Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q1 2020 Earnings Presentation
29 slides from Prosperity Bancshares's earnings presentation, 2020
Slide 1: Investor Presentation First Quarter 2020
Investor Presentation First 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 First Quarter Highlights
2020 First Quarter Highlights • Net income of $130.8 million and earnings per share (diluted) of $1.39 for three months ended March 31, 2020 • Assets of $31.7 billion, total loans of $19.1 billion(1), and deposits of $23.8 billion at March 31, 2020 • Common equity tier 1 ratio of 12.27% and leverage
Slide 4: Response to Coronavirus Pandemic
Response to Coronavirus Pandemic Customers & Our Communities Associates & Safety Precautions Providing Access to Paycheck Protection Program Business Continuity and Associate Safety Response Prosperity is an SBA Preferred Lender All banking centers open with lobby access by appointment or walk u
Slide 5: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $31.7 billion in total assets • Ranked #3 in deposit market share in Texas (1) Oklahoma INTERSTATE 44 • Texas and Oklahoma continue to benefit from strong Tulsa INTERSTATE 35 economies, and are home to 54 Fortune 50
Slide 6: Balance Sheet Summary
Balance Sheet Summary ($ in millions) $35,000 Data as of 03/31/2020 $7,000 Total Loans (1) $19.1 Bn Deposits $23.8 Bn $30,000 $6,000 Assets $31.7 Bn $25,000 10 Year CAGR (2) $5,000 Loans 18.8% Deposits 12.8% $20,000 Assets 13.8% $4,000 $15,000 $3,000 $10,000 $2,000 $5,000 $1,000 $0 $0 2009 2010 2011
Slide 7: Net Income
Net Income ($ in millions) (4) $369.2 $400.0 10 Year CAGR: (1)(4) 12.7% $332.6 $346.3(4) $350.0 5 Year CAGR:(2)(4) 4.4% $321.8 $309.6 $311.7 $297.4 $286.6 $300.0 $274.5 $272.2 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $167.9 $185.7 $154.9 $141.7 $130.8 $150.0 $127.7 $111.9 $82.4 $106.7 $100.0
Slide 8: Earnings Per Share
Earnings Per Share (4) $5.50 10 Year EPS CAGR: (1)(4) 7.6% $5.02 (4) $4.52 $4.71 $5.00 5 Year EPS CAGR:(2)(4) 3.0% $4.61 $4.21 $4.32 $4.46 $4.50 $4.09 $3.94 $3.92 $4.00 $3.65 $3.65 $3.60 $3.73 $3.43 $3.50 $3.23 $3.07 $3.01 $2.98 $3.00 $2.73 $2.41 $2.50 $2.00 $1.18 $1.39 $1.50 $1.16 $1.13 $1.00 $0.50
Slide 9: Net Interest Margin
Net Interest Margin 4.50% 4.08% 4.04% 3.98% 4.00% 3.81% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.32% 3.36% 3.29% 3.20% 3.18% 3.20% 3.13% 3.16% 3.19% 3.18% 3.16% 3.12% 3.09% 3.00% 2.50% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 1Q20 Net Interest Margin (Tax Equivalent) Net Intere
Slide 10: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ($ in millions) $35,000 $32,186 $31,743 60.0% $30,000 55.0% $25,000 $22,587 $22,693 $22,037 $22,331 $22,354 $21,508 50.0% 46.3% $20,000 44.8% $18,642 48.3% 43.5% 43.7% 42.9% 45.0% 42.8% 42.5% 42.8% 42.9% 41.6% 41.8% 41.9% $15,000 $14,584 42.6% 40.0% $9,477 $9,823 $10,
Slide 11: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $3,000 30.00% 28.66% $2,250 27.40% 25.11% 24.24% 21.93% 22.52% 19.98% 20.16% 20.00% $1,500 16.95% 16.00% 15.80% 15.24% 15.06% 14.23% 10.00% $750 0.00% $0 (1) (1) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 1Q20 ROATCE Ta
Slide 12: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.67% 1.53% 1.50% 1.47% 1.46% 1.44% 1.42% 1.38% 1.36% 1.38% 1.35% 1.33% 1.26% 1.25% 1.22% 1.25% 1.00% 0.75% (1) (1) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 1Q20 ROAA ROAA (Excluding Merger Charges) 12 (1) Interim periods shown on an annualized
Slide 13: Deposit Composition
Deposit Composition As of March 31, 2020 ($ in millions) CDs & Other $mm Cost (%)(1) Time 14.0% Noninterest- Bearing Noninterest-Bearing Demand $7,461 0.00% Demand Interest-Bearing Demand $4,980 0.57% 31.3% Money Market & Savings $8,058 0.71% Money Market & Savings CDs & Other Time $3,327 1.63% 33.8
Slide 14: Loan Growth
Loan Growth ($ in millions) $20,000 100.0% $18,845 $19,127 $18,000 $1,553 $1,714 92.5% $17,293 $17,413 $16,000 85.0% 80.3% 77.9% $14,000 77.5% $12,000 72.8% 70.0% $10,370 72.6% $10,390 $10,000 $9,439 $9,622 $10,021 62.5% $9,244 55.6% 56.2% $7,775 53.4% 60.1% 60.6% $8,000 52.2% 55.0% 46.5% 46.7% 46.7
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview As of March 31, 2020 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Home Agriculture Equity (Inc. Farm) $516 $635 2.6% 1-4 Family 3.3% $3,993 Warehouse 20.9% Construction Purchase $2,051 Fixed Floating Program 10.7% 35.4% 32.5% $1,714 ~2.5yr 9.
Slide 16: Loan Portfolio Detail
Loan Portfolio Detail As of March 31, 2020 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 28% of commercial real estate is owner occupied Multifamily (MF) $1,412 21% • CRE and construction loans conservatively Office Retail $1,350 21% underwritten to cost of col
Slide 17: Energy Portfolio Detail
Energy Portfolio Detail As of March 31, 2020 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 12.2%, or $87.8 Midstream million (excluding fair value marks) $23 Reserve-based 3% • $372.8 million, or 51.9% of energy loans ar
Slide 18: CECL Implementation and ACL Build
CECL Implementation and ACL Build 0.51% ALLL to 1.88% ACL to Total Loans (1)(2) Total Loans (1)(2) $131.8 $13.1 $327.2 ($14.0) Allowance for Outstanding Increased Credit Losses balances reserve related Historical loss to changes in rates macro-economic conditions Charge-offs and $108.9 recov
Slide 19: Asset Quality
Asset Quality NPAs / Loans + OREO 6.00% 5.36% 4.98% 5.00% 4.72% 4.00% 3.00% 2.74% 2.32% 2.00% 1.55% 1.06% 1.17% 0.96% 0.94% 0.97% 1.00% 0.66% 0.49% 0.50% 0.60% 0.40% 0.48% 0.45% 0.40% 0.46% 0.37% 0.39% 0.32% 0.25% 0.29% 0.35% 0.18% 0.33% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 20: Net Charge-Offs
Asset Quality Net Charge-Offs / Average Loans 2.00% 1.74% 1.66% 1.50% 0.96% 0.98% 1.00% 0.52% 0.50% 0.26% 0.29% 0.41% 0.41% 0.20% 0.17% 0.18% 0.17% 0.16% 0.15% 0.18% 0.23% 0.21% 0.00% 0.14% 0.16% 0.14% 0.10% 0.05% 0.08% (2) (2) ($ in millions) 0.04% 0.02% 0.04% 0.02% Net Charge-Offs 2007 2008 2009 2
Slide 21: Securities Portfolio Detail
Securities Portfolio Detail As of March 31, 2020 ($ in millions) U.S. Government Agency Securities 0.1% Mortgage-Backed Securities $7,629 States & Mortgage- Political Collateralized Mortgage Obligations $454 Backed Subdivisions Securities States & Political Subdivisions $209 2.5% 91.9% U.S. Governme
Slide 22: 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 23: Total Return Performance
Total Return Performance IPO (November 12, 1998) to March 31, 2020 1,800 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,129,204 1,600 on 3/31/2020 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 PB
Slide 24: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2020 - 2025 • Today, Texas is the 2nd largest Prosperity Deposits(2) Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock L
Slide 25: Corporate Relocations to Texas
Corporate Relocations to Texas California 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 26: 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 • Headquarters to 22 Fortune 500 companies in 2019 • For the twelve months ended January 2020, Houston added 63,400 jobs, represe
Slide 27: 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 • Headquarters to 24 Fortune 500 companies in 2019, up from 22 in 2018, with five in the top 100 • Dallas has
Slide 28: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise Franchise • Ranked #1 place to live in the U.S. in 2019 by U.S. News and World Report for the third year in a row INTERSTATE 35 • For the twelve months ended February 2020, Austin added ~36,700 jobs, representing a growth rate of 3.3% • Pro
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 281-269-7222 Fax Cullen Zalman Investor Relations 281-269-7176 cullen.zalman@prosp
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