Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q3 2018 Earnings Presentation
26 slides from Prosperity Bancshares's earnings presentation, 2018
Slide 1: Investor Presentation Third Quarter 2018
Investor Presentation Third Quarter 2018
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Statements contained in this presentation which are not historical facts and which pertain to future operating results of Prosperity Bancshares, Inc.® and its subsidiaries constitute “forward-looking statements” withi
Slide 3: 2018 Third Quarter Highlights
2018 Third Quarter Highlights • Net income of $82.523 million and earnings per share (diluted) of $1.18 for three months ended September 30, 2018 • Assets of $22.613 billion, loans of $10.293 billion, and deposits of $16.734 billion at September 30, 2018 • Loans increased 5.8% (annualized) in the th
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $22.613 billion in total assets • Ranked #3 in deposit market share in Texas (1) • Shareholder driven with 5.1% fully diluted insider ownership (2) • Successful integration of 42 acquisitions (whole bank, branch and
Slide 5: Balance Sheet Summary
Balance Sheet Summary ($ in millions) Data as of 09/30/2018 $22,500 $4,800 Loans $10.293 Bn Deposits $16.734 Bn Assets $22.613 Bn $4,000 $18,000 10 Year CAGR (1) Loans 12.3% Deposits 13.6% $3,200 Assets 13.5% $13,500 $2,400 $9,000 $1,600 $4,500 $800 $0 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 6: Net Income
Net Income ($ in millions) $350.0 10 Year CAGR:(1) 12.5% $297.4 $300.0 5 Year CAGR:(2) 10.1% $286.6 $274.5 $272.2 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $185.7 $167.9 $141.7 $154.9 $150.0 $127.7 $111.9 $82.5 $100.0 $84.2 $84.5 $67.9 $80.0 $63.0 $50.0 $0.0 (3) 2007 2008 2009 2010 2011 2012
Slide 7: Earnings Per Share
Earnings Per Share $5.00 10 Year EPS CAGR:(1) 7.3% $4.32 $4.09 5 Year CAGR:(2) 3.9% $3.94 $3.92 $4.00 $3.65 $3.65 $3.73 $3.43 $3.60 $3.23 $3.01 $2.98 $3.07 $3.00 $2.73 $2.41 $1.94 $1.86 $2.00 $1.18 $0.98 $1.15 $0.91 $1.00 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(3) 3Q17 3Q18 Note
Slide 8: Net Interest Margin
Net Interest Margin 4.50% 4.06% 4.08% 4.04% 3.96% 3.98% 4.00% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.29% 3.20% 3.22% 3.13% 3.16% 3.19% 3.15% 3.09% 3.07% 3.09% 3.00% 2.50% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 Net Interest Margin (Tax Equivalent) Net Interest Margin (E
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ($ in millions) $25,000 $22,331 $22,587 $22,613 $21,508 $22,037 60.0% $20,000 $18,642 55.0% 50.0% 46.2% 46.5% 46.3% $14,584 $15,000 44.8% 42.8% 43.5% 42.8% 43.5% 45.0% 41.8% 41.9% 42.5% 41.6% $9,477 $9,823 $10,000 $9,072 $8,850 40.0% $6,372 35.0% $5,000 30.0% $0 25.0%
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $2,500 30.03% $2,000 30.00% 28.66% 27.40% 24.16% 25.11% 24.24% 21.93% 22.52% $1,500 19.98% 20.00% 16.95% 16.17% 15.06% 14.83% $1,000 10.00% $500 0.00% (1) (1) $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 ROATCE Ta
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.47% 1.46% 1.50% 1.44% 1.44% 1.38% 1.38% 1.36% 1.35% 1.33% 1.26% 1.25% 1.22% 1.22% 1.25% 1.20% 1.00% 0.75% (1) (1) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 11 (1) Interim periods shown on an annualized basis
Slide 12: Deposit Composition
Deposit Composition As of September 30, 2018 ($ in millions) CDs & Other $mm Cost (%)(1) Time 12.5% Non-Interest Bearing Non-Interest Bearing Demand $5,700 0.00% Demand 34.1% Interest Bearing Demand $3,551 0.51% Money Market & Money Market & Savings $5,392 0.67% Savings 32.2% Interest Bearing CDs &
Slide 13: Loan Growth
Loan Growth ($ in millions) $12,000 65.0% $10,293 $10,021 $9,911 $10,000 59.1% $9,622 61.5% 60.0% 58.4% $9,244 $9,439 56.2% 58.6% 55.6% $8,000 $7,775 55.0% 53.4% 52.2% 50.8% $6,000 48.8% 50.0% $5,180 46.5% 46.7% 46.7% 44.5% $4,000 $3,567 $3,377 $3,485 $3,766 45.0% $3,137 $2,177 $2,000 40.0% $0 35.0%
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2018 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Agriculture Home (Inc. Farm) Equity 1-4 Family $706 $274 $2,440 6.8% 2.7% 23.7% Fixed Floating C&I Construction 37.5% 38.7% $1,160 $1,560 ~3.2yr 11.3% 15.2% Avg. Life Consu
Slide 15: Loan Portfolio Segment Detail
Loan Portfolio Segment Detail Commercial Real Estate Detail Energy Detail - Outstanding Balance ($ in millions) ($ in millions) Office Shopping Building Center $366 $610 Multi- 10% 17% Family $173 5% Servicers Producers C&I $241 $3,507mm $365mm $124 $281 66.0% Total 8% Total 34.0% Other Owner $582 O
Slide 16: Houston MSA CRE Portfolio
Houston MSA CRE Portfolio As of September 30, 2018 ($ in millions) Owner Occupied $544 Shopping Center / Retail $302 Shopping Center / Retail Commercial & Industrial $128 24.7% Owner Occupied Office $96 44.3% Commercial & Medical $31 Industrial 10.4% Hotel $38 Office Multi-Family $39 7.8% Other $48
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO 5.00% 4.88% 4.65% 3.95% 4.00% 3.00% 2.82% 2.63% 1.91% 2.00% 1.35% 1.07% 1.04% 0.93% 1.00% 0.79% 0.49% 0.48% 0.45% 0.46% 0.50% 0.46% 0.40% 0.32% 0.40% 0.37% 0.25% 0.29% 0.16% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q17 3Q18 UBPR Peer Group (1) P
Slide 18: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2018 ($ in millions) U.S. Treasury Securities / U.S. Gov. Obligations 0.3% Mortgage-Backed Securities $9,205 Mortgage- States & Political States & Political Subdivisions $257 Backed Subdivisions Securities 2.7% Collateralized Mortgage Obligations $14 9
Slide 19: Dividend History
Dividend History $1.60 (d) $1.38 $1.40 Compounded Annual Growth (c) Rate from 2003 - 2017 was 13.0% $1.24 (b) $1.20 $1.12 (a) $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 2012 2013 2014 2015 2
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2018 1,800 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,561,790 on 9/30/2018 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/1998 11/12/2001 11/12/2004 11/12/2007 11/12/2010 11/12/2013 11/12/2016 PB (+1,461.8%) S&P 5
Slide 21: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) 2018 - 2023 • Today, Texas is the 2nd largest Prosperity Population state in the U.S. with over 28 Prosperity Deposits Growth million residents Metropolitan Statistical Area Presence ($mm) (%) L
Slide 22: Corporate Relocations to Texas
Corporate Relocations to Texas California AccentCare Active Networks The Allen Group, Inc. Allied Electronic Recycling Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. Ameriflight LLC Canada Banker’s Toolbox, Inc. Absolute Software (ABT) Boreland Software Corporation Bio-Solutions Co
Slide 23: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston MSA is the 5th largest in the United States by population with 7.0 million people • Headquarters to 20 Fortune 500 companies, and only New York City is home to more publicly traded companies • Home of the Texas Medical Center –
Slide 24: 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 7.5 million residents • Headquarters to 22 Fortune 500 companies • Dallas has the largest workforce of any MSA in Texas • For the twelve
Slide 25: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Ranked #1 place to live in the U.S. in 2017 by U.S. News and World Report • For the twelve months ended June 2018, Austin added 35,700 jobs, representing a growth rate of 3.4%, making it the third fastest growing job market in the country
Slide 26: 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 David Hollaway Chief Financial Officer 281-269-7199 david.hollawa
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