Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q2 2022 Earnings Presentation
28 slides from Prosperity Bancshares's earnings presentation, Jul 27, 2022
Slide 1: Investor Presentation Second Quarter 2022
Investor Presentation Second Quarter 2022
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: Second Quarter Highlights
Second Quarter Highlights • Net income of $128.5 million and earnings per share (diluted) of $1.40 for three months ended June 30, 2022 • Assets of $37.4 billion, total loans of $18.2 billion, and deposits of $29.9 billion at June 30, 2022 • Common equity tier 1 ratio of 15.26% and leverage ratio of
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $37.4 billion in total assets • Prosperity has been ranked in the Top 10 of Forbes America’s Best Oklahoma INTERSTATE 44 Banks since the list’s inception in 2010, and was ranked #6 in 2022 INTERSTATE 35 Tulsa • Rank
Slide 5: Balance Sheet Summary
Balance Sheet Summary 0,000 Data as of 06/30/2022 ,000 Total Loans $18.2 Bn Deposits $29.9 Bn ,000 ,000 Assets $37.4 Bn 0,000 10 Year CAGR (1) ,000 Loans 17.3% Deposits 14.3% 2 ,000 Assets 14.4% ,000 20,000 ,000 1 ,000 2,000 10,000 1,000 ,000 0 0 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21
Slide 6: Net Income
Net Income 00 0 10 Year CAGR:(1) 13.9% 00 0 5 Year CAGR:(2) 13.6% 00 0 00 0 200 0 100 0 00 (3) 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $
Slide 7: Earnings Per Share
Earnings Per Share 10 Year EPS CAGR:(1) 6.4% 00 5 Year EPS CAGR:(2) 7.3% 00 00 00 2 00 1 00 0 00 (3) 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4
Slide 8: Net Interest Margin
Net Interest Margin 0 00 0 00 2 0 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ’ ,000 100 0 0,000 00 , , ,100 ,0 00 ,000 2,1 00 0,000 00 2 ,000 22, 22,0 22, 1 22, 21, 0 00 20,000 1 , 2 00 1 ,000 1 , 00 , 2 10,000 20 0 ,000 10 0 0 00 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 % of Assets Acquired 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 0 00 , 00 0 00 2, 0 20 00 1, 00 10 00 0 0 00 (2) (1) (1) 0 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 ROATCE Tangible Common Equity (1) Interim periods shown on an annualized basis 10 (2) Includes NOL tax benefit of $20.145 million related to t
Slide 11: Return on Average Assets
Return on Average Assets 2 00 1 1 0 12 1 00 0 (2) (1) (1) 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of June 30, 2022 ($ in millions) Noninterest-Bearing Deposit Growth C s ther Time CAGR: 19.0%(2) 10 10 11 0 10 1 10 0 0 2 oney arket oninterest Savings Bearing emand 9.0% Increase YoY 47.9% Increase Over Past 9 Quarters nterest Bearing emand 21 2 1 20 2 20 20 20 1 21 2 21 21 2
Slide 13: Loan Growth
Loan Growth 22,000 100 0 1 , 00 2 2, 2 1, 2,0 1 , 00 1, 1,1 0 1 ,2 1 , 0 1 ,1 1 ,0 1 1 , 0 1 , 00 1 ,200 0 1 00 0 10 11,000 2 , 00 0 , 00 , 00 00 2,200 2 0 2 0 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP)
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of June 30, 2022 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure PPP oans Agriculture 2 ( nc Farm) 02 PP 1,1 2 Energy 0 C 1 Family ,1 Fixed Floa ng 2 2,1 11 2 0 0 ~2.8yr Avg. Life Comm E Home E uity , 2 1 Construc on 2, 1 ariable ate Consumer
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of June 30, 2022 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • oan portfolio is diversified across the Bank’s market areas and by underlying collateral type e Retail $1,238 25% om Industrial $873 18% n tr a • 33% of commercial real esta
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of June 30, 2022 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 3.9%, or $16.6 Ser e million (excluding fair value marks)(1) ro er • $9.3 million, or 2.2% of energy loans, are subject to $430mm
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.71% ACL to Total 1.67% ACL to Total Loans (1) Loans (1) Allowance for ▪ Net increased reserve Allowance for ▪ Net Charge-offs ▪ Outstanding Credit Losses related to changes in Credit Losses ▪ PCD recoveries balances macro-economic ▪ $1.4 milli
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 2 00 1 00 0 00 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 2 21 2 22 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1)
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 2 00 1 0 1 00 0 0 0 00 (2) ($ in millions) (2) Recoveries Charge-Offs 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 1 (3) 2021 (3) 2 21 2 22 2 Net 1 1 20 1 (3) 2 1 2 1 1 0 12 (3) 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of June 30, 2022 ($ in millions) ther Securi es 01 States $mm Poli cal Subdivisions Mortgage-Backed Securities $14,144 ortgage 0 Collateralized Mortgage Obligations $624 Backed Collaterali ed Securi es States & Political Subdivisions $132 ortgage bliga ons Other Securi
Slide 21: Total Return Performance
Total Return Performance IPO (November 12, 1998) to June 30, 2022 2,000 n e te n ro er ty’ 1,800 on 11/12/98 was worth $1,700,733 on 6/30/22 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 11/12/20 PB (+1,60
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2022 - 2027 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 23: Corporate Relocations to Texas
California Aatonomy Corporate Relocations to Texas 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 Aviat Networks, Inc.
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 7.3 million residents – Population is expected to grow 6.0% from 2022 to 2027 • Houston is the 7th largest metropolitan economy in the U.S. – Headquarters to
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 7.8 million residents – Population is expected to grow 5.9% from 2022 to 2027 • As of May 2022, total nonfarm employment has increa
Slide 26: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Population grew by 33% from 2010 to 2020, the highest of any major MSA in the country INTERSTATE – Ranks first among MSAs for new residents as a percent of total 35 population • Expected population growth of 6.9% through 2027, the second
Slide 27: Dividend History
Dividend History 22 (a) 2 00 om o n e nn a ro t ate from a 1 1 0 12 1 00 0 en H tory 0 0 02 Q1 Q2 Q3 Q4 (Declared) 0 00 200 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 27 (a) 2021 dividend consists of $0.49 per share declared in Q1 2021, 2Q 2021, 3Q 2021 and $0.52 pe
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 Cullen Zalman SVP – Banking & Corporate Activities 281-269-7176 cullen.zalman@pros
Prosperity Bancshares — Q2 2022 Earnings Presentation on 6ix