Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q3 2021 Earnings Presentation
28 slides from Prosperity Bancshares's earnings presentation, Oct 27, 2021
Slide 1: Investor Presentation Third Quarter 2021
Investor Presentation Third 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: Third Quarter Highlights
Third Quarter Highlights • Net income of $128.6 million and earnings per share (diluted) of $1.39 for three months ended September 30, 2021 • Assets of $36.5 billion, total loans of $19.0 billion, and deposits of $29.5 billion at September 30, 2021 • Common equity tier 1 ratio of 14.84% and leverage
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $36.5 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 09/30/2021 ,000 Total Loans $19.0 Bn ,000 Deposits $29.5 Bn ,000 Assets $36.5 Bn 0,000 10 Year CAGR (1) ,000 Loans 19.2% ,000 Deposits 13.9% Assets 13.6% ,000 0,000 ,000 1 ,000 ,000 10,000 1,000 ,000 0 0 010 011 01 01 01 01 01 01 01 01 0 0 0 1 Assets Deposits T
Slide 6: Net Income
Net Income 00 0 10 Year CAGR:(1) 15.3% 00 0 5 Year CAGR:(2) 13.0% 00 0 00 0 00 0 100 0 00 (3) 010 011 01 01 01 01 01 01 01 01 0 0 0 1 Note: Net income includes the following ($ in thousands) Provision for Credit $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 $10,
Slide 7: Earnings Per Share
Earnings Per Share 00 10 Year EPS CAGR:(1) 7.6% 00 5 Year EPS CAGR:(2) 6.8% 00 00 00 1 00 0 00 (3) 010 011 01 01 01 01 01 01 01 01 0 0 0 1 Note: Net income includes the following ($ in thousands) Provision for Credit $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000
Slide 8: Net Interest Margin
Net Interest Margin 0 00 0 00 0 010 011 01 01 01 01 01 01 01 01 0 0 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 , 1 00 ,0 ,000 ,1 ,1 0 0,000 00 ,000 , 1 , , 1, 0 ,0 1 , 0 0,000 1 , 00 1 ,000 , , 10,000 0 ,000 00 0 (3) 0 010 011 01 01 01 01 01 01 01 01 0 0 0 1 % of Assets Acquired 1.6% 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31.3% 0.0% 0.0% 0.0% Total Assets Excluding A
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 0 00 , 0 ,000 0 00 , 0 0 00 1, 00 10 00 0 0 00 (2) (1) (1) 0 010 011 01 01 01 01 01 01 01 01 0 0 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) 010 011 01 01 01 01 01 01 01 01 0 0 0 1 (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of September 30, 2021 ($ in millions) C s ther Time $mm Cost (%)(1) oninterest Noninterest-Bearing Demand $10,326 0.00% oney arket Bearing Savings emand Interest-Bearing Demand $6,089 0.24% 0 Money Market & Savings $10,159 0.18% CDs & Other Time $2,878 0.47% nterest Bearing em
Slide 13: Loan Growth
Loan Growth ,000 100 0 $20,796 $20,247 0,000 $18,845 , 1 $18,958 , 1 ,000 1, 1, 0 1 ,0 1 , 1 , 0 1 ,000 1 , 0 1 ,000 0 00 1 ,000 10,000 0 ,000 ,000 ,000 00 ,000 0 0 010 011 01 01 01 01 01 01 01 01 0 0 0 1 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Pur
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2021 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure PPP oans Agriculture 1 ( nc Farm) arehouse 1 1, 10 1 Family , 0 Energy Fixed Floa ng C Home E uity 0 ~2.6yr 1, Avg. Life Construc on Comm E Consumer , , 1 ther 1 0 ariable
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of September 30, 2021 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 31% of commercial real estate is owner occupied n tr a Retail $1,322 24% • CRE and construction loans conservatively t er Office $1,012 18% underwritten to cost of coll
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of September 30, 2021 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 4.4%, or $24.8 tream million (excluding fair value marks)(1) e er e ba e • $59.3 million, or 10.4% of energy loans, are subje
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.89% ACL to Total 1.73% ACL to Total Loans (1)(2) Loans (1)(2) Allowance for ▪ Net increased reserve Credit Losses ▪ Net Charge-offs ▪ Outstanding Allowance for related to changes in ▪ $4.6 million related ▪ PCD recoveries balances macro-econom
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 00 1 00 0 00 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0 0 1 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performa
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 00 1 0 1 00 0 0 (2) (2) 0 00 ($ in millions) Recoveries Charge-Offs 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0(3) 0 1 Net 01 1 (3) 1 1 1 1 0 10 (3) 1 1 00 00 00 010 011 01 01 01 01 01 01 01 01 0 0 0 1 (3) Net PCD (3) (3) 1 1 00 00 00 010 011 01 01 01 0
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2021 ($ in millions) States Poli cal Subdivisions 10 $mm ortgage Mortgage-Backed Securities $11,901 Collaterali ed Backed ortgage Collateralized Mortgage Obligations $596 Securi es bliga ons States & Political Subdivisions $130 Total Securities: $12.6B
Slide 21: Dividend History
Dividend History (d) 00 (c) 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 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 4Q 2018 (b
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2021 2,000 n e te n ro er t ’ on 11/12/98 was worth $1,739,034 1,800 on 9/30/21 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 11/12/20 PB (
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2021 - 2026 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 24: Corporate Relocations to Texas
California Corporate Relocations to Texas Aatonomy AccentCare Active Networks AEND Industries, Inc. AECOM The Allen Group, Inc. Allied Electronic Recycling AllyMe Group, Inc. Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. Amazing Magnets Canada Ameriflight LLC Absolute Software (AB
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 over 7.2 million residents – Population is expected to grow 7.6% from 2021 to 2026 • Houston is ranked 1st in average wage after adjusting for cost-of-living • Headq
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 7.7 million residents – Population is expected to grow 7.5% from 2021 to 2026 • As of August 2021, total nonfarm employment has inc
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 8.5% through 2026, the highest of any INTERSTATE 35 MSA in the country • Ranked as the best city in the U.S. for technolog
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 281-269-7222 Fax Cullen Zalman SVP – Banking & Corporate Activities 281-269-7176 c
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