Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q4 2018 Earnings Presentation
26 slides from Prosperity Bancshares's earnings presentation, 2019
Slide 1: Investor Presentation Fourth Quarter 2018
Investor Presentation Fourth Quarter 2018
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: 2018 Fourth Quarter Highlights
2018 Fourth Quarter Highlights • Net income of $83.331 million and earnings per share (diluted) of $1.19 for three months ended December 31, 2018 • Assets of $22.693 billion, loans of $10.370 billion, and deposits of $17.257 billion at December 31, 2018 • Common equity tier 1 ratio was 16.32% and le
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $22.693 billion in total assets • Ranked #3 in deposit market share in Texas (1) • Texas and Oklahoma continue to benefit from strong economies, and are home to 53 Fortune 500 headquartered companies • Shareholder d
Slide 5: Balance Sheet Summary
Balance Sheet Summary ($ in millions) $22,500 $4,800 Data as of 12/31/2018 Loans $10.370 Bn Deposits $17.257 Bn Assets $22.693 Bn $4,000 $18,000 10 Year CAGR (1) Loans 11.3% $3,200 Deposits 9.0% $13,500 Assets 9.6% $2,400 $9,000 $1,600 $4,500 $800 $0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 6: Net Income
Net Income ($ in millions) $350.0 $321.8 $311.7 10 Year CAGR:(1) 14.3% $297.4 $300.0 $286.6 5 Year CAGR:(2) 7.8% $274.5 $272.2 $255.5 $250.6 $259.3 $250.0 $236.2 $221.4 $200.0 $185.7 $167.9 $141.7 $154.9 $150.0 $127.7 $111.9 $83.3 $100.0 $84.5 $67.1 $81.2 $64.4 $50.0 $0.0 (3) 2008 2009 2010 2011 201
Slide 7: Earnings Per Share
Earnings Per Share $5.00 $4.61 10 Year EPS CAGR:(1) 9.5% $4.32 $4.46 5 Year CAGR:(2) 4.8% $4.09 $3.94 $3.92 $4.00 $3.65 $3.65 $3.73 $3.43 $3.60 $3.23 $3.01 $2.98 $3.07 $3.00 $2.73 $2.41 $2.00 $1.86 $1.19 $0.97 $1.16 $0.93 $1.00 $0.00 (3) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4Q17 4Q
Slide 8: Net Interest Margin
Net Interest Margin 4.50% 4.08% 4.04% 3.98% 4.00% 3.96% 3.80% 3.58% 3.53% 3.50% 3.35% 3.38% 3.35% 3.29% 3.20% 3.20% 3.15% 3.13% 3.16% 3.19% 3.18% 3.12% 3.12% 3.09% 3.10% 3.00% 2.50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4Q17 4Q18 Net Interest Margin (Tax Equivalent) Net Interest Mar
Slide 9: Efficiency Ratio
Efficiency Ratio ($ in millions) $25,000 $22,331 $22,587 $22,693 $21,508 $22,037 60.0% $20,000 $18,642 55.0% 50.0% 46.5% 46.3% $14,584 $15,000 44.8% 43.5% 43.7% 45.0% 42.8% 42.5% 42.8% 41.6% 41.8% 41.9% $9,477 $9,823 $10,000 $9,072 $8,850 40.0% 35.0% $5,000 30.0% $0 25.0% 2008 2009 2010 2011 2012 20
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity ($ in millions) 40.00% $2,500 $2,000 30.00% 28.66% 27.40% 24.16% 25.11% 24.24% 21.93% 22.52% $1,500 19.98% 20.00% 16.95% 16.00% 15.84% 15.06% 14.31% $1,000 10.00% $500 0.00% $0 (1) (1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4Q17 4Q18 ROATCE Ta
Slide 11: Return on Average Assets
Return on Average Assets 2.00% 1.75% 1.50% 1.47% 1.47% 1.44% 1.42% 1.38% 1.36% 1.35% 1.33% 1.26% 1.25% 1.20% 1.22% 1.20% 1.25% 1.00% 0.75% (1) (1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4Q17 4Q18 11 (1) Interim periods shown on an annualized basis
Slide 12: Deposit Composition
Deposit Composition As of December 31, 2018 ($ in millions) CDs & Other Time $mm Cost (%)(1) 12.0% Noninterest- Bearing Noninterest-Bearing Demand $5,666 0.00% Demand 32.8% Money Interest-Bearing Demand $4,124 0.57% Market & Savings Money Market & Savings $5,387 0.73% 31.3% Interest- Bearing CDs & O
Slide 13: Loan Growth
Loan Growth ($ in millions) $12,000 65.0% $10,370 $10,021 $10,000 $9,439 $9,622 60.0% $9,244 60.1% 56.2% 55.6% $8,000 $7,775 55.0% 53.4% 52.2% 50.8% $6,000 48.8% 50.0% $5,180 46.5% 46.7% 46.7% $3,766 44.5% $4,000 $3,567 $3,377 $3,485 45.0% $2,000 40.0% $0 35.0% 2008 2009 2010 2011 2012 2013 2014 201
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of December 31, 2018 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Agriculture Home (Inc. Farm) Equity 1-4 Family $730 $268 $2,439 7.0% 2.6% 23.5% Floating C&I 37.5% Construction Fixed $1,111 ~3.1yr $1,622 38.5% 10.7% 15.7% Avg. Life Consum
Slide 15: Loan Portfolio Segment Detail
Loan Portfolio Segment Detail Commercial Real Estate Detail Energy Detail - Outstanding Balance ($ in millions) ($ in millions) Shopping Office Center / Retail Building $565 $363 Multi- 16% 10% Family $183 5% Servicers $258 Producers C&I $293 69% $372mm $114 $3,539mm Total 9% Total 31% Other Owner $
Slide 16: Houston MSA CRE Portfolio
Houston MSA CRE Portfolio As of December 31, 2018 ($ in millions) Owner Occupied $548 Shopping Shopping Center / Retail $261 Center / Retail 21.9% Commercial & Industrial $125 Owner Occupied Office $94 46.0% Commercial & Industrial Medical $29 10.5% Hotel $49 Office Multi-Family $39 7.9% Other $46 M
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO 5.00% 4.88% 4.65% 3.95% 4.00% 3.00% 2.82% 2.63% 1.91% 2.00% 1.35% 1.07% 1.04% 0.93% 1.00% 0.79% 0.49% 0.48% 0.45% 0.46% 0.50% 0.40% 0.32% 0.40% 0.37% 0.37% 0.25% 0.29% 0.18% 0.18% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4Q17 4Q18 UBPR Peer
Slide 18: Securities Portfolio Detail
Securities Portfolio Detail As of December 31, 2018 ($ in millions) U.S. Treasury Securities / U.S. Gov. Obligations 0.3% Mortgage-Backed Securities $9,115 Mortgage- States & Political States & Political Subdivisions $254 Backed Subdivisions Securities 2.7% Collateralized Mortgage Obligations $13 96
Slide 19: Dividend History
Dividend History $1.60 (d) $1.49 (c) $1.38 $1.40 Compounded Annual Growth (b) Rate from 2003 - 2018 was 12.6% $1.24 (a) $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 2012 2013 2014
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to December 31, 2018 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,403,695 on 12/31/2018 20 Source: S&P Global. Market data as of 12/28/2018.
Slide 21: 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 2019 - 2024 • Today, Texas is the 2nd largest state in the U.S. , and largest in Prosperity Deposits Population the 48 contiguous U.S. with over Metropolitan Statistical Area Presence
Slide 22: Corporate Relocations to Texas
California Corporate Relocations to Texas 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) Banker’s Toolbox, Inc. Bio-Solutions C
Slide 23: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston MSA is the 5th largest in the United States by population with 7.0 million people • Headquarters to 21 Fortune 500 companies in 2018 • Home of the Texas Medical Center – the world’s largest medical complex, and NASA’s Johnson Sp
Slide 24: 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 7.6 million residents • Headquarters to 22 Fortune 500 companies in 2018 • Dallas has the largest workforce of any MSA in Texas • Accord
Slide 25: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise • Ranked #1 place to live in the U.S. in 2018 by U.S. News and World Report for the second year in a row • For the twelve months ended October 2018, Austin added 40,400 jobs, representing a growth rate of 3.9%, making it the second fastest
Slide 26: 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 David Hollaway Chief Financial Officer 281-269-7199 david.hollawa
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