PB - Earnings call transcript Q2 2019 | Prosperity Bancshares, Inc.

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Operator

Good day, and welcome to the Prosperity Bancshares Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Charlotte Rasche. ahead. go Please

Charlotte Rasche

and morning, weeks. Bancshares’ Good call gentlemen, welcome for at and being at for Thank same the quarter ladies XXXX Prosperity location prosperitybankusa.com internet the second live next This be earnings to available broadcast replay few you. the over and will conference is call.

Chairman; and And me Executive today Vice is I'm Charlotte and Osmonov, President Timanus, with Vice Asylbek Officer; General Counsel Tim Zalman, Karnes, Bob Officer. here President; Chairman Chief Credit Financial Rasche, Executive of Executive H.E. Dowdell, Prosperity Lending Officer; and President. Eddie Bancshares. Hester, Randy Chief David Chief Officer; Jr., Vice Safady, Merle Chief

be a of who who off Zalman Osmonov, including for our followed will lead review David some will our financial discuss the asset Timanus, by review Tim will quality. statistics, and of Asylbek the with activity, highlights lending recent will He recent quarter.

we will the questions. call for Finally, open

the live During the call, following moderator, call by interested will participate Jake. parties by provided our be instructions may that

or begin, let me in laws, Certain discussed as securities matters constitute may by the risks, involve be of expressed results, we presentation Prosperity performance such unknown may materially and results, cause Bancshares forward-looking of usual known the such different may purposes the statements factors, and this of forward-looking and disclaimers. federal for implied make the uncertainties Before performance other achievements which or to actual statements. the or achievements from future

Securities with Bancshares' and and cause statements the and All by be their forms expressly we different other those forward-looking statements. qualified than statements are that SEC. with can Commission, XX-K, in Additional have entirety materially statements and including information Prosperity in in concerning actual filed forward-looking reports results cautionary Exchange these could be the to XX-Q factors found the filings

over Zalman. to Now, the let David me call turn

David Zalman

you, Thank Charlotte.

call. XXXX to to I our listening quarter would welcome like second and conference everyone thank

returns impressive equity we and quarter assets For XX.XX% annualized the average XXXX, on on of common average annualized. second showed of tangible X.XX% of

million million the quarter or $XX.X increase same were $XX.X of second earnings period compared to points. XXXX, basis the Our XX in in XXXX, $XXX,XXX an for

earnings diluted for period an in basis compared points. same of for XXXX, increase share quarter second the $X.XX Out the of per XXXX, to $X.XX XX were

Our billion, million $XX.XXX loans at XXXX X.X%, at June were an billion, of XX, XXXX. XX, the with increase $XX.XXX June $XXX compared or

$XX.XXX reflecting confidence. linked increase Our quarter million loan billion March an business or loans XXXX. saw growth XX, consumer X.X% from and annualized quarter, X.X%, second the $XXX on strong We basis at in

at deposit XX of at with XXXX billion $XX.XXX June billion XX, compared XXXX. decrease were Our June a $XX basis or XX, $XX.XXX million points,

XXXX. deposits Our from XXX $XX.XXX linked March at decreased or billion quarter X.X% million, XX,

decrease third their as generally was balances crops as in due yet income not large throughout due are planted year. well primarily funds payments, customer tax public but Historically, balances deposit tax to This quarters lower second their our have balances harvested, to quarterly and having customers dollars the seasonality. as farming from lower the using having declining been

deposits XX, the deposits, but yielding primarily It they noninterest-bearing to XX, comparing our be in average that XXXX. bank. XXXX when XXXX an quarterly same should higher, When June annualized the core noted of comparing to comparing of outside the X.X% when demand basis period increased deposits higher investments decreased public March on second to are total in investing quarter XXXX, funds due slightly, quarter-end,

organization Bank of forward XX to the Texas about build Financial merger locations bank. greatest are opportunities area. but our at cities strategic of Bank, in the parent the North combined in look Dallas-Fort LegacyTexas believe LegacyTexas this XX LegacyTexas the this operates and Worth We partnering had time. and with around provided team LegacyTexas the that pending Group, Hanigan We number entire to excited with a transaction the Texas-based premier opportunities company for We Kevin

a position LegacyTexas, competitive will addition of we the have in significant metropolitan Texas’ With and areas. two largest

Prosperity states. is operate vibrant in and fortunate growing to

see in Oklahoma due growth companies tax and and to from political Texas and a and to expanding We tailwind moving business-friendly climate rates. employment to continue lower a

towns. Texas low well continue by to sales Oklahoma as tax businesses perform increased credit strong, by card reflected As purchases, as to increased and rebates consumer most well and economies to remains do and cities confidence record with unemployment, evidenced small continue

sound loans operating manner posted maintaining of and second product and reflecting from in in channels. core to in investing quarter quality distribution on customer while confidence Prosperity for building X.X% We bank the business and the a focus annualized XXXX, consumers. efficient ever-changing asset increase relationships, also continues an technology

become. grow to through helping and has people enjoyable, Company a and it mergers of in again it continue support We develop want and the operate our and to easy next organically, every our I for acquisitions. to Company. intend generation to your make safe We success and the thank in be the manner. of Company want to both customer’s everyone leaders, for to Thanks make involved experience sound

turn discuss some Chief to financial Officer, me we Financial over our specific to results Let discussion Asylbek our achieved. Osmonov,

Asylbek?

Asylbek Osmonov

Thank you, Mr. Zalman.

to due $XXX.X second prior the decrease Net accretion interest million X.X%. the for primarily in before year. loan period of XXXX XXXX in of same loans was than for the a provision $X or million XXXX, quarter The for a months discount in compared on collection normal three to ended decrease losses and June the income credit was nonaccrual lower million XX, $XXX.X higher

three XX, the quarter period same months The net the to and compared equivalent margin basis for X.XX% XXXX, X.X% interest a for June in for ended tax XXXX. March XX, on XXXX, X.XX% was ended the

compared to for period $XX $XX.X XXXX, X.XX% XX, and million loans million XX, for same March XXXX. X.XX%, June for XXXX. for year, accounting income higher the for normal ended on XXXX, ended same months compared core interest the last was than X.XX% Noninterest ended adjustments and three period purchase collection quarter June nonaccrual in the to Excluding quarter margin XX, XXXX the the in was net the

same Noninterest ended expense in June period for XXXX, XX.XX% the to XXXX, months was ratio June period The XX.XX% XXXX. XX, for XX, ended compared for efficiency the XX.XX% compared and the for three million XXXX. in XX, months months three million, for same the to $XX.X three ended March XXXX was $XX.X

The annual X.XX billion. bond portfolio X.XX approximately effective metrics at $X.X projected a flows X/XX/XXXX showed and average duration and of years life weighted of of cash

some let over detail me presentation Timanus And asset turn loans with on to that, quality. Tim credit, and for the

Tim Timanus

Asylbek. Thank you,

in XX, Our an from increase real $XX,XXX,XXX at to March XXXX. estate, non-performing The This of was quarter-end other company XX, up $XX,XXX,XXX $XX,XXX,XXX and in totaled June estate. XXXX in and are loans assets, $XX,XXX,XXX other of at of non-performing made or nonperforming asset which XXXX in $XX,XXX,XXX XXXX. XX, loans assets the all is XX% XX, service $XXX,XXX assets Of repossessed real of are compared credits. basis or credits, total June points March points XX $XXX,XXX basis energy or XX $X,XXX,XXX

X,XXX,XXX XXXX. added $XXX,XXX for in sold. XXXX, the March XXXX quarter XX, for the June for ended compared XX, March three months have credit for $XXX,XXX assets charges-offs XX, three to of ended was XX, XX, losses June net $XXX,XXX ended June XXXX, the Net to been allowance were charge-offs quarter during $X,XXX,XXX months nonperforming compared negative the the Since to a XXXX. ended

XX% million XXXX Loans $XXX was production rate billion XXXX were up the loans, billion, monthly at The new March of million, the $XX.XXX XXXX. loan $XXX to fixed made $XX.XXX quarter total XX, ended XX, is XX, at June quarter June average for to XX, XX% for XX% XX, outstanding compared The rate. and June ended floating compared March variable XXXX loan XXXX. rate

turn I will it Charlotte over Rasche. now to

Charlotte Rasche

Thank you, Tim.

on with the week, we the applications Before LegacyTexas. wanted expect file with filed we week take provide Texas FDIC we of you our merger pending the Banking, to required Last questions, Federal Reserve in or to a with the so. brief next and we and Department with update regulatory

have We employees operations, operational discuss we managers companies key had and loan meetings begun and between the current originations, at departments integration information operations, at also processes, the To-date, management, and various to security. risk multiple of deposit efforts including have LegacyTexas. IT compliance, team with our mortgage both

the LegacyTexas them. are team and members with forward working with to We impressed look

close could occur. fourth to the merger expect in although We delays XXXX, quarter of the

we answer with At you Jake, please assist questions. prepared time, questions? us can your this are to

Operator

Gailey begin will now [Operator KBW. the Please Brady We ahead. question-and-answer with go session. from question first Instructions] comes The

Brady Gailey

Thank morning, guys. you. Good

bit So, this like bit. deposit we quarter. being yields a I little quarter, looks of margin, it and talked know, last about net higher kind the It up flat, lower not a some costs. slip saw bond from it’s We interest if little

margin interest what do couple it's As at I of we're you we know forward, look trending? is yield rate looking curve now How doing. doing the a foresee cuts net and the and

David Zalman

David. bank I'm give today. based is the we as This you to really is again, the numbers Brady, are on going

merge and the the net stay pretty today, you I'll of So, timeframe. rates a more XX-month look that at, this give see us if interest significantly, With we no where the XX you changes way together, Legacy at margin lot they're changed the that will if are look scenarios. or and we and get check interest bank, still you significantly three slides a increases in in just -- when

the margin XX-month basis see maybe XXX%, XX just deposit If points, X count if is, X like about a down say, to ratio, points rates categories or basis would points, this basis loan dip we rates you scenario X basis look look at, go another in a and that it X. XX-month you increases interest the slight category. that -- back of to if have take Again, at loans we net XX X doesn't that see maybe down X and staying any and exactly interest in points. you interest increase you will about of X And but everything in

So, change. real not all all, in a big

longer merge even our when Our down up. staying some is, they're this, significant us points, basis But the scenario most. Legacy where and see positive. XX still or margin bank at course interest helps together, bank the having rates But That increase. interest net term, best we're you you said pretty in going of going should

Asylbek Osmonov

will I want This agree. on bit. I to a Asylbek. add is Yes. little

forward. But we you the in X The second yield up cost aspect from of we’re cost increases prior be, loans seeing course, we're half saw this of cost deposits at in that that XXX; going went quarter now, XXX. would year, us putting bit, definitely at look and a stabilizing our loan the of and new deposits quarters. points, margin terms of impacted slowdown the to deposit the basis or compared by of of the quarter. deposits what the loan which would for wildcard Right is If our that help about core

improve. us So, that mentioned, based Mr. should help going But, the like should Zalman our model, forward. on NIM

David Zalman

pace the -- the of past what think quarters, I mean, couple I at the everybody. overall, over think, the I surprised deposits increased rate

I I this, seen only think, when is on working yield we have loan, again, when a yield you're getting now. we're put think that still security on, in we towards And, better those. And our security they're loans right at today X.XX. putting where things stabilization two

if all to So, today, be closer getting we’re probably reinvesting we’d X.XX%. them

some have we in gains So, both categories.

think that rate bad. probably or good say a a third; better the third. have about third, more floating banks, floating, lot third, looks impacted we're than I other positioned portfolio we of If plus be strictly more. a loans, a with XX; that and be I we we're commercial were would balanced. Fixed could it are rates a fixed like we'd It definitely a variables. third, a

pretty So, we're I think, overall. balanced

Asylbek Osmonov

security also a QX. Okay. net then, quarter little bit for higher versus premium this was amortization And the

would think really I forward, mean, QX low historically. level... I I to was expect same compared But, going relatively

David Zalman

refinancing quarter more natural down. going rates interest Yes. lot expect, We this saw just to And with think. that's a I

Brady Gailey

should book I where right. like point to know come second the a That's looks going down little to trend book we those Do quarter. to down helpful. about again that bond roughly already be quarter bit. balances stable talked see the continued All And you bond It delevering in forward? continuing the last or the

David Zalman

One, last this because and two your is deposits parts your grow bond that's how -- third loans how much there's were less that Historically quarters. the -- Historically, and year. our book; from, from your quarter your where question. deposits would in X%. there's the They two then, to do seasonally come probably X% answer much low So, money to do grow grow? it’s the

But, should if category. are two -- there's grow in say you if you that So, both at that a things going that think. on I still historically, bit it would see look little you have I would probably

balance, in the still growth see you some see grow book should the securities loans you should think I and also.

Asylbek Osmonov

Because invest But, in That’s X.XX investments because rate -- decrease with other we borrowing. was loans right the on overnight possible. in correct in the want decrease now. line is exactly to like as the is our

running our both So, in line bit a that that's decrease items. little the the and off reason see we’re the bond you portfolio,

David Zalman

it I don’t makes money... this lot about of borrowing a earlier, sense, think we talked

Asylbek Osmonov

correct that sheet. and in it management well It’s helps of margin our as balance

Brady Gailey

All on helpful. just then, right. finally That's me And the buyback. for

of the per back like the little the in you at on Maybe going share, even the kind buybacks thoughts announced. You the half Company. late in future it I the X% maybe over look looks price repurchased just repurchased a was the after $XX.XX, it of quarter, LegacyTexas deal year? If forward

David Zalman

Yes.

maximum And the because we our that dive, earnings exactly could stock announcement. that in, took our we until Legacy buy, the that a and every underpriced. it almost we really felt couldn't You’re day right. of the bought we buy was jumped day we and After deal, announced

we just again. of of capital, price, felt And and jumped like stock where the a if it should it, becomes be, again, if We have happens in back really be that stock disproportionate we’ll the and to we So, price again. the more same do in. the the we'll ever be lot we it should

Operator

Next Demba from go SunTrust. comes ahead. with question Please Jennifer

Jennifer Demba

Two Thank questions. you.

expectations First, is, near LegacyTexas accretion what's transaction? for M&A the your environment second Thanks. how more over appetite the for does And term? impact new now your the rate my question assumptions

David Zalman

-- on first net he's Asylbek question and I’ll more Jennifer mergers. with interest effect. first how they should I’ll part what to because margins calculations probably appetite turn take some like the done in may to look the the of second question, and regard

Asylbek Osmonov

Yes.

the not the discount, Regarding rates the talking with had we’ve if see about credit the probably impact going accretion forward. going decreasing, to January in on accretion will I previously, a credit definitely becomes But think That we're we much Legacy, acquisition. the right discount previous again, the of that spoken CECL you're the discount as starting Xst. to under you of SOP that allowance that

that than So, should the I But not of acquisitions. it. accretion the or had rate going down, environment slowing previous think incomes discount of going forward, we from with credit would down less those we side see any be

David Zalman

guess, in probably money I probably those a great they think, margin. Loan; see we $XXX step money on have broker a the their on Home purchased chunk lower with that's we think number are net interest going -- down the are CDs I further, more, a a what CDs again, own Federal Legacy But two, I because have probably they have going million we call that such rates so that would of or CDs. opportunity call

our that think with money replace core I core deposit, we can our deposits. that

total is cost… cost Our right Our what now?

Asylbek Osmonov

Cost of points basis deposit XX is

David Zalman

their where X%. points is basis XX overall over

the net is increases overall, dramatically. for So, two them of It also helps together our combination both. It banks interest our real benefit margin.

our is and I acquisitions. I for focus the to appetite earlier, the want and as our we part more and sure bank. us want feels mentioned But and a earlier everybody that I as the that too, Kevin that make Legacy and feels that I build this Texas we going do, we're together So, that question anybody, foremost want mentioned to And scare to don't about but same on, this way premier of related then, first think second to and mergers comfortable forward.

think more I at in time. at the I that a think again. to transactions out there we see look couple But, just Legacy the will deal with looking right the back we It we will there's seemed Legacy. this step and -- you so, that other And did particular of market it the do still before were was

Jennifer Demba

Follow-up question. to first the

announced accretion over saw when said legacy, you you So, XXXX would be earnings a little you XX%.

So, achievable you some do with still feel offset. that's

David Zalman

well, that's it's We out. acquisition only that it’s with XXX,XXX creation of that That going bought our feel do going too. like to stock. already as we shares And And achievable. be we the helps improving why the in

really, down on XX%. XX% transaction, really give If wanted wanted too, to Legacy about we us put to about really you cash them remember only the

of somewhere in settled we XX% the think, I category cash.

-- So, -- we do in more money. the that will were to cost we good And add have feel in to if buy gave pretty we like can the market But, can market they accretion. And we real. that were saves the buy the I excess seem we always that. really on do

Asylbek Osmonov

But XX% going That and in XX XXXX, to the I accretion, accretion, assuming savings. Yes. we're full agree. savings. realize And savings, will XXXX be XXX% XX% probably plus

David Zalman

the making XXX% You’re the -- integration that point get by will a happens just saying first… you're we that just time

Asylbek Osmonov

accretion want going in I clear XXXX but exactly. why That’s Yes, XX% happen to in not to ‘XX. that that is

Operator

comes next go Rose Michael from James. The Please question ahead. with Raymond

Michael Rose

the quarter. looking side Legacy quarter, Just negative at migration had this looks they some like this it

it those So, potentially to what deal by going looks I I'm guess, the like of asking some is, loans closes. are time be the resolved

expect to could credit So, actually we the come down? mark

David Zalman

don't mark down because off, but mark guess off. it But the I guess they're mark was. been but guess, were what we already if in in were I guess, identified for into from diligence seeing would might you could from very more consideration. they than if appropriately. identify no were say hasn't the your mark of that changed that they be And first that if charged those I or so yes, the know taken have like original it's -- now down due -- right loans clear, them perspective, been reserved that are would all them, being I identified our have overall being were also say, you're loans really this, because will diligence. those marked I charged come I charged off, I’m all, and the due then, we our

Asylbek Osmonov

haven't the is we not overall that and thing to mark anything initially. seen think, we seen overall, would emphasize I change the talking anything that were Legacy about has aggregate But,

David Zalman

Right.

right we everything at -- this. what There's nothing aware time. same know that -- they have of the we're in and think and that think unexpected they're now of seeing aware was we're I that I

Michael Rose

do of And view pretty we've just you on on that maybe a the mortgage been this haven’t historically love line any across as Understood. it, expect closes? would business? to the what's you one know, their deal relates but what would They question that David, warehouse guys that it in of your Thanks. had kind nice just business quarter, bump more I in them. industry. to thoughts once seen with

David Zalman

Yes.

you as think, bigger, business. different of you get I take on lines

Sometimes, that we've more -- in I been conservative think always nature.

I think, that is have. Legacy than we more taking risk

Kevin I very forward, think going feels comfortable mortgage with lending, warehouse it.

to we're went at -- And to deal, into so, we something our it’s it. at that think looking from with right feel like can't $X.X you it's we're something we part comfortable And going billion expand we're when now, where it. that it I or $X.X billion that that. going tell to But of of to I keep. part this it’s

Operator

The question Please with [Operator Olney go from next comes ahead. Matt Stephens. Instructions]

Matt Olney

guys. Thanks loan average few want yields new is last coming Can that that renewed great. X.X%. in circle the on change you yields around are discussion quarters? the rate the I all of the just said over And has morning, the the back XQ? I believe and to at clarify, loan good Hey, you new And margin. around

Asylbek Osmonov

our think rate impact. But I average we mentioned, at that's as of see expected the was putting we're -- you putting X.XX%. not if going But how what not QX it books now, what But sure quarters, average has books. So, also we're to significantly. rate on X.XX, changed it's our past in right change, few we with on X.XX% that look

David Zalman

really rates that there extremely Matt, I of you even we some when would base there. would for three years. Randy, -- want that, a X% five feel a this, dropped know loans was low, kind still especially add on and what charging, were we fixed fixed comments say rate we below do too to that on we dropped I don't on rate. ever

Randy Hester

were lowest. Probably their X.X% Xs, mid the when rates at

David Zalman

the lowest. At

Randy Hester

while. for X% above we've But, been a

David Zalman

of rates are forecast want don’t But amount to Yes. going well a as I to because -- I have where probably you we I and I think we're both, at mean, that certain of a be. knows we're fixed verbal rates, there certain amount rates who say, too. what that. positioned

Matt Olney

liability pressure I the peers. Right. But, the And see was deposit great, on incremental surprised versus then, side, CD still to cost. cost on especially

bps think sequentially. I XX up they were

Just appreciate the you is trying is and few incremental pressure in emerging guys avoided years? new that that that to -- pressure last is or serve the for more in you've -- markets pressure rural markets the this over that metro

David Zalman

saw And That's really really I around if XX% that's we I When -- probably because or started, a bank like And just started CDs. on to probably me. of CDs. we XX% we banking that we -- enough. XX% just have the of the when really we have felt XX%, dropped in our okay, look or CDs. ratio today, had like,

I So, market. leaving not we're mean, the

X.X% going on see Not that CDs. lose did we're I go back the one not we're not was to to customers and X% existing But, where higher to keep and our to it more much offer we X% offer out to trying at, after we us didn't it didn't try rate and that lose. on but You were. year, year CD, And or more want one on where the maintaining was from guess, CDs. we go

Tim Timanus

in let David. very metropolitan But, the it a bit, me seeing all than large institutions seeing it's that add all And it board ones. the major from large We're say, I little very to the financial not markets, markets. firstly, across will in other we're the banks.

from Chases the coming people in markets So, we're It's that. and just like seeing the and markets, it of Americas larger seeing Bank the in smaller we're both. it the not

David Zalman

loan anybody to bank it massive, smaller XXX%. into paying they're whatever than doing Now, probably they’re more high deposit just rates. the else, think regional had very, are ratios very and money to I And banks takes a more get their

Tim Timanus

seeing a offering years going competition, fair then, see while and five year as I day. guess, I long is rates were anymore. But little as we from to X. correct. now CD amount in seeing for will over We're X.X% every X That's not range, out, a to it at I X% much the commonplace. say, X.X one every of a went

still there. out So, it's

David Zalman

mean, this. But don’t base I somewhat -- well the on, like stabilizing keep and comments months that ads down. see anymore. page -- overall, statement pressure I rates know I you can it ago, for said, maybe year few that I think you Tim, seen coming I on see except plus like making of X% that a and did do a in a not the paper Asylbek’s as full we you’re

Tim Timanus

That's correct.

For customers XX X to I That's with down to rates. day having money to emails dropped these some banking a to from maybe or getting X while, centers, of problems move a very or a was XX X day. wanting probably high

So, not it's as but there, it it's still prevalent was. exactly as correct. That's

Operator

question go ahead. Jon Please Capital with next from RBC comes Markets. Arfstrom The

Jon Arfstrom

on just Tim growth. or David maybe loan for Question

big unusual picture feel a a of just or increase good had you pace But, for out would of overall this you long as you, good the anything -- quarter. that in good terms saw? like does You growth call growth

David Zalman

As swings. surprised we anything tell, things can unusual. wouldn't From time, I this But, business don't that any any get see all expect reason there's in large of stable. what we world. in say the I are moment to

typically it's of guarantees. in is terms Dallas, example. still But where stable are they’ve So, there in But, those Houston are softness, in our office healthy occupancies any the everything for been. there's markets. and no in If

moving So, a I forward, business think usual, while. it's as for

Tim Timanus

we at to a quarter, I off overall, first you think and I was qualify looked at consumers I like businesses, of when the it pretty few everything and going start. slow days healthy. looks look getting say, the to looks were when

However, We when a end. way. slower started really at the the start, same came quarter, through I looked it we last actually were

a So, change… whole see lot I of don't

Asylbek Osmonov

The good. still pipeline is

Tim Timanus

pipeline still The good. is

David Zalman

The still pipeline good. is

in sometimes, decent quarter summer when of And off. This drops reasonably there's for us. it seasonality the was bit everybody's vacation, on a past

we off much in as didn't years. see have we drop a some as So, of

hopefully forward. of as not stable, reason no to to going there's think So, going and this moment, be it's improving

Jon Arfstrom

of like in But general? but a it it if the about not looks necessarily most growth how you was And increased, in are overall category a loan you looks the like small I'm feel down but and health there. categories, seeing they is of And this asking some bit. opportunities it your about energy curious, energy,

David Zalman

I that I on cyclical, our we're is be. there it what are lending don't but I'm significant will always I mean, fine, It's caution. certainly energy seeing can been. is. take one some. always it opportunities. additional know be has is of it sure, guess, Energy

overly careful be to it, a have just they'll things a they're when and know You deteriorate like get before not you enthusiastic because look improving bit, bit.

it it would the would So, I loans we're I that still either. don't growing in that see We're still for significantly, and there. making energy see out don't anticipate declining significantly, business. portfolio be stable a I while,

Jon Arfstrom

curious, you portfolio, is Asylbek, it David take? two. the same or different then, environment But, last anything bit. about portfolio, the obviously about approach or the if or in rate little methodical the quarter changed always it you’ve doing of just a with bit And a over that thinking terms just you're securities just talked the I'm

David Zalman

anything. -- putting and the higher really That's we try I would really on and being methodical bank month to -- say for bond We're approach, what we really, the I we same the the the most for with reducing the portfolio loans if mean money bonds and there haven't into go been money hasn't really if they’re [ph] CDs -- pay out and to last or rates borrow rates lower or any anything. need so, part.

with same think the just So, strategy. we're that's -- sticking I

Operator

Please I to Charlotte question-and-answer over Rasche. turn like go session. our concludes conference This would back to ahead. the

Charlotte Rasche

and work we to Thank participate our appreciate value. for in you, today. support to continue gentlemen, Company building we that on time and shareholder our will get Jake. Thank taking the you, for call ladies We the

Operator

Thank concluded. attending you for now is today's conference presentation. The

You may disconnect. now

Prosperity Bancshares (PB) 24 Jul 192019 Q2 Earnings call transcript