Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Investor Presentation (May 2008)
28 slides from Prosperity Bancshares's investor presentation, May 21, 2008
Slide 1: Prosperity Bancshares, Inc.
—PRO BANCSHARES, INC: ankers... not just a bank: 7 =
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 This presentation may contain forward-looking statements within the meaning of the securities laws that are based on current expectations, assumptions’ estimates and projections about Prosperity Bancshares ®, and its
Slide 3: Prosperity is a Track Record of Success
Prosperity is . . . . a Track Record of Success • A $6.5 billion Texas based Financial Holding Company rd • 3 largest Texas based commercial bank by deposit size • Strong balance sheet growth – 10 year CAGR of 49% loans, 35% deposits, and 38% assets • Strong earnings growth – 10 year CAGR of 11% for
Slide 4: Banking Center Network
Banking Center Network Franchise – $ 5.0 billion in Deposits $ 3.2 billion in Loans 130 Full Service Locations 23 in Central Texas 26 in Dallas/Fort Worth area 2 in East Texas 46 in Houston CMSA 33 in South Texas 4
Slide 5: Balance Sheet Summary
Balance Sheet Summary As Originally Reported $6,600 $1,200 $6,000 Total footings as of 3/31/08 $5,400 $1,000 Loans = $3.2 billion $4,800 Deposits = $5.0 billion Assets = $6.5 billion $800 $4,200 $3,600 $600 $3,000 $2,400 Loans $400 Deposits $1,800 Assets $1,200 Equity $200 $600 $0 $0 5 $ in millions
Slide 6: EPS Growth
EPS Growth Diluted $2.25 Net income 5 and 10 year $2.09 EPS 10 year $2.00 $1.94 CAGR = 9% CAGR = 34% and 38% respectively $1.77 $1.75 $1.59 $1.50 $1.36 $1.22 $1.25 $1.00 $0.75 $0.52 $0.52 $0.50 $0.25 $0.00 2002 2003 2004 2005 2006 2007 1Q 2007 1Q 2008 6
Slide 7: Net Interest Income and Margin (fte)
Net Interest Income and Margin (fte) $60 4.20% 4.09% 4.12% 4.07% $50 4.10% 4.03% $40 3.93% 4.00% $30 3.90% 3.81% 3.82% 3.79% 3.77% $20 3.80% Net Interest Net Interest Margin for 2006 - 3.80% and for 2007 – 4.06% Income $10 3.70% Net Interest Margin $0 3.60% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q
Slide 8: Efficiency Ratio
Efficiency Ratio 55.00% 2 acquisitions $296 million 52.50% 51.82% assets acquired 50.39% 2 acquisitions 50.00% 4 acquisitions 48.99% $1.9 billion $426 million assets assets 49.45% acquired 47.50% acquired 2 acquisitions 45.29% 45.06% 45.45% $846 million 45.00% assets acquired 1 acquisition 5 acquisi
Slide 9: Deposit Composition
Deposit Composition March 31, 2008 1Q08 Cost of Deposits-2.35% CDs & IRAs Non-interest >$100,000 bearing DDA 17.7% 24.3% CDs & IRAs <$100,000 16.6% Interest MMA & Bearing DDA Savings 15.5% 25.9% Amount % of total Non-interest bearing DDA $ 1,202,622 24.3 % Interst Bearing DDA 769,440 15.5 MMA & Savi
Slide 10: Loan Growth
Loan Growth $3,600 70.00% $3,200 65.00% $2,800 60.00% $2,400 55.00% $2,000 50.00% $1,600 45.00% $1,200 40.00% $800 Loans $400 Loan / Deposit 35.00% Ratio $0 30.00% 2002 2003 2004 2005 2006 2007 1Q07 1Q08 Loan/deposit ratio increased from 37% at 12/31/03 to 63% at 12/31/07 $ in millions 10
Slide 11: Loan Portfolio
Loan Portfolio March 31, 2008 Agriculture Loans/Deposits: 63.9% Home Equity Consumer 3.8% 3.0% 3.9% Commercial 1-4 Family R.E. Residential 36.7% 17.3% Commercial Construction 14.3% 21.0% Amount % of total Commercial R.E. $ 1,161,668 36.7 % Commercial 452,635 14.3 Construction 664,679 21.0 1-4 Family
Slide 12: Historical Loan Composition
Historical Loan Composition 12/31/2002 12/31/2003 12/31/2004 12/31/2005 12/31/2006 12/31/2007 CAGR Loan Composition Commercial $ 93.8 13.8% $ 94.0 12.2% $ 144.4 13.9% $ 222.8 14.4% $ 297.7 13.7% $ 453.6 14.5% 37.0% Construction $ 52.4 7.7% $ 36.5 4.7% $ 109.6 10.6% $ 206.7 13.4% $ 433.2 19.9% $ 683.
Slide 13: Asset Quality – NPA/Loans + OREO
Asset Quality – NPA*/Loans + OREO * Includes loans past due 90 days and still accruing 1.20% 1.18% PRSP NPA*/Loans + OREO Peer NPA*/Loans + OREO 1.02% 1.00% 0.97% 1.00% 0.83% 0.83% 0.80% 0.65% 0.60% 0.55% 0.49% 0.38% 0.40% 0.20% 0.17% 0.13% 0.09% 0.13% 0.05% 0.00% 0.00% 2001 2002 2003 2004 2005 2006
Slide 14: Asset Quality - NCO/Average Loans
Asset Quality - NCO/Average Loans 0.60% PRSP NCO / Loans Peer NCO / Loans 0.54% 0.50% 0.40% 0.32% 0.30% 0.30% 0.23% 0.19% 0.20% 0.19% 0.20% 0.15% 0.10% 0.10% 0.08% 0.06% 0.03% 0.05% 0.06% 0.04% 0.02% 0.00% 2001 2002 2003 2004 2005 2006* 2007* 1Q07 1Q08 Texas Peer Group Includes: CFR, EBTX, FFIN, FBT
Slide 15: Total Return Performance
Total Return Performance 800 $100,000 invested in PRSP at 700 IPO on 11/12/1998 was worth $558,000 on 12/31/2007 600 500 400 300 200 100 0 Prosperity Bancshares Inc. (+458.0%) Russell 3000 (+41.0%) NASDAQ Bank Index (+48.4%) 15 Source: FactSet Research Systems
Slide 16: Merger & Acquisition History
Merger & Acquisition History* $40 11/16/05 05/02/02 08/15/02 10/26/04 Southern National Bank 06/21/99 Paradigm Bank Deal Value: $242.7 First National Bank FirstCapital Bank $35 South Texas Bancshares, Inc. Deal Value: $41.6 Deal Value: $5.0 Deal Value: $135.7 Location: Houston Location: Houston Deal
Slide 17: Contact Information
Contact Information Corporate Headquarters Investor Contacts Prosperity Bank Plaza David Zalman 4295 San Felipe Chairman & Chief Executive Officer Houston, Texas 77027 979.543.2200 david.zalman@prosperitybanktx.com 281.269.7199 Telephone Dan Rollins 281.269-7222 Fax President & Chief Operating Offic
Slide 18: 1Q08 Presentation
1Q08 Presentation
Slide 19: Supplemental Data
Supplemental Data 19
Slide 20: Financial Highlights
Financial Highlights As Originally Reported (Dollars in thousands, except EPS) 2003 2004 2005 2006 2007 1Q07 1Q08 Assets $2,400,487 $2,697,228 $3,585,982 $4,586,769 $6,372,343 $6,326,699 $6,464,733 Loans $770,053 $1,035,513 $1,542,125 $2,176,507 $3,142,971 $3,161,627 $3,247,708 Deposits $2,083,748 $
Slide 21: PRSP Acquisitions
PRSP Acquisitions At Announcement Sellers' PRSP Sellers' Assets Deal Date of Accounting Assets Assets Contribution Value Announcement Seller City State Type Consideration Method ($000) ($000) (%) ($000) 2/7/2008 1st Choice Bancorp, Inc. Houston TX Bank Mixed Purchase 6,372,343 313,900 4.69 66.2 05/0
Slide 22: Projected Population Change
Projected Population Change 2005-2010 (%) 12.00% 10.86% 10.58% 10.00% 8.00% 6.26% 6.00% 4.00% 2.00% 0.00% PRSP Pro Forma * Texas Average National Average * Pro Forma includes the acquisition of TXUI Growth Rates are deposits rated by County 22 Source: SNL Financial
Slide 23: The Greater Houston Market
The Greater Houston Market • A metropolitan region of 5.4 million that is projected to grow 15.0% from 2005 to 2010 • Houston is the 4th largest city in the US • Harris County is Texas’ largest deposit market with $85.8 billion in total deposits • Home to 24 FORTUNE 500 companies • Port of Houston c
Slide 24: Fort Bend County
Fort Bend County • Fast-growing county with an attractive customer base – 26.6% historical population growth for 2000 – 2005 Versus 10.8% for Texas and 6.2% for the U.S. – 27.6% projected population growth for 2005 – 2010 Versus 10.6% for Texas and 6.3% for the U.S. • Ranks second in the nation for
Slide 25: The Dallas/Fort Worth Market
The Dallas/Fort Worth Market • Fort Worth is Texas’ third largest deposit market • A metropolitan region of 5.9 million that is projected to grow 13.9% from 2005 to 2010 – Tarrant County will lead the region’s population growth, adding up to 800,000 people by 2030 • New residents and businesses are
Slide 26: Other Significant Markets
Other Significant Markets The Victoria Market The Corpus Christi Market • Known as the South Texas Crossroads, • 8th Largest City in Texas Victoria is located at the intersection of three major US highways: 77, 87 and 59 • 7th Largest Port in the US; Employs (the future I-69) 40,000 Texans and provi
Slide 27: Other Significant Markets
Other Significant Markets The Bryan / College Station Market The Austin / Round Rock Market • Current population of more than 200,000 • A metropolitan region of 1.4 million that that is projected to grow 9.6% from 2005 is projected to grow 16.2% from 2005 to to 2010 2010 • Home to the fourth largest
Slide 28: 1st Quarter Earnings
st 1 Quarter Earnings
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