Prosperity Bancshares, Inc.® Reports Fourth Quarter 2015 Earnings

- Fourth quarter 2015 earnings per share (diluted) of $1.01

- Fourth quarter net income of $70.475 million

- Linked quarter loans increased 2.5% (10.1% annualized)

- Nonperforming assets remain low at 0.23% of fourth quarter average earning assets

- Nonperforming assets decreased 10.6% compared with the third quarter 2015

- Return on fourth quarter average assets (annualized) of 1.30%

- Return on fourth quarter average tangible common equity of 18.56%

- Acquisition of Tradition Bancshares, Inc. completed on January 1, 2016

Jan 27, 2016, 06:05 ET from Prosperity Bancshares, Inc.

HOUSTON, Jan. 27, 2016 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income for the quarter ended December 31, 2015 of $70.475 million or $1.01 per diluted common share. Additionally, nonperforming assets remain low at 0.23% of fourth quarter average earning assets with an annualized return on fourth quarter average assets of 1.30%.

"We were very pleased with our fourth quarter 2015 results and trends," said David Zalman, Prosperity's Chairman and Chief Executive Officer.

"Net income (excluding purchase accounting adjustments) was $66.147 million for the quarter ended December 31, 2015 compared with $58.499 million for the quarter ended December 31, 2014, an increase of 13.1%. Net income per diluted common share (excluding purchase accounting adjustments) was $0.94 for the three months ended December 31, 2015 compared with $0.84 for the three months ended December 31, 2014, an increase of 11.9%. Our return on average tangible common equity for the quarter ended December 31, 2015 was 18.56%. The reconciliations of these non-GAAP financial measures are included below," continued Zalman.

"We saw solid organic loan growth during the fourth quarter, as linked quarter loans increased $233.6 million or 2.5% (10.1% annualized) from $9.205 billion at September 30, 2015 to $9.439 billion on December 31, 2015.  Our asset quality also improved in the fourth quarter.  Nonperforming assets totaled $43.459 million or 0.23% of quarterly average interest-earning assets at December 31, 2015, compared with $48.628 million or 0.26% of quarterly average interest-earning assets at September 30, 2015.  This represented a 10.6% reduction in nonperforming assets."

"Although the Texas economy is challenged by the energy downturn, it is a much more diversified economy than it was in the 1980's.  Texas grew over 120,000 new jobs in 2015, despite the job losses in the oil industry.  The medical, petrochemical, auto and technology companies increased jobs, taking up the slack.  The Oklahoma and Texas unemployment rates are lower than the U.S. national average and Dallas-Fort Worth and Houston rank among the top five largest metro areas in terms of population and economic output in the U.S.  We believe that Texas' central location, its oil and gas deposits, its proximity to Mexico, its fast growing population, its low cost of doing business, lack of state income tax and its friendly legal climate to business will continue to drive businesses and people to relocate in Texas.  Texas ranks number two in the most Fortune 500 companies located in a state."

"I would like to acknowledge the loss of Dr. William Fagan, a longtime director of Prosperity Bancshares who passed away Sunday.  Dr. Fagan joined the Company's board years ago when Prosperity Bank merged with his bank, Paradigm Bank.  He was very loyal, supportive and loved by us all.  We will miss him," concluded Zalman.

Results of Operations for the Three Months Ended December 31, 2015

Net income was $70.475 million for the three months ended December 31, 2015 compared with $78.228 million for the same period in 2014. Net income per diluted common share was $1.01 for the three months ended December 31, 2015 compared with $1.12 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $66.147 million for the quarter ended December 31, 2015 compared with $58.499 million for the quarter ended December 31, 2014, an increase of 13.1%. Net income per diluted common share (excluding purchase accounting adjustments) was $0.94 for the three months ended December 31, 2015 compared with $0.84 for the three months ended December 31, 2014, an increase of 11.9%. The reconciliation of these non-GAAP financial measures is shown on page 12. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2015 were 1.30%, 8.17% and 18.56%, respectively.  Prosperity's efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 42.58% for the three months ended December 31, 2015.

Net interest income before provision for credit losses for the quarter ended December 31, 2015 was $153.258 million compared with $177.751 million during the same period in 2014. This change was primarily due to a decrease in loan discount accretion of $20.751 million for the quarter ended December 31, 2015 compared with the quarter ended December 31, 2014. Linked quarter net interest income before provision for credit losses was $153.258 million for the three months ended December 31, 2015 compared with $156.108 million for the three months ended September 30, 2015. This change was primarily due to a decrease in loan discount accretion of $3.195 million for the quarter ended December 31, 2015 compared with the quarter ended September 30, 2015. The net interest margin on a tax equivalent basis was 3.24% for the three months ended December 31, 2015, compared with 3.89% for the same period in 2014 and 3.30% for the three months ended September 30, 2015. This change was primarily due to the decrease in loan discount accretion and lower yields on average interest-earning assets for the three months ended December 31, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.11% for the three months ended December 31, 2015, compared with 3.25% for the same period in 2014 and 3.10% for the three months ended September 30, 2015. The reconciliation of these non-GAAP financial measures is shown on page 12.

Noninterest income was $30.283 million for the three months ended December 31, 2015 compared with $29.380 million for the same period in 2014. This change was primarily due to the net gain on sale of assets and other noninterest income. On a linked quarter basis, noninterest income decreased $1.497 million or 4.7% compared with the quarter ended September 30, 2015. This was primarily due to a decrease in mortgage income and other noninterest income.

Noninterest expense was $77.909 million for the three months ended December 31, 2015 compared with $84.036 million for the same period in 2014. This change was primarily due to a decrease in regulatory assessments, salary and benefits expense and net occupancy and equipment expense. On a linked quarter basis, noninterest expense increased $1.479 million or 1.9% compared with the quarter ended September 30, 2015. This was primarily due to an increase in salary and benefits expense and other noninterest expense, partially offset by a decrease in FDIC insurance for the three months ended December 31, 2015.  

Results of Operations for the Year Ended December 31, 2015

Net income was $286.646 million for the year ended December 31, 2015 compared with $297.441 million for the same period in 2014.  Net income per diluted common share was $4.09 for the year ended December 31, 2015 compared with $4.32 for the same period in 2014. Net income (excluding purchase accounting adjustments) was $255.479 million for the year ended December 31, 2015 compared with $236.157 million for the year ended December 31, 2014, an increase of 8.2%. Net income per diluted common share (excluding purchase accounting adjustments) was $3.65 for the year ended December 31, 2015 compared with $3.43 for the year ended December 31, 2014, an increase of 6.4%. The reconciliation of these non-GAAP financial measures is shown on page 12.  Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2015 were 1.33%, 8.51% and 19.98%, respectively.  Prosperity's efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 41.87% for the year ended December 31, 2015.

Net interest income before provision for credit losses for the year ended December 31, 2015 was $630.510 million compared with $671.154 million for the same period in 2014.  The change was primarily due to a decrease of $43.753 million in loan discount accretion partially offset by lower rates paid on average interest-bearing liabilities for the year ended December 31, 2015. The net interest margin on a tax equivalent basis for the year ended December 31, 2015 decreased to 3.38% compared with 3.80% for the same period in 2014. This was primarily due to a decrease in loan discount accretion and lower yields on average interest-earning assets partially offset by lower rates paid on average interest-bearing liabilities for the year ended December 31, 2015. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis was 3.13% for the year ended December 31, 2015 compared with 3.29% for the same period in 2014. The reconciliation of these non-GAAP financial measures is shown on page 12.

Noninterest income was $120.781 million for the year ended December 31, 2015 compared with $120.832 million for the same period in 2014. Noninterest expense was $313.536 million for the year ended December 31, 2015 compared with $327.962 million for the same period in 2014.  This change was primarily due to a decrease in salary and benefits expense and other noninterest expense.  

Balance Sheet Information

At December 31, 2015, Prosperity had $22.037 billion in total assets, an increase of $529.483 million or 2.5%, compared with $21.508 billion at December 31, 2014.

Loans at December 31, 2015 were $9.439 billion, an increase of $194.406 million or 2.1%, compared with $9.244 billion at December 31, 2014. Linked quarter loans increased $233.601 million or 2.5% (10.1% annualized) from $9.205 billion at September 30, 2015. 

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At December 31, 2015, oil and gas loans totaled $399.084 million or 4.2% of total loans, of which $178.614 million were production loans and $220.470 million were servicing loans compared with total oil and gas loans of $500.409 million or 5.4% of total loans at December 31, 2014, of which $271.972 million were production loans and $228.437 million were servicing loans.

Deposits at December 31, 2015 were $17.681 billion, a decrease of $12.039 million or 0.1%, compared with $17.693  billion at December 31, 2014. Linked quarter deposits increased $741.182 million or 4.4% (17.3% annualized) from $16.940 billion at September 30, 2015.

Asset Quality

Nonperforming assets totaled $43.459 million or 0.23% of quarterly average interest-earning assets at December 31, 2015, compared with $36.919 million or 0.20% of quarterly average interest-earning assets at December 31, 2014, and $48.628 million or 0.26% of quarterly average interest-earning assets at September 30, 2015. On a linked quarter basis, nonperforming assets decreased $5.169 million or 10.6%. The allowance for credit losses was 0.86% of total loans at December 31, 2015, 0.87% of total loans at December 31, 2014 and 0.88% of total loans at September 30, 2015.  Excluding loans acquired that are accounted for under FASB Accounting Standards Codification ("ASC") Topics 310-20 and 310-30, the allowance for credit losses was 1.01% of remaining loans as of December 31, 2015, compared with 1.14% at December 31, 2014 and 1.06% at September 30, 2015.  Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure. 

The provision for credit losses was $500 thousand for the three months ended December 31, 2015 compared with $6.350 million for the three months ended December 31, 2014 and $5.310 million for the three months ended September 30, 2015.  The provision for credit losses was $7.560 million for the year ended December 31, 2015 compared with $18.275 million for the year ended December 31, 2014. 

Net charge-offs were $119 thousand for the three months ended December 31, 2015 compared with $3.201 million for the three months ended December 31, 2014 and $5.279 million for the three months ended September 30, 2015. Net charge-offs were  $6.938 million  for the year ended December 31, 2015 compared with $4.795 million for the year ended December 31, 2014.

Conference Call

Prosperity's management team will host a conference call on Wednesday, January 27, 2016 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity's fourth quarter 2015 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 6167440.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com.  The webcast may be accessed directly from Prosperity's home page by clicking the "Investor Relations" tab and then the "Presentations & Calls" link.

Non-GAAP Financial Measures

Prosperity's management uses certain non−GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio.  Further, as a result of acquisitions, and the related purchase accounting adjustments, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its net income and earnings per share (excluding purchase accounting adjustments) and its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20, "Receivables-Nonrefundable Fees and Other Costs" and 310-30, "Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality").  Prosperity has included in this Earnings Release information related to these non-GAAP financial measures for the applicable periods presented.  Please refer to page 12 and to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures.

Dividend

Prosperity Bancshares, Inc. ("Prosperity Bancshares") declared a first quarter cash dividend of $0.30 per share, to be paid on April 1, 2016 to all shareholders of record as of March 18, 2016.

Acquisition of Tradition Bancshares, Inc.

On January 1, 2016, Prosperity Bancshares completed the acquisition of Tradition Bancshares, Inc. ("Tradition") and its wholly-owned subsidiary Tradition Bank headquartered in Houston, Texas. Tradition Bank operated 7 banking offices in the Houston, Texas area, including its main office in Bellaire, 3 banking centers in Katy and 1 banking center in The Woodlands. As of December 31, 2015, Tradition, on a consolidated basis, reported total assets of $547.963 million, total loans of $253.315 million, total deposits of $488.928 million and shareholders' equity of $43.103 million.

Under the terms of the definitive agreement, Prosperity Bancshares issued 679,528 shares of Prosperity Bancshares common stock plus $39.0 million in cash for all outstanding shares of Tradition capital stock. As the acquisition was completed after year end, such information is not included in the quarter ended December 31, 2015 financial results.

Prosperity Bancshares, Inc. ®

As of December 31, 2015, Prosperity Bancshares, Inc. ® is a $22.037 billion Houston, Texas based regional financial holding company, formed in 1983. Operating under a community banking philosophy and seeking to develop broad customer relationships based on service and convenience, Prosperity offers a variety of traditional loan and deposit products to its customers, which consist primarily of small and medium sized businesses and consumers. In addition to established banking products, Prosperity offers a complete line of services including: Internet Banking services at www.prosperitybankusa.com, Retail Brokerage Services, Credit Cards, MasterMoney Debit Cards, 24 hour voice response banking, Trust and Wealth Management, Mortgage Services and Mobile Banking.

Including the former Tradition Bank locations, Prosperity currently operates 248 full-service banking locations: 67 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area, 6 in the Central Oklahoma area and 8 in the Tulsa, Oklahoma area.

 

Bryan/College Station Area -

Sachse

Sugar Land

Taft

Bryan

The Colony

SW Medical Center

Victoria

Bryan-29th Street

Turtle Creek

Tanglewood

Victoria-Navarro

Westmoreland

The Plaza

Bryan-East

Uptown

Victoria-North

Bryan-North

Waugh Drive

Yoakum

Caldwell

Fort Worth -

Westheimer

Yorktown

College Station

Haltom City

West University

Crescent Point

Keller

Woodcreek

West Texas Area -

Hearne

Roanoke

Abilene -

Huntsville

Stockyards

Other Houston Area

Antilley Road

Madisonville

Locations -

Barrow Street

Navasota

Other Dallas/Fort Worth

Angleton

Cypress Street

New Waverly

Locations -

Bay City

Judge Ely

Rock Prairie

Arlington

Beaumont

Mockingbird

Southwest Parkway

Azle

Cinco Ranch

Tower Point

Ennis

Cleveland

Lubbock -

Wellborn Road

Gainesville

East Bernard

4th Street

Glen Rose

El Campo

66th Street

Central Texas Area -

Granbury

Dayton

82nd Street

Austin -

Mesquite

Galveston

86th Street

Muenster

Groves

98th Street

Allandale

Sanger

Hempstead

Avenue Q

Cedar Park

Waxahachie

Hitchcock

North University

Congress

Weatherford

Katy

Texas Tech Student Union

Lakeway

Katy-Spring Green

Liberty Hill

East Texas Area -

Liberty

Midland -

Northland

Athens

Magnolia

Wadley

Oak Hill

Blooming Grove

Magnolia Parkway

Wall Street

Research Blvd

Canton

Mont Belvieu

Westlake

Carthage

Nederland

Odessa -

Corsicana

Needville

Grandview

Other Central Texas Locations -

Crockett

Rosenberg

Grant

Bastrop

Eustace

Shadow Creek

Kermit Highway

Canyon Lake

Gilmer

Spring

Parkway

Dime Box

Grapeland

The Woodlands-College Park

Dripping Springs

Gun Barrel City

The Woodlands-I-45

Other West Texas

Locations -

Elgin

Jacksonville

The Woodlands-Research Forest

Big Spring

Flatonia

Kerens

Tomball

Brownfield

Georgetown

Longview

Waller

Brownwood

Gruene

Mount Vernon

West Columbia

Cisco

Kingsland

Palestine

Wharton

Comanche

La Grange

Rusk

Winnie

Early

Lexington

Seven Points

Wirt

Floydada

New Braunfels

Teague

Gorman

Pleasanton

Tyler-Beckham

South Texas Area -

Levelland

Round Rock

Tyler-South Broadway

Corpus Christi -

Littlefield

San Antonio

Tyler-University

Airline

Merkel

Schulenburg

Winnsboro

Calallen

Plainview

Seguin

Carmel

San Angelo

Smithville

Houston Area -

Northwest

Slaton

Thorndale

Houston -

Saratoga

Snyder

Weimar

Aldine

Timbergate

Alief

Water Street

Oklahoma

Dallas/Fort Worth Area -

Bellaire

Central Oklahoma-

Bellaire (Tradition)

Dallas -

Beltway

Other South Texas

23rd Street

Abrams Centre

Clear Lake

Locations -

Edmond

Balch Springs

Copperfield

Alice

Expressway

Camp Wisdom

Cypress

Aransas Pass

I-240

Cedar Hill

Downtown

Beeville

Memorial

Dallas – Central Expressway

Eastex

Colony Creek

Norman

Forest Park

Fairfield

Cuero

Frisco

First Colony

Edna

Tulsa-

Fry Road

Frisco-West

Gessner

Goliad

Garnett

Kiest

Gladebrook

Gonzales

Harvard

Grand Parkway

McKinney

Heights

Hallettsville

Memorial

McKinney-Stonebridge

Highway 6 West

Kingsville

Owasso

Midway

Little York

Mathis

Sheridan

Northwest Highway

Medical Center

Padre Island

S. Harvard

Plano

Memorial Drive

Palacios

Utica Tower

Preston Forest

Northside

Port Lavaca

Yale

Preston Road

Pasadena

Portland

Red Oak

Pecan Grove

Rockport

Pin Oak

River Oaks

Sinton

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the securities laws that are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries.  These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements.  These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives.  Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and weather.  These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2014 and other reports and statements Prosperity Bancshares has filed with the SEC. Copies of the SEC filings for Prosperity Bancshares® may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.   

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Dec 31, 2015

Sep 30, 2015

 Jun 30, 2015 

 Mar 31, 2015 

 Dec 31, 2014 

Balance Sheet Data

 (at period end)

Total loans

$    9,438,589

$    9,204,988

$       9,114,335

$        9,166,005

$       9,244,183

Investment securities(A)

9,502,427

9,530,761

9,698,079

9,579,496

9,045,776

Federal funds sold 

1,418

996

1,451

1,639

569

Allowance for credit losses

(81,384)

(81,003)

(80,972)

(80,963)

(80,762)

Cash and due from banks

562,544

300,230

353,047

352,642

677,285

Goodwill

1,868,827

1,881,955

1,881,955

1,881,955

1,874,191

Core deposit intangibles, net

49,417

51,712

54,068

56,458

58,947

Other real estate owned

2,963

3,271

2,806

3,010

3,237

Fixed assets, net

267,996

271,650

275,347

276,468

281,549

Other assets

424,419

402,676

386,171

370,149

402,758

Total assets

$  22,037,216

$  21,567,236

$     21,686,287

$      21,606,859

$     21,507,733

Noninterest-bearing deposits

$    5,136,579

$    5,093,175

$       5,040,628

$        5,038,436

$       4,936,420

Interest-bearing deposits

12,544,540

11,846,762

11,961,036

12,522,916

12,756,738

Total deposits

17,681,119

16,939,937

17,001,664

17,561,352

17,693,158

Other borrowings

491,399

786,571

886,741

331,914

8,724

Securities sold under repurchase agreements

315,253

310,038

334,189

318,418

315,523

Junior subordinated debentures

-

-

-

-

167,531

Other liabilities

86,535

119,451

106,408

93,314

77,971

Total liabilities

18,574,306

18,155,997

18,329,002

18,304,998

18,262,907

Shareholders' equity(B)

3,462,910

3,411,239

3,357,285

3,301,861

3,244,826

Total liabilities and equity

$  22,037,216

$  21,567,236

$     21,686,287

$      21,606,859

$     21,507,733

(A) Includes $3,138, $3,788, $4,655, $5,296 and $5,737  in unrealized gains on available for sale securities for the quarterly periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively.

(B) Includes $2,040, $2,462, $3,026, $3,442 and $3,729 in after-tax unrealized gains on available for sale securities for the quarterly periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Three Months Ended

Year-to-Date

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Income Statement Data

Interest income:

Loans

$       114,234

$       116,911

$       119,404

$        124,878

$       139,396

$       475,427

$       525,716

Securities(C)

48,301

48,610

48,530

48,562

47,108

194,003

188,744

Federal funds sold and other earning assets

37

22

47

165

74

271

335

Total interest income

162,572

165,543

167,981

173,605

186,578

669,701

714,795

Interest expense:

Deposits

8,575

8,753

9,169

9,577

7,326

36,074

37,871

Other borrowings

541

473

365

129

200

1,508

772

Securities sold under repurchase agreements

198

209

208

203

202

818

938

Junior subordinated debentures

-

-

-

791

1,099

791

4,060

Total interest expense

9,314

9,435

9,742

10,700

8,827

39,191

43,641

Net interest income

153,258

156,108

158,239

162,905

177,751

630,510

671,154

Provision for credit losses

500

5,310

500

1,250

6,350

7,560

18,275

Net interest income after provision for credit losses

152,758

150,798

157,739

161,655

171,401

622,950

652,879

Noninterest income:

Nonsufficient funds (NSF) fees

8,974

9,082

8,310

7,918

9,345

34,284

37,048

Credit card, debit card and ATM card income 

5,938

5,955

6,003

5,638

5,786

23,534

22,889

Service charges on deposit accounts

4,289

4,438

4,189

4,179

4,263

17,095

16,452

Trust income

1,988

1,986

2,047

2,009

2,165

8,030

8,108

Mortgage income

1,289

1,770

1,513

1,148

1,049

5,720

4,264

Brokerage income

1,407

1,596

1,541

1,409

1,455

5,953

5,868

Bank owned life insurance income

1,394

1,384

1,390

1,380

1,392

5,548

5,189

Net gain on sale of assets

581

173

270

1,379

24

2,403

4,658

Other noninterest income

4,423

5,396

5,034

3,361

3,901

18,214

16,356

Total noninterest income

30,283

31,780

30,297

28,421

29,380

120,781

120,832

Noninterest expense:

Salaries and benefits

48,500

46,587

47,819

49,966

49,557

192,872

199,270

Net occupancy and equipment

5,774

6,088

5,812

5,964

6,620

23,638

24,756

Credit and debit card, data processing and software amortization

3,996

3,924

4,045

3,817

4,553

15,782

15,790

Regulatory assessments and FDIC insurance

2,460

3,366

4,253

4,354

4,354

14,433

15,017

Core deposit intangibles amortization

2,295

2,356

2,390

2,489

2,667

9,530

9,940

Depreciation

3,310

3,313

3,420

2,916

3,491

12,959

13,730

Communications

2,814

2,663

2,835

2,809

2,993

11,121

11,609

Other real estate expense

241

123

129

132

363

625

1,019

Net (gain) loss on sale of other real estate

52

(68)

(32)

14

(726)

(34)

(2,040)

Other noninterest expense

8,467

8,078

9,064

7,001

10,164

32,610

38,871

Total noninterest expense

77,909

76,430

79,735

79,462

84,036

313,536

327,962

Income before income taxes

105,132

106,148

108,301

110,614

116,745

430,195

445,749

Provision for income taxes

34,657

35,550

36,369

36,973

38,517

143,549

148,308

Net income available to common shareholders

$         70,475

$         70,598

$         71,932

$          73,641

$         78,228

$       286,646

$       297,441

(C) Interest income on securities was reduced by net premium amortization of $13,775, $14,845, $15,466, $14,144 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively, and $58,230 and $51,679 for the years ended December 31, 2015 and December 31, 2014, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars and share amounts in thousands, except per share data and market prices)

Three Months Ended

Year-to-Date

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Profitability

Net income

$         70,475

$         70,598

$         71,932

$          73,641

$         78,228

$       286,646

$       297,441

Basic earnings per share

$             1.01

$             1.01

$             1.03

$              1.05

$             1.12

$             4.09

$             4.32

Diluted earnings per share

$             1.01

$             1.01

$             1.03

$              1.05

$             1.12

$             4.09

$             4.32

Return on average assets(D) 

1.30%

1.30%

1.33%

1.37%

1.48%

1.33%

1.44%

Return on average common equity(D) 

8.17%

8.31%

8.61%

8.98%

9.70%

8.51%

9.66%

Return on average tangible common equity(D) (E)

18.56%

19.30%

20.49%

21.84%

23.87%

19.98%

24.24%

Tax equivalent net interest margin(F)

3.24%

3.30%

3.39%

3.57%

3.89%

3.38%

3.80%

Efficiency ratio(G)

42.58%

40.72%

42.35%

41.83%

40.78%

41.87%

41.81%

Liquidity and Capital Ratios

Equity to assets

15.71%

15.82%

15.48%

15.28%

15.09%

15.71%

15.09%

Common equity tier 1 capital(H)

13.55%

13.37%

12.91%

12.40%

N/A

13.55%

N/A

Tier 1 risk-based capital

13.55%

(I)

13.37%

(I)

12.91%

(I)

12.40%

(I)

13.80%

13.55%

(I)

13.80%

Total risk-based capital

14.25%

(I)

14.09%

(I)

13.63%

(I)

13.14%

(I)

14.56%

14.25%

(I)

14.56%

Tier 1 leverage capital

7.97%

(I)

7.65%

(I)

7.35%

(I)

6.96%

(I)

7.69%

7.97%

(I)

7.69%

Period end tangible equity to period end tangible assets(E)

7.68%

7.53%

7.20%

6.93%

6.70%

7.68%

6.70%

Other Data

Shares used in computed earnings per share

Basic

70,021

70,041

70,037

70,034

69,768

70,033

68,855

Diluted

70,032

70,053

70,053

70,055

69,796

70,049

68,911

Period end shares outstanding

70,022

70,040

70,040

70,024

69,780

70,022

69,780

Cash dividends paid per common share

$         0.3000

$         0.2725

$         0.2725

$          0.2725

$         0.2725

$         1.1175

$         0.9925

Book value per share

$           49.45

$           48.70

$           47.93

$            47.15

$           46.50

$           49.45

$           46.50

Tangible book value per share(E)

$           22.06

$           21.10

$           20.29

$            19.47

$           18.80

$           22.06

$           18.80

Common Stock Market Price

High

$           57.04

$           59.97

$           59.30

$            55.88

$           61.15

$           59.97

$           67.68

Low

46.23

43.76

50.91

45.01

52.62

43.76

52.62

Period end closing price

47.86

49.11

57.74

52.48

55.36

47.86

55.36

Employees – FTE

3,037

3,051

3,065

3,081

3,096

3,037

3,096

Number of banking centers

241

244

245

244

245

241

245

(D) Interim periods annualized.

(E) Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.

(F) Net interest margin for all periods presented is calculated on an actual 365 day basis.

(G) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale of assets.  Additionally, taxes are not part of this calculation.

(H) Common equity tier 1 capital ratio is a new ratio required under the Basel III Capital Rules effective January 1, 2015.

(I)  Calculated pursuant to the phase-in provisions of the Basel III Capital Rules.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS 

Three Months Ended

Dec 31, 2015

Sep 30, 2015

Dec 31, 2014

Average Balance

Interest Earned/ Interest Paid

Average Yield/ Rate

(L)

Average Balance

Interest Earned/ Interest Paid

Average Yield/ Rate

(L)

Average Balance

Interest Earned/ Interest Paid

Average Yield/ Rate

(L)

Interest-Earning Assets: 

Loans

$   9,322,399

$ 114,234

4.86%

$   9,156,679

$ 116,911

5.07%

$   9,325,330

$ 139,396

5.93%

Investment securities

9,524,084

48,301

2.01%

(J)

9,706,373

48,610

1.99%

(J)

8,835,176

47,108

2.12%

(J)

Federal funds sold and other earning assets

65,695

37

0.22%

55,000

22

0.16%

143,705

74

0.20%

  Total interest-earning assets 

18,912,178

$ 162,572

3.41%

18,918,052

$ 165,543

3.47%

18,304,211

$ 186,578

4.04%

Allowance for credit losses 

(81,230)

(80,793)

(76,948)

Noninterest-earning assets 

2,854,168

2,819,150

2,883,029

  Total assets

$ 21,685,116

$ 21,656,409

$ 21,110,292

Interest-Bearing Liabilities: 

Interest-bearing demand deposits

$   3,767,138

$     2,005

0.21%

$   3,663,114

$     1,961

0.21%

$   3,546,825

$     2,068

0.23%

Savings and money market deposits

5,511,240

3,317

0.24%

5,492,326

3,392

0.24%

5,442,568

3,301

0.24%

Certificates and other time deposits 

2,560,527

3,253

0.50%

2,685,346

3,400

0.50%

3,083,047

1,957

0.25%

Other borrowings 

839,164

541

0.26%

886,787

473

0.21%

168,167

200

0.47%

Securities sold under repurchase agreements 

314,278

198

0.25%

331,286

209

0.25%

323,882

202

0.25%

Junior subordinated debentures 

167,531

1,099

2.60%

  Total interest-bearing liabilities 

12,992,347

9,314

0.28%

(K)

13,058,859

9,435

0.29%

(K)

12,732,020

8,827

0.28%

(K)

Noninterest-bearing liabilities: 

Noninterest-bearing demand deposits

5,124,630

5,078,234

5,045,097

Other liabilities 

116,860

121,360

106,222

  Total liabilities

18,233,837

18,258,453

17,883,339

Shareholders' equity 

3,451,279

3,397,956

3,226,953

  Total liabilities and shareholders' equity 

$ 21,685,116

$ 21,656,409

$ 21,110,292

Net interest income and margin 

$ 153,258

3.22%

$ 156,108

3.27%

$ 177,751

3.85%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

1,412

1,463

1,836

Net interest income and margin (tax equivalent basis)

$ 154,670

3.24%

$ 157,571

3.30%

$ 179,587

3.89%

(J) Yield on securities was impacted by net premium amortization of $13,775, $14,845 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015 and December 31, 2014, respectively.

(K) Total cost of funds, including noninterest bearing deposits, was 0.20%, 0.21% and 0.20% for the three months ended December 31, 2015, September 30, 2015 and December 31, 2014, respectively.

(L) Annualized and based on an actual/365 day basis. 

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS 

Year-to-Date

December 31, 2015

December 31, 2014

Average Balance

Interest Earned/ Interest Paid

Average Yield/ Rate

(O)

Average Balance

Interest Earned/ Interest Paid

Average Yield/ Rate

(O)

Interest-Earning Assets: 

Loans

$   9,200,765

$475,427

5.17%

$      8,988,069

$525,716

5.85%

Investment securities

9,541,443

194,003

2.03%

(M)

8,723,011

188,744

2.16%

(M)

Federal funds sold and other earning assets

116,283

271

0.23%

143,754

335

0.23%

      Total interest-earning assets 

18,858,491

$669,701

3.55%

17,854,834

$714,795

4.00%

Allowance for credit losses 

(80,894)

(72,714)

Noninterest-earning assets 

2,841,007

2,814,809

      Total assets

$ 21,618,604

$    20,596,929

Interest-Bearing Liabilities: 

Interest-bearing demand deposits

$   3,873,495

$    8,776

0.23%

$      3,516,987

$    8,561

0.24%

Savings and money market deposits

5,505,524

13,488

0.24%

5,355,967

13,406

0.25%

Certificates and other time deposits 

2,754,466

13,810

0.50%

3,129,710

15,904

0.51%

Other borrowings

623,441

1,508

0.24%

144,570

772

0.53%

Securities sold under repurchase agreements 

329,745

818

0.25%

361,025

938

0.26%

Junior subordinated debentures 

29,443

791

2.69%

154,902

4,060

2.62%

      Total interest-bearing liabilities 

13,116,114

39,191

0.30%

(N)

12,663,161

43,641

0.34%

(N)

Noninterest-bearing liabilities: 

Noninterest-bearing demand deposits

5,024,379

4,687,680

Other liabilities 

109,323

165,764

      Total liabilities

18,249,816

17,516,605

Shareholders' equity 

3,368,788

3,080,324

      Total liabilities and shareholders' equity 

$ 21,618,604

$    20,596,929

Net interest income and margin 

$630,510

3.34%

$671,154

3.76%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

6,102

7,968

Net interest income and margin (tax equivalent basis)

$636,612

3.38%

$679,122

3.80%

(M) Yield on securities was impacted by net premium amortization of $58,230 and $51,679 for the years ended December 31, 2015 and 2014, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 0.22% and 0.25% for the years ended December 31, 2015 and 2014, respectively.

(O) Annualized and based on an actual/365 day basis. 

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Year -to-Date

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Adjustment to Loan Yield (P)

Interest on loans, as reported

$       114,234

$       116,911

$       119,404

$        124,878

$       139,396

$       475,427

$       525,716

   Purchase accounting adjustment- loan discount accretion

ASC 310-20

(6,066)

(7,060)

(10,388)

(10,714)

(14,857)

(34,228)

(64,655)

ASC 310-30

(1,773)

(3,974)

(3,214)

(8,933)

(13,733)

(17,894)

(31,220)

Total

(7,839)

(11,034)

(13,602)

(19,647)

(28,590)

(52,122)

(95,875)

Interest on loans excluding discount accretion

$       106,395

$       105,877

$       105,802

$        105,231

$       110,806

$       423,305

$       429,841

Average loans

$    9,322,399

$    9,156,679

$    9,133,625

$     9,189,380

$    9,325,330

$    9,200,765

$    8,988,069

Loan yield excluding purchase accounting adjustment

4.53%

4.59%

4.65%

4.64%

4.71%

4.60%

4.78%

Loan yield, as reported

4.86%

5.07%

5.24%

5.51%

5.93%

5.17%

5.85%

Adjustment to Securities Yield (P)

Interest on securities, as reported

$         48,301

$         48,610

$         48,530

$          48,562

$         47,108

$       194,003

$       188,744

   Purchase accounting adjustment-securities amortization

1,578

1,565

1,579

1,647

1,590

6,369

6,590

Interest on securities excluding amortization

$         49,879

$         50,175

$         50,109

$          50,209

$         48,698

$       200,372

$       195,334

Average securities

$    9,524,084

$    9,706,373

$    9,688,961

$     9,241,434

$    8,835,176

$    9,541,443

$    8,723,011

Securities yield excluding purchase accounting adjustment

2.08%

2.05%

2.07%

2.20%

2.19%

2.10%

2.24%

Securities yield, as reported

2.01%

1.99%

2.01%

2.13%

2.12%

2.03%

2.16%

Adjustment to Time Deposits Yield (P)

Interest on time deposits, as reported

$           3,253

$           3,400

$           3,568

$            3,589

$           1,957

$         13,810

$         15,904

   Purchase accounting adjustment-time deposit amortization

195

220

220

420

2,443

1,055

2,556

Interest on time deposits excluding amortization

$           3,448

$           3,620

$           3,788

$            4,009

$           4,400

$         14,865

$         18,460

Average time deposits

$    2,560,527

$    2,685,346

$    2,821,058

$     2,956,038

$    3,083,047

$    2,754,466

$    3,129,710

Time deposits yield excluding purchase accounting adjustment

0.53%

0.53%

0.54%

0.55%

0.57%

0.54%

0.59%

Time deposits yield, as reported

0.50%

0.50%

0.51%

0.49%

0.25%

0.50%

0.51%

Net Interest Margin (tax equivalent basis, excluding purchase accounting adjustments to yield) (P)

3.11%

3.10%

3.13%

3.17%

3.25%

3.13%

3.29%

Net Interest Margin (tax equivalent basis), as reported

3.24%

3.30%

3.39%

3.57%

3.89%

3.38%

3.80%

Net income available to common shareholders, as reported

$         70,475

$         70,598

$         71,932

$          73,641

$         78,228

$       286,646

$       297,441

    Less:  Purchase accounting adjustments, net of tax (Q)

(4,328)

(6,444)

(8,132)

(12,263)

(19,729)

(31,167)

(61,284)

Net income available to common shareholders, excluding purchase accounting adjustments (P)

$         66,147

$         64,154

$         63,800

$          61,378

$         58,499

$       255,479

$       236,157

Basic earnings per share, excluding purchase accounting adjusments (P)

$             0.94

$             0.92

$             0.91

$              0.88

$             0.84

$             3.65

$             3.43

Diluted earnings per share, excluding purchase accounting adjustments (P)

$             0.94

$             0.92

$             0.91

$              0.88

$             0.84

$             3.65

$             3.43

 

Acquired Loans Accounted for Under ASC 310-20

Acquired Loans Accounted for Under ASC 310-30

Total Loans Accounted for Under ASC 310-20 and 310-30

Balance at Acquisition Date

Balance at Sep 30, 2015

Balance at Dec 31, 2015

Balance at Acquisition Date

Balance at Sep 30, 2015

Balance at Dec 31, 2015

Balance at Acquisition Date

Balance at Sep 30, 2015

Balance at Dec 31, 2015

Loan marks:

Acquired banks (R)

$       225,589

$              60,819

$          54,734

$      131,906

$          41,814

$          39,976

$       357,495

$            102,633

$              94,710

Acquired portfolio loan balances:

Acquired banks (R)

5,456,934

1,560,730

1,430,501

255,846

83,272

79,802

5,712,780

 (S)

1,644,002

1,510,303

Acquired portfolio loan balances less loan marks

$    5,231,345

$         1,499,911

$     1,375,767

$      123,940

$          41,458

$          39,826

$    5,355,285

$         1,541,369

$         1,415,593

(P)  Non-GAAP financial measure.

(Q) Using effective tax rate of 33.0%, 33.5%, 33.6%, 33.4% and 33.0% for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and  December 31, 2014, respectively, and 33.4% and 33.3% for the years ended December 31, 2015 and 2014, respectively.

(R)  Includes Bank of Texas, Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank and The F&M Bank & Trust Company.

(S)  Actual principal balances acquired. 

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Dec 31, 2015

 Sep 30, 2015 

 Jun 30, 2015 

 Mar 31, 2015 

 Dec 31, 2014 

YIELD TREND

Interest-Earning Assets: 

Loans

4.86%

5.07%

5.24%

5.51%

5.93%

Investment securities (T) 

2.01%

1.99%

2.01%

2.13%

2.12%

Federal funds sold and other earning assets

0.22%

0.16%

0.24%

0.25%

0.20%

  Total interest-earning assets 

3.41%

3.47%

3.56%

3.77%

4.04%

Interest-Bearing Liabilities: 

Interest-bearing demand deposits

0.21%

0.21%

0.23%

0.25%

0.23%

Savings and money market deposits

0.24%

0.24%

0.25%

0.25%

0.24%

Certificates and other time deposits 

0.50%

0.50%

0.51%

0.49%

0.25%

Other borrowings

0.26%

0.21%

0.21%

0.73%

0.47%

Securities sold under repurchase agreements

0.25%

0.25%

0.25%

0.24%

0.25%

Junior subordinated debentures 

2.69%

2.60%

  Total interest-bearing liabilities 

0.28%

0.29%

0.30%

0.33%

0.28%

Net Interest Margin 

3.22%

3.27%

3.36%

3.53%

3.85%

Net Interest Margin (tax equivalent)

3.24%

3.30%

3.39%

3.57%

3.89%

(T) Yield on securities was impacted by net premium amortization of $13,775, $14,845, $15,466, $14,144 and $13,031 for the three month periods ended December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively. 

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

March 31, 2015

Dec 31, 2014

Balance Sheet Averages

Total loans

$    9,322,399

$    9,156,679

$    9,133,625

$          9,189,380

$    9,325,330

Investment securities

9,524,084

9,706,373

9,688,961

9,241,434

8,835,176

Federal funds sold and other earning assets

65,695

55,000

79,659

267,672

143,705

Total interest-earning assets

18,912,178

18,918,052

18,902,245

18,698,486

18,304,211

Allowance for credit losses

(81,230)

(80,793)

(80,868)

(80,681)

(76,948)

Cash and due from banks

257,986

237,191

241,110

284,395

273,503

Goodwill

1,881,812

1,881,955

1,881,955

1,874,274

1,883,654

Core deposit intangibles, net

50,545

52,909

55,245

57,687

43,157

Other real estate

3,014

3,096

2,972

3,536

4,843

Fixed assets, net

270,800

273,818

276,761

280,515

282,827

Other assets

390,011

370,181

359,601

371,295

395,045

Total assets

$  21,685,116

$  21,656,409

$  21,639,021

$        21,489,507

$  21,110,292

Noninterest-bearing deposits

$    5,124,630

$    5,078,234

$    4,992,301

$          4,899,279

$    5,045,097

Interest-bearing demand deposits

3,767,138

3,663,114

3,891,682

4,178,883

3,546,825

Savings and money market deposits

5,511,240

5,492,326

5,476,931

5,542,081

5,442,568

Certificates and other time deposits

2,560,527

2,685,346

2,821,058

2,956,038

3,083,047

Total deposits

16,963,535

16,919,020

17,181,972

17,576,281

17,117,537

Other borrowings

839,164

886,787

684,371

72,118

168,167

Securities sold under repurchase agreements

314,278

331,286

333,220

340,469

323,882

Junior subordinated debentures

-

-

-

119,408

167,531

Other liabilities

116,860

121,360

98,133

100,648

106,222

Shareholders' equity

3,451,279

3,397,956

3,341,325

3,280,583

3,226,953

Total liabilities and equity

$  21,685,116

$  21,656,409

$  21,639,021

$        21,489,507

$  21,110,292

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Period End Balances

Loan Portfolio

Commercial and other

$    1,403,378

14.9%

$    1,372,737

14.9%

$    1,341,213

14.7%

$     1,390,068

15.2%

$    1,452,536

15.7%

Construction

1,073,198

11.4%

1,072,985

11.7%

1,068,056

11.7%

1,040,845

11.3%

1,026,475

11.1%

1-4 family residential

2,360,798

25.0%

2,318,841

25.2%

2,289,114

25.1%

2,272,788

24.8%

2,250,251

24.4%

Home equity

279,867

2.9%

277,744

3.0%

273,538

3.0%

269,894

2.9%

271,930

2.9%

Commercial real estate

3,131,083

33.2%

2,992,726

32.5%

2,958,239

32.5%

3,021,656

33.0%

3,030,340

32.8%

Agriculture (includes farmland)

648,818

6.9%

618,563

6.7%

600,745

6.6%

556,839

6.1%

551,646

6.0%

Consumer

142,363

1.5%

146,216

1.6%

149,991

1.6%

152,077

1.7%

160,596

1.7%

Energy Loans

399,084

4.2%

405,176

4.4%

433,439

4.8%

461,838

5.0%

500,409

5.4%

Total loans

$    9,438,589

$    9,204,988

$    9,114,335

$     9,166,005

$    9,244,183

Deposit Types

Noninterest-bearing DDA

$    5,136,579

29.1%

$    5,093,175

30.1%

$    5,040,628

29.7%

$     5,038,436

28.7%

$    4,936,420

27.9%

Interest-bearing DDA

4,481,575

25.3%

3,604,798

21.3%

3,746,939

22.0%

4,038,690

23.0%

4,260,038

24.1%

Money market

3,639,187

20.6%

3,716,094

21.9%

3,607,000

21.2%

3,773,011

21.5%

3,680,711

20.8%

Savings

1,940,855

11.0%

1,896,725

11.2%

1,853,322

10.9%

1,828,790

10.4%

1,784,889

10.1%

Certificates and other time deposits

2,482,923

14.0%

2,629,145

15.5%

2,753,775

16.2%

2,882,425

16.4%

3,031,100

17.1%

Total deposits

$  17,681,119

$  16,939,937

$  17,001,664

$   17,561,352

$  17,693,158

Loan to Deposit Ratio

53.4%

54.3%

53.6%

52.2%

52.2%

Construction Loans

Single family residential construction

$       353,706

32.9%

$       351,169

32.6%

$       354,211

33.0%

$        356,081

34.1%

$       329,797

32.0%

Land development

88,239

8.2%

84,040

7.8%

84,864

7.9%

89,403

8.5%

84,051

8.2%

Raw land

153,274

14.3%

143,955

13.4%

145,885

13.6%

129,470

12.4%

106,058

10.3%

Residential lots

130,596

12.1%

131,793

12.3%

127,671

11.9%

128,064

12.2%

148,763

14.4%

Commercial lots

87,375

8.1%

84,162

7.8%

87,719

8.2%

92,677

8.9%

89,565

8.7%

Commercial construction and other

262,783

24.4%

281,231

26.1%

271,833

25.4%

249,504

23.9%

272,723

26.4%

Net unaccreted discount

(2,775)

(3,365)

(4,127)

(4,354)

(4,482)

Total construction loans

$    1,073,198

$    1,072,985

$    1,068,056

$     1,040,845

$    1,026,475

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2015 

Collateral Type

Houston

Dallas

Austin

OK City

Tulsa

Other (U) 

Total

Shopping center/retail

$  163,362

$    45,874

$  27,793

$    29,491

$  23,365

$  120,964

$      410,849

Commercial & industrial buildings

78,431

31,714

6,557

7,692

9,887

61,756

196,037

Office buildings

58,735

135,081

21,174

24,569

7,912

74,155

321,626

Medical buildings

48,905

17,971

56

9,748

8,310

51,103

136,093

Apartment buildings

45,817

10,803

13,392

16,989

10,459

105,049

202,509

Hotel

23,039

33,435

12,004

28,426

-

89,250

186,154

Other

81,585

12,198

16,772

12,204

12,055

95,618

230,432

Total

$  499,874

$  287,076

$  97,748

$  129,119

$  71,988

$  597,895

$   1,683,700

(V)

(U) Includes other MSA and non-MSA regions.

(V) Represents a portion of total commercial real estate loans of $3.131 billion as of December 31, 2015.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Year-to-Date

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Dec 31, 2015

Dec 31, 2014

Asset Quality

Nonaccrual loans

$         39,711

$         44,935

$         31,987

$          29,252

$         31,422

$         39,711

$         31,422

Accruing loans 90 or more days past due

614

261

153

2,968

2,193

614

2,193

Total nonperforming loans

40,325

45,196

32,140

32,220

33,615

40,325

33,615

Repossessed assets

171

161

173

146

67

171

67

Other real estate

2,963

3,271

2,806

3,010

3,237

2,963

3,237

  Total nonperforming assets

$         43,459

$         48,628

$         35,119

$          35,376

$         36,919

$         43,459

$         36,919

Nonperforming assets:

Commercial and industrial

$         22,275

$         26,200

$         20,295

$          16,830

$         21,418

$         22,275

$         21,418

Construction, land development and other land loans

134

475

813

3,023

1,893

134

1,893

1-4 family residential (including home equity)

4,692

4,766

5,124

5,087

5,232

4,692

5,232

Commercial real estate (including multi-family residential)

15,836

16,485

7,939

9,736

6,695

15,836

6,695

Agriculture (including farmland)

208

376

605

281

473

208

473

Consumer and other

314

326

343

419

1,208

314

1,208

Total 

$         43,459

$         48,628

$         35,119

$          35,376

$         36,919

$         43,459

$         36,919

Number of loans/properties

147

159

161

166

169

147

169

Allowance for credit losses at end of period

$         81,384

$         81,003

$         80,972

$          80,963

$         80,762

$         81,384

$         80,762

Net charge-offs:

Commercial and industrial

$             (528)

$           4,426

$               (28)

$               504

$              318

4,374

$              352

Construction, land development and other land loans

(109)

173

(2)

145

(1)

207

69

1-4 family residential (including home equity)

1

110

12

86

420

209

1,027

Commercial real estate (including multi-family residential)

194

53

114

33

1,732

394

1,791

Agriculture (including farmland)

(77)

(40)

(65)

(78)

(13)

(260)

(990)

Consumer and other

638

557

460

359

745

2,014

2,546

Total 

$              119

$           5,279

$              491

$            1,049

$           3,201

$           6,938

$           4,795

Asset Quality Ratios

Nonperforming assets to average earning assets

0.23%

0.26%

0.19%

0.19%

0.20%

0.23%

0.21%

Nonperforming assets to loans and other real estate

0.46%

0.53%

0.39%

0.39%

0.40%

0.46%

0.40%

Net charge-offs to average loans (annualized)

0.01%

0.23%

0.02%

0.05%

0.14%

0.08%

0.05%

Allowance for credit losses to total loans

0.86%

0.88%

0.89%

0.88%

0.87%

0.86%

0.87%

Allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30) (E)

1.01%

1.06%

1.09%

1.12%

1.14%

1.01%

1.14%

 

Prosperity Bancshares, Inc.® Notes to Selected Financial Data (Unaudited) (Dollars and share amounts in thousands, except per share data)

Consolidated Financial Highlights

NOTES TO SELECTED FINANCIAL DATA

Prosperity's management uses certain non−GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its net income and earnings per share (each excluding purchase accounting adjustments) and its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30). Prosperity has included information below and on page 12 of this Earnings Release relating to these non-GAAP financial measures for the applicable periods presented. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and Prosperity believes that its presentation, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Prosperity's business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook.  These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 

Three Months Ended

Year-to-Date

Dec 31, 2015

Sep 30, 2015

 Jun 30, 2015 

 Mar 31, 2015 

 Dec 31, 2014 

 Dec 31, 2015 

 Dec 31, 2014 

Return on average tangible common equity:

Net income

$           70,475

$           70,598

$          71,932

$          73,641

$          78,228

$        286,646

$        297,441

Average shareholders' equity

$      3,451,279

$      3,397,956

$     3,341,325

$     3,280,583

$     3,226,953

$     3,368,788

$     3,080,324

Less: Average goodwill and other intangible assets

(1,932,357)

(1,934,864)

(1,937,200)

(1,931,961)

(1,926,811)

(1,934,099)

(1,853,350)

         Average tangible shareholders' equity

$      1,518,922

$      1,463,092

$     1,404,125

$     1,348,622

$     1,300,142

$     1,434,689

$     1,226,974

Return on average tangible common  equity:

18.56%

19.30%

20.49%

21.84%

23.87%

19.98%

24.24%

Tangible book value per share:

Shareholders' equity

$      3,462,910

$      3,411,239

$     3,357,285

$     3,301,861

$     3,244,826

$     3,462,910

$     3,244,826

Less: Goodwill and other intangible assets

(1,918,244)

(1,933,667)

(1,936,023)

(1,938,413)

(1,933,138)

(1,918,244)

(1,933,138)

         Tangible shareholders' equity

$      1,544,666

$      1,477,572

$     1,421,262

$     1,363,448

$     1,311,688

$     1,544,666

$     1,311,688

Period end shares outstanding

70,022

70,040

70,040

70,024

69,780

70,022

69,780

Tangible book value per share:

$             22.06

$             21.10

$            20.29

$            19.47

$            18.80

$            22.06

$            18.80

Period end tangible equity to period end tangible assets ratio:

Tangible shareholders' equity

$      1,544,666

$      1,477,572

$     1,421,262

$     1,363,448

$     1,311,688

$     1,544,666

$     1,311,688

Total assets

$    22,037,216

$    21,567,236

$   21,686,287

$   21,606,859

$   21,507,733

$   22,037,216

$   21,507,733

Less: Goodwill and other intangible assets

(1,918,244)

(1,933,667)

(1,936,023)

(1,938,413)

(1,933,138)

(1,918,244)

(1,933,138)

         Tangible assets

$    20,118,972

$    19,633,569

$   19,750,264

$   19,668,446

$   19,574,595

$   20,118,972

$   19,574,595

Period end tangible equity to period end tangible assets ratio:

7.68%

7.53%

7.20%

6.93%

6.70%

7.68%

6.70%

 

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

(Dollars in thousands)

Three Months Ended

Year-to-Date

Dec 31, 2015

Sep 30, 2015

 Jun 30, 2015 

 Mar 31, 2015 

 Dec 31, 2014 

 Dec 31, 2015 

 Dec 31, 2014 

Allowance for credit losses to total loans, excluding acquired loans:

Allowance for credit losses

$           81,384

$           81,003

$          80,972

$          80,963

$          80,762

$          81,384

$          80,762

Total loans

$      9,438,589

$      9,204,988

$     9,114,335

$     9,166,005

$     9,244,183

$     9,438,589

$     9,244,183

Less: Fair value of acquired loans (acquired portfolio loan balances less loan marks)

$      1,415,593

$      1,541,369

$     1,705,552

$     1,910,646

$     2,154,148

$     1,415,593

$     2,154,148

Total loans less acquired loans

$      8,022,996

$      7,663,619

$     7,408,783

$     7,255,359

$     7,090,035

$     8,022,996

$     7,090,035

Allowance for credit losses to total loans, excluding acquired loans (non-GAAP basis)

1.01%

1.06%

1.09%

1.12%

1.14%

1.01%

1.14%

 

SOURCE Prosperity Bancshares, Inc.



RELATED LINKS

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