Q1 2024 South Plains Financial Inc Earnings Call

Presentation

Operator

Good afternoon, ladies and gentlemen, and welcome to South Plains Financial Inc. First Quarter 2024 earnings conference call. During today's presentation, all parties will be in a listen-only mode following the presentation. The conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Steve Crockett, Chief Financial Officer and Treasurer of South Plains Financial. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. We appreciate you joining our earnings conference call. With me here today are Curtis Griffin, our Chairman and Chief Executive Officer, Cory Newsom, our President, and Brent Bates, our Chief Credit Officer, the related earnings press release and earnings presentation are available on the News and Events section of our website SPFI. Dot Bank.
Before we begin, I'd like to remind everyone that this call may contain forward looking statements and are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated future results, please see our safe harbor statements in our earnings press release and in our earnings presentation. All comments made during today's call are subject to the Safe Harbor statements. Any forward-looking statements presented herein are made only as of today's date, and we do not undertake any duty to update such forward-looking statements except as required by law.
Additionally, during today's call, we may discuss certain non-GAAP measures which we believe are useful in evaluating our performance. A reconciliation of these non-GAAP measures to the most comparable GAAP measures can also be found in our earnings release and in the earnings presentation purpose, let me hand it over to you.

Thank you, Steve, and good afternoon. On today's call. I will briefly review the highlights of our first quarter 2024 results as well as spend some time on our business philosophy and initiatives to become our customers' primary banking relationship. Cory will discuss our loan portfolio as well as our initiatives to drive growth across the bank. Steve will then conclude with a more detailed review of our first quarter financial results.
Starting on Slide 4 of our earnings presentation. I'm pleased with our first quarter results as we've started to see our net interest margin stabilize, driven by improved loan yields, including interest recoveries, combined with a slowing of the rate of deposit cost increases our loan production was strong through the first quarter, though it was largely offset by our typical seasonal agricultural paydowns as well as the early payoffs of several loans that we've been working to move out of the bank. We continue to aggressively manage the credit quality of our loan portfolio as evidenced by our ratio of nonperforming assets to total assets, which was only 10 basis points at the end of the first quarter. Additionally, our classified loans remain near the lowest levels since the start of the pandemic. Lastly, while competition for deposits remains a challenge in the current banking environment, we delivered modest deposit growth as our community base deposit franchise remains a competitive advantage and we believe provides adequate liquidity to fund loan growth as we move through the year. I am proud of our results, which are a testament to our employees, our culture and how we do business. On these calls. We often discuss our focus on relationships that we're looking for long term customer relationships and not transactions. While we've not spent time talking about on our calls is the purpose behind that as well as our mission statement and values at South Plains, our core purpose is to use the power of relationships to help people succeed and live better for our customers. That means providing personalized advice and solutions to help them achieve their goals. Over the years, we've invested in our product and people to ensure that we can do this better than our peers as a result, I believe that we can achieve significant organic growth over time by leveraging what we have in place today, while also taking advantage of the dislocation that is occurring across our markets. This dislocation is creating customer dissatisfaction, which is providing our bankers with the opportunity to move relationships to South Plains to further take advantage of this dislocation. We've been recruiting experienced treasury management executives to meet the customer demand that we see across our markets. We have also been refining our go-to market strategy by focusing more on our customers' needs and challenges by taking a solutions-based sales approach. We are first identifying our customers' needs and then providing the right product to meet those needs that positions us to win their business and become their primary bank. We've already started to see the early signs of success as this approach is resonating with our customers. Additionally, we significantly exceed the minimum regulatory levels necessary for the company to be deemed well-capitalized, and we are focused on both growing the bank while also returning a steady stream of income to our shareholders through our quarterly dividend. This past week, our Board of Directors authorized a $0.14 per share quarterly dividend, which is an 8% increase over our prior dividend levels. This will be our 20th consecutive quarterly dividend to be paid on May 13th, 2024 for shareholders of record on April 29th, 2024. Our Board of Directors also authorized a 10 million stock repurchase program in February, given our belief that our shares continue to trade at a discount to intrinsic value.
Now let me turn the call over to Cory.

Thank you, Curtis, and good afternoon, everyone.
Starting on slide 6, our loan portfolio held steady through the first quarter as compared to the linked quarter. Importantly, our production in multifamily and single-family property loans and general commercial loans largely offset $28 million of seasonal agricultural paydowns, a $16 million reduction in residential construction loans and a $13 million decline in our indirect auto portfolio. Further, we had $26 million of principal reduction in watch list loans. As Curtis touched on, we continue to aggressively manage the credit quality of our loan portfolio, having moved several loans that were on our watch list out of the bank, we will continue to take a proactive approach to credit and are very pleased with the credit quality of our loan portfolio. So this was a headwind to the loan growth in the first quarter. We remain confident in our full year guidance of low single digit loan growth. The yield on our loan portfolio was 6.53% in the first quarter at 24 basis points as compared to 6.29% in the linked quarter. Steve will give a little bit more color on the increase in a moment.
Skipping to slide 8, we grew loans by $22 million or 8.5% annualized to $1.06 billion in our major metropolitan markets of Dallas, Houston and El Paso as compared to the linked quarter. Looking forward, we will continue to seek to selectively add lenders across all of our markets both metro and rural who fit our culture and could bring business to the bank given the continued organic growth opportunities that we see.
The Permian Basin is a region that is experiencing dislocation as competitors go through both ownership and leadership changes, which is creating an opportunity to attract high quality loan and deposit relationships to South Plains. These are relationships that we've been after for several years and in some cases are changing banks for the first time in their careers to bring these relationships to the bank. We've invested in our people, branches and infrastructure. It takes time to build your brand new market. And we are just beginning to hit our stride as our Citibank brand is starting to gain acceptance in Midland and Odessa. Additionally, the investments that we have made across the Permian demonstrate our long-term commitment to the market. We remain optimistic with organic growth opportunities that we have across our markets and believe we have a long runway ahead of us. So we have experienced recent headwinds, which have slowed loan growth. We do have near-term opportunities to drive interest income for growth with loan repricing.
As I mentioned on slide 10, as we've been discussing on prior earnings calls, we expect to continue to deliver interest income growth as many lower rate loans continue to experience, principal repayments and or rate resets. While we expect the majority of this repricing to begin accelerating in the second half of 2024 and into 2025, we believe the loan yields remain remain elevated, even as the Fed begins to cut interest rates at some point in the second half of this year, given lower liquidity in the market this should benefit our net interest income and net interest margin in the third and fourth quarters of this year.
Turning to slide 10, our indirect auto loan portfolio decreased by approximately $13 million to 273.4 million in the first quarter as compared to the end of the fourth quarter of 2023. We remain cautious with a focus on maintaining the credit quality of this portfolio. Through the quarter, we've also seen volumes moderate, while competitors are becoming more aggressive at the higher end of the credit spectrum. We're not changing how we price risk that our clinical seeing our portfolio gradually shrink. We will never sacrifice credit quality for the sake of growth. The strong credit quality of our indirect portfolio can be seen in the 30 plus days past due, which were 22 basis points in the first quarter, down from 40 basis points in the fourth quarter additionally, we monitor our 10 to 29 day past dues closely as this is where you typically begin to see signs of trouble with the consumer. Importantly, we did not see an increase in the level of these past-due loans during the first quarter.
Turning to slide 11, we generated $11.4 million of noninterest income in the first quarter as compared to $9.1 million in the linked quarter. This was primarily due to an increase of $2.3 million in mortgage banking revenues. We recorded a $55,000 increase to the fair value of our mortgage servicing rights asset during the quarter, which compares to a $1.5 million write-down in the linked quarter as interest rates that affect the value rose modestly in the first quarter after falling late in the fourth quarter of 2023. As we have discussed on prior calls, we have aggressively managed our mortgage business to ensure it would run at or near a breakeven pace at the bottom of the cycle, while having the nucleus in place for the eventual upturn in the residential housing market. We believe our team has managed the cycle well, and we are starting to see the benefits of purchase volumes modestly rose in the first quarter. We are also beginning to see successes in our treasury management business as our team has seen customer wins. As Curtis touched on earlier, we expect to see a moderate increase in fee income for treasury management starting in the second quarter as momentum is building for the first quarter, noninterest income was 24% of bank revenues as compared to 21% in the fourth quarter of 2023. Continuing to grow, our noninterest income remains a focus of our team. I would now like to turn the call over to Steve.

Thanks, Corey. For the first quarter diluted earnings per share was $0.64, which compares to $0.61 per share in the linked quarter and $0.53 in the year ago quarter.
Turning to Slide 13. Net interest income was $35.4 million for the first quarter as compared to $35.2 million for the linked quarter. Interest income increased $1.5 million in the first quarter, primarily due to a $1 million expansion in loan interest income. The growth in loan interest income was mainly due to a 24 basis point rise in loan yields, which includes approximately $667,000 in recoveries of interest on loans that had previously been maintained on nonaccrual. The overall increase in interest income was largely offset by a $1.3 million growth in interest expense in the first quarter. Given the continued rise in deposit costs, our net interest margin calculated on a tax equivalent basis was 3.56% in the first quarter as compared to 3.52% in the linked quarter. The four basis point increase to our net income was due primarily to higher loan yields, including approximately seven basis points from interest recoveries, partially offset by the rise in our cost of deposits. Importantly, our non-interest bearing deposits held steady through the first quarter at 26.8% of total deposits and helped to mitigate the rise in our funding cost as compared to the linked quarter as outlined on slide 14, our average cost of deposits was 241 basis points in the first quarter, an increase of 17 basis points from the linked quarter given the rising interest rate environment over the past year and the resulting increase in competition for deposits, we've had to be proactive in maintaining deposit relationships, which has led to the rise in our funding costs. Overall, our core deposit franchise continues to remain steady. Looking ahead to the second quarter, we expect modest upward pressure on deposit costs, which could slightly pressure on NIM. If loan growth remains subdued. However, we continue to expect our NIM to trough through the second quarter of 2024.
Turning to Slide 15. Our ratio of allowance for credit losses to total loans held for investment was 1.4% at the end of the first quarter, largely unchanged from the end of the prior quarter. We recorded an $830,000 provision for credit losses in the first quarter, which was largely attributable to net charge-off activity in the quarter for nonperforming loans totaled $3.4 million at the end of the first quarter, which was a decrease from 5.2 million at the end of 2023. Our allowance for credit losses to nonperforming loans was 2,248% at March 31st, 2024.
Skipping ahead to Slide 19, our noninterest expense was $31.9 million in the first quarter as compared to $30.6 million in the linked quarter to $1.3 million increase was largely the result of a rise of $1 million in personnel costs, which predominantly came from higher healthcare insurance costs and an increase in incentive-based compensation.
Looking ahead to the second quarter, we expect noninterest expense to modestly rise from the first quarter's level as mortgage volumes improve through the spring selling season.
Moving to Slide 21. We remain well capitalized with tangible common equity to tangible assets of 9.22% at the end of the first quarter, largely unchanged from the end of the fourth quarter of 2023. Tangible book value per share increased to $23.56 as of the end of the first quarter compared to $23.47 as of the end of 2023. The $8.7 million of net income after dividends paid was mainly offset by the after-tax decrease in fair value of our available-for-sale securities net of fair value hedges as a result of increases in long-term market interest rates during the period. I'll turn the call back to Curtis for concluding remarks.

Thank you, Steve. I am proud of our results, which clearly demonstrates that the bank is operating at a high level as our margin is beginning to stabilize. The credit quality of our loan portfolio is very strong, and we have many organic growth initiatives underway that we believe will deliver value to our shareholders.
To conclude, I'd like to thank our employees for their efforts and commitment to both the bank and to our customers. Our continued success would not be possible without their dedication and hard work.
Thank you again for your time today. And operator, please open the line for any questions.

Question and Answer Session

Operator

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two, if you would like to remove your question from the queue and For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Brett, rather than with the group. Please proceed.

Hey, good afternoon, everyone. Or I want to reiterate or I guess the thing I just wanted to start with the treasury platform and you guys talked about some wins and expecting fee income to be stronger from here, partially as a result of that. Can you maybe talk a little bit about the magnitude of fees we might see from treasury and then if any of that showed up in DDA and this quarter?
This is Corey, Brad. I don't think a lot of it showed up yet because we've gone through in a lot of we started out by resetting some of our pricing and we've gone back, we spent a lot of time trying to make sure that we didn't price ourselves out of the market that make sure that we weren't necessarily underpriced in any area through that. We figured out that there was a group relatively decently I probably I would guess on the 10th 10, 15% range of increase in fees that we'll start seeing coming our way. So I think that's one of the when we talk to the fact that we think we'll see it. We were simply looking at that we might even take into consideration the new business that we're just continuing to add on and bringing in there. So I think we're definitely going to see a lift.
Okay.

And then just any sense for sort of those already are not prepared to really give you a hard number on me of the total volume, albeit but from a personal perspective, Ara Fisher again informed me just a couple of days ago that one of our other outside company accounts is one of the ones that's going to see a pretty significant increase in there. So it's certainly it's going to be significantly more than what we've been paying in fees under the new structure. So again, we'll have to work closely with customers and ensure they understand what's going on. And but we think we're staying within market. But I do look for a fairly substantial bump in the charges that relate back primarily customer accounts. And of course, you've got the earnings credit numbers against those two. So it just depends on the account balances and all that. But I'm real pleased with the direction we're going. I think it's going to be something you will see a meaningful number show up on the noninterest income part by the end of Q2.

And I do want to clarify that, Brett, we've spent a lot of time running impact reports. We know how we know how this is going to impact our customers. We don't think it's going to be a massive impact on any one customer to where it becomes an issue. But we think as it as an overall inclusive level is going to be, but it could be meaningful. So we've tried to look at it from every direction and feel good about it. But I don't think we stand in a position to feel like that we're going to jeopardize ourself with business because it's so significant.
Okay. That's helpful, guys. And then wanted to talk about capital. You know, it seems like your ratios are really healthy. And I just wanted to get your sense of appetite for the buyback near term versus maybe keeping some powder dry for for M&A in and maybe what you see is that the right capital levels for the environment we're in?

Let me let me take a crack at that one. And really, we look at capital and as having four components on how we might use things first and foremost, be sure we have plenty for organic growth. I think we will see sooner some good growth as we keep emphasizing in the presentations we're giving up. Texas is doing well. There's even with the current rate environment, there's a lot of opportunities. There are pipelines are picking up and we do need to have first and foremost plenty of capital to back that up. We will use some for a buyback. We're probably not going to be as aggressive maybe as we were last year with it, but we're going to keep a buyback in place from now toward the Board authorized. So we'll see how that works at the levels that we feel comfortable acquiring some stock. I do think that given the current environment, buying our own stock is so provides a better and more immediate benefit to our shareholders than buying anybody else in terms of an acquisition. So right now we're looking at debt, not pursuing man and third on the list will keep paying dividends because we do believe we need to have a good cash return back to shareholders within the kind of been in fourth place, we will have dry powder available for an acquisition. If the right, they'll have to come along. I just don't know that we're going to see that until we get to some normalization reduction, whatever you want to call it an overall rates because nearly anybody that we'd be looking at out there. If you're trying to look at a multiple over tangible, it would be a one that. But today, I don't think you're going to find any good seller that would be willing to take it just my opinion.

Okay. That's really helpful. If I could sneak in one last one. You talked about some of the credits moving out some do you guys think with the pipeline that you're kind of that mid single digit growth number is still reasonable? And does that kind of build from here on the back half?

Or do you see some of that more in 2Q now this is on Brad.
I feel very confident about our single digit growth. I mean, you think about ag, the ag portfolio and the seasonal decline that we had in the first quarter. And then and then on top of that, we exited some credits and potentially and still remain flat. That's an indication of really the production that we have go on, and we're seeing that pipeline come up toward the end of the first quarter. So I think I think I can see that even as a start to make fruit as early as the second quarter as you see some good growth in the second quarter, Brad, I mean, okay, we talked about exiting a few credits, but I mean, we'll exit some more.

I mean, we're and we very much work our portfolio at all times. And I mean, without the majority of our portfolio. We're extremely proud of. We will do everything we can to retain it. So when we start seeing some weak points that we don't think we want to be with in a little bit more digital environment. We're going to start work our way out of it. I'm kind of proud of that.
Okay.
Great. Appreciate all the color, guys.

Operator

Our next question is from Woody Lee with KBW. Please proceed.

And good afternoon, everybody. Literally, maybe just a follow-up on the watch list credits that you did exit, were they were they concentrated in any segments or were they truly just couple of one-offs?
Well, this is Brian again that it was a mix of credits and from small to kind of medium size the largest being a multi-family credit.

Okay, got it.
Okay.
Maybe shifting over to the net interest margin. I believe in your opening remarks you said it could be down modestly in the second quarter, I'm assuming that excluding the impact of the interest recoveries, so if you strip that out then on an apples to apples basis, that will be down a couple of basis points from there?

Yes, this is Steve. I mean, yes, we had looked at 67 basis points in that number. So we would have been at three 49 where we're going to start from start from that number and say it could it could decline slightly from there. But again, there's just a lot of movements in rates and deposit costs really even every single day as we've seen what's been going on in the market in our stance changes a little bit. And so we've been hoping that that would be on the upward trend, but with moving some of those credits out that had some of that nonaccrual interest that allowed us to bump that up a little bit during the quarter. Yes. And then based on the loan repricing, I mean, do you think it's realistic the margin started to expand in the back half of the year, again, given given what we know today, which can change given given the given the markets I would I would say we should be able to see that. I mean, you even if you exclude out that those interest recoveries, you can see the loan yield is increasing. And as we as we fund new loans, they are at generally a higher rate. We're getting some of the lower lower stuff off the books. So I think we I think we feel good given given having loan growth.
Yes.
If loans, I think we said earlier, if it loan somehow change if we get additional payoffs, maybe the that are not forecasted, you could have a little bit more headwind to that. But I mean, given what we see right now that that's reasonable.

Got it. Thanks for taking my questions.
Yes, so thank you.

Operator

And our next question is from Stephen Scouten with Piper Sandler. Please proceed.

Hey, good afternoon, everyone. I appreciate all the color so far here. I'm just kind of curious on, Brett, you talked about a new some new loan yields coming on at higher than average, and we're seeing some of that momentum already. But I'm wondering if you could give me a feel for where those new loan yields are coming on in the quarter, kind of what the incremental cost of new deposits has been?

This is Brian.
As far as the growth, I mean, first quarter growth, we saw growth in both multi-family, most of which was completed construction projects, C&I business and some and residential rental properties. And then again, we talked about ag at the CES ag seasonal paydowns. But if I look at our pipeline that I was talking about earlier, having grown in the first quarter. It's a pretty good mix of C&I business and real estate. And so I mean, that's really where the where the growth is coming from.

And then as far as the cost of deposits remained stable this quarter from a pricing standpoint, I mean, we're putting stuff on at prime plus. Again, we're trying to be very careful about how we do that and making sure that we were doing a good job with floors and much of these, and we're not having trouble getting.

Yes, on the on the deposit side, I mean, you do see a mix. I mean, it's obviously we were able to get some some some lower-cost deposits were put in, I mean, putting on some new non-interest bearing, although the overall balances we're fairly flat. But I mean, would you still see new new business coming in with some of the new lending relationships at that level on the high end. I mean, there's definitely stuff that pushes up to five, 5%. I mean, there's still a lot of a lot of competition there on the deposits, again, Porch Fortunately, our liquidity position at the end of the quarter allows for a little bit more room that that will be accretive to us in the shorter term of getting some of that deploy them into loans.

I think one thing that we have been able to do though is is to strategically move away sort of some of our higher-cost deposits when it works. And some of those are with relationships that we need to bring it back. We bring it back, but which we're very much watching that too, to exit those when we can.

Yes, no, that's very helpful. And Gord, do you happen to know you may not have this offhand, but in terms of how much of your book you might have with we have floors on the loans at this point in time.

You've got a company flat-footed on that.

When you say you have a it did not have that here in Toronto, Canada and either assist like.

Yes, no, from Novartis.

And then maybe just because the last thing I know you said some kind of very early signs of deposit cost pressure starting to ease, I guess kind of digging into that a little bit further. What exactly are you seeing that gives you some encouragement you just referenced kind of non-interest bearing or at least stabilizing this quarter. Do you think those noninterest-bearing deposits can stay kind of in this? Was it 20 and be 26.5% of average deposits in that range as I mean, we've had we've had good luck the last quarter where we're seeing we're seeing some good things, however, that this quarter you got you do have tax payments going out a lot of tax payments. And so those that can be from a broad, broad base of account types. But just I think with the different different initiatives that we've got which we've talked a little bit about on treasury management and a few other fee, other things that are just trying to find to grow deposits at or at a reasonable of cost to them, I think will the increased focus will help will help the success there. But they're I mean they're still going to be there's a lot of competition, and we see it every single day of somebody who's who's shown us what they can get again at another another institution there is there is no question that we face some pressure and I don't I would have been slightly want to get away from that.

But I will tell you that I think consistently we find ourselves on larger deposits, pricing them anywhere from 15 to 20 basis points cheaper today than we were doing that three months ago. And we're very carefully doing that.

And just looking at what we see in media advertising media we are not seeing as many of the really high rate CD specials in our certainly in our lumber market as we were saying just a few months ago. So I think perhaps some of our competitors out there have got enough of those they think on the books and addressed immediate liquidity needs perhaps and it has reduced a little pressure on that yes, that's great color.

It's Glad good glad to hear some people are being a little bit more rational. So I appreciate all that all the color. And congrats on a great quarter and thanks, Nitin.

Thanks.

Operator

As a reminder, it is star one on your telephone keypad. If you would like to ask a question.
Our next question is from Joe. The indigenous with Raymond James. Please proceed.

Good afternoon, Joe.

So I was hoping to circle back on loan growth here and do you have that handy?

How much kind of gross production you had in the quarter and then kind of maybe how that's trended versus prior quarters?
Josh, I don't I do not have that handy, Joe, but I can tell you, I mean, you know, is it from the back half of last year to the first quarter?
It is field.
The production is a little better. I mean, when you factor in some of the areas. I mean, different segments are different. So in auto, we contracted on, and that's that's on purpose. Well, kind of a little bit industry driven. We're not we're not chasing growth in that area by buying price and to achieve them. And in other areas, as we mentioned earlier, with ag being down some. So now I feel like it was comparable to the back half of last year. But I do think our pipelines a little bit better than it was at the beginning of the first quarter right now.

Douglas, Kris, I think one thing that you know look at I'm looking at slide 8, if you look at what we did in major metropolitan markets, and that was about an 8.5% annualized growth rate in those markets in that first quarter, even though we were flat overall, we even in most markets, we did have a couple of credits that we wanted to exit and got out of there. That's obviously not a place we have farm loans, but even with those a couple of reductions that we had, that's still 8.5% growth, right? And while we expect we'll get some growth here in Lubbock and some of our other rural markets, and we will start funding up on some ag loans as well as seasonally as that starts to happen. So I think I still feel pretty good about us hitting at least low single digit growth for the year, and it could be better than that. It's just like everything kind of dependent on the economy and our borrowers attitudes out there on what they can make more concerns.

Right. Right now, I don't think we've had any disappointment in the slightest way of how we held first part of the second quarter is kicked off.
Okay. I appreciate that. And kind of moving over to treasury management and just kind of want to take a step back and think big picture here.

So if we look at your refreshed report approach, can you quantify what success would look like from this new initiative, whether that's increased fee income or non-interest bearing deposits over, say, the next about two, three years.

So if you've been listening and our meetings, I think it takes both enough assays to increase fee income. It is very much a piece of that, but the non-interest bearing deposits are bigger. I mean, from my perspective, that drive an overall medium up with what we're trying to do. That's what we are so focused on. But you know that from a from a treasury side of the thing that I look at. We continue to mature in that area in such a good way. And the success that we're having and it gets to it gets some of the quality just at the level of education there. We're willing to put the effort in front of our teams to understand what we can do, how we do it and then basically get it down to a level of service to take care of your clients. And I think we're doing that on a daily basis and we get better and better at it.
The thing is we can talk about treasury treasury isn't I mean we don't have a new approach. Every time we turn around. We just continue to mature what we've had. We have good products. We have good teams, but our treasury is at the table at the beginning, not at the end when we're sitting here having these discussions, and I think that's where it's coming from we think it's going to be very easy to do that deliver pretty quickly increased fee income doesn't worry me in the slightest way, but we're focused on the deposits in the end of the day as we look at pricing on loans or anything else, it all gets down to how we bring operating accounts and everything into the into play with all of this stuff in those are the those are the wins we're having.

Understood. I appreciate the color on that as well.

The questions I had. Thanks a lot.

Thanks, Joshua.

Operator

We have reached the end of our question and answer session. I will now turn the call back over to Curtis Gryphics for closing remarks.

Thank you, operator, and thank you to everyone for participating in our call today. We've had a very solid quarter to begin 2024. I'm pleased with how we're pursuing the many opportunities that we have in front of us the disruptions in several of our markets from changes in other banks, ownership and leadership continue to open doors for our team to bring high-quality customer relationships at South Plains. We continue to recruit, talented and experienced bankers in all of our markets because we believe that building strong personal relationships with our customers is the key to our growth and profitability. I'm very blessed to be a part of our family of employees, customers and shareholders, and I remain very optimistic about our future. Thank you again for your time today.

Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.