Exhibit 99.1
| PRESS RELEASE | For more information contact: |
| | |
Prosperity Bancshares, Inc.® | Dan Rollins |
| Prosperity Bank Plaza | President and Chief Operating Officer |
| 4295 San Felipe | 281.269.7199 |
| Houston, Texas 77027 | dan.rollins@prosperitybanktx.com |
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
REPORTS STRONG
THIRD QUARTER EARNINGS
| · | 3Q09 Earnings Per Share of $0.63 (diluted) |
| · | 3Q09 Net Interest Margin (tax equivalent) of 4.08% |
| · | Allowance for Credit Losses to Total Loans increased to 1.39% |
| · | Tangible Common Equity Ratio increased to 5.13% |
| · | Non-Performing Assets remain low at 0.29% of Average Earning Assets |
HOUSTON, October 16, 2009. Prosperity Bancshares, Inc.® (NASDAQ: PRSP), the parent company of Prosperity Bank®, reported net income for the quarter ended September 30, 2009 of $29.322 million or $0.63 per diluted common share, an increase in net income of $13.875 million or 89.8%, compared with $15.447 million or $0.33 per diluted common share for the same period in 2008. Earnings for the three months ended September 30, 2008 included a $9.116 million after-tax ($14.025 million pre-tax) impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities (“impairment charge on securities” or “impairment charge”). Excluding the impairment charge, net income for the quarter ended September 30, 2008 would have been $24.563 million or $0.53 per diluted common share. Net income for the quarter ended September 30, 2009 increased $4.759 million or 19.4% when compared to net income for the quarter ended September 30, 2008 excluding the impairment charge.
“I am proud to report our team’s outstanding performance during the past quarter,” commented David Zalman, Chairman and Chief Executive Officer. “Our bankers are competing well in all of our markets and we continue to believe our strong asset quality and strong earnings capacity will lead to future opportunities.”
“We continued to reduce our exposure to construction and development loans while our team of professional bankers continued to attract core deposit customers in our market areas throughout Texas,” continued Zalman. “While Texas is certainly not immune to the economic ills affecting other parts of the country, we are encouraged by the resilience of the Texas economy.”
Prosperity’s management uses certain non−GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio. Prosperity also reviewed its net income, earnings per share, non-interest expense and related performance ratios for the three and nine month periods ending September 30, 2008 excluding the non-recurring impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. 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.
Results of operations for the three months ended September 30, 2009
For the three months ended September 30, 2009, net income was $29.322 million compared with $15.447 million for the same period in 2008. Net income per diluted common share was $0.63 for the three months ended September 30, 2009 and $0.33 for the same period in 2008. Earnings for the three months ended September 30, 2008 included a $9.116 million after-tax ($14.025 million pre-tax) impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities. Excluding the impairment charge, net income for the quarter ended September 30, 2008 would have been $24.563 million or $0.53 per diluted common share. Net income for the quarter ended September 30, 2009 increased $4.759 million or 19.4% when compared to net income for the quarter ended September 30, 2008 excluding the impairment charge. Returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2009 were 1.32%, 8.93% and 29.34%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities and assets and impairment charge on securities) was 44.46% for the three months ended September 30, 2009.
Net interest income before provision for credit losses for the quarter ended September 30, 2009 increased 33.9% to $77.413 million compared with $57.806 million during the same period in 2008. The increase was attributable primarily to a 35.7% increase in average earning assets primarily due to the assumption of certain deposits and acquisition of certain assets of Franklin Bank from the FDIC. The net interest margin on a tax equivalent basis decreased to 4.08% for the three months ended September 30, 2009 compared with 4.15% for the same period in 2008.
On a linked quarter basis, the tax equivalent net interest margin increased four basis points to 4.08% for the three months ended September 30, 2009 from 4.04% reported for the three months ended June 30, 2009 as a result of multiple factors, including lower deposit pricing.
Non-interest income increased $2.119 million or 16.2% to $15.236 million for the three months ended September 30, 2009 compared with $13.117 million for the same period in 2008. The increase was mainly attributable to an increase in service charges on deposit accounts related to accounts assumed from the FDIC as part of the Franklin Bank transaction.
Non-interest expense decreased $5.029 million or 10.9% to $41.201 million for the third quarter of 2009 compared with $46.230 million for the third quarter of 2008. The decrease was attributable to a $14.025 million impairment charge on securities during the three months ended September 30, 2008, partially offset by increased expenses related to operating the additional banking offices that were acquired in the Franklin Bank transaction and increased FDIC insurance premiums. Excluding the impairment charge, non-interest expense increased $8.996 million or 27.9%, primarily due to increases in staff and general operating expenses related to the banking centers acquired in the Franklin Bank transaction and increased FDIC deposit insurance assessments.
Prosperity’s FDIC deposit insurance assessments for 2008 were approximately $1.4 million. The expected full year 2009 FDIC deposit insurance assessment (excluding any one-time assessments) is currently projected to be between $8.0 million and $9.0 million pre-tax based upon deposit balances at September 30, 2009. Additionally, the FDIC imposed an emergency special assessment as of June 30, 2009, which for Prosperity totaled approximately $4.3 million in pre-tax expense or $0.06 per diluted common share after tax. Additionally, the FDIC has adopted a proposed rule to require depository institutions to pre-pay, on December 30, 2009, estimated quarterly risk-based assessments for the fourth quarter of 2009 and all of 2010, 2011 and 2012. Comments to the proposed rule are due to the FDIC by October 28, 2009 and a final rule will be adopted after that date.
Average loans increased 4.3% or $141.858 million to $3.431 billion for the quarter ended September 30, 2009 compared with $3.289 billion for the same period in 2008. Linked quarter average loans decreased 1.2% or $41.388 million from $3.472 billion at June 30, 2009. Average deposits increased 39.3% or $2.037 billion to $7.224 billion for the quarter ended September 30, 2009 compared with $5.187 billion for the same period in 2008. Linked quarter average deposits decreased 0.3% or $22.541 million from $7.246 billion at June 30, 2009.
Loans at September 30, 2009 were $3.406 billion, an increase of $157,520 million or 4.9%, compared with $3.249 billion at September 30, 2008. Loans decreased 1.3% or $45.182 million on a linked quarter basis compared with loans of $3.451 billion at June 30, 2009. As reflected in the table below, linked quarter loans for the third quarter of 2009 were impacted by the loans acquired from the FDIC as a part of the Franklin Bank transaction in November 2008. Excluding the loans acquired in this transaction, linked quarter loans decreased 0.8%.
Deposits at September 30, 2009 were $7.118 billion, an increase of $2.013 billion or 39.4%, compared with $5.105 billion at September 30, 2008. Linked quarter deposits decreased $139.902 million or 1.9% from $7.258 billion at June 30, 2009. As reflected in the table below, linked quarter deposits for the third quarter of 2009 were impacted by the deposits assumed from the FDIC as part of the Franklin Bank transaction. Excluding the deposits assumed in this transaction, linked quarter deposits increased 1.0% and 9.4% from September 30, 2008.
| Balance Sheet Data (at period end) | | Sept 30, 2009 | | | June 30, 2009 | | | Sept 30, 2008 | |
| (In thousands) | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | |
| Loans: | | | | | | | | | |
| Acquired from FDIC (related to Franklin Bank) | | $ | 264,319 | | | $ | 282,733 | | | $ | 0 | |
| All other | | | 3,141,818 | | | | 3,168,586 | | | | 3,248,617 | |
| Total Loans | | $ | 3,406,137 | | | $ | 3,451,319 | | | $ | 3,248,617 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Assumed from FDIC (related to Franklin Bank) | | $ | 1,533,641 | | | $ | 1,729,657 | | | $ | 0 | |
| All other | | | 5,584,352 | | | | 5,528,238 | | | | 5,104,842 | |
| Total Deposits | | $ | 7,117,993 | | | $ | 7,257,895 | | | $ | 5,104,842 | |
At September 30, 2009, construction loans totaled $564.106 million, consisting of approximately $152 million of single family residential construction loans; $77 million of land development loans; $84 million of raw land loans; $104 million of residential lot loans; $48 million of commercial lot loans; and $99 million of commercial and other construction loans. This is a decrease of $49.280 million from construction loans at June 30, 2009.
At September 30, 2009, Prosperity had $8.957 billion in total assets, $3.406 billion in loans, and $7.118 billion in deposits. Assets, loans and deposits at September 30, 2009 increased by 32.0%, 4.9% and 39.4%, respectively, compared with their level at September 30, 2008.
Results of operations for the nine months ended September 30, 2009
For the nine months ended September 30, 2009, net income was $81.310 million compared with $61.822 million for the same period in 2008. Net income per diluted common share was $1.76 for the nine months ended September 30, 2009 compared with $1.37 for the same period in 2008. Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2009 were 1.22%, 8.39% and 28.72%, respectively. Prosperity’s efficiency ratio was 47.60% for the nine months ended September 30, 2009.
Net interest income before provision for credit losses for the nine months ended September 30, 2009 increased $63.240 million or 38.6%, to $227.012 million compared with $163.772 million during the same period in 2008. The increase was attributable primarily to a 40.5% increase in average earning assets.
Non-interest income increased $6.524 million or 16.8% to $45.386 million for the nine months ended September 30, 2009 compared with $38.862 million for the same period in 2008. The increase was mainly attributable to an increase in service charges on deposit accounts related to accounts assumed from the FDIC as part of the Franklin Bank transaction and deposit accounts assumed from the 1st Choice acquisition.
Non-interest expense increased $23.314 million or 22.0% to $129.524 million for the nine months ended September 30, 2009 compared with $106.210 million for the same period in 2008. The increase was attributable to the increased expenses related to operating the additional banking offices that were acquired in the Franklin Bank transaction, the 1st Choice acquisition and FDIC deposit insurance assessments, partially offset by a $14.025 million pre-tax impairment charge on securities recognized in the third quarter of 2008.
The provision for credit losses was $20.275 million for the nine months ended September 30, 2009 compared to $3.867 million for the nine months ended September 30, 2008. Net charge offs were $9.932 million for the nine months ended September 30, 2009 compared to $4.611 million for the nine months ended September 30, 2008.
Asset Quality
Non-performing assets totaled $21.920 million or 0.29% of average earning assets at September 30, 2009 compared with $14.536 million or 0.26% of average earning assets at September 30, 2008 and $19.587 million or 0.26% of average earnings assets at June 30, 2009. The allowance for credit losses was 1.39% of total loans at September 30, 2009 compared with 1.05% at September 30, 2008 and 1.23% of total loans at June 30, 2009.
Non-performing assets (In thousands) | | Sept 30, 2009 | | | June 30, 2009 | | | Sept 30, 2008 | |
| | | Amount | | | | # | | | Amount | | | | # | | | Amount | | | | # | |
| Commercial | | $ | 920 | | | | 26 | | | $ | 955 | | | | 28 | | | $ | 1,600 | | | | 26 | |
| Construction | | | 10,975 | | | | 40 | | | | 10,969 | | | | 38 | | | | 6,562 | | | | 29 | |
| 1-4 family (including home equity) | | | 1,285 | | | | 16 | | | | 1,353 | | | | 22 | | | | 2,962 | | | | 17 | |
| Commercial real estate (including multi-family) | | | 8,592 | | | | 13 | | | | 6,157 | | | | 9 | | | | 2,886 | | | | 8 | |
| Agriculture | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 400 | | | | 2 | |
| Consumer | | | 148 | | | | 13 | | | | 153 | | | | 11 | | | | 126 | | | | 18 | |
| Other | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Total | | $ | 21,920 | | | | 108 | | | $ | 19,587 | | | | 108 | | | $ | 14,536 | | | | 100 | |
Net Charge-offs (In thousands) | | Three Months Ended Sept 30, 2009 | | | Three Months Ended June 30, 2009 | | | Three Months Ended Sept 30, 2008 | |
| Commercial | | $ | 712 | | | $ | 307 | | | $ | 223 | |
| Construction | | | 780 | | | | 1,185 | | | | 1,043 | |
| 1-4 family (including home equity) | | | 297 | | | | 510 | | | | 128 | |
| Commercial real estate (including multi-family) | | | 215 | | | | 1,091 | | | | (14 | ) |
| Agriculture | | | 53 | | | | (1 | ) | | | 51 | |
| Consumer | | | 492 | | | | 434 | | | | 373 | |
| Total | | $ | 2,549 | | | $ | 3,526 | | | $ | 1,804 | |
The provision for credit losses was $7.250 million for the three months ended September 30, 2009 and $1.700 million for the three months ended September 30, 2008. Prosperity’s loan loss reserve model called for increased provisioning in the third quarter due to increased charge-offs resulting from a general weakening of the economy. Net charge offs were $2.549 million for the three months ended September 30, 2009 and $1.804 million for the three months ended September 30, 2008.
Conference Call
Prosperity’s management team will host a conference call on Friday, October 16, 2009 at 10:30 a.m. Eastern Daylight Time (9:30 a.m. Central Daylight Time) to discuss Prosperity’s third quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-895-4790, the reference code is PBTX.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website at www.prosperitybanktx.com. The webcast may be accessed directly from Prosperity’s Home page under News and Events.
Assumption of deposits and acquisition of certain assets from the FDIC as receiver for Franklin Bank, SSB
On November 7, 2008, Prosperity Bank® paid a deposit premium of approximately $60.918 million to assume approximately $3.6 billion of deposits, including all uninsured deposits, from the FDIC, acting in its capacity as receiver for Franklin Bank. The FDIC entered into a purchase and assumption agreement with Prosperity Bank, which paid a premium to ensure that all deposits of Franklin Bank, both insured and uninsured, were transferred to Prosperity Bank®. Under the terms of the purchase and assumption agreement, Prosperity Bank® acquired certain assets from the FDIC, including approximately $350 million in US Treasury and Agency Securities and approximately $350 million in performing loans. The remaining net proceeds were predominately invested in US Agency Securities.
While Franklin Bank operated forty-five (45) full service banking offices, Prosperity Bank continues to operate thirty-three (33) of these locations and has consolidated the remainder with other nearby Prosperity locations.
Acquisition of 1st Choice Bancorp, Inc.
On June 1, 2008, Prosperity completed its previously announced acquisition of 1st Choice Bancorp, Inc. and its wholly owned subsidiary, 1st Choice Bank. 1st Choice Bancorp, Inc. operated two (2) banking offices in Houston, Texas, with one location in South Houston and another in the Heights area which was consolidated with Prosperity’s Heights location and is located in 1st Choice’s Heights banking office. As of May 31, 2008, 1st Choice Bancorp reported total assets of approximately $314.9 million, loans of approximately $192.7 million, deposits of approximately $285.2 million and stockholders’ equity of approximately $26.4 million.
In connection with the acquisition, Prosperity issued 1,757,757 shares of its common stock and paid approximately $18.758 million in cash for all outstanding shares of 1st Choice Bancorp.
Prosperity Bancshares, Inc.®
Prosperity Bancshares, Inc.®, a $9.0 billion Houston, Texas based regional financial holding company, formed in 1983, operates under a community banking philosophy and seeks to develop broad customer relationships based on service and convenience. Prosperity offers a variety of traditional loan and deposit products to its customers, which consist primarily of small and medium sized businesses and consumers. In addition to established banking products, Prosperity offers a complete line of services including: Internet Banking services at http://www.prosperitybanktx.com, Retail Brokerage Services, MasterMoney Debit Cards, and 24 hour voice response banking. Prosperity currently operates one hundred fifty-eight (158) full service banking locations; fifty-one (51) in the Houston area; twenty-seven (27) in the South Texas area including Corpus Christi and Victoria; twenty-four (24) in the Dallas/Fort Worth area; twenty (20) in the East Texas area; twenty-seven (27) in the Central Texas area including Austin and San Antonio; and nine (9) in the Bryan/College Station area.
Bryan/College Station - Bryan Bryan-East Bryan-North Caldwell College Station Greens Prairie Navasota Rock Prairie Wellborn Road Central Texas Area - Austin - Allandale Cedar Park Congress 183 Lakeway Liberty Hill Northland Oak Hill Parmer Lane Research Blvd Rollingwood Slaughter Lane Other Central Texas Locations - Bastrop Dime Box Dripping Springs Elgin Flatonia Georgetown Kingsland La Grange Lexington New Braunfels Round Rock San Antonio Schulenburg Smithville Weimar Dallas/Fort Worth Area - Dallas - Abrams Centre | Balch Springs Camp Wisdom Cedar Hill Central Expressway Frisco Frisco-West Kiest Preston Road Red Oak The Colony Turtle Creek Westmoreland Fort Worth - - Haltom City Keller Roanoke Stockyards Other Dallas/Fort Worth Locations - Azle Ennis Gainesville Mesquite Muenster Sanger Waxahachie East Texas Area - Athens Athens-South Blooming Grove Canton Carthage Corsicana Crockett Eustace Grapeland Gun Barrel City Jacksonville Kerens Longview Mount Vernon Palestine Rusk Seven Points Tyler | Tyler-University Winnsboro Houston Area - Houston - Aldine Bellaire Clear Lake Copperfield Cypress Downtown Fairfield Gessner Gladebrook Harrisburg Heights Highway 6 West Hillcroft Little York Medical Center Memorial Drive Pasadena Pecan Grove River Oaks Sugar Land SW Medical Center Tanglewood Uptown Waugh Drive Westheimer Woodcreek Other Houston Area Locations - Angleton Beaumont Cinco Ranch Cleveland East Bernard Edna El Campo Dayton Galveston Groves Hempstead Hitchcock Katy | Liberty Magnolia Mont Belvieu Nederland Needville Sweeny Tomball Waller West Columbia Wharton Winnie Wirt South Texas Area - Corpus Christi - Airline Carmel Northwest Saratoga Water Street Other South Texas Locations - Alice Aransas Pass Bay City Beeville Cuero Goliad Gonzales Hallettsville Kingsville Mathis Padre Island Palacios Pleasanton Port Lavaca Portland Rockport Seguin Sinton Victoria Victoria-North Yoakum Yorktown |
“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 securities laws that are based on current expectations, assumptions, estimates and projections about Prosperity and its subsidiaries. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity’s control that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. 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); 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 fluctuations and interest rate fluctuations; weather; and the stock price volatility associated with “small-cap” companies. These and various other factors are discussed in Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2008 and other reports and statements we have filed with the SEC. Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from www.prosperitybanktx.com.
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| | | Three Months Ended | | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Selected Earnings and Per | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Share Data | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Total interest income | | $ | 101,695 | | | $ | 84,846 | | | $ | 310,029 | | | $ | 251,290 | |
| Total interest expense | | | 24,282 | | | | 27,040 | | | | 83,017 | | | | 87,518 | |
| Net interest income | | | 77,413 | | | | 57,806 | | | | 227,012 | | | | 163,772 | |
| Provision for credit losses | | | 7,250 | | | | 1,700 | | | | 20,275 | | | | 3,867 | |
| Net interest income after | | | | | | | | | | | | | | | | |
| provision for credit losses | | | 70,163 | | | | 56,106 | | | | 206,737 | | | | 159,905 | |
| | | | | | | | | | | | | | | | | |
| Total non-interest income | | | 15,236 | | | | 13,117 | | | | 45,386 | | | | 38,862 | |
Total non-interest expense (A) | | | 41,201 | | | | 46,230 | | | | 129,524 | | | | 106,210 | |
| Net income before taxes | | | 44,198 | | | | 22,993 | | | | 122,599 | | | | 92,557 | |
| Federal income taxes | | | 14,876 | | | | 7,546 | | | | 41,289 | | | | 30,735 | |
| | | | | | | | | | | | | | | | | |
Net income (B) | | $ | 29,322 | | | $ | 15,447 | | | $ | 81,310 | | | $ | 61,822 | |
| | | | | | | | | | | | | | | | | |
Basic earnings per share (C) | | $ | 0.64 | | | $ | 0.34 | | | $ | 1.76 | | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | |
Diluted earnings per share (C) | | $ | 0.63 | | | $ | 0.33 | | | $ | 1.76 | | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,153 | | | | 46,072 | | | | 46,153 | | | | 46,072 | |
| Weighted average shares | | | | | | | | | | | | | | | | |
| outstanding (basic) | | | 46,125 | | | | 46,065 | | | | 46,106 | | | | 45,038 | |
| Weighted average shares | | | | | | | | | | | | | | | | |
| outstanding (diluted) | | | 46,347 | | | | 46,302 | | | | 46,243 | | | | 45,217 | |
(A) Total non-interest expense for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax impairment charge on securities.
(B) Earnings for the three and nine months ended September 30, 2008 include a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities.
(C) Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities which resulted in a $0.19 and $0.20 decrease in basic and diluted earnings per share to $0.34 and $0.33, respectively, for the three months ended September 30, 2008 and a $0.21 and $0.20 decrease in basic and diluted earnings per share to $1.37 and $1.37, respectively, for the nine months ended September 30, 2008.
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Balance Sheet Averages | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Total loans | | $ | 3,431,061 | | | $ | 3,289,203 | | | | 3,477,972 | | | $ | 3,212,176 | |
| Investment securities | | | 4,062,796 | | | | 2,292,571 | | | | 4,019,370 | | | | 2,134,396 | |
| Federal funds sold and | | | | | | | | | | | | | | | | |
| other temporary | | | | | | | | | | | | | | | | |
| investments | | | 107,008 | | | | 18,854 | | | | 98,782 | | | | 61,264 | |
| Total earning assets | | | 7,600,865 | | | | 5,600,628 | | | | 7,596,124 | | | | 5,407,836 | |
| Allowance for credit losses | | | (43,610 | ) | | | (33,746 | ) | | | (40,045 | ) | | | (32,839 | ) |
| Cash and due from banks | | | 126,659 | | | | 134,849 | | | | 139,017 | | | | 137,177 | |
| Goodwill | | | 875,176 | | | | 811,726 | | | | 875,450 | | | | 785,853 | |
| Core deposit intangibles (CDI) | | | 39,027 | | | | 46,240 | | | | 39,217 | | | | 44,840 | |
| Other real estate | | | 13,910 | | | | 6,972 | | | | 11,508 | | | | 8,984 | |
| Fixed assets, net | | | 150,216 | | | | 124,828 | | | | 141,510 | | | | 124,082 | |
| Other assets | | | 105,304 | | | | 109,952 | | | | 106,204 | | | | 112,720 | |
| Total assets | | $ | 8,867,547 | | | $ | 6,801,449 | | | $ | 8,868,985 | | | $ | 6,588,653 | |
| | | | | | | | | | | | | | | | | |
| Non-interest bearing deposits | | $ | 1,475,878 | | | $ | 1,266,924 | | | $ | 1,490,911 | | | $ | 1,212,379 | |
| Interest bearing deposits | | | 5,747,980 | | | | 3,920,291 | | | | 5,761,958 | | | | 3,842,826 | |
| Total deposits | | | 7,223,858 | | | | 5,187,215 | | | | 7,252,869 | | | | 5,055,205 | |
| Securities sold under | | | | | | | | | | | | | | | | |
| repurchase agreements | | | 109,961 | | | | 95,533 | | | | 95,488 | | | | 81,390 | |
| Federal funds purchased and | | | | | | | | | | | | | | | | |
| other borrowings | | | 49,539 | | | | 146,172 | | | | 53,733 | | | | 106,572 | |
| Junior subordinated | | | | | | | | | | | | | | | | |
| debentures | | | 92,265 | | | | 92,265 | | | | 92,265 | | | | 101,429 | |
| Other liabilities | | | 77,913 | | | | 55,105 | | | | 82,492 | | | | 61,405 | |
Shareholders' equity(D) | | | 1,314,011 | | | | 1,225,159 | | | | 1,292,138 | | | | 1,182,652 | |
| Total liabilities and equity | | $ | 8,867,547 | | | $ | 6,801,449 | | | $ | 8,868,985 | | | $ | 6,588,653 | |
(D) Includes $13,735 and ($3,643) in after tax unrealized gains (losses) on available for sale securities for the three months ending September 30, 2009 and September 30, 2008, respectively, and $13,767 and ($1,109) for the nine months ending September 30, 2009 and September 30, 2008, respectively.
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Income Statement Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Interest on loans | | $ | 54,809 | | | $ | 56,925 | | | $ | 165,859 | | | $ | 171,393 | |
| Interest on securities | | | 46,812 | | | | 27,834 | | | | 143,990 | | | | 78,473 | |
| Interest on federal funds sold | | | | | | | | | | | | | | | | |
| and other temporary | | | | | | | | | | | | | | | | |
| investments | | | 74 | | | | 87 | | | | 180 | | | | 1,424 | |
| Total interest income | | | 101,695 | | | | 84,846 | | | | 310,029 | | | | 251,290 | |
| Interest expense - deposits | | | 22,694 | | | | 23,874 | | | | 77,772 | | | | 78,029 | |
| Interest expense - debentures | | | 879 | | | | 1,410 | | | | 2,957 | | | | 4,987 | |
| Interest expense - other | | | 709 | | | | 1,756 | | | | 2,288 | | | | 4,502 | |
| Total interest expense | | | 24,282 | | | | 27,040 | | | | 83,017 | | | | 87,518 | |
Net interest income (E) | | | 77,413 | | | | 57,806 | | | | 227,012 | | | | 163,772 | |
| Provision for credit losses | | | 7,250 | | | | 1,700 | | | | 20,275 | | | | 3,867 | |
| Net interest income after | | | | | | | | | | | | | | | | |
| provision for credit losses | | | 70,163 | | | | 56,106 | | | | 206,737 | | | | 159,905 | |
| Service charges on | | | | | | | | | | | | | | | | |
| deposit accounts | | | 13,554 | | | | 11,348 | | | | 38,789 | | | | 32,581 | |
| Net (loss) gain on sale of assets | | | (20 | ) | | | 34 | | | | 277 | | | | 715 | |
| Net gain (loss) on sale of ORE | | | 115 | | | | (210 | ) | | | 552 | | | | (648 | ) |
| Brokered mortgage income | | | 59 | | | | 74 | | | | 269 | | | | 296 | |
| Net gain on sale of held for | | | | | | | | | | | | | | | | |
| sale loans | | | 0 | | | | 46 | | | | 0 | | | | 229 | |
| Other non-interest income | | | 1,528 | | | | 1,825 | | | | 5,499 | | | | 5,689 | |
| Total non-interest income | | | 15,236 | | | | 13,117 | | | | 45,386 | | | | 38,862 | |
| | | | | | | | | | | | | | | | | |
Salaries and benefits (F) | | | 21,507 | | | | 17,526 | | | | 64,649 | | | | 50,407 | |
| CDI amortization | | | 2,479 | | | | 2,562 | | | | 7,635 | | | | 7,513 | |
| Net occupancy and equipment | | | 3,624 | | | | 3,088 | | | | 11,116 | | | | 8,765 | |
| Depreciation | | | 2,100 | | | | 1,955 | | | | 6,170 | | | | 5,812 | |
| Data processing | | | | | | | | | | | | | | | | |
| and software amortization | | | 1,446 | | | | 1,319 | | | | 5,063 | | | | 3,971 | |
| Impairment charge on | | | | | | | | | | | | | | | | |
| securities | | | 0 | | | | 14,025 | | | | 0 | | | | 14,025 | |
| Other non-interest expense | | | 10,045 | | | | 5,755 | | | | 34,891 | | | | 15,717 | |
| Total non-interest expense | | | 41,201 | | | | 46,230 | | | | 129,524 | | | | 106,210 | |
| Net income before taxes | | | 44,198 | | | | 22,993 | | | | 122,599 | | | | 92,557 | |
| Federal income taxes | | | 14,876 | | | | 7,546 | | | | 41,289 | | | | 30,735 | |
| Net income available | | | | | | | | | | | | | | | | |
to common shareholders(G) | | $ | 29,322 | | | $ | 15,447 | | | $ | 81,310 | | | $ | 61,822 | |
(E) Net interest income on a tax equivalent basis would be $78,111 and $58,471 for the three months ended September 30, 2009 and September 30, 2008, respectively, and $229,096 and $165,995 for the nine months ended September 30, 2009 and September 30, 2008, respectively.
(F) Salaries and benefits includes stock-based compensation expense of $267 and $470 for the three months ended September 30, 2009 and September 30, 2008, respectively, and $887 and $1,111 for the nine months ended September 30, 2009 and September 30, 2008, respectively.
(G) Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| | | Three Months Ended | | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Common Share and | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Other Data | | | | | | | | | | | | |
| Employees - FTE | | | 1,608 | | | | 1,366 | | | | 1,608 | | | | 1,366 | |
| | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 28.75 | | | $ | 26.68 | | | $ | 28.75 | | | $ | 26.68 | |
| Tangible book value per share | | $ | 8.93 | | | $ | 8.08 | | | $ | 8.93 | | | $ | 8.08 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,153 | | | | 46,072 | | | | 46,153 | | | | 46,072 | |
| Weighted average shares | | | | | | | | | | | | | | | | |
| outstanding (basic) | | | 46,125 | | | | 46,065 | | | | 46,106 | | | | 45,038 | |
| Weighted average shares | | | | | | | | | | | | | | | | |
| outstanding (diluted) | | | 46,347 | | | | 46,302 | | | | 46,243 | | | | 45,217 | |
| | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 2,878 | | | $ | 2,757 | | | $ | 2,878 | | | $ | 2,757 | |
| Accruing loans 90 or more | | | | | | | | | | | | | | | | |
| days past due | | | 5,938 | | | | 4,083 | | | | 5,938 | | | | 4,083 | |
| Restructured loans | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Total non-performing loans | | | 8,816 | | | | 6,840 | | | | 8,816 | | | | 6,840 | |
| Repossessed assets | | | 366 | | | | 158 | | | | 366 | | | | 158 | |
| Other real estate | | | 12,738 | | | | 7,538 | | | | 12,738 | | | | 7,538 | |
| Total non-performing assets | | $ | 21,920 | | | $ | 14,536 | | | $ | 21,920 | | | $ | 14,536 | |
| | | | | | | | | | | | | | | | | |
| Allowance for credit losses at | | | | | | | | | | | | | | | | |
| end of period | | $ | 47,312 | | | $ | 33,981 | | | $ | 47,312 | | | $ | 33,981 | |
| | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 2,549 | | | $ | 1,804 | | | $ | 9,932 | | | $ | 4,611 | |
| | | | | | | | | | | | | | | | | |
Basic earnings per share (H) | | $ | 0.64 | | | $ | 0.34 | | | $ | 1.76 | | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | |
Diluted earnings per share (H) | | $ | 0.63 | | | $ | 0.33 | | | $ | 1.76 | | | $ | 1.37 | |
(H) Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities which resulted in a $0.19 and $0.20 decrease in basic and diluted earnings per share to $0.34 and $0.33, respectively, for the three months ended September 30, 2008 and a $0.21 and $0.20 decrease in basic and diluted earnings per share to $1.37 and $1.37, respectively, for the nine months ended September 30, 2008.
Prosperity Bancshares, Inc.®
Financial Highlights
| | | Three Months Ended | | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Performance Ratios | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Return on average | | | | | | | | | | | | |
assets (annualized) (I) | | | 1.32 | % | | | 0.91 | % | | | 1.22 | % | | | 1.25 | % |
| Return on average common | | | | | | | | | | | | | | | | |
equity (annualized) (I) | | | 8.93 | % | | | 5.04 | % | | | 8.39 | % | | | 6.97 | % |
| Return on average tangible | | | | | | | | | | | | | | | | |
common equity (annualized) (I) | | | 29.34 | % | | | 16.83 | % | | | 28.72 | % | | | 23.42 | % |
| Net interest margin | | | | | | | | | | | | | | | | |
(tax equivalent) (annualized) (J) | | | 4.08 | % | | | 4.15 | % | | | 4.03 | % | | | 4.10 | % |
| | | | | | | | | | | | | | | | | |
Efficiency ratio(K) | | | 44.46 | % | | | 45.43 | % | | | 47.60 | % | | | 45.65 | % |
| | | | | | | | | | | | | | | | | |
| Asset Quality Ratios | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Non-performing assets to | | | | | | | | | | | | | | | | |
| average earning assets | | | 0.29 | % | | | 0.26 | % | | | 0.29 | % | | | 0.27 | % |
| Non-performing assets to loans | | | | | | | | | | | | | | | | |
| and other real estate | | | 0.64 | % | | | 0.45 | % | | | 0.64 | % | | | 0.45 | % |
| Net charge-offs | | | | | | | | | | | | | | | | |
| to average loans | | | 0.07 | % | | | 0.05 | % | | | 0.29 | % | | | 0.14 | % |
| Allowance for credit losses to | | | | | | | | | | | | | | | | |
| total loans | | | 1.39 | % | | | 1.05 | % | | | 1.39 | % | | | 1.05 | % |
| | | | | | | | | | | | | | | | | |
| Common Stock Market Price | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| High | | $ | 37.36 | | | $ | 46.48 | | | $ | 37.36 | | | $ | 46.48 | |
| | | | | | | | | | | | | | | | | |
| Low | | $ | 28.13 | | | $ | 23.32 | | | $ | 20.04 | | | $ | 21.96 | |
| | | | | | | | | | | | | | | | | |
| Period end market price | | $ | 34.79 | | | $ | 33.99 | | | $ | 34.79 | | | $ | 33.99 | |
(I) Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities which resulted in a 53 and 19 basis point decrease in return on average assets to 0.91% and 1.25%, respectively, a 298 and 103 basis point decrease in return on average equity to 5.04% and 6.97%, respectively, and a 993 and 345 basis point decrease in return on average tangible common equity to 16.83% and 23.42%, respectively
(J) Net interest margin for all periods presented is calculated on an actual 365 or actual 366 day basis.
(K) The Company revised its efficiency ratio in the fourth quarter 2008 and no longer excludes gains and losses on the sale of ORE. The efficiency ratio is calculated by dividing total non-interest expense (excluding provision for credit losses) by net interest income plus non-interest income (excluding net gains and losses on the sale of securities and assets and impairment charge on securities). Prior period amounts have been restated to reflect the current methodology. Additionally, taxes are not part of this calculation.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Sept 30, 2009 | | | June 30, 2009 | | | March 31, 2009 | | | Dec 31, 2008 | |
| Loan Portfolio | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 439,848 | | | | 12.92 | % | | $ | 461,622 | | | | 13.38 | % | | $ | 461,514 | | | | 13.18 | % | | $ | 499,143 | | | | 13.99 | % |
| Construction | | | 564,106 | | | | 16.56 | % | | | 613,386 | | | | 17.77 | % | | | 643,151 | | | | 18.37 | % | | | 666,080 | | | | 18.67 | % |
| 1-4 family residential | | | 692,885 | | | | 20.34 | % | | | 675,702 | | | | 19.58 | % | | | 667,392 | | | | 19.06 | % | | | 668,096 | | | | 18.73 | % |
| Home equity | | | 116,873 | | | | 3.43 | % | | | 115,029 | | | | 3.33 | % | | | 112,053 | | | | 3.20 | % | | | 107,048 | | | | 3.01 | % |
| Commercial real estate | | | 1,336,454 | | | | 39.24 | % | | | 1,318,489 | | | | 38.20 | % | | | 1,346,056 | | | | 38.45 | % | | | 1,343,401 | | | | 37.66 | % |
| Agriculture | | | 145,176 | | | | 4.26 | % | | | 149,515 | | | | 4.33 | % | | | 144,384 | | | | 4.12 | % | | | 145,649 | | | | 4.08 | % |
| Consumer | | | 110,795 | | | | 3.25 | % | | | 117,576 | | | | 3.41 | % | | | 126,750 | | | | 3.62 | % | | | 137,640 | | | | 3.86 | % |
| Total Loans | | $ | 3,406,137 | | | | | | | $ | 3,451,319 | | | | | | | $ | 3,501,300 | | | | | | | $ | 3,567,057 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing DDA | | $ | 1,473,189 | | | | 20.70 | % | | $ | 1,476,378 | | | | 20.34 | % | | $ | 1,510,005 | | | | 20.95 | % | | $ | 1,522,983 | | | | 20.85 | % |
| Interest bearing DDA | | | 1,066,778 | | | | 14.99 | % | | | 1,060,965 | | | | 14.62 | % | | | 1,030,826 | | | | 14.30 | % | | | 1,082,078 | | | | 14.82 | % |
| Money Market | | | 1,682,345 | | | | 23.63 | % | | | 1,614,874 | | | | 22.25 | % | | | 1,495,724 | | | | 20.76 | % | | | 1,400,673 | | | | 19.18 | % |
| Savings | | | 320,078 | | | | 4.50 | % | | | 325,232 | | | | 4.48 | % | | | 322,130 | | | | 4.47 | % | | | 309,938 | | | | 4.24 | % |
| Time < $100 | | | 1,289,362 | | | | 18.11 | % | | | 1,418,375 | | | | 19.54 | % | | | 1,491,380 | | | | 20.69 | % | | | 1,577,431 | | | | 21.60 | % |
| Time > $100 | | | 1,286,241 | | | | 18.07 | % | | | 1,362,071 | | | | 18.77 | % | | | 1,356,814 | | | | 18.83 | % | | | 1,410,194 | | | | 19.31 | % |
| Total Deposits | | $ | 7,117,993 | | | | | | | $ | 7,257,895 | | | | | | | $ | 7,206,879 | | | | | | | $ | 7,303,297 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loan to Deposit Ratio | | | 47.9 | % | | | | | | | 47.6 | % | | | | | | | 48.6 | % | | | | | | | 48.8 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Single family residential construction | | $ | 152,056 | | | | 26.96 | % | | $ | 177,632 | | | | 28.96 | % | | $ | 214,034 | | | | 33.28 | % | | $ | 237,191 | | | | 35.61 | % |
| Land development | | | 76,996 | | | | 13.65 | % | | | 86,363 | | | | 14.08 | % | | | 91,005 | | | | 14.15 | % | | | 90,846 | | | | 13.64 | % |
| Raw land | | | 84,384 | | | | 14.96 | % | | | 96,157 | | | | 15.67 | % | | | 89,003 | | | | 13.84 | % | | | 89,120 | | | | 13.38 | % |
| Residential lots | | | 103,565 | | | | 18.36 | % | | | 101,321 | | | | 16.52 | % | | | 104,684 | | | | 16.28 | % | | | 106,869 | | | | 16.04 | % |
| Commercial lots | | | 48,139 | | | | 8.53 | % | | | 49,614 | | | | 8.09 | % | | | 37,318 | | | | 5.80 | % | | | 39,374 | | | | 5.91 | % |
| Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| construction and other | | | 98,966 | | | | 17.54 | % | | | 102,299 | | | | 16.68 | % | | | 107,107 | | | | 16.65 | % | | | 102,680 | | | | 15.42 | % |
| Total Construction Loans | | $ | 564,106 | | | | | | | $ | 613,386 | | | | | | | $ | 643,151 | | | | | | | $ | 666,080 | | | | | |
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Sept 30, 2009 | | | June 30, 2009 | | | Mar 31, 2009 | | | Dec 31, 2008 | | | Sept 30, 2008 | |
Balance Sheet Data (at period end) | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | |
| Total loans | | $ | 3,406,137 | | | $ | 3,451,319 | | | $ | 3,501,300 | | | $ | 3,567,057 | | | $ | 3,248,617 | |
Investment securities (L) | | | 4,255,057 | | | | 3,981,109 | | | | 3,991,200 | | | | 4,160,401 | | | | 2,294,403 | |
| Federal funds sold and other | | | | | | | | | | | | | | | | | | | | |
| temporary investments | | | 35,930 | | | | 128,451 | | | | 14,930 | | | | 16,404 | | | | 25,748 | |
| Total earning assets | | | 7,697,124 | | | | 7,560,879 | | | | 7,507,430 | | | | 7,743,862 | | | | 5,568,768 | |
| Allowance for credit losses | | | (47,312 | ) | | | (42,611 | ) | | | (39,238 | ) | | | (36,970 | ) | | | (33,981 | ) |
| Cash and due from banks | | | 120,932 | | | | 142,860 | | | | 148,938 | | | | 212,335 | | | | 159,386 | |
| Goodwill | | | 876,958 | | | | 875,434 | | | | 874,356 | | | | 874,654 | | | | 811,916 | |
| Core deposit intangibles | | | 37,825 | | | | 40,305 | | | | 42,796 | | | | 38,196 | | | | 44,974 | |
| Other real estate | | | 12,738 | | | | 11,101 | | | | 9,134 | | | | 4,450 | | | | 7,538 | |
| Fixed assets, net | | | 149,725 | | | | 149,742 | | | | 151,544 | | | | 123,638 | | | | 123,823 | |
| Other assets | | | 109,342 | | | | 101,241 | | | | 104,237 | | | | 112,199 | | | | 105,485 | |
| Total assets | | $ | 8,957,332 | | | $ | 8,838,951 | | | $ | 8,799,197 | | | $ | 9,072,364 | | | $ | 6,787,909 | |
| | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 1,473,189 | | | $ | 1,476,378 | | | $ | 1,510,005 | | | $ | 1,522,983 | | | $ | 1,263,407 | |
| Interest bearing deposits | | | 5,644,804 | | | | 5,781,517 | | | | 5,696,874 | | | | 5,780,314 | | | | 3,841,435 | |
| Total deposits | | | 7,117,993 | | | | 7,257,895 | | | | 7,206,879 | | | | 7,303,297 | | | | 5,104,842 | |
| Securities sold under | | | | | | | | | | | | | | | | | | | | |
| repurchase agreements | | | 100,636 | | | | 96,732 | | | | 81,773 | | | | 96,017 | | | | 100,310 | |
| Federal funds purchased and | | | | | | | | | | | | | | | | | | | | |
| other borrowings | | | 253,855 | | | | 28,170 | | | | 28,441 | | | | 229,395 | | | | 219,671 | |
| Junior subordinated | | | | | | | | | | | | | | | | | | | | |
| debentures | | | 92,265 | | | | 92,265 | | | | 92,265 | | | | 92,265 | | | | 92,265 | |
| Other liabilities | | | 65,548 | | | | 64,794 | | | | 109,291 | | | | 96,284 | | | | 41,641 | |
| Total liabilities | | | 7,630,297 | | | | 7,539,856 | | | | 7,518,649 | | | | 7,817,258 | | | | 5,558,729 | |
Shareholders' equity (M) | | | 1,327,035 | | | | 1,299,095 | | | | 1,280,548 | | | | 1,255,106 | | | | 1,229,180 | |
| Total liabilities and equity | | $ | 8,957,332 | | | $ | 8,838,951 | | | $ | 8,799,197 | | | $ | 9,072,364 | | | $ | 6,787,909 | |
(L) Includes $26,688, $20,153, $23,784, $15,158 and $1,220 in unrealized gains on available for sale securities for the quarterly periods ending September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively.
(M) Includes $17,347, $13,099, $15,460, $9,853 and $793 in after-tax unrealized gains on available for sale securities for the quarterly periods ending September 30, 2009, June 30, 2009, March 31, 2009, December 31, 2008, and September 30, 2008, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | |
| | | Sept 30, 2009 | | | June 30, 2009 | | | Mar 31, 2009 | | | Dec 31, 2008 | | | Sept 30, 2008 | |
| Income Statement Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | |
| Interest on loans | | $ | 54,809 | | | $ | 55,248 | | | $ | 55,802 | | | $ | 56,073 | | | $ | 56,925 | |
| Interest on securities | | | 46,812 | | | | 47,450 | | | | 49,726 | | | | 39,713 | | | | 27,834 | |
| Interest on federal funds | | | | | | | | | | | | | | | | | | | | |
| sold and other earning | | | | | | | | | | | | | | | | | | | | |
| assets | | | 74 | | | | 70 | | | | 38 | | | | 802 | | | | 87 | |
| Total interest income | | | 101,695 | | | | 102,768 | | | | 105,566 | | | | 96,588 | | | | 84,846 | |
| Interest expense - deposits | | | 22,694 | | | | 25,621 | | | | 29,457 | | | | 29,663 | | | | 23,874 | |
| Interest expense - debentures | | | 879 | | | | 959 | | | | 1,119 | | | | 1,452 | | | | 1,410 | |
| Interest expense - other | | | 709 | | | | 667 | | | | 912 | | | | 1,516 | | | | 1,756 | |
| Total interest expense | | | 24,282 | | | | 27,247 | | | | 31,488 | | | | 32,631 | | | | 27,040 | |
| Net interest income | | | 77,413 | | | | 75,521 | | | | 74,078 | | | | 63,957 | | | | 57,806 | |
| Provision for credit losses | | | 7,250 | | | | 6,900 | | | | 6,125 | | | | 6,000 | | | | 1,700 | |
| Net interest income after | | | | | | | | | | | | | | | | | | | | |
| provision for credit losses | | | 70,163 | | | | 68,621 | | | | 67,953 | | | | 57,957 | | | | 56,106 | |
| Service charges on | | | | | | | | | | | | | | | | | | | | |
| deposits accounts | | | 13,554 | | | | 12,863 | | | | 12,372 | | | | 13,204 | | | | 11,348 | |
| Net (loss) gain on sale of assets | | | (20 | ) | | | 200 | | | | 97 | | | | 130 | | | | 34 | |
| Net gain (loss) on sale of | | | | | | | | | | | | | | | | | | | | |
| ORE | | | 115 | | | | 415 | | | | 22 | | | | (1,684 | ) | | | (210 | ) |
| Brokered mortgage income | | | 59 | | | | 140 | | | | 70 | | | | 34 | | | | 74 | |
| Net gain on sale of held for | | | | | | | | | | | | | | | | | | | | |
| sale loans | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 46 | |
| Other non-interest income | | | 1,528 | | | | 1,515 | | | | 2,456 | | | | 1,824 | | | | 1,825 | |
| Total non-interest income | | | 15,236 | | | | 15,133 | | | | 15,017 | | | | 13,508 | | | | 13,117 | |
| Salaries and benefits | | | 21,507 | | | | 20,494 | | | | 22,648 | | | | 20,411 | | | | 17,526 | |
| CDI amortization | | | 2,479 | | | | 2,492 | | | | 2,664 | | | | 2,284 | | | | 2,562 | |
| Net occupancy and equipment | | | 3,624 | | | | 3,514 | | | | 3,978 | | | | 3,704 | | | | 3,088 | |
| Depreciation | | | 2,100 | | | | 2,069 | | | | 2,001 | | | | 1,854 | | | | 1,955 | |
| Data processing and | | | | | | | | | | | | | | | | | | | | |
| software amortization | | | 1,446 | | | | 1,562 | | | | 2,055 | | | | 1,609 | | | | 1,319 | |
| Impairment charge on | | | | | | | | | | | | | | | | | | | | |
| securities | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 14,025 | |
| Other non-interest expense | | | 10,045 | | | | 14,169 | | | | 10,677 | | | | 7,724 | | | | 5,755 | |
| Total non-interest expense | | | 41,201 | | | | 44,300 | | | | 44,023 | | | | 37,586 | | | | 46,230 | |
| Net income before taxes | | | 44,198 | | | | 39,454 | | | | 38,947 | | | | 33,879 | | | | 22,993 | |
| Federal income taxes | | | 14,876 | | | | 12,944 | | | | 13,469 | | | | 11,194 | | | | 7,546 | |
| Net income available | | | | | | | | | | | | | | | | | | | | |
to common shareholders(N) | | $ | 29,322 | | | $ | 26,510 | | | $ | 25,478 | | | $ | 22,685 | | | $ | 15,447 | |
N) Earnings for the three months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities.
Prosperity Bancshares, Inc.®
Financial Highlights
| Comparative Quarterly | | Three Months Ended | |
| Asset Quality, Performance | | Sept 30, 2009 | | | June 30, 2009 | | | Mar 31, 2009 | | | Dec 31, 2008 | | | Sept 30, 2008 | |
| & Capital Ratios | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Return on average | | | | | | | | | | | | | | | |
assets (annualized)(O) | | | 1.32 | % | | | 1.20 | % | | | 1.15 | % | | | 1.09 | % | | | 0.91 | % |
| Return on average common | | | | | | | | | | | | | | | | | | | | |
equity (annualized)(O) | | | 8.93 | % | | | 8.18 | % | | | 8.02 | % | | | 7.30 | % | | | 5.04 | % |
| Return on average tangible | | | | | | | | | | | | | | | | | | | | |
equity (annualized)(O) | | | 29.34 | % | | | 27.98 | % | | | 28.52 | % | | | 24.89 | % | | | 16.83 | % |
| Net interest margin | | | | | | | | | | | | | | | | | | | | |
| (tax equivalent) (annualized) | | | 4.08 | % | | | 4.04 | % | | | 3.98 | % | | | 3.65 | % | | | 4.15 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Employees - FTE | | | 1,608 | | | | 1,634 | | | | 1,684 | | | | 1,734 | | | | 1,366 | |
| | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio | | | 44.46 | % | | | 48.98 | % | | | 49.47 | % | | | 48.60 | % | | | 45.43 | % |
| Non-performing assets to | | | | | | | | | | | | | | | | | | | | |
| average earning assets | | | 0.29 | % | | | 0.26 | % | | | 0.16 | % | | | 0.20 | % | | | 0.26 | % |
| Non-performing assets to loans | | | | | | | | | | | | | | | | | | | | |
| and other real estate | | | 0.64 | % | | | 0.57 | % | | | 0.36 | % | | | 0.40 | % | | | 0.45 | % |
| Net charge-offs to | | | | | | | | | | | | | | | | | | | | |
| average loans | | | 0.07 | % | | | 0.10 | % | | | 0.11 | % | | | 0.09 | % | | | 0.05 | % |
| Allowance for credit losses to | | | | | | | | | | | | | | | | | | | | |
| total loans | | | 1.39 | % | | | 1.23 | % | | | 1.12 | % | | | 1.04 | % | | | 1.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 28.75 | | | $ | 28.17 | | | $ | 27.78 | | | $ | 27.24 | | | $ | 26.68 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible book value per share | | $ | 8.93 | | | $ | 8.31 | | | $ | 7.88 | | | $ | 7.43 | | | $ | 8.08 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 risk-based capital | | | 11.85 | % | | | 11.24 | % | | | 10.53 | % | | | 9.89 | % | | | 12.71 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total risk-based capital | | | 13.01 | % | | | 12.28 | % | | | 11.48 | % | | | 10.76 | % | | | 13.65 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage capital | | | 6.09 | % | | | 5.81 | % | | | 5.48 | % | | | 5.68 | % | | | 7.75 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible | | | | | | | | | | | | | | | | | | | | |
| assets | | | 5.13 | % | | | 4.84 | % | | | 4.61 | % | | | 4.19 | % | | | 6.28 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Equity to assets | | | 14.82 | % | | | 14.70 | % | | | 14.55 | % | | | 13.83 | % | | | 18.11 | % |
(O) Earnings for the three months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on securities, which resulted in a 53 basis point decrease in return on average assets to 0.91%, a 298 basis point decrease in return on average equity to 5.04% and a 993 basis point decrease in return on average tangible common equity to 16.83%.
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended September 30, 2009 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | |
| Loans | | $ | 3,431,061 | | | $ | 54,809 | | | | 6.34 | % |
| Investment securities | | | 4,062,796 | | | | 46,812 | | | | 4.61 | % |
| Federal funds sold | | | | | | | | | | | | |
| and other temporary investments | | | 107,008 | | | | 74 | | | | 0.27 | % |
| Total interest earning assets | | | 7,600,865 | | | $ | 101,695 | | | | 5.31 | % |
| Allowance for credit losses | | | (43,610 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,310,292 | | | | | | | | | |
| Total assets | | $ | 8,867,547 | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 1,092,719 | | | $ | 2,253 | | | | 0.82 | % |
| Savings and money market deposits | | | 1,969,427 | | | | 4,579 | | | | 0.92 | % |
| Certificates and other time deposits | | | 2,685,834 | | | | 15,862 | | | | 2.34 | % |
| Securities sold under repurchase agreements | | | 109,961 | | | | 320 | | | | 1.15 | % |
| Federal funds purchased and other borrowings | | | 49,539 | | | | 389 | | | | 3.12 | % |
| Junior subordinated debentures | | | 92,265 | | | | 879 | | | | 3.78 | % |
| Total interest bearing liabilities | | $ | 5,999,745 | | | $ | 24,282 | | | | 1.61 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 1,475,878 | | | | | | | | | |
| Other liabilities | | | 77,913 | | | | | | | | | |
| Total liabilities | | $ | 7,553,536 | | | | | | | | | |
| Shareholders' equity | | $ | 1,314,011 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 8,867,547 | | | | | | | | | |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 77,413 | | | | 4.04 | % |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | | | | | | | |
| (tax equivalent) | | | | | | $ | 78,111 | | | | 4.08 | % |
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended September 30, 2008 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | |
| Loans | | $ | 3,289,203 | | | $ | 56,925 | | | | 6.89 | % |
| Investment securities | | | 2,292,571 | | | | 27,834 | | | | 4.86 | % |
| Federal funds sold | | | | | | | | | | | | |
| and other temporary investments | | | 18,854 | | | | 87 | | | | 1.84 | % |
| Total interest earning assets | | | 5,600,628 | | | $ | 84,846 | | | | 6.03 | % |
| Allowance for credit losses | | | (33,746 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,234,567 | | | | | | | | | |
| Total assets | | $ | 6,801,449 | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 712,741 | | | $ | 1,565 | | | | 0.87 | % |
| Savings and money market deposits | | | 1,439,838 | | | | 6,783 | | | | 1.87 | % |
| Certificates and other time deposits | | | 1,767,712 | | | | 15,526 | | | | 3.49 | % |
| Securities sold under repurchase agreements | | | 95,533 | | | | 631 | | | | 2.63 | % |
| Federal funds purchased and other borrowings | | | 146,172 | | | | 1,125 | | | | 3.06 | % |
| Junior subordinated debentures | | | 92,265 | | | | 1,410 | | | | 6.08 | % |
| Total interest bearing liabilities | | | 4,254,261 | | | $ | 27,040 | | | | 2.53 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | | 1,266,924 | | | | | | | | | |
| Other liabilities | | | 55,105 | | | | | | | | | |
| Total liabilities | | | 5,576,290 | | | | | | | | | |
| Shareholders' equity | | | 1,225,159 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 6,801,449 | | | | | | | | | |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 57,806 | | | | 4.11 | % |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | | | | | | | |
| (tax equivalent) | | | | | | $ | 58,471 | | | | 4.15 | % |
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Nine Months Ended September 30, 2009 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | |
| Loans | | $ | 3,477,972 | | | $ | 165,859 | | | | 6.38 | % |
| Investment securities | | | 4,019,370 | | | | 143,990 | | | | 4.78 | % |
| Federal funds sold | | | | | | | | | | | | |
| and other temporary investments | | | 98,782 | | | | 180 | | | | 0.24 | % |
| Total interest earning assets | | | 7,596,124 | | | $ | 310,029 | | | | 5.46 | % |
| Allowance for credit losses | | | (40,045 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,312,906 | | | | | | | | | |
| Total assets | | $ | 8,868,985 | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 1,069,884 | | | $ | 6,557 | | | | 0.82 | % |
| Savings and money market deposits | | | 1,884,542 | | | | 15,255 | | | | 1.08 | % |
| Certificates and other time deposits | | | 2,807,532 | | | | 55,960 | | | | 2.66 | % |
| Securities sold under repurchase agreements | | | 95,488 | | | | 948 | | | | 1.33 | % |
| Federal funds purchased and other borrowings | | | 53,733 | | | | 1,340 | | | | 3.33 | % |
| Junior subordinated debentures | | | 92,265 | | | | 2,957 | | | | 4.28 | % |
| Total interest bearing liabilities | | | 6,003,444 | | | $ | 83,017 | | | | 1.85 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | | 1,490,911 | | | | | | | | | |
| Other liabilities | | | 82,492 | | | | | | | | | |
| Total liabilities | | | 7,567,847 | | | | | | | | | |
| Shareholders' equity | | | 1,292,138 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 8,868,985 | | | | | | | | | |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 227,012 | | | | 4.00 | % |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | | | | | | | |
| (tax equivalent) | | | | | | $ | 229,096 | | | | 4.03 | % |
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Nine Months Ended September 30, 2008 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | |
| Loans | | $ | 3,212,176 | | | $ | 171,393 | | | | 7.13 | % |
| Investment securities | | | 2,134,396 | | | | 78,473 | | | | 4.90 | % |
| Federal funds sold | | | | | | | | | | | | |
| and other temporary investments | | | 61,264 | | | | 1,424 | | | | 3.10 | % |
| Total interest earning assets | | $ | 5,407,836 | | | $ | 251,290 | | | | 6.21 | % |
| Allowance for credit losses | | | (32,839 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,213,656 | | | | | | | | | |
| Total assets | | $ | 6,588,653 | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 775,730 | | | $ | 6,338 | | | | 1.09 | % |
| Savings and money market deposits | | | 1,354,694 | | | | 20,875 | | | | 2.06 | % |
| Certificates and other time deposits | | | 1,712,402 | | | | 50,816 | | | | 3.96 | % |
| Securities sold under repurchase agreements | | | 81,390 | | | | 1,809 | | | | 2.97 | % |
| Federal funds purchased and other borrowings | | | 106,572 | | | | 2,693 | | | | 3.38 | % |
| Junior subordinated debentures | | | 101,429 | | | $ | 4,987 | | | | 6.57 | % |
| Total interest bearing liabilities | | $ | 4,132,217 | | | $ | 87,518 | | | | 2.83 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 1,212,379 | | | | | | | | | |
| Other liabilities | | | 61,405 | | | | | | | | | |
| Total liabilities | | $ | 5,406,001 | | | | | | | | | |
| Shareholders' equity | | | 1,182,652 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 6,588,653 | | | | | | | | | |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 163,772 | | | | 4.05 | % |
| | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | | | | | | | |
| (tax equivalent) | | | | | | $ | 165,995 | | | | 4.10 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
Consolidated Financial Highlights
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 tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio for internal planning and forecasting purposes. Prosperity also reviewed its net income, earnings per share, non-interest expense and related performance ratios for the three and nine month periods ended September 30, 2008 excluding the non-recurring impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity’s financial results and Prosperity believes that its presentation, together with the accompanying reconciliations, provides a 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 measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and 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.
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
| | | Three months ended | |
| | | Sept 30, 2009 | | | June 30, 2009 | | | Mar 31, 2009 | | | Dec 31, 2008 | | | Sept 30, 2008 | |
| Return on average tangible common equity: | | | | | | | | | | |
| Net income | | $ | 29,322 | | | $ | 26,510 | | | $ | 25,478 | | | $ | 22,685 | | | $ | 15,447 | |
| Average shareholders' equity | | | 1,314,011 | | | | 1,295,737 | | | | 1,270,380 | | | | 1,242,491 | | | | 1,225,159 | |
| Less: Average goodwill and other intangible assets | | | (914,203 | ) | | | (916,754 | ) | | | (913,010 | ) | | | (877,985 | ) | | | (857,966 | ) |
| Average tangible shareholders’ equity | | $ | 399,808 | | | $ | 378,983 | | | $ | 357,370 | | | $ | 364,506 | | | $ | 367,193 | |
| Return on average tangible common equity: | | | 29.34 | % | | | 27.98 | % | | | 28.52 | % | | | 24.89 | % | | | 16.83 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible book value per share: | | | | | | | | | | | | | |
| Shareholders’ equity | | $ | 1,327,035 | | | $ | 1,299,095 | | | $ | 1,280,548 | | | $ | 1,255,106 | | | $ | 1,229,180 | |
| Less: Goodwill and other intangible assets | | | (914,783 | ) | | | (915,739 | ) | | | (917,152 | ) | | | (912,850 | ) | | | (856,890 | ) |
| Tangible shareholders’ equity | | $ | 412,252 | | | $ | 383,356 | | | $ | 363,396 | | | $ | 342,256 | | | $ | 372,290 | |
| | | | | | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,153 | | | | 46,109 | | | | 46,100 | | | | 46,080 | | | | 46,072 | |
| Tangible book value per share: | | $ | 8.93 | | | $ | 8.31 | | | $ | 7.88 | | | $ | 7.43 | | | $ | 8.08 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | | | | | | | |
| Tangible shareholders’ equity | | $ | 412,252 | | | $ | 383,356 | | | $ | 363,396 | | | $ | 342,256 | | | $ | 372,290 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 8,957,332 | | | $ | 8,838,951 | | | $ | 8,799,197 | | | $ | 9,072,364 | | | $ | 6,787,909 | |
| Less: Goodwill and other intangible assets | | | (914,783 | ) | | | (915,739 | ) | | | (917,152 | ) | | | (912,850 | ) | | | (856,890 | ) |
| Tangible assets | | $ | 8,042,549 | | | $ | 7,923,212 | | | $ | 7,882,045 | | | $ | 8,159,514 | | | $ | 5,931,019 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | 5.13 | % | | | 4.84 | % | | | 4.61 | % | | | 4.19 | % | | | 6.28 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
| | | Nine Months Ended | |
| | | Sept 30, 2009 | | | Sept 30, 2008 | |
| Return on average tangible common equity: | | | | | | |
| Net income | | $ | 81,310 | | | $ | 61,822 | |
| Average shareholders' equity | | | 1,292,138 | | | | 1,225,159 | |
| Less: Average goodwill and other intangible assets | | | (914,667 | ) | | | (857,966 | ) |
| Average tangible shareholders’ equity | | $ | 377,471 | | | $ | 367,193 | |
| Return on average tangible common equity: | | | 28.72 | % | | | 22.45 | % |
| | | | | | | | | |
| Tangible book value per share: | | | | | | | | |
| Shareholders equity | | $ | 1,327,035 | | | $ | 1,229,180 | |
| Less: Goodwill and other intangible assets | | | (914,783 | ) | | | (856,890 | ) |
| Tangible shareholders’ equity | | $ | 412,252 | | | $ | 372,290 | |
| | | | | | | | | |
| Period end shares outstanding | | | 46,153 | | | | 46,072 | |
| Tangible book value per share: | | $ | 8.93 | | | $ | 8.08 | |
| | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | | | |
| Tangible shareholders’ equity | | $ | 412,252 | | | $ | 372,290 | |
| | | | | | | | | |
| Total assets | | $ | 8,957,332 | | | $ | 6,787,909 | |
| Less: Goodwill and other intangible assets | | | (914,783 | ) | | | (856,890 | ) |
| Tangible assets | | $ | 8,042,549 | | | $ | 5,931,019 | |
| | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | 5.13 | % | | | 6.28 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
Results of operations before impairment charge in the third quarter of 2008
The following results illustrate the effect of the $14.025 million pre-tax ($9.116 million after-tax) impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities which was recognized in the third quarter of 2008(1):
| | | 3 Months Ended | | | 9 Months Ended | |
| | | September 30, 2008 | | | September 30, 2008 | |
| Adjusted non-interest expense: | | | | | | |
| Non-interest expense (GAAP) | | $ | 46,230 | | | $ | 106,210 | |
| Less: Impairment charge on securities | | | (14,025 | ) | | | (14,025 | ) |
| Adjusted non-interest expense | | $ | 32,205 | | | $ | 92,185 | |
| | | | | | | | | |
| Adjusted net income: | | | | | | | | |
| Net income (GAAP) | | $ | 15,447 | | | $ | 61,822 | |
| Add: Impairment charge on securities | | | 14,025 | | | | 14,025 | |
| Less: Tax effect of impairment charge on securities | | | (4,909 | ) | | | (4,909 | ) |
| Adjusted net income | | $ | 24,563 | | | $ | 70,938 | |
| | | | | | | | | |
| Adjusted earnings per share: | | | | | |
| Adjusted net income | | $ | 24,563 | | | $ | 70,938 | |
| Weighted average shares outstanding-basic | | | 46,065 | | | | 45,039 | |
| Adjusted earnings per share (basic) | | $ | 0.53 | | | $ | 1.58 | |
| Weighted average shares outstanding-diluted | | | 46,302 | | | | 45,217 | |
| Adjusted earnings per share (diluted) | | $ | 0.53 | | | $ | 1.57 | |
| | | | | | | | | |
| Adjusted return on average assets: | | | | | |
| Adjusted net income | | $ | 24,563 | | | $ | 70,938 | |
| Average assets | | $ | 6,801,449 | | | $ | 6,588,653 | |
| Adjusted return on average assets | | | 1.44 | % | | | 1.44 | % |
| | | | | | | | | |
| Adjusted return on average common equity: | | | | | |
| Adjusted net income | | $ | 24,563 | | | $ | 70,938 | |
| Average equity | | $ | 1,225,159 | | | $ | 1,182,652 | |
| Adjusted return on average common equity | | | 8.02 | % | | | 8.00 | % |
(1) Total non-interest income, net interest income and shareholders’ equity were not affected by the impairment charge
