Exhibit 99.1
PRESS RELEASE | For more information contact: |
| |
Prosperity Bancshares, Inc.® Prosperity Bank Plaza 4295 San Felipe Houston, Texas 77027 | David Zalman Chairman and Chief Executive Officer 281.269.7199 david.zalman@prosperitybankusa.com |
FOR IMMEDIATE RELEASE
Prosperity Bancshares, Inc.®
REPORTS FOURTH QUARTER
2015EARNINGS
| | ● | Fourth quarter 2015 earnings per share (diluted) of$1.01 |
| | ● | Fourth quarter net income of $70.475 million |
| | ● | Linked quarter loans increased 2.5% (10.1% annualized) |
| | ● | Nonperforming assets remain low at0.23% offourth quarter average earning assets |
| | ● | Nonperforming assets decreased 10.6% compared with the third quarter 2015 |
| | ● | Return onfourth quarter average assets(annualized)of1.30% |
| | ● | Return on fourth quarter average tangible common equity of 18.56% |
| | ● | Acquisition of Tradition Bancshares, Inc. completed on January 1, 2016 |
HOUSTON, January 27, 2016. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®(collectively, “Prosperity”), reported net income for the quarter ended December 31, 2015 of $70.475 million or $1.01per diluted common share. Additionally, nonperforming assets remain low at 0.23% of fourth quarter average earning assets with an annualized return on fourth quarter average assets of 1.30%.
“We were very pleased with our fourth quarter 2015 results and trends,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.
“Net income (excluding purchase accounting adjustments) was $66.147 million for the quarter ended December 31, 2015 compared with $58.499 million for the quarter ended December 31, 2014, an increase of 13.1%. Net income per diluted common share (excluding purchase accounting adjustments) was $0.94 for the three months ended December 31, 2015 compared with $0.84 for the three months ended December 31, 2014, an increase of 11.9%. Our return on average tangible common equity for the quarter ended December 31, 2015 was 18.56%. The reconciliations of these non-GAAP financial measures are included below,” continued Zalman.
“We saw solid organic loan growth during the fourth quarter, as linked quarter loans increased $233.6 million or 2.5% (10.1% annualized) from $9.205 billion at September 30, 2015 to $9.439 billion on December 31, 2015. Our asset quality also improved in the fourth quarter. Nonperforming assets totaled $43.459 million or 0.23% of quarterly average interest-earning assets at December 31, 2015, compared with $48.628 million or 0.26% of quarterly average interest-earning assets at September 30, 2015. This represented a 10.6% reduction in nonperforming assets.”
“Although the Texas economy is challenged by the energy downturn, it is a much more diversified economy than it was in the 1980’s. Texas grew over 120,000 new jobs in 2015, despite the job losses in the oil industry. The medical, petrochemical, auto and technology companies increased jobs, taking up the slack. The Oklahoma and Texas unemployment rates are lower than the U.S. national average and Dallas-Fort Worth and Houston rank among the top five largest metro areas in terms of population and economic output in the U.S. We believe that Texas’ central location, its oil and gas deposits, its proximity to Mexico, its fast growing population, its low cost of doing business, lack of state income tax and its friendly legal climate to business will continue to drive businesses and people to relocate in Texas. Texas ranks number two in the most Fortune 500 companies located in a state.”
“I would like to acknowledge the loss of Dr. William Fagan, a longtime director of Prosperity Bancshares who passed away Sunday. Dr. Fagan joined the Company’s board years ago when Prosperity Bank merged with his bank, Paradigm Bank. He was very loyal, supportive and loved by us all. We will miss him,” concluded Zalman.
Results ofOperations for theThreeMonthsEndedDecember 31, 2015
Net income was $70.475 million for the three months ended December 31, 2015 compared with $78.228 million for the same period in 2014. Net income per diluted common share was $1.01 for the three months ended December 31, 2015 compared with $1.12 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $66.147 million for the quarter ended December 31, 2015 compared with $58.499 million for the quarter ended December 31, 2014, an increase of 13.1%. Net income per diluted common share (excluding purchase accounting adjustments) was $0.94 for the three months ended December 31, 2015 compared with $0.84 for the three months ended December 31, 2014, an increase of 11.9%. 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 December 31, 2015 were 1.30%, 8.17% and 18.56%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 42.58% for the three months ended December 31, 2015.
Net interest income before provision for credit losses for the quarter ended December 31, 2015 was $153.258 million compared with $177.751 million during the same period in 2014. This change was primarily due to a decrease in loan discount accretion of $20.751 million for the quarter ended December 31, 2015 compared with the quarter ended December 31, 2014. Linked quarter net interest income before provision for credit losses was $153.258 million for the three months ended December 31, 2015 compared with $156.108 million for the three months ended September 30, 2015. This change was primarily due to a decrease in loan discount accretion of $3.195 million for the quarter ended December 31, 2015 compared with the quarter ended September 30, 2015. The net interest margin on a tax equivalent basis was 3.24% for the three months ended December 31, 2015, compared with 3.89% for the same period in 2014 and 3.30% for the three months ended September 30, 2015. This change was primarily due to the decrease in loan discount accretion and lower yields on average interest-earning assets for the three months ended December 31, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.11% for the three months ended December 31, 2015, compared with 3.25% for the same period in 2014 and 3.10% for the three months ended September 30, 2015. The reconciliation of these non-GAAP financial measures is shown on page 12.
Noninterest income was $30.283 million for the three months ended December 31, 2015 compared with $29.380 million for the same period in 2014. This change was primarily due to the net gain on sale of assets and other noninterest income. On a linked quarter basis, noninterest income decreased $1.497 million or 4.7% compared with the quarter ended September 30, 2015. This was primarily due to a decrease in mortgage income and other noninterest income.
Noninterest expense was $77.909 million for the three months ended December 31, 2015 compared with $84.036 million for the same period in 2014. This change was primarily due to a decrease in regulatory assessments, salary and benefits expense and net occupancy and equipment expense. On a linked quarter basis, noninterest expense increased $1.479 million or 1.9% compared with the quarter ended September 30, 2015. This was primarily due to an increase in salary and benefits expense and other noninterest expense, partially offset by a decrease in FDIC insurance for the three months ended December 31, 2015.
ResultsofOperations fortheYearEndedDecember 31, 2015
Net income was $286.646 million for the year ended December 31, 2015 compared with $297.441 million for the same period in 2014. Net income per diluted common share was $4.09 for the year ended December 31, 2015 compared with $4.32 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $255.479 million for the year ended December 31, 2015 compared with $236.157 million for the year ended December 31, 2014, an increase of 8.2%. Net income per diluted common share (excluding purchase accounting adjustments) was $3.65 for the year ended December 31, 2015 compared with $3.43 for the year ended December 31, 2014, an increase of 6.4%. 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 for the year ended December 31, 2015 were 1.33%, 8.51% and 19.98%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 41.87% for the year ended December 31, 2015.
Net interest income before provision for credit losses for the year ended December 31, 2015 was $630.510 million compared with $671.154 million for the same period in 2014. The change was primarily due to a decrease of $43.753 million in loan discount accretion partially offset by lower rates paid on average interest-bearing liabilities for the year ended December 31, 2015. The net interest margin on a tax equivalent basis for the year ended December 31, 2015 decreased to 3.38% compared with 3.80% for the same period in 2014. This was primarily due to a 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 year ended December 31, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.13% for the year ended December 31, 2015 compared with 3.29% for the same period in 2014. The reconciliation of these non-GAAP financial measures is shown on page 12.
Noninterest income was $120.781 million for the year ended December 31, 2015 compared with $120.832 million for the same period in 2014. Noninterest expense was $313.536 million for the year ended December 31, 2015 compared with $327.962 million for the same period in 2014. This change was primarily due to a decrease in salary and benefits expense and other noninterest expense.
Balance Sheet Information
At December 31, 2015, Prosperity had $22.037 billion in total assets, an increase of $529.483 million or 2.5%, compared with $21.508 billion at December 31, 2014.
Loans at December 31, 2015 were $9.439 billion, an increase of $194.406 millionor 2.1%, compared with $9.244 billion at December 31, 2014. Linked quarter loans increased $233.601 million or 2.5% (10.1% annualized) from $9.205 billion at September 30, 2015.
As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At December 31, 2015, oil and gas loans totaled $399.084 million or 4.2% of total loans, of which $178.614 million were production loans and $220.470 million were servicing loans compared with total oil and gas loans of $500.409 million or 5.4% of total loans at December 31, 2014, of which $271.972 million were production loans and $228.437 million were servicing loans.
Deposits at December 31, 2015 were $17.681 billion, a decrease of $12.039 million or 0.1%, compared with $17.693 billion at December 31, 2014. Linked quarter deposits increased $741.182 million or 4.4% (17.3% annualized) from $16.940 billion at September 30, 2015.
Asset Quality
Nonperforming assets totaled $43.459 million or 0.23% of quarterly average interest-earning assets at December 31, 2015, compared with $36.919 million or 0.20% of quarterly average interest-earning assets at December 31, 2014, and $48.628 million or 0.26% of quarterly average interest-earning assets at September 30, 2015. On a linked quarter basis, nonperforming assets decreased $5.169 million or 10.6%. The allowance for credit losses was 0.86% of total loans at December 31, 2015, 0.87% of total loans at December 31, 2014 and 0.88% of total loans at September 30, 2015. Excluding loans acquired that are accounted for under FASB Accounting Standards Codification (“ASC”) Topics 310-20 and 310-30, the allowance for credit losses was 1.01% of remaining loans as of December 31, 2015, compared with 1.14% at December 31, 2014 and 1.06% at September 30, 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 December 31, 2015 compared with $6.350 million for the three months ended December 31, 2014 and $5.310 million for the three months ended September 30, 2015. The provision for credit losses was $7.560 millionfor the year ended December 31, 2015 compared with $18.275 million for the year ended December 31, 2014.
Net charge-offs were $119 thousand for the three months ended December 31, 2015 compared with $3.201 million for the three months ended December 31, 2014 and $5.279 million for the three months ended September 30, 2015. Net charge-offs were $6.938 millionfor the year ended December 31, 2015 compared with $4.795 million for the year ended December 31, 2014.
Conference Call
Prosperity’s management team will host a conference call on Wednesday, January 27, 2016 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity’s fourth quarter 2015 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 6167440.
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 ratio. 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 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 page 12 and 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. (“Prosperity Bancshares”) declared a first quarter cash dividend of $0.30 per share, to be paid on April 1, 2016 to all shareholders of record as of March 18, 2016.
Acquisition ofTradition Bancshares, Inc.
On January 1, 2016, Prosperity Bancshares completed the acquisition of Tradition Bancshares, Inc. (“Tradition”) and its wholly-owned subsidiary Tradition Bank headquartered in Houston, Texas. Tradition Bank operated 7 banking offices in the Houston, Texas area, including its main office in Bellaire, 3 banking centers in Katy and 1 banking center in The Woodlands. As of December 31, 2015, Tradition, on a consolidated basis, reported total assets of $547.963 million, total loans of $253.315 million, total deposits of $488.928 million and shareholders’ equity of $43.103 million.
Under the terms of the definitive agreement, Prosperity Bancshares issued 679,528 shares of Prosperity Bancshares common stock plus $39.0 million in cash for all outstanding shares of Tradition capital stock. As the acquisition was completed after year end, such information is not included in the quarter ended December 31, 2015 financial results.
Prosperity Bancshares, Inc. ®
As of December 31, 2015, Prosperity Bancshares, Inc. ® is a $22.037 billion Houston, 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.
Including the former Tradition Bank locations, Prosperity currently operates 248 full-service banking locations: 67 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 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 8 in the Tulsa, Oklahoma area.
Bryan/College Station Area - Bryan Bryan-29th Street Bryan-East Bryan-North Caldwell College Station Crescent Point Hearne Huntsville Madisonville Navasota New Waverly Rock Prairie Southwest Parkway Tower Point Wellborn Road Central Texas Area - Austin - Allandale Cedar Park Congress Lakeway Liberty Hill Northland Oak Hill Research Blvd Westlake Other Central Texas Locations - Bastrop Canyon Lake Dime Box Dripping Springs Elgin Flatonia Georgetown Gruene Kingsland La Grange Lexington New Braunfels Pleasanton Round Rock San Antonio Schulenburg Seguin Smithville Thorndale Weimar Dallas/Fort Worth Area - Dallas - Abrams Centre Balch Springs Camp Wisdom Cedar Hill Dallas – Central Expressway Forest Park Frisco Frisco-West Kiest McKinney McKinney-Stonebridge Midway Northwest Highway Plano Preston Forest Preston Road Red Oak Sachse The Colony Turtle Creek | Westmoreland Fort Worth - Haltom City Keller Roanoke Stockyards Other Dallas/Fort Worth Locations - Arlington Azle Ennis Gainesville Glen Rose Granbury Mesquite Muenster Sanger Waxahachie Weatherford East Texas Area - Athens Blooming Grove Canton Carthage Corsicana Crockett Eustace Gilmer Grapeland Gun Barrel City Jacksonville Kerens Longview Mount Vernon Palestine Rusk Seven Points Teague Tyler-Beckham Tyler-South Broadway Tyler-University Winnsboro Houston Area - Houston - Aldine Alief Bellaire Bellaire (Tradition) Beltway Clear Lake Copperfield Cypress Downtown Eastex Fairfield First Colony Fry Road Gessner Gladebrook Grand Parkway Heights Highway 6 West Little York Medical Center Memorial Drive Northside Pasadena Pecan Grove Pin Oak River Oaks | Sugar Land SW Medical Center Tanglewood The Plaza Uptown Waugh Drive Westheimer West University Woodcreek Other Houston Area Locations - Angleton Bay City Beaumont Cinco Ranch Cleveland East Bernard El Campo Dayton Galveston Groves Hempstead Hitchcock Katy Katy-Spring Green Liberty Magnolia Magnolia Parkway Mont Belvieu Nederland Needville Rosenberg Shadow Creek Spring The Woodlands-College Park The Woodlands-I-45 The Woodlands-Research Forest Tomball Waller West Columbia Wharton Winnie Wirt South Texas Area - Corpus Christi - Airline Calallen Carmel Northwest Saratoga Timbergate Water Street Other South Texas Locations - Alice Aransas Pass Beeville Colony Creek Cuero Edna Goliad Gonzales Hallettsville Kingsville Mathis Padre Island Palacios Port Lavaca Portland Rockport | Sinton Taft Victoria Victoria-Navarro Victoria-North Yoakum Yorktown West Texas Area - Abilene - Antilley Road Barrow Street Cypress Street Judge Ely Mockingbird Lubbock - 4th Street 66th Street 82nd Street 86th Street 98th Street Avenue Q North University Texas Tech Student Union Midland - Wadley Wall Street Odessa - Grandview Grant Kermit Highway Parkway Other West Texas Locations - Big Spring Brownfield Brownwood Cisco Comanche Early Floydada Gorman Levelland Littlefield Merkel Plainview San Angelo Slaton Snyder Oklahoma Central Oklahoma- 23rdStreet Edmond Expressway I-240 Memorial Norman Tulsa- Garnett Harvard Memorial Owasso Sheridan S. Harvard Utica Tower Yale |
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“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 ProsperityBancsharesand 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, interest rateand commodity pricefluctuations; and weather. These and various other factors are discussed in Prosperity Bancshares’ Annual Report on Form 10-K for the year ended December 31, 2014 and other reports and statements ProsperityBancshareshas 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)
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | |
Balance Sheet Data(at period end) | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,166,005 | | | $ | 9,244,183 | |
Investment securities(A) | | | 9,502,427 | | | | 9,530,761 | | | | 9,698,079 | | | | 9,579,496 | | | | 9,045,776 | |
Federal funds sold | | | 1,418 | | | | 996 | | | | 1,451 | | | | 1,639 | | | | 569 | |
Allowance for credit losses | | | (81,384 | ) | | | (81,003 | ) | | | (80,972 | ) | | | (80,963 | ) | | | (80,762 | ) |
Cash and due from banks | | | 562,544 | | | | 300,230 | | | | 353,047 | | | | 352,642 | | | | 677,285 | |
Goodwill | | | 1,868,827 | | | | 1,881,955 | | | | 1,881,955 | | | | 1,881,955 | | | | 1,874,191 | |
Core deposit intangibles, net | | | 49,417 | | | | 51,712 | | | | 54,068 | | | | 56,458 | | | | 58,947 | |
Other real estate owned | | | 2,963 | | | | 3,271 | | | | 2,806 | | | | 3,010 | | | | 3,237 | |
Fixed assets, net | | | 267,996 | | | | 271,650 | | | | 275,347 | | | | 276,468 | | | | 281,549 | |
Other assets | | | 424,419 | | | | 402,676 | | | | 386,171 | | | | 370,149 | | | | 402,758 | |
Total assets | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | |
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Noninterest-bearing deposits | | $ | 5,136,579 | | | $ | 5,093,175 | | | $ | 5,040,628 | | | $ | 5,038,436 | | | $ | 4,936,420 | |
Interest-bearing deposits | | | 12,544,540 | | | | 11,846,762 | | | | 11,961,036 | | | | 12,522,916 | | | | 12,756,738 | |
Total deposits | | | 17,681,119 | | | | 16,939,937 | | | | 17,001,664 | | | | 17,561,352 | | | | 17,693,158 | |
Other borrowings | | | 491,399 | | | | 786,571 | | | | 886,741 | | | | 331,914 | | | | 8,724 | |
Securities sold under repurchase agreements | | | 315,253 | | | | 310,038 | | | | 334,189 | | | | 318,418 | | | | 315,523 | |
Junior subordinated debentures | | | - | | | | - | | | | - | | | | - | | | | 167,531 | |
Other liabilities | | | 86,535 | | | | 119,451 | | | | 106,408 | | | | 93,314 | | | | 77,971 | |
Total liabilities | | | 18,574,306 | | | | 18,155,997 | | | | 18,329,002 | | | | 18,304,998 | | | | 18,262,907 | |
Shareholders' equity(B) | | | 3,462,910 | | | | 3,411,239 | | | | 3,357,285 | | | | 3,301,861 | | | | 3,244,826 | |
Total liabilities and equity | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | |
(A) Includes $3,138, $3,788, $4,655, $5,296 and $5,737 in unrealized gains on available for sale securities for the quarterly periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively. |
(B) Includes $2,040, $2,462, $3,026, $3,442 and $3,729 in after-tax unrealized gains on available for sale securities for the quarterly periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Dec 31, 2015 | | | Dec 31, 2014 | |
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Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 124,878 | | | $ | 139,396 | | | $ | 475,427 | | | $ | 525,716 | |
Securities(C) | | | 48,301 | | | | 48,610 | | | | 48,530 | | | | 48,562 | | | | 47,108 | | | | 194,003 | | | | 188,744 | |
Federal funds sold and other earning assets | | | 37 | | | | 22 | | | | 47 | | | | 165 | | | | 74 | | | | 271 | | | | 335 | |
Total interest income | | | 162,572 | | | | 165,543 | | | | 167,981 | | | | 173,605 | | | | 186,578 | | | | 669,701 | | | | 714,795 | |
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Interest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 8,575 | | | | 8,753 | | | | 9,169 | | | | 9,577 | | | | 7,326 | | | | 36,074 | | | | 37,871 | |
Other borrowings | | | 541 | | | | 473 | | | | 365 | | | | 129 | | | | 200 | | | | 1,508 | | | | 772 | |
Securities sold under repurchase agreements | | | 198 | | | | 209 | | | | 208 | | | | 203 | | | | 202 | | | | 818 | | | | 938 | |
Junior subordinated debentures | | | - | | | | - | | | | - | | | | 791 | | | | 1,099 | | | | 791 | | | | 4,060 | |
Total interest expense | | | 9,314 | | | | 9,435 | | | | 9,742 | | | | 10,700 | | | | 8,827 | | | | 39,191 | | | | 43,641 | |
Net interest income | | | 153,258 | | | | 156,108 | | | | 158,239 | | | | 162,905 | | | | 177,751 | | | | 630,510 | | | | 671,154 | |
Provision for credit losses | | | 500 | | | | 5,310 | | | | 500 | | | | 1,250 | | | | 6,350 | | | | 7,560 | | | | 18,275 | |
Net interest income after provision for credit losses | | | 152,758 | | | | 150,798 | | | | 157,739 | | | | 161,655 | | | | 171,401 | | | | 622,950 | | | | 652,879 | |
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Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonsufficient funds (NSF) fees | | | 8,974 | | | | 9,082 | | | | 8,310 | | | | 7,918 | | | | 9,345 | | | | 34,284 | | | | 37,048 | |
Credit card, debit card and ATM card income | | | 5,938 | | | | 5,955 | | | | 6,003 | | | | 5,638 | | | | 5,786 | | | | 23,534 | | | | 22,889 | |
Service charges on deposit accounts | | | 4,289 | | | | 4,438 | | | | 4,189 | | | | 4,179 | | | | 4,263 | | | | 17,095 | | | | 16,452 | |
Trust income | | | 1,988 | | | | 1,986 | | | | 2,047 | | | | 2,009 | | | | 2,165 | | | | 8,030 | | | | 8,108 | |
Mortgage income | | | 1,289 | | | | 1,770 | | | | 1,513 | | | | 1,148 | | | | 1,049 | | | | 5,720 | | | | 4,264 | |
Brokerage income | | | 1,407 | | | | 1,596 | | | | 1,541 | | | | 1,409 | | | | 1,455 | | | | 5,953 | | | | 5,868 | |
Bank owned life insurance income | | | 1,394 | | | | 1,384 | | | | 1,390 | | | | 1,380 | | | | 1,392 | | | | 5,548 | | | | 5,189 | |
Net gain on sale of assets | | | 581 | | | | 173 | | | | 270 | | | | 1,379 | | | | 24 | | | | 2,403 | | | | 4,658 | |
Other noninterest income | | | 4,423 | | | | 5,396 | | | | 5,034 | | | | 3,361 | | | | 3,901 | | | | 18,214 | | | | 16,356 | |
Total noninterest income | | | 30,283 | | | | 31,780 | | | | 30,297 | | | | 28,421 | | | | 29,380 | | | | 120,781 | | | | 120,832 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits | | | 48,500 | | | | 46,587 | | | | 47,819 | | | | 49,966 | | | | 49,557 | | | | 192,872 | | | | 199,270 | |
Net occupancy and equipment | | | 5,774 | | | | 6,088 | | | | 5,812 | | | | 5,964 | | | | 6,620 | | | | 23,638 | | | | 24,756 | |
Credit and debit card, data processing and software amortization | | | 3,996 | | | | 3,924 | | | | 4,045 | | | | 3,817 | | | | 4,553 | | | | 15,782 | | | | 15,790 | |
Regulatory assessments and FDIC insurance | | | 2,460 | | | | 3,366 | | | | 4,253 | | | | 4,354 | | | | 4,354 | | | | 14,433 | | | | 15,017 | |
Core deposit intangibles amortization | | | 2,295 | | | | 2,356 | | | | 2,390 | | | | 2,489 | | | | 2,667 | | | | 9,530 | | | | 9,940 | |
Depreciation | | | 3,310 | | | | 3,313 | | | | 3,420 | | | | 2,916 | | | | 3,491 | | | | 12,959 | | | | 13,730 | |
Communications | | | 2,814 | | | | 2,663 | | | | 2,835 | | | | 2,809 | | | | 2,993 | | | | 11,121 | | | | 11,609 | |
Other real estate expense | | | 241 | | | | 123 | | | | 129 | | | | 132 | | | | 363 | | | | 625 | | | | 1,019 | |
Net (gain) loss on sale of other real estate | | | 52 | | | | (68 | ) | | | (32 | ) | | | 14 | | | | (726 | ) | | | (34 | ) | | | (2,040 | ) |
Other noninterest expense | | | 8,467 | | | | 8,078 | | | | 9,064 | | | | 7,001 | | | | 10,164 | | | | 32,610 | | | | 38,871 | |
Total noninterest expense | | | 77,909 | | | | 76,430 | | | | 79,735 | | | | 79,462 | | | | 84,036 | | | | 313,536 | | | | 327,962 | |
Income before income taxes | | | 105,132 | | | | 106,148 | | | | 108,301 | | | | 110,614 | | | | 116,745 | | | | 430,195 | | | | 445,749 | |
Provision for income taxes | | | 34,657 | | | | 35,550 | | | | 36,369 | | | | 36,973 | | | | 38,517 | | | | 143,549 | | | | 148,308 | |
Net income available to common shareholders | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 286,646 | | | $ | 297,441 | |
(C) Interest income on securities was reduced by net premium amortization of $13,775, $14,845, $15,466, $14,144 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively, and $58,230 and $51,679 for the years ended December 31, 2015 and December 31, 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 | |
| | | Dec 31, 2015 | | | | Sep 30, 2015 | | | | Jun 30, 2015 | | | | Mar 31, 2015 | | | | Dec 31, 2014 | | | Dec 31, 2015 | | | | Dec 31, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Profitability | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 70,475 | | | | $ | 70,598 | | | | $ | 71,932 | | | | $ | 73,641 | | | | $ | 78,228 | | | $ | 286,646 | | | | $ | 297,441 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 1.01 | | | | $ | 1.01 | | | | $ | 1.03 | | | | $ | 1.05 | | | | $ | 1.12 | | | $ | 4.09 | | | | $ | 4.32 | |
Diluted earnings per share | | $ | 1.01 | | | | $ | 1.01 | | | | $ | 1.03 | | | | $ | 1.05 | | | | $ | 1.12 | | | $ | 4.09 | | | | $ | 4.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (D) | | | 1.30 | % | | | | 1.30 | % | | | | 1.33 | % | | | | 1.37 | % | | | | 1.48 | % | | | 1.33 | % | | | | 1.44 | % |
Return on average common equity (D) | | | 8.17 | % | | | | 8.31 | % | | | | 8.61 | % | | | | 8.98 | % | | | | 9.70 | % | | | 8.51 | % | | | | 9.66 | % |
Return on average tangible common equity (D) (E) | | | 18.56 | % | | | | 19.30 | % | | | | 20.49 | % | | | | 21.84 | % | | | | 23.87 | % | | | 19.98 | % | | | | 24.24 | % |
Tax equivalent net interest margin (F) | | | 3.24 | % | | | | 3.30 | % | | | | 3.39 | % | | | | 3.57 | % | | | | 3.89 | % | | | 3.38 | % | | | | 3.80 | % |
Efficiency ratio(G) | | | 42.58 | % | | | | 40.72 | % | | | | 42.35 | % | | | | 41.83 | % | | | | 40.78 | % | | | 41.87 | % | | | | 41.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liquidity and Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity to assets | | | 15.71 | % | | | | 15.82 | % | | | | 15.48 | % | | | | 15.28 | % | | | | 15.09 | % | | | 15.71 | % | | | | 15.09 | % |
Common equity tier 1 capital(H) | | | 13.55 | % | | | | 13.37 | % | | | | 12.91 | % | | | | 12.40 | % | | | N/A | | | | 13.55 | % | | | N/A | |
Tier 1 risk-based capital | | | 13.55 | % | (I) | | | 13.37 | % | (I) | | | 12.91 | % | (I) | | | 12.40 | % | (I) | | | 13.80 | % | | | 13.55 | % | (I) | | | 13.80 | % |
Total risk-based capital | | | 14.25 | % | (I) | | | 14.09 | % | (I) | | | 13.63 | % | (I) | | | 13.14 | % | (I) | | | 14.56 | % | | | 14.25 | % | (I) | | | 14.56 | % |
Tier 1 leverage capital | | | 7.97 | % | (I) | | | 7.65 | % | (I) | | | 7.35 | % | (I) | | | 6.96 | % | (I) | | | 7.69 | % | | | 7.97 | % | (I) | | | 7.69 | % |
Period end tangible equity to period end tangible assets(E) | | | 7.68 | % | | | | 7.53 | % | | | | 7.20 | % | | | | 6.93 | % | | | | 6.70 | % | | | 7.68 | % | | | | 6.70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares used in computed earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 70,021 | | | | | 70,041 | | | | | 70,037 | | | | | 70,034 | | | | | 69,768 | | | | 70,033 | | | | | 68,855 | |
Diluted | | | 70,032 | | | | | 70,053 | | | | | 70,053 | | | | | 70,055 | | | | | 69,796 | | | | 70,049 | | | | | 68,911 | |
Period end shares outstanding | | | 70,022 | | | | | 70,040 | | | | | 70,040 | | | | | 70,024 | | | | | 69,780 | | | | 70,022 | | | | | 69,780 | |
Cash dividends paid per common share | | $ | 0.3000 | | | | $ | 0.2725 | | | | $ | 0.2725 | | | | $ | 0.2725 | | | | $ | 0.2725 | | | $ | 1.1175 | | | | $ | 0.9925 | |
Book value per share | | $ | 49.45 | | | | $ | 48.70 | | | | $ | 47.93 | | | | $ | 47.15 | | | | $ | 46.50 | | | $ | 49.45 | | | | $ | 46.50 | |
Tangible book value per share(E) | | $ | 22.06 | | | | $ | 21.10 | | | | $ | 20.29 | | | | $ | 19.47 | | | | $ | 18.80 | | | $ | 22.06 | | | | $ | 18.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock Market Price | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
High | | $ | 57.04 | | | | $ | 59.97 | | | | $ | 59.30 | | | | $ | 55.88 | | | | $ | 61.15 | | | $ | 59.97 | | | | $ | 67.68 | |
Low | | | 46.23 | | | | | 43.76 | | | | | 50.91 | | | | | 45.01 | | | | | 52.62 | | | | 43.76 | | | | | 52.62 | |
Period end closing price | | | 47.86 | | | | | 49.11 | | | | | 57.74 | | | | | 52.48 | | | | | 55.36 | | | | 47.86 | | | | | 55.36 | |
Employees – FTE | | | 3,037 | | | | | 3,051 | | | | | 3,065 | | | | | 3,081 | | | | | 3,096 | | | | 3,037 | | | | | 3,096 | |
Number of banking centers | | | 241 | | | | | 244 | | | | | 245 | | | | | 244 | | | | | 245 | | | | 241 | | | | | 245 | |
(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 | | |
| | | Dec 31, 2015 | | | | Sep 30, 2015 | | | | Dec 31, 2014 | | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (L) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (L) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (L) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,322,399 | | | $ | 114,234 | | | | 4.86 | % | | | $ | 9,156,679 | | | $ | 116,911 | | | | 5.07 | % | | | $ | 9,325,330 | | | $ | 139,396 | | | | 5.93 | % | |
Investment securities | | | 9,524,084 | | | | 48,301 | | | | 2.01 | % | (J) | | | 9,706,373 | | | | 48,610 | | | | 1.99 | % | (J) | | | 8,835,176 | | | | 47,108 | | | | 2.12 | % | (J) |
Federal funds sold and other earning assets | | | 65,695 | | | | 37 | | | | 0.22 | % | | | | 55,000 | | | | 22 | | | | 0.16 | % | | | | 143,705 | | | | 74 | | | | 0.20 | % | |
Total interest-earning assets | | | 18,912,178 | | | $ | 162,572 | | | | 3.41 | % | | | | 18,918,052 | | | $ | 165,543 | | | | 3.47 | % | | | | 18,304,211 | | | $ | 186,578 | | | | 4.04 | % | |
Allowance for credit losses | | | (81,230 | ) | | | | | | | | | | | | (80,793 | ) | | | | | | | | | | | | (76,948 | ) | | | | | | | | | |
Noninterest-earning assets | | | 2,854,168 | | | | | | | | | | | | | 2,819,150 | | | | | | | | | | | | | 2,883,029 | | | | | | | | | | |
Total assets | | $ | 21,685,116 | | | | | | | | | | | | $ | 21,656,409 | | | | | | | | | | | | $ | 21,110,292 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 3,767,138 | | | $ | 2,005 | | | | 0.21 | % | | | $ | 3,663,114 | | | $ | 1,961 | | | | 0.21 | % | | | $ | 3,546,825 | | | $ | 2,068 | | | | 0.23 | % | |
Savings and money market deposits | | | 5,511,240 | | | | 3,317 | | | | 0.24 | % | | | | 5,492,326 | | | | 3,392 | | | | 0.24 | % | | | | 5,442,568 | | | | 3,301 | | | | 0.24 | % | |
Certificates and other time deposits | | | 2,560,527 | | | | 3,253 | | | | 0.50 | % | | | | 2,685,346 | | | | 3,400 | | | | 0.50 | % | | | | 3,083,047 | | | | 1,957 | | | | 0.25 | % | |
Other borrowings | | | 839,164 | | | | 541 | | | | 0.26 | % | | | | 886,787 | | | | 473 | | | | 0.21 | % | | | | 168,167 | | | | 200 | | | | 0.47 | % | |
Securities sold under repurchase agreements | | | 314,278 | | | | 198 | | | | 0.25 | % | | | | 331,286 | | | | 209 | | | | 0.25 | % | | | | 323,882 | | | | 202 | | | | 0.25 | % | |
Junior subordinated debentures | | | — | | | | — | | | | — | | | | | — | | | | — | | | | — | | | | | 167,531 | | | | 1,099 | | | | 2.60 | % | |
Total interest-bearing liabilities | | | 12,992,347 | | | | 9,314 | | | | 0.28 | % | (K) | | | 13,058,859 | | | | 9,435 | | | | 0.29 | % | (K) | | | 12,732,020 | | | | 8,827 | | | | 0.28 | % | (K) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 5,124,630 | | | | | | | | | | | | | 5,078,234 | | | | | | | | | | | | | 5,045,097 | | | | | | | | | | |
Other liabilities | | | 116,860 | | | | | | | | | | | | | 121,360 | | | | | | | | | | | | | 106,222 | | | | | | | | | | |
Total liabilities | | | 18,233,837 | | | | | | | | | | | | | 18,258,453 | | | | | | | | | | | | | 17,883,339 | | | | | | | | | | |
Shareholders' equity | | | 3,451,279 | | | | | | | | | | | | | 3,397,956 | | | | | | | | | | | | | 3,226,953 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 21,685,116 | | | | | | | | | | | | $ | 21,656,409 | | | | | | | | | | | | $ | 21,110,292 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 153,258 | | | | 3.22 | % | | | | | | | $ | 156,108 | | | | 3.27 | % | | | | | | | $ | 177,751 | | | | 3.85 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 1,412 | | | | | | | | | | | | | 1,463 | | | | | | | | | | | | | 1,836 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin (tax equivalent basis) | | | | | | $ | 154,670 | | | | 3.24 | % | | | | | | | $ | 157,571 | | | | 3.30 | % | | | | | | | $ | 179,587 | | | | 3.89 | % | |
(J) Yield on securities was impacted by net premium amortization of $13,775, $14,845 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015 and December 31, 2014, respectively. |
(K) Total cost of funds, including noninterest bearing deposits, was 0.20%, 0.21% and 0.20% for the three months ended December 31, 2015, September 30, 2015 and December 31, 2014, respectively. |
(L) Annualized and based on an actual/365 day basis. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS | | Year-to-Date | |
| | | December 31, 2015 | | | December 31, 2014 | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (O) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (O) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,200,765 | | | $ | 475,427 | | | | 5.17 | % | | $ | 8,988,069 | | | $ | 525,716 | | | | 5.85 | % |
Investment securities | | | 9,541,443 | | | | 194,003 | | | | 2.03 | % | (M) | | | 8,723,011 | | | | 188,744 | | | | 2.16 | % | (M) |
Federal funds sold and other earning assets | | | 116,283 | | | | 271 | | | | 0.23 | % | | | 143,754 | | | | 335 | | | | 0.23 | % |
Total interest-earning assets | | | 18,858,491 | | | $ | 669,701 | | | | 3.55 | % | | | 17,854,834 | | | $ | 714,795 | | | | 4.00 | % |
Allowance for credit losses | | | (80,894 | ) | | | | | | | | | | | (72,714 | ) | | | | | | | | |
Noninterest-earning assets | | | 2,841,007 | | | | | | | | | | | | 2,814,809 | | | | | | | | | |
Total assets | | $ | 21,618,604 | | | | | | | | | | | $ | 20,596,929 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 3,873,495 | | | $ | 8,776 | | | | 0.23 | % | | $ | 3,516,987 | | | $ | 8,561 | | | | 0.24 | % |
Savings and money market deposits | | | 5,505,524 | | | | 13,488 | | | | 0.24 | % | | | 5,355,967 | | | | 13,406 | | | | 0.25 | % |
Certificates and other time deposits | | | 2,754,466 | | | | 13,810 | | | | 0.50 | % | | | 3,129,710 | | | | 15,904 | | | | 0.51 | % |
Other borrowings | | | 623,441 | | | | 1,508 | | | | 0.24 | % | | | 144,570 | | | | 772 | | | | 0.53 | % |
Securities sold under repurchase agreements | | | 329,745 | | | | 818 | | | | 0.25 | % | | | 361,025 | | | | 938 | | | | 0.26 | % |
Junior subordinated debentures | | | 29,443 | | | | 791 | | | | 2.69 | % | | | 154,902 | | | | 4,060 | | | | 2.62 | % |
Total interest-bearing liabilities | | | 13,116,114 | | | | 39,191 | | | 0.30 | % | (N) | | | 12,663,161 | | | | 43,641 | | | 0.34 | % | (N) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 5,024,379 | | | | | | | | | | | | 4,687,680 | | | | | | | | | |
Other liabilities | | | 109,323 | | | | | | | | | | | | 165,764 | | | | | | | | | |
Total liabilities | | | 18,249,816 | | | | | | | | | | | | 17,516,605 | | | | | | | | | |
Shareholders' equity | | | 3,368,788 | | | | | | | | | | | | 3,080,324 | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 21,618,604 | | | | | | | | | | | $ | 20,596,929 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 630,510 | | | | 3.34 | % | | | | | | $ | 671,154 | | | | 3.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 6,102 | | | | | | | | | | | | 7,968 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin (tax equivalent basis) | | | | | | $ | 636,612 | | | | 3.38 | % | | | | | | $ | 679,122 | | | | 3.80 | % |
(M) Yield on securities was impacted by net premium amortization of $58,230 and $51,679 for the years ended December 31, 2015 and 2014, respectively. |
(N) Total cost of funds, including noninterest bearing deposits, was 0.22% and 0.25% for the years ended December 31, 2015 and 2014, respectively. |
(O) Annualized and based on an actual/365 day basis. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands, except per share data)
| | | Three Months Ended | | | Year -to-Date | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Dec 31, 2015 | | | Dec 31, 2014 | |
Adjustment to Loan Yield(P) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on loans, as reported | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 124,878 | | | $ | 139,396 | | | $ | 475,427 | | | $ | 525,716 | |
Purchase accounting adjustment- loan discount accretion | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ASC 310-20 | | | (6,066 | ) | | | (7,060 | ) | | | (10,388 | ) | | | (10,714 | ) | | | (14,857 | ) | | | (34,228 | ) | | | (64,655 | ) |
ASC 310-30 | | | (1,773 | ) | | | (3,974 | ) | | | (3,214 | ) | | | (8,933 | ) | | | (13,733 | ) | | | (17,894 | ) | | | (31,220 | ) |
Total | | | (7,839 | ) | | | (11,034 | ) | | | (13,602 | ) | | | (19,647 | ) | | | (28,590 | ) | | | (52,122 | ) | | | (95,875 | ) |
Interest on loans excluding discount accretion | | $ | 106,395 | | | $ | 105,877 | | | $ | 105,802 | | | $ | 105,231 | | | $ | 110,806 | | | $ | 423,305 | | | $ | 429,841 | |
Average loans | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | | | $ | 9,189,380 | | | $ | 9,325,330 | | | $ | 9,200,765 | | | $ | 8,988,069 | |
Loan yield excluding purchase accounting adjustment | | | 4.53 | % | | | 4.59 | % | | | 4.65 | % | | | 4.64 | % | | | 4.71 | % | | | 4.60 | % | | | 4.78 | % |
Loan yield, as reported | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % | | | 5.51 | % | | | 5.93 | % | | | 5.17 | % | | | 5.85 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Securities Yield(P) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on securities, as reported | | $ | 48,301 | | | $ | 48,610 | | | $ | 48,530 | | | $ | 48,562 | | | $ | 47,108 | | | $ | 194,003 | | | $ | 188,744 | |
Purchase accounting adjustment-securities amortization | | | 1,578 | | | | 1,565 | | | | 1,579 | | | | 1,647 | | | | 1,590 | | | | 6,369 | | | | 6,590 | |
Interest on securities excluding amortization | | $ | 49,879 | | | $ | 50,175 | | | $ | 50,109 | | | $ | 50,209 | | | $ | 48,698 | | | $ | 200,372 | | | $ | 195,334 | |
Average securities | | $ | 9,524,084 | | | $ | 9,706,373 | | | $ | 9,688,961 | | | $ | 9,241,434 | | | $ | 8,835,176 | | | $ | 9,541,443 | | | $ | 8,723,011 | |
Securities yield excluding purchase accounting adjustment | | | 2.08 | % | | | 2.05 | % | | | 2.07 | % | | | 2.20 | % | | | 2.19 | % | | | 2.10 | % | | | 2.24 | % |
Securities yield, as reported | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % | | | 2.13 | % | �� | | 2.12 | % | | | 2.03 | % | | | 2.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Time Deposits Yield(P) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on time deposits, as reported | | $ | 3,253 | | | $ | 3,400 | | | $ | 3,568 | | | $ | 3,589 | | | $ | 1,957 | | | $ | 13,810 | | | $ | 15,904 | |
Purchase accounting adjustment-time deposit amortization | | | 195 | | | | 220 | | | | 220 | | | | 420 | | | | 2,443 | | | | 1,055 | | | | 2,556 | |
Interest on time deposits excluding amortization | | $ | 3,448 | | | $ | 3,620 | | | $ | 3,788 | | | $ | 4,009 | | | $ | 4,400 | | | $ | 14,865 | | | $ | 18,460 | |
Average time deposits | | $ | 2,560,527 | | | $ | 2,685,346 | | | $ | 2,821,058 | | | $ | 2,956,038 | | | $ | 3,083,047 | | | $ | 2,754,466 | | | $ | 3,129,710 | |
Time deposits yield excluding purchase accounting adjustment | | | 0.53 | % | | | 0.53 | % | | | 0.54 | % | | | 0.55 | % | | | 0.57 | % | | | 0.54 | % | | | 0.59 | % |
Time deposits yield, as reported | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % | | | 0.49 | % | | | 0.25 | % | | | 0.50 | % | | | 0.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis, excludingpurchase accounting adjustments to yield)(P) | | | 3.11 | % | | | 3.10 | % | | | 3.13 | % | | | 3.17 | % | | | 3.25 | % | | | 3.13 | % | | | 3.29 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis), as reported | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.57 | % | | | 3.89 | % | | | 3.38 | % | | | 3.80 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders, as reported | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 286,646 | | | $ | 297,441 | |
Less: Purchase accounting adjustments, net of tax(Q) | | | (4,328 | ) | | | (6,444 | ) | | | (8,132 | ) | | | (12,263 | ) | | | (19,729 | ) | | | (31,167 | ) | | | (61,284 | ) |
Net income available to common shareholders, excludingpurchase accounting adjustments(P) | | $ | 66,147 | | | $ | 64,154 | | | $ | 63,800 | | | $ | 61,378 | | | $ | 58,499 | | | $ | 255,479 | | | $ | 236,157 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share, excluding purchase accounting adjusments(P) | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 0.88 | | | $ | 0.84 | | | $ | 3.65 | | | $ | 3.43 | |
Diluted earnings per share, excluding purchase accounting adjustments(P) | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 0.88 | | | $ | 0.84 | | | $ | 3.65 | | | $ | 3.43 | |
| | | 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 Sep 30, 2015 | | | Balance at Dec 31, 2015 | | | Balance at Acquisition Date | | | Balance at Sep 30, 2015 | | | Balance at Dec 31, 2015 | | | Balance at Acquisition Date | | | | Balance at Sep 30, 2015 | | | Balance at Dec 31, 2015 | |
Loan marks: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired banks(R) | | $ | 225,589 | | | $ | 60,819 | | | $ | 54,734 | | | $ | 131,906 | | | $ | 41,814 | | | $ | 39,976 | | | $ | 357,495 | | | | $ | 102,633 | | | $ | 94,710 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired banks(R) | | | 5,456,934 | | | | 1,560,730 | | | | 1,430,501 | | | | 255,846 | | | | 83,272 | | | | 79,802 | | | | 5,712,780 | | (S) | | | 1,644,002 | | | | 1,510,303 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances less loan marks | | $ | 5,231,345 | | | $ | 1,499,911 | | | $ | 1,375,767 | | | $ | 123,940 | | | $ | 41,458 | | | $ | 39,826 | | | $ | 5,355,285 | | | | $ | 1,541,369 | | | $ | 1,415,593 | |
(P) Non-GAAP financial measure. |
(Q) Using effective tax rate of 33.0%,33.5%,33.6%, 33.4% and 33.0% for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively, and 33.4% and33.3% for the years ended December 31, 2015 and 2014, respectively. |
(R) Includes Bank of Texas, Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank and The F&M Bank & Trust Company. |
(S) Actual principal balances acquired. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | |
YIELD TREND | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % | | | 5.51 | % | | | 5.93 | % |
Investment securities(T) | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % | | | 2.13 | % | | | 2.12 | % |
Federal funds sold and other earning assets | | | 0.22 | % | | | 0.16 | % | | | 0.24 | % | | | 0.25 | % | | | 0.20 | % |
Total interest-earning assets | | | 3.41 | % | | | 3.47 | % | | | 3.56 | % | | | 3.77 | % | | | 4.04 | % |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 0.21 | % | | | 0.21 | % | | | 0.23 | % | | | 0.25 | % | | | 0.23 | % |
Savings and money market deposits | | | 0.24 | % | | | 0.24 | % | | | 0.25 | % | | | 0.25 | % | | | 0.24 | % |
Certificates and other time deposits | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % | | | 0.49 | % | | | 0.25 | % |
Other borrowings | | | 0.26 | % | | | 0.21 | % | | | 0.21 | % | | | 0.73 | % | | | 0.47 | % |
Securities sold under repurchase agreements | | | 0.25 | % | | | 0.25 | % | | | 0.25 | % | | | 0.24 | % | | | 0.25 | % |
Junior subordinated debentures | | | — | | | | — | | | | — | | | | 2.69 | % | | | 2.60 | % |
Total interest-bearing liabilities | | | 0.28 | % | | | 0.29 | % | | | 0.30 | % | | | 0.33 | % | | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.22 | % | | | 3.27 | % | | | 3.36 | % | | | 3.53 | % | | | 3.85 | % |
Net Interest Margin (tax equivalent) | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.57 | % | | | 3.89 | % |
(T) Yield on securities was impacted by net premium amortization of $13,775, $14,845, $15,466, $14,144 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | March 31, 2015 | | | Dec 31, 2014 | |
Balance Sheet Averages | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | | | $ | 9,189,380 | | | $ | 9,325,330 | |
Investment securities | | | 9,524,084 | | | | 9,706,373 | | | | 9,688,961 | | | | 9,241,434 | | | | 8,835,176 | |
Federal funds sold and other earning assets | | | 65,695 | | | | 55,000 | | | | 79,659 | | | | 267,672 | | | | 143,705 | |
Total interest-earning assets | | | 18,912,178 | | | | 18,918,052 | | | | 18,902,245 | | | | 18,698,486 | | | | 18,304,211 | |
Allowance for credit losses | | | (81,230 | ) | | | (80,793 | ) | | | (80,868 | ) | | | (80,681 | ) | | | (76,948 | ) |
Cash and due from banks | | | 257,986 | | | | 237,191 | | | | 241,110 | | | | 284,395 | | | | 273,503 | |
Goodwill | | | 1,881,812 | | | | 1,881,955 | | | | 1,881,955 | | | | 1,874,274 | | | | 1,883,654 | |
Core deposit intangibles, net | | | 50,545 | | | | 52,909 | | | | 55,245 | | | | 57,687 | | | | 43,157 | |
Other real estate | | | 3,014 | | | | 3,096 | | | | 2,972 | | | | 3,536 | | | | 4,843 | |
Fixed assets, net | | | 270,800 | | | | 273,818 | | | | 276,761 | | | | 280,515 | | | | 282,827 | |
Other assets | | | 390,011 | | | | 370,181 | | | | 359,601 | | | | 371,295 | | | | 395,045 | |
Total assets | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | | | $ | 21,489,507 | | | $ | 21,110,292 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,124,630 | | | $ | 5,078,234 | | | $ | 4,992,301 | | | $ | 4,899,279 | | | $ | 5,045,097 | |
Interest-bearing demand deposits | | | 3,767,138 | | | | 3,663,114 | | | | 3,891,682 | | | | 4,178,883 | | | | 3,546,825 | |
Savings and money market deposits | | | 5,511,240 | | | | 5,492,326 | | | | 5,476,931 | | | | 5,542,081 | | | | 5,442,568 | |
Certificates and other time deposits | | | 2,560,527 | | | | 2,685,346 | | | | 2,821,058 | | | | 2,956,038 | | | | 3,083,047 | |
Total deposits | | | 16,963,535 | | | | 16,919,020 | | | | 17,181,972 | | | | 17,576,281 | | | | 17,117,537 | |
Other borrowings | | | 839,164 | | | | 886,787 | | | | 684,371 | | | | 72,118 | | | | 168,167 | |
Securities sold under repurchase agreements | | | 314,278 | | | | 331,286 | | | | 333,220 | | | | 340,469 | | | | 323,882 | |
Junior subordinated debentures | | | - | | | | - | | | | - | | | | 119,408 | | | | 167,531 | |
Other liabilities | | | 116,860 | | | | 121,360 | | | | 98,133 | | | | 100,648 | | | | 106,222 | |
Shareholders' equity | | | 3,451,279 | | | | 3,397,956 | | | | 3,341,325 | | | | 3,280,583 | | | | 3,226,953 | |
Total liabilities and equity | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | | | $ | 21,489,507 | | | $ | 21,110,292 | |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | |
Period End Balances | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and other | | $ | 1,403,378 | | | | 14.9 | % | | $ | 1,372,737 | | | | 14.9 | % | | $ | 1,341,213 | | | | 14.7 | % | | $ | 1,390,068 | | | | 15.2 | % | | $ | 1,452,536 | | | | 15.7 | % |
Construction | | | 1,073,198 | | | | 11.4 | % | | | 1,072,985 | | | | 11.7 | % | | | 1,068,056 | | | | 11.7 | % | | | 1,040,845 | | | | 11.3 | % | | | 1,026,475 | | | | 11.1 | % |
1-4 family residential | | | 2,360,798 | | | | 25.0 | % | | | 2,318,841 | | | | 25.2 | % | | | 2,289,114 | | | | 25.1 | % | | | 2,272,788 | | | | 24.8 | % | | | 2,250,251 | | | | 24.4 | % |
Home equity | | | 279,867 | | | | 2.9 | % | | | 277,744 | | | | 3.0 | % | | | 273,538 | | | | 3.0 | % | | | 269,894 | | | | 2.9 | % | | | 271,930 | | | | 2.9 | % |
Commercial real estate | | | 3,131,083 | | | | 33.2 | % | | | 2,992,726 | | | | 32.5 | % | | | 2,958,239 | | | | 32.5 | % | | | 3,021,656 | | | | 33.0 | % | | | 3,030,340 | | | | 32.8 | % |
Agriculture (includes farmland) | | | 648,818 | | | | 6.9 | % | | | 618,563 | | | | 6.7 | % | | | 600,745 | | | | 6.6 | % | | | 556,839 | | | | 6.1 | % | | | 551,646 | | | | 6.0 | % |
Consumer | | | 142,363 | | | | 1.5 | % | | | 146,216 | | | | 1.6 | % | | | 149,991 | | | | 1.6 | % | | | 152,077 | | | | 1.7 | % | | | 160,596 | | | | 1.7 | % |
Energy Loans | | | 399,084 | | | | 4.2 | % | | | 405,176 | | | | 4.4 | % | | | 433,439 | | | | 4.8 | % | | | 461,838 | | | | 5.0 | % | | | 500,409 | | | | 5.4 | % |
Total loans | | $ | 9,438,589 | | | | | | | $ | 9,204,988 | | | | | | | $ | 9,114,335 | | | | | | | $ | 9,166,005 | | | | | | | $ | 9,244,183 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing DDA | | $ | 5,136,579 | | | | 29.1 | % | | $ | 5,093,175 | | | | 30.1 | % | | $ | 5,040,628 | | | | 29.7 | % | | $ | 5,038,436 | | | | 28.7 | % | | $ | 4,936,420 | | | | 27.9 | % |
Interest-bearing DDA | | | 4,481,575 | | | | 25.3 | % | | | 3,604,798 | | | | 21.3 | % | | | 3,746,939 | | | | 22.0 | % | | | 4,038,690 | | | | 23.0 | % | | | 4,260,038 | | | | 24.1 | % |
Money market | | | 3,639,187 | | | | 20.6 | % | | | 3,716,094 | | | | 21.9 | % | | | 3,607,000 | | | | 21.2 | % | | | 3,773,011 | | | | 21.5 | % | | | 3,680,711 | | | | 20.8 | % |
Savings | | | 1,940,855 | | | | 11.0 | % | | | 1,896,725 | | | | 11.2 | % | | | 1,853,322 | | | | 10.9 | % | | | 1,828,790 | | | | 10.4 | % | | | 1,784,889 | | | | 10.1 | % |
Certificates and other time deposits | | | 2,482,923 | | | | 14.0 | % | | | 2,629,145 | | | | 15.5 | % | | | 2,753,775 | | | | 16.2 | % | | | 2,882,425 | | | | 16.4 | % | | | 3,031,100 | | | | 17.1 | % |
Total deposits | | $ | 17,681,119 | | | | | | | $ | 16,939,937 | | | | | | | $ | 17,001,664 | | | | | | | $ | 17,561,352 | | | | | | | $ | 17,693,158 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio | | | 53.4 | % | | | | | | | 54.3 | % | | | | | | | 53.6 | % | | | | | | | 52.2 | % | | | | | | | 52.2 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Single family residential construction | | $ | 353,706 | | | | 32.9 | % | | $ | 351,169 | | | | 32.6 | % | | $ | 354,211 | | | | 33.0 | % | | $ | 356,081 | | | | 34.1 | % | | $ | 329,797 | | | | 32.0 | % |
Land development | | | 88,239 | | | | 8.2 | % | | | 84,040 | | | | 7.8 | % | | | 84,864 | | | | 7.9 | % | | | 89,403 | | | | 8.5 | % | | | 84,051 | | | | 8.2 | % |
Raw land | | | 153,274 | | | | 14.3 | % | | | 143,955 | | | | 13.4 | % | | | 145,885 | | | | 13.6 | % | | | 129,470 | | | | 12.4 | % | | | 106,058 | | | | 10.3 | % |
Residential lots | | | 130,596 | | | | 12.1 | % | | | 131,793 | | | | 12.3 | % | | | 127,671 | | | | 11.9 | % | | | 128,064 | | | | 12.2 | % | | | 148,763 | | | | 14.4 | % |
Commercial lots | | | 87,375 | | | | 8.1 | % | | | 84,162 | | | | 7.8 | % | | | 87,719 | | | | 8.2 | % | | | 92,677 | | | | 8.9 | % | | | 89,565 | | | | 8.7 | % |
Commercial construction and other | | | 262,783 | | | | 24.4 | % | | | 281,231 | | | | 26.1 | % | | | 271,833 | | | | 25.4 | % | | | 249,504 | | | | 23.9 | % | | | 272,723 | | | | 26.4 | % |
Net unaccreted discount | | | (2,775 | ) | | | | | | | (3,365 | ) | | | | | | | (4,127 | ) | | | | | | | (4,354 | ) | | | | | | | (4,482 | ) | | | | |
Total construction loans | | $ | 1,073,198 | | | | | | | $ | 1,072,985 | | | | | | | $ | 1,068,056 | | | | | | | $ | 1,040,845 | | | | | | | $ | 1,026,475 | | | | | |
Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2015 |
Collateral Type | | Houston | | | Dallas | | | Austin | | | OK City | | | Tulsa | | | Other(U) | | | Total | | |
Shopping center/retail | | $ | 163,362 | | | $ | 45,874 | | | $ | 27,793 | | | $ | 29,491 | | | $ | 23,365 | | | $ | 120,964 | | | $ | 410,849 | | |
Commercial & industrial buildings | | | 78,431 | | | | 31,714 | | | | 6,557 | | | | 7,692 | | | | 9,887 | | | | 61,756 | | | | 196,037 | | |
Office buildings | | | 58,735 | | | | 135,081 | | | | 21,174 | | | | 24,569 | | | | 7,912 | | | | 74,155 | | | | 321,626 | | |
Medical buildings | | | 48,905 | | | | 17,971 | | | | 56 | | | | 9,748 | | | | 8,310 | | | | 51,103 | | | | 136,093 | | |
Apartment buildings | | | 45,817 | | | | 10,803 | | | | 13,392 | | | | 16,989 | | | | 10,459 | | | | 105,049 | | | | 202,509 | | |
Hotel | | | 23,039 | | | | 33,435 | | | | 12,004 | | | | 28,426 | | | | - | | | | 89,250 | | | | 186,154 | | |
Other | | | 81,585 | | | | 12,198 | | | | 16,772 | | | | 12,204 | | | | 12,055 | | | | 95,618 | | | | 230,432 | | |
Total | | $ | 499,874 | | | $ | 287,076 | | | $ | 97,748 | | | $ | 129,119 | | | $ | 71,988 | | | $ | 597,895 | | | $ | 1,683,700 | | (V) |
(U) Includes other MSA and non-MSA regions. |
(V) Represents a portion of total commercial real estate loans of $3.131 billion as of December 31, 2015. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Dec 31, 2015 | | | Dec 31, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 39,711 | | | $ | 44,935 | | | $ | 31,987 | | | $ | 29,252 | | | $ | 31,422 | | | $ | 39,711 | | | $ | 31,422 | |
Accruing loans 90 or more days past due | | | 614 | | | | 261 | | | | 153 | | | | 2,968 | | | | 2,193 | | | | 614 | | | | 2,193 | |
Total nonperforming loans | | | 40,325 | | | | 45,196 | | | | 32,140 | | | | 32,220 | | | | 33,615 | | | | 40,325 | | | | 33,615 | |
Repossessed assets | | | 171 | | | | 161 | | | | 173 | | | | 146 | | | | 67 | | | | 171 | | | | 67 | |
Other real estate | | | 2,963 | | | | 3,271 | | | | 2,806 | | | | 3,010 | | | | 3,237 | | | | 2,963 | | | | 3,237 | |
Total nonperforming assets | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 35,376 | | | $ | 36,919 | | | $ | 43,459 | | | $ | 36,919 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 22,275 | | | $ | 26,200 | | | $ | 20,295 | | | $ | 16,830 | | | $ | 21,418 | | | $ | 22,275 | | | $ | 21,418 | |
Construction, land development and other land loans | | | 134 | | | | 475 | | | | 813 | | | | 3,023 | | | | 1,893 | | | | 134 | | | | 1,893 | |
1-4 family residential (including home equity) | | | 4,692 | | | | 4,766 | | | | 5,124 | | | | 5,087 | | | | 5,232 | | | | 4,692 | | | | 5,232 | |
Commercial real estate (including multi-family residential) | | | 15,836 | | | | 16,485 | | | | 7,939 | | | | 9,736 | | | | 6,695 | | | | 15,836 | | | | 6,695 | |
Agriculture (including farmland) | | | 208 | | | | 376 | | | | 605 | | | | 281 | | | | 473 | | | | 208 | | | | 473 | |
Consumer and other | | | 314 | | | | 326 | | | | 343 | | | | 419 | | | | 1,208 | | | | 314 | | | | 1,208 | |
Total | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 35,376 | | | $ | 36,919 | | | $ | 43,459 | | | $ | 36,919 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of loans/properties | | | 147 | | | | 159 | | | | 161 | | | | 166 | | | | 169 | | | | 147 | | | | 169 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses at end of period | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 80,963 | | | $ | 80,762 | | | $ | 81,384 | | | $ | 80,762 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | (528 | ) | | $ | 4,426 | | | $ | (28 | ) | | $ | 504 | | | $ | 318 | | | | 4,374 | | | $ | 352 | |
Construction, land development and other land loans | | | (109 | ) | | | 173 | | | | (2 | ) | | | 145 | | | | (1 | ) | | | 207 | | | | 69 | |
1-4 family residential (including home equity) | | | 1 | | | | 110 | | | | 12 | | | | 86 | | | | 420 | | | | 209 | | | | 1,027 | |
Commercial real estate (including multi-family residential) | | | 194 | | | | 53 | | | | 114 | | | | 33 | | | | 1,732 | | | | 394 | | | | 1,791 | |
Agriculture (including farmland) | | | (77 | ) | | | (40 | ) | | | (65 | ) | | | (78 | ) | | | (13 | ) | | | (260 | ) | | | (990 | ) |
Consumer and other | | | 638 | | | | 557 | | | | 460 | | | | 359 | | | | 745 | | | | 2,014 | | | | 2,546 | |
Total | | $ | 119 | | | $ | 5,279 | | | $ | 491 | | | $ | 1,049 | | | $ | 3,201 | | | $ | 6,938 | | | $ | 4,795 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets to average earning assets | | | 0.23 | % | | | 0.26 | % | | | 0.19 | % | | | 0.19 | % | | | 0.20 | % | | | 0.23 | % | | | 0.21 | % |
Nonperforming assets to loans and other real estate | | | 0.46 | % | | | 0.53 | % | | | 0.39 | % | | | 0.39 | % | | | 0.40 | % | | | 0.46 | % | | | 0.40 | % |
Net charge-offs to average loans (annualized) | | | 0.01 | % | | | 0.23 | % | | | 0.02 | % | | | 0.05 | % | | | 0.14 | % | | | 0.08 | % | | | 0.05 | % |
Allowance for credit losses to total loans | | | 0.86 | % | | | 0.88 | % | | | 0.89 | % | | | 0.88 | % | | | 0.87 | % | | | 0.86 | % | | | 0.87 | % |
Allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30)(E) | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.12 | % | | | 1.14 | % | | | 1.01 | % | | | 1.14 | % |
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 | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Dec 31, 2015 | | | Dec 31, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average tangible common equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | | | $ | 78,228 | | | $ | 286,646 | | | $ | 297,441 | |
Average shareholders' equity | | $ | 3,451,279 | | | $ | 3,397,956 | | | $ | 3,341,325 | | | $ | 3,280,583 | | | $ | 3,226,953 | | | $ | 3,368,788 | | | $ | 3,080,324 | |
Less: Average goodwill and other intangible assets | | | (1,932,357 | ) | | | (1,934,864 | ) | | | (1,937,200 | ) | | | (1,931,961 | ) | | | (1,926,811 | ) | | | (1,934,099 | ) | | | (1,853,350 | ) |
Average tangible shareholders’ equity | | $ | 1,518,922 | | | $ | 1,463,092 | | | $ | 1,404,125 | | | $ | 1,348,622 | | | $ | 1,300,142 | | | $ | 1,434,689 | | | $ | 1,226,974 | |
Return on average tangible common equity: | | | 18.56 | % | | | 19.30 | % | | | 20.49 | % | | | 21.84 | % | | | 23.87 | % | | | 19.98 | % | | | 24.24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible book value per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 3,462,910 | | | $ | 3,411,239 | | | $ | 3,357,285 | | | $ | 3,301,861 | | | $ | 3,244,826 | | | $ | 3,462,910 | | | $ | 3,244,826 | |
Less: Goodwill and other intangible assets | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,938,413 | ) | | | (1,933,138 | ) | | | (1,918,244 | ) | | | (1,933,138 | ) |
Tangible shareholders’ equity | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,363,448 | | | $ | 1,311,688 | | | $ | 1,544,666 | | | $ | 1,311,688 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | | 70,022 | | | | 70,040 | | | | 70,040 | | | | 70,024 | | | | 69,780 | | | | 70,022 | | | | 69,780 | |
Tangible book value per share: | | $ | 22.06 | | | $ | 21.10 | | | $ | 20.29 | | | $ | 19.47 | | | $ | 18.80 | | | $ | 22.06 | | | $ | 18.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible shareholders’ equity | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,363,448 | | | $ | 1,311,688 | | | $ | 1,544,666 | | | $ | 1,311,688 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | | | $ | 21,507,733 | | | $ | 22,037,216 | | | $ | 21,507,733 | |
Less: Goodwill and other intangible assets | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,938,413 | ) | | | (1,933,138 | ) | | | (1,918,244 | ) | | | (1,933,138 | ) |
Tangible assets | | $ | 20,118,972 | | | $ | 19,633,569 | | | $ | 19,750,264 | | | $ | 19,668,446 | | | $ | 19,574,595 | | | $ | 20,118,972 | | | $ | 19,574,595 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | 7.68 | % | | | 7.53 | % | | | 7.20 | % | | | 6.93 | % | | | 6.70 | % | | | 7.68 | % | | | 6.70 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | | | Dec 31, 2014 | | | Dec 31, 2015 | | | Dec 31, 2014 | |
Allowance for credit losses to total loans, excluding acquired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 80,963 | | | $ | 80,762 | | | $ | 81,384 | | | $ | 80,762 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,166,005 | | | $ | 9,244,183 | | | $ | 9,438,589 | | | $ | 9,244,183 | |
Less: Fair value of acquired loans (acquired portfolio loan balances less loan marks) | | $ | 1,415,593 | | | $ | 1,541,369 | | | $ | 1,705,552 | | | $ | 1,910,646 | | | $ | 2,154,148 | | | $ | 1,415,593 | | | $ | 2,154,148 | |
Total loans less acquired loans | | $ | 8,022,996 | | | $ | 7,663,619 | | | $ | 7,408,783 | | | $ | 7,255,359 | | | $ | 7,090,035 | | | $ | 8,022,996 | | | $ | 7,090,035 | |
Allowance for credit losses to total loans, excluding acquired loans (non-GAAP basis) | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.12 | % | | | 1.14 | % | | | 1.01 | % | | | 1.14 | % |
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