Exhibit 99.1

 

 

PRESS RELEASE

For more information contact:

 

 

Prosperity Bancshares, Inc.®

David Zalman

Prosperity Bank Plaza

Chairman and Chief Executive Officer

4295 San Felipe

281.269.7199

Houston, Texas 77027

david.zalman@prosperitybankusa.com

FOR IMMEDIATE RELEASE

PROSPERITY BANCSHARES, INC.®

REPORTS THIRD QUARTER

2018 EARNINGS

 

 

Third quarter earnings per common share (diluted) increased 20.4% to $1.18 compared with the third quarter 2017

 

Third quarter net income increased 21.5% to $82.523 million compared with the third quarter 2017

 

Loans increased 5.8% (annualized) in the third quarter 2018

 

Average noninterest-bearing deposits increased 5.3% compared with the third quarter 2017

 

Nonperforming assets decreased 46.9% in the third quarter to 0.08% of third quarter average interest-earning assets

 

Return (annualized) on third quarter average assets of 1.46%

 

Returns (annualized) on third quarter average common equity of 8.30% and average tangible common equity of 16.17%‍(1)

 

Increase in dividend of 13.9% to $0.41 for the fourth quarter 2018

HOUSTON, October 24, 2018. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, “Prosperity”), reported net income for the quarter ended September 30, 2018 of $82.523 million, an increase of $14.615 million or 21.5% compared with $67.908 million for the same period in 2017. Net income per diluted common share increased 20.4% to $1.18 compared with $0.98 for the same period in 2017. Additionally, loans increased 5.8% (annualized) during the third quarter of 2018 and nonperforming assets remain low at 0.08% of third quarter average interest-earning assets.

“We are pleased to announce that Prosperity will increase its quarterly dividend for the fourth quarter of 2018 to $0.41 per share from $0.36 per share, a 13.9% increase.  Prosperity shareholders have enjoyed a 13% compounded annual growth rate in dividends from 2003-2017.  We will continue striving to build deposits, loans and other services to increase shareholder value,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.

“Economic fundamentals are strong in the communities we serve.  The low national unemployment rate, together with a GDP that is stronger than we have seen in years, has resulted in interest rate increases that may continue over the next year.  The increased interest rates have affected the rates we pay on deposits, the rates we charge on loans and the rates we earn on bonds.  We believe that the economy has provided an opportunity for the Federal Reserve to normalize rates and be ready to respond to any future economic downturn.  We expect the increased interest rates to help our bank,” continued Zalman.

 

 

______________

(1)

Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

 

Page 1 of 16


 

“Prosperity achieved 5.8% annualized loan growth on a linked quarter basis and a 20.4% increase in earnings per share to $1.18 compared with the third quarter 2017.  We also experienced a 5.3% increase in average noninterest-bearing deposits year over year,” added Zalman.

“Texas and Oklahoma should continue to prosper with no or low state income tax, a business friendly political climate and a tailwind from the energy sector.  Further, Texas has four out of the top ten fastest growing MSAs in the United States – those being Houston, Dallas, Austin and San Antonio,” stated Zalman.

“I would like to thank our shareholders and our associates for making this all possible,” concluded Zalman.

Results of Operations for the Three Months Ended September 30, 2018

Net income was $82.523 million(2) for the three months ended September 30, 2018 compared with $67.908 million(3) for the same period in 2017, an increase of $14.615 million or 21.5%. Net income per diluted common share was $1.18 for the three months ended September 30, 2018 compared with $0.98 for the same period in 2017, an increase of 20.4%. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2018 were 1.46%, 8.30% and 16.17%(1), respectively.  Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 43.50%(1) for the three months ended September 30, 2018.

Net interest income before provision for credit losses for the three months ended September 30, 2018 was $157.319 million compared with $156.147 million during the same period in 2017, an increase of $1.172 million or 0.8%. This change was primarily due to higher loan and investment yields and balances, partially offset by higher rates on interest-bearing liabilities and a decrease in loan discount accretion. Linked quarter net interest income before provision for credit losses decreased $4.484 million or 2.8% to $157.319 million compared with $161.803 million during the three months ended June 30, 2018. This change was primarily due to a decrease in loan discount accretion, lower collection on previously identified troubled assets compared with the second quarter 2018 and higher average rates on interest-bearing liabilities.

The net interest margin on a tax equivalent basis was 3.15% for the three months ended September 30, 2018 compared with 3.22% for the same period in 2017. This change was primarily due to a decrease in loan discount accretion of $4.429 million. On a linked quarter basis, the net interest margin was 3.15% compared with 3.28% for the three months ended June 30, 2018, primarily due to a decrease in loan discount accretion, lower collection on previously identified troubled assets compared with the second quarter 2018 and higher average rates on interest-bearing liabilities.

Noninterest income was $30.624 million for the three months ended September 30, 2018 compared with $28.809 million for the same period in 2017, an increase of $1.815 million or 6.3%. This increase was primarily due to an increase in trust income and other noninterest income. On a linked quarter basis, noninterest income increased $2.253 million or 7.9% to $30.624 million compared with $28.371 million during the three months ended June 30, 2018. This increase was primarily due to increases in other noninterest income, nonsufficient funds fees and trust income.

Noninterest expense was $81.760 million for the three months ended September 30, 2018 compared with $77.509 million for the same period in 2017, an increase of $4.251 million or 5.5%. This increase was primarily due to the 5% salary or pay rate increase for all associates following the enactment of the Tax Cuts and Jobs act. On a linked quarter basis, noninterest expense decreased $1.842 million or 2.2% to $81.760 million compared with $83.602 million during the three months ended June 30, 2018. This decrease was primarily due to a decrease in incentive compensation.

Results of Operations for the Nine Months Ended September 30, 2018

Net income was $238.481 million(4) for the nine months ended September 30, 2018 compared with $205.027 million(5) for the same period in 2017, an increase of $33.454 million or 16.3%.  Net income per diluted common share was $3.42 for the nine months ended September 30, 2018 compared with $2.95 for the same period in 2017, an increase of 15.9%. Annualized returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2018 were 1.41%, 8.11% and 16.03%(1), respectively.  Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 43.88%(1) for the nine months ended September 30, 2018.

______________

(2)

Includes purchase accounting adjustments of $2.514 million, net of tax, primarily comprised of loan discount accretion of $3.457 million for the three months ended September 30, 2018.

(3)

Includes purchase accounting adjustments of $4.903 million, net of tax, primarily comprised of loan discount accretion of $7.886 million for the three months ended September 30, 2017.

(4)

Includes purchase accounting adjustments of $7.971 million, net of tax, primarily comprised of loan discount accretion of $11.006 million for the nine months ended September 30, 2018.

(5)

Includes purchase accounting adjustments of $10.138 million, net of tax, primarily comprised of loan discount accretion of $17.110 million for the nine months ended September 30, 2017.

 

Page 2 of 16


 

Net interest income before provision for credit losses for the nine months ended September 30, 2018 was $472.345 million compared with $460.813 million for the same period in 2017, an increase of $11.532 million or 2.5%. This change was primarily due to higher loan and investment yields and an increase in loan balances, partially offset by higher rates on interest-bearing liabilities and a decrease in loan discount accretion.

The net interest margin on a tax equivalent basis for the nine months ended September 30, 2018 was 3.20% compared with 3.18% for the same period in 2017.

Noninterest income was $86.933 million for the nine months ended September 30, 2018 compared with $87.413 million for the same period in 2017, a decrease of $480 thousand or 0.5%.

Noninterest expense was $245.416 million for the nine months ended September 30, 2018 compared with $232.013 million for the same period in 2017, an increase of $13.403 million or 5.8%. This increase was primarily due to the 5% salary or pay rate increase for all associates following the enactment of the Tax Cuts and Jobs act.

Balance Sheet Information

At September 30, 2018, Prosperity had $22.613 billion in total assets, an increase of $469.320 million or 2.1%, compared with $22.143 billion at September 30, 2017.

Loans at September 30, 2018 were $10.293 billion, an increase of $381.644 million or 3.9%, compared with $9.911 billion at September 30, 2017. Linked quarter loans increased $146.281 million or 1.4% (5.8% annualized) from $10.147 billion at June 30, 2018.

Deposits at September 30, 2018 were $16.734 billion, a decrease of $173.712 million or 1.0%, compared with $16.907 billion at September 30, 2017. Linked quarter deposits decreased $244.840 million or 1.4% from $16.979 billion at June 30, 2018. This change was primarily due to public funds seasonality.

Asset Quality

Nonperforming assets totaled $16.777 million or 0.08% of quarterly average interest-earning assets at September 30, 2018, compared with $45.823 million or 0.24% of quarterly average interest-earning assets at September 30, 2017, and $31.585 million or 0.16% of quarterly average interest-earning assets at June 30, 2018.

The allowance for credit losses was $85.996 million or 0.84% of total loans at September 30, 2018, $86.812 million or 0.88% of total loans at September 30, 2017 and $84.964 million or 0.84% of total loans at June 30, 2018.  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 0.88%(1) of remaining loans as of September 30, 2018, compared with 0.95%(1) at September 30, 2017 and 0.89%(1) at June 30, 2018.

The provision for credit losses was $2.350 million for the three months ended September 30, 2018 compared with $6.900 million for the three months ended September 30, 2017 and $4.000 million for the three months ended June 30, 2018. The provision for credit losses was $15.350 million for the nine months ended September 30, 2018 compared with $12.325 million for the nine months ended September 30, 2017.

Net charge-offs were $1.318 million for the three months ended September 30, 2018 compared with $3.871 million for the three months ended September 30, 2017 and $2.636 million for the three months ended June 30, 2018. Net charge-offs were $13.395 million for the nine months ended September 30, 2018 compared with $10.839 million for the nine months ended September 30, 2017.

Dividend

Prosperity Bancshares, Inc. declared a fourth quarter cash dividend of $0.41 per share to be paid on January 2, 2019 to all shareholders of record as of December 15, 2018, an increase of 13.9% compared with the third quarter 2018 dividend.  

Conference Call

Prosperity’s management team will host a conference call on Wednesday, October 24, 2018 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity’s third quarter 2018 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383. The elite entry number is 6906264.

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 from Prosperity’s home page by selecting “Presentations & Calls” from the drop-down menu on the Investor Relations tab and following the instructions.

Page 3 of 16


 

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, tangible equity to tangible assets ratio and the efficiency ratio, excluding net gains and losses on the sale of assets and securities.  Further, as a result of acquisitions and the related purchase accounting adjustments, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20, “Receivables-Nonrefundable Fees and Other Costs” and 310-30, “Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality”).  Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity’s financial results and that their presentation, together with the accompanying reconciliations, provides a more 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 financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook.  These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Please refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Prosperity Bancshares, Inc. ®

As of September 30, 2018, Prosperity Bancshares, Inc. ® is a $22.613 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, Debit Cards, 24 hour voice response banking, Trust and Wealth Management, Mortgage Services, Cash Management and Mobile Banking.

As of September 30, 2018, Prosperity operated 242 full-service banking locations: 65 in the Houston area, including The Woodlands; 29 in the South Texas area including Corpus Christi and Victoria; 33 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.

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. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and 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, 2017 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.

 

 

Page 4 of 16


 

Bryan/College Station Area -

 

Keller

 

Westheimer

 

Taft

Bryan

 

Roanoke

 

West University

 

Yoakum

Bryan-29th Street

 

Stockyards

 

Woodcreek

 

Yorktown

Bryan-East

 

 

 

 

 

 

Bryan-North

 

Other Dallas/Fort Worth Area

 

Katy -

 

West Texas Area -

Caldwell

 

Locations -

 

Cinco Ranch

 

Abilene -

College Station

 

Arlington

 

Katy-Spring Green

 

Antilley Road

Crescent Point

 

Azle

 

 

 

Barrow Street

Hearne

 

Ennis

 

The Woodlands -

 

Cypress Street

Huntsville

 

Gainesville

 

The Woodlands-College Park

 

Judge Ely

Madisonville

 

Glen Rose

 

The Woodlands-I-45

 

Mockingbird

Navasota

 

Granbury

 

The Woodlands-Research Forest

 

 

New Waverly

 

Mesquite

 

 

 

Lubbock -

Rock Prairie

 

Muenster

 

Other Houston Area

 

4th Street

Southwest Parkway

 

Sanger

 

Locations -

 

66th Street

Tower Point

 

Waxahachie

 

Angleton

 

82nd Street

Wellborn Road

 

Weatherford

 

Bay City

 

86th Street

 

 

 

 

Beaumont

 

98th Street

Central Texas Area -

 

East Texas Area -

 

Cleveland

 

Avenue Q

Austin -

 

Athens

 

East Bernard

 

North University

Allandale

 

Blooming Grove

 

El Campo

 

Texas Tech Student Union

Cedar Park

 

Canton

 

Dayton

 

 

Congress

 

Carthage

 

Galveston

 

Midland -

Lakeway

 

Corsicana

 

Groves

 

Wadley

Liberty Hill

 

Crockett

 

Hempstead

 

Wall Street

Northland

 

Eustace

 

Hitchcock

 

 

Oak Hill

 

Gilmer

 

Liberty

 

Odessa -

Research Blvd

 

Grapeland

 

Magnolia

 

Grandview

Westlake

 

Gun Barrel City

 

Magnolia Parkway

 

Grant

 

 

Jacksonville

 

Mont Belvieu

 

Kermit Highway

Other Central Texas Area

 

Kerens

 

Nederland

 

Parkway

Locations -

 

Longview

 

Needville

 

 

Bastrop

 

Mount Vernon

 

Rosenberg

 

Other West Texas Area

Canyon Lake

 

Palestine

 

Shadow Creek

 

Locations -

Dime Box

 

Rusk

 

Spring

 

Big Spring

Dripping Springs

 

Seven Points

 

Tomball

 

Brownfield

Elgin

 

Teague

 

Waller

 

Brownwood

Flatonia

 

Tyler-Beckham

 

West Columbia

 

Cisco

Georgetown

 

Tyler-South Broadway

 

Wharton

 

Comanche

Gruene

 

Tyler-University

 

Winnie

 

Early

Kingsland

 

Winnsboro

 

Wirt

 

Floydada

La Grange

 

 

 

 

 

Gorman

Lexington

 

Houston Area -

 

South Texas Area -

 

Levelland

New Braunfels

 

Houston -

 

Corpus Christi -

 

Littlefield

Pleasanton

 

Aldine

 

Calallen

 

Merkel

Round Rock

 

Alief

 

Carmel

 

Plainview

San Antonio

 

Bellaire

 

Northwest

 

San Angelo

Schulenburg

 

Beltway

 

Saratoga

 

Slaton

Seguin

 

Clear Lake

 

Timbergate

 

Snyder

Smithville

 

Copperfield

 

Water Street

 

 

Thorndale

 

Cypress

 

 

 

Oklahoma

Weimar

 

Downtown

 

Victoria -

 

Central Oklahoma Area-

 

 

Eastex

 

Victoria Main

 

Oklahoma City -

Dallas/Fort Worth Area -

 

Fairfield

 

Victoria-Navarro

 

23rd Street

Dallas -

 

First Colony

 

Victoria-North

 

Expressway

Abrams Centre

 

Fry Road

 

 

 

I-240

Balch Springs

 

Gessner

 

Other South Texas Area

 

Memorial

Camp Wisdom

 

Gladebrook

 

Locations -

 

 

Cedar Hill

 

Grand Parkway

 

Alice

 

Other Central Oklahoma Area

Frisco

 

Heights

 

Aransas Pass

 

Locations -

Frisco-West

 

Highway 6 West

 

Beeville

 

Edmond

Kiest

 

Little York

 

Colony Creek

 

Norman

McKinney

 

Medical Center

 

Cuero

 

 

McKinney-Stonebridge

 

Memorial Drive

 

Edna

 

Tulsa Area-

Midway

 

Northside

 

Goliad

 

Tulsa -

Plano

 

Pasadena

 

Gonzales

 

Garnett

Preston Forest

 

Pecan Grove

 

Hallettsville

 

Harvard

Preston Road

 

Pin Oak

 

Kingsville

 

Memorial

Red Oak

 

River Oaks

 

Mathis

 

Sheridan

Sachse

 

Sugar Land

 

Padre Island

 

S. Harvard

The Colony

 

SW Medical Center

 

Palacios

 

Utica Tower

Turtle Creek

 

Tanglewood

 

Port Lavaca

 

Yale

Westmoreland

 

The Plaza

 

Portland

 

 

 

 

Uptown

 

Rockport

 

Other Tulsa Area Locations -

Fort Worth -

 

Waugh Drive

 

Sinton

 

Owasso

Haltom City

 

 

 

 

 

 

 - - -

Page 5 of 16


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

 

 

 

 

Sep 30, 2018

 

 

Jun 30, 2018

 

 

Mar 31, 2018

 

 

Dec 31, 2017

 

 

Sep 30, 2017

 

Balance Sheet Data (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

10,292,846

 

 

$

10,146,565

 

 

$

10,011,416

 

 

$

10,020,773

 

 

$

9,911,202

 

Investment securities(A)

 

 

9,504,733

 

 

 

9,620,614

 

 

 

9,710,254

 

 

 

9,672,116

 

 

 

9,410,522

 

Federal funds sold

 

 

639

 

 

 

577

 

 

 

469

 

 

 

697

 

 

 

1,007

 

Allowance for credit losses

 

 

(85,996

)

 

 

(84,964

)

 

 

(83,600

)

 

 

(84,041

)

 

 

(86,812

)

Cash and due from banks

 

 

293,831

 

 

 

274,902

 

 

 

243,514

 

 

 

391,616

 

 

 

302,469

 

Goodwill

 

 

1,900,845

 

 

 

1,900,845

 

 

 

1,900,845

 

 

 

1,900,845

 

 

 

1,900,845

 

Core deposit intangibles, net

 

 

34,295

 

 

 

35,773

 

 

 

37,274

 

 

 

38,842

 

 

 

40,464

 

Other real estate owned

 

 

889

 

 

 

10,316

 

 

 

10,538

 

 

 

11,152

 

 

 

14,512

 

Fixed assets, net

 

 

256,426

 

 

 

255,465

 

 

 

257,057

 

 

 

257,065

 

 

 

256,011

 

Other assets

 

 

414,075

 

 

 

410,647

 

 

 

384,547

 

 

 

378,227

 

 

 

393,043

 

Total assets

 

$

22,612,583

 

 

$

22,570,740

 

 

$

22,472,314

 

 

$

22,587,292

 

 

$

22,143,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

5,700,242

 

 

$

5,657,589

 

 

$

5,707,994

 

 

$

5,623,322

 

 

$

5,465,474

 

Interest-bearing deposits

 

 

11,033,522

 

 

 

11,321,015

 

 

 

11,624,885

 

 

 

12,198,138

 

 

 

11,442,002

 

Total deposits

 

 

16,733,764

 

 

 

16,978,604

 

 

 

17,332,879

 

 

 

17,821,460

 

 

 

16,907,476

 

Other borrowings

 

 

1,501,207

 

 

 

1,254,849

 

 

 

820,079

 

 

 

505,223

 

 

 

960,365

 

Securities sold under repurchase agreements

 

 

297,126

 

 

 

293,039

 

 

 

339,576

 

 

 

324,154

 

 

 

334,621

 

Other liabilities

 

 

84,789

 

 

 

108,796

 

 

 

103,635

 

 

 

112,301

 

 

 

159,443

 

Total liabilities

 

 

18,616,886

 

 

 

18,635,288

 

 

 

18,596,169

 

 

 

18,763,138

 

 

 

18,361,905

 

Shareholders' equity(B)

 

 

3,995,697

 

 

 

3,935,452

 

 

 

3,876,145

 

 

 

3,824,154

 

 

 

3,781,358

 

Total liabilities and equity

 

$

22,612,583

 

 

$

22,570,740

 

 

$

22,472,314

 

 

$

22,587,292

 

 

$

22,143,263

 

 

(A) Includes $586, $436, $57, ($143) and $1,635 in unrealized gains (losses) on available for sale securities for the quarterly periods ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively.

(B) Includes $463, $345, $45, ($113) and $1,063 in after-tax unrealized gains (losses) on available for sale securities for the quarterly periods ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively.

 

Page 6 of 16


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

 

 

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Sep 30, 2018

 

 

Jun 30, 2018

 

 

Mar 31, 2018

 

 

Dec 31, 2017

 

 

Sep 30, 2017

 

 

Sep 30, 2018

 

 

Sep 30, 2017

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

128,645

 

 

$

128,445

 

 

$

116,246

 

 

$

120,086

 

 

$

121,567

 

 

$

373,336

 

 

$

348,252

 

Securities(C)

 

 

55,705

 

 

 

55,577

 

 

 

54,457

 

 

 

51,510

 

 

 

50,610

 

 

 

165,739

 

 

 

156,679

 

Federal funds sold and other earning assets

 

 

326

 

 

 

299

 

 

 

315

 

 

 

243

 

 

 

242

 

 

 

940

 

 

 

585

 

Total interest income

 

 

184,676

 

 

 

184,321

 

 

 

171,018

 

 

 

171,839

 

 

 

172,419

 

 

 

540,015

 

 

 

505,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

19,208

 

 

 

16,061

 

 

 

14,472

 

 

 

12,587

 

 

 

12,376

 

 

 

49,741

 

 

 

33,725

 

Other borrowings

 

 

7,583

 

 

 

6,046

 

 

 

2,973

 

 

 

2,852

 

 

 

3,540

 

 

 

16,602

 

 

 

10,056

 

Securities sold under repurchase agreements

 

 

566

 

 

 

411

 

 

 

350

 

 

 

350

 

 

 

356

 

 

 

1,327

 

 

 

922

 

Total interest expense

 

 

27,357

 

 

 

22,518

 

 

 

17,795

 

 

 

15,789

 

 

 

16,272

 

 

 

67,670

 

 

 

44,703

 

Net interest income

 

 

157,319

 

 

 

161,803

 

 

 

153,223

 

 

 

156,050

 

 

 

156,147

 

 

 

472,345

 

 

 

460,813

 

Provision for credit losses

 

 

2,350

 

 

 

4,000

 

 

 

9,000

 

 

 

2,000

 

 

 

6,900

 

 

 

15,350

 

 

 

12,325

 

Net interest income after provision for credit losses

 

 

154,969

 

 

 

157,803

 

 

 

144,223

 

 

 

154,050

 

 

 

149,247

 

 

 

456,995

 

 

 

448,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonsufficient funds (NSF) fees

 

 

8,606

 

 

 

7,828

 

 

 

7,827

 

 

 

8,110

 

 

 

8,350

 

 

 

24,261

 

 

 

24,244

 

Credit card, debit card and ATM card income

 

 

6,242

 

 

 

6,335

 

 

 

5,961

 

 

 

6,211

 

 

 

6,075

 

 

 

18,538

 

 

 

18,214

 

Service charges on deposit accounts

 

 

5,137

 

 

 

5,150

 

 

 

5,275

 

 

 

5,250

 

 

 

5,251

 

 

 

15,562

 

 

 

16,077

 

Trust income

 

 

2,692

 

 

 

2,251

 

 

 

2,728

 

 

 

2,734

 

 

 

2,040

 

 

 

7,671

 

 

 

6,466

 

Mortgage income

 

 

856

 

 

 

1,109

 

 

 

763

 

 

 

826

 

 

 

854

 

 

 

2,728

 

 

 

3,227

 

Brokerage income

 

 

784

 

 

 

687

 

 

 

625

 

 

 

574

 

 

 

461

 

 

 

2,096

 

 

 

1,376

 

Bank owned life insurance income

 

 

1,326

 

 

 

1,317

 

 

 

1,311

 

 

 

1,347

 

 

 

1,366

 

 

 

3,954

 

 

 

4,083

 

Net gain (loss) on sale of assets

 

 

4

 

 

 

(44

)

 

 

 

 

 

41

 

 

 

62

 

 

 

(40

)

 

 

(1,962

)

Net (loss) gain on sale of securities

 

 

 

 

 

(13

)

 

 

 

 

 

 

 

 

 

 

 

(13

)

 

 

3,270

 

Other noninterest income

 

 

4,977

 

 

 

3,751

 

 

 

3,448

 

 

 

4,127

 

 

 

4,350

 

 

 

12,176

 

 

 

12,418

 

Total noninterest income

 

 

30,624

 

 

 

28,371

 

 

 

27,938

 

 

 

29,220

 

 

 

28,809

 

 

 

86,933

 

 

 

87,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

51,906

 

 

 

53,360

 

 

 

50,399

 

 

 

48,756

 

 

 

47,866

 

 

 

155,665

 

 

 

143,653

 

Net occupancy and equipment

 

 

5,808

 

 

 

5,692

 

 

 

5,609

 

 

 

5,748

 

 

 

5,691

 

 

 

17,109

 

 

 

16,654

 

Credit and debit card, data processing and software amortization

 

 

4,512

 

 

 

4,356

 

 

 

4,448

 

 

 

4,423

 

 

 

4,506

 

 

 

13,316

 

 

 

12,807

 

Regulatory assessments and FDIC insurance

 

 

3,347

 

 

 

3,575

 

 

 

3,575

 

 

 

3,759

 

 

 

3,455

 

 

 

10,497

 

 

 

10,552

 

Core deposit intangibles amortization

 

 

1,478

 

 

 

1,501

 

 

 

1,568

 

 

 

1,622

 

 

 

1,686

 

 

 

4,547

 

 

 

5,320

 

Depreciation

 

 

3,139

 

 

 

3,054

 

 

 

3,033

 

 

 

3,011

 

 

 

3,050

 

 

 

9,226

 

 

 

9,204

 

Communications

 

 

2,442

 

 

 

2,606

 

 

 

2,580

 

 

 

2,608

 

 

 

2,618

 

 

 

7,628

 

 

 

7,984

 

Other real estate expense

 

 

219

 

 

 

83

 

 

 

89

 

 

 

181

 

 

 

110

 

 

 

391

 

 

 

333

 

Net (gain) loss on sale or write-down of other real estate

 

 

(2

)

 

 

10

 

 

 

122

 

 

 

2,978

 

 

 

(140

)

 

 

130

 

 

 

(221

)

Other noninterest expense

 

 

8,911

 

 

 

9,365

 

 

 

8,631

 

 

 

8,002

 

 

 

8,667

 

 

 

26,907

 

 

 

25,727

 

Total noninterest expense

 

 

81,760

 

 

 

83,602

 

 

 

80,054

 

 

 

81,088

 

 

 

77,509

 

 

 

245,416

 

 

 

232,013

 

Income before income taxes

 

 

103,833

 

 

 

102,572

 

 

 

92,107

 

 

 

102,182

 

 

 

100,547

 

 

 

298,512

 

 

 

303,888

 

Provision for income taxes

 

 

21,310

 

 

 

20,975

 

 

 

17,746

 

 

 

35,044

 

 

 

32,639

 

 

 

60,031

 

 

 

98,861

 

Net income available to common shareholders

 

$

82,523

 

 

$

81,597

 

 

$

74,361

 

 

$

67,138

 

 

$

67,908

 

 

$

238,481

 

 

$

205,027

 

 

(C) Interest income on securities was reduced by net premium amortization of $8,073, $7,753, $8,450, $9,521 and $10,115 for the three-month periods ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively, and $24,276 and $29,401 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.

Page 7 of 16


 

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

 

 

 

Sep 30, 2018

 

 

Jun 30, 2018

 

 

Mar 31, 2018

 

 

Dec 31, 2017

 

 

Sep 30, 2017

 

 

Sep 30, 2018

 

 

Sep 30, 2017

 

Profitability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (D) (E)

 

$

82,523

 

 

$

81,597

 

 

$

74,361

 

 

$

67,138

 

 

$

67,908

 

 

$

238,481

 

 

$

205,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.18

 

 

$

1.17

 

 

$

1.07

 

 

$

0.97

 

 

$

0.98