
|
266,991
|
0.35
|
%
|
272,676
|
0.37
|
%
|
||||||||||
Savings accounts
|
71,754
|
0.20
|
%
|
65,307
|
0.25
|
%
|
||||||||||
Money market accounts
|
1,109,575
|
1.38
|
%
|
1,048,188
|
1.13
|
%
|
||||||||||
Time deposits
|
319,811
|
1.89
|
%
|
313,298
|
1.45
|
%
|
||||||||||
Total interest-bearing deposits
|
1,768,131
|
1.27
|
%
|
1,699,469
|
1.03
|
%
|
||||||||||
Total deposits
|
$
|
2,338,559
|
0.96
|
%
|
$
|
2,195,277
|
0.80
|
%
|
(Dollars in thousands)
|
Three
Months
|
Three to
Six Months
|
Six to
12 Months
|
After
12 Months
|
Total
|
|||||||||||||||
$
|
43,344
|
$
|
43,359
|
$
|
48,866
|
$
|
133,535
|
$
|
269,104
|
As of December 31,
|
||||||||
2019
|
2018
|
|||||||
(Dollars in thousands)
|
||||||||
Amount outstanding at year-end
|
$
|
115,000
|
$
|
95,000
|
||||
Weighted average interest rate at year-end
|
1.64
|
%
|
2.27
|
%
|
||||
Maximum month-end balance during the year
|
$
|
115,000
|
$
|
95,000
|
||||
Average balance outstanding during the year
|
$
|
95,055
|
$
|
95,000
|
||||
Weighted average interest rate during the year
|
2.13
|
%
|
1.88
|
%
|
Name of Trust
|
Issue
Date
|
Amount
of Trust
Preferred
Securities
|
Amount of
Debentures
|
Stated
Maturity Date
of Trust Preferred
Securities and
Debentures(1)
|
Interest Rate of
Trust Preferred
Securities and
Debentures(2)(3)
|
||||||||||
(Dollars in thousands)
|
|||||||||||||||
South Plains Financial Capital Trust III
|
2004
|
$
|
10,000
|
$
|
10,310
|
2034
|
3-mo. LIBOR
+ 265 bps; 4.58%
|
||||||||
South Plains Financial Capital Trust IV
|
2005
|
20,000
|
20,619
|
2035
|
33-mo. LIBOR
+ 139 bps; 3.28%
|
||||||||||
South Plains Financial Capital Trust V
|
2007
|
15,000
|
15,464
|
2037
|
3-mo. LIBOR
+ 150 bps; 3.39%
|
||||||||||
Total
|
$
|
45,000
|
$
|
46,393
|
(1) |
May be redeemed at the Company’s option.
|
(2) |
Interest payable quarterly with principal due at maturity.
|
(3) |
Rate as of last reset date, prior to December 31, 2019.
|
Actual
|
Regulatory
Capital Ratio
Requirements
|
Minimum
To be Considered
“Well Capitalized”
|
Regulatory Capital
Ratio Requirements,
including fully phased-
in Capital Conservation
|
|||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
As of December 31, 2019:
|
||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
373,684
|
14.88
|
%
|
$
|
263,769
|
10.50
|
%
|
n/a
|
n/a
|
$
|
263,769
|
10.50
|
%
|
||||||||||||||||||
Bank
|
368,322
|
14.67
|
%
|
263,702
|
10.50
|
%
|
$
|
251,145
|
10.00
|
%
|
263,702
|
10.50
|
%
|
|||||||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
322,835
|
12.85
|
%
|
213,527
|
8.50
|
%
|
n/a
|
n/a
|
213,527
|
8.50
|
%
|
|||||||||||||||||||||
Bank
|
343,945
|
13.70
|
%
|
213,473
|
8.50
|
%
|
200,916
|
8.00
|
%
|
213,473
|
8.50
|
%
|
||||||||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
277,835
|
11.06
|
%
|
175,846
|
7.00
|
%
|
n/a
|
n/a
|
175,846
|
7.00
|
%
|
|||||||||||||||||||||
Bank
|
343,945
|
13.70
|
%
|
175,801
|
7.00
|
%
|
163,244
|
6.50
|
%
|
175,801
|
7.00
|
%
|
||||||||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
322,835
|
10.74
|
%
|
120,219
|
4.00
|
%
|
n/a
|
n/a
|
120,219
|
4.00
|
%
|
|||||||||||||||||||||
Bank
|
343,945
|
11.45
|
%
|
121,235
|
4.00
|
%
|
150,175
|
5.00
|
%
|
121,235
|
4.00
|
%
|
Actual
|
Regulatory
Capital Ratio
Requirements
|
Minimum
To be Considered
“Well Capitalized”
|
Regulatory Capital
Ratio Requirements,
including fully phased-
in Capital Conservation
|
|||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||
As of December 31, 2018:
|
||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
$
|
309,798
|
14.28
|
%
|
$
|
214,301
|
9.90
|
%
|
n/a
|
n/a
|
$
|
227,864
|
10.50
|
%
|
||||||||||||||||||
Bank
|
294,572
|
13.58
|
%
|
214,246
|
9.90
|
%
|
$
|
216,958
|
10.00
|
%
|
227,806
|
10.50
|
%
|
|||||||||||||||||||
Tier 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
260,020
|
11.98
|
%
|
170,898
|
7.90
|
%
|
n/a
|
n/a
|
184,462
|
8.50
|
%
|
|||||||||||||||||||||
Bank
|
271,266
|
12.50
|
%
|
170,855
|
7.90
|
%
|
173,567
|
8.00
|
%
|
184,415
|
8.50
|
%
|
||||||||||||||||||||
CET 1 capital (to risk-weighted assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
215,020
|
9.91
|
%
|
138,346
|
6.40
|
%
|
n/a
|
n/a
|
151,910
|
7.00
|
%
|
|||||||||||||||||||||
Bank
|
271,266
|
12.50
|
%
|
138,311
|
6.40
|
%
|
141,023
|
6.50
|
%
|
151,871
|
7.00
|
%
|
||||||||||||||||||||
Tier 1 capital (to average assets)
|
||||||||||||||||||||||||||||||||
Consolidated
|
260,020
|
9.63
|
%
|
108,033
|
4.00
|
%
|
n/a
|
n/a
|
108,033
|
4.00
|
%
|
|||||||||||||||||||||
Bank
|
271,266
|
10.05
|
%
|
107,940
|
4.00
|
%
|
134,925
|
5.00
|
%
|
107,940
|
4.00
|
%
|
Payments Due at December 31, 2019
|
||||||||||||||||||||
Within
One Year
|
One to
Three Years
|
Three to
Five Years
|
After Five
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Time deposits
|
$
|
217,527
|
$
|
93,029
|
$
|
45,467
|
$
|
—
|
$
|
356,023
|
||||||||||
Short-term borrowings
|
37,165
|
—
|
—
|
—
|
37,165
|
|||||||||||||||
Notes payable and other long-term borrowings
|
20,000
|
—
|
—
|
75,000
|
95,000
|
|||||||||||||||
Subordinated debt securities
|
—
|
—
|
—
|
26,472
|
26,472
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
—
|
—
|
—
|
46,393
|
46,393
|
|||||||||||||||
Operating lease commitments
|
1,613
|
2,687
|
1,721
|
4,367
|
10,388
|
|||||||||||||||
Total contractual obligations
|
$
|
276,305
|
$
|
95,716
|
$
|
47,188
|
$
|
152,232
|
$
|
571,441
|
Payments Due at December 31, 2018
|
||||||||||||||||||||
Within
One Year
|
One to
Three Years
|
Three to
Five Years
|
After Five
Years
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Time deposits
|
$
|
163,101
|
$
|
53,737
|
$
|
94,676
|
$
|
23
|
$
|
311,537
|
||||||||||
Short-term borrowings
|
17,705
|
—
|
—
|
—
|
17,705
|
|||||||||||||||
Notes payable and other long-term borrowings
|
—
|
20,000
|
—
|
75,000
|
95,000
|
|||||||||||||||
Subordinated debt securities
|
7,530
|
—
|
—
|
26,472
|
34,002
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
—
|
—
|
—
|
46,393
|
46,393
|
|||||||||||||||
Operating lease commitments
|
1,834
|
2,188
|
1,868
|
5,095
|
10,985
|
|||||||||||||||
Total contractual obligations
|
$
|
190,170
|
$
|
75,925
|
$
|
96,544
|
$
|
152,983
|
$
|
515,622
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
(Dollars in thousands)
|
||||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
409,969
|
$
|
346,245
|
||||
Standby letters of credit
|
10,748
|
5,062
|
||||||
Total
|
$
|
420,717
|
$
|
351,307
|
As of December 31,
|
||||||||
2019
|
2018
|
|||||||
Change in Interest Rates (Basis Points)
|
Percent Change in
Net Interest Income
|
Percent Change in
Net Interest Income
|
||||||
+300
|
(2.44
|
)
|
(0.95
|
)
|
||||
+200
|
(1.40
|
)
|
(0.39
|
)
|
||||
+100
|
(0.71
|
)
|
0.06
|
|||||
-100
|
(0.23
|
)
|
(1.90
|
)
|
As of December 31,
|
||||||||
2019
|
2018
|
|||||||
(Dollars in thousands)
|
||||||||
Total stockholders’ equity
|
$
|
306,182
|
$
|
212,775
|
||||
Less: Goodwill and other intangibles
|
(27,389
|
)
|
—
|
|||||
Tangible common equity
|
$
|
$ 278,793
|
$
|
212,775
|
||||
Total assets
|
$
|
3,237,167
|
$
|
2,712,745
|
||||
Less: Goodwill and other intangibles
|
(27,389
|
)
|
—
|
|||||
Tangible assets
|
$
|
3,209,778
|
$
|
2,712,745
|
||||
Shares outstanding
|
18,036,115
|
14,771,520
|
||||||
Total stockholders’ equity to total assets
|
9.46
|
%
|
7.84
|
%
|
||||
Tangible common equity to tangible assets
|
8.69
|
%
|
7.84
|
%
|
||||
Book value per share
|
$
|
16.98
|
$
|
14.40
|
||||
Tangible book value per share
|
$
|
15.46
|
$
|
14.40
|
Page
|
|
76 | |
Consolidated Financial Statements:
|
|
77 | |
78 | |
80 | |
81 | |
82 |
December 31,
|
||||||||
2019
|
2018
|
|||||||
ASSETS
|
(In thousands except per share data)
|
|||||||
Cash and due from banks
|
$
|
56,246
|
$
|
47,802
|
||||
Interest-bearing deposits in banks
|
101,853
|
198,187
|
||||||
Cash and cash equivalents
|
158,099
|
245,989
|
||||||
Securities available for sale
|
707,650
|
338,196
|
||||||
Loans held for sale
|
49,035
|
38,382
|
||||||
Loans held for investment
|
2,143,623
|
1,957,197
|
||||||
Allowance for loan losses
|
(24,197
|
)
|
(23,126
|
)
|
||||
Accrued interest receivable
|
13,924
|
12,957
|
||||||
Premises and equipment, net
|
61,873
|
59,787
|
||||||
Bank-owned life insurance
|
69,397
|
57,172
|
||||||
Goodwill
|
18,757
|
—
|
||||||
Intangible assets, net
|
8,632
|
—
|
||||||
Other assets
|
30,374
|
26,191
|
||||||
Total assets
|
$
|
3,237,167
|
$
|
2,712,745
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
790,921
|
$
|
510,067
|
||||
Interest-bearing
|
1,905,936
|
1,767,387
|
||||||
Total deposits
|
2,696,857
|
2,277,454
|
||||||
Short-term borrowings
|
37,165
|
17,705
|
||||||
Accrued expenses and other liabilities
|
29,098
|
29,416
|
||||||
Notes payable & other borrowings
|
95,000
|
95,000
|
||||||
Subordinated debt securities
|
26,472
|
34,002
|
||||||
Junior subordinated deferrable interest debentures
|
46,393
|
46,393
|
||||||
Total liabilities
|
2,930,985
|
2,499,970
|
||||||
Commitments and contingent liabilities
|
||||||||
ESOP owned shares
|
58,195
|
|||||||
Stockholders’ equity:
|
||||||||
Common stock, $1 par value, 30,000,000 shares authorized; 18,036,115 issued in 2019 and 14,771,520 issued in 2018
|
18,036
|
14,772
|
||||||
Additional paid-in capital
|
140,492
|
80,412
|
||||||
Retained earnings
|
146,696
|
119,834
|
||||||
Accumulated other comprehensive income (loss)
|
958
|
(2,243
|
)
|
|||||
306,182
|
212,775
|
|||||||
Less ESOP owned shares
|
—
|
58,195
|
||||||
Total stockholders’ equity
|
306,182
|
154,580
|
||||||
Total liabilities and stockholders’ equity
|
$
|
3,237,167
|
$
|
2,712,745
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
(In thousands except per share data)
|
||||||||
Interest income:
|
||||||||
Loans, including fees
|
$
|
116,904
|
$
|
105,710
|
||||
Securities:
|
||||||||
Taxable
|
8,890
|
5,577
|
||||||
Non taxable
|
1,018
|
2,872
|
||||||
Federal funds sold and interest-bearing deposits in banks
|
6,130
|
3,935
|
||||||
Total interest income
|
132,942
|
118,094
|
||||||
Interest expense:
|
||||||||
Deposits
|
22,491
|
17,561
|
||||||
Notes payable & other borrowings
|
2,314
|
2,051
|
||||||
Subordinated debt securities
|
1,616
|
1,046
|
||||||
Junior subordinated deferrable interest debentures
|
1,946
|
1,824
|
||||||
Total interest expense
|
28,367
|
22,482
|
||||||
Net interest income
|
104,575
|
95,612
|
||||||
Provision for loan losses
|
2,799
|
6,901
|
||||||
Net interest income, after provision for loan losses
|
101,776
|
88,711
|
||||||
Noninterest income:
|
||||||||
Service charges on deposit accounts
|
8,129
|
7,813
|
||||||
Income from insurance activities
|
7,016
|
7,128
|
||||||
Net gain on sales of loans
|
23,521
|
19,703
|
||||||
Bank card services and interchange fees
|
8,692
|
8,845
|
||||||
Investment commissions
|
1,710
|
1,779
|
||||||
Fiduciary fees
|
2,306
|
1,442
|
||||||
Other
|
5,259
|
5,411
|
||||||
Total noninterest income
|
56,633
|
52,121
|
||||||
Noninterest expense:
|
||||||||
Salaries and employee benefits
|
75,392
|
71,778
|
||||||
Occupancy and equipment, net
|
13,572
|
13,571
|
||||||
Professional services
|
7,334
|
6,734
|
||||||
Marketing and development
|
3,017
|
3,050
|
||||||
IT and data services
|
2,830
|
2,233
|
||||||
Bank card expenses
|
3,346
|
2,743
|
||||||
Appraisal expenses
|
1,625
|
1,353
|
||||||
Other
|
14,592
|
13,981
|
||||||
Total noninterest expense
|
121,708
|
115,443
|
||||||
Income before income taxes
|
36,701
|
25,389
|
||||||
Income tax expense (benefit)
|
7,481
|
(3,901
|
)
|
|||||
Net income
|
$
|
29,220
|
$
|
29,290
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
(In thousands except per share data)
|
||||||||
Earnings per share:
|
||||||||
Basic
|
$
|
1.74
|
$
|
1.98
|
||||
Diluted
|
$
|
1.71
|
$
|
1.98
|
||||
Net income
|
$
|
29,220
|
$
|
29,290
|
||||
Other comprehensive income (loss):
|
||||||||
Change in net unrealized loss on securities available for sale
|
4,025
|
(1,773
|
)
|
|||||
Reclassification adjustment for (gain) loss included in net income
|
28
|
(620
|
)
|
|||||
Tax effect
|
(852
|
)
|
596
|
|||||
Other comprehensive income (loss)
|
3,201
|
(1,797
|
)
|
|||||
Comprehensive income
|
$
|
32,421
|
$
|
27,493
|
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
Unearned
ESOP
|
Treasury
|
Less:
ESOP
Owned
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Shares
|
Stock
|
Shares
|
Total
|
||||||||||||||||||||||||||||
(In thousands, except share data)
|
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
15,153,510
|
$
|
15,154
|
$
|
85,888
|
$
|
120,589
|
$
|
(446
|
)
|
$
|
—
|
$
|
(5,858
|
)
|
$
|
(57,121
|
)
|
$
|
158,206
|
||||||||||||||||
Net income
|
—
|
—
|
—
|
29,290
|
—
|
—
|
—
|
—
|
29,290
|
|||||||||||||||||||||||||||
Cash dividends:
|
||||||||||||||||||||||||||||||||||||
Common - $2.03 per share
|
—
|
—
|
—
|
(30,045
|
)
|
—
|
—
|
—
|
—
|
(30,045
|
)
|
|||||||||||||||||||||||||
Other comprehensive (loss), (net of tax)
|
—
|
—
|
—
|
—
|
(1,797
|
)
|
—
|
—
|
—
|
(1,797
|
)
|
|||||||||||||||||||||||||
Net change in value of ESOP shares
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(1,074
|
)
|
(1,074
|
)
|
|||||||||||||||||||||||||
Extinguish treasury stock
|
(381,990
|
)
|
(382
|
)
|
(5,476
|
)
|
—
|
—
|
—
|
5,858
|
—
|
—
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
14,771,520
|
14,772
|
80,412
|
119,834
|
(2,243
|
)
|
—
|
—
|
(58,195
|
)
|
154,580
|
|||||||||||||||||||||||||
Issuance of common stock, net
|
3,207,000
|
3,207
|
48,185
|
—
|
—
|
—
|
—
|
—
|
51,392
|
|||||||||||||||||||||||||||
Net income
|
—
|
—
|
—
|
29,220
|
—
|
—
|
—
|
—
|
29,220
|
|||||||||||||||||||||||||||
Cash dividends:
|
||||||||||||||||||||||||||||||||||||
Common - $0.06 per share
|
—
|
—
|
—
|
(1,079
|
)
|
—
|
—
|
—
|
—
|
(1,079
|
)
|
|||||||||||||||||||||||||
Other comprehensive income, (net of tax)
|
—
|
—
|
—
|
—
|
3,201
|
—
|
—
|
—
|
3,201
|
|||||||||||||||||||||||||||
Terminated ESOP put option
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
58,195
|
58,195
|
|||||||||||||||||||||||||||
Exercise of employee stock options, net of 111,011 shares for cashless exercise and net of 18,894 shares for taxes
|
57,595
|
57
|
(408
|
)
|
—
|
—
|
—
|
—
|
—
|
(351
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
—
|
—
|
853
|
—
|
—
|
—
|
—
|
—
|
853
|
|||||||||||||||||||||||||||
Share-based liability awards modified to equity awards
|
—
|
—
|
11,450
|
—
|
—
|
—
|
—
|
—
|
11,450
|
|||||||||||||||||||||||||||
Cumulative change in accounting principle
|
—
|
—
|
—
|
(1,279
|
)
|
—
|
—
|
—
|
—
|
(1,279
|
)
|
|||||||||||||||||||||||||
Balance at December 31, 2019
|
18,036,115
|
$
|
18,036
|
$
|
140,492
|
$
|
146,696
|
$
|
958
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
306,182
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
(In thousands except per share data)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
29,220
|
$
|
29,290
|
||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||
Provision for loan losses
|
2,799
|
6,901
|
||||||
Provision for foreclosed asset losses
|
—
|
285
|
||||||
Depreciation and amortization
|
5,225
|
5,185
|
||||||
Accretion and amortization
|
252
|
1,305
|
||||||
Other gains, net
|
40
|
(788
|
)
|
|||||
Net gain on sales of loans
|
(23,521
|
)
|
(19,703
|
)
|
||||
Proceeds from sales of loans held for sale
|
653,548
|
555,325
|
||||||
Loans originated for sale
|
(640,680
|
)
|
(544,690
|
)
|
||||
Earnings on bank-owned life insurance
|
(1,293
|
)
|
(1,282
|
)
|
||||
Stock-based compensation
|
853
|
—
|
||||||
Net change in:
|
||||||||
Accrued interest receivable and other assets
|
(2,336
|
)
|
(8,187
|
)
|
||||
Accrued expenses and other liabilities
|
6,377
|
3,279
|
||||||
Net cash from operating activities
|
30,484
|
26,920
|
||||||
Cash flows from investing activities:
|
||||||||
Activity in securities available for sale:
|
||||||||
Purchases
|
(489,032
|
)
|
(539,091
|
)
|
||||
Sales
|
52,495
|
102,332
|
||||||
Maturities, prepayments, and calls
|
139,255
|
364,909
|
||||||
Maturities, prepayments, and calls of held to maturity securities
|
—
|
14,675
|
||||||
Loan originations and principal collections, net
|
5,572
|
(126,732
|
)
|
|||||
Net cash received in business combinations
|
78,171
|
—
|
||||||
Purchases of premises and equipment, net
|
(3,997
|
)
|
(3,134
|
)
|
||||
Proceeds from sales of premises and equipment
|
208
|
126
|
||||||
Proceeds from sales of foreclosed assets
|
3,835
|
2,823
|
||||||
Net cash from investing activities
|
(213,493
|
)
|
(184,092
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
33,227
|
123,373
|
||||||
Net change in short-term borrowings
|
19,460
|
2,155
|
||||||
Proceeds from common stock issuance, net
|
51,392
|
—
|
||||||
Payments to tax authorities for stock-based compensation
|
(351
|
)
|
—
|
|||||
Proceeds from notes payable and other borrowings
|
—
|
13,115
|
||||||
Payments made on notes payable and other borrowings
|
(7,530
|
)
|
—
|
|||||
Cash dividends on common stock
|
(1,079
|
)
|
(30,045
|
)
|
||||
Net cash from financing activities
|
95,119
|
108,598
|
||||||
Net change in cash and cash equivalents
|
$
|
(87,890
|
)
|
$
|
(48,574
|
)
|
||
Beginning cash and cash equivalents
|
245,989
|
294,563
|
||||||
Ending cash and cash equivalents
|
$
|
158,099
|
$
|
245,989
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid on deposits and borrowed funds
|
$
|
28,125
|
$
|
22,024
|
||||
Income taxes paid
|
6,474
|
2,729
|
||||||
Supplemental schedule of noncash investing and financing activities:
|
||||||||
Loans transferred to foreclosed assets
|
2,452
|
6,473
|
||||||
Financed foreclosed asset sales
|
—
|
4,019
|
Wholly Owned, Consolidated Subsidiaries:
|
|
City Bank
|
Bank subsidiary
|
Windmark Insurance Agency, Inc.
|
Non-bank subsidiary
|
Ruidoso Retail, Inc.
|
Non-bank subsidiary
|
CB Provence, LLC
|
Non-bank subsidiary
|
CBT Brushy Creek, LLC
|
Non-bank subsidiary
|
CBT Properties, LLC
|
Non-bank subsidiary
|
Wholly Owned, Equity Method Subsidiaries:
|
|
South Plains Financial Capital Trusts (SPFCT) III-V
|
Non-bank subsidiaries
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
2019
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
4,750
|
$
|
57
|
$
|
—
|
$
|
4,807
|
||||||||
State and municipal
|
94,512
|
1,091
|
(911
|
)
|
94,692
|
|||||||||||
Mortgage-backed securities
|
463,899
|
3,727
|
(3,110
|
)
|
464,516
|
|||||||||||
Collateralized mortgage obligations
|
107,443
|
15
|
(169
|
)
|
107,289
|
|||||||||||
Asset-backed and other amortizing securities
|
35,833
|
522
|
(9
|
)
|
36,346
|
|||||||||||
$
|
706,437
|
$
|
5,412
|
$
|
(4,199
|
)
|
$
|
707,650
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
2018
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
84,765
|
$
|
18
|
$
|
(76
|
)
|
$
|
84,707
|
|||||||
State and municipal
|
32,205
|
480
|
(375
|
)
|
32,310
|
|||||||||||
Mortgage-backed securities
|
184,267
|
29
|
(2,040
|
)
|
182,256
|
|||||||||||
Asset-backed and other amortizing securities
|
39,799
|
1
|
(877
|
)
|
38,923
|
|||||||||||
$
|
341,036
|
$
|
528
|
$
|
(3,368
|
)
|
$
|
338,196
|
Available for Sale
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
Within 1 year
|
$
|
470
|
$
|
472
|
||||
After 1 year through 5 years
|
5,778
|
5,842
|
||||||
After 5 years through 10 years
|
14,206
|
14,472
|
||||||
After 10 years
|
78,808
|
78,713
|
||||||
Other
|
607,175
|
608,151
|
||||||
$
|
706,437
|
$
|
707,650
|
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
|||||||||||||||||||
2019
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
State and municipal
|
58,389
|
910
|
387
|
1
|
58,776
|
911
|
||||||||||||||||||
Mortgage-backed securities
|
284,120
|
3,071
|
4,661
|
40
|
288,781
|
3,111
|
||||||||||||||||||
Collateralized mortgage obligations
|
60,039
|
168
|
—
|
—
|
60,039
|
168
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
2,661
|
9
|
—
|
—
|
2,661
|
9
|
||||||||||||||||||
$
|
405,209
|
$
|
4,158
|
$
|
5,048
|
$
|
41
|
$
|
410,257
|
$
|
4,199
|
|||||||||||||
2018
|
||||||||||||||||||||||||
U.S. government and agencies
|
$
|
77,891
|
$
|
27
|
$
|
2,048
|
$
|
49
|
$
|
79,939
|
$
|
76
|
||||||||||||
State and municipal
|
5,662
|
92
|
9,781
|
283
|
15,443
|
375
|
||||||||||||||||||
Mortgage-backed securities
|
108,962
|
293
|
54,035
|
1,747
|
162,997
|
2,040
|
||||||||||||||||||
Asset-backed and other amortizing securities
|
–
|
–
|
37,351
|
877
|
37,351
|
877
|
||||||||||||||||||
$
|
192,515
|
$
|
412
|
$
|
103,215
|
$
|
2,956
|
$
|
295,730
|
$
|
3,368
|
2019
|
2018
|
|||||||
Commercial real estate
|
$
|
658,195
|
$
|
538,037
|
||||
Commercial - specialized
|
309,505
|
305,022
|
||||||
Commercial - general
|
441,398
|
427,728
|
||||||
Consumer:
|
||||||||
1-4 family residential
|
362,796
|
346,153
|
||||||
Auto loans
|
215,209
|
191,647
|
||||||
Other consumer
|
74,000
|
70,209
|
||||||
Construction
|
82,520
|
78,401
|
||||||
2,143,623
|
1,957,197
|
|||||||
Allowance for loan losses
|
(24,197
|
)
|
(23,126
|
)
|
||||
Loans, net
|
$
|
2,119,426
|
$
|
1,934,071
|
Beginning
Balance
|
Provision for
Loan Losses
|
Charge-offs
|
Recoveries
|
Ending
Balance
|
||||||||||||||||
2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
5,579
|
$
|
(961
|
)
|
$
|
—
|
$
|
431
|
$
|
5,049
|
|||||||||
Commercial - specialized
|
2,516
|
2
|
(355
|
)
|
124
|
2,287
|
||||||||||||||
Commercial - general
|
8,173
|
1,209
|
(306
|
)
|
533
|
9,609
|
||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
2,249
|
219
|
(436
|
)
|
61
|
2,093
|
||||||||||||||
Auto loans
|
2,994
|
1,276
|
(1,067
|
)
|
182
|
3,385
|
||||||||||||||
Other consumer
|
1,192
|
969
|
(1,034
|
)
|
214
|
1,341
|
||||||||||||||
Construction
|
423
|
85
|
(75
|
)
|
—
|
433
|
||||||||||||||
Total
|
$
|
23,126
|
$
|
2,799
|
$
|
(3,273
|
)
|
$
|
1,545
|
$
|
24,197
|
|||||||||
2018
|
||||||||||||||||||||
Commercial real estate
|
$
|
3,769
|
$
|
1,728
|
$
|
(1,540
|
)
|
$
|
1,622
|
$
|
5,579
|
|||||||||
Commercial - specialized
|
2,367
|
177
|
(115
|
)
|
87
|
2,516
|
||||||||||||||
Commercial - general
|
10,151
|
1,539
|
(4,291
|
)
|
774
|
8,173
|
||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
1,787
|
660
|
(272
|
)
|
74
|
2,249
|
||||||||||||||
Auto loans
|
2,068
|
1,733
|
(972
|
)
|
165
|
2,994
|
||||||||||||||
Other consumer
|
971
|
974
|
(941
|
)
|
188
|
1,192
|
||||||||||||||
Construction
|
348
|
90
|
(15
|
)
|
—
|
423
|
||||||||||||||
Total
|
$
|
21,461
|
$
|
6,901
|
$
|
(8,146
|
)
|
$
|
2,910
|
$
|
23,126
|
Recorded Investment
|
Allowance for Loan Losses
|
|||||||||||||||
Individually
Evaluated
|
Collectively
Evaluated
|
Individually
Evaluated
|
Collectively
Evaluated
|
|||||||||||||
2019
|
||||||||||||||||
Commercial real estate
|
$
|
299
|
$
|
657,896
|
$
|
—
|
$
|
5,049
|
||||||||
Commercial - specialized
|
573
|
308,932
|
—
|
2,287
|
||||||||||||
Commercial - general
|
1,396
|
440,002
|
525
|
9,084
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
1,899
|
360,897
|
—
|
2,093
|
||||||||||||
Auto loans
|
—
|
215,209
|
—
|
3,385
|
||||||||||||
Other consumer
|
—
|
74,000
|
—
|
1,341
|
||||||||||||
Construction
|
—
|
82,520
|
—
|
433
|
||||||||||||
Total
|
$
|
4,167
|
$
|
2,139,456
|
$
|
525
|
$
|
23,672
|
||||||||
2018
|
||||||||||||||||
Commercial -
|
$
|
1,819
|
$
|
536,218
|
$
|
—
|
$
|
5,579
|
||||||||
Commercial - specialized
|
2,116
|
302,906
|
—
|
2,516
|
||||||||||||
Commercial - general
|
2,950
|
424,778
|
233
|
7,940
|
||||||||||||
Consumer:
|
||||||||||||||||
1-4 family residential
|
2,475
|
343,678
|
8
|
2,241
|
||||||||||||
Auto loans
|
—
|
191,647
|
—
|
2,994
|
||||||||||||
Other consumer
|
—
|
70,209
|
—
|
1,192
|
||||||||||||
Construction
|
—
|
78,401
|
—
|
423
|
||||||||||||
Total
|
$
|
9,360
|
$
|
1,947,837
|
$
|
241
|
$
|
22,885
|
Unpaid
Contractual
Principal
Balance |
Recorded
Investment
With No
Allowance |
Recorded
Investment
With
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
Average
Recorded
Investment
|
|||||||||||||||||||
2019
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
754
|
$
|
299
|
$
|
—
|
$
|
299
|
$
|
—
|
$
|
1,059
|
||||||||||||
Commercial -specialized
|
573
|
573
|
—
|
573
|
—
|
1,345
|
||||||||||||||||||
Commercial - general
|
1,839
|
—
|
1,396
|
1,396
|
525
|
2,173
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family
|
2,318
|
1,899
|
—
|
1,899
|
—
|
2,187
|
||||||||||||||||||
Auto loans
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
5,484
|
$
|
2,771
|
$
|
1,396
|
$
|
4,167
|
$
|
525
|
$
|
6,764
|
||||||||||||
2018
|
||||||||||||||||||||||||
Commercial real estate
|
$
|
2,274
|
$
|
1,819
|
$
|
—
|
$
|
1,819
|
$
|
—
|
$
|
4,590
|
||||||||||||
Commercial specialized
|
2,116
|
2,116
|
—
|
2,116
|
—
|
3,742
|
||||||||||||||||||
Commercial general
|
4,758
|
240
|
2,710
|
2,950
|
233
|
3,963
|
||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||
1-4 family
|
2,894
|
2,111
|
364
|
2,475
|
8
|
2,881
|
||||||||||||||||||
Auto loans
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
12,042
|
$
|
6,286
|
$
|
3,074
|
$
|
9,360
|
$
|
241
|
$
|
15,176
|
30-89 Days
Past Due
|
90 Days or
More Past Due
|
Nonaccrual
|
||||||||||
2019
|
||||||||||||
Commercial real estate
|
$
|
37
|
$
|
116
|
$
|
162
|
||||||
Commercial - specialized
|
708
|
—
|
1,172
|
|||||||||
Commercial - general
|
1,747
|
—
|
2,254
|
|||||||||
Consumer:
|
||||||||||||
1-4 Family residential
|
1,212
|
932
|
1,105
|
|||||||||
Auto loans
|
1,468
|
183
|
—
|
|||||||||
Other consumer
|
848
|
121
|
—
|
|||||||||
Construction
|
1,159
|
—
|
—
|
|||||||||
Total
|
$
|
7,179
|
$
|
1,352
|
$
|
4,693
|
||||||
2018
|
||||||||||||
Commercial real estate
|
$
|
1,748
|
$
|
—
|
$
|
217
|
||||||
Commercial - specialized
|
992
|
—
|
2,550
|
|||||||||
Commercial - general
|
2,625
|
—
|
2,134
|
|||||||||
Consumer:
|
||||||||||||
1-4 Family residential
|
1,611
|
440
|
1,489
|
|||||||||
Auto loans
|
825
|
50
|
—
|
|||||||||
Other consumer
|
883
|
74
|
—
|
|||||||||
Construction
|
—
|
—
|
—
|
|||||||||
Total
|
$
|
8,684
|
$
|
564
|
$
|
6,390
|
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
2019
|
||||||||||||||||||||
Commercial real estate
|
$
|
632,641
|
$
|
22,313
|
$
|
3,241
|
$
|
—
|
$
|
658,195
|
||||||||||
Commercial - specialized
|
307,239
|
—
|
2,266
|
—
|
309,505
|
|||||||||||||||
Commercial - general
|
428,155
|
—
|
13,243
|
—
|
441,398
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
356,422
|
—
|
6,374
|
—
|
362,796
|
|||||||||||||||
Auto loans
|
214,363
|
—
|
846
|
—
|
215,209
|
|||||||||||||||
Other consumer
|
73,716
|
—
|
284
|
—
|
74,000
|
|||||||||||||||
Construction
|
82,520
|
—
|
—
|
—
|
82,520
|
|||||||||||||||
Total
|
$
|
2,095,056
|
$
|
22,313
|
$
|
26,254
|
$
|
—
|
$
|
2,143,623
|
||||||||||
2018
|
||||||||||||||||||||
Commercial real estate
|
$
|
514,249
|
$
|
17,300
|
$
|
6,488
|
$
|
—
|
$
|
538,037
|
||||||||||
Commercial - specialized
|
301,289
|
—
|
3,733
|
—
|
305,022
|
|||||||||||||||
Commercial - general
|
415,675
|
1,449
|
10,604
|
—
|
427,728
|
|||||||||||||||
Consumer:
|
||||||||||||||||||||
1-4 family residential
|
340,836
|
—
|
5,317
|
—
|
346,153
|
|||||||||||||||
Auto loans
|
191,435
|
—
|
212
|
—
|
191,647
|
|||||||||||||||
Other consumer
|
70,075
|
—
|
134
|
—
|
70,209
|
|||||||||||||||
Construction
|
78,401
|
—
|
—
|
—
|
78,401
|
|||||||||||||||
Total
|
$
|
1,911,960
|
$
|
18,749
|
$
|
26,488
|
$
|
—
|
$
|
1,957,197
|
2019
|
2018
|
|||||||
Beginning balance
|
$
|
2,285
|
$
|
2,830
|
||||
Additions
|
3,469
|
6,473
|
||||||
Sales, net
|
(3,871
|
)
|
(6,733
|
)
|
||||
Current year valuation write-down
|
—
|
(285
|
)
|
|||||
Ending balance
|
$
|
1,883
|
$
|
2,285
|
2019
|
2018
|
|||||||
Beginning balance
|
$
|
325
|
$
|
1,413
|
||||
Current year valuation write-down
|
—
|
285
|
||||||
Reductions from sales
|
(325
|
)
|
(1,373
|
)
|
||||
Ending balance
|
$
|
—
|
$
|
325
|
2019
|
2018
|
|||||||
Net gain (loss) on sales
|
$
|
(37
|
)
|
$
|
108
|
|||
Current year valuation write-down
|
—
|
285
|
||||||
Operating expenses, net of rental income
|
145
|
86
|
||||||
Foreclosed assets expense, net
|
$
|
108
|
$
|
479
|
2019
|
2018
|
|||||||
Land
|
$
|
10,825
|
$
|
10,121
|
||||
Buildings and improvements
|
63,972
|
60,799
|
||||||
Furniture and equipment
|
44,460
|
41,954
|
||||||
Construction in process
|
974
|
672
|
||||||
120,231
|
113,546
|
|||||||
Less accumulated depreciation
|
(58,358
|
)
|
(53,759
|
)
|
||||
Premises and equipment, net
|
$
|
61,873
|
$
|
59,787
|
2019
|
2018
|
|||||||
Beginning goodwill
|
$
|
—
|
$
|
—
|
||||
Arising from business combinations
|
18,757
|
—
|
||||||
Ending goodwill
|
$
|
18,757
|
$
|
—
|
||||
Amortized intangible assets:
|
||||||||
CDI
|
$
|
6,679
|
$
|
—
|
||||
Less: Accumulated amortization
|
(202
|
)
|
—
|
|||||
6,477
|
—
|
|||||||
Other intangibles
|
2,309
|
—
|
||||||
Less: Accumulated amortization
|
(154
|
)
|
—
|
|||||
2,155
|
||||||||
Other intangible assets, net
|
$
|
8,632
|
$
|
—
|
CDI
|
Other Intangible
|
Total
|
||||||||||
2020
|
$
|
1,194
|
$
|
473
|
$
|
1,667
|
||||||
2021
|
1,073
|
462
|
1,535
|
|||||||||
2022
|
951
|
462
|
1,413
|
|||||||||
2023
|
830
|
462
|
1,292
|
|||||||||
2024
|
708
|
308
|
1,016
|
2020
|
$
|
217,527
|
||
2021
|
34,102
|
|||
2022
|
58,927
|
|||
2023
|
39,431
|
|||
2024
|
6,036
|
|||
Thereafter
|
—
|
|||
$
|
356,023
|
2019
|
2018
|
|||||||
Federal funds purchased
|
$
|
17,165
|
$
|
17,705
|
||||
FHLB advances - short-term
|
20,000
|
—
|
||||||
Total
|
$
|
37,165
|
$
|
17,705
|
Issue Date
|
Original
Amount of Advance
|
2019 Balance
|
2018 Balance
|
Maturity Date
|
Interest Rate
at December 31, 2019
|
||||||||||||
2013
|
$
|
20,000
|
$
|
20,000
|
$
|
20,000
|
2020
|
Fixed; 1.50%
|
|||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 1.67%
|
||||||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 1.67%
|
||||||||||||
2015
|
25,000
|
25,000
|
25,000
|
2025
|
Variable; 1.69%
|
||||||||||||
$
|
95,000
|
$
|
95,000
|
$
|
95,000
|
|
Issue Date
|
Amount
of TPS
|
Amount
of
Debentures
|
Stated Maturity
Date
of TPS and
Debentures(1)
|
Interest Rate of
TPS and
Debentures(2)(3)
|
|||||||||
South Plains Financial Capital Trust III
|
2004
|
$
|
10,000
|
$
|
10,310
|
2034
|
3-mo. LIBOR + 265bps; 4.58%
|
|||||||
South Plains Financial Capital Trust IV
|
2005
|
20,000
|
20,619
|
2035
|
3-mo. LIBOR + 139bps; 3.28%
|
|||||||||
South Plains Financial Capital Trust V
|
2007
|
15,000
|
15,464
|
2037
|
3-mo. LIBOR + 150bps; 3.39%
|
|||||||||
Total
|
$
|
45,000
|
$
|
46,393
|
(1) |
May be redeemed five years from the issue date, the Company has no current plans to redeem; (2) Interest payable quarterly with principal due at maturity; (3) Rate as of last reset date.
|
Number
of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Year Ended December 31, 2019
|
||||||||||||||||
Outstanding at beginning of year:
|
—
|
$
|
—
|
$
|
—
|
|||||||||||
Granted
|
1,691,403
|
13.23
|
12,946,412
|
|||||||||||||
Exercised
|
(187,500
|
)
|
10.60
|
1,926,300
|
||||||||||||
Forfeited
|
(27,406
|
)
|
17.91
|
81,132
|
||||||||||||
Expired
|
(13,500
|
)
|
18.70
|
29,340
|
||||||||||||
Balance, December 31, 2019
|
1,462,997
|
$
|
13.42
|
6.11
|
$
|
10,909,640
|
||||||||||
Exercisable at end of period
|
1,016,850
|
$
|
11.68
|
5.67
|
$
|
9,341,289
|
||||||||||
Vested at end of period
|
1,016,850
|
$
|
11.68
|
5.67
|
$
|
9,341,289
|
Year Ended
December 31, 2019
|
||||
Expected volatility
|
24.88% to 31.54%
|
|||
Expected dividend yield
|
0.70
|
%
|
||
Expected term (years)
|
0.5 - 7.0 years
|
|||
Risk-free interest rate
|
1.46% to 2.63%
|
|||
Weighted average grant date fair value
|
$
|
7.98
|
Number
of Shares
|
Weighted-Average
Grant Date
Fair Value
|
|||||||
Year Ended December 31, 2019
|
||||||||
Outstanding at beginning of year:
|
81,200
|
$
|
19.46
|
|||||
Granted
|
—
|
—
|
||||||
Exercised
|
—
|
—
|
||||||
Forfeited
|
—
|
—
|
||||||
Balance, December 31, 2019
|
81,200
|
$
|
19.46
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Current expense
|
||||||||
Federal
|
$
|
6,923
|
$
|
2,873
|
||||
State
|
224
|
121
|
||||||
Deferred expense
|
||||||||
Federal
|
334
|
(6,895
|
)
|
|||||
Total
|
$
|
7,481
|
$
|
(3,901
|
)
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Federal statutory rate times financial statement income
|
$
|
7,707
|
$
|
5,332
|
||||
Effect of:
|
||||||||
Initial recognition of net deferred tax asset
|
—
|
(6,741
|
)
|
|||||
S Corp taxable income
|
—
|
(2,267
|
)
|
|||||
Tax-exempt income
|
(348
|
)
|
(314
|
)
|
||||
State taxes, net of federal benefit
|
177
|
95
|
||||||
Earnings from bank owned life insurance
|
(272
|
)
|
(153
|
)
|
||||
Non deductible expenses
|
190
|
125
|
||||||
Other, net
|
27
|
22
|
||||||
Total
|
$
|
7,481
|
$
|
(3,901
|
)
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Deferred tax assets
|
||||||||
Allowance for loan loss
|
$
|
5,081
|
$
|
4,857
|
||||
Deferred compensation
|
4,669
|
4,560
|
||||||
Other real estate owned
|
251
|
320
|
||||||
Nonaccrual loans
|
180
|
169
|
||||||
Unrealized loss on available-for-sale securities
|
—
|
596
|
||||||
Other
|
162
|
174
|
||||||
Total deferred tax assets
|
10,343
|
10,676
|
||||||
Deferred tax liabilities
|
||||||||
Depreciation
|
(2,417
|
)
|
(2,331
|
)
|
||||
Intangibles
|
(924
|
)
|
—
|
|||||
Prepaid expenses
|
(419
|
)
|
(390
|
)
|
||||
Mortgage servicing rights
|
(431
|
)
|
(267
|
)
|
||||
Unrealized gain on available-for-sale securities
|
(255
|
)
|
—
|
|||||
Other
|
(278
|
)
|
(197
|
)
|
||||
Total deferred tax liabilities
|
(4,724
|
)
|
(3,185
|
)
|
||||
Net deferred tax asset
|
$
|
5,619
|
$
|
7,491
|
2019
|
2018
|
|||||||
Commitments to grant loans and unfunded commitments under lines of credit
|
$
|
409,969
|
$
|
346,245
|
||||
Standby letters-of-credit
|
10,748
|
5,062
|
2020
|
$
|
1,613
|
||
2021
|
1,439
|
|||
2022
|
1,248
|
|||
2023
|
999
|
|||
2024
|
722
|
|||
Thereafter
|
4,367
|
|||
$
|
10,388
|
Actual
|
Minimum Required
Under BASEL III
Fully Phased-In
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
December 31, 2019:
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
373,684
|
14.88
|
%
|
$
|
263,769
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
368,322
|
14.67
|
%
|
263,702
|
10.50
|
%
|
$
|
251,145
|
10.00
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
12.85
|
%
|
213,527
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
13.70
|
%
|
213,473
|
8.50
|
%
|
200,916
|
8.00
|
%
|
|||||||||||||||
Common Tier 1 (CET1):
|
||||||||||||||||||||||||
Consolidated
|
277,835
|
11.06
|
%
|
175,846
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
13.70
|
%
|
175,801
|
7.00
|
%
|
163,244
|
6.50
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
322,835
|
10.74
|
%
|
120,219
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
343,945
|
11.45
|
%
|
121,235
|
4.00
|
%
|
150,175
|
5.00
|
%
|
|||||||||||||||
December 31, 2018:
|
||||||||||||||||||||||||
Total Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
$
|
309,798
|
14.28
|
%
|
$
|
214,301
|
9.90
|
%
|
N/A
|
N/A
|
||||||||||||||
City Bank
|
294,572
|
13.58
|
%
|
214,246
|
9.90
|
%
|
$
|
216,958
|
10.00
|
%
|
||||||||||||||
Tier I Capital to Risk Weighted Assets:
|
||||||||||||||||||||||||
Consolidated
|
260,020
|
11.98
|
%
|
170,898
|
7.90
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
271,266
|
12.50
|
%
|
170,855
|
7.90
|
%
|
173,567
|
8.00
|
%
|
|||||||||||||||
Common Tier 1 (CET1):
|
||||||||||||||||||||||||
Consolidated
|
215,020
|
9.91
|
%
|
138,346
|
6.40
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
271,266
|
12.50
|
%
|
138,311
|
6.40
|
%
|
141,023
|
6.50
|
%
|
|||||||||||||||
Tier I Capital to Average Assets:
|
||||||||||||||||||||||||
Consolidated
|
260,020
|
9.63
|
%
|
108,033
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||
City Bank
|
271,266
|
10.05
|
%
|
107,940
|
4.00
|
%
|
134,925
|
5.00
|
%
|
Interest Rate Contracts
|
Location
|
2019
|
2018
|
|||||||
Change in fair value on interest rate swaps hedging fixed rate loans
|
Interest income
|
$
|
(520
|
)
|
$
|
110
|
||||
Change in fair value on fixed rate loans - hedged item
|
Interest income
|
$
|
511
|
$
|
(133
|
)
|
2019
|
2018
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other liabilities:
|
||||||||||||||||
Interest rate swaps related to fixed rate loans
|
$
|
10,557
|
$
|
351
|
$
|
—
|
$
|
—
|
||||||||
Included in other assets:
|
||||||||||||||||
Interest rate swaps related to fixed
|
$
|
—
|
$
|
—
|
$
|
10,917
|
$
|
169
|
Location
|
2019
|
2018
|
||||||||
Forward contracts related to mortgage loans held for sale
|
Net gain on sales of loans
|
$
|
672
|
$
|
(661
|
)
|
||||
Interest rate lock commitments
|
Net gain on sales of loans
|
$
|
(249
|
)
|
$
|
582
|
2019
|
2018
|
|||||||||||||||
Notional
Amount
|
Fair
Value
|
Notional
Amount
|
Fair
Value
|
|||||||||||||
Included in other assets:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Interest rate lock commitments
|
52,875
|
814
|
46,891
|
1,063
|
||||||||||||
Total included in other assets
|
$
|
52,875
|
$
|
814
|
$
|
46,891
|
$
|
1,063
|
||||||||
Included in other liabilities:
|
||||||||||||||||
Forward contracts related to mortgage loans held for sale
|
$
|
58,948
|
$
|
141
|
$
|
54,998
|
$
|
672
|
||||||||
Interest rate lock commitments
|
—
|
—
|
—
|
—
|
||||||||||||
Total included in other liabilities
|
$
|
58,948
|
$
|
141
|
$
|
54,998
|
$
|
672
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
ASSETS
|
(In thousands except per share data)
|
|||||||
Cash and cash equivalents
|
$
|
4,181
|
$
|
22,627
|
||||
Investment in banking subsidiary
|
372,292
|
269,022
|
||||||
Investment in other subsidiary
|
51
|
58
|
||||||
Other assets
|
3,906
|
2,304
|
||||||
Total assets
|
$
|
380,430
|
$
|
294,011
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Debt
|
$
|
72,865
|
$
|
80,395
|
||||
Accrued expenses and other liabilities
|
1,383
|
841
|
||||||
ESOP-owned shares
|
—
|
58,195
|
||||||
Stockholders’ equity
|
306,182
|
154,580
|
||||||
Total liabilities and stockholders’ equity
|
$
|
380,430
|
$
|
294,011
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Dividends
|
$
|
10,000
|
$
|
17,500
|
||||
Other income
|
64
|
60
|
||||||
ESOP Contribution
|
(1,800
|
)
|
(2,000
|
)
|
||||
Interest expense
|
(3,562
|
)
|
(2,870
|
)
|
||||
Other expense
|
(2,221
|
)
|
(1,001
|
)
|
||||
Income before income tax and undistributed subsidiary income
|
2,481
|
11,689
|
||||||
Income tax (benefit)
|
(1,498
|
)
|
(800
|
)
|
||||
Equity in undistributed subsidiary income
|
25,241
|
16,801
|
||||||
Net Income
|
$
|
29,220
|
$
|
29,290
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
29,220
|
$
|
29,290
|
||||
Adjustments:
|
||||||||
Equity in undistributed subsidiary income
|
(25,241
|
)
|
(16,801
|
)
|
||||
Stock based compensation
|
853
|
—
|
||||||
Change in other assets
|
(1,601
|
)
|
(456
|
)
|
||||
Change in other liabilities
|
541
|
468
|
||||||
Release of unearned ESOP shares
|
—
|
—
|
||||||
Net cash from operating activities
|
3,772
|
12,501
|
||||||
Cash flows from investing activities:
|
||||||||
Return of capital from subsidiary
|
—
|
2,500
|
||||||
Cash paid in WTSB business combination
|
(76,100
|
)
|
—
|
|||||
Net cash from investing activities
|
(76,100
|
)
|
2,500
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from long-term borrowings
|
—
|
13,115
|
||||||
Repayments of long-term borrowings
|
(7,530
|
)
|
—
|
|||||
Issuance of common stock
|
51,392
|
—
|
||||||
Payments to tax authorities for stock-based compensation
|
(351
|
)
|
—
|
|||||
Share based liability conversion
|
11,450
|
—
|
||||||
Cash dividends on common stock
|
(1,079
|
)
|
(30,045
|
)
|
||||
Net cash from financing activities
|
53,882
|
(16,930
|
)
|
|||||
Net change in cash and cash equivalents
|
(18,446
|
)
|
(1,929
|
)
|
||||
Beginning cash and cash equivalents
|
22,627
|
24,556
|
||||||
Ending cash and cash equivalents
|
$
|
4,181
|
$
|
22,627
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Net income
|
$
|
29,220
|
$
|
29,290
|
||||
Weighted average common shares outstanding - basic
|
16,818,697
|
14,771,520
|
||||||
Weighted average common shares outstanding - diluted
|
17,040,550
|
14,771,520
|
||||||
Basic earnings per share
|
$
|
1.74
|
$
|
1.98
|
||||
Diluted earnings per share
|
$
|
1.71
|
$
|
1.98
|
Banking
|
Insurance
|
Consolidated
|
||||||||||
2019
|
||||||||||||
Net interest income
|
$
|
104,575
|
$
|
—
|
$
|
104,575
|
||||||
Provision for loan loss
|
(2,799
|
)
|
—
|
(2,799
|
)
|
|||||||
Noninterest income
|
49,834
|
6,799
|
56,633
|
|||||||||
Noninterest expense
|
(117,160
|
)
|
(4,548
|
)
|
(121,708
|
)
|
||||||
Income before income taxes
|
34,450
|
2,251
|
36,701
|
|||||||||
Income tax (expense) benefit
|
(7,097
|
)
|
(384
|
)
|
(7,481
|
)
|
||||||
Net income
|
$
|
27,353
|
$
|
1,867
|
$
|
29,220
|
||||||
Total assets
|
$
|
3,224,396
|
$
|
12,771
|
$
|
3,237,167
|
Banking
|
Insurance
|
Consolidated
|
||||||||||
2018
|
||||||||||||
Net interest income (expense)
|
$
|
95,612
|
$
|
—
|
$
|
95,612
|
||||||
Provision for loan loss
|
(6,901
|
)
|
—
|
(6,901
|
)
|
|||||||
Noninterest income
|
45,247
|
6,874
|
52,121
|
|||||||||
Noninterest expense
|
(111,104
|
)
|
(4,339
|
)
|
(115,443
|
)
|
||||||
Income before income taxes
|
22,854
|
2,535
|
25,389
|
|||||||||
Income tax (expense) benefit
|
4,129
|
(228
|
)
|
3,901
|
||||||||
Net income
|
$
|
26,983
|
$
|
2,307
|
$
|
29,290
|
||||||
Total assets
|
$
|
2,701,600
|
$
|
11,145
|
$
|
2,712,745
|
● |
Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting
entity has the ability to access at the measurement date.
|
● |
Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or
liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
|
● |
Level 3 Inputs - Significant unobservable inputs for determining the fair values of assets or liabilities that reflect
an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
2019
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
—
|
$
|
4,807
|
$
|
—
|
$
|
4,807
|
||||||||
State and municipal
|
—
|
94,692
|
—
|
94,692
|
||||||||||||
Mortgage-backed securities
|
—
|
571,805
|
—
|
571,805
|
||||||||||||
Asset-backed and other amortizing securities
|
—
|
36,346
|
—
|
36,346
|
||||||||||||
Loans held for sale (mandatory)
|
—
|
32,809
|
—
|
32,809
|
||||||||||||
Mortgage servicing rights
|
—
|
2,054
|
—
|
2,054
|
||||||||||||
Asset derivatives
|
—
|
814
|
—
|
814
|
||||||||||||
Liability derivatives
|
—
|
(492
|
)
|
—
|
(492
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
—
|
—
|
3,642
|
3,642
|
||||||||||||
Other real estate owned
|
—
|
—
|
1,883
|
1,883
|
||||||||||||
Loans held for sale (best efforts)
|
—
|
16,226
|
—
|
16,226
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
2018
|
||||||||||||||||
Assets (liabilities) measured at fair value on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. government and agencies
|
$
|
74,419
|
$
|
10,288
|
$
|
—
|
$
|
84,707
|
||||||||
State and municipal
|
—
|
32,310
|
—
|
32,310
|
||||||||||||
Mortgage-backed securities
|
—
|
182,256
|
—
|
182,256
|
||||||||||||
Asset-backed and other amortizing securities
|
—
|
38,923
|
—
|
38,923
|
||||||||||||
Loans held for sale (mandatory)
|
—
|
31,874
|
—
|
31,874
|
||||||||||||
Mortgage servicing rights
|
—
|
1,270
|
—
|
1,270
|
||||||||||||
Asset derivatives
|
—
|
1,232
|
—
|
1,232
|
||||||||||||
Liability derivatives
|
—
|
(672
|
)
|
—
|
(672
|
)
|
||||||||||
Assets measured at fair value on a non-recurring basis:
|
||||||||||||||||
Impaired loans
|
—
|
—
|
9,119
|
9,119
|
||||||||||||
Other real estate owned
|
—
|
—
|
2,285
|
2,285
|
||||||||||||
Loans held for sale (best efforts)
|
—
|
6,508
|
—
|
6,508
|
Fair Value
|
Valuation Techniques
|
Unobservable Inputs
|
Range of
Discounts
|
||||||||
2019
|
|||||||||||
Impaired loans
|
$
|
3,642
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
0%-100
|
%
|
|||||
Other real estate owned
|
1,883
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
15%-66
|
%
|
||||||
2018
|
|||||||||||
Impaired loans
|
$
|
9,119
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
0%-100
|
%
|
|||||
Other real estate owned
|
2,285
|
Third party appraisals or inspections
|
Collateral discounts and selling costs
|
15%-66
|
%
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
2019
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
158,099
|
$
|
158,099
|
$
|
—
|
$
|
—
|
$
|
158,099
|
||||||||||
Loans, net
|
2,119,426
|
—
|
—
|
2,123,289
|
2,123,289
|
|||||||||||||||
Accrued interest receivable
|
13,924
|
—
|
13,924
|
—
|
13,924
|
|||||||||||||||
Bank-owned life insurance
|
69,397
|
—
|
69,397
|
—
|
69,397
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
2,696,857
|
2,354,999
|
346,194
|
—
|
2,701,193
|
|||||||||||||||
Accrued interest payable
|
2,283
|
—
|
2,283
|
—
|
2,283
|
|||||||||||||||
Notes payable & other borrowings
|
95,000
|
—
|
95,000
|
—
|
95,000
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
—
|
46,393
|
—
|
46,393
|
|||||||||||||||
Subordinated debt securities
|
26,472
|
—
|
26,472
|
—
|
26,472
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
2018
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
245,989
|
$
|
245,989
|
$
|
—
|
$
|
—
|
$
|
245,989
|
||||||||||
Loans, net
|
1,934,071
|
—
|
—
|
1,923,830
|
1,923,830
|
|||||||||||||||
Accrued interest receivable
|
12,957
|
—
|
12,957
|
—
|
12,957
|
|||||||||||||||
Bank-owned life insurance
|
57,172
|
—
|
57,172
|
—
|
57,172
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
2,277,454
|
1,965,925
|
299,423
|
—
|
2,265,348
|
|||||||||||||||
Accrued interest payable
|
2,042
|
—
|
2,042
|
—
|
2,042
|
|||||||||||||||
Notes payable & other borrowings
|
95,000
|
—
|
95,000
|
—
|
95,000
|
|||||||||||||||
Junior subordinated deferrable interest debentures
|
46,393
|
—
|
46,393
|
—
|
46,393
|
|||||||||||||||
Subordinated debt securities
|
34,002
|
—
|
34,002
|
—
|
34,002
|
Cash paid
|
$
|
2,800
|
||
Assets acquired:
|
||||
Premises and equipment, net
|
$
|
8
|
||
Customer list
|
1,800
|
|||
Other intangible assets
|
509
|
|||
Other assets
|
290
|
|||
Total assets acquired
|
$
|
2,607
|
||
Goodwill recorded in acquisition
|
$
|
193
|
Cash paid
|
$
|
76,100
|
||
Assets acquired:
|
||||
Cash and cash equivalents
|
$
|
77,903
|
||
Interest-bearing time deposits in banks
|
52,700
|
|||
Federal funds purchased
|
26,468
|
|||
Securities available for sale
|
68,398
|
|||
Loans held for investment
|
196,178
|
|||
Bank-owned life insurance
|
10,932
|
|||
Premises and equipment, net
|
4,132
|
|||
Accrued interest receivable
|
1,114
|
|||
Core deposit intangible
|
6,679
|
|||
Other assets
|
2,648
|
|||
Total assets acquired
|
$
|
447,152
|
||
Liabilities assumed
|
||||
Deposits
|
$
|
386,176
|
||
Accrued interest payable
|
55
|
|||
Deferred tax liability
|
961
|
|||
Other liabilities
|
2,424
|
|||
Total liabilities assumed
|
$
|
389,616
|
||
Net assets acquired
|
$
|
57,536
|
||
Goodwill recorded in acquisition
|
$
|
18,564
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Interest income
|
$
|
148,287
|
$
|
135,249
|
||||
Noninterest income
|
59,785
|
54,208
|
||||||
Total Revenue
|
208,072
|
189,457
|
||||||
Net income
|
$
|
29,643
|
$
|
33,785
|
||||
Basic earnings per share
|
$
|
1.90
|
$
|
2.29
|
||||
Diluted earnings per share
|
$
|
1.89
|
$
|
2.29
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
(1) |
The consolidated financial statements, notes thereto and independent auditors’ report thereon, filed as part hereof, are listed in Item 8.
|
(2) |
All financial statement schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
|
(3) |
Exhibits
|
Exhibit No.
|
Description
|
|
Agreement and Plan of Merger by and between South Plains Financial, Inc., SPFI Merger Sub, Inc., City Bank, and West Texas State Bank, dated as of July 25, 2019, (incorporated by reference to
Exhibit 2.1 to Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)) (schedules to which have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the SEC upon request).
|
||
Amended and Restated Certificate of Formation of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of South Plains
Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Amended and Restated Bylaws of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form S-1 of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
||
Specimen common stock certificate of South Plains Financial, Inc. (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-1 of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Voting Agreement, dated as of July 25, 2019, by and among South Plains Financial, Inc., West Texas State Bank and the shareholders of West Texas State Bank party thereto (incorporated
by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)).
|
||
Form of Director Support Agreement, dated as of July 25, 2019, by and among South Plains Financial, Inc. and each non-employee director of West Texas State Bank (incorporated by reference to
Exhibit 10.3 to Current Report on Form 8-K filed with the SEC on July 25, 2019 (File No. 38895)).
|
||
Executive Employment Agreement, dated December 18, 2019, by and between South Plains Financial, Inc., City Bank, and Curtis C. Griffith (incorporated herein by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed at the SEC on December 19, 2019 (File No. 001-38895).
|
||
Executive Employment Agreement, dated March 6, 2019, by and between South Plains Financial, Inc. and Cory T. Newsom (incorporated herein by reference to Exhibit 10.4 to the Registration
Statement on Form S-1/A of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form S-1/A of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Stock Option Award Agreement under the South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form
S-1/A of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Restricted Stock Unit Award Agreement under the South Plains Financial, Inc. 2019 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Registration Statement
on Form S-1 of South Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019).
|
||
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.9 to the Registration Statement on Form S-1/A of South Plains Financial, Inc. (Registration No. 333-230851)
filed April 29, 2019).
|
||
Deferred Compensation Plan Adoption Agreement of Cory T. Newsom (incorporated herein by reference to Exhibit 10.5 to the Registration Statement on Form S-1/A of South Plains Financial, Inc.
(Registration No. 333-230851) filed April 29, 2019).
|
Joint Beneficiary Designation Agreement of Cory Newsom, effective January 1, 2008 (incorporated herein by reference to Exhibit 10.6 to the Registration Statement on Form S-1/A of South Plains
Financial, Inc. (Registration No. 333-230851) filed April 29, 2019)
|
||
Joint Beneficiary Designation Agreement of Cory Newsom, effective April 1, 2014 (incorporated herein by reference to Exhibit 10.7 to the Registration Statement on Form S-1/A of South Plains
Financial, Inc. (Registration No. 333-230851) filed April 29, 2019)
|
||
Board Representation Agreement between South Plains Financial, Inc. and James C. Henry (incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form S-1/A of South
Plains Financial, Inc. (Registration No. 333-230851) filed April 29, 2019)
|
||
Subsidiaries of South Plains Financial, Inc.
|
||
Consent of Weaver and Tidwell, LLP.
|
||
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
||
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
||
Section 1350 Certification of Chief Executive Officer.
|
||
Section 1350 Certification of Chief Financial Officer.
|
||
101*
|
The following material from South Plains Financial, Inc.’s Form 10-K for the year ended December 31, 2019, formatted in XBRL (eXtensible
Business Reporting Language), filed herewith: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash
Flows, and (v) Notes to Unaudited Consolidated Financial Statements.
|
* |
Filed with this Annual Report on Form 10-K.
|
** |
Furnished with this Annual Report on Form 10-K.
|
† |
Indicates a management contract or compensatory plan.
|
South Plains Financial, Inc.
|
||
Date: March 25, 2020
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
||
Chairman and Chief Executive Officer
|
||
Signature
|
Title
|
Date
|
||
/s/ Curtis C. Griffith
|
||||
Curtis C. Griffith
|
Director (Chairman); Chief Executive Officer (principal executive officer)
|
March 25, 2020
|
||
/s/ Cory T. Newsom
|
||||
Cory T. Newsom
|
Director and President
|
March 25, 2020
|
||
/s/ Steven B. Crockett
|
||||
Steven B. Crockett
|
Chief Financial Officer and Treasurer (principal financial and accounting officer)
|
March 25, 2020
|
||
/s/ Richard D. Campbell
|
||||
Richard D. Campbell
|
Director
|
March 25, 2020
|
||
/s/ Cynthia B. Keith
|
||||
Cynthia B. Keith
|
Director
|
March 25, 2020
|
||
/s/ Allison S. Navitskas
|
||||
Allison S. Navitskas
|
Director
|
March 25, 2020
|
||
/s/ Noe G. Valles
|
||||
Noe G. Valles
|
Director
|
March 25, 2020
|
||
/s/ Kyle R. Wargo
|
||||
Kyle R. Wargo
|
Director
|
March 25, 2020
|
Entity Name
|
State of Incorporation
|
City Bank
|
Texas
|
South Plains Financial Capital Trust III
|
Delaware
|
South Plains Financial Capital Trust IV
|
Delaware
|
South Plains Financial Capital Trust V
|
Delaware
|
Windmark Insurance Agency, Inc.
|
Texas
|
1. |
I have reviewed this Annual Report on Form10-K of South Plains Financial, Inc. (the “registrant”) for the year ended December 31, 2019 (this “report”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 25, 2020
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
||
Chairman and Chief Executive Officer
|
1. |
I have reviewed this Annual Report on Form 10-K of South Plains Financial, Inc. (the “registrant”) for the year ended December 31, 2019 (this “report”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 25, 2020
|
By:
|
/s/ Steven B. Crockett
|
Steven B. Crockett
|
||
Chief Financial Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 25, 2020
|
By:
|
/s/ Curtis C. Griffith
|
Curtis C. Griffith
|
||
Chairman and Chief Executive Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 25, 2020
|
By:
|
/s/ Steven B. Crockett
|
Steven B. Crockett
|
||
Chief Financial Officer
|
FORECLOSED ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
FORECLOSED ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreclosed Assets Activity | Foreclosed assets activity was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Valuation Allowance | Activity in the valuation allowance was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Expenses Related to Foreclosed Assets | Net expenses related to foreclosed assets include:
|
BORROWING ARRANGEMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWING ARRANGEMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings | The following table summarizes our short-term borrowings at year-end:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FHLB Advances | The following table is a detail of the advances as of December 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debentures and Trust Preferred Securities | The following table is a detail of the debentures and TPS at December 31, 2019:
|
BORROWING ARRANGEMENTS |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWING ARRANGEMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWING ARRANGEMENTS | 8. BORROWING ARRANGEMENTS Short-term borrowings The following table summarizes our short-term borrowings at year-end:
Federal funds purchased are short-term borrowings that generally have one-day maturities. Lines of credit The bank subsidiary has a line of credit with FHLB. The amount of the line is determined by FHLB on a quarterly basis. The line is primarily used to purchase Federal funds or to secure letters of credit to pledge as collateral against certain public deposits. The line is collateralized by a blanket floating lien on all first mortgage loans and commercial real estate loans as well as all FHLB stock, which has a carrying amount of $4.4 million at December 31, 2019. The available capacity of the line was $394.3 million and $425.4 million at December 31, 2019 and 2018, respectively. The bank subsidiary also has a line of credit with the Federal Reserve Bank of Dallas (“FRB”). The amount of the line is determined on a monthly basis by FRB. The line is collateralized by a blanket floating lien on all agriculture, commercial, and consumer loans. The amount of the line was $547.0 million and $532.0 million at December 31, 2019 and 2018, respectively. This line was not used at December 31, 2019 or 2018. The bank subsidiary also has uncollateralized lines of credit with multiple banks. The total amount of the lines was $135.0 million and $135.0 million as of December 31, 2019 and 2018, respectively. These lines were not used at December 31, 2019 or 2018. Notes payable and other borrowings The bank subsidiary has multiple advances from FHLB. The advances are collateralized through the line of credit with FHLB with interest payable monthly and principal due at maturity. The following table is a detail of the advances as of December 31:
Junior subordinated deferrable interest debentures and Trust preferred securities The Company established grantor trusts (“trusts”) that issued obligated mandatorily redeemable preferred securities (“TPS”); the Company issued junior subordinated deferrable interest debentures (debentures) to the trusts. The trusts are not consolidated and the debentures issued by the Company to the trusts are reflected in the Company’s consolidated balance sheets. The Company records interest expense on the debentures in its CFS. The common capital securities issued by the trusts ($1.4 million) are included in other assets in the Company’s consolidated balance sheets under the equity method of accounting. The amount of the capital securities represents the Company’s maximum exposure to loss. The Company is required by the Board of Governors of the Federal Reserve System (“Federal Reserve”) to maintain certain levels of capital for bank regulatory purposes. The debentures issued by the trusts to the Company, less the common capital securities of the trusts, continue to qualify as Tier 1 capital, subject to limitation to 25% of Tier 1 capital, under guidance issued by the Federal Reserve. Although the trusts are not consolidated in these CFS, the TPS remain outstanding with terms substantially the same as the debentures. The Company’s interest payments on its debentures are the sole source of repayment for the TPS. Additionally, the Company guarantees payment of interest and principal on the TPS. The terms of the debentures and TPS allow for interest to be deferred for up to five years consecutively. During this time, shareholder dividends are not allowed to be paid. The following table is a detail of the debentures and TPS at December 31, 2019:
Subordinated debt securities In January 2014, the Company issued $20.9 million in subordinated debt securities. These securities paid interest quarterly and were scheduled to mature January 2024. There was $14.4 million issued at an initial rate of 5% and $6.5 million issued at an initial rate of 4%. These rates were fixed for five years from issuance and would then float at the Wall Street Journal prime rate, with a floor of 4% and a ceiling of 7.5%. The securities were unsecured and could be called by the Company at any time after five years from issuance, and they qualified for tier 2 capital treatment, subject to regulatory limitations. In December 2018, we notified all holders of these subordinated debt securities that we intended to call these securities in January 2019 and provided holders the option to exchange those subordinated debt securities for newly-issued subordinated debt securities or to have their securities be redeemed. Holders of $13.4 million in subordinated debt securities elected to exchange their securities while holders of $7.5 million in subordinated debt securities elected to have their securities be redeemed. As a result, the outstanding balance of these securities at December 31, 2018 was $7.5 million. In December 2018, the Company issued $26.5 million in subordinated debt securities, including $13.4 million issued in exchange for our previously issued notes as described above. $12.4 million of the securities have a maturity date of December 2028 and an average fixed rate of 5.74% for the first five years. The remaining $14.1 million of securities have a maturity date of December 2030 and an average fixed rate of 6.41% for the first seven years. After the fixed rate periods, all securities will float at the Wall Street Journal prime rate, with a floor of 4.5% and a ceiling of 7.5%. These securities pay interest quarterly, are unsecured, and may be called by the Company at any time after the remaining maturity is five years or less. Additionally, these securities qualify for tier 2 capital treatment, subject to regulatory limitations. |
FORECLOSED ASSETS |
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FORECLOSED ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FORECLOSED ASSETS | 4. FORECLOSED ASSETS Foreclosed assets activity was as follows:
Activity in the valuation allowance was as follows:
Net expenses related to foreclosed assets include:
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RELATED-PARTY TRANSACTIONS |
12 Months Ended |
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Dec. 31, 2019 | |
RELATED-PARTY TRANSACTIONS [Abstract] | |
RELATED-PARTY TRANSACTIONS | 12. RELATED-PARTY TRANSACTIONS Direct and indirect loans to executive officers, directors, significant stockholders and their related affiliates as of December 31, 2019 and 2018 aggregated approximately $10.3 million and $10.0 million, respectively. There were no charge-offs related to these loans in 2019 or 2018 and advance and repayment activity was routine. Deposits from these related parties in the CFS were not significant. |
INCOME TAXES, Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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May 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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INCOME TAXES [Abstract] | |||
Federal statutory rate | 21.00% | ||
Reconciliation of Income Tax Expenses [Abstract] | |||
Federal statutory rate times financial statement income | $ 7,707 | $ 5,332 | |
Effect of [Abstract] | |||
Initial recognition of net deferred tax asset | $ (6,700) | 0 | (6,741) |
S Corp taxable income | 0 | (2,267) | |
Tax-exempt income | (348) | (314) | |
State taxes, net of federal benefit | 177 | 95 | |
Earnings from bank owned life insurance | (272) | (153) | |
Non deductible expenses | 190 | 125 | |
Other, net | 27 | 22 | |
Total | $ 7,481 | $ (3,901) |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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EARNINGS PER SHARE [Abstract] | ||
Net income | $ 29,220 | $ 29,290 |
Weighted average common shares outstanding - basic (in shares) | 16,818,697 | 14,771,520 |
Weighted average common shares outstanding - diluted (in shares) | 17,040,550 | 14,771,520 |
Basic earnings per share (in dollars per share) | $ 1.74 | $ 1.98 |
Diluted earnings per share (in dollars per share) | $ 1.71 | $ 1.98 |
EMPLOYEE BENEFITS, Employee Stock Ownership Plan (Details) - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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EMPLOYEE BENEFITS [Abstract] | ||
Required service period for an employee to be covered by ESOP and 401(k) plan | 1 month | |
Contributions to ESOP by employer | $ 1.8 | $ 2.0 |
Shares held by ESOP (in shares) | 2,959,826 | 2,988,470 |
Shares repurchased from ESOP participants (in shares) | 0 | 0 |
Fair value of ESOP shares subject to repurchase obligation | $ 58.2 |
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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RELATED-PARTY TRANSACTIONS [Abstract] | ||
Direct and indirect loans to related parties, aggregated amount | $ 10.3 | $ 10.0 |
Charge-offs related to related-party loans | $ 0.0 | $ 0.0 |
BORROWING ARRANGEMENTS, Short-term Borrowings (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Short-term borrowings [Abstract] | ||
Total | $ 37,165 | $ 17,705 |
Federal Funds Purchased [Member] | ||
Short-term borrowings [Abstract] | ||
Total | $ 17,165 | 17,705 |
Short-term borrowings, maturity period | 1 day | |
FHLB Advances - Short-Term [Member] | ||
Short-term borrowings [Abstract] | ||
Total | $ 20,000 | $ 0 |
FAIR VALUE DISCLOSURES, Quantitative Information about Non-Recurring Level 3 Fair Value Measurements (Details) - Third Party Appraisals or Inspections [Member] $ in Thousands |
Dec. 31, 2019
USD ($)
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Dec. 31, 2018
USD ($)
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Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Impaired loans | $ 3,642 | $ 9,119 |
Other real estate owned | $ 1,883 | $ 2,285 |
Collateral Discounts and Selling Costs [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Impaired loans, discounts | 0 | 0 |
Other real estate owned, discounts | 0.15 | 0.15 |
Collateral Discounts and Selling Costs [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Impaired loans, discounts | 1 | 1 |
Other real estate owned, discounts | 0.66 | 0.66 |
FORECLOSED ASSETS, Net Expenses Related to Foreclosed Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Net expenses related to foreclosed assets [Abstract] | ||
Net gain (loss) on sales | $ (37) | $ 108 |
Current year valuation write-down | 0 | 285 |
Operating expenses, net of rental income | 145 | 86 |
Foreclosed assets expense, net | $ 108 | $ 479 |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables) |
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Condensed Balance Sheets | CONDENSED BALANCE SHEETS
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Condensed Statement of Income | CONDENSED STATEMENTS OF INCOME
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Condensed Statements of Cash Flows | CONDENSED STATEMENTS OF CASH FLOWS
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BUSINESS COMBINATIONS (Tables) |
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Fair Value of the Assets Acquired and Liabilities Assumed | Fair values of the assets acquired and liabilities assumed in this transaction as of the closing date are as follows:
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Unaudited Pro Forma Information | The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1 of each year.
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Windmark Insurance Agency, Inc. [Member] | Crop Insurance Agency in Texas [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value of the Assets Acquired and Liabilities Assumed | Fair value of the assets acquired and liabilities assumed in this transaction as of the closing date are as follows:
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BUSINESS COMBINATIONS | 20. BUSINESS COMBINATIONS In September 2019, Windmark acquired the operating assets of a crop insurance agency in Texas for $2.8 million. Windmark recorded $193,000 for goodwill, which represents the excess of the cash paid compared to the fair market value of identifiable assets acquired. Fair value of the assets acquired and liabilities assumed in this transaction as of the closing date are as follows:
West Texas State Bank In November 2019, the Company completed its acquisition of West Texas State Bank (“WTSB”). This transaction resulted in six additional branches. The Company paid the shareholders of WTSB $76.1 million in cash, for all outstanding stock of WTSB and resulted in 100% ownership interest. The Company recognized total goodwill of $18.6 million which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair market value of identifiable assets acquired. None of the goodwill recognized is expected to be deductible for income tax purposes. The Company incurred expenses related to the acquisition of approximately $955 thousand for the year ended December 31, 2019, which are included in noninterest expense in the Consolidated Statements of Comprehensive Income. Non-credit impaired loans had a fair value of $196.2 million at the acquisition date and contractual balance of $198.4 million. As of the acquisition date, the Company expects that an insignificant amount of the contractual balance of these loans will be uncollectible. The difference of $2.2 million will be recognized into interest income as an adjustment to yield over the life of the loans. Purchased credit impaired loans were insignificant. Fair values of the assets acquired and liabilities assumed in this transaction as of the closing date are as follows:
As of December 31, 2019, management still is evaluating the fair values of other assets and other liabilities. Amounts shown above are preliminary and the Company expects to finalize these values by the fourth quarter 2020. The following table presents unaudited pro forma information as if the WTSB acquisition was completed as of January 1, 2018. The pro forma results combine historical results of WTSB into the Company’s consolidated statement of income including the impact of certain purchase accounting adjustments including loan discount accretion and intangible assets amortization. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1 of each year.
Revenues and earnings of the acquired company since the acquisition date have not been disclosed as WTSB was merged into the Company and separate financial information is not readily available. |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION |
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PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 16. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION Condensed financial information of South Plains Financial, Inc. follows: CONDENSED BALANCE SHEETS
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF CASH FLOWS
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SECURITIES |
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SECURITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES | 2. SECURITIES The amortized cost and fair value of securities, with gross unrealized gains and losses, at year-end follow:
The amortized cost and fair value of debt securities at December 31, 2019 are presented below by contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Other securities are shown separately since they are not due at a single maturity date.
During 2018, all 122 securities designated as HTM were transferred to AFS based on ASU 2017-12. These securities had a book value of $75.2 million and a fair value of $77.6 million as of January 1, 2018, the effective date of the transfer. The unrealized gain is recorded in the change in unrealized loss on securities in other comprehensive income. At year-end 2019 and 2018, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity. Securities with a carrying value of approximately $211.0 million and $200.0 million at December 31, 2019 and 2018, respectively, were pledged to collateralize public deposits and for other purposes as required or permitted by law. The following table segregates securities with unrealized losses at year-end, by the period they have been in a loss position:
There were 27 securities with an unrealized loss at December 31, 2019. Management does not believe that these losses are other than temporary as there is no intent to sell any of these securities before recovery and it is not probable that we will be required to sell any of these securities before recovery, and credit loss, if any, is not material. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2019, management believes the impairments detailed in the table above are temporary and no impairment loss has been realized in the Company’s CFS. |
Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Mar. 25, 2020 |
Jun. 30, 2019 |
|
Cover [Abstract] | |||
Entity Registrant Name | SOUTH PLAINS FINANCIAL, INC. | ||
Entity Central Index Key | 0001163668 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 220.4 | ||
Entity Common Stock, Shares Outstanding | 18,056,014 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | TX |
DEPOSITS (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
DEPOSITS [Abstract] | ||
Time deposit meeting or exceeding FDIC Insurance limit of $250,000 | $ 147,000 | $ 130,000 |
Maturities of Time Deposits [Abstract] | ||
2020 | 217,527 | |
2021 | 34,102 | |
2022 | 58,927 | |
2023 | 39,431 | |
2024 | 6,036 | |
Thereafter | 0 | |
Total | $ 356,023 |
BUSINESS COMBINATIONS, West Texas State Bank (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Nov. 12, 2019
USD ($)
Branch
|
Dec. 31, 2019
USD ($)
$ / shares
|
Dec. 31, 2018
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
|
|
Liabilities assumed [Abstract] | ||||
Goodwill recorded in acquisition | $ 18,757 | $ 0 | $ 0 | |
West Texas State Bank [Member] | ||||
Business Combinations [Abstract] | ||||
Number of additional branches | Branch | 6 | |||
Ownership interest | 100.00% | |||
Goodwill recognized expected to be deductible for income tax purposes | $ 0 | |||
Acquisition expenses | 955 | |||
Contractual balance of non-credit impaired loans | 198,400 | |||
Discount on acquired loans to be recognized into interest income | 2,200 | |||
Assets Acquired and Liabilities Assumed [Abstract] | ||||
Cash paid | 76,100 | |||
Assets acquired [Abstract] | ||||
Cash and cash equivalents | 77,903 | |||
Interest-bearing time deposits in banks | 52,700 | |||
Federal funds purchased | 26,468 | |||
Securities available for sale | 68,398 | |||
Loans held for investment | 196,178 | |||
Bank-owned life insurance | 10,932 | |||
Premises and equipment, net | 4,132 | |||
Accrued interest receivable | 1,114 | |||
Other assets | 2,648 | |||
Total assets acquired | 447,152 | |||
Liabilities assumed [Abstract] | ||||
Deposits | 386,176 | |||
Accrued interest payable | 55 | |||
Deferred tax liability | 961 | |||
Other liabilities | 2,424 | |||
Total liabilities assumed | 389,616 | |||
Net assets acquired | 57,536 | |||
Goodwill recorded in acquisition | 18,564 | |||
Pro Forma Information [Abstract] | ||||
Interest income | 148,287 | 135,249 | ||
Noninterest income | 59,785 | 54,208 | ||
Total Revenue | 208,072 | 189,457 | ||
Net income | $ 29,643 | $ 33,785 | ||
Basic earnings per share (in dollars per share) | $ / shares | $ 1.90 | $ 2.29 | ||
Diluted earnings per share (in dollars per share) | $ / shares | $ 1.89 | $ 2.29 | ||
West Texas State Bank [Member] | Core Deposit Intangible [Member] | ||||
Assets acquired [Abstract] | ||||
Intangible assets | $ 6,679 |
FAIR VALUE DISCLOSURES, Assets (Liabilities) Measured at Fair Value on Recurring and Non-Recurring Basis (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Securities available for sale [Abstract] | ||
Securities available for sale | $ 707,650 | $ 338,196 |
U.S. Government and Agencies [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 4,807 | 84,707 |
State and Municipal [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 94,692 | 32,310 |
Mortgage-Backed Securities [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 464,516 | 182,256 |
Recurring [Member] | ||
Securities available for sale [Abstract] | ||
Asset-backed and other amortizing securities | 36,346 | 38,923 |
Loans held for sale (mandatory) | 32,809 | 31,874 |
Mortgage servicing rights | 2,054 | 1,270 |
Asset derivatives | 814 | 1,232 |
Liability derivatives | (492) | (672) |
Recurring [Member] | U.S. Government and Agencies [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 4,807 | 84,707 |
Recurring [Member] | State and Municipal [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 94,692 | 32,310 |
Recurring [Member] | Mortgage-Backed Securities [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 571,805 | 182,256 |
Recurring [Member] | Level 1 [Member] | ||
Securities available for sale [Abstract] | ||
Asset-backed and other amortizing securities | 0 | 0 |
Loans held for sale (mandatory) | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Asset derivatives | 0 | 0 |
Liability derivatives | 0 | 0 |
Recurring [Member] | Level 1 [Member] | U.S. Government and Agencies [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 74,419 |
Recurring [Member] | Level 1 [Member] | State and Municipal [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Mortgage-Backed Securities [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 0 |
Recurring [Member] | Level 2 [Member] | ||
Securities available for sale [Abstract] | ||
Asset-backed and other amortizing securities | 36,346 | 38,923 |
Loans held for sale (mandatory) | 32,809 | 31,874 |
Mortgage servicing rights | 2,054 | 1,270 |
Asset derivatives | 814 | 1,232 |
Liability derivatives | (492) | (672) |
Recurring [Member] | Level 2 [Member] | U.S. Government and Agencies [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 4,807 | 10,288 |
Recurring [Member] | Level 2 [Member] | State and Municipal [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 94,692 | 32,310 |
Recurring [Member] | Level 2 [Member] | Mortgage-Backed Securities [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 571,805 | 182,256 |
Recurring [Member] | Level 3 [Member] | ||
Securities available for sale [Abstract] | ||
Asset-backed and other amortizing securities | 0 | 0 |
Loans held for sale (mandatory) | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Asset derivatives | 0 | 0 |
Liability derivatives | 0 | 0 |
Recurring [Member] | Level 3 [Member] | U.S. Government and Agencies [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 0 |
Recurring [Member] | Level 3 [Member] | State and Municipal [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Mortgage-Backed Securities [Member] | ||
Securities available for sale [Abstract] | ||
Securities available for sale | 0 | 0 |
Nonrecurring [Member] | ||
Assets Measured at Fair Value on a Non-Recurring Basis [Abstract] | ||
Impaired loans | 3,642 | 9,119 |
Other real estate owned | 1,883 | 2,285 |
Loans held-for-sale (best efforts) | 16,226 | 6,508 |
Nonrecurring [Member] | Level 1 [Member] | ||
Assets Measured at Fair Value on a Non-Recurring Basis [Abstract] | ||
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Loans held-for-sale (best efforts) | 0 | 0 |
Nonrecurring [Member] | Level 2 [Member] | ||
Assets Measured at Fair Value on a Non-Recurring Basis [Abstract] | ||
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Loans held-for-sale (best efforts) | 16,226 | 6,508 |
Nonrecurring [Member] | Level 3 [Member] | ||
Assets Measured at Fair Value on a Non-Recurring Basis [Abstract] | ||
Impaired loans | 3,642 | 9,119 |
Other real estate owned | 1,883 | 2,285 |
Loans held-for-sale (best efforts) | $ 0 | $ 0 |
FORECLOSED ASSETS, Activity in Valuation Allowance (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Activity in Valuation Allowance [Roll Forward] | ||
Beginning balance | $ 325 | $ 1,413 |
Current year valuation write-down | 0 | 285 |
Reductions from sales | (325) | (1,373) |
Ending balance | $ 0 | $ 325 |
EARNINGS PER SHARE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Factors Used in Earnings Per Share Computation | The factors used in the earnings per share computation follow:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
1 Months Ended | 7 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Mar. 11, 2019
$ / shares
shares
|
May 31, 2018
USD ($)
|
May 31, 2019
USD ($)
$ / shares
shares
|
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Dec. 31, 2019
USD ($)
Segment
$ / shares
shares
|
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Mar. 10, 2019
shares
|
|
Change in Capital Structure [Abstract] | |||||||
Number of shares of common stock authorized (in shares) | shares | 30,000,000 | 30,000,000 | 30,000,000 | 30,000,000 | 1,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 1.00 | $ 1 | $ 1 | $ 1 | |||
Stock split ratio | 29 | ||||||
Loans [Abstract] | |||||||
Number of days principal or interest payments are past due for loans to be placed on nonaccrual status | 90 days | ||||||
Servicing Rights [Abstract] | |||||||
Servicing rights | $ 1,300,000 | $ 2,100,000 | $ 1,300,000 | ||||
Mortgage Banking Derivatives [Abstract] | |||||||
Recorded value of interest locks at inception | 0 | ||||||
Recorded value of forward loan sales commitments at inception | 0 | ||||||
Advertising [Abstract] | |||||||
Advertising costs | 2,200,000 | 2,500,000 | |||||
Income Taxes [Abstract] | |||||||
Deferred tax asset relating to S corporation revocation | $ 6,700,000 | $ 0 | 6,741,000 | ||||
Amount distributed to shareholders | 25,000,000 | ||||||
Segment Information [Abstract] | |||||||
Number of reportable segments | Segment | 2 | ||||||
Change in Accounting Principle [Abstract] | |||||||
Cumulative-effect adjustment to retained earnings, net | 119,834,000 | $ 146,696,000 | 119,834,000 | ||||
Minimum [Member] | |||||||
Allowance for Loan Losses [Abstract] | |||||||
Threshold balance of loan to be specifically reviewed for impairment | $ 250,000 | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
Change in Accounting Principle [Abstract] | |||||||
Cumulative-effect adjustment to retained earnings, net | 1,300,000 | 1,300,000 | |||||
Cumulative-effect adjustment to retained earnings, before tax | 1,600,000 | 1,600,000 | |||||
Cumulative-effect adjustment to retained earnings, tax | 340,000 | 340,000 | |||||
City Bank [Member] | Bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | City Bank | ||||||
Windmark Insurance Agency, Inc. ("Windmark") [Member] | |||||||
Nonmarketable Equity Securities [Abstract] | |||||||
Equity method investment ownership percentage | 50.00% | ||||||
Windmark Insurance Agency, Inc. ("Windmark") [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | Windmark Insurance Agency, Inc. | ||||||
Ruidoso Retail, Inc. [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | Ruidoso Retail, Inc. | ||||||
CB Provence, LLC [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | CB Provence, LLC | ||||||
CBT Brushy Creek, LLC [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | CBT Brushy Creek, LLC | ||||||
CBT Properties, LLC [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Consolidated Subsidiaries | CBT Properties, LLC | ||||||
South Plains Financial Capital Trusts (SPFCT) III-V [Member] | Non-bank Subsidiary [Member] | |||||||
Subsidiaries Information [Abstract] | |||||||
Wholly Owned, Equity Method Subsidiaries | South Plains Financial Capital Trusts (SPFCT) III-V | ||||||
Core Deposits Intangible [Member] | Maximum [Member] | |||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||
Estimated useful lives | 10 years | ||||||
Customer Relationships [Member] | |||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||
Estimated useful lives | 5 years | ||||||
Employment Agreements [Member] | |||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||
Estimated useful lives | 5 years | ||||||
Initial Public Offering [Member] | |||||||
Stock Offering [Abstract] | |||||||
Common stock issued and sold (in shares) | shares | 3,207,000 | ||||||
Common stock sold to underwriters (in shares) | shares | 507,000 | ||||||
Offering price (in dollars per share) | $ / shares | $ 17.50 | ||||||
Aggregate gross proceeds from initial public offering | $ 56,100,000 | ||||||
Aggregate net proceeds from initial public offering | $ 51,400,000 | ||||||
Building and Improvements [Member] | Maximum [Member] | |||||||
Premises and Equipment [Abstract] | |||||||
Useful life | 40 years | ||||||
Furniture and Equipment [Member] | Minimum [Member] | |||||||
Premises and Equipment [Abstract] | |||||||
Useful life | 3 years | ||||||
Furniture and Equipment [Member] | Maximum [Member] | |||||||
Premises and Equipment [Abstract] | |||||||
Useful life | 10 years | ||||||
Substandard or Worse [Member] | Minimum [Member] | |||||||
Allowance for Loan Losses [Abstract] | |||||||
Threshold balance of loan to be specifically reviewed for impairment | $ 250,000 | ||||||
Stock Appreciation Rights (SARs) [Member] | |||||||
Change in Accounting Principle [Abstract] | |||||||
Fair value in excess of recorded intrinsic value | $ 1,600,000 | $ 1,600,000 |
FAIR VALUE DISCLOSURES |
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FAIR VALUE DISCLOSURES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | 19. FAIR VALUE DISCLOSURES Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Valuation techniques that are consistent with the market approach, the income approach and/or the cost approach are required by GAAP. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset. Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy for valuation inputs gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
The following table summarizes fair value measurements as of December 31:
Securities – Fair value is calculated based on market prices of similar securities using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded. Loans held for sale (mandatory) – Loans held for sale originated for mandatory delivery are reported at fair value. Fair value is determined using quoted prices for similar assets, adjusted for specific attributes of that loan. Mortgage servicing rights – Mortgage servicing rights are reported at fair value. Fair value is based on market prices for comparable mortgage servicing contracts. Derivatives – Fair value of derivatives is based on valuation models using observable market data as of the measurement date. Impaired loans – Impaired loans are reported at the fair value of the underlying collateral, less estimated disposal costs, if repayment is expected solely from the sale of the collateral. Collateral values are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. Foreclosed assets – Foreclosed assets are transferred from loans at the lower of cost or fair value, less estimated costs to sell. Collateral values are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. Loans held for sale (best efforts) – Loans held for sale originated for best efforts delivery are reported at fair value if, on an aggregate basis, the fair value for the loans is less than cost. In determining whether the fair value of loans held for sale is less than cost when quoted market prices are not available, the Company may consider outstanding investor commitments or discounted cash flow analyses with market assumptions. Such fair values are classified within either Level 2 or Level 3 of the fair value hierarchy. The following table presents quantitative information about non-recurring Level 3 fair value measurements at December 31:
The following table summarizes carrying value measurements as of December 31:
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DERIVATIVES |
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DERIVATIVES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | 15. DERIVATIVES The Company utilizes interest rate swap agreements as part of its asset-liability management strategy to help manage its interest-rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. The following table reflects the changes in fair value hedges included in the Consolidated Statements of Comprehensive Income as of December 31:
The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of December 31:
Mortgage banking derivatives The net gains (losses) relating to free standing derivative instruments used for risk management are summarized below as of December 31:
The following table reflects the amount and fair value of mortgage banking derivatives in the Consolidated Balance Sheets as of December 31:
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
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Interest income: | ||
Loans, including fees | $ 116,904 | $ 105,710 |
Securities: | ||
Taxable | 8,890 | 5,577 |
Non taxable | 1,018 | 2,872 |
Federal funds sold and interest-bearing deposits in banks | 6,130 | 3,935 |
Total interest income | 132,942 | 118,094 |
Interest expense: | ||
Deposits | 22,491 | 17,561 |
Notes payable & other borrowings | 2,314 | 2,051 |
Subordinated debt securities | 1,616 | 1,046 |
Junior subordinated deferrable interest debentures | 1,946 | 1,824 |
Total interest expense | 28,367 | 22,482 |
Net interest income | 104,575 | 95,612 |
Provision for loan losses | 2,799 | 6,901 |
Net interest income, after provision for loan losses | 101,776 | 88,711 |
Noninterest income: | ||
Service charges on deposit accounts | 8,129 | 7,813 |
Income from insurance activities | 7,016 | 7,128 |
Net gain on sales of loans | 23,521 | 19,703 |
Bank card services and interchange fees | 8,692 | 8,845 |
Investment commissions | 1,710 | 1,779 |
Fiduciary fees | 2,306 | 1,442 |
Other | 5,259 | 5,411 |
Total noninterest income | 56,633 | 52,121 |
Noninterest expense: | ||
Salaries and employee benefits | 75,392 | 71,778 |
Occupancy and equipment, net | 13,572 | 13,571 |
Professional services | 7,334 | 6,734 |
Marketing and development | 3,017 | 3,050 |
IT and data services | 2,830 | 2,233 |
Bank card expenses | 3,346 | 2,743 |
Appraisal expenses | 1,625 | 1,353 |
Other | 14,592 | 13,981 |
Total noninterest expense | 121,708 | 115,443 |
Income before income taxes | 36,701 | 25,389 |
Income tax expense (benefit) | 7,481 | (3,901) |
Net income | $ 29,220 | $ 29,290 |
Earnings per share: | ||
Basic (in dollars per share) | $ 1.74 | $ 1.98 |
Diluted (in dollars per share) | $ 1.71 | $ 1.98 |
Net income | $ 29,220 | $ 29,290 |
Other comprehensive income (loss): | ||
Change in net unrealized loss on securities available for sale | 4,025 | (1,773) |
Reclassification adjustment for (gain) loss included in net income | 28 | (620) |
Tax effect | (852) | 596 |
Other comprehensive income (loss) | 3,201 | (1,797) |
Comprehensive income | $ 32,421 | $ 27,493 |
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