Exhibit 99.1
PRESS RELEASE | For more information contact: |
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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 FIRST QUARTER
2016EARNINGS
| | ● | First quarter 2016 earnings per share (diluted) of$0.98 |
| | | |
| | ● | First quarter net income of $68.951 million |
| | | |
| | ● | Nonperforming assets remain low at0.29% of first quarter average earning assets |
| | | |
| | ● | Return on first quarter average assets (annualized) of 1.24% |
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| | ● | Return on first quarter averagetangiblecommon equity of17.60% |
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| | ● | First quarter efficiency ratio of 41.08% |
HOUSTON, April 27, 2016. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®(collectively, “Prosperity”), reported net income for the quarter ended March 31, 2016 of $68.951 million or $0.98per diluted common share. Additionally, nonperforming assets remain low at 0.29% of first quarter average earning assets.
“I am pleased to share the positive earnings we showed for the first quarter of 2016. We showed an impressive return on first quarter average tangible common equity of 17.60% and a notable 1.24% annualized return on first quarter average assets. Our earnings were impacted by a larger than normal provision for credit losses of $14.0 million. During the quarter we experienced a loss in three credits that were from acquired banks. Two of the credits were energy credits with total charge-offs of $6.0 million and one was an agricultural credit with a charge-off of $7.0 million,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.
“Despite the downturn in the oil and gas industry, the unemployment rates in Texas and Oklahoma remain strong. Obviously, parts of Texas are impacted more than others, such as Midland/Odessa, South Texas and Houston; however, other parts of Texas and Oklahoma are doing well, including Dallas/Ft. Worth, which has shown solid population and job growth, as well as Austin, San Antonio and the Bryan/College Station area. The petrochemical, medical and hospitality industries have taken up a lot of slack in the Houston and South Texas areas. I am constantly amazed at the resiliency in the markets we serve. Grade A office space and apartments have been negatively impacted in Houston, but are still holding up fairly well. Retail real estate is continuing to do very well. The aerospace industry is creating new jobs and a need for new homes in Oklahoma,” continued Zalman.
“Our associates are working hard selling our products and services, including deposits, loans, trust, mortgage banking, wealth management and cash management, as well as others that help our customers with their financial stability. I am very optimistic about our future. We believe that the hard work of our entire team will help our customers grow and, in turn, increase shareholder value,” concluded Zalman.
Results ofOperations for theThreeMonthsEndedMarch 31, 2016
Net income was $68.951 million for the three months ended March 31, 2016 compared with $73.641 million for the same period in 2015. Net income per diluted common share was $0.98 for the three months ended March 31, 2016 compared with $1.05 for the same period in 2015. Net income (excluding purchase accounting adjustments) was $60.239 million for the quarter ended March 31, 2016 compared with $61.378 million for the quarter ended March 31, 2015. Net income per diluted common share (excluding purchase accounting adjustments) was $0.86 for the three months ended March 31, 2016 compared with $0.88 for the three months ended March 31, 2015. The reconciliation of these non-GAAP financial measures is shown on page 11. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2016 were 1.24%, 7.85% and 17.60%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 41.08% for the three months ended March 31, 2016.
Net interest income before provision for credit losses for the quarter ended March 31, 2016 was $166.257 million compared with $162.905 million during the same period in 2015. This increase was primarily due to an increase in average interest-earning assets of 3.8%, partially offset by a decrease in loan discount accretion of $5.153 million for the three months ended March 31, 2016. Linked quarter net interest income before provision for credit losses was $166.257 million compared with $153.258 million during the three months ended December 31, 2015, primarily due to the acquisition of Tradition Bancshares, Inc. and its wholly-owned subsidiary Tradition Bank (collectively “Tradition”) on January 1, 2016.
The net interest margin on a tax equivalent basis was 3.48% for the three months ended March 31, 2016, compared with 3.57% for the same period in 2015. This change was primarily due to a decrease in loan discount accretion of $5.153 million for the three months ended March 31, 2016 compared with the three months ended March 31, 2015. Linked quarter net interest margin on a tax equivalent basis was 3.48% for the three months ended March 31, 2016 compared with 3.24% for the three months ended December 31, 2015. This change was primarily due to an increase in average interest-earning assets and loan discount accretion. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.21% for the three months ended March 31, 2016, compared with 3.17% for the same period in 2015 and 3.11% for the three months ended December 31, 2015. The reconciliation of these non-GAAP financial measures is shown on page 11.
Noninterest income was $30.793 million for the three months ended March 31, 2016 compared with $28.421 million for the same period in 2015, an increase of $2.372 million or 8.3%. This change was due to an increase in service charges on deposit accounts, an increase in mortgage income and an increase in other noninterest income. On a linked quarter basis, noninterest income increased $510 thousand or 1.7% compared with the quarter ended December 31, 2015.
Noninterest expense was $80.528 million for the three months ended March 31, 2016 compared with $79.462 million for the same period in 2015, an increase of $1.066 million or 1.3%. This change was primarily due to an increase in other noninterest expense. On a linked quarter basis, noninterest expense increased $2.619 million or 3.4% compared with the quarter ended December 31, 2015. This was primarily due to an increase in salaries and benefits expense as a result of the Tradition acquisition and an increase in regulatory assessments and FDIC insurance. One-time pre-tax merger related expenses of $624 thousand related to the Tradition acquisition were recorded during the first quarter of 2016.
Balance Sheet Information
At March 31, 2016, Prosperity had $21.978 billion in total assets, an increase of $371.486 million or 1.7%, compared with $21.607 billion at March 31, 2015.
Loans at March 31, 2016 were $9.654 billion, an increase of $488.403 millionor 5.3%, compared with $9.166 billion at March 31, 2015. Linked quarter loans increased $215.819 million or 2.3% (9.1% annualized) from $9.439 billion at December 31, 2015. Linked quarter loans were impacted by the acquisition of Tradition and a reduction in oil and gas loans.
As part of its commercial and industrial lending activities, Prosperity extends credit to oil and gas production and service 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 service loans are loans to companies that provide services for oil and gas production and exploration. At March 31, 2016, oil and gas loans totaled $362.826 million or 3.8% of total loans, of which $166.422 million were to production companies and $196.404 million were to service companies. This compares with total oil and gas loans of $461.838 million or 5.0% of total loans at March 31, 2015, of which $213.177 million were to production companies and $248.661 million were to service companies. On a linked quarter basis, oil and gas loans decreased $36.258 million, from $399.084 million or 4.2% of total loans at December 31, 2015, of which $178.614 million were production loans and $220.470 million were servicing loans.
Deposits at March 31, 2016 were $17.873 billion, an increase of $311.414 million or 1.8%, compared with $17.561 billion at March 31, 2015. Linked quarter deposits increased $191.647 million or 1.1% from $17.681 billion at December 31, 2015.
The table below provides detail on loans acquired and deposits assumed in the acquisition of Tradition completed on January 1, 2016:
Balance Sheet Data (at period end)
(In thousands)
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | | | | | | |
Loans acquired (including new production since acquisition date): | | | | | | | | | | | | | | | | | | | | |
Tradition | | $ | 232,160 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
All other loans | | | 9,422,248 | | | | 9,438,589 | | | | 9,204,988 | | | | 9,114,335 | | | | 9,166,005 | |
Total loans | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,166,005 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Deposits assumed (including new deposits since acquisition date): | | | | | | | | | | | | | | | | | | | | |
Tradition | | $ | 476,203 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
All other deposits | | | 17,396,563 | | | | 17,681,119 | | | | 16,939,937 | | | | 17,001,664 | | | | 17,561,352 | |
Total deposits | | $ | 17,872,766 | | | $ | 17,681,119 | | | $ | 16,939,937 | | | $ | 17,001,664 | | | $ | 17,561,352 | |
Excluding loans acquired in the Tradition acquisition and new production at the acquired banking centers since the acquisition date, loans at March 31, 2016 increased $256.243 million or 2.8% compared with March 31, 2015 and, on a linked quarter basis, decreased $16.341 million or 0.2%.
Excluding deposits assumed in the Tradition acquisition and new deposits generated at the acquired banking centers since the acquisition date, deposits at March 31, 2016 decreased $164.789 million or 0.9% compared with March 31, 2015 and, on a linked quarter basis, decreased $284.556 million or 1.6%.
Asset Quality
Nonperforming assets totaled $56.985 million or 0.29% of quarterly average interest-earning assets at March 31, 2016, compared with $35.376 million or 0.19% of quarterly average interest-earning assets at March 31, 2015, and $43.459 million or 0.23% of quarterly average interest-earning assets at December 31, 2015. On a linked quarter basis, nonperforming assets increased $13.526 million or 31.1%.This increase was primarily due to an agricultural loan and other real estate acquired from Tradition.
The allowance for credit losses was 0.87% of total loans at March 31, 2016, 0.88% of total loans at March 31, 2015 and 0.86% of total loans at December 31, 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 1.03% of remaining loans as of March 31, 2016, compared with 1.12% at March 31, 2015 and 1.01% at December 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 $14.000 million for the three months ended March 31, 2016 compared with $1.250 million for the three months ended March 31, 2015 and $500 thousand for the three months ended December 31, 2015.
Net charge-offs were $11.670 million for the three months ended March 31, 2016 compared with $1.049 million for the three months ended March 31, 2015 and $119 thousand for the three months ended December 31, 2015. This increase was primarily due to charge-offs related to one agricultural loan and two energy loans during the first quarter of 2016.
Conference Call
Prosperity’s management team will host a conference call on Wednesday, April 27, 2016 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity’s first quarter 2016 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 7806381.
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 11 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 second quarter cash dividend of $0.30 per share, to be paid on July 1, 2016 to all shareholders of record as of June 17, 2016.
Stock Repurchase Program
On January 27, 2016, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 3.54 million shares, of its outstanding common stock may be acquired over the next twelve months at the discretion of management. During the first quarter of 2016, Prosperity Bancshares repurchased 1.16 million shares of its common stock at an average weighted price of $40.66 per share.
Acquisition ofTradition Bancshares, Inc.
On January 1, 2016, Prosperity Bancshares completed the acquisition of Tradition Bancshares, Inc. 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 Bancshares, Inc., 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 Bancshares, Inc. capital stock.
Prosperity Bancshares, Inc. ®
As of March 31, 2016, Prosperity Bancshares, Inc. ® is a $21.978 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 at www.prosperitybankusa.com, Retail Brokerage Services, Credit Cards, MasterMoney Debit Cards, 24 hour voice response banking, Trust and Wealth Management, Mortgage Services, Cash Management and Mobile Banking.
Prosperity currently operates 245 full-service banking locations: 65 in the Houston area, including The Woodlands; 29 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 - | | Fort Worth - | | Uptown | | West Texas Area - |
Bryan | | Haltom City | | Waugh Drive | | Abilene - |
Bryan-29th Street | | Keller | | Westheimer | | Antilley Road |
Bryan-East | | Roanoke | | West University | | Barrow Street |
Bryan-North | | Stockyards | | Woodcreek | | Cypress Street |
Caldwell | | | | | | Judge Ely |
College Station | | Other Dallas/Fort Worth Area | | Other Houston Area | | Mockingbird |
Crescent Point | | Locations - | | Locations - | | |
Hearne | | Arlington | | Angleton | | Lubbock - |
Huntsville | | Azle | | Bay City | | 4th Street |
Madisonville | | Ennis | | Beaumont | | 66th Street |
Navasota | | Gainesville | | Cinco Ranch | | 82nd Street |
New Waverly | | Glen Rose | | Cleveland | | 86th Street |
Rock Prairie | | Granbury | | East Bernard | | 98th Street |
Southwest Parkway | | Mesquite | | El Campo | | Avenue Q |
Tower Point | | Muenster | | Dayton | | North University |
Wellborn Road | | Sanger | | Galveston | | Texas Tech Student Union |
| | | Waxahachie | | Groves | | |
Central Texas Area - | | Weatherford | | Hempstead | | Midland - |
Austin - | | | | Hitchcock | | Wadley |
Allandale | | East Texas Area - | | Katy-Spring Green | | Wall Street |
Cedar Park | | Athens | | Liberty | | |
Congress | | Blooming Grove | | Magnolia | | Odessa - |
Lakeway | | Canton | | Magnolia Parkway | | Grandview |
Liberty Hill | | Carthage | | Mont Belvieu | | Grant |
Northland | | Corsicana | | Nederland | | Kermit Highway |
Oak Hill | | Crockett | | Needville | | Parkway |
Research Blvd | | Eustace | | Rosenberg | | |
Westlake | | Gilmer | | Shadow Creek | | Other West Texas Area Locations - |
| | | Grapeland | | Spring | | Big Spring |
Other Central Texas Area Locations - | | Gun Barrel City | | The Woodlands-College Park | | Brownfield |
Bastrop | | Jacksonville | �� | The Woodlands-I-45 | | Brownwood |
Canyon Lake | | Kerens | | The Woodlands-Research Forest | | Cisco |
Dime Box | | Longview | | Tomball | | Comanche |
Dripping Springs | | Mount Vernon | | Waller | | Early |
Elgin | | Palestine | | West Columbia | | Floydada |
Flatonia | | Rusk | | Wharton | | Gorman |
Georgetown | | Seven Points | | Winnie | | Levelland |
Gruene | | Teague | | Wirt | | Littlefield |
Kingsland | | Tyler-Beckham | | | | Merkel |
La Grange | | Tyler-South Broadway | | South Texas Area - | | Plainview |
Lexington | | Tyler-University | | Corpus Christi - | | San Angelo |
New Braunfels | | Winnsboro | | Calallen | | Slaton |
Pleasanton | | | | Carmel | | Snyder |
Round Rock | | Houston Area - | | Northwest | | |
San Antonio | | Houston - | | Saratoga | | Oklahoma |
Schulenburg | | Aldine | | Timbergate | | Central Oklahoma Area- |
Seguin | | Alief | | Water Street | | Oklahoma City - |
Smithville | | Bellaire (Tradition) | | | | 23rdStreet |
Thorndale | | Beltway | | Other South Texas Area | | Expressway |
Weimar | | Clear Lake | | Locations - | | I-240 |
| | | Copperfield | | Alice | | Memorial |
Dallas/Fort Worth Area - | | Cypress | | Aransas Pass | | |
Dallas - | | Downtown | | Beeville | | Other Central Oklahoma Area |
Abrams Centre | | Eastex | | Colony Creek | | Locations - |
Balch Springs | | Fairfield | | Cuero | | Edmond |
Camp Wisdom | | First Colony | | Edna | | Norman |
Cedar Hill | | Fry Road | | Goliad | | |
Dallas – Central Expressway | | Gessner | | Gonzales | | Tulsa Area- |
Forest Park | | Gladebrook | | Hallettsville | | Tulsa - |
Frisco | | Grand Parkway | | Kingsville | | Garnett |
Frisco-West | | Heights | | Mathis | | Harvard |
Kiest | | Highway 6 West | | Padre Island | | Memorial |
McKinney | | Little York | | Palacios | | Sheridan |
McKinney-Stonebridge | | Medical Center | | Port Lavaca | | S. Harvard |
Midway | | Memorial Drive | | Portland | | Utica Tower |
Northwest Highway | | Northside | | Rockport | | Yale |
Plano | | Pasadena | | Sinton | | |
Preston Forest | | Pecan Grove | | Taft | | Other Tulsa Area Locations - |
Preston Road | | Pin Oak | | Victoria | | Owasso |
Red Oak | | River Oaks | | Victoria-Navarro | | |
Sachse | | Sugar Land | | Victoria-North | | |
The Colony | | SW Medical Center | | Yoakum | | |
Turtle Creek | | Tanglewood | | Yorktown | | |
Westmoreland | | The Plaza | | | | |
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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, 2015 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)
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
(at period end) | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,166,005 | |
Investment securities(A) | | | 9,448,704 | | | | 9,502,427 | | | | 9,530,761 | | | | 9,698,079 | | | | 9,579,496 | |
Federal funds sold | | | 1,386 | | | | 1,418 | | | | 996 | | | | 1,451 | | | | 1,639 | |
Allowance for credit losses | | | (83,714 | ) | | | (81,384 | ) | | | (81,003 | ) | | | (80,972 | ) | | | (80,963 | ) |
Cash and due from banks | | | 334,592 | | | | 562,544 | | | | 300,230 | | | | 353,047 | | | | 352,642 | |
Goodwill | | | 1,903,451 | | | | 1,868,827 | | | | 1,881,955 | | | | 1,881,955 | | | | 1,881,955 | |
Core deposit intangibles, net | | | 47,195 | | | | 49,417 | | | | 51,712 | | | | 54,068 | | | | 56,458 | |
Other real estate owned | | | 16,695 | | | | 2,963 | | | | 3,271 | | | | 2,806 | | | | 3,010 | |
Fixed assets, net | | | 277,951 | | | | 267,996 | | | | 271,650 | | | | 275,347 | | | | 276,468 | |
Other assets | | | 377,677 | | | | 424,419 | | | | 402,676 | | | | 386,171 | | | | 370,149 | |
Total assets | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,112,943 | | | $ | 5,136,579 | | | $ | 5,093,175 | | | $ | 5,040,628 | | | $ | 5,038,436 | |
Interest-bearing deposits | | | 12,759,823 | | | | 12,544,540 | | | | 11,846,762 | | | | 11,961,036 | | | | 12,522,916 | |
Total deposits | | | 17,872,766 | | | | 17,681,119 | | | | 16,939,937 | | | | 17,001,664 | | | | 17,561,352 | |
Other borrowings | | | 186,225 | | | | 491,399 | | | | 786,571 | | | | 886,741 | | | | 331,914 | |
Securities sold under repurchase agreements | | | 304,204 | | | | 315,253 | | | | 310,038 | | | | 334,189 | | | | 318,418 | |
Junior subordinated debentures | | | 7,217 | | | | - | | | | - | | | | - | | | | - | |
Other liabilities | | | 108,873 | | | | 86,535 | | | | 119,451 | | | | 106,408 | | | | 93,314 | |
Total liabilities | | | 18,479,285 | | | | 18,574,306 | | | | 18,155,997 | | | | 18,329,002 | | | | 18,304,998 | |
Shareholders' equity(B) | | | 3,499,060 | | | | 3,462,910 | | | | 3,411,239 | | | | 3,357,285 | | | | 3,301,861 | |
Total liabilities and equity | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | |
(A) Includes $3,286, $3,138, $3,788, $4,655 and $5,296 in unrealized gains on available for sale securities for the quarterly periods ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. |
| |
(B) Includes $2,136, $2,040, $2,462, $3,026 and $3,442 in after-tax unrealized gains on available for sale securities for the quarterly periods ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
| | | | | | | | | | | | | | | | | | | | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 124,522 | | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 124,878 | |
Securities(C) | | | 52,573 | | | | 48,301 | | | | 48,610 | | | | 48,530 | | | | 48,562 | |
Federal funds sold and other earning assets | | | 96 | | | | 37 | | | | 22 | | | | 47 | | | | 165 | |
Total interest income | | | 177,191 | | | | 162,572 | | | | 165,543 | | | | 167,981 | | | | 173,605 | |
| | | | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 10,206 | | | | 8,575 | | | | 8,753 | | | | 9,169 | | | | 9,577 | |
Other borrowings | | | 482 | | | | 541 | | | | 473 | | | | 365 | | | | 129 | |
Securities sold under repurchase agreements | | | 212 | | | | 198 | | | | 209 | | | | 208 | | | | 203 | |
Junior subordinated debentures | | | 34 | | | | - | | | | - | | | | - | | | | 791 | |
Total interest expense | | | 10,934 | | | | 9,314 | | | | 9,435 | | | | 9,742 | | | | 10,700 | |
Net interest income | | | 166,257 | | | | 153,258 | | | | 156,108 | | | | 158,239 | | | | 162,905 | |
Provision for credit losses | | | 14,000 | | | | 500 | | | | 5,310 | | | | 500 | | | | 1,250 | |
Net interest income after provision for credit losses | | | 152,257 | | | | 152,758 | | | | 150,798 | | | | 157,739 | | | | 161,655 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | |
Nonsufficient funds (NSF) fees | | | 8,189 | | | | 8,974 | | | | 9,082 | | | | 8,310 | | | | 7,918 | |
Credit card, debit card and ATM card income | | | 5,827 | | | | 5,938 | | | | 5,955 | | | | 6,003 | | | | 5,638 | |
Service charges on deposit accounts | | | 4,590 | | | | 4,289 | | | | 4,438 | | | | 4,189 | | | | 4,179 | |
Trust income | | | 2,027 | | | | 1,988 | | | | 1,986 | | | | 2,047 | | | | 2,009 | |
Mortgage income | | | 1,471 | | | | 1,289 | | | | 1,770 | | | | 1,513 | | | | 1,148 | |
Brokerage income | | | 1,290 | | | | 1,407 | | | | 1,596 | | | | 1,541 | | | | 1,409 | |
Bank owned life insurance income | | | 1,383 | | | | 1,394 | | | | 1,384 | | | | 1,390 | | | | 1,380 | |
Net gain on sale of assets | | | 1,020 | | | | 581 | | | | 173 | | | | 270 | | | | 1,379 | |
Other noninterest income | | | 4,996 | | | | 4,423 | | | | 5,396 | | | | 5,034 | | | | 3,361 | |
Total noninterest income | | | 30,793 | | | | 30,283 | | | | 31,780 | | | | 30,297 | | | | 28,421 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits | | | 50,114 | | | | 48,500 | | | | 46,587 | | | | 47,819 | | | | 49,966 | |
Net occupancy and equipment | | | 5,624 | | | | 5,774 | | | | 6,088 | | | | 5,812 | | | | 5,964 | |
Credit and debit card, data processing and software amortization | | | 4,430 | | | | 3,996 | | | | 3,924 | | | | 4,045 | | | | 3,817 | |
Regulatory assessments and FDIC insurance | | | 3,430 | | | | 2,460 | | | | 3,366 | | | | 4,253 | | | | 4,354 | |
Core deposit intangibles amortization | | | 2,223 | | | | 2,295 | | | | 2,356 | | | | 2,390 | | | | 2,489 | |
Depreciation | | | 3,349 | | | | 3,310 | | | | 3,313 | | | | 3,420 | | | | 2,916 | |
Communications | | | 2,939 | | | | 2,814 | | | | 2,663 | | | | 2,835 | | | | 2,809 | |
Other real estate expense | | | 42 | | | | 241 | | | | 123 | | | | 129 | | | | 132 | |
Net (gain) loss on sale of other real estate | | | (14 | ) | | | 52 | | | | (68 | ) | | | (32 | ) | | | 14 | |
Other noninterest expense | | | 8,391 | | | | 8,467 | | | | 8,078 | | | | 9,064 | | | | 7,001 | |
Total noninterest expense | | | 80,528 | | | | 77,909 | | | | 76,430 | | | | 79,735 | | | | 79,462 | |
Income before income taxes | | | 102,522 | | | | 105,132 | | | | 106,148 | | | | 108,301 | | | | 110,614 | |
Provision for income taxes | | | 33,571 | | | | 34,657 | | | | 35,550 | | | | 36,369 | | | | 36,973 | |
Net income available to common shareholders | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | |
(C) Interest income on securities was reduced by net premium amortization of $10,253, $13,775, $14,845, $15,466 and $14,144 for the three month periods ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. |
Prosperity Bancshares, Inc. ®
Financial Highlights (Unaudited)
(Dollars and share amounts in thousands, except per share data and market prices)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
| | | | | | | | | | | | | | | | | | | | | |
Profitability | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | |
| | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 0.98 | | | $ | 1.01 | | | $ | 1.01 | | | $ | 1.03 | | | $ | 1.05 | |
Diluted earnings per share | | $ | 0.98 | | | $ | 1.01 | | | $ | 1.01 | | | $ | 1.03 | | | $ | 1.05 | |
| | | | | | | | | | | | | | | | | | | | | |
Return on average assets (D) | | | 1.24 | % | | | 1.30 | % | | | 1.30 | % | | | 1.33 | % | | | 1.37 | % |
Return on average common equity (D) | | | 7.85 | % | | | 8.17 | % | | | 8.31 | % | | | 8.61 | % | | | 8.98 | % |
Return on average tangible common equity (D) (E) | | | 17.60 | % | | | 18.56 | % | | | 19.30 | % | | | 20.49 | % | | | 21.84 | % |
Tax equivalent net interest margin (F) | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.57 | % |
Efficiency ratio(G) | | | 41.08 | % | | | 42.58 | % | | | 40.72 | % | | | 42.35 | % | | | 41.83 | % |
| | | | | | | | | | | | | | | | | | | | | |
Liquidity and Capital Ratios | | | | | | | | | | | | | | | | | | | | |
Equity to assets | | | 15.92 | % | | | 15.71 | % | | | 15.82 | % | | | 15.48 | % | | | 15.28 | % |
Common equity tier 1 capital | | | 13.20 | % | | | 13.55 | % | | | 13.37 | % | | | 12.91 | % | | | 12.40 | % |
Tier 1 risk-based capital | | | 13.20 | % | | | 13.55 | % | | | 13.37 | % | | | 12.91 | % | | | 12.40 | % |
Total risk-based capital | | | 13.90 | % | | | 14.25 | % | | | 14.09 | % | | | 13.63 | % | | | 13.14 | % |
Tier 1 leverage capital | | | 7.70 | % | | | 7.97 | % | | | 7.65 | % | | | 7.35 | % | | | 6.96 | % |
Period end tangible equity to period end tangible assets(E) | | | 7.73 | % | | | 7.68 | % | | | 7.53 | % | | | 7.20 | % | | | 6.93 | % |
| | | | | | | | | | | | | | | | | | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | |
Weighted-average shares used in computing earnings per share | | | | | | | | | | | | | | | | | | | | |
Basic | | | 70,174 | | | | 70,021 | | | | 70,041 | | | | 70,037 | | | | 70,034 | |
Diluted | | | 70,181 | | | | 70,032 | | | | 70,053 | | | | 70,053 | | | | 70,055 | |
Period end shares outstanding | | | 69,543 | | | | 70,022 | | | | 70,040 | | | | 70,040 | | | | 70,024 | |
Cash dividends paid per common share | | $ | 0.3000 | | | $ | 0.3000 | | | $ | 0.2725 | | | $ | 0.2725 | | | $ | 0.2725 | |
Book value per share | | $ | 50.32 | | | $ | 49.45 | | | $ | 48.70 | | | $ | 47.93 | | | $ | 47.15 | |
Tangible book value per share(E) | | $ | 22.27 | | | $ | 22.06 | | | $ | 21.10 | | | $ | 20.29 | | | $ | 19.47 | |
| | | | | | | | | | | | | | | | | | | | | |
Common Stock Market Price | | | | | | | | | | | | | | | | | | | | |
High | | $ | 47.50 | | | $ | 57.04 | | | $ | 59.97 | | | $ | 59.30 | | | $ | 55.88 | |
Low | | | 33.57 | | | | 46.23 | | | | 43.76 | | | | 50.91 | | | | 45.01 | |
Period end closing price | | | 46.39 | | | | 47.86 | | | | 49.11 | | | | 57.74 | | | | 52.48 | |
Employees – FTE | | | 3,132 | | | | 3,037 | | | | 3,051 | | | | 3,065 | | | | 3,081 | |
Number of banking centers | | | 246 | | | | 241 | | | | 244 | | | | 245 | | | | 244 | |
(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 based on average balances on an actual 365 day or 366 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. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS | | Three Months Ended | | |
| | | Mar 31, 2016 | | | | Dec 31, 2015 | | | | Mar 31, 2015 | | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (J) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (J) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (J) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,700,554 | | | $ | 124,522 | | | | 5.16 | % | | | $ | 9,322,399 | | | $ | 114,234 | | | | 4.86 | % | | | $ | 9,189,380 | | | $ | 124,878 | | | | 5.51 | % | |
Investment securities | | | 9,630,496 | | | | 52,573 | | | | 2.20 | % | (H) | | | 9,524,084 | | | | 48,301 | | | | 2.01 | % | (H) | | | 9,241,434 | | | | 48,562 | | | | 2.13 | % | (H) |
Federal funds sold and other earning assets | | | 80,400 | | | | 96 | | | | 0.48 | % | | | | 65,695 | | | | 37 | | | | 0.22 | % | | | | 267,672 | | | | 165 | | | | 0.25 | % | |
Total interest-earning assets | | | 19,411,450 | | | | 177,191 | | | | 3.67 | % | | | | 18,912,178 | | | | 162,572 | | | | 3.41 | % | | | | 18,698,486 | | | | 173,605 | | | | 3.77 | % | |
Allowance for credit losses | | | (83,883 | ) | | | | | | | | | | | | (81,230 | ) | | | | | | | | | | | | (80,681 | ) | | | | | | | | | |
Noninterest-earning assets | | | 2,937,937 | | | | | | | | | | | | | 2,854,168 | | | | | | | | | | | | | 2,871,702 | | | | | | | | | | |
Total assets | | $ | 22,265,504 | | | | | | | | | | | | $ | 21,685,116 | | | | | | | | | | | | $ | 21,489,507 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 4,442,652 | | | $ | 2,784 | | | | 0.25 | % | | | $ | 3,767,138 | | | $ | 2,005 | | | | 0.21 | % | | | $ | 4,178,883 | | | $ | 2,583 | | | | 0.25 | % | |
Savings and money market deposits | | | 5,820,161 | | | | 3,885 | | | | 0.27 | % | | | | 5,511,240 | | | | 3,317 | | | | 0.24 | % | | | | 5,542,081 | | | | 3,405 | | | | 0.25 | % | |
Certificates and other time deposits | | | 2,577,676 | | | | 3,537 | | | | 0.55 | % | | | | 2,560,527 | | | | 3,253 | | | | 0.50 | % | | | | 2,956,038 | | | | 3,589 | | | | 0.49 | % | |
Other borrowings | | | 361,778 | | | | 482 | | | | 0.54 | % | | | | 839,164 | | | | 541 | | | | 0.26 | % | | | | 72,118 | | | | 129 | | | | 0.73 | % | |
Securities sold under repurchase agreements | | | 306,192 | | | | 212 | | | | 0.28 | % | | | | 314,278 | | | | 198 | | | | 0.25 | % | | | | 340,469 | | | | 203 | | | | 0.24 | % | |
Junior subordinated debentures | | | 7,217 | | | | 34 | | | | 1.89 | % | | | | — | | | | — | | | | — | | | | | 119,408 | | | | 791 | | | | 2.69 | % | |
Total interest-bearing liabilities | | | 13,515,676 | | | | 10,934 | | | | 0.33 | % | (I) | | | 12,992,347 | | | | 9,314 | | | | 0.28 | % | (I) | | | 13,208,997 | | | | 10,700 | | | | 0.33 | % | (I) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 5,085,456 | | | | | | | | | | | | | 5,124,630 | | | | | | | | | | | | | 4,899,279 | | | | | | | | | | |
Other liabilities | | | 149,379 | | | | | | | | | | | | | 116,860 | | | | | | | | | | | | | 100,648 | | | | | | | | | | |
Total liabilities | | | 18,750,511 | | | | | | | | | | | | | 18,233,837 | | | | | | | | | | | | | 18,208,924 | | | | | | | | | | |
Shareholders' equity | | | 3,514,993 | | | | | | | | | | | | | 3,451,279 | | | | | | | | | | | | | 3,280,583 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 22,265,504 | | | | | | | | | | | | $ | 21,685,116 | | | | | | | | | | | | $ | 21,489,507 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 166,257 | | | | 3.44 | % | | | | | | | $ | 153,258 | | | | 3.22 | % | | | | | | | $ | 162,905 | | | | 3.53 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 1,836 | | | | | | | | | | | | | 1,412 | | | | | | | | | | | | | 1,664 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin (tax equivalent basis) | | | | | | $ | 168,093 | | | | 3.48 | % | | | | | | | $ | 154,670 | | | | 3.24 | % | | | | | | | $ | 164,569 | | | | 3.57 | % | |
(H) Yield on securities was impacted by net premium amortization of $10,253, $13,775 and $14,144 for the three month periods ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively. |
(I) Total cost of funds, including noninterest bearing deposits, was 0.24%, 0.20% and 0.24% for the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively. |
(J) Annualized and based on an actual 365 day or 366 day basis. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands, except per share data)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
Adjustment to Loan Yield(K) | | | | | | | | | | | | | | | | | | | | |
Interest on loans, as reported | | $ | 124,522 | | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 124,878 | |
Purchase accounting adjustment- loan discount accretion | | | | | | | | | | | | | | | | | | | | |
ASC 310-20 | | | (6,663 | ) | | | (6,066 | ) | | | (7,060 | ) | | | (10,388 | ) | | | (10,714 | ) |
ASC 310-30 | | | (7,831 | ) | | | (1,773 | ) | | | (3,974 | ) | | | (3,214 | ) | | | (8,933 | ) |
Total | | | (14,494 | ) | | | (7,839 | ) | | | (11,034 | ) | | | (13,602 | ) | | | (19,647 | ) |
Interest on loans excluding discount accretion | | $ | 110,028 | | | $ | 106,395 | | | $ | 105,877 | | | $ | 105,802 | | | $ | 105,231 | |
Average loans | | $ | 9,700,554 | | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | | | $ | 9,189,380 | |
Loan yield excluding purchase accounting adjustment | | | 4.56 | % | | | 4.53 | % | | | 4.59 | % | | | 4.65 | % | | | 4.64 | % |
Loan yield, as reported | | | 5.16 | % | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % | | | 5.51 | % |
| | | | | | | | | | | | | | | | | | | | | |
Adjustment to Securities Yield(K) | | | | | | | | | | | | | | | | | | | | |
Interest on securities, as reported | | $ | 52,573 | | | $ | 48,301 | | | $ | 48,610 | | | $ | 48,530 | | | $ | 48,562 | |
Purchase accounting adjustment-securities amortization | | | 1,722 | | | | 1,578 | | | | 1,565 | | | | 1,579 | | | | 1,647 | |
Interest on securities excluding amortization | | $ | 54,295 | | | $ | 49,879 | | | $ | 50,175 | | | $ | 50,109 | | | $ | 50,209 | |
Average securities | | $ | 9,630,496 | | | $ | 9,524,084 | | | $ | 9,706,373 | | | $ | 9,688,961 | | | $ | 9,241,434 | |
Securities yield excluding purchase accounting adjustment | | | 2.27 | % | | | 2.08 | % | | | 2.05 | % | | | 2.07 | % | | | 2.20 | % |
Securities yield, as reported | | | 2.20 | % | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % | | | 2.13 | % |
| | | | | | | | | | | | | | | | | | | | | |
Adjustment to Time Deposits Yield(K) | | | | | | | | | | | | | | | | | | | | |
Interest on time deposits, as reported | | $ | 3,537 | | | $ | 3,253 | | | $ | 3,400 | | | $ | 3,568 | | | $ | 3,589 | |
Purchase accounting adjustment- time deposit amortization | | | 182 | | | | 195 | | | | 220 | | | | 220 | | | | 420 | |
Interest on time deposits excluding amortization | | $ | 3,719 | | | $ | 3,448 | | | $ | 3,620 | | | $ | 3,788 | | | $ | 4,009 | |
Average time deposits | | $ | 2,577,676 | | | $ | 2,560,527 | | | $ | 2,685,346 | | | $ | 2,821,058 | | | $ | 2,956,038 | |
Time deposits yield excluding purchase accounting adjustment | | | 0.58 | % | | | 0.53 | % | | | 0.53 | % | | | 0.54 | % | | | 0.55 | % |
Time deposits yield, as reported | | | 0.55 | % | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % | | | 0.49 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis, excludingpurchase accounting adjustments to yield)(K) | | | 3.21 | % | | | 3.11 | % | | | 3.10 | % | | | 3.13 | % | | | 3.17 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis), as reported | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.57 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders, as reported | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | |
Less: Purchase accounting adjustments, net of tax(L) | | | (8,712 | ) | | | (4,328 | ) | | | (6,444 | ) | | | (8,132 | ) | | | (12,263 | ) |
Net income available to common shareholders, excludingpurchase accounting adjustments(K) | | $ | 60,239 | | | $ | 66,147 | | | $ | 64,154 | | | $ | 63,800 | | | $ | 61,378 | |
| | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share, excluding purchase accounting adjusments(K) | | $ | 0.86 | | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 0.88 | |
Diluted earnings per share, excluding purchase accounting adjustments(K) | | $ | 0.86 | | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 0.88 | |
| | | 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 Dec 31, 2015 | | | Balance at Mar 31, 2016 | | | Balance at Acquisition Date | | | Balance at Dec 31, 2015 | | | Balance at Mar 31, 2016 | | | Balance at Acquisition Date | | | | Balance at Dec 31, 2015 | | | Balance at Mar 31, 2016 | |
Loan marks: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Previously acquired banks(M) | | $ | 225,589 | | | $ | 54,734 | | | $ | 47,386 | | | $ | 131,906 | | | $ | 39,976 | | | $ | 27,928 | | | $ | 357,495 | | | | $ | 94,710 | | | $ | 75,314 | |
2016 acquisition(N) | | | 3,491 | | | | - | | | | 3,123 | | | | 10,222 | | | | - | | | | 6,126 | | | | 13,713 | | | | | - | | | | 9,249 | |
Total | | | 229,080 | | | | 54,734 | | | | 50,509 | | | | 142,128 | | | | 39,976 | | | | 34,054 | | | | 371,208 | | | | | 94,710 | | | | 84,563 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Previously acquired banks(M) | | | 5,456,934 | | | | 1,430,501 | | | | 1,289,661 | | | | 255,846 | | | | 79,802 | | | | 60,917 | | | | 5,712,780 | | | | | 1,510,303 | | | | 1,350,578 | |
2016 acquisition(N) | | | 234,064 | | | | - | | | | 216,631 | | | | 19,375 | | | | - | | | | 12,673 | | | | 253,439 | | | | | - | | | | 229,304 | |
Total | | | 5,690,998 | | | | 1,430,501 | | | | 1,506,292 | | | | 275,221 | | | | 79,802 | | | | 73,590 | | | | 5,966,219 | | (O) | | | 1,510,303 | | | | 1,579,882 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances less loan marks | | $ | 5,461,918 | | | $ | 1,375,767 | | | $ | 1,455,783 | | | $ | 133,093 | | | $ | 39,826 | | | $ | 39,536 | | | $ | 5,595,011 | | | | $ | 1,415,593 | | | $ | 1,495,319 | |
(K) Non-GAAP financial measure. |
(L) Using effective tax rate of 32.7%,33.0%,33.5%,33.6% and 33.4% for the three month periods ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. |
(M) 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. |
(N) Tradition Bank was acquired on January 1, 2016. During the first quarter of 2016, Tradition Bank added $253.4 million in loans with related purchase accounting adjustments of $13.7 million at acquisition date. |
(O) Actual principal balances acquired. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
YIELD TREND(P) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | | 5.16 | % | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % | | | 5.51 | % |
Investment securities(Q) | | | 2.20 | % | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % | | | 2.13 | % |
Federal funds sold and other earning assets | | | 0.48 | % | | | 0.22 | % | | | 0.16 | % | | | 0.24 | % | | | 0.25 | % |
Total interest-earning assets | | | 3.67 | % | | | 3.41 | % | | | 3.47 | % | | | 3.56 | % | | | 3.77 | % |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 0.25 | % | | | 0.21 | % | | | 0.21 | % | | | 0.23 | % | | | 0.25 | % |
Savings and money market deposits | | | 0.27 | % | | | 0.24 | % | | | 0.24 | % | | | 0.25 | % | | | 0.25 | % |
Certificates and other time deposits | | | 0.55 | % | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % | | | 0.49 | % |
Other borrowings | | | 0.54 | % | | | 0.26 | % | | | 0.21 | % | | | 0.21 | % | | | 0.73 | % |
Securities sold under repurchase agreements | | | 0.28 | % | | | 0.25 | % | | | 0.25 | % | | | 0.25 | % | | | 0.24 | % |
Junior subordinated debentures | | | 1.89 | % | | | — | | | | — | | | | — | | | | 2.69 | % |
Total interest-bearing liabilities | | | 0.33 | % | | | 0.28 | % | | | 0.29 | % | | | 0.30 | % | | | 0.33 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.44 | % | | | 3.22 | % | | | 3.27 | % | | | 3.36 | % | | | 3.53 | % |
Net Interest Margin (tax equivalent) | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.57 | % |
(P) Annualized and based on average balances on an actual 365 day or 366 day basis. |
(Q) Yield on securities was impacted by net premium amortization of $10,253, $13,775, $14,845, $15,466 and $14,144 for the three month periods ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
Balance Sheet Averages | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,700,554 | | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | | | $ | 9,189,380 | |
Investment securities | | | 9,630,496 | | | | 9,524,084 | | | | 9,706,373 | | | | 9,688,961 | | | | 9,241,434 | |
Federal funds sold and other earning assets | | | 80,400 | | | | 65,695 | | | | 55,000 | | | | 79,659 | | | | 267,672 | |
Total interest-earning assets | | | 19,411,450 | | | | 18,912,178 | | | | 18,918,052 | | | | 18,902,245 | | | | 18,698,486 | |
Allowance for credit losses | | | (83,883 | ) | | | (81,230 | ) | | | (80,793 | ) | | | (80,868 | ) | | | (80,681 | ) |
Cash and due from banks | | | 274,535 | | | | 257,986 | | | | 237,191 | | | | 241,110 | | | | 284,395 | |
Goodwill | | | 1,899,667 | | | | 1,881,812 | | | | 1,881,955 | | | | 1,881,955 | | | | 1,874,274 | |
Core deposit intangibles, net | | | 48,314 | | | | 50,545 | | | | 52,909 | | | | 55,245 | | | | 57,687 | |
Other real estate | | | 6,077 | | | | 3,014 | | | | 3,096 | | | | 2,972 | | | | 3,536 | |
Fixed assets, net | | | 279,179 | | | | 270,800 | | | | 273,818 | | | | 276,761 | | | | 280,515 | |
Other assets | | | 430,165 | | | | 390,011 | | | | 370,181 | | | | 359,601 | | | | 371,295 | |
Total assets | | $ | 22,265,504 | | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | | | $ | 21,489,507 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,085,456 | | | $ | 5,124,630 | | | $ | 5,078,234 | | | $ | 4,992,301 | | | $ | 4,899,279 | |
Interest-bearing demand deposits | | | 4,442,652 | | | | 3,767,138 | | | | 3,663,114 | | | | 3,891,682 | | | | 4,178,883 | |
Savings and money market deposits | | | 5,820,161 | | | | 5,511,240 | | | | 5,492,326 | | | | 5,476,931 | | | | 5,542,081 | |
Certificates and other time deposits | | | 2,577,676 | | | | 2,560,527 | | | | 2,685,346 | | | | 2,821,058 | | | | 2,956,038 | |
Total deposits | | | 17,925,945 | | | | 16,963,535 | | | | 16,919,020 | | | | 17,181,972 | | | | 17,576,281 | |
Other borrowings | | | 361,778 | | | | 839,164 | | | | 886,787 | | | | 684,371 | | | | 72,118 | |
Securities sold under repurchase agreements | | | 306,192 | | | | 314,278 | | | | 331,286 | | | | 333,220 | | | | 340,469 | |
Junior subordinated debentures | | | 7,217 | | | | - | | | | - | | | | - | | | | 119,408 | |
Other liabilities | | | 149,379 | | | | 116,860 | | | | 121,360 | | | | 98,133 | | | | 100,648 | |
Shareholders' equity | | | 3,514,993 | | | | 3,451,279 | | | | 3,397,956 | | | | 3,341,325 | | | | 3,280,583 | |
Total liabilities and equity | | $ | 22,265,504 | | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | | | $ | 21,489,507 | |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
Period End Balances | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and other | | $ | 1,441,679 | | | | 14.9 | % | | $ | 1,403,378 | | | | 14.9 | % | | $ | 1,372,737 | | | | 14.9 | % | | $ | 1,341,213 | | | | 14.7 | % | | $ | 1,390,068 | | | | 15.2 | % |
Construction | | | 1,173,524 | | | | 12.2 | % | | | 1,073,198 | | | | 11.4 | % | | | 1,072,985 | | | | 11.7 | % | | | 1,068,056 | | | | 11.7 | % | | | 1,040,845 | | | | 11.3 | % |
1-4 family residential | | | 2,379,503 | | | | 24.6 | % | | | 2,360,798 | | | | 25.0 | % | | | 2,318,841 | | | | 25.2 | % | | | 2,289,114 | | | | 25.1 | % | | | 2,272,788 | | | | 24.8 | % |
Home equity | | | 283,686 | | | | 2.9 | % | | | 279,867 | | | | 2.9 | % | | | 277,744 | | | | 3.0 | % | | | 273,538 | | | | 3.0 | % | | | 269,894 | | | | 2.9 | % |
Commercial real estate | | | 3,229,706 | | | | 33.5 | % | | | 3,131,083 | | | | 33.2 | % | | | 2,992,726 | | | | 32.5 | % | | | 2,958,239 | | | | 32.5 | % | | | 3,021,656 | | | | 33.0 | % |
Agriculture (includes farmland) | | | 641,293 | | | | 6.6 | % | | | 648,818 | | | | 6.9 | % | | | 618,563 | | | | 6.7 | % | | | 600,745 | | | | 6.6 | % | | | 556,839 | | | | 6.1 | % |
Consumer | | | 142,191 | | | | 1.5 | % | | | 142,363 | | | | 1.5 | % | | | 146,216 | | | | 1.6 | % | | | 149,991 | | | | 1.6 | % | | | 152,077 | | | | 1.7 | % |
Energy Loans | | | 362,826 | | | | 3.8 | % | | | 399,084 | | | | 4.2 | % | | | 405,176 | | | | 4.4 | % | | | 433,439 | | | | 4.8 | % | | | 461,838 | | | | 5.0 | % |
Total loans | | $ | 9,654,408 | | | | | | | $ | 9,438,589 | | | | | | | $ | 9,204,988 | | | | | | | $ | 9,114,335 | | | | | | | $ | 9,166,005 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing DDA | | $ | 5,112,943 | | | | 28.6 | % | | $ | 5,136,579 | | | | 29.1 | % | | $ | 5,093,175 | | | | 30.1 | % | | $ | 5,040,628 | | | | 29.7 | % | | $ | 5,038,436 | | | | 28.7 | % |
Interest-bearing DDA | | | 4,382,999 | | | | 24.5 | % | | | 4,481,575 | | | | 25.3 | % | | | 3,604,798 | | | | 21.3 | % | | | 3,746,939 | | | | 22.0 | % | | | 4,038,690 | | | | 23.0 | % |
Money market | | | 3,812,420 | | | | 21.3 | % | | | 3,639,187 | | | | 20.6 | % | | | 3,716,094 | | | | 21.9 | % | | | 3,607,000 | | | | 21.2 | % | | | 3,773,011 | | | | 21.5 | % |
Savings | | | 2,017,980 | | | | 11.3 | % | | | 1,940,855 | | | | 11.0 | % | | | 1,896,725 | | | | 11.2 | % | | | 1,853,322 | | | | 10.9 | % | | | 1,828,790 | | | | 10.4 | % |
Certificates and other time deposits | | | 2,546,424 | | | | 14.3 | % | | | 2,482,923 | | | | 14.0 | % | | | 2,629,145 | | | | 15.5 | % | | | 2,753,775 | | | | 16.2 | % | | | 2,882,425 | | | | 16.4 | % |
Total deposits | | $ | 17,872,766 | | | | | | | $ | 17,681,119 | | | | | | | $ | 16,939,937 | | | | | | | $ | 17,001,664 | | | | | | | $ | 17,561,352 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio | | | 54.0 | % | | | | | | | 53.4 | % | | | | | | | 54.3 | % | | | | | | | 53.6 | % | | | | | | | 52.2 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Single family residential construction | | $ | 407,519 | | | | 34.5 | % | | $ | 353,706 | | | | 32.9 | % | | $ | 351,169 | | | | 32.6 | % | | $ | 354,211 | | | | 33.0 | % | | $ | 356,081 | | | | 34.1 | % |
Land development | | | 84,141 | | | | 7.1 | % | | | 88,239 | | | | 8.2 | % | | | 84,040 | | | | 7.8 | % | | | 84,864 | | | | 7.9 | % | | | 89,403 | | | | 8.5 | % |
Raw land | | | 174,546 | | | | 14.8 | % | | | 153,274 | | | | 14.3 | % | | | 143,955 | | | | 13.4 | % | | | 145,885 | | | | 13.6 | % | | | 129,470 | | | | 12.4 | % |
Residential lots | | | 126,881 | | | | 10.8 | % | | | 130,596 | | | | 12.1 | % | | | 131,793 | | | | 12.3 | % | | | 127,671 | | | | 11.9 | % | | | 128,064 | | | | 12.2 | % |
Commercial lots | | | 80,286 | | | | 6.8 | % | | | 87,375 | | | | 8.1 | % | | | 84,162 | | | | 7.8 | % | | | 87,719 | | | | 8.2 | % | | | 92,677 | | | | 8.9 | % |
Commercial construction and other | | | 306,742 | | | | 26.0 | % | | | 262,783 | | | | 24.4 | % | | | 281,231 | | | | 26.1 | % | | | 271,833 | | | | 25.4 | % | | | 249,504 | | | | 23.9 | % |
Net unaccreted discount | | | (6,591 | ) | | | | | | | (2,775 | ) | | | | | | | (3,365 | ) | | | | | | | (4,127 | ) | | | | | | | (4,354 | ) | | | | |
Total construction loans | | $ | 1,173,524 | | | | | | | $ | 1,073,198 | | | | | | | $ | 1,072,985 | | | | | | | $ | 1,068,056 | | | | | | | $ | 1,040,845 | | | | | |
Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2016
Collateral Type | | Houston | | | Dallas | | | Austin | | | OK City | | | Tulsa | | | Other(R) | | | Total | |
Shopping center/retail | | $ | 198,214 | | | $ | 47,640 | | | $ | 31,384 | | | $ | 29,198 | | | $ | 28,527 | | | $ | 123,919 | | | $ | 458,882 | |
Commercial & industrial buildings | | | 76,039 | | | | 31,463 | | | | 8,270 | | | | 7,495 | | | | 9,742 | | | | 65,255 | | | | 198,264 | |
Office buildings | | | 76,774 | | | | 135,620 | | | | 20,531 | | | | 39,469 | | | | 7,630 | | | | 74,559 | | | | 354,583 | |
Medical buildings | | | 50,583 | | | | 8,850 | | | | 54 | | | | 24,050 | | | | 8,206 | | | | 48,428 | | | | 140,171 | |
Apartment buildings | | | 49,719 | | | | 9,956 | | | | 12,176 | | | | 16,593 | | | | 10,784 | | | | 82,743 | | | | 181,971 | |
Hotel | | | 27,771 | | | | 32,816 | | | | 11,912 | | | | 28,060 | | | | - | | | | 88,985 | | | | 189,544 | |
Other | | | 86,174 | | | | 10,078 | | | | 17,576 | | | | 11,626 | | | | 10,888 | | | | 86,640 | | | | 222,982 | |
Total | | $ | 565,274 | | | $ | 276,423 | | | $ | 101,903 | | | $ | 156,491 | | | $ | 75,777 | | | $ | 570,529 | | | $ | 1,746,397 | (S) |
(R) Includes other MSA and non-MSA regions. |
(S) Represents a portion of total commercial real estate loans of $3.230 billion as of March 31, 2016. |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
| | | | | | | | | | | | | | | | | | | | | |
Asset Quality | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 39,036 | | | $ | 39,711 | | | $ | 44,935 | | | $ | 31,987 | | | $ | 29,252 | |
Accruing loans 90 or more days past due | | | 1,093 | | | | 614 | | | | 261 | | | | 153 | | | | 2,968 | |
Total nonperforming loans | | | 40,129 | | | | 40,325 | | | | 45,196 | | | | 32,140 | | | | 32,220 | |
Repossessed assets | | | 161 | | | | 171 | | | | 161 | | | | 173 | | | | 146 | |
Other real estate | | | 16,695 | | | | 2,963 | | | | 3,271 | | | | 2,806 | | | | 3,010 | |
Total nonperforming assets | | $ | 56,985 | | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 35,376 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 18,835 | | | $ | 22,275 | | | $ | 26,200 | | | $ | 20,295 | | | $ | 16,830 | |
Construction, land development and other land loans | | | 2,913 | | | | 134 | | | | 475 | | | | 813 | | | | 3,023 | |
1-4 family residential (including home equity) | | | 6,226 | | | | 4,692 | | | | 4,766 | | | | 5,124 | | | | 5,087 | |
Commercial real estate (including multi-family residential) | | | 22,208 | | | | 15,836 | | | | 16,485 | | | | 7,939 | | | | 9,736 | |
Agriculture (including farmland) | | | 6,578 | | | | 208 | | | | 376 | | | | 605 | | | | 281 | |
Consumer and other | | | 225 | | | | 314 | | | | 326 | | | | 343 | | | | 419 | |
Total | | $ | 56,985 | | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 35,376 | |
| | | | | | | | | | | | | | | | | | | | | |
Number of loans/properties | | | 168 | | | | 147 | | | | 159 | | | | 161 | | | | 166 | |
| | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses at end of period | | $ | 83,714 | | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 80,963 | |
| | | | | | | | | | | | | | | | | | | | | |
Net charge-offs: | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 4,396 | | | $ | (528 | ) | | $ | 4,426 | | | $ | (28 | ) | | $ | 504 | |
Construction, land development and other land loans | | | (186 | ) | | | (109 | ) | | | 173 | | | | (2 | ) | | | 145 | |
1-4 family residential (including home equity) | | | 30 | | | | 1 | | | | 110 | | | | 12 | | | | 86 | |
Commercial real estate (including multi-family residential) | | | 59 | | | | 194 | | | | 53 | | | | 114 | | | | 33 | |
Agriculture (including farmland) | | | 6,962 | | | | (77 | ) | | | (40 | ) | | | (65 | ) | | | (78 | ) |
Consumer and other | | | 409 | | | | 638 | | | | 557 | | | | 460 | | | | 359 | |
Total | | $ | 11,670 | | | $ | 119 | | | $ | 5,279 | | | $ | 491 | | | $ | 1,049 | |
| | | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets to average earning assets | | | 0.29 | % | | | 0.23 | % | | | 0.26 | % | | | 0.19 | % | | | 0.19 | % |
Nonperforming assets to loans and other real estate | | | 0.59 | % | | | 0.46 | % | | | 0.53 | % | | | 0.39 | % | | | 0.39 | % |
Net charge-offs to average loans (annualized) | | | 0.48 | % | | | 0.01 | % | | | 0.23 | % | | | 0.02 | % | | | 0.05 | % |
Allowance for credit losses to total loans | | | 0.87 | % | | | 0.86 | % | | | 0.88 | % | | | 0.89 | % | | | 0.88 | % |
Allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30)(E) | | | 1.03 | % | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.12 | % |
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 11 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 | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
| | | | | | | | | | | | | | | | | | | | | |
Return on average tangible common equity: | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 73,641 | |
Average shareholders' equity | | $ | 3,514,993 | | | $ | 3,451,279 | | | $ | 3,397,956 | | | $ | 3,341,325 | | | $ | 3,280,583 | |
Less: Average goodwill and other intangible assets | | | (1,947,981 | ) | | | (1,932,357 | ) | | | (1,934,864 | ) | | | (1,937,200 | ) | | | (1,931,961 | ) |
Average tangible shareholders’ equity | | $ | 1,567,012 | | | $ | 1,518,922 | | | $ | 1,463,092 | | | $ | 1,404,125 | | | $ | 1,348,622 | |
Return on average tangible common equity: | | | 17.60 | % | | | 18.56 | % | | | 19.30 | % | | | 20.49 | % | | | 21.84 | % |
| | | | | | | | | | | | | | | | | | | | | |
Tangible book value per share: | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 3,499,060 | | | $ | 3,462,910 | | | $ | 3,411,239 | | | $ | 3,357,285 | | | $ | 3,301,861 | |
Less: Goodwill and other intangible assets | | | (1,950,646 | ) | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,938,413 | ) |
Tangible shareholders’ equity | | $ | 1,548,414 | | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,363,448 | |
| | | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | | 69,543 | | | | 70,022 | | | | 70,040 | | | | 70,040 | | | | 70,024 | |
Tangible book value per share: | | $ | 22.27 | | | $ | 22.06 | | | $ | 21.10 | | | $ | 20.29 | | | $ | 19.47 | |
| | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | | | | | | | | | | | | | | | | | | |
Tangible shareholders’ equity | | $ | 1,548,414 | | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,363,448 | |
| | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,606,859 | |
Less: Goodwill and other intangible assets | | | (1,950,646 | ) | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,938,413 | ) |
Tangible assets | | $ | 20,027,699 | | | $ | 20,118,972 | | | $ | 19,633,569 | | | $ | 19,750,264 | | | $ | 19,668,446 | |
| | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | 7.73 | % | | | 7.68 | % | | | 7.53 | % | | | 7.20 | % | | | 6.93 | % |
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Mar 31, 2015 | |
Allowance for credit losses to total loans, excluding acquired loans: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 83,714 | | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 80,963 | |
| | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,166,005 | |
Less: Fair value of acquired loans (acquired portfolio loan balances less loan marks) | | $ | 1,495,319 | | | $ | 1,415,593 | | | $ | 1,541,369 | | | $ | 1,705,552 | | | $ | 1,910,646 | |
Total loans less acquired loans | | $ | 8,159,089 | | | $ | 8,022,996 | | | $ | 7,663,619 | | | $ | 7,408,783 | | | $ | 7,255,359 | |
Allowance for credit losses to total loans, excluding acquired loans (non-GAAP basis) | | | 1.03 | % | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.12 | % |
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