Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q2 2017 Earnings Presentation
26 slides from Prosperity Bancshares's earnings presentation, 2017
Slide 1: 2nd Quarter 2017
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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: 2Q17 Highlights
2Q17 Highlights • Net income of $68.554 million and earnings per share (diluted) of $0.99 for three months ending June 30, 2017 • Assets of $22.297 billion, loans of $9.864 billion, and deposits of $17.071 billion at June 30, 2017 • Common equity tier 1 ratio was 14.80% and leverage ratio was 8.82%
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with approximately $22.297 billion in total assets • Ranked #2 in deposit market share in Texas (1) • Shareholder driven with 4.9% fully diluted insider ownership • Successful integration of 42 acquisitions (whole bank,
Slide 5: Balance Sheet Summary
Balance Sheet Summary $4,000 $22,500 Totals as of 06/30/2017 Loans $21,000 Loans = $9.864 Billion Deposits $3,500 $19,500 Deposits = $17.071 Billion Assets $18,000 Assets = $22.297 Billion Equity $3,000 $16,500 10 year CAGR $15,000 Loans = 16.0% $2,500 $13,500 Deposits = 16.6% Assets = 17.1% $12,000
Slide 6: Net Income
Net Income $350 Net Income (*) Net Income (excluding Purchase Accounting Adjustments) $297.4 $300 $286.6 $274.5 10 Year CAGR 16.1% $250 5 Year CAGR 14.1% $221.4 $200 $167.9 $150 $141.7 $127.7 $111.9 $100 $84.2 $84.5 $68.1 $68.6 $62.4 $66.0 $50 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q1
Slide 7: EPS Growth
EPS Growth Diluted $5.00 EPS (*) $4.32 EPS (excluding Purchase Accounting Adjustments) $4.09 $3.94 $4.00 10 Year CAGR 7.3% $3.65 5 Year CAGR 5.5% $3.23 $3.01 $3.00 $2.73 $2.41 $1.94 $1.86 $2.00 $0.98 $0.99 $0.90 $0.95 $1.00 $0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q16 2Q17 * EPS amou
Slide 8: Net Interest Margin
Net Interest Margin 4.50% Net Interest Margin (Tax Equivalent) Net Interest Margin (excluding Purchase Accounting Adjustments) 4.06% 4.08% 4.04% 3.96% 3.98% 4.00% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.37% 3.29% 3.20% 3.19% 3.13% 3.16% 3.14% 3.06% 3.00% 2.50% 2007 2008 2009 2010 2011 2012 2013
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio* $25,000 Total Assets Acquired (at Acquisition Closing) $22,331 $22,297 $22,037 Total Assets without Acquisitions $21,508 Efficiency Ratio $20,000 $18,642 $14,584 $15,000 46.19% 46.51% 46.27% 44.83% 42.76% 43.48% 41.60% 41.81% 41.87% 42.50% 42.34% $10,000 $9,072 $8,85
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity 40.00% 35.00% 30.03% 30.00% 28.66% 27.40% 25.11% 24.24% 25.00% 22.52% 24.16% 20.00% 21.93% 19.98% 17.15% 15.39% 15.00% 16.95% 10.00% 5.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q16 2Q17 Interim periods annualized. 10
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.47% 1.50% 1.44% 1.38% 1.38% 1.36% 1.35% 1.33% 1.26% 1.25% 1.24% 1.20% 1.22% 1.25% 1.00% 0.75% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2Q16 2Q17 Interim periods annualized. 11
Slide 12: Loan Growth
Loan Growth $12,000 70.0% Loans Loans/Deposits Ratio 65.0% $9,650 $9,864 $10,000 $9,439 $9,622 $9,244 59.1% 57.8% 60.0% $7,775 55.6% 56.0% $8,000 53.4% 55.0% 52.2% 50.8% $6,000 50.0% 48.8% 46.5% 46.7% 46.7% $5,180 45.0% $4,000 $3,567 $3,766 $3,377 $3,485 44.5% $3,093 40.0% $2,000 35.0% $0 30.0% 2007
Slide 13: Loan Portfolio
Loan Portfolio June 30, 2017 Consumer Loans By Area Loans/Deposits: 57.8% 2.7% Approximate $ in millions Energy Bryan/College Station: $616 Commercial Agriculture 2.9% 12.2% 7.1% Central Oklahoma: $491 Construction Central Texas: $1,334 14.0% Dallas/Ft. Worth: $1,052 Commercial R.E. East Texas: $373
Slide 14: Energy Portfolio
Energy Portfolio As of June 30, 2017 Outstanding Balance Portfolio Commentary Total outstanding balance of $287.8 million, or 2.9% of total loans Producers Total unfunded commitments of $175.0 million $115.3 Servicers 40% $172.5 Total energy reserves of 2.94% or $8.5 million 60% $13.8 millio
Slide 15: Houston MSA CRE Portfolio
Houston MSA CRE Portfolio As of June 30, 2017 TOTAL: $1.1 Billion Shopping Center/Retail 19.8% Owner Occupied Shopping Center/Retail - $218.0 44.2% Commercial & Industrial - $114.7 Commercial & Industrial Office - $77.3 10.4% Medical - $55.2 Multi-Family - $25.0 Hotel - $46.6 Office Other - $76.4 7.
Slide 16: Asset Quality
Asset Quality NPA*/Loans + OREO 5.00% 4.88% 4.65% Prosperity Bank 4.50% UBPR - Peer Group 4.00% 3.95% 3.50% 3.00% 2.82% 2.63% 2.50% 2.00% 1.91% 1.50% 1.35% 1.04% 0.93% 1.00% 1.07% 0.85% 1.00% 0.49% 0.48% 0.45% 0.46% 0.50% 0.54% 0.48% 0.40% 0.32% 0.40% 0.50% 0.25% 0.29% 0.00% 2007 2008 2009 2010 2011
Slide 17: Deposit Composition
Deposit Composition June 30, 2017 Cost of Deposits: 0.27% Certificates & Other Time Deposits 13.4% DDA - Non- Interest Bearing Amount 31.6% DDA - Non-Interest Bearing $5,397 DDA - Interest Bearing 3,703 Money Market & Savings 5,692 Money Market & Certificates & Other Savings Time Deposits 2,278 33.3
Slide 18: Dividend History
Dividend History (c) $1.30 $1.24 (b) Dividend Payment $1.12 $1.10 (a) $0.99 $0.89 $0.90 $0.80 $0.72 $0.70 $0.64 $0.57 $0.51 $0.50 $0.46 $0.41 Compounded Annual Growth $0.35 Rate from 2003-2016 was 13.11% $0.31 $0.30 $0.25 $0.10 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -$
Slide 19: Total Return Performance
Total Return Performance IPO (November 12, 1998) to June 30, 2017 1,800 $100,000 invested in Prosperity’s 1,600 IPO on 11/12/98 was worth $1,410,380 on 06/30/17 1,400 1,200 1,000 800 600 400 200 0 11/12/1998 11/12/2001 11/12/2004 11/12/2007 11/12/2010 11/12/2013 06/30/2017 11/12/2016 PB (+1,310.4%)
Slide 20: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2017 - 2022 • Texas is the second largest state in Prosperity Deposits Population the U.S. with nearly 28 million # MSA Presence ($mm) Growth Lubbock Lubbock Lubbock Lubbock Fort Wort
Slide 21: Corporate Relocations to Texas
Corporate Relocations to Texas California AccentCare Active Networks 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 Corp (BISU) Boreland Software Co
Slide 22: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston is the 5th most populous metropolitan area in the nation • Headquarters to 25 Fortune 500 companies • Port of Houston is ranked 1st in the United States in foreign tonnage in 2015 45 • Home of the Texas Medical Center – the worl
Slide 23: Dallas/Ft. Worth Market Highlights
Dallas/Ft. Worth Market Highlights Market Highlights Dallas/Ft. Worth Franchise • Dallas/Ft. Worth is the 4th most populous metropolitan area in the nation • Headquarters to 25 Fortune 500 companies • Added 119,300 jobs from February 2016 to February 2017, representing a 3.5% growth rate, which is m
Slide 24: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Austin has nearly doubled in size over the last 10 years, from 1.2 million residents in 2000 to 2.0 million residents in 2015 • Jobs in the technology industry total nearly 129,700, or 13.6% of all jobs, 35 compared to 6.7% nationally • A
Slide 25: Texas Markets: Economic Diversity
Texas Markets: Economic Diversity Houston Employment by Industry DFW Employment by Industry Austin Employment by Industry Information Financial Financial Information activities 1% activities 2% 5% Information 6% Financial 3% activities 8% Professional and Trade, Professional and business transportat
Slide 26: 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@prosperitybankusa.com 281.269.7199 Telephone David Hollaway 281.269-7222 Fax Chief Financial Officer www.p
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