Exhibit 99.1
PRESS RELEASE | For more information contact: |
| | |
Prosperity Bancshares, Inc.® | David Zalman |
Prosperity Bank Plaza | Chairman and Chief Executive Officer |
4295 San Felipe | 281.269.7199 |
Houston, Texas 77027 | david.zalman@prosperitybankusa.com |
FOR IMMEDIATE RELEASE
Prosperity Bancshares, Inc.®
REPORTS SECOND QUARTER
2016EARNINGS
| | ● | Second quarter 2016 earnings per share (diluted) of$0.98 |
| | ● | Second quarter net income of $68.071 million |
| | ● | Nonperforming assets remain low at0.27% ofsecond quarter average earning assets |
| | ● | Return (annualized) onsecond quarter average assets of1.24% |
| | ● | Second quarter efficiency ratio of42.46% |
| | ● | Returns (annualized) on second quarter average common equity of 7.70% and average tangible common equity of 17.15%(1) |
HOUSTON, July 27, 2016. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®(collectively, “Prosperity”), reported net income for the quarter ended June 30, 2016 of $68.071 million or $0.98per diluted common share. Additionally, nonperforming assets remain low at 0.27% of second quarter average earning assets.
“I am pleased to share the positive earnings we had for the second quarter of 2016, despite a large provision for credit losses and continued low interest rates. We showed impressive annualized returns on second quarter average tangible common equity of 17.15% and on second quarter average assets of 1.24%. Our earnings were impacted by a $6.0 million provision for credit losses, larger than our provision for this same period in 2015,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.
“Prosperity operates in markets across Texas and Oklahoma, some of which have been impacted more than others by the downturn in the energy industry. We have experienced solid loan growth in the first six months of 2016 in our Central Texas, Bryan/College Station, Houston and Dallas/Ft. Worth areas, which have offset the markets affected more by the energy industry, such as West Texas, South Texas and Oklahoma. We believe that we have seen the bottom in oil prices and that the energy industry should start experiencing job recoveries by the first quarter of 2017,” continued Zalman.
“I am amazed at the resiliency in the markets we serve. Austin, Dallas and San Antonio are three of the ten fastest growing cities in the U.S. The Texas unemployment rate held steady in May 2016 at 4.4%, which is lower than the U.S. rate of 4.7%, while the Oklahoma unemployment rate was 4.7% in May, in line with the U.S. rate. Home prices in Texas continue to rise, partly due to solid demand and low inventories, while home prices in Oklahoma also rose slightly,” added Zalman.
_____________
(1)Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
“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 profitability. We will continue to focus on running one of the most efficient banks in the country, maintaining our solid asset quality and enhancing shareholder value,” concluded Zalman.
Results ofOperations for theThreeMonthsEndedJune 30, 2016
Net income was $68.071 million for the three months ended June 30, 2016 compared with $71.932 million for the same period in 2015. Net income per diluted common share was $0.98 for the three months ended June 30, 2016 compared with $1.03 for the same period in 2015. Net income (excluding purchase accounting adjustments) was $62.359 million for the quarter ended June 30, 2016 compared with $63.800 million for the quarter ended June 30, 2015. Net income per diluted common share (excluding purchase accounting adjustments) was $0.90 for the three months ended June 30, 2016 compared with $0.91 for the three months ended June 30, 2015. The reconciliation of these non-GAAP financial measures is shown on page 13. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2016 were 1.24%, 7.70% and 17.15%(1), respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 42.46% for the three months ended June 30, 2016.
Net interest income before provision for credit losses for the quarter ended June 30, 2016 was $158.467 million compared with $158.239 million during the same period in 2015, an increase of $228 thousand or 0.1%. Linked quarter net interest income before provision for credit losses decreased to $158.467 million compared with $166.257 million during the three months ended March 31, 2016, primarily due to a decrease in loan discount accretion of $5.190 million and a decrease in average interest-earning assets of 1.3% for the three months ended June 30, 2016.
The net interest margin on a tax equivalent basis was 3.37% for the three months ended June 30, 2016, compared with 3.39% for the same period in 2015. Linked quarter net interest margin on a tax equivalent basis was 3.37% for the three months ended June 30, 2016 compared with 3.48% for the three months ended March 31, 2016. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.19% for the three months ended June 30, 2016, compared with 3.13% for the same period in 2015 and 3.21% for the three months ended March 31, 2016. The reconciliation of these non-GAAP financial measures is shown on page 13.
Noninterest income was $28.473 million for the three months ended June 30, 2016 compared with $30.297 million for the same period in 2015, a decrease of $1.824 million or 6.0%. On a linked quarter basis, noninterest income decreased $2.320 million or 7.5% compared with the quarter ended March 31, 2016.
Noninterest expense was $79.235 million for the three months ended June 30, 2016 compared with $79.735 million for the same period in 2015, a decrease of $500 thousand or 0.6%. On a linked quarter basis, noninterest expense decreased $1.293 million or 1.6% compared with the quarter ended March 31, 2016.
Results of Operations for the Six Months ended June 30, 2016
Net income was $137.022 million for the six months ended June 30, 2016 compared with $145.573 million for the same period in 2015. Net income per diluted common share was $1.96 for the six months ended June 30, 2016 compared with $2.08 for the same period in 2015. Net income (excluding purchase accounting adjustments) was $122.598 million for the six months ended June 30, 2016 compared with $125.183 million for the six months ended June 30, 2015. Net income per diluted common share (excluding purchase accounting adjustments) was $1.75 for the six months ended June 30, 2016 compared with $1.79 for the six months ended June 30, 2015. The reconciliation of these non-GAAP financial measures is shown on page 13. Annualized returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2016 were 1.24%, 7.77% and 17.37%(1), respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 41.75% for the six months ended June 30, 2016.
Net interest income before provision for credit losses for the six months ended June 30, 2016 was $324.724 million compared with $321.144 million for the same period in 2015, an increase of $3.580 million or 1.1%. The change was primarily due to an increase of 2.6% in average interest-earning assets, partially offset by a decrease in loan discount accretion of $9.451 million for the six months ended June 30, 2016. The net interest margin on a tax equivalent basis for the six months ended June 30, 2016 was 3.43% compared with 3.48% for the same period in 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.20% for the six months ended June 30, 2016 compared with 3.15% for the same period in 2015. The reconciliation of these non-GAAP financial measures is shown on page 13.
Noninterest income was $59.266 million for the six months ended June 30, 2016 compared with $58.718 million for the same period in 2015, an increase of $548 thousand or 0.9%. Noninterest expense was $159.763 million for the six months ended June 30, 2016 compared with $159.197 million for the same period in 2015, an increase of $566 thousand or 0.4%. One-time pretax merger related expenses of $658 thousand related to the Tradition acquisition were recorded during the six months ended June 30, 2016.
Balance Sheet Information
At June 30, 2016, Prosperity had $21.796 billion in total assets, an increase of $110.023 million or 0.5%, compared with $21.686 billion at June 30, 2015.
Loans at June 30, 2016 were $9.650 billion, an increase of $535.673 millionor 5.9%, compared with $9.114 billion at June 30, 2015. Linked quarter loans decreased $4.400 million from $9.654 billion at March 31, 2016.
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 June 30, 2016, oil and gas loans totaled $328.409 million or 3.4% of total loans, of which $156.734 million were to production companies and $171.675 million were to service companies. This compares with total oil and gas loans of $433.439 million or 4.8% of total loans at June 30, 2015, of which $216.898 million were to production companies and $216.541 million were to service companies. On a linked quarter basis, oil and gas loans decreased $34.417 million, from $362.826 million or 3.8% of total loans at March 31, 2016, of which $166.422 million were production loans and $196.404 million were service loans.
Deposits at June 30, 2016 were $17.219 billion, an increase of $217.481 million or 1.3%, compared with $17.002 billion at June 30, 2015. Linked quarter deposits decreased $653.621 million or 3.7% from $17.873 billion at March 31, 2016. The decrease primarily resulted from lower deposit balances for Prosperity’s over 400 public fund customers due largely to seasonality.
The table below provides detail on the impact of loans acquired and deposits assumed in the acquisition of Tradition completed on January 1, 2016:
Balance Sheet Data (at period end)
(In thousands)
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | | | | | | | | | | | |
Loans acquired (including new production since acquisition date): | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Tradition | | $ | 233,340 | | | $ | 232,160 | | | $ | - | | | $ | - | | | $ | - | |
All other loans | | | 9,416,668 | | | | 9,422,248 | | | | 9,438,589 | | | | 9,204,988 | | | | 9,114,335 | |
Total loans | | $ | 9,650,008 | | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Deposits assumed (including new deposits since acquisition date): | | | | | | | | | | | | | | | | | | | | |
Tradition | | $ | 440,110 | | | $ | 476,203 | | | $ | - | | | $ | - | | | $ | - | |
All other deposits | | | 16,779,035 | | | | 17,396,563 | | | | 17,681,119 | | | | 16,939,937 | | | | 17,001,664 | |
Total deposits | | $ | 17,219,145 | | | $ | 17,872,766 | | | $ | 17,681,119 | | | $ | 16,939,937 | | | $ | 17,001,664 | |
Excluding loans acquired in the Tradition acquisition and new production at the acquired banking centers since the acquisition date, loans at June 30, 2016 increased $302.333 million or 3.3% compared with June 30, 2015 and, on a linked quarter basis, decreased $5.580 million or 0.1%.
Excluding deposits assumed in the Tradition acquisition and new deposits generated at the acquired banking centers since the acquisition date, deposits at June 30, 2016 decreased $222.629 million or 1.3% compared with June 30, 2015 and, on a linked quarter basis, decreased $617.528 million or 3.5%.
Asset Quality
Nonperforming assets totaled $52.130 million or 0.27% of quarterly average interest-earning assets at June 30, 2016, compared with $35.119 million or 0.19% of quarterly average interest-earning assets at June 30, 2015, and $56.985 million or 0.29% of quarterly average interest-earning assets at March 31, 2016.
The allowance for credit losses was 0.87% of total loans at June 30, 2016, 0.89% of total loans at June 30, 2015 and 0.87% of total loans at March 31, 2016. 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 June 30, 2016, compared with 1.09% at June 30, 2015 and 1.03% at March 31, 2016(1).
The provision for credit losses was $6.000 million for the three months ended June 30, 2016 compared with $500 thousand for the three months ended June 30, 2015 and $14.000 million for the three months ended March 31, 2016. The provision for credit losses was $20.000 millionfor the six months ended June 30, 2016 compared with $1.750 million for the six months ended June 30, 2015.
Net charge-offs were $5.888 million for the three months ended June 30, 2016 compared with $491 thousand for the three months ended June 30, 2015 and $11.670 million for the three months ended March 31, 2016. Net charge-offs for the second quarter of 2016 were primarily comprised of one energy loan and an additional charge on one agricultural loan. Net charge-offs were $17.558 millionfor the six months ended June 30, 2016 compared with $1.540 million for the six months ended June 30, 2015.
Conference Call
Prosperity’s management team will host a conference call on Wednesday, July 27, 2016 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity’s second quarter 2016 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 7002992.
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 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, nor of greater importance than, 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. Please refer to page 13 and 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 third quarter cash dividend of $0.30 per share, to be paid on October 3, 2016 to all shareholders of record as of September 16, 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. As of June 30, 2016, Prosperity Bancshares had repurchased an aggregate of 1.24 million shares of its common stock under this program at an average weighted average price of $40.98 per share. During the second quarter of 2016, Prosperity Bancshares repurchased 85 thousand shares of its common stock at an average weighted price of $45.40 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 June 30, 2016, Prosperity Bancshares, Inc. ® is a $21.796 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 | | | | |
- - -
“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)
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
(at period end) | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,650,008 | | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | |
Investment securities(A) | | | 9,274,651 | | | | 9,448,704 | | | | 9,502,427 | | | | 9,530,761 | | | | 9,698,079 | |
Federal funds sold | | | 484 | | | | 1,386 | | | | 1,418 | | | | 996 | | | | 1,451 | |
Allowance for credit losses | | | (83,826 | ) | | | (83,714 | ) | | | (81,384 | ) | | | (81,003 | ) | | | (80,972 | ) |
Cash and due from banks | | | 333,208 | | | | 334,592 | | | | 562,544 | | | | 300,230 | | | | 353,047 | |
Goodwill | | | 1,903,451 | | | | 1,903,451 | | | | 1,868,827 | | | | 1,881,955 | | | | 1,881,955 | |
Core deposit intangibles, net | | | 44,861 | | | | 47,195 | | | | 49,417 | | | | 51,712 | | | | 54,068 | |
Other real estate owned | | | 15,677 | | | | 16,695 | | | | 2,963 | | | | 3,271 | | | | 2,806 | |
Fixed assets, net | | | 273,104 | | | | 277,951 | | | | 267,996 | | | | 271,650 | | | | 275,347 | |
Other assets | | | 384,692 | | | | 377,677 | | | | 424,419 | | | | 402,676 | | | | 386,171 | |
Total assets | | $ | 21,796,310 | | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,016,637 | | | $ | 5,112,943 | | | $ | 5,136,579 | | | $ | 5,093,175 | | | $ | 5,040,628 | |
Interest-bearing deposits | | | 12,202,508 | | | | 12,759,823 | | | | 12,544,540 | | | | 11,846,762 | | | | 11,961,036 | |
Total deposits | | | 17,219,145 | | | | 17,872,766 | | | | 17,681,119 | | | | 16,939,937 | | | | 17,001,664 | |
Other borrowings | | | 606,049 | | | | 186,225 | | | | 491,399 | | | | 786,571 | | | | 886,741 | |
Securities sold under repurchase agreements | | | 320,001 | | | | 304,204 | | | | 315,253 | | | | 310,038 | | | | 334,189 | |
Junior subordinated debentures | | | - | | | | 7,217 | | | | - | | | | - | | | | - | |
Other liabilities | | | 106,531 | | | | 108,873 | | | | 86,535 | | | | 119,451 | | | | 106,408 | |
Total liabilities | | | 18,251,726 | | | | 18,479,285 | | | | 18,574,306 | | | | 18,155,997 | | | | 18,329,002 | |
Shareholders' equity(B) | | | 3,544,584 | | | | 3,499,060 | | | | 3,462,910 | | | | 3,411,239 | | | | 3,357,285 | |
Total liabilities and equity | | $ | 21,796,310 | | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | |
(A) Includes $2,496, $3,286, $3,138, $3,788 and $4,655 in unrealized gains on available for sale securities for the quarterly periods ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.
(B) Includes $1,623, $2,136, $2,040, $2,462 and $3,026 in after-tax unrealized gains on available for sale securities for the quarterly periods ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Jun 30, 2016 | | | Jun 30, 2015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 118,297 | | | $ | 124,522 | | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 242,819 | | | $ | 244,282 | |
Securities(C) | | | 51,097 | | | | 52,573 | | | | 48,301 | | | | 48,610 | | | | 48,530 | | | | 103,670 | | | | 97,092 | |
Federal funds sold and other earning assets | | | 65 | | | | 96 | | | | 37 | | | | 22 | | | | 47 | | | | 161 | | | | 212 | |
Total interest income | | | 169,459 | | | | 177,191 | | | | 162,572 | | | | 165,543 | | | | 167,981 | | | | 346,650 | | | | 341,586 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 10,045 | | | | 10,206 | | | | 8,575 | | | | 8,753 | | | | 9,169 | | | | 20,251 | | | | 18,746 | |
Other borrowings | | | 710 | | | | 482 | | | | 541 | | | | 473 | | | | 365 | | | | 1,192 | | | | 494 | |
Securities sold under repurchase agreements | | | 234 | | | | 212 | | | | 198 | | | | 209 | | | | 208 | | | | 446 | | | | 411 | |
Junior subordinated debentures | | | 3 | | | | 34 | | | | - | | | | - | | | | - | | | | 37 | | | | 791 | |
Total interest expense | | | 10,992 | | | | 10,934 | | | | 9,314 | | | | 9,435 | | | | 9,742 | | | | 21,926 | | | | 20,442 | |
Net interest income | | | 158,467 | | | | 166,257 | | | | 153,258 | | | | 156,108 | | | | 158,239 | | | | 324,724 | | | | 321,144 | |
Provision for credit losses | | | 6,000 | | | | 14,000 | | | | 500 | | | | 5,310 | | | | 500 | | | | 20,000 | | | | 1,750 | |
Net interest income after provision for credit losses | | | 152,467 | | | | 152,257 | | | | 152,758 | | | | 150,798 | | | | 157,739 | | | | 304,724 | | | | 319,394 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonsufficient funds (NSF) fees | | | 8,031 | | | | 8,189 | | | | 8,974 | | | | 9,082 | | | | 8,310 | | | | 16,220 | | | | 16,228 | |
Credit card, debit card and ATM card income | | | 5,929 | | | | 5,827 | | | | 5,938 | | | | 5,955 | | | | 6,003 | | | | 11,756 | | | | 11,641 | |
Service charges on deposit accounts | | | 4,610 | | | | 4,590 | | | | 4,289 | | | | 4,438 | | | | 4,189 | | | | 9,200 | | | | 8,368 | |
Trust income | | | 1,762 | | | | 2,027 | | | | 1,988 | | | | 1,986 | | | | 2,047 | | | | 3,789 | | | | 4,056 | |
Mortgage income | | | 1,772 | | | | 1,471 | | | | 1,289 | | | | 1,770 | | | | 1,513 | | | | 3,243 | | | | 2,661 | |
Brokerage income | | | 1,286 | | | | 1,290 | | | | 1,407 | | | | 1,596 | | | | 1,541 | | | | 2,576 | | | | 2,950 | |
Bank owned life insurance income | | | 1,473 | | | | 1,383 | | | | 1,394 | | | | 1,384 | | | | 1,390 | | | | 2,856 | | | | 2,770 | |
Net gain on sale of assets | | | 332 | | | | 1,020 | | | | 581 | | | | 173 | | | | 270 | | | | 1,352 | | | | 1,649 | |
Other noninterest income | | | 3,278 | | | | 4,996 | | | | 4,423 | | | | 5,396 | | | | 5,034 | | | | 8,274 | | | | 8,395 | |
Total noninterest income | | | 28,473 | | | | 30,793 | | | | 30,283 | | | | 31,780 | | | | 30,297 | | | | 59,266 | | | | 58,718 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits | | | 48,224 | | | | 50,114 | | | | 48,500 | | | | 46,587 | | | | 47,819 | | | | 98,338 | | | | 97,785 | |
Net occupancy and equipment | | | 5,741 | | | | 5,624 | | | | 5,774 | | | | 6,088 | | | | 5,812 | | | | 11,365 | | | | 11,776 | |
Credit and debit card, data processing and software amortization | | | 4,164 | | | | 4,430 | | | | 3,996 | | | | 3,924 | | | | 4,045 | | | | 8,594 | | | | 7,862 | |
Regulatory assessments and FDIC insurance | | | 3,447 | | | | 3,430 | | | | 2,460 | | | | 3,366 | | | | 4,253 | | | | 6,877 | | | | 8,607 | |
Core deposit intangibles amortization | | | 2,334 | | | | 2,222 | | | | 2,295 | | | | 2,356 | | | | 2,390 | | | | 4,556 | | | | 4,879 | |
Depreciation | | | 3,286 | | | | 3,349 | | | | 3,310 | | | | 3,313 | | | | 3,420 | | | | 6,635 | | | | 6,336 | |
Communications | | | 2,981 | | | | 2,939 | | | | 2,814 | | | | 2,663 | | | | 2,835 | | | | 5,920 | | | | 5,644 | |
Other real estate expense | | | 50 | | | | 42 | | | | 241 | | | | 123 | | | | 129 | | | | 92 | | | | 261 | |
Net loss (gain) on sale of other real estate | | | 347 | | | | (14 | ) | | | 52 | | | | (68 | ) | | | (32 | ) | | | 333 | | | | (18 | ) |
Other noninterest expense | | | 8,661 | | | | 8,392 | | | | 8,467 | | | | 8,078 | | | | 9,064 | | | | 17,053 | | | | 16,065 | |
Total noninterest expense | | | 79,235 | | | | 80,528 | | | | 77,909 | | | | 76,430 | | | | 79,735 | | | | 159,763 | | | | 159,197 | |
Income before income taxes | | | 101,705 | | | | 102,522 | | | | 105,132 | | | | 106,148 | | | | 108,301 | | | | 204,227 | | | | 218,915 | |
Provision for income taxes | | | 33,634 | | | | 33,571 | | | | 34,657 | | | | 35,550 | | | | 36,369 | | | | 67,205 | | | | 73,342 | |
Net income available to common shareholders | | $ | 68,071 | | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 137,022 | | | $ | 145,573 | |
(C) Interest income on securities was reduced by net premium amortization of $10,407, $10,253, $13,775, $14,845 and $15,466 for the three month periods ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively, and $20,660 and $29,610 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.
Prosperity Bancshares, Inc. ®
Financial Highlights (Unaudited)
(Dollars and share amounts in thousands, except per share data and market prices)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Jun 30, 2016 | | | Jun 30, 2015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Profitability | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 68,071 | | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 137,022 | | | $ | 145,573 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | $ | 0.98 | | | $ | 0.98 | | | $ | 1.01 | | | $ | 1.01 | | | $ | 1.03 | | | $ | 1.96 | | | $ | 2.08 | |
Diluted earnings per share | | $ | 0.98 | | | $ | 0.98 | | | $ | 1.01 | | | $ | 1.01 | | | $ | 1.03 | | | $ | 1.96 | | | $ | 2.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (D) | | | 1.24 | % | | | 1.24 | % | | | 1.30 | % | | | 1.30 | % | | | 1.33 | % | | | 1.24 | % | | | 1.35 | % |
Return on average common equity (D) | | | 7.70 | % | | | 7.85 | % | | | 8.17 | % | | | 8.31 | % | | | 8.61 | % | | | 7.77 | % | | | 8.80 | % |
Return on average tangible common equity (D) (E) | | | 17.15 | % | | | 17.60 | % | | | 18.56 | % | | | 19.30 | % | | | 20.49 | % | | | 17.37 | % | | | 21.16 | % |
Tax equivalent net interest margin (F) | | | 3.37 | % | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.43 | % | | | 3.48 | % |
Efficiency ratio(G) | | | 42.46 | % | | | 41.08 | % | | | 42.58 | % | | | 40.72 | % | | | 42.35 | % | | | 41.75 | % | | | 42.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liquidity and Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity to assets | | | 16.26 | % | | | 15.92 | % | | | 15.71 | % | | | 15.82 | % | | | 15.48 | % | | | 16.26 | % | | | 15.48 | % |
Common equity tier 1 capital | | | 13.66 | % | | | 13.20 | % | | | 13.55 | % | | | 13.37 | % | | | 12.91 | % | | | 13.66 | % | | | 12.91 | % |
Tier 1 risk-based capital | | | 13.66 | % | | | 13.20 | % | | | 13.55 | % | | | 13.37 | % | | | 12.91 | % | | | 13.66 | % | | | 12.91 | % |
Total risk-based capital | | | 14.37 | % | | | 13.90 | % | | | 14.25 | % | | | 14.09 | % | | | 13.63 | % | | | 14.37 | % | | | 13.63 | % |
Tier 1 leverage capital | | | 8.11 | % | | | 7.70 | % | | | 7.97 | % | | | 7.65 | % | | | 7.35 | % | | | 8.11 | % | | | 7.35 | % |
Period end tangible equity to period end tangible assets(E) | | | 8.04 | % | | | 7.73 | % | | | 7.68 | % | | | 7.53 | % | | | 7.20 | % | | | 8.04 | % | | | 7.20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted-average shares used in computing earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 69,565 | | | | 70,174 | | | | 70,021 | | | | 70,041 | | | | 70,037 | | | | 69,869 | | | | 70,035 | |
Diluted | | | 69,574 | | | | 70,181 | | | | 70,032 | | | | 70,053 | | | | 70,053 | | | | 69,877 | | | | 70,054 | |
Period end shares outstanding | | | 69,480 | | | | 69,543 | | | | 70,022 | | | | 70,040 | | | | 70,040 | | | | 69,480 | | | | 70,040 | |
Cash dividends paid per common share | | $ | 0.3000 | | | $ | 0.3000 | | | $ | 0.3000 | | | $ | 0.2725 | | | $ | 0.2725 | | | $ | 0.6000 | | | $ | 0.5450 | |
Book value per share | | $ | 51.02 | | | $ | 50.32 | | | $ | 49.45 | | | $ | 48.70 | | | $ | 47.93 | | | $ | 51.02 | | | $ | 47.93 | |
Tangible book value per share(E) | | $ | 22.97 | | | $ | 22.27 | | | $ | 22.06 | | | $ | 21.10 | | | $ | 20.29 | | | $ | 22.97 | | | $ | 20.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock Market Price | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
High | | $ | 54.57 | | | $ | 47.50 | | | $ | 57.04 | | | $ | 59.97 | | | $ | 59.30 | | | $ | 54.57 | | | $ | 59.30 | |
Low | | | 43.28 | | | | 33.57 | | | | 46.23 | | | | 43.76 | | | | 50.91 | | | | 33.57 | | | | 45.01 | |
Period end closing price | | | 50.99 | | | | 46.39 | | | | 47.86 | | | | 49.11 | | | | 57.74 | | | | 50.99 | | | | 57.74 | |
Employees – FTE | | | 3,106 | | | | 3,132 | | | | 3,037 | | | | 3,051 | | | | 3,065 | | | | 3,106 | | | | 3,065 | |
Number of banking centers | | | 245 | | | | 246 | | | | 241 | | | | 244 | | | | 245 | | | | 245 | | | | 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 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)
| | | Three Months Ended | | |
| | | Jun 30, 2016 | | | | Mar 31, 2016 | | | | Jun 30, 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) |
| YIELD ANALYSIS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,660,065 | | | $ | 118,297 | | | | 4.93 | % | | | $ | 9,700,554 | | | $ | 124,522 | | | | 5.16 | % | | | $ | 9,133,625 | | | $ | 119,404 | | | | 5.24 | % | |
Investment securities | | | 9,436,896 | | | | 51,097 | | | | 2.18 | % | (H) | | | 9,630,496 | | | | 52,573 | | | | 2.20 | % | (H) | | | 9,688,961 | | | | 48,530 | | | | 2.01 | % | (H) |
Federal funds sold and other earning assets | | | 68,268 | | | | 65 | | | | 0.38 | % | | | | 80,400 | | | | 96 | | | | 0.48 | % | | | | 79,659 | | | | 47 | | | | 0.24 | % | |
Total interest-earning assets | | | 19,165,229 | | | | 169,459 | | | | 3.56 | % | | | | 19,411,450 | | | | 177,191 | | | | 3.67 | % | | | | 18,902,245 | | | | 167,981 | | | | 3.56 | % | |
Allowance for credit losses | | | (83,036 | ) | | | | | | | | | | | | (83,883 | ) | | | | | | | | | | | | (80,868 | ) | | | | | | | | | |
Noninterest-earning assets | | | 2,826,205 | | | | | | | | | | | | | 2,937,937 | | | | | | | | | | | | | 2,817,644 | | | | | | | | | | |
Total assets | | $ | 21,908,398 | | | | | | | | | | | | $ | 22,265,504 | | | | | | | | | | | | $ | 21,639,021 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 4,108,305 | | | $ | 2,569 | | | | 0.25 | % | | | $ | 4,442,652 | | | $ | 2,784 | | | | 0.25 | % | | | $ | 3,891,682 | | | $ | 2,227 | | | | 0.23 | % | |
Savings and money market deposits | | | 5,734,739 | | | | 3,832 | | | | 0.27 | % | | | | 5,820,161 | | | | 3,885 | | | | 0.27 | % | | | | 5,476,931 | | | | 3,374 | | | | 0.25 | % | |
Certificates and other time deposits | | | 2,517,896 | | | | 3,644 | | | | 0.58 | % | | | | 2,577,676 | | | | 3,537 | | | | 0.55 | % | | | | 2,821,058 | | | | 3,568 | | | | 0.51 | % | |
Other borrowings | | | 489,616 | | | | 710 | | | | 0.58 | % | | | | 361,778 | | | | 482 | | | | 0.54 | % | | | | 684,371 | | | | 365 | | | | 0.21 | % | |
Securities sold under repurchase agreements | | | 322,274 | | | | 234 | | | | 0.29 | % | | | | 306,192 | | | | 212 | | | | 0.28 | % | | | | 333,220 | | | | 208 | | | | 0.25 | % | |
Junior subordinated debentures | | | 555 | | | | 3 | | | | 2.17 | % | | | | 7,217 | | | | 34 | | | | 1.89 | % | | | | - | | | | - | | | | — | | |
Total interest-bearing liabilities | | | 13,173,385 | | | | 10,992 | | | | 0.34 | % | (I) | | | 13,515,676 | | | | 10,934 | | | | 0.33 | % | (I) | | | 13,207,262 | | | | 9,742 | | | | 0.30 | % | (I) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 5,099,736 | | | | | | | | | | | | | 5,085,456 | | | | | | | | | | | | | 4,992,301 | | | | | | | | | | |
Other liabilities | | | 98,023 | | | | | | | | | | | | | 149,379 | | | | | | | | | | | | | 98,133 | | | | | | | | | | |
Total liabilities | | | 18,371,144 | | | | | | | | | | | | | 18,750,511 | | | | | | | | | | | | | 18,297,696 | | | | | | | | | | |
Shareholders' equity | | | 3,537,254 | | | | | | | | | | | | | 3,514,993 | | | | | | | | | | | | | 3,341,325 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 21,908,398 | | | | | | | | | | | | $ | 22,265,504 | | | | | | | | | | | | $ | 21,639,021 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 158,467 | | | | 3.33 | % | | | | | | | $ | 166,257 | | | | 3.44 | % | | | | | | | $ | 158,239 | | | | 3.36 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 1,968 | | | | | | | | | | | | | 1,836 | | | | | | | | | | | | | 1,563 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin (tax equivalent basis) | | | | | | $ | 160,435 | | | | 3.37 | % | | | | | | | $ | 168,093 | | | | 3.48 | % | | | | | | | $ | 159,802 | | | | 3.39 | % | |
(H) Yield on securities was impacted by net premium amortization of $10,407, $10,253 and $15,466 for the three month periods ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively.
(I) Total cost of funds, including noninterest bearing deposits, was 0.24%, 0.24% and 0.21% for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively.
(J) Annualized and based on an actual 365 day or 366 day basis.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Year-to-Date | | |
| | | Jun 30, 2016 | | | | Jun 30, 2015 | | |
| | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (M) | | Average Balance | | | Interest Earned/ Interest Paid | | | Average Yield/ Rate | | (M) |
| YIELD ANALYSIS | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 9,680,309 | | | $ | 242,819 | | | | 5.04 | % | | | $ | 9,161,349 | | | $ | 244,282 | | | | 5.38 | % | |
Investment securities | | | 9,533,696 | | | | 103,670 | | | | 2.19 | % | (K) | | | 9,466,434 | | | | 97,092 | | | | 2.07 | % | (K) |
Federal funds sold and other earning assets | | | 74,334 | | | | 161 | | | | 0.44 | % | | | | 173,147 | | | | 212 | | | | 0.25 | % | |
Total interest-earning assets | | | 19,288,339 | | | | 346,650 | | | | 3.61 | % | | | | 18,800,930 | | | $ | 341,586 | | | | 3.66 | % | |
Allowance for credit losses | | | (83,459 | ) | | | | | | | | | | | | (80,775 | ) | | | | | | | | | |
Noninterest-earning assets | | | 2,882,072 | | | | | | | | | | | | | 2,843,739 | | | | | | | | | | |
Total assets | | $ | 22,086,952 | | | | | | | | | | | | $ | 21,563,894 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 4,275,478 | | | $ | 5,353 | | | | 0.25 | % | | | $ | 4,034,489 | | | $ | 4,810 | | | | 0.24 | % | |
Savings and money market deposits | | | 5,777,450 | | | | 7,717 | | | | 0.27 | % | | | | 5,509,326 | | | | 6,779 | | | | 0.25 | % | |
Certificates and other time deposits | | | 2,547,786 | | | | 7,181 | | | | 0.57 | % | | | | 2,888,176 | | | | 7,157 | | | | 0.50 | % | |
Other borrowings | | | 425,697 | | | | 1,192 | | | | 0.56 | % | | | | 379,936 | | | | 494 | | | | 0.26 | % | |
Securities sold under repurchase agreements | | | 314,233 | | | | 446 | | | | 0.29 | % | | | | 336,824 | | | | 411 | | | | 0.25 | % | |
Junior subordinated debentures | | | 3,886 | | | | 37 | | | | 1.91 | % | | | | 59,374 | | | | 791 | | | | 2.69 | % | |
Total interest-bearing liabilities | | | 13,344,530 | | | | 21,926 | | | | 0.33 | % | (L) | | | 13,208,125 | | | | 20,442 | | | | 0.31 | % | (L) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 5,092,596 | | | | | | | | | | | | | 4,946,138 | | | | | | | | | | |
Other liabilities | | | 123,700 | | | | | | | | | | | | | 99,375 | | | | | | | | | | |
Total liabilities | | | 18,560,826 | | | | | | | | | | | | | 18,253,638 | | | | | | | | | | |
Shareholders' equity | | | 3,526,126 | | | | | | | | | | | | | 3,310,256 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 22,086,952 | | | | | | | | | | | | $ | 21,563,894 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin | | | | | | $ | 324,724 | | | | 3.39 | % | | | | | | | $ | 321,144 | | | | 3.44 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP to GAAP reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tax equivalent adjustment | | | | | | | 3,804 | | | | | | | | | | | | | 3,227 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income and margin (tax equivalent basis) | | | | | | $ | 328,528 | | | | 3.43 | % | | | | | | | $ | 324,371 | | | | 3.48 | % | |
(K) Yield on securities was impacted by net premium amortization of $20,660 and $29,610 for the six month periods ended June 30, 2016 and 2015, respectively.
(L) Total cost of funds, including noninterest bearing deposits, was 0.24% and 0.23% for the six month periods ended June 30, 2016 and 2015, respectively.
(M) Annualized and based on an actual 365 or 366 day basis.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands, except per share data)
| | | Three Months Ended | | | Year -to-Date | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Jun 30, 2016 | | | Jun 30, 2015 | |
Adjustment to Loan Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on loans, as reported | | $ | 118,297 | | | $ | 124,522 | | | $ | 114,234 | | | $ | 116,911 | | | $ | 119,404 | | | $ | 242,819 | | | $ | 244,282 | |
Purchase accounting adjustment- loan discount accretion | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ASC 310-20 | | | (5,833 | ) | | | (6,663 | ) | | | (6,066 | ) | | | (7,060 | ) | | | (10,388 | ) | | | (12,496 | ) | | | (21,101 | ) |
ASC 310-30 | | | (3,471 | ) | | | (7,831 | ) | | | (1,773 | ) | | | (3,974 | ) | | | (3,214 | ) | | | (11,302 | ) | | | (12,148 | ) |
Total | | | (9,304 | ) | | | (14,494 | ) | | | (7,839 | ) | | | (11,034 | ) | | | (13,602 | ) | | | (23,798 | ) | | | (33,249 | ) |
Interest on loans excluding discount accretion | | $ | 108,993 | | | $ | 110,028 | | | $ | 106,395 | | | $ | 105,877 | | | $ | 105,802 | | | $ | 219,021 | | | $ | 211,033 | |
Average loans | | $ | 9,660,065 | | | $ | 9,700,554 | | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | | | $ | 9,680,309 | | | $ | 9,161,349 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan yield excluding purchase accounting adjustment | | | 4.54 | % | | | 4.56 | % | | | 4.53 | % | | | 4.59 | % | | | 4.65 | % | | | 4.55 | % | | | 4.65 | % |
Loan yield, as reported | | | 4.93 | % | | | 5.16 | % | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % | | | 5.04 | % | | | 5.38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Securities Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on securities, as reported | | $ | 51,097 | | | $ | 52,573 | | | $ | 48,301 | | | $ | 48,610 | | | $ | 48,530 | | | $ | 103,670 | | | $ | 97,092 | |
Purchase accounting adjustment-securities amortization | | | 948 | | | | 1,722 | | | | 1,578 | | | | 1,565 | | | | 1,579 | | | | 2,670 | | | | 3,226 | |
Interest on securities excluding amortization | | $ | 52,045 | | | $ | 54,295 | | | $ | 49,879 | | | $ | 50,175 | | | $ | 50,109 | | | $ | 106,340 | | | $ | 100,318 | |
Average securities | | $ | 9,436,896 | | | $ | 9,630,496 | | | $ | 9,524,084 | | | $ | 9,706,373 | | | $ | 9,688,961 | | | $ | 9,533,696 | | | $ | 9,466,434 | |
Securities yield excluding purchase accounting adjustment | | | 2.22 | % | | | 2.27 | % | | | 2.08 | % | | | 2.05 | % | | | 2.07 | % | | | 2.24 | % | | | 2.14 | % |
Securities yield, as reported | | | 2.18 | % | | | 2.20 | % | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % | | | 2.19 | % | | | 2.07 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustment to Time Deposits Yield(N) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest on time deposits, as reported | | $ | 3,644 | | | $ | 3,537 | | | $ | 3,253 | | | $ | 3,400 | | | $ | 3,568 | | | $ | 7,181 | | | $ | 7,157 | |
Purchase accounting adjustment- time deposit amortization | | | 178 | | | | 182 | | | | 195 | | | | 220 | | | | 220 | | | | 360 | | | | 640 | |
Interest on time deposits excluding amortization | | $ | 3,822 | | | $ | 3,719 | | | $ | 3,448 | | | $ | 3,620 | | | $ | 3,788 | | | $ | 7,541 | | | $ | 7,797 | |
Average time deposits | | $ | 2,517,896 | | | $ | 2,577,676 | | | $ | 2,560,527 | | | $ | 2,685,346 | | | $ | 2,821,058 | | | $ | 2,547,786 | | | $ | 2,888,176 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Time deposits yield excluding purchase accounting adjustment | | | 0.61 | % | | | 0.58 | % | | | 0.53 | % | | | 0.53 | % | | | 0.54 | % | | | 0.60 | % | | | 0.54 | % |
Time deposits yield, as reported | | | 0.58 | % | | | 0.55 | % | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % | | | 0.57 | % | | | 0.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis, excluding purchase accounting adjustments to yield)(N) | | | 3.19 | % | | | 3.21 | % | | | 3.11 | % | | | 3.10 | % | | | 3.13 | % | | | 3.20 | % | | | 3.15 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin (tax equivalent basis), as reported | | | 3.37 | % | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % | | | 3.43 | % | | | 3.48 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common shareholders,as reported | | $ | 68,071 | | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 137,022 | | | $ | 145,573 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less: Purchase accounting adjustments, net of tax(O) | | | (5,712 | ) | | | (8,712 | ) | | | (4,328 | ) | | | (6,444 | ) | | | (8,132 | ) | | | (14,424 | ) | | | (20,390 | ) |
Net income available to common shareholders, excludingpurchase accounting adjustments(N) | | $ | 62,359 | | | $ | 60,239 | | | $ | 66,147 | | | $ | 64,154 | | | $ | 63,800 | | | $ | 122,598 | | | $ | 125,183 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share, excluding purchase accounting adjusments(N) | | $ | 0.90 | | | $ | 0.86 | | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 1.75 | | | $ | 1.79 | |
Diluted earnings per share, excluding purchase accounting adjustments(N) | | $ | 0.90 | | | $ | 0.86 | | | $ | 0.94 | | | $ | 0.92 | | | $ | 0.91 | | | $ | 1.75 | | | $ | 1.79 | |
| | | Acquired Loans Accounted for Under ASC 310-20 | | | Acquired Loans Accounted for Under ASC 310-30 | | | Total Loans Accounted for Under ASC 310-20 and 310-30 | |
| | | Balance at Acquisition Date | | | Balance at Mar 31, 2016 | | | Balance at Jun 30, 2016 | | | Balance at Acquisition Date | | | Balance at Mar 31, 2016 | | | Balance at Jun 30, 2016 | | | Balance at Acquisition Date | | | | Balance at Mar 31, 2016 | | | Balance at Jun 30, 2016 | |
Loan marks: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Previously acquired banks(P) | | $ | 225,589 | | | $ | 47,386 | | | $ | 41,851 | | | $ | 131,906 | | | $ | 27,928 | | | $ | 26,010 | | | $ | 357,495 | | | | $ | 75,314 | | | $ | 67,861 | |
2016 acquisition(Q) | | | 3,491 | | | | 3,123 | | | | 2,821 | | | | 10,222 | | | | 6,126 | | | | 4,469 | | | | 13,713 | | | | | 9,249 | | | | 7,290 | |
Total | | | 229,080 | | | | 50,509 | | | | 44,672 | | | | 142,128 | | | | 34,054 | | | | 30,479 | | | | 371,208 | | | | | 84,563 | | | | 75,151 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Previously acquired banks(P) | | | 5,456,934 | | | | 1,289,661 | | | | 1,181,003 | | | | 255,846 | | | | 60,917 | | | | 56,223 | | | | 5,712,780 | | | | | 1,350,578 | | | | 1,237,226 | |
2016 acquisition(Q) | | | 234,064 | | | | 216,631 | | | | 201,687 | | | | 19,375 | | | | 12,673 | | | | 9,348 | | | | 253,439 | | | | | 229,304 | | | | 211,035 | |
Total | | | 5,690,998 | | | | 1,506,292 | | | | 1,382,690 | | | | 275,221 | | | | 73,590 | | | | 65,571 | | | | 5,966,219 | | (R) | | | 1,579,882 | | | | 1,448,261 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired portfolio loan balances less loan marks | | $ | 5,461,918 | | | $ | 1,455,783 | | | $ | 1,338,018 | | | $ | 133,093 | | | $ | 39,536 | | | $ | 35,092 | | | $ | 5,595,011 | | | | $ | 1,495,319 | | | $ | 1,373,110 | |
(N) Non-GAAP financial measure.
(O) Using effective tax rate of 33.1%, 32.7%,33.0%,33.5% and33.6% for the three month periods ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively, and 32.9% and 33.5% for the six month periods ended June 30, 2016 and 2015, respectively.
(P) Includes Bank of Texas, Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank and The F&M Bank & Trust Company.
(Q) 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.
(R) Actual principal balances acquired.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | |
YIELD TREND(S) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | | 4.93 | % | | | 5.16 | % | | | 4.86 | % | | | 5.07 | % | | | 5.24 | % |
Investment securities(T) | | | 2.18 | % | | | 2.20 | % | | | 2.01 | % | | | 1.99 | % | | | 2.01 | % |
Federal funds sold and other earning assets | | | 0.38 | % | | | 0.48 | % | | | 0.22 | % | | | 0.16 | % | | | 0.24 | % |
Total interest-earning assets | | | 3.56 | % | | | 3.67 | % | | | 3.41 | % | | | 3.47 | % | | | 3.56 | % |
| | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 0.25 | % | | | 0.25 | % | | | 0.21 | % | | | 0.21 | % | | | 0.23 | % |
Savings and money market deposits | | | 0.27 | % | | | 0.27 | % | | | 0.24 | % | | | 0.24 | % | | | 0.25 | % |
Certificates and other time deposits | | | 0.58 | % | | | 0.55 | % | | | 0.50 | % | | | 0.50 | % | | | 0.51 | % |
Other borrowings | | | 0.58 | % | | | 0.54 | % | | | 0.26 | % | | | 0.21 | % | | | 0.21 | % |
Securities sold under repurchase agreements | | | 0.29 | % | | | 0.28 | % | | | 0.25 | % | | | 0.25 | % | | | 0.25 | % |
Junior subordinated debentures | | | 2.17 | % | | | 1.89 | % | | | — | | | | — | | | | — | |
Total interest-bearing liabilities | | | 0.34 | % | | | 0.33 | % | | | 0.28 | % | | | 0.29 | % | | | 0.30 | % |
| | | | | | | | | | | | | | | | | | | | | |
Net Interest Margin | | | 3.33 | % | | | 3.44 | % | | | 3.22 | % | | | 3.27 | % | | | 3.36 | % |
Net Interest Margin (tax equivalent) | | | 3.37 | % | | | 3.48 | % | | | 3.24 | % | | | 3.30 | % | | | 3.39 | % |
(S) Annualized and based on average balances on an actual 365 day or 366 day basis.
(T) Yield on securities was impacted by net premium amortization of $10,407, $10,253, $13,775, $14,845 and $15,466 for the three month periods ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | |
Balance Sheet Averages | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,660,065 | | | $ | 9,700,554 | | | $ | 9,322,399 | | | $ | 9,156,679 | | | $ | 9,133,625 | |
Investment securities | | | 9,436,896 | | | | 9,630,496 | | | | 9,524,084 | | | | 9,706,373 | | | | 9,688,961 | |
Federal funds sold and other earning assets | | | 68,268 | | | | 80,400 | | | | 65,695 | | | | 55,000 | | | | 79,659 | |
Total interest-earning assets | | | 19,165,229 | | | | 19,411,450 | | | | 18,912,178 | | | | 18,918,052 | | | | 18,902,245 | |
Allowance for credit losses | | | (83,036 | ) | | | (83,883 | ) | | | (81,230 | ) | | | (80,793 | ) | | | (80,868 | ) |
Cash and due from banks | | | 227,570 | | | | 274,535 | | | | 257,986 | | | | 237,191 | | | | 241,110 | |
Goodwill | | | 1,903,451 | | | | 1,899,667 | | | | 1,881,812 | | | | 1,881,955 | | | | 1,881,955 | |
Core deposit intangibles, net | | | 46,059 | | | | 48,314 | | | | 50,545 | | | | 52,909 | | | | 55,245 | |
Other real estate | | | 15,549 | | | | 6,077 | | | | 3,014 | | | | 3,096 | | | | 2,972 | |
Fixed assets, net | | | 276,727 | | | | 279,179 | | | | 270,800 | | | | 273,818 | | | | 276,761 | |
Other assets | | | 356,849 | | | | 430,165 | | | | 390,011 | | | | 370,181 | | | | 359,601 | |
Total assets | | $ | 21,908,398 | | | $ | 22,265,504 | | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | |
| | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 5,099,736 | | | $ | 5,085,456 | | | $ | 5,124,630 | | | $ | 5,078,234 | | | $ | 4,992,301 | |
Interest-bearing demand deposits | | | 4,108,305 | | | | 4,442,652 | | | | 3,767,138 | | | | 3,663,114 | | | | 3,891,682 | |
Savings and money market deposits | | | 5,734,739 | | | | 5,820,161 | | | | 5,511,240 | | | | 5,492,326 | | | | 5,476,931 | |
Certificates and other time deposits | | | 2,517,896 | | | | 2,577,676 | | | | 2,560,527 | | | | 2,685,346 | | | | 2,821,058 | |
Total deposits | | | 17,460,676 | | | | 17,925,945 | | | | 16,963,535 | | | | 16,919,020 | | | | 17,181,972 | |
Other borrowings | | | 489,616 | | | | 361,778 | | | | 839,164 | | | | 886,787 | | | | 684,371 | |
Securities sold under repurchase agreements | | | 322,274 | | | | 306,192 | | | | 314,278 | | | | 331,286 | | | | 333,220 | |
Junior subordinated debentures | | | 555 | | | | 7,217 | | | | - | | | | - | | | | - | |
Other liabilities | | | 98,023 | | | | 149,379 | | | | 116,860 | | | | 121,360 | | | | 98,133 | |
Shareholders' equity | | | 3,537,254 | | | | 3,514,993 | | | | 3,451,279 | | | | 3,397,956 | | | | 3,341,325 | |
Total liabilities and equity | | $ | 21,908,398 | | | $ | 22,265,504 | | | $ | 21,685,116 | | | $ | 21,656,409 | | | $ | 21,639,021 | |
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | |
Period End Balances | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,299,310 | | | | 13.5 | % | | $ | 1,337,189 | | | | 14.9 | % | | $ | 1,293,162 | | | | 14.9 | % | | $ | 1,243,656 | | | | 14.9 | % | | $ | 1,221,078 | | | | 14.7 | % |
Construction, land development and other land loans | | | 1,167,286 | | | | 12.1 | % | | | 1,173,524 | | | | 12.2 | % | | | 1,073,198 | | | | 11.4 | % | | | 1,072,985 | | | | 11.7 | % | | | 1,068,056 | | | | 11.7 | % |
1-4 family residential | | | 2,424,868 | | | | 25.1 | % | | | 2,379,503 | | | | 24.6 | % | | | 2,360,798 | | | | 25.0 | % | | | 2,318,841 | | | | 25.2 | % | | | 2,289,114 | | | | 25.1 | % |
Home equity | | | 283,212 | | | | 2.9 | % | | | 283,686 | | | | 2.9 | % | | | 279,867 | | | | 2.9 | % | | | 277,744 | | | | 3.0 | % | | | 273,538 | | | | 3.0 | % |
Commercial real estate (includes multi-family residential) | | | 3,229,556 | | | | 33.5 | % | | | 3,229,706 | | | | 33.5 | % | | | 3,131,083 | | | | 33.2 | % | | | 2,992,726 | | | | 32.5 | % | | | 2,958,239 | | | | 32.5 | % |
Agriculture (includes farmland) | | | 657,633 | | | | 6.8 | % | | | 641,293 | | | | 6.6 | % | | | 648,818 | | | | 6.9 | % | | | 618,563 | | | | 6.7 | % | | | 600,745 | | | | 6.6 | % |
Consumer and other | | | 259,734 | | | | 2.7 | % | | | 246,681 | | | | 1.5 | % | | | 252,579 | | | | 1.5 | % | | | 275,297 | | | | 1.6 | % | | | 270,126 | | | | 1.6 | % |
Energy | | | 328,409 | | | | 3.4 | % | | | 362,826 | | | | 3.8 | % | | | 399,084 | | | | 4.2 | % | | | 405,176 | | | | 4.4 | % | | | 433,439 | | | | 4.8 | % |
Total loans | | $ | 9,650,008 | | | | | | | $ | 9,654,408 | | | | | | | $ | 9,438,589 | | | | | | | $ | 9,204,988 | | | | | | | $ | 9,114,335 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit Types | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing DDA | | $ | 5,016,637 | | | | 29.1 | % | | $ | 5,112,943 | | | | 28.6 | % | | $ | 5,136,579 | | | | 29.1 | % | | $ | 5,093,175 | | | | 30.1 | % | | $ | 5,040,628 | | | | 29.7 | % |
Interest-bearing DDA | | | 3,976,839 | | | | 23.1 | % | | | 4,382,999 | | | | 24.5 | % | | | 4,481,575 | | | | 25.3 | % | | | 3,604,798 | | | | 21.3 | % | | | 3,746,939 | | | | 22.0 | % |
Money market | | | 3,687,602 | | | | 21.4 | % | | | 3,812,420 | | | | 21.3 | % | | | 3,639,187 | | | | 20.6 | % | | | 3,716,094 | | | | 21.9 | % | | | 3,607,000 | | | | 21.2 | % |
Savings | | | 2,022,327 | | | | 11.8 | % | | | 2,017,980 | | | | 11.3 | % | | | 1,940,855 | | | | 11.0 | % | | | 1,896,725 | | | | 11.2 | % | | | 1,853,322 | | | | 10.9 | % |
Certificates and other time deposits | | | 2,515,740 | | | | 14.6 | % | | | 2,546,424 | | | | 14.3 | % | | | 2,482,923 | | | | 14.0 | % | | | 2,629,145 | | | | 15.5 | % | | | 2,753,775 | | | | 16.2 | % |
Total deposits | | $ | 17,219,145 | | | | | | | $ | 17,872,766 | | | | | | | $ | 17,681,119 | | | | | | | $ | 16,939,937 | | | | | | | $ | 17,001,664 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan to Deposit Ratio | | | 56.0 | % | | | | | | | 54.0 | % | | | | | | | 53.4 | % | | | | | | | 54.3 | % | | | | | | | 53.6 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Single family residential construction | | $ | 410,456 | | | | 35.0 | % | | $ | 407,519 | | | | 34.5 | % | | $ | 353,706 | | | | 32.9 | % | | $ | 351,169 | | | | 32.6 | % | | $ | 354,211 | | | | 33.0 | % |
Land development | | | 85,488 | | | | 7.3 | % | | | 84,141 | | | | 7.1 | % | | | 88,239 | | | | 8.2 | % | | | 84,040 | | | | 7.8 | % | | | 84,864 | | | | 7.9 | % |
Raw land | | | 161,402 | | | | 13.8 | % | | | 174,546 | | | | 14.8 | % | | | 153,274 | | | | 14.3 | % | | | 143,955 | | | | 13.4 | % | | | 145,885 | | | | 13.6 | % |
Residential lots | | | 131,807 | | | | 11.3 | % | | | 126,881 | | | | 10.8 | % | | | 130,596 | | | | 12.1 | % | | | 131,793 | | | | 12.3 | % | | | 127,671 | | | | 11.9 | % |
Commercial lots | | | 83,725 | | | | 7.1 | % | | | 80,286 | | | | 6.8 | % | | | 87,375 | | | | 8.1 | % | | | 84,162 | | | | 7.8 | % | | | 87,719 | | | | 8.2 | % |
Commercial construction and other | | | 298,713 | | | | 25.5 | % | | | 306,742 | | | | 26.0 | % | | | 262,783 | | | | 24.4 | % | | | 281,231 | | | | 26.1 | % | | | 271,833 | | | | 25.4 | % |
Net unaccreted discount | | | (4,305 | ) | | | | | | | (6,591 | ) | | | | | | | (2,775 | ) | | | | | | | (3,365 | ) | | | | | | | (4,127 | ) | | | | |
Total construction loans | | $ | 1,167,286 | | | | | | | $ | 1,173,524 | | | | | | | $ | 1,073,198 | | | | | | | $ | 1,072,985 | | | | | | | $ | 1,068,056 | | | | | |
Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of June 30, 2016
Collateral Type | | Houston | | | Dallas | | | Austin | | | OK City | | | Tulsa | | | Other(U) | | | Total | | |
Shopping center/retail | | $ | 205,200 | | | $ | 44,092 | | | $ | 29,506 | | | $ | 28,670 | | | $ | 27,653 | | | $ | 114,698 | | | $ | 449,819 | | |
Commercial & industrial buildings | | | 83,725 | | | | 31,233 | | | | 10,056 | | | | 11,390 | | | | 9,486 | | | | 68,714 | | | | 214,604 | | |
Office buildings | | | 84,554 | | | | 133,602 | | | | 18,556 | | | | 39,153 | | | | 7,519 | | | | 80,473 | | | | 363,857 | | |
Medical buildings | | | 52,530 | | | | 8,724 | | | | 53 | | | | 27,820 | | | | 8,101 | | | | 57,047 | | | | 154,275 | | |
Apartment buildings | | | 47,711 | | | | 12,954 | | | | 13,235 | | | | 17,507 | | | | 11,719 | | | | 80,242 | | | | 183,368 | | |
Hotel | | | 29,470 | | | | 32,435 | | | | 11,815 | | | | 24,588 | | | | - | | | | 89,596 | | | | 187,904 | | |
Other | | | 76,413 | | | | 11,168 | | | | 18,123 | | | | 8,751 | | | | 10,439 | | | | 73,867 | | | | 198,761 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 579,603 | | | $ | 274,208 | | | $ | 101,344 | | | $ | 157,879 | | | $ | 74,917 | | | $ | 564,637 | | | $ | 1,752,588 | | (V) |
(U) Includes other MSA and non-MSA regions.
(V) Represents a portion of total commercial real estate loans of $3.230 billion as of June 30, 2016.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Jun 30, 2016 | | | Jun 30, 2015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 29,547 | | | $ | 39,036 | | | $ | 39,711 | | | $ | 44,935 | | | $ | 31,987 | | | $ | 29,547 | | | $ | 31,987 | |
Accruing loans 90 or more days past due | | | 6,822 | | | | 1,093 | | | | 614 | | | | 261 | | | | 153 | | | | 6,822 | | | | 153 | |
Total nonperforming loans | | | 36,369 | | | | 40,129 | | | | 40,325 | | | | 45,196 | | | | 32,140 | | | | 36,369 | | | | 32,140 | |
Repossessed assets | | | 84 | | | | 161 | | | | 171 | | | | 161 | | | | 173 | | | | 84 | | | | 173 | |
Other real estate | | | 15,677 | | | | 16,695 | | | | 2,963 | | | | 3,271 | | | | 2,806 | | | | 15,677 | | | | 2,806 | |
Total nonperforming assets | | $ | 52,130 | | | $ | 56,985 | | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 52,130 | | | $ | 35,119 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial (includes energy) | | $ | 16,822 | | | $ | 18,835 | | | $ | 22,275 | | | $ | 26,200 | | | $ | 20,295 | | | $ | 16,822 | | | $ | 20,295 | |
Construction, land development and other land loans | | | 1,606 | | | | 2,913 | | | | 134 | | | | 475 | | | | 813 | | | | 1,606 | | | | 813 | |
1-4 family residential (includes home equity) | | | 5,016 | | | | 6,226 | | | | 4,692 | | | | 4,766 | | | | 5,124 | | | | 5,016 | | | | 5,124 | |
Commercial real estate (includes multi-family residential) | | | 26,651 | | | | 22,208 | | | | 15,836 | | | | 16,485 | | | | 7,939 | | | | 26,651 | | | | 7,939 | |
Agriculture (includes farmland) | | | 1,682 | | | | 6,578 | | | | 208 | | | | 376 | | | | 605 | | | | 1,682 | | | | 605 | |
Consumer and other | | | 353 | | | | 225 | | | | 314 | | | | 326 | | | | 343 | | | | 353 | | | | 343 | |
Total | | $ | 52,130 | | | $ | 56,985 | | | $ | 43,459 | | | $ | 48,628 | | | $ | 35,119 | | | $ | 52,130 | | | $ | 35,119 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of loans/properties | | | 166 | | | | 168 | | | | 147 | | | | 159 | | | | 161 | | | | 166 | | | | 161 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses at end of period | | $ | 83,826 | | | $ | 83,714 | | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 83,826 | | | $ | 80,972 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial (includes energy) | | $ | 4,109 | | | $ | 4,396 | | | $ | (528 | ) | | $ | 4,426 | | | $ | (28 | ) | | $ | 8,505 | | | $ | 476 | |
Construction, land development and other land loans | | | (25 | ) | | | (186 | ) | | | (109 | ) | | | 173 | | | | (2 | ) | | | (211 | ) | | | 143 | |
1-4 family residential (includes home equity) | | | (78 | ) | | | 30 | | | | 1 | | | | 110 | | | | 12 | | | | (48 | ) | | | 98 | |
Commercial real estate (includes multi-family residential) | | | 197 | | | | 59 | | | | 194 | | | | 53 | | | | 114 | | | | 256 | | | | 147 | |
Agriculture (includes farmland) | | | (655 | ) | | | 6,962 | | | | (77 | ) | | | (40 | ) | | | (65 | ) | | | 6,307 | | | | (143 | ) |
Consumer and other | | | 2,340 | | | | 409 | | | | 638 | | | | 557 | | | | 460 | | | | 2,749 | | | | 819 | |
Total | | $ | 5,888 | | | $ | 11,670 | | | $ | 119 | | | $ | 5,279 | | | $ | 491 | | | $ | 17,558 | | | $ | 1,540 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets to average earning assets | | | 0.27 | % | | | 0.29 | % | | | 0.23 | % | | | 0.26 | % | | | 0.19 | % | | | 0.27 | % | | | 0.19 | % |
Nonperforming assets to loans and other real estate | | | 0.54 | % | | | 0.59 | % | | | 0.46 | % | | | 0.53 | % | | | 0.39 | % | | | 0.54 | % | | | 0.39 | % |
Net charge-offs to average loans (annualized) | | | 0.24 | % | | | 0.48 | % | | | 0.01 | % | | | 0.23 | % | | | 0.02 | % | | | 0.36 | % | | | 0.03 | % |
Allowance for credit losses to total loans | | | 0.87 | % | | | 0.87 | % | | | 0.86 | % | | | 0.88 | % | | | 0.89 | % | | | 0.87 | % | | | 0.89 | % |
Allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30)(E) | | | 1.01 | % | | | 1.03 | % | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.01 | % | | | 1.09 | % |
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 13 of this Earnings Release relating to these non-GAAP financial measures for the applicable periods presented.
| | | Three Months Ended | | | Year-to-Date | |
| | | Jun 30, 2016 | | | Mar 31, 2016 | | | Dec 31, 2015 | | | Sep 30, 2015 | | | Jun 30, 2015 | | | Jun 30, 2016 | | | Jun 30, 2015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average tangible common equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 68,071 | | | $ | 68,951 | | | $ | 70,475 | | | $ | 70,598 | | | $ | 71,932 | | | $ | 137,022 | | | $ | 145,573 | |
Average shareholders' equity | | $ | 3,537,254 | | | $ | 3,514,993 | | | $ | 3,451,279 | | | $ | 3,397,956 | | | $ | 3,341,325 | | | $ | 3,526,126 | | | $ | 3,310,256 | |
Less: Average goodwill and other intangible assets | | | (1,949,510 | ) | | | (1,947,981 | ) | | | (1,932,357 | ) | | | (1,934,864 | ) | | | (1,937,200 | ) | | | (1,948,746 | ) | | | (1,934,595 | ) |
Average tangible shareholders’ equity | | $ | 1,587,744 | | | $ | 1,567,012 | | | $ | 1,518,922 | | | $ | 1,463,092 | | | $ | 1,404,125 | | | $ | 1,577,380 | | | $ | 1,375,661 | |
Return on average tangible common equity: | | | 17.15 | % | | | 17.60 | % | | | 18.56 | % | | | 19.30 | % | | | 20.49 | % | | | 17.37 | % | | | 21.16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible book value per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 3,544,584 | | | $ | 3,499,060 | | | $ | 3,462,910 | | | $ | 3,411,239 | | | $ | 3,357,285 | | | $ | 3,544,584 | | | $ | 3,357,285 | |
Less: Goodwill and other intangible assets | | | (1,948,312 | ) | | | (1,950,646 | ) | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,948,312 | ) | | | (1,936,023 | ) |
Tangible shareholders’ equity | | $ | 1,596,272 | | | $ | 1,548,414 | | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,596,272 | | | $ | 1,421,262 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | | 69,480 | | | | 69,543 | | | | 70,022 | | | | 70,040 | | | | 70,040 | | | | 69,480 | | | | 70,040 | |
Tangible book value per share: | | $ | 22.97 | | | $ | 22.27 | | | $ | 22.06 | | | $ | 21.10 | | | $ | 20.29 | | | $ | 22.97 | | | $ | 20.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tangible shareholders’ equity | | $ | 1,596,272 | | | $ | 1,548,414 | | | $ | 1,544,666 | | | $ | 1,477,572 | | | $ | 1,421,262 | | | $ | 1,596,272 | | | $ | 1,421,262 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 21,796,310 | | | $ | 21,978,345 | | | $ | 22,037,216 | | | $ | 21,567,236 | | | $ | 21,686,287 | | | $ | 21,796,310 | | | $ | 21,686,287 | |
Less: Goodwill and other intangible assets | | | (1,948,312 | ) | | | (1,950,646 | ) | | | (1,918,244 | ) | | | (1,933,667 | ) | | | (1,936,023 | ) | | | (1,948,312 | ) | | | (1,936,023 | ) |
Tangible assets | | $ | 19,847,998 | | | $ | 20,027,699 | | | $ | 20,118,972 | | | $ | 19,633,569 | | | $ | 19,750,264 | | | $ | 19,847,998 | | | $ | 19,750,264 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end tangible equity to period end tangible assets ratio: | | | 8.04 | % | | | 7.73 | % | | | 7.68 | % | | | 7.53 | % | | | 7.20 | % | | | 8.04 | % | | | 7.20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses to total loans, excluding acquired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 83,826 | | | $ | 83,714 | | | $ | 81,384 | | | $ | 81,003 | | | $ | 80,972 | | | $ | 83,826 | | | $ | 80,972 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,650,008 | | | $ | 9,654,408 | | | $ | 9,438,589 | | | $ | 9,204,988 | | | $ | 9,114,335 | | | $ | 9,650,008 | | | $ | 9,114,335 | |
Less: Fair value of acquired loans (acquired portfolio loan balances less loan marks) | | $ | 1,373,110 | | | $ | 1,495,319 | | | $ | 1,415,593 | | | $ | 1,541,369 | | | $ | 1,705,552 | | | $ | 1,373,110 | | | $ | 1,705,552 | |
Total loans less acquired loans | | $ | 8,276,898 | | | $ | 8,159,089 | | | $ | 8,022,996 | | | $ | 7,663,619 | | | $ | 7,408,783 | | | $ | 8,276,898 | | | $ | 7,408,783 | |
Allowance for credit losses to total loans, excluding acquired loans (non-GAAP basis) | | | 1.01 | % | | | 1.03 | % | | | 1.01 | % | | | 1.06 | % | | | 1.09 | % | | | 1.01 | % | | | 1.09 | % |
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