Updated 3/26
South Plains Financial, Inc. might not be making headlines, but this regional bank has been steadily building its story through strong fundamentals and reliable dividends. Headquartered in Texas and operating primarily through its subsidiary, City Bank, SPFI serves a mix of markets, from agricultural regions to booming metro areas like Dallas and Austin. It offers a wide range of banking services—commercial loans, mortgage products, consumer banking—and keeps things grounded in community roots.
This is the kind of bank that doesn’t seek attention, but instead focuses on long-term growth, stable returns, and rewarding shareholders along the way. For dividend-focused investors looking for sustainable income from a small-cap financial stock, South Plains may be worth a closer look.
Recent Events
SPFI closed out 2023 on a strong note. Revenue jumped 15.9% year over year, and net income surged nearly 60% over the same period. That kind of earnings growth from a regional bank isn’t just impressive—it’s a clear sign that management has been navigating rising rates and shifting lending conditions with a steady hand.
Profitability metrics also paint a strong picture. Return on equity came in at 11.75%, while return on assets reached 1.18%. Operating margin is sitting above 40%, which signals a highly efficient operation that’s not just chasing loan volume, but also managing its costs well. On top of that, the bank has built up a sizable cash position of $373 million. That’s a strong war chest for a company with a market cap just over $550 million.
Key Dividend Metrics
💰 Forward Dividend Yield: 1.79%
📈 Dividend Growth (5-Year Average): 1.45%
🧾 Payout Ratio: 19.18%
🔒 Dividend Safety: Solid, with a wide cushion
📅 Recent Dividend Date: February 18, 2025
📉 Beta: 0.60 – indicating relatively low stock volatility
Dividend Overview
South Plains doesn’t offer a headline-grabbing yield, but what it does provide is consistency. A 1.79% forward yield won’t light up a spreadsheet, but it’s a noticeable bump above the company’s five-year average. More importantly, SPFI is distributing just under 20% of its earnings as dividends. That’s a conservative approach, and it leaves plenty of room for future increases or reinvestment into the business.
Investors who prioritize sustainable income streams over flashy returns will likely appreciate this kind of measured, disciplined payout policy.
Dividend Growth and Safety
There’s a quiet confidence in how SPFI handles its dividend. No erratic jumps. No unnecessary pressure on earnings. Just steady, incremental growth that tracks along with the company’s improving performance.
With a payout ratio under 20%, there’s a huge buffer. Even if earnings dip in a given year, the dividend can easily be maintained without tapping reserves. This kind of breathing room is exactly what long-term income investors look for.
And with recent earnings climbing nearly 60% year over year, the foundation is strong. Future hikes might not be huge, but they’ll be supported by real profits—not just financial engineering.
Chart Analysis
Market Cycle Context
The chart for South Plains Financial (SPFI) reveals a clear journey through multiple stages of the market cycle over the past year. What we’re seeing now is a potential transition out of the markdown phase and into the early stages of a reaccumulation or possible markup—though confirmation is still needed.
Back in the mid-to-late summer of 2024, the stock broke out from a relatively quiet sideways zone, entering a strong markup phase that carried it from around $27 to over $40 in just a few months. That rally, accompanied by growing volume and an upward-sloping 50-day moving average crossing over the 200-day, had all the traits of a classic markup wave.
But that bullish momentum began to fade around the December peak. The price struggled to hold new highs, and the stock began forming a series of lower highs and lower lows. The 50-day moving average rolled over and started trending downward, eventually crossing below the 200-day moving average in February 2025—often a technical red flag that signals broader distribution.
Current Phase and Structure
The recent price action hints at the tail end of a markdown phase. SPFI appears to have found support just above the 200-day moving average, which has flattened but hasn’t yet turned down. Price dipped below it briefly in early March but quickly bounced, suggesting buyers are starting to step in around the $32 level.
Volume during this recent bounce has been modest, but there was a noticeable spike in one of the more recent up days—showing early signs that interest is returning. What’s encouraging for bulls is that price is once again challenging the 50-day moving average from below. If SPFI can reclaim this level and hold above it with improving volume, it could shift sentiment and begin carving out a base for a new leg higher.
Recent Candle Activity
The last five candles are showing a mix of consolidation and upward bias. Most of them have small real bodies with lower wicks, reflecting intraday dips being bought—an early sign of buyer presence at these levels. The candle from March 25, with a narrow range and a slight close above the open, suggests some hesitation but still leans toward accumulation rather than distribution.
None of the recent candles show excessive upper wicks, which means selling pressure near intraday highs has been limited. That’s a quiet but important signal in spotting a shift in short-term control from sellers to buyers.
Volume and RSI Insights
Volume remains relatively low but stable, with one notable spike aligning with a recent upward move. This is worth keeping an eye on—continued strength in volume on up days would help confirm that accumulation is underway.
The Relative Strength Index (RSI) dipped to mild oversold levels earlier in March and has since begun climbing again. It’s now heading toward the midline, which adds more support to the idea that downside momentum is fading. A break above the 50 level would reinforce that bullish pressure is starting to rebuild.
Moving Average Behavior
The 50-day moving average is still sloping down, but price is pushing up toward it. This test is key. A successful reclaim, especially if followed by a golden cross or flattening of the 50-day, could suggest the markdown is complete. Meanwhile, the 200-day moving average is holding steady with a gentle upward slope, keeping longer-term structure intact.
All eyes now are on whether SPFI can close above $34.50 and do so on stronger volume, which would turn this current bounce into something more meaningful.
Analyst Ratings
South Plains Financial, Inc. (SPFI) continues to draw positive sentiment from analysts, with a consensus buy rating and an average 12-month price target of $42.67. This points to a healthy upside from current levels, driven by the bank’s consistent earnings performance and strong balance sheet.
Recent analyst actions include:
📈 January 27, 2025 – Keefe, Bruyette & Woods reaffirmed their outperform rating, slightly adjusting their price target from $46.00 to $45.00. The minor revision reflects updated forecasts but overall confidence in SPFI’s core banking operations remains strong.
🚀 January 27, 2025 – Hovde Group also maintained an outperform rating and bumped their target from $46.00 to $47.00. Their revised outlook was based on the company’s robust net interest margin and effective cost control measures, which have outperformed peer averages.
💼 July 23, 2024 – Piper Sandler reiterated a buy rating, lifting the price target from $32.00 to $36.00. This upgrade was driven by expectations of continued loan growth and stable credit quality, particularly in SPFI’s Texas footprint.
📊 January 29, 2024 – Raymond James kept their outperform rating in place and raised the price target from $28.00 to $31.00. Analysts cited improving earnings visibility and a more favorable interest rate outlook as key drivers.
🔄 July 26, 2023 – Keefe, Bruyette & Woods had earlier reaffirmed their outperform call but lowered the price target from $30.00 to $28.00, reflecting caution around macroeconomic conditions at the time. Despite the slight pullback, the long-term view remained constructive.
Analysts across the board are recognizing SPFI’s disciplined lending approach, strong liquidity position, and improving return metrics. While some price targets have seen small adjustments, the overall tone remains upbeat and reflects confidence in the bank’s ability to keep delivering value to shareholders.
Earnings Report Summary
South Plains Financial wrapped up 2024 with a strong finish, showing investors they’re still focused on solid, steady performance—even in a year full of shifting interest rates and a cooling economy.
Strong Finish to the Year
In the fourth quarter, SPFI posted net income of $16.5 million, or $0.96 per share. That’s a noticeable jump from the $11.2 million they earned in Q3 and well above the $10.3 million from the same period a year ago. The back half of the year clearly gained some momentum, and it showed up in the bottom line.
For the full year, net income came in at $49.7 million, with earnings per share at $2.92. That’s down a bit from the previous year, but last year’s results were boosted by a one-time gain from selling off a business unit. Without that bump, 2024 looked like a healthy, consistent year.
Improving Margins and Deposit Costs
One area that really stood out was the bank’s net interest margin—it ticked up to 3.75% in Q4, from 3.65% the quarter before. That improvement wasn’t accidental. SPFI managed to bring down its average deposit costs, which landed at 2.29%. That 18-basis point drop helped widen the spread between what the bank earns on loans and pays on deposits.
In today’s rate environment, that kind of margin control is critical. It’s a sign that management is keeping a close eye on funding costs while still finding ways to put money to work profitably.
Loan Growth and Stable Deposits
Total assets crept up slightly to $4.23 billion by year-end, and loan balances saw a modest increase of about $41 million—roughly a 1.4% gain. It’s not aggressive growth, but it fits the bank’s cautious lending strategy. SPFI seems more interested in quality than quantity, especially with the economy in a bit of a transition phase.
Deposits remained steady at $3.62 billion, with a solid 25.8% of that sitting in noninterest-bearing accounts. That’s a great foundation, and it gives the bank some cushion against rising funding costs down the road.
Credit Quality and Capital Strength
On the credit side, SPFI continues to keep things clean. The allowance for credit losses stood at 1.42% of total loans, which reflects solid credit management and a healthy portfolio overall.
Capital levels are also in great shape. The total risk-based capital ratio hit 16.74%, and common equity tier 1 came in at 12.41%—well above regulatory thresholds. These numbers give SPFI plenty of room to weather bumps in the road while still supporting growth and shareholder returns.
All in all, the fourth quarter capped off a year of strong fundamentals, careful balance sheet management, and a clear focus on long-term stability.
Financial Health and Stability
SPFI’s balance sheet is in excellent shape. Cash on hand outweighs total debt by more than 3-to-1, and that kind of liquidity is a real asset in today’s banking landscape. With rising interest rates and ongoing economic uncertainty, having this much dry powder offers both flexibility and protection.
Book value per share is around $26.67, and the stock is currently trading near $33.60. That puts the price-to-book ratio at about 1.26—hardly expensive given the quality of the business.
Add in an operating margin over 40%, and it’s clear that SPFI isn’t just relying on traditional loan spreads to make money. There’s a balanced income mix and a sharp focus on cost management driving those results.
Valuation and Stock Performance
Even after gaining more than 25% over the past year, SPFI still trades at a relatively modest valuation. The trailing P/E ratio sits at 11.5, which suggests the market isn’t fully pricing in the company’s earnings momentum. Price-to-sales is 3.02, and price-to-book is comfortably in value territory for a financial name of this quality.
The stock’s low beta of 0.60 also speaks to its relative calm during market swings. For income investors trying to avoid portfolio volatility, this makes SPFI even more appealing.
Looking at technicals, the 50-day moving average is slightly above the current price, and the 200-day is right in line. That kind of sideways action implies stability rather than excessive speculation—something many dividend investors would find comforting.
Risks and Considerations
SPFI doesn’t come without its potential drawbacks. First, the dividend yield might be a little light for investors who are looking to maximize income now. This is more of a total return play with a reliable dividend kicker, not a high-yield engine.
Second, the bank’s footprint is concentrated in Texas, which has historically been a growth region—but still introduces some geographic risk. Any localized downturns in real estate, agriculture, or regional lending conditions could have a more pronounced effect on results than a nationally diversified institution.
Finally, trading volume is modest—just over 30,000 shares a day. That won’t matter to most long-term investors, but for those needing significant liquidity, it’s worth being aware of.
Final Thoughts
South Plains Financial isn’t a flashy name, and that’s part of the charm. This is a conservatively managed, highly profitable bank with a solid dividend and room to grow. It’s not offering sky-high yields or trying to impress with unsustainable payout ratios. Instead, it’s building value slowly and delivering steady returns to shareholders.
For dividend-focused investors looking for safety, predictability, and a little bit of growth under the hood, SPFI checks a lot of boxes. It may not be the loudest voice in the room—but sometimes, that’s exactly what you want in a long-term income holding.