South Plains Financial, Inc 8-K, filed Mar 8, 2022
South Plains Financial, Inc. (SPFI)
8-K
2022-03-08
For: 2022-03-08
View Original
Added on
April 06, 2026
About this 8-K
South Plains Financial, Inc filed this 8-K on March 8, 2022.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 8, 2022
(Exact name of registrant as specified in its charter)
|
|
|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(806 ) 792-7101
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 |
Regulation FD Disclosure.
|
On March 8, 2022, South Plains Financial, Inc. (the “Company”) is presenting at the Western Financial Services Conference hosted
by Piper Sandler & Co. A copy of the investor presentation that the Company will use during the conference is furnished as Exhibit 99.1 of this Current Report on Form 8-K and is incorporated herein by reference. This investor presentation
will also be available on our website, www.spfi.bank, under the “News & Events” section.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including
Exhibit 99.1 hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in Item 7.01 of
this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be incorporated by reference into any filing or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing or document.
| Item 9.01 |
Financial Statements and Exhibits.
|
| (d) |
Exhibits.
|
| 99.1 |
South Plains Financial, Inc. Investor Presentation, dated March 8, 2022.
|
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL).
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
SOUTH PLAINS FINANCIAL, INC.
|
||
|
Dated: March 8, 2022
|
By:
|
/s/ Steven B. Crockett
|
|
Steven B. Crockett
|
||
|
Chief Financial Officer and Treasurer
|
||
Exhibit 99.1
South Plains Financial Investor Presentation March 8, 2022 1
Safe Harbor Statement and Other Disclosures About South Plains Financial, Inc.South Plains Financial,
Inc. ("South Plains" or the "Company") is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas ("City Bank" or the "Bank"). City Bank is one of the largest independent banks in West Texas and
has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. South Plains provides a wide range of commercial and consumer financial
services to small and medium-sized businesses and individuals in its market areas. Its principal business activities include commercial and retail banking, along with insurance, investment, trust and mortgage services. Please visit
https://www.spfi.bank for more information.FORWARD-LOOKING STATEMENTSThis presentation contains, and future oral and written statements of South Plains and City Bank may contain, statements about future events that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to, among other things, future events and South Plains’ financial
performance. Any statements about South Plains’ expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but
not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and
similar words or phrases. Forward-looking statements include, but are not limited to: (i) projections and estimates of revenues, expenses, income or loss, earnings or loss per share, and other financial items, (ii) statements of plans,
objectives and expectations of South Plains or its management, (iii) statements of future economic performance, and (iv) statements of assumptions underlying such statements. Forward-looking statements should not be relied on because they
involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of South Plains and City Bank. These risks, uncertainties and other factors may cause the actual results, performance, and achievements of
South Plains and City Bank to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences include, but are not
limited to, local, regional, national and international economic conditions, the extent of the impact of the COVID-19 pandemic (and any current or future variant thereof), including the impact of actions taken by governmental and regulatory
authorities in response to such pandemic, such as the Coronavirus Aid, Relief, and Economic Security Act and subsequent related legislations, and the programs established thereunder, and City Bank’s participation in such programs, volatility
of the financial markets, changes in interest rates, regulatory considerations, competition and market expansion opportunities, changes in non-interest expenditures or in the anticipated benefits of such expenditures, the receipt of required
regulatory approvals, changes in non-performing assets and charge-offs, adequacy of loan loss reserves, changes in tax laws, current or future litigation, regulatory examinations or other legal and/or regulatory actions, the impact of any
tariffs, terrorist threats and attacks, acts of war or threats thereof or other pandemics. Therefore, South Plains can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are
cautioned not to place undue reliance on the forward-looking statements contained in this presentation. For more information about these factors, please see South Plains’ reports filed with or furnished to the U.S. Securities and Exchange
Commission (the “SEC”), including South Plains’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Further, any forward-looking statement speaks only as of the date on which it is made and South Plains undertakes no obligation to update or revise any forward-looking statement to reflect
events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements, express or implied, herein are qualified in their entirety
by this cautionary statement. 2
Safe Harbor Statement and Other Disclosures NON-GAAP FINANCIAL MEASURESManagement believes that
certain non-GAAP performance measures used in this presentation provide meaningful information about underlying trends in its business and operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for,
SPFI’s reported results prepared in accordance with GAAP. Numbers in this presentation may not sum due to rounding. 3
New Mexico Texas Dallas Bryan /College Station Houston Midland Odessa El
Paso Lubbock Ruidoso SanAntonio Ft. Worth Austin Albuquerque Santa Fe City Bank Branch Locations A Leading West Texas Franchise 4 Financial Snapshot (As of Dec. 31, 2021) Our Company Bank holding company headquartered in
Lubbock, Texas with $3.9 billion in total assetsOne of the largest independent banks headquartered in West TexasExecuted a successful IPO in May 2019; one of two publicly-traded Texas institutions west of I-35Repeatedly recognized as an
outstanding place to work, including being on American Banker’s Best Banks to Work For list six consecutive times Balance Sheet (Dollars in thousands) 4Q’21 Total Assets $3,901,855 Total Loans Held for
Investment $2,437,577 Allowance for Loan Losses $42,098 Total Deposits $3,341,222 Interest-bearing Deposits $2,269,855 Noninterest-bearing Deposits $1,071,367 Total Stockholders’ Equity $407,427 Profitability (Dollars in
thousands) 4Q’21 Net Income $14,614 Return on Average Assets (annualized) 1.50% Return on Average Equity (annualized) 14.39% Net Interest Margin (calculated on a tax-equivalent basis) 3.50% Efficiency Ratio 66.07% Capital
Ratios 4Q’21 Total Stockholders’ Equity to Total Assets 10.44% Tangible Common Equity to Tangible Assets 9.85% Common Equity Tier 1 to Risk-Weighted Assets 12.91% Tier 1 Capital to Average Assets 10.77% Total Capital to
Risk-Weighted Assets 18.40% Asset Quality 4Q’21 Nonperforming Loans to Total Loans Held for Investment 0.43% Nonperforming Assets to Total Assets 0.30% Allowance for Loan Losses to Total Loans Held for Investment 1.73% Net
Charge-Offs to Average Loans Outstanding (annualized) 0.11% Unless otherwise stated, financial data as of December 31, 2021 as complied and reported by South PlainsNote: Tangible common equity to Tangible assets is a non-GAAP measure. See
appendix for the reconciliation to GAAP
Our History and Growth Profile 5 Our History Loans and Deposits ($M) First State Bank of Morton,
a community bank that held approximately $1 million of total assets in 1941Parent company to First State Bank of Morton acquired South Plains National Bank of Levelland, Texas in 1991 and changed its name to South Plains BankCompany became
the holding company to First State Bank of Morton and South Plains Bank in 1993Acquired City Bank in 1993, which was originally established in Lubbock in 1984, and merged First State Bank of Morton and South Plains Bank into City Bank in 1998
and 1999, respectively$59.2 million initial public offering on May 8, 2019, pricing with-in the range at $17.50Closed the $76.1 million acquisition of West Texas State Bank on November 12, 2019, which added six branches to the Midland /
Odessa area and approximately $430 million in assetsToday we serve our customers through 25 full-service banking locations across six geographic markets, and 15 mortgage loan production offices Note: Tangible common equity is a non-GAAP
measure. See appendix for the reconciliation toGAAP; Company documents; S&P Global Market Intelligence Tangible Common Equity ($M) Total Assets ($M)
Investment Highlights 6 Improving Profitability Organic Growth Strong Credit Culture Enterprise
Risk Management Experienced Management Team Emphasize Community Banking Capital Allocation to Drive Value 1 2 3 4 5 6 7
Experienced Management Team 7 Curtis C. GriffithChairman & Chief Executive Officer Elected to
the board of directors of First State Bank of Morton, Texas, in 1972 and employed by it in 1979Elected Chairman of the First State Bank of Morton board in 1984Chairman of the Board of City Bank and the Company since 1993 Steven B.
CrockettChief Financial Officer & Treasurer Appointed Chief Financial Officer in 2015Controller of City Bank and the Company for 14 and 5 years respectivelyBegan career in public accounting in 1994 by serving for seven years with a local
firm in Lubbock, Texas Mikella D. NewsomChief Risk Officer & Secretary Appointed Chief Risk Officer of the Company in 2019Chief Risk Officer of City Bank since 2015Appointed Secretary of the Company in 2013More than 20 years with City
Bank and its predecessors Cory T. NewsomPresident Entire banking career with the Company focused on lending and operationsAppointed President and Chief Executive Officer of City Bank in 2008Joined the Board in 2008 Brent A. BatesCity
Bank’s Chief Credit Officer Joined City Bank in February 2020Previously served as Division Credit Officer for Simmons First National CorpPreviously served as EVP and Chief Credit Officer of Southwest Bancorp, Inc. 1
Significant Insider Share Ownership Stakeholders / Insiders currently own approximately 38.2% of the
Company 8 Shares1 Name Title Position % Outstanding Market Value ($000’s) South Plains Financial ESOP ESOP 2,549,335 14.35% $70,897 Curtis C. Griffith* Chairman & CEO 2,058,263 11.59% 57,240 Henry Taw, L.P.
*** -- 1,703,787 9.59% 47,382 Cory T. Newsom* President & Director 227,665 1.28% 6,331 Noe G. Valles Director 84,466 0.48% 2,349 Steven B. Crockett CFO & Treasurer 53,993 0.30% 1,502 Richard D. Campbell** Lead
Director 45,093 0.25% 1,254 Kelly L. Deterding Pres. Insur Division & SVP of Insur Dev (Bank) 24,270 0.14% 675 Mikella D. Newsom Chief Risk Officer and Secretary 20,720 0.12% 576 Kyle R.
Wargo Director 8,866 0.05% 247 Cynthia B. Keith Director 4,866 0.03% 135 Total 6,781,324 38.18% $188,588 Market data as of December 31, 2021; Shareholder information as of December 31, 2021. Source: Company filings
and documents; S&P Global Market Intelligence 1 * - Includes shares voted by individual.**. - Includes shares voted by individual except as noted in *** below.*** - Voting power for shares is with Richard D. Campbell
Emphasis on Community Banking 9 2 Our strategy - deliver best-in-class customer service and
achieve our goal of becoming the preferred community bank in our market areasTo achieve our goal - we build long-lasting relationships with our customers by delivering high quality products and services Our focus on providing “big bank”
products with the personal attention of a community bank resonates with our customers and drives market shareOur customer service-driven, community-focused business model differentiates our company from competitors, many of which are larger
out-of-market banks Our Goal We measure success by the support that we can provide to our local communities, not the level of business that we can achieveProviding service and aid to our communities is, ultimately, how we have succeeded
over our long historyOur dedication and commitment is at the core of City Bank’s culture as we encourage our employees to volunteer, including as part of their workOur employees have partnered with Meals on Wheels to help care for senior
citizens in Lubbock and City Bank has also been a long time supporter of the South Plains Food Bank and have made a five year, $150,000 pledge Dedicated to Supporting our Communities
Market Branches1 Deposits($ millions)1 Market Highlights 10 $2,129 Population in excess of
320,000 with major industries in agribusiness, education, and trade among othersHome of Texas Tech University – enrollment of 40,000 students 6 $287 Responsible for the production of over four million barrels of crude oil per day, or
roughly 39% of Total U.S. oil productionGrowing expansion of alternative energy resources, creating a solar and wind production hub 3 $450 DFW is the largest MSA in Texas and fourth largest in the nationResponsible for producing 28% of
Texas GDP in 2019Home to 22 Fortune 500 Companies 2 $205 Population of 865,000+ with major military presence through Fort BlissAdjacent to Juarez, Mexico, which has a growing industrial center, and an estimated population of 1.5 million
peopleHome to four universities including The University of Texas at El Paso 2 $171 Serves as a regional economic hubLarge investments from developers over the past ten years – housing subdivisions, condominiums, retail establishments,
etc.Growing retirement community 1 $73 Home to Texas A&M University – enrollment of 71,000 studentsRanked first in Texas and second nationwide for Best Small Places for Business and Careers in 2019 by Forbes 1 $27 Second largest
MSA in Texas and fifth largest in the nationHome to 24 Fortune 500 CompaniesCalled the “Energy Capital of the World,” the area also boasts the world’s largest medical center and second busiest port in the U.S. Ruidoso /Eastern New Mexico El
Paso Our Markets of Operation 10 2 Source: Company documents; FRED; S&P Global Market Intelligence; Respective university websites; Branch and deposit data as of December 31, 2021; 2020 U.S. Census Bureau data Permian Basin Dallas
/Ft. Worth Bryan /College Station Houston /The Woodlands Lubbock /South Plains Find a stat
Our Markets of Operation (Cont’d) 11 Deposit Market Share: Lubbock MSA Lubbock, Texas – Our
Home Market Major industries include agriculture – primarily cotton, corn, and grain sorghum – as well as education, trade and transportation, health services and governmentHome to Texas Tech University – enrollment ranks within the top 10
for universities in Texas as of Fall 2020 at 40,000+ studentsThe Lubbock MSA reports unemployment of 5.8% for 2020Forbes listed Lubbock as one of its ‘‘Best Places for Business and Careers’’ during
2019 Headquarters In-Market Rank Institution City State Branches Deposits (Millions)(1) Market Share 1 Hilltop Holdings Dallas TX 10 $2,135 19.1% 2 South Plans
Financial Lubbock TX 8 $1,867 16.7% 3 Wells Fargo San Francisco CA 10 $1,062 9.5% 4 Heartland Financial USA Dubuque IA 9 $1,009 9.0% 5 Prosperity Bancshares Houston TX 16 $916 8.2% 6 Amarillo National
Bancorp Amarillo TX 10 $760 6.8% 7 Peoples Bancorp Lubbock TX 6 $567 5.1% 8 Happy Bancshares Amarillo TX 7 $490 4.4% 9 Bank of America Charlotte NC 2 $468 4.2% 10 Vista
Bancshares Dallas TX 6 $384 3.4% 11 Americo Bancshares Wolfforth TX 5 $307 2.8% 12 Plains Bancorp Dimmitt TX 3 $250 2.2% 13 Lone Star State Bancshares Lubbock TX 1 $205 1.8% 14 First Bancshares of
Texas Midland TX 2 $159 1.4% 15 The PNC Financial Services Group Pittsburg PA 2 $137 1.2% Top 1 - 15 Total 97 $10,553 94.3% Total For Market (25) 114 $11,186 100.0% 2 Deposit data as
of June 30, 2021 as complied and reported by S&P Global Market Intelligence. Source: BLS; FDIC; S&P Global Market Intelligence; Lubbock Chamber of Commerce; Forbes
Enterprise Risk Management 12 3 We implemented a rigorous enterprise risk management (“ERM”)
system in the aftermath of the 2008 financial crisis, and view this development as a defining event for our institution This system delivers a systematic approach to risk measurement and enhances the effectiveness of risk management across
the institution Integrating this system into our culture and strategic decision making has improved all functional areas of the business Significantly improved asset quality by enhancing our underwriting process, and establishing a specific
credit appetite that aligns to the broader enterprise risk management framework Has provided a process to quickly detect and address potential problems in our loan portfolio, greatly improving our ability to manage through the COVID-19
pandemic We have also implemented monitoring and controls for other functional areas such as:Information security and technology, vendor management, liquidity, interest rate risk, compliance, and company reputation The ERM program has
positioned our Company to better consummate acquisitions with less risk and increased cost savings We believe we are the only community bank of our size and in our market area to implement such a comprehensive enterprise risk management
system
Our Credit Culture 13 We have a service-driven, relationship-based, business-focused credit
culture, rather than a price-driven, transaction-based cultureSubstantially all of our loans are made to borrowers located, or operating, in our primary market areas with whom we have ongoing relationships across various product linesThe few
loans secured by properties outside of our primary market areas were made to borrowers who are otherwise well-known to usWe adhere to what we believe are disciplined underwriting standards, but also remain cognizant of serving the credit
needs of customers in our primary market areas by offering flexible loan solutions in a responsive and timely mannerOur lending policies do not provide for loans that are highly speculative, subprime, or that have high loan-to-value ratiosWe
maintain asset quality through an emphasis on the following: These components, together with active credit management, are the foundation of our credit culture, which we believe is critical to enhancing the long-term value of our
organization to our shareholders, customers, employees, and communities 4 Local market knowledge Long-term customer relationships Consistent and thorough underwriting Conservative Credit Culture Loan Portfolio Diversity
Relationship Focused Source: Company documents
Loan Approval Process 14 Striking a Balance Between: In Our Decision Making and Responsiveness
to Customers Prudence Disciplined Underwriting Flexibility Loan relationships in excess of an individual officers lending authority up to $3 million may be approved with joint authorities of the market president and senior credit
officer.Loan relationships over $3 million are approved by our Executive Loan Committee.New loans over $5 million to a relationship over $20 million are reported to the Board Credit Risk Committee. These limits are reviewed periodically by
the Company’s Board of DirectorsWe believe that our credit approval process provides for thorough underwriting and efficient decision making 4 Source: Company documents
Credit Quality 15 4Q’21 Highlights Credit Quality Ratios While growth continued in the loan
portfolio, the Company made no provision for loan loss in 4Q’21 in light of the general improvements in the economy and a decline in classified loans of $20.3 million in 4Q’21Ratio of Allowance for Loan Losses (“ALLL”) to Loans Held for
Investment (“HFI”) was 1.73% at 12/31/21 Net Charge-Offs to Average Loans ALLL to Total Loans HFI Source: Company documents
We are actively recruiting additional lenders from other institutions as we continue to make progress
with our goal of adding 20 lenders to our lending team over a two-year timeframe. We are actively hiring in all of our markets with a focus on Dallas and Houston where we have commercial loan offices. As we put our excess liquidity to work in
organic loan growth, we anticipate an expansion of our net interest margin and an acceleration in earnings growth, resulting in improved returns in future periods. Organic Growth Strategy Homegrown Returns We focus on leveraging our
banking platform in our metropolitan markets of Dallas, Houston and El Paso, where we target customers looking for our relationship-based approach to banking and our sophisticated products and services Our strategy is to continue gathering
low-cost deposits in smaller, non-metropolitan markets and deploy our excess funds in larger, more dynamic lending markets, where we have had strong success 16 Includes three Dallas, TX branches, two El Paso, TX branches, and one Houston,
TX branchIncludes ten branches in the Lubbock/South Plains, TX market area, six branches in the Permian Basin, TX, two branches in Ruidoso, NM, and one branch in Bryan/College Station, TXDeposit and Loan data as of December 30, 2021 (Dollars
in thousands) Deposits(3) Loans(3) Amount Overall % Amount Overall % Loans/Deposits Metropolitan Markets(1) $ 682,166 20.4% $ 737,503 30.0% 108.1% Community
Markets(2) $ 2,659,056 79.6% $ 1,700,074 70.0% 63.9% 5
New Mexico Texas Dallas Bryan /College Station Houston Midland Odessa El
Paso Lubbock Ruidoso SanAntonio Ft. Worth Austin Albuquerque Santa Fe City Bank Branch Locations Organic Growth Markets 17 El Paso Adjacent to Juarez, Mexico, which has a growing industrial center and an estimated
population of 1.5 million people, and has contributed to significant growth in the El Paso MSAHome to Fort Bliss, which houses the 1st Armored Division, the 32nd Army Air and Missile Defense Command and the 402nd Field Artillery Brigade,
among other major units, and has almost 50,000 military and civilian employeesOther large employers include El Paso Healthcare System, Tenet Hospitals, The University of Texas at El Paso, The Texas Tech School of Medicine, El Paso Community
College, Southwest University and Vista College 5 Dallas / Ft. Worth1 Largest MSA in Texas, responsible for a total GDP of almost $524 Billion in 2019Estimated population of around 7.6 million as of 2020, which is a little over 26% of the
state’s populationPopulation has steadily expanded over the past decade, with an increase of over 1.2 million residentsCompetitive cost of living, provides an attractive location for companies interested in relocating to more efficient
economic environments Major U.S. Airport hub, responsible for 35.8 million enplaned passengers in 2019Home to 22 Fortune 500 companies, in notable sectors including energy, financial services, transportation, and technology Source: Bureau of
Transportation Statistics; Federal Reserve of Dallas; FRED; Texas Demographic Center
Capital Allocation to Drive Value 18 6 Stock repurchase programs:Repurchased $3.1 million and
$4.4 million of stock in 4Q’21 and 3Q’21, respectivelyApproved a new $10 million program effective November 6, 2021Dividends:12 consecutive quarterly dividends paidGrowth of 114% in dividends paid in 2021 (2021 - $0.30 per share vs. 2020 -
$0.14 per share)Dividend paid in February 2022 increased to $0.11 per share from $0.09 per share We continue to pursue a thoughtful capital allocation strategy to drive value
Improving Profitability 19 We have invested heavily into our infrastructure including:Our
Enterprise Risk Management system State-of-the-art operations center which houses City Bank’s back-office processing for deposit operations, loan operations, mortgage operations, and corporate trainingDigital and payment technologies
including improved remote deposit capture software for business customers, expanded usage of electronic signatures, online account tools, and technologies that facilitate more efficient item processing These investments position City Bank to
scale to more than $5 billion in total assets through both organic growth and accretive, strategic M&A without commensurate additional expenses Long Term Goal: Deliver peer average or better ROA’s and ROE’s 7
Investment Highlights 20 Improving Profitability Organic Growth Strong Credit Culture Enterprise
Risk Management Experienced Management Team Emphasize Community Banking Capital Allocation to Drive Value 1 2 3 4 5 6 7
Financial Update 21
Fourth Quarter 2021 Highlights 22 Note: Tangible book value per share is a non-GAAP measures. See
appendix for the reconciliation to GAAP Source: Company documents Net income of $14.6 million, compared to $15.2 million in 3Q’21 and $15.9 million in 4Q’20Diluted earnings per share of $0.79, compared to $0.82 in 3Q’21 and $0.87 in
4Q’20Average cost of deposits declined to 23 bps, compared to 25 bps in 3Q’21 and 31 bps in 4Q’20Loans held for investment grew $8.5 million, or 0.4%, during the fourth quarter of 2021 as compared to September 30, 2021Nonperforming assets to
total assets were 0.30%, compared to 0.32% at 9/30/21 and 0.45% at 12/31/20Net interest margin, calculated on a tax-equivalent basis, of 3.50%, compared to 3.58% in 3Q’21 and 3.64% in 4Q’20 Efficiency ratio was 66.07%, compared to 66.45% in
3Q’21 and 64.19% in 4Q’20Tangible book value per share of $21.51, compared to $20.90 at 9/30/21 and $18.97 at 12/31/20Return on average assets (annualized) of 1.50%, compared to 1.61% in 3Q’21 and 1.76% in 4Q’20
Loan Portfolio 23 4Q’21 Highlights Total loans increased by $8.5 million compared to 3Q’21,
primarily due to:$30.5 million organic net loan growthPartially offset by SBA forgiveness and repayments of $22.0 million in PPP loans Additionally, there were $26.8 million in early payoffs from two hotel loans and a classified commercial
creditStrategic initiative underway to grow SPFI’s banking team by more than 30% over two years with a primary focus on Dallas and Houston markets4Q’21 yield on loans, ex-PPP, of 4.81%; a decrease of 5 bps compared to 3Q’21, excluding PPP
loans Total Loans Held for Investment$ in Millions Source: Company documents
Loan Portfolio 24 Portfolio Composition Loan Portfolio ($ in
millions) 12/31/21 Commercial C&D $ 104.8 Residential C&D 218.3 CRE Owner/Occ. 230.6 Other CRE Non Owner/Occ. 440.8 Multi-Family 138.4 C&I 376.8 Agriculture 191.2 1-4 Family
387.7 Auto 240.7 Other Consumer 68.1 PPP 40.2 Total $ 2,437.6 Source: Company documents Active loan modifications attributed to the COVID-19 pandemic were 0.7%, or $15.9 million, of total loans at December
31, 2021. All of these active modified loans are in the hotel portfolio and have original modified terms that extended up to 18 months. We expect that these remaining modified loans will return to full payment status at the end of their
respective modification periods. 4Q’21 Highlights
DirectEnergy Select Loan Industry Concentration Detail 25 As of December 31,
2021 Hospitality Total operating hospitality loans of $113 million*$8 million in hotels under construction, with no unfunded commitments83% of balances are to limited service hotels35% of operating hospitality classified; <1.0% is
nonaccrual; none are 30 days or more past dueALLL on operating hospitality is 7.8%** Does not include loans reported in construction and development Total direct energy loans of $119 million96% support services, 4% upstreamNearly 100% are
located in Permian and Palo Duro Basins5% of energy sector classified; <1.0% is 30 days or more past dueALLL on energy sector is 1.8% Hotels by Geography Source: Company documents Energy Support Services by Type
Mortgage Banking Overview 26 Mortgage Banking Activity$ in Millions 4Q’21 Highlights $49 million
decrease in interest rate lock commitments at 12/31/21 compared to 9/30/21Mortgage loan originations decreased 16.1% in 4Q’21 compared to 3Q’21Mortgage servicing rights asset valuation – a positive adjustment of $400 thousand in 4Q’21,
compared to a positive adjustment of $119 thousand in 3Q’21 Source: Company documents
Diversified Revenue Stream Twelve Months Ended December 31, 2021 27 Total Revenues$219.2
million Noninterest Income$97.5 million Source: Company documents
Net Interest Income and Margin 28 Net Interest Income & Margin$ in Millions 4Q’21
Highlights Net interest income of $31.4 million, compared to $31.2 million in 3Q’21; the increase was due to:Growth of $66.1 million in average loans outstandingPartially offset by 9 bps decrease in loan yield4Q’21 net interest margin
(“NIM”), calculated on a tax-equivalent basis, of 3.50% and a decrease of 8 bps compared to 3Q’21 Source: Company documents
Deposit Portfolio 29 Total Deposits$ in Millions 4Q’21 Highlights Total Deposits of $3.34 billion
at 4Q’21, an increase of $129 million from 3Q’21Largest increase was experienced in personal accounts Cost of interest-bearing deposits declined in 4Q’21 to 35 bps from 37 bps in 3Q’21Noninterest-bearing deposits represented 32.1% of deposits
in 4Q’21, compared to 32.8% in 3Q’21 Source: Company documents
Investment Securities 30 4Q’21 Highlights Investment Securities totaled $724.5 million at
12/31/21, a decrease of $28.1 million from 3Q’21All municipal bonds are in TexasAll MBS, CMO, and Asset Backed securities are U.S. Government or GSE 4Q’21 Securities Composition $752.6million Securities & Cash$ in Millions Source:
Company documents
Noninterest Expense and Efficiency 31 Noninterest Expense$ in Millions 4Q’21 Highlights Noninterest
expense for 4Q’21 decreased $2.0 million from 3Q’21 primarily due to:$1.1 million decrease in personnel expense related to the seasonal decline in insurance activities$854 thousand decrease in mortgage commissions due to the decline in
mortgage loan originations during 4Q’21Partially offset by an $881 thousand increase in professional services expensesManagement continues to focus on reducing fixed expenses to drive improved profitability Source: Company documents
Balance Sheet Highlights$ in Millions Balance Sheet Growth and Development 32 Tangible Book Value
Per Share Note: Tangible book value per share is a non-GAAP measure. See appendix for the reconciliation to GAAP Source: Company documents
Strong Capital Base 33 Tangible Common Equity to Tangible Assets Ratio Common Equity Tier 1
Ratio Tier 1 Capital to Average Assets Ratio Total Capital to Risk-Weighted Assets Ratio Source: Company documents Note: Tangible common equity to tangible assets is a non-GAAP measure. See appendix for the reconciliation to GAAP
Appendix 34
Non-GAAP Financial Measures 35 Unaudited$ in Thousands Source: Company documents As of the
quarter ended December 31,2021 September 30,2021 June 30,2021 March 31,2021 December 31,2020 Tangible common equity Total common stockholders'
equity $ 407,427 $ 398,276 $ 392,815 $ 374,671 $ 370,048 Less: goodwill and other intangibles (25,403) (25,804) (26,226) (26,648) (27,070)
Tangible common equity $ 382,024 $ 372,472 $ 366,589 $ 348,023 $ 342,978 Tangible assets Total assets $ 3,901,855 $ 3,774,175
$ 3,712,915 $ 3,732,894 $ 3,599,160 Less: goodwill and other intangibles (25,403) (25,804) (26,226) (26,648) (27,070) Tangible assets $ 3,876,452
$ 3,748,371 $ 3,686,689 $ 3,706,246 $ 3,572,090 Shares outstanding 17,760,243 17,824,094 18,014,398 18,053,229 18,076,364
Total stockholders' equity to total assets 10.44% 10.55% 10.58% 10.04% 10.28% Tangible common equity to tangible assets 9.85% 9.94% 9.94% 9.39% 9.60% Book value per
share $ 22.94 $ 22.34 $ 21.81 $ 20.75 $ 20.47 Tangible book value per share $ 21.51 $ 20.90 $ 20.35 $ 19.28 $ 18.97