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.®
FIRST QUARTER EARNINGS UP 21.7%
· 1Q 2010 Earnings Per Share of $0.66 (diluted)
· Non-Performing Assets 0.26% of Average Earning Assets
· Tangible Common Equity Ratio 5.48%
· Total Risk Based Capital increased to 14.07%
HOUSTON, April 23, 2010. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported net income for the three months ended March 31, 2010 of $30.998 million or $0.66 per diluted common share, an increase in net income of $5.520 million or 21.7%, compared with $25.478 million or $0.55 per diluted common share for the same period in 2009.
“Our company continues to perform well in the current economic environment” commented, David Zalman, Chairman and Chief Executive Officer. “Our continued focus on our core values of strong credit quality, real relationship based banking, local decision makers and expense control has resulted in another strong quarter.”
“With the completion of the acquisition of the three (3) former U.S. Bank locations in the first quarter and the scheduled completion on April 30th of nineteen (19) Texas retail bank locations of First Bank, we will have added over $900 million in deposits from year end. We believe our long term prospects continue to be bright,” continued Zalman.
In addition to Prosperity’s GAAP (generally accepted accounting principles) financial reporting, Prosperity’s management includes certain non−GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity, tangible book value per share and the tangible equity to tangible assets ratio. 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.
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Results of operations for the three months ended March 31, 2010
For the three months ended March 31, 2010, net income was $30.998 million compared with $25.478 million for the same period in 2009. Net income per diluted common share was $0.66 for the three months ended March 31, 2010 and $0.55 for the same period in 2009. Returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2010 were 1.40%, 9.07% and 27.22%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities and assets) was 43.77% for the three months ended March 31, 2010.
Net interest income before provision for credit losses for the three months ended March 31, 2010 increased 5.0% to $77.772 million compared with $74.078 million during the same period in 2009. The net interest margin on a tax equivalent basis increased to 4.20% for the three months ended March 31, 2010 compared with 3.98% for the same period in 2009. The tax equivalent net interest margin decreased 4 basis points to 4.20% reported for the three months ended March 31, 2010 from 4.24% reported for the three months ended December 31, 2009.
Non-interest income decreased $2.039 million or 13.6% to $12.978 million for the three months ended March 31, 2010 compared with $15.017 million for the same period in 2009. The decrease was mainly attributable to a decrease in NSF charges on deposit accounts and a decrease in other non-interest income. For the three months ended March 31, 2009, other non-interest income included approximately $750,000 in income paid to Prosperity by the FDIC for services performed as part of the Franklin transaction.
Non-interest expense decreased $4.298 million or 9.8% to $39.725 million for the three months ended March 31, 2010 compared with $44.023 million for the same period in 2009. The decrease was attributable to cost savings associated with the operational integration of Franklin Bank which occurred in late February 2009.
Loans at March 31, 2010 were $3.348 billion, a decrease of $152.917 million or 4.4%, compared with $3.501 billion at March 31, 2009. Loans decreased 0.8% or $28.320 million on a linked quarter basis compared with loans of $3.377 billion at December 31, 2009. As reflected in the table below, linked quarter loans at March 31, 2010 were impacted by the $33.317 million in loans acquired in connection with the U.S. Bank transaction in March 2010.
Deposits at March 31, 2010 were $7.599 billion, an increase of $392.100 million or 5.4%, compared with $7.207 billion at March 31, 2009. Linked quarter deposits increased $340.429 million or 4.7% from $7.259 billion at December 31, 2009. As reflected in the table below, linked quarter deposits at March 31, 2010 were impacted by the $374.508 million in deposits assumed in connection with the U.S. Bank transaction in March 2010.
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| Balance Sheet Data (at period end) | Mar 31, 2010 | Dec 31, 2009 | Mar 31, 2009 | |||||||||
| (In thousands) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| Loans: | ||||||||||||
| Acquired with U.S. Bank branches | $ | 33,317 | $ | 0 | $ | 0 | ||||||
| All other | 3,315,066 | 3,376,703 | 3,501,300 | |||||||||
| Total Loans | $ | 3,348,383 | $ | 3,376,703 | $ | 3,501,300 | ||||||
| Deposits: | ||||||||||||
| Assumed with U.S. Bank branches | $ | 374,508 | $ | 0 | 0 | |||||||
| All other | 7,224,471 | 7,258,550 | 7,206,879 | |||||||||
| Total Deposits | $ | 7,598,979 | $ | 7,258,550 | $ | 7,206,879 | ||||||
Average loans decreased 5.3% or $187.388 million to $3.343 billion for the three months ended March 31, 2010 compared with $3.530 billion for the same period of 2009. Linked quarter average loans decreased 1.4% or $46.687 million from $3.390 billion for the three months ended December 31, 2009. Average deposits decreased 0.3% or $24.212 million to $7.253 billion for the three months ended March 31, 2010 compared with $7.277 billion for the same period of 2009. Linked quarter average deposits increased 2.3% or $164.614 million from $7.089 billion for the three months ended December 31, 2009.
At March 31, 2010, construction loans totaled $539.430 million, consisting of approximately $135 million of single family residential construction loans; $77 million of land development loans; $77 million of raw land loans; $99 million of residential lot loans; $50 million of commercial lot loans; and $102 million of commercial construction and other construction loans. This is a decrease of $17.815 million from construction loans at December 31, 2009.
At March 31, 2010, Prosperity had $9.219 billion in total assets, $7.599 billion in deposits and $3.348 billion in loans. Assets and deposits at March 31, 2010 increased 4.8% and 5.4%, respectively, compared with their level at March 31, 2009 and loans decreased 4.4% compared with their level at March 31, 2009.
Asset Quality
Non-performing assets totaled $19.868 million or 0.26% of average earning assets at March 31, 2010 compared with $12.525 million or 0.16% of average earning assets at March 31, 2009 and $16.356 million or 0.22% of average earnings assets at December 31, 2009. The allowance for credit losses was 1.55% of total loans at March 31, 2010 compared with 1.12% at March 31, 2009 and 1.54% of total loans at December 31, 2009.
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| Non-performing assets | Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | |||||||||||||||||||||
| (In thousands) | Amount | # | Amount | # | Amount | # | ||||||||||||||||||
| Construction | $ | 8,719 | 42 | $ | 5,622 | 43 | $ | 10,975 | 40 | |||||||||||||||
| Agriculture and agriculture real estate | 4 | 1 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| 1-4 family (including home equity) | 3,946 | 36 | 2,383 | 26 | 1,285 | 16 | ||||||||||||||||||
| Commercial real estate (including multi-family) | 5,432 | 12 | 6,834 | 14 | 8,592 | 13 | ||||||||||||||||||
| Commercial | 1,662 | 25 | 1,390 | 19 | 920 | 26 | ||||||||||||||||||
| Consumer | 105 | 10 | 127 | 11 | 148 | 13 | ||||||||||||||||||
| Total | $ | 19,868 | 126 | $ | 16,356 | 113 | $ | 21,920 | 108 | |||||||||||||||
The provision for credit losses was $4.410 million for the three months ended March 31, 2010 and $6.125 million for the three months ended March 31, 2009. Net charge offs were $4.381 million for the three months ended March 31, 2010 and $3.857 million for the three months ended March 31, 2009.
Net Charge-offs (In thousands) | Three Months Ended Mar 31, 2010 | Three Months Ended Dec 31, 2009 | Three Months Ended Mar 31, 2009 | |||||||||
| 1-4 family (including home equity) | $ | 133 | $ | 446 | $ | 117 | ||||||
| Agriculture | (24 | ) | 10 | 23 | ||||||||
| Commercial | 595 | 1,762 | 761 | |||||||||
| Commercial RE (including multi-family) | 546 | 312 | 0 | |||||||||
| Construction | 2,962 | 1,009 | 2,387 | |||||||||
| Consumer | 169 | 410 | 569 | |||||||||
| Total | $ | 4,381 | $ | 3,949 | $ | 3,857 | ||||||
Conference Call
Prosperity’s management team will host a conference call on Friday, April 23, 2010 at 10:30 a.m. Eastern Daylight Time (9:30 a.m. Central Daylight Time) to discuss Prosperity’s first quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-895-1085, 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 Investor Relations page by clicking on the “1st Quarter Results and Webcast” link.
Acquisition of First Bank Branches
On February 8, 2010, Prosperity signed a definitive agreement whereby Prosperity Bank® will acquire the nineteen (19) Texas retail bank branches of First Bank, a Missouri state-chartered bank. Prosperity Bank will pay a premium of 5.5% for approximately $500 million in deposits, as well as purchase approximately $100 million in loans and other assets attributable to the branches.
First Bank’s Texas locations are all in the Houston and Dallas metropolitan areas and represent a strategic enhancement to Prosperity’s presence in these markets. After the consolidation of locations near existing Prosperity banking centers, Prosperity will operate thirty-one (31) Dallas/Fort Worth area banking centers and fifty-eight (58) Houston area banking centers.
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The deposits to be assumed are primarily core deposits and will enhance Prosperity’s market position in Texas. The $100 million in loans to be purchased were individually selected by Prosperity from First Bank’s loan portfolio associated with the Texas branches and consist of performing business and consumer-related Texas-based loans.
The definitive agreement has been approved by both banks and appropriate regulatory authorities and the transaction is expected to close during the second quarter of 2010, although delays could occur. The transaction is subject to certain closing conditions.
Acquisition of U. S. Bank’s Texas Branches
On March 29, 2010, Prosperity completed the previously announced acquisition of the three (3) Texas retail bank branches of U.S. Bank. The transaction continued Prosperity’s strategic growth and expansion of the franchise in Texas. Prosperity Bank paid a premium for approximately $375 million in deposits, as well as purchased certain loans and other assets attributable to the branches.
The three locations acquired by Prosperity were the Texas locations U.S. Bank acquired from the FDIC on October 30, 2009 when U.S. Bank acquired the nine (9) subsidiary banks of FBOP Corporation. The Texas banks were Madisonville State Bank in Madisonville, Texas; Citizens National Bank in Teague, Texas; and North Houston Bank in Houston, Texas.
Prosperity Bancshares, Inc.®
Prosperity Bancshares, Inc., a $9.2 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 sixty-one (161) full service banking locations; fifty-two (52) 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-one (21) in the East Texas area; twenty-seven (27) in the Central Texas area including Austin and San Antonio; and ten (10) in the Bryan/College Station area.
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| Central Texas Area - | Dallas/Fort Worth Area - | Rusk | Hitchcock |
| Seven Points | Katy | ||
| Austin - | Dallas - | Teague | Liberty |
| Allandale | Abrams Centre | Tyler | Magnolia |
| Cedar Park | Balch Springs | Tyler-University | Mont Belvieu |
| Congress | Camp Wisdom | Winnsboro | Nederland |
| 183 | Cedar Hill | Needville | |
| Lakeway | Central Expressway | Houston Area - | Sweeny |
| Liberty Hill | Frisco | Tomball | |
| Northland | Frisco-West | Houston - - | Waller |
| Oak Hill | Kiest | Aldine | West Columbia |
| Parmer Lane | Preston Road | Bellaire | Wharton |
| Research Blvd | Red Oak | Clear Lake | Winnie |
| Rollingwood | The Colony | Copperfield | Wirt |
| Slaughter Lane | Turtle Creek | Cypress | |
| Westmoreland | Downtown | South Texas Area - | |
| Bryan/College Station - | Eastex | ||
| Bryan | Fort Worth - | Fairfield | Corpus Christi - |
| Bryan-East | Haltom City | Gessner | Airline |
| Bryan-North | Keller | Gladebrook | Carmel |
| Caldwell | Roanoke | Harrisburg | Northwest |
| College Station | Stockyards | Heights | Saratoga |
| Greens Prairie | Highway 6 West | Water Street | |
| Madisonville | Other Dallas/Fort Worth Locations - | Hillcroft | |
| Navasota | Azle | Little York | Other South Texas |
| Wellborn Road | Ennis | Medical Center | Locations - |
| Rock Prairie | Gainesville | Memorial Drive | Alice |
| Mesquite | Pasadena | Aransas Pass | |
| Other Central Texas Locations - | Muenster | Pecan Grove | Beeville |
| Bastrop | Sanger | River Oaks | Cuero |
| Dime Box | Waxahachie | Sugar Land | Edna |
| Dripping Springs | SW Medical Center | Goliad | |
| Elgin | East Texas Area - | Tanglewood | Gonzales |
| Flatonia | Athens | Uptown | Hallettsville |
| Georgetown | Athens-South | Waugh Drive | Kingsville |
| Kingsland | Blooming Grove | Westheimer | Mathis |
| La Grange | Canton | Woodcreek | Palacios |
| Lexington | Carthage | Pleasanton | |
| New Braunfels | Corsicana | Other Houston Area | Port Aransas |
| Round Rock | Crockett | Locations - | Port Lavaca |
| San Antonio | Eustace | Angleton | Portland |
| Schulenburg | Grapeland | Bay City | Rockport |
| Smithville | Gun Barrel City | Beaumont | Seguin |
| Weimar | Jacksonville | Cinco Ranch | Sinton |
| Kerens | Cleveland | Victoria | |
| Longview | East Bernard | Victoria-North | |
| Mount Vernon | El Campo | Yoakum | |
| Palestine | Dayton | Yorktown | |
| Galveston | |||
| Groves | |||
| Hempstead |
“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 Bancshares®, 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, 2009 and other reports and statements we have filed with the SEC. Copies of the SEC filings for Prosperity Bancshares Inc.® may be downloaded from the Internet at no charge from www.prosperitybanktx.com.
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Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | ||||||||||||||||||||
| Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | June 30, 2009 | Mar 31, 2009 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Selected Earnings and Per Share Data | ||||||||||||||||||||
| Total interest income | $ | 96,496 | $ | 99,585 | $ | 101,695 | $ | 102,768 | $ | 105,566 | ||||||||||
| Total interest expense | 18,724 | 19,496 | 24,282 | 27,247 | 31,488 | |||||||||||||||
| Net interest income | 77,772 | 80,089 | 77,413 | 75,521 | 74,078 | |||||||||||||||
| Provision for credit losses | 4,410 | 8,500 | 7,250 | 6,900 | 6,125 | |||||||||||||||
| Net interest income after provision for credit losses | 73,362 | 71,589 | 70,163 | 68,621 | 67,953 | |||||||||||||||
| Total non-interest income | 12,978 | 14,711 | 15,236 | 15,133 | 15,017 | |||||||||||||||
| Total non-interest expense | 39,725 | 40,176 | 41,201 | 44,300 | 44,023 | |||||||||||||||
| Net income before taxes | 46,615 | 46,124 | 44,198 | 39,454 | 38,947 | |||||||||||||||
| Federal income taxes | 15,617 | 15,555 | 14,876 | 12,944 | 13,469 | |||||||||||||||
| Net income | $ | 30,998 | $ | 30,569 | $ | 29,322 | $ | 26,510 | $ | 25,478 | ||||||||||
| Basic earnings per share | $ | 0.67 | $ | 0.66 | $ | 0.64 | $ | 0.57 | $ | 0.55 | ||||||||||
| Diluted earnings per share | $ | 0.66 | $ | 0.65 | $ | 0.63 | $ | 0.57 | $ | 0.55 | ||||||||||
| Period end shares outstanding | 46,575 | 46,541 | 46,153 | 46,109 | 46,100 | |||||||||||||||
| Weighted average shares outstanding (basic) | 46,553 | 46,524 | 46,125 | 46,105 | 46,086 | |||||||||||||||
| Weighted average shares outstanding (diluted) | 46,858 | 46,800 | 46,347 | 46,225 | 46,139 | |||||||||||||||
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Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||
| Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 | Dec 31, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Balance Sheet Averages | ||||||||||||||||
| Total loans | $ | 3,342,842 | $ | 3,530,230 | $ | 3,389,529 | $ | 3,365,552 | ||||||||
| Investment securities | 4,177,540 | 4,030,151 | 4,152,752 | 3,229,874 | ||||||||||||
| Federal funds sold and other temporary investments | 60,536 | 66,597 | 13,607 | 451,524 | ||||||||||||
| Total earning assets | 7,580,918 | 7,626,978 | 7,555,888 | 7,046,950 | ||||||||||||
| Allowance for credit losses | (51,750 | ) | (37,220 | ) | (48,894 | ) | (33,494 | ) | ||||||||
| Cash and due from banks | 134,541 | 156,785 | 131,189 | 183,507 | ||||||||||||
| Goodwill | 877,863 | 875,925 | 876,979 | 835,328 | ||||||||||||
| Core Deposit Intangibles (CDI) | 34,202 | 37,085 | 36,543 | 42,657 | ||||||||||||
| Other real estate | 12,974 | 7,016 | 12,308 | 6,431 | ||||||||||||
| Fixed assets, net | 148,865 | 123,547 | 149,649 | 124,210 | ||||||||||||
| Other assets | 142,611 | 107,750 | 105,351 | 138,298 | ||||||||||||
| Total assets | $ | 8,880,224 | $ | 8,897,866 | $ | 8,819,013 | $ | 8,343,887 | ||||||||
| Non-interest bearing deposits | $ | 1,445,859 | $ | 1,492,026 | $ | 1,481,514 | $ | 1,425,440 | ||||||||
| Interest bearing deposits | 5,807,343 | 5,785,388 | 5,607,074 | 5,260,084 | ||||||||||||
| Total deposits | 7,253,202 | 7,277,414 | 7,088,588 | 6,685,524 | ||||||||||||
| Securities sold under repurchase agreements | 71,250 | 83,734 | 88,094 | 92,941 | ||||||||||||
| Federal funds purchased and other borrowings | 32,080 | 83,091 | 141,073 | 178,369 | ||||||||||||
| Junior subordinated debentures | 92,265 | 92,265 | 92,265 | 92,265 | ||||||||||||
| Other liabilities | 63,916 | 90,982 | 66,410 | 52,297 | ||||||||||||
Shareholders' equity(A) | 1,367,511 | 1,270,380 | 1,342,583 | 1,242,491 | ||||||||||||
| Total liabilities and equity | $ | 8,880,224 | $ | 8,897,866 | $ | 8,819,013 | $ | 8,343,887 | ||||||||
(A) Includes $17,660, $11,721, $18,216 and ($1,675) in after-tax unrealized gains (losses) on available for sale securities for the three month periods ending March 31, 2010, March 31, 2009, December 31, 2009 and December 31, 2008, respectively.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||
| Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 | Dec 31, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Income Statement Data | ||||||||||||||||
| Interest on loans | $ | 51,453 | $ | 55,802 | $ | 53,461 | $ | 56,073 | ||||||||
| Interest on securities | 45,014 | 49,726 | 46,116 | 39,713 | ||||||||||||
| Interest on federal funds sold and other temporary investments | 29 | 38 | 8 | 802 | ||||||||||||
| Total interest income | 96,496 | 105,566 | 99,585 | 96,588 | ||||||||||||
| Interest expense - deposits | 17,485 | 29,457 | 18,062 | 29,663 | ||||||||||||
| Interest expense - debentures | 791 | 1,119 | 803 | 1,452 | ||||||||||||
| Interest expense - other | 448 | 912 | 631 | 1,516 | ||||||||||||
| Total interest expense | 18,724 | 31,488 | 19,496 | 32,631 | ||||||||||||
Net interest income (B) | 77,772 | 74,078 | 80,089 | 63,957 | ||||||||||||
| Provision for credit losses | 4,410 | 6,125 | 8,500 | 6,000 | ||||||||||||
| Net interest income after provision for credit losses | 73,362 | 67,953 | 71,589 | 57,957 | ||||||||||||
| Service charges on deposit accounts | 11,589 | 12,372 | 12,953 | 13,204 | ||||||||||||
| Net gain on sale of assets | 0 | 97 | 145 | 130 | ||||||||||||
| Net gain (loss) on sale of ORE | (294 | ) | 22 | (135 | ) | (1,684 | ) | |||||||||
| Brokered mortgage income | 13 | 70 | 36 | 34 | ||||||||||||
| Other non-interest income | 1,670 | 2,456 | 1,712 | 1,824 | ||||||||||||
| Total non-interest income | 12,978 | 15,017 | 14,711 | 13,508 | ||||||||||||
Salaries and benefits (C) | 21,112 | 22,648 | 19,747 | 20,411 | ||||||||||||
| CDI amortization | 2,290 | 2,664 | 2,441 | 2,284 | ||||||||||||
| Net occupancy and equipment | 3,434 | 3,978 | 3,794 | 3,704 | ||||||||||||
| Depreciation | 2,006 | 2,001 | 2,056 | 1,854 | ||||||||||||
| Data processing and software amortization | 1,415 | 2,055 | 1,386 | 1,609 | ||||||||||||
| Other non-interest expense | 9,468 | 10,677 | 10,752 | 7,724 | ||||||||||||
| Total non-interest expense | 39,725 | 44,023 | 40,176 | 37,586 | ||||||||||||
| Net income before taxes | 46,615 | 38,947 | 46,124 | 33,879 | ||||||||||||
| Federal income taxes | 15,617 | 13,469 | 15,555 | 11,194 | ||||||||||||
| Net income available to common shareholders | $ | 30,998 | $ | 25,478 | $ | 30,569 | $ | 22,685 | ||||||||
(B) Net interest income on a tax equivalent basis would be $78,465, $74,759, $80,770 and $64,597, for the three months ended March 31, 2010, March 31, 2009, December 31, 2009 and December 31, 2008, respectively.
(C) Salaries and benefits includes stock-based compensation expense of $791, $326, $628 and $432 for the three months ended March 31, 2010, March 31, 2009, December 31, 2009 and December 31, 2008, respectively.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
As of and for the Three Months Ended | ||||||||||||||||
| Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 | Dec 31, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Common Share and Other Data | ||||||||||||||||
| Employees - FTE | 1,651 | 1,684 | 1,594 | 1,734 | ||||||||||||
| Book value per share | $ | 29.58 | $ | 27.78 | $ | 29.03 | $ | 27.24 | ||||||||
| Tangible book value per share | $ | 9.76 | $ | 7.88 | $ | 9.43 | $ | 7.43 | ||||||||
| Period end shares outstanding | 46,575 | 46,100 | 46,541 | 46,080 | ||||||||||||
| Weighted average shares outstanding (basic) | 46,553 | 46,086 | 46,524 | 46,078 | ||||||||||||
| Weighted average shares outstanding (diluted) | 46,858 | 46,139 | 46,800 | 46,276 | ||||||||||||
| Non-accrual loans | $ | 3,853 | $ | 1,402 | $ | 6,079 | $ | 2,142 | ||||||||
| Accruing loans 90 or more days past due | 2,794 | 1,562 | 2,332 | 7,594 | ||||||||||||
| Restructured loans | 0 | 0 | 0 | 0 | ||||||||||||
| Total non-performing loans | 6,647 | 2,964 | 8,411 | 9,736 | ||||||||||||
| Repossessed assets | 230 | 427 | 116 | 182 | ||||||||||||
| Other real estate | 12,991 | 9,134 | 7,829 | 4,450 | ||||||||||||
| Total non-performing assets | $ | 19,868 | $ | 12,525 | $ | 16,356 | $ | 14,368 | ||||||||
| Allowance for credit losses at end of period | $ | 51,893 | $ | 39,238 | $ | 51,863 | $ | 36,970 | ||||||||
| Net charge-offs | $ | 4,381 | $ | 3,857 | $ | 3,949 | $ | 3,011 | ||||||||
| Basic earnings per share | $ | 0.67 | $ | 0.55 | $ | 0.66 | $ | 0.49 | ||||||||
| Diluted earnings per share | $ | 0.66 | $ | 0.55 | $ | 0.65 | $ | 0.49 | ||||||||
Page 10 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | ||||||||||||||||
| Mar 31, 2010 | Mar 31, 2009 | Dec 31, 2009 | Dec 31, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average assets (annualized) | 1.40 | % | 1.15 | % | 1.39 | % | 1.09 | % | ||||||||
| Return on average common equity (annualized) | 9.07 | % | 8.02 | % | 9.11 | % | 7.30 | % | ||||||||
| Return on average tangible common equity (annualized) | 27.22 | % | 28.52 | % | 28.50 | % | 24.89 | % | ||||||||
Net interest margin (D) (tax equivalent) (annualized) | 4.20 | % | 3.98 | % | 4.24 | % | 3.65 | % | ||||||||
Efficiency ratio(E) | 43.77 | % | 49. 47 | % | 42.44 | % | 48.60 | % | ||||||||
| Asset Quality Ratios | ||||||||||||||||
| Non-performing assets to average earning assets | 0.26 | % | 0.16 | % | 0.22 | % | 0.20 | % | ||||||||
| Non-performing assets to loans and other real estate | 0.59 | % | 0.36 | % | 0.48 | % | 0.40 | % | ||||||||
| Net charge-offs to average loans | 0.13 | % | 0.11 | % | 0.12 | % | 0.09 | % | ||||||||
| Allowance for credit losses to total loans | 1.55 | % | 1.12 | % | 1.54 | % | 1.04 | % | ||||||||
| Common Stock Market Price | ||||||||||||||||
| High | $ | 42.55 | $ | 30.00 | $ | 41.18 | $ | 36.98 | ||||||||
| Low | $ | 37.93 | $ | 20.04 | $ | 33.62 | $ | 25.08 | ||||||||
| Period end market price | $ | 40.99 | $ | 27.35 | $ | 40.47 | $ | 29.59 | ||||||||
(D) Net interest margin for all periods presented is calculated on an actual 365 or actual 366 day basis.
(E) 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). Additionally, taxes are not part of this calculation.
Page 11 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | June 30, 2009 | |||||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||
| Loan Portfolio | ||||||||||||||||||||||||||||||||
| Commercial | $ | 412,602 | 12.32 | % | $ | 415,512 | 12.31 | % | $ | 439,848 | 12.91 | % | $ | 461,622 | 13.38 | % | ||||||||||||||||
| Construction | 539,430 | 16.11 | % | 557,245 | 16.51 | % | 564,106 | 16.56 | % | 613,386 | 17.77 | % | ||||||||||||||||||||
| 1-4 family residential | 729,015 | 21.77 | % | 709,101 | 21.00 | % | 692,885 | 20.34 | % | 675,702 | 19.58 | % | ||||||||||||||||||||
| Home equity | 119,754 | 3.58 | % | 117,661 | 3.48 | % | 116,873 | 3.43 | % | 115,029 | 3.33 | % | ||||||||||||||||||||
| Commercial real estate | 1,302,357 | 38.90 | % | 1,339,219 | 39.66 | % | 1,336,454 | 39.25 | % | 1,318,489 | 38.20 | % | ||||||||||||||||||||
| Agriculture | 140,418 | 4.19 | % | 135,529 | 4.01 | % | 145,176 | 4.26 | % | 149,515 | 4.33 | % | ||||||||||||||||||||
| Consumer | 104,807 | 3.13 | % | 102,436 | 3.03 | % | 110,795 | 3.25 | % | 117,576 | 3.41 | % | ||||||||||||||||||||
| Total Loans | $ | 3,348,383 | $ | 3,376,703 | $ | 3,406,137 | $ | 3,451,319 | ||||||||||||||||||||||||
| Deposit Types | ||||||||||||||||||||||||||||||||
| Non-interest bearing DDA | $ | 1,525,079 | 20.07 | % | $ | 1,492,612 | 20.56 | % | $ | 1,473,189 | 20.70 | % | $ | 1,476,378 | 20.34 | % | ||||||||||||||||
| Interest bearing DDA | 1,354,393 | 17.82 | % | 1,391,133 | 19.17 | % | 1,066,778 | 14.99 | % | 1,060,965 | 14.62 | % | ||||||||||||||||||||
| Money Market | 1,807,704 | 23.79 | % | 1,619,970 | 22.32 | % | 1,682,345 | 23.63 | % | 1,614,874 | 22.25 | % | ||||||||||||||||||||
| Savings | 360,776 | 4.75 | % | 322,399 | 4.44 | % | 320,078 | 4.50 | % | 325,232 | 4.48 | % | ||||||||||||||||||||
| Time < $100 | 1,284,271 | 16.90 | % | 1,208,658 | 16.65 | % | 1,289,362 | 18.11 | % | 1,418,375 | 19.54 | % | ||||||||||||||||||||
| Time > $100 | 1,266,756 | 16.67 | % | 1,223,778 | 16.86 | % | 1,286,241 | 18.07 | % | 1,362,071 | 18.77 | % | ||||||||||||||||||||
| Total Deposits | $ | 7,598,979 | $ | 7,258,550 | $ | 7,117,993 | $ | 7,257,895 | ||||||||||||||||||||||||
| Loan to Deposit Ratio | 44.1 | % | 46.5 | % | 47.9 | % | 47.6 | % | ||||||||||||||||||||||||
| Construction Loans | ||||||||||||||||||||||||||||||||
| Single family residential construction | $ | 134,963 | 25.03 | % | $ | 146,554 | 26.30 | % | $ | 152,056 | 26.96 | % | $ | 177,632 | 28.96 | % | ||||||||||||||||
| Land development | 76,871 | 14.25 | % | 89,128 | 15.99 | % | 76,996 | 13.65 | % | 86,363 | 14.08 | % | ||||||||||||||||||||
| Raw land | 76,817 | 14.24 | % | 79,055 | 14.19 | % | 84,384 | 14.96 | % | 96,157 | 15.67 | % | ||||||||||||||||||||
| Residential lots | 99,012 | 18.35 | % | 101,090 | 18.14 | % | 103,565 | 18.36 | % | 101,321 | 16.52 | % | ||||||||||||||||||||
| Commercial lots | 49,863 | 9.24 | % | 51,639 | 9.27 | % | 48,139 | 8.53 | % | 49,614 | 8.09 | % | ||||||||||||||||||||
| Commercial construction and other | 101,904 | 18.89 | % | 89,779 | 16.11 | % | 98,966 | 17.54 | % | 102,299 | 16.68 | % | ||||||||||||||||||||
| Total Construction Loans | $ | 539,430 | $ | 557,245 | $ | 564,106 | $ | 613,386 | ||||||||||||||||||||||||
Page 12 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | June 30, 2009 | Mar 31, 2009 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
| Total loans | $ | 3,348,383 | $ | 3,376,703 | $ | 3,406,137 | $ | 3,451,319 | $ | 3,501,300 | ||||||||||
Investment securities (F) | 4,525,506 | 4,118,290 | 4,255,057 | 3,981,109 | 3,991,200 | |||||||||||||||
| Federal funds sold | 577 | 354 | 264 | 813 | 590 | |||||||||||||||
| Allowance for credit losses | (51,893 | ) | (51,863 | ) | (47,312 | ) | (42,611 | ) | (39,238 | ) | ||||||||||
| Cash and due from banks | 169,534 | 194,963 | 156,598 | 270,498 | 163,278 | |||||||||||||||
| Goodwill | 890,123 | 876,987 | 876,958 | 875,434 | 874,356 | |||||||||||||||
| Core deposit intangibles | 33,094 | 35,385 | 37,825 | 40,305 | 42,796 | |||||||||||||||
| Other real estate | 12,991 | 7,829 | 12,738 | 11,101 | 9,134 | |||||||||||||||
| Fixed assets, net | 152,886 | 148,855 | 149,725 | 149,742 | 151,544 | |||||||||||||||
| Other assets | 137,532 | 142,897 | 109,342 | 101,241 | 104,237 | |||||||||||||||
| Total assets | $ | 9,218,733 | $ | 8,850,400 | $ | 8,957,332 | $ | 8,838,951 | $ | 8,799,197 | ||||||||||
| Demand deposits | $ | 1,525,079 | $ | 1,492,612 | $ | 1,473,189 | $ | 1,476,378 | $ | 1,510,005 | ||||||||||
| Interest bearing deposits | 6,073,900 | 5,765,938 | 5,644,804 | 5,781,517 | 5,696,874 | |||||||||||||||
| Total deposits | 7,598,979 | 7,258,550 | 7,117,993 | 7,257,895 | 7,206,879 | |||||||||||||||
| Securities sold under repurchase agreements | 68,441 | 72,596 | 100,636 | 96,732 | 81,773 | |||||||||||||||
| Federal funds purchased and other borrowings | 15,879 | 26,140 | 253,855 | 28,170 | 28,441 | |||||||||||||||
| Junior subordinated debentures | 92,265 | 92,265 | 92,265 | 92,265 | 92,265 | |||||||||||||||
| Other liabilities | 65,262 | 49,604 | 65,548 | 64,794 | 109,291 | |||||||||||||||
| Total liabilities | 7,840,826 | 7,499,155 | 7,630,297 | 7,539,856 | 7,518,649 | |||||||||||||||
Shareholders' equity (G) | 1,377,907 | 1,351,245 | 1,327,035 | 1,299,095 | 1,280,548 | |||||||||||||||
| Total liabilities and equity | $ | 9,218,733 | $ | 8,850,400 | $ | 8,957,332 | $ | 8,838,951 | $ | 8,799,197 | ||||||||||
(F) Includes $27,710, $25,855, $26,688, $20,153 and $23,784 in unrealized gains on available for sale securities for the quarterly periods ending March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.
(G) Includes $18,011, $16,806, $17,347, $13,099 and $15,460 in after-tax unrealized gains on available for sale securities for the quarterly periods ending March 31, 2010, December 31, 2009, September 30, 2009, June 30, 2009 and March 31, 2009, respectively.
Page 13 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||||||
| Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | June 30, 2009 | Mar 31, 2009 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
| Interest on loans | $ | 51,453 | $ | 53,461 | $ | 54,809 | $ | 55,248 | $ | 55,802 | ||||||||||
| Interest on securities | 45,014 | 46,116 | 46,812 | 47,450 | 49,726 | |||||||||||||||
| Interest on federal funds sold and other earning assets | 29 | 8 | 74 | 70 | 38 | |||||||||||||||
| Total interest income | 96,496 | 99,585 | 101,695 | 102,768 | 105,566 | |||||||||||||||
| Interest expense - deposits | 17,485 | 18,062 | 22,694 | 25,621 | 29,457 | |||||||||||||||
| Interest expense - debentures | 791 | 803 | 879 | 959 | 1,119 | |||||||||||||||
| Interest expense - other | 448 | 631 | 709 | 667 | 912 | |||||||||||||||
| Total interest expense | 18,724 | 19,496 | 24,282 | 27,247 | 31,488 | |||||||||||||||
| Net interest income | 77,772 | 80,089 | 77,413 | 75,521 | 74,078 | |||||||||||||||
| Provision for credit losses | 4,410 | 8,500 | 7,250 | 6,900 | 6,125 | |||||||||||||||
| Net interest income after provision for credit losses | 73,362 | 71,589 | 70,163 | 68,621 | 67,953 | |||||||||||||||
| Service charges on deposits accounts | 11,589 | 12,953 | 13,554 | 12,863 | 12,372 | |||||||||||||||
| Net gain (loss) on sale of assets | 0 | 145 | (20 | ) | 200 | 97 | ||||||||||||||
| Net gain (loss) on sale of ORE | (294 | ) | (135 | ) | 115 | 415 | 22 | |||||||||||||
| Brokered mortgage income | 13 | 36 | 59 | 140 | 70 | |||||||||||||||
| Other non-interest income | 1,670 | 1,712 | 1,528 | 1,515 | 2,456 | |||||||||||||||
| Total non-interest income | 12,978 | 14,711 | 15,236 | 15,133 | 15,017 | |||||||||||||||
| Salaries and benefits | 21,112 | 19,747 | 21,507 | 20,494 | 22,648 | |||||||||||||||
| CDI amortization | 2,290 | 2,441 | 2,479 | 2,492 | 2,664 | |||||||||||||||
| Net occupancy and equipment | 3,434 | 3,794 | 3,624 | 3,514 | 3,978 | |||||||||||||||
| Depreciation | 2,006 | 2,056 | 2,100 | 2,069 | 2,001 | |||||||||||||||
| Data processing and software amortization | 1,415 | 1,386 | 1,446 | 1,562 | 2,055 | |||||||||||||||
| Other non-interest expense | 9,468 | 10,752 | 10,045 | 14,169 | 10,677 | |||||||||||||||
| Total non-interest expense | 39,725 | 40,176 | 41,201 | 44,300 | 44,023 | |||||||||||||||
| Net income before taxes | 46,615 | 46,124 | 44,198 | 39,454 | 38,947 | |||||||||||||||
| Federal income taxes | 15,617 | 15,555 | 14,876 | 12,944 | 13,469 | |||||||||||||||
| Net income available to common shareholders | $ | 30,998 | $ | 30,569 | $ | 29,322 | $ | 26,510 | $ | 25,478 | ||||||||||
Page 14 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | ||||||||||||||||||||
| Mar 31, 2010 | Dec 31, 2009 | Sept. 30, 2009 | June 30, 2009 | Mar 31, 2009 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Comparative Quarterly Asset Quality, Performance & Capital Ratios | ||||||||||||||||||||
| Return on average assets (annualized) | 1.40 | % | 1.39 | % | 1.32 | % | 1.20 | % | 1.15 | % | ||||||||||
| Return on average common equity (annualized) | 9.07 | % | 9.11 | % | 8.93 | % | 8.18 | % | 8.02 | % | ||||||||||
| Return on average tangible equity (annualized) | 27.22 | % | 28.50 | % | 29.34 | % | 27.98 | % | 28.52 | % | ||||||||||
| Net interest margin (tax equivalent) (annualized) | 4.20 | % | 4.24 | % | 4.08 | % | 4.04 | % | 3.98 | % | ||||||||||
| Employees - FTE | 1,651 | 1,594 | 1,608 | 1,634 | 1,684 | |||||||||||||||
| Efficiency ratio | 43.77 | % | 42.44 | % | 44.46 | % | 48.98 | % | 49.47 | % | ||||||||||
| Non-performing assets to average earning assets | 0.26 | % | 0.22 | % | 0.29 | % | 0.26 | % | 0.16 | % | ||||||||||
| Non-performing assets to loans and other real estate | 0.59 | % | 0.48 | % | 0.64 | % | 0.57 | % | 0.36 | % | ||||||||||
| Net charge-offs to average loans | 0.13 | % | 0.12 | % | 0.07 | % | 0.10 | % | 0.11 | % | ||||||||||
| Allowance for credit losses to total loans | 1.55 | % | 1.54 | % | 1.39 | % | 1.23 | % | 1.12 | % | ||||||||||
| Book value per share | $ | 29.58 | $ | 29.03 | $ | 28.75 | $ | 28.17 | $ | 27.78 | ||||||||||
| Tangible book value per share | $ | 9.76 | $ | 9.43 | $ | 8.93 | $ | 8.31 | $ | 7.88 | ||||||||||
| Tier 1 risk-based capital | 12.82 | % | 12.61 | % | 11.85 | % | 11.24 | % | 10.53 | % | ||||||||||
| Total risk-based capital | 14.07 | % | 13.86 | % | 13.01 | % | 12.28 | % | 11.48 | % | ||||||||||
| Tier 1 leverage capital | 6.61 | % | 6.47 | % | 6.09 | % | 5.81 | % | 5.48 | % | ||||||||||
| Tangible equity to tangible assets | 5.48 | % | 5.53 | % | 5.13 | % | 4.84 | % | 4.61 | % | ||||||||||
| Equity to assets | 14.95 | % | 15.27 | % | 14.82 | % | 14.70 | % | 14.55 | % | ||||||||||
Page 15 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended Mar 31, 2010 | ||||||||||||
| YIELD ANALYSIS | Average | Interest Earned | Average | |||||||||
| Balance | / Interest Paid | Yield/Rate | ||||||||||
| Interest Earning Assets: | ||||||||||||
| Loans | $ | 3,342,842 | $ | 51,453 | 6.24 | % | ||||||
| Investment securities | 4,177,540 | 45,014 | 4.31 | % | ||||||||
| Federal funds sold and other temporary investments | 60,536 | 29 | 0.19 | % | ||||||||
| Total interest earning assets | 7,580,918 | $ | 96,496 | 5.16 | % | |||||||
| Allowance for credit losses | (51,750 | ) | ||||||||||
| Non-interest earning assets | 1,351,056 | |||||||||||
| Total assets | $ | 8,880,224 | ||||||||||
| Interest Bearing Liabilities: | ||||||||||||
| Interest bearing demand deposits | $ | 1,384,304 | $ | 2,738 | 0.80 | % | ||||||
| Savings and money market deposits | 2,037,235 | 4,020 | 0.80 | % | ||||||||
| Certificates and other time deposits | 2,385,804 | 10,727 | 1.82 | % | ||||||||
| Securities sold under repurchase agreements | 71,250 | 148 | 0.84 | % | ||||||||
| Federal funds purchased and other borrowings | 32,080 | 300 | 3.79 | % | ||||||||
| Junior subordinated debentures | 92,265 | 791 | 3.48 | % | ||||||||
| Total interest bearing liabilities | 6,002,938 | $ | 18,724 | 1.26 | % | |||||||
| Non-interest bearing liabilities: | ||||||||||||
| Non-interest bearing demand deposits | 1,445,859 | |||||||||||
| Other liabilities | 63,916 | |||||||||||
| Total liabilities | 7,512,713 | |||||||||||
| Shareholders' equity | 1,367,511 | |||||||||||
| Total liabilities and shareholders' equity | $ | 8,880,224 | ||||||||||
| Net Interest Income & Margin | $ | 77,772 | 4.16 | % | ||||||||
| Net Interest Income & Margin (tax equivalent) | $ | 78,465 | 4.20 | % | ||||||||
Page 16 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended Mar 31, 2009 | ||||||||||||
| YIELD ANALYSIS | Average | Interest Earned | Average | |||||||||
| Balance | / Interest Paid | Yield/Rate | ||||||||||
| Interest Earning Assets: | ||||||||||||
| Loans | $ | 3,530,230 | $ | 55,802 | 6.41 | % | ||||||
| Investment securities | 4,030,151 | 49,726 | 4.94 | % | ||||||||
| Federal funds sold and other temporary investments | 66,597 | 38 | 0.23 | % | ||||||||
| Total interest earning assets | 7,626,978 | $ | 105,566 | 5.61 | % | |||||||
| Allowance for credit losses | (37,220 | ) | ||||||||||
| Non-interest earning assets | 1,308,108 | |||||||||||
| Total assets | $ | 8,897,866 | ||||||||||
| Interest Bearing Liabilities: | ||||||||||||
| Interest bearing demand deposits | $ | 1,068,685 | $ | 2,122 | 0.81 | % | ||||||
| Savings and money market deposits | 1,803,137 | 6,057 | 1.36 | % | ||||||||
| Certificates and other time deposits | 2,913,566 | 21,278 | 2.96 | % | ||||||||
| Securities sold under repurchase agreements | 83,734 | 348 | 1.69 | % | ||||||||
| Federal funds purchased and other borrowings | 83,091 | 564 | 2.75 | % | ||||||||
| Junior subordinated debentures | 92,265 | 1,119 | 4.92 | % | ||||||||
| Total interest bearing liabilities | 6,044,478 | $ | 31,488 | 2.11 | % | |||||||
| Non-interest bearing liabilities: | ||||||||||||
| Non-interest bearing demand deposits | 1,492,026 | |||||||||||
| Other liabilities | 90,982 | |||||||||||
| Total liabilities | 7,627,486 | |||||||||||
| Shareholders' equity | 1,270,380 | |||||||||||
| Total liabilities and shareholders' equity | $ | 8,897,866 | ||||||||||
| Net Interest Income & Margin | $ | 74,078 | 3.94 | % | ||||||||
| Net Interest Income & Margin (tax equivalent) | $ | 74,759 | 3.98 | % | ||||||||
Page 17 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended December 31, 2009 | ||||||||||||
| YIELD ANALYSIS | Average | Interest Earned | Average | |||||||||
| Balance | / Interest Paid | Yield/Rate | ||||||||||
| Interest Earning Assets: | ||||||||||||
| Loans | $ | 3,389,529 | $ | 53,461 | 6.26 | % | ||||||
| Investment securities | 4,152,752 | 46,116 | 4.44 | % | ||||||||
| Federal funds sold and other temporary investments | 13,607 | 8 | 0.23 | % | ||||||||
| Total interest earning assets | 7,555,888 | $ | 99,585 | 5.23 | % | |||||||
| Allowance for credit losses | (48,894 | ) | ||||||||||
| Non-interest earning assets | 1,312,019 | |||||||||||
| Total assets | $ | 8,819,013 | ||||||||||
| Interest Bearing Liabilities: | ||||||||||||
| Interest bearing demand deposits | $ | 1,119,119 | $ | 2,030 | 0.72 | % | ||||||
| Savings and money market deposits | 1,988,158 | 4,150 | 0.83 | % | ||||||||
| Certificates and other time deposits | 2,499,797 | 11,882 | 1.89 | % | ||||||||
| Securities sold under repurchase agreements | 88,094 | 218 | 0.98 | % | ||||||||
| Federal funds purchased and other borrowings | 141,073 | 413 | 1.16 | % | ||||||||
| Junior subordinated debentures | 92,265 | 803 | 3.45 | % | ||||||||
| Total interest bearing liabilities | 5,928,506 | $ | 19,496 | 1.30 | % | |||||||
| Non-interest bearing liabilities: | ||||||||||||
| Non-interest bearing demand deposits | 1,481,514 | |||||||||||
| Other liabilities | 66,410 | |||||||||||
| Total liabilities | 7,476,430 | |||||||||||
| Shareholders' equity | 1,342,583 | |||||||||||
| Total liabilities and shareholders' equity | $ | 8,819,013 | ||||||||||
| Net Interest Income & Margin | $ | 80,089 | 4.21 | % | ||||||||
| Net Interest Income & Margin (tax equivalent) | $ | 80,770 | 4.24 | % | ||||||||
Page 18 of 20
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 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 better 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.
Page 19 of 20
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
| Three months ended | ||||||||||||||||||||
Mar 31, 2010 | Dec 31, 2009 | Sept 30, 2009 | June 30, 2009 | Mar 31, 2009 | ||||||||||||||||
| Return on average tangible common equity: | ||||||||||||||||||||
| Net income | $ | 30,998 | $ | 30,569 | $ | 29,322 | $ | 26,510 | $ | 25,478 | ||||||||||
| Average shareholders' equity | 1,367,511 | 1,342,583 | 1,314,011 | 1,295,737 | 1,270,380 | |||||||||||||||
| Less: Average goodwill and other intangible assets | (912,065 | ) | (913,522 | ) | (914,203 | ) | (916,754 | ) | (913,010 | ) | ||||||||||
| Average tangible shareholders’ equity | $ | 455,446 | $ | 429,061 | $ | 399,808 | $ | 378,983 | $ | 357,370 | ||||||||||
| Return on average tangible common equity (annualized): | 27.22 | % | 28.50 | % | 29.34 | % | 27.98 | % | 28.52 | % | ||||||||||
| Tangible book value per share: | ||||||||||||||||||||
| Shareholders’ equity | $ | 1,377,907 | $ | 1,351,245 | $ | 1,327,035 | $ | 1,299,095 | $ | 1,280,548 | ||||||||||
| Less: Goodwill and other intangible assets | (923,217 | ) | (912,372 | ) | (914,783 | ) | (915,739 | ) | (917,152 | ) | ||||||||||
| Tangible shareholders’ equity | $ | 454,690 | $ | 438,873 | $ | 412,252 | $ | 383,356 | $ | 363,396 | ||||||||||
| Period end shares outstanding | 46,575 | 46,541 | 46,153 | 46,109 | 46,100 | |||||||||||||||
| Tangible book value per share: | $ | 9.76 | $ | 9.43 | $ | 8.93 | $ | 8.31 | $ | 7.88 | ||||||||||
| Tangible equity to tangible assets ratio: | ||||||||||||||||||||
| Tangible shareholders’ equity | $ | 454,690 | $ | 438,873 | $ | 412,252 | $ | 383,356 | $ | 363,396 | ||||||||||
| Total assets | $ | 9,218,733 | $ | 8,850,400 | $ | 8,957,332 | $ | 8,838,951 | $ | 8,799,197 | ||||||||||
| Less: Goodwill and other intangible assets | (923,217 | ) | (912,372 | ) | (914,783 | ) | (915,739 | ) | (917,152 | ) | ||||||||||
| Tangible assets | $ | 8,295,516 | $ | 7,938,028 | $ | 8,042,549 | $ | 7,923,212 | $ | 7,882,045 | ||||||||||
| Tangible equity to tangible assets ratio: | 5.48 | % | 5.53 | % | 5.13 | % | 4.84 | % | 4.61 | % | ||||||||||
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