Exhibit 99.1
| PRESS RELEASE | For more information contact: | |
| Prosperity Bancshares, Inc.® | Dan Rollins | |
| Prosperity Bank Plaza | President and Chief Operating Officer | |
| 4295 San Felipe | 281.269.7199 | |
| Houston, Texas 77027 | dan.rollins@prosperitybanktx.com | |
| FOR IMMEDIATE RELEASE | ||
PROSPERITY BANCSHARES, INC.®
REPORTS THIRD QUARTER EARNINGS
| — | 3Q 2008 Operating Earnings Per Share of $0.53 (diluted) |
| — | 3Q 2008 Net Interest Margin (tax equivalent) increases to 4.15% |
| — | Non-Performing Assets equal 0.26% of Average Earning Assets |
| — | Tier 1 Risk Based Capital Ratio is 13.31% |
| — | Tangible Equity Ratio is 6.28% |
| — | Total Risk Based Capital is 14.29% |
| — | Tier 1 Leverage Capital is 7.75% |
HOUSTON, October 17, 2008. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported earnings for the quarter ended September 30, 2008. Net income for the quarter was $15.447 million or $0.33 per diluted common share, a decrease in net income of $8.401 million or 35.2%, compared with $23.848 million or $0.54 per diluted common share for the same period in 2007. The decrease was primarily due to a $9.116 million after-tax ($14.025 million pre-tax) impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities.
Excluding the impairment charge on Prosperity’s Fannie Mae and Freddie Mac perpetual preferred securities, net income for the quarter would have been $24.563 million or $0.53 per diluted common share, an increase in net income of $715,000 or 3.0%, compared with $23.848 million or $0.54 per diluted common share for the same period in the prior year.
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“Over the past few months, we have witnessed dramatic changes in our industry as well as our overall economy,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer. “Never-the-less, our team of experienced bankers continues to perform exceptionally well.”
Since January 1, 2007, Prosperity has completed the following acquisitions: 1st Choice Bancorp, Inc. on June 1, 2008; the 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.
Results of operations for the three months ended September 30, 2008
As a result of actions taken in early September 2008 by the United States Treasury Department and the Federal Housing Finance Agency with respect to Fannie Mae and the Freddie Mac, Prosperity recorded an other-than-temporary impairment and took a non-cash charge of $14.025 million pre-tax ($9.116 million after-tax) to its earnings for the third quarter of 2008 related to the full value of its investments in perpetual preferred securities issued by Fannie Mae and Freddie Mac. The value of these securities decreased materially and it is unclear if and when the value will improve. Please refer to the table on page 4 for operating results excluding the impairment charge.
For the three months ended September 30, 2008, net income was $15.447 million compared with $23.848 million for the same period in 2007. Net income per diluted common share was $0.33 for the three months ended September 30, 2008 and $0.54 for the same period in 2007. Returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2008 were 0.91%, 5.04% and 16.83%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities, ORE and assets and impairment charge on write-down of securities) was 45.30% for the three months ended September 30, 2008.
Net interest income before provision for credit losses for the quarter ended September 30, 2008 increased 12.5% to $57.806 million compared with $51.369 million during the same period in 2007. The increase was attributable primarily to a 10.1% increase in average earning assets and the rate paid on interest-bearing liabilities decreasing at a faster pace than the yield earned on interest earning assets. The net interest margin on a tax equivalent basis increased to 4.15% for the three months ended September 30, 2008 compared with 4.07% for the same period in 2007.
Non-interest income decreased $1.042 million or 7.4% to $13.117 million for the three months ended September 30, 2008 compared with $14.159 million for the same period in 2007. The decrease was mainly attributable to (i) a decrease in net gain/loss on sale of ORE, held for sale loans and other assets (ii) a decrease in other non-interest income due to decreases in dividends paid on Federal Home Loan Bank stock and income from Bank Owned Life Insurance (BOLI), both of which are related to the recent decline in interest rates and (iii) partially offset by an increase in service charges on deposit accounts which was primarily attributed to an increased number of deposit accounts from the Banco Popular and 1st Choice acquisitions as well as an increase in debit card income.
Non-interest expense increased $16.143 million or 53.7% to $46.230 million for the third quarter of 2008 compared with $30.087 million for the third quarter of 2007. The increase was primarily attributable to the $14.025 million pre-tax impairment write-down on Fannie Mae and Freddie Mac perpetual preferred securities. Excluding the impairment write-down, non-interest expense increased $2.118 million, or 7.0% . The increase was due primarily to an increase in salaries and benefits expense due to annual merit increases and incentive programs and to an increase in general operating costs associated with the banking centers acquired in 2008.
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Loans at September 30, 2008 were $3.249 billion, an increase of $121.062 million, or 3.9%, compared with $3.128 billion at September 30, 2007. Linked quarter loans decreased 2.0% or $64.711 million, with loans decreasing from $3.313 billion at June 30, 2008. As reflected in the table below, linked quarter loans for the third quarter of 2008 were impacted by the loans acquired as a part of the acquisitions of The Bank of Navasota, the Banco Popular Houston branches and 1stChoice.
Deposits at September 30, 2008 were $5.105 billion, an increase of $320.828 million or 6.7%, compared with $4.784 billion at September 30, 2007. Linked quarter deposits decreased 3.6% from $5.297 billion at June 30, 2008. As reflected in the table below, linked quarter deposits for the third quarter of 2008 were impacted by the deposits assumed as a part of the acquisitions of The Bank of Navasota, the Banco Popular Houston branches and 1st Choice.
| Sept 30, 2008 | June 30, 2008 | Sept 30, 2007 | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||
Balance Sheet Data (at period end) | |||||||||
(In Thousands) | |||||||||
Loans: | |||||||||
Acquired with The Bank of Navasota | $ | 19,980 | $ | 21,862 | $ | 30,800 | |||
Acquired with Banco Popular Houston Branches | 2,637 | 2,207 | 0 | ||||||
Acquired with 1stChoice Bank | 182,780 | 184,526 | 0 | ||||||
All other | 3,043,220 | 3,104,733 | 3,096,755 | ||||||
Total Loans | $ | 3,248,617 | $ | 3,313,328 | $ | 3,127,555 | |||
Deposits: | |||||||||
Assumed with The Bank of Navasota | $ | 55,138 | $ | 60,470 | $ | 60,526 | |||
Assumed with Banco Popular Houston Branches | 118,490 | 127,965 | 0 | ||||||
Assumed with 1stChoice Bank | 262,465 | 287,996 | 0 | ||||||
All other | 4,668,749 | 4,820,203 | 4,723,488 | ||||||
Total Deposits | $ | 5,104,842 | $ | 5,296,634 | $ | 4,784,014 | |||
Average loans increased 4.6% or $146.127 million to $3.289 billion for the quarter ended September 30, 2008 compared with $3.143 billion for the same period of 2007. Linked quarter average loans increased 2.7% or $85.898 million from $3.203 billion at June 30, 2008. Average deposits increased 9.3% to $5.187 billion for the quarter ended September 30, 2008 compared with $4.748 billion for the same period of 2007. Linked quarter average deposits increased 2.9% or $147.411 million from $5.040 billion at June 30, 2008.
At September 30, 2008, construction loans totaled $626.443 million, consisting of approximately $206 million of single family residential construction loans; $74 million of land development loans; $91 million of raw land loans; $101 million of residential lot loans; $36 million commercial lot loans; and $118 million of commercial construction and other construction loans. This is a decrease of $32.226 million from June 30, 2008.
Non-performing assets totaled $14.536 million or 0.26% of average earning assets at September 30, 2008 compared with $9.499 million or 0.19% of average earning assets at September 30, 2007 and $11.651 million or 0.22% of average earnings assets at June 30, 2008. At September 30, 2008, the allowance for credit losses was 1.05% of total loans, compared with 1.14% at September 30, 2007 and 1.03% of total loans at June 30, 2008.
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The provision for credit losses was $1.700 million for the three months ended September 30, 2008 and $75,000 for the three months ended September 30, 2007. Net charge offs were $1.805 million for the three months ended September 30, 2008 and $1.313 million for the three months ended September 30, 2007.
At September 30, 2008, Prosperity had $6.788 billion in total assets, $3.249 billion in loans, and $5.105 billion in deposits. Assets, loans and deposits at September 30, 2008 grew by 10.0%, 3.9% and 6.7%, respectively, compared with their level at September 30, 2007.
Results of operations before impairment charge
The following results illustrates the effect of the $14.025 million pre-tax ($9.116 million after-tax) impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities:
| As reported (with charge): 3 months ended Sept 30, 2008 | Without charge: 3 months ended Sept 30, 2008 | As reported (with charge): 9 months ended Sept 30, 2008 | Without charge: 9 months ended Sept 30, 2008 | |||||||||||||
Non-interest income (in thousands) | $ | 13,117 | $ | 13,117 | $ | 38,862 | $ | 38,862 | ||||||||
Non-interest expense (in thousands) | 46,230 | 32,205 | 106,210 | 92,185 | ||||||||||||
Income before taxes (in thousands) | 22,993 | 37,018 | 92,557 | 106,582 | ||||||||||||
Taxes (in thousands) | 7,546 | 12,455 | 30,735 | 35,644 | ||||||||||||
Net income (in thousands) | 15,447 | 24,563 | 61,822 | 70,938 | ||||||||||||
Return on average assets | 0.91 | % | 1.44 | % | 1.25 | % | 1.44 | % | ||||||||
Return on average common equity | 5.04 | % | 8.02 | % | 6.97 | % | 8.00 | % | ||||||||
Return on average tangible common equity | 16.83 | % | 26.76 | % | 23.42 | % | 26.87 | % | ||||||||
Earnings per share (basic) | $ | 0.34 | $ | 0.53 | $ | 1.37 | $ | 1.58 | ||||||||
Earnings per share (diluted) | $ | 0.33 | $ | 0.53 | $ | 1.37 | $ | 1.57 | ||||||||
Shareholders’ equity (in thousands) | $ | 1,229,180 | $ | 1,229,180 | $ | 1,229,180 | $ | 1,229,180 | ||||||||
Results of operations for the nine months ended September 30, 2008
For the nine months ended September 30, 2008, net income was $61.822 million compared with $67.071 million for the same period in 2007. Net income per diluted common share was $1.37 for the nine months ended September 30, 2008 compared with $1.56 for the same period in 2007. The decrease was primarily due to a $9.116 million after-tax impairment charge on Fannie Mae and Freddie Mac perpetual preferred securities.
Excluding the impairment charge on the Fannie Mae and Freddie Mac perpetual preferred securities, net income for the nine months would have been $70.938 million or $1.57 per diluted common share, an increase in net income of $3.867 million or 5.8%, compared with $67.071 million or $1.56 per diluted common share for the same period in the prior year.
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Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2008 were 1.25%, 6.97% and 23.42%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities, ORE and assets and impairment charge on write-down of securities) was 45.51% for the nine months ended September 30, 2008.
Net interest income before provision for credit losses for the nine months ended September 30, 2008 increased $14.970 million or 10.1%, to $163.772 million compared with $148.802 million during the same period in 2007. The increase was attributable primarily to an 8.1% increase in average earning assets and the rate paid on interest-bearing liabilities decreasing at a faster pace than the yield earned on interest earning assets.
Non-interest income decreased $813,000 or 2.1% to $38.862 million for the nine months ended September 30, 2008 compared with $39.675 million for the same period in 2007. The decrease was mainly attributable to (i) a decrease in net gain/loss on sale of ORE and sales of held for sale loans, (ii) a decrease in other non-interest income which includes decreases in dividends paid on Federal Home Loan Bank stock and trust and investment income and (iii) partially offset by an increase in service charges on deposit accounts. The increase in service charges on deposit accounts is primarily attributed to an increased number of deposit accounts from the Banco Popular and 1stChoice acquisitions as well as an increase in debit card income. The decrease in trust and investment income and gains on sales of held for sale loans was due to the Prosperity’s dissolution of the trust department and mortgage department acquired from Texas United Bancshares, Inc. in 2007.
Non-interest expense increased $18.780 million or 21.5% to $106.210 million for the first nine months of 2008 compared with $87.430 million for the same period in 2007. The increase was attributable primarily to the $14.025 million pre-tax impairment write-down on Fannie Mae and Freddie Mac perpetual preferred securities. Excluding the impairment write-down, non-interest expense increased $4.755 million, or 5.4% . The increase was due primarily to an increase in salaries and benefits expense due to annual merit increases and incentive programs and to an increase in general operating costs associated with the banking centers acquired in 2008.
The provision for credit losses was $3.867 million for the nine months ended September 30, 2008 and $640,000 for the nine months ended September 30, 2007. Net charge offs were $4.611 million for the nine months ended September 30, 2008 and $2.480 million for the nine months ended September 30, 2007.
Conference Call
Prosperity’s management team will host a conference call on Friday, October 17, 2008 at 10:30 a.m. Eastern Daylight Savings Time (9:30 a.m. Central Daylight Savings Time) to discuss Prosperity’s third quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-894-5910, 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 “3rd Quarter Results and Webcast” link.
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Acquisition of 1st Choice Bancorp, Inc.
On June 1, 2008, Prosperity completed its previously announced acquisition of 1st Choice Bancorp, Inc. and its wholly owned subsidiary, 1st Choice Bank. 1st Choice Bancorp, Inc. operated two (2) banking offices in Houston, Texas, with one location in South Houston and another in the Heights area, which was consolidated with Prosperity’s Heights location and is located in 1st Choice’s Heights banking office. As of May 31, 2008, 1st Choice Bancorp reported total assets of approximately $314.9 million, loans of approximately $192.7 million, deposits of approximately $285.2 million and stockholders’ equity of approximately $26.4 million.
In connection with the acquisition, Prosperity issued 1,757,757 shares of its common stock and paid approximately $18.758 million in cash for all outstanding shares of 1st Choice Bancorp.
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.
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.
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Prosperity Bank® operates the following full service banking centers:
| 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 | ||||
| Other Central | Ennis | Gonzales | ||||
| Texas Locations - | Gainesville | Other Houston Area | Hallettsville | |||
| Caldwell | Mesquite | Locations - | Kingsville | |||
| Dime Box | Muenster | Angleton | Mathis | |||
| Flatonia | Sanger | Cinco Ranch | Palacios | |||
| La Grange | Waxahachie | Cleveland | Pleasanton | |||
| Lexington | Dayton | Port Aransas | ||||
| Navasota | East Texas Area - | Galveston | Port Lavaca | |||
| New Braunfels | Crockett | Hempstead | Portland | |||
| San Antonio | Grapeland | Hitchcock | Rockport | |||
| Schulenburg | Katy | Seguin | ||||
| Weimar | Houston Area - | Liberty | Sinton | |||
| Magnolia | Victoria | |||||
| Dallas/Fort Worth | Houston - | Mont Belvieu | Victoria - North | |||
| Area - | Aldine | Needville | Wharton | |||
| Bellaire | Sweeny | Yoakum | ||||
| Dallas - | CityWest | Tomball | Yorktown | |||
| Abrams Centre | Clear Lake | Waller | ||||
| Balch Springs | Copperfield | West Columbia | ||||
| Camp Wisdom | Cypress | Winnie | ||||
| Wirt |
“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.
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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, 2008 | Sept 30, 2007 | Sept 30, 2008 | Sept 30, 2007 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Selected Earnings and Per Share Data | ||||||||||||
Total interest income | $ | 84,846 | $ | 88,004 | $ | 251,290 | $ | 255,168 | ||||
Total interest expense | 27,040 | 36,635 | 87,518 | 106,366 | ||||||||
Net interest income | 57,806 | 51,369 | 163,772 | 148,802 | ||||||||
Provision for credit losses | 1,700 | 75 | 3,867 | 640 | ||||||||
Net interest income after provision for credit losses | 56,106 | 51,294 | 159,905 | 148,162 | ||||||||
Total non-interest income | 13,117 | 14,159 | 38,862 | 39,675 | ||||||||
Total non-interest expense(A) | 46,230 | 30,087 | 106,210 | 87,430 | ||||||||
Net income before taxes | 22,993 | 35,366 | 92,557 | 100,407 | ||||||||
Federal income taxes | 7,546 | 11,518 | 30,735 | 33,336 | ||||||||
Net income(B) | $ | 15,447 | $ | 23,848 | $ | 61,822 | $ | 67,071 | ||||
Basic earnings per share(C) | $ | 0.34 | $ | 0.54 | $ | 1.37 | $ | 1.58 | ||||
Diluted earnings per share(C) | $ | 0.33 | $ | 0.54 | $ | 1.37 | $ | 1.56 | ||||
Period end shares | 46,072 | 44,110 | 46,072 | 44,110 | ||||||||
Weighted average shares outstanding (basic) | 46,065 | 43,910 | 45,038 | 42,521 | ||||||||
Weighted average shares outstanding (diluted) | 46,302 | 44,254 | 45,217 | 42,934 | ||||||||
(A) | Total non-interest expense for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax impairment charge on write-down of securities. |
(B) | Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities. |
(C) | Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities which resulted in a $0.19 and $0.20 decrease in basic and diluted earnings per share to $0.34 and $0.33, respectively, for the three months ended September 30, 2008 and a $0.21 and $0.20 decrease in basic and diluted earnings per share to $1.37 and $1.37, respectively, for the nine months ended September 30, 2008. |
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept 30, 2008 | Sept 30, 2007 | Sept 30, 2008 | Sept 30, 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Balance Sheet Averages | ||||||||||||||||
Total loans | $ | 3,289,203 | $ | 3,143,076 | $ | 3,212,176 | $ | 3,078,065 | ||||||||
Investment securities | 2,292,571 | 1,892,030 | 2,134,396 | 1,865,847 | ||||||||||||
Federal funds sold and other temporary investments | 18,854 | 51,880 | 61,264 | 58,117 | ||||||||||||
Total earning assets | 5,600,628 | 5,086,986 | 5,407,836 | 5,002,029 | ||||||||||||
Allowance for credit losses | (33,746 | ) | (35,862 | ) | (32,839 | ) | (34,742 | ) | ||||||||
Cash and due from banks | 134,849 | 144,822 | 137,177 | 142,965 | ||||||||||||
Goodwill | 811,726 | 739,422 | 785,853 | 707,644 | ||||||||||||
Core Deposit Intangibles (CDI) | 46,240 | 48,070 | 44,840 | 40,610 | ||||||||||||
Other real estate | 6,972 | 2,070 | 8,984 | 1,383 | ||||||||||||
Fixed assets, net | 124,828 | 121,067 | 124,082 | 115,778 | ||||||||||||
Other assets | 109,952 | 126,699 | 112,720 | 111,100 | ||||||||||||
Total assets | $ | 6,801,449 | $ | 6,233,274 | $ | 6,588,653 | $ | 6,086,767 | ||||||||
Non-interest bearing deposits | $ | 1,266,924 | $ | 1,170,352 | $ | 1,212,379 | $ | 1,123,452 | ||||||||
Interest bearing deposits | 3,920,291 | 3,577,406 | 3,842,826 | 3,578,165 | ||||||||||||
Total deposits | 5,187,215 | 4,747,758 | 5,055,205 | 4,701,617 | ||||||||||||
Securities sold under repurchase agreements | 95,533 | 82,973 | 81,390 | 72,724 | ||||||||||||
Federal funds purchased and other borrowings | 146,172 | 116,609 | 106,572 | 97,757 | ||||||||||||
Junior subordinated debentures | 92,265 | 119,328 | 101,429 | 128,522 | ||||||||||||
Other liabilities | 55,105 | 66,678 | 61,405 | 48,678 | ||||||||||||
Shareholders’ equity(D) | 1,225,159 | 1,099,928 | 1,182,652 | 1,037,469 | ||||||||||||
Total liabilities and equity | $ | 6,801,449 | $ | 6,233,274 | $ | 6,588,653 | $ | 6,086,767 | ||||||||
(D) | Includes ($3,643) and ($2,990), in after-tax unrealized gains (losses) on available for sale securities for the three month periods ending September 30, 2008 and September 30, 2007, respectively and ($1,109) and ($2,462) for the nine month periods ending September 30, 2008 and September 30, 2007, respectively. |
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||
| Sept 30, 2008 | Sept 30, 2007 | Sept 30, 2008 | Sept 30, 2007 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Income Statement Data | ||||||||||||||
Interest on loans | $ | 56,925 | $ | 64,036 | $ | 171,393 | $ | 185,919 | ||||||
Interest on securities | 27,834 | 23,316 | 78,473 | 67,021 | ||||||||||
Interest on federal funds sold and other earning assets | 87 | 652 | 1,424 | 2,228 | ||||||||||
Total interest income | 84,846 | 88,004 | 251,290 | 255,168 | ||||||||||
Interest expense—deposits | 23,874 | 31,794 | 78,029 | 92,328 | ||||||||||
Interest expense—debentures | 1,410 | 2,358 | 4,987 | 7,852 | ||||||||||
Interest expense—other | 1,756 | 2,483 | 4,502 | 6,186 | ||||||||||
Total interest expense | 27,040 | 36,635 | 87,518 | 106,366 | ||||||||||
Net interest income(E) | 57,806 | 51,369 | 163,772 | 148,802 | ||||||||||
Provision for credit losses | 1,700 | 75 | 3,867 | 640 | ||||||||||
Net interest income after provision for credit losses | 56,106 | 51,294 | 159,905 | 148,162 | ||||||||||
Service charges on deposit accounts | 11,348 | 10,785 | 32,581 | 29,908 | ||||||||||
Net gain on sale of assets | 34 | 188 | 715 | 182 | ||||||||||
Net (loss) gain on sale of ORE | (210 | ) | 452 | (648 | ) | 552 | ||||||||
Brokered mortgage income | 74 | 188 | 296 | 574 | ||||||||||
Net gain on sale of held for sale loans | 46 | 269 | 229 | 1,202 | ||||||||||
Gain on sale of securities | 0 | 58 | 0 | 58 | ||||||||||
Other non-interest income | 1,825 | 2,219 | 5,689 | 7,199 | ||||||||||
Total non-interest income | 13,117 | 14,159 | 38,862 | 39,675 | ||||||||||
Salaries and benefits(F) | 17,526 | 16,365 | 50,407 | 48,163 | ||||||||||
CDI amortization | 2,562 | 2,586 | 7,513 | 7,297 | ||||||||||
Net occupancy and equipment | 3,088 | 2,665 | 8,765 | 7,759 | ||||||||||
Depreciation | 1,955 | 1,895 | 5,812 | 5,656 | ||||||||||
Data processing and software amortization | 1,319 | 1,290 | 3,971 | 3,447 | ||||||||||
Impairment charge on write-down of securities | 14,025 | 0 | 14,025 | 0 | ||||||||||
Other non-interest expense | 5,755 | 5,286 | 15,717 | 15,108 | ||||||||||
Total non-interest expense | 46,230 | 30,087 | 106,210 | 87,430 | ||||||||||
Net income before taxes | 22,993 | 35,366 | 92,557 | 100,407 | ||||||||||
Federal income taxes | 7,546 | 11,518 | 30,735 | 33,336 | ||||||||||
Net income available to common shareholders(G) | $ | 15,447 | $ | 23,848 | $ | 61,822 | $ | 67,071 | ||||||
(E) | Net interest income on a tax equivalent basis would be $58,471 and $52,182 for the three months ended September 30, 2008 and September 30, 2007, respectively and $165,995 and $151,088 for the nine months ended September 30, 2008 and September 30, 2007, respectively. |
(F) | Salaries and benefits includes equity compensation expenses of $470 and $534 for the three months ended September 30, 2008 and September 30, 2007, respectively and $1,111 and $1,491 for the nine months ended September 30, 2008 and September 30, 2007, respectively. |
(G) | Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities. |
Page 10 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||
| Sept 30, 2008 | Sept 30, 2007 | Sept 30, 2008 | Sept 30, 2007 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Common Share and Other Data | ||||||||||||
Employees—FTE | 1,366 | 1,369 | 1,366 | 1,369 | ||||||||
Book value per share | $ | 26.68 | $ | 25.19 | $ | 26.68 | $ | 25.19 | ||||
Tangible book value per share | $ | 8.08 | $ | 7.18 | $ | 8.08 | $ | 7.18 | ||||
Period end shares outstanding | 46,072 | 44,110 | 46,072 | 44,110 | ||||||||
Weighted average shares outstanding (basic) | 46,065 | 43,910 | 45,038 | 42,521 | ||||||||
Weighted average shares outstanding (diluted) | 46,302 | 44,254 | 45,217 | 42,934 | ||||||||
Non-accrual loans | $ | 2,757 | $ | 1,645 | $ | 2,757 | $ | 1,645 | ||||
Accruing loans 90 or more days past due | 4,083 | 6,273 | 4,083 | 6,273 | ||||||||
Restructured loans | 0 | 0 | 0 | 0 | ||||||||
Total non-performing loans | 6,840 | 7,918 | 6,840 | 7,918 | ||||||||
Repossessed assets | 158 | 121 | 158 | 121 | ||||||||
Other real estate | 7,538 | 1,460 | 7,538 | 1,460 | ||||||||
Total non-performing assets | $ | 14,536 | $ | 9,499 | $ | 14,536 | $ | 9,499 | ||||
Allowance for credit losses at end of period | $ | 33,981 | $ | 35,536 | $ | 33,981 | $ | 35,536 | ||||
Net charge-offs | $ | 1,805 | $ | 1,313 | $ | 4,611 | $ | 2,480 | ||||
Basic earnings per share(H) | $ | 0.34 | $ | 0.54 | $ | 1.37 | $ | 1.58 | ||||
Diluted earnings per share(H) | $ | 0.33 | $ | 0.54 | $ | 1.37 | $ | 1.56 | ||||
(H) | Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities which resulted in a $0.19 and $0.20 decrease in basic and diluted earnings per share to $0.34 and $0.33, respectively, for the three months ended September 30, 2008 and a $0.21 and $0.20 decrease in basic and diluted earnings per share to $1.37 and $1.37, respectively, for the nine months ended September 30, 2008. |
Page 11 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept 30, 2008 | Sept 30, 2007 | Sept 30, 2008 | Sept 30, 2007 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Performance Ratios | ||||||||||||||||
Return on average(I) assets (annualized) | 0.91 | % | 1.53 | % | 1.25 | % | 1.47 | % | ||||||||
Return on average common(I) equity (annualized) | 5.04 | % | 8.67 | % | 6.97 | % | 8.62 | % | ||||||||
Return on average tangible(I) common equity (annualized) | 16.83 | % | 30.53 | % | 23.42 | % | 30.92 | % | ||||||||
Net interest margin(J) (tax equivalent) (annualized) | 4.15 | % | 4.07 | % | 4.10 | % | 4.04 | % | ||||||||
Efficiency ratio(K) | 45.30 | % | 46.41 | % | 45.51 | % | 46.58 | % | ||||||||
Asset Quality Ratios | ||||||||||||||||
Non-performing assets to average earning assets | 0.26 | % | 0.19 | % | 0.27 | % | 0.19 | % | ||||||||
Non-performing assets to loans and other real estate | 0.45 | % | 0.30 | % | 0.45 | % | 0.30 | % | ||||||||
Net charge-offs to average loans | 0.05 | % | 0.04 | % | 0.14 | % | 0.08 | % | ||||||||
Allowance for credit losses to total loans | 1.05 | % | 1.14 | % | 1.05 | % | 1.14 | % | ||||||||
Common Stock Market Price | ||||||||||||||||
High | $ | 46.48 | $ | 36.00 | $ | 46.48 | $ | 37.11 | ||||||||
Low | $ | 23.32 | $ | 27.70 | $ | 21.96 | $ | 27.70 | ||||||||
Period end market price | $ | 33.99 | $ | 33.16 | $ | 33.99 | $ | 33.16 | ||||||||
(I) | Earnings for the three and nine months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after- tax, impairment charge on write-down of securities which resulted in a 53 and 19 basis point decrease in return on average assets to 0.91% and 1.25%, respectively, a 298 and 103 basis point decrease in return on average equity to 5.04% and 6.97%, respectively, and a 993 and 345 basis point decrease in return on average tangible common equity to 16.83% and 23.42%, respectively. |
(J) | Net interest margin for all periods presented is calculated on an actual 365 or actual 366 day basis. |
(K) | 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, ORE and assets and impairment charge on write-down of securities). Additionally, taxes are not part of this calculation. |
Page 12 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Sept 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||||||||||
Loan Portfolio | ||||||||||||||||||||||||||||
Commercial | $ | 470,099 | 14.5 | % | $ | 486,817 | 14.7 | % | $ | 452,635 | 14.3 | % | $ | 453,644 | 14.5 | % | ||||||||||||
Construction | 626,443 | 19.3 | % | 658,669 | 19.9 | % | 664,679 | 21.0 | % | 683,171 | 21.7 | % | ||||||||||||||||
1-4 family residential | 574,583 | 17.7 | % | 568,377 | 17.1 | % | 546,765 | 17.3 | % | 526,338 | 16.7 | % | ||||||||||||||||
Home equity | 95,962 | 3.0 | % | 95,774 | 2.9 | % | 94,559 | 3.0 | % | 93,877 | 3.0 | % | ||||||||||||||||
Commercial real estate | 1,229,219 | 37.8 | % | 1,241,872 | 37.5 | % | 1,161,668 | 36.7 | % | 1,148,709 | 36.6 | % | ||||||||||||||||
Agriculture | 133,123 | 4.1 | % | 135,421 | 4.1 | % | 119,346 | 3.8 | % | 114,019 | 3.6 | % | ||||||||||||||||
Consumer | 119,188 | 3.6 | % | 126,398 | 3.8 | % | 121,975 | 3.9 | % | 123,213 | 3.9 | % | ||||||||||||||||
Total Loans | $ | 3,248,617 | $ | 3,313,328 | $ | 3,161,627 | $ | 3,142,971 | ||||||||||||||||||||
Deposit Types | ||||||||||||||||||||||||||||
Non-interest bearing DDA | $ | 1,263,407 | 24.7 | % | $ | 1,285,493 | 24.3 | % | $ | 1,202,622 | 24.3 | % | $ | 1,168,069 | 23.5 | % | ||||||||||||
Interest bearing DDA | 707,055 | 13.9 | % | 750,214 | 14.2 | % | 769,440 | 15.5 | % | 1,004,761 | 20.2 | % | ||||||||||||||||
Money Market | 1,147,559 | 22.5 | % | 1,213,710 | 22.9 | % | 1,042,744 | 21.1 | % | 970,112 | 19.5 | % | ||||||||||||||||
Savings | 246,370 | 4.8 | % | 251,815 | 4.7 | % | 239,633 | 4.8 | % | 223,161 | 4.5 | % | ||||||||||||||||
Time < $100 | 814,165 | 15.9 | % | 840,744 | 15.9 | % | 819,671 | 16.6 | % | 791,818 | 16.0 | % | ||||||||||||||||
Time > $100 | 926,286 | 18.2 | % | 954,658 | 18.0 | % | 874,608 | 17.7 | % | 808,486 | 16.3 | % | ||||||||||||||||
Total Deposits | $ | 5,104,842 | $ | 5,296,634 | $ | 4,948,718 | $ | 4,966,407 | ||||||||||||||||||||
Loan to Deposit Ratio | 63.6 | % | 62.6 | % | 63.9 | % | 63.3 | % | ||||||||||||||||||||
Page 13 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Sept 30, 2008 | June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Total loans | $ | 3,248,617 | $ | 3,313,328 | $ | 3,161,627 | $ | 3,142,971 | $ | 3,127,555 | ||||||||||
Investment securities(L) | 2,294,403 | 2,235,703 | 2,086,382 | 1,857,606 | 1,804,326 | |||||||||||||||
Federal funds sold and other temporary investments | 25,748 | 14,230 | 32,268 | 193,043 | 101,173 | |||||||||||||||
Total earning assets | 5,568,768 | 5,563,261 | 5,280,277 | 5,193,620 | 5,033,054 | |||||||||||||||
Allowance for credit losses | (33,981 | ) | (34,085 | ) | (32,067 | ) | (32,543 | ) | (35,536 | ) | ||||||||||
Cash and due from banks | 159,386 | 170,966 | 159,754 | 178,247 | 141,662 | |||||||||||||||
Goodwill | 811,916 | 811,391 | 769,013 | 753,909 | 745,650 | |||||||||||||||
Core deposit intangibles | 44,974 | 47,536 | 43,577 | 46,069 | 48,689 | |||||||||||||||
Other real estate | 7,538 | 6,655 | 11,612 | 10,207 | 1,460 | |||||||||||||||
Fixed assets, net | 123,823 | 125,000 | 123,806 | 120,044 | 120,794 | |||||||||||||||
Other assets | 105,485 | 103,010 | 108,761 | 102,790 | 114,751 | |||||||||||||||
Total assets | $ | 6,787,909 | $ | 6,793,734 | $ | 6,464,733 | $ | 6,372,343 | $ | 6,170,524 | ||||||||||
Demand deposits | $ | 1,263,407 | $ | 1,285,493 | $ | 1,202,622 | $ | 1,168,069 | $ | 1,165,089 | ||||||||||
Interest bearing deposits | 3,841,435 | 4,011,141 | 3,746,096 | 3,798,338 | 3,618,925 | |||||||||||||||
Total deposits | 5,104,842 | 5,296,634 | 4,948,718 | 4,966,407 | 4,784,014 | |||||||||||||||
Securities sold under repurchase agreements | 100,310 | 99,225 | 70,942 | 84,581 | 79,484 | |||||||||||||||
Federal funds purchased and other borrowings | 219,671 | 42,089 | 125,360 | 31,466 | 31,988 | |||||||||||||||
Junior subordinated debentures | 92,265 | 92,265 | 112,885 | 112,885 | 112,885 | |||||||||||||||
Other liabilities | 41,641 | 45,916 | 58,761 | 49,573 | 50,908 | |||||||||||||||
Total liabilities | 5,558,729 | 5,576,129 | 5,316,666 | 5,244,912 | 5,059,279 | |||||||||||||||
Shareholders’ equity(M) | 1,229,180 | 1,217,605 | 1,148,067 | 1,127,431 | 1,111,245 | |||||||||||||||
Total liabilities and equity | $ | 6,787,909 | $ | 6,793,734 | $ | 6,464,733 | $ | 6,372,343 | $ | 6,170,524 | ||||||||||
(L) | Includes $1,220, ($633), $3,903, ($7,795) and ($2,924) in unrealized gains (losses) on available for sale securities for the quarterly periods ending September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007, respectively. |
(M) | Includes $793, ($411), $2,537, ($5,067) and ($1,901) in after-tax unrealized gains (losses) on available for sale securities for the quarterly periods ending September 30, 2008, June 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007, respectively. |
Page 14 of 20
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||||
| Sept 30, 2008 | June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | ||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Income Statement Data | ||||||||||||||||||
Interest on loans | $ | 56,925 | $ | 55,948 | $ | 58,520 | $ | 61,682 | $ | 64,036 | ||||||||
Interest on securities | 27,834 | 25,856 | 24,783 | 22,446 | 23,316 | |||||||||||||
Interest on federal funds sold and other earning assets | 87 | 175 | 1,162 | 1,313 | 652 | |||||||||||||
Total interest income | 84,846 | 81,979 | 84,465 | 85,441 | 88,004 | |||||||||||||
Interest expense- deposits | 23,874 | 25,210 | 28,945 | 30,354 | 31,794 | |||||||||||||
Interest expense- debentures | 1,410 | 1,558 | 2,019 | 2,206 | 2,358 | |||||||||||||
Interest expense- other | 1,756 | 1,240 | 1,506 | 1,247 | 2,483 | |||||||||||||
Total interest expense | 27,040 | 28,008 | 32,470 | 33,807 | 36,635 | |||||||||||||
Net interest income | 57,806 | 53,971 | 51,995 | 51,634 | 51,369 | |||||||||||||
Provision for credit losses | 1,700 | 1,000 | 1,167 | 120 | 75 | |||||||||||||
Net interest income after provision for credit losses | 56,106 | 52,971 | 50,828 | 51,514 | 51,294 | |||||||||||||
Service charges on deposits accounts | 11,348 | 10,727 | 10,506 | 11,029 | 10,785 | |||||||||||||
Net gain on sale of assets | 34 | 676 | 4 | 91 | 188 | |||||||||||||
Net (loss) gain on sale of ORE | (210 | ) | (478 | ) | 39 | (6 | ) | 452 | ||||||||||
Brokered mortgage income | 74 | 113 | 109 | 105 | 188 | |||||||||||||
Net gain on sale of held for sale loans | 46 | 110 | 73 | 132 | 269 | |||||||||||||
Gain on sale of securities | 0 | 0 | 0 | 28 | 58 | |||||||||||||
Other non-interest income | 1,825 | 1,918 | 1,948 | 1,869 | 2,219 | |||||||||||||
Total non-interest income | 13,117 | 13,066 | 12,679 | 13,248 | 14,159 | |||||||||||||
Salaries and benefits | 17,526 | 16,751 | 16,130 | 15,747 | 16,365 | |||||||||||||
CDI amortization | 2,562 | 2,459 | 2,492 | 2,620 | 2,586 | |||||||||||||
Net occupancy and equipment | 3,088 | 2,867 | 2,810 | 2,775 | 2,665 | |||||||||||||
Depreciation | 1,955 | 1,920 | 1,937 | 1,955 | 1,895 | |||||||||||||
Data processing and software amortization | 1,319 | 1,361 | 1,291 | 1,123 | 1,290 | |||||||||||||
Impairment charge on write-down of securities | 14,025 | 0 | 0 | 9,975 | 0 | |||||||||||||
Other non-interest expense | 5,755 | 5,502 | 4,460 | 5,218 | 5,286 | |||||||||||||
Total non-interest expense | 46,230 | 30,860 | 29,120 | 39,413 | 30,087 | |||||||||||||
Net income before taxes | 22,993 | 35,177 | 34,387 | 25,349 | 35,366 | |||||||||||||
Federal income taxes | 7,546 | 11,740 | 11,449 | 8,268 | 11,518 | |||||||||||||
Net income available to common shareholders | $ | 15,447 | (N) | $ | 23,437 | $ | 22,938 | $ | 17,081 | (O) | $ | 23,848 | ||||||
| (N) | Earnings for the three months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities. |
| (O) | Earnings for the three months ended December 31, 2007 includes a $9.975 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 | |||||||||||||||
| Sept 30, 2008 | June 30, 2008 | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Comparative Quarterly Asset Quality, Performance & Capital Ratios | |||||||||||||||
Return on average assets (annualized) | 0.91 | %(P) | 1.43 | % | 1.43 | % | 1.11 | %(Q) | 1.53 | % | |||||
Return on average common equity (annualized) | 5.04 | %(P) | 7.96 | % | 8.02 | % | 6.09 | %(Q) | 8.67 | % | |||||
Return on average tangible equity (annualized) | 16.83 | %(P) | 26.93 | % | 27.28 | % | 20.83 | %(Q) | 30.53 | % | |||||
Net interest margin (tax equivalent) (annualized) | 4.15 | % | 4.10 | % | 4.03 | % | 4.12 | % | 4.07 | % | |||||
Employees—FTE | 1,366 | 1,397 | 1,374 | 1,359 | 1,369 | ||||||||||
Efficiency ratio | 45.30 | % | 46.17 | % | 45.06 | % | 45.45 | % | 46.41 | % | |||||
Non-performing assets to average earning assets | 0.26 | % | 0.22 | % | 0.33 | % | 0.30 | % | 0.19 | % | |||||
Non-performing assets to loans and other real estate | 0.45 | % | 0.35 | % | 0.55 | % | 0.49 | % | 0.30 | % | |||||
Net charge-offs to average loans | 0.05 | % | 0.04 | % | 0.05 | % | 0.10 | % | 0.04 | % | |||||
Allowance for credit losses to total loans | 1.05 | % | 1.03 | % | 1.01 | % | 1.04 | % | 1.14 | % | |||||
Tier 1 risk-based capital | 13.31 | % | 12.70 | % | 13.16 | % | 13.13 | % | 13.03 | % | |||||
Total risk-based capital | 14.29 | % | 13.67 | % | 14.11 | % | 14.11 | % | 14.11 | % | |||||
Tier 1 leverage capital | 7.75 | % | 7.87 | % | 7.91 | % | 8.09 | % | 7.83 | % | |||||
Tangible equity to tangible assets | 6.28 | % | 6.04 | % | 5.94 | % | 5.88 | % | 5.89 | % | |||||
Equity to assets | 18.11 | % | 17.92 | % | 17.76 | % | 17.69 | % | 18.01 | % | |||||
(P) | Earnings for the three months ended September 30, 2008 includes a $14.025 million pre-tax, or $9.116 million after-tax, impairment charge on write-down of securities, which resulted in a 53 basis point decrease in return on average assets to 0.91%, a 298 basis point decrease in return on average equity to 5.04% and a 993 basis point decrease in return on average tangible common equity to 16.83%. |
(Q) | 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 September 30, 2008 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,289,203 | $ | 56,925 | 6.89 | % | ||||
Investment securities | 2,292,571 | 27,834 | 4.86 | % | ||||||
Federal funds sold and other temporary investments | 18,854 | 87 | 1.84 | % | ||||||
Total interest earning assets | 5,600,628 | $ | 84,846 | 6.03 | % | |||||
Allowance for credit losses | (33,746 | ) | ||||||||
Non-interest earning assets | 1,234,567 | |||||||||
Total assets | $ | 6,801,449 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 712,741 | $ | 1,565 | 0.87 | % | ||||
Savings and money market deposits | 1,439,838 | 6,783 | 1.87 | % | ||||||
Certificates and other time deposits | 1,767,712 | 15,526 | 3.49 | % | ||||||
Securities sold under repurchase agreements | 95,533 | 631 | 2.63 | % | ||||||
Federal funds purchased and other borrowings | 146,172 | 1,125 | 3.06 | % | ||||||
Junior subordinated debentures | 92,265 | 1,410 | 6.08 | % | ||||||
Total interest bearing liabilities | 4,254,261 | $ | 27,040 | 2.53 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,266,924 | |||||||||
Other liabilities | 55,105 | |||||||||
Total liabilities | 5,576,290 | |||||||||
Shareholders’ equity | 1,225,159 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,801,449 | ||||||||
Net Interest Income & Margin | $ | 57,806 | 4.11 | % | ||||||
Net Interest Income & Margin | ||||||||||
(tax equivalent) | $ | 58,471 | 4.15 | % | ||||||
Page 17 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended September 30, 2007 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,143,076 | $ | 64,036 | 8.08 | % | ||||
Investment securities | 1,892,030 | 23,316 | 4.93 | % | ||||||
Federal funds sold and other temporary investments | 51,880 | 652 | 4.99 | % | ||||||
Total interest earning assets | 5,086,986 | $ | 88,004 | 6.86 | % | |||||
Allowance for credit losses | (35,862 | ) | ||||||||
Non-interest earning assets | 1,182,150 | |||||||||
Total assets | $ | 6,233,274 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 795,016 | $ | 3,880 | 1.94 | % | ||||
Savings and money market deposits | 1,214,542 | 9,503 | 3.10 | % | ||||||
Certificates and other time deposits | 1,567,848 | 18,411 | 4.66 | % | ||||||
Securities sold under repurchase agreements | 82,973 | 935 | 4.47 | % | ||||||
Federal funds purchased and other borrowings | 116,609 | 1,548 | 5.27 | % | ||||||
Junior subordinated debentures | 119,328 | 2,358 | 7.84 | % | ||||||
Total interest bearing liabilities | 3,896,316 | $ | 36,635 | 3.73 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,170,352 | |||||||||
Other liabilities | 66,678 | |||||||||
Total liabilities | 5,133,346 | |||||||||
Shareholders’ equity | 1,099,928 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,233,274 | ||||||||
Net Interest Income & Margin | $ | 51,369 | 4.01 | % | ||||||
Net Interest Income & Margin | ||||||||||
(tax equivalent) | $ | 52,182 | 4.07 | % | ||||||
Page 18 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Nine Months Ended September 30, 2008 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield / Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,212,176 | $ | 171,393 | 7.13 | % | ||||
Investment securities | 2,134,396 | 78,473 | 4.90 | % | ||||||
Federal funds sold and other temporary investments | 61,264 | 1,424 | 3.10 | % | ||||||
Total interest earning assets | 5,407,836 | $ | 251,290 | 6.21 | % | |||||
Allowance for credit losses | (32,839 | ) | ||||||||
Non-interest earning assets | 1,213,656 | |||||||||
Total assets | $ | 6,588,653 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 775,730 | $ | 6,338 | 1.09 | % | ||||
Savings and money market deposits | 1,354,694 | 20,875 | 2.06 | % | ||||||
Certificates and other time deposits | 1,712,402 | 50,816 | 3.96 | % | ||||||
Securities sold under repurchase agreements | 81,390 | 1,809 | 2.97 | % | ||||||
Federal funds purchased and other borrowings | 106,572 | 2,693 | 3.38 | % | ||||||
Junior subordinated debentures | 101,429 | 4,987 | 6.57 | % | ||||||
Total interest bearing liabilities | 4,132,217 | $ | 87,518 | 2.83 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,212,379 | |||||||||
Other liabilities | 61,405 | |||||||||
Total liabilities | 5,406,001 | |||||||||
Shareholders’ equity | 1,182,652 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,588,653 | ||||||||
Net Interest Income & Margin | $ | 163,772 | 4.05 | % | ||||||
Net Interest Income & Margin | ||||||||||
(tax equivalent) | $ | 165,995 | 4.10 | % | ||||||
Page 19 of 20
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Nine Months Ended September 30, 2007 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield / Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,078,065 | $ | 185,919 | 8.08 | % | ||||
Investment securities | 1,865,847 | 67,021 | 4.79 | % | ||||||
Federal funds sold and other temporary investments | 58,117 | 2,228 | 5.13 | % | ||||||
Total interest earning assets | 5,002,029 | $ | 255,168 | 6.82 | % | |||||
Allowance for credit losses | (34,742 | ) | ||||||||
Non-interest earning assets | 1,119,480 | |||||||||
Total assets | $ | 6,086,767 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 830,770 | $ | 12,803 | 2.06 | % | ||||
Savings and money market deposits | 1,211,118 | 26,800 | 2.96 | % | ||||||
Certificates and other time deposits | 1,536,277 | 52,725 | 4.59 | % | ||||||
Securities sold under repurchase agreements | 72,724 | 2,319 | 4.26 | % | ||||||
Federal funds purchased and other borrowings | 97,757 | 3,867 | 5.29 | % | ||||||
Junior subordinated debentures | 128,522 | 7,852 | 8.17 | % | ||||||
Total interest bearing liabilities | 3,877,168 | $ | 106,366 | 3.67 | % | |||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | 1,123,452 | |||||||||
Other liabilities | 48,678 | |||||||||
Total liabilities | 5,049,298 | |||||||||
Shareholders’ equity | 1,037,469 | |||||||||
Total liabilities and shareholders’ equity | $ | 6,086,767 | ||||||||
Net Interest Income & Margin | $ | 148,802 | 3.98 | % | ||||||
Net Interest Income & Margin | ||||||||||
(tax equivalent) | $ | 151,088 | 4.04 | % | ||||||
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