PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2022 EARNINGS
- Third quarter net income of $135.8 million and earnings per share (diluted) of $1.49
- Third quarter net income increased $7.3 million or 5.7% compared to the second quarter 2022
- Loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, increased $530.8 million or 3.1% (12.5% annualized) during the third quarter
- Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.61%(1)
- Nonperforming assets remain low at 0.06% of third quarter average interest-earning assets
- Return (annualized) on third quarter average assets of 1.45%, average common equity of 8.24% and average tangible common equity of 16.44%(1)
- Net interest margin on a tax equivalent basis increased 14 basis points to 3.11% during the third quarter
- Increase in dividend of 5.8% to $0.55 for the fourth quarter 2022
- Announced the signing of a definitive merger agreement with First Bancshares of Texas, Inc., headquartered in Midland, Texas
- Announced the signing of a definitive merger agreement with Lone Star State Bancshares, Inc., headquartered in Lubbock, Texas
HOUSTON, Oct. 26, 2022 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $135.8 million for the quarter ended September 30, 2022 compared with $128.6 million for the same period in 2021. Net income per diluted common share was $1.49 for the quarter ended September 30, 2022 compared with $1.39 for the same period in 2021, an increase of 7.2%, and the annualized return on third quarter average assets was 1.45%. Additionally, loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program ("PPP") loans, increased $530.8 million or 3.1% (12.5% annualized) during the third quarter of 2022. Nonperforming assets remain low at 0.06% of third quarter average interest-earning assets.
"This is an exciting time for Prosperity. On October 11, 2022, we announced the signing of definitive merger agreements with First Bancshares of Texas, Inc., headquartered in Midland, Texas and Lone Star State Bancshares, Inc., headquartered in Lubbock, Texas. On a pro forma basis, we will have over $6 billion in assets located in our West Texas market, and the number one market share in the combined Midland and Odessa markets and the number three market share in Lubbock," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.
"We also recently announced that the Board of Directors voted to increase the fourth quarter 2022 dividend to $0.55 a share. This represents a 6.0% increase in dividends declared in 2022 compared with 2021. The increase reflects the confidence the Board has in the continuing success of our company and in the communities we serve," continued Zalman.
"With the Federal Reserve continuing to raise rates, our net interest margin continues to increase, which improves our earnings. This trend should continue as our assets reprice over time. We saw strong loan growth for the quarter, with loans, excluding Warehouse Purchase Program and PPP loans, increasing 12.5% on an annualized basis. Our asset quality continues to be one of the best in banking with nonperforming assets of 0.06% of quarterly average interest-earning assets as of September 30, 2022," added Zalman.
"Individuals and businesses continue to move to Texas and Oklahoma because of lower tax rates and a pro-business political environment," stated Zalman.
"We are excited with our performance and the recently announced merger transactions and look forward to continuing to build our company. I want to thank our customers for their business and loyalty and our associates and board members for their work and dedication," concluded Zalman.
Results of Operations for the Three Months Ended September 30, 2022
Net income was $135.8 million(2) for the three months ended September 30, 2022 compared with $128.6 million(3) for the same period in 2021, an increase of $7.2 million or 5.6%. The change was primarily due to an increase in securities interest income, partially offset by a decrease in loan interest income (including a decrease in PPP fees and interest income of $13.9 million), a decrease in loan discount accretion of $4.1 million, and an increase in interest expense. Net income per diluted common share was $1.49 for the three months ended September 30, 2022 compared with $1.39 for the same period in 2021. On a linked quarter basis, net income was $135.8 million(2) for the three months ended September 30, 2022 compared with $128.5 million(4) for the three months ended June 30, 2022, an increase of $7.3 million or 5.7%. The change was primarily due to an increase in loan interest income and securities interest income, partially offset by an increase in interest expense. Net income per diluted common share was $1.49 for the three months ended September 30, 2022 compared with $1.40 for the three months ended June 30, 2022. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2022 were 1.45%, 8.24% and 16.44%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 41.38%(1) for the three months ended September 30, 2022.
Net interest income before provision for credit losses for the three months ended September 30, 2022 was $260.7 million compared with $248.6 million for the same period in 2021, an increase of $12.1 million or 4.9%. The change was primarily due to an increase in the average balance and average rates on investment securities and an increase in the average balance on loans held for investment, partially offset by a decrease in loan discount accretion of $4.1 million, a decrease in PPP fees and interest income of $13.9 million, and an increase in the average rates on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $260.7 million compared with $248.5 million for the three months ended June 30, 2022, an increase of $12.2 million or 4.9%. The change was primarily due to an increase in the average balances and average rates on loans and average rates on investment securities, partially offset by an increase in the average rates on interest-bearing liabilities.
The net interest margin on a tax equivalent basis was 3.11% for the three months ended September 30, 2022 compared with 3.10% for the same period in 2021 and 2.97% for the three months ended June 30, 2022. The linked quarter increase was primarily due to higher average balances and average rates on loans and average rates on investment securities, partially offset by an increase in the average rates on interest-bearing liabilities.
Noninterest income was $34.7 million for the three months ended September 30, 2022 compared with $34.6 million for the same period in 2021. On a linked quarter basis, noninterest income was $34.7 million compared with $37.6 million for the three months ended June 30, 2022, a decrease of $2.9 million or 7.7%, primarily due to decreases in net gain on the sale or write-down of assets and other noninterest income.
Noninterest expense was $122.2 million for the three months ended September 30, 2022 compared with $119.8 million for the same period in 2021, an increase of $2.4 million or 2.0%, primarily due to an increase in salaries and credit and debit card, data processing and software amortization. On a linked quarter basis, noninterest expense decreased $664 thousand to $122.2 million compared with $122.9 million for the three months ended June 30, 2022.
Results of Operations for the Nine Months Ended September 30, 2022
Net income was $386.6 million(5) for the nine months ended September 30, 2022 compared with $392.5 million(6) for the same period in 2021. Net income per diluted common share was $4.22 for the nine months ended September 30, 2022 compared with $4.23 for the same period in 2021. Annualized returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2022 were 1.37%, 7.88% and 15.83%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 42.70%(1) for the nine months ended September 30, 2022.
Net interest income before provision for credit losses for the nine months ended September 30, 2022 was $749.1 million compared with $748.5 million for the prior year, an increase of $546 thousand.
The net interest margin on a tax equivalent basis for the nine months ended September 30, 2022 was 2.99% compared with 3.20% for the same period in 2021. The change was primarily due to a decrease in loan discount accretion of $27.4 million and a decrease in PPP fees and interest income of $36.1 million, partially offset by an increase in the average balances and rates on investment securities and a decrease in the average rate on interest-bearing liabilities.
Noninterest income was $107.4 million for the nine months ended September 30, 2022 compared with $104.2 million for the same period in 2021, an increase of $3.2 million or 3.1%. The increase was primarily due to an increase in NSF income, a net gain on the sale or write-down of assets and an increase in trust income, partially offset by a decrease in mortgage income.
Noninterest expense was $364.9 million for the nine months ended September 30, 2022 compared with $354.1 million for the same period in 2021, an increase of $10.9 million or 3.1%. The increase was primarily due to an increase in salaries and benefits, the change in net loss (gain) on sale or write-down of other real estate and an increase in credit and debit card and data processing expense.
Balance Sheet Information
At September 30, 2022, Prosperity had $37.844 billion in total assets, an increase of $1.331 billion or 3.6%, compared with $36.512 billion at September 30, 2021.
Loans at September 30, 2022 were $18.506 billion, a decrease of $451.4 million or 2.4%, compared with $18.958 billion at September 30, 2021, primarily due to decreases in Warehouse Purchase Program, PPP and commercial real estate loans, partially offset by increases in 1-4 family residential and construction, land development and other land loans. Linked quarter loans increased $297.4 million or 1.6% (6.5% annualized) from $18.209 billion at June 30, 2022. Excluding Warehouse Purchase Program and PPP loans, loans at September 30, 2022 were $17.575 billion compared to $16.594 billion at September 30, 2021, an increase of $980.7 million or 5.9%. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, increased $530.8 million or 3.1% (12.5% annualized) from $17.044 billion at June 30, 2022.
As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At September 30, 2022, oil and gas loans totaled $410.1 million (net of discount and excluding PPP loans totaling $4.7 million) or 2.2% of total loans, of which $190.3 million were production loans and $219.7 million were servicing loans, compared with total oil and gas loans of $569.3 million (net of discount and excluding PPP loans totaling $55.8 million) or 3.0% of total loans at September 30, 2021, of which $352.4 million were production loans and $216.9 million were servicing loans. In addition, as of September 30, 2022, Prosperity had total unfunded commitments to oil and gas companies of $463.3 million compared with total unfunded commitments to oil and gas companies of $363.3 million as of September 30, 2021. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.
Deposits at September 30, 2022 were $29.300 billion, a decrease of $151.6 million or 0.5%, compared with $29.452 billion at September 30, 2021. Linked quarter deposits decreased $565.5 million or 1.9% from $29.866 billion at June 30, 2022, primarily due to a decrease in public fund deposits. Prosperity generally experiences seasonality with its public fund deposits, as public fund customers use the tax dollars they receive in December and January throughout the year, resulting in lower deposit balances in the second and third quarters of the year. On a linked quarter basis, noninterest-bearing deposits increased by $122.0 million.
Asset Quality
Nonperforming assets totaled $19.9 million or 0.06% of quarterly average interest-earning assets at September 30, 2022 compared with $36.5 million or 0.11% of quarterly average interest-earning assets at September 30, 2021 and $22.2 million or 0.07% of quarterly average interest-earning assets at June 30, 2022.
The allowance for credit losses on loans and off-balance sheet credit exposures was $312.1 million at September 30, 2022 compared with $317.1 million at September 30, 2021 and $313.9 million at June 30, 2022. There was no provision for credit losses for the three and nine months ended September 30, 2022 and 2021.
The allowance for credit losses on loans was $282.2 million or 1.52% of total loans at September 30, 2022 compared with $287.2 million or 1.51% of total loans at September 30, 2021 and $284.0 million or 1.56% of total loans at June 30, 2022. Excluding Warehouse Purchase Program and PPP loans, the allowance for credit losses on loans to total loans was 1.61%(1) at September 30, 2022 compared with 1.73%(1) at September 30, 2021 and 1.67%(1) at June 30, 2022.
Net charge-offs were $1.8 million for the three months ended September 30, 2022 compared with net charge-offs of $15.7 million for the three months ended September 30, 2021 and net charge-offs of $1.2 million for the three months ended June 30, 2022. During the third quarter of 2022, net charge-offs did not include any purchased credit deteriorated ("PCD") loans and $16 thousand of specific reserves on resolved PCD loans was released to the general reserve.
Net charge-offs were $4.2 million for the nine months ended September 30, 2022 compared with $28.9 million for the nine months ended September 30, 2021. Net charge-offs for the nine months ended September 30, 2022 did not include any PCD loans and $2.0 million of specific reserves on resolved PCD loans was released to the general reserve during the period.
Dividend
Prosperity Bancshares declared a fourth quarter cash dividend of $0.55 per share to be paid on January 3, 2023, to all shareholders of record as of December 15, 2022, an increase of $0.03 per share, or 5.8%, from the prior quarter.
Stock Repurchase Program
On January 18, 2022, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.61 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 18, 2023, at the discretion of management. Under its 2022 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended September 30, 2022 and 981,884 shares of its common stock at an average weighted price of $66.90 per share during the nine months ended September 30, 2022.
Pending Acquisition of First Bancshares of Texas, Inc.
On October 11, 2022, Prosperity Bancshares and First Bancshares of Texas, Inc. ("First Bancshares") jointly announced the signing of a definitive merger agreement whereby First Bancshares, the parent company of FirstCapital Bank of Texas, N.A., ("FirstCapital Bank") will merge with and into Prosperity. FirstCapital Bank operates 16 banking offices in 6 different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas. As of June 30, 2022, First Bancshares, on a consolidated basis, reported total assets of $2.121 billion, total loans of $1.589 billion and total deposits of $1.781 billion.
Under the terms of the merger agreement, Prosperity will issue 3,583,370 shares of Prosperity common stock plus $93.4 million in cash for all outstanding shares of First Bancshares capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $341.6 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of First Bancshares. The transaction is expected to close during the first quarter of 2023, although delays could occur.
Pending Acquisition of Lone Star State Bancshares, Inc.
On October 11, 2022, Prosperity Bancshares and Lone Star State Bancshares, Inc. ("Lone Star") jointly announced the signing of a definitive merger agreement whereby Lone Star, the parent company of Lone Star State Bank of West Texas ("Lone Star Bank") will merge with and into Prosperity. Lone Star Bank operates 5 banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of June 30, 2022, Lone Star, on a consolidated basis, reported total assets of $1.305 billion, total loans of $933.5 million and total deposits of $1.174 billion.
Under the terms of the merger agreement, Prosperity will issue 2,376,182 shares of Prosperity common stock plus $64.1 million in cash for all outstanding shares of Lone Star capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $228.7 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of Lone Star. The transaction is expected to close during the first quarter of 2023, although delays could occur.
Conference Call
Prosperity's management team will host a conference call on Wednesday, October 26, 2022, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2022 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7408913.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity's home page by selecting "Presentations, Webcasts & Calls" from the menu on the Investor Relations link and following the instructions.
Non-GAAP Financial Measures
Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; and the efficiency ratio excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity's business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Please refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.
Prosperity Bancshares, Inc. ®
As of September 30, 2022, Prosperity Bancshares, Inc.® is a $37.844 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.
Prosperity currently operates 272 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.
Cautionary Notes on Forward-Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "believe," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of each of the proposed transactions, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. These forward‑looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of Prosperity's control, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Many possible events or factors could adversely affect the future financial results and performance of Prosperity, First Bancshares, Lone Star or the combined company and could cause those results or performance to differ materially from those expressed in or implied by the forward-looking statements. Such risks and uncertainties include, among others: the occurrence of any event, change or other circumstance that could give rise to the right of a party to terminate the merger agreement with First Bancshares or Lone Star, as applicable, the outcome of any legal proceedings that may be instituted against Prosperity, First Bancshares or Lone Star, delays in completing either of the transactions, the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of each of the transactions) or First Bancshares shareholder approval or Lone Star shareholder approval or to satisfy any of the other conditions to the transactions on a timely basis or at all, the possibility that the anticipated benefits of the transactions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors generally, or specifically in the West Texas area and the West, North and Central Texas area where First Bancshares and Lone Star, respectively, do a majority of their respective business and Prosperity has a significant presence, the possibility that the transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transactions, Prosperity's ability to complete the acquisition and integration of First Bancshares and of Lone Star successfully, and the dilution caused by Prosperity's issuance of additional shares of its common stock in connection with the transactions. Prosperity disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other factors are discussed in Prosperity's Annual Report on Form 10-K for the year ended December 31, 2021, and other reports and statements Prosperity has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.
Additional Information about the First Bancshares Merger and Where to Find It
In connection with the proposed merger of First Bancshares into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to be issued to the shareholders of First Bancshares. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of First Bancshares seeking their approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, FIRST BANCSHARES AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. You will also be able to obtain these documents, when they are filed, free of charge, from Prosperity at http://www.prosperitybankusa.com. Copies of the proxy statement/prospectus can also be obtained, when it becomes available, free of charge, by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, (281) 269-7199 or to First Bancshares of Texas, Inc., 310 West Wall Street, Suite 1200, Midland, Texas 79701, Attention: Ken Burgess, (844) 322-8392.
Additional Information about the Lone Star Merger and Where to Find It
In connection with the proposed merger of Lone Star into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to be issued to the shareholders of Lone Star. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of Lone Star seeking their approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, LONE STAR AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. You will also be able to obtain these documents, when they are filed, free of charge, from Prosperity at http://www.prosperitybankusa.com. Copies of the proxy statement/prospectus can also be obtained, when it becomes available, free of charge, by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, (281) 269-7199 or to Lone Star State Bancshares, Inc., 6220 Milwaukee Avenue, Lubbock, Texas 79424, Attention: Alan Lackey, (806) 771-7717.
Participants in the Solicitation
Prosperity, First Bancshares and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Bancshares in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.
Prosperity, Lone Star and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lone Star in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.
Additional information about Prosperity and its directors and executive officers may be found in the definitive proxy statement of Prosperity relating to its 2022 Annual Meeting of Shareholders filed with the SEC on March 14, 2022, and other documents filed by Prosperity with the SEC. These documents can be obtained free of charge from the sources described above.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
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(1) |
Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. |
(2) |
Includes purchase accounting adjustments of $997 thousand, net of tax, primarily comprised of loan discount accretion of $1.2 million for the three months ended September 30, 2022. |
(3) |
Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $5.4 million for the three months ended September 30, 2021. |
(4) |
Includes purchase accounting adjustments of $103 thousand, net of tax, primarily comprised of loan discount accretion of $59 thousand for the three months ended June 30, 2022. |
(5) |
Includes purchase accounting adjustments of $5.2 million, net of tax, primarily comprised of loan discount accretion of $6.5 million for the nine months ended September 30, 2022. |
(6) |
Includes purchase accounting adjustments of $27.3 million, net of tax, primarily comprised of loan discount accretion of $33.9 million for the nine months ended September 30, 2021. |
Bryan/College Station Area |
Garland |
Palestine |
Magnolia |
Texas Tech Student Union |
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Bryan |
Grapevine |
Rusk |
Magnolia Parkway |
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Bryan-29th Street |
Grapevine Main |
Seven Points |
Mont Belvieu |
Midland |
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Bryan-East |
Kiest |
Teague |
Nederland |
Wadley |
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Bryan-North |
Lake Highlands |
Tyler-Beckham |
Needville |
Wall Street |
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Caldwell |
McKinney |
Tyler-South Broadway |
Rosenberg |
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College Station |
McKinney Eldorado |
Tyler-University |
Shadow Creek |
Odessa |
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Crescent Point |
McKinney Redbud |
Winnsboro |
Spring |
Grandview |
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Hearne |
North Carrolton |
Tomball |
Grant |
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Huntsville |
Park Cities |
Houston Area |
Waller |
Kermit Highway |
||||
Madisonville |
Plano |
Houston |
West Columbia |
Parkway |
||||
Navasota |
Plano-West |
Aldine |
Wharton |
|||||
New Waverly |
Preston Forest |
Alief |
Winnie |
Other West Texas Area |
||||
Rock Prairie |
Preston Parker |
Bellaire |
Wirt |
Locations |
||||
Southwest Parkway |
Preston Royal |
Beltway |
Big Spring |
|||||
Tower Point |
Red Oak |
Clear Lake |
South Texas Area - |
Brownfield |
||||
Wellborn Road |
Richardson |
Copperfield |
Corpus Christi |
Brownwood |
||||
Richardson-West |
Cypress |
Calallen |
Cisco |
|||||
Central Texas Area |
Rosewood Court |
Downtown |
Carmel |
Comanche |
||||
Austin |
The Colony |
Eastex |
Northwest |
Early |
||||
Allandale |
Tollroad |
Fairfield |
Saratoga |
Floydada |
||||
Cedar Park |
Trinity Mills |
First Colony |
Timbergate |
Gorman |
||||
Congress |
Turtle Creek |
Fry Road |
Water Street |
Levelland |
||||
Lakeway |
West 15th Plano |
Gessner |
Littlefield |
|||||
Liberty Hill |
West Allen |
Gladebrook |
Victoria |
Merkel |
||||
Northland |
Westmoreland |
Grand Parkway |
Victoria Main |
Plainview |
||||
Oak Hill |
Wylie |
Heights |
Victoria-Navarro |
San Angelo |
||||
Research Blvd |
Highway 6 West |
Victoria-North |
Slaton |
|||||
Westlake |
Fort Worth |
Little York |
Victoria Salem |
Snyder |
||||
Haltom City |
Medical Center |
|||||||
Other Central Texas Area |
Hulen |
Memorial Drive |
Other South Texas Area |
Oklahoma |
||||
Locations |
Keller |
Northside |
Locations |
Central Oklahoma Area |
||||
Bastrop |
Museum Place |
Pasadena |
Alice |
Oklahoma City |
||||
Canyon Lake |
Renaissance Square |
Pecan Grove |
Aransas Pass |
23rd Street |
||||
Dime Box |
Roanoke |
Pin Oak |
Beeville |
Expressway |
||||
Dripping Springs |
Stockyards |
River Oaks |
Colony Creek |
I-240 |
||||
Elgin |
Sugar Land |
Cuero |
Memorial |
|||||
Flatonia |
Other Dallas/Fort Worth Area |
SW Medical Center |
Edna |
|||||
Georgetown |
Locations |
Tanglewood |
Goliad |
Other Central Oklahoma Area |
||||
Gruene |
Arlington |
The Plaza |
Gonzales |
Locations |
||||
Kingsland |
Azle |
Uptown |
Hallettsville |
Edmond |
||||
La Grange |
Ennis |
Waugh Drive |
Kingsville |
Norman |
||||
Lexington |
Gainesville |
Westheimer |
Mathis |
|||||
New Braunfels |
Glen Rose |
West University |
Padre Island |
Tulsa Area |
||||
Pleasanton |
Granbury |
Woodcreek |
Palacios |
Tulsa |
||||
Round Rock |
Grand Prairie |
Port Lavaca |
Garnett |
|||||
San Antonio |
Jacksboro |
Katy |
Portland |
Harvard |
||||
Schulenburg |
Mesquite |
Cinco Ranch |
Rockport |
Memorial |
||||
Seguin |
Muenster |
Katy-Spring Green |
Sinton |
Sheridan |
||||
Smithville |
Runaway Bay |
Taft |
S. Harvard |
|||||
Thorndale |
Sanger |
The Woodlands |
Yoakum |
Utica Tower |
||||
Weimar |
Waxahachie |
The Woodlands-College Park |
Yorktown |
Yale |
||||
Weatherford |
The Woodlands-I-45 |
|||||||
Dallas/Fort Worth Area |
The Woodlands-Research Forest |
West Texas Area |
Other Tulsa Area Locations |
|||||
Dallas |
East Texas Area |
Abilene |
Owasso |
|||||
14th Street Plano |
Athens |
Other Houston Area |
Antilley Road |
|||||
Abrams Centre |
Blooming Grove |
Locations |
Barrow Street |
|||||
Addison |
Canton |
Angleton |
Cypress Street |
|||||
Allen |
Carthage |
Bay City |
Judge Ely |
|||||
Balch Springs |
Corsicana |
Beaumont |
Mockingbird |
|||||
Camp Wisdom |
Crockett |
Cleveland |
||||||
Carrollton |
Eustace |
East Bernard |
Lubbock |
|||||
Cedar Hill |
Gilmer |
El Campo |
4th Street |
|||||
Coppell |
Grapeland |
Dayton |
66th Street |
|||||
East Plano |
Gun Barrel City |
Galveston |
82nd Street |
|||||
Euless |
Jacksonville |
Groves |
86th Street |
|||||
Frisco |
Kerens |
Hempstead |
98th Street |
|||||
Frisco Warren |
Longview |
Hitchcock |
Avenue Q |
|||||
Frisco-West |
Mount Vernon |
Liberty |
North University |
- - -
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands) |
||||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
||||||||||||||||
Balance Sheet Data (at period end) |
||||||||||||||||||||
Loans held for sale |
$ |
2,871 |
$ |
3,350 |
$ |
2,810 |
$ |
7,274 |
$ |
10,197 |
||||||||||
Loans held for investment |
17,580,653 |
17,067,871 |
16,720,173 |
16,833,171 |
16,949,486 |
|||||||||||||||
Loans held for investment - Warehouse Purchase |
922,764 |
1,137,623 |
1,344,541 |
1,775,699 |
1,998,049 |
|||||||||||||||
Total loans |
18,506,288 |
18,208,844 |
18,067,524 |
18,616,144 |
18,957,732 |
|||||||||||||||
Investment securities(A) |
14,806,487 |
14,912,313 |
14,798,127 |
12,818,901 |
12,629,368 |
|||||||||||||||
Federal funds sold |
244 |
201 |
274 |
241 |
237 |
|||||||||||||||
Allowance for credit losses on loans |
(282,179) |
(283,959) |
(285,163) |
(286,380) |
(287,187) |
|||||||||||||||
Cash and due from banks |
602,152 |
393,716 |
1,560,321 |
2,547,739 |
1,055,386 |
|||||||||||||||
Goodwill |
3,231,636 |
3,231,636 |
3,231,636 |
3,231,636 |
3,231,636 |
|||||||||||||||
Core deposit intangibles, net |
53,906 |
56,483 |
59,064 |
61,684 |
64,539 |
|||||||||||||||
Other real estate owned |
1,758 |
1,555 |
1,705 |
622 |
150 |
|||||||||||||||
Fixed assets, net |
337,099 |
335,939 |
336,075 |
319,799 |
322,799 |
|||||||||||||||
Other assets |
586,111 |
530,528 |
501,623 |
523,584 |
537,459 |
|||||||||||||||
Total assets |
$ |
37,843,502 |
$ |
37,387,256 |
$ |
38,271,186 |
$ |
37,833,970 |
$ |
36,512,119 |
||||||||||
Noninterest-bearing deposits |
$ |
11,154,143 |
$ |
11,032,184 |
$ |
10,776,652 |
$ |
10,750,034 |
$ |
10,326,489 |
||||||||||
Interest-bearing deposits |
18,145,952 |
18,833,434 |
20,291,658 |
20,021,728 |
19,125,163 |
|||||||||||||||
Total deposits |
29,300,095 |
29,865,618 |
31,068,310 |
30,771,762 |
29,451,652 |
|||||||||||||||
Other borrowings |
1,165,000 |
300,000 |
— |
— |
— |
|||||||||||||||
Securities sold under repurchase agreements |
454,304 |
481,785 |
440,891 |
448,099 |
440,969 |
|||||||||||||||
Allowance for credit losses on off-balance sheet |
29,947 |
29,947 |
29,947 |
29,947 |
29,947 |
|||||||||||||||
Other liabilities |
282,514 |
188,079 |
227,614 |
156,926 |
244,110 |
|||||||||||||||
Total liabilities |
31,231,860 |
30,865,429 |
31,766,762 |
31,406,734 |
30,166,678 |
|||||||||||||||
Shareholders' equity(B) |
6,611,642 |
6,521,827 |
6,504,424 |
6,427,236 |
6,345,441 |
|||||||||||||||
Total liabilities and equity |
$ |
37,843,502 |
$ |
37,387,256 |
$ |
38,271,186 |
$ |
37,833,970 |
$ |
36,512,119 |
||||||||||
(A) |
Includes $(296), $1,517, $2,115, $2,290 and $2,483 in unrealized (losses) gains on available for sale securities for the quarterly periods ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively. |
(B) |
Includes $(234), $1,198 $1,671, $1,809 and $1,961 in after-tax unrealized (losses) gains on available for sale securities for the quarterly periods ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands) |
||||||||||||||||||||||||||||
Three Months Ended |
Year-to-Date |
|||||||||||||||||||||||||||
Sep 30, |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Sep 30, |
Sep 30, |
||||||||||||||||||||||
Income Statement Data |
||||||||||||||||||||||||||||
Interest income: |
||||||||||||||||||||||||||||
Loans |
$ |
210,268 |
$ |
192,770 |
$ |
193,025 |
$ |
206,209 |
$ |
213,821 |
$ |
596,063 |
$ |
663,699 |
||||||||||||||
Securities(C) |
68,761 |
64,111 |
55,011 |
46,857 |
46,217 |
187,883 |
128,602 |
|||||||||||||||||||||
Federal funds sold and other earning assets |
525 |
925 |
847 |
563 |
302 |
2,297 |
993 |
|||||||||||||||||||||
Total interest income |
279,554 |
257,806 |
248,883 |
253,629 |
260,340 |
786,243 |
793,294 |
|||||||||||||||||||||
Interest expense: |
||||||||||||||||||||||||||||
Deposits |
14,669 |
8,641 |
8,754 |
8,685 |
11,578 |
32,064 |
44,228 |
|||||||||||||||||||||
Other borrowings |
3,719 |
450 |
— |
— |
— |
4,169 |
— |
|||||||||||||||||||||
Securities sold under repurchase agreements |
487 |
244 |
185 |
184 |
195 |
916 |
518 |
|||||||||||||||||||||
Total interest expense |
18,875 |
9,335 |
8,939 |
8,869 |
11,773 |
37,149 |
44,746 |
|||||||||||||||||||||
Net interest income |
260,679 |
248,471 |
239,944 |
244,760 |
248,567 |
749,094 |
748,548 |
|||||||||||||||||||||
Provision for credit losses |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||
Net interest income after provision for credit losses |
260,679 |
248,471 |
239,944 |
244,760 |
248,567 |
749,094 |
748,548 |
|||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||
Nonsufficient funds (NSF) fees |
8,887 |
8,484 |
8,124 |
8,401 |
7,962 |
25,495 |
21,209 |
|||||||||||||||||||||
Credit card, debit card and ATM card income |
8,889 |
8,880 |
8,179 |
8,894 |
8,837 |
25,948 |
25,786 |
|||||||||||||||||||||
Service charges on deposit accounts |
6,222 |
6,365 |
6,211 |
6,237 |
6,115 |
18,798 |
18,155 |
|||||||||||||||||||||
Trust income |
3,174 |
2,875 |
2,703 |
2,698 |
2,467 |
8,752 |
7,580 |
|||||||||||||||||||||
Mortgage income |
340 |
502 |
455 |
685 |
1,396 |
1,297 |
7,617 |
|||||||||||||||||||||
Brokerage income |
940 |
917 |
892 |
953 |
861 |
2,749 |
2,367 |
|||||||||||||||||||||
Bank owned life insurance income |
1,214 |
1,293 |
1,283 |
1,317 |
1,325 |
3,790 |
3,911 |
|||||||||||||||||||||
Net gain (loss) on sale or write-down of assets |
50 |
1,108 |
689 |
1,165 |
255 |
1,847 |
(68) |
|||||||||||||||||||||
Other noninterest income |
4,972 |
7,170 |
6,586 |
5,407 |
5,427 |
18,728 |
17,652 |
|||||||||||||||||||||
Total noninterest income |
34,688 |
37,594 |
35,122 |
35,757 |
34,645 |
107,404 |
104,209 |
|||||||||||||||||||||
Noninterest expense: |
||||||||||||||||||||||||||||
Salaries and benefits |
79,578 |
80,371 |
79,411 |
76,496 |
78,412 |
239,360 |
234,060 |
|||||||||||||||||||||
Net occupancy and equipment |
8,412 |
8,039 |
7,848 |
8,140 |
8,165 |
24,299 |
24,044 |
|||||||||||||||||||||
Credit and debit card, data processing and |
9,516 |
9,246 |
8,849 |
9,050 |
9,103 |
27,611 |
26,054 |
|||||||||||||||||||||
Regulatory assessments and FDIC insurance |
2,807 |
2,851 |
2,850 |
2,801 |
2,497 |
8,508 |
7,837 |
|||||||||||||||||||||
Core deposit intangibles amortization |
2,577 |
2,581 |
2,620 |
2,855 |
2,878 |
7,778 |
8,696 |
|||||||||||||||||||||
Depreciation |
4,436 |
4,539 |
4,547 |
4,518 |
4,524 |
13,522 |
13,577 |
|||||||||||||||||||||
Communications |
3,374 |
3,206 |
2,919 |
3,134 |
3,013 |
9,499 |
8,894 |
|||||||||||||||||||||
Other real estate expense |
198 |
195 |
214 |
24 |
30 |
607 |
472 |
|||||||||||||||||||||
Net loss (gain) on sale or write-down of other |
(213) |
14 |
(621) |
2 |
4 |
(820) |
(2,722) |
|||||||||||||||||||||
Other noninterest expense |
11,529 |
11,836 |
11,213 |
12,518 |
11,189 |
34,578 |
33,170 |
|||||||||||||||||||||
Total noninterest expense |
122,214 |
122,878 |
119,850 |
119,538 |
119,815 |
364,942 |
354,082 |
|||||||||||||||||||||
Income before income taxes |
173,153 |
163,187 |
155,216 |
160,979 |
163,397 |
491,556 |
498,675 |
|||||||||||||||||||||
Provision for income taxes |
37,333 |
34,697 |
32,890 |
34,192 |
34,807 |
104,920 |
106,165 |
|||||||||||||||||||||
Net income available to common shareholders |
$ |
135,820 |
$ |
128,490 |
$ |
122,326 |
$ |
126,787 |
$ |
128,590 |
$ |
386,636 |
$ |
392,510 |
||||||||||||||
(C) |
Interest income on securities was reduced by net premium amortization of $9,947, $11,450, $12,857, $16,006 and $15,141 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and $34,254 and $42,421 for the nine months ended September 30, 2022 and September 30, 2021, respectively. |
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars and share amounts in thousands, except per share data and market prices) |
|||||||||||||||||||||||||||||
Three Months Ended |
Year-to-Date |
||||||||||||||||||||||||||||
Sep 30, |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||||||||||||||
Profitability |
|||||||||||||||||||||||||||||
Net income (D) (E) |
$ |
135,820 |
$ |
128,490 |
$ |
122,326 |
$ |
126,787 |
$ |
128,590 |
$ |
386,636 |
$ |
392,510 |
|||||||||||||||
Basic earnings per share |
$ |
1.49 |
$ |
1.40 |
$ |
1.33 |
$ |
1.38 |
$ |
1.39 |
$ |
4.22 |
$ |
4.23 |
|||||||||||||||
Diluted earnings per share |
$ |
1.49 |
$ |
1.40 |
$ |
1.33 |
$ |
1.38 |
$ |
1.39 |
$ |
4.22 |
$ |
4.23 |
|||||||||||||||
Return on average assets (F) |
1.45 |
% |
1.36 |
% |
1.29 |
% |
1.37 |
% |
1.42 |
% |
1.37 |
% |
1.47 |
% |
|||||||||||||||
Return on average common equity (F) |
8.24 |
% |
7.84 |
% |
7.54 |
% |
7.91 |
% |
8.07 |
% |
7.88 |
% |
8.32 |
% |
|||||||||||||||
Return on average tangible common equity (F) (G) |
16.44 |
% |
15.73 |
% |
15.30 |
% |
16.26 |
% |
16.72 |
% |
15.83 |
% |
17.53 |
% |
|||||||||||||||
Tax equivalent net interest margin (D) (E) (H) |
3.11 |
% |
2.97 |
% |
2.88 |
% |
2.97 |
% |
3.10 |
% |
2.99 |
% |
3.20 |
% |
|||||||||||||||
Efficiency ratio (G) (I) |
41.38 |
% |
43.12 |
% |
43.68 |
% |
42.79 |
% |
42.34 |
% |
42.70 |
% |
41.52 |
% |
|||||||||||||||
Liquidity and Capital Ratios |
|||||||||||||||||||||||||||||
Equity to assets |
17.47 |
% |
17.44 |
% |
17.00 |
% |
16.99 |
% |
17.38 |
% |
17.47 |
% |
17.38 |
% |
|||||||||||||||
Common equity tier 1 capital |
15.44 |
% |
(J) |
15.26 |
% |
(J) |
15.32 |
% |
(J) |
15.10 |
% |
14.84 |
% |
15.44 |
% |
(J) |
14.84 |
% |
|||||||||||
Tier 1 risk-based capital |
15.44 |
% |
(J) |
15.26 |
% |
(J) |
15.32 |
% |
(J) |
15.10 |
% |
14.84 |
% |
15.44 |
% |
(J) |
14.84 |
% |
|||||||||||
Total risk-based capital |
16.09 |
% |
(J) |
15.91 |
% |
(J) |
15.99 |
% |
(J) |
15.45 |
% |
15.20 |
% |
16.09 |
% |
(J) |
15.20 |
% |
|||||||||||
Tier 1 leverage capital |
9.94 |
% |
(J) |
9.58 |
% |
(J) |
9.44 |
% |
(J) |
9.62 |
% |
9.55 |
% |
9.94 |
% |
(J) |
9.55 |
% |
|||||||||||
Period end tangible equity to period end tangible |
9.62 |
% |
9.48 |
% |
9.19 |
% |
9.07 |
% |
9.18 |
% |
9.62 |
% |
9.18 |
% |
|||||||||||||||
Other Data |
|||||||||||||||||||||||||||||
Weighted-average shares used in computing |
|||||||||||||||||||||||||||||
Basic |
91,209 |
91,772 |
92,161 |
92,162 |
92,683 |
91,710 |
92,823 |
||||||||||||||||||||||
Diluted |
91,209 |
91,772 |
92,161 |
92,162 |
92,683 |
91,710 |
92,823 |
||||||||||||||||||||||
Period end shares outstanding |
91,210 |
91,196 |
92,160 |
92,170 |
92,160 |
91,210 |
92,160 |
||||||||||||||||||||||
Cash dividends paid per common share |
$ |
0.52 |
$ |
0.52 |
$ |
0.52 |
$ |
0.52 |
$ |
0.49 |
$ |
1.56 |
$ |
1.47 |
|||||||||||||||
Book value per common share |
$ |
72.49 |
$ |
71.51 |
$ |
70.58 |
$ |
69.73 |
$ |
68.85 |
$ |
72.49 |
$ |
68.85 |
|||||||||||||||
Tangible book value per common share (G) |
$ |
36.47 |
$ |
35.46 |
$ |
34.87 |
$ |
34.00 |
$ |
33.09 |
$ |
36.47 |
$ |
33.09 |
|||||||||||||||
Common Stock Market Price |
|||||||||||||||||||||||||||||
High |
$ |
77.93 |
$ |
73.50 |
$ |
80.46 |
$ |
78.67 |
$ |
72.97 |
$ |
80.46 |
$ |
83.02 |
|||||||||||||||
Low |
$ |
65.37 |
$ |
64.69 |
$ |
69.08 |
$ |
68.53 |
$ |
64.40 |
$ |
64.69 |
$ |
64.40 |
|||||||||||||||
Period end closing price |
$ |
66.68 |
$ |
68.27 |
$ |
69.38 |
$ |
72.35 |
$ |
71.13 |
$ |
66.68 |
$ |
71.13 |
|||||||||||||||
Employees – FTE (excluding overtime) |
3,592 |
3,576 |
3,595 |
3,704 |
3,625 |
3,592 |
3,625 |
||||||||||||||||||||||
Number of banking centers |
272 |
272 |
272 |
273 |
273 |
272 |
273 |
||||||||||||||||||||||
(D) |
Includes purchase accounting adjustments for the periods presented as follows: |
Three Months Ended |
Year-to-Date |
||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
Sep 30, 2022 |
Sep 30, 2021 |
|||||||
Loan discount accretion |
|||||||||||||
ASC 310-20 |
$912 |
$(265) |
$4,674 |
$4,635 |
$3,761 |
$5,321 |
$26,805 |
||||||
ASC 310-30 |
$322 |
$324 |
$521 |
$731 |
$1,618 |
$1,167 |
$7,107 |
||||||
Securities net amortization |
$40 |
$12 |
$52 |
$139 |
$136 |
$104 |
$418 |
||||||
Time deposits amortization |
$68 |
$84 |
$100 |
$127 |
$201 |
$252 |
$1,035 |
||||||
(E) |
Using effective tax rate of 21.6%, 21.3%, 21.2%, 21.2% and 21.3% for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and 21.3% for the nine months ended September 30, 2022 and September 30, 2021. |
(F) |
Interim periods annualized. |
(G) |
Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. |
(H) |
Net interest margin for all periods presented is based on average balances on an actual 365-day basis. |
(I) |
Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation. |
(J) |
Beginning on January 1, 2022, the cumulative amount of the current expected credit loss ("CECL") transition adjustments is being phased in over a three-year transition period. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited)
(Dollars in thousands) |
|||||||||||||||||||||||||||||||||||||
YIELD ANALYSIS |
Three Months Ended |
||||||||||||||||||||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Sep 30, 2021 |
|||||||||||||||||||||||||||||||||||
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
(K) |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
(K) |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
(K) |
||||||||||||||||||||||||||
Interest-earning assets: |
|||||||||||||||||||||||||||||||||||||
Loans held for sale |
$ |
4,136 |
$ |
57 |
5.47 % |
$ |
3,199 |
$ |
40 |
5.02 % |
$ |
11,714 |
$ |
91 |
3.08 % |
||||||||||||||||||||||
Loans held for investment |
17,275,866 |
199,417 |
4.58 % |
16,799,609 |
182,286 |
4.35 % |
17,102,998 |
199,019 |
4.62 % |
||||||||||||||||||||||||||||
Loans held for investment - Warehouse |
938,589 |
10,794 |
4.56 % |
1,257,521 |
10,444 |
3.33 % |
1,836,252 |
14,711 |
3.18 % |
||||||||||||||||||||||||||||
Total Loans |
18,218,591 |
210,268 |
4.58 % |
18,060,329 |
192,770 |
4.28 % |
18,950,964 |
213,821 |
4.48 % |
||||||||||||||||||||||||||||
Investment securities |
14,962,847 |
68,761 |
1.82 % |
(L) |
14,989,666 |
64,111 |
1.72 % |
(L) |
12,184,964 |
46,217 |
1.50 % |
(L) |
|||||||||||||||||||||||||
Federal funds sold and other earning assets |
87,859 |
525 |
2.37 % |
540,907 |
925 |
0.69 % |
734,787 |
302 |
0.16 % |
||||||||||||||||||||||||||||
Total interest-earning assets |
33,269,297 |
279,554 |
3.33 % |
33,590,902 |
257,806 |
3.08 % |
31,870,715 |
260,340 |
3.24 % |
||||||||||||||||||||||||||||
Allowance for credit losses on loans |
(283,244) |
(284,550) |
(301,011) |
||||||||||||||||||||||||||||||||||
Noninterest-earning assets |
4,480,512 |
4,448,060 |
4,728,965 |
||||||||||||||||||||||||||||||||||
Total assets |
$ |
37,466,565 |
$ |
37,754,412 |
$ |
36,298,669 |
|||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
|||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits |
$ |
6,155,511 |
$ |
2,345 |
0.15 % |
$ |
6,437,614 |
$ |
2,154 |
0.13 % |
$ |
6,089,678 |
$ |
3,614 |
0.24 % |
||||||||||||||||||||||
Savings and money market deposits |
10,172,986 |
9,479 |
0.37 % |
10,702,273 |
4,473 |
0.17 % |
9,944,664 |
4,522 |
0.18 % |
||||||||||||||||||||||||||||
Certificates and other time deposits |
2,185,529 |
2,845 |
0.52 % |
2,409,663 |
2,014 |
0.34 % |
2,897,123 |
3,442 |
0.47 % |
||||||||||||||||||||||||||||
Other borrowings |
577,828 |
3,719 |
2.55 % |
112,582 |
450 |
1.60 % |
— |
— |
— |
||||||||||||||||||||||||||||
Securities sold under repurchase agreements |
473,584 |
487 |
0.41 % |
463,108 |
244 |
0.21 % |
448,338 |
195 |
0.17 % |
||||||||||||||||||||||||||||
Total interest-bearing liabilities |
19,565,438 |
18,875 |
0.38 % |
(M) |
20,125,240 |
9,335 |
0.19 % |
(M) |
19,379,803 |
11,773 |
0.24 % |
(M) |
|||||||||||||||||||||||||
Noninterest-bearing liabilities: |
|||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits |
11,048,856 |
10,855,802 |
10,286,062 |
||||||||||||||||||||||||||||||||||
Allowance for credit losses on off-balance |
29,947 |
29,947 |
29,947 |
||||||||||||||||||||||||||||||||||
Other liabilities |
231,812 |
186,344 |
229,502 |
||||||||||||||||||||||||||||||||||
Total liabilities |
30,876,053 |
31,197,333 |
29,925,314 |
||||||||||||||||||||||||||||||||||
Shareholders' equity |
6,590,512 |
6,557,079 |
6,373,355 |
||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
37,466,565 |
$ |
37,754,412 |
$ |
36,298,669 |
|||||||||||||||||||||||||||||||
Net interest income and margin |
$ |
260,679 |
3.11 % |
$ |
248,471 |
2.97 % |
$ |
248,567 |
3.09 % |
||||||||||||||||||||||||||||
Non-GAAP to GAAP reconciliation: |
|||||||||||||||||||||||||||||||||||||
Tax equivalent adjustment |
458 |
445 |
551 |
||||||||||||||||||||||||||||||||||
Net interest income and margin (tax |
$ |
261,137 |
3.11 % |
$ |
248,916 |
2.97 % |
$ |
249,118 |
3.10 % |
||||||||||||||||||||||||||||
(K) |
Annualized and based on an actual 365-day basis. |
(L) |
Yield on securities was impacted by net premium amortization of $9,947, $11,450 and $15,141 for the three months ended September 30, 2022, June 31, 2022 and September 30, 2021, respectively. |
(M) |
Total cost of funds, including noninterest bearing deposits, was 0.24%, 0.12% and 0.16% for the three months ended September 30, 2022, June 31, 2022 and September 30, 2021, respectively. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited)
(Dollars in thousands) |
|||||||||||||||||||||||||
YIELD ANALYSIS |
Year-to-Date |
||||||||||||||||||||||||
Sep 30, 2022 |
Sep 30, 2021 |
||||||||||||||||||||||||
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
(N) |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
(N) |
||||||||||||||||||
Interest-earning assets: |
|||||||||||||||||||||||||
Loans held for sale |
$ |
3,980 |
$ |
137 |
4.60 % |
$ |
19,507 |
$ |
439 |
3.01 % |
|||||||||||||||
Loans held for investment |
16,931,422 |
564,736 |
4.46 % |
17,228,462 |
613,813 |
4.76 % |
|||||||||||||||||||
Loans held for investment - Warehouse Purchase |
1,153,762 |
31,190 |
3.61 % |
2,061,432 |
49,447 |
3.21 % |
|||||||||||||||||||
Total loans |
18,089,164 |
596,063 |
4.41 % |
19,309,401 |
663,699 |
4.60 % |
|||||||||||||||||||
Investment securities |
14,579,521 |
187,883 |
1.72 % |
(O) |
10,849,373 |
128,602 |
1.58 % |
(O) |
|||||||||||||||||
Federal funds sold and other earning assets |
913,923 |
2,297 |
0.34 % |
1,151,647 |
993 |
0.12 % |
|||||||||||||||||||
Total interest-earning assets |
33,582,608 |
786,243 |
3.13 % |
31,310,421 |
793,294 |
3.39 % |
|||||||||||||||||||
Allowance for credit losses on loans |
(284,486) |
(307,500) |
|||||||||||||||||||||||
Noninterest-earning assets |
4,462,318 |
4,644,874 |
|||||||||||||||||||||||
Total assets |
$ |
37,760,440 |
$ |
35,647,795 |
|||||||||||||||||||||
Interest-bearing liabilities: |
|||||||||||||||||||||||||
Interest-bearing demand deposits |
$ |
6,453,810 |
$ |
6,951 |
0.14 % |
$ |
6,160,988 |
$ |
15,028 |
0.33 % |
|||||||||||||||
Savings and money market deposits |
10,579,351 |
17,978 |
0.23 % |
9,747,706 |
15,765 |
0.22 % |
|||||||||||||||||||
Certificates and other time deposits |
2,409,251 |
7,135 |
0.40 % |
2,969,151 |
13,435 |
0.60 % |
|||||||||||||||||||
Other borrowings |
232,253 |
4,169 |
2.40 % |
— |
— |
— |
|||||||||||||||||||
Securities sold under repurchase agreements |
462,994 |
916 |
0.26 % |
403,254 |
518 |
0.17 % |
|||||||||||||||||||
Total interest-bearing liabilities |
20,137,659 |
37,149 |
0.25 % |
(P) |
19,281,099 |
44,746 |
0.31 % |
(P) |
|||||||||||||||||
Noninterest-bearing liabilities: |
|||||||||||||||||||||||||
Noninterest-bearing demand deposits |
10,848,605 |
9,855,599 |
|||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit |
29,947 |
29,947 |
|||||||||||||||||||||||
Other liabilities |
198,196 |
194,347 |
|||||||||||||||||||||||
Total liabilities |
31,214,407 |
29,360,992 |
|||||||||||||||||||||||
Shareholders' equity |
6,546,033 |
6,286,803 |
|||||||||||||||||||||||
Total liabilities and shareholders' equity |
37,760,440 |
$ |
35,647,795 |
||||||||||||||||||||||
Net interest income and margin |
$ |
749,094 |
2.98 % |
$ |
748,548 |
3.20 % |
|||||||||||||||||||
Non-GAAP to GAAP reconciliation: |
|||||||||||||||||||||||||
Tax equivalent adjustment |
1,375 |
1,772 |
|||||||||||||||||||||||
Net interest income and margin (tax equivalent basis) |
$ |
750,469 |
2.99 % |
$ |
750,320 |
3.20 % |
|||||||||||||||||||
(N) |
Annualized and based on an actual 365-day basis. |
(O) |
Yield on securities was impacted by net premium amortization of $34,254 and $42,421 for the nine months ended September 30, 2022 and 2021, respectively. |
(P) |
Total cost of funds, including noninterest bearing deposits, was 0.16% and 0.21% for the nine months ended September 30, 2022 and 2021, respectively. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands) |
|||||||||||||||||||
Three Months Ended |
|||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
YIELD TREND (Q) |
|||||||||||||||||||
Interest-Earning Assets: |
|||||||||||||||||||
Loans held for sale |
5.47 |
% |
5.02 |
% |
3.52 |
% |
3.20 |
% |
3.08 |
% |
|||||||||
Loans held for investment |
4.58 |
% |
4.35 |
% |
4.44 |
% |
4.53 |
% |
4.62 |
% |
|||||||||
Loans held for investment - Warehouse Purchase |
4.56 |
% |
3.33 |
% |
3.18 |
% |
3.12 |
% |
3.18 |
% |
|||||||||
Total loans |
4.58 |
% |
4.28 |
% |
4.35 |
% |
4.40 |
% |
4.48 |
% |
|||||||||
Investment securities (R) |
1.82 |
% |
1.72 |
% |
1.62 |
% |
1.46 |
% |
1.50 |
% |
|||||||||
Federal funds sold and other earning assets |
2.37 |
% |
0.69 |
% |
0.16 |
% |
0.16 |
% |
0.16 |
% |
|||||||||
Total interest-earning assets |
3.33 |
% |
3.08 |
% |
2.98 |
% |
3.07 |
% |
3.24 |
% |
|||||||||
Interest-Bearing Liabilities: |
|||||||||||||||||||
Interest-bearing demand deposits |
0.15 |
% |
0.13 |
% |
0.15 |
% |
0.14 |
% |
0.24 |
% |
|||||||||
Savings and money market deposits |
0.37 |
% |
0.17 |
% |
0.15 |
% |
0.15 |
% |
0.18 |
% |
|||||||||
Certificates and other time deposits |
0.52 |
% |
0.34 |
% |
0.35 |
% |
0.38 |
% |
0.47 |
% |
|||||||||
Other borrowings |
2.55 |
% |
1.60 |
% |
— |
— |
— |
||||||||||||
Securities sold under repurchase agreements |
0.41 |
% |
0.21 |
% |
0.17 |
% |
0.17 |
% |
0.17 |
% |
|||||||||
Total interest-bearing liabilities |
0.38 |
% |
0.19 |
% |
0.17 |
% |
0.18 |
% |
0.24 |
% |
|||||||||
Net Interest Margin |
3.11 |
% |
2.97 |
% |
2.87 |
% |
2.96 |
% |
3.09 |
% |
|||||||||
Net Interest Margin (tax equivalent) |
3.11 |
% |
2.97 |
% |
2.88 |
% |
2.97 |
% |
3.10 |
% |
|||||||||
(Q) |
Annualized and based on average balances on an actual 365-day basis. |
(R) |
Yield on securities was impacted by net premium amortization of $9,947, $11,450, $12,857, $16,006 and $15,141 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands) |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
||||||||||||||||
Balance Sheet Averages |
||||||||||||||||||||
Loans held for sale |
$ |
4,136 |
$ |
3,199 |
$ |
4,611 |
$ |
8,794 |
$ |
11,714 |
||||||||||
Loans held for investment |
17,275,866 |
16,799,609 |
16,712,690 |
16,830,163 |
17,102,998 |
|||||||||||||||
Loans held for investment - Warehouse Purchase |
938,589 |
1,257,521 |
1,268,715 |
1,772,971 |
1,836,252 |
|||||||||||||||
Total Loans |
18,218,591 |
18,060,329 |
17,986,016 |
18,611,928 |
18,950,964 |
|||||||||||||||
Investment securities |
14,962,847 |
14,989,666 |
13,772,974 |
12,751,857 |
12,184,964 |
|||||||||||||||
Federal funds sold and other earning assets |
87,859 |
540,907 |
2,135,503 |
1,393,859 |
734,787 |
|||||||||||||||
Total interest-earning assets |
33,269,297 |
33,590,902 |
33,894,493 |
32,757,644 |
31,870,715 |
|||||||||||||||
Allowance for credit losses on loans |
(283,244) |
(284,550) |
(285,692) |
(287,191) |
(301,011) |
|||||||||||||||
Cash and due from banks |
302,479 |
309,223 |
326,552 |
329,406 |
570,765 |
|||||||||||||||
Goodwill |
3,231,637 |
3,231,637 |
3,231,637 |
3,231,637 |
3,231,637 |
|||||||||||||||
Core deposit intangibles, net |
55,158 |
57,728 |
60,346 |
63,091 |
65,955 |
|||||||||||||||
Other real estate |
1,652 |
1,639 |
1,893 |
321 |
279 |
|||||||||||||||
Fixed assets, net |
336,657 |
336,242 |
327,297 |
321,524 |
323,584 |
|||||||||||||||
Other assets |
552,929 |
511,591 |
510,944 |
530,603 |
536,745 |
|||||||||||||||
Total assets |
$ |
37,466,565 |
$ |
37,754,412 |
$ |
38,067,470 |
$ |
36,947,035 |
$ |
36,298,669 |
||||||||||
Noninterest-bearing deposits |
$ |
11,048,856 |
$ |
10,855,802 |
$ |
10,636,624 |
$ |
10,587,441 |
$ |
10,286,062 |
||||||||||
Interest-bearing demand deposits |
6,155,511 |
6,437,614 |
6,775,114 |
6,196,283 |
6,089,678 |
|||||||||||||||
Savings and money market deposits |
10,172,986 |
10,702,273 |
10,870,461 |
10,286,650 |
9,944,664 |
|||||||||||||||
Certificates and other time deposits |
2,185,529 |
2,409,663 |
2,637,529 |
2,766,123 |
2,897,123 |
|||||||||||||||
Total deposits |
29,562,882 |
30,405,352 |
30,919,728 |
29,836,497 |
29,217,527 |
|||||||||||||||
Other borrowings |
577,828 |
112,582 |
— |
— |
— |
|||||||||||||||
Securities sold under repurchase agreements |
473,584 |
463,108 |
452,054 |
432,981 |
448,338 |
|||||||||||||||
Allowance for credit losses on off-balance sheet |
29,947 |
29,947 |
29,947 |
29,947 |
29,947 |
|||||||||||||||
Other liabilities |
231,812 |
186,344 |
176,360 |
234,746 |
229,502 |
|||||||||||||||
Shareholders' equity |
6,590,512 |
6,557,079 |
6,489,381 |
6,412,864 |
6,373,355 |
|||||||||||||||
Total liabilities and equity |
$ |
37,466,565 |
$ |
37,754,412 |
$ |
38,067,470 |
$ |
36,947,035 |
$ |
36,298,669 |
||||||||||
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands) |
|||||||||||||||||||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||||||||||||||||||
Period End Balances |
|||||||||||||||||||||||||||||||||||
Loan Portfolio |
|||||||||||||||||||||||||||||||||||
Commercial and industrial |
$ |
2,188,029 |
11.8 |
% |
$ |
2,155,727 |
11.8 |
% |
$ |
2,007,783 |
11.1 |
% |
$ |
2,050,631 |
11.0 |
% |
$ |
1,841,899 |
9.7 |
% |
|||||||||||||||
Warehouse purchase program |
922,764 |
5.0 |
% |
1,137,623 |
6.2 |
% |
1,344,541 |
7.4 |
% |
1,775,699 |
9.5 |
% |
1,998,049 |
10.6 |
% |
||||||||||||||||||||
Construction, land development and |
2,659,552 |
14.4 |
% |
2,460,526 |
13.5 |
% |
2,327,837 |
12.9 |
% |
2,299,715 |
12.4 |
% |
2,269,417 |
12.0 |
% |
||||||||||||||||||||
1-4 family residential |
5,447,993 |
29.4 |
% |
5,156,200 |
28.3 |
% |
4,970,620 |
27.5 |
% |
4,860,419 |
26.1 |
% |
4,709,468 |
24.8 |
% |
||||||||||||||||||||
Home equity |
943,197 |
5.1 |
% |
932,725 |
5.1 |
% |
870,130 |
4.8 |
% |
808,289 |
4.4 |
% |
746,426 |
3.9 |
% |
||||||||||||||||||||
Commercial real estate (includes |
4,966,243 |
26.8 |
% |
4,967,662 |
27.3 |
% |
5,150,555 |
28.5 |
% |
5,251,368 |
28.2 |
% |
5,550,841 |
29.3 |
% |
||||||||||||||||||||
Agriculture (includes farmland) |
670,603 |
3.6 |
% |
665,960 |
3.7 |
% |
617,418 |
3.4 |
% |
620,338 |
3.3 |
% |
631,497 |
3.3 |
% |
||||||||||||||||||||
Consumer and other |
288,834 |
1.6 |
% |
274,532 |
1.5 |
% |
246,433 |
1.4 |
% |
288,496 |
1.6 |
% |
274,980 |
1.5 |
% |
||||||||||||||||||||
Energy |
410,069 |
2.2 |
% |
430,339 |
2.4 |
% |
445,949 |
2.5 |
% |
491,305 |
2.6 |
% |
569,314 |
3.0 |
% |
||||||||||||||||||||
Paycheck Protection Program |
9,004 |
0.1 |
% |
27,550 |
0.2 |
% |
86,258 |
0.5 |
% |
169,884 |
0.9 |
% |
365,841 |
1.9 |
% |
||||||||||||||||||||
Total loans |
$ |
18,506,288 |
$ |
18,208,844 |
$ |
18,067,524 |
$ |
18,616,144 |
$ |
18,957,732 |
|||||||||||||||||||||||||
Deposit Types |
|||||||||||||||||||||||||||||||||||
Noninterest-bearing DDA |
$ |
11,154,143 |
38.1 |
% |
$ |
11,032,184 |
36.9 |
% |
$ |
10,776,652 |
34.7 |
% |
$ |
10,750,034 |
34.9 |
% |
$ |
10,326,489 |
35.0 |
% |
|||||||||||||||
Interest-bearing DDA |
6,027,157 |
20.6 |
% |
6,331,314 |
21.2 |
% |
6,603,934 |
21.2 |
% |
6,741,092 |
21.9 |
% |
6,088,923 |
20.7 |
% |
||||||||||||||||||||
Money market |
6,438,787 |
22.0 |
% |
6,646,726 |
22.3 |
% |
7,603,329 |
24.5 |
% |
7,178,904 |
23.3 |
% |
6,864,664 |
23.3 |
% |
||||||||||||||||||||
Savings |
3,563,776 |
12.1 |
% |
3,597,820 |
12.0 |
% |
3,543,300 |
11.4 |
% |
3,401,727 |
11.1 |
% |
3,293,850 |
11.2 |
% |
||||||||||||||||||||
Certificates and other time deposits |
2,116,232 |
7.2 |
% |
2,257,574 |
7.6 |
% |
2,541,095 |
8.2 |
% |
2,700,005 |
8.8 |
% |
2,877,726 |
9.8 |
% |
||||||||||||||||||||
Total deposits |
$ |
29,300,095 |
$ |
29,865,618 |
$ |
31,068,310 |
$ |
30,771,762 |
$ |
29,451,652 |
|||||||||||||||||||||||||
Loan to Deposit Ratio |
63.2 |
% |
61.0 |
% |
58.2 |
% |
60.5 |
% |
64.4 |
% |
|||||||||||||||||||||||||
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands) |
|||||||||||||||||||||||||||||||||||
Construction Loans |
|||||||||||||||||||||||||||||||||||
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||||||||||||||||||
Single family residential construction |
$ |
1,004,000 |
37.8 |
% |
$ |
911,443 |
37.0 |
% |
$ |
816,072 |
35.0 |
% |
$ |
728,393 |
31.7 |
% |
$ |
659,248 |
29.0 |
% |
|||||||||||||||
Land development |
145,303 |
5.5 |
% |
133,398 |
5.4 |
% |
103,853 |
4.5 |
% |
99,099 |
4.3 |
% |
92,623 |
4.1 |
% |
||||||||||||||||||||
Raw land |
343,066 |
12.9 |
% |
316,750 |
12.9 |
% |
310,987 |
13.4 |
% |
322,673 |
14.0 |
% |
315,803 |
13.9 |
% |
||||||||||||||||||||
Residential lots |
237,714 |
8.9 |
% |
223,703 |
9.1 |
% |
212,029 |
9.1 |
% |
206,978 |
9.0 |
% |
195,201 |
8.6 |
% |
||||||||||||||||||||
Commercial lots |
181,679 |
6.8 |
% |
184,794 |
7.5 |
% |
183,760 |
7.9 |
% |
184,901 |
8.0 |
% |
169,189 |
7.5 |
% |
||||||||||||||||||||
Commercial construction and other |
747,803 |
28.1 |
% |
690,453 |
28.1 |
% |
701,148 |
30.1 |
% |
757,687 |
33.0 |
% |
837,436 |
36.9 |
% |
||||||||||||||||||||
Net unaccreted discount |
(13) |
(15) |
(12) |
(16) |
(83) |
||||||||||||||||||||||||||||||
Total construction loans |
$ |
2,659,552 |
$ |
2,460,526 |
$ |
2,327,837 |
$ |
2,299,715 |
$ |
2,269,417 |
|||||||||||||||||||||||||
Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of September 30, 2022 |
||||||||||||||||||||||||||||
Houston |
Dallas |
Austin |
OK City |
Tulsa |
Other (S) |
Total |
||||||||||||||||||||||
Collateral Type |
||||||||||||||||||||||||||||
Shopping center/retail |
$ |
422,432 |
$ |
257,332 |
$ |
50,427 |
$ |
18,868 |
$ |
27,159 |
$ |
276,875 |
$ |
1,053,093 |
||||||||||||||
Commercial and industrial buildings |
160,956 |
78,735 |
18,646 |
32,753 |
16,267 |
166,892 |
474,249 |
|||||||||||||||||||||
Office buildings |
92,541 |
322,061 |
26,391 |
68,836 |
4,378 |
64,189 |
578,396 |
|||||||||||||||||||||
Medical buildings |
82,266 |
20,237 |
2,525 |
20,961 |
39,028 |
51,973 |
216,990 |
|||||||||||||||||||||
Apartment buildings |
79,475 |
64,631 |
12,259 |
13,995 |
8,239 |
147,840 |
326,439 |
|||||||||||||||||||||
Hotel |
92,257 |
68,683 |
44,188 |
28,364 |
— |
131,290 |
364,782 |
|||||||||||||||||||||
Other |
73,549 |
76,947 |
32,797 |
7,512 |
2,593 |
71,337 |
264,735 |
|||||||||||||||||||||
Total |
$ |
1,003,476 |
$ |
888,626 |
$ |
187,233 |
$ |
191,289 |
$ |
97,664 |
$ |
910,396 |
$ |
3,278,684 |
(T) |
|||||||||||||
Acquired Loans |
||||||||||||||||||||||||||||||||||||
Non-PCD Loans |
PCD Loans |
Total Acquired Loans |
||||||||||||||||||||||||||||||||||
Balance at Acquisition Date |
Balance at Jun 30, |
Balance at Sep 30, |
Balance at Acquisition Date |
Balance at Jun 30, |
Balance at Sep 30, |
Balance at Acquisition Date |
Balance at Jun 30, |
Balance at Sep 30, |
||||||||||||||||||||||||||||
Loan marks: |
||||||||||||||||||||||||||||||||||||
Acquired banks (U) |
$ |
345,599 |
$ |
3,734 |
$ |
2,836 |
$ |
320,052 |
$ |
3,993 |
$ |
3,671 |
$ |
665,651 |
$ |
7,727 |
$ |
6,507 |
||||||||||||||||||
Acquired portfolio loan balances: |
||||||||||||||||||||||||||||||||||||
Acquired banks (U) |
12,286,159 |
1,559,270 |
1,410,748 |
689,573 |
68,125 |
66,613 |
12,975,732 |
(V) |
1,627,395 |
1,477,361 |
||||||||||||||||||||||||||
Acquired portfolio loan balances less |
$ |
11,940,560 |
$ |
1,555,536 |
$ |
1,407,912 |
$ |
369,521 |
$ |
64,132 |
$ |
62,942 |
$ |
12,310,081 |
$ |
1,619,668 |
$ |
1,470,854 |
||||||||||||||||||
(S) |
Includes other MSA and non-MSA regions. |
(T) |
Represents a portion of total commercial real estate loans of $4.966 billion as of September 30, 2022. |
(U) |
Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank and LegacyTexas Bank. |
(V) |
Actual principal balances acquired. |
Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands) |
|||||||||||||||||||||||||||
Three Months Ended |
Year-to-Date |
||||||||||||||||||||||||||
Sep 30, |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Sep 30, |
Sep 30, |
|||||||||||||||||||||
Asset Quality |
|||||||||||||||||||||||||||
Nonaccrual loans |
$ |
17,729 |
$ |
20,619 |
$ |
21,765 |
$ |
26,269 |
$ |
35,035 |
$ |
17,729 |
$ |
35,035 |
|||||||||||||
Accruing loans 90 or more days past due |
378 |
13 |
3,695 |
887 |
1,038 |
378 |
1,038 |
||||||||||||||||||||
Total nonperforming loans |
18,107 |
20,632 |
25,460 |
27,156 |
36,073 |
18,107 |
36,073 |
||||||||||||||||||||
Repossessed assets |
13 |
— |
19 |
310 |
326 |
13 |
326 |
||||||||||||||||||||
Other real estate |
1,758 |
1,555 |
1,705 |
622 |
150 |
1,758 |
150 |
||||||||||||||||||||
Total nonperforming assets |
$ |
19,878 |
$ |
22,187 |
$ |
27,184 |
$ |
28,088 |
$ |
36,549 |
$ |
19,878 |
$ |
36,549 |
|||||||||||||
Nonperforming assets: |
|||||||||||||||||||||||||||
Commercial and industrial (includes energy) |
$ |
2,376 |
$ |
2,964 |
$ |
4,403 |
$ |
6,150 |
$ |
8,199 |
$ |
2,376 |
$ |
8,199 |
|||||||||||||
Construction, land development and other land |
1,712 |
1,866 |
1,761 |
1,841 |
803 |
1,712 |
803 |
||||||||||||||||||||
1-4 family residential (includes home equity) |
13,986 |
14,335 |
11,899 |
11,990 |
11,117 |
13,986 |
11,117 |
||||||||||||||||||||
Commercial real estate (includes multi-family |
1,364 |
2,448 |
7,685 |
7,276 |
15,691 |
1,364 |
15,691 |
||||||||||||||||||||
Agriculture (includes farmland) |
434 |
567 |
1,402 |
816 |
643 |
434 |
643 |
||||||||||||||||||||
Consumer and other |
6 |
7 |
34 |
15 |
96 |
6 |
96 |
||||||||||||||||||||
Total |
$ |
19,878 |
$ |
22,187 |
$ |
27,184 |
$ |
28,088 |
$ |
36,549 |
$ |
19,878 |
$ |
36,549 |
|||||||||||||
Number of loans/properties |
150 |
160 |
147 |
157 |
155 |
150 |
155 |
||||||||||||||||||||
Allowance for credit losses on loans |
$ |
282,179 |
$ |
283,959 |
$ |
285,163 |
$ |
286,380 |
$ |
287,187 |
$ |
282,179 |
$ |
287,187 |
|||||||||||||
Net charge-offs (recoveries): |
|||||||||||||||||||||||||||
Commercial and industrial (includes energy) |
$ |
(15) |
$ |
(197) |
$ |
14 |
$ |
177 |
$ |
3,763 |
$ |
(198) |
$ |
8,876 |
|||||||||||||
Construction, land development and other land |
(4) |
(5) |
430 |
(162) |
(4) |
421 |
(114) |
||||||||||||||||||||
1-4 family residential (includes home equity) |
(202) |
(32) |
87 |
(72) |
66 |
(147) |
107 |
||||||||||||||||||||
Commercial real estate (includes multi-family |
757 |
395 |
(366) |
(10) |
11,180 |
786 |
18,286 |
||||||||||||||||||||
Agriculture (includes farmland) |
119 |
(9) |
(103) |
(102) |
(63) |
7 |
(39) |
||||||||||||||||||||
Consumer and other |
1,125 |
1,052 |
1,155 |
976 |
755 |
3,332 |
1,765 |
||||||||||||||||||||
Total |
$ |
1,780 |
$ |
1,204 |
$ |
1,217 |
$ |
807 |
$ |
15,697 |
$ |
4,201 |
$ |
28,881 |
|||||||||||||
Asset Quality Ratios |
|||||||||||||||||||||||||||
Nonperforming assets to average interest-earning |
0.06 |
% |
0.07 |
% |
0.08 |
% |
0.09 |
% |
0.11 |
% |
0.06 |
% |
0.12 |
% |
|||||||||||||
Nonperforming assets to loans and other real estate |
0.11 |
% |
0.12 |
% |
0.15 |
% |
0.15 |
% |
0.19 |
% |
0.11 |
% |
0.19 |
% |
|||||||||||||
Net charge-offs to average loans (annualized) |
0.04 |
% |
0.03 |
% |
0.03 |
% |
0.02 |
% |
0.33 |
% |
0.03 |
% |
0.20 |
% |
|||||||||||||
Allowance for credit losses on loans to total loans |
1.52 |
% |
1.56 |
% |
1.58 |
% |
1.54 |
% |
1.51 |
% |
1.52 |
% |
1.51 |
% |
|||||||||||||
Allowance for credit losses on loans to total loans, |
1.61 |
% |
1.67 |
% |
1.71 |
% |
1.72 |
% |
1.73 |
% |
1.61 |
% |
1.73 |
% |
|||||||||||||
Prosperity Bancshares, Inc.® Notes to Selected Financial Data (Unaudited) (Dollars and share amounts in thousands, except per share data) |
||||||||||||||||||||||||||||
NOTES TO SELECTED FINANCIAL DATA |
||||||||||||||||||||||||||||
Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses on loans to total loans (excluding Warehouse Purchase Program loans and PPP loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented. |
||||||||||||||||||||||||||||
Three Months Ended |
Year-to-Date |
|||||||||||||||||||||||||||
Sep 30, |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Sep 30, |
Sep 30, |
||||||||||||||||||||||
Reconciliation of return on average common equity to |
||||||||||||||||||||||||||||
Net income |
$ |
135,820 |
$ |
128,490 |
$ |
122,326 |
$ |
126,787 |
$ |
128,590 |
$ |
386,636 |
$ |
392,510 |
||||||||||||||
Average shareholders' equity |
$ |
6,590,512 |
$ |
6,557,079 |
$ |
6,489,381 |
$ |
6,412,864 |
$ |
6,373,355 |
$ |
6,546,033 |
$ |
6,286,803 |
||||||||||||||
Less: Average goodwill and other intangible assets |
(3,286,795) |
(3,289,365) |
(3,291,983) |
(3,294,728) |
(3,297,592) |
(3,289,362) |
(3,300,990) |
|||||||||||||||||||||
Average tangible shareholders' equity |
$ |
3,303,717 |
$ |
3,267,714 |
$ |
3,197,398 |
$ |
3,118,136 |
$ |
3,075,763 |
$ |
3,256,671 |
$ |
2,985,813 |
||||||||||||||
Return on average tangible common equity (F) |
16.44 |
% |
15.73 |
% |
15.30 |
% |
16.26 |
% |
16.72 |
% |
15.83 |
% |
17.53 |
% |
||||||||||||||
Reconciliation of book value per share to tangible book |
||||||||||||||||||||||||||||
Shareholders' equity |
$ |
6,611,642 |
$ |
6,521,827 |
$ |
6,504,424 |
$ |
6,427,236 |
$ |
6,345,441 |
$ |
6,611,642 |
$ |
6,345,441 |
||||||||||||||
Less: Goodwill and other intangible assets |
(3,285,541) |
(3,288,119) |
(3,290,700) |
(3,293,320) |
(3,296,175) |
(3,285,541) |
(3,296,175) |
|||||||||||||||||||||
Tangible shareholders' equity |
$ |
3,326,101 |
$ |
3,233,708 |
$ |
3,213,724 |
$ |
3,133,916 |
$ |
3,049,266 |
$ |
3,326,101 |
$ |
3,049,266 |
||||||||||||||
Period end shares outstanding |
91,210 |
91,196 |
92,160 |
92,170 |
92,160 |
91,210 |
92,160 |
|||||||||||||||||||||
Tangible book value per share |
$ |
36.47 |
$ |
35.46 |
$ |
34.87 |
$ |
34.00 |
$ |
33.09 |
$ |
36.47 |
$ |
33.09 |
||||||||||||||
Reconciliation of equity to assets ratio to period end |
||||||||||||||||||||||||||||
Tangible shareholders' equity |
$ |
3,326,101 |
$ |
3,233,708 |
$ |
3,213,724 |
$ |
3,133,916 |
$ |
3,049,266 |
$ |
3,326,101 |
$ |
3,049,266 |
||||||||||||||
Total assets |
$ |
37,843,502 |
$ |
37,387,256 |
$ |
38,271,186 |
$ |
37,833,970 |
$ |
36,512,119 |
$ |
37,843,502 |
$ |
36,512,119 |
||||||||||||||
Less: Goodwill and other intangible assets |
(3,285,541) |
(3,288,119) |
(3,290,700) |
(3,293,320) |
(3,296,175) |
(3,285,541) |
(3,296,175) |
|||||||||||||||||||||
Tangible assets |
$ |
34,557,961 |
$ |
34,099,137 |
$ |
34,980,486 |
$ |
34,540,650 |
$ |
33,215,944 |
$ |
34,557,961 |
$ |
33,215,944 |
||||||||||||||
Period end tangible equity to period end tangible assets |
9.62 |
% |
9.48 |
% |
9.19 |
% |
9.07 |
% |
9.18 |
% |
9.62 |
% |
9.18 |
% |
||||||||||||||
Reconciliation of allowance for credit losses to total |
||||||||||||||||||||||||||||
Allowance for credit losses on loans |
$ |
282,179 |
$ |
283,959 |
$ |
285,163 |
$ |
286,380 |
$ |
287,187 |
$ |
282,179 |
$ |
287,187 |
||||||||||||||
Total loans |
$ |
18,506,288 |
$ |
18,208,844 |
$ |
18,067,524 |
$ |
18,616,144 |
$ |
18,957,732 |
$ |
18,506,288 |
$ |
18,957,732 |
||||||||||||||
Less: Warehouse Purchase Program loans |
(922,764) |
(1,137,623) |
(1,344,541) |
(1,775,699) |
(1,998,049) |
(922,764) |
(1,998,049) |
|||||||||||||||||||||
Less: Paycheck Protection Program loans |
(9,004) |
(27,550) |
(86,258) |
(169,884) |
(365,841) |
(9,004) |
(365,841) |
|||||||||||||||||||||
Total loans less Warehouse Purchase Program and |
$ |
17,574,520 |
$ |
17,043,671 |
$ |
16,636,725 |
$ |
16,670,561 |
$ |
16,593,842 |
$ |
17,574,520 |
$ |
16,593,842 |
||||||||||||||
Allowance for credit losses on loans to total loans |
1.61 |
% |
1.67 |
% |
1.71 |
% |
1.72 |
% |
1.73 |
% |
1.61 |
% |
1.73 |
% |
||||||||||||||
Reconciliation of efficiency ratio to efficiency ratio |
||||||||||||||||||||||||||||
Noninterest expense |
$ |
122,214 |
$ |
122,878 |
$ |
119,850 |
$ |
119,538 |
$ |
119,815 |
$ |
364,942 |
$ |
354,082 |
||||||||||||||
Net interest income |
$ |
260,679 |
$ |
248,471 |
$ |
239,944 |
$ |
244,760 |
$ |
248,567 |
$ |
749,094 |
$ |
748,548 |
||||||||||||||
Noninterest income |
34,688 |
37,594 |
35,122 |
35,757 |
34,645 |
107,404 |
104,209 |
|||||||||||||||||||||
Less: net gain (loss) on sale or write down of assets |
50 |
1,108 |
689 |
1,165 |
255 |
1,847 |
(68) |
|||||||||||||||||||||
Noninterest income excluding net gains and losses on the |
34,638 |
36,486 |
34,433 |
34,592 |
34,390 |
105,557 |
104,277 |
|||||||||||||||||||||
Total income excluding net gains and losses on the |
$ |
295,317 |
$ |
284,957 |
$ |
274,377 |
$ |
279,352 |
$ |
282,957 |
$ |
854,651 |
$ |
852,825 |
||||||||||||||
Efficiency ratio, excluding net gains and losses on the sale |
41.38 |
% |
43.12 |
% |
43.68 |
% |
42.79 |
% |
42.34 |
% |
42.70 |
% |
41.52 |
% |
||||||||||||||
SOURCE Prosperity Bancshares, Inc.
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