- Board approved increase in dividend of 3.57% to $0.58 for fourth quarter 2024, representing the 21st consecutive annual increase, with a compound annual growth rate of 11.1%
- Net income of $127.3 million and diluted earnings per share of $1.34 for third quarter 2024
- Net interest margin increased 23 basis points to 2.95% compared to third quarter 2023
- Deposits increased $154.5 million and loans increased $60.0 million during third quarter 2024
- Noninterest-bearing deposits of $9.8 billion, representing 34.9% of total deposits
- Allowance for credit losses on loans and on off-balance sheet credit exposure of $392.0 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.68%(1)
- Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets
- Return (annualized) on third quarter average assets of 1.28%, average common equity of 6.93% and average tangible common equity of 13.50%(1)
HOUSTON, Oct. 23, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $127.3 million for the quarter ended September 30, 2024 compared with $112.2 million for the same period in 2023. Net income per diluted common share was $1.34 for the quarter ended September 30, 2024 compared with $1.20 for the same period in 2023. The annualized return on third quarter average assets was 1.28%. Additionally, deposits increased $154.5 million and loans increased $60.0 million during the third quarter of 2024. Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets. On April 1, 2024, Lone Star State Bancshares, Inc. ("Lone Star") merged with Prosperity Bancshares and Lone Star State Bank of West Texas ("Lone Star Bank") merged with Prosperity Bank (collectively, the "LSSB Merger").
"I am pleased to announce that the Board of Directors approved increasing the fourth quarter 2024 dividend to $0.58 per share from $0.56 per share that was paid in the prior four quarters. The increase reflects the continued confidence the Board has in our company and our markets. The compound annual growth rate in dividends declared from 2003 to 2024 was 11.1%," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.
"We continue to share our success with our shareholders through the payment of dividends and opportunistic stock repurchases, while also continuing to grow our capital. Our tangible capital increased $218 million from September 30, 2023, to September 30, 2024. This is the amount Prosperity retained after paying $212 million in dividends and repurchasing $75 million of our common stock during this period, reflecting Prosperity's stable earnings. Further, Prosperity's tangible book value per share has a compound annual growth rate of 11% for the last 21 years, or since 2003," added Zalman.
"The $2.4 trillion Texas economy is the eighth-largest among the nations of the world, larger than Russia, Canada and Italy, among others. An estimated 1,000 to 1,300 people move to Texas every day. Based on US Census Bureau data, in 2023, 473,453 people moved to Texas, which equates to approximately 40,000 per month or 1,300 per day," added Zalman.
"The Texas and Oklahoma economies continue to benefit from companies relocating from states with higher taxes and more regulation. This, combined with people moving to the states, requires additional housing and infrastructure, a driver for loans and increased business opportunities. We believe our bank is located in two of the best states we can be for future growth and continued prosperity," concluded Zalman.
Results of Operations for the Three Months Ended September 30, 2024
For the three months ended September 30, 2024, net income was $127.3 million (2) or $1.34 per diluted common share compared with $112.2 million (3) or $1.20 per diluted common share for the same period in 2023, an increase of $15.1 million or 13.4%. The change was primarily due to an increase in net interest income, partially offset by an increase in noninterest expense related to three months of Lone Star Bank operations. For the three months ended September 30, 2024, net income was $127.3 million (2) or $1.34 per diluted common share compared with $111.6 million (4) or $1.17 per diluted common share for the three months ended June 30, 2024, an increase of $15.7 million or 14.0%. The change was primarily due to higher net interest income, lower merger related provision for credit losses and lower merger related expenses, partially offset by lower net gain on sale or write-up of securities. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2024 were 1.28%, 6.93% and 13.50%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 46.87%(1) for the three months ended September 30, 2024.
Net interest income before provision for credit losses was $261.7 million for the three months ended September 30, 2024 compared with $239.5 million for the same period in 2023, an increase of $22.2 million or 9.3%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. Net interest income before provision for credit losses increased $2.9 million or 1.1% to $261.7 million for the three months ended September 30, 2024 compared with $258.8 million for the three months ended June 30, 2024.
The net interest margin on a tax equivalent basis was 2.95% for the three months ended September 30, 2024 compared with 2.72% for the same period in 2023 and 2.94% for the three months ended June 30, 2024. The year-to-year change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.
Noninterest income was $41.1 million for the three months ended September 30, 2024 compared $38.7 million for the same period in 2023, an increase of $2.4 million or 6.1%. The change was primarily due to an increase in the net gain (loss) on sale or write-down of assets, partially offset by a decrease in other noninterest income. Noninterest income was $41.1 million for the three months ended September 30, 2024 compared with $46.0 million for the three months ended June 30, 2024, a decrease of $4.9 million or 10.7%. The change was primarily due to lower net gain on sale or write-up of securities, partially offset by an increase in net gain (loss) on sale or write-down of assets.
Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $135.7 million for the same period in 2023, an increase of $4.7 million or 3.5%, primarily due to an increase in salaries and benefits, an increase in credit and debit card, data processing and software amortization, and additional expenses related to three months of Lone Star Bank operations, partially offset by a decrease in merger related expenses. Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $152.8 million for the three months ended June 30, 2024, a decrease of $12.5 million or 8.2%, primarily due to a decrease in FDIC special assessment, a decrease in merger related expenses and a decrease in other noninterest expense.
Results of Operations for the Nine Months Ended September 30, 2024
For the nine months ended September 30, 2024, net income was $349.3 million (5) or $3.68 per diluted common share compared with $323.8 million (6) or $3.50 per diluted common share for the same period in 2023. Net income and net income per diluted common share for the nine months ended September 30, 2024 was impacted by an increase in net interest income, a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.2 million, lower merger related provision for credit losses and a decrease in merger related expenses, partially offset by a FDIC special assessment of $3.6 million and an increase in noninterest expenses related to six months of Lone Star Bank operations. Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2024 were 1.16%, 6.40% and 12.43%(1), respectively.
Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $353.9 million (1) or $3.74 (1) per diluted common share for the nine months ended September 30, 2024 and annualized returns on average assets, average common equity and average tangible common equity for the same period were 1.18%(1), 6.49%(1) and 12.59%(1), respectively. Prosperity's efficiency ratio was 49.25%(1) for the nine months ended September 30, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 48.33%(1).
Net interest income before provision for credit losses for the nine months ended September 30, 2024 was $758.7 million compared with $719.5 million for the same period in 2023, an increase of $39.3 million or 5.5%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.
The net interest margin on a tax equivalent basis for the nine months ended September 30, 2024 was 2.86% compared with 2.79% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. The increases in the average balances on loans and deposits were primarily due to the LSSB Merger.
Noninterest income was $126.0 million for the nine months ended September 30, 2024 compared with $116.7 million for the same period in 2023, an increase of $9.3 million or 7.9%, primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales, and an increase in trust income, partially offset by a decrease in other noninterest income.
Noninterest expense was $429.0 million for the nine months ended September 30, 2024 compared with $404.5 million for the same period in 2023, an increase of $24.5 million or 6.1%, primarily due to a FDIC special assessment of $3.6 million, an increase in salaries and benefits and additional expenses related to six months of Lone Star Bank operations and nine months of FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") operations, partially offset by a decrease in merger related expenses.
Balance Sheet Information
At September 30, 2024, Prosperity had $40.115 billion in total assets, an increase of $819.6 million or 2.1%, compared with $39.296 billion at September 30, 2023. Linked quarter total assets increased by $353.0 million or 0.9% compared with $39.762 billion at June 30, 2024.
Loans were $22.381 billion at September 30, 2024, an increase of $948.1 million or 4.4%, compared with $21.433 billion at September 30, 2023. Linked quarter loans increased $60.0 million or 0.3% (1.1% annualized) from $22.321 billion at June 30, 2024. Loans, excluding Warehouse Purchase Program loans, were $21.152 billion at September 30, 2024 compared with $20.520 billion at September 30, 2023, an increase of $631.8 million or 3.1%, and compared with $21.239 billion at June 30, 2024, a decrease of $87.3 million.
Deposits were $28.088 billion at September 30, 2024, an increase of $774.8 million or 2.8%, compared with $27.313 billion at September 30, 2023. Linked quarter deposits increased $154.5 million or 0.6% (2.2% annualized) from $27.933 billion at June 30, 2024.
The table below provides detail on the impact of loans acquired and deposits assumed in the LSSB Merger:
Balance Sheet Data (at period end) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Loans acquired (including new production since acquisition | ||||||||||||||||||||
Lone Star Bank | $ | 1,109,783 | $ | 1,084,559 | $ | - | $ | - | $ | - | ||||||||||
Prosperity Bank | ||||||||||||||||||||
Warehouse Purchase Program loans | 1,228,706 | 1,081,403 | 864,924 | 822,245 | 912,327 | |||||||||||||||
All other loans | 20,042,363 | 20,154,853 | 20,400,323 | 20,358,293 | 20,520,386 | |||||||||||||||
Total loans | $ | 22,380,852 | $ | 22,320,815 | $ | 21,265,247 | $ | 21,180,538 | $ | 21,432,713 | ||||||||||
Deposits assumed (including new deposits since acquisition | ||||||||||||||||||||
Lone Star Bank | $ | 1,136,216 | $ | 1,187,821 | $ | - | $ | - | $ | - | ||||||||||
All other deposits | 26,951,395 | 26,745,265 | 27,175,518 | 27,179,809 | 27,312,800 | |||||||||||||||
Total deposits | $ | 28,087,611 | $ | 27,933,086 | $ | 27,175,518 | $ | 27,179,809 | $ | 27,312,800 | ||||||||||
As reflected in the table above, loan and deposit growth was impacted by the LSSB Merger.
Excluding loans acquired in the LSSB Merger and new production at the acquired banking centers since April 1, 2024, loans at September 30, 2024 decreased $161.6 million compared with September 30, 2023 and increased $34.8 million compared with June 30, 2024.
Excluding deposits assumed in the LSSB Merger and new deposits generated at the acquired banking centers since April 1, 2024, deposits at September 30, 2024 decreased by $361.4 million compared with September 30, 2023 and increased by $206.1 million compared with June 30, 2024.
Asset Quality
Nonperforming assets totaled $89.9 million or 0.25% of quarterly average interest-earning assets at September 30, 2024 compared with $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 and $89.6 million or 0.25% of quarterly average interest-earning assets at June 30, 2024, with a significant portion of the balance for each period attributable to acquired loans.
The allowance for credit losses on loans and off-balance sheet credit exposures was $392.0 million at September 30, 2024 compared with $388.0 million at September 30, 2023 and $397.5 million at June 30, 2024. There was no provision for credit losses for the three months ended September 30, 2024 and 2023, and a provision for credit losses of $9.1 million and $18.5 million for the nine months ended September 30, 2024 and 2023, respectively. As a result of the loans acquired in the LSSB Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures.
The allowance for credit losses on loans was $354.4 million or 1.58% of total loans at September 30, 2024 compared with $351.5 million or 1.64% of total loans at September 30, 2023 and $359.9 million or 1.61% of total loans at June 30, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.68%(1) at September 30, 2024 compared with 1.71%(1) at September 30, 2023 and 1.69%(1) at June 30, 2024.
Net charge-offs were $5.5 million for the three months ended September 30, 2024 compared with net charge-offs of $3.4 million for the three months ended September 30, 2023 and net charge-offs of $4.4 million for the three months ended June 30, 2024. Net charge-offs for the third quarter of 2024 included $1.4 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Further, $5.0 million of reserves on resolved PCD loans without any related charge-offs was released to the general reserve.
Net charge-offs were $12.0 million for the nine months ended September 30, 2024 compared with $18.9 million for the nine months ended September 30, 2023. Net charge-offs for the nine months ended September 30, 2024 included $3.3 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the LSSB Merger. Further, $13.9 million of reserves on resolved PCD loans was released to the general reserve.
Visa Class B-1 Stock Exchange
During the second quarter 2024, Prosperity tendered all of its shares of Visa, Inc. ("Visa") Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock, pursuant to the terms and subject to the conditions of the public offering of Visa to exchange its Class B-1 common stock for a combination of shares of its Class B-2 common stock and Class C common stock, which expired on May 3, 2024. Prosperity recorded an unrealized gain of $20.6 million during the second quarter 2024 based on the conversion privilege of the Class C common stock and the closing price of Visa Class A common stock. In the exchange, Prosperity received 48,492 shares of Class B-2 stock, recorded at zero cost basis, and 19,245 shares of Class C common stock and has subsequently sold all shares of Class C stock.
Dividend
Prosperity Bancshares declared a fourth quarter 2024 cash dividend of $0.58 per share to be paid on January 2, 2025, to all shareholders of record as of December 13, 2024, an increase of $0.02 per share, or 3.57%, from the prior quarter.
Stock Repurchase Program
On January 16, 2024, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.7 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 16, 2025, at the discretion of management. Under its 2024 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended September 30, 2024, and approximately 1.2 million shares of its common stock at an average weighted price of $60.35 per share during the nine months ended September 30, 2024.
Merger of Lone Star State Bancshares, Inc.
On April 1, 2024, Prosperity completed the merger of Lone Star and its wholly owned subsidiary Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 full-service 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.
Pursuant to the terms of the definitive agreement, Prosperity issued 2,376,182 shares of Prosperity common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star in the second quarter of 2024. This resulted in goodwill of $108.0 million as of September 30, 2024, which does not include all the subsequent fair value adjustments that have not yet been finalized.
Conference Call
Prosperity's management team will host a conference call on Wednesday, October 23, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2024 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 7527596.
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 Investor Relations page by selecting "Presentations, Webcasts & Calls" from the menu and following the instructions.
Non-GAAP Financial Measures
Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on the sale or write-up of securities, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses, and FDIC special assessment. 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, 2024, Prosperity Bancshares, Inc.® is a $40.115 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 287 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; 31 in the Central Texas area including Austin and San Antonio; 43 in the West Texas area including Lubbock, Midland - Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area and 5 in the West Texas area currently doing business as Lone Star Bank.
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 credit 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 credit losses, changes in deposits, borrowings and the investment securities portfolio, 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 any proposed transactions, and statements about the assumptions underlying any such statement. 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. These risks and uncertainties include, but are not limited to, whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and the effect, impact, potential duration or other implications of weather and climate-related events. 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, 2023, 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.
(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 $4.3 million, net of tax, primarily comprised of loan discount accretion of $4.8 million for the three months ended September 30, 2024. |
(3) | Includes purchase accounting adjustments of $2.5 million, net of tax, primarily comprised of loan discount accretion of $2.3 million, and merger related expenses of $1.1 million for the three months ended September 30, 2023. |
(4) | Includes purchase accounting adjustments of $6.1 million, net of tax, primarily comprised of loan discount accretion of $7.2 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $10.7 million for the three months ended June 30, 2024. |
(5) | Includes purchase accounting adjustments of $12.4 million, net of tax, primarily comprised of loan discount accretion of $13.9 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.2 million for the nine months ended September 30, 2024. |
(6) | Includes purchase accounting adjustments of $5.6 million, net of tax, primarily comprised of loan discount accretion of $5.6 million, merger related provision for credit losses of $18.5 million and merger related expenses of $14.9 million for the nine months ended September 30, 2023. |
Bryan/College Station Area | Grapevine | Teague | Rosenberg | Midland | ||||
Bryan | Grapevine Main | Tyler-Beckham | Shadow Creek | North | ||||
Bryan-29th Street | Kiest | Tyler-South Broadway | Spring | Wadley | ||||
Bryan-East | Lake Highlands | Tyler-University | Tomball | Wall Street | ||||
Bryan-North | McKinney | Winnsboro | Waller | West | ||||
Caldwell | McKinney Eldorado | West Columbia | ||||||
College Station | McKinney Redbud | Houston Area | Wharton | Odessa | ||||
Hearne | North Carrolton | Houston | Winnie | Grant | ||||
Huntsville | Park Cities | Aldine | Wirt | Kermit Highway | ||||
Madisonville | Plano | Alief | Parkway | |||||
Navasota | Plano-West | Bellaire | South Texas Area - | |||||
New Waverly | Preston Forest | Beltway | Corpus Christi | Wichita Falls | ||||
Rock Prairie | Preston Parker | Clear Lake | Calallen | Cattlemans | ||||
Southwest Parkway | Preston Royal | Copperfield | Carmel | Kell | ||||
Tower Point | Red Oak | Cypress | Northwest | |||||
Wellborn Road | Richardson | Downtown | Saratoga | Other West Texas Area | ||||
Richardson-West | Eastex | Timbergate | Locations | |||||
Central Texas Area | Rosewood Court | Fairfield | Water Street | Big Spring | ||||
Austin | The Colony | First Colony | Brownfield | |||||
Cedar Park | Tollroad | Fry Road | Victoria | Brownwood | ||||
Congress | Trinity Mills | Gessner | Victoria Main | Burkburnett | ||||
Lakeway | Turtle Creek | Gladebrook | Victoria-Navarro | Byers | ||||
Liberty Hill | West 15th Plano | Grand Parkway | Victoria-North | Cisco | ||||
Northland | West Allen | Heights | Victoria Salem | Comanche | ||||
Oak Hill | Westmoreland | Highway 6 West | Early | |||||
Research Blvd | Wylie | Little York | Other South Texas Area | Floydada | ||||
Westlake | Medical Center | Locations | Gorman | |||||
Fort Worth | Memorial Drive | Alice | Henrietta | |||||
Other Central Texas Area | Haltom City | Northside | Aransas Pass | Levelland | ||||
Locations | Hulen | Pasadena | Beeville | Littlefield | ||||
Bastrop | Keller | Pecan Grove | Colony Creek | Merkel | ||||
Canyon Lake | Museum Place | Pin Oak | Cuero | Plainview | ||||
Dime Box | Renaissance Square | River Oaks | Edna | San Angelo | ||||
Dripping Springs | Roanoke | Sugar Land | Goliad | Slaton | ||||
Elgin | Stockyards | SW Medical Center | Gonzales | Snyder | ||||
Flatonia | Tanglewood | Hallettsville | ||||||
Fredericksburg | Other Dallas/Fort Worth Area | The Plaza | Kingsville | Lone Star West Texas Area | ||||
Georgetown | Locations | Uptown | Mathis | Big Spring | ||||
Gruene | Arlington | Waugh Drive | Padre Island | Brownfield | ||||
Horseshoe Bay | Azle | Westheimer | Palacios | Lubbock | ||||
Kingsland | Ennis | West University | Port Lavaca | Midland | ||||
La Grange | Gainesville | Woodcreek | Portland | Odessa | ||||
Lexington | Glen Rose | Rockport | ||||||
Marble Falls | Granbury | Katy | Sinton | Oklahoma | ||||
New Braunfels | Grand Prairie | Cinco Ranch | Taft | Central Oklahoma Area | ||||
Pleasanton | Jacksboro | Katy-Spring Green | Yoakum | Oklahoma City | ||||
Round Rock | Mesquite | Yorktown | 23rd Street | |||||
San Antonio | Muenster | The Woodlands | Expressway | |||||
Schulenburg | Runaway Bay | The Woodlands-College Park | West Texas Area | I-240 | ||||
Seguin | Sanger | The Woodlands-I-45 | Abilene | Memorial | ||||
Smithville | Waxahachie | The Woodlands-Research Forest | Antilley Road | |||||
Thorndale | Weatherford | Barrow Street | Other Central Oklahoma Area | |||||
Weimar | Other Houston Area | Cypress Street | Locations | |||||
East Texas Area | Locations | Judge Ely | Edmond | |||||
Dallas/Fort Worth Area | Athens | Angleton | Mockingbird | Norman | ||||
Dallas | Blooming Grove | Bay City | ||||||
14th Street Plano | Canton | Beaumont | Amarillo | Tulsa Area | ||||
Abrams Centre | Carthage | Cleveland | Hillside | Tulsa | ||||
Addison | Corsicana | East Bernard | Soncy | Garnett | ||||
Allen | Crockett | El Campo | Harvard | |||||
Balch Springs | Eustace | Dayton | Lubbock | Memorial | ||||
Camp Wisdom | Gilmer | Galveston | 4th Street | Sheridan | ||||
Carrollton | Grapeland | Groves | 66th Street | S. Harvard | ||||
Cedar Hill | Gun Barrel City | Hempstead | 82nd Street | Utica Tower | ||||
Coppell | Jacksonville | Hitchcock | 86th Street | Yale | ||||
East Plano | Kerens | Liberty | 98th Street | |||||
Euless | Longview | Magnolia | Avenue Q | Other Tulsa Area Locations | ||||
Frisco | Mount Vernon | Magnolia Parkway | Milwaukee | Owasso | ||||
Frisco Warren | Palestine | Mont Belvieu | North University | |||||
Frisco-West | Rusk | Nederland | Texas Tech Student Union | |||||
Garland | Seven Points | Needville | ||||||
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (In thousands) | ||||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Loans held for sale | $ | 6,113 | $ | 9,951 | $ | 6,380 | $ | 5,734 | $ | 10,187 | ||||||||||
Loans held for investment | 21,146,033 | 21,229,461 | 20,393,943 | 20,352,559 | 20,510,199 | |||||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,228,706 | 1,081,403 | 864,924 | 822,245 | 912,327 | |||||||||||||||
Total loans | 22,380,852 | 22,320,815 | 21,265,247 | 21,180,538 | 21,432,713 | |||||||||||||||
Investment securities(A) | 11,300,756 | 11,702,139 | 12,301,138 | 12,803,896 | 13,192,742 | |||||||||||||||
Federal funds sold | 208 | 234 | 250 | 260 | 234 | |||||||||||||||
Allowance for credit losses on loans | (354,397) | (359,852) | (330,219) | (332,362) | (351,495) | |||||||||||||||
Cash and due from banks | 2,209,863 | 1,507,604 | 1,086,444 | 458,153 | 512,239 | |||||||||||||||
Goodwill | 3,504,388 | 3,504,107 | 3,396,402 | 3,396,086 | 3,396,459 | |||||||||||||||
Core deposit intangibles, net | 70,178 | 74,324 | 60,757 | 63,994 | 67,553 | |||||||||||||||
Other real estate owned | 5,757 | 4,960 | 2,204 | 1,708 | 9,320 | |||||||||||||||
Fixed assets, net | 373,812 | 377,394 | 372,333 | 369,992 | 370,237 | |||||||||||||||
Other assets | 623,903 | 630,569 | 601,964 | 605,612 | 665,682 | |||||||||||||||
Total assets | $ | 40,115,320 | $ | 39,762,294 | $ | 38,756,520 | $ | 38,547,877 | $ | 39,295,684 | ||||||||||
Noninterest-bearing deposits | $ | 9,811,361 | $ | 9,706,505 | $ | 9,526,535 | $ | 9,776,572 | $ | 10,281,893 | ||||||||||
Interest-bearing deposits | 18,276,250 | 18,226,581 | 17,648,983 | 17,403,237 | 17,030,907 | |||||||||||||||
Total deposits | 28,087,611 | 27,933,086 | 27,175,518 | 27,179,809 | 27,312,800 | |||||||||||||||
Other borrowings | 3,900,000 | 3,900,000 | 3,900,000 | 3,725,000 | 4,250,000 | |||||||||||||||
Securities sold under repurchase agreements | 228,896 | 233,689 | 261,671 | 309,277 | 300,714 | |||||||||||||||
Subordinated debentures | - | - | - | - | - | |||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 37,646 | 37,646 | 36,503 | 36,503 | 36,503 | |||||||||||||||
Other liabilities | 499,918 | 374,429 | 278,284 | 217,958 | 362,990 | |||||||||||||||
Total liabilities | 32,754,071 | 32,478,850 | 31,651,976 | 31,468,547 | 32,263,007 | |||||||||||||||
Shareholders' equity(B) | 7,361,249 | 7,283,444 | 7,104,544 | 7,079,330 | 7,032,677 | |||||||||||||||
Total liabilities and equity | $ | 40,115,320 | $ | 39,762,294 | $ | 38,756,520 | $ | 38,547,877 | $ | 39,295,684 | ||||||||||
(A) | Includes $(1,070), $(2,007), $(2,954), $(1,770) and $(2,442) in unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively. |
(B) | Includes $(845), $(1,586), $(2,333), $(1,398) and $(1,930) in after-tax unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, 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 | $ | 337,451 | $ | 336,428 | $ | 306,228 | $ | 306,562 | $ | 308,678 | $ | 980,107 | $ | 842,434 | ||||||||||||||
Securities(C) | 59,617 | 62,428 | 66,421 | 68,077 | 69,987 | 188,466 | 215,225 | |||||||||||||||||||||
Federal funds sold and other earning assets | 20,835 | 14,095 | 9,265 | 1,793 | 1,689 | 44,195 | 10,452 | |||||||||||||||||||||
Total interest income | 417,903 | 412,951 | 381,914 | 376,432 | 380,354 | 1,212,768 | 1,068,111 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Deposits | 107,758 | 106,124 | 92,692 | 84,969 | 76,069 | 306,574 | 187,376 | |||||||||||||||||||||
Other borrowings | 46,792 | 46,282 | 48,946 | 52,386 | 62,190 | 142,020 | 153,937 | |||||||||||||||||||||
Securities sold under repurchase agreements | 1,662 | 1,759 | 2,032 | 2,094 | 2,533 | 5,453 | 7,310 | |||||||||||||||||||||
Subordinated debentures | - | - | - | - | 38 | - | 38 | |||||||||||||||||||||
Total interest expense | 156,212 | 154,165 | 143,670 | 139,449 | 140,830 | 454,047 | 348,661 | |||||||||||||||||||||
Net interest income | 261,691 | 258,786 | 238,244 | 236,983 | 239,524 | 758,721 | 719,450 | |||||||||||||||||||||
Provision for credit losses | - | 9,066 | - | - | - | 9,066 | 18,540 | |||||||||||||||||||||
Net interest income after provision for credit losses | 261,691 | 249,720 | 238,244 | 236,983 | 239,524 | 749,655 | 700,910 | |||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Nonsufficient funds (NSF) fees | 9,016 | 8,153 | 8,288 | 8,365 | 8,719 | 25,457 | 25,326 | |||||||||||||||||||||
Credit card, debit card and ATM card income | 9,620 | 9,384 | 8,861 | 9,314 | 9,285 | 27,865 | 27,157 | |||||||||||||||||||||
Service charges on deposit accounts | 6,664 | 6,436 | 6,406 | 6,316 | 6,262 | 19,506 | 18,266 | |||||||||||||||||||||
Trust income | 3,479 | 3,601 | 4,156 | 3,360 | 3,326 | 11,236 | 9,909 | |||||||||||||||||||||
Mortgage income | 962 | 745 | 610 | 542 | 857 | 2,317 | 1,756 | |||||||||||||||||||||
Brokerage income | 1,258 | 1,186 | 1,235 | 1,059 | 1,067 | 3,679 | 3,216 | |||||||||||||||||||||
Bank owned life insurance income | 2,028 | 1,885 | 2,047 | 1,882 | 1,864 | 5,960 | 4,771 | |||||||||||||||||||||
Net gain (loss) on sale or write-down of assets | 3,178 | (903) | (35) | (84) | (45) | 2,240 | 2,070 | |||||||||||||||||||||
Net gain on sale or write-up of securities | 224 | 10,723 | 298 | - | - | 11,245 | - | |||||||||||||||||||||
Other noninterest income | 4,670 | 4,793 | 7,004 | 5,814 | 7,408 | 16,467 | 24,226 | |||||||||||||||||||||
Total noninterest income | 41,099 | 46,003 | 38,870 | 36,568 | 38,743 | 125,972 | 116,697 | |||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and benefits | 88,367 | 89,584 | 85,771 | 80,486 | 85,423 | 263,722 | 247,944 | |||||||||||||||||||||
Net occupancy and equipment | 9,291 | 8,915 | 8,623 | 9,093 | 9,464 | 26,829 | 26,424 | |||||||||||||||||||||
Credit and debit card, data processing and software amortization | 11,985 | 11,998 | 10,975 | 10,741 | 10,919 | 34,958 | 30,829 | |||||||||||||||||||||
Regulatory assessments and FDIC insurance | 5,726 | 10,317 | 5,538 | 24,940 | 5,155 | 21,581 | 15,225 | |||||||||||||||||||||
Core deposit intangibles amortization | 4,146 | 4,156 | 3,237 | 3,559 | 3,576 | 11,539 | 9,117 | |||||||||||||||||||||
Depreciation | 4,741 | 4,836 | 4,686 | 4,607 | 4,585 | 14,263 | 13,676 | |||||||||||||||||||||
Communications | 3,360 | 3,485 | 3,402 | 3,572 | 3,686 | 10,247 | 10,841 | |||||||||||||||||||||
Other real estate expense | 12 | 69 | 187 | 165 | 153 | 268 | (253) | |||||||||||||||||||||
Net (gain) loss on sale or write-down of | (97) | 31 | (138) | 34 | (734) | (204) | (780) | |||||||||||||||||||||
Merger related expenses | 63 | 4,381 | - | 278 | 1,104 | 4,444 | 14,855 | |||||||||||||||||||||
Other noninterest expense | 12,744 | 15,070 | 13,567 | 14,696 | 12,326 | 41,381 | 36,649 | |||||||||||||||||||||
Total noninterest expense | 140,338 | 152,842 | 135,848 | 152,171 | 135,657 | 429,028 | 404,527 | |||||||||||||||||||||
Income before income taxes | 162,452 | 142,881 | 141,266 | 121,380 | 142,610 | 446,599 | 413,080 | |||||||||||||||||||||
Provision for income taxes | 35,170 | 31,279 | 30,840 | 25,904 | 30,402 | 97,289 | 89,240 | |||||||||||||||||||||
Net income available to common shareholders | $ | 127,282 | $ | 111,602 | $ | 110,426 | $ | 95,476 | $ | 112,208 | $ | 349,310 | $ | 323,840 | ||||||||||||||
(C) | Interest income on securities was reduced by net premium amortization of $5,574, $5,831, $5,822, $6,428 and $6,897 for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and $17,227 and $21,412 for the nine months ended September 30, 2024 and 2023, 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) | $ | 127,282 | $ | 111,602 | $ | 110,426 | $ | 95,476 | $ | 112,208 | $ | 349,310 | $ | 323,840 | ||||||||||||||
Basic earnings per share | $ | 1.34 | $ | 1.17 | $ | 1.18 | $ | 1.02 | $ | 1.20 | $ | 3.68 | $ | 3.50 | ||||||||||||||
Diluted earnings per share | $ | 1.34 | $ | 1.17 | $ | 1.18 | $ | 1.02 | $ | 1.20 | $ | 3.68 | $ | 3.50 | ||||||||||||||
Return on average assets (F)(J) | 1.28 | % | 1.12 | % | 1.13 | % | 0.98 | % | 1.13 | % | 1.16 | % | 1.11 | % | ||||||||||||||
Return on average common equity (F)(J) | 6.93 | % | 6.10 | % | 6.20 | % | 5.39 | % | 6.39 | % | 6.40 | % | 6.25 | % | ||||||||||||||
Return on average tangible common equity (F) (G)(J) | 13.50 | % | 11.81 | % | 12.06 | % | 10.54 | % | 12.58 | % | 12.43 | % | 12.17 | % | ||||||||||||||
Tax equivalent net interest margin (D) (E) (H) | 2.95 | % | 2.94 | % | 2.79 | % | 2.75 | % | 2.72 | % | 2.86 | % | 2.79 | % | ||||||||||||||
Efficiency ratio (G) (I)(K) | 46.87 | % | 51.82 | % | 49.07 | % | 55.61 | % | 48.74 | % | 49.25 | % | 48.50 | % | ||||||||||||||
Liquidity and Capital Ratios | ||||||||||||||||||||||||||||
Equity to assets | 18.35 | % | 18.32 | % | 18.33 | % | 18.37 | % | 17.90 | % | 18.35 | % | 17.90 | % | ||||||||||||||
Common equity tier 1 capital | 15.84 | % | 15.42 | % | 15.75 | % | 15.54 | % | 14.98 | % | 15.84 | % | 14.98 | % | ||||||||||||||
Tier 1 risk-based capital | 15.84 | % | 15.42 | % | 15.75 | % | 15.54 | % | 14.98 | % | 15.84 | % | 14.98 | % | ||||||||||||||
Total risk-based capital | 17.10 | % | 16.67 | % | 17.00 | % | 16.56 | % | 16.05 | % | 17.10 | % | 16.05 | % | ||||||||||||||
Tier 1 leverage capital | 10.52 | % | 10.29 | % | 10.37 | % | 10.39 | % | 10.03 | % | 10.52 | % | 10.03 | % | ||||||||||||||
Period end tangible equity to period end | 10.36 | % | 10.24 | % | 10.33 | % | 10.31 | % | 9.96 | % | 10.36 | % | 9.96 | % | ||||||||||||||
Other Data | ||||||||||||||||||||||||||||
Weighted-average shares used in computing | ||||||||||||||||||||||||||||
Basic | 95,261 | 95,765 | 93,706 | 93,715 | 93,720 | 94,912 | 92,628 | |||||||||||||||||||||
Diluted | 95,261 | 95,765 | 93,706 | 93,715 | 93,720 | 94,912 | 92,628 | |||||||||||||||||||||
Period end shares outstanding | 95,261 | 95,262 | 93,525 | 93,722 | 93,717 | 95,261 | 93,717 | |||||||||||||||||||||
Cash dividends paid per common share | $ | 0.56 | $ | 0.56 | $ | 0.56 | $ | 0.56 | $ | 0.55 | $ | 1.68 | $ | 1.65 | ||||||||||||||
Book value per common share | $ | 77.27 | $ | 76.46 | $ | 75.96 | $ | 75.54 | $ | 75.04 | $ | 77.27 | $ | 75.04 | ||||||||||||||
Tangible book value per common share (G) | $ | 39.75 | $ | 38.89 | $ | 39.00 | $ | 38.62 | $ | 38.08 | $ | 39.75 | $ | 38.08 | ||||||||||||||
Common Stock Market Price | ||||||||||||||||||||||||||||
High | $ | 74.87 | $ | 66.18 | $ | 68.88 | $ | 68.79 | $ | 63.65 | $ | 74.87 | $ | 78.76 | ||||||||||||||
Low | $ | 58.66 | $ | 57.16 | $ | 60.08 | $ | 49.60 | $ | 52.62 | $ | 57.16 | $ | 52.62 | ||||||||||||||
Period end closing price | $ | 72.07 | $ | 61.14 | $ | 65.78 | $ | 67.73 | $ | 54.58 | $ | 72.07 | $ | 54.58 | ||||||||||||||
Employees - FTE (excluding overtime) | 3,896 | 3,902 | 3,901 | 3,850 | 3,853 | 3,896 | 3,853 | |||||||||||||||||||||
Number of banking centers | 287 | 288 | 283 | 285 | 285 | 287 | 285 | |||||||||||||||||||||
(D) Includes purchase accounting adjustments for the periods presented as follows: |
Three Months Ended | Year-to-Date | ||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Sep 30, 2024 | Sep 30, 2023 | |||||||
Loan discount accretion | |||||||||||||
Non-PCD | $3,616 | $4,797 | $1,312 | $1,543 | $1,508 | $9,725 | $3,282 | ||||||
PCD | $1,212 | $2,394 | $548 | $937 | $767 | $4,154 | $2,284 | ||||||
Securities net accretion | $555 | $564 | $561 | $598 | $626 | $1,680 | $1,050 | ||||||
Time deposits amortization | $(40) | $4 | $(97) | $(150) | $(210) | $(133) | $(450) | ||||||
(E) | Using effective tax rate of 21.6%, 21.9%, 21.8%, 21.3% and 21.3% for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and 21.8% and 21.6% for the nine months ended September 30, 2024 and 2023, respectively. |
(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 366-day or 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, write-down or write-up of assets and securities. Additionally, taxes are not part of this calculation. |
(J) | For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax 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. |
(K) | For calculations of the efficiency ratio excluding merger related expenses and FDIC special assessment 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. ® Financial Highlights (Unaudited) (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
YIELD ANALYSIS | Three Months Ended | ||||||||||||||||||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | |||||||||||||||||||||||||||||||||
Average | Interest | Average | (L) | Average | Interest | Average | (L) | Average | Interest | Average | (L) | ||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Loans held for sale | $ | 7,913 | $ | 137 | 6.89 % | $ | 8,446 | $ | 149 | 7.10 % | $ | 9,832 | $ | 162 | 6.54 % | ||||||||||||||||||||
Loans held for investment | 21,107,139 | 316,939 | 5.97 % | 21,328,824 | 319,361 | 6.02 % | 20,496,075 | 290,566 | 5.62 % | ||||||||||||||||||||||||||
Loans held for investment - Warehouse Purchase Program | 1,114,681 | 20,375 | 7.27 % | 917,026 | 16,918 | 7.42 % | 972,936 | 17,950 | 7.32 % | ||||||||||||||||||||||||||
Total loans | 22,229,733 | 337,451 | 6.04 % | 22,254,296 | 336,428 | 6.08 % | 21,478,843 | 308,678 | 5.70 % | ||||||||||||||||||||||||||
Investment securities | 11,612,193 | 59,617 | 2.04 % | (M) | 12,179,074 | 62,428 | 2.06 % | (M) | 13,512,137 | 69,987 | 2.05 % | (M) | |||||||||||||||||||||||
Federal funds sold and other earning assets | 1,531,788 | 20,835 | 5.41 % | 1,026,251 | 14,095 | 5.52 % | 125,690 | 1,689 | 5.33 % | ||||||||||||||||||||||||||
Total interest-earning assets | 35,373,714 | 417,903 | 4.70 % | 35,459,621 | 412,951 | 4.68 % | 35,116,670 | 380,354 | 4.30 % | ||||||||||||||||||||||||||
Allowance for credit losses on loans | (358,237) | (332,904) | (343,967) | ||||||||||||||||||||||||||||||||
Noninterest-earning assets | 4,873,725 | 4,822,131 | 4,829,336 | ||||||||||||||||||||||||||||||||
Total assets | $ | 39,889,202 | $ | 39,948,848 | $ | 39,602,039 | |||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 4,774,975 | $ | 9,251 | 0.77 % | $ | 4,839,194 | $ | 9,133 | 0.76 % | $ | 4,768,485 | $ | 5,182 | 0.43 % | ||||||||||||||||||||
Savings and money market deposits | 8,908,315 | 49,824 | 2.23 % | 9,084,051 | 50,252 | 2.22 % | 8,977,824 | 44,446 | 1.96 % | ||||||||||||||||||||||||||
Certificates and other time deposits | 4,564,232 | 48,683 | 4.24 % | 4,400,922 | 46,739 | 4.27 % | 3,172,178 | 26,441 | 3.31 % | ||||||||||||||||||||||||||
Other borrowings | 3,900,000 | 46,792 | 4.77 % | 3,900,000 | 46,282 | 4.77 % | 4,671,449 | 62,190 | 5.28 % | ||||||||||||||||||||||||||
Securities sold under repurchase agreements | 242,813 | 1,662 | 2.72 % | 258,637 | 1,759 | 2.74 % | 389,149 | 2,533 | 2.58 % | ||||||||||||||||||||||||||
Subordinated debentures | - | - | - | - | - | - | 2,578 | 38 | 5.85 % | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 22,390,335 | 156,212 | 2.78 % | (N) | 22,482,804 | 154,165 | 2.76 % | (N) | 21,981,663 | 140,830 | 2.54 % | (N) | |||||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 9,680,785 | 9,780,211 | 10,269,162 | ||||||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 37,646 | 36,729 | 36,504 | ||||||||||||||||||||||||||||||||
Other liabilities | 433,171 | 327,847 | 290,217 | ||||||||||||||||||||||||||||||||
Total liabilities | 32,541,937 | 32,627,591 | 32,577,546 | ||||||||||||||||||||||||||||||||
Shareholders' equity | 7,347,265 | 7,321,257 | 7,024,493 | ||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 39,889,202 | $ | 39,948,848 | $ | 39,602,039 | |||||||||||||||||||||||||||||
Net interest income and margin | $ | 261,691 | 2.94 % | $ | 258,786 | 2.94 % | $ | 239,524 | 2.71 % | ||||||||||||||||||||||||||
Non-GAAP to GAAP reconciliation: | |||||||||||||||||||||||||||||||||||
Tax equivalent adjustment | 808 | 800 | 1,000 | ||||||||||||||||||||||||||||||||
Net interest income and margin | $ | 262,499 | 2.95 % | $ | 259,586 | 2.94 % | $ | 240,524 | 2.72 % | ||||||||||||||||||||||||||
(L) | Annualized and based on an actual 366-day or 365-day basis. |
(M) | Yield on securities was impacted by net premium amortization of $5,574, $5,831 and $6,897 for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively. |
(N) | Total cost of funds, including noninterest bearing deposits, was 1.94%, 1.92% and 1.73% for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively. |
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars in thousands) | |||||||||||||||||||||||
YIELD ANALYSIS | Year-to-Date | ||||||||||||||||||||||
Sep 30, 2024 | Sep 30, 2023 | ||||||||||||||||||||||
Average | Interest | Average | (O) | Average | Interest | Average | (O) | ||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Loans held for sale | $ | 7,278 | $ | 378 | 6.94 % | $ | 5,389 | $ | 267 | 6.62 % | |||||||||||||
Loans held for investment | 21,312,440 | 928,973 | 5.82 % | 19,546,826 | 797,861 | 5.46 % | |||||||||||||||||
Loans held for investment - Warehouse Purchase Program | 918,172 | 50,756 | 7.38 % | 831,143 | 44,306 | 7.13 % | |||||||||||||||||
Total loans | 22,237,890 | 980,107 | 5.89 % | 20,383,358 | 842,434 | 5.53 % | |||||||||||||||||
Investment securities | 12,161,391 | 188,466 | 2.07 % | (P) | 13,937,483 | 215,225 | 2.06 % | (P) | |||||||||||||||
Federal funds sold and other earning assets | 1,153,335 | 44,195 | 5.12 % | 290,275 | 10,452 | 4.81 % | |||||||||||||||||
Total interest-earning assets | 35,552,616 | 1,212,768 | 4.56 % | 34,611,116 | 1,068,111 | 4.13 % | |||||||||||||||||
Allowance for credit losses on loans | (341,659) | (303,518) | |||||||||||||||||||||
Noninterest-earning assets | 4,823,938 | 4,722,064 | |||||||||||||||||||||
Total assets | $ | 40,034,895 | $ | 39,029,662 | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Interest-bearing demand deposits | $ | 4,947,514 | $ | 26,807 | 0.72 % | $ | 5,260,463 | $ | 12,765 | 0.32 % | |||||||||||||
Savings and money market deposits | 9,060,992 | 147,228 | 2.17 % | 9,235,646 | 122,992 | 1.78 % | |||||||||||||||||
Certificates and other time deposits | 4,356,700 | 132,539 | 4.06 % | 2,627,402 | 51,619 | 2.63 % | |||||||||||||||||
Other borrowings | 3,960,821 | 142,020 | 4.79 % | 4,001,994 | 153,937 | 5.14 % | |||||||||||||||||
Securities sold under repurchase agreements | 265,878 | 5,453 | 2.74 % | 419,304 | 7,310 | 2.33 % | |||||||||||||||||
Subordinated debentures | - | - | - | 1,375 | 38 | 3.69 % | |||||||||||||||||
Total interest-bearing liabilities | 22,591,905 | 454,047 | 2.68 % | (Q) | 21,546,184 | 348,661 | 2.16 % | (Q) | |||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||
Noninterest-bearing demand deposits | 9,759,927 | 10,310,878 | |||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures | 36,994 | 32,181 | |||||||||||||||||||||
Other liabilities | 372,060 | 232,903 | |||||||||||||||||||||
Total liabilities | 32,760,886 | 32,122,146 | |||||||||||||||||||||
Shareholders' equity | 7,274,009 | 6,907,516 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 40,034,895 | $ | 39,029,662 | |||||||||||||||||||
Net interest income and margin | $ | 758,721 | 2.85 % | $ | 719,450 | 2.78 % | |||||||||||||||||
Non-GAAP to GAAP reconciliation: | |||||||||||||||||||||||
Tax equivalent adjustment | 2,416 | 2,866 | |||||||||||||||||||||
Net interest income and margin (tax equivalent basis) | $ | 761,137 | 2.86 % | $ | 722,316 | 2.79 % | |||||||||||||||||
(O) | Based on an actual 366-day or 365-day basis. |
(P) | Yield on securities was impacted by net premium amortization of $17,227 and $21,412 for the nine months ended September 30, 2024 and 2023, respectively. |
(Q) | Total cost of funds, including noninterest bearing deposits, was 1.87% and 1.46% for the nine months ended September 30, 2024 and 2023, respectively. |
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars in thousands) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | |||||||||||||||
YIELD TREND (R) | |||||||||||||||||||
Interest-Earning Assets: | |||||||||||||||||||
Loans held for sale | 6.89 | % | 7.10 | % | 6.77 | % | 7.47 | % | 6.54 | % | |||||||||
Loans held for investment | 5.97 | % | 6.02 | % | 5.77 | % | 5.68 | % | 5.62 | % | |||||||||
Loans held for investment - Warehouse | 7.27 | % | 7.42 | % | 7.51 | % | 7.46 | % | 7.32 | % | |||||||||
Total loans | 6.04 | % | 6.08 | % | 5.83 | % | 5.75 | % | 5.70 | % | |||||||||
Investment securities (S) | 2.04 | % | 2.06 | % | 2.10 | % | 2.07 | % | 2.05 | % | |||||||||
Federal funds sold and other earning assets | 5.41 | % | 5.52 | % | 5.54 | % | 5.68 | % | 5.33 | % | |||||||||
Total interest-earning assets | 4.70 | % | 4.68 | % | 4.45 | % | 4.35 | % | 4.30 | % | |||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||
Interest-bearing demand deposits | 0.77 | % | 0.76 | % | 0.66 | % | 0.56 | % | 0.43 | % | |||||||||
Savings and money market deposits | 2.23 | % | 2.22 | % | 2.13 | % | 2.03 | % | 1.96 | % | |||||||||
Certificates and other time deposits | 4.24 | % | 4.27 | % | 4.05 | % | 3.80 | % | 3.31 | % | |||||||||
Other borrowings | 4.77 | % | 4.77 | % | 4.82 | % | 5.16 | % | 5.28 | % | |||||||||
Securities sold under repurchase agreements | 2.72 | % | 2.74 | % | 2.76 | % | 2.77 | % | 2.58 | % | |||||||||
Subordinated debentures | - | - | - | - | 5.85 | % | |||||||||||||
Total interest-bearing liabilities | 2.78 | % | 2.76 | % | 2.62 | % | 2.58 | % | 2.54 | % | |||||||||
Net Interest Margin | 2.94 | % | 2.94 | % | 2.78 | % | 2.74 | % | 2.71 | % | |||||||||
Net Interest Margin (tax equivalent) | 2.95 | % | 2.94 | % | 2.79 | % | 2.75 | % | 2.72 | % | |||||||||
(R) | Annualized and based on average balances on an actual 366-day or 365-day basis. |
(S) | Yield on securities was impacted by net premium amortization of $5,574, $5,831, $5,822, $6,428 and $6,897 for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively. |
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars in thousands) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | ||||||||||||||||
Balance Sheet Averages | ||||||||||||||||||||
Loans held for sale | $ | 7,913 | $ | 8,446 | $ | 5,467 | $ | 9,828 | $ | 9,832 | ||||||||||
Loans held for investment | 21,107,139 | 21,328,824 | 20,415,316 | 20,370,915 | 20,496,075 | |||||||||||||||
Loans held for investment - Warehouse Purchase | 1,114,681 | 917,026 | 720,650 | 770,481 | 972,936 | |||||||||||||||
Total loans | 22,229,733 | 22,254,296 | 21,141,433 | 21,151,224 | 21,478,843 | |||||||||||||||
Investment securities | 11,612,193 | 12,179,074 | 12,693,268 | 13,074,243 | 13,512,137 | |||||||||||||||
Federal funds sold and other earning assets | 1,531,788 | 1,026,251 | 672,840 | 125,295 | 125,690 | |||||||||||||||
Total interest-earning assets | 35,373,714 | 35,459,621 | 34,507,541 | 34,350,762 | 35,116,670 | |||||||||||||||
Allowance for credit losses on loans | (358,237) | (332,904) | (331,708) | (346,493) | (343,967) | |||||||||||||||
Cash and due from banks | 304,911 | 295,077 | 315,612 | 302,864 | 301,201 | |||||||||||||||
Goodwill | 3,504,300 | 3,482,448 | 3,396,177 | 3,396,224 | 3,387,293 | |||||||||||||||
Core deposit intangibles, net | 72,330 | 59,979 | 62,482 | 65,986 | 69,551 | |||||||||||||||
Other real estate | 5,339 | 3,071 | 2,319 | 4,781 | 6,301 | |||||||||||||||
Fixed assets, net | 375,626 | 377,369 | 372,458 | 370,900 | 367,814 | |||||||||||||||
Other assets | 611,219 | 604,187 | 610,649 | 670,187 | 697,176 | |||||||||||||||
Total assets | $ | 39,889,202 | $ | 39,948,848 | $ | 38,935,530 | $ | 38,815,211 | $ | 39,602,039 | ||||||||||
Noninterest-bearing deposits | $ | 9,680,785 | $ | 9,780,211 | $ | 9,443,249 | $ | 9,960,240 | $ | 10,269,162 | ||||||||||
Interest-bearing demand deposits | 4,774,975 | 4,839,194 | 5,143,585 | 4,822,698 | 4,768,485 | |||||||||||||||
Savings and money market deposits | 8,908,315 | 9,084,051 | 8,889,077 | 8,815,892 | 8,977,824 | |||||||||||||||
Certificates and other time deposits | 4,564,232 | 4,400,922 | 3,683,815 | 3,442,115 | 3,172,178 | |||||||||||||||
Total deposits | 27,928,307 | 28,104,378 | 27,159,726 | 27,040,945 | 27,187,649 | |||||||||||||||
Other borrowings | 3,900,000 | 3,900,000 | 4,083,132 | 4,028,263 | 4,671,449 | |||||||||||||||
Securities sold under repurchase agreements | 242,813 | 258,637 | 296,437 | 300,317 | 389,149 | |||||||||||||||
Subordinated debentures | - | - | - | - | 2,578 | |||||||||||||||
Allowance for credit losses on off-balance sheet credit | 37,646 | 36,729 | 36,503 | 36,503 | 36,504 | |||||||||||||||
Other liabilities | 433,171 | 327,847 | 238,480 | 323,344 | 290,217 | |||||||||||||||
Shareholders' equity | 7,347,265 | 7,321,257 | 7,121,252 | 7,085,839 | 7,024,493 | |||||||||||||||
Total liabilities and equity | $ | 39,889,202 | $ | 39,948,848 | $ | 38,935,530 | $ | 38,815,211 | $ | 39,602,039 | ||||||||||
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars in thousands) | |||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | |||||||||||
Period End Balances | |||||||||||||||
Loan Portfolio | |||||||||||||||
Commercial and industrial | $1,970,844 | 8.8 % | $2,023,531 | 9.1 % | $1,932,534 | 9.1 % | $1,936,717 | 9.2 % | $2,153,391 | 10.1 % | |||||
Warehouse purchase program | 1,228,706 | 5.5 % | 1,081,403 | 4.8 % | 864,924 | 4.1 % | 822,245 | 3.9 % | 912,327 | 4.3 % | |||||
Construction, land development and other land loans | 2,814,521 | 12.6 % | 2,828,372 | 12.7 % | 2,876,588 | 13.5 % | 3,076,591 | 14.5 % | 3,200,479 | 14.9 % | |||||
1-4 family residential | 7,557,858 | 33.8 % | 7,496,485 | 33.6 % | 7,331,251 | 34.5 % | 7,207,226 | 34.0 % | 7,032,593 | 32.8 % | |||||
Home equity | 919,676 | 4.1 % | 930,428 | 4.2 % | 950,169 | 4.5 % | 960,852 | 4.5 % | 969,498 | 4.5 % | |||||
Commercial real estate (includes multi-family residential) | 5,869,687 | 26.2 % | 5,961,884 | 26.7 % | 5,631,460 | 26.5 % | 5,662,948 | 26.7 % | 5,606,837 | 26.2 % | |||||
Agriculture (includes farmland) | 1,033,224 | 4.6 % | 1,037,361 | 4.6 % | 813,092 | 3.8 % | 816,043 | 3.9 % | 801,933 | 3.7 % | |||||
Consumer and other | 413,548 | 1.8 % | 340,611 | 1.5 % | 326,915 | 1.5 % | 329,593 | 1.6 % | 306,018 | 1.4 % | |||||
Energy | 572,788 | 2.6 % | 620,740 | 2.8 % | 538,314 | 2.5 % | 368,323 | 1.7 % | 449,637 | 2.1 % | |||||
Total loans | $22,380,852 | $22,320,815 | $21,265,247 | $21,180,538 | $21,432,713 | ||||||||||
Deposit Types | |||||||||||||||
Noninterest-bearing DDA | $9,811,361 | 34.9 % | $9,706,505 | 34.7 % | $9,526,535 | 35.1 % | $9,776,572 | 36.0 % | $10,281,893 | 37.6 % | |||||
Interest-bearing DDA | 4,800,758 | 17.1 % | 4,762,730 | 17.1 % | 4,867,247 | 17.9 % | 5,115,945 | 18.8 % | 4,797,259 | 17.6 % | |||||
Money market | 6,166,792 | 22.0 % | 6,180,769 | 22.1 % | 6,134,221 | 22.6 % | 5,859,701 | 21.6 % | 5,892,505 | 21.6 % | |||||
Savings | 2,707,982 | 9.6 % | 2,765,197 | 9.9 % | 2,830,117 | 10.4 % | 2,881,397 | 10.6 % | 3,005,936 | 11.0 % | |||||
Certificates and other time deposits | 4,600,718 | 16.4 % | 4,517,885 | 16.2 % | 3,817,398 | 14.0 % | 3,546,194 | 13.0 % | 3,335,207 | 12.2 % | |||||
Total deposits | $28,087,611 | $27,933,086 | $27,175,518 | $27,179,809 | $27,312,800 | ||||||||||
Loan to Deposit Ratio | 79.7 % | 79.9 % | 78.3 % | 77.9 % | 78.5 % | ||||||||||
Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Construction Loans | |||||||||||||||||||||||||||||||||||
Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | |||||||||||||||||||||||||||||||
Single family residential construction | $ | 836,571 | 29.7 | % | $ | 940,381 | 33.2 | % | $ | 1,031,163 | 35.8 | % | $ | 1,088,636 | 35.4 | % | $ | 1,157,016 | 36.1 | % | |||||||||||||||
Land development | 256,571 | 9.1 | % | 241,639 | 8.5 | % | 290,243 | 10.1 | % | 367,849 | 12.0 | % | 359,518 | 11.2 | % | ||||||||||||||||||||
Raw land | 263,411 | 9.4 | % | 291,112 | 10.3 | % | 311,265 | 10.8 | % | 328,365 | 10.7 | % | 340,659 | 10.7 | % | ||||||||||||||||||||
Residential lots | 217,920 | 7.7 | % | 222,343 | 7.9 | % | 224,901 | 7.8 | % | 222,591 | 7.2 | % | 216,659 | 6.8 | % | ||||||||||||||||||||
Commercial lots | 58,472 | 2.1 | % | 60,264 | 2.1 | % | 59,691 | 2.1 | % | 155,415 | 5.0 | % | 154,425 | 4.8 | % | ||||||||||||||||||||
Commercial construction and other | 1,183,127 | 42.0 | % | 1,074,361 | 38.0 | % | 959,687 | 33.4 | % | 914,436 | 29.7 | % | 973,022 | 30.4 | % | ||||||||||||||||||||
Net unaccreted discount | (1,551) | (1,728) | (362) | (701) | (820) | ||||||||||||||||||||||||||||||
Total construction loans | $ | 2,814,521 | $ | 2,828,372 | $ | 2,876,588 | $ | 3,076,591 | $ | 3,200,479 | |||||||||||||||||||||||||
Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of September 30, 2024 | ||||||||||||||||||||||||||||
Houston | Dallas | Austin | OK City | Tulsa | Other (T) | Total | ||||||||||||||||||||||
Collateral Type | ||||||||||||||||||||||||||||
Shopping center/retail | $ | 365,720 | $ | 263,161 | $ | 58,574 | $ | 15,161 | $ | 13,648 | $ | 324,444 | $ | 1,040,708 | ||||||||||||||
Commercial and industrial | 141,749 | 114,151 | 22,622 | 34,900 | 17,150 | 291,397 | 621,969 | |||||||||||||||||||||
Office buildings | 99,817 | 215,635 | 91,439 | 46,970 | 3,651 | 95,542 | 553,054 | |||||||||||||||||||||
Medical buildings | 82,161 | 16,906 | 1,699 | 43,107 | 30,230 | 71,716 | 245,819 | |||||||||||||||||||||
Apartment buildings | 113,670 | 128,055 | 18,335 | 14,618 | 14,937 | 244,729 | 534,344 | |||||||||||||||||||||
Hotel | 106,115 | 99,032 | 32,554 | 17,506 | - | 191,873 | 447,080 | |||||||||||||||||||||
Other | 174,867 | 56,237 | 28,891 | 7,709 | 1,555 | 94,037 | 363,296 | |||||||||||||||||||||
Total | $ | 1,084,099 | $ | 893,177 | $ | 254,114 | $ | 179,971 | $ | 81,171 | $ | 1,313,738 | $ | 3,806,270 | (U) | |||||||||||||
Acquired Loans | |||||||||||||||||||||||||||||||||||
Non-PCD Loans | PCD Loans | Total Acquired Loans | |||||||||||||||||||||||||||||||||
Balance at | Balance at | Balance at | Balance at | Balance at | Balance at | Balance at | Balance at | Balance at | |||||||||||||||||||||||||||
Loan marks: | |||||||||||||||||||||||||||||||||||
Acquired banks (V) | $ | 345,599 | $ | (920) | $ | (950) | $ | 320,052 | $ | 2,412 | $ | 2,320 | $ | 665,651 | $ | 1,492 | $ | 1,370 | |||||||||||||||||
FirstCapital Bank (W) | 22,648 | 17,210 | 15,853 | 7,790 | 4,305 | 4,041 | 30,438 | 21,515 | 19,894 | ||||||||||||||||||||||||||
Lone Star Bank (X) | 20,378 | 17,960 | 15,709 | 4,558 | 2,790 | 1,913 | 24,936 | 20,750 | 17,622 | ||||||||||||||||||||||||||
Total | 388,625 | 34,250 | 30,612 | 332,400 | 9,507 | 8,274 | 721,025 | 43,757 | 38,886 | ||||||||||||||||||||||||||
Acquired portfolio loan | |||||||||||||||||||||||||||||||||||
Acquired banks (V) | 12,286,159 | 875,474 | 845,545 | 689,573 | 57,417 | 57,780 | 12,975,732 | 932,891 | 903,325 | ||||||||||||||||||||||||||
FirstCapital Bank (W) | 1,021,694 | 652,527 | 600,616 | 627,991 | 395,743 | 356,084 | 1,649,685 | 1,048,270 | 956,700 | ||||||||||||||||||||||||||
Lone Star Bank (X) | 1,016,128 | 919,865 | 868,114 | 59,109 | 59,075 | 54,793 | 1,075,237 | 978,940 | 922,907 | ||||||||||||||||||||||||||
Total | 14,323,981 | 2,447,866 | 2,314,275 | 1,376,673 | 512,235 | 468,657 | 15,700,654 | (Y) | 2,960,101 | 2,782,932 | |||||||||||||||||||||||||
Acquired portfolio loan | $ | 13,935,356 | $ | 2,413,616 | $ | 2,283,663 | $ | 1,044,273 | $ | 502,728 | $ | 460,383 | $ | 14,979,629 | $ | 2,916,344 | $ | 2,744,046 | |||||||||||||||||
(T) | Includes other MSA and non-MSA regions. |
(U) | Represents a portion of total commercial real estate loans of $5.870 billion as of September 30, 2024. |
(V) | 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. |
(W) | On May 1, 2023, Prosperity completed the merger (the "FB Merger") of First Bancshares and its wholly owned subsidiary FirstCapital Bank. The FB Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.4 million at acquisition date, which were subject to subsequent fair value adjustments. |
(X) | The LSSB Merger was completed on April 1, 2024 and resulted in the addition of $1.075 billion in loans with related purchase accounting adjustments of $24.9 million at acquisition date, which were subject to subsequent fair value adjustments. |
(Y) | 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 | $ | 83,969 | $ | 84,175 | $ | 78,475 | $ | 68,688 | $ | 59,729 | $ | 83,969 | $ | 59,729 | |||||||||||||
Accruing loans 90 or more days past due | 20 | 322 | 3,035 | 2,195 | 397 | 20 | 397 | ||||||||||||||||||||
Total nonperforming loans | 83,989 | 84,497 | 81,510 | 70,883 | 60,126 | 83,989 | 60,126 | ||||||||||||||||||||
Repossessed assets | 177 | 113 | 97 | 76 | 35 | 177 | 35 | ||||||||||||||||||||
Other real estate | 5,757 | 4,960 | 2,204 | 1,708 | 9,320 | 5,757 | 9,320 | ||||||||||||||||||||
Total nonperforming assets | $ | 89,923 | $ | 89,570 | $ | 83,811 | $ | 72,667 | $ | 69,481 | $ | 89,923 | $ | 69,481 | |||||||||||||
Nonperforming assets: | |||||||||||||||||||||||||||
Commercial and industrial (includes energy) | $ | 13,642 | $ | 16,340 | $ | 10,199 | $ | 8,957 | $ | 22,219 | $ | 13,642 | $ | 22,219 | |||||||||||||
Construction, land development and other land | 4,053 | 4,895 | 15,826 | 17,343 | 8,684 | 4,053 | 8,684 | ||||||||||||||||||||
1-4 family residential (includes home equity) | 36,660 | 33,935 | 30,206 | 26,096 | 23,708 | 36,660 | 23,708 | ||||||||||||||||||||
Commercial real estate (includes multi-family | 32,803 | 31,776 | 23,720 | 18,775 | 13,341 | 32,803 | 13,341 | ||||||||||||||||||||
Agriculture (includes farmland) | 2,686 | 2,550 | 3,714 | 1,460 | 1,511 | 2,686 | 1,511 | ||||||||||||||||||||
Consumer and other | 79 | 74 | 146 | 36 | 18 | 79 | 18 | ||||||||||||||||||||
Total | $ | 89,923 | $ | 89,570 | $ | 83,811 | $ | 72,667 | $ | 69,481 | $ | 89,923 | $ | 69,481 | |||||||||||||
Number of loans/properties | 346 | 349 | 319 | 292 | 260 | 346 | 260 | ||||||||||||||||||||
Allowance for credit losses on loans | $ | 354,397 | $ | 359,852 | $ | 330,219 | $ | 332,362 | $ | 351,495 | $ | 354,397 | $ | 351,495 | |||||||||||||
Net charge-offs (recoveries): | |||||||||||||||||||||||||||
Commercial and industrial (includes energy) | $ | 3,309 | $ | 2,777 | $ | 283 | $ | 16,123 | $ | 1,594 | $ | 6,369 | $ | 282 | |||||||||||||
Construction, land development and other land | 378 | 109 | (2) | (5) | (5) | 485 | 32 | ||||||||||||||||||||
1-4 family residential (includes home equity) | 409 | 425 | 457 | 20 | (78) | 1,291 | (288) | ||||||||||||||||||||
Commercial real estate (includes multi-family | 258 | (381) | (17) | 1,590 | 570 | (140) | 15,526 | ||||||||||||||||||||
Agriculture (includes farmland) | (116) | 214 | 23 | - | - | 121 | (84) | ||||||||||||||||||||
Consumer and other | 1,217 | 1,224 | 1,399 | 1,405 | 1,327 | 3,840 | 3,390 | ||||||||||||||||||||
Total | $ | 5,455 | $ | 4,368 | $ | 2,143 | $ | 19,133 | $ | 3,408 | $ | 11,966 | $ | 18,858 | |||||||||||||
Asset Quality Ratios | |||||||||||||||||||||||||||
Nonperforming assets to average interest-earning | 0.25 | % | 0.25 | % | 0.24 | % | 0.21 | % | 0.20 | % | 0.25 | % | 0.20 | % | |||||||||||||
Nonperforming assets to loans and other real estate | 0.40 | % | 0.40 | % | 0.39 | % | 0.34 | % | 0.32 | % | 0.40 | % | 0.32 | % | |||||||||||||
Net charge-offs to average loans (annualized) | 0.10 | % | 0.08 | % | 0.04 | % | 0.36 | % | 0.06 | % | 0.07 | % | 0.12 | % | |||||||||||||
Allowance for credit losses on loans to total loans | 1.58 | % | 1.61 | % | 1.55 | % | 1.57 | % | 1.64 | % | 1.58 | % | 1.64 | % | |||||||||||||
Allowance for credit losses on loans to total loans, | 1.68 | % | 1.69 | % | 1.62 | % | 1.63 | % | 1.71 | % | 1.68 | % | 1.71 | % | |||||||||||||
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, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses and FDIC special assessment. 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 to total loans (excluding Warehouse Purchase Program 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 diluted earnings per share to diluted earnings | ||||||||||||||||||||||||||||
Diluted earnings per share (unadjusted) | $ | 1.34 | $ | 1.17 | $ | 1.18 | $ | 1.02 | $ | 1.20 | $ | 3.68 | $ | 3.50 | ||||||||||||||
Net income | $ | 127,282 | $ | 111,602 | $ | 110,426 | $ | 95,476 | $ | 112,208 | $ | 349,310 | $ | 323,840 | ||||||||||||||
Merger related provision for credit losses, net of tax(Z) | - | 7,162 | - | - | - | 7,162 | 14,647 | |||||||||||||||||||||
Merger related expenses, net of tax(Z) | 50 | 3,461 | - | 220 | 872 | 3,511 | 11,735 | |||||||||||||||||||||
FDIC special assessment, net of tax(Z) | - | 2,807 | - | 15,736 | - | 2,807 | - | |||||||||||||||||||||
Net gain on sale or write-up of securities, net of tax(Z) | (177) | (8,472) | (235) | - | - | (8,884) | - | |||||||||||||||||||||
Net income excluding merger related provision for credit losses, net | $ | 127,155 | $ | 116,560 | $ | 110,191 | $ | 111,432 | $ | 113,080 | $ | 353,906 | $ | 350,222 | ||||||||||||||
Weighted average diluted shares outstanding | 95,261 | 95,765 | 93,706 | 93,715 | 93,720 | 94,912 | 92,628 | |||||||||||||||||||||
Merger related provision for credit losses, net of tax, per diluted common share(Z) | $ | - | $ | 0.07 | $ | - | $ | - | $ | - | $ | 0.08 | $ | 0.16 | ||||||||||||||
Merger related expenses, net of tax, per diluted common share(Z) | $ | - | $ | 0.04 | $ | - | $ | - | $ | 0.01 | $ | 0.04 | $ | 0.13 | ||||||||||||||
FDIC special assessment, net of tax, per diluted common share(Z) | $ | - | $ | 0.03 | $ | - | $ | 0.17 | $ | - | $ | 0.03 | $ | - | ||||||||||||||
Net gain on sale or write-up of securities, net of tax, per diluted common share(Z) | $ | - | $ | (0.09) | $ | - | $ | - | $ | - | $ | (0.09) | $ | - | ||||||||||||||
Diluted earnings per share excluding merger related provision for | $ | 1.34 | $ | 1.22 | $ | 1.18 | $ | 1.19 | $ | 1.21 | $ | 3.74 | $ | 3.79 | ||||||||||||||
Reconciliation of return on average assets to return on average | ||||||||||||||||||||||||||||
Return on average assets (unadjusted) | 1.28 | % | 1.12 | % | 1.13 | % | 0.98 | % | 1.13 | % | 1.16 | % | 1.11 | % | ||||||||||||||
Net income excluding merger related provision for credit losses, net | $ | 127,155 | $ | 116,560 | $ | 110,191 | $ | 111,432 | $ | 113,080 | $ | 353,906 | $ | 350,222 | ||||||||||||||
Average total assets | $ | 39,889,202 | $ | 39,948,848 | $ | 38,935,530 | $ | 38,815,211 | $ | 39,602,039 | $ | 40,034,895 | $ | 39,029,662 | ||||||||||||||
Return on average assets excluding merger related provision for | 1.28 | % | 1.17 | % | 1.13 | % | 1.15 | % | 1.14 | % | 1.18 | % | 1.20 | % | ||||||||||||||
(Z) Calculated assuming a federal tax rate of 21.0%. | ||||||||||||||||||||||||||||
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 return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, | ||||||||||||||||||||||||||||
Return on average common equity (unadjusted) | 6.93 | % | 6.10 | % | 6.20 | % | 5.39 | % | 6.39 | % | 6.40 | % | 6.25 | % | ||||||||||||||
Net income excluding merger related provision for credit losses, net | $ | 127,155 | $ | 116,560 | $ | 110,191 | $ | 111,432 | $ | 113,080 | $ | 353,906 | $ | 350,222 | ||||||||||||||
Average shareholders' equity | $ | 7,347,265 | $ | 7,321,257 | $ | 7,121,252 | $ | 7,085,839 | $ | 7,024,493 | $ | 7,274,009 | $ | 6,907,516 | ||||||||||||||
Return on average common equity excluding merger related | 6.92 | % | 6.37 | % | 6.19 | % | 6.29 | % | 6.44 | % | 6.49 | % | 6.76 | % | ||||||||||||||
Reconciliation of return on average common equity to return on | ||||||||||||||||||||||||||||
Net income | $ | 127,282 | $ | 111,602 | $ | 110,426 | $ | 95,476 | $ | 112,208 | $ | 349,310 | $ | 323,840 | ||||||||||||||
Average shareholders' equity | $ | 7,347,265 | $ | 7,321,257 | $ | 7,121,252 | $ | 7,085,839 | $ | 7,024,493 | $ | 7,274,009 | $ | 6,907,516 | ||||||||||||||
Less: Average goodwill and other intangible assets | (3,576,630) | (3,542,427) | (3,458,659) | (3,462,210) | (3,456,844) | (3,526,501) | (3,360,296) | |||||||||||||||||||||
Average tangible shareholders' equity | $ | 3,770,635 | $ | 3,778,830 | $ | 3,662,593 | $ | 3,623,629 | $ | 3,567,649 | $ | 3,747,508 | $ | 3,547,220 | ||||||||||||||
Return on average tangible common equity (F) | 13.50 | % | 11.81 | % | 12.06 | % | 10.54 | % | 12.58 | % | 12.43 | % | 12.17 | % | ||||||||||||||
Reconciliation of return on average common equity to return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax: | ||||||||||||||||||||||||||||
Net income excluding merger related provision for credit losses, net | $ | 127,155 | $ | 116,560 | $ | 110,191 | $ | 111,432 | $ | 113,080 | $ | 353,906 | $ | 350,222 | ||||||||||||||
Average shareholders' equity | $ | 7,347,265 | $ | 7,321,257 | $ | 7,121,252 | $ | 7,085,839 | $ | 7,024,493 | $ | 7,274,009 | $ | 6,907,516 | ||||||||||||||
Less: Average goodwill and other intangible assets | (3,576,630) | (3,542,427) | (3,458,659) | (3,462,210) | (3,456,844) | (3,526,501) | (3,360,296) | |||||||||||||||||||||
Average tangible shareholders' equity | $ | 3,770,635 | $ | 3,778,830 | $ | 3,662,593 | $ | 3,623,629 | $ | 3,567,649 | $ | 3,747,508 | $ | 3,547,220 | ||||||||||||||
Return on average tangible common equity excluding merger | 13.49 | % | 12.34 | % | 12.03 | % | 12.30 | % | 12.68 | % | 12.59 | % | 13.16 | % | ||||||||||||||
Reconciliation of book value per share to tangible book value | ||||||||||||||||||||||||||||
Shareholders' equity | $ | 7,361,249 | $ | 7,283,444 | $ | 7,104,544 | $ | 7,079,330 | $ | 7,032,677 | $ | 7,361,249 | $ | 7,032,677 | ||||||||||||||
Less: Goodwill and other intangible assets | (3,574,566) | (3,578,431) | (3,457,159) | (3,460,080) | (3,464,012) | (3,574,566) | (3,464,012) | |||||||||||||||||||||
Tangible shareholders' equity | $ | 3,786,683 | $ | 3,705,013 | $ | 3,647,385 | $ | 3,619,250 | $ | 3,568,665 | $ | 3,786,683 | $ | 3,568,665 | ||||||||||||||
Period end shares outstanding | 95,261 | 95,262 | 93,525 | 93,722 | 93,717 | 95,261 | 93,717 | |||||||||||||||||||||
Tangible book value per share | $ | 39.75 | $ | 38.89 | $ | 39.00 | $ | 38.62 | $ | 38.08 | $ | 39.75 | $ | 38.08 | ||||||||||||||
Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio: | ||||||||||||||||||||||||||||
Tangible shareholders' equity | $ | 3,786,683 | $ | 3,705,013 | $ | 3,647,385 | $ | 3,619,250 | $ | 3,568,665 | $ | 3,786,683 | $ | 3,568,665 | ||||||||||||||
Total assets | $ | 40,115,320 | $ | 39,762,294 | $ | 38,756,520 | $ | 38,547,877 | $ | 39,295,684 | $ | 40,115,320 | $ | 39,295,684 | ||||||||||||||
Less: Goodwill and other intangible assets | (3,574,566) | (3,578,431) | (3,457,159) | (3,460,080) | (3,464,012) | (3,574,566) | (3,464,012) | |||||||||||||||||||||
Tangible assets | $ | 36,540,754 | $ | 36,183,863 | $ | 35,299,361 | $ | 35,087,797 | $ | 35,831,672 | $ | 36,540,754 | $ | 35,831,672 | ||||||||||||||
Period end tangible equity to period end tangible assets ratio | 10.36 | % | 10.24 | % | 10.33 | % | 10.31 | % | 9.96 | % | 10.36 | % | 9.96 | % | ||||||||||||||
Three Months Ended | Year-to-Date | |||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Sep 30, | Sep 30, | ||||||||||||||||||||||
Reconciliation of allowance for credit losses to total loans to allowance for credit losses on loans to total loans excluding Warehouse Purchase Program: | ||||||||||||||||||||||||||||
Allowance for credit losses on loans | $ | 354,397 | $ | 359,852 | $ | 330,219 | $ | 332,362 | $ | 351,495 | $ | 354,397 | $ | 351,495 | ||||||||||||||
Total loans | $ | 22,380,852 | $ | 22,320,815 | $ | 21,265,247 | $ | 21,180,538 | $ | 21,432,713 | $ | 22,380,852 | $ | 21,432,713 | ||||||||||||||
Less: Warehouse Purchase Program loans | (1,228,706) | (1,081,403) | (864,924) | (822,245) | (912,327) | (1,228,706) | (912,327) | |||||||||||||||||||||
Total loans less Warehouse Purchase Program | $ | 21,152,146 | $ | 21,239,412 | $ | 20,400,323 | $ | 20,358,293 | $ | 20,520,386 | $ | 21,152,146 | $ | 20,520,386 | ||||||||||||||
Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program | 1.68 | % | 1.69 | % | 1.62 | % | 1.63 | % | 1.71 | % | 1.68 | % | 1.71 | % | ||||||||||||||
Reconciliation of efficiency ratio to efficiency ratio excluding | ||||||||||||||||||||||||||||
Noninterest expense | $ | 140,338 | $ | 152,842 | $ | 135,848 | $ | 152,171 | $ | 135,657 | $ | 429,028 | $ | 404,527 | ||||||||||||||
Net interest income | $ | 261,691 | $ | 258,786 | $ | 238,244 | $ | 236,983 | $ | 239,524 | $ | 758,721 | $ | 719,450 | ||||||||||||||
Noninterest income | 41,099 | 46,003 | 38,870 | 36,568 | 38,743 | 125,972 | 116,697 | |||||||||||||||||||||
Less: net (loss) gain on sale or write-down of assets | 3,178 | (903) | (35) | (84) | (45) | 2,240 | 2,070 | |||||||||||||||||||||
Less: net gain on sale or write-up of securities | 224 | 10,723 | 298 | - | - | 11,245 | - | |||||||||||||||||||||
Noninterest income excluding net gains and losses on the sale, | 37,697 | 36,183 | 38,607 | 36,652 | 38,788 | 112,487 | 114,627 | |||||||||||||||||||||
Total income excluding net gains and losses on the sale, write- | $ | 299,388 | $ | 294,969 | $ | 276,851 | $ | 273,635 | $ | 278,312 | $ | 871,208 | $ | 834,077 | ||||||||||||||
Efficiency ratio, excluding net gains and losses on the sale, write- | 46.87 | % | 51.82 | % | 49.07 | % | 55.61 | % | 48.74 | % | 49.25 | % | 48.50 | % | ||||||||||||||
Reconciliation of efficiency ratio to efficiency ratio, excluding | ||||||||||||||||||||||||||||
Noninterest expense | $ | 140,338 | $ | 152,842 | $ | 135,848 | $ | 152,171 | $ | 135,657 | $ | 429,028 | $ | 404,527 | ||||||||||||||
Less: merger related expenses | 63 | 4,381 | - | 278 | 1,104 | 4,444 | 14,855 | |||||||||||||||||||||
Less: FDIC special assessment | - | 3,554 | - | 19,919 | - | 3,554 | - | |||||||||||||||||||||
Noninterest expense excluding merger related expenses and FDIC special assessment | $ | 140,275 | $ | 144,907 | $ | 135,848 | $ | 131,974 | $ | 134,553 | $ | 421,030 | $ | 389,672 | ||||||||||||||
Net interest income | $ | 261,691 | $ | 258,786 | $ | 238,244 | $ | 236,983 | $ | 239,524 | $ | 758,721 | $ | 719,450 | ||||||||||||||
Noninterest income | 41,099 | 46,003 | 38,870 | 36,568 | 38,743 | 125,972 | 116,697 | |||||||||||||||||||||
Less: net (loss) gain on sale or write down of assets | 3,178 | (903) | (35) | (84) | (45) | 2,240 | 2,070 | |||||||||||||||||||||
Less: net gain on sale or write-up of securities | 224 | 10,723 | 298 | - | - | 11,245 | - | |||||||||||||||||||||
Noninterest income excluding net gains and losses on the sale, | 37,697 | 36,183 | 38,607 | 36,652 | 38,788 | 112,487 | 114,627 | |||||||||||||||||||||
Total income excluding net gains and losses on the sale, write- | $ | 299,388 | $ | 294,969 | $ | 276,851 | $ | 273,635 | $ | 278,312 | $ | 871,208 | $ | 834,077 | ||||||||||||||
Efficiency ratio, excluding net gains and losses on the sale, write- | 46.85 | % | 49.13 | % | 49.07 | % | 48.23 | % | 48.35 | % | 48.33 | % | 46.72 | % | ||||||||||||||
SOURCE Prosperity Bancshares, Inc.
