| 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 9.3%
| | · | 1Q 2011 Earnings Per Share of $0.72 (diluted) |
| | · | Linked quarter loan growth 2.5% (10.1% annualized) |
| | · | Linked quarter deposit growth 4.9% (19.4% annualized) |
| | · | Non-Performing Assets 0.16% of Average Earning Assets |
| | · | Tangible Common Equity Ratio 6.03% |
HOUSTON, April 14, 2011. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported net income for the three months ended March 31, 2011 of $33.878 million or $0.72 per diluted common share, an increase in net income of $2.880 million or 9.3%, compared with $30.998 million or $0.66 per diluted common share for the same period in 2010.
“Last fall, we challenged our associates to grow our loans and deposits. Viewing the outstanding results for the first quarter, it appears our team is well on its way to achieving those goals” commented David Zalman, Chairman and Chief Executive Officer.
“With earnings up over 9%, linked quarter annualized loan growth in excess of 10% and linked quarter annualized deposit growth over 19%, I need to compliment all of our associates for their outstanding efforts. In addition, our asset quality has continued to improve with our non-performing asset ratio falling to 0.16% of average earning assets. Our company is fortunate to be located in one of the fastest growing states in the nation with what we believe to be one of the best economies. With our 175 full service locations across the state, we believe we are well positioned for continued growth” 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.
Results of operations for the three months ended March 31, 2011
For the three months ended March 31, 2011, net income was $33.878 million compared with $30.998 million for the same period in 2010. Net income per diluted common share was $0.72 for the three months ended March 31, 2011 and $0.66 for the same period in 2010. Returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2011 were 1.42%, 9.22% and 26.22%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of assets) was 44.30% for the three months ended March 31, 2011.
Net interest income before provision for credit losses for the three months ended March 31, 2011 increased 3.4% to $80.413 million compared with $77.772 million during the same period in 2010. The increase in net interest income was primarily due to growth in average earning assets of $626.685 million or 8.3% from $7.581 billion at March 31, 2010 to $8.208 billion at March 31, 2011. The net interest margin on a tax equivalent basis decreased to 4.02% for the three months ended March 31, 2011 compared with 4.20% for the same period in 2010. The tax equivalent net interest margin increased 3 basis points to 4.02% reported for the three months ended March 31, 2011 from 3.99% reported for the three months ended December 31, 2010.
Non-interest income increased $889,000 or 6.9% to $13.867 million for the three months ended March 31, 2011 compared with $12.978 million for the same period in 2010. The increase in non-interest income is primarily attributed to the U.S. Bank and First Bank branch acquisitions which occurred on March 29, 2010 and April 30, 2010, respectively, and an increase in debit card and ATM card income.
Non-interest expense increased $1.970 million or 5.0% to $41.695 million for the three months ended March 31, 2011 compared with $39.725 million for the same period in 2010. This is primarily attributable to additional salaries and benefits expense which was impacted by personnel added from the U.S. Bank and First Bank branch acquisitions.
Loans at March 31, 2011 were $3.573 billion, an increase of $224.537 million or 6.7%, compared with $3.348 billion at March 31, 2010. Loans increased 2.5% (10.1% annualized) or $87.897 million on a linked quarter basis compared with loans of $3.485 billion at December 31, 2010. As reflected in the table below, linked quarter loans at March 31, 2011 were impacted by the loans acquired in connection with the U.S. Bank and First Bank branch acquisitions. Excluding the loans acquired in these acquisitions, linked quarter loans increased 8.6% on an annualized basis.
Deposits at March 31, 2011 were $7.816 billion, an increase of $217.405 million or 2.9%, compared with $7.599 billion at March 31, 2010. Linked quarter deposits increased $361.464 million or 4.9% (19.4% annualized) from $7.455 billion at December 31, 2010. As reflected in the table below, linked quarter deposits at March 31, 2011 were impacted by the deposits assumed in connection with the U.S. Bank and First Bank branch acquisitions. Excluding the deposits assumed in these acquisitions, linked quarter deposits increased 23.7% on an annualized basis.
| Balance Sheet Data (at period end) | | Mar 31, 2011 | | | Dec 31, 2010 | | | Mar 31, 2010 | |
| (In thousands) | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | |
| Loans: | | | | | | | | | |
| Acquired with U.S. Bank branches | | $ | 36,819 | | | $ | 28,379 | | | $ | 33,317 | |
| Acquired with First Bank branches | | | 60,308 | | | | 53,982 | | | | 0 | |
| All other | | | 3,475,793 | | | | 3,402,662 | | | | 3,315,066 | |
| Total Loans | | $ | 3,572,920 | | | $ | 3,485,023 | | | $ | 3,348,383 | |
| | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Acquired with U.S. Bank branches | | $ | 273,769 | | | $ | 283,478 | | | $ | 374,508 | |
| Assumed with First Bank branches | | | 322,044 | | | | 355,049 | | | | 0 | |
| All other | | | 7,220,571 | | | | 6,816,393 | | | | 7,224,471 | |
| Total Deposits | | $ | 7,816,384 | | | $ | 7,454,920 | | | $ | 7,598,979 | |
Average loans increased 5.2% or $173.682 million to $3.517 billion for the three months ended March 31, 2011 compared with $3.343 billion for the same period of 2010. Linked quarter average loans increased 2.8% or $94.826 million from $3.422 billion for the three months ended December 31, 2010. Average deposits increased 6.1% or $445.191 million to $7.698 billion for the three months ended March 31, 2011 compared with $7.253 billion for the same period of 2010. Linked quarter average deposits increased 3.3% or $245.219 million from $7.453 billion for the three months ended December 31, 2010.
At March 31, 2011, construction loans totaled $494.159 million, consisting of approximately $112 million of single family residential construction loans; $51 million of land development loans; $70 million of raw land loans; $86 million of residential lot loans; $51 million of commercial lot loans; and $124 million of commercial construction and other construction loans. This is a decrease of $8.168 million from construction loans at December 31, 2010.
At March 31, 2011, Prosperity had $9.723 billion in total assets, $7.816 billion in deposits and $3.573 billion in loans. Assets, deposits and loans at March 31, 2011 increased 5.5%, 2.9% and 6.7%, respectively, compared with their level at March 31, 2010.
Asset Quality
Non-performing assets totaled $12.888 million or 0.16% of average earning assets at March 31, 2011 compared with $19.868 million or 0.26% of average earning assets at March 31, 2010 and $15.842 million or 0.20% of average earnings assets at December 31, 2010. The allowance for credit losses was 1.45% of total loans at March 31, 2011 compared with 1.55% at March 31, 2010 and 1.48% of total loans at December 31, 2010.
Non-performing assets (In thousands) | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | |
| | | Amount | | | # | | | Amount | | | # | | | Amount | | | # | |
| Construction | | $ | 6,511 | | | | 37 | | | $ | 8,469 | | | | 46 | | | $ | 7,740 | | | | 44 | |
| Agriculture and agriculture real estate | | | 17 | | | | 2 | | | | 11 | | | | 1 | | | | 0 | | | | 0 | |
| 1-4 family (including home equity) | | | 3,130 | | | | 25 | | | | 3,933 | | | | 38 | | | | 4,024 | | | | 46 | |
| Commercial real estate (including multi-family) | | | 2,299 | | | | 7 | | | | 2,022 | | | | 6 | | | | 7,383 | | | | 9 | |
| Commercial | | | 861 | | | | 12 | | | | 1,317 | | | | 17 | | | | 1,446 | | | | 20 | |
| Consumer | | | 70 | | | | 9 | | | | 90 | | | | 13 | | | | 107 | | | | 15 | |
| Total | | $ | 12,888 | | | | 92 | | | $ | 15,842 | | | | 121 | | | $ | 20,700 | | | | 134 | |
The provision for credit losses was $1.700 million for the three months ended March 31, 2011 and $4.410 million for the three months ended March 31, 2010. Net charge offs were $1.524 million for the three months ended March 31, 2011 and $4.381 million for the three months ended March 31, 2010.
Net Charge-offs (In thousands) | | Three Months Ended Mar 31, 2011 | | | Three Months Ended Dec 31, 2010 | | | Three Months Ended Mar 31, 2010 | |
| 1-4 family (including home equity) | | $ | 226 | | | $ | 314 | | | $ | 133 | |
| Agriculture | | | (1 | ) | | | — | | | | (24 | ) |
| Commercial | | | 216 | | | | 855 | | | | 595 | |
| Commercial RE (including multi-family) | | | 320 | | | | 285 | | | | 546 | |
| Construction | | | 697 | | | | 1,014 | | | | 2,962 | |
| Consumer | | | 66 | | | | 202 | | | | 169 | |
| Total | | $ | 1,524 | | | $ | 2,670 | | | $ | 4,381 | |
Conference Call
Prosperity’s management team will host a conference call on Thursday, April 14, 2011 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 800-895-0198. 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.
Payoff of Trust Preferred Securities
On March 7, 2011, Prosperity paid off $7.0 million in trust preferred securities that bore a fixed interest rate of 10.60%. A penalty of $382,501 was incurred in connection with the payoff and recorded as interest expense – debentures.
Acquisition of First Bank’s Texas Branches
On April 30, 2010, Prosperity completed the previously announced acquisition of nineteen (19) Texas retail bank branches of First Bank, a Missouri state-chartered bank. Prosperity Bank paid a premium of 5.5% for approximately $500 million in deposits and purchased approximately $100 million in loans and other assets attributable to the branches.
First Bank’s Texas locations were all in the Houston and Dallas metropolitan areas and represented a strategic enhancement to Prosperity’s presence in these markets. After the consolidation of locations near existing Prosperity banking centers, Prosperity operates thirty-one (31) Dallas/Fort Worth area banking centers and sixty (60) Houston area banking centers.
The deposits assumed were primarily core deposits and the $100 million in loans purchased were individually selected by Prosperity from First Bank’s loan portfolio associated with the Texas branches and consisted of performing business and consumer-related Texas-based loans.
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 $9.7 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 seventy-five (175) full service banking locations; sixty (60) in the Houston area; twenty (20) in the South Texas area including Corpus Christi and Victoria; thirty-one (31) in the Dallas/Fort Worth area; twenty-one (21) in the East Texas area; thirty-three (33) in the Central Texas area including Austin and San Antonio; and ten (10) in the Bryan/College Station area.
| Bryan/College Station Area - | | Dallas/Fort Worth Area - | | Jacksonville | | Bay City |
| | | | | Kerens | | Beaumont |
| Bryan | | Dallas - | | Longview | | Cinco Ranch |
| Bryan-East | | Abrams Centre | | Mount Vernon | | Cleveland |
| Bryan-North | | Balch Springs | | Palestine | | East Bernard |
| Caldwell | | Camp Wisdom | | Rusk | | El Campo |
| College Station | | Cedar Hill | | Seven Points | | Dayton |
| Greens Prairie | | Central Expressway | | Teague | | Galveston |
| Madisonville | | East Renner | | Tyler | | Groves |
| Navasota | | Frisco | | Tyler-University | | Hempstead |
| Rock Prairie | | Frisco-West | | Winnsboro | | Hitchcock |
| Wellborn Road | | Independence | | | | Katy |
| | | Kiest | | | | Liberty |
| Central Texas Area - | | McKinney | | Houston Area - | | Magnolia |
| | | McKinney-Stonebridge | | | | Mont Belvieu |
| Austin - | | Midway | | Houston - | | Nederland |
| 183 | | Preston Forest | | Aldine | | Needville |
| Allandale | | Preston Road | | Allen Parkway | | Shadow Creek |
| Cedar Park | | Red Oak | | Bellaire | | Sweeny |
| Congress | | Sachse | | Beltway | | Tomball |
| Lakeway | | The Colony | | Clear Lake | | Waller |
| Liberty Hill | | Turtle Creek | | Copperfield | | West Columbia |
| Northland | | Westmoreland | | Cypress | | Wharton |
| Oak Hill | | | | Downtown | | Winnie |
| Parmer Lane | | | | Eastex | | Wirt |
| Research Blvd | | Fort Worth - | | Fairfield | | |
| Westlake | | Haltom City | | First Colony | | |
| | | Keller | | Gessner | | South Texas Area - |
| | | Roanoke | | Gladebrook | | |
| Other Central Texas | | Stockyards | | Harrisburg | | Corpus Christi - |
| Locations - | | | | Heights | | Airline |
| Bastrop | | | | Highway 6 West | | Carmel |
| Cuero | | Other Dallas/Fort Worth | | Hillcroft | | Northwest |
| Dime Box | | Locations - | | Little York | | Saratoga |
| Dripping Springs | | Azle | | Medical Center | | Water Street |
| Elgin | | Ennis | | Memorial Drive | | |
| Flatonia | | Gainesville | | Northside | | Other South Texas |
| Georgetown | | Mesquite | | Pasadena | | Locations - |
| Gonzales | | Muenster | | Pecan Grove | | Alice |
| Hallettsville | | Sanger | | Piney Point | | Aransas Pass |
| Kingsland | | Waxahachie | | River Oaks | | Beeville |
| La Grange | | | | Royal Oaks | | Edna |
| Lexington | | | | Sugar Land | | Goliad |
| New Braunfels | | East Texas Area - | | SW Medical Center | | Kingsville |
| Pleasanton | | Athens | | Tanglewood | | Mathis |
| Round Rock | | Athens-South | | Uptown | | Padre Island |
| San Antonio | | Blooming Grove | | Waugh Drive | | Palacios |
| Schulenburg | | Canton | | West University | | Port Lavaca |
| Seguin | | Carthage | | Westheimer | | Portland |
| Smithville | | Corsicana | | Woodcreek | | Rockport |
| Weimar | | Crockett | | | | Sinton |
| Yoakum | | Eustace | | Other Houston Area | | Victoria |
| Yorktown | | Grapeland | | Locations - | | Victoria-North |
| | | Gun Barrel City | | Angleton | | |
“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, which 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, 2010 and other reports and statements Prosperity has filed with the SEC. Copies of the SEC filings for Prosperity Bancshares’® 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 | |
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | | | June 30, 2010 | | | Mar 31, 2010 | |
| Selected Earnings and Per Share Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | |
| Total interest income | | $ | 93,409 | | | $ | 92,436 | | | $ | 96,247 | | | $ | 99,358 | | | $ | 96,496 | |
| Total interest expense | | | 12,996 | | | | 12,927 | | | | 15,980 | | | | 18,758 | | | | 18,724 | |
| Net interest income | | | 80,413 | | | | 79,509 | | | | 80,267 | | | | 80,600 | | | | 77,772 | |
| Provision for credit losses | | | 1,700 | | | | 2,900 | | | | 3,000 | | | | 3,275 | | | | 4,410 | |
| Net interest income after provision for credit losses | | | 78,713 | | | | 76,609 | | | | 77,267 | | | | 77,325 | | | | 73,362 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total non-interest income | | | 13,867 | | | | 13,905 | | | | 13,654 | | | | 13,296 | | | | 12,978 | |
| Total non-interest expense | | | 41,695 | | | | 41,227 | | | | 42,593 | | | | 43,049 | | | | 39,725 | |
| Net income before taxes | | | 50,885 | | | | 49,287 | | | | 48,328 | | | | 47,572 | | | | 46,615 | |
| Federal income taxes | | | 17,007 | | | | 16,489 | | | | 16,162 | | | | 15,826 | | | | 15,617 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 33,878 | | | $ | 32,798 | | | $ | 32,166 | | | $ | 31,746 | | | $ | 30,998 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.72 | | | $ | 0.70 | | | $ | 0.69 | | | $ | 0.68 | | | $ | 0.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.72 | | | $ | 0.70 | | | $ | 0.69 | | | $ | 0.68 | | | $ | 0.66 | |
| | | | | | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,782 | | | | 46,684 | | | | 46,653 | | | | 46,622 | | | | 46,575 | |
| Weighted average shares outstanding (basic) | | | 46,733 | | | | 46,671 | | | | 46,640 | | | | 46,610 | | | | 46,553 | |
| Weighted average shares outstanding (diluted) | | | 46,942 | | | | 46,818 | | | | 46,774 | | | | 46,854 | | | | 46,858 | |
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2011 | | | Mar 31, 2010 | | | Dec 31, 2010 | | | Dec 31, 2009 | |
| Balance Sheet Averages | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Total loans | | $ | 3,516,524 | | | $ | 3,342,842 | | | $ | 3,421,698 | | | $ | 3,389,529 | |
| Investment securities | | | 4,677,900 | | | | 4,177,540 | | | | 4,542,433 | | | | 4,152,752 | |
| Federal funds sold and other temporary investments | | | 13,179 | | | | 60,536 | | | | 14,305 | | | | 13,607 | |
| Total earning assets | | | 8,207,603 | | | | 7,580,918 | | | | 7,978,436 | | | | 7,555,888 | |
| Allowance for credit losses | | | (51,697 | ) | | | (51,750 | ) | | | (51,551 | ) | | | (48,894 | ) |
| Cash and due from banks | | | 137,811 | | | | 134,541 | | | | 133,620 | | | | 131,189 | |
| Goodwill | | | 924,412 | | | | 877,863 | | | | 923,687 | | | | 876,979 | |
| Core Deposit Intangibles (CDI) | | | 27,711 | | | | 34,202 | | | | 29,822 | | | | 36,543 | |
| Other real estate | | | 12,745 | | | | 12,974 | | | | 13,121 | | | | 12,308 | |
| Fixed assets, net | | | 159,261 | | | | 148,865 | | | | 160,177 | | | | 149,649 | |
| Other assets | | | 143,768 | | | | 142,611 | | | | 133,839 | | | | 105,351 | |
| Total assets | | $ | 9,561,614 | | | $ | 8,880,224 | | | $ | 9,321,151 | | | $ | 8,819,013 | |
| | | | | | | | | | | | | | | | | |
| Non-interest bearing deposits | | $ | 1,672,590 | | | $ | 1,445,859 | | | $ | 1,661,448 | | | $ | 1,481,514 | |
| Interest bearing deposits | | | 6,025,803 | | | | 5,807,343 | | | | 5,791,726 | | | | 5,607,074 | |
| Total deposits | | | 7,698,393 | | | | 7,253,202 | | | | 7,453,174 | | | | 7,088,588 | |
| Securities sold under repurchase agreements | | | 51,609 | | | | 71,250 | | | | 77,759 | | | | 88,094 | |
| Federal funds purchased and other borrowings | | | 191,945 | | | | 32,080 | | | | 198,677 | | | | 141,073 | |
| Junior subordinated debentures | | | 91,063 | | | | 92,265 | | | | 92,265 | | | | 92,265 | |
| Other liabilities | | | 59,556 | | | | 63,916 | | | | 54,429 | | | | 66,410 | |
Shareholders' equity(A) | | | 1,469,048 | | | | 1,367,511 | | | | 1,444,847 | | | | 1,342,583 | |
| Total liabilities and equity | | $ | 9,561,614 | | | $ | 8,880,224 | | | $ | 9,321,151 | | | $ | 8,819,013 | |
(A) Includes $13,707, $17,660, $17,516 and $18,216 in after-tax unrealized gains (losses) on available for sale securities for the three month periods ending March 31, 2011, March 31, 2010, December 31, 2010 and December 31, 2009, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2011 | | | Mar 31, 2010 | | | Dec 31, 2010 | | | Dec 31, 2009 | |
| Income Statement Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Interest on loans | | $ | 52,200 | | | $ | 51,453 | | | $ | 52,722 | | | $ | 53,461 | |
| Interest on securities | | | 41,204 | | | | 45,014 | | | | 39,708 | | | | 46,116 | |
| Interest on federal funds sold and other temporary investments | | | 5 | | | | 29 | | | | 6 | | | | 8 | |
| Total interest income | | | 93,409 | | | | 96,496 | | | | 92,436 | | | | 99,585 | |
| Interest expense - deposits | | | 11,512 | | | | 17,485 | | | | 11,749 | | | | 18,062 | |
| Interest expense - debentures | | | 1,147 | | | | 791 | | | | 803 | | | | 803 | |
| Interest expense - other | | | 337 | | | | 448 | | | | 375 | | | | 631 | |
| Total interest expense | | | 12 ,996 | | | | 18,724 | | | | 12,927 | | | | 19,496 | |
Net interest income (B) | | | 80,413 | | | | 77,772 | | | | 79,509 | | | | 80,089 | |
| Provision for credit losses | | | 1,700 | | | | 4,410 | | | | 2,900 | | | | 8,500 | |
| Net interest income after provision for credit losses | | | 78,713 | | | | 73,362 | | | | 76,609 | | | | 71,589 | |
| | | | | | | | | | | | | | | | | |
| Non-sufficient funds (NSF) fees | | | 6,107 | | | | 6,485 | | | | 6,905 | | | | 7,872 | |
| Debit card and ATM card income | | | 3,452 | | | | 2,726 | | | | 3,261 | | | | 2,639 | |
| Service charges on deposit accounts | | | 2,483 | | | | 2,378 | | | | 2,614 | | | | 2,442 | |
| Net gain on sale of assets | | | 165 | | | | 0 | | | | 2 | | | | 145 | |
| Net loss on sale of ORE | | | (160 | ) | | | (294 | ) | | | (915 | ) | | | (135 | ) |
| Brokered mortgage income | | | 45 | | | | 13 | | | | 78 | | | | 36 | |
| Other non-interest income | | | 1,775 | | | | 1,670 | | | | 1,960 | | | | 1,712 | |
| Total non-interest income | | | 13,867 | | | | 12,978 | | | | 13,905 | | | | 14,711 | |
| | | | | | | | | | | | | | | | | |
Salaries and benefits (C) | | | 23,204 | | | | 21,112 | | | | 21,421 | | | | 19,747 | |
| CDI amortization | | | 2,034 | | | | 2,290 | | | | 2,172 | | | | 2,441 | |
| Net occupancy and equipment | | | 3,648 | | | | 3,434 | | | | 3,975 | | | | 3,794 | |
| Depreciation | | | 2,021 | | | | 2,006 | | | | 1,999 | | | | 2,056 | |
| Data processing and software amortization | | | 1,672 | | | | 1,415 | | | | 1,515 | | | | 1,386 | |
| Regulatory assessments and FDIC insurance | | | 3,001 | | | | 2,609 | | | | 2,812 | | | | 2,473 | |
| Other non-interest expense | | | 6,115 | | | | 6,859 | | | | 7,333 | | | | 8,279 | |
| Total non-interest expense | | | 41,695 | | | | 39,725 | | | | 41,227 | | | | 40,176 | |
| Net income before taxes | | | 50,885 | | | | 46,615 | | | | 49,287 | | | | 46,124 | |
| Federal income taxes | | | 17,007 | | | | 15,617 | | | | 16,489 | | | | 15,555 | |
| Net income available to common shareholders | | $ | 33,878 | | | $ | 30,998 | | | $ | 32,798 | | | $ | 30,569 | |
(B) Net interest income on a tax equivalent basis would be $81,302, $78,465, $80,238 and $80,770, for the three months ended March 31, 2011, March 31, 2010, December 31, 2010 and December 31, 2009, respectively.
(C) Salaries and benefits includes stock-based compensation expense of $708, $791, $825 and $628 for the three months ended March 31, 2011, March 31, 2010, December 31, 2010 and December 31, 2009, respectively.
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, 2011 | | | Mar 31, 2010 | | | Dec 31, 2010 | | | Dec 31, 2009 | |
Common Share and Other Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Employees - FTE | | | 1,672 | | | | 1,651 | | | | 1,708 | | | | 1,594 | |
| | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 31.65 | | | $ | 29.58 | | | $ | 31.11 | | | $ | 29.03 | |
| Tangible book value per share | | $ | 11.31 | | | $ | 9.76 | | | $ | 10.70 | | | $ | 9.43 | |
| | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,782 | | | | 46,575 | | | | 46,684 | | | | 46,541 | |
| Weighted average shares outstanding (basic) | | | 46,733 | | | | 46,553 | | | | 46,671 | | | | 46,524 | |
| Weighted average shares outstanding (diluted) | | | 46,942 | | | | 46,858 | | | | 46,818 | | | | 46,800 | |
| | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 2,279 | | | $ | 3,853 | | | $ | 4,439 | | | $ | 6,079 | |
| Accruing loans 90 or more days past due | | | 76 | | | | 2,794 | | | | 189 | | | | 2,332 | |
| Restructured loans | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Total non-performing loans | | | 2,355 | | | | 6,647 | | | | 4,628 | | | | 8,411 | |
| Repossessed assets | | | 68 | | | | 230 | | | | 161 | | | | 116 | |
| Other real estate | | | 10,465 | | | | 12,991 | | | | 11,053 | | | | 7,829 | |
| Total non-performing assets | | $ | 12,888 | | | $ | 19,868 | | | $ | 15,842 | | | $ | 16,356 | |
| | | | | | | | | | | | | | | | | |
| Allowance for credit losses at end of period | | $ | 51,760 | | | $ | 51,893 | | | $ | 51,584 | | | $ | 51,863 | |
| | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 1,524 | | | $ | 4,381 | | | $ | 2,670 | | | $ | 3,949 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.72 | | | $ | 0.67 | | | $ | 0.70 | | | $ | 0.66 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.72 | | | $ | 0.66 | | | $ | 0.70 | | | $ | 0.65 | |
Prosperity Bancshares, Inc.®
Financial Highlights
| | | Three Months Ended | |
| | | Mar 31, 2011 | | | Mar 31, 2010 | | | Dec 31, 2010 | | | Dec 31, 2009 | |
| Performance Ratios | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.42 | % | | | 1.40 | % | | | 1.41 | % | | | 1.39 | % |
| Return on average common equity (annualized) | | | 9.22 | % | | | 9.07 | % | | | 9.08 | % | | | 9.11 | % |
| Return on average tangible common equity (annualized) | | | 26.22 | % | | | 27.22 | % | | | 26.70 | % | | | 28.50 | % |
Net interest margin (D) (tax equivalent) (annualized) | | | 4.02 | % | | | 4.20 | % | | | 3.99 | % | | | 4.24 | % |
| | | | | | | | | | | | | | | | | |
Efficiency ratio(E) | | | 44.30 | % | | | 43.77 | % | | | 44.13 | % | | | 42.44 | % |
| | | | | | | | | | | | | | | | | |
| Asset Quality Ratios | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Non-performing assets to average earning assets | | | 0.16 | % | | | 0.26 | % | | | 0.20 | % | | | 0.22 | % |
| Non-performing assets to loans and other real estate | | | 0.36 | % | | | 0.59 | % | | | 0.45 | % | | | 0.48 | % |
| Net charge-offs to average loans | | | 0.04 | % | | | 0.13 | % | | | 0.08 | % | | | 0.12 | % |
| Allowance for credit losses to total loans | | | 1.45 | % | | | 1.55 | % | | | 1.48 | % | | | 1.54 | % |
| | | | | | | | | | | | | | | | | |
| Common Stock Market Price | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| High | | $ | 42.92 | | | $ | 42.55 | | | $ | 39.96 | | | $ | 41.18 | |
| | | | | | | | | | | | | | | | | |
| Low | | $ | 38.23 | | | $ | 37.93 | | | $ | 30.37 | | | $ | 33.62 | |
| | | | | | | | | | | | | | | | | |
| Period end market price | | $ | 42.77 | | | $ | 40.99 | | | $ | 39.28 | | | $ | 40.47 | |
(D) Net interest margin for all periods presented is calculated on an actual 365 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 assets). Additionally, taxes are not part of this calculation.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | | | June 30, 2010 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 460,066 | | | | 12.88 | % | | $ | 440,480 | | | | 12.64 | % | | $ | 419,539 | | | | 12.29 | % | | $ | 440,274 | | | | 12.85 | % |
| Construction | | | 494,159 | | | | 13.83 | % | | | 502,327 | | | | 14.41 | % | | | 498,400 | | | | 14.60 | % | | | 514,793 | | | | 15.03 | % |
| 1-4 family residential | | | 882,807 | | | | 24.71 | % | | | 824,057 | | | | 23.65 | % | | | 789,859 | | | | 23.14 | % | | | 758,670 | | | | 22.15 | % |
| Home equity | | | 123,696 | | | | 3.46 | % | | | 118,781 | | | | 3.41 | % | | | 114,846 | | | | 3.36 | % | | | 116,071 | | | | 3.39 | % |
| Commercial real estate | | | 1,385,031 | | | | 38.76 | % | | | 1,370,649 | | | | 39.33 | % | | | 1,357,046 | | | | 39.75 | % | | | 1,349,834 | | | | 39.42 | % |
| Agriculture | | | 144,535 | | | | 4.05 | % | | | 140,752 | | | | 4.04 | % | | | 143,917 | | | | 4.22 | % | | | 148,770 | | | | 4.34 | % |
| Consumer | | | 82,626 | | | | 2.31 | % | | | 87,977 | | | | 2.52 | % | | | 90,212 | | | | 2.64 | % | | | 96,628 | | | | 2.82 | % |
| Total Loans | | $ | 3,572,920 | | | | | | | $ | 3,485,023 | | | | | | | $ | 3,413,819 | | | | | | | $ | 3,425,040 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing DDA | | $ | 1,730,427 | | | | 22.14 | % | | $ | 1,673,190 | | | | 22.44 | % | | $ | 1,623,078 | | | | 21.66 | % | | $ | 1,576,727 | | | | 20.18 | % |
| Interest bearing DDA | | | 1,432,766 | | | | 18.33 | % | | | 1,412,337 | | | | 18.95 | % | | | 1,278,564 | | | | 17.07 | % | | | 1,359,041 | | | | 17.39 | % |
| Money Market | | | 2,014,674 | | | | 25.77 | % | | | 1,748,344 | | | | 23.45 | % | | | 1,799,923 | | | | 24.03 | % | | | 1,901,149 | | | | 24.33 | % |
| Savings | | | 454,649 | | | | 5.82 | % | | | 423,026 | | | | 5.67 | % | | | 402,707 | | | | 5.38 | % | | | 385,376 | | | | 4.93 | % |
| Time < $100 | | | 1,072,343 | | | | 13.72 | % | | | 1,119,336 | | | | 15.01 | % | | | 1,224,226 | | | | 16.34 | % | | | 1,316,602 | | | | 16.85 | % |
| Time > $100 | | | 1,111,525 | | | | 14.22 | % | | | 1,078,687 | | | | 14.48 | % | | | 1,163,082 | | | | 15.52 | % | | | 1,275,034 | | | | 16.32 | % |
| Total Deposits | | $ | 7,816,384 | | | | | | | $ | 7,454,920 | | | | | | | $ | 7,491,580 | | | | | | | $ | 7,813,929 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loan to Deposit Ratio | | | 45.7 | % | | | | | | | 46.7 | % | | | | | | | 45.6 | % | | | | | | | 43.8 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Single family residential construction | | $ | 112,175 | | | | 22.70 | % | | $ | 118,207 | | | | 23.52 | % | | $ | 127,325 | | | | 25.55 | % | | $ | 136,127 | | | | 26.45 | % |
| Land development | | | 50,600 | | | | 10.24 | % | | | 52,773 | | | | 10.51 | % | | | 55,902 | | | | 11.22 | % | | | 74,570 | | | | 14.49 | % |
| Raw land | | | 70,074 | | | | 14.18 | % | | | 64,524 | | | | 12.85 | % | | | 67,108 | | | | 13.46 | % | | | 68,112 | | | | 13.23 | % |
| Residential lots | | | 86,359 | | | | 17.48 | % | | | 88,648 | | | | 17.65 | % | | | 88,611 | | | | 17.78 | % | | | 93,764 | | | | 18.21 | % |
| Commercial lots | | | 50,543 | | | | 10.23 | % | | | 52,183 | | | | 10.39 | % | | | 48,346 | | | | 9.70 | % | | | 49,341 | | | | 9.58 | % |
| Commercial construction and other | | | 124,408 | | | | 25.17 | % | | | 125,992 | | | | 25.08 | % | | | 111,108 | | | | 22.29 | % | | | 92,879 | | | | 18.04 | % |
| Total Construction Loans | | $ | 494,159 | | | | | | | $ | 502,327 | | | | | | | $ | 498,400 | | | | | | | $ | 514,793 | | | | | |
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | | | June 30, 2010 | | | Mar 31, 2010 | |
| Balance Sheet Data (at period end) | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | |
| Total loans | | $ | 3,572,920 | | | $ | 3,485,023 | | | $ | 3,413,819 | | | $ | 3,425,040 | | | $ | 3,348,383 | |
Investment securities (F) | | | 4,798,642 | | | | 4,617,116 | | | | 4,472,639 | | | | 4,817,847 | | | | 4,525,506 | |
| Federal funds sold | | | 517 | | | | 393 | | | | 553 | | | | 823 | | | | 577 | |
| Allowance for credit losses | | | (51,760 | ) | | | (51,584 | ) | | | (51,354 | ) | | | (52,727 | ) | | | (51,893 | ) |
| Cash and due from banks | | | 145,521 | | | | 158,975 | | | | 140,678 | | | | 148,395 | | | | 169,534 | |
| Goodwill | | | 924,537 | | | | 924,258 | | | | 923,933 | | | | 921,484 | | | | 890,123 | |
| Core deposit intangibles | | | 26,742 | | | | 28,776 | | | | 30,948 | | | | 33,389 | | | | 33,094 | |
| Other real estate | | | 10,465 | | | | 11,053 | | | | 11,233 | | | | 12,520 | | | | 12,991 | |
| Fixed assets, net | | | 159,050 | | | | 159,053 | | | | 159,717 | | | | 161,267 | | | | 152,886 | |
| Other assets | | | 136,313 | | | | 143,509 | | | | 136,336 | | | | 140,784 | | | | 137,532 | |
| Total assets | | $ | 9,722,947 | | | $ | 9,476,572 | | | $ | 9,238,502 | | | $ | 9,608,822 | | | $ | 9,218,733 | |
| | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 1,730,427 | | | $ | 1,673,190 | | | $ | 1,623,078 | | | $ | 1,576,727 | | | $ | 1,525,079 | |
| Interest bearing deposits | | | 6,085,957 | | | | 5,781,730 | | | | 5,868,502 | | | | 6,237,202 | | | | 6,073,900 | |
| Total deposits | | | 7,816,384 | | | | 7,454,920 | | | | 7,491,580 | | | | 7,813,929 | | | | 7,598,979 | |
| Securities sold under repurchase agreements | | | 51,847 | | | | 60,659 | | | | 96,416 | | | | 93,060 | | | | 68,441 | |
| Federal funds purchased and other borrowings | | | 228,092 | | | | 374,433 | | | | 71,686 | | | | 154,935 | | | | 15,879 | |
| Junior subordinated debentures | | | 85,055 | | | | 92,265 | | | | 92,265 | | | | 92,265 | | | | 92,265 | |
| Other liabilities | | | 61,071 | | | | 41,956 | | | | 56,985 | | | | 50,499 | | | | 65,262 | |
| Total liabilities | | | 8,242,449 | | | | 8,024,233 | | | | 7,808,932 | | | | 8,204,688 | | | | 7,840,826 | |
Shareholders' equity (G) | | | 1,480,498 | | | | 1,452,339 | | | | 1,429,570 | | | | 1,404,134 | | | | 1,377,907 | |
| Total liabilities and equity | | $ | 9,722,947 | | | $ | 9,476,572 | | | $ | 9,238,502 | | | $ | 9,608,822 | | | $ | 9,218,733 | |
(F) Includes $21,088, $22,007, $26,869, $28,028 and $27,710 in unrealized gains on available for sale securities for the quarterly periods ending March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.
(G) Includes $13,707, $14,304, $17,465, $18,218 and $18,011 in after-tax unrealized gains on available for sale securities for the quarterly periods ending March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | | | June 30, 2010 | | | Mar 31, 2010 | |
| Income Statement Data | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | |
| Interest on loans | | $ | 52,200 | | | $ | 52,722 | | | $ | 52,855 | | | $ | 52,681 | | | $ | 51,453 | |
| Interest on securities | | | 41,204 | | | | 39,708 | | | | 43,382 | | | | 46,603 | | | | 45,014 | |
| Interest on federal funds sold and other earning assets | | | 5 | | | | 6 | | | | 10 | | | | 74 | | | | 29 | |
| Total interest income | | | 93,409 | | | | 92,436 | | | | 96,247 | | | | 99,358 | | | | 96,496 | |
| Interest expense - deposits | | | 11,512 | | | | 11,749 | | | | 14,702 | | | | 17,573 | | | | 17,485 | |
| Interest expense - debentures | | | 1,147 | | | | 803 | | | | 857 | | | | 799 | | | | 791 | |
| Interest expense - other | | | 337 | | | | 375 | | | | 421 | | | | 386 | | | | 448 | |
| Total interest expense | | | 12,996 | | | | 12,927 | | | | 15,980 | | | | 18,758 | | | | 18,724 | |
| Net interest income | | | 80,413 | | | | 79,509 | | | | 80,267 | | | | 80,600 | | | | 77,772 | |
| Provision for credit losses | | | 1,700 | | | | 2,900 | | | | 3,000 | | | | 3,275 | | | | 4,410 | |
| Net interest income after provision for credit losses | | | 78,713 | | | | 76,609 | | | | 77,267 | | | | 77,325 | | | | 73,362 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-sufficient funds (NSF) fees | | | 6,107 | | | | 6,905 | | | | 7,274 | | | | 6,917 | | | | 6,485 | |
| Debit card and ATM card income | | | 3,452 | | | | 3,261 | | | | 3,393 | | | | 3,201 | | | | 2,726 | |
| Service charges on deposit accounts | | | 2,483 | | | | 2,614 | | | | 2,534 | | | | 2,562 | | | | 2,378 | |
| Net gain on sale of assets | | | 165 | | | | 2 | | | | 1 | | | | 399 | | | | 0 | |
| Net loss on sale of ORE | | | (160 | ) | | | (915 | ) | | | (1,364 | ) | | | (1,689 | ) | | | (294 | ) |
| Brokered mortgage income | | | 45 | | | | 78 | | | | 64 | | | | 50 | | | | 13 | |
| Other non-interest income | | | 1,775 | | | | 1,960 | | | | 1,752 | | | | 1,856 | | | | 1,670 | |
| Total non-interest income | | | 13,867 | | | | 13,905 | | | | 13,654 | | | | 13,296 | | | | 12,978 | |
| | | | | | | | | | | | | | | | | | | | | |
| Salaries and benefits | | | 23,204 | | | | 21,421 | | | | 22,016 | | | | 22,431 | | | | 21,112 | |
| CDI amortization | | | 2,034 | | | | 2,172 | | | | 2,274 | | | | 2,280 | | | | 2,290 | |
| Net occupancy and equipment | | | 3,648 | | | | 3,975 | | | | 4,036 | | | | 3,708 | | | | 3,434 | |
| Depreciation | | | 2,021 | | | | 1,999 | | | | 2,161 | | | | 2,147 | | | | 2,006 | |
| Data processing and software amortization | | | 1,672 | | | | 1,515 | | | | 1,550 | | | | 1,742 | | | | 1,415 | |
| Regulatory assessments and FDIC insurance | | | 3,001 | | | | 2,812 | | | | 2,817 | | | | 2,801 | | | | 2,609 | |
| Other non-interest expense | | | 6,115 | | | | 7,333 | | | | 7,739 | | | | 7,940 | | | | 6,859 | |
| Total non-interest expense | | | 41,695 | | | | 41,227 | | | | 42,593 | | | | 43,049 | | | | 39,725 | |
| Net income before taxes | | | 50,885 | | | | 49,287 | | | | 48,328 | | | | 47,572 | | | | 46,615 | |
| Federal income taxes | | | 17,007 | | | | 16,489 | | | | 16,162 | | | | 15,826 | | | | 15,617 | |
| Net income available to common shareholders | | $ | 33,878 | | | $ | 32,798 | | | $ | 32,166 | | | $ | 31,746 | | | $ | 30,998 | |
Prosperity Bancshares, Inc.®
Financial Highlights
| | | Three Months Ended | |
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept. 30, 2010 | | | June 30, 2010 | | | Mar 31, 2010 | |
| Comparative Quarterly | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| Asset Quality, Performance & Capital Ratios | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.42 | % | | | 1.41 | % | | | 1.36 | % | | | 1.34 | % | | | 1.40 | % |
| Return on average common equity (annualized) | | | 9.22 | % | | | 9.08 | % | | | 9.06 | % | | | 9.12 | % | | | 9.07 | % |
| Return on average tangible equity (annualized) | | | 26.22 | % | | | 26.70 | % | | | 27.62 | % | | | 28.08 | % | | | 27.22 | % |
| Net interest margin (tax equivalent) (annualized) | | | 4.02 | % | | | 3.99 | % | | | 3.97 | % | | | 4.00 | % | | | 4.20 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Employees - FTE | | | 1,672 | | | | 1,708 | | | | 1,719 | | | | 1,753 | | | | 1,651 | |
| | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio | | | 44.30 | % | | | 44.13 | % | | | 45.35 | % | | | 46.04 | % | | | 43.77 | % |
| Non-performing assets to average earning assets | | | 0.16 | % | | | 0.20 | % | | | 0.26 | % | | | 0.27 | % | | | 0.26 | % |
| Non-performing assets to loans and other real estate | | | 0.36 | % | | | 0.45 | % | | | 0.60 | % | | | 0.64 | % | | | 0.59 | % |
| Net charge-offs to average loans | | | 0.04 | % | | | 0.08 | % | | | 0.13 | % | | | 0.07 | % | | | 0.13 | % |
| Allowance for credit losses to total loans | | | 1.45 | % | | | 1.48 | % | | | 1.50 | % | | | 1.54 | % | | | 1.55 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 31.65 | | | $ | 31.11 | | | $ | 30.64 | | | $ | 30.12 | | | $ | 29.58 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible book value per share | | $ | 11.31 | | | $ | 10.70 | | | $ | 10.17 | | | $ | 9.64 | | | $ | 9.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 risk-based capital | | | 14.00 | % | | | 13.64 | % | | | 13.23 | % | | | 12.31 | % | | | 12.82 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total risk-based capital | | | 15.21 | % | | | 14.87 | % | | | 14.47 | % | | | 13.56 | % | | | 14.07 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage capital | | | 6.97 | % | | | 6.87 | % | | | 6.45 | % | | | 6.10 | % | | | 6.61 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible assets | | | 6.03 | % | | | 5.86 | % | | | 5.73 | % | | | 5.19 | % | | | 5.48 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Equity to assets | | | 15.23 | % | | | 15.33 | % | | | 15.47 | % | | | 14.61 | % | | | 14.95 | % |
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended Marc 31, 2011 | | | Three Months Ended March 31, 2010 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 3,516,524 | | | $ | 52,200 | | | | 6.02 | % | | $ | 3,342,842 | | | $ | 51,453 | | | | 6.24 | % |
| Investment securities | | | 4,677,900 | | | | 41,204 | | | | 3.52 | % | | | 4,177,540 | | | | 45,014 | | | | 4.31 | % |
| Federal funds sold and other earning assets | | | 13,179 | | | | 5 | | | | 0.15 | % | | | 60,536 | | | | 29 | | | | 0.19 | % |
| Total interest earning assets | | | 8,207,603 | | | $ | 93,409 | | | | 4.62 | % | | | 7,580,918 | | | $ | 96,496 | | | | 5.16 | % |
| Allowance for credit losses | | | (51,697 | ) | | | | | | | | | | | (51,750 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,405,708 | | | | | | | | | | | | 1,351,056 | | | | | | | | | |
| Total assets | | $ | 9,561,614 | | | | | | | | | | | $ | 8,880,224 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 1,489,160 | | | $ | 2,238 | | | | 0.61 | % | | $ | 1,384,304 | | | $ | 2,738 | | | | 0.80 | % |
| Savings and money market deposits | | | 2,359,077 | | | | 3,336 | | | | 0.57 | % | | | 2,037,235 | | | | 4,020 | | | | 0.80 | % |
| Certificates and other time deposits | | | 2,177,566 | | | | 5,938 | | | | 1.11 | % | | | 2,385,804 | | | | 10,727 | | | | 1.82 | % |
| Securities sold under repurchase agreements | | | 51,609 | | | | 69 | | | | 0.54 | % | | | 71,250 | | | | 148 | | | | 0.84 | % |
| Federal funds purchased and other borrowings | | | 191,945 | | | | 268 | | | | 0.57 | % | | | 32,080 | | | | 300 | | | | 3.79 | % |
| Junior subordinated debentures | | | 91,063 | | | | 1,147 | | | | 5.11 | % | | | 92,265 | | | | 791 | | | | 3.48 | % |
| Total interest bearing liabilities | | $ | 6,360,420 | | | $ | 12,996 | | | | 0.83 | % | | $ | 6,002,938 | | | $ | 18,724 | | | | 1.26 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 1,672,590 | | | | | | | | | | | $ | 1,445,859 | | | | | | | | | |
| Other liabilities | | | 59,556 | | | | | | | | | | | | 63,916 | | | | | | | | | |
| Total liabilities | | $ | 8,092,566 | | | | | | | | | | | $ | 7,512,713 | | | | | | | | | |
| Shareholders' equity | | $ | 1,469,048 | | | | | | | | | | | $ | 1,367,511 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 9,561,614 | | | | | | | | | | | $ | 8,880,224 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 80,413 | | | | 3.97 | % | | | | | | $ | 77,772 | | | | 4.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income & Margin (tax equivalent) | | | | | | $ | 81,302 | | | | 4.02 | % | | | | | | $ | 78,465 | | | | 4.20 | % |
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended December 31, 2010 | | | Three Months Ended December 31, 2009 | |
| YIELD ANALYSIS | | Average | | | Interest Earned | | | Average | | | Average | | | Interest Earned | | | Average | |
| | | Balance | | | / Interest Paid | | | Yield/Rate | | | Balance | | | / Interest Paid | | | Yield/Rate | |
| | | | | | | | | | | | | | | | | | | |
| Interest Earning Assets: | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 3,421,698 | | | $ | 52,722 | | | | 6.11 | % | | $ | 3,389,529 | | | $ | 53,461 | | | | 6.26 | % |
| Investment securities | | | 4,542,433 | | | | 39,708 | | | | 3.50 | % | | | 4,152,752 | | | | 46,116 | | | | 4.44 | % |
| Federal funds sold and other earning assets | | | 14,305 | | | | 6 | | | | 0.17 | % | | | 13,607 | | | | 8 | | | | 0.23 | % |
| Total interest earning assets | | | 7,978,436 | | | $ | 92,436 | | | | 4.60 | % | | | 7,555,888 | | | $ | 99,585 | | | | 5.23 | % |
| Allowance for credit losses | | | (51,551 | ) | | | | | | | | | | | (48,894 | ) | | | | | | | | |
| Non-interest earning assets | | | 1,394,266 | | | | | | | | | | | | 1,312,019 | | | | | | | | | |
| Total assets | | $ | 9,321,151 | | | | | | | | | | | $ | 8,819,013 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing demand deposits | | $ | 1,291,312 | | | $ | 1,772 | | | | 0.54 | % | | $ | 1,119,119 | | | $ | 2,030 | | | | 0.72 | % |
| Savings and money market deposits | | | 2,229,295 | | | | 3,189 | | | | 0.57 | % | | | 1,988,158 | | | | 4,150 | | | | 0.83 | % |
| Certificates and other time deposits | | | 2,271,119 | | | | 6,788 | | | | 1.19 | % | | | 2,499,797 | | | | 11,882 | | | | 1.89 | % |
| Securities sold under repurchase agreements | | | 77,759 | | | | 110 | | | | 0.56 | % | | | 88,094 | | | | 218 | | | | 0.98 | % |
| Federal funds purchased and other borrowings | | | 198,677 | | | | 265 | | | | 0.53 | % | | | 141,073 | | | | 413 | | | | 1.16 | % |
| Junior subordinated debentures | | | 92,265 | | | | 803 | | | | 3.45 | % | | | 92,265 | | | | 803 | | | | 3.45 | % |
| Total interest bearing liabilities | | $ | 6,160,427 | | | $ | 12,927 | | | | 0.83 | % | | $ | 5,928,506 | | | $ | 19,496 | | | | 1.30 | % |
| Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | | $ | 1,661,448 | | | | | | | | | | | $ | 1,481,514 | | | | | | | | | |
| Other liabilities | | | 54,429 | | | | | | | | | | | | 66,410 | | | | | | | | | |
| Total liabilities | | $ | 7,876,304 | | | | | | | | | | | $ | 7,476,430 | | | | | | | | | |
| Shareholders' equity | | $ | 1,444,847 | | | | | | | | | | | $ | 1,342,583 | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 9,321,151 | �� | | | | | | | | | | $ | 8,819,013 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income & Margin | | | | | | $ | 79,509 | | | | 3.95 | % | | | | | | $ | 80,089 | | | | 4.21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income & Margin (tax equivalent) | | | | | | $ | 80,238 | | | | 3.99 | % | | | | | | $ | 80,770 | | | | 4.24 | % |
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.
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
| | | Three months ended | |
| | | Mar 31, 2011 | | | Dec 31, 2010 | | | Sept 30, 2010 | | | June 30, 2010 | | | Mar 31, 2010 | |
| Return on average tangible common equity: | | | | | | | | | | | | | | | |
| Net income | | $ | 33,878 | | | $ | 32,798 | | | $ | 32,166 | | | $ | 31,746 | | | $ | 30,998 | |
| Average shareholders' equity | | | 1,469,048 | | | | 1,444,847 | | | | 1,419,784 | | | | 1,392,493 | | | | 1,367,511 | |
| Less: Average goodwill and other intangible assets | | | (952,123 | ) | | | (953,509 | ) | | | (953,892 | ) | | | (940,246 | ) | | | (912,065 | ) |
| Average tangible shareholders’ equity | | $ | 516,925 | | | $ | 491,338 | | | $ | 465,892 | | | $ | 452,247 | | | $ | 455,446 | |
| Return on average tangible common equity (annualized): | | | 26.22 | % | | | 26.70 | % | | | 27.62 | % | | | 28.08 | % | | | 27.22 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible book value per share: | | | | | | | | | | | | | | | | | | | | |
| Shareholders’ equity | | $ | 1,480,498 | | | $ | 1,452,339 | | | $ | 1,429,570 | | | $ | 1,404,134 | | | $ | 1,377,907 | |
| Less: Goodwill and other intangible assets | | | (951,279 | ) | | | (953,034 | ) | | | (954,881 | ) | | | (954,873 | ) | | | (923,217 | ) |
| Tangible shareholders’ equity | | $ | 529,219 | | | $ | 499,305 | | | $ | 474,689 | | | $ | 449,261 | | | $ | 454,690 | |
| | | | | | | | | | | | | | | | | | | | | |
| Period end shares outstanding | | | 46,782 | | | | 46,684 | | | | 46,653 | | | | 46,622 | | | | 46,575 | |
| Tangible book value per share: | | $ | 11.31 | | | $ | 10.70 | | | $ | 10.17 | | | $ | 9.64 | | | $ | 9.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | | | | | | | | | | | | | | | | | | |
| Tangible shareholders’ equity | | $ | 529,219 | | | $ | 499,305 | | | $ | 474,689 | | | $ | 449,261 | | | $ | 454,690 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 9,722,947 | | | $ | 9,476,572 | | | $ | 9,238,502 | | | $ | 9,608,822 | | | $ | 9,218,733 | |
| Less: Goodwill and other intangible assets | | | (951,279 | ) | | | (953,034 | ) | | | (954,881 | ) | | | (954,873 | ) | | | (923,217 | ) |
| Tangible assets | | $ | 8,771,668 | | | $ | 8,523,538 | | | $ | 8,283,621 | | | $ | 8,653,949 | | | $ | 8,295,516 | |
| | | | | | | | | | | | | | | | | | | | | |
| Tangible equity to tangible assets ratio: | | | 6.03 | % | | | 5.86 | % | | | 5.73 | % | | | 5.19 | % | | | 5.48 | % |
