SPFI Stock Forecast & Price Target

South Plains Financial is supported by a durable low-cost deposit base, strong Texas market positioning, and a profitable franchise that has produced a 1.4%+ ROA, 14.8% CET1, and 10.5% TCE as of 1Q26. Its outlook improves with 5% organic loan growth in 2Q26, deposit growth in line with expectations, and the BOH acquisition, which added over $700M of assets and should lift growth, cross-sell opportunities, and expense savings after integration. With credit metrics remaining clean, a loan/deposit ratio of 82% that can move toward 85%, and management open to further accretive M&A, the company appears well positioned for continued earnings and franchise expansion.

South Plains Financial is under pressure fundamentally because loan growth has stalled, with loans down 5.2% and average earning assets still only in the 70s as a percentage of the balance sheet, limiting future net interest income expansion. Although 1Q26 produced a solid 1.40% ROA and core EPS of $0.91, the 4 bps decline in NIM to 4.00%, rising deposit costs to 2.08%, and 1Q26 non-performing assets increasing to 0.27% point to a business that is preserving profitability rather than improving it. The outlook is further weakened by integration risk from BOH Holdings, a $49M unrealized securities loss on the $609M portfolio, and criticized loans at 3.2% of the portfolio, all of which leave earnings quality and asset quality vulnerable.