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 Houston, Texas 77027 | 281.269.7199
| |
| dan.rollins@prosperitybanktx.com | ||
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
REPORTS STRONG
SECOND QUARTER EARNINGS
| • | 2Q09 Earnings Per Share of $0.57 (diluted) |
| • | Net Interest Margin (tax equivalent) increases to 4.04% |
| • | Allowance for Credit Losses to Total Loans increased to 1.23% |
| • | Tangible Common Equity Ratio increased to 4.84% |
| • | Non-Performing Assets remain low at 0.26% of Average Earning Assets |
HOUSTON, July 17, 2009. Prosperity Bancshares, Inc.® NASDAQ: (PRSP), the parent company of Prosperity Bank®, reported net income for the quarter ended June 30, 2009 of $26.510 million or $0.57 per diluted common share, an increase in net income of $3.073 million or 13.1%, compared with $23.437 million or $0.52 per diluted common share for the same period in 2008.
“While the banking industry continues to face significant headwinds, I am pleased to report strong earnings by our company,” commented David Zalman, Chairman and Chief Executive Officer. “We continue to believe our decision last fall not to participate in the U.S. Treasury Department’s TARP program was the right decision for our shareholders and our customers and expect that the strength of our bank will lead to future opportunities.”
“During the quarter, we continued to reduce our exposure to construction and development loans while our team of professional bankers continued to attract core deposit customers across the state of Texas. Additionally, excluding recently acquired locations, we experienced linked quarter deposit growth in excess of 16%,” continued Zalman.
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Prosperity’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. Please refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures.
Results of operations for the three months ended June 30, 2009
For the three months ended June 30, 2009, net income was $26.510 million compared with $23.437 million for the same period in 2008. Net income per diluted common share was $0.57 for the three months ended June 30, 2009 and $0.52 for the same period in 2008. Returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2009 were 1.20%, 8.18% and 27.98%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities and assets) was 48.98% for the three months ended June 30, 2009.
Net interest income before provision for credit losses for the quarter ended June 30, 2009 increased 39.9% to $75.521 million compared with $53.971 million during the same period in 2008. The increase was attributable primarily to a 40.8% increase in average earning assets primarily due to the Franklin transaction. The net interest margin on a tax equivalent basis decreased to 4.04% for the three months ended June 30, 2009 compared with 4.10% for the same period in 2008.
On a linked quarter basis, the tax equivalent net interest margin increased six basis points to 4.04% for the three months ended June 30, 2009 from 3.98% reported for the three months ended March 31, 2009 as a result of multiple factors including lower deposit pricing.
Non-interest income increased $2.067 million or 15.8% to $15.133 million for the three months ended June 30, 2009 compared with $13.066 million for the same period in 2008. The increase was mainly attributable to an increase in service charges on deposit accounts related to accounts assumed from the FDIC as part of the Franklin Bank transaction.
Non-interest expense increased $13.440 million or 43.6% to $44.300 million for the second quarter of 2009 compared with $30.860 million for the second quarter of 2008. The increase was attributable to the increased expenses related to operating the additional banking offices that were acquired in the Franklin Bank transaction and increased FDIC insurance premiums.
Prosperity’s FDIC insurance premium cost for 2008 was approximately $1.4 million. The expected full year 2009 FDIC insurance premium (excluding any one-time assessments) is currently projected to be between $8.0 million and $9.0 million based upon deposit balances at June 30, 2009. Additionally, the FDIC imposed an emergency special assessment as of June 30, 2009, which for Prosperity will total approximately $4.2 million in pre-tax expense or $0.06 per diluted common share after tax.
Average loans increased 8.4% or $269.144 million to $3.472 billion for the quarter ended June 30, 2009 compared with $3.203 billion for the same period of 2008. Linked quarter average loans decreased 1.6% or $57.781 million from $3.530 billion at March 31, 2009. Average deposits increased 43.8% or $2.207 billion to $7.246 billion for the quarter ended June 30, 2009 compared with $5.040 billion for the same period of 2008. Linked quarter average deposits decreased 0.4% or $31.015 million from $7.277 billion at March 31, 2009.
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Loans at June 30, 2009 were $3.451 billion, an increase of $137.991 million or 4.2%, compared with $3.313 billion at June 30, 2008. Loans decreased 1.4% or $49.981 million on a linked quarter basis compared with loans of $3.501 billion at March 31, 2009. As reflected in the table below, linked quarter loans for the second quarter of 2009 were impacted by the loans acquired from the FDIC as a part of the Franklin Bank transaction in November 2008 and the loans acquired as a part of the acquisition of 1st Choice in the second quarter of 2008. Excluding the loans acquired in these transactions, loans decreased 0.3%.
Deposits at June 30, 2009 were $7.258 billion, an increase of $1.961 billion or 37.0%, compared with $5.297 billion at June 30, 2008. Linked quarter deposits increased $51.016 million or 0.7% from $7.207 billion at March 31, 2009. As reflected in the table below, linked quarter deposits for the second quarter of 2009 were impacted by the deposits assumed from the FDIC as part of the Franklin Bank transaction and the deposits assumed as a part of the acquisition of 1st Choice. Excluding the deposits assumed in these transactions, linked quarter deposits increased 16.2% on an annualized basis and deposits increased 5.6% from June 30, 2008.
| June 30, 2009 | Mar 31, 2009 | June 30, 2008 | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||
Balance Sheet Data (at period end) (In thousands) | |||||||||
Loans: | |||||||||
Acquired with 1st Choice | 144,771 | 155,671 | 184,526 | ||||||
Acquired from FDIC (related to Franklin Bank) | 282,733 | 312,793 | 0 | ||||||
All other | 3,023,815 | 3,032,836 | 3,128,802 | ||||||
Total Loans | $ | 3,451,319 | $ | 3,501,300 | $ | 3,313,328 | |||
Deposits: | |||||||||
Assumed with 1st Choice Bank | 237,953 | 242,116 | 287,996 | ||||||
Assumed from FDIC (related to Franklin Bank) | 1,729,657 | 1,880,823 | 0 | ||||||
All other | 5,290,285 | 5,083,940 | 5,008,638 | ||||||
Total Deposits | $ | 7,257,895 | $ | 7,206,879 | $ | 5,296,634 | |||
At June 30, 2009, construction loans totaled $613.386 million, consisting of approximately $178 million of single family residential construction loans; $86 million of land development loans; $96 million of raw land loans; $101 million of residential lot loans; $50 million of commercial lot loans; and $102 million of commercial construction and other construction loans. This is a decrease of $29.765 million from construction loans at March 31, 2009.
At June 30, 2009, Prosperity had $8.839 billion in total assets, $3.451 billion in loans, and $7.258 billion in deposits. Assets, loans and deposits at June 30, 2009 increased by 30.1%, 4.2% and 37.0%, respectively, compared with their level at June 30, 2008.
Results of operations for the six months ended June 30, 2009
For the six months ended June 30, 2009, net income was $51.988 million compared with $46.375 million for the same period in 2008. Net income per diluted common share was $1.13 for the six months ended June 30, 2009 compared with $1.04 for the same period in 2008. Returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2009 were 1.17%, 8.12% and 28.39%, respectively. Prosperity’s efficiency ratio was 49.22% for the six months ended June 30, 2009.
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Net interest income before provision for credit losses for the six months ended June 30, 2009 increased $43.633 million or 41.2%, to $149.599 million compared with $105.966 million during the same period in 2008. The increase was attributable primarily to a 43.0% increase in average earning assets.
Non-interest income increased $4.405 million or 17.1% to $30.150 million for the six months ended June 30, 2009 compared with $25.745 million for the same period in 2008. The increase was mainly attributable to an increase in service charges on deposit accounts related to accounts assumed from the FDIC as part of the Franklin Bank transaction and deposit accounts assumed from the 1st Choice acquisition.
Non-interest expense increased $28.343 million or 47.3% to $88.323 million for the first six months of 2009 compared with $59.980 million for the same period in 2008. The increase was attributable to the increased expenses related to operating the additional banking offices that were acquired in the Franklin Bank transaction, the 1st Choice acquisition and FDIC insurance premiums.
The provision for credit losses was $13.025 million for the six months ended June 30, 2009 compared to $2.167 million for the six months ended June 30, 2008. Net charge offs were $7.383 million for the six months ended June 30, 2009 compared to $2.806 million for the six months ended June 30, 2008.
Asset Quality
Non-performing assets totaled $19.587 million or 0.26% of average earning assets at June 30, 2009 compared with $11.651 million or 0.22% of average earning assets at June 30, 2008 and $12.525 million or 0.16% of average earnings assets at March 31, 2009. The allowance for credit losses was 1.23% of total loans at June 30, 2009 compared with 1.03% at June 30, 2008 and 1.12% of total loans at March 31, 2009.
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | |||||||||||||
| Amount | # | Amount | # | Amount | # | ||||||||||
Non-performing assets (In thousands) | |||||||||||||||
Commercial | $ | 955 | 28 | $ | 1,207 | 24 | $ | 1,491 | 16 | ||||||
Construction | 10,969 | 38 | 9,219 | 46 | 9,252 | 36 | |||||||||
1-4 family (including home equity) | 1,353 | 22 | 1,110 | 17 | 1,325 | 19 | |||||||||
Commercial real estate (including multi-family) | 6,157 | 9 | 859 | 5 | 2,014 | 8 | |||||||||
Agriculture and agriculture real estate | 0 | 0 | 8 | 1 | 30 | 3 | |||||||||
Consumer | 153 | 11 | 122 | 11 | 250 | 15 | |||||||||
Other | 0 | 0 | 0 | 0 | 6 | 1 | |||||||||
Total | $ | 19,587 | 108 | $ | 12,525 | 104 | $ | 14,368 | 98 | ||||||
| Three Months Ended June 30, 2009 | Three Months Ended Mar 31, 2009 | Twelve Months Ended Dec 31, 2008 | |||||||||
Net Charge-offs (In thousands) | |||||||||||
Commercial | $ | 307 | $ | 761 | $ | 2,489 | |||||
Construction | 1,185 | 2,387 | 3,190 | ||||||||
1-4 family (including home equity) | 510 | 117 | 351 | ||||||||
Commercial RE (including multi-family) | 1,091 | 0 | (110 | ) | |||||||
Agriculture | (1 | ) | 23 | 327 | |||||||
Consumer | 434 | 569 | 1,374 | ||||||||
Total | $ | 3,526 | $ | 3,857 | $ | 7,621 | |||||
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The provision for credit losses was $6.9 million for the three months ended June 30, 2009 and $1.0 million for the three months ended June 30, 2008. Prosperity’s loan loss reserve model called for increased provisioning in the second quarter due to increased charge-offs resulting from a general weakening of the economy. Net charge offs were $3.526 million for the three months ended June 30, 2009 and $1.163 million for the three months ended June 30, 2008.
Conference Call
Prosperity’s management team will host a conference call on Friday, July 17, 2009 at 10:30 a.m. Eastern Daylight Time (9:30 a.m. Central Daylight Time) to discuss Prosperity’s second quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-895-4790, 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 Home page under News and Events.
Assumption of deposits and acquisition of certain assets from the FDIC as receiver for Franklin Bank, SSB
On November 7, 2008, Prosperity Bank® paid a deposit premium of approximately $60.918 million to assume approximately $3.6 billion of deposits, including all uninsured deposits, from the FDIC, acting in its capacity as receiver for Franklin Bank. The FDIC entered into a purchase and assumption agreement with Prosperity Bank, which paid a premium to ensure that all deposits of Franklin Bank, both insured and uninsured, were transferred to Prosperity Bank®. Under the terms of the purchase and assumption agreement, Prosperity Bank® acquired certain assets from the FDIC, including approximately $350 million in US Treasury and Agency Securities and approximately $350 million in performing loans. The remaining net proceeds were predominately invested in US Agency Securities.
While Franklin Bank operated forty-five (45) full service banking offices, Prosperity Bank continues to operate thirty-three (33) of these locations and has consolidated the remainder with other nearby Prosperity locations.
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.
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Prosperity Bancshares, Inc.®
Prosperity Bancshares, Inc.®, an $8.8 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 fifty-eight (158) full service banking locations; fifty-one (51) in the Houston area; twenty-seven (27) in the South Texas area including Corpus Christi and Victoria; twenty-four (24) in the Dallas/Fort Worth area; twenty (20) in the East Texas area; twenty-seven (27) in the Central Texas area including Austin and San Antonio; and nine (9) in the Bryan/College Station area.
Central Texas Area -
Austin - Allandale Cedar Park Congress 183 Lakeway Liberty Hill Northland Oak Hill Parmer Lane Research Blvd Rollingwood Slaughter Lane
Bryan/College Station - Bryan Bryan-East Bryan-North College Station Greens Prairie Wellborn Road Rock Prairie
Other Central Texas Locations - Bastrop Caldwell Dime Box Dripping Springs Elgin Flatonia Georgetown Kingsland La Grange Lexington Navasota New Braunfels Round Rock San Antonio Schulenburg Smithville Weimar | Dallas/Fort Worth Area -
Dallas - Abrams Centre Balch Springs Camp Wisdom Cedar Hill Central Expressway Frisco Frisco-West Kiest Preston Road Red Oak The Colony Turtle Creek Westmoreland
Fort Worth - Haltom City Keller Roanoke Stockyards
Other Dallas/Fort Worth Locations - Azle Ennis Gainesville Mesquite Muenster Sanger Waxahachie
East Texas Area - Athens Athens-South Blooming Grove Canton Carthage Corsicana Crockett Eustace Grapeland Gun Barrel City Jacksonville Kerens Longview Mount Vernon | Palestine Rusk Seven Points Tyler Tyler-University Winnsboro
Houston Area -
Houston - Aldine Bellaire Clear Lake Copperfield Cypress Downtown Fairfield Gessner Gladebrook Harrisburg Heights Highway 6 West Hillcroft Little York Medical Center Memorial Drive Pasadena Pecan Grove River Oaks Sugar Land SW Medical Center Tanglewood Uptown Waugh Drive Westheimer Woodcreek
Other Houston Area Locations - Angleton Beaumont Cinco Ranch Cleveland East Bernard Edna El Campo Dayton Galveston Groves Hempstead | Hitchcock Katy Liberty Magnolia Mont Belvieu Nederland Needville Sweeny Tomball Waller West Columbia Wharton Winnie Wirt
South Texas Area -
Corpus Christi - Airline Carmel Northwest Saratoga Water Street
Other South Texas Locations - Alice Aransas Pass Bay City Beeville Cuero Goliad Gonzales Hallettsville Kingsville Mathis Padre Island Palacios Pleasanton Port Lavaca Portland Rockport Seguin Sinton Victoria Victoria-North Yoakum Yorktown | |||
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements within the meaning of the securities laws that are based on current expectations,
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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 Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2008 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 | ||||||||||||
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Selected Earnings and PerShare Data | ||||||||||||
Total interest income | $ | 102,768 | $ | 105,566 | $ | 96,588 | $ | 84,846 | ||||
Total interest expense | 27,247 | 31,488 | 32,631 | 27,040 | ||||||||
Net interest income | 75,521 | 74,078 | 63,957 | 57,806 | ||||||||
Provision for credit losses | 6,900 | 6,125 | 6,000 | 1,700 | ||||||||
Net interest income after provision for credit losses | 68,621 | 67,953 | 57,957 | 56,106 | ||||||||
Total non-interest income | 15,133 | 15,017 | 13,508 | 13,117 | ||||||||
Total non-interest expense | 44,300 | 44,023 | 37,586 | 46,230 | ||||||||
Net income before taxes | 39,454 | 38,947 | 33,879 | 22,993 | ||||||||
Federal income taxes | 12,944 | 13,469 | 11,194 | 7,546 | ||||||||
Net income | $ | 26,510 | $ | 25,478 | $ | 22,685 | $ | 15,447 | ||||
Basic earnings per share | $ | 0.57 | $ | 0.55 | $ | 0.49 | $ | 0.34 | ||||
Diluted earnings per share | $ | 0.57 | $ | 0.55 | $ | 0.49 | $ | 0.33 | ||||
Period end shares outstanding | 46,109 | 46,100 | 46,080 | 46,072 | ||||||||
Weighted average shares outstanding (basic) | 46,105 | 46,086 | 46,078 | 46,065 | ||||||||
Weighted average shares outstanding (diluted) | 46,225 | 46,139 | 46,276 | 46,302 | ||||||||
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Balance Sheet Averages | ||||||||||||||||
Total loans | $ | 3,472,449 | $ | 3,203,305 | $ | 3,501,488 | $ | 3,173,240 | ||||||||
Investment securities | 3,964,766 | 2,131,370 | 3,997,278 | 2,054,440 | ||||||||||||
Federal funds sold and other temporary investments | 122,358 | 33,803 | 94,631 | 82,702 | ||||||||||||
Total earning assets | 7,559,573 | 5,368,478 | 7,593,397 | 5,310,382 | ||||||||||||
Allowance for credit losses | (39,249 | ) | (32,813 | ) | (38,240 | ) | (32,381 | ) | ||||||||
Cash and due from banks | 133,739 | 131,015 | 145,232 | 138,354 | ||||||||||||
Goodwill | 875,236 | 785,604 | 875,601 | 772,774 | ||||||||||||
Core Deposit Intangibles (CDI) | 41,518 | 43,461 | 39,314 | 44,131 | ||||||||||||
Other real estate | 13,524 | 8,581 | 10,288 | 10,002 | ||||||||||||
Fixed assets, net | 150,475 | 123,876 | 137,086 | 123,705 | ||||||||||||
Other assets | 99,169 | 111,062 | 100,472 | 111,016 | ||||||||||||
Total assets | $ | 8,833,985 | $ | 6,539,264 | $ | 8,863,150 | $ | 6,477,983 | ||||||||
Non-interest bearing deposits | $ | 1,499,888 | $ | 1,215,176 | $ | 1,498,136 | $ | 1,184,121 | ||||||||
Interest bearing deposits | 5,746,511 | 3,824,628 | 5,767,455 | 3,803,669 | ||||||||||||
Total deposits | 7,246,399 | 5,039,804 | 7,265,591 | 4,987,790 | ||||||||||||
Securities sold under repurchase agreements | 92,466 | 82,408 | 88,128 | 74,241 | ||||||||||||
Federal funds purchased and other borrowings | 28,937 | 76,132 | 55,865 | 86,554 | ||||||||||||
Junior subordinated debentures | 92,265 | 102,575 | 92,265 | 106,012 | ||||||||||||
Other liabilities | 78,181 | 61,187 | 80,101 | 63,032 | ||||||||||||
Shareholders’ equity (A) | 1,295,737 | 1,177,158 | 1,281,200 | 1,160,354 | ||||||||||||
Total liabilities and equity | $ | 8,833,985 | $ | 6,539,264 | $ | 8,863,150 | $ | 6,477,983 | ||||||||
| (A) | Includes $15,800 and $1,675 in after tax unrealized gains on available for sale securities for the three month periods ending June 30, 2009 and June 30, 2008, respectively and $13,722 and $172 for the six months ending June 30, 2009 and June 30, 2008, respectively. |
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Income Statement Data | ||||||||||||||
Interest on loans | $ | 55,248 | $ | 55,948 | $ | 111,050 | $ | 114,468 | ||||||
Interest on securities | 47,450 | 25,856 | 97,178 | 50,639 | ||||||||||
Interest on federal funds sold and other temporary investments | 70 | 175 | 106 | 1,337 | ||||||||||
Total interest income | 102,768 | 81,979 | 208,334 | 166,444 | ||||||||||
Interest expense - deposits | 25,621 | 25,210 | 55,078 | 54,155 | ||||||||||
Interest expense - debentures | 959 | 1,558 | 2,078 | 3,577 | ||||||||||
Interest expense - other | 667 | 1,240 | 1,579 | 2,746 | ||||||||||
Total interest expense | 27,247 | 28,008 | 58,735 | 60,478 | ||||||||||
Net interest income(B) | 75,521 | 53,971 | 149,599 | 105,966 | ||||||||||
Provision for credit losses | 6,900 | 1,000 | 13,025 | 2,167 | ||||||||||
Net interest income after provision for credit losses | 68,621 | 52,971 | 136,574 | 103,799 | ||||||||||
Service charges on deposit accounts | 12,863 | 10,727 | 25,235 | 21,233 | ||||||||||
Net gain on sale of assets | 200 | 676 | 297 | 680 | ||||||||||
Net gain (loss) on sale of ORE | 415 | (478 | ) | 437 | (439 | ) | ||||||||
Brokered mortgage income | 140 | 113 | 210 | 222 | ||||||||||
Net gain on sale of held for sale loans | 0 | 110 | 0 | 183 | ||||||||||
Gain on sale of securities | 0 | 0 | 0 | 0 | ||||||||||
Other non-interest income | 1,515 | 1,918 | 3,971 | 3,866 | ||||||||||
Total non-interest income | 15,133 | 13,066 | 30,150 | 25,745 | ||||||||||
Salaries and benefits(C) | 20,494 | 16,751 | 43,142 | 32,881 | ||||||||||
CDI amortization | 2,492 | 2,459 | 5,156 | 4,951 | ||||||||||
Net occupancy and equipment | 3,514 | 2,867 | 7,492 | 5,677 | ||||||||||
Depreciation | 2,069 | 1,920 | 4,070 | 3,857 | ||||||||||
Data processing and software amortization | 1,562 | 1,361 | 3,617 | 2,652 | ||||||||||
Impairment charge on write-down of securities | 0 | 0 | 0 | 0 | ||||||||||
Other non-interest expense | 14,169 | 5,502 | 24,846 | 9,962 | ||||||||||
Total non-interest expense | 44,300 | 30,860 | 88,323 | 59,980 | ||||||||||
Net income before taxes | 39,454 | 35,177 | 78,401 | 69,564 | ||||||||||
Federal income taxes | 12,944 | 11,740 | 26,413 | 23,189 | ||||||||||
Net income available to common shareholders | $ | 26,510 | $ | 23,437 | $ | 51,988 | $ | 46,375 | ||||||
| (B) | Net interest income on a tax equivalent basis would be $76,226 and $54,692 for the three months ended June 30, 2009 and June 30, 2008, respectively and $150,985 and $107,524 for the six months ended June 30, 2009 and June 30, 2008, respectively. |
| (C) | Salaries and benefits includes stock-based compensation expense of $294 and $393 for the three months ended June 30, 2009 and June 30, 2008, respectively and $620 and $641 for the six months ended June 30, 2009 and June 30, 2008, respectively. |
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Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Common Share and Other Data | ||||||||||||
Employees - FTE | 1,634 | 1,397 | 1,634 | 1,397 | ||||||||
Book value per share | $ | 28.17 | $ | 26.44 | $ | 28.17 | $ | 26.44 | ||||
Tangible book value per share | $ | 8.31 | $ | 7.79 | $ | 8.31 | $ | 7.79 | ||||
Period end shares outstanding | 46,109 | 46,060 | 46,109 | 46,060 | ||||||||
Weighted average shares outstanding (basic) | 46,105 | 44,852 | 46,097 | 44,520 | ||||||||
Weighted average shares outstanding (diluted) | 46,225 | 45,039 | 46,146 | 44,676 | ||||||||
Non-accrual loans | $ | 646 | $ | 2,727 | $ | 646 | $ | 2,727 | ||||
Accruing loans 90 or more days past due | 7,497 | 2,130 | 7,497 | 2,130 | ||||||||
Restructured loans | 0 | 0 | 0 | 0 | ||||||||
Total non-performing loans | 8,143 | 4,857 | 8,143 | 4,857 | ||||||||
Repossessed assets | 343 | 139 | 343 | 139 | ||||||||
Other real estate | 11,101 | 6,655 | 11,101 | 6,655 | ||||||||
Total non-performing assets | $ | 19,587 | $ | 11,651 | $ | 19,587 | $ | 11,651 | ||||
Allowance for credit losses at end of period | $ | 42,611 | $ | 34,085 | $ | 42,611 | $ | 34,085 | ||||
Net charge-offs | $ | 3,526 | $ | 1,163 | $ | 7,383 | $ | 2,806 | ||||
Basic earnings per share | $ | 0.57 | $ | 0.52 | $ | 1.13 | $ | 1.04 | ||||
Diluted earnings per share | $ | 0.57 | $ | 0.52 | $ | 1.13 | $ | 1.04 | ||||
Page 10 of 22
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets (annualized) | 1.20 | % | 1.43 | % | 1.17 | % | 1.43 | % | ||||||||
Return on average common equity (annualized) | 8.18 | % | 7.96 | % | 8.12 | % | 7.99 | % | ||||||||
Return on average tangible common equity (annualized) | 27.98 | % | 26.93 | % | 28.39 | % | 27.01 | % | ||||||||
Net interest margin (D) (tax equivalent) (annualized) | 4.04 | % | 4.10 | % | 4.01 | % | 4.07 | % | ||||||||
Efficiency ratio (E) | 48.98 | % | 46.50 | % | 49.22 | % | 45.78 | % | ||||||||
| Asset Quality Ratios | ||||||||||||||||
Non-performing assets to average earning assets | 0.26 | % | 0.22 | % | 0.26 | % | 0.22 | % | ||||||||
Non-performing assets to loans and other real estate | 0.57 | % | 0.35 | % | 0.57 | % | 0.35 | % | ||||||||
Net charge-offs to average loans | 0.10 | % | 0.04 | % | 0.21 | % | 0.09 | % | ||||||||
Allowance for credit losses to total loans | 1.23 | % | 1.03 | % | 1.23 | % | 1.03 | % | ||||||||
Common Stock Market Price | ||||||||||||||||
High | $ | 31.23 | $ | 32.29 | $ | 31.23 | $ | 32.29 | ||||||||
Low | $ | 26.20 | $ | 25.37 | $ | 20.04 | $ | 21.96 | ||||||||
Period end market price | $ | 29.83 | $ | 26.73 | $ | 29.83 | $ | 26.73 | ||||||||
| (D) | Net interest margin for all periods presented is calculated on an actual 365 or actual 366 day basis. |
| (E) | The Company revised its efficiency ratio in the fourth quarter 2008 and no longer excludes gains and losses on the sale of ORE. The efficiency ratio is calculated by dividing total non-interest expense (excluding provision for credit losses) by net interest income plus non-interest income (excluding net gains and losses on the sale of securities and assets and impairment charge on write-down of securities). Prior period amounts have been restated to reflect the current methodology. Additionally, taxes are not part of this calculation. |
Page 11 of 22
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
| Loan Portfolio | ||||||||||||||||||||||||||||
Commercial | $ | 461,622 | 13.38 | % | $ | 461,514 | 13.18 | % | $ | 499,143 | 13.99 | % | $ | 470,099 | 14.47 | % | ||||||||||||
Construction | 613,386 | 17.77 | % | 643,151 | 18.37 | % | 666,080 | 18.67 | % | 626,443 | 19.28 | % | ||||||||||||||||
1-4 family residential | 675,702 | 19.58 | % | 667,392 | 19.06 | % | 668,096 | 18.73 | % | 574,583 | 17.69 | % | ||||||||||||||||
Home equity | 115,029 | 3.33 | % | 112,053 | 3.20 | % | 107,048 | 3.01 | % | 95,962 | 2.95 | % | ||||||||||||||||
Commercial real estate | 1,318,489 | 38.20 | % | 1,346,056 | 38.45 | % | 1,343,401 | 37.66 | % | 1,229,219 | 37.84 | % | ||||||||||||||||
Agriculture | 149,515 | 4.33 | % | 144,384 | 4.12 | % | 145,649 | 4.08 | % | 133,123 | 4.10 | % | ||||||||||||||||
Consumer | 117,576 | 3.41 | % | 126,750 | 3.62 | % | 137,640 | 3.86 | % | 119,188 | 3.67 | % | ||||||||||||||||
Total Loans | $ | 3,451,319 | $ | 3,501,300 | $ | 3,567,057 | $ | 3,248,617 | ||||||||||||||||||||
Deposit Types | ||||||||||||||||||||||||||||
Non-interest bearing DDA | $ | 1,476,378 | 20.34 | % | $ | 1,510,005 | 20.95 | % | $ | 1,522,983 | 20.85 | % | $ | 1,263,407 | 24.75 | % | ||||||||||||
Interest bearing DDA | 1,060,965 | 14.62 | % | 1,030,826 | 14.30 | % | 1,082,078 | 14.82 | % | 707,055 | 13.85 | % | ||||||||||||||||
Money Market | 1,614,874 | 22.25 | % | 1,495,724 | 20.76 | % | 1,400,673 | 19.18 | % | 1,147,559 | 22.48 | % | ||||||||||||||||
Savings | 325,232 | 4.48 | % | 322,130 | 4.47 | % | 309,938 | 4.24 | % | 246,370 | 4.83 | % | ||||||||||||||||
Time < $100 | 1,418,375 | 19.54 | % | 1,491,380 | 20.69 | % | 1,577,431 | 21.60 | % | 814,165 | 15.95 | % | ||||||||||||||||
Time > $100 | 1,362,071 | 18.77 | % | 1,356,814 | 18.83 | % | 1,410,194 | 19.31 | % | 926,286 | 18.14 | % | ||||||||||||||||
Total Deposits | $ | 7,257,895 | $ | 7,206,879 | $ | 7,303,297 | $ | 5,104,842 | ||||||||||||||||||||
Loan to Deposit Ratio | 47.6 | % | 48.6 | % | 48.8 | % | 63.6 | % | ||||||||||||||||||||
Construction Loans | ||||||||||||||||||||||||||||
Single family residential | $ | 177,632 | 28.96 | % | $ | 214,034 | 33.28 | % | $ | 237,191 | 35.61 | % | $ | 233,196 | 37.23 | % | ||||||||||||
Land development | 86,363 | 14.08 | % | 91,005 | 14.15 | % | 90,846 | 13.64 | % | 73,955 | 11.81 | % | ||||||||||||||||
Raw land | 96,157 | 15.67 | % | 89,003 | 13.84 | % | 89,120 | 13.38 | % | 90,974 | 14.52 | % | ||||||||||||||||
Residential lots | 101,321 | 16.52 | % | 104,684 | 16.28 | % | 106,869 | 16.04 | % | 101,027 | 16.13 | % | ||||||||||||||||
Commercial lots | 49,614 | 8.09 | % | 37,318 | 5.80 | % | 39,374 | 5.91 | % | 35,890 | 5.73 | % | ||||||||||||||||
Commercial construction and other | 102,299 | 16.68 | % | 107,107 | 16.65 | % | 102,680 | 15.42 | % | 91,401 | 14.58 | % | ||||||||||||||||
Total Construction Loans | $ | 613,386 | $ | 643,151 | $ | 666,080 | $ | 626,443 | ||||||||||||||||||||
Page 12 of 22
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | June 30, 2008 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Total loans | $ | 3,451,319 | $ | 3,501,300 | $ | 3,567,057 | $ | 3,248,617 | $ | 3,313,328 | ||||||||||
Investment securities(F) | 3,981,109 | 3,991,200 | 4,160,401 | 2,294,403 | 2,235,703 | |||||||||||||||
Federal funds sold and other temporary investments | 128,451 | 14,930 | 16,404 | 25,748 | 14,230 | |||||||||||||||
Total earning assets | 7,560,879 | 7,507,430 | 7,743,862 | 5,568,768 | 5,563,261 | |||||||||||||||
Allowance for credit losses | (42,611 | ) | (39,238 | ) | (36,970 | ) | (33,981 | ) | (34,085 | ) | ||||||||||
Cash and due from banks | 142,860 | 148,938 | 212,335 | 159,386 | 170,966 | |||||||||||||||
Goodwill | 875,434 | 874,356 | 874,654 | 811,916 | 811,391 | |||||||||||||||
Core deposit intangibles | 40,305 | 42,796 | 38,196 | 44,974 | 47,536 | |||||||||||||||
Other real estate | 11,101 | 9,134 | 4,450 | 7,538 | 6,655 | |||||||||||||||
Fixed assets, net | 149,742 | 151,544 | 123,638 | 123,823 | 125,000 | |||||||||||||||
Other assets | 101,241 | 104,237 | 112,199 | 105,485 | 103,010 | |||||||||||||||
Total assets | $ | 8,838,951 | $ | 8,799,197 | $ | 9,072,364 | $ | 6,787,909 | $ | 6,793,734 | ||||||||||
Demand deposits | $ | 1,476,378 | $ | 1,510,005 | $ | 1,522,983 | $ | 1,263,407 | $ | 1,285,493 | ||||||||||
Interest bearing deposits | 5,781,517 | 5,696,874 | 5,780,314 | 3,841,435 | 4,011,141 | |||||||||||||||
Total deposits | 7,257,895 | 7,206,879 | 7,303,297 | 5,104,842 | 5,296,634 | |||||||||||||||
Securities sold under repurchase agreements | 96,732 | 81,773 | 96,017 | 100,310 | 99,225 | |||||||||||||||
Federal funds purchased and other borrowings | 28,170 | 28,441 | 229,395 | 219,671 | 42,089 | |||||||||||||||
Junior subordinated debentures | 92,265 | 92,265 | 92,265 | 92,265 | 92,265 | |||||||||||||||
Other liabilities | 64,794 | 109,291 | 96,284 | 41,641 | 45,916 | |||||||||||||||
Total liabilities | 7,539,856 | 7,518,649 | 7,817,258 | 5,558,729 | 5,576,129 | |||||||||||||||
Shareholders’ equity(G) | 1,299,095 | 1,280,548 | 1,255,106 | 1,229,180 | 1,217,605 | |||||||||||||||
Total liabilities and equity | $ | 8,838,951 | $ | 8,799,197 | $ | 9,072,364 | $ | 6,787,909 | $ | 6,793,734 | ||||||||||
| (F) | Includes $20,153, $23,784, $15,158, $1,220 and ($633) in unrealized gains (losses) on available for sale securities for the quarterly periods ending June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008 and June 30, 2008, respectively. |
| (G) | Includes $13,099, $15,460, $9,853, $793 and ($411) in after-tax unrealized gains (losses) on available for sale securities for the quarterly periods ending June 30, 2009, March 31, 2009, December 31, 2008, September 30, 2008 and June 30, 2008, respectively. |
Page 13 of 22
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||||
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | June 30, 2008 | ||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Income Statement Data | ||||||||||||||||||
Interest on loans | $ | 55,248 | $ | 55,802 | $ | 56,073 | $ | 56,925 | $ | 55,948 | ||||||||
Interest on securities | 47,450 | 49,726 | 39,713 | 27,834 | 25,856 | |||||||||||||
Interest on federal funds sold and other earning assets | 70 | 38 | 802 | 87 | 175 | |||||||||||||
Total interest income | 102,768 | 105,566 | 96,588 | 84,846 | 81,979 | |||||||||||||
Interest expense - deposits | 25,621 | 29,457 | 29,663 | 23,874 | 25,210 | |||||||||||||
Interest expense - debentures | 959 | 1,119 | 1,452 | 1,410 | 1,558 | |||||||||||||
Interest expense - other | 667 | 912 | 1,516 | 1,756 | 1,240 | |||||||||||||
Total interest expense | 27,247 | 31,488 | 32,631 | 27,040 | 28,008 | |||||||||||||
Net interest income | 75,521 | 74,078 | 63,957 | 57,806 | 53,971 | |||||||||||||
Provision for credit losses | 6,900 | 6,125 | 6,000 | 1,700 | 1,000 | |||||||||||||
Net interest income after provision for credit losses | 68,621 | 67,953 | 57,957 | 56,106 | 52,971 | |||||||||||||
Service charges on deposits accounts | 12,863 | 12,372 | 13,204 | 11,348 | 10,727 | |||||||||||||
Net gain on sale of assets | 200 | 97 | 130 | 34 | 676 | |||||||||||||
Net gain (loss) on sale of ORE | 415 | 22 | (1,684 | ) | (210 | ) | (478 | ) | ||||||||||
Brokered mortgage income | 140 | 70 | 34 | 74 | 113 | |||||||||||||
Net gain on sale of held for sale loans | 0 | 0 | 0 | 46 | 110 | |||||||||||||
Gain on sale of securities | 0 | 0 | 0 | 0 | 0 | |||||||||||||
Other non-interest income | 1,515 | 2,456 | 1,824 | 1,825 | 1,918 | |||||||||||||
Total non-interest income | 15,133 | 15,017 | 13,508 | 13,117 | 13,066 | |||||||||||||
Salaries and benefits | 20,494 | 22,648 | 20,411 | 17,526 | 16,751 | |||||||||||||
CDI amortization | 2,492 | 2,664 | 2,284 | 2,562 | 2,459 | |||||||||||||
Net occupancy and equipment | 3,514 | 3,978 | 3,704 | 3,088 | 2,867 | |||||||||||||
Depreciation | 2,069 | 2,001 | 1,854 | 1,955 | 1,920 | |||||||||||||
Data processing and software amortization | 1,562 | 2,055 | 1,609 | 1,319 | 1,361 | |||||||||||||
Impairment charge on write-down of securities | 0 | 0 | 0 | 14,025 | 0 | |||||||||||||
Other non-interest expense | 14,169 | 10,677 | 7,724 | 5,755 | 5,502 | |||||||||||||
Total non-interest expense | 44,300 | 44,023 | 37,586 | 46,230 | 30,860 | |||||||||||||
Net income before taxes | 39,454 | 38,947 | 33,879 | 22,993 | 35,177 | |||||||||||||
Federal income taxes | 12,944 | 13,469 | 11,194 | 7,546 | 11,740 | |||||||||||||
Net income available to common shareholders | $ | 26,510 | $ | 25,478 | $ | 22,685 | $ | 15,447 | $ | 23,437 | ||||||||
Page 14 of 22
Prosperity Bancshares, Inc.®
Financial Highlights
| Three Months Ended | ||||||||||||||||||||
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | June 30, 2008 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Comparative Quarterly Asset Quality, Performance & Capital Ratios | ||||||||||||||||||||
Return on average assets (annualized) | 1.20 | % | 1.15 | % | 1.09 | % | 0.91 | % | 1.43 | % | ||||||||||
Return on average common equity (annualized) | 8.18 | % | 8.02 | % | 7.30 | % | 5.04 | % | 7.96 | % | ||||||||||
Return on average tangible equity (annualized) | 27.98 | % | 28.52 | % | 24.89 | % | 16.83 | % | 26.93 | % | ||||||||||
Net interest margin (tax equivalent) (annualized) | 4.04 | % | 3.98 | % | 3.65 | % | 4.15 | % | 4.10 | % | ||||||||||
Employees - FTE | 1,634 | 1,684 | 1,734 | 1,366 | 1,397 | |||||||||||||||
Efficiency ratio | 48.98 | % | 49.47 | % | 48.60 | % | 45.43 | % | 46.50 | % | ||||||||||
Non-performing assets to average earning assets | 0.26 | % | 0.16 | % | 0.20 | % | 0.26 | % | 0.22 | % | ||||||||||
Non-performing assets to loans and other real estate | 0.57 | % | 0.36 | % | 0.40 | % | 0.45 | % | 0.35 | % | ||||||||||
Net charge-offs to average loans | 0.10 | % | 0.11 | % | 0.09 | % | 0.05 | % | 0.04 | % | ||||||||||
Allowance for credit losses to total loans | 1.23 | % | 1.12 | % | 1.04 | % | 1.05 | % | 1.03 | % | ||||||||||
Book value per share | $ | 28.17 | $ | 27.78 | $ | 27.24 | $ | 26.68 | $ | 26.44 | ||||||||||
Tangible book value per share | $ | 8.31 | $ | 7.88 | $ | 7.43 | $ | 8.08 | $ | 7.79 | ||||||||||
Tier 1 risk-based capital | 11.24 | % | 10.53 | % | 9.89 | % | 12.71 | % | 12.70 | % | ||||||||||
Total risk-based capital | 12.28 | % | 11.48 | % | 10.76 | % | 13.65 | % | 13.67 | % | ||||||||||
Tier 1 leverage capital | 5.81 | % | 5.48 | % | 5.68 | % | 7.75 | % | 7.87 | % | ||||||||||
Tangible equity to tangible assets | 4.84 | % | 4.61 | % | 4.19 | % | 6.28 | % | 6.04 | % | ||||||||||
Equity to assets | 14.70 | % | 14.55 | % | 13.83 | % | 18.11 | % | 17.92 | % | ||||||||||
Page 15 of 22
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended June 30, 2009 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,472,449 | $ | 55,248 | 6.38 | % | ||||
Investment securities | 3,964,766 | 47,450 | 4.79 | % | ||||||
Federal funds sold and other temporary investments | 122,358 | 70 | 0.23 | % | ||||||
Total interest earning assets | 7,559,573 | $ | 102,768 | 5.45 | % | |||||
Allowance for credit losses | (39,249 | ) | ||||||||
Non-interest earning assets | 1,313,661 | |||||||||
Total assets | $ | 8,833,985 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 1,047,363 | $ | 2,182 | 0.84 | % | ||||
Savings and money market deposits | 1,878,238 | 4,619 | 0.99 | % | ||||||
Certificates and other time deposits | 2,820,910 | 18,820 | 2.68 | % | ||||||
Securities sold under repurchase agreements | 92,466 | 280 | 1.21 | % | ||||||
Federal funds purchased and other borrowings | 28,937 | 387 | 5.36 | % | ||||||
Junior subordinated debentures | 92,265 | 959 | 4.17 | % | ||||||
Total interest bearing liabilities | $ | 5,960,179 | $ | 27,247 | 1.83 | % | ||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | $ | 1,499,888 | ||||||||
Other liabilities | 78,181 | |||||||||
Total liabilities | $ | 7,538,248 | ||||||||
Shareholders’ equity | $ | 1,295,737 | ||||||||
Total liabilities and shareholders’ equity | $ | 8,833,985 | ||||||||
Net Interest Income & Margin | $ | 75,521 | 4.01 | % | ||||||
Net Interest Income & Margin | $ | 76,226 | 4.04 | % | ||||||
Page 16 of 22
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 | $ | 54,692 | 4.10 | % | ||||||
Page 17 of 22
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
| Six Months Ended June 30, 2009 | ||||||||||
| Average Balance | Interest Earned / Interest Paid | Average Yield/Rate | ||||||||
YIELD ANALYSIS | ||||||||||
Interest Earning Assets: | ||||||||||
Loans | $ | 3,501,488 | $ | 111,050 | 6.40 | % | ||||
Investment securities | 3,997,278 | 97,178 | 4.86 | % | ||||||
Federal funds sold and other temporary investments | 94,631 | 106 | 0.23 | % | ||||||
Total interest earning assets | $ | 7,593,397 | $ | 208,334 | 5.53 | % | ||||
Allowance for credit losses | (38,240 | ) | ||||||||
Non-interest earning assets | 1,307,993 | |||||||||
Total assets | $ | 8,863,150 | ||||||||
Interest Bearing Liabilities: | ||||||||||
Interest bearing demand deposits | $ | 1,058,122 | $ | 4,304 | 0.82 | % | ||||
Savings and money market deposits | 1,841,147 | 10,676 | 1.17 | % | ||||||
Certificates and other time deposits | 2,868,186 | 40,098 | 2.82 | % | ||||||
Securities sold under repurchase agreements | 88,128 | 628 | 1.44 | % | ||||||
Federal funds purchased and other borrowings | 55,865 | 951 | 3.43 | % | ||||||
Junior subordinated debentures | 92,265 | $ | 2,078 | 4.54 | % | |||||
Total interest bearing liabilities | $ | 6,003,713 | $ | 58,735 | 1.97 | % | ||||
Non-interest bearing liabilities: | ||||||||||
Non-interest bearing demand deposits | $ | 1,498,136 | ||||||||
Other liabilities | 80,101 | |||||||||
Total liabilities | $ | 7,581,950 | ||||||||
Shareholders’ equity | 1,281,200 | |||||||||
Total liabilities and shareholders’ equity | $ | 8,863,150 | ||||||||
Net Interest Income & Margin | $ | 149,599 | 3.97 | % | ||||||
Net Interest Income & Margin | $ | 150,985 | 4.01 | % | ||||||
Page 18 of 22
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 | $ | 107,524 | 4.07 | % | ||||||
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Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA
Prosperity’s management uses certain non–GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio for internal planning and forecasting purposes. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity’s financial results and Prosperity believes that its presentation, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Prosperity’s business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
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Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||||||
| June 30, 2009 | Mar 31, 2009 | Dec 31, 2008 | Sept 30, 2008 | June 30, 2008 | ||||||||||||||||
Net Income | $ | 26,510 | $ | 25,478 | $ | 22,685 | $ | 15,447 | $ | 23,437 | ||||||||||
Period end shares outstanding | 46,109 | 46,100 | 46,080 | 46,072 | 46,060 | |||||||||||||||
Total assets | $ | 8,838,951 | $ | 8,799,197 | $ | 9,072,364 | $ | 6,787,909 | $ | 6,793,734 | ||||||||||
Shareholders’ equity | 1,299,095 | 1,280,548 | 1,255,106 | 1,229,180 | 1,217,605 | |||||||||||||||
Average shareholders’ equity | 1,295,737 | 1,270,380 | 1,242,491 | 1,225,159 | 1,177,158 | |||||||||||||||
Goodwill and Core Deposit Intangibles (CDI) | 915,739 | 917,152 | 912,850 | 856,890 | 858,927 | |||||||||||||||
Average goodwill and Core Deposit Intangibles | 916,754 | 913,010 | 877,985 | 857,966 | 829,065 | |||||||||||||||
Tangible shareholders’ equity(1) | 383,356 | 363,396 | 342,256 | 372,290 | 358,678 | |||||||||||||||
Average tangible shareholders’ equity(2) | 378,983 | 357,370 | 364,506 | 367,193 | 348,093 | |||||||||||||||
Tangible assets(3) | 7,923,212 | 7,882,045 | 8,159,514 | 5,931,019 | 5,934,807 | |||||||||||||||
Tangible book value per share(4) | $ | 8.31 | $ | 7.88 | $ | 7.43 | $ | 8.08 | $ | 7.79 | ||||||||||
Return on average tangible common equity(5) | 27.98 | % | 28.52 | % | 24.89 | % | 16.83 | % | 26.93 | % | ||||||||||
Tangible equity to tangible assets ratio(6) | 4.84 | % | 4.61 | % | 4.19 | % | 6.28 | % | 6.04 | % | ||||||||||
| (1) | Tangible shareholders’ equity is calculated by subtracting goodwill and CDI from shareholders’ equity. |
| (2) | Average tangible shareholders’ equity is calculated by subtracting average goodwill and CDI from average shareholders’ equity. |
| (3) | Tangible assets is calculated by subtracting goodwill and CDI from total assets. |
| (4) | Tangible book value is calculated by dividing tangible shareholders’ equity by period end shares outstanding. |
| (5) | Return on average tangible common equity is calculated by dividing net income by average tangible shareholders’ equity (annualized). |
| (6) | Tangible equity to tangible assets ratio is calculated by dividing tangible shareholders’ equity by tangible assets. |
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Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| Six Months Ended | ||||||||
| June 30, 2009 | June 30, 2008 | |||||||
Net Income | $ | 51,988 | $ | 46,375 | ||||
Period end shares outstanding | 46,109 | 46,060 | ||||||
Total assets | $ | 8,838,951 | $ | 6,793,734 | ||||
Shareholders’ equity | 1,299,095 | 1,217,605 | ||||||
Average shareholders’ equity | 1,281,200 | 1,160,354 | ||||||
Goodwill and Core Deposit Intangibles (CDI) | 915,739 | 858,927 | ||||||
Average goodwill and Core Deposit Intangibles | 914,915 | 816,905 | ||||||
Tangible shareholders’ equity(1) | 383,356 | 358,678 | ||||||
Average tangible shareholders’ equity(2) | 366,285 | 343,449 | ||||||
Tangible assets(3) | 7,923,212 | 5,934,807 | ||||||
Tangible book value per share(4) | $ | 8.31 | $ | 7.79 | ||||
Return on average tangible common equity(5) | 28.39 | % | 27.01 | % | ||||
Tangible equity to tangible assets ratio(6) | 4.84 | % | 6.04 | % | ||||
| (1) | Tangible shareholders’ equity is calculated by subtracting goodwill and CDI from shareholders’ equity. |
| (2) | Average tangible shareholders’ equity is calculated by subtracting average goodwill and CDI from average shareholders’ equity. |
| (3) | Tangible assets is calculated by subtracting goodwill and CDI from total assets. |
| (4) | Tangible book value is calculated by dividing tangible shareholders’ equity by period end shares outstanding. |
| (5) | Return on average tangible common equity is calculated by dividing net income by average tangible shareholders’ equity (annualized). |
| (6) | Tangible equity to tangible assets ratio is calculated by dividing tangible shareholders’ equity by tangible assets. |
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