Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q4 2022 Earnings Presentation
29 slides from Prosperity Bancshares's earnings presentation, Jan 25, 2023
Slide 1: Investor Presentation Fourth Quarter 2022
Investor Presentation Fourth Quarter 2022
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: Important Information
Important Information Additional Information about the First Bancshares Merger and Where to Find It In connection with the proposed merger of First Bancshares into Prosperity, Prosperity has filed with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to
Slide 4: Fourth Quarter Highlights
Fourth Quarter Highlights • Net income of $137.9 million and earnings per share (diluted) of $1.51 for three months ended December 31, 2022 • Assets of $37.7 billion, total loans of $18.8 billion, and deposits of $28.5 billion at December 31, 2022 • Common equity tier 1 ratio of 15.88% and leverage
Slide 5: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $37.7 billion in total assets • Prosperity has been ranked in the Top 10 of Forbes America’s Best Oklahoma INTERSTATE 44 Banks since the list’s inception in 2010, and was ranked #6 in 2022 INTERSTATE 35 Tulsa • Rank
Slide 6: Balance Sheet Summary
Balance Sheet Summary Data as of 12/31/2022 0,000 Total Loans $18.8 Bn ,000 Deposits $28.5 Bn Assets $37.7 Bn ,000 ,000 (1) 10 Year CAGR 0,000 Loans 13.8% Deposits 9.4% ,000 Assets 10.0% 2 ,000 ,000 20,000 ,000 1 ,000 2,000 10,000 1,000 ,000 0 0 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22
Slide 7: Net Income
Net Income 00 0 10 Year Core CAGR:(1) 12.8% 00 0 5 Year Core CAGR:(2) 14.9% 00 0 00 0 200 0 100 0 00 (3) 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $2
Slide 8: Earnings Per Share
Earnings Per Share 10 Year Core EPS CAGR:(1) 6.6% 00 5 Year Core EPS CAGR:(2) 8.7% 00 00 00 2 00 1 00 0 00 (3) 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,
Slide 9: Net Interest Margin
Net Interest Margin 0 0 0 0 10 2 0 2 0 2 0 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 9 Source: Company Documents
Slide 10: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ’ ,000 100 0 0,000 00 , , 0 , , 0 ,0 00 ,000 2,1 00 0,000 00 2 ,000 22, 22, 21, 0 22,0 22, 1 00 20,000 1 , 2 00 1 ,000 1 , 00 10,000 20 0 ,000 10 0 0 00 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 % of Assets Acquired 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31
Slide 11: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 0 00 , 00 0 00 2, 0 20 00 1, 00 10 00 0 0 00 0 (2) (1) (1) 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 ROATCE Tangible Common Equity (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the C
Slide 12: Return on Average Assets
Return on Average Assets 2 00 1 1 0 12 1 00 0 (2) (1) (1) 2012 201 201 201 201 201 201 201 2020 2021 2022 21 22 (1) Interim periods shown on an annualized basis 12 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 13: Deposit Composition
Deposit Composition As of December 31, 2022 ($ in millions) C s $mm Cost (%)(1) ther Time Noninterest-Bearing Demand $10,915 0.00% 0 Interest-Bearing Demand $5,986 0.22% Money Market & Savings $9,636 1.13% oney arket oninterest Savings Bearing emand CDs & Other Time $1,996 0.94% 2 Total Deposits: $2
Slide 14: Loan Growth
Loan Growth 22,000 100 0 1 , 00 2 2, 2 1 1, 1, 1 , 00 0 1 , 00 1 ,200 0 0 00 0 11,000 2 , 00 0 , 00 , 00 00 2,200 2 0 2 0 2012 201 201 201 201 201 201 201 2020 2021 2022 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview As of December 31, 2022 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Comm E , 2 Floa ng Energy 2 C 2 Construc on 2,1 2, 0 2 11 Fixed ~3.1yr Consumer 1 Agriculture 2 Avg. Life ther ( nc Farm) 2 1 1 Family , PPP oans ariable ate Home E uity 0 2
Slide 16: Loan Portfolio Detail
Loan Portfolio Detail As of December 31, 2022 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • oan portfolio is diversified across the Bank’s market areas and by underlying collateral type t er Retail $1,286 26% om Industrial $980 20% n tr a • 34% of commercial re
Slide 17: Loan Portfolio Detail (Continued)
Loan Portfolio Detail (Continued) As of December 31, 2022 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 2.1%, or $9.2 Ser e million (excluding fair value marks)(1) ro er $429mm • $9.5 million, or 2.2% of energy loans, ar
Slide 18: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.61% ACL to Total 1.56% ACL to Total Loans (1) Loans (1) Allowance for ▪ Net Charge-offs ▪ PCD recoveries ▪ Outstanding ▪ Net increased reserve Allowance for Credit Losses balances related to changes in Credit Losses ▪ $6.2 million released rel
Slide 19: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 2 00 1 00 0 00 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 2022 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 19 Note: NPAs include loans past due 90 days and still accruing (1) UBPR
Slide 20: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 2 00 1 0 1 00 0 0 0 00 (2) ($ in millions) (2) Recoveries Charge-Offs 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 1 (3) 2021 2 (3) 2022 21 22 Net 1 1 20 1 (3) 2 1 2 1 1 0 0 (3) 0 (3) 200 200 200 2010 2011 2012 201 201 201 201 201 201 201
Slide 21: Securities Portfolio Detail
Securities Portfolio Detail As of December 31, 2022 ($ in millions) ther Securi es 01 States $mm Poli cal Mortgage-Backed Securities $13,713 ortgage Subdivisions Backed 0 Collateralized Mortgage Obligations $629 Securi es Collaterali ed States & Political Subdivisions $122 ortgage Other Securities $
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to December 30, 2022 2,000 n e te n ro per ty’ 1,800 on 11/12/98 was worth $1,845,013 on 12/30/22 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 11/12/20 11/
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2023 - 2028 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 24: Corporate Relocations to Texas
Corporate Relocations to Texas California Aatonomy AccentCare Active Networks AEND Industries, Inc. AECOM The Allen Group, Inc. Allied Electronic Recycling AllyMe Group, Inc. Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. Amazing Magnets Canada Ameriflight LLC Absolute Software (AB
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 nearly 7.4 million residents – Population is expected to grow 4.8% from 2023 - 2028 • Home to ASA’s Johnson Space Center and Texas edical Center – the world’s larges
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 7.9 million residents – Population is expected to grow 5.0% from 2023 - 2028 • As of November 2022, total nonfarm employment has in
Slide 27: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Population grew by 33% from 2010 to 2020, the highest of any major MSA in the country INTERSTATE – Ranks first among MSAs for new residents as a percent of total 35 population • Expected population growth of 7.8% from 2023 - 2028 • As of
Slide 28: Dividend History
Dividend History 22 (a) 2 00 ompo n e nn a ro t ate from a 1 1 0 12 1 00 0 en H tory 0 0 02 Q1 Q2 Q3 Q4 (Declared) 0 00 200 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 2022 28 (a) 2022 dividend consists of $0.52 per share declared in Q1 2022, 2Q 2022, 3Q 2022 and $0.
Slide 29: 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 Cullen Zalman SVP – Banking & Corporate Activities 281-269-7176 cullen.zalman@pros
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