Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q1 2023 Earnings Presentation
27 slides from Prosperity Bancshares's earnings presentation, Apr 26, 2023
Slide 1: Investor Presentation First Quarter 2023
Investor Presentation First Quarter 2023
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 at the annual meeting may contain, forward-looking statements
Slide 3: First Quarter Highlights
First Quarter Highlights • Net income of $124.7 million and earnings per share (diluted) of $1.37 for three months ended March 31, 2023 • Assets of $37.8 billion, total loans of $19.3 billion, and deposits of $27.0 billion at March 31, 2023 • Common equity tier 1 ratio of 15.59% and leverage ratio o
Slide 4: 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 2023 INTERSTATE 35 Tulsa • Rank
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 03/31/2023 0,000 ,000 Total Loans $19.3 Bn Deposits $27.0 Bn ,000 Assets $37.8 Bn ,000 10 Year CAGR (1) 0,000 Loans 13.8% ,000 Deposits 9.4% Assets 10.0% 2 ,000 ,000 20,000 ,000 1 ,000 2,000 10,000 1,000 ,000 0 0 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1
Slide 6: Net Income
Net Income 00 0 10 Year Core CAGR:(1) 12.8% 5 Year Core CAGR:(2) 14.9% 00 0 00 0 00 0 200 0 100 0 00 (3) 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350 $4,300
Slide 7: Earnings Per Share
Earnings Per Share 10 Year Core EPS CAGR:(1) 6.6% 00 5 Year Core EPS CAGR:(2) 8.7% 00 00 00 2 00 1 00 0 00 2012 201 201 201 201 201 201 201 2020 (3) 2021 2022 1 22 1 2 Note: Net income includes the following ($ in thousands) Provision for Credit $6,100 $17,240 $18,275 $7,560 $24,000 $14,325 $16,350
Slide 8: Net Interest Margin
Net Interest Margin 0 0 0 0 10 2 0 2 0 2 0 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 Net Interest Margin (Tax Equivalent) Net Interest Margin (Excluding Purchase Accounting Adjustments) 8 Source: Company Documents
Slide 9: Acquisitions & Efficiency Ratio
Acquisitions & Efficiency Ratio ’ ,000 100 0 0,000 ,2 1 00 , , 0 , 2 ,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 10,000 20 0 ,000 10 0 0 00 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 % of Assets Acquired 23.7% 20.9% 11.2% 0.0% 2.5% 0.0% 0
Slide 10: 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 (1) (1) 0 (2) 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 ROATCE Tangible Common Equity (1) Interim periods shown on an annualized basis 10 (2) Includes NOL tax benefit of $20.145 million related to th
Slide 11: Return on Average Assets
Return on Average Assets 2 00 1 1 0 12 1 00 0 (2) (1) (1) 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of March 31, 2023 ($ in millions) C s ther $mm Cost (%)(1) Time Noninterest-Bearing Demand $10,108 0.00% oninterest Bearing emand Interest-Bearing Demand $5,332 0.26% oney arket Savings Money Market & Savings $9,326 1.50% CDs & Other Time $2,238 1.59% nterest Bearing Total Dep
Slide 13: Loan Growth
Loan Growth 22,000 100 0 1 , 00 2 2, 2 1 1, 1, 1 , 1 , 00 1 ,0 1, 0 1 ,2 1 , 0 1 , 0 1 , 2 1 , 00 1 1 ,200 0 0 00 0 2 11,000 2 , 00 0 , 00 , 00 00 2,200 2 0 2 0 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP)
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of March 31, 2023 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure Comm E ,1 Floa ng 2 C Energy 2 Construc on 2,0 0 2, 00 10 21 Fixed ~3.1yr Consumer 1 0 Agriculture 0 Avg. Life ther 2 ( nc Farm) 1 21 1 Family Home E uity ,0 ariable ate 1 2 2
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of March 31, 2023 ($ 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 t er • CRE and construction loans conservatively om Retail $1,283 25% underwr
Slide 16: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.56% ACL to Total 1.52% ACL to Total Loans (1) Loans (1) Allowance for ▪ Net recoveries of ▪ PCD recoveries ▪ Outstanding ▪ Net increased reserve Allowance for Credit Losses $0.6 million balances related to changes in Credit Losses ▪ $0.2 milli
Slide 17: Asset Quality
Asset Quality NPAs / Loans + OREO 00 00 00 00 2 00 1 00 0 00 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 2022 1 22 1 2 UBPR Peer Group (1) Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 17 Note: NPAs include loans past due 90 days and still accruing
Slide 18: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans 1 0 1 0 0 0 0 0 (2) (2) 0 10 ($ in millions) Recoveries Charge-Offs 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 (3) 2021 (3) 2022 1 22 1 2 1 2 Net 1 1 20 1 (3) 2 1 2 1 1 0 12 (3) 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020
Slide 19: Securities Portfolio Detail
Securities Portfolio Detail As of March 31, 2023 ($ in millions) ther Securi es 01 States $mm Poli cal Mortgage-Backed Securities $13,309 ortgage Subdivisions Backed 0 Collateralized Mortgage Obligations $635 Securi es Collaterali ed States & Political Subdivisions $115 ortgage Other Securities $12
Slide 20: Total Return Performance
Total Return Performance IPO (November 12, 1998) to March 31, 2023 2,000 n e te n Pro er ty’ P 1,800 on 11/12/98 was worth $1,575,525 on 3/31/23 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 11/12
Slide 21: 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 21 (a) 2022 dividend consists of $0.52 per share declared in Q1 2022, 2Q 2022, 3Q 2022 and $0.
Slide 22: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2023 - 2028 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S by population Metropolitan Statistical Area Presence ($mm) Growth Lubbock Lubbock Lubbock
Slide 23: Corporate Relocations to Texas
Corporate Relocations to Texas California Aatonomy AccentCare Active Networks AEND Industries, Inc. AECOM The Allen Group, Inc. Allied Electronic Recycling AllyMe Group, Inc. Corporate Relocations to Texas (2004 – Present) ALL-Q-TELL Corp. Amazing Magnets Canada Ameriflight LLC New York Anything Liq
Slide 24: Houston Market Highlights
Houston Market Highlights Market Highlights Houston Franchise • Houston MSA is the 5th largest in the United States by population with nearly 7.4 million residents – Population is expected to grow 4.8% from 2023 - 2028 • Home to ASA’s Johnson Space Center and Texas Medical Center – the world’s large
Slide 25: 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 7.9 million residents – Population is expected to grow 5.0% from 2023 - 2028 • As of March 2023, total nonfarm employment has incre
Slide 26: 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 – Ranks first among MSAs for new residents as a percent of total INTERSTATE 35 population • Expected population growth of 7.8% from 2023 - 2028 • As of
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 SVP – Banking & Corporate Activities 281-269-7176 cullen.zalman@pros
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