Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Investor Presentation (2020)
28 slides from Prosperity Bancshares's investor presentation, 2020
Slide 1: Investor Presentation Third Quarter 2020
Investor Presentation Third Quarter 2020
Slide 2: “Safe Harbor” Statement
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 “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 with
Slide 3: 2020 Third Quarter Highlights
2020 Third Quarter Highlights • Net income of $130.1 million and earnings per share (diluted) of $1.40 for three months ended September 30, 2020 • Assets of $33.2 billion, total loans of $20.8 billion, and deposits of $26.5 billion at September 30, 2020 • Common equity tier 1 ratio of 13.17% and lev
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $33.2 billion in total assets • Ranked #3 in deposit market share in Texas (1) Oklahoma INTERSTATE 44 • Texas and Oklahoma continue to benefit from strong Tulsa INTERSTATE 35 economies, and are home to 55 Fortune 50
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 09/30/2020 Total Loans (1) $20.8 Bn Deposits $26.5 Bn Assets $33.2 Bn 10 Year CAGR (2) Loans 18.8% Deposits 12.8% Assets 13.8% Assets Deposits Total Loans Equity Source: Company Documents 5 (1) Total loans include Warehouse Purchase Program (WPP) loans (2) Represents
Slide 6: Net Income
Net Income (4) (4) 10 Year CAGR:(1)(4) 12.7% 5 Year CAGR:(2)(4) 4.4% (3) Note: Net income includes the following ($ in thousands) Provision for Credit $28,775 $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $1,100 $10,000 Losses Loan Discount - - - $26,413 $62,723 $95,875
Slide 7: Earnings Per Share
Earnings Per Share (4) 10 Year EPS CAGR:(1)(4) 7.6% (4) 5 Year EPS CAGR:(2)(4) 3.0% (3) Note: Net income includes the following ($ in thousands) Provision for Credit $28,775 $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $1,100 $10,000 Losses Loan Discount - - - $26,413
Slide 8: Net Interest Margin
Net Interest Margin Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio % of Assets Acquired 0.0% 1.6% 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31.3% 0.0% 0.0% Total Assets Excluding Acquisitions Total Assets Acquired (1) Efficiency Ratio(2) Efficiency Ratio (Excluding Merger Charges) (2) Source: Company Documents (1) Representative of
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity (1) (1) ROATCE Tangible Common Equity ROATCE (Excluding Merger Charges) 10 (1) Interim periods shown on an annualized basis
Slide 11: Return on Average Assets
Return on Average Assets (1) (1) ROAA ROAA (Excluding Merger Charges) 11 (1) Interim periods shown on an annualized basis
Slide 12: Deposit Composition
Deposit Composition As of September 30, 2020 ($ in millions) $mm Cost (%)(1) Noninterest-Bearing Demand $8,998 0.00% Interest-Bearing Demand $5,298 0.38% Money Market & Savings $9,097 0.35% CDs & Other Time $3,066 1.23% Total Deposits: $26.5Bn Total Cost of Deposits: 0.34%(1) Cost of Interest-Bearin
Slide 13: Loan Growth
Loan Growth $20,796 $18,845 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit Ratio (Including WPP) 13 Source: Company Documents
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2020 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure ~2.3yr Avg. Life Loans By Area (4) Amount(2)(4) % of Total Bryan / College Station $690 3.8% Total Loans: $20.8Bn Central Oklahoma Central Texas $683 $1,662 3.8% 9.2% Loans
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of September 30, 2020 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 29% of commercial real estate is owner occupied Retail $1,316 21% • CRE and construction loans conservatively Office $1,180 19% underwritten to cost of collateral Multi
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of September 30, 2020 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 7.1%, or $42.7 million (excluding fair value marks)(1) • $265.8 million, or 44.0% of energy loans are subject $605mm to fair
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.90% ACL to Total 1.94% ACL to Total Loans (1)(2) Loans (1)(2) Allowance for Allowance for ▪ Net Charge-offs Credit Losses ▪ Net increased reserve Credit Losses ▪ $8.6 million related ▪ PCD recoveries to PCD loans ▪ Outstanding related to chang
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performance Report; Peer Group 2 (94 banks) – Insured commercial banks having asse
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans (2) (2) ($ in millions) Recoveries Charge-Offs Net (3) Net PCD (3) UBPR Peer Group (1) Prosperity Bank Non-Acquired Loan Charge-Offs Acquired Loan Charge-Offs Acquired Loan Charge-Offs Under CECL (3) (3) Net PCD Recoveries Under CECL Source: Company Docu
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2020 ($ in millions) $mm Mortgage-Backed Securities $6,716 Collateralized Mortgage Obligations $542 States & Political Subdivisions $170 U.S. Government Agency Securities $4 Total Securities: $7.4Bn Yield on Securities: 1.99%(1) 93.8% Held to Maturity
Slide 21: Dividend History
Dividend History $1.80 $1.69 (d) (c) $1.60 Compounded Annual Growth $1.49 Rate from 2003 - 2019 was 12.7% $1.38 (b) $1.40 (a) $1.24 $1.20 $1.12 $0.99 $1.00 $0.89 $0.80 $0.80 $0.72 $0.64 $0.57 $0.60 $0.51 $0.46 $0.41 $0.40 $0.35 $0.31 $0.25 $0.20 $0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2020 1,800 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,232,776 on 9/30/2020 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/1
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2021 - 2026 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($mm) Growth the 48 contiguous U.
Slide 24: Corporate Relocations to Texas
California Corporate Relocations to Texas Aatonomy AccentCare Active Networks AEND Industries, Inc. The Allen Group, Inc. Allied Electronic Recycling Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. Ameriflight LLC Canada Aviat Networks, Inc. Absolute Software (ABT) Banker’s Toolbox,
Slide 25: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston MSA is the 5th largest in the United States by population with approximately 7.2 million residents – Population is expected to grow 7.6% from 2021 to 2026 • In July 2020, total nonfarm employment dropped 6.0% YoY compared to the
Slide 26: Dallas/Ft. Worth Market Highlights
Dallas/Ft. Worth Market Highlights Market Highlights Dallas / Ft. Worth Franchise • Dallas/Ft. Worth MSA is the 4th largest in the United States by population with over 7.7 million residents – Population is expected to grow 7.5% from 2021 to 2026 • In August 2020, total nonfarm employment only decre
Slide 27: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise Franchise • Ranked #3 place to live in the U.S. in 2020 by U.S. News and World Report, with expected population growth of 8.5% through 2026 • Ranked as the 3rd best city for technology professionals to work INTERSTATE 35 – IT job growth is
Slide 28: Contact Information
Contact Information Corporate Headquarters Investor Contacts Prosperity Bank Plaza David Zalman 4295 San Felipe Chairman & CEO Houston Texas 77027 979-543-2200 david.zalman@prosperitybankusa.com 281-269-7199 Telephone 281-269-7222 Fax Cullen Zalman Investor Relations 281-269-7176 cullen.zalman@prosp