South Plains: A Seamless Leadership Handoff Meets a Transformative Houston Integration
The Plan Takes Shape
South Plains Financial's second-quarter earnings call was less about the quarter's results and more about the year ahead. The headline is a leadership transition — a smooth, choreographed change that has been in motion for years. Curtis Griffith, Chairman and CEO, announced his retirement at year-end, handing the reins to Cory Newsom, who has been “leading our day-to-day operations and driving our growth strategy” — Curtis Griffith, Chief Executive Officer (retiring) · 2026-07-17 all along. The stock sale he disclosed in June, as part of “a longstanding estate planning strategy” — Curtis Griffith, Chief Executive Officer (retiring) · 2026-07-17, might have caused concern at other banks, but here it's framed as a non-event: the board even bought back a portion of his shares.
The strategic rationale is clear. Newsom's fingerprints are already on the bank's biggest recent move — the BOH acquisition — and he has big plans for what comes next. The company is “optimistic about our growth prospects for the second half,” as CFO Brent Banks put it, driven by a combination of lender hires, a strong pipeline, and the payoff of the Houston deal. The stock's flat 90-day tape (“another solid quarter” — Cory Newsom, President and Chief Executive Officer · 2026-07-17) reflects that the market is not yet giving credit for the potential cost saves still to come.
Cost of Funds: The Untapped Lever
The core financial theme of the call is the ability to optimize Bank of Houston's costlier funding base. The bank has already repaid its Federal Home Loan Bank borrowings and is letting higher-cost time deposits roll off. CFO Steve Crockett is measured about the pace:
We did do a little bit in the quarter. As you can tell, we still have opportunities in front of us that we're working on right now.
This is a deliberate, earnings-accretive project that should support “managing NIM in the same range” — Brett Rabatin, Analyst · 2026-07-17 while the loan book expands. The company has historically held a strong organic loan growth mindset — it's the primary pillar of the strategy — and management is confident the newly onboarded Houston team will keep that momentum going despite elevated payoffs in the quarter (“we can continue the path we're on” — Brent Bates, Chief Financial Officer · 2026-07-17).
Confluence of Themes
Across the market, several peers are discussing the same balance-sheet levers: deposit growth, tariff-related refunds, and deposit growth in higher-rate environments. But SPFI's specific focus on post-acquisition cost-of-funds optimization is distinct. The prior-quarter call (2026-04-28) already telegraphed this: “we've got a lot of on-hand liquidity... as some of these higher cost things that are not core hit the dates we can, we'll just pay them off.” — Curtis Griffith, Executive (likely CEO or President) · 2026-04-28 The current quarter confirms execution is ongoing.
The leadership transition is a company-unique event that will not be repeated, and it comes during a transformative period: assets grew to $5.4 billion, and the bank now has meaningful scale in Dallas, Houston, and El Paso. With the Board authorizing a 6% dividend increase and a continued buyback program, the tone is confident.
From a fundamentals perspective, the numbers validate the story. Net income grew 18% year-over-year, and the efficiency ratio has improved to 48.1% (down 13 points over two years). The balance sheet remains well-capitalized, with tangible common equity to tangible assets at 10.47%.
Look Ahead
This is a bank executing a plan, not scrambling. The market's quiet 90-day tape suggests investors are waiting to see proof that the BOH integration delivers the targeted cost saves and that organic loan growth can overcome the payoff headwind. With a clear handoff, disciplined M&A appetite, and a visible path to margin stability, South Plains looks well positioned. The real test will come in the next two quarters as the cost-of-funds benefits materialize.