Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q4 2020 Earnings Presentation
28 slides from Prosperity Bancshares's earnings presentation, January 2021
Slide 1: Investor Presentation Fourth Quarter 2020
Investor Presentation Fourth Quarter 2020
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: 2020 Fourth Quarter Highlights
2020 Fourth Quarter Highlights • Net income of $137.1 million and earnings per share (diluted) of $1.48 for three months ended December 31, 2020 • Assets of $34.1 billion, total loans of $20.2 billion, and deposits of $27.4 billion at December 31, 2020 • Common equity tier 1 ratio of 13.74% and leve
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $34.1 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 55 Fortune 50
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 12/31/2020 Total Loans (1) $20.2 Bn Deposits $27.4 Bn Assets $34.1 Bn 10 Year CAGR (2) Loans 19.2% Deposits 13.9% Assets 13.6% Assets Deposits Total Loans Equity Source: Company Documents 5 (1) Total loans include Warehouse Purchase Program (WPP) loans (2) Represents
Slide 6: Net Income
Net Income (3) 10 Year CAGR:(1)(3) 15.4% (3) 5 Year CAGR:(2)(3) 13.3% (3) (3) (3) (3) (4) Note: Net income includes the following ($ in thousands) Provision for Credit $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 $1,700 - Losses Loan Discount - - $26,413 $62,72
Slide 7: Earnings Per Share
Earnings Per Share (3) 10 Year EPS CAGR:(1)(3) 7.7% (3) (3) 5 Year EPS CAGR:(2)(3) 7.1% (3) (3) (3) (4) Note: Net income includes the following ($ in thousands) Provision for Credit $13,585 $5,200 $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 $1,700 - Losses Loan Discount - -
Slide 8: Net Interest Margin
Net Interest Margin Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio % of Assets Acquired 1.6% 0.0% 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31.3% 0.0% Total Assets Excluding Acquisitions Total Assets Acquired (1) Efficiency Ratio(2) Efficiency Ratio (Excluding Merger Charges) (2) Source: Company Documents (1) Representative of target ass
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity (2) (1) (1) ROATCE Tangible Common Equity ROATCE (Excluding Merger Charges) (1) Interim periods shown on an annualized basis 10 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 11: Return on Average Assets
Return on Average Assets (2) (1) (1) ROAA ROAA (Excluding Merger Charges) (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of December 31, 2020 ($ in millions) $mm Cost (%)(1) Noninterest-Bearing Demand $9,151 0.00% Interest-Bearing Demand $5,899 0.38% Money Market & Savings $9,244 0.30% CDs & Other Time $3,066 0.98% Total Deposits: $27.4Bn Total Cost of Deposits: 0.29%(1) Cost of Interest-Bearing
Slide 13: Loan Growth
Loan Growth $20,247 $18,845 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit Ratio (Including WPP) 13 Source: Company Documents
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of December 31, 2020 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure ~2.4yr Avg. Life Loans By Area Amount(2)(4) % of Total Bryan / College Station $653 3.8% Total Loans: $20.2Bn Central Oklahoma Central Texas $648 $1,660 3.8% 9.6% Loans HFI
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of December 31, 2020 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 29% of commercial real estate is owner occupied Retail $1,372 22% • CRE and construction loans conservatively Office $1,150 19% underwritten to cost of collateral Multif
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of December 31, 2020 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 6.3%, or $32.4 million (excluding fair value marks)(1) • $149.8 million, or 29.2% of energy loans, are subject $513mm to fair
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.94% ACL to Total 1.92% ACL to Total Loans (1)(2) Loans (1)(2) Allowance for ▪ Net Charge-offs Allowance for Credit Losses ▪ Net increased reserve ▪ $4.8 million related ▪ PCD recoveries Credit Losses to PCD loans ▪ Outstanding related to chang
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performance Report; Peer Group 2 (94 banks) – Insured commercial banks having asse
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans (2) ($ in millions) (2) Recoveries Charge-Offs (3) Net (3) (3) Net PCD (3) UBPR Peer Group (1) Prosperity Bank Non-Acquired Loan Charge-Offs Acquired Loan Charge-Offs Pre CECL Acquired Loan Charge-Offs Post CECL(3) (3) Net PCD Recoveries Post CECL Source
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of December 31, 2020 ($ in millions) $mm Mortgage-Backed Securities $7,668 Collateralized Mortgage Obligations $707 States & Political Subdivisions $166 Total Securities: $8.5Bn Yield on Securities: 1.83%(1) 92.4% Held to Maturity Duration: ~2.7 Yrs.(2) 7.6% Available
Slide 21: Dividend History
Dividend History (d) (c) (b) (a) (a) 2017 dividend consists of $0.34 per share declared in 1Q 2017, 2Q 2017, 3Q 2017 and $0.36 per share declared in 4Q 2017 (b) 2018 dividend consists of $0.36 per share declared in 1Q 2018, 2Q 2018, 3Q 2018 and $0.41 per share declared in 4Q 2018 21 (c) (d) 2019 div
Slide 22: Total Return Performance
Total Return Performance IPO (November 12, 1998) to December 31, 2020 1,800 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,662,009 on 12/31/2020 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/1
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2021 - 2026 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubb
Slide 24: Corporate Relocations to Texas
Corporate Relocations to Texas California Aatonomy AccentCare Active Networks Corporate Relocations to Texas (2004 – Present) AEND Industries, Inc. The Allen Group, Inc. Allied Electronic Recycling ALL-Q-TELL Corp. Ameriflight LLC Canada Aviat Networks, Inc. Absolute Software (ABT) Banker’s Toolbox,
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 approximately 7.2 million residents – Population is expected to grow 7.6% from 2021 to 2026 • As of November 2020, total nonfarm employment fell by 4.6% YoY, compare
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 7.7 million residents – Population is expected to grow 7.5% from 2021 to 2026 • As of November 2020, total nonfarm employment has o
Slide 27: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise Franchise • Ranked #3 place to live in the U.S. in 2020 by U.S. News and World Report, with expected population growth of 8.5% through 2026 • Ranked as the 3rd best city for technology professionals to work INTERSTATE 35 – IT job growth is
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 281-269-7222 Fax Cullen Zalman SVP – Banking & Corporate Activities 281-269-7176 c
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