Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q4 2019 Earnings Presentation
25 slides from Prosperity Bancshares's earnings presentation, January 2020
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019
Slide 2: "Safe Harbor" Statement
“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 Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
Slide 3: 2019 Fourth Quarter Highlights
2019 Fourth Quarter Highlights • Net income of $86.1 million and earnings per share (diluted) of $1.01 for three months ended December 31, 2019 • Excluding after-tax merger related charges of $36.7 million or $0.43 (diluted) per share, net income of $122.8 million and earnings per share (diluted) of
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $32.2 billion in total assets • Ranked #3 in deposit market share in Texas (1) Oklahoma INTERSTATE 44 • Texas and Oklahoma continue to benefit from strong Tulsa INTERSTATE 35 economies, and are home to 54 Fortune 50
Slide 5: Balance Sheet Summary
Balance Sheet Summary ($ in millions) $35,000 Data as of 12/31/2019 $7,000 Total Loans (1) $18.8 Bn Deposits $24.2 Bn $30,000 Assets $32.2 Bn $6,000 10 Year CAGR (2) $25,000 $5,000 Loans 18.8% Deposits 12.8% Assets 13.8% $20,000 $4,000 $15,000 $3,000 $10,000 $2,000 $5,000 $1,000 $0 $0 (1) 2009 2010
Slide 6: Net Income
Net Income ($ in millions) (4) $369.2 $400.0 10 Year CAGR: (1)(4) 12.7% $332.6 $346.3(4) 5 Year CAGR:(2)(4) 4.4% $309.6 $350.0 $321.8 $311.7 $297.4 $286.6 $300.0 $274.5 $272.2 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $167.9 $185.7 $154.9 $122.8 (4) $141.7 (4) $150.0 $127.7 $86.1 $102.9 $111.
Slide 7: Earnings Per Share
Earnings Per Share (4) $5.50 $5.02 10 Year EPS CAGR:(1)(4) 7.6% $4.52 $4.71 (4) $5.00 5 Year EPS CAGR:(2)(4) 3.0% $4.61 $4.21 $4.32 $4.46 $4.50 $4.09 $3.94 $3.92 $4.00 $3.65 $3.65 $3.60 $3.73 $3.43 $3.50 $3.23 $3.07 $3.01 $2.98 $3.00 $2.73 $2.41 $2.50 (4) $2.00 $1.44 (4) $1.19 $1.01 $1.20 $1.50 $1.1
Slide 8: Net Interest Margin
Net Interest Margin 4.50% 4.08% 4.04% 3.98% 4.00% 3.80% 3.66% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.29% 3.32% 3.26% 3.20% 3.13% 3.16% 3.19% 3.18% 3.18% 3.15% 3.12% 3.09% 3.10% 3.00% 2.50% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4Q18 4Q19 Net Interest Margin (Tax Equivalent) Net Intere
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ($ in millions) $35,000 $32,186 60.0% $30,000 55.0% $25,000 $22,587 $22,693 $22,037 $22,331 $21,508 50.0% 46.3% $20,000 44.8% $18,642 48.3% 43.5% 43.7% 45.0% 42.8% 42.5% 42.8% 41.6% 41.8% 41.9% $15,000 $14,584 42.6% 40.0% $9,477 $9,823 $10,000 $8,850 35.0% $5,000 30.0
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $3,000 30.00% 28.66% $2,250 27.40% 25.11% 24.24% 21.93% 22.52% 19.98% 20.00% 17.82% $1,500 16.95% 16.00% 15.80% 15.84% 15.06% 14.23% 10.00% 12.50% $750 0.00% (1) (1) $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4Q18 4Q19 RO
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.69% 1.53% 1.50% 1.47% 1.47% 1.44% 1.42% 1.38% 1.36% 1.38% 1.35% 1.33% 1.26% 1.25% 1.22% 1.19% 1.25% 1.00% 0.75% (1) (1) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4Q18 4Q19 ROAA ROAA (Excluding Merger Charges) 11 (1) Interim periods shown on an annu
Slide 12: Deposit Composition
Deposit Composition As of December 31, 2019 ($ in millions) CDs & Other $mm Cost (%)(1) Time Noninterest- Noninterest-Bearing Demand $7,764 0.00% 14.4% Bearing Interest-Bearing Demand $5,101 0.54% Demand 32.1% Money Market & Savings $7,855 0.79% Money Market CDs & Other Time $3,480 1.67% & Savings 3
Slide 13: Loan Growth
Loan Growth ($ in millions) $20,000 100.0% $18,845 $18,000 $1,553 92.5% $17,293 $16,000 85.0% 77.9% $14,000 77.5% $12,000 70.0% $10,370 71.5% $9,622 $10,021 $10,000 $9,244 $9,439 62.5% 55.6% 56.2% $7,775 52.2% 53.4% 60.1% $8,000 55.0% 46.5% 46.7% 46.7% $6,000 $5,180 50.8% 47.5% $3,485 $3,766 44.5% $
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of December 31, 2019 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Warehouse Agriculture Purchase (Inc. Farm) Program $681 $1,553 1-4 Family 3.6% 8.2% $3,880 Home 20.6% Construction Equity $2,064 Fixed Floating $507 11.0% 37.5% 34.3% 2.6% ~
Slide 15: Loan Portfolio Segment Detail
Loan Portfolio Segment Detail As of December 31, 2019 ($ in millions) Commercial Real Estate Detail Energy Detail - Outstanding Balance ($ in millions) Multi-Family ($ in millions) $1,380 21% Retail / Shopping Center Producers Office Building $998 15% $401 $1,058 57% 16% $6,556mm C&I $698mm Total $4
Slide 16: Asset Quality
Asset Quality NPAs / Loans + OREO 5.00% 4.88% 4.65% 3.95% 4.00% 3.00% 2.82% 2.63% 1.91% 2.00% 1.35% 1.07% 1.04% 0.93% 1.00% 0.79% 0.66% 0.49% 0.48% 0.45% 0.46% 0.50% 0.40% 0.32% 0.40% 0.37% 0.33% 0.25% 0.29% 0.18% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 UBPR Peer Group
Slide 17: Securities Portfolio Detail
Securities Portfolio Detail As of December 31, 2019 ($ in millions) U.S. Government Agency Securities 0.2% $mm Mortgage- Mortgage-Backed Securities $7,878 States & Backed Securities Political Collateralized Mortgage Obligations $439 Subdivisions 91.9% 2.8% States & Political Subdivisions $239 U.S. G
Slide 18: Dividend History
Dividend History $1.80 $1.69 (d) (c) $1.60 Compounded Annual Growth $1.49 Rate from 2003 - 2019 was 12.7% $1.38 (b) $1.40 (a) $1.24 $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 201
Slide 19: Total Return Performance
Total Return Performance IPO (November 12, 1998) to December 31, 2019 $100,000 invested in Prosperity’s IPO 1,800 on 11/12/98 was worth $1,668,894 on 12/31/2019 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/1
Slide 20: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2020 - 2025 • Today, Texas is the 2nd largest Prosperity Deposits(2) Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock L
Slide 21: Corporate Relocations to Texas
Corporate Relocations to Texas California 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) Aviat Networks, Inc. Bio-Solutions Cor
Slide 22: 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 22 Fortune 500 companies in 2019 • For the twelve months ended October 2019, Houston added 80,400 jobs, represe
Slide 23: 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 7.7 million residents • Headquarters to 24 Fortune 500 companies in 2019, up from 22 in 2018, with five in the top 100 • Dallas has
Slide 24: 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 November 2019, Austin added 39,607 jobs, representing a growth rate of 3.7% • Info
Slide 25: 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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