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South Plains Financial , Inc. South Plains Financial , Inc. Reports Third Quarter 2021 Financial Results October 26 , 2021 LUBBOCK , Texas , Oct. 26 , 2021 ( GLOBE NEWSWIRE ) -- South Plains Financial , Inc. ( NASDAQ : SPFI ) ( " South Plains " or the " Company " ) , the parent company of City Bank ( " City Bank " or the " Bank " ) , today reported its financial results for the quarter ended September 30 , 2021 . Third Quarter 2021 Highlights • Net income for the third quarter of 2021 was $ 15.2 million , compared to $ 13.7 million for the second quarter of 2021 and $ 16.7 million for the third quarter of 2020 . • Diluted earnings per share for the third quarter of 2021 was $ 0.82 , compared to $ 0.74 for the second quarter of 2021 and $ 0.92 for the third quarter of 2020 . • Average cost of deposits for the third quarter of 2021 decreased to 25 basis points , compared to 27 basis points for the second quarter of 2021 and 34 basis points for the third quarter of 2020 . • The Company did not record a provision for loan losses in the third quarter of 2021 , compared to a negative provision for loan losses of $ 2.0 million for the second quarter of 2021 and provision for loan losses of $ 6.1 million for the third quarter of 2020 . • Loans held for investment grew $ 125.6 million , or 5.5 % , during the third quarter of 2021 as compared to June 30 , 2021 . • Nonperforming assets to total assets were 0.32 % at September 30 , 2021 , compared to 0.37 % at June 30 , 2021 and 0.46 % at September 30 , 2020 . • Return on average assets for the third quarter of 2021 was 1.61 % annualized , compared to 1.46 % annualized for the second quarter of 2021 and 1.88 % annualized for the third quarter of 2020 . • Tangible book value ( non - GAAP ) per share was $ 20.90 as of September 30 , 2021 , compared to $ 20.35 per share as of June 30 , 2021 and $ 18.00 per share as of September 30 , 2020 . Curtis Griffith , South Plains ' Chairman and Chief Executive Officer , commented , " I am very pleased with our team's performance again in the third quarter and would like to thank our employees for their hard work as they continue to deliver outstanding service to our customers which continues to translate into strong results for the Bank . This can be seen in our financial performance as we grew loans by 5.5 % in the third quarter of 2021 and have benefited from a strong Texas economy . We are also benefiting from our plan to grow our lending team by more than 30 % over a two - year timeframe , as the lenders who we have recruited have begun growing their loan portfolios . In fact , we are seeing an acceleration in activity in several of our key markets , like Houston , where we have recently hired a new market leader . We expect to continue redeploying our excess liquidity into higher yielding loans , which we believe will drive an acceleration to net interest income and offset the eventual decline in mortgage revenue as activity normalizes in future periods . We remain very optimistic with what the future holds for South Plains and continue to see our shares trading below intrinsic value . As a result , we were aggressive in the third quarter having repurchased approximately 190,000 shares under our previously - announced $ 10 million share repurchase plan . " Results of Operations , Quarter Ended September 30 , 2021 Net Interest Income Net interest income was $ 31.2 million for the third quarter of 2021 , compared to $ 29.6 million for the second quarter of 2021 and $ 31.3 million for the third quarter of 2020. Net interest margin was 3.58 % for the third quarter of 2021 , compared to 3.42 % for the second quarter of 2021 and 3.82 % for the third quarter of 2020. The average yield on loans was 4.99 % for the third quarter of 2021 , compared to 4.97 % for the second quarter of 2021 and 5.08 % for the third quarter of 2020. The average cost of deposits was 25 basis points for the third quarter of 2021 , representing a two basis point decrease from the second quarter of 2021 and a 9 basis point decrease from the third quarter of 2020 . Interest income was $ 34.4 million for the third quarter of 2021 , compared to $ 33.0 million for the second quarter of 2021 and $ 34.5 million for the third quarter of 2020. Interest income increased $ 1.4 million in the third quarter of 2021 from the second quarter of 2021 due primarily to an increase of $ 1.5 million in loan interest income as a result of the growth of $ 82.9 million in average loans outstanding during the third quarter of 2021. In the third quarter of 2021 , interest and fees on Small Business Administration ( " SBA " ) Paycheck Protection Program ( " PPP " ) loans declined $ 405 thousand compared to the second quarter of 2021 , as the average balance of PPP loans decreased $ 70.3 million during the third quarter of 2021 due to PPP loan forgiveness payments received from the SBA during the quarter . Interest income was flat in the third quarter of 2021 compared to the third quarter of 2020 as average interest - earning assets were $ 199.2 million higher and the related yield was 26 basis points lower in the third quarter of 2021 . During the third quarter of 2021 , the Company recognized $ 1.7 million in deferred PPP - related SBA fees . At September 30 , 2021 , the Company had $ 2.9 million of deferred PPP fees that have not been accreted to income , the majority of which are expected to be recognized as PPP loans continue to be forgiven by the SBA over the next several quarters . Interest expense was $ 3.3 million for the third quarter of 2021 , compared to $ 3.4 million for the second quarter of 2021 and $ 3.2 million for the third quarter of 2020. Interest expense declined 4.8 % as compared to the second quarter of 2021 as a result of lower average interest - bearing deposits and a reduction in interest rates on these deposits . Interest expense was consistent as compared to the third quarter of 2020 , with a reduction in interest rates on interest - bearing deposits offset by an increase in the overall cost of long - term borrowings . The increase in the cost of long - term borrowings was due to the issuance of $ 50 million in subordinated notes at the end of the third quarter of 2020 .