EXHIBIT 99.1
| PRESS RELEASE | For more information contact: | |
Prosperity Bancshares, Inc.® Prosperity Bank Plaza 4295 San Felipe Houston, Texas 77027 | Dan Rollins President and Chief Operating Officer 281.269.7199 dan.rollins@prosperitybanktx.com | |
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
REPORTS SECOND QUARTER EARNINGS
| • | 2Q 2008 Earnings Per Share of $0.52 (diluted) |
| • | Net Interest Margin (tax equivalent) increases to 4.10% |
| • | NPA’s reduced to 0.22% of Average Earning Assets |
HOUSTON, July 23, 2008. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported earnings for the quarter ended June 30, 2008. Net income for the quarter was $23.437 million or $0.52 per diluted common share, an increase in net income of $444,000 or 1.9%, compared with $22.993 million or $0.52 per diluted common share for the same period in the prior year.
Since January 1, 2007, Prosperity has completed the following acquisitions: 1st Choice Bancorp, Inc. on June 1, 2008, Houston branches of Banco Popular North America on January 10, 2008, The Bank of Navasota, N.A. on September 1, 2007 and Texas United Bancshares, Inc. on January 31, 2007. The results of operations for these acquisitions have been included in Prosperity’s consolidated financial statements since their respective purchase dates.
“I am proud to report another strong quarter of performance by our bank,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer. “While we are certainly not immune to the issues facing the commercial banking industry nationwide, we are pleased with our performance and are cautiously optimistic about the future.”
Page 1 of 20
Results of operations for the three months ended June 30, 2008
For the three months ended June 30, 2008, net income was $23.437 million compared with $22.993 million for the same period in 2007. Net income per diluted common share was $0.52 for the three months ended June 30, 2008 and 2007. Returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2008 were 1.43%, 7.96% and 26.93%, respectively. Prosperity’s efficiency ratio was 46.17% for the three months ended June 30, 2008.
Net interest income before provision for credit losses for the quarter ended June 30, 2008 increased 5.1% to $53.971 million compared with $51.344 million during the same period in 2007. The increase was attributable primarily to a 5.1% increase in average earning assets. The net interest margin on a tax equivalent basis increased to 4.10% for the three months ended June 30, 2008 compared with 4.09% for the same period in 2007.
Non-interest income decreased 5.6% to $13.066 million for the three months ended June 30, 2008 compared with $13.845 million for the same period in 2007. The decrease was attributable primarily to a $200,000 decrease in gains on the sale of held for sale loans and a $416,000 decrease in trust and investment income, which is a component of other non-interest income. Prosperity discontinued the origination of mortgage loans for sale, which was part of the mortgage banking activities of Texas United Bancshares, Inc. (TXUI), in the fourth quarter 2007 and does not expect to have significant gains and losses from this activity going forward. The decrease in trust and investment income was due to the dissolution in the second quarter of 2007 of the trust department acquired in the TXUI acquisition. Linked quarter non-interest income increased 3.1% primarily due to an increase in service charges on deposit accounts related to the 1st Choice acquisition.
Non-interest expense increased $788,000 or 2.6% to $30.860 million for the second quarter of 2008 compared with $30.072 million for the second quarter of 2007. The increase was attributable primarily to the increased operating costs associated with the additional banking centers acquired as a part of the three acquisitions completed since July 2007. Linked quarter non-interest expense increased 6.0% primarily due to the 1st Choice acquisition and increases in annual salaries and benefits and professional fees.
Loans at June 30, 2008 were $3.313 billion, an increase of $132.152 million, or 4.2%, compared with $3.181 billion at June 30, 2007. Linked quarter loans increased 4.8% or $151.701 million, with loans increasing from $3.162 billion at March 31, 2008. As reflected in the table below, linked quarter loan growth for the second quarter of 2008 was impacted by the loans acquired as a part of the acquisitions of The Bank of Navasota, the Banco Popular Houston branches and 1st Choice. Excluding the loans acquired as a part of those acquisitions, linked quarter loans decreased 1.0%.
Deposits at June 30, 2008 were $5.297 billion, an increase of $520.252 million or 10.9%, compared with $4.776 billion at June 30, 2007. Linked quarter deposits increased 7.0% from $4.949 billion at March 31, 2008. As reflected in the table below, linked quarter deposits for the second quarter of 2008 were impacted by the deposits assumed as a part of the acquisitions of Navsasota, the Banco Popular Houston branches and 1st Choice. Excluding deposits assumed as a part of those acquisitions, linked quarter deposits increased 1.0%.
Page 2 of 20
Balance Sheet Data (at period end) | June 30, 2008 | Mar 31, 2008 | June 30, 2007 | ||||||
| (In Thousands) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Loans: | |||||||||
Acquired with The Bank of Navasota | $ | 21,862 | $ | 24,339 | $ | 0 | |||
Acquired with Banco Popular Houston Branches | 2,207 | 1,629 | 0 | ||||||
Acquired with 1stChoice Bank | 184,526 | 0 | 0 | ||||||
All other | 3,104,733 | 3,135,659 | 3,181,176 | ||||||
Total Loans | $ | 3,313,328 | $ | 3,161,627 | $ | 3,181,176 | |||
Deposits: | |||||||||
Assumed with The Bank of Navasota | $ | 60,470 | 59,212 | $ | 0 | ||||
Assumed with Banco Popular Houston Branches | 127,965 | 117,873 | 0 | ||||||
Assumed with 1stChoice Bank | 287,996 | 0 | 0 | ||||||
All other | 4,820,203 | 4,771,633 | 4,776,382 | ||||||
Total Deposits | $ | 5,296,634 | $ | 4,948,718 | $ | 4,776,382 | |||
Average loans decreased 0.5% or $16.595 million to $3.203 billion for the quarter ended June 30, 2008 compared with $3.220 billion for the same period of 2007. Linked quarter average loans increased 1.9% or $60.131 million from $3.143 billion. Average deposits increased 4.2% to $5.040 billion for the quarter ended June 30, 2008 compared with $4.838 billion for the same period of 2007. Linked quarter average deposits increased 2.1% or $101.885 million from $4.938 billion at March 31, 2008. The linked quarter increase in both average loans and average deposits was primarily due to the 1st Choice acquisition.
At June 30, 2008, construction loans totaled $658.669 million, consisting of approximately $225 million of single family residence construction; $130 million of land development; $135 million of raw land; $100 million of lot loans; and $69 million of commercial construction and other construction loans.
The provision for credit losses was $1.000 million for the three months ended June 30, 2008, $320,000 for the three months ended June 30, 2007 and $1.167 million for the three months ended March 31, 2008. In making its evaluation of the adequacy of the allowance for credit losses, management considers factors such as historical loan loss experience, industry diversification of Prosperity’s commercial loan portfolio, the amount of nonperforming assets and related collateral, the volume, growth and composition of Prosperity’s loan portfolio, current economic changes that may affect the borrower’s ability to pay and the value of collateral, the evaluation of Prosperity’s loan portfolio through its internal loan review process and other relevant factors.
Non-performing assets totaled $11.651 million or 0.22% of average earning assets at June 30, 2008 compared with $11.193 million or 0.22% of average earning assets at June 30, 2007 and $17.554 million or 0.33% of average earnings assets at March 31, 2008. At June 30, 2008, the allowance for credit losses was 1.03% of total loans, compared with 1.14% at June 30, 2007 and 1.01% of total loans at March 31, 2008.
Page 3 of 20
Prosperity owns Fannie Mae and Freddie Mac preferred stock with a par value of $24 million. In the fourth quarter of 2007, the net book value of the preferred stock was reduced to it’s December 31, 2007 market value of $14.025 million, or 0.21% of total assets at June 30, 2008, due to an other-than-temporary impairment charge of $9.975 million. The market value of the Fannie Mae and Freddie Mac preferred stock was $11.769 million as of June 30, 2008, or 0.17% of total assets, resulting in an unrealized loss of $2.256 million as of June 30, 2008 and a $1.466 million reduction in equity through other comprehensive income as of the same date.
At June 30, 2008, Prosperity had $6.794 billion in total assets, $3.313 billion in loans, $5.297 billion in deposits, and approximately 336,000 deposit and loan accounts. Assets, loans and deposits at June 30, 2008 grew by 9.8%, 4.2% and 10.9%, respectively, compared with their level at June 30, 2007.
Results of operations for the six months ended June 30, 2008
For the six months ended June 30, 2008, net income was $46.375 million compared with $43.222 million for the same period in 2007. Net income per diluted common share was $1.04 for the six months ended June 30, 2008 compared with $1.02 for the same period in 2007. Returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2008 were 1.43%, 7.99% and 27.01%, respectively. Prosperity’s efficiency ratio was 45.62% for the six months ended June 30, 2008.
Net interest income before provision for credit losses for the six months ended June 30, 2008 increased $8.534 million or 8.8%, to $105.966 million compared with $97.432 million during the same period in 2007. The increase was attributable primarily to a 7.1% increase in average earning assets.
Non-interest income increased $229,000 or 0.9% to $25.745 million for the six months ended June 30, 2008 compared with $25.516 million for the same period in 2007. The increase was attributable primarily to the increased customer service charges associated with the additional banking centers acquired as a part of the four acquisitions completed since January 2007, partially offset by a decrease in gain on sale of held for sale loans and trust and investment income.
Non-interest expense increased $2.637 million or 4.6% to $59.980 million for the first six months of 2008 compared with $57.343 million the same period in 2007. The increase was mainly attributed to the increased operating costs associated with the additional banking centers acquired as a part of the four acquisitions completed since January 2007.
The provision for credit losses was $2.167 million for the six months ended June 30, 2008 and $565,000 for the six months ended June 30, 2007. Net charge offs were $2.806 million for the six months ended June 30, 2008 and $1.166 million for the six months ended June 30, 2007.
Redemption of Junior Subordinated Debentures
On June 26, 2008, Prosperity redeemed in full the junior subordinated debentures held by SNB Statutory Trust II in the amount of $10.310 million. The debentures redeemed bore interest at a floating rate of 3 month LIBOR + 3.15%. The trust in turn redeemed in full the trust preferred securities and common securities it issued.
Page 4 of 20
Conference Call
Prosperity’s management team will host a conference call on Wednesday, July 23, 2008 at 10:30 a.m. Eastern Daylight Savings Time (9:30 a.m. Central Daylight Savings Time) to discuss Prosperity’s second quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-862-9098, the reference code is PBTX.
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 “2nd Quarter Results and Webcast” link.
Acquisition of 1st Choice Bancorp, Inc.
On June 1, 2008, Prosperity completed its previously announced acquisition of 1st Choice Bancorp, Inc. and its wholly- owned subsidiary, 1st Choice Bank. 1st Choice Bancorp, Inc. operated two (2) banking offices in Houston, Texas, with one location in South Houston and another in the Heights area, which was consolidated with Prosperity’s Heights location and is located in 1st Choice’s Heights banking office. As of May 31, 2008, 1st Choice Bancorp reported total assets of approximately $314.9 million, loans of approximately $192.7 million, deposits of approximately $285.2 million and stockholders’ equity of approximately $26.4 million.
In connection with the acquisition, Prosperity issued 1,757,757 shares of Prosperity common stock plus approximately $18.758 million in cash for all outstanding shares of 1st Choice Bancorp.
Acquisition of Banco Popular’s Houston Branches
On January 10, 2008, Prosperity Bank® completed its previously announced acquisition of six (6) Houston retail bank branches from Banco Popular North America. The branches had approximately $125 million in combined deposits. All six (6) locations are now operating as full service banking centers of Prosperity Bank®.
Acquisition of The Bank of Navasota, N.A.
On September 1, 2007, Prosperity completed its previously announced acquisition of The Bank of Navasota, N.A. Navasota is located between Hempstead and College Station and bridges the gap between Prosperity’s banking centers in northwest Houston, including Hempstead, and its five (5) locations in Bryan-College Station. The Bank of Navasota operated one (1) banking office in Navasota, Grimes County, Texas, which became a full service banking center of Prosperity Bank. As of August 31, 2007, The Bank of Navasota reported total assets of approximately $73.4 million, loans of approximately $33.0 million, deposits of approximately $63.8 million and shareholders’ equity of approximately $9.1 million.
In connection with the acquisition, Prosperity issued 251,454 shares of its common stock and paid approximately $8.625 million in cash for all outstanding shares of The Bank of Navasota.
Page 5 of 20
Prosperity Bancshares, Inc.®
Prosperity Bancshares, Inc.®, a $6.8 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 athttp://www.prosperitybanktx.com, Retail Brokerage Services, MasterMoney Debit Cards, and 24 hour voice response banking. Prosperity currently operates one hundred thirty-one (131) full service banking locations; forty-six (46) in the Houston CMSA; thirty-three (33) in the South Texas area including Corpus Christi and Victoria; twenty-six (26) in the Dallas/Fort Worth metroplex; two (2) in the East Texas area; twenty-four (24) in the Central Texas area including Austin, Bryan/College Station and San Antonio. Prosperity Bank® operates the following full service banking centers:
Page 6 of 20
| Central Texas | Cedar Hill | Downtown | South Texas Area - | |||
| Area - | Central Expressway | Fairfield | ||||
| Frisco | Gessner | Corpus Christi - | ||||
| Austin - | Frisco - West | Gladebrook | Airline | |||
| Allandale | Kiest | Harrisburg | Carmel | |||
| Cedar Park | Preston Road | Heights | Everhart | |||
| Congress | Red Oak | Highway 6 West | Northwest | |||
| 183 | The Colony | Hillcroft | Saratoga | |||
| Lakeway | Turtle Creek | Holcombe | Woodlawn | |||
| Liberty Hill | Westmoreland | Little York | Water Street | |||
| Oak Hill | Medical Center | |||||
| Research Blvd | Fort Worth - | Memorial Drive | Other South Texas | |||
| Round Rock | Haltom City | Pasadena | Locations - | |||
| Keller | Pecan Grove | Alice | ||||
| Bryan/College | Roanoke | River Oaks | Aransas Pass | |||
| Station - | Stockyards | Sugar Land | Bay City | |||
| Bryan | SW Medical Center | Beeville | ||||
| Bryan- East | Other Dallas/Fort | Tanglewood | Cuero | |||
| Bryan- North | Worth Locations - | Uptown | East Bernard | |||
| College Station | Azle | Waugh Drive | Edna | |||
| Wellborn Road | Blooming Grove | Westheimer | El Campo | |||
| Corsicana | Woodcreek | Goliad | ||||
| Ennis | Gonzales | |||||
| Other Central | Gainesville | Other Houston | Hallettsville | |||
| Texas Locations - | Mesquite | Area | Kingsville | |||
| Caldwell | Muenster | Locations - | Mathis | |||
| Dime Box | Sanger | Angleton | Palacios | |||
| Flatonia | Waxahachie | Cinco Ranch | Pleasanton | |||
| La Grange | Cleveland | Port Aransas | ||||
| Lexington | East Texas Area - | Dayton | Port Lavaca | |||
| Navasota | Crockett | Galveston | Portland | |||
| New Braunfels | Grapeland | Hempstead | Rockport | |||
| San Antonio | Hitchcock | Seguin | ||||
| Schulenburg | Katy | Sinton | ||||
| Weimar | Liberty | Victoria | ||||
| Houston Area - | Magnolia | Victoria - North | ||||
| Mont Belvieu | Wharton | |||||
| Houston - | Needville | Yoakum | ||||
| Dallas/Fort Worth | Aldine | Sweeny | Yorktown | |||
| Area - | Bellaire | Tomball | ||||
| CityWest | Waller | |||||
| Dallas - | Clear Lake | West Columbia | ||||
| Abrams Centre | Copperfield | Winnie | ||||
| Balch Springs | Cypress | Wirt | ||||
| Camp Wisdom |
Page 7 of 20
“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 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 our most recent Annual Report on Form 10-K and other reports and statements we have filed with the SEC.
Copies of the SEC filings for Prosperity Bancshares’s® may be downloaded from the Internet at no charge fromwww.prosperitybanktx.com.
- - -
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Selected Earnings and Per Share Data | ||||||||||||
Total interest income | $ | 81,979 | $ | 87,300 | $ | 166,444 | $ | 167,163 | ||||
Total interest expense | 28,008 | 35,956 | 60,478 | 69,731 | ||||||||
Net interest income | 53,971 | 51,344 | 105,966 | 97,432 | ||||||||
Provision for credit losses | 1,000 | 320 | 2,167 | 565 | ||||||||
Net interest income after provision for credit losses | 52,971 | 51,024 | 103,799 | 96,867 | ||||||||
Total non-interest income | 13,066 | 13,845 | 25,745 | 25,516 | ||||||||
Total non-interest expense | 30,860 | 30,072 | 59,980 | 57,343 | ||||||||
Net income before taxes | 35,177 | 34,797 | 69,564 | 65,040 | ||||||||
Federal income taxes | 11,740 | 11,804 | 23,189 | 21,818 | ||||||||
Net income | $ | 23,437 | $ | 22,993 | $ | 46,375 | $ | 43,222 | ||||
Basic earnings per share | $ | 0.52 | $ | 0.53 | $ | 1.04 | $ | 1.03 | ||||
Diluted earnings per share | $ | 0.52 | $ | 0.52 | $ | 1.04 | $ | 1.02 | ||||
Period end shares outstanding | 46,060 | 43,811 | 46,060 | 43,811 | ||||||||
Weighted average shares outstanding (basic) | 44,852 | 43,796 | 44,520 | 41,816 | ||||||||
Weighted average shares outstanding (diluted) | 45,039 | 44,216 | 44,676 | 42,261 | ||||||||
Page 8 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Balance Sheet Averages | ||||||||||||||||
Total loans | $ | 3,203,305 | $ | 3,219,900 | $ | 3,173,240 | $ | 3,045,020 | ||||||||
Investment securities | 2,131,370 | 1,837,702 | 2,054,440 | 1,852,538 | ||||||||||||
Federal funds sold and other temporary investments | 33,803 | 51,238 | 82,702 | 61,288 | ||||||||||||
Total earning assets | 5,368,478 | 5,108,840 | 5,310,382 | 4,958,846 | ||||||||||||
Allowance for credit losses | (32,813 | ) | (36,348 | ) | (32,381 | ) | (34,173 | ) | ||||||||
Cash and due from banks | 131,015 | 152,302 | 138,354 | 142,021 | ||||||||||||
Goodwill | 785,604 | 739,316 | 772,774 | 691,489 | ||||||||||||
Core Deposit Intangibles (CDI) | 43,461 | 50,576 | 44,131 | 36,818 | ||||||||||||
Other real estate | 8,581 | 1,315 | 10,002 | 1,033 | ||||||||||||
Fixed assets, net | 123,876 | 119,615 | 123,705 | 113,090 | ||||||||||||
Other assets | 111,062 | 112,310 | 111,016 | 106,185 | ||||||||||||
Total assets | $ | 6,539,264 | $ | 6,247,926 | $ | 6,477,983 | $ | 6,015,309 | ||||||||
Non-interest bearing deposits | $ | 1,215,176 | $ | 1,168,630 | $ | 1,184,121 | $ | 1,097,824 | ||||||||
Interest bearing deposits | 3,824,628 | 3,669,599 | 3,803,669 | 3,578,549 | ||||||||||||
Total deposits | 5,039,804 | 4,838,229 | 4,987,790 | 4,676,373 | ||||||||||||
Securities sold under repurchase agreements | 82,408 | 75,809 | 74,241 | 67,515 | ||||||||||||
Federal funds purchased and other borrowings | 76,132 | 65,892 | 86,554 | 88,075 | ||||||||||||
Junior subordinated debentures | 102,575 | 141,236 | 106,012 | 133,763 | ||||||||||||
Other liabilities | 61,187 | 49,799 | 63,032 | 43,344 | ||||||||||||
Shareholders’ equity(A) | 1,177,158 | 1,076,961 | 1,160,354 | 1,006,239 | ||||||||||||
Total liabilities and equity | $ | 6,539,264 | $ | 6,247,926 | $ | 6,477,983 | $ | 6,015,309 | ||||||||
(A) | Includes $1,675 and ($1,819), in after tax unrealized gains (losses) on available for sale securities for the three month periods ending June 30, 2008 and June 30, 2007, respectively, and $172 and ($2,194) for the six month periods ending June 30, 2008 and June 30, 2007, respectively. |
Page 9 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Income Statement Data | ||||||||||||
Interest on loans | $ | 55,948 | $ | 64,622 | $ | 114,468 | $ | 121,882 | ||||
Interest on securities | 25,856 | 21,996 | 50,639 | 43,705 | ||||||||
Interest on federal funds sold and other earning assets | 175 | 682 | 1,337 | 1,576 | ||||||||
Total interest income | 81,979 | 87,300 | 166,444 | 167,163 | ||||||||
Interest expense - deposits | 25,210 | 31,421 | 54,155 | 60,534 | ||||||||
Interest expense - debentures | 1,558 | 2,896 | 3,577 | 5,494 | ||||||||
Interest expense - other | 1,240 | 1,639 | 2,746 | 3,703 | ||||||||
Total interest expense | 28,008 | 35,956 | 60,478 | 69,731 | ||||||||
Net interest income(B) | 53,971 | 51,344 | 105,966 | 97,432 | ||||||||
Provision for credit losses | 1,000 | 320 | 2,167 | 565 | ||||||||
Net interest income after provision for credit losses | 52,971 | 51,024 | 103,799 | 96,867 | ||||||||
Service charges on deposit accounts | 10,727 | 10,613 | 21,233 | 19,123 | ||||||||
Net gain on sale of assets | 198 | 82 | 241 | 96 | ||||||||
Brokered mortgage income | 113 | 254 | 222 | 386 | ||||||||
Net gain on sale of held for sale loans | 110 | 310 | 183 | 913 | ||||||||
Other non-interest income | 1,918 | 2,586 | 3,866 | 4,998 | ||||||||
Total non-interest income | 13,066 | 13,845 | 25,745 | 25,516 | ||||||||
Salaries and benefits(C) | 16,751 | 16,496 | 32,881 | 31,798 | ||||||||
CDI amortization | 2,459 | 2,566 | 4,951 | 4,711 | ||||||||
Net occupancy and equipment | 2,867 | 2,636 | 5,677 | 5,094 | ||||||||
Depreciation | 1,920 | 1,885 | 3,857 | 3,761 | ||||||||
Data processing and software amortization | 1,361 | 1,172 | 2,652 | 2,157 | ||||||||
Other non-interest expense | 5,502 | 5,317 | 9,962 | 9,822 | ||||||||
Total non-interest expense | 30,860 | 30,072 | 59,980 | 57,343 | ||||||||
Net income before taxes | 35,177 | 34,797 | 69,564 | 65,040 | ||||||||
Federal income taxes | 11,740 | 11,804 | 23,189 | 21,818 | ||||||||
Net income available to common shareholders | $ | 23,437 | $ | 22,993 | $ | 46,375 | $ | 43,222 | ||||
(B) | Net interest income on a tax equivalent basis would be $54,692 and $52,141 for the three months ended June 30, 2008 and June 30, 2007, respectively, and $107,524 and $98,905 for the six months ended June 30, 2008 and June 30, 2007, respectively. |
(C) | Salaries and benefits includes equity compensation expenses of $393 and $524 for the three months ended June 30, 2008 and June 30, 2007, respectively, and $641 and $957 for the six months ended June 30, 2008 and June 30, 2007, respectively. |
Page 10 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Common Share and Other Data | ||||||||||||
Employees - FTE | 1,397 | 1,408 | 1,397 | 1,408 | ||||||||
Book value per share | $ | 26.44 | $ | 24.69 | $ | 26.44 | $ | 24.69 | ||||
Tangible book value per share | $ | 7.79 | $ | 6.75 | $ | 7.79 | $ | 6.75 | ||||
Period end shares outstanding | 46,060 | 43,811 | 46,060 | 43,811 | ||||||||
Weighted average shares outstanding (basic) | 44,852 | 43,796 | 44,520 | 41,816 | ||||||||
Weighted average shares outstanding (diluted) | 45,039 | 44,216 | 44,676 | 42,261 | ||||||||
Non-accrual loans | $ | 2,727 | $ | 1,265 | $ | 2,727 | $ | 1,265 | ||||
Accruing loans 90 or more days past due | 2,130 | 6,216 | 2,130 | 6,216 | ||||||||
Restructured loans | 0 | 0 | 0 | 0 | ||||||||
Total non-performing loans | 4,857 | 7,481 | 4,857 | 7,481 | ||||||||
Repossessed assets | 139 | 75 | 139 | 75 | ||||||||
Other real estate | 6,655 | 3,637 | 6,655 | 3,637 | ||||||||
Total non-performing assets | $ | 11,651 | $ | 11,193 | $ | 11,651 | $ | 11,193 | ||||
Allowance for credit losses at end of period | $ | 34,085 | $ | 36,129 | $ | 34,085 | $ | 36,129 | ||||
Net charge-offs | $ | 1,163 | $ | 531 | $ | 2,806 | $ | 1,166 | ||||
Basic earnings per share | $ | 0.52 | $ | 0.53 | $ | 1.04 | $ | 1.03 | ||||
Diluted earnings per share | $ | 0.52 | $ | 0.52 | $ | 1.04 | $ | 1.02 | ||||
Page 11 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets (annualized) | 1.43 | % | 1.47 | % | 1.43 | % | 1.44 | % | ||||||||
Return on average common equity (annualized) | 7.96 | % | 8.54 | % | 7.99 | % | 8.59 | % | ||||||||
Return on average tangible common equity (annualized) | 26.93 | % | 32.04 | % | 27.01 | % | 31.10 | % | ||||||||
Net interest margin(D) (tax equivalent) (annualized) | 4.10 | % | 4.09 | % | 4.07 | % | 4.02 | % | ||||||||
Efficiency ratio(E) | 46.17 | % | 46.19 | % | 45.62 | % | 46.68 | % | ||||||||
Asset Quality Ratios | ||||||||||||||||
Non-performing assets to average earning assets | 0.22 | % | 0.22 | % | 0.22 | % | 0.23 | % | ||||||||
Non-performing assets to loans and other real estate | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||
Net charge-offs to average loans | 0.04 | % | 0.02 | % | 0.09 | % | 0.04 | % | ||||||||
Allowance for credit losses to total loans | 1.03 | % | 1.14 | % | 1.03 | % | 1.14 | % | ||||||||
Common Stock Market Price | ||||||||||||||||
High | $ | 32.29 | $ | 35.91 | $ | 32.29 | $ | 37.11 | ||||||||
Low | $ | 25.37 | $ | 32.63 | $ | 21.96 | $ | 32.18 | ||||||||
Period end market price | $ | 26.73 | $ | 32.76 | $ | 26.73 | $ | 32.76 | ||||||||
(D) | Net interest margin for all periods presented is calculated on an actual/365 or actual/ 366 day basis. |
(E) | Calculated by dividing total non-interest expense (excluding credit loss provisions) 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 12 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| June 30, 2008 | March 31, 2008 | December 31, 2007 | Sept 30, 2007 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||||||||||
Loan Portfolio | ||||||||||||||||||||||||||||
Commercial | $ | 486,817 | 14.7 | % | $ | 452,635 | 14.3 | % | $ | 453,644 | 14.5 | % | $ | 445,132 | 14.2 | % | ||||||||||||
Construction | 658,669 | 19.9 | % | 664,679 | 21.0 | % | 683,171 | 21.7 | % | 708,355 | 22.7 | % | ||||||||||||||||
1-4 family residential | 568,377 | 17.1 | % | 546,765 | 17.3 | % | 526,338 | 16.7 | % | 527,176 | 16.9 | % | ||||||||||||||||
Home equity | 95,774 | 2.9 | % | 94,559 | 3.0 | % | 93,877 | 3.0 | % | 94,861 | 3.0 | % | ||||||||||||||||
Commercial real estate | 1,241,872 | 37.5 | % | 1,161,668 | 36.7 | % | 1,148,709 | 36.6 | % | 1,108,254 | 35.4 | % | ||||||||||||||||
Agriculture | 135,421 | 4.1 | % | 119,346 | 3.8 | % | 114,019 | 3.6 | % | 115,619 | 3.7 | % | ||||||||||||||||
Consumer | 126,398 | 3.8 | % | 121,975 | 3.9 | % | 123,213 | 3.9 | % | 128,158 | 4.1 | % | ||||||||||||||||
Total Loans | $ | 3,313,328 | $ | 3,161,627 | $ | 3,142,971 | $ | 3,127,555 | ||||||||||||||||||||
Deposit Types | ||||||||||||||||||||||||||||
Non-interest bearing DDA | $ | 1,285,493 | 24.3 | % | $ | 1,202,622 | 24.3 | % | $ | 1,168,069 | 23.5 | % | $ | 1,165,089 | 24.4 | % | ||||||||||||
Interest bearing DDA | 750,214 | 14.2 | % | 769,440 | 15.5 | % | 1,004,761 | 20.2 | % | 809,459 | 16.9 | % | ||||||||||||||||
Money Market | 1,213,710 | 22.9 | % | 1,042,744 | 21.1 | % | 970,112 | 19.5 | % | 997,250 | 20.9 | % | ||||||||||||||||
Savings | 251,815 | 4.7 | % | 239,633 | 4.8 | % | 223,161 | 4.5 | % | 225,831 | 4.7 | % | ||||||||||||||||
Time < $100 | 840,744 | 15.9 | % | 819,671 | 16.6 | % | 791,818 | 16.0 | % | 800,400 | 16.7 | % | ||||||||||||||||
Time > $100 | 954,658 | 18.0 | % | 874,608 | 17.7 | % | 808,486 | 16.3 | % | 785,985 | 16.4 | % | ||||||||||||||||
Total Deposits | $ | 5,296,634 | $ | 4,948,718 | $ | 4,966,407 | $ | 4,784,014 | ||||||||||||||||||||
| Loan to Deposit Ratio | 62.6 | % | 63.9 | % | 63.3 | % | 65.4 | % | ||||||||||||||||||||
Page 13 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | June 30, 2007 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Total loans | $ | 3,313,328 | $ | 3,161,627 | $ | 3,142,971 | $ | 3,127,555 | $ | 3,181,176 | ||||||||||
Investment securities(F) | 2,235,703 | 2,086,382 | 1,857,606 | 1,804,326 | 1,818,723 | |||||||||||||||
Federal funds sold and other temporary investments | 14,230 | 32,268 | 193,043 | 101,173 | 32,243 | |||||||||||||||
Total earning assets | 5,563,261 | 5,280,277 | 5,193,620 | 5,033,054 | 5,032,142 | |||||||||||||||
Allowance for credit losses | (34,085 | ) | (32,067 | ) | (32,543 | ) | (35,536 | ) | (36,129 | ) | ||||||||||
Cash and due from banks | 170,966 | 159,754 | 178,247 | 141,662 | 153,854 | |||||||||||||||
Goodwill | 811,391 | 769,013 | 753,909 | 745,650 | 736,624 | |||||||||||||||
Core deposit intangibles | 47,536 | 43,577 | 46,069 | 48,689 | 49,317 | |||||||||||||||
Other real estate | 6,655 | 11,612 | 10,207 | 1,460 | 3,637 | |||||||||||||||
Fixed assets, net | 125,000 | 123,806 | 120,044 | 120,794 | 120,810 | |||||||||||||||
Other assets | 103,010 | 108,761 | 102,790 | 114,751 | 124,659 | |||||||||||||||
Total assets | $ | 6,793,734 | $ | 6,464,733 | $ | 6,372,343 | $ | 6,170,524 | $ | 6,184,914 | ||||||||||
Demand deposits | $ | 1,285,493 | $ | 1,202,622 | $ | 1,168,069 | $ | 1,165,089 | $ | 1,184,172 | ||||||||||
Interest bearing deposits | 4,011,141 | 3,746,096 | 3,798,338 | 3,618,925 | 3,592,210 | |||||||||||||||
Total deposits | 5,296,634 | 4,948,718 | 4,966,407 | 4,784,014 | 4,776,382 | |||||||||||||||
Securities sold under repurchase agreements | 99,225 | 70,942 | 84,581 | 79,484 | 86,035 | |||||||||||||||
Federal funds purchased and other borrowings | 42,089 | 125,360 | 31,466 | 31,988 | 59,499 | |||||||||||||||
Junior subordinated debentures | 92,265 | 112,885 | 112,885 | 112,885 | 120,617 | |||||||||||||||
Other liabilities | 45,916 | 58,761 | 49,573 | 50,908 | 60,805 | |||||||||||||||
Total liabilities | 5,576,129 | 5,316,666 | 5,244,912 | 5,059,279 | 5,103,338 | |||||||||||||||
Shareholders’ equity(G) | 1,217,605 | 1,148,067 | 1,127,431 | 1,111,245 | 1,081,576 | |||||||||||||||
Total liabilities and equity | $ | 6,793,734 | $ | 6,464,733 | $ | 6,372,343 | $ | 6,170,524 | $ | 6,184,914 | ||||||||||
(F) | Includes ($633), $3,903, ($7,795), ($2,924), and ($5,111) in unrealized gains (losses) on available for sale securities for the quarterly periods ending June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. |
(G) | Includes ($411), $2,537, ($5,067), ($1,901), and ($3,322) in after tax unrealized gains (losses) on available for sale securities for the quarterly periods ending June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007, respectively. |
Page 14 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||
| June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | Jun 30, 2007 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Income Statement Data | ||||||||||||||||
Interest on loans | $ | 55,948 | $ | 58,520 | $ | 61,682 | $ | 64,036 | $ | 64,622 | ||||||
Interest on securities | 25,856 | 24,783 | 22,446 | 23,316 | 21,996 | |||||||||||
Interest on federal funds sold and other earning assets | 175 | 1,162 | 1,313 | 652 | 682 | |||||||||||
Total interest income | 81,979 | 84,465 | 85,441 | 88,004 | 87,300 | |||||||||||
Interest expense- deposits | 25,210 | 28,945 | 30,354 | 31,794 | 31,421 | |||||||||||
Interest expense- debentures | 1,558 | 2,019 | 2,206 | 2,358 | 2,896 | |||||||||||
Interest expense- other | 1,240 | 1,506 | 1,247 | 2,483 | 1,639 | |||||||||||
Total interest expense | 28,008 | 32,470 | 33,807 | 36,635 | 35,956 | |||||||||||
Net interest income | 53,971 | 51,995 | 51,634 | 51,369 | 51,344 | |||||||||||
Provision for credit losses | 1,000 | 1,167 | 120 | 75 | 320 | |||||||||||
Net interest income after provision for credit losses | 52,971 | 50,828 | 51,514 | 51,294 | 51,024 | |||||||||||
Service charges on deposits accounts | 10,727 | 10,506 | 11,029 | 10,785 | 10,613 | |||||||||||
Net gain on sale of assets | 198 | 43 | 85 | 640 | 82 | |||||||||||
Brokered mortgage income | 113 | 109 | 105 | 188 | 254 | |||||||||||
Net gain on sale of held for sale loans | 110 | 73 | 132 | 269 | 310 | |||||||||||
Gain on sale of securities | 0 | 0 | 28 | 58 | 0 | |||||||||||
Other non-interest income | 1,918 | 1,948 | 1,869 | 2,219 | 2,586 | |||||||||||
Total non-interest income | 13,066 | 12,679 | 13,248 | 14,159 | 13,845 | |||||||||||
Salaries and benefits | 16,751 | 16,130 | 15,747 | 16,365 | 16,496 | |||||||||||
CDI amortization | 2,459 | 2,492 | 2,620 | 2,586 | 2,566 | |||||||||||
Net occupancy and equipment | 2,867 | 2,810 | 2,775 | 2,665 | 2,636 | |||||||||||
Depreciation | 1,920 | 1,937 | 1,955 | 1,895 | 1,885 | |||||||||||
Impairment write-down loss on securities | 0 | 0 | 9,975 | 0 | 0 | |||||||||||
Data processing and software amortization | 1,361 | 1,291 | 1,123 | 1,290 | 1,172 | |||||||||||
Other non-interest expense | 5,502 | 4,460 | 5,218 | 5,286 | 5,317 | |||||||||||
Total non-interest expense | 30,860 | 29,120 | 39,413 | 30,087 | 30,072 | |||||||||||
Net income before taxes | 35,177 | 34,387 | 25,349 | 35,366 | 34,797 | |||||||||||
Federal income taxes | 11,740 | 11,449 | 8,268 | 11,518 | 11,804 | |||||||||||
Net income available to common shareholders | $ | 23,437 | $ | 22,938 | $ | 17,081 | (H) | $ | 23,848 | $ | 22,993 | |||||
(H) | Earnings for the three months ended December 31, 2007 includes a $10.0 million pre-tax, or $6.5 million after-tax, impairment charge on write-down of securities. |
Page 15 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | |||||||||||||||
| June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sep 30, 2007 | Jun 30, 2007 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Comparative Quarterly Asset Quality, Performance & Capital Ratios | |||||||||||||||
Return on average assets (annualized) | 1.43 | % | 1.43 | % | 1.11 | %(I) | 1.53 | % | 1.47 | % | |||||
Return on average common equity (annualized) | 7.96 | % | 8.02 | % | 6.09 | %(I) | 8.67 | % | 8.54 | % | |||||
Return on average tangible equity (annualized) | 26.93 | % | 27.28 | % | 20.83 | %(I) | 30.53 | % | 32.04 | % | |||||
Net interest margin (tax equivalent) (annualized) | 4.10 | % | 4.03 | % | 4.12 | % | 4.07 | % | 4.09 | % | |||||
Employees - FTE | 1,397 | 1,374 | 1,359 | 1,369 | 1,408 | ||||||||||
Efficiency ratio | 46.17 | % | 45.06 | % | 45.45 | % | 46.41 | % | 46.19 | % | |||||
Non-performing assets to average earning assets | 0.22 | % | 0.33 | % | 0.30 | % | 0.19 | % | 0.22 | % | |||||
Non-performing assets to loans and other real estate | 0.35 | % | 0.55 | % | 0.49 | % | 0.30 | % | 0.35 | % | |||||
Net charge-offs to average loans | 0.04 | % | 0.05 | % | 0.10 | % | 0.04 | % | 0.02 | % | |||||
Allowance for credit losses to total loans | 1.03 | % | 1.01 | % | 1.04 | % | 1.14 | % | 1.14 | % | |||||
Tier 1 risk-based capital | 12.70 | % | 13.16 | % | 13.13 | % | 13.03 | % | 12.36 | % | |||||
Total risk-based capital | 13.67 | % | 14.11 | % | 14.11 | % | 14.11 | % | 14.18 | % | |||||
Tier 1 leverage capital | 7.87 | % | 7.91 | % | 8.09 | % | 7.83 | % | 7.57 | % | |||||
Tangible equity to tangible | 6.04 | % | 5.94 | % | 5.88 | % | 5.89 | % | 5.48 | % | |||||
Equity to assets | 17.92 | % | 17.76 | % | 17.69 | % | 18.01 | % | 17.49 | % | |||||
(I) | Earnings for the three months ended December 31, 2007 includes a $6.5 million after-tax impairment charge on write-down of securities, which resulted in a 41 basis point decrease on return on average assets to 1.11%, a 231 basis point decrease on return on average equity to 6.09% and a 790 basis point decrease on return on average tangible common equity to 20.83%. |
Page 16 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended June 30, 2008 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,203,305 | $ | 55,948 | 7.02 | % | ||||
Investment securities | 2,131,370 | 25,856 | 4.85 | % | ||||||
Federal funds sold and other temporary investments | 33,803 | 175 | 2.08 | % | ||||||
Total interest earning assets | 5,368,478 | $ | 81,979 | 6.14 | % | |||||
Allowance for credit losses | (32,813 | ) | ||||||||
Non-interest earning assets | 1,203,599 | |||||||||
Total assets | $ | 6,539,264 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 745,413 | $ | 1,652 | 0.89 | % | ||||
Savings and money market deposits | 1,370,964 | 6,678 | 1.96 | % | ||||||
Certificates and other time deposits | 1,708,251 | 16,880 | 3.97 | % | ||||||
Securities sold under repurchase agreements | 82,408 | 574 | 2.80 | % | ||||||
Federal funds purchased and other borrowings | 76,132 | 666 | 3.52 | % | ||||||
Junior subordinated debentures | 102,575 | 1,558 | 6.11 | % | ||||||
Total interest bearing liabilities | 4,085,743 | $ | 28,008 | 2.76 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,215,176 | |||||||||
Other liabilities | 61,187 | |||||||||
Total liabilities | 5,362,106 | |||||||||
Shareholders’ equity | 1,177,158 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,539,264 | ||||||||
Net Interest Income & Margin | $ | 53,971 | 4.04 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 54,692 | 4.10 | % | ||||||
Page 17 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended June 30, 2007 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,219,900 | $ | 64,622 | 8.05 | % | ||||
Investment securities | 1,837,702 | 21,996 | 4.79 | % | ||||||
Federal funds sold and other temporary investments | 51,238 | 682 | 5.34 | % | ||||||
Total interest earning assets | 5,108,840 | $ | 87,300 | 6.85 | % | |||||
Allowance for credit losses | (36,348 | ) | ||||||||
Non-interest earning assets | 1,175,434 | |||||||||
Total assets | $ | 6,247,926 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 839,596 | $ | 4,193 | 2.00 | % | ||||
Savings and money market deposits | 1,241,951 | 9,030 | 2.92 | % | ||||||
Certificates and other time deposits | 1,588,052 | 18,198 | 4.60 | % | ||||||
Securities sold under repurchase agreements | 75,809 | 782 | 4.14 | % | ||||||
Federal funds purchased and other borrowings | 65,892 | 857 | 5.22 | % | ||||||
Junior subordinated debentures | 141,236 | 2,896 | 8.22 | % | ||||||
Total interest bearing liabilities | 3,952,536 | $ | 35,956 | 3.65 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,168,630 | |||||||||
Other liabilities | 49,799 | |||||||||
Total liabilities | 5,170,965 | |||||||||
Shareholders’ equity | 1,076,961 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,247,926 | ||||||||
Net Interest Income & Margin | $ | 51,344 | 4.03 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 52,141 | 4.09 | % | ||||||
Page 18 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Six Months Ended June 30, 2008 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,173,240 | $ | 114,468 | 7.25 | % | ||||
Investment securities | 2,054,440 | 50,639 | 4.93 | % | ||||||
Federal funds sold and other temporary investments | 82,702 | 1,337 | 3.25 | % | ||||||
Total interest earning assets | 5,310,382 | $ | 166,444 | 6.30 | % | |||||
Allowance for credit losses | (32,381 | ) | ||||||||
Non-interest earning assets | 1,199,982 | |||||||||
Total assets | $ | 6,477,983 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 807,570 | $ | 4,773 | 1.19 | % | ||||
Savings and money market deposits | 1,311,655 | 14,092 | 2.16 | % | ||||||
Certificates and other time deposits | 1,684,444 | 35,290 | 4.21 | % | ||||||
Securities sold under repurchase agreements | 74,241 | 1,178 | 3.19 | % | ||||||
Federal funds purchased and other borrowings | 86,554 | 1,568 | 3.64 | % | ||||||
Junior subordinated debentures | 106,012 | 3,577 | 6.79 | % | ||||||
Total interest bearing liabilities | 4,070,476 | $ | 60,478 | 2.99 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,184,121 | |||||||||
Other liabilities | 63,032 | |||||||||
Total liabilities | 5,317,629 | |||||||||
Shareholders’ equity | 1,160,354 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,477,983 | ||||||||
Net Interest Income & Margin | $ | 105,966 | 4.01 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 107,524 | 4.07 | % | ||||||
Page 19 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Six Months Ended June 30, 2007 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,045,020 | $ | 121,882 | 8.07 | % | ||||
Investment securities | 1,852,538 | 43,705 | 4.72 | % | ||||||
Federal funds sold and other temporary investments | 61,288 | 1,576 | 5.19 | % | ||||||
Total interest earning assets | 4,958,846 | $ | 167,163 | 6.80 | % | |||||
Allowance for credit losses | (34,173 | ) | ||||||||
Non-interest earning assets | 1,090,636 | |||||||||
Total assets | $ | 6,015,309 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 848,943 | $ | 8,923 | 2.12 | % | ||||
Savings and money market deposits | 1,209,377 | 17,297 | 2.88 | % | ||||||
Certificates and other time deposits | 1,520,229 | 34,314 | 4.55 | % | ||||||
Securities sold under repurchase agreements | 67,515 | 1,384 | 4.13 | % | ||||||
Federal funds purchased and other borrowings | 88,075 | 2,319 | 5.31 | % | ||||||
Junior subordinated debentures | 133,763 | 5,494 | 8.28 | % | ||||||
Total interest bearing liabilities | 3,867,902 | $ | 69,731 | 3.64 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,097,824 | |||||||||
Other liabilities | 43,344 | |||||||||
Total liabilities | 5,009,070 | |||||||||
Shareholders’ equity | 1,006,239 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,015,309 | ||||||||
Net Interest Income & Margin | $ | 97,432 | 3.96 | % | ||||||
Net Interest Income & Margin (tax equivalent) | $ | 98,905 | 4.02 | % | ||||||
—
Page 20 of 20