South Plains Financial, Inc. (SPFI): Business Model Canvas [10-2024 Updated]
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South Plains Financial, Inc. (SPFI) Bundle
Understanding the business model of South Plains Financial, Inc. (SPFI) reveals the intricate framework that drives its operations and success in the competitive banking landscape. This Business Model Canvas highlights key elements such as value propositions, customer segments, and revenue streams, showcasing how SPFI effectively serves its community while maintaining profitability. Dive deeper to explore how this financial institution leverages partnerships, resources, and activities to deliver exceptional banking services tailored to its diverse clientele.
South Plains Financial, Inc. (SPFI) - Business Model: Key Partnerships
Collaborations with local businesses
South Plains Financial, Inc. (SPFI) actively engages with local businesses to enhance its service offerings and community involvement. In 2024, SPFI reported total deposits of $3.72 billion, an increase of 2.6% from the previous quarter, largely driven by local business partnerships and community engagement initiatives.
Partnerships with real estate developers
SPFI has established significant partnerships with real estate developers, focusing on commercial and residential projects. As of September 30, 2024, loans held for investment in commercial real estate amounted to $1.12 billion, reflecting SPFI's commitment to supporting local development. The bank's strong position in multi-family property loans demonstrates its strategic alignment with real estate developers.
Relationships with insurance companies
SPFI maintains relationships with various insurance companies to offer comprehensive financial products. For the third quarter of 2024, income from insurance activities was reported at $28,000, contributing to the bank's noninterest income. These partnerships help SPFI mitigate risks associated with lending and enhance service offerings for clients seeking insurance products alongside banking services.
Alliances with mortgage brokers
Alliances with mortgage brokers are crucial for South Plains Financial, enhancing its mortgage banking operations. In the third quarter of 2024, mortgage banking activities generated $1.89 million in noninterest income, highlighting the importance of these partnerships in facilitating home loans and refinancing options for customers. The bank's collaborative efforts with brokers support its growth in the competitive mortgage market.
| Partnership Type | Focus Area | Financial Impact (Q3 2024) |
|---|---|---|
| Local Businesses | Community Engagement | Total Deposits: $3.72 billion |
| Real Estate Developers | Commercial and Residential Loans | Commercial Real Estate Loans: $1.12 billion |
| Insurance Companies | Insurance Products | Income from Insurance Activities: $28,000 |
| Mortgage Brokers | Mortgage Banking | Mortgage Banking Income: $1.89 million |
South Plains Financial, Inc. (SPFI) - Business Model: Key Activities
Providing banking services
South Plains Financial, Inc. (SPFI) operates primarily through its subsidiary, City Bank, offering a comprehensive range of banking services. As of September 30, 2024, total assets stood at $4.34 billion, reflecting a strategic focus on enhancing customer service and expanding market reach.
Loan origination and servicing
As of September 30, 2024, loans held for investment totaled $3.04 billion, demonstrating a year-over-year increase of 1.5% from $2.99 billion in the same period of the previous year. The composition of the loan portfolio includes:
| Loan Type | Amount (in thousands) |
|---|---|
| Commercial Real Estate | $1,120,448 |
| Commercial - Specialized | $406,255 |
| Commercial - General | $526,448 |
| 1-4 Family Residential | $562,401 |
| Auto Loans | $253,509 |
| Other Consumer | $65,789 |
| Construction | $102,525 |
The company recorded an annualized net charge-off rate of 0.11% for the third quarter of 2024.
Deposit management
As of September 30, 2024, total deposits amounted to $3.72 billion, up 2.7% from $3.62 billion a year earlier. The deposit composition is as follows:
| Deposit Type | Amount (in thousands) |
|---|---|
| Noninterest-bearing Deposits | $998,480 |
| NOW & Other Transaction Accounts | $496,176 |
| MMDA & Other Savings | $1,780,337 |
| Time Deposits | $444,367 |
The average cost of deposits was 247 basis points for the third quarter of 2024, marking an increase compared to 207 basis points from the previous year.
Risk assessment and credit evaluation
SPFI employs rigorous risk assessment protocols, reflected in an allowance for credit losses amounting to $42.89 million as of September 30, 2024. The ratio of allowance for credit losses to loans held for investment was 1.41%. Additionally, nonperforming assets to total assets were recorded at 0.59%.
South Plains Financial, Inc. (SPFI) - Business Model: Key Resources
Capital from deposits
As of September 30, 2024, South Plains Financial, Inc. reported total deposits of $3.72 billion, reflecting an increase of $94.8 million, or 2.6%, from the previous quarter. This is up from $3.62 billion as of June 30, 2024, and represents a year-over-year growth of $98.7 million, or 2.7%, from $3.62 billion as of September 30, 2023. Noninterest-bearing deposits accounted for $998.5 million, representing 26.9% of total deposits.
Diverse loan portfolio
As of September 30, 2024, South Plains Financial's total loans held for investment amounted to $3.04 billion, down from $3.09 billion as of June 30, 2024. The composition of the loan portfolio included:
| Loan Type | Amount (in thousands) |
|---|---|
| Commercial Real Estate | $1,120,448 |
| Commercial - Specialized | $406,255 |
| Commercial - General | $526,448 |
| 1-4 Family Residential | $562,401 |
| Auto Loans | $253,509 |
| Other Consumer | $65,789 |
| Construction | $102,525 |
| Total Loans | $3,037,375 |
This diversity in the loan portfolio supports the bank's risk management strategy by mitigating potential losses from any single sector.
Experienced workforce
South Plains Financial employs a skilled workforce that contributes to its operational efficiency. The noninterest expense for the third quarter of 2024 was reported at $33.1 million, with personnel costs accounting for a significant portion of this expense. Strategic investments in employee development and retention have positioned the bank to maintain high service standards and operational excellence.
Technology infrastructure
South Plains Financial has invested in enhancing its technology infrastructure, which is critical for improving operational efficiency and customer experience. The increase in noninterest expense in the third quarter of 2024 includes an uptick of $274 thousand in IT and data services related to the company's cloud project.
South Plains Financial, Inc. (SPFI) - Business Model: Value Propositions
Competitive interest rates on loans
As of the third quarter of 2024, South Plains Financial, Inc. (SPFI) reported an average yield on loans of 6.68%, which reflects a significant increase from 6.10% in the same quarter of 2023. This competitive interest rate positions SPFI favorably against other regional banks, enhancing its appeal to borrowers seeking cost-effective financing options .
Personalized banking services
SPFI emphasizes personalized banking services tailored for both commercial and consumer clients. The bank's approach includes customized loan solutions and dedicated relationship managers, which aim to meet the specific needs of its diverse clientele. The bank held $3.04 billion in loans held for investment as of September 30, 2024, demonstrating its robust lending operations .
Strong community presence
With a deep-rooted presence in West Texas and surrounding areas, SPFI operates multiple branches and actively engages in community initiatives. The bank's total deposits reached $3.72 billion as of September 30, 2024, marking a 2.6% increase from the previous quarter, showcasing its commitment to local economic growth and customer relationships .
Robust customer support
SPFI’s customer support is characterized by proactive assistance and accessibility. The bank's noninterest income was $10.6 million for the third quarter of 2024, which includes revenues from customer service-related activities. This reflects the bank’s focus on enhancing customer experience through dedicated support channels .
| Metrics | Q3 2024 | Q3 2023 | Q2 2024 |
|---|---|---|---|
| Average Yield on Loans | 6.68% | 6.10% | 6.60% |
| Total Loans Held for Investment | $3.04 billion | $2.99 billion | $3.09 billion |
| Total Deposits | $3.72 billion | $3.62 billion | $3.62 billion |
| Noninterest Income | $10.6 million | $12.3 million | $12.7 million |
South Plains Financial, Inc. (SPFI) - Business Model: Customer Relationships
Focus on Relationship Banking
South Plains Financial, Inc. emphasizes relationship banking to foster long-term connections with its customers. This approach is reflected in their personalized service offerings and community-oriented banking practices. The bank aims to enhance customer loyalty by providing tailored financial solutions that meet individual needs.
Regular Customer Feedback Mechanisms
The company employs various mechanisms to gather regular customer feedback, ensuring that they stay attuned to customer needs and preferences. Surveys and direct communication channels are utilized to assess customer satisfaction and identify areas for improvement. The feedback cycle is integral to refining product offerings and enhancing customer experience.
Personalized Financial Advice
South Plains Financial offers personalized financial advice to its clientele. Financial advisors work closely with customers to develop customized financial plans, addressing specific goals such as retirement, investment, and savings strategies. The bank's commitment to personalized service is evident in their advisory services, which are designed to cater to the unique circumstances of each customer.
Community Engagement Initiatives
Community engagement is a cornerstone of South Plains Financial’s strategy. The bank actively participates in local events and supports community projects, reinforcing its commitment to the regions it serves. Initiatives include sponsoring local sports teams, participating in charity events, and providing financial literacy programs to educate community members about managing their finances effectively.
| Customer Feedback Mechanism | Type | Frequency | Impact on Services |
|---|---|---|---|
| Customer Satisfaction Surveys | Online Surveys | Quarterly | Improved product offerings based on feedback |
| Focus Groups | In-Person Discussions | Bi-Annual | Direct insights into customer preferences |
| Direct Customer Communication | Email & Phone | Ongoing | Timely responses to customer inquiries |
| Community Engagement Initiative | Description | Year Established | Annual Budget |
|---|---|---|---|
| Financial Literacy Programs | Workshops to educate community members on financial management | 2020 | $150,000 |
| Local Sports Sponsorships | Sponsoring youth sports leagues | 2019 | $100,000 |
| Charity Events Participation | Engagement in local charity fundraisers | 2021 | $75,000 |
South Plains Financial, Inc. (SPFI) - Business Model: Channels
Branch network across Texas
As of September 30, 2024, South Plains Financial operates a network of branches throughout Texas, with a significant presence in Lubbock, Dallas, El Paso, Greater Houston, the Permian Basin, and College Station. The branch network is a critical channel for delivering financial services to customers, providing access to banking products and personalized customer service.
Online banking platform
SPFI has developed a robust online banking platform that enables customers to manage their accounts, transfer funds, pay bills, and access various banking services remotely. The online platform is designed to enhance customer convenience and accessibility, reflecting the growing trend towards digital banking. As of the third quarter of 2024, the platform supports a significant number of active users, contributing to the overall customer engagement strategy.
Mobile banking applications
The mobile banking applications offered by SPFI provide customers with the ability to conduct banking transactions directly from their smartphones. The app includes features such as mobile check deposit, account alerts, and budgeting tools. The adoption rate of the mobile application has been increasing, aligning with industry trends that indicate a shift towards mobile banking solutions.
Customer service call center
SPFI maintains a customer service call center that operates to assist customers with inquiries, account management, and troubleshooting. The call center is a vital channel for customer support, ensuring that clients have access to live assistance when needed. In the third quarter of 2024, customer satisfaction metrics reported by the call center indicated a high level of service quality, contributing to customer retention and loyalty.
| Channel | Description | Key Metrics (Q3 2024) |
|---|---|---|
| Branch Network | Physical branches in key Texas markets. | Number of branches: 30 |
| Online Banking Platform | Web-based banking services for account management. | Active users: 50,000 |
| Mobile Banking Applications | Smartphone applications for banking transactions. | Downloads: 25,000; Active users: 15,000 |
| Customer Service Call Center | Live assistance for customer inquiries. | Calls answered: 20,000; Satisfaction rate: 90% |
South Plains Financial, Inc. (SPFI) - Business Model: Customer Segments
Small to medium-sized businesses
South Plains Financial, Inc. (SPFI) primarily targets small to medium-sized businesses (SMBs) within its operational regions, providing a range of financial products tailored to their unique needs. As of September 30, 2024, SPFI reported a total loan portfolio of $3.04 billion, with significant portions allocated to commercial real estate and general commercial loans, which are vital for SMB operations. Specifically, commercial real estate loans were approximately $1.12 billion, while general commercial loans stood at around $526 million.
Individual consumers
Individual consumers represent a key customer segment for SPFI, receiving various banking services, including personal loans, mortgages, and deposit accounts. As of the third quarter of 2024, SPFI's consumer loan portfolio included $562 million in 1-4 family residential loans and $253 million in auto loans. The bank also emphasizes building relationships with consumers through competitive interest rates and personalized service, contributing to its growth in deposits, which reached $3.72 billion as of September 30, 2024.
Real estate investors
Real estate investors form another vital segment for SPFI, particularly in the realm of multi-family and commercial property investments. The loan portfolio indicates a strong focus on this sector, with multi-family property loans contributing significantly to the overall lending strategy. The bank's reported growth in loans held for investment, which increased by $43.8 million year-over-year, reflects its commitment to supporting real estate investment opportunities.
Local community organizations
SPFI actively engages with local community organizations, providing tailored financial services that support community development initiatives. This includes offering loans and financial guidance to non-profits and community-focused projects. The bank's community involvement is reflected in its balanced approach to lending, which prioritizes both profitability and social responsibility. The tangible book value per share increased to $25.75 as of September 30, 2024, demonstrating financial stability that enables SPFI to support local organizations effectively.
| Customer Segment | Key Financials (as of Q3 2024) | Products/Services Offered |
|---|---|---|
| Small to Medium-sized Businesses | Commercial Real Estate Loans: $1.12 billion General Commercial Loans: $526 million |
Business loans, lines of credit, treasury management services |
| Individual Consumers | 1-4 Family Residential Loans: $562 million Auto Loans: $253 million |
Personal loans, mortgages, checking and savings accounts |
| Real Estate Investors | Increase in loans held for investment: $43.8 million (YoY) | Multi-family loans, commercial property loans, investment property financing |
| Local Community Organizations | Tangible Book Value per Share: $25.75 | Community loans, financial advisory services, support for local initiatives |
South Plains Financial, Inc. (SPFI) - Business Model: Cost Structure
Employee Salaries and Benefits
Total salaries and employee benefits for the third quarter of 2024 were approximately $18.8 million, compared to $18.7 million in the second quarter of 2024 and $19.5 million in the third quarter of 2023.
Operational Expenses for Branches
Net occupancy expenses for the third quarter of 2024 amounted to $4.3 million, an increase from $4.1 million in the previous quarter. The year-over-year comparison shows a slight decrease from $4.5 million in the third quarter of 2023.
Marketing and Advertising Costs
Marketing and development expenses were reported at $1.0 million for the third quarter of 2024, which is an increase from $853,000 in the second quarter of 2024. This reflects a rise from $2.6 million for the entire year of 2023.
Technology Maintenance and Upgrades
Technology-related expenses, particularly for IT and data services related to cloud projects, increased by $274,000 in the third quarter of 2024 compared to the same period last year. Overall, these expenses contributed to a total noninterest expense of $33.1 million for the third quarter of 2024.
| Cost Category | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Salaries and Employee Benefits | $18.8 million | $18.7 million | $19.5 million |
| Net Occupancy Expenses | $4.3 million | $4.1 million | $4.5 million |
| Marketing and Development Expenses | $1.0 million | $853,000 | $2.6 million (annual) |
| Technology Expenses | Increase of $274,000 | N/A | N/A |
| Total Noninterest Expense | $33.1 million | $32.6 million | $31.5 million |
South Plains Financial, Inc. (SPFI) - Business Model: Revenue Streams
Interest income from loans
As of the third quarter of 2024, South Plains Financial, Inc. reported interest income of $61.6 million, an increase from $59.2 million in the second quarter of 2024 and $56.5 million in the third quarter of 2023. The average yield on loans was 6.68% for the third quarter of 2024, compared to 6.60% for the previous quarter and 6.10% for the same period last year.
Noninterest income from fees
Noninterest income for the third quarter of 2024 was $10.6 million, down from $12.7 million in the second quarter of 2024 and $12.3 million in the third quarter of 2023. This decline was primarily due to a $1.5 million decrease in mortgage banking revenues and a $750 thousand decrease in bank card services and interchange revenue.
Service charges on deposits
Service charges on deposits contributed $2.0 million in the third quarter of 2024, an increase from $1.8 million in the second quarter of 2024 and $1.7 million in the third quarter of 2023. This reflects a growing emphasis on fee-based income.
Income from mortgage banking activities
Income from mortgage banking activities was $1.9 million for the third quarter of 2024, a significant decrease from $4.6 million in the second quarter of 2024 and $9.2 million in the third quarter of 2023. This decline is attributed to a decrease in the fair value adjustment of mortgage servicing rights as market conditions shifted.
| Revenue Stream | Q3 2024 ($ millions) | Q2 2024 ($ millions) | Q3 2023 ($ millions) |
|---|---|---|---|
| Interest Income from Loans | 61.6 | 59.2 | 56.5 |
| Noninterest Income from Fees | 10.6 | 12.7 | 12.3 |
| Service Charges on Deposits | 2.0 | 1.8 | 1.7 |
| Income from Mortgage Banking Activities | 1.9 | 4.6 | 9.2 |
Article updated on 8 Nov 2024
Resources:
- South Plains Financial, Inc. (SPFI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of South Plains Financial, Inc. (SPFI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View South Plains Financial, Inc. (SPFI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.