EXHIBIT 99.1
PRESS RELEASE | For more information contact: | |
| Prosperity Bancshares, Inc.® | Dan Rollins | |
Prosperity Bank Plaza | Senior Vice President | |
4295 San Felipe | 713.693.9300 | |
Houston, Texas 77027 | dan.rollins@prosperitybanktx.com | |
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
THIRD QUARTER EARNINGS UP 38.3%
| • | Earnings Per Share increases to $0.40 (Diluted) |
| • | Organic Loan Growth in Excess of 11% Annualized |
| • | Non-Interest Income up 41.3% |
| • | Listed byAmerican Bankeras one of the “Most Efficient Bank Holding Companies” |
| • | Expansion into Austin Completed |
HOUSTON, October 15, 2004. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported record earnings for the quarter and nine months ended September 30, 2004. Net income for the quarter was $8.946 million or $0.40 per diluted common share, an increase in net income of $2.476 million or 38.3 percent, compared with $6.470 million or $0.34 per diluted common share for the same period in the prior year. Net income for the nine months ended September 30, 2004 was $25.371 million or $1.18 per diluted common share, an increase in net income of $6.016 million, or 31.1 percent comparted with the same period of 2003.
Prosperity completed its acquisitions of both Liberty Bancshares, Inc. and its subsidiary Liberty Bank, ssb and of Village Bank & Trust, ssb on August 1, 2004. The results of operations for these
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acquisitions have been included in the consolidated financial statements since their respective purchase dates.
“The third quarter of 2004 was another record quarter for our company. Net income and earnings per share are at all time highs,” said David Zalman, Prosperity’s Chief Executive Officer and President. “In addition, we entered the Austin, Texas market with the completion of our previously announced acquisitions of Liberty Bank and Village Bank & Trust.”
Mr. Zalman continued: “Internal loan growth in excess of eleven percent on an annualized basis for the second consecutive quarter is a testament to the efforts of our entire team. I continue to be pleased at the dedication to customer service our team of Real Bankers SM exhibits each day.”
“Our long term strategy includes organic growth from our established banking centers along with the pursuit of possible future selected acquisitions to expand our footprint,” remarked Dan Rollins, Vice Chairman of the Board of Directors of Prosperity Bank®. “In today’s environment, we remain focused on the core strengths of our company, strong asset quality; expanding non-interest income; strategic acquisitions; and true customer-centered relationship banking.”
“We are pleased to be recognized byAmerican Bankerin a recent issue as one of the “Most Efficient Bank Holding Companies” in America,” continued Rollins.
“Our expansion into the Austin market in August 2004 and the Dallas market over the past few years is an excellent example of our ability to acquire and integrate other financial institutions into our organization,” added Ned S. Holmes, Prosperity’s Chairman of the Board of Directors. “We intend to continue looking for partners across Texas in the future.”
Results of operations for the three months ended September 30, 2004 compared to the same period in 2003
For the three months ended September 30, 2004, net income was $8.946 million compared to $6.470 million for the same period in 2003. Net income per diluted common share was $0.40 for the three months ended September 30, 2004 compared with $0.34 for the same period in 2003. Returns on average assets, average common shareholders’ equity and average tangible shareholders’ equity for the three months ended September 30, 2004 were 1.37 percent, 14.42 percent and 34.50 percent, respectively. Prosperity’s efficiency ratio was 48.55 percent for the three months ended September 30, 2004.
Net interest income for the quarter ended September 30, 2004 increased 40.5 percent, to $21.067 million from $14.990 million during the same period in 2003. The increase was attributable primarily to a 28.6 percent increase in average earning assets combined with a 25 basis point increase in the net interest margin on a tax equivalent basis.
Non-interest income increased 41.3 percent to $6.111 million for the three months ended September 30, 2004 compared with the same period in 2003. The increase was attributable primarily to deposit service charges on the increased number of deposit accounts as a result of the additional locations acquired over the past year. Non-interest expenses increased $3.487 million or 35.9 percent compared with the third quarter of 2003. The increase in non-interest expenses was primarily
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attributable to the increased operating costs associated with the additional banking centers acquired as a part of the four acquisitions completed since October 2003.
Loans at September 30, 2004 were $1.007 billion, an increase of $307.2 million, or 43.9 percent, compared with $700.2 million at September 30, 2003. Loans acquired as a part of the Liberty Bank and Village Bank & Trust acquisitions totaled $195.0 million at September 30, 2004. Loan growth, excluding loans acquired with the Liberty Bank and Village Bank & Trust acquisitions, was approximately 11% linked quarter on an annualized basis.
Average loans increased 32.7 percent or $229.0 million to $928.4 million on September 30, 2004 as compared with $699.4 million at the same period last year. The provision for credit losses was $420,000 for the three months ended September 30, 2004 compared with $120,000 for the same period in 2003. Provision expense was 142.4 percent of net charge-offs for the three months ended September 30, 2004 and 129.7 percent of net charge-offs for the nine months ended September 30, 2004.
Non-performing assets totaled $2.563 million or 0.25 percent of total loans and ORE at September 30, 2004, compared with $1.434 million or 0.20 percent of loans and ORE at September 30, 2003. The increase in the provision for loan losses is a result of management’s analysis of the adequacy of the allowance for loan losses to absorb inherent losses in the loan portfolio. The adequacy calculation considers numerous factors, including the increased volume of the loan portfolio, any change in the level of nonperforming assets and net charge-offs. At September 30, 2004, the reserve for credit losses was 1.28 percent of total loans, compared to 1.29 percent at September 30, 2003.
At September 30, 2004, Prosperity had $2.709 billion in total assets, $1.007 billion in loans, $2.327 billion in deposits, and approximately 158,000 deposit and loan accounts. Assets, loans and deposits at September 30, 2004 grew by 30.3 percent, 43.9 percent and 27.4 percent, respectively, compared with their levels at September 30, 2003.
Results of Operations for the nine months ended September 30, 2004 compared to the same period in 2003
Net income for the nine months ended September 30, 2004 was $25.371 million or $1.18 per diluted common share, compared to $19.355 million or $1.01 per diluted common share, for the same period in 2003, an increase of 31.1 percent and 16.8 percent, respectively.
Prosperity’s annualized return on average assets, return on average common shareholders’ equity and return on average shareholders’ tangible equity for the nine months ended September 30, 2004 was 1.36 percent 14.49 percent and 33.09 percent, respectively. Prosperity’s efficiency ratio was 49.29 percent for the nine months ended September 30, 2004.
Net interest income for the nine months ended September 30, 2004 increased 29.7 percent, to $59.765 million from $46.096 million during the same time period in 2003. The increase was attributable primarily to a 28.5 percent increase in average earning assets.
Non-interest income increased 38.4 percent to $16.838 million for the nine months ended September 30, 2004 compared with the same period in 2003. Non-interest expenses increased $8.155 million
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or 27.6 percent compared with the same period in 2003.
Conference Call
Prosperity’s management team will host a conference call on Friday, October 15, 2004 at 10:30 a.m. Eastern Daylight Time (9:30 a.m. Central Daylight Time) to discuss their earnings results, the recent acquisitions of Liberty Bank and Village Bank & Trust, business trends and their outlook for the rest of 2004. Individuals and investment professionals may participate in the call by dialing
1-800-362-0571.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website atwww.prosperitybanktx.com. The webcast may be accessed directly from Prosperity’s Investor Relations page by clicking on the “3rd Quarter results and webcast” link.
Acquisition of Liberty Bank
On August 1, 2004, Prosperity completed the acquisition of Liberty Bancshares, Inc. and its subsidiary Liberty Bank, ssb, in a stock and cash transaction. Liberty Bank operated six (6) offices in Austin, Texas, all of which became full service banking centers of Prosperity Bank.
Acquisition of Village Bank & Trust
On August 1, 2004, Prosperity completed the acquisition of Village Bank & Trust in a cash transaction. Village Bank & Trust operated one (1) office in Austin, Texas, which became a full service banking center of Prosperity Bank.
Prosperity Bancshares, Inc.
Prosperity Bancshares®, a $2.7 billion Houston, Texas based regional financial holding company, formed in 1983, was recently named to the Keefe Bruyette & Woods, Inc. annual Honor Roll for achieving exceptional earnings per share growth for the past 10 years.
Operating under a community banking philosophy, Prosperity 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 consumers and small and medium sized businesses. In addition to established banking products, Prosperity offers a complete line of services including: Internet Banking services atwww.prosperitybanktx.com, Retail Brokerage Services, MasterMoney Debit Cards, and 24 hour voice response banking. Prosperity currently operates fifty-eight (58) full service banking locations, twenty-nine (29) in the Houston CMSA, eleven (11) in the Dallas area, seven (7) in the Austin area and eleven (11) in eight contiguous counties south and southwest of Houston.
Prosperity Bank operates the following full service banking centers: Angleton; Austin—Allandale; Austin—Congress; Austin—Lakeway; Austin—Research Boulevard; Austin—Riverside; Austin—William Cannon; Bay City; Beeville; Blooming Grove; Clear Lake; Cleveland; Corsicana; Cuero; Dallas—Abrams Centre; Dallas—Camp Wisdom; Dallas—Cedar Hill; Dallas—Kiest; Dallas—Red Oak; Dallas—Preston Road; Dallas—Turtle Creek; Dallas—Westmoreland; Dayton; East Bernard;
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Edna; El Campo; Ennis; Galveston; Goliad; Hitchcock; Houston—Aldine; Houston—Bellaire; Houston—CityWest; Houston—Copperfield; Houston—Cypress; Houston—Downtown; Houston—Fairfield; Houston—Gladebrook; Houston—Highway 6; Houston—Medical Center; Houston—Memorial; Houston—Post Oak; Houston—River Oaks; Houston—Tanglewood; Houston—Waugh Drive; Houston—Woodcreek; Liberty; Magnolia; Mathis; Mont Belvieu; Needville; Oak Hill; Palacios; Sweeny; Victoria; West Columbia; Wharton and Winnie.
– – –
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by our 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 whether we can: continue to sustain our current internal growth rate or our total growth rate; successfully close and integrate acquisitions; continue to provide products and services that appeal to our customers; continue to have access to the debt and equity capital we need to sustain our growth; and achieve our sales objectives. Other risks include 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); 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 our most recent Annual Report on Form 10-K.
Copies of Prosperity Bancshares’s® SEC filings may be downloaded from the Internet at no charge fromwww.prosperitybanktx.com.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept 30, 2004 | Sept 30, 2003 | Sept 30, 2004 | Sept 30, 2003 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Balance Sheet Averages | ||||||||||||||||
Total loans | $ | 928,375 | $ | 699,382 | $ | 824,275 | $ | 683,325 | ||||||||
Investment securities | 1,387,445 | 1,093,201 | 1,403,263 | 1,048,804 | ||||||||||||
Fed funds sold and other earnings | 38,437 | 37,827 | 28,311 | 22,753 | ||||||||||||
Total earning assets | 2,354,257 | 1,830,410 | 2,255,849 | 1,754,882 | ||||||||||||
Allowance for credit losses | (11,967 | ) | (9,254 | ) | (10,948 | ) | (9,385 | ) | ||||||||
Cash and due from banks | 57,166 | 49,087 | 56,765 | 48,805 | ||||||||||||
Goodwill | 136,414 | 77,403 | 123,113 | 72,736 | ||||||||||||
Core Deposit Intangibles (CDI) | 8,004 | 4,512 | 8,062 | 4,300 | ||||||||||||
Other real estate | 511 | 860 | 244 | 755 | ||||||||||||
Fixed assets, net | 35,506 | 29,588 | 34,335 | 28,512 | ||||||||||||
Other assets | 24,284 | 23,422 | 21,209 | 23,883 | ||||||||||||
Total assets | $ | 2,604,175 | $ | 2,006,028 | $ | 2,488,629 | $ | 1,924,488 | ||||||||
Non-interest bearing deposits | $ | 491,471 | $ | 363,160 | $ | 454,878 | $ | 335,533 | ||||||||
Interest bearing deposits | 1,747,569 | 1,395,663 | 1,689,365 | 1,345,032 | ||||||||||||
Total deposits | 2,239,040 | 1,758,823 | 2,144,243 | 1,680,565 | ||||||||||||
Federal funds purchased & interest bearing liabilities | 45,164 | 30,058 | 41,289 | 34,574 | ||||||||||||
Junior subordinated debentures | 59,804 | 40,474 | 59,804 | 36,178 | ||||||||||||
Other liabilities | 12,024 | 9,145 | 9,895 | 10,163 | ||||||||||||
Shareholders’ equity(A) | 248,143 | 167,528 | 233,398 | 163,008 | ||||||||||||
Total liabilities and equity | $ | 2,604,175 | $ | 2,006,028 | $ | 2,488,629 | $ | 1,924,488 | ||||||||
(A)Includes ($2,977), $2,045, ($15) and $2,504 in after tax unrealized (losses)/gains on available for sale securities for the three month periods ending September 30, 2004 and September 30, 2003 and the nine month periods ending September 30, 2004 and September 30, 2003 respectively.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||
| Sept 30, 2004 | Sept 30, 2003 | Sept 30, 2004 | Sept 30, 2003 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Income Statement Data | ||||||||||||
Interest on loans | $ | 14,760 | $ | 11,675 | $ | 39,222 | $ | 34,630 | ||||
Interest on securities | 13,862 | 9,605 | 41,981 | 30,986 | ||||||||
Interest on federal funds sold and other earning assets | 141 | 85 | 245 | 176 | ||||||||
Total interest income | 28,763 | 21,365 | 81,448 | 65,792 | ||||||||
Interest expense—deposits | 6,316 | 5,459 | 17,783 | 17,074 | ||||||||
Interest expense—debentures | 1,044 | 675 | 3,011 | 1,840 | ||||||||
Interest expense—other | 336 | 241 | 889 | 782 | ||||||||
Total interest expense | 7,696 | 6,375 | 21,683 | 19,696 | ||||||||
Net interest income(B) | 21,067 | 14,990 | 59,765 | 46,096 | ||||||||
Provision for credit losses | 420 | 120 | 660 | 360 | ||||||||
Net interest income after provision for credit losses | 20,647 | 14,870 | 59,105 | 45,736 | ||||||||
Service charges on deposit accounts | 5,237 | 3,523 | 14,827 | 10,148 | ||||||||
Net gain on sale of assets | 175 | 219 | 308 | 265 | ||||||||
Gain on sale of securities | 0 | 0 | 78 | 0 | ||||||||
Other income | 699 | 584 | 1,625 | 1,757 | ||||||||
Total non-interest income | 6,111 | 4,326 | 16,838 | 12,170 | ||||||||
Salaries and benefits | 7,147 | 5,259 | 20,459 | 15,943 | ||||||||
Intangible asset amortization | 455 | 207 | 1,220 | 590 | ||||||||
Net occupancy and equipment | 1,499 | 1,045 | 4,055 | 2,988 | ||||||||
Depreciation | 728 | 634 | 2,118 | 1,855 | ||||||||
Data processing | 540 | 453 | 1,473 | 1,728 | ||||||||
Other expenses | 2,825 | 2,109 | 8,395 | 6,461 | ||||||||
Total non-interest expenses | 13,194 | 9,707 | 37,720 | 29,565 | ||||||||
Net earnings before taxes | 13,564 | 9,489 | 38,223 | 28,341 | ||||||||
Federal income taxes | 4,618 | 3,019 | 12,852 | 8,986 | ||||||||
Net earnings available to common shareholders | $ | 8,946 | $ | 6,470 | $ | 25,371 | $ | 19,355 | ||||
(B) Net interest income on a tax equivalent basis would be $21,452 and $15,503 for the three months ended September 30, 2004 and September 30, 2003, respectively, and $61,050 and $47,635 for the nine months ended September 30, 2004 and
September 30, 2003, respectively.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||
| Sept 30, 2004 | Sept 30, 2003 | Sept 30, 2004 | Sept 30, 2003 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Common Share and Other Data | ||||||||||||
Employees—FTE | 653 | 512 | 653 | 512 | ||||||||
Book value per share | $ | 12.02 | $ | 8.91 | $ | 12.02 | $ | 8.91 | ||||
Tangible book value per share | $ | 4.71 | $ | 4.63 | $ | 4.71 | $ | 4.63 | ||||
Period end shares outstanding | 22,378 | 18,964 | 22,378 | 18,964 | ||||||||
Weighted average shares outstanding (basic) | 21,843 | 18,974 | 21,250 | 18,948 | ||||||||
Weighted average shares outstanding (diluted) | 22,106 | 19,254 | 21,528 | 19,238 | ||||||||
Non-accrual loans | $ | 709 | $ | 9 | $ | 709 | $ | 9 | ||||
Accruing loans 90 days or more days past due | 1,238 | 608 | 1,238 | 608 | ||||||||
Restructured loans | 0 | 0 | 0 | 0 | ||||||||
Total non-performing loans | 1,947 | 617 | 1,947 | 617 | ||||||||
Repossessed assets | 81 | 52 | 81 | 52 | ||||||||
Other real estate | 535 | 765 | 535 | 765 | ||||||||
Total non-performing assets | $ | 2,563 | $ | 1,434 | $ | 2,563 | $ | 1,434 | ||||
Allowance for credit losses at end of period | $ | 12,861 | $ | 9,061 | $ | 12,861 | $ | 9,061 | ||||
Net charge-offs | $ | 295 | $ | 287 | $ | 509 | $ | 1,446 | ||||
Basic earnings per share | $ | 0.41 | $ | 0.34 | $ | 1.19 | $ | 1.02 | ||||
Diluted earnings per share | $ | 0.40 | $ | 0.34 | $ | 1.18 | $ | 1.01 | ||||
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Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept 30, 2004 | Sept 30, 2003 | Sept 30, 2004 | Sept 30, 2003 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets (annualized) | 1.37 | % | 1.29 | % | 1.36 | % | 1.34 | % | ||||||||
Return on average common equity (annualized) | 14.42 | % | 15.45 | % | 14.49 | % | 15.83 | % | ||||||||
Return on average tangible common equity (annualized) | 34.50 | % | 30.23 | % | 33.09 | % | 30.02 | % | ||||||||
Net interest margin (tax equivalent) (annualized) | 3.64 | % | 3.39 | % | 3.61 | % | 3.62 | % | ||||||||
Efficiency ratio(C) | 48.55 | % | 50.25 | % | 49.29 | % | 50.74 | % | ||||||||
Asset Quality Ratios | ||||||||||||||||
Non-performing assets to average earning assets | 0.11 | % | 0.08 | % | 0.11 | % | 0.08 | % | ||||||||
Non-performing assets to loans and other real estate | 0.25 | % | 0.20 | % | 0.25 | % | 0.20 | % | ||||||||
Net charge-offs to average loans | 0.03 | % | 0.04 | % | 0.06 | % | 0.21 | % | ||||||||
Allowance for credit losses to total loans | 1.28 | % | 1.29 | % | 1.28 | % | 1.29 | % | ||||||||
Common Stock Market Price | ||||||||||||||||
High | $ | 27.75 | $ | 22.99 | $ | 27.75 | $ | 22.99 | ||||||||
Low | $ | 23.23 | $ | 18.65 | $ | 21.89 | $ | 16.16 | ||||||||
Period end market price | $ | 26.72 | $ | 21.31 | $ | 26.72 | $ | 21.31 | ||||||||
(C)Calculated by dividing total non-interest expense (excluding securities losses and credit loss provisions) by net interest income plus non-interest income (excluding securities gains). Additionally, taxes are not part of this calculation.
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Sept 30, 2004 | June 30, 2004 | Mar 31, 2004 | Dec 31, 2003 | Sept 30, 2003 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Total loans | $ | 1,007,420 | $ | 790,920 | $ | 770,223 | $ | 770,053 | $ | 700,221 | ||||||||||
Investment securities(D) | 1,353,578 | 1,418,364 | 1,426,636 | 1,376,880 | 1,150,893 | |||||||||||||||
Federal funds sold and other earning assets | 72,595 | 7,849 | 28,323 | 11,992 | 52,321 | |||||||||||||||
Total earning assets | 2,433,593 | 2,217,133 | 2,225,182 | 2,158,925 | 1,903,435 | |||||||||||||||
Allowance for credit losses | (12,861 | ) | (10,371 | ) | (10,460 | ) | (10,370 | ) | (9,061 | ) | ||||||||||
Cash and due from banks | 60,874 | 48,782 | 55,524 | 71,983 | 51,746 | |||||||||||||||
Goodwill | 150,585 | 116,574 | 116,123 | 118,012 | 76,941 | |||||||||||||||
Core deposit intangible | 13,300 | 8,080 | 8,461 | 6,743 | 4,315 | |||||||||||||||
Other real estate | 535 | 48 | 80 | 246 | 765 | |||||||||||||||
Fixed assets, net | 36,331 | 32,762 | 33,651 | 34,299 | 28,278 | |||||||||||||||
Other assets | 26,812 | 21,336 | 20,992 | 20,649 | 22,113 | |||||||||||||||
Total assets | $ | 2,709,169 | $ | 2,434,344 | $ | 2,449,553 | $ | 2,400,487 | $ | 2,078,532 | ||||||||||
Demand deposits | $ | 527,845 | $ | 444,067 | $ | 443,137 | $ | 467,389 | $ | 374,877 | ||||||||||
Interest bearing deposits | 1,799,433 | 1,635,850 | 1,679,724 | 1,616,359 | 1,452,401 | |||||||||||||||
Total deposits | 2,327,278 | 2,079,917 | 2,122,861 | 2,083,748 | 1,827,278 | |||||||||||||||
Federal funds purchased and other interest bearing liabilities | 41,468 | 58,940 | 30,578 | 30,936 | 31,074 | |||||||||||||||
Junior subordinated debentures | 59,804 | 59,804 | 59,804 | 59,804 | 45,500 | |||||||||||||||
Other liabilities | 11,354 | 7,457 | 10,383 | 6,411 | 5,701 | |||||||||||||||
Total liabilities | 2,439,904 | 2,206,118 | 2,223,626 | 2,180,899 | 1,909,553 | |||||||||||||||
Shareholders’ equity(E) | 269,265 | 228,226 | 225,927 | 219,588 | 168,979 | |||||||||||||||
Total liabilities and equity | $ | 2,709,169 | $ | 2,434,344 | $ | 2,449,553 | $ | 2,400,487 | $ | 2,078,532 | ||||||||||
(D) Includes ($2,863), ($4,483), $2,783, $3,115 and $2,112 in unrealized (losses)/gains on available for sale securities for the quarterly periods ending September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003 and September 30, 2003, respectively.
(E)Includes ($1,861), ($2,914), $1,809, $2,024 and $1,373 in after tax unrealized (losses)/gains on available for sale securities for the quarterly periods ending September 30, 2004, June 30, 2004, March 31, 2004, December 31, 2003 and September 30, 2003, respectively.
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Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | |||||||||||||||
| Sept 30, 2004 | Jun 30, 2004 | Mar 31, 2004 | Dec 31, 2003 | Sept 30, 2003 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Comparative Quarterly Asset | |||||||||||||||
Quality, Performance & Capital Ratios |
| ||||||||||||||
Return on average assets (annualized) | 1.37 | % | 1.37 | % | 1.33 | % | 1.28 | % | 1.29 | % | |||||
Return on average common equity (annualized) | 14.42 | % | 14.63 | % | 14.44 | % | 15.01 | % | 15.45 | % | |||||
Return on average tangible equity (annualized) | 34.50 | % | 32.05 | % | 32.67 | % | 29.68 | % | 30.23 | % | |||||
Net interest margin (tax equivalent) (annualized) | 3.64 | % | 3.55 | % | 3.63 | % | 3.68 | % | 3.39 | % | |||||
Efficiency ratio | 48.55 | % | 48.81 | % | 50.60 | % | 53.69 | % | 50.25 | % | |||||
Non-performing assets to average earning assets | 0.11 | % | 0.07 | % | 0.03 | % | 0.05 | % | 0.08 | % | |||||
Non-performing assets to loans and other real estate | 0.25 | % | 0.20 | % | 0.08 | % | 0.13 | % | 0.20 | % | |||||
Net charge-offs to average loans | 0.03 | % | 0.03 | % | 0.00 | % | 0.02 | % | 0.04 | % | |||||
Allowance for credit losses to total loans | 1.28 | % | 1.31 | % | 1.36 | % | 1.35 | % | 1.29 | % | |||||
Tier 1 risk-based capital | 14.24 | % | 17.40 | % | 16.68 | % | 16.69 | % | 16.09 | % | |||||
Total risk-based capital | 15.35 | % | 18.50 | % | 17.78 | % | 17.84 | % | 17.20 | % | |||||
Tier 1 leverage capital | 6.77 | % | 7.10 | % | 6.87 | % | 6.70 | % | 6.85 | % | |||||
Tangible equity to tangible assets | 4.14 | % | 4.48 | % | 4.36 | % | 4.17 | % | 4.39 | % | |||||
Equity to assets | 9.94 | % | 9.38 | % | 9.23 | % | 9.15 | % | 8.13 | % | |||||
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Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended Sept 30, 2004 | ||||||||||
| Average Balance | Interest Income/ Interest | Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 928,375 | $ | 14,760 | 6.36 | % | ||||
Investment securities | 1,387,445 | 13,862 | 4.00 | % | ||||||
Federal funds sold | 38,437 | 141 | 1.47 | % | ||||||
Total interest earning assets | 2,354,257 | $ | 28,763 | 4.89 | % | |||||
Allowance for credit losses | (11,967 | ) | ||||||||
Non-interest earning assets | 261,885 | |||||||||
Total assets | $ | 2,604,175 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 479,891 | $ | 1,245 | 1.04 | % | ||||
Savings and money market deposits | 513,768 | 1,064 | 0.83 | % | ||||||
Certificates and other time deposits | 753,910 | 4,007 | 2.13 | % | ||||||
Trust preferred securities | 59,804 | 1,044 | 6.98 | % | ||||||
Federal funds purchased and other borrowings | 45,164 | 336 | 2.98 | % | ||||||
Total Interest Bearing Liabilities | 1,852,537 | $ | 7,696 | 1.66 | % | |||||
Non-interest Bearing Liabilities: | ||||||||||
Non-interest bearing demand deposits | 491,471 | |||||||||
Other liabilities | 12,024 | |||||||||
Total liabilities | 2,356,032 | |||||||||
Shareholders’ equity | 248,143 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,604,175 | ||||||||
Net Interest Income & Margin | $ | 21,067 | 3.58 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 21,452 | 3.64 | % | ||||||
Page 12 of 16
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended Jun 30, 2004 | ||||||||||
| Average Balance | Interest Income/ Interest Expense | Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 772,496 | $ | 12,149 | 6.29 | % | ||||
Investment securities | 1,429,320 | 14,124 | 3.95 | % | ||||||
Federal funds sold | 21,503 | 40 | 0.74 | % | ||||||
Total interest earning assets | 2,223,319 | $ | 26,313 | 4.73 | % | |||||
Allowance for credit losses | (10,551 | ) | ||||||||
Non-interest earning assets | 229,347 | |||||||||
Total assets | $ | 2,442,115 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 466,618 | $ | 1,189 | 1.02 | % | ||||
Savings and money market deposits | 473,290 | 856 | 0.72 | % | ||||||
Certificates and other time deposits | 717,515 | 3,641 | 2.03 | % | ||||||
Junior subordinated debentures | 59,804 | 971 | 6.49 | % | ||||||
Federal funds purchased and other borrowings | 43,385 | 305 | 2.81 | % | ||||||
Total Interest Bearing Liabilities | 1,760,612 | $ | 6,962 | 1.58 | % | |||||
Non-interest Bearing Liabilities: | ||||||||||
Non-interest bearing demand deposits | 443,212 | |||||||||
Other liabilities | 9,602 | |||||||||
Total liabilities | 2,213,426 | |||||||||
Shareholders’ equity | 228,689 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,442,115 | ||||||||
Net Interest Income & Margin | $ | 19,351 | 3.48 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 19,746 | 3.55 | % | ||||||
Page 13 of 16
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
Three Months Ended September 30, 2003 | ||||||||||
| Average Balance | Interest Income/ Interest Expense | Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 699,382 | $ | 11,675 | 6.68 | % | ||||
Investment securities | 1,093,201 | 9,605 | 3.51 | % | ||||||
Federal funds sold | 37,827 | 85 | 0.90 | % | ||||||
Total interest earning assets | 1,830,410 | $ | 21,365 | 4.67 | % | |||||
Allowance for credit losses | (9,254 | ) | ||||||||
Non-interest earning assets | 184,872 | |||||||||
Total assets | $ | 2,006,028 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 374,638 | $ | 1,004 | 1.07 | % | ||||
Savings and money market deposits | 399,054 | 780 | 0.78 | % | ||||||
Certificates and other time deposits | 621,971 | 3,675 | 2.36 | % | ||||||
Junior subordinated debentures | 40,474 | 675 | 6.67 | % | ||||||
Federal funds purchased and other borrowings | 30,058 | 241 | 3.21 | % | ||||||
Total Interest bearing Liabilities | 1,466,195 | $ | 6,375 | 1.74 | % | |||||
Non-interest bearing Liabilities: | ||||||||||
Non-interest bearing demand deposits | 363,160 | |||||||||
Other liabilities | 9,145 | |||||||||
Total liabilities | 1,838,500 | |||||||||
Shareholders’ equity | 167,528 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,006,028 | ||||||||
Net Interest Income & Margin | $ | 14,990 | 3.28 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 15,503 | 3.39 | % | ||||||
Page 14 of 16
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Nine Months Ended September 30, 2004 | ||||||||||
| Average Balance | Interest Income/ Interest Expense | Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 824,275 | $ | 39,222 | 6.34 | % | ||||
Investment securities | 1,403,263 | 41,981 | 3.99 | % | ||||||
Federal funds sold | 28,311 | 245 | 1.15 | % | ||||||
Total interest earning assets | 2,255,849 | $ | 81,448 | 4.81 | % | |||||
Allowance for credit losses | (10,948 | ) | ||||||||
Non-interest earning assets | 243,728 | |||||||||
Total assets | $ | 2,488,629 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 479,150 | $ | 3,689 | 1.03 | % | ||||
Savings and money market deposits | 486,330 | 2,815 | 0.77 | % | ||||||
Certificates and other time deposits | 723,885 | 11,279 | 2.08 | % | ||||||
Junior subordinated debentures | 59,804 | 3,011 | 6.71 | % | ||||||
Federal funds purchased and other borrowings | 41,289 | 889 | 2.87 | % | ||||||
Total Interest Bearing Liabilities | 1,790,458 | $ | 21,683 | 1.61 | % | |||||
Non-interest Bearing Liabilities: | ||||||||||
Non-interest bearing demand deposits | 454,878 | |||||||||
Other liabilities | 9,895 | |||||||||
Total liabilities | 2,255,231 | |||||||||
Shareholders’ equity | 233,398 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,488,629 | ||||||||
Net Interest Income & Margin | $ | 59,765 | 3.53 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 61,050 | 3.61 | % | ||||||
Page 15 of 16
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Nine Months Ended September 30, 2003 | ||||||||||
| Average Balance | Interest Income/ Interest Expense | Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 683,325 | $ | 34,630 | 6.76 | % | ||||
Investment securities | 1,048,804 | 30,986 | 3.94 | % | ||||||
Federal funds sold | 22,753 | 176 | 1.03 | % | ||||||
Total interest earning assets | 1,754,882 | $ | 65,792 | 5.00 | % | |||||
Allowance for credit losses | (9,385 | ) | ||||||||
Non-interest earning assets | 178,991 | |||||||||
Total assets | $ | 1,924,488 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 354,569 | $ | 3,080 | 1.16 | % | ||||
Savings and money market deposits | 388,987 | 2,618 | 0.90 | % | ||||||
Certificates and other time deposits | 601,476 | 11,376 | 2.52 | % | ||||||
Junior subordinated debentures | 36,178 | 1,840 | 6.78 | % | ||||||
Federal funds purchased and other borrowings | 34,574 | 782 | 3.02 | % | ||||||
Total Interest Bearing Liabilities | 1,415,784 | $ | 19,696 | 1.85 | % | |||||
Non-interest Bearing Liabilities: | ||||||||||
Non-interest bearing demand deposits | 335,533 | |||||||||
Other liabilities | 10,163 | |||||||||
Total liabilities | 1,761,480 | |||||||||
Shareholders’ equity | 163,008 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 1,924,488 | ||||||||
Net Interest Income & Margin | $ | 46,096 | 3.50 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 47,635 | 3.62 | % | ||||||
– – –
Page 16 of 16