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Investing.com - Raymond (NSE:RYMD) James raised its price target on South Plains Financial Inc . (NASDAQ:SPFI) to $42.00 from $38.00 while maintaining an Outperform rating following the company’s second-quarter 2025 results. The regional bank, currently trading at $36.76 with a market cap of nearly $600 million, appears fairly valued according to InvestingPro analysis, which shows the stock trading at an attractive P/E ratio of 11.7x.
The bank’s quarterly performance exceeded both Raymond James and Street expectations for earnings per share and pre-provision net revenue on a core basis. South Plains Financial’s net interest margin expanded 9 basis points quarter-over-quarter to 3.90%, excluding a $1.7 million one-time interest income recovery, compared to forecasts of 3.82%-3.83%. InvestingPro data reveals the company has maintained strong financial health, earning a "GOOD" overall score, while consistently raising its dividend for six consecutive years.
South Plains Financial reported improvements in several key metrics, including lower-than-expected noninterest expenses, modestly stronger loan growth than forecast, improved profitability metrics, higher capital levels, and improved deposit mix. The company’s tangible book value increased 2.5% quarter-over-quarter to $26.70.
Some negative factors noted included core fee income modestly below Raymond James’ forecast, increased provision expense due to credit migration in the portfolio, and an outflow of high-cost public funds that contributed to deposit balances falling short of expectations.
Raymond James reduced its 2025 loan growth forecast to align with South Plains Financial’s lowered outlook, which now expects second-half 2025 loan growth to be flat to up low-single digits, but increased its 2026 growth outlook to reflect benefits from the company’s lender hiring efforts. For deeper insights into SPFI’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, South Plains Financial Inc. reported robust financial results for the second quarter of 2025, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $0.86, exceeding the projected $0.77, and reported revenue of $54.7 million, which was higher than the anticipated $52.02 million. These results reflect a significant earnings surprise of 11.69% and a revenue surprise of 5.15%, highlighting the company’s strong performance. The firm’s net interest income rose to $42.5 million, up from $38.5 million in the previous quarter, with a net interest margin improvement to 4.07% from 3.81%. South Plains Financial is also exploring opportunities for mergers and acquisitions, with a focus on maintaining a strong capital position and expanding lending capabilities. Analysts from firms such as Piper Sandler and Hovde Group discussed the potential for margin expansion and strategic hiring to support future growth. The company remains optimistic about loan growth, targeting mid to high single-digit growth for the full year, while also focusing on increasing its deposit base.
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