Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q4 2021 Earnings Presentation
28 slides from Prosperity Bancshares's earnings presentation, Jan 26, 2022
Slide 1: Investor Presentation Fourth Quarter 2021
Investor Presentation Fourth Quarter 2021
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 presentation contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the
Slide 3: Fourth Quarter Highlights
Fourth Quarter Highlights • Net income of $126.8 million and earnings per share (diluted) of $1.38 for three months ended December 31, 2021 • Assets of $37.8 billion, total loans of $18.6 billion, and deposits of $30.8 billion at December 31, 2021 • Common equity tier 1 ratio of 15.10% and leverage
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $37.8 billion in total assets • Ranked the 2nd Best Bank in America in 2021 by Forbes and has been ranked in the Top 10 of Forbes America’s Best Banks Oklahoma INTERSTATE 44 Tulsa INTERSTATE since 2010 35 • Ranked #
Slide 5: Balance Sheet Summary
Balance Sheet Summary 0,000 Data as of 12/31/2021 ,000 Total Loans $18.6 Bn Deposits $30.8 Bn ,000 Assets $37.8 Bn ,000 0,000 10 Year CAGR (1) Loans 17.3% ,000 Deposits 14.3% ,000 Assets 14.4% ,000 0,000 ,000 1 ,000 ,000 10,000 1,000 ,000 0 0 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 Assets Deposits T
Slide 6: Net Income
Net Income 00 0 10 Year CAGR:(1) 13.9% 00 0 5 Year CAGR:(2) 13.6% 00 0 00 0 00 0 100 0 00 (3) 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 - - - Losses
Slide 7: Earnings Per Share
Earnings Per Share 10 Year EPS CAGR:(1) 6.4% 00 5 Year EPS CAGR:(2) 7.3% 00 00 00 00 1 00 0 00 (3) 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 - - - L
Slide 8: Net Interest Margin
Net Interest Margin 0 00 0 00 0 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio 0,000 ,0 , 00 ,000 ,1 ,0 , 0 0,000 00 ,000 ,0 , 1 , 1, 0 1 , 0 0,000 1 , , 00 1 ,000 , 0 10,000 ,000 00 0 0 (3) 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 % of Assets Acquired 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31.3% 0.0% 0.0% 0.0% 0.0% Total Assets Excluding Acq
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 0 00 , 00 0 00 , 0 0 00 1, 00 10 00 0 0 00 (2) (1) (1) 0 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 ROATCE Tangible Common Equity (1) Interim periods shown on an annualized basis 10 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 11: Return on Average Assets
Return on Average Assets 00 1 1 0 1 1 00 0 (2) (1) (1) 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of December 31, 2021 ($ in millions) Noninterest-Bearing Deposit Growth C s ther Time 2 Year CAGR: 17.7%(2) 10 10 1 10 oninterest oney arket Bearing 0 0 Savings emand 17.5% Increase YoY nterest Bearing 38.5% Increase Over Past 8 Quarters emand 1 1 1 0 0 0 0 1 1 1 1 1 $mm Cost
Slide 13: Loan Growth
Loan Growth ,000 100 0 1 , 00 , 1, 1 , 00 1, 0 1 , 1 , 0 1 , 0 1 , 00 1 , 00 00 0 11,000 0 , 00 0 , 00 , 00 00 , 00 0 0 011 01 01 01 01 01 01 01 01 0 0 0 1 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit Ratio (Includi
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of December 31, 2021 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure PPP oans Agriculture 1 0 ( nc Farm) 0 0 arehouse 1, Energy 1 Family 1 , 0 1 Fixed Floa ng C ,0 1 Home E uity ~2.7yr 11 0 0 Avg. Life Comm E Construc on , 1 , 00 Consumer 1 t
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of December 31, 2021 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 32% of commercial real estate is owner occupied ommer a Retail $1,291 24% n tr a • CRE and construction loans conservatively t er Office $939 18% underwritten to cost of
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of December 31, 2021 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 4.6%, or $22.8 million (excluding fair value marks)(1) e er e ba e • $19.9 million, or 4.1% of energy loans, are subject to $4
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.73% ACL to Total 1.72% ACL to Total Loans (1) Loans (1) Allowance for ▪ Net increased reserve Allowance for ▪ Net Charge-offs ▪ Outstanding Credit Losses related to changes in Credit Losses ▪ PCD recoveries balances macro-economic ▪ $1.7 milli
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 00 1 00 0 00 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0 0 1 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performa
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 00 1 0 1 00 0 0 (2) 0 00 ($ in millions) (2) Recoveries Charge-Offs 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0(3) 0 1(3) 0 1 Net 1 1 1 01 1 1 0 (3) 1 0 (3) 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0 0 1 0 1 (3) Net PCD (3) (3) (3) 1 00 00 00 010 011
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of December 31, 2021 ($ in millions) States Poli cal Subdivisions $mm 10 Mortgage-Backed Securities $12,161 ortgage Collaterali ed Collateralized Mortgage Obligations $523 Backed ortgage Securi es bliga ons States & Political Subdivisions $133 1 Total Securities: $12.8
Slide 21: Dividend History
Dividend History (d) (c) 00 om o n e nn a ro t ate from a (b) 1 (a) 1 0 1 1 00 0 en H tor 0 0 0 Q1 Q2 Q3 Q4 (Declared) 0 00 00 00 00 00 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0 0 1 (a) 2018 dividend consists of $0.36 per share declared in 1Q 2018, 2Q 2018, 3Q 2018 and $0.41 per share declared in
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to December 31, 2021 2,000 1,800 n e te n ro er t ’ on 11/12/98 was worth $1,780,465 1,600 on 12/31/21 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 11/12/20 PB (
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2022 - 2027 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 24: Corporate Relocations to Texas
California Aatonomy Corporate Relocations to Texas AccentCare Active Networks AEND Industries, Inc. AECOM The Allen Group, Inc. Allied Electronic Recycling AllyMe Group, Inc. ALL-Q-TELL Corp. Corporate Relocations to Texas (2004 – Present) Amazing Magnets Ameriflight LLC Canada Aviat Networks, Inc.
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 7.3 million residents – Population is expected to grow 6.0% from 2022 to 2027 • Headquarters to 24 Fortune 500 companies – Home to the Texas Medical Center –
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 7.8 million residents – Population is expected to grow 5.9% from 2022 to 2027 • As of November 2021, total nonfarm employment has i
Slide 27: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise Franchise • Ranked #5 place to live in the U.S. in 2021 by U.S. News and World Report • Expected population growth of 6.9% through 2027, the second highest INTERSTATE 35 of any major MSA in the country • Ranked as the best city in the U.S.
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 Cullen Zalman SVP – Banking & Corporate Activities 281-269-7176 cullen.zalman@pros
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