Exhibit 99.1
FDIC Assisted Assumption of Deposits
Franklin Bank, SSB
Houston, Texas
November 7, 2008
“Safe Harbor” Statement
under the Private Securities Litigation Reform Act of 1999
The statements contained in this presentation which are not historical facts contain forward-looking information with respect to plans, projections, or future performance of Prosperity Bancshares, Inc. and its subsidiaries. Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, may have been made in this document. Prosperity’s results may differ materially from those in the forward-looking statements for a variety of reasons, including actions of competitors; changes in laws and regulations; customer and consumer response to marketing; effectiveness of spending, investment or programs; and economic conditions. These factors, and others, are more fully described in Prosperity Bancshares, Inc.’s filings with the Securities and Exchange Commission.
Copies of Prosperity Bancshares, Inc.’s SEC filings are available over the Internet at no charge from www.freeedgar.com.
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Key Terms
Transaction Prosperity to acquire:
All deposits of Franklin Bank, including $1.7 billion of brokered deposits Approximately $250 million in assets, primarily Treasury and Agency securities Transaction does not include: Assets and liabilities of Franklin Bank Corp. (Holding Company)
Senior debt, subordinated debt, trust preferred securities, preferred stock, and common stock of Franklin Bank Corp. (Holding Company)
Consideration 1.71% deposit premium or approximately $60 million cash
Divestitures None
Approvals All necessary approvals have been received
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Strategic Rationale
Franklin deposit acquisition provides unique opportunity to expand deposit base and increase revenue returns for Prosperity shareholders
Strategic Fit:
Prosperity becomes the second largest independent bank in Texas based on deposits, behind Cullen/Frost
Greatly enhances core deposit franchise in stable markets:
Combined deposits of $7.1 billion (excluding brokered deposits) and 176 branches Expanding into the stable, low-cost deposit markets of East Texas Significantly increased market share in existing, fast-growing market of Austin
Reinforcing strong presence in the Bryan-College Station area, home of Texas A&M University
Financially Compelling:
Accretive in the first 12 months
Opportunity to grow revenue and realize significant cost savings Drive efficiencies in branch network and back office
Prosperity maintains strong capital and liquidity positions Retail deposits add to stable funding base
Ability to integrate:
Recent proven capabilities with success in First Choice, Bank of Navasota, Texas United and SNB Bancshares transactions
Over 20 successful acquisition integrations since 1998
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Pro Forma Deposit Market Share
Texas
Rank Institution Branch Count Deposits in Market ($000) Market Share (%)
1 |
| Bank of America Corp. (NC) 474 122,862,837 26.9 |
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| JPMorgan Chase & Co. (NY) 732 77,019,337 16.9 |
3 |
| Wells Fargo & Co. (CA) 828 44,982,262 9.8 |
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| Banco Bilbao Vizcaya Argent SA 322 22,351,076 4.9 |
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| Cullen/Frost Bankers Inc. (TX) 121 10,757,727 2.4 |
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| Pro Forma Prosperity Bancshares Inc. (TX)(1) 176 7,289,318 1.6 |
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| Guaranty Financial Group Inc. (TX) 103 6,880,493 1.5 |
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| Zions Bancorp. (UT) 94 6,786,263 1.5 |
9 Capital One Financial Corp. (VA) 173 6,015,471 1.3
10 International Bancshares Corp. (TX) 215 5,702,356 1.2
11 Prosperity Bancshares Inc. (TX) 130 5,319,646 1.2
12 Comerica Inc. (TX) 81 4,007,962 0.9
13 Franklin Bank Corp. (TX) 46 3,722,597 0.8
14 Sterling Bancshares Inc. (TX) 62 3,690,729 0.8
15 Citigroup Inc. (NY) 123 3,654,270 0.8
Totals (1 - 15) 3,504 323,753,026 70.9
Totals (1 - 627) 6,969 456,897,177 100.0
Source: SNL Financial
(1) Pro forma PRSP excludes $1.7B of Franklin’s brokered deposits due to anticipated run-off Deposit data as of June 30, 2008; pro forma for pending and recently completed acquisitions
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Pro Forma Branch Network
# of Branches
Prosperity Bancshares Inc. 130
Franklin Bank 46
Pro Forma 176
Sources: SNL Financial and MapPoint
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Pro Forma Markets
Branches Deposits Pro Forma
Deposit Rank
MSA PRSP Franklin Pro Forma PRSP Franklin Pro Forma
Houston 46 — 46 $2,480,917 $— $2,480,917 7
Dallas / Fort Worth 22 — 22 707,658 — 707,658 21
Austin 9 14 23 283,236 418,259 701,495 8
College Station 6 8 14 134,431 398,559 532,990 3
El Campo 3 2 5 252,202 120,422 372,624 1
Corpus Christi 12 — 12 306,328 — 306,328 6
Athens — 7 7 — 263,317 263,317 1
Beaumont — 3 3 — 179,995 179,995 8
Victoria 4 — 4 166,481 — 166,481 3
Bay City 2 — 2 135,208 — 135,208 1
Gainesville 2 — 2 105,675 — 105,675 2
Jacksonville — 2 2 — 100,698 100,698 3
Tyler — 2 2 — 97,819 97,819 12
Palestine — 1 1 — 88,176 88,176 3
San Antonio 4 — 4 83,358 — 83,358 27
Beeville 1 — 1 67,150 — 67,150 2
Corsicana 2 1 3 37,419 17,767 55,186 4
Longview — 1 1 — 52,509 52,509 18
Alice 1 — 1 20,537 — 20,537 5
Kingsville 1 — 1 14,419 — 14,419 5
No Defined MSA 15 5 20 524,627 232,151 756,778 -
Totals 130 46 176 $5,319,646 $1,969,672 $7,289,318
Source: SNL Financial
Note: Excludes $1.7B of Franklin brokered deposits at company headquarters in Houston Branch data as of October 31, 2008 Deposit data as of June 30, 2008
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Integration Plan
Integrate branch network:
Identified 8 branches that can likely be closed and consolidated with existing Prosperity banking centers without material deposit attrition
Optimize branch staffing to reflect Prosperity’s efficiency and productivity levels
Leverage Franklin Bank’s deposit base over time:
Most deposits will be invested in short-term, low-risk securities initially
As attractive lending opportunities arise and are funded, the loan to deposit ratio of Franklin Bank’s deposit base will increase to be similar to Prosperity’s current ratio over the next few years
Ability to purchase loans at book value
90 day exclusive right to assume leases and purchase owned property
Integration Schedule
Expected conversion in the first quarter of 2009
Branch consolidation to be completed by second quarter of 2009
Majority of synergies achievable by end of 2009
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Capital Ratio Analysis
(Dollars in millions) PRSP 09/30/08 Pro Forma 9/30/2008 (1) Brokered Deposit Run-off Pro Forma 9/30/2008 (2)
Assets (reg.)
Total Assets $6,788 $10,499 $8,746
Tangible Assets 5,931 9,579 7,826
RWA 3,464 4,163 3,813
Average Assets for Leverage Ratio 5,945 9,579 7,826
Deposits 5,105 8,816 (1,753) 7,063
Capital (reg)
Tangible Common Equity 372 309 309
Tier 1 Capital 461 398 398
Total Capital 495 432 432
Capital Ratios
TCE/TA 6.3% 3.2% 4.0%
Leverage 7.8% 4.2% 5.1%
Tier 1 Capital 13.3% 9.6% 10.4%
Total Capital 14.3% 10.4% 11.3%
(1) |
| Includes brokered deposits |
(2) |
| Excludes brokered deposits due to anticipated run-off |
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Contact Information
Corporate Headquarters
Prosperity Bank Plaza
4295 San Felipe
Houston, Texas 77027
Investor Contacts
David Zalman
Chairman & Chief Executive Officer
979.543.2200
david.zalman@prosperitybanktx.com
281.269.7199 Telephone
281.269-7222 Fax
www.prosperitybanktx.com
Dan Rollins
President & Chief Operating Officer
281.269.7199
dan.rollins@prosperitybanktx.com
David Hollaway
Chief Financial Officer
979.543.2200
david.hollaway@prosperitybanktx.com
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