Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q2 2024 Earnings Presentation
27 slides from Prosperity Bancshares's earnings presentation, Jul 24, 2024
Slide 1: Investor Presentation Second Quarter 2024
Investor Presentation Second Quarter 2024
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 presentation contains, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements
Slide 3: Second Quarter Highlights
Second Quarter Highlights • Net income of $111.6 million, or $116.6 million excluding merger related expenses and non-recurring items(1) • Earnings per share (diluted) of $1.17, or $1.22 excluding merger related expenses and non-recurring items(1) • Assets of $39.8 billion, total loans of $22.3 bill
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $39.8 billion in total assets • Prosperity has been ranked as one of Forbes America’s Best Banks since the list’s inception in 2010, and was ranked in the Top 10 for Oklahoma INTERST 44 TE Tulsa 14 consecutive years
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 06/30/2024 Loans $22.3 Bn Deposits $27.9 Bn Assets $39.8 Bn 10 Year CAGR (1) Loans 10.5% Deposits 5.9% Assets 7.5% Assets Deposits Total Loans Equity 5 Source: Company Documents (1) Represents the Compound Annual Growth Rate from 12/31/2013 – 12/31/2023
Slide 6: Net Income
Net Income 10 Year Core CAGR:(1) 9.3% Note: Net income includes the following ($ in thousands) Provision for Credit $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 - - $18,540 - $9,066 Losses Loan Discount $62,723 $95,875 $52,122 $38,970 $21,906 $13,909 $28,045 $91,341 $39,278 $7,401 $
Slide 7: Earnings Per Share
Earnings Per Share 10 Year Core EPS CAGR:(1) 4.8% Note: Net income includes the following ($ in thousands) Provision for Credit $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300 $20,000 - - $18,540 - $9,066 Losses Loan Discount $62,723 $95,875 $52,122 $38,970 $21,906 $13,909 $28,045 $91,341 $39,
Slide 8: Net Interest Margin
Net Interest Margin Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ($’s in millions) % of Assets Acquired 20.9% 11.2% 0.0% 2.5% 0.0% 0.0% 31.3% 0.0% 0.0% 0.0% 5.5% 0.0% 3.4% (1) (2) Total Assets Excluding Acquisitions Total Assets Acquired Efficiency Ratio (3) Efficiency Ratio (Excluding Non-Recurring Charges) Source: Company Documen
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity (1) (1) ROATCE Tangible Common Equity (2) ROATCE (Excluding Non-Recurring Charges) (1) Interim periods shown on an annualized basis 10 (2) Excludes after-tax merger related provision and expenses related to recent acquisitions, gain on Visa Class B-1 stock ex
Slide 11: Return on Average Assets
Return on Average Assets (1) (1) (2) ROAA ROAA (Excluding Non-Recurring Charges) (1) Interim periods shown on an annualized basis 11 (2) Excludes after-tax merger related provision and expenses related to recent acquisitions, gain on Visa Class B-1 stock exchange net of investment securities sales a
Slide 12: Deposit Composition
Deposit Composition As of June 30, 2024 ($ in millions) (1) $mm Cost (%) Noninterest-Bearing Demand $9,707 0.00% Interest-Bearing Demand $4,763 0.76% Money Market & Savings $8,946 2.22% CDs & Other Time $4,518 4.27% Total Deposits: $27.9Bn Total Cost of Deposits: 1.52% (1) Cost of Interest-Bearing D
Slide 13: Loan Growth
Loan Growth Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit Ratio (Including WPP) 13 Source: Company Documents
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of June 30, 2024 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure ~4.3yr Avg. Life (2)(4) Loans By Area Bryan / College Station Amount $873 % of Total 4.1% Total Loans: $22.3Bn Central Oklahoma Central Texas $602 $2,682 2.8% 12.7% Loans HFI (E
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of June 30, 2024 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • Loan portfolio is diversified across the Bank’s market areas and by underlying collateral type Retail $1,454 24% • CRE and construction loans conservatively Industrial $1,25
Slide 16: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) $366.7 million Total Allowance for Credit Losses and Unfunded Commitments $397.5 million 1.62% ACL to Total 1.69% ACL to Total Loans (1) Loans (1) $1.1 Net increased Allowance for Increase in reserve related to Credit Losses Increase in al
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO (1) UBPR Peer Group Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 17 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performance Report; Peer Group 2 (114 banks) – Insured commercial banks having ass
Slide 18: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans (2) (2) ($ in millions) Recoveries Charge-Offs Net PCD Net (1) UBPR Peer Group Prosperity Bank (3) Non-Acquired Loan Charge-Offs Acquired Loan Charge-Offs Pre-CECL Acquired Loan Charge-Offs Post-CECL (3) Source: Company Documents & Uniform Bank Performan
Slide 19: Securities Portfolio Detail
Securities Portfolio Detail As of June 30, 2024 ($ in millions) $mm Mortgage-Backed Securities $11,113 Collateralized Mortgage Obligations $442 States & Political Subdivisions $112 Other Securities $28 U.S. Government Agency Securities $8 Total Securities: $11.7Bn Yield on Securities: 2.06%(1) 97.3%
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to June 30, 2024 2,000 $100,000 invested in Prosperity’s IPO 1,800 on 11/12/98 was worth $1,639,576 on 6/30/24 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
Slide 21: Dividend History
Dividend History (a) (Declared) 21 (a) 2023 dividend consists of $0.55 per share declared in Q1 2023, 2Q 2023, 3Q 2023 and $0.56 per share in 4Q 2023
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) 2024 - 2029 • Today, Texas is the 2nd largest state Prosperity Proj. Population in the U.S by population with ~31 Prosperity Deposits Growth Lubbock Lubbock Lubbock Lubbock million residents Met
Slide 23: Corporate Relocations to Texas
California Aatonomy Corporate Relocations to Texas AccentCare Active Networks AECOM AEND Industries, Inc. Allied Electronic Recycling Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. AllyMe Group, Inc. Amazing Magnets Ameriflight LLC Anything Liquid Manufacturing Aviat Networks, Inc.
Slide 24: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • The Houston MSA is the 5th largest in the United States by population with nearly 7.5 million residents – Population is expected to grow 4.9% from 2024 – 2029 (compared to the 2.4% projected growthfor the U.S.) – Median Household Income
Slide 25: Dallas/Ft. Worth Market Highlights
Dallas/Ft. Worth Market Highlights Market Highlights Dallas / Ft. Worth Franchise • The Dallas/Ft. Worth MSA is the 4th largest in the United States by population with over 8.1 million residents – Population is expected to grow 5.1% from 2024 – 2029 (compared to the 2.4% projected growth for the U.S
Slide 26: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • The Austin MSA is the 26th largest in the United States by population with over 2.5 million residents – Population is expected to grow 9.0% from 2024 – 2029 (compared to INTERSTATE 35 the 2.4% projected growth for the U.S.) – Median House
Slide 27: 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 EVP – Banking & Corporate Activities 281-269-7176 cullen.zalman@pros
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