Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q1 2019 Earnings Presentation
26 slides from Prosperity Bancshares's earnings presentation, 2019
Slide 1: Investor Presentation First Quarter 2019
Investor Presentation First Quarter 2019
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995 Statements contained in this presentation which are not historical facts and which pertain to future operating results of Prosperity Bancshares, Inc.® and its subsidiaries constitute “forward-looking statements” withi
Slide 3: 2019 First Quarter Highlights
2019 First Quarter Highlights • Net income of $82.402 million and earnings per share (diluted) of $1.18 for three months ended March 31, 2019 • Assets of $22.354 billion, loans of $10.414 billion, and deposits of $17.198 billion at March 31, 2019 • Common equity tier 1 ratio was 16.76% and leverage
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $22.354 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 53 Fortune 500 headquartered companies • Shareholder d
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 03/31/2019 Loans $10.414 Bn Deposits $17.198 Bn Assets $22.354 Bn 10 Year CAGR (1) Loans 11.3% Deposits 9.0% Assets 9.6% Assets Deposits Loans Equity Source: Company Documents 5 (1) Represents the Compound Annual Growth Rate from 12/31/2008 – 12/31/2018
Slide 6: Net Income
Net Income ($ in millions) $350.0 10 Year CAGR:(1) 14.3% $321.8 $311.7 $297.4 $300.0 5 Year CAGR:(2) 7.8% $286.6 $274.5 $272.2 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $185.7 $167.9 $141.7 $154.9 $150.0 $127.7 $111.9 $82.4 $100.0 $84.5 $74.4 $72.8 $81.2 $50.0 $0.0 (3) 2008 2009 2010 2011 201
Slide 7: Earnings Per Share
Earnings Per Share 10 Year EPS CAGR:(1) 9.5% 5 Year EPS CAGR:(2) 4.8% (3) Note: Net income includes the following ($ in thousands) Provision for Credit $9,867 $28,775 $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $9,000 $700 Losses Loan Discount - - - - $26,413 $62,723 $95,875
Slide 8: Net Interest Margin
Net Interest Margin 4.50% 4.08% 4.04% 3.98% 4.00% 3.96% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.29% 3.20% 3.20% 3.13% 3.16% 3.19% 3.18% 3.16% 3.16% 3.12% 3.12% 3.09% 3.00% 2.50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q18 1Q19 Net Interest Margin (Tax Equivalent) Net Interest Mar
Slide 9: Efficiency Ratio
Efficiency Ratio ($ in millions) $25,000 $22,331 $22,587 $22,693 $22,472 $22,354 $21,508 $22,037 60.0% $20,000 $18,642 55.0% 50.0% 46.5% 46.3% $14,584 $15,000 44.8% 43.7% 44.2% 42.8% 43.5% 42.8% 42.9% 45.0% 41.8% 41.9% 42.5% 41.6% $9,477 $9,823 $10,000 $9,072 $8,850 40.0% 35.0% $5,000 30.0% $0 25.0%
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ 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% 15.43% 15.24% 15.06% $1,000 10.00% $500 0.00% (1) (1) $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q18 1Q19 ROATCE Ta
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.47% 1.46% 1.50% 1.44% 1.42% 1.38% 1.36% 1.35% 1.33% 1.32% 1.26% 1.25% 1.20% 1.22% 1.25% 1.00% 0.75% (1) (1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q18 1Q19 11 (1) Interim periods shown on an annualized basis
Slide 12: Deposit Composition
Deposit Composition As of March 31, 2019 ($ in millions) $mm Cost (%)(1) CDs & Other Noninterest-Bearing Demand $5,674 0.00% Time 12.0% Noninterest- Interest-Bearing Demand $3,875 0.67% Bearing Money Market & Savings $5,596 0.83% Demand 33.0% CDs & Other Time $2,053 1.40% Money Market & Savings 32.5
Slide 13: Loan Growth
Loan Growth ($ in millions) $12,000 65.0% $10,370 $10,414 $10,021 $10,011 $10,000 $9,439 $9,622 60.0% $9,244 60.1% 60.6% 56.2% 55.6% 57.8% $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% $0 35.0% 2008 2009
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of March 31, 2019 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Home Agriculture Equity (Inc. Farm) $262 1-4 Family $708 2.5% $2,444 6.8% 23.5% Fixed Floating C&I Construction 38.2% 37.8% $1,118 $1,709 ~3.1yr 10.7% 16.4% Avg. Life Comm. R.E
Slide 15: Loan Portfolio Segment Detail
Loan Portfolio Segment Detail Commercial Real Estate Detail Energy Detail - Outstanding Balance ($ in millions) ($ in millions) Shopping Office Center / Retail Building $561 $370 Multi- 16% 11% Family $141 4% Servicers C&I $265 Producers $287 70% $381mm $3,497mm $116 8% Total Total 30% Other Owner $
Slide 16: Houston MSA CRE Portfolio
Houston MSA CRE Portfolio As of March 31, 2019 ($ in millions) Owner Occupied $544 Shopping Center / Retail Shopping Center / Retail $264 22.3% Owner Commercial & Industrial $129 Occupied 46.0% Office $99 Commercial & Industrial Medical $30 10.9% Hotel $51 Office Multi-Family $23 8.4% Other $44 Othe
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO 5.00% 4.88% 4.65% 3.95% 4.00% 3.00% 2.82% 2.63% 1.91% 2.00% 1.35% 1.07% 1.04% 0.93% 1.00% 0.79% 0.66% 0.49% 0.48% 0.45% 0.46% 0.50% 0.40% 0.32% 0.40% 0.37% 0.33% 0.39% 0.25% 0.29% 0.18% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q18 1Q19 UBPR
Slide 18: Securities Portfolio Detail
Securities Portfolio Detail As of March 31, 2019 ($ in millions) U.S. Treasury Securities / U.S. Gov. Obligations 0.3% Mortgage-Backed Securities $8,875 Mortgage- States & Political States & Political Subdivisions $227 Backed Subdivisions Securities 2.5% U.S. Treasury Securities / U.S. Gov. Obligati
Slide 19: 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 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to March 31, 2019 $100,000 invested in Prosperity’s IPO 1,800 on 11/12/98 was worth $1,574,096 on 3/31/2019 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 11/12/18 PB
Slide 21: 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 2019 - 2024 • Today, Texas is the 2nd largest state in the U.S., and largest in Prosperity Deposits Population the 48 contiguous U.S. with over Metropolitan Statistical Area Presence
Slide 22: 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. Canada Ameriflight LLC Absolute Software (ABT) Banker’s Toolbox, Inc. Bio-Solutions C
Slide 23: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston MSA is the 5th largest in the United States by population with 7.0 million people • Headquarters to 21 Fortune 500 companies in 2018 • For the twelve months ended March 2019, Houston added 68,500 jobs, representing a growth rate
Slide 24: 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 7.6 million residents • Headquarters to 22 Fortune 500 companies in 2018 • Dallas has the largest workforce of any MSA in Texas • Fo
Slide 25: Austin Market Highlights
Austin Market Highlights Market Highlights Austin 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 • For the twelve months ended March 2019, Austin added 22,700 jobs, representing a growth rate of 2.1% • Wholesale trade was Austin’s fa
Slide 26: 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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