Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q3 2022 Earnings Presentation
29 slides from Prosperity Bancshares's earnings presentation, Oct 26, 2022
Slide 1: Investor Presentation Third Quarter 2022
Investor Presentation Third 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 release contains, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements with
Slide 3: Important Information
Important Information Additional Information about the First Bancshares Merger and Where to Find It In connection with the proposed merger of First Bancshares into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to
Slide 4: Third Quarter Highlights
Third Quarter Highlights • Net income of $135.8 million and earnings per share (diluted) of $1.49 for three months ended September 30, 2022 • Assets of $37.8 billion, total loans of $18.5 billion, and deposits of $29.3 billion at September 30, 2022 • Common equity tier 1 ratio of 15.44% and leverage
Slide 5: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $37.8 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 6: Balance Sheet Summary
Balance Sheet Summary Data as of 09/30/2022 0,000 ,000 Total Loans $18.5 Bn Deposits $29.3 Bn ,000 Assets $37.8 Bn ,000 10 Year CAGR (1) 0,000 Loans 17.3% ,000 Deposits 14.3% 2 ,000 Assets 14.4% ,000 20,000 ,000 1 ,000 2,000 10,000 1,000 ,000 0 0 2011 2012 201 201 201 201 201 201 201 2020 2021 21 22
Slide 7: Net Income
Net Income 00 0 10 Year CAGR:(1) 13.9% 00 0 5 Year CAGR:(2) 13.6% 00 0 00 0 200 0 100 0 00 (3) 2011 2012 201 201 201 201 201 201 201 2020 2021 21 22 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,0
Slide 8: Earnings Per Share
Earnings Per Share 10 Year EPS CAGR:(1) 6.4% 00 5 Year EPS CAGR:(2) 7.3% 00 00 00 2 00 1 00 0 00 (3) 2011 2012 201 201 201 201 201 201 201 2020 2021 21 22 Note: Net income includes the following ($ in thousands) Provision for Credit $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300
Slide 9: Net Interest Margin
Net Interest Margin 0 00 0 00 2 0 2011 2012 201 201 201 201 201 201 201 2020 2021 21 22 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 9 Source: Company Documents
Slide 10: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ’ ,000 100 0 0,000 00 , , , 12 ,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 21 22 % of Assets Acquired 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0
Slide 11: 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 21 22 ROATCE Tangible Common Equity (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the C
Slide 12: 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 21 22 (1) Interim periods shown on an annualized basis 12 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 13: Deposit Composition
Deposit Composition As of September 30, 2022 ($ in millions) Noninterest-Bearing Deposit Growth C s ther CAGR: 17.4%(2) 11 0 11 2 Time 10 10 2 10 1 10 oney arket 0 0 2 Savings oninterest 1 Bearing emand 1 8.0% Increase YoY nterest Bearing 49.5% Increase Over Past 10 Quarters emand 20 1 20 2 20 20 20
Slide 14: Loan Growth
Loan Growth 22,000 100 0 1 , 00 2 2, 2 1, 1, 1, 2 1 , 00 0 1 ,2 1 , 0 1 , 1 , 0 1 , 0 1 , 00 1 ,200 0 2 00 0 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 21 22 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Pu
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview As of September 30, 2022 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Comm E , Energy 2 10 Floa ng C 22 10 Construc on 2,1 Fixed Consumer 2, 0 11 20 ~3.0yr Agriculture ther 1 ( nc Farm) Avg. Life 2 1 1 1 Family Home E uity PPP oans , ariable
Slide 16: Loan Portfolio Detail
Loan Portfolio Detail As of September 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 t er Retail $1,321 27% om Industrial $935 19% n tr a • 34% of commercial r
Slide 17: Energy Portfolio Detail
Energy Portfolio Detail As of September 30, 2022 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 3.7%, or $15.4 Ser e million (excluding fair value marks)(1) ro er • $8.4 million, or 2.0% of energy loans, are subject to $4
Slide 18: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.67% ACL to Total 1.61% ACL to Total Loans (1) Loans (1) Allowance for ▪ Net Charge-offs ▪ PCD recoveries ▪ Outstanding ▪ Net increased reserve Allowance for Credit Losses balances related to changes in Credit Losses ▪ $16 thousand released rel
Slide 19: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 2 00 1 00 0 00 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 21 22 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 19 Note: NPAs include loans past due 90 days and still accruing (1) UBPR
Slide 20: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 2 00 1 0 1 00 0 0 (2) 0 00 ($ in millions) (2) Recoveries Charge-Offs 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 1 (3) 2021 (3) 21 22 2 Net 1 1 20 1 1 (3) 2 1 2 1 1 0 1 (3) 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
Slide 21: Securities Portfolio Detail
Securities Portfolio Detail As of September 30, 2022 ($ in millions) ther Securi es 01 States $mm Poli cal Mortgage-Backed Securities $14,032 ortgage Subdivisions Backed 0 Collateralized Mortgage Obligations $639 Securi es Collaterali ed States & Political Subdivisions $124 ortgage Other Securities
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to September 30, 2022 2,000 n e te n ro er ty’ 1,800 on 11/12/98 was worth $1,673,423 on 9/30/22 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18 11/12/20 PB (
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2022 - 2027 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 24: 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 25: 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 26: 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 August 2022, total nonfarm employment has inc
Slide 27: 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 28: 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 2022 28 (a) 2021 dividend consists of $0.49 per share declared in Q1 2021, 2Q 2021, 3Q 2021 and $0.
Slide 29: 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
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