South Plains Financial, Inc. (NASDAQ:SPFI) has a Return on Invested Capital (ROIC) of 7.87%, which is lower than its Weighted Average Cost of Capital (WACC) of 13.32%, indicating inefficiency in generating sufficient returns.
Red River Bancshares, Inc. (RRBI) shows a more efficient capital utilization with a ROIC of 11.81% compared to its WACC of 12.93%.
RBB Bancorp (RBB) and Business First Bancshares, Inc. (BFST) display less favorable metrics, highlighting challenges in generating adequate returns on their invested capital.
South Plains Financial, Inc. (NASDAQ:SPFI) is a financial services company that provides a range of banking products and services. It operates primarily in Texas, offering personal and commercial banking, mortgage lending, and wealth management services. SPFI competes with other regional banks like Red River Bancshares, Inc. (RRBI), RBB Bancorp (RBB), SmartFinancial, Inc. (SMBK), Business First Bancshares, Inc. (BFST), and MetroCity Bankshares, Inc. (MCBS).
In evaluating SPFI’s financial performance, the Return on Invested Capital (ROIC) is a key metric. SPFI’s ROIC is 7.87%, which is lower than its Weighted Average Cost of Capital (WACC) of 13.32%. This indicates that SPFI is not generating sufficient returns to cover its cost of capital, with a ROIC to WACC ratio of 0.59.
Comparatively, Red River Bancshares, Inc. (RRBI) has a ROIC of 11.81% and a WACC of 12.93%, resulting in a ROIC to WACC ratio of 0.91. This suggests that RRBI is more efficient in generating returns relative to its cost of capital, making it a stronger performer in this aspect among its peers.
RBB Bancorp (RBB) and Business First Bancshares, Inc. (BFST) show less favorable metrics, with RBB having a ROIC of 4.33% against a WACC of 14.46%, and BFST with a negative ROIC of -3.76% compared to a WACC of 12.92%. These figures highlight challenges in generating adequate returns on their invested capital.
SmartFinancial, Inc. (SMBK) and MetroCity Bankshares, Inc. (MCBS) also present interesting comparisons. SMBK has a ROIC of 12.50% and a WACC of 17.43%, while MCBS has a ROIC of 7.70% and a WACC of 10.48%. Their ROIC to WACC ratios of 0.72 and 0.73, respectively, indicate varying levels of efficiency in capital utilization.
