Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q2 2023 Earnings Presentation
27 slides from Prosperity Bancshares's earnings presentation, Jul 26, 2023
Slide 1: Investor Presentation Second Quarter 2023
Investor Presentation Second 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: Second Quarter Highlights
Second Quarter Highlights • Net income of $86.9 million, or $111.8 million excluding after-tax merger related provision and expenses • Earnings per share (diluted) of $0.94, or $1.21 excluding after-tax merger related provision and expenses • Assets of $39.9 billion, total loans of $21.7 billion, an
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $39.9 billion in total assets • Prosperity has been ranked in the Top 10 of Forbes America’s Best Oklahoma INTERST 44 TE Banks since the list’s inception in 2010, and was ranked #6 in 2023 INTERSTATE 35 Tulsa • Rank
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 06/30/2023 0,000 Total Loans $21.7 Bn ,000 Deposits $27.4 Bn Assets $39.9 Bn 5,000 ,000 (1) 10 Year CAGR 0,000 Loans 13.8% Deposits 9.4% 5,000 Assets 10.0% 25,000 ,000 20,000 ,000 15,000 2,000 10,000 1,000 5,000 0 0 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2
Slide 6: Net Income
Net Income 00.0 10 Year Core CAGR:(1) 12.8% 5 Year Core CAGR:(2) 14.9% 500.0 00.0 00.0 200.0 100.0 0.0 (3) 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4
Slide 7: Earnings Per Share
Earnings Per Share 10 Year Core EPS CAGR:(1) 6.6% .00 5 Year Core EPS CAGR:(2) 8.7% 5.00 .00 .00 2.00 1.00 0.00 (3) 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $
Slide 8: Net Interest Margin
Net Interest Margin .90 . 0 .50 . 0 .10 2.90 2. 0 2.50 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ’ 5,000 100.0 9,905 0,000 90.0 , , 90 , ,059 0.0 5,000 2,1 0.0 0,000 0.0 25,000 5 .2 22,0 22, 1 22,5 22, 9 21,50 50.0 20,000 1 , 2 0.0 15,000 1 ,5 0.0 10,000 20.0 5,000 10.0 0 0.0 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 % of Assets Acquired 23.7% 20
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 0.00 , 00 0.00 2, 50 20.00 1,900 10.00 950 9. 0.00 (1) (1) 0 (2) 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 ROATCE Tangible Common Equity ROATCE (Excluding Merger Charges) (3) (1) Interim periods shown on an annualized basis (2) Includes NOL t
Slide 11: Return on Average Assets
Return on Average Assets 2.00 1. 5 1.50 1.25 1.00 0. 9 0. 5 (2) (1) (1) 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 ROAA ROAA (Excluding Merger Charges)(3) (1) Interim periods shown on an annualized basis (2) Includes NOL tax benefit of $20.145 million related to the CARES Act 11 (3)
Slide 12: Deposit Composition
Deposit Composition As of June 30, 2023 ($ in millions) $mm Cost (%)(1) C s Noninterest-Bearing Demand $10,365 0.00% ther Time Interest-Bearing Demand $4,953 0.30% 10.9 Money Market & Savings $9,084 1.88% oninterest Bearing emand CDs & Other Time $2,979 2.59% oney arket .9 Savings .1 Total Deposits:
Slide 13: Loan Growth
Loan Growth 22,000 100.0 1,1 9 19, 00 20,505 92.5 2, 2 1 1 , 00 1,55 1, 1 ,099 1,1 5.0 1 ,29 1 , 05 9.1 1 , 0 1 ,0 1 15, 00 .5 .9 1 ,200 .0 .0 0.0 0.5 1.0 11,000 2.5 , 00 55.0 , 00 .5 , 00 0.0 2,200 2.5 0 25.0 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 Loans (Excluding Warehouse Purc
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of June 30, 2023 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Comm. R.E. 5, Floa ng C I 2 .2 Energy 29.1 2,2 500 Construc on 10.5 2. Fixed ,215 ~3.1yr Consumer 1 . Agriculture 1. ther (Inc. Farm) Avg. Life 05 0 1. . 1 Family Home Equity ,
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of June 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 t er Retail $1,396 24% • CRE and construction loans conservatively om Industri
Slide 16: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) $312.1 million Total Allowance for Credit Losses and Unfunded Commitments $381.7 million 1.52% ACL to Total 1.68% ACL to Total Loans (1) Loans (1) $0.3 ▪ Net increased Allowance for ▪ Increase in $6.2 allowance for Non- reserve related to Credit
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO .00 5.00 .00 .00 2.00 1.00 0.00 200 200 2009 2010 2011 2012 201 201 2015 201 201 201 2019 2020 2021 2022 2 22 2 2 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 17 Note: NPAs include loans past due 90 days and still a
Slide 18: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 1.90 1. 0 0.90 0. 0 (2) (2) 0.10 ($ in millions) Recoveries Charge-Offs 200 200 2009 2010 2011 2012 201 201 2015 201 201 201 2019 2020 (3) 2021 (3) 2022 2 22 2 2 1.9 29. Net 1 .9 1 .9 20.1 (3) 1 .1 (3) 5. . 5.2 5.1 2.5 . .9 15. 1 .0 . . 1.2 (3) 200 200 2
Slide 19: Securities Portfolio Detail
Securities Portfolio Detail As of June 30, 2023 ($ in millions) ther Securi es 0. States $mm Poli cal Mortgage-Backed Securities $12,880 ortgage Subdivisions Backed 0.9 Collateralized Mortgage Obligations $624 Securi es Collaterali ed States & Political Subdivisions $122 9 .2 ortgage bliga ons Other
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to June 30, 2023 2,000 n e te n Pro er ty’ P 1,800 on 11/12/98 was worth $1,459,935 on 6/30/23 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 11/12/18 11/12/20 11/12/
Slide 21: Dividend History
Dividend History 2.25 (a) 2.00 om o n e nn a ro t ate from a 1. 5 1.50 1.25 1.00 0. 5 en H tory 0.50 0.25 Q1 Q2 Q3 Q4 (Declared) 0.00 200 200 2005 200 200 200 2009 2010 2011 2012 201 201 2015 201 201 201 2019 2020 2021 2022 21 (a) 2022 dividend consists of $0.52 per share declared in Q1 2022, 2Q 202
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2023 - 2028 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock with ov
Slide 23: Corporate Relocations to Texas
Corporate Relocations to Texas California Aatonomy AccentCare Active Networks AEND Industries, Inc. 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 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 • Home to ASA’s Johnson Space Center and Texas edical Center – the world’s larges
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 • As of May 2023, total nonfarm employment has increas
Slide 26: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Population grew by 40% from 2010 to 2022, the highest of any major MSA in the country – Ranks first among MSAs for new residents as a percent of total INTERSTATE 35 population • Expected population growth of 7.8% from 2023 - 2028 • As of
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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