Exhibit 99.1
| PRESS RELEASE | For more information contact: |
| |
Prosperity Bancshares, Inc.® | David Zalman |
Prosperity Bank Plaza | Chairman and Chief Executive Officer |
4295 San Felipe | 281.269.7199 |
Houston, Texas 77027 | david.zalman@prosperitybankusa.com |
FOR IMMEDIATE RELEASE
Prosperity Bancshares, Inc.®
REPORTS SECOND QUARTER
2015EARNINGS
| | ● | Second quarter 2015 earnings per share (diluted)of$1.03 |
| | | |
| | ● | Second quarter netincome of $71.932 million |
| | | |
| | ● | Nonperforming assets remain low at0.19% ofsecond quarter average earning assets |
| | | |
| | ● | Return on second quarter average assets of 1.33% |
| | | |
| | ● | Second quarter efficiency ratio of 42.35% |
HOUSTON, July 24, 2015. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®(collectively, “Prosperity”), reported net income for the quarter ended June 30, 2015 of $71.932 million or $1.03per diluted common share. Additionally, nonperforming assets remain low at 0.19% of second quarter average earning assets with return on second quarter average assets of 1.33%.
“Texas, which has been the top state in job creation for the past decade, continues to produce opportunities and growth in employment despite the struggling oil and gas industry. Texas payrolls increased by 16,700 workers in June, while unemployment fell to 4.2%. Refining, petrochemicals and service industries are offsetting job losses in the oil industry. Employment in the health services and education sectors has been strong as well. Austin continues to boom with an annual job growth rate of 6.6%. Texas is now America’s top technology exporter, surpassing longtime leader California. The Texas strategy of avoiding burdensome taxation and regulation continues to attract growing businesses and has resulted in economic diversification,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.
“During the second quarter of 2015, our bank continued to see growth in loans and deposits compared to the same quarter a year ago, excluding the F&M acquisition. In our experience, most of the banks we have acquired go through a transition period during which we anticipate loans and deposits to decrease. We continue to see opportunities in the markets we serve and are optimistic about the potential business possibilities that are being presented to us,” continued Zalman.
“We continue to grow core earnings. Net income for the quarter ended June 30, 2015 (excluding purchase accounting adjustments) was $63.800 million, an increase of $4.191 million or 7.0%, compared with $59.609 million in net income (excluding purchase accounting adjustments) for the quarter ended June 30, 2014,” added Zalman.
“I would like to thank our associates and directors for all of their hard work and dedication and give a special thank you to all of our customers for their continued business and loyalty,” concluded Zalman.
Results of operations for the three months endedJune 30,2015
Net income was $71.932 million for the three months ended June 30, 2015 compared with $75.506 million for the same period in 2014. Net income per diluted common share was $1.03for the three months ended June 30, 2015 compared with $1.08 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $63.800 million for the quarter ended June 30, 2015 compared with $59.609 million for the quarter ended June 30, 2014. Net income per diluted common share (excluding purchase accounting adjustments) was $0.91 for the three months ended June 30, 2015 compared with $0.85 for the three months ended June 30, 2014. The reconciliation of these non-GAAP financial measures is shown on page 12. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2015 were 1.33%, 8.61% and 20.49%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 42.35% for the three months ended June 30, 2015.
Net interest income before provision for credit losses for the quarter ended June 30, 2015 was $158.239 million compared with $174.055 million during the same period in 2014. This change was primarily due to a decrease in loan discount accretion of $11.750 million for the quarter ended June 30, 2015 compared with the quarter ended June 30, 2014. Linked quarter net interest income before provision for credit losses was $158.239 million compared with $162.905 million during the three months ended March 31, 2015. This change was primarily due to a decrease in loan discount accretion of $6.045 million for the quarter ended June 30, 2015 compared with the quarter ended March 31, 2015. The net interest margin on a tax equivalent basis decreased to 3.39% for the three months ended June 30, 2015, compared with 3.83% for the same period in 2014 and 3.57% for the three months ended March 31, 2015. This was primarily due to the decrease in loan discount accretion and lower yields on average interest earning assets partially offset by lower rates paid on average interest bearing liabilities for the quarter ended June 30, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.13% for the three months ended June 30, 2015, compared with 3.31% for the same period in 2014 and 3.17% for the three months ended March 31, 2015.
Noninterest income was $30.297 million for the three months ended June 30, 2015 compared with $32.597 million for the same period in 2014. This change was primarily due to a decrease in net gain on sale of assets and NSF fees. On a linked quarter basis, noninterest income increased $1.876 million or 6.6% compared with the quarter ended March 31, 2015. This was primarily due to an increase in other noninterest income resulting from a merchant incentive payment of $1.5 million recorded during the second quarter of 2015.
Noninterest expense was $79.735 million for the three months ended June 30, 2015 compared with $87.292 million for the same period in 2014. This change was primarily due to a decrease in salary and benefits expense. On a linked quarter basis, noninterest expense increased $273 thousand or 0.3% compared with the quarter ended March 31, 2015.
Results of operations for the six months ended June 30, 2015
Net income was $145.573 million for the six months ended June 30, 2015 compared with $142.643 million for the same period in 2014. Net income per diluted common share was $2.08 for the six months ended June 30, 2015 compared with $2.10 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $125.183 million for the six months ended June 30, 2015 compared with $119.020 million for the six months ended June 30, 2014. Net income per diluted common share (excluding purchase accounting adjustments) was $1.79 for the six months ended June 30, 2015 compared with $1.75 for the six months ended June 30, 2014. The reconciliation of these non-GAAP financial measures is shown on page 12. Returns on average assets, average common equity and average tangible common equity, each on an annualized basis, for the six months ended June 30, 2015 were 1.35%, 8.80% and 21.16%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 42.09% for the six months ended June 30, 2015.
Net interest income before provision for credit losses for the six months ended June 30, 2015, increased $3.398 million to $321.144 million compared with $317.746 million during the same period in 2014. The increase was primarily due to an 8.1% increase in average interest earning assets and a decrease in average rate paid on interest bearing liabilities, partially offset by a decrease in average yield on interest earning assets and a $5.578 million decrease in loan discount accretion. The net interest margin on a tax equivalent basis for the six months ended June 30, 2015 decreased to 3.48% compared with 3.73% for the same period in 2014. This was primarily due to lower yields on average interest earning assets and the decrease in loan discount accretion, partially offset by lower rates paid on interest bearing liabilities for the six months ended June 30, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis decreased to 3.15% for the six months ended June 30, 2015 from 3.32% for the same period in 2014.
Noninterest income was $58.718 millionfor the six months ended June 30, 2015 compared with $61.261 million for the same period in 2014. This change was primarily due to a decrease in gain on sale of assets and NSF fees, partially offset by an increase in mortgage income. Noninterest expense was $159.197 millionfor the six months ended June 30, 2015 compared with $158.386 million for the same period in 2014.
The table below provides detail on total loans and deposits including loans acquired and deposits assumed in the acquisition of F&M completed on April 1, 2014:
Balance Sheet Data (at period end) | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | | | | | | | | | | | | | | | | | | | | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | | Jun 30, 2014 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | | (Unaudited) | |
| | | | | | | | | | | | | | | | | | | | | | |
Loans acquired (including new production since acquisition date): | | | | | | | | | | | | | | | | | | | | | |
F&M | | $ | 1,080,439 | | | $ | 1,139,849 | | | $ | 1,224,498 | | | $ | 1,451,075 | | | | $ | 1,502,836 | |
All other loans | | | 8,033,896 | | | | 8,026,156 | | | | 8,019,685 | | | | 7,917,813 | | | | | 7,805,326 | |
Total loans | | $ | 9,114,335 | | | $ | 9,166,005 | | | $ | 9,244,183 | | | $ | 9,368,888 | | | | $ | 9,308,162 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Deposits assumed (including new deposits since acquisition date): | | | | | | | | | | | | | | | | | | | | | |
F&M | | $ | 1,548,817 | | | $ | 1,705,203 | | | $ | 2,063,229 | | | $ | 1,905,233 | | | | $ | 2,090,468 | |
All other deposits | | | 15,452,847 | | | | 15,856,149 | | | | 15,629,929 | | | | 15,108,794 | | | | | 15,190,587 | |
Total deposits | | $ | 17,001,664 | | | $ | 17,561,352 | | | $ | 17,693,158 | | | $ | 17,014,027 | | | | $ | 17,281,055 | |
Loans at June 30, 2015 were $9.114 billion, a decrease of $193.827 millionor 2.1%, compared with $9.308 billion at June 30, 2014. Linked quarter loans decreased $51.670 million or 0.6% from $9.166 billion at March 31, 2015. Excluding loans acquired in the F&M acquisition and new production at the acquired banking centers since the acquisition date, loans at June 30, 2015 increased $228.570 million or 2.9% compared with June 30, 2014 and increased $7.740 million or 0.1% on a linked quarter basis.
Deposits at June 30, 2015 were $17.002 billion, a decrease of $279.391 million or 1.6%, compared with $17.281 billion at June 30, 2014. Linked quarter deposits decreased $559.688 million or 3.2% from $17.561 billion at March 31, 2015. Excluding deposits assumed in the F&M acquisition and new deposits generated at the acquired banking centers since the acquisition date, deposits at June 30, 2015 increased $262.260 million or 1.7% compared with June 30, 2014 and decreased $403.302 million or 2.5% on a linked quarter basis, primarily due to seasonality.
At June 30, 2015, Prosperity had $21.686 billionin total assets, $9.114 billion in loans and $17.002 billionin deposits. At June 30, 2015 assets increased by 2.1%, loans decreased by 2.1% and deposits decreased by 1.6%, compared with their respective levels at June 30, 2014.
Asset Quality
Nonperforming assets totaled $35.119 million or 0.19% of quarterly average earning assets at June 30, 2015, compared with $28.521 million or 0.15% of quarterly average earning assets at June 30, 2014, and $35.376 million or 0.19% of quarterly average earning assets at March 31, 2015. The allowance for credit losses was 0.89% of total loans at June 30, 2015, 0.79% of total loans at June 30, 2014 and 0.88% of total loans at March 31, 2015. Excluding loans acquired that are accounted for under ASC Topics 310-20 and 310-30, the allowance for credit losses was 1.09% of remaining loans as of June 30, 2015, compared with 1.15% at June 30, 2014 and 1.12% at March 31, 2015. Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
The provision for credit losses was $500 thousand for the three months ended June 30, 2015 compared with $6.325 million for the three months ended June 30, 2014 and $1.250 million for the three months ended March 31, 2015. The provision for credit losses was $1.750 millionfor the six months ended June 30, 2015 compared with $6.925 million for the six months ended June 30, 2014.
Net charge offs were $491 thousand for the three months ended June 30, 2015 compared with $155 thousand for the three months ended June 30, 2014 and $1.049 million for the three months ended March 31, 2015. Net charge offs were $1.540 millionfor the six months ended June 30, 2015 compared with $941 thousand for the six months ended June 30, 2014.
Conference Call
Prosperity’s management team will host a conference call on Friday, July 24, 2015 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity’s second quarter 2015 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 8652160.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website atwww.prosperitybankusa.com. The webcast may be accessed directly from Prosperity’s home page by clicking the “Investor Relations” tab and then the “Presentations & Calls” link.
Non-GAAP Financial Measures
Prosperity’s management uses certain non−GAAP 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. Further, as a result of acquisitions, and the related purchase accounting adjustments, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its net income and earnings per share (excluding purchase accounting adjustments) and its allowance for credit losses to total loans (excluding acquired loans accounted for under FASB Accounting Standards Codification (“ASC”) Topics 310-20, “Receivables-Nonrefundable Fees and Other Costs” and 310-30, “Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality”). Prosperity has included in this Earnings Release information related 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.
Dividend
Prosperity Bancshares, Inc. (“Bancshares”) declared a third quarter cash dividend of $0.2725 per share, to be paid on October 1, 2015 to all shareholders of record as of September 18, 2015.
Capital Management
The Basel III Capital Rules adopted by the federal regulatory authorities in 2013 substantially revised the risk-based capital requirements applicable to Bancshares and Prosperity Bank. The Basel III Capital Rules became effective for Prosperity on January 1, 2015, subject to a phase-in period for certain provisions. Among other things, the Basel III Capital Rules introduced a new capital measure called “Common Equity Tier 1,” which is a comparison of the sum of certain equity capital components to total risk-weighted assets, and revised the risk-weighting approach of the capital ratios with a more risk-sensitive approach that expanded the risk-weighting categories from the previous Basel I derived categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets. Prosperity’s capital ratios as of June 30, 2015 reflect the phase-in provisions of the new Basel III Capital Rules.
Acquisition ofF&M Bancorporation Inc.
On April 1, 2014, Prosperity completed the acquisition of F&M Bancorporation Inc. (“FMBC”) and its wholly-owned subsidiary, The F&M Bank & Trust Company (“F&M”) headquartered in Tulsa, Oklahoma. F&M operated 13 banking offices: 9 in Tulsa, Oklahoma and surrounding areas; 3 in Dallas, Texas; and 1 loan production office in Oklahoma City, Oklahoma. As of March 31, 2014, FMBC, on a consolidated basis, reported total assets of $2.412 billion, total loans of $1.738 billion and total deposits of $2.267 billion.
Pursuant to the terms of the acquisition agreement, Prosperity issued 3,298,022 shares of Prosperity common stock plus $34.240 million in cash for all outstanding shares of FMBC capital stock, which resulted in goodwill of $206.010 million as of June 30, 2015. Additionally, Prosperity recognized $27.140 million of core deposit intangibles as of June 30, 2015.
Prosperity Bancshares, Inc. ®
As of June 30, 2015, Prosperity Bancshares Inc. ® is a $21.686 billionHouston, Texas based regional financial holding company, formed in 1983. Operating under a community banking philosophy and seeking 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 atwww.prosperitybankusa.com, Retail Brokerage Services, Credit Cards, MasterMoney Debit Cards, 24 hour voice response banking, Trust and Wealth Management, Mortgage Services and Mobile Banking.
Prosperity currently operates 245 full-service banking locations: 61 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 37 in the Dallas/Fort Worth area; 22 in the East Texas area; 30 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area, 6 in the Central Oklahoma area and 9 in the Tulsa, Oklahoma area.
Bryan/College Station Area - | | Sachse | | | | |
Bryan | | The Colony | | Sugar Land | | Sinton |
Bryan-29th Street | | Turtle Creek | | SW Medical Center | | Taft |
Bryan-East | | Turtle Creek Loan Office | | Tanglewood | | Victoria |
Bryan-North | | Westmoreland | | Uptown | | Victoria-Navarro |
Caldwell | | | | Waugh Drive | | Victoria-North |
College Station | | Fort Worth - | | Westheimer | | Yoakum |
Crescent Point | | Haltom City | | West University | | Yorktown |
Hearne | | Keller | | Woodcreek | | |
Huntsville | | Roanoke | | | | West Texas Area - |
Madisonville | | Stockyards | | Other Houston Area | | Abilene - |
Navasota | | | | Locations - | | Antilley Road |
New Waverly | | Other Dallas/Fort Worth | | Angleton | | Barrow Street |
Rock Prairie | | Locations - | | Bay City | | Cypress Street |
Southwest Parkway | | Arlington | | Beaumont | | Judge Ely |
Tower Point | | Azle | | Cinco Ranch | | Mockingbird |
Wellborn Road | | Ennis | | Cleveland | | |
| | | Gainesville | | East Bernard | | Lubbock - |
Central Texas Area - | | Glen Rose | | El Campo | | 4th Street |
Austin - | | Granbury | | Dayton | | 66th Street |
183 | | Mesquite | | Galveston | | 82nd Street |
Allandale | | Muenster | | Groves | | 86th Street |
Cedar Park | | Sanger | | Hempstead | | 98th Street |
Congress | | Waxahachie | | Hitchcock | | Avenue Q |
Lakeway | | Weatherford | | Katy | | North University |
Liberty Hill | | | | Katy-Spring Green | | Texas Tech Student Union |
Northland | | East Texas Area - | | Liberty | | |
Oak Hill | | Athens | | Magnolia | | Midland - |
Research Blvd | | Blooming Grove | | Magnolia Parkway | | Wadley |
Westlake | | Canton | | Mont Belvieu | | Wall Street |
| | | Carthage | | Nederland | | |
Other Central Texas Locations - | | Corsicana | | Needville | | Odessa - |
Bastrop | | Crockett | | Rosenberg | | Grandview |
Canyon Lake | | Eustace | | Shadow Creek | | Grant |
Dime Box | | Gilmer | | Spring | | Kermit Highway |
Dripping Springs | | Grapeland | | Sweeny | | Parkway |
Elgin | | Gun Barrel City | | The Woodlands-I-45 | | |
Flatonia | | Jacksonville | | The Woodlands-Research Forest | | Other West Texas Locations - |
Georgetown | | Kerens | | Tomball | | Big Spring |
Gruene | | Longview | | Waller | | Brownfield |
Kingsland | | Mount Vernon | | West Columbia | | Brownwood |
La Grange | | Palestine | | Wharton | | Cisco |
Lexington | | Rusk | | Winnie | | Comanche |
New Braunfels | | Seven Points | | Wirt | | Early |
Pleasanton | | Teague | | | | Floydada |
Round Rock | | Tyler-Beckham | | South Texas Area - | | Gorman |
San Antonio | | Tyler-South Broadway | | Corpus Christi - | | Levelland |
Schulenburg | | Tyler-University | | Airline | | Littlefield |
Seguin | | Winnsboro | | Calallen | | Merkel |
Smithville | | | | Carmel | | Plainview |
Thorndale | | Houston Area - | | Northwest | | San Angelo |
Weimar | | Houston - | | Saratoga | | Slaton |
| | | Aldine | | Timbergate | | Snyder |
Dallas/Fort Worth Area - | | Bellaire | | Water Street | | |
Dallas - | | Beltway | | | | Oklahoma |
Abrams Centre | | Clear Lake | | Other South Texas | | Central Oklahoma- |
Balch Springs | | Copperfield | | Locations - | | 23rdStreet |
Camp Wisdom | | Cypress | | Alice | | Edmond |
Cedar Hill | | Downtown | | Aransas Pass | | Expressway |
Dallas – Central Expressway | | Eastex | | Beeville | | I-240 |
Forest Park | | Fairfield | | Colony Creek | | Memorial |
Frisco | | First Colony | | Cuero | | Norman |
Frisco-West | | Gessner | | Edna | | |
Kiest | | Gladebrook | | Goliad | | Tulsa- |
McKinney | | Heights | | Gonzales | | Garnett |
McKinney-Stonebridge | | Highway 6 West | | Hallettsville | | Harvard |
Midway | | Little York | | Kingsville | | Memorial |
Northwest Highway | | Medical Center | | Mathis | | Owasso |
Plano | | Memorial Drive | | Padre Island | | Sheridan |
Preston Forest | | Northside | | Palacios | | S. Harvard |
Preston Road | | Pasadena | | Port Lavaca | | Utica Square |
Red Oak | | Pecan Grove | | Portland | | Utica Tower |
| | | River Oaks | | Rockport | | Yale |
- - -
“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, assumptions, estimates and projections about Prosperity 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, which 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; and weather. These and various other factors are discussed in Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2014 and other reports and statements Prosperity has filed with the SEC. Copies of the SEC filings for Prosperity Bancshares® may be downloaded from the Internet at no chargefromhttp://www.prosperitybankusa.com.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| | | June 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
(at period end) | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,114,335 | | | $ | 9,166,005 | | | $ | 9,244,183 | | | $ | 9,368,888 | | | $ | 9,308,162 | |
Investment securities(A) | | | 9,698,079 | | | | 9,579,496 | | | | 9,045,776 | | | | 8,845,909 | | | | 8,851,235 | |
Federal funds sold | | | 1,451 | | | | 1,639 | | | | 569 | | | | 484 | | | | 3,630 | |
Allowance for credit losses | | | (80,972 | ) | | | (80,963 | ) | | | (80,762 | ) | | | (77,613 | ) | | | (73,266 | ) |
Cash and due from banks | | | 353,047 | | | | 352,642 | | | | 677,285 | | | | 330,952 | | | | 509,853 | |
Goodwill | | | 1,881,955 | | | | 1,881,955 | | | | 1,874,191 | | | | 1,892,255 | | | | 1,894,270 | |
Core deposit intangibles, net | | | 54,068 | | | | 56,458 | | | | 58,947 | | | | 34,474 | | | | 37,072 | |
Other real estate owned | | | 2,806 | | | | 3,010 | | | | 3,237 | | | | 5,504 | | | | 5,093 | |
Fixed assets, net | | | 275,347 | | | | 276,468 | | | | 281,549 | | | | 283,011 | | | | 285,751 | |
Other assets | | | 386,171 | | | | 370,149 | | | | 402,758 | | | | 433,450 | | | | 426,306 | |
Total assets | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | | | $ | 21,117,314 | | | $ | 21,248,106 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,040,628 | | | $ | 5,038,436 | | | $ | 4,936,420 | | | $ | 4,968,867 | | | $ | 4,921,398 | |
Interest-bearing deposits | | | 11,961,036 | | | | 12,522,916 | | | | 12,756,738 | | | | 12,045,160 | | | | 12,359,657 | |
Total deposits | | | 17,001,664 | | | | 17,561,352 | | | | 17,693,158 | | | | 17,014,027 | | | | 17,281,055 | |
Other borrowings | | | 886,741 | | | | 331,914 | | | | 8,724 | | | | 289,972 | | | | 200,210 | |
Securities sold under repurchase agreements | | | 334,189 | | | | 318,418 | | | | 315,523 | | | | 358,053 | | | | 388,342 | |
Junior subordinated debentures | | | - | | | | - | | | | 167,531 | | | | 167,531 | | | | 167,531 | |
Other liabilities | | | 106,408 | | | | 93,314 | | | | 77,971 | | | | 104,781 | | | | 90,374 | |
Total liabilities | | | 18,329,002 | | | | 18,304,998 | | | | 18,262,907 | | | | 17,934,364 | | | | 18,127,512 | |
Shareholders' equity(B) | | | 3,357,285 | | | | 3,301,861 | | | | 3,244,826 | | | | 3,182,950 | | | | 3,120,594 | |
Total liabilities and equity | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | | | $ | 21,117,314 | | | $ | 21,248,106 | |
(A) Includes $4,655, $5,296, $5,737, $5,756 and $6,706 in unrealized gains on available for sale securities for the quarterly periods ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
(B) Includes $3,026, $3,442, $3,729, $3,741 and $4,359 in after-tax unrealized gains on available for sale securities for the quarterly periods ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | Jun 30, 2014 | |
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Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 119,404 | | | $ | 124,878 | | | $ | 139,396 | | | $ | 140,521 | | | $ | 138,655 | | | $ | 244,282 | | | $ | 245,799 | |
Securities(C) | | | 48,530 | | | | 48,562 | | | | 47,108 | | | | 46,910 | | | | 47,670 | | | | 97,092 | | | | 94,726 | |
Federal funds sold and other earning assets | | | 47 | | | | 165 | | | | 74 | | | | 35 | | | | 178 | | | | 212 | | | | 226 | |
Total interest income | | | 167,981 | | | | 173,605 | | | | 186,578 | | | | 187,466 | | | | 186,503 | | | | 341,586 | | | | 340,751 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 9,169 | | | | 9,577 | | | | 7,326 | | | | 10,240 | | | | 10,918 | | | | 18,746 | | | | 20,305 | |
Other borrowings | | | 365 | | | | 129 | | | | 200 | | | | 225 | | | | 189 | | | | 494 | | | | 347 | |
Securities sold under repurchase agreements | | | 208 | | | | 203 | | | | 202 | | | | 245 | | | | 254 | | | | 411 | | | | 491 | |
Junior subordinated debentures | | | - | | | | 791 | | | | 1,099 | | | | 1,099 | | | | 1,087 | | | | 791 | | | | 1,862 | |
Total interest expense | | | 9,742 | | | | 10,700 | | | | 8,827 | | | | 11,809 | | | | 12,448 | | | | 20,442 | | | | 23,005 | |
Net interest income | | | 158,239 | | | | 162,905 | | | | 177,751 | | | | 175,657 | | | | 174,055 | | | | 321,144 | | | | 317,746 | |
Provision for credit losses | | | 500 | | | | 1,250 | | | | 6,350 | | | | 5,000 | | | | 6,325 | | | | 1,750 | | | | 6,925 | |
Net interest income after provision for credit losses | | | 157,739 | | | | 161,655 | | | | 171,401 | | | | 170,657 | | | | 167,730 | | | | 319,394 | | | | 310,821 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonsufficient funds (NSF) fees | | | 8,310 | | | | 7,918 | | | | 9,345 | | | | 9,734 | | | | 9,099 | | | | 16,228 | | | | 17,969 | |
Credit card, debit card and ATM card income | | | 6,003 | | | | 5,638 | | | | 5,786 | | | | 5,921 | | | | 6,030 | | | | 11,641 | | | | 11,182 | |
Service charges on deposit accounts | | | 4,189 | | | | 4,179 | | | | 4,263 | | | | 4,255 | | | | 4,325 | | | | 8,368 | | | | 7,934 | |
Trust income | | | 2,047 | | | | 2,009 | | | | 2,165 | | | | 2,099 | | | | 2,044 | | | | 4,056 | | | | 3,844 | |
Mortgage income | | | 1,513 | | | | 1,148 | | | | 1,049 | | | | 1,414 | | | | 1,208 | | | | 2,661 | | | | 1,801 | |
Brokerage income | | | 1,541 | | | | 1,409 | | | | 1,455 | | | | 1,743 | | | | 1,401 | | | | 2,950 | | | | 2,670 | |
Bank owned life insurance income | | | 1,390 | | | | 1,380 | | | | 1,392 | | | | 1,404 | | | | 1,365 | | | | 2,770 | | | | 2,393 | |
Net gain on sale of assets | | | 270 | | | | 1,379 | | | | 24 | | | | 23 | | | | 1,301 | | | | 1,649 | | | | 4,611 | |
Other noninterest income | | | 5,034 | | | | 3,361 | | | | 3,901 | | | | 3,598 | | | | 5,824 | | | | 8,395 | | | | 8,857 | |
Total noninterest income | | | 30,297 | | | | 28,421 | | | | 29,380 | | | | 30,191 | | | | 32,597 | | | | 58,718 | | | | 61,261 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits | | | 47,819 | | | | 49,966 | | | | 49,557 | | | | 52,179 | | | | 54,126 | | | | 97,785 | | | | 97,534 | |
Net occupancy and equipment | | | 5,812 | | | | 5,964 | | | | 6,620 | | | | 6,801 | | | | 5,996 | | | | 11,776 | | | | 11,335 | |
Debit card, data processing and software amortization | | | 4,045 | | | | 3,817 | | | | 4,553 | | | | 4,044 | | | | 4,009 | | | | 7,862 | | | | 7,193 | |
Regulatory assessments and FDIC insurance | | | 4,253 | | | | 4,354 | | | | 4,354 | | | | 4,051 | | | | 3,886 | | | | 8,607 | | | | 6,612 | |
Core deposit intangibles amortization | | | 2,390 | | | | 2,489 | | | | 2,667 | | | | 2,598 | | | | 2,630 | | | | 4,879 | | | | 4,675 | |
Depreciation | | | 3,420 | | | | 2,916 | | | | 3,491 | | | | 3,516 | | | | 3,522 | | | | 6,336 | | | | 6,723 | |
Communications | | | 2,835 | | | | 2,809 | | | | 2,993 | | | | 2,960 | | | | 2,919 | | | | 5,644 | | | | 5,656 | |
Other real estate expense | | | 129 | | | | 132 | | | | 363 | | | | 72 | | | | 188 | | | | 261 | | | | 584 | |
Net (gain) loss on sale of other real estate | | | (32 | ) | | | 14 | | | | (726 | ) | | | 30 | | | | (1,404 | ) | | | (18 | ) | | | (1,344 | ) |
Other noninterest expense | | | 9,064 | | | | 7,001 | | | | 10,164 | | | | 9,289 | | | | 11,420 | | | | 16,065 | | | | 19,418 | |
Total noninterest expense | | | 79,735 | | | | 79,462 | | | | 84,036 | | | | 85,540 | | | | 87,292 | | | | 159,197 | | | | 158,386 | |
Income before income taxes | | | 108,301 | | | | 110,614 | | | | 116,745 | | | | 115,308 | | | | 113,035 | | | | 218,915 | | | | 213,696 | |
Provision for income taxes | | | 36,369 | | | | 36,973 | | | | 38,517 | | | | 38,738 | | | | 37,529 | | | | 73,342 | | | | 71,053 | |
Net income available to common shareholders | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 76,570 | | | $ | 75,506 | | | $ | 145,573 | | | $ | 142,643 | |
(C) Interest income on securities was reduced by net premium amortization of $15,466, $14,144, $13,031, $13,531 and $12,837 for the three month periods ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively, and $29,610 and $25,117 for the six month periods ended June 30, 2015 and June 30, 2014, respectively.
Prosperity Bancshares, Inc. ®
Financial Highlights (Unaudited)
(Dollars and share amounts in thousands, except per share data and market prices)
| | �� | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2015 | | | | Mar 31, 2015 | | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | | Jun 30, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Profitability | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 71,932 | | | | $ | 73,641 | | | | $ | 78,228 | | | $ | 76,570 | | | $ | 75,506 | | | $ | 145,573 | | | | $ | 142,643 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 1.03 | | | | $ | 1.05 | | | | $ | 1.12 | | | $ | 1.10 | | | $ | 1.08 | | | $ | 2.08 | | | | $ | 2.10 | |
Diluted earnings per share | | $ | 1.03 | | | | $ | 1.05 | | | | $ | 1.12 | | | $ | 1.10 | | | $ | 1.08 | | | $ | 2.08 | | | | $ | 2.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (D) | | | 1.33 | % | | | | 1.37 | % | | | | 1.48 | % | | | 1.45 | % | | | 1.42 | % | | | 1.35 | % | | | | 1.43 | % |
Return on average common equity (D) | | | 8.61 | % | | | | 8.98 | % | | | | 9.70 | % | | | 9.69 | % | | | 9.75 | % | | | 8.80 | % | | | | 9.72 | % |
Return on average tangible common equity (D) (E) | | | 20.49 | % | | | | 21.84 | % | | | | 23.87 | % | | | 24.84 | % | | | 24.06 | % | | | 21.16 | % | | | | 24.12 | % |
Tax equivalent net interest margin (F) | | | 3.39 | % | | | | 3.57 | % | | | | 3.89 | % | | | 3.85 | % | | | 3.83 | % | | | 3.48 | % | | | | 3.73 | % |
Efficiency ratio(G) | | | 42.35 | % | | | | 41.83 | % | | | | 40.78 | % | | | 41.55 | % | | | 42.90 | % | | | 42.09 | % | | | | 42.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liquidity and Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity to assets | | | 15.48 | % | | | | 15.28 | % | | | | 15.09 | % | | | 15.07 | % | | | 14.69 | % | | | 15.48 | % | | | | 14.69 | % |
Common equity tier 1 capital(H) | | | 12.91 | % | | | | 12.40 | % | | | N/A | | | N/A | | | N/A | | | | 12.91 | % | | | N/A | |
Tier 1 risk-based capital | | | 12.91 | % | (I) | | | 12.40 | % | (I) | | | 13.80 | % | | | 13.18 | % | | | 12.50 | % | | | 12.91 | % | (I) | | | 12.50 | % |
Total risk-based capital | | | 13.63 | % | (I) | | | 13.14 | % | (I) | | | 14.56 | % | | | 13.90 | % | | | 13.18 | % | | | 13.63 | % | (I) | | | 13.18 | % |
Tier 1 leverage capital | | | 7.35 | % | (I) | | | 6.96 | % | (I) | | | 7.69 | % | | | 7.40 | % | | | 6.98 | % | | | 7.35 | % | (I) | | | 6.98 | % |
Period end tangible equity to period end tangible assets(E) | | | 7.20 | % | | | | 6.93 | % | | | | 6.70 | % | | | 6.55 | % | | | 6.16 | % | | | 7.20 | % | | | | 6.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares used in computed earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 70,037 | | | | | 70,034 | | | | | 69,768 | | | | 69,751 | | | | 69,667 | | | | 70,035 | | | | | 67,936 | |
Diluted | | | 70,053 | | | | | 70,055 | | | | | 69,796 | | | | 69,791 | | | | 69,728 | | | | 70,054 | | | | | 68,014 | |
Period end shares outstanding | | | 70,040 | | | | | 70,024 | | | | | 69,780 | | | | 69,756 | | | | 69,744 | | | | 70,040 | | | | | 69,744 | |
Cash dividends paid per common share | | $ | 0.2725 | | | | $ | 0.2725 | | | | $ | 0.2725 | | | $ | 0.2400 | | | $ | 0.2400 | | | $ | 0.5450 | | | | $ | 0.4800 | |
Book value per share | | $ | 47.93 | | | | $ | 47.15 | | | | $ | 46.50 | | | $ | 45.63 | | | $ | 44.74 | | | $ | 47.93 | | | | $ | 44.74 | |
Tangible book value per share(E) | | $ | 20.29 | | | | $ | 19.47 | | | | $ | 18.80 | | | $ | 18.01 | | | $ | 17.05 | | | $ | 20.29 | | | | $ | 17.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock Market Price | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
High | | $ | 59.30 | | | | $ | 55.88 | | | | $ | 61.15 | | | $ | 63.73 | | | $ | 67.49 | | | $ | 59.30 | | | | $ | 67.68 | |
Low | | | 50.91 | | | | | 45.01 | | | | | 52.62 | | | | 55.99 | | | | 56.04 | | | | 45.01 | | | | | 56.04 | |
Period end closing price | | | 57.74 | | | | | 52.48 | | | | | 55.36 | | | | 57.17 | | | | 62.60 | | | | 57.74 | | | | | 62.60 | |
Employees – FTE | | | 3,065 | | | | | 3,081 | | | | | 3,096 | | | | 3,057 | | | | 3,199 | | | | 3,065 | | | | | 3,199 | |
Number of banking centers | | | 245 | | | | | 244 | | | | | 245 | | | | 245 | | | | 247 | | | | 245 | | | | | 247 | |
(D) Interim periods annualized.
(E) Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
(F) Net interest margin for all periods presented is calculated on an actual 365 day basis.
(G) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale of assets. Additionally, taxes are not part of this calculation.
(H) Common equity tier 1 capital ratio is a new ratio required under the Basel III Capital Rules effective January 1, 2015.
(I) Calculated pursuant to the phase-in provisions of the Basel III Capital Rules.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS | | Three Months Ended | | |
| | | Jun 30, 2015 | | | | Mar 31, 2015 | | | | Jun 30, 2014 | | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,133,625 | | | $ | 119,404 | | | | 5.24 | % | | | $ | 9,189,380 | | | $ | 124,878 | | | | 5.51 | % | | | $ | 9,468,136 | | | $ | 138,655 | | | | 5.87 | % | |
Investment securities | | | 9,688,961 | | | | 48,530 | | | | 2.01 | % | (J) | | | 9,241,434 | | | | 48,562 | | | | 2.13 | % | (J) | | | 8,748,322 | | | | 47,670 | | | | 2.19 | % | (J) |
Federal funds sold and otherearning assets | | | 79,659 | | | | 47 | | | | 0.24 | % | | | | 267,672 | | | | 165 | | | | 0.25 | % | | | | 234,302 | | | | 178 | | | | 0.30 | % | |
Total interest-earning assets | | | 18,902,245 | | | $ | 167,981 | | | | 3.56 | % | | | | 18,698,486 | | | $ | 173,605 | | | | 3.77 | % | | | | 18,450,760 | | | $ | 186,503 | | | | 4.05 | % | |
Allowance for credit losses | | | (80,868 | ) | | | | | | | | | | | | (80,681 | ) | | | | | | | | | | | | (72,587 | ) | | | | | | | | | |
Noninterest-earning assets | | | 2,817,644 | | | | | | | | | | | | | 2,871,702 | | | | | | | | | | | | | 2,939,375 | | | | | | | | | | |
Total assets | | $ | 21,639,021 | | | | | | | | | | | | $ | 21,489,507 | | | | | | | | | | | | $ | 21,317,548 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 3,891,682 | | | $ | 2,227 | | | | 0.23 | % | | | $ | 4,178,883 | | | $ | 2,583 | | | | 0.25 | % | | | $ | 3,568,475 | | | $ | 2,272 | | | | 0.26 | % | |
Savings and money market deposits | | | 5,476,931 | | | | 3,374 | | | | 0.25 | % | | | | 5,542,081 | | | | 3,405 | | | | 0.25 | % | | | | 5,479,978 | | | | 3,550 | | | | 0.26 | % | |
Certificates and other time deposits | | | 2,821,058 | | | | 3,568 | | | | 0.51 | % | | | | 2,956,038 | | | | 3,589 | | | | 0.49 | % | | | | 3,379,819 | | | | 5,096 | | | | 0.60 | % | |
Other borrowings | | | 684,371 | | | | 365 | | | | 0.21 | % | | | | 72,118 | | | | 129 | | | | 0.73 | % | | | | 140,906 | | | | 189 | | | | 0.54 | % | |
Securities sold under repurchase agreements | | | 333,220 | | | | 208 | | | | 0.25 | % | | | | 340,469 | | | | 203 | | | | 0.24 | % | | | | 382,692 | | | | 254 | | | | 0.27 | % | |
Junior subordinated debentures | | | - | | | | - | | | | — | | | | | 119,408 | | | | 791 | | | | 2.69 | % | | | | 167,531 | | | | 1,087 | | | | 2.60 | % | |
Total interest-bearing liabilities | | | 13,207,262 | | | | 9,742 | | | | 0.30 | % | (K) | | | 13,208,997 | | | | 10,700 | | | | 0.33 | % | (K) | | | 13,119,401 | | | | 12,448 | | | | 0.38 | % | (K) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 4,992,301 | | | | | | | | | | | | | 4,899,279 | | | | | | | | | | | | | 4,735,575 | | | | | | | | | | |
Other liabilities | | | 98,133 | | | | | | | | | | | | | 100,648 | | | | | | | | | | | | | 365,169 | | | | | | | | | | |
Total liabilities | | | 18,297,696 | | | | | | | | | | | | | 18,208,924 | | | | | | | | | | | | | 18,220,145 | | | | | | | | | | |
Shareholders' equity | | | 3,341,325 | | | | | | | | | | | | | 3,280,583 | | | | | | | | | | | | | 3,097,403 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 21,639,021 | | | | | | | | | | | | $ | 21,489,507 | | | | | | | | | | | | $ | 21,317,548 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 158,239 | | | | 3.36 | % | | | | | | | $ | 162,905 | | | | 3.53 | % | | | | | | | $ | 174,055 | | | | 3.78 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 1,563 | | | | | | | | | | | | | 1,664 | | | | | | | | | | | | | 2,083 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin(tax equivalent basis) | | | | | | $ | 159,802 | | | | 3.39 | % | | | | | | | $ | 164,569 | | | | 3.57 | % | | | | | | | $ | 176,138 | | | | 3.83 | % | |
(J) Yield on securities was impacted by net premium amortization of $15,466, $14,144 and $12,837 for the three month periods ended June 30, 2015, March 31, 2015 and June 30, 2014, respectively.
(K) Total cost of funds, including noninterest bearing deposits, was 0.21%, 0.24%and 0.28% for the three months ended June 30, 2015, March 31, 2015 and June 30, 2014, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS | | Year-to-Date | |
| | | 2015 | | | 2014 | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,161,349 | | | $ | 244,282 | | | | 5.38 | % | | $ | 8,616,796 | | | $ | 245,799 | | | | 5.75 | % |
Investment securities | | | 9,466,434 | | | | 97,092 | | | | 2.07 | % (L) | | | 8,608,411 | | | | 94,726 | | | | 2.22 | % (L) |
Federal funds sold and otherearning assets | | | 173,147 | | | | 212 | | | | 0.25 | % | | | 168,368 | | | | 226 | | | | 0.27 | % |
Total interest-earning assets | | | 18,800,930 | | | $ | 341,586 | | | | 3.66 | % | | | 17,393,575 | | | $ | 340,751 | | | | 3.95 | % |
Allowance for credit losses | | | (80,775 | ) | | | | | | | | | | | (69,919 | ) | | | | | | | | |
Noninterest-earning assets | | | 2,843,739 | | | | | | | | | | | | 2,746,112 | | | | | | | | | |
Total assets | | $ | 21,563,894 | | | | | | | | | | | $ | 20,069,768 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 4,034,489 | | | $ | 4,810 | | | | 0.24 | % | | $ | 3,561,460 | | | $ | 4,404 | | | | 0.25 | % |
Savings and money market deposits | | | 5,509,326 | | | | 6,779 | | | | 0.25 | % | | | 5,237,557 | | | | 6,705 | | | | 0.26 | % |
Certificates and other time deposits | | | 2,888,176 | | | | 7,157 | | | | 0.50 | % | | | 3,099,815 | | | | 9,196 | | | | 0.60 | % |
Other borrowings | | | 379,936 | | | | 494 | | | | 0.26 | % | | | 96,666 | | | | 347 | | | | 0.72 | % |
Securities sold under repurchase agreements | | | 336,824 | | | | 411 | | | | 0.25 | % | | | 365,316 | | | | 491 | | | | 0.27 | % |
Junior subordinated debentures | | | 59,374 | | | | 791 | | | | 2.69 | % | | | 145,881 | | | | 1,862 | | | | 2.57 | % |
Total interest-bearing liabilities | | | 13,208,125 | | | | 20,442 | | | | 0.31 | % (M) | | | 12,506,695 | | | | 23,005 | | | | 0.37 | % (M) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 4,946,138 | | | | | | | | | | | | 4,378,471 | | | | | | | | | |
Other liabilities | | | 99,375 | | | | | | | | | | | | 224,497 | | | | | | | | | |
Total liabilities | | | 18,253,638 | | | | | | | | | | | | 17,109,663 | | | | | | | | | |
Shareholders' equity | | | 3,310,256 | | | | | | | | | | | | 2,960,105 | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 21,563,894 | | | | | | | | | | | $ | 20,069,768 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 321,144 | | | | 3.44 | % | | | | | | $ | 317,746 | | | | 3.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 3,227 | | | | | | | | | | | | 4,135 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin(tax equivalent basis) | | | | | | $ | 324,371 | | | | 3.48 | % | | | | | | $ | 321,881 | | | | 3.73 | % |
(L) Yield on securities was impacted by net premium amortization of $29,610 and $25,117 for the six month periods ended June 30, 2015 and 2014, respectively.
(M) Total cost of funds, including noninterest bearing deposits, was 0.23% and 0.27% for the six month periods ended June 30, 2015 and 2014, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year -to-Date | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | Jun 30, 2014 | |
Adjustment to Loan Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on loans, as reported | | $ | 119,404 | | | $ | 124,878 | | | $ | 139,396 | | | $ | 140,521 | | | $ | 138,655 | | | $ | 244,282 | | | $ | 245,799 | |
Purchase accounting adjustment-loan discount accretion | | | (13,602 | ) | | | (19,647 | ) | | | (28,590 | ) | | | (28,458 | ) | | | (25,352 | ) | | | (33,249 | ) | | | (38,827 | ) |
Interest on loans without discount accretion | | $ | 105,802 | | | $ | 105,231 | | | $ | 110,806 | | | $ | 112,063 | | | $ | 113,303 | | | $ | 211,033 | | | $ | 206,972 | |
Average loans | | $ | 9,133,625 | | | $ | 9,189,380 | | | $ | 9,325,330 | | | $ | 9,381,248 | | | $ | 9,468,136 | | | $ | 9,161,349 | | | $ | 8,616,796 | |
Loan yield without purchase accounting adjustment | | | 4.65 | % | | | 4.64 | % | | | 4.71 | % | | | 4.74 | % | | | 4.80 | % | | | 4.65 | % | | | 4.84 | % |
Loan yield, as reported | | | 5.24 | % | | | 5.51 | % | | | 5.93 | % | | | 5.94 | % | | | 5.87 | % | | | 5.38 | % | | | 5.75 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Securities Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on securities, as reported | | $ | 48,530 | | | $ | 48,562 | | | $ | 47,108 | | | $ | 46,910 | | | $ | 47,670 | | | $ | 97,092 | | | $ | 94,726 | |
Purchase accounting adjustment-securities amortization | | | 1,579 | | | | 1,647 | | | | 1,590 | | | | 1,466 | | | | 1,570 | | | | 3,226 | | | | 3,534 | |
Interest on securities without amortization | | $ | 50,109 | | | $ | 50,209 | | | $ | 48,698 | | | $ | 48,376 | | | $ | 49,240 | | | $ | 100,318 | | | $ | 98,260 | |
Average securities | | $ | 9,688,961 | | | $ | 9,241,434 | | | $ | 8,835,176 | | | $ | 8,836,309 | | | $ | 8,748,322 | | | $ | 9,466,434 | | | $ | 8,608,411 | |
Securities yield without purchase accounting adjustment | | | 2.07 | % | | | 2.20 | % | | | 2.19 | % | | | 2.17 | % | | | 2.26 | % | | | 2.14 | % | | | 2.30 | % |
Securities yield, as reported | | | 2.01 | % | | | 2.13 | % | | | 2.12 | % | | | 2.11 | % | | | 2.19 | % | | | 2.07 | % | | | 2.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Time Deposits Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on time deposits, as reported | | $ | 3,568 | | | $ | 3,589 | | | $ | 1,957 | | | $ | 4,751 | | | $ | 5,096 | | | $ | 7,157 | | | $ | 9,196 | |
Purchase accounting adjustment-time deposit amortization | | | 220 | | | | 420 | | | | 2,443 | | | | 16 | | | | 16 | | | | 640 | | | | 97 | |
Interest on time deposits without amortization | | $ | 3,788 | | | $ | 4,009 | | | $ | 4,400 | | | $ | 4,767 | | | $ | 5,112 | | | $ | 7,797 | | | $ | 9,293 | |
Average time deposits | | $ | 2,821,058 | | | $ | 2,956,038 | | | $ | 3,083,047 | | | $ | 3,235,185 | | | $ | 3,379,819 | | | $ | 2,888,176 | | | $ | 3,099,815 | |
Time deposits yield without purchase accounting adjustment | | | 0.54 | % | | | 0.55 | % | | | 0.57 | % | | | 0.58 | % | | | 0.61 | % | | | 0.54 | % | | | 0.60 | % |
Time deposits yield, as reported | | | 0.51 | % | | | 0.49 | % | | | 0.25 | % | | | 0.58 | % | | | 0.60 | % | | | 0.50 | % | | | 0.60 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis, excludingpurchase accounting adjustments to yield) | | | 3.13 | % | | | 3.17 | % | | | 3.25 | % | | | 3.26 | % | | | 3.31 | % | | | 3.15 | % | | | 3.32 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis), as reported | | | 3.39 | % | | | 3.57 | % | | | 3.89 | % | | | 3.85 | % | | | 3.83 | % | | | 3.48 | % | | | 3.73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders,as reported | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 76,570 | | | $ | 75,506 | | | $ | 145,573 | | | $ | 142,643 | |
Less: Purchase accounting adjustments, net of tax(O) | | | (8,132 | ) | | | (12,263 | ) | | | (19,729 | ) | | | (17,935 | ) | | | (15,897 | ) | | | (20,390 | ) | | | (23,623 | ) |
Net income available to common shareholders, adjusted | | $ | 63,800 | | | $ | 61,378 | | | $ | 58,499 | | | $ | 58,635 | | | $ | 59,609 | | | $ | 125,183 | | | $ | 119,020 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share, adjusted(N) | | $ | 0.91 | | | $ | 0.88 | | | $ | 0.84 | | | $ | 0.84 | | | $ | 0.86 | | | $ | 1.79 | | | $ | 1.75 | |
Diluted earnings per share, adjusted(N) | | $ | 0.91 | | | $ | 0.88 | | | $ | 0.84 | | | $ | 0.84 | | | $ | 0.85 | | | $ | 1.79 | | | $ | 1.75 | |
| | | Acquired Loans Accounted for Under ASC 310-20 | | | Acquired Loans Accounted for Under ASC 310-30 | | | Total Loans Accounted for Under ASC 310-20 and 310-30 | |
| | | Balance at Acquisition Date | | | Balance at Mar 31, 2015 | | | Balance at Jun 30, 2015 | | | Balance at Acquisition Date | | | Balance at Mar 31, 2015 | | | Balance at Jun 30, 2015 | | | Balance at Acquisition Date | | | | Balance at Mar 31, 2015 | | | Balance at Jun 30, 2015 | |
Loan marks: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired banks(P) | | $ | 225,589 | | | $ | 78,289 | | | $ | 67,895 | | | $ | 131,906 | | | $ | 51,647 | | | $ | 48,277 | | | $ | 357,495 | | | | $ | 129,936 | | | $ | 116,172 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired banks(P) | | | 5,456,934 | | | | 1,939,609 | | | | 1,727,123 | | | | 255,846 | | | | 100,973 | | | | 94,601 | | | | 5,712,780 | | (Q) | | | 2,040,582 | | | | 1,821,724 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances less loan marks | | $ | 5,231,345 | | | $ | 1,861,320 | | | $ | 1,659,228 | | | $ | 123,940 | | | $ | 49,326 | | | $ | 46,324 | | | $ | 5,355,285 | | | | $ | 1,910,646 | | | $ | 1,705,552 | |
(N) Non-GAAP financial measure.
(O) Using effective tax rate of 33.6%, 33.4%, 33.0%, 33.6% and 33.2% for the three month periods ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively, and 33.5% and 33.2% for the six month periods ended June 30, 2015 and 2014, respectively.
(P) Includes Bank of Texas, Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank and F&M Bank.
(Q) Actual principal balances acquired.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | |
YIELD TREND | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | | 5.24 | % | | | 5.51 | % | | | 5.93 | % | | | 5.94 | % | | | 5.87 | % |
Investment securities(R) | | | 2.01 | % | | | 2.13 | % | | | 2.12 | % | | | 2.11 | % | | | 2.19 | % |
Federal funds sold and other earning assets | | | 0.24 | % | | | 0.25 | % | | | 0.20 | % | | | 0.15 | % | | | 0.30 | % |
Total interest-earning assets | | | 3.56 | % | | | 3.77 | % | | | 4.04 | % | | | 4.06 | % | | | 4.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 0.23 | % | | | 0.25 | % | | | 0.23 | % | | | 0.24 | % | | | 0.26 | % |
Savings and money market deposits | | | 0.25 | % | | | 0.25 | % | | | 0.24 | % | | | 0.25 | % | | | 0.26 | % |
Certificates and other time deposits | | | 0.51 | % | | | 0.49 | % | | | 0.25 | % | | | 0.58 | % | | | 0.60 | % |
Other borrowings | | | 0.21 | % | | | 0.73 | % | | | 0.47 | % | | | 0.42 | % | | | 0.54 | % |
Securities sold under repurchase agreements | | | 0.25 | % | | | 0.24 | % | | | 0.25 | % | | | 0.25 | % | | | 0.27 | % |
Junior subordinated debentures | | | — | | | | 2.69 | % | | | 2.60 | % | | | 2.60 | % | | | 2.60 | % |
Total interest-bearing liabilities | | | 0.30 | % | | | 0.33 | % | | | 0.28 | % | | | 0.36 | % | | | 0.38 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.36 | % | | | 3.53 | % | | | 3.85 | % | | | 3.81 | % | | | 3.78 | % |
Net Interest Margin (tax equivalent) | | | 3.39 | % | | | 3.57 | % | | | 3.89 | % | | | 3.85 | % | | | 3.83 | % |
(R) Yield on securities was impacted by net premium amortization of $15,466, $14,144, $13,031, $13,531 and $12,837 for the three month periods ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Jun 30, 2015 | | | March 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | |
Balance Sheet Averages | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,133,625 | | | $ | 9,189,380 | | | $ | 9,325,330 | | | $ | 9,381,248 | | | $ | 9,468,136 | |
Investment securities | | | 9,688,961 | | | | 9,241,434 | | | | 8,835,176 | | | | 8,836,309 | | | | 8,748,322 | |
Federal funds sold andother earning assets | | | 79,659 | | | | 267,672 | | | | 143,705 | | | | 95,378 | | | | 234,302 | |
Total interest-earning assets | | | 18,902,245 | | | | 18,698,486 | | | | 18,304,211 | | | | 18,312,935 | | | | 18,450,760 | |
Allowance for credit losses | | | (80,868 | ) | | | (80,681 | ) | | | (76,948 | ) | | | (73,977 | ) | | | (72,587 | ) |
Cash and due from banks | | | 241,110 | | | | 284,395 | | | | 273,503 | | | | 267,389 | | | | 284,432 | |
Goodwill | | | 1,881,955 | | | | 1,874,274 | | | | 1,883,654 | | | | 1,893,667 | | | | 1,803,534 | |
Core deposit intangibles, net | | | 55,245 | | | | 57,687 | | | | 43,157 | | | | 35,753 | | | | 38,469 | |
Other real estate | | | 2,972 | | | | 3,536 | | | | 4,843 | | | | 5,405 | | | | 8,562 | |
Fixed assets, net | | | 276,761 | | | | 280,515 | | | | 282,827 | | | | 285,039 | | | | 292,075 | |
Other assets | | | 359,601 | | | | 371,295 | | | | 395,045 | | | | 394,509 | | | | 512,303 | |
Total assets | | $ | 21,639,021 | | | $ | 21,489,507 | | | $ | 21,110,292 | | | $ | 21,120,720 | | | $ | 21,317,548 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 4,992,301 | | | $ | 4,899,279 | | | $ | 5,045,097 | | | $ | 4,939,388 | | | $ | 4,735,575 | |
Interest-bearing demand deposits | | | 3,891,682 | | | | 4,178,883 | | | | 3,546,825 | | | | 3,399,655 | | | | 3,568,475 | |
Savings and money market deposits | | | 5,476,931 | | | | 5,542,081 | | | | 5,442,568 | | | | 5,502,326 | | | | 5,479,978 | |
Certificates and other time deposits | | | 2,821,058 | | | | 2,956,038 | | | | 3,083,047 | | | | 3,235,185 | | | | 3,379,819 | |
Total deposits | | | 17,181,972 | | | | 17,576,281 | | | | 17,117,537 | | | | 17,076,554 | | | | 17,163,847 | |
Other borrowings | | | 684,371 | | | | 72,118 | | | | 168,167 | | | | 215,222 | | | | 140,906 | |
Securities sold under repurchase agreements | | | 333,220 | | | | 340,469 | | | | 323,882 | | | | 389,726 | | | | 382,692 | |
Junior subordinated debentures | | | - | | | | 119,408 | | | | 167,531 | | | | 167,531 | | | | 167,531 | |
Other liabilities | | | 98,133 | | | | 100,648 | | | | 106,222 | | | | 109,287 | | | | 365,169 | |
Shareholders' equity | | | 3,341,325 | | | | 3,280,583 | | | | 3,226,953 | | | | 3,162,400 | | | | 3,097,403 | |
Total liabilities and equity | | $ | 21,639,021 | | | $ | 21,489,507 | | | $ | 21,110,292 | | | $ | 21,120,720 | | | $ | 21,317,548 | |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | |
Period End Balances | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and other | | $ | 1,774,652 | | | | 19.5 | % | | $ | 1,851,906 | | | | 20.2 | % | | $ | 1,952,945 | | | | 21.1 | % | | $ | 2,058,217 | | | | 22.0 | % | | $ | 2,139,983 | | | | 23.0 | % |
Construction | | | 1,068,056 | | | | 11.7 | % | | | 1,040,845 | | | | 11.3 | % | | | 1,026,475 | | | | 11.1 | % | | | 1,041,300 | | | | 11.1 | % | | | 1,005,099 | | | | 10.8 | % |
1-4 family residential | | | 2,289,114 | | | | 25.1 | % | | | 2,272,788 | | | | 24.8 | % | | | 2,250,251 | | | | 24.4 | % | | | 2,210,141 | | | | 23.6 | % | | | 2,153,801 | | | | 23.1 | % |
Home equity | | | 273,538 | | | | 3.0 | % | | | 269,894 | | | | 2.9 | % | | | 271,930 | | | | 2.9 | % | | | 269,850 | | | | 2.9 | % | | | 267,759 | | | | 2.9 | % |
Commercial real estate | | | 2,958,239 | | | | 32.5 | % | | | 3,021,656 | | | | 33.0 | % | | | 3,030,340 | | | | 32.8 | % | | | 3,091,090 | | | | 33.0 | % | | | 3,027,945 | | | | 32.6 | % |
Agriculture (includes farmland) | | | 600,745 | | | | 6.6 | % | | | 556,839 | | | | 6.1 | % | | | 551,646 | | | | 6.0 | % | | | 534,672 | | | | 5.7 | % | | | 542,360 | | | | 5.8 | % |
Consumer | | | 149,991 | | | | 1.6 | % | | | 152,077 | | | | 1.7 | % | | | 160,596 | | | | 1.7 | % | | | 163,618 | | | | 1.7 | % | | | 171,215 | | | | 1.8 | % |
Total loans | | $ | 9,114,335 | | | | | | | $ | 9,166,005 | | | | | | | $ | 9,244,183 | | | | | | | $ | 9,368,888 | | | | | | | $ | 9,308,162 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing DDA | | $ | 5,040,628 | | | | 29.7 | % | | $ | 5,038,436 | | | | 28.7 | % | | $ | 4,936,420 | | | | 27.9 | % | | $ | 4,968,867 | | | | 29.2 | % | | $ | 4,921,398 | | | | 28.5 | % |
Interest-bearing DDA | | | 3,746,939 | | | | 22.0 | % | | | 4,038,690 | | | | 23.0 | % | | | 4,260,038 | | | | 24.1 | % | | | 3,359,606 | | | | 19.7 | % | | | 3,467,826 | | | | 20.1 | % |
Money market | | | 3,607,000 | | | | 21.2 | % | | | 3,773,011 | | | | 21.5 | % | | | 3,680,711 | | | | 20.8 | % | | | 3,788,358 | | | | 22.3 | % | | | 3,861,339 | | | | 22.3 | % |
Savings | | | 1,853,322 | | | | 10.9 | % | | | 1,828,790 | | | | 10.4 | % | | | 1,784,889 | | | | 10.1 | % | | | 1,728,676 | | | | 10.2 | % | | | 1,707,645 | | | | 9.9 | % |
Certificates and other time deposits | | | 2,753,775 | | | | 16.2 | % | | | 2,882,425 | | | | 16.4 | % | | | 3,031,100 | | | | 17.1 | % | | | 3,168,520 | | | | 18.6 | % | | | 3,322,847 | | | | 19.2 | % |
Total deposits | | $ | 17,001,664 | | | | | | | $ | 17,561,352 | | | | | | | $ | 17,693,158 | | | | | | | $ | 17,014,027 | | | | | | | $ | 17,281,055 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio | | | 53.6 | % | | | | | | | 52.2 | % | | | | | | | 52.2 | % | | | | | | | 55.1 | % | | | | | | | 53.9 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Single family residentialconstruction | | $ | 354,211 | | | | 33.0 | % | | $ | 356,081 | | | | 34.1 | % | | $ | 329,797 | | | | 32.0 | % | | $ | 317,307 | | | | 30.3 | % | | $ | 316,579 | | | | 31.2 | % |
Land development | | | 84,864 | | | | 7.9 | % | | | 89,403 | | | | 8.5 | % | | | 84,051 | | | | 8.2 | % | | | 89,553 | | | | 8.5 | % | | | 88,947 | | | | 8.8 | % |
Raw land | | | 145,885 | | | | 13.6 | % | | | 129,470 | | | | 12.4 | % | | | 106,058 | | | | 10.3 | % | | | 83,013 | | | | 7.9 | % | | | 62,731 | | | | 6.2 | % |
Residential lots | | | 127,671 | | | | 11.9 | % | | | 128,064 | | | | 12.2 | % | | | 148,763 | | | | 14.4 | % | | | 154,027 | | | | 14.7 | % | | | 138,769 | | | | 13.7 | % |
Commercial lots | | | 87,719 | | | | 8.2 | % | | | 92,677 | | | | 8.9 | % | | | 89,565 | | | | 8.7 | % | | | 86,991 | | | | 8.3 | % | | | 93,200 | | | | 9.2 | % |
Commercial construction and other | | | 271,833 | | | | 25.4 | % | | | 249,504 | | | | 23.9 | % | | | 272,723 | | | | 26.4 | % | | | 317,355 | | | | 30.3 | % | | | 312,870 | | | | 30.9 | % |
Net unaccreted discount | | | (4,127 | ) | | | | | | | (4,354 | ) | | | | | | | (4,482 | ) | | | | | | | (6,946 | ) | | | | | | | (7,997 | ) | | | | |
Total construction loans | | $ | 1,068,056 | | | | | | | $ | 1,040,845 | | | | | | | $ | 1,026,475 | | | | | | | $ | 1,041,300 | | | | | | | $ | 1,005,099 | | | | | |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | Jun 30, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 31,987 | | | $ | 29,252 | | | $ | 31,422 | | | $ | 26,804 | | | $ | 23,082 | | | $ | 31,987 | | | $ | 23,082 | |
Accruing loans 90 or moredays past due | | | 153 | | | | 2,968 | | | | 2,193 | | | | 17,753 | | | | 335 | | | | 153 | | | | 335 | |
Total nonperforming loans | | | 32,140 | | | | 32,220 | | | | 33,615 | | | | 44,557 | | | | 23,417 | | | | 32,140 | | | | 23,417 | |
Repossessed assets | | | 173 | | | | 146 | | | | 67 | | | | 21 | | | | 11 | | | | 173 | | | | 11 | |
Other real estate | | | 2,806 | | | | 3,010 | | | | 3,237 | | | | 5,504 | | | | 5,093 | | | | 2,806 | | | | 5,093 | |
Total nonperforming assets | | $ | 35,119 | | | $ | 35,376 | | | $ | 36,919 | | | $ | 50,082 | | | $ | 28,521 | | | $ | 35,119 | | | $ | 28,521 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 20,295 | | | $ | 16,830 | | | $ | 21,418 | | | $ | 26,172 | | | $ | 14,434 | | | $ | 20,295 | | | $ | 14,434 | |
Construction, land development and other land loans | | | 813 | | | | 3,023 | | | | 1,893 | | | | 5,998 | | | | 2,449 | | | | 813 | | | | 2,449 | |
1-4 family residential (including home equity) | | | 5,124 | | | | 5,087 | | | | 5,232 | | | | 7,559 | | | | 6,909 | | | | 5,124 | | | | 6,909 | |
Commercial real estate (including multi-family residential) | | | 7,939 | | | | 9,736 | | | | 6,695 | | | | 9,686 | | | | 3,970 | | | | 7,939 | | | | 3,970 | |
Agriculture (including farmland) | | | 605 | | | | 281 | | | | 473 | | | | 182 | | | | 140 | | | | 605 | | | | 140 | |
Consumer and other | | | 343 | | | | 419 | | | | 1,208 | | | | 485 | | | | 619 | | | | 343 | | | | 619 | |
Total | | $ | 35,119 | | | $ | 35,376 | | | $ | 36,919 | | | $ | 50,082 | | | $ | 28,521 | | | $ | 35,119 | | | $ | 28,521 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of loans/properties | | | 161 | | | | 166 | | | | 169 | | | | 194 | | | | 179 | | | | 161 | | | | 179 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses atend of period | | $ | 80,972 | | | $ | 80,963 | | | $ | 80,762 | | | $ | 77,613 | | | $ | 73,266 | | | $ | 80,972 | | | $ | 73,266 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | (28 | ) | | $ | 504 | | | $ | 318 | | | $ | 17 | | | $ | (64 | ) | | $ | 476 | | | $ | 17 | |
Construction, land development and other land loans | | | (2 | ) | | | 145 | | | | (1 | ) | | | (28 | ) | | | 115 | | | | 143 | | | | 98 | |
1-4 family residential (including home equity) | | | 12 | | | | 86 | | | | 420 | | | | 70 | | | | 406 | | | | 98 | | | | 537 | |
Commercial real estate (including multi-family residential) | | | 114 | | | | 33 | | | | 1,732 | | | | (6 | ) | | | 5 | | | | 147 | | | | 65 | |
Agriculture (including farmland) | | | (65 | ) | | | (78 | ) | | | (13 | ) | | | (53 | ) | | | (843 | ) | | | (143 | ) | | | (924 | ) |
Consumer and other | | | 460 | | | | 359 | | | | 745 | | | | 653 | | | | 536 | | | | 819 | | | | 1,148 | |
Total | | $ | 491 | | | $ | 1,049 | | | $ | 3,201 | | | $ | 653 | | | $ | 155 | | | $ | 1,540 | | | $ | 941 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets toaverage earning assets | | | 0.19 | % | | | 0.19 | % | | | 0.20 | % | | | 0.27 | % | | | 0.15 | % | | | 0.19 | % | | | 0.16 | % |
Nonperforming assets to loansand other real estate | | | 0.39 | % | | | 0.39 | % | | | 0.40 | % | | | 0.53 | % | | | 0.31 | % | | | 0.39 | % | | | 0.31 | % |
Net charge-offs toaverage loans (annualized) | | | 0.02 | % | | | 0.05 | % | | | 0.14 | % | | | 0.03 | % | | | 0.01 | % | | | 0.03 | % | | | 0.02 | % |
Allowance for credit losses tototal loans | | | 0.89 | % | | | 0.88 | % | | | 0.87 | % | | | 0.83 | % | | | 0.79 | % | | | 0.89 | % | | | 0.79 | % |
Allowance for credit losses to total loans(excluding acquired loans accounted forunder ASC Topics 310-20 and 310-30)(E) | | | 1.09 | % | | | 1.12 | % | | | 1.14 | % | | | 1.14 | % | | | 1.15 | % | | | 1.09 | % | | | 1.15 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands, except per share data)
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. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its net income and earnings per share (each excluding purchase accounting adjustments) and its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30). Prosperity has included information below and on page 12 of this Earnings Release 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. Further, Prosperity believes that these non-GAAP measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. 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.
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | Jun 30, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average tangible common equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 76,570 | | | $ | 75,506 | | | $ | 145,573 | | | $ | 142,643 | |
Average shareholders' equity | | $ | 3,341,325 | | | $ | 3,280,583 | | | $ | 3,226,953 | | | $ | 3,162,400 | | | $ | 3,097,403 | | | $ | 3,310,256 | | | $ | 2,960,105 | |
Less: Average goodwill and other intangible assets | | | (1,937,200 | ) | | | (1,931,961 | ) | | | (1,926,811 | ) | | | (1,929,420 | ) | | | (1,842,003 | ) | | | (1,934,595 | ) | | | (1,777,346 | ) |
Average tangible shareholders’ equity | | $ | 1,404,125 | | | $ | 1,348,622 | | | $ | 1,300,142 | | | $ | 1,232,980 | | | $ | 1,255,400 | | | $ | 1,375,661 | | | $ | 1,182,759 | |
Return on average tangible common equity: | | | 20.49 | % | | | 21.84 | % | | | 23.87 | % | | | 24.84 | % | | | 24.06 | % | | | 21.16 | % | | | 24.12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible book value per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 3,357,285 | | | $ | 3,301,861 | | | $ | 3,244,826 | | | $ | 3,182,950 | | | $ | 3,120,594 | | | $ | 3,357,285 | | | $ | 3,120,594 | |
Less: Goodwill and other intangible assets | | | (1,936,023 | ) | | | (1,938,413 | ) | | | (1,933,138 | ) | | | (1,926,729 | ) | | | (1,931,342 | ) | | | (1,936,023 | ) | | | (1,931,342 | ) |
Tangible shareholders’ equity | | $ | 1,421,262 | | | $ | 1,363,448 | | | $ | 1,311,688 | | | $ | 1,256,221 | | | $ | 1,189,252 | | | $ | 1,421,262 | | | $ | 1,189,252 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | | 70,040 | | | | 70,024 | | | | 69,780 | | | | 69,756 | | | | 69,744 | | | | 70,040 | | | | 69,744 | |
Tangible book value per share: | | $ | 20.29 | | | $ | 19.47 | | | $ | 18.80 | | | $ | 18.01 | | | $ | 17.05 | | | $ | 20.29 | | | $ | 17.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible shareholders’ equity | | $ | 1,421,262 | | | $ | 1,363,448 | | | $ | 1,311,688 | | | $ | 1,256,221 | | | $ | 1,189,252 | | | $ | 1,421,262 | | | $ | 1,189,252 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | | | $ | 21,117,314 | | | $ | 21,248,106 | | | $ | 21,686,287 | | | $ | 21,248,106 | |
Less: Goodwill and other intangible assets | | | (1,936,023 | ) | | | (1,938,413 | ) | | | (1,933,138 | ) | | | (1,926,729 | ) | | | (1,931,342 | ) | | | (1,936,023 | ) | | | (1,931,342 | ) |
Tangible assets | | $ | 19,750,264 | | | $ | 19,668,446 | | | $ | 19,574,595 | | | $ | 19,190,585 | | | $ | 19,316,764 | | | $ | 19,750,264 | | | $ | 19,316,764 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | 7.20 | % | | | 6.93 | % | | | 6.70 | % | | | 6.55 | % | | | 6.16 | % | | | 7.20 | % | | | 6.16 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Sep 30, 2014 | | | Jun 30, 2014 | | | Jun 30, 2015 | | | Jun 30, 2014 | |
Allowance for credit losses to total loans, excluding acquired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 80,972 | | | $ | 80,963 | | | $ | 80,762 | | | $ | 77,613 | | | $ | 73,266 | | | $ | 80,972 | | | $ | 73,266 | |
Total loans | | $ | 9,114,335 | | | $ | 9,166,005 | | | $ | 9,244,183 | | | $ | 9,368,888 | | | $ | 9,308,162 | | | $ | 9,114,335 | | | $ | 9,308,162 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less: Fair value of acquired loans (acquired portfolioloan balances less loan marks) | | $ | 1,705,552 | | | $ | 1,910,646 | | | $ | 2,154,148 | | | $ | 2,536,433 | | | $ | 2,948,999 | | | $ | 1,705,552 | | | $ | 2,948,999 | |
Total loans less acquired loans | | $ | 7,408,783 | | | $ | 7,255,358 | | | $ | 7,090,035 | | | $ | 6,832,455 | | | $ | 6,359,163 | | | $ | 7,408,783 | | | $ | 6,359,163 | |
Allowance for credit losses to total loans, excludingacquired loans (non-GAAP basis) | | | 1.09 | % | | | 1.12 | % | | | 1.14 | % | | | 1.14 | % | | | 1.15 | % | | | 1.09 | % | | | 1.15 | % |
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