Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — KWB Conference 2007
28 slides from Prosperity Bancshares's conference presentation, Aug 1, 2007
Slide 1: Prosperity Bancshares, Inc. – Bankers... not just a bank
—PRO BANCSHARES, INC: ankers... not just a bank: 7 =
Slide 2: "Safe Harbor" Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 This presentation 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 s
Slide 3: Prosperity is... a Track Record of Success
Prosperity is . . . . a Track Record of Success • A $6.2 billion Texas based Financial Holding Company rd • 3 largest Texas based commercial bank by deposit size • Strong balance sheet growth – 10 year CAGR of 34% loans, 30% deposits, and 32% assets • Strong earnings growth – 10 year CAGR of 18% for
Slide 4: Banking Center Network
Banking Center Network Franchise – $ 4.8 billion in Deposits $ 3.2 billion in Loans 124 Full Service Locations 9 in Austin area 5 in Bryan/College Station 11 in Corpus Christi area 27 in Dallas/Fort Worth area 2 in East Texas # of 40 in Houston CMSA Branches 30 in South and South Prosperity Bancshar
Slide 5: Balance Sheet Summary
Balance Sheet Summary As Originally Reported $6,600 $1,200 $6,000 Total footings as of 6/30/07 $5,400 $1,000 Loans = $3.2 billion $4,800 Deposits = $4.8 billion Assets = $6.2 billion $800 $4,200 $3,600 $600 $3,000 $2,400 Loans $400 Deposits $1,800 Assets $1,200 Equity $200 $600 $0 $0 5 $ in millions
Slide 6: EPS Growth
EPS Growth Diluted $2.25 Net income 5 and 10 year $1.94 EPS 10 year $2.00 CAGR = 18% CAGR = 37% and 37% respectively $1.77 $1.75 $1.59 $1.50 $1.36 $1.22 $1.25 $1.00 $0.79 $0.75 $0.48 $0.52 $0.50 $0.25 $0.00 2001 2002 2003 2004 2005 2006 2Q 2006 2Q 2007 6
Slide 7: Net Interest Income and Margin (fte)
Net Interest Income and Margin (fte) $60 4.20% 4.09% $50 4.10% 3.93% $40 4.00% 3.82% 3.77% 3.79% 3.81% $30 3.82% 3.81% 3.77% 3.90% $20 3.80% Net Interest Margin for 2005- 3.81% Net Interest and for 2006 - 3.80% Income $10 3.70% Net Interest Margin $0 3.60% 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q0
Slide 8: Loan Growth
Loan Growth $3,600 70.00% Organic Loan Growth has averaged $3,200 7.1% for the last two years 65.00% $2,800 60.00% $2,400 55.00% $2,000 50.00% $1,600 45.00% $1,200 40.00% $800 Loans $400 Loan / Deposit 35.00% Ratio $0 30.00% 2001 2002 2003 2004 2005 2006 2Q06 2Q07 Loan/deposit ratio increased from 3
Slide 9: Efficiency Ratio
Efficiency Ratio 55.00% 4 acquisitions $426 million 2 acquisitions 52.50% assets acquired $846 million assets acquired 1 acquisition 50.39% 51.82% $1.8 billion 50.00% assets acquired 48.99% 49.45% 47.50% 46.19% 45.29% 45.00% 2 acquisitions $296 million 1 acquisition 5 acquisitions assets acquired $1
Slide 10: Loan Portfolio
Loan Portfolio June 30, 2007 Agriculture Loans/Deposits: 66.6% 3.7% Home Equity Consumer 3.0% 4.0% Commercial 1-4 Family R.E. Residential 35.5% 16.5% Commercial Construction 14.9% 22.5% Amount % of total Commercial R.E. $ 1,127,304 35.4 % Commercial 473,526 14.9 Construction 715,385 22.5 1-4 Family
Slide 11: Historical Loan Composition
Historical Loan Composition 12/31/2002 12/31/2003 12/31/2004 12/31/2005 12/31/2006 6/30/2007 CAGR Loan Composition Commercial $ 93.8 13.8% $ 94.0 12.2% $ 144.4 13.9% $ 222.8 14.4% $ 297.7 13.7% $ 473.5 14.9% 33.5% Construction $ 52.4 7.7% $ 36.5 4.7% $ 109.6 10.6% $ 206.7 13.4% $ 433.2 19.9% $ 715.4
Slide 12: Asset Quality – NPA/Loans + OREO
Asset Quality – NPA/Loans + OREO 1.20% PRSP NPA / Loans PRSP NPA/ Loan II Peer NPA / Loans 1.06% 1.00% 0.92% 0.81% 0.80% 0.72% 0.77% 0.60% 0.55% 0.40% 0.37% 0.20% 0.04% 0.06% 0.04% 0.00% 0.02% 0.00% 2001 2002 2003 2004 2005 2006* 2Q06 2Q07 Texas Peer Group Includes: CFR, FFIN, FBTX, IBOC, MCBI, SBSI
Slide 13: Asset Quality - NCO/Average Loans
Asset Quality - NCO/Average Loans 0.60% 0.54% 0.50% 0.40% 0.32% PRSP NCO / Loans PRSP NCO / Loans II Peer NCO / Loans 0.30% 0.29% 0.23% 0.20% 0.19% 0.20% 0.15% 0.10% 0.06% 0.06% 0.08% 0.04% 0.03% 0.00% 2001 2002 2003 2004 2005 2006* 2Q06 2Q07 Texas Peer Group Includes: CFR, FFIN, FBTX, IBOC, MCBI, S
Slide 14: Bond Portfolio
Bond Portfolio June 30, 2007 Corporate & Total Carrying Value of Investment US Agencies & Other Securities $1,818,723 Treasury $11,387 CMOs $429,558 0.62% $247,832 • Approx. annual cash 23.55% flow $500 million 13.59% • Effective duration 2.9 years Municipals $95,421 5.23% Portfolio Allocation HTM $
Slide 15: Deposit Composition
Deposit Composition June 30, 2007 2Q07 Cost of Deposits-2.60% Non-interest CDs & IRAs bearing DDA CDs & IRAs >$100,000 16.3% 24.8% <$100,000 16.5% Interest MMA & Bearing DDA Savings 16.8% 25.6% Amount % of total Non-interest bearing DDA $ 1,184,172 24.8 % Interest Bearing DDA 804,961 16.8 MMA & Savi
Slide 16: Total Return Performance
Total Return Performance 700 $100,000 invested in PRSP at 600 IPO on 11/12/1998 was worth $648,167 on 12/31/2006 500 400 300 200 100 0 Prosperity Bancshares Inc. (+548.2%) Russell 3000 (+54.8%) NASDAQ Bank Index (+90.5%) 16 Source: FactSet Research Systems
Slide 17: Merger & Acquisition History
Merger & Acquisition History* $40 05/02/02 11/16/05 06/21/99 Paradigm Bank 10/26/04 Southern National Bank Deal Value: $41.6 08/15/02 Deal Value: $242.7 $35 South Texas Bancshares, Inc. Location: Houston First National Bank FirstCapital Bank Location: Houston Deal Value: $23.4 Deal Value: $135.7 Loc
Slide 18: Contact Information
Contact Information Corporate Headquarters Investor Contacts Prosperity Bank Plaza David Zalman 4295 San Felipe Chairman & Chief Executive Officer Houston, Texas 77027 979.543.2200 david.zalman@prosperitybanktx.com 281.269.7199 Telephone Dan Rollins 281.269-7222 Fax President & Chief Operating Offic
Slide 19: Supplemental Data
Supplemental Data 19
Slide 20: Financial Highlights
Financial Highlights As Originally Reported (Dollars in thousands, except EPS) 2003 2004 2005 2006 2Q 06 2Q 07 Assets $2,400,487 $2,697,228 $3,585,982 $4,586,769 $4,531,951 $6,184,914 Loans $770,053 $1,035,513 $1,542,125 $2,176,507 $2,204,792 $3,181,176 Deposits $2,083,748 $2,317,076 $2,920,318 $3,7
Slide 21: PRSP Acquisitions
PRSP Acquisitions At Announcement Sellers' PRSP Sellers' Assets Deal Accounting Assets Assets Contribution Value Seller City State Type Consideration Method ($000) ($000) (%) ($000) Texas United Bancshares, Inc. La Grange TX Bank Common Stock Purchase 4,547,220 1,818,000 27.82 357.1 SNB Bancshares,
Slide 22: Projected Population Change
Projected Population Change 2005-2010 (%) 12.00% 10.86% 10.58% 10.00% 8.00% 6.26% 6.00% 4.00% 2.00% 0.00% PRSP Pro Forma * Texas Average National Average * Pro Forma includes the acquisition of TXUI Growth Rates are deposits rated by County 22 Source: SNL Financial
Slide 23: The Greater Houston Market
The Greater Houston Market • A metropolitan region of 5.4 million that is projected to grow 15.0% from 2005 to 2010 • Houston is the 4th largest city in the US • Harris County is Texas’ largest deposit market with $85.8 billion in total deposits • Home to 24 FORTUNE 500 companies • Port of Houston c
Slide 24: Fort Bend County
Fort Bend County • Fast-growing county with an attractive customer base – 26.6% historical population growth for 2000 – 2005 Versus 10.8% for Texas and 6.2% for the U.S. – 27.6% projected population growth for 2005 – 2010 Versus 10.6% for Texas and 6.3% for the U.S. • Ranks second in the nation for
Slide 25: The Dallas/Fort Worth Market
The Dallas/Fort Worth Market • Fort Worth is Texas’ third largest deposit market • A metropolitan region of 5.9 million that is projected to grow 13.9% from 2005 to 2010 – Tarrant County will lead the region’s population growth, adding up to 800,000 people by 2030 • New residents and businesses are
Slide 26: Other Significant Markets
Other Significant Markets The Victoria Market The Corpus Christi Market • Known as the South Texas Crossroads, • 8th Largest City in Texas Victoria is located at the intersection of three major US highways: 77, 87 and 59 • 7th Largest Port in the US; Employs (the future I-69) 40,000 Texans and provi
Slide 27: Other Significant Markets
Other Significant Markets The Bryan / College Station Market The Austin / Round Rock Market • Current population of more than 200,000 • A metropolitan region of 1.4 million that that is projected to grow 9.6% from 2005 is projected to grow 16.2% from 2005 to to 2010 2010 • Home to the fourth largest
Slide 28: 2Q07 Presentation – KWB Conference July 31-August 1, 2007
2Q07 Presentation –KWB Conference July 31- August 1, 2007