Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Investor Presentation (July 2008)
22 slides from Prosperity Bancshares's investor presentation, Jul 30, 2008
Slide 1: Prosperity Bancshares, Inc. - Bankers... not just a bank
—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 $6.8 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: 2nd Quarter Highlights
nd 2 Quarter Highlights • Expanding Net Interest Margin - Increased to 4.10% in 2nd Quarter • Non- Performing Assets to Average Earning Assets decreased to 0.22% or $11.6 million • Strong Earnings of $23.437 million or $0.52 per share (diluted) or 1.43% Return on Assets in 2 nd Quarter • Stable Texa
Slide 5: Banking Center Network
Banking Center Network Texas has five of the The Dallas/ Fort nation’s top 20 cities Worth MSA is the in population: nation’s 4th largest Franchise – regional area with 4 Houston 6.1 million residents $ 6.8 billion in Assets 7 San Antonio 9 Dallas $ 5.3 billion in Deposits 16 Austin $ 3.3 billion in
Slide 6: Population Growth
Population Growth Population Change for 2007 Austin Area 65,880 Dallas/ Fort Worth Area 162,250 Change in Population 16.0% Houston 120,544 14.0% Area 12.0% San 10.0% Antonio 53,925 Area 8.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 4.0% 2.0% United States 0.0% Texas Source: Census Bureau 1985 1990 1995 20
Slide 7: Balance Sheet Summary
Balance Sheet Summary As Originally Reported $7,200 $1,400 Total footings as $6,600 of 6/30/08 $1,200 $6,000 Loans = $3.3 bil. $5,400 Deposits = $5.3 bil. $1,000 Assets = $6.8 bil. $4,800 $4,200 $800 $3,600 5 year CAGR $3,000 $600 Loans = 36% Loans Deposits = 26% Assets = 28% $2,400 Deposits $400 $1
Slide 8: EPS Growth
EPS Growth Diluted 5 year CAGR without non-cash impairment would be 11% $2.25 $2.09* $1.94 $1.94 $2.00 $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 2Q 2007 2Q 2008 * EPS without the non-cash after tax impairment charge related to F
Slide 9: 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 2Q07 2Q08 Loan/ deposit ratio increased from 37% at 12/31/03 to 63% at 12/31/07 $ in millions 9
Slide 10: Loan Portfolio
Loan Portfolio June 30, 2008 Agriculture Loans/ Deposits: 62.6% 4.1% Home Equity Consumer 2.9% 3.8% Commercial 1-4 Family R.E. Residential 37.4% 17.2% Commercial Construction 14.7% 19.9% Amount % of total Construction Loan Breakout Approximate $ in million Commercial R.E. $ 1,241,873 37.4 % Commerci
Slide 11: 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% 0.49% 0.38% 0.40% 0.35% 0.35% 0.20% 0.17% 0.13% 0.09% 0.05% 0.00% 0.00% 2001 2002 2003 2004 2005 200
Slide 12: Net Interest Margin
Net Interest Margin * * Tax equivalent- annualized 4.20% 4.10% 4.07% 4.12% 4.03% 4.09% 4.10% 4.00% 3.93% 3.90% 3.93% 3.82% 3.80% 3.82% Net Interest Margin for 2006 - 3.80% and for 2007 -4.06% 3.70% 3.60% 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 12
Slide 13: 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 14: 2nd Quarter Earnings
nd 2 Quarter Earnings
Slide 15: Supplemental Data
Supplemental Data 15
Slide 16: Supplemental Data
Supplemental Data th The Houston MSA is the nation’s 6 largest regional area with 5.6 million residents th The Dallas/ Fort Worth MSA is the nation’s 4 largest regional area with 6.1 million residents Texas has five of the nation’s top 20 cities for population:* Houston #4, San Antonio #7, Dallas #9
Slide 17: Financial Highlights
Financial Highlights As Originally Reported (Dollars in thousands, except EPS) 2003 2004 2005 2006 2007 2Q07 2Q08 Non-Interest Income $16,966 $23,071 $30,021 $33,982 $52,923 $13,845 $13,066 Net Interest Income $64,499 $81,967 $110,897 $138,145 $200,435 $51,344 $53,971 Net Income $26,548 $34,707 $47,
Slide 18: PRSP Acquisitions
PRSP Acquisitions At Announcement Sellers' PRSP Sellers' Assets Date of Accounting Assets Assets Contribution Deal Value Announcement Seller City State Type Consideration Method ($000) ($000) (%) ($000) 1 2/7/2008 1st Choice Bancorp, Inc. Houston TX Bank Mixed Purchase 6,372,343 313,900 4.69 66.2 2
Slide 19: 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% 36.2% Construction $ 52.4 7.7% $ 36.5 4.7% $ 109.6 10.6% $ 206.7 13.4% $ 433.2 19.9% $ 683.
Slide 20: Deposit Composition
Deposit Composition June 30, 2008 2Q08 Cost of Deposits-2.01% CDs & IRAs Non-interest >$100,000 bearing DDA 18.0% 24.3% CDs & IRAs <$100,000 15.9% Interest Bearing DDA MMA & 14.2% Savings 27.6% Amount % of total Non-interest bearing DDA $ 1,285,493 24.3 % Interst Bearing DDA 750,214 14.2 MMA & Savin
Slide 21: 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% 0.06% 0.04% 0.04% 0.02% 0.00% 2001 2002 2003 2004 2005 2006* 2007* 2Q07 2Q08 Texas Peer Group Includes: CFR, EBTX, FFIN, FBT
Slide 22: 2nd Quarter Earnings - KBW
nd 2 Quarter Earnings - KBW
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