Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q3 2023 Earnings Presentation
27 slides from Prosperity Bancshares's earnings presentation, Oct 25, 2023
Slide 1: Investor Presentation Third Quarter 2023
Investor Presentation Third Quarter 2023
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, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements
Slide 3: Third Quarter Highlights
Third Quarter Highlights • Net income of $112.2 million, or $113.1 million excluding after-tax merger related provision and expenses • Earnings per share (diluted) of $1.20, or $1.21 excluding after-tax merger related provision and expenses • Assets of $39.3 billion, total loans of $21.4 billion, an
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $39.3 billion in total assets • Prosperity has been ranked in the Top 10 of Forbes America’s Best Oklahoma Banks since the list’s inception in 2010, and was ranked #6 in 2023 INTERST TE 44 Tulsa INTERSTATE 35 • Rank
Slide 5: Balance Sheet Summary
Balance Sheet Summary ($ in millions) Data as of 09/30/2023 $40,000 Loans $21.4 Bn $8,000 Deposits $27.3 Bn Assets $39.3 Bn $35,000 $7,000 10 Year CAGR (1) $30,000 Loans 13.8% $6,000 Deposits 9.4% Assets 10.0% $25,000 $5,000 $20,000 $4,000 $15,000 $3,000 $10,000 $2,000 $5,000 $1,000 $0 $0 2012 2013
Slide 6: Net Income
Net Income (1) $600.0 10 Year Core CAGR: 12.8% 5 Year Core CAGR: (2) 14.9% $528.9 $524.5 $519.3 $518.5 $500.0 $487.8 $452.4 $400.0 $321.8 $332.6 $297.4 $286.6 $311.7 $309.6 $300.0 $274.5 $272.2 $255.5 $250.6 $259.3 $221.4 $236.2 $200.0 $167.9 $185.7 $111.8 $113.1 $154.9 $109.3 $110.8 $86.9 $84.5 $11
Slide 7: Earnings Per Share
Earnings Per Share (1) 10 Year Core EPS CAGR: 6.6% $6.00 $5.68 $5.73 5 Year Core EPS CAGR: (2) 8.7% $5.60 $5.66 $5.26 $5.00 $4.61 $4.86 $4.52 $4.32 $4.46 $4.21 $4.09 $3.94 $3.92 $4.00 $3.65 $3.65 $3.60 $3.73 $3.23 $3.43 $2.98 $3.07 $3.00 $1.21 $1.21 $2.00 $1.18 $1.19 $0.94 $0.91 $1.20 $1.17 $1.00 $0
Slide 8: Net Interest Margin
Net Interest Margin 3.90% 3.80% 3.70% 3.64% 3.58% 3.53% 3.50% 3.38% 3.35% 3.35% 3.32% 3.29% 3.30% 3.30% 3.20% 3.19% 3.18% 3.18% 3.16% 3.14% 3.13% 3.12% 3.09% 3.10% 3.00% 3.02% 2.98% 2.90% 2.73% 2.72% 2.70% 2.68% 2.70% 2.50% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 3Q23 Net Interes
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ($’s in millions) $45,000 100.0% $39,905 $39,296 $40,000 90.0% $37,834 $37,690 $34,059 80.0% $35,000 $32,186 70.0% $30,000 60.0% $25,000 53.2% $22,037 $22,331 $22,587 $22,693 48.7% $21,508 50.0% $20,000 $18,642 48.3% 48.5% 43.5% 48.4% 40.0% 41.8% 41.9% 42.5% 42.8% 43.
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $3,800 30.00% $2,850 24.24% 21.93% 22.52% 19.98% 19.83% 20.00% 16.95% $1,900 17.18% 15.06% 16.00% 15.94% 14.23% 12.68% 12.43% 12.58% 10.00% $950 9.67% 0.00% (1) (1) $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 3Q23 ROA
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.62% 1.50% 1.44% 1.44% 1.42% 1.38% 1.39% 1.35% 1.36% 1.33% 1.25% 1.25% 1.22% 1.14% 1.14% 1.13% 1.00% 0.89% 0.75% (1) (1) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 3Q23 ROAA ROAA (Excluding Merger Charges)(2) (1) Interim periods shown on an annu
Slide 12: Deposit Composition
Deposit Composition As of September 30, 2023 ($ in millions) CDs & Other $mm Cost (%)(1) Time 12.2% Noninterest-Bearing Demand $10,282 0.00% Noninterest- Interest-Bearing Demand $4,797 0.43% Bearing Demand 37.6% Money Market & Savings $8,898 1.96% Money Market & Savings CDs & Other Time $3,335 3.31%
Slide 13: Loan Growth
Loan Growth ($ in millions) $21,654 $21,433 $22,000 100.0% $20,247 $1,149 $912 $19,800 $18,845 $18,616 $18,840 $20,505 $20,520 92.5% $2,842 $741 $17,600 $1,553 $1,776 85.0% $18,099 79.1% $17,293 $17,405 78.5% $16,840 $15,400 77.5% 77.9% 74.9% $13,200 74.0% 75.1% 70.0% 66.0% 60.5% $10,370 71.5% $11,0
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2023 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Comm. R.E. $5,607 26.2% Floating C&I 27.5% Construc�on Energy $3,200 $2,153 $450 14.9% 10.1% Fixed Consumer & 2.1% 41.6% ~4.3yr Other $306 Agriculture Avg. Life (Inc. Farm)
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of September 30, 2023 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • Loan portfolio is diversified across the Bank’s market areas and by underlying collateral type Other Retail $1,410 25% • CRE and construction loans conservatively Com.
Slide 16: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) $381.7 million Total Allowance for Credit Losses and Unfunded Commitments $388.0 million 1.68% ACL to Total 1.71% ACL to Total Loans (1) Loans (1) $10.2 $2.3 $345.2 $351.5 $36.5 ($3.4) ($2.8) Increase in Net increased Allowance for allowance
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO 6.00% 5.36% 4.98% 4.72% 5.00% 4.00% 3.00% 2.74% 2.32% 2.00% 1.55% 1.17% 1.06% 0.96% 0.94% 0.97% 1.00% 0.66% 0.60% 0.70% 0.49% 0.40% 0.48% 0.45% 0.53% 0.44% 0.32% 0.25% 0.29% 0.40% 0.46% 0.50% 0.37% 0.29% 0.29% 0.32% 0.18% 0.33% 0.15% 0.15% 0.00% 2007 2008 2009 2010
Slide 18: Asset Quality
Asset Quality Net Charge-Offs / Average Loans 1.90% 1.74% 1.66% 1.40% 0.96% 0.98% 0.90% 0.52% 0.26% 0.40% 0.29% 0.31% (2) 0.20% 0.17% 0.21% 0.17% 0.16% 0.15% 0.20% 0.16% 0.41% 0.41% 0.03% 0.18% 0.23% 0.14% 0.10% 0.18% 0.16% 0.14% 0.16% -0.10% 0.04% 0.05% 0.08% 0.08% 0.03% (2) 0.03% 0.06% ($ in milli
Slide 19: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2023 ($ in millions) Other Securi�es 0.3% States & $mm Poli�cal Mortgage- Subdivisions Mortgage-Backed Securities $12,439 Backed 0.9% Collateralized Mortgage Obligations $599 Securi�es Collateralized 94.3% States & Political Subdivisions $114 Mortgage
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2023 2,000 $100,000 invested in Prosperity’s IPO 1,800 on 11/12/98 was worth $1,424,462 on 9/30/23 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/
Slide 21: Dividend History
Dividend History $2.50 (a) $2.21 $2.25 Compounded Annual Growth Rate $2.11 from 2003 - 2023 was 11.5% $1.99 $2.00 $1.87 $1.69 $1.75 $1.49 $1.50 $1.38 $1.24 $1.25 $1.12 $0.99 $1.00 $0.89 $0.80 $0.72 $0.75 $0.64 2023 Dividend History $0.57 $0.51 $0.56 $0.46 $0.55 $0.55 $0.55 $0.50 $0.41 $0.31 $0.35 $0
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2023 - 2028 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock with ov
Slide 23: Corporate Relocations to Texas
Corporate Relocations to Texas California Aatonomy AccentCare Active Networks AEND Industries, Inc. Corporate Relocations to Texas (2004 – Present) AECOM The Allen Group, Inc. Allied Electronic Recycling AllyMe Group, Inc. ALL-Q-TELL Corp. Amazing Magnets Ameriflight LLC Canada New York Anything Liq
Slide 24: 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 – Median Household Income is expected to grow 8.7% from 2023 - 2028 • Home to NAS
Slide 25: 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 – Median Household Income is expected to grow 12.1% fr
Slide 26: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • For the 12th consecutive year, the Austin metro area was the fastest growing region in the county, among large metros – Ranks first among MSAs for new residents as a percent of total INTERSTATE 35 population • Expected population growth o
Slide 27: 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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