Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q3 2019 Earnings Presentation
27 slides from Prosperity Bancshares's earnings presentation, 2019
Slide 1: Investor Presentation Third Quarter 2019
Investor Presentation Third Quarter 2019
Slide 2: Important Information
Important Information Cautionary Notes on Forward-Looking Statements This communication contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securit
Slide 3: 2019 Third Quarter Highlights
2019 Third Quarter Highlights • Net income of $81.758 million and earnings per share (diluted) of $1.19 for three months ended September 30, 2019 • Assets of $22.093 billion, loans of $10.673 billion, and deposits of $16.930 billion at September 30, 2019 • Common equity tier 1 ratio was 16.68% and l
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $22.093 billion in total assets • Ranked #3 in deposit market share in Texas (1) • Texas and Oklahoma continue to benefit from strong economies, and are home to 54 Fortune 500 headquartered companies • Shareholder d
Slide 5: Pending Merger with LegacyTexas
Pending Merger with LegacyTexas Partnering to Create a Premier Franchise Pro Forma Branch Footprint with LegacyTexas Pro Forma Deposit Market Share - Texas Market No. of Deposits Share Rank Institution (State) Branches ($ millions) (%) 1 JPMorgan Chase & Co. (NY) 558 $ 191,879 24.2% 2 Bank of Americ
Slide 6: Balance Sheet Summary
Balance Sheet Summary ($ in millions) $25,000 Data as of 09/30/2019 $4,800 Loans $10.673 Bn Deposits $16.930 Bn Assets $22.093 Bn $4,000 $20,000 10 Year CAGR (1) Loans 11.3% Deposits 9.0% $3,200 $15,000 Assets 9.6% $2,400 $10,000 $1,600 $5,000 $800 $0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 7: Net Income
Net Income ($ in millions) $350.0 $321.8 10 Year CAGR:(1) 14.3% $311.7 $297.4 $300.0 5 Year CAGR:(2) 7.8% $286.6 $272.2 $274.5 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $185.7 $167.9 $154.9 $141.7 $150.0 $127.7 $111.9 $81.8 $82.5 $100.0 $84.5 $80.0 $80.9 $50.0 $0.0 (3) 2008 2009 2010 2011 201
Slide 8: Earnings Per Share
Earnings Per Share $5.00 10 Year EPS CAGR:(1) 9.5% $4.61 $4.32 $4.46 5 Year EPS CAGR:(2) 4.8% $4.09 $3.94 $3.92 $4.00 $3.65 $3.65 $3.73 $3.43 $3.60 $3.23 $3.01 $2.98 $3.07 $3.00 $2.73 $2.41 $2.00 $1.86 $1.18 $1.19 $1.15 $1.18 $1.00 $0.00 (3) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q1
Slide 9: Net Interest Margin
Net Interest Margin 4.50% 4.08% 4.04% 3.98% 4.00% 3.96% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.29% 3.20% 3.16% 3.16% 3.19% 3.18% 3.13% 3.12% 3.15% 3.14% 3.09% 3.09% 3.00% 2.50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q18 3Q19 Net Interest Margin (Tax Equivalent) Net Interest Mar
Slide 10: Efficiency Ratio
Efficiency Ratio ($ in millions) $25,000 $22,331 $22,587 $22,693 $22,613 $22,037 $22,093 60.0% $21,508 $20,000 $18,642 55.0% 50.0% 46.5% 46.3% $14,584 $15,000 44.8% 43.5% 43.7% 43.5% 43.7% 42.8% 42.5% 42.8% 45.0% 41.6% 41.8% 41.9% $9,477 $9,823 $10,000 $9,072 $8,850 40.0% 35.0% $5,000 30.0% $0 25.0%
Slide 11: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $2,500 $2,000 30.00% 28.66% 27.40% 24.16% 25.11% 24.24% 21.93% 22.52% $1,500 19.98% 20.00% 16.95% 16.00% 16.17% 15.06% 14.77% $1,000 10.00% $500 0.00% (1) (1) $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q18 3Q19 ROATCE Ta
Slide 12: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.47% 1.46% 1.47% 1.50% 1.44% 1.42% 1.38% 1.36% 1.35% 1.33% 1.26% 1.25% 1.22% 1.25% 1.20% 1.00% 0.75% (1) (1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q18 3Q19 12 (1) Interim periods shown on an annualized basis
Slide 13: Deposit Composition
Deposit Composition As of September 30, 2019 ($ in millions) $mm Cost (%)(1) CDs & Other Noninterest-Bearing Demand $5,784 0.00% Time 12.4% Interest-Bearing Demand $3,564 0.62% Noninterest- Bearing Demand Money Market & Savings $5,485 0.90% 34.2% CDs & Other Time $2,096 1.67% Money Market & Savings
Slide 14: Loan Growth
Loan Growth ($ in millions) $12,000 65.0% 63.0% 61.5% $10,370 $10,021 $10,673 $10,000 $9,439 $9,622 $10,293 60.0% $9,244 60.1% 56.2% 55.6% $8,000 $7,775 55.0% 53.4% 52.2% 50.8% $6,000 48.8% 50.0% $5,180 46.5% 46.7% 46.7% $3,766 44.5% $4,000 $3,567 $3,377 $3,485 45.0% $2,000 40.0% $0 35.0% 2008 2009
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2019 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Home Agriculture Equity (Inc. Farm) $251 1-4 Family $729 2.3% $2,473 6.8% 23.2% Fixed Floating C&I Construction 37.5% 38.2% $1,121 $1,765 ~3.0yr 10.5% 16.5% Avg. Life Comm.
Slide 16: Loan Portfolio Segment Detail
Loan Portfolio Segment Detail As of September 30, 2019 ($ in millions) Commercial Real Estate Detail Energy Detail - Outstanding Balance ($ in millions) Multi-Family ($ in millions) Retail / Shopping Office Building $227 Center $382 6% $537 10% 15% Servicers C&I $257 $279 76% $3,652mm 8% $339mm Prod
Slide 17: Houston MSA CRE Portfolio
Houston MSA CRE Portfolio As of September 30, 2019 ($ in millions) Owner Occupied $538 Shopping Center / Retail $262 Shopping Center / Retail Commercial & Industrial $122 22.1% Owner Office $79 Occupied 45.5% Commercial & Medical $32 Industrial 10.3% Hotel $51 Multi-Family $50 Office 6.7% Other $50
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO 5.00% 4.88% 4.65% 3.95% 4.00% 3.00% 2.82% 2.63% 1.91% 2.00% 1.35% 1.07% 1.04% 0.93% 1.00% 0.79% 0.66% 0.49% 0.48% 0.45% 0.46% 0.50% 0.48% 0.40% 0.32% 0.40% 0.37% 0.25% 0.29% 0.18% 0.16% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q18 3Q19 UBPR
Slide 19: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2019 ($ in millions) U.S. Government Agency Securities 0.2% $mm Mortgage- States & Mortgage-Backed Securities $8,050 Backed Political Subdivisions Collateralized Mortgage Obligations $242 Securities 94.8% 2.2% States & Political Subdivisions $189 Colla
Slide 20: Dividend History
Dividend History $1.60 (d) $1.49 (c) $1.38 $1.40 Compounded Annual Growth (b) Rate from 2003 - 2018 was 12.6% $1.24 (a) $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 2012 2013 2014
Slide 21: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2019 $100,000 invested in Prosperity’s IPO 1,800 on 11/12/98 was worth $1,629,104 on 9/30/2019 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/1
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2020 - 2025 • Today, Texas is the 2nd largest Prosperity Deposits(2) Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock L
Slide 23: Corporate Relocations to Texas
California Corporate Relocations to Texas 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 Banker’s Toolbox, Inc. Absolute Software (ABT) Boreland Softwa
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 approximately 7.2 million residents • Headquarters to 20 Fortune 500 companies in 2019 • For the twelve months ended August 2019, Houston added 81,900 jobs, represen
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 7.6 million residents • PB • LTXB • Headquarters to 24 Fortune 500 companies in 2019, up from 22 in 2018, with five in the top 100
Slide 26: 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 August 2019, Austin added 22,200 jobs, representing a growth rate of 2.1% • Wholes
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 281-269-7222 Fax Cullen Zalman Investor Relations 281-269-7176 cullen.zalman@prosp
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