South Plains Financial Q2 Earnings Call Highlights

South Plains Financial NASDAQ: SPFI reported higher second-quarter 2026 earnings as its recent Bank of Houston acquisition contributed to balance sheet growth, while management said the company remains focused on organic loan expansion, expense discipline and maintaining profitability amid an elevated interest-rate environment. The Lubbock, Texas-based parent of City Bank posted diluted earnings per share of $0.96 for the quarter, up from $0.85 in the linked quarter, Chief Financial Officer and Treasurer Steve Crockett said on the company’s earnings call. Crockett said the increase was primarily driven by the Bank of Houston acquisition and improved non-interest income.

Net interest income rose to $50.3 million, up $7.4 million from the first quarter, largely due to the addition of $667 million of interest-earning assets from Bank of Houston. The company’s tax-equivalent net interest margin was 4.00%, compared with 4.04% in the first quarter. Crockett noted that the first-quarter margin was aided by 5 basis points from a non-accrual loan interest recovery, and said the company has held its margin steady over the past four quarters when excluding problem-loan interest and fee recoveries.

President Cory Newsom said South Plains has largely completed the integration of Bank of Houston, with the systems conversion occurring in May, roughly three months after the transaction closed. Loans held for investment increased by $677.3 million from the linked quarter to $3.77 billion. The increase included $632 million of loans from Bank of Houston and $35 million of organic loan growth. Loans in the company’s major metropolitan markets of Dallas, Houston and El Paso increased by $682 million to $1.69 billion, driven by the acquired Bank of Houston loans and $50 million of organic growth. Newsom said the acquired loan portfolio has performed in line with expectations and that South Plains sees further opportunities to optimize the acquired balance sheet by evaluating higher-cost funding sources and certain relationships.

During the question-and-answer session, Crockett said some work had already been done to manage Bank of Houston funding costs, with more expected in the third quarter. Chairman and Chief Executive Officer Curtis Griffith said Bank of Houston’s Federal Home Loan Bank borrowings had been paid off. Management also said expense savings tied to the deal should begin to show more clearly after the second quarter. Non-interest expense rose by $4.3 million to $39.9 million, with the increase primarily reflecting $2.7 million in core operating expenses related to Bank of Houston and higher incentive-based compensation. Crockett said the quarter included about $1.1 million of acquisition-related expenses, including $710,000 in personnel expenses, and that acquisition ex