Prosperity Bancshares, Inc. · NYSE:PB
Prosperity Bancshares — Q2 2021 Earnings Presentation
28 slides from Prosperity Bancshares's earnings presentation, Jul 28, 2021
Slide 1: Investor Presentation Second Quarter 2021
Investor Presentation Second Quarter 2021
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 forward-looking statements within the meaning of the federal securities laws, including Section 27A of the
Slide 3: Second Quarter Highlights
Second Quarter Highlights • Net income of $130.6 million and earnings per share (diluted) of $1.41 for three months ended June 30, 2021 • Assets of $36.1 billion, total loans of $19.3 billion, and deposits of $29.1 billion at June 30, 2021 • Common equity tier 1 ratio of 15.26% and leverage ratio of
Slide 4: Strong Presence in Texas and Oklahoma
Strong Presence in Texas and Oklahoma • A Texas-based financial holding company with $36.1 billion in total assets • Ranked #3 in deposit market share in Texas (1) Oklahoma INTERSTA TE 44 • Texas and Oklahoma continue to benefit from strong Tulsa INTERSTATE 35 economies, and are home to 52 Fortune 5
Slide 5: Balance Sheet Summary
Balance Sheet Summary Data as of 06/30/2021 Total Loans $19.3 Bn Deposits $29.1 Bn Assets $36.1 Bn 10 Year CAGR (1) Loans 19.2% Deposits 13.9% Assets 13.6% Assets Deposits Total Loans Equity 5 Source: Company Documents (1) Represents the Compound Annual Growth Rate from 12/31/2010 – 12/31/2020
Slide 6: Net Income
Net Income 10 Year CAGR:(1) 15.3% 5 Year CAGR:(2) 13.0% (3) (3) Note: Net income includes the following ($ 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 $10,000 - Losses Loan Discount - - $26,413 $62,723 $95,875 $52,122 $38,970
Slide 7: Earnings Per Share
Earnings Per Share 10 Year EPS CAGR:(1) 7.6% 5 Year EPS CAGR:(2) 6.8% (3) (3) Note: Net income includes the following ($ 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 $10,000 - Losses Loan Discount - - $26,413 $62,723 $95,875 $
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 (3) % 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% 0.0% 0.0% (1) (2) Total Assets Excluding Acquisitions Total Assets Acquired Efficiency Ratio Source: Company Documents (1) Representative of target assets at closing (2) Calculated by
Slide 10: Return on Average Tangible Common Equity
Return on Average Tangible Common Equity (2) (1) (2) (1) ROATCE Tangible Common Equity (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) (2) (1) (1) Interim periods shown on an annualized basis 11 (2) Includes NOL tax benefit of $20.145 million related to the CARES Act
Slide 12: Deposit Composition
Deposit Composition As of June 30, 2021 ($ in millions) (1) $mm Cost (%) Noninterest-Bearing Demand $10,099 0.00% Interest-Bearing Demand $6,185 0.35% Money Market & Savings $9,867 0.22% CDs & Other Time $2,959 0.58% Total Deposits: $29.1Bn Total Cost of Deposits: 0.21%(1) Cost of Interest-Bearing D
Slide 13: Loan Growth
Loan Growth $21,025 $20,247 $18,845 $19,252 Loans (Excluding Warehouse Purchase Program) Loan / Deposit Ratio (Excluding WPP) Warehouse Purchase Program (WPP) Loan / Deposit Ratio (Including WPP) 13 Source: Company Documents
Slide 14: Loan Portfolio Overview
Loan Portfolio Overview As of June 30, 2021 ($ in millions) Loan Portfolio by Category & Geography Loans by Rate Structure ~2.6yr Avg. Life Total Loans: $19.3Bn (2)(4) Loans By Area Amount % of Total Bryan / College Station $683 4.0% Central Oklahoma Central Texas $648 $1,851 3.8% 10.9% Loans HFI (E
Slide 15: Loan Portfolio Detail
Loan Portfolio Detail As of June 30, 2021 ($ in millions) Portfolio Commentary Commercial Real Estate Detail ($ in millions) • 30% of commercial real estate is owner occupied Retail $1,334 23% • CRE and construction loans conservatively Office $1,062 19% underwritten to cost of collateral Industrial
Slide 16: Energy Portfolio Detail
Energy Portfolio Detail As of June 30, 2021 ($ in millions) Energy Detail - Outstanding Balance Portfolio Commentary ($ in millions) • Total energy loan loss reserves of 6.0%, or $30.0 million (excluding fair value marks)(1) • $85.6 million, or 17.1% of energy loans, are subject $502mm to fair value
Slide 17: Changes to Allowance for Credit Losses
Changes to Allowance for Credit Losses ($ in millions) 1.89% ACL to Total 1.85% ACL to Total Loans (1)(2) Loans (1)(2) Allowance for Net Charge-offs Allowance for Credit Losses PCD recoveries Outstanding Net increased reserve $1.0 million related related to changes in Credit Losses $2.1
Slide 18: Asset Quality
Asset Quality NPAs / Loans + OREO (1) UBPR Peer Group Prosperity Bank Source: Company Documents & Uniform Bank Performance Report 18 Note: NPAs include loans past due 90 days and still accruing (1) UBPR = Uniform Bank Performance Report; Peer Group 2 (94 banks) – Insured commercial banks having asse
Slide 19: Asset Quality: Net Charge-Offs / Average Loans
Asset Quality Net Charge-Offs / Average Loans (2) (2) ($ in millions) Recoveries Charge-Offs (3) Net (3) (3) (3) Net PCD (3) (3) (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) Net PCD Recoveries Post-CE
Slide 20: Securities Portfolio Detail
Securities Portfolio Detail As of June 30, 2021 ($ in millions) $mm Mortgage-Backed Securities $11,132 Collateralized Mortgage Obligations $636 States & Political Subdivisions $149 Total Securities: $11.9Bn Yield on Securities: 1.57%(1) 94.9% Held to Maturity Duration: ~3.9 Yrs.(2) 5.1% Available fo
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 June 30, 2021 2,000 $100,000 invested in Prosperity’s IPO on 11/12/98 was worth $1,742,392 1,800 on 6/30/21 1,600 1,400 1,200 1,000 800 600 400 200 0 11/12/98 11/12/00 11/12/02 11/12/04 11/12/06 11/12/08 11/12/10 11/12/12 11/12/14 11/12/16 11/12/18
Slide 23: Presence in Fast-Growing Markets
Presence in Fast-Growing Markets Positioned in Strong Markets Top 10 Fastest Growing MSAs in the U.S. (1) Prosperity 2021 - 2026 • Today, Texas is the 2nd largest Prosperity Deposits Population state in the U.S., and largest in Metropolitan Statistical Area Presence ($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 AllyMe Group, Inc. ALL-Q-TELL Corp. Amazing Magnets Canada Ameriflight LLC Absolute Software (ABT) Avi
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 • Houston is ranked 1st in average wage after adjusting for cost-of-livin
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 June 2021, total nonfarm employment has incre
Slide 27: Austin Market Highlights
Austin Market Highlights Market Highlights Austin Franchise Franchise • Ranked #5 place to live in the U.S. in 2021 by U.S. News and World Report, with expected population growth of 8.5% through 2026 • Ranked as the best city in the U.S. for technology professionals and INTERSTATE 35 businesses – IT
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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