EX-99.1 2 pb-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

img98618419_0.jpg 

 

PRESS RELEASE

For more information contact:

 

 

Prosperity Bancshares, Inc.®

Cullen Zalman

Prosperity Bank Plaza

Senior Vice President – Banking and Corporate Activities

4295 San Felipe

281.269.7199

Houston, Texas 77027

cullen.zalman@prosperitybankusa.com

FOR IMMEDIATE RELEASE

PROSPERITY BANCSHARES, INC.®

REPORTS FOURTH QUARTER

2023 EARNINGS

Net income of $95.5 million and diluted earnings per share of $1.02 for fourth quarter 2023; excluding the FDIC special assessment of $19.9 million and merger related expenses, net income was $111.4 million(1) and diluted earnings per share was $1.19(1)
Loans, excluding Warehouse Purchase Program loans, increased $2.259 billion or 12.5% during 2023
Loans, excluding Warehouse Purchase Program loans and loans acquired in the merger of First Bancshares of Texas, Inc, increased $882.7 million or 4.9% during 2023
Noninterest-bearing deposits of $9.8 billion, representing 36.0% of total deposits
Borrowings decreased by $525.0 million during the fourth quarter 2023
Net interest margin increased 3 basis points to 2.75% during the fourth quarter 2023
Allowance for credit losses on loans and on off-balance sheet credit exposure of $368.9 million and allowance for credit losses to total loans, excluding Warehouse Purchase Program, of 1.63%(1)
Nonperforming assets remain low at 0.21% of fourth quarter average interest-earning assets
Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas
Approved 2024 Stock Repurchase Program covering up to 5% of outstanding common stock

HOUSTON, January 24, 2024. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, “Prosperity”), reported net income of $95.5 million for the quarter ended December 31, 2023 compared with $137.9 million for the same period in 2022. Net income per diluted common share was $1.02 for the quarter ended December 31, 2023 compared with $1.51 for the same period in 2022. During the fourth quarter of 2023, Prosperity incurred a Federal Deposit Insurance Corporation (“FDIC”) special assessment of $19.9 million, or $0.17(1) per diluted common share net of tax, which was assessed by the FDIC to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in early 2023. Excluding this assessment and merger related expenses, net income was $111.4 million(1) and earnings per diluted common share was $1.19(1) for the fourth quarter of 2023. The annualized return on fourth quarter average assets was 0.98%; excluding the FDIC special assessment, net of tax, and merger related expenses, net of tax, the return was 1.15%. Nonperforming assets remain low at 0.21% of fourth quarter average interest-earning assets. On May 1, 2023, First Bancshares of Texas, Inc. (“First Bancshares”) merged with Prosperity Bancshares and FirstCapital Bank of Texas, N.A. (“FirstCapital Bank”) merged with Prosperity Bank (collectively, the “Merger”).

 

“We remain excited about the growth and future of our company. Prosperity operates in two of the best economies in the U.S. Even with the recent interest rate increases, economic activity and job growth in Texas and Oklahoma remain solid,” said David Zalman, Prosperity’s Senior Chairman and Chief Executive Officer.

______________

(1)
Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Page 1


“Prosperity has a strong capital position that provides us with flexibility in pursuing strategic opportunities, such as mergers and acquisitions and the repurchase of our stock when appropriate. We expect that our net interest margin will continue to expand to our historically normal level as our assets reprice over the next several years, increasing our earnings per share. Further, we have a strong core deposit base, with 36% of our deposits in noninterest-bearing accounts,” concluded Zalman.

 

Results of Operations for the Three Months Ended December 31, 2023

For the three months ended December 31, 2023, net income was $95.5 million(2) or $1.02 per diluted common share compared with $112.2 million(3) or $1.20 per diluted common share for the three months ended September 30, 2023. The three months ended December 31, 2023 was impacted by the FDIC special assessment of $19.9 million and merger related expenses. For the three months ended December 31, 2023, net income was $95.5 million(2) or $1.02 per diluted common share compared with $137.9 million(4) or $1.51 per diluted common share for the same period in 2022. The change was primarily due to an increase in interest expense and an increase in noninterest expense that includes the FDIC special assessment, partially offset by an increase in loan interest income. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2023 were 0.98%, 5.39% and 10.54%(1), respectively.

Excluding the FDIC special assessment, net of tax, and merger related expenses, net of tax, net income was $111.4 million(1) or $1.19(1) per diluted common share for the three months ended December 31, 2023 and annualized returns on average assets, average common equity and average tangible common equity were 1.15%(1), 6.29%(1) and 12.30%(1), respectively, for the same period. Prosperity’s efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 55.61%(1) for the three months ended December 31, 2023; and, excluding the FDIC special assessment and merger related expenses, the efficiency ratio was 48.23%(1).

Net interest income before provision for credit losses was $237.0 million for the three months ended December 31, 2023 compared with $239.5 million for the three months ended September 30, 2023. Net interest income before provision for credit losses decreased $19.2 million or 7.5% to $237.0 million for the three months ended December 31, 2023 compared with $256.1 million for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

The net interest margin on a tax equivalent basis was 2.75% for the three months ended December 31, 2023 compared with 2.72% for the three months ended September 30, 2023. The net interest margin on a tax equivalent basis was 2.75% for the three months ended December 31, 2023 compared with 3.05% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

Noninterest income was $36.6 million for the three months ended December 31, 2023 compared with $38.7 million for the three months ended September 30, 2023 and $37.7 million for the three months ended December 31, 2022.

Noninterest expense was $152.2 million for the three months ended December 31, 2023 compared with $135.7 million for the three months ended September 30, 2023, an increase of $16.5 million or 12.2%. The change was primarily due to the FDIC special assessment of $19.9 million and an increase in other noninterest expense, partially offset by a decrease in salaries and benefits. Noninterest expense was $152.2 million for the three months ended December 31, 2023 compared with $119.2 million for the same period in 2022, an increase of $32.9 million or 27.6%. The change was primarily due to the FDIC special assessment of $19.9 million and additional expenses related to the Merger.

______________

(2)
Includes purchase accounting adjustments of $2.6 million, net of tax, primarily comprised of loan discount accretion of $2.5 million, merger related expenses of $278 thousand, and the FDIC special assessment of $19.9 million for the three months ended December 31, 2023.
(3)
Includes purchase accounting adjustments of $2.5 million, net of tax, primarily comprised of loan discount accretion of $2.3 million, and merger related expenses of $1.1 million for the three months ended September 30, 2023.
(4)
Includes purchase accounting adjustments of $758 thousand, net of tax, primarily comprised of loan discount accretion of $913 thousand for the three months ended December 31, 2022.
(5)
Includes purchase accounting adjustments of $8.1 million, net of tax, primarily comprised of loan discount accretion of $8.0 million, merger related provision for credit losses of $18.5 million, merger related expenses of $15.1 million, and the FDIC special assessment of $19.9 million for the year ended December 31, 2023.
(6)
Includes purchase accounting adjustments of $6.0 million, net of tax, primarily comprised of loan discount accretion of $7.4 million for the year ended December 31, 2022.

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Results of Operations for the Year Ended December 31, 2023

For the year ended December 31, 2023, net income was $419.3 million(5) or $4.51 per diluted common share compared with $524.5 million(6) or $5.73 per diluted common share for the same period in 2022. The change was primarily due to lower net interest income, the FDIC special assessment of $19.9 million, merger related provision for credit losses of $18.5 million, merger related expenses of $15.1 million and additional expenses related to the Merger. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2023 were 1.08%, 6.03% and 11.76%(1), respectively. Excluding the FDIC special assessment, net of tax, merger related provision for credit losses, net of tax, and merger related expenses, net of tax, net income was $461.7 million(1) or $4.97(1) per diluted common share for the year ended December 31, 2023 and returns on average assets, average common equity and average tangible common equity for the same period were 1.18%(1), 6.64%(1) and 12.95%(1), respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 50.26%(1) for the year ended December 31, 2023; and, excluding the FDIC special assessment and merger related expenses, the efficiency ratio was 47.09% (1).

Net interest income before provision for credit losses for the year ended December 31, 2023 was $956.4 million compared with $1.005 billion for the same period in 2022, a decrease of $48.8 million or 4.9%. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by increases in the average balances and average rates on loans.

The net interest margin on a tax equivalent basis for the year ended December 31, 2023 was 2.78% compared with 3.00% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

Noninterest income was $153.3 million for the year ended December 31, 2023 compared with $145.1 million for the same period in 2022, an increase of $8.1 million or 5.6%, primarily due to the Merger, partially offset by lower net gain on sale or write-down of assets.

Noninterest expense was $556.7 million for the year ended December 31, 2023 compared with $484.2 million for the same period in 2022, an increase of $72.5 million or 15.0%, primarily due to the FDIC special assessment of $19.9 million, merger related expenses of $15.1 million and additional expenses related to the Merger.

Balance Sheet Information

At December 31, 2023, Prosperity had $38.548 billion in total assets, an increase of $858.0 million or 2.3%, compared with $37.690 billion at December 31, 2022.

Loans were $21.181 billion at December 31, 2023, an increase of $2.341 billion or 12.4%, compared with $18.840 billion at December 31, 2022. Linked quarter loans decreased $252.2 million or 1.2% from $21.433 billion at September 30, 2023. Loans, excluding Warehouse Purchase Program loans, were $20.358 billion at December 31, 2023 compared with $18.099 billion at December 31, 2022, an increase of $2.259 billion or 12.5%, and compared with $20.520 billion at September 30, 2023, a decrease of $162.1 million.

Deposits were $27.180 billion at December 31, 2023, decreased $1.354 billion or 4.7%, compared with $28.534 billion at December 31, 2022, primarily due to a decrease in business deposits and public fund deposits, partially offset by an increase in Merger acquired deposits. Linked quarter deposits decreased $133.0 million or 0.5% from $27.313 billion at September 30, 2023.

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The table below provides detail on the impact of loans acquired and deposits assumed in the Merger.

 

Balance Sheet Data (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Loans acquired (including new production since acquisition date):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FirstCapital Bank

 

$

1,376,356

 

 

$

1,494,378

 

 

$

1,590,137

 

 

$

 

 

$

 

Prosperity - Warehouse Purchase Program loans

 

 

822,245

 

 

 

912,327

 

 

 

1,148,883

 

 

 

799,115

 

 

 

740,620

 

Prosperity - All other loans

 

 

18,981,937

 

 

 

19,026,008

 

 

 

18,914,926

 

 

 

18,535,244

 

 

 

18,099,207

 

Total loans

 

$

21,180,538

 

 

$

21,432,713

 

 

$

21,653,946

 

 

$

19,334,359

 

 

$

18,839,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits assumed (including new deposits since acquisition date):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FirstCapital Bank

 

$

1,517,217

 

 

$

1,625,691

 

 

$

1,481,831

 

 

$

 

 

$

 

All other deposits

 

 

25,662,592

 

 

 

25,687,109

 

 

 

25,899,055

 

 

 

27,004,236

 

 

 

28,533,531

 

Total deposits

 

$

27,179,809

 

 

$

27,312,800

 

 

$

27,380,886

 

 

$

27,004,236

 

 

$

28,533,531

 

 

Excluding loans acquired in the Merger and new production since May 1, 2023 by the acquired lending operations, loans at December 31, 2023 grew $964.4 million or 5.1% compared with December 31, 2022 and decreased $134.2 million or 0.7% compared with September 30, 2023. Excluding loans acquired in the Merger, new production since May 1, 2023 by the acquired lending operations and Warehouse Purchase Program loans, loans at December 31, 2023 grew $882.7 million or 4.9% compared with December 31, 2022 and decreased $44.1 million or 0.2% compared with September 30, 2023.

 

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since May 1, 2023, deposits at December 31, 2023 decreased by $2.871 billion or 10.1% compared with December 31, 2022 and decreased by $24.5 million or 0.1% compared with September 30, 2023.

Asset Quality

Nonperforming assets totaled $72.7 million or 0.21% of quarterly average interest-earning assets at December 31, 2023 compared with $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 and $27.5 million or 0.08% of quarterly average interest-earning assets at December 31, 2022. The increase during 2023 was primarily due to the Merger.

The allowance for credit losses on loans and off-balance sheet credit exposures was $368.9 million at December 31, 2023 compared with $311.5 million at December 31, 2022 and $388.0 million at September 30, 2023. There was no provision for credit losses for the three months ended December 31, 2023 and a provision for credit losses of $18.5 million for the year ended December 31, 2023 compared to no provision for credit losses for the three months and year ended December 31, 2022. The $18.5 million provision was made as a result of the loans acquired in the Merger and included a $12.0 million provision for credit losses on loans and a $6.5 million provision for credit losses on off-balance sheet credit exposures.

The allowance for credit losses on loans was $332.4 million or 1.57% of total loans at December 31, 2023 compared with $281.6 million or 1.49% of total loans at December 31, 2022 and $351.5 million or 1.64% of total loans at September 30, 2023. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.63%(1) at December 31, 2023 compared with 1.56%(1) at December 31, 2022 and 1.71%(1) at September 30, 2023.

 

Net charge-offs were $19.1 million for the three months ended December 31, 2023 compared with net charge-offs of $3.4 million for the three months ended September 30, 2023 and net charge-offs of $603 thousand for the three months ended December 31, 2022. Net charge-offs for the fourth quarter of 2023 included $16.3 million related to resolved purchased credit deteriorated (“PCD”) loans. The PCD loans had reserves of $16.2 million assigned as of the acquisition date. Additionally, $7.4 million of reserves on resolved PCD loans was released to the general reserve.

 

Net charge-offs were $38.0 million for the year ended December 31, 2023 compared with $4.8 million for the year ended December 31, 2022. Net charge-offs for the year ended December 31, 2023 included $16.6 million related to resolved PCD loans and $15.0 million related to one commercial real estate loan acquired in a previous merger. The PCD loans had reserves of $16.3 million assigned as of the acquisition date. Additionally, reserves on PCD loans increased by $76.8 million due to the Merger and $23.5 million of reserves on resolved PCD loans was released to the general reserve.

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Dividend

Prosperity Bancshares declared a first quarter 2024 cash dividend of $0.56 per share to be paid on April 1, 2024, to all shareholders of record as of March 15, 2024.

Stock Repurchase Program

On January 16, 2024, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.7 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 16, 2025, at the discretion of management. Under its 2023 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended December 31, 2023, and approximately 1.21 million shares of its common stock at an average weighted price of $59.88 per share during the year ended December 31, 2023.

Merger of First Bancshares of Texas, Inc.

On May 1, 2023, Prosperity completed the merger of First Bancshares and its wholly owned subsidiary FirstCapital Bank, headquartered in Midland, Texas. FirstCapital Bank operated 16 full-service banking offices in six different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas.

 

Pursuant to the terms of the definitive agreement, Prosperity issued 3,583,370 shares of Prosperity common stock plus approximately $91.5 million in cash for all outstanding shares of First Bancshares. This resulted in goodwill of $164.5 million as of December 31, 2023, which was subject to subsequent fair value adjustments. During the second quarter of 2023, Prosperity completed the operational conversion of FirstCapital Bank.

Pending Merger of Lone Star State Bancshares, Inc.

On October 11, 2022, Prosperity Bancshares and Lone Star State Bancshares, Inc. (“Lone Star”) jointly announced the signing of a definitive merger agreement whereby Lone Star, the parent company of Lone Star State Bank of West Texas (“Lone Star Bank”) will merge with and into Prosperity. Lone Star Bank operates 5 banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of December 31, 2023, Lone Star, on a consolidated basis, reported total assets of $1.372 billion, total loans of $1.081 billion and total deposits of $1.211 billion.

Under the terms of the merger agreement, Prosperity will issue 2,376,182 shares of Prosperity common stock plus $64.1 million in cash for all outstanding shares of Lone Star capital stock, subject to certain conditions and potential adjustments. Based on Prosperity’s closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $228.7 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals. The shareholders of Lone Star approved the transaction on March 28, 2023.

Conference Call

Prosperity’s management team will host a conference call on Wednesday, January 24, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity’s fourth quarter 2023 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 6674169.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity’s Investor Relations page by selecting “Presentations, Webcasts & Calls” from the menu and following the instructions.

Non-GAAP Financial Measures

Prosperity’s management uses certain non-GAAP financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and the FDIC special assessment, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, merger related expenses and the FDIC special assessment. Prosperity believes these non-GAAP financial measures provide information useful to investors in

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understanding Prosperity’s financial results and their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity’s business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Please refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Prosperity Bancshares, Inc. ®

As of December 31, 2023, Prosperity Bancshares, Inc.® is a $38.548 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

Prosperity currently operates 285 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 32 in the Central Texas area including Austin and San Antonio; 44 in the West Texas area including Lubbock, Midland-Odessa, Abilene; Amarillo and Wichita Falls; 16 in the Bryan/College Station area, 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area.

Cautionary Notes on Forward-Looking Statements

“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 within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may,” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity’s possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity’s future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity’s loan portfolio and allowance for loan losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity’s future operations, future or proposed acquisitions, including the pending transaction with Lone Star, the future or expected effect of acquisitions on Prosperity’s operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of each of the proposed transactions, and statements about the assumptions underlying any such statement. These forward‑looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of Prosperity’s control, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks, including Lone Star; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, including the pending transaction with Lone Star, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity’s securities portfolio; customer and consumer demand, including customer and consumer response to

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marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and the effect, impact, potential duration or other implications of weather and climate-related events. Prosperity disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other factors are discussed in Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2022, and other reports and statements Prosperity has filed with the Securities and Exchange Commission (“SEC”). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

 

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Bryan/College Station Area

 

Frisco-West

 

Rusk

 

Nederland

 

Texas Tech Student Union

Bryan

 

Garland

 

Seven Points

 

Needville

 

 

Bryan-29th Street

 

Grapevine

 

Teague

 

Rosenberg

 

Midland

Bryan-East

 

Grapevine Main

 

Tyler-Beckham

 

Shadow Creek

 

North

Bryan-North

 

Kiest

 

Tyler-South Broadway

 

Spring

 

Wadley

Caldwell

 

Lake Highlands

 

Tyler-University

 

Tomball

 

Wall Street

College Station

 

McKinney

 

Winnsboro

 

Waller

 

West

Crescent Point

 

McKinney Eldorado

 

 

 

West Columbia

 

 

Hearne

 

McKinney Redbud

 

Houston Area

 

Wharton

 

Odessa

Huntsville

 

North Carrolton

 

Houston

 

Winnie

 

Grandview

Madisonville

 

Park Cities

 

Aldine

 

Wirt

 

Grant

Navasota

 

Plano

 

Alief

 

 

 

Kermit Highway

New Waverly

 

Plano-West

 

Bellaire

 

South Texas Area -

 

Parkway

Rock Prairie

 

Preston Forest

 

Beltway

 

Corpus Christi

 

 

Southwest Parkway

 

Preston Parker

 

Clear Lake

 

Calallen

 

Wichita Falls

Tower Point

 

Preston Royal

 

Copperfield

 

Carmel

 

Cattlemans

Wellborn Road

 

Red Oak

 

Cypress

 

Northwest

 

Kell

 

 

Richardson

 

Downtown

 

Saratoga

 

 

Central Texas Area

 

Richardson-West

 

Eastex

 

Timbergate

 

Other West Texas Area

Austin

 

Rosewood Court

 

Fairfield

 

Water Street

 

Locations

Allandale

 

The Colony

 

First Colony

 

 

Big Spring

Cedar Park

 

Tollroad

 

Fry Road

 

Victoria

 

Brownfield

Congress

 

Trinity Mills

 

Gessner

 

Victoria Main

 

Brownwood

Lakeway

 

Turtle Creek

 

Gladebrook

 

Victoria-Navarro

 

Burkburnett

Liberty Hill

 

West 15th Plano

 

Grand Parkway

 

Victoria-North

 

Byers

Northland

 

West Allen

 

Heights

 

Victoria Salem

 

Cisco

Oak Hill

 

Westmoreland

 

Highway 6 West

 

 

 

Comanche

Research Blvd

 

Wylie

 

Little York

 

Other South Texas Area

 

Early

Westlake

 

 

 

Medical Center

 

 Locations

 

Floydada

 

 

Fort Worth

 

Memorial Drive

 

Alice

 

Gorman

Other Central Texas Area

 

Haltom City

 

Northside

 

Aransas Pass

 

Henrietta

Locations

 

Hulen

 

Pasadena

 

Beeville

 

Levelland

Bastrop

 

Keller

 

Pecan Grove

 

Colony Creek

 

Littlefield

Canyon Lake

 

Museum Place

 

Pin Oak

 

Cuero

 

Merkel

Dime Box

 

Renaissance Square

 

River Oaks

 

Edna

 

Plainview

Dripping Springs

 

Roanoke

 

Sugar Land

 

Goliad

 

San Angelo

Elgin

 

Stockyards

 

SW Medical Center

 

Gonzales

 

Slaton

Flatonia

 

 

 

Tanglewood

 

Hallettsville

 

Snyder

Fredericksburg

 

Other Dallas/Fort Worth Area

 

The Plaza

 

Kingsville

 

 

Georgetown

 

Locations

 

Uptown

 

Mathis

 

Oklahoma

Gruene

 

Arlington

 

Waugh Drive

 

Padre Island

 

Central Oklahoma Area

Horseshoe Bay

 

Azle

 

Westheimer

 

Palacios

 

Oklahoma City

Kingsland

 

Ennis

 

West University

 

Port Lavaca

 

23rd Street

La Grange

 

Gainesville

 

Woodcreek

 

Portland

 

Expressway

Lexington

 

Glen Rose

 

 

 

Rockport

 

I-240

Marble Falls

 

Granbury

 

Katy

 

Sinton

 

Memorial

New Braunfels

 

Grand Prairie

 

Cinco Ranch

 

Taft

 

 

Pleasanton

 

Jacksboro

 

Katy-Spring Green

 

Yoakum

 

Other Central Oklahoma Area

Round Rock

 

Mesquite

 

 

 

Yorktown

 

 Locations

San Antonio

 

Muenster

 

The Woodlands

 

 

 

Edmond

Schulenburg

 

Runaway Bay

 

The Woodlands-College Park

 

West Texas Area

 

Norman

Seguin

 

Sanger

 

The Woodlands-I-45

 

Abilene

 

 

Smithville

 

Waxahachie

 

The Woodlands-Research Forest

 

Antilley Road

 

Tulsa Area

Thorndale

 

Weatherford

 

 

 

Barrow Street

 

Tulsa

Weimar

 

 

 

Other Houston Area

 

Cypress Street

 

Garnett

 

 

East Texas Area

 

Locations

 

Judge Ely

 

Harvard

Dallas/Fort Worth Area

 

Athens

 

Angleton

 

Mockingbird

 

Memorial

Dallas

 

Blooming Grove

 

Bay City

 

 

 

Sheridan

14th Street Plano

 

Canton

 

Beaumont

 

Amarillo

 

S. Harvard

Abrams Centre

 

Carthage

 

Cleveland

 

Hillside

 

Utica Tower

Addison

 

Corsicana

 

East Bernard

 

Soncy

 

Yale

Allen

 

Crockett

 

El Campo

 

 

 

 

Balch Springs

 

Eustace

 

Dayton

 

Lubbock

 

Other Tulsa Area Locations

Camp Wisdom

 

Gilmer

 

Galveston

 

4th Street

 

Owasso

Carrollton

 

Grapeland

 

Groves

 

66th Street

 

 

Cedar Hill

 

Gun Barrel City

 

Hempstead

 

82nd Street

 

 

Coppell

 

Jacksonville

 

Hitchcock

 

86th Street

 

 

East Plano

 

Kerens

 

Liberty

 

98th Street

 

 

Euless

 

Longview

 

Magnolia

 

Avenue Q

 

 

Frisco

 

Mount Vernon

 

Magnolia Parkway

 

Milwaukee

 

 

Frisco Warren

 

Palestine

 

Mont Belvieu

 

North University

 

 

 

 

- - -

Page 8


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

Balance Sheet Data (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

5,734

 

 

$

10,187

 

 

$

10,656

 

 

$

1,603

 

 

$

554

 

Loans held for investment

 

 

20,352,559

 

 

 

20,510,199

 

 

 

20,494,407

 

 

 

18,533,641

 

 

 

18,098,653

 

Loans held for investment - Warehouse Purchase Program

 

 

822,245

 

 

 

912,327

 

 

 

1,148,883

 

 

 

799,115

 

 

 

740,620

 

Total loans

 

 

21,180,538

 

 

 

21,432,713

 

 

 

21,653,946

 

 

 

19,334,359

 

 

 

18,839,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities(A)

 

 

12,803,896

 

 

 

13,192,742

 

 

 

13,667,319

 

 

 

14,071,545

 

 

 

14,476,005

 

Federal funds sold

 

 

260

 

 

 

234

 

 

 

181

 

 

 

222

 

 

 

301

 

Allowance for credit losses on loans

 

 

(332,362

)

 

 

(351,495

)

 

 

(345,209

)

 

 

(282,191

)

 

 

(281,576

)

Cash and due from banks

 

 

458,153

 

 

 

512,239

 

 

 

396,848

 

 

 

405,331

 

 

 

423,832

 

Goodwill

 

 

3,396,086

 

 

 

3,396,459

 

 

 

3,383,698

 

 

 

3,231,636

 

 

 

3,231,636

 

Core deposit intangibles, net

 

 

63,994

 

 

 

67,553

 

 

 

71,128

 

 

 

48,974

 

 

 

51,348

 

Other real estate owned

 

 

1,708

 

 

 

9,320

 

 

 

3,107

 

 

 

1,989

 

 

 

1,963

 

Fixed assets, net

 

 

369,992

 

 

 

370,237

 

 

 

365,299

 

 

 

345,149

 

 

 

339,453

 

Other assets

 

 

605,612

 

 

 

665,682

 

 

 

708,814

 

 

 

672,218

 

 

 

607,040

 

Total assets

 

$

38,547,877

 

 

$

39,295,684

 

 

$

39,905,131

 

 

$

37,829,232

 

 

$

37,689,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

9,776,572

 

 

$

10,281,893

 

 

$

10,364,921

 

 

$

10,108,348

 

 

$

10,915,448

 

Interest-bearing deposits

 

 

17,403,237

 

 

 

17,030,907

 

 

 

17,015,965

 

 

 

16,895,888

 

 

 

17,618,083

 

Total deposits

 

 

27,179,809

 

 

 

27,312,800

 

 

 

27,380,886

 

 

 

27,004,236

 

 

 

28,533,531

 

Other borrowings

 

 

3,725,000

 

 

 

4,250,000

 

 

 

4,800,000

 

 

 

3,365,000

 

 

 

1,850,000

 

Securities sold under repurchase agreements

 

 

309,277

 

 

 

300,714

 

 

 

434,160

 

 

 

434,261

 

 

 

428,134

 

Subordinated debentures

 

 

 

 

 

 

 

 

3,093

 

 

 

 

 

 

 

Allowance for credit losses on off-balance sheet credit exposures

 

 

36,503

 

 

 

36,503

 

 

 

36,503

 

 

 

29,947

 

 

 

29,947

 

Other liabilities

 

 

217,958

 

 

 

362,990

 

 

 

282,373

 

 

 

256,671

 

 

 

148,843

 

Total liabilities

 

 

31,468,547

 

 

 

32,263,007

 

 

 

32,937,015

 

 

 

31,090,115

 

 

 

30,990,455

 

Shareholders' equity(B)

 

 

7,079,330

 

 

 

7,032,677

 

 

 

6,968,116

 

 

 

6,739,117

 

 

 

6,699,374

 

Total liabilities and equity

 

$

38,547,877

 

 

$

39,295,684

 

 

$

39,905,131

 

 

$

37,829,232

 

 

$

37,689,829

 

 

(A) Includes $(1,770), $(2,442), $(3,393), $(4,399) and $(4,396) in unrealized losses on available for sale securities for the quarterly periods ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

(B) Includes $(1,398), $(1,930), $(2,681), $(3,476) and $(3,473) in after-tax unrealized losses on available for sale securities for the quarterly periods ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

 

Page 9


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Dec 31,
2023

 

 

Sep 30,
2023

 

 

Jun 30,
2023

 

 

Mar 31,
2023

 

 

Dec 31,
2022

 

 

Dec 31,
2023

 

 

Dec 31,
2022

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

306,562

 

 

$

308,678

 

 

$

286,638

 

 

$

247,118

 

 

$

235,126

 

 

$

1,148,996

 

 

$

831,189

 

Securities(C)

 

 

68,077

 

 

 

69,987

 

 

 

72,053

 

 

 

73,185

 

 

 

72,533

 

 

 

283,302

 

 

 

260,416

 

Federal funds sold and other earning assets

 

 

1,793

 

 

 

1,689

 

 

 

1,757

 

 

 

7,006

 

 

 

933

 

 

 

12,245

 

 

 

3,230

 

Total interest income

 

 

376,432

 

 

 

380,354

 

 

 

360,448

 

 

 

327,309

 

 

 

308,592

 

 

 

1,444,543

 

 

 

1,094,835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

84,969

 

 

 

76,069

 

 

 

63,964

 

 

 

47,343

 

 

 

36,048

 

 

 

272,345

 

 

 

68,112

 

Other borrowings

 

 

52,386

 

 

 

62,190

 

 

 

57,351

 

 

 

34,396

 

 

 

14,682

 

 

 

206,323

 

 

 

18,851

 

Securities sold under repurchase agreements

 

 

2,094

 

 

 

2,533

 

 

 

2,674

 

 

 

2,103

 

 

 

1,725

 

 

 

9,404

 

 

 

2,641

 

Subordinated debentures

 

 

 

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

Total interest expense

 

 

139,449

 

 

 

140,830

 

 

 

123,989

 

 

 

83,842

 

 

 

52,455

 

 

 

488,110

 

 

 

89,604

 

Net interest income

 

 

236,983

 

 

 

239,524

 

 

 

236,459

 

 

 

243,467

 

 

 

256,137

 

 

 

956,433

 

 

 

1,005,231

 

Provision for credit losses

 

 

 

 

 

 

 

 

18,540

 

 

 

 

 

 

 

 

 

18,540

 

 

 

 

Net interest income after provision for credit losses

 

 

236,983

 

 

 

239,524

 

 

 

217,919

 

 

 

243,467

 

 

 

256,137

 

 

 

937,893

 

 

 

1,005,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonsufficient funds (NSF) fees

 

 

8,365

 

 

 

8,719

 

 

 

8,512

 

 

 

8,095

 

 

 

8,519

 

 

 

33,691

 

 

 

34,014

 

Credit card, debit card and ATM card income

 

 

9,314

 

 

 

9,285

 

 

 

9,206

 

 

 

8,666

 

 

 

8,816

 

 

 

36,471

 

 

 

34,764

 

Service charges on deposit accounts

 

 

6,316

 

 

 

6,262

 

 

 

6,078

 

 

 

5,926

 

 

 

5,932

 

 

 

24,582

 

 

 

24,730

 

Trust income

 

 

3,360

 

 

 

3,326

 

 

 

3,358

 

 

 

3,225

 

 

 

3,498

 

 

 

13,269

 

 

 

12,250

 

Mortgage income

 

 

542

 

 

 

857

 

 

 

661

 

 

 

238

 

 

 

102

 

 

 

2,298

 

 

 

1,399

 

Brokerage income

 

 

1,059

 

 

 

1,067

 

 

 

1,000

 

 

 

1,149

 

 

 

905

 

 

 

4,275

 

 

 

3,654

 

Bank owned life insurance income

 

 

1,882

 

 

 

1,864

 

 

 

1,553

 

 

 

1,354

 

 

 

1,329

 

 

 

6,653

 

 

 

5,119

 

Net (loss) gain on sale or write-down of assets

 

 

(84

)

 

 

(45

)

 

 

1,994

 

 

 

121

 

 

 

2,087

 

 

 

1,986

 

 

 

3,934

 

Other noninterest income

 

 

5,814

 

 

 

7,408

 

 

 

7,326

 

 

 

9,492

 

 

 

6,536

 

 

 

30,040

 

 

 

25,264

 

Total noninterest income

 

 

36,568

 

 

 

38,743

 

 

 

39,688

 

 

 

38,266

 

 

 

37,724

 

 

 

153,265

 

 

 

145,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

80,486

 

 

 

85,423

 

 

 

84,723

 

 

 

77,798

 

 

 

75,353

 

 

 

328,430

 

 

 

314,713

 

Net occupancy and equipment

 

 

9,093

 

 

 

9,464

 

 

 

8,935

 

 

 

8,025

 

 

 

8,147

 

 

 

35,517

 

 

 

32,446

 

Credit and debit card, data processing and software amortization

 

 

10,741

 

 

 

10,919

 

 

 

10,344

 

 

 

9,566

 

 

 

9,716

 

 

 

41,570

 

 

 

37,327

 

Regulatory assessments and FDIC insurance

 

 

24,940

 

 

 

5,155

 

 

 

5,097

 

 

 

4,973

 

 

 

2,873

 

 

 

40,165

 

 

 

11,381

 

Core deposit intangibles amortization

 

 

3,559

 

 

 

3,576

 

 

 

3,167

 

 

 

2,374

 

 

 

2,558

 

 

 

12,676

 

 

 

10,336

 

Depreciation

 

 

4,607

 

 

 

4,585

 

 

 

4,658

 

 

 

4,433

 

 

 

4,438

 

 

 

18,283

 

 

 

17,960

 

Communications

 

 

3,572

 

 

 

3,686

 

 

 

3,693

 

 

 

3,462

 

 

 

3,506

 

 

 

14,413

 

 

 

13,005

 

Other real estate expense

 

 

165

 

 

 

153

 

 

 

(464

)

 

 

58

 

 

 

154

 

 

 

(88

)

 

 

761

 

Net loss (gain) on sale or write-down of other real estate

 

 

34

 

 

 

(734

)

 

 

(33

)

 

 

(13

)

 

 

(63

)

 

 

(746

)

 

 

(883

)

Merger related expenses

 

 

278

 

 

 

1,104

 

 

 

12,891

 

 

 

860

 

 

 

272

 

 

 

15,133

 

 

 

272

 

Other noninterest expense

 

 

14,696

 

 

 

12,326

 

 

 

12,859

 

 

 

11,464

 

 

 

12,290

 

 

 

51,345

 

 

 

46,868

 

Total noninterest expense

 

 

152,171

 

 

 

135,657

 

 

 

145,870

 

 

 

123,000

 

 

 

119,244

 

 

 

556,698

 

 

 

484,186

 

Income before income taxes

 

 

121,380

 

 

 

142,610

 

 

 

111,737

 

 

 

158,733

 

 

 

174,617

 

 

 

534,460

 

 

 

666,173

 

Provision for income taxes

 

 

25,904

 

 

 

30,402

 

 

 

24,799

 

 

 

34,039

 

 

 

36,737

 

 

 

115,144

 

 

 

141,657

 

Net income available to common shareholders

 

$

95,476

 

 

$

112,208

 

 

$

86,938

 

 

$

124,694

 

 

$

137,880

 

 

$

419,316

 

 

$

524,516

 

 

(C) Interest income on securities was reduced by net premium amortization of $6,428, $6,897, $7,131, $7,384 and $8,703 for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and $27,840 and $42,957 for the years ended December 31, 2023 and 2022, respectively.

Page 10


 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars and share amounts in thousands, except per share data and market prices)

 

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

 

Dec 31, 2023

 

 

Dec 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profitability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (D) (E)

 

$

95,476

 

 

$

112,208

 

 

$

86,938

 

 

$

124,694

 

 

$

137,880

 

 

$

419,316

 

 

$

524,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.02

 

 

$

1.20

 

 

$

0.94

 

 

$

1.37

 

 

$

1.51

 

 

$

4.51

 

 

$

5.73

 

Diluted earnings per share

 

$

1.02

 

 

$

1.20

 

 

$

0.94

 

 

$

1.37

 

 

$

1.51

 

 

$

4.51

 

 

$

5.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (F) (J)

 

 

0.98

%

 

 

1.13

%

 

 

0.89

%

 

 

1.31

%

 

 

1.47

%

 

 

1.08

%

 

 

1.39

%

Return on average common equity (F) (J)

 

 

5.39

%

 

 

6.39

%

 

 

5.01

%

 

 

7.38

%

 

 

8.26

%

 

 

6.03

%

 

 

7.97

%

Return on average tangible common equity (F) (G) (J)

 

 

10.54

%

 

 

12.58

%

 

 

9.67

%

 

 

14.34

%

 

 

16.26

%

 

 

11.76

%

 

 

15.94

%

Tax equivalent net interest margin (D) (E) (H)

 

 

2.75

%

 

 

2.72

%

 

 

2.73

%

 

 

2.93

%

 

 

3.05

%

 

 

2.78

%

 

 

3.00

%

Efficiency ratio (G) (I) (K)

 

 

55.61

%

 

 

48.74

%

 

 

53.21

%

 

 

43.68

%

 

 

40.87

%

 

 

50.26

%

 

 

42.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity and Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to assets

 

 

18.37

%

 

 

17.90

%

 

 

17.46

%

 

 

17.81

%

 

 

17.78

%

 

 

18.37

%

 

 

17.78

%

Common equity tier 1 capital

 

 

15.54

%

 

 

14.98

%

 

 

14.49

%

 

 

15.59

%

 

 

15.88

%

 

 

15.54

%

 

 

15.88

%

Tier 1 risk-based capital

 

 

15.54

%

 

 

14.98

%

 

 

14.49

%

 

 

15.59

%

 

 

15.88

%

 

 

15.54

%

 

 

15.88

%

Total risk-based capital

 

 

16.56

%

 

 

16.05

%

 

 

15.52

%

 

 

16.41

%

 

 

16.51

%

 

 

16.56

%

 

 

16.51

%

Tier 1 leverage capital

 

 

10.39

%

 

 

10.03

%

 

 

9.96

%

 

 

10.06

%

 

 

10.16

%

 

 

10.39

%

 

 

10.16

%

Period end tangible equity to period end tangible assets (G)

 

 

10.31

%

 

 

9.96

%

 

 

9.64

%

 

 

10.01

%

 

 

9.93

%

 

 

10.31

%

 

 

9.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

93,715

 

 

 

93,720

 

 

 

92,930

 

 

 

91,207

 

 

 

91,287

 

 

 

92,902

 

 

 

91,604

 

Diluted

 

 

93,715

 

 

 

93,720

 

 

 

92,930

 

 

 

91,207

 

 

 

91,287

 

 

 

92,902

 

 

 

91,604

 

Period end shares outstanding

 

 

93,722

 

 

 

93,717

 

 

 

93,721

 

 

 

90,693

 

 

 

91,314

 

 

 

93,722

 

 

 

91,314

 

Cash dividends paid per common share

 

$

0.56

 

 

$

0.55

 

 

$

0.55

 

 

$

0.55

 

 

$

0.55

 

 

$

2.21

 

 

$

2.11

 

Book value per common share

 

$

75.54

 

 

$

75.04

 

 

$

74.35

 

 

$

74.31

 

 

$

73.37

 

 

$

75.54

 

 

$

73.37

 

Tangible book value per common share (G)

 

$

38.62

 

 

$

38.08

 

 

$

37.49

 

 

$

38.13

 

 

$

37.41

 

 

$

38.62

 

 

$

37.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock Market Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$

68.79

 

 

$

63.65

 

 

$

63.13

 

 

$

78.76

 

 

$

76.32

 

 

$

78.76

 

 

$

80.46

 

Low

 

$

49.60

 

 

$

52.62

 

 

$

55.12

 

 

$

58.25

 

 

$

66.71

 

 

$

49.60

 

 

$

64.69

 

Period end closing price

 

$

67.73

 

 

$

54.58

 

 

$

56.48

 

 

$

61.52

 

 

$

72.68

 

 

$

67.73

 

 

$

72.68

 

Employees – FTE (excluding overtime)

 

 

3,850

 

 

 

3,853

 

 

 

3,710

 

 

 

3,651

 

 

 

3,633

 

 

 

3,850

 

 

 

3,633

 

Number of banking centers

 

 

285

 

 

 

285

 

 

 

286

 

 

 

272

 

 

 

272

 

 

 

285

 

 

 

272

 

 

(D) Includes purchase accounting adjustments for the periods presented as follows:

 

Three Months Ended

 

Year-to-Date

 

Dec 31,

2023

 

Sep 30,

2023

 

Jun 30,

2023

 

Mar 31,

2023

 

Dec 31,

2022

 

Dec 31,

2023

 

Dec 31,

2022

Loan discount accretion

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-PCD

$1,543

 

$1,508

 

$1,242

 

$532

 

$603

 

$4,825

 

$5,924

PCD

$937

 

$767

 

$1,178

 

$339

 

$310

 

$3,221

 

$1,477

Securities net accretion (amortization)

$598

 

$626

 

$426

 

$(2)

 

$(12)

 

$1,648

 

$116

Time deposits amortization

$(150)

 

$(210)

 

$(187)

 

$(53)

 

$(59)

 

$(600)

 

$(311)

 

(E) Using effective tax rate of 21.3%, 21.3%, 22.2%, 21.4% and 21.0% for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and 21.5% and 21.3% for the years ended December 31, 2023 and 2022, respectively.

(F) Interim periods annualized.

(G) Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(H) Net interest margin for all periods presented is based on average balances on an actual 365-day basis.

(I) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation.

(J) For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax, refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K) For calculations of the efficiency ratio excluding merger related expenses and FDIC special assessment refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Page 11


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

 

Three Months Ended

 

 

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

Dec 31, 2022

 

 

 

 

Average
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

 

(L)

Average
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

(L)

Average
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

 

(L)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

9,828

 

 

$

185

 

 

7.47%

 

 

$

9,832

 

 

$

162

 

 

6.54%

 

$

1,758

 

 

$

27

 

 

6.09%

 

 

Loans held for investment

 

 

20,370,915

 

 

 

291,882

 

 

5.68%

 

 

 

20,496,075

 

 

 

290,566

 

 

5.62%

 

 

17,818,769

 

 

 

223,768

 

 

4.98%

 

 

Loans held for investment - Warehouse Purchase Program

 

 

770,481

 

 

 

14,495

 

 

7.46%

 

 

 

972,936

 

 

 

17,950

 

 

7.32%

 

 

747,007

 

 

 

11,331

 

 

6.02%

 

 

Total loans

 

 

21,151,224

 

 

 

306,562

 

 

5.75%

 

 

 

21,478,843

 

 

 

308,678

 

 

5.70%

 

 

18,567,534

 

 

 

235,126

 

 

5.02%

 

 

Investment securities

 

 

13,074,243

 

 

 

68,077

 

 

2.07%

 

(M)

 

13,512,137

 

 

 

69,987

 

 

2.05%

(M)

 

14,715,516

 

 

 

72,533

 

 

1.96%

 

(M)

Federal funds sold and other earning assets

 

 

125,295

 

 

 

1,793

 

 

5.68%

 

 

 

125,690

 

 

 

1,689

 

 

5.33%

 

 

101,986

 

 

 

933

 

 

3.63%

 

 

Total interest-earning assets

 

 

34,350,762

 

 

 

376,432

 

 

4.35%

 

 

 

35,116,670

 

 

 

380,354

 

 

4.30%

 

 

33,385,036

 

 

 

308,592

 

 

3.67%

 

 

Allowance for credit losses on loans

 

 

(346,493

)

 

 

 

 

 

 

 

 

(343,967

)

 

 

 

 

 

 

 

(282,546

)

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

4,810,942

 

 

 

 

 

 

 

 

 

4,829,336

 

 

 

 

 

 

 

 

4,515,412

 

 

 

 

 

 

 

 

Total assets

 

$

38,815,211

 

 

 

 

 

 

 

 

$

39,602,039

 

 

 

 

 

 

 

$

37,617,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

4,822,698

 

 

$

6,789

 

 

0.56%

 

 

$

4,768,485

 

 

$

5,182

 

 

0.43%

 

$

5,843,672

 

 

$

3,224

 

 

0.22%

 

 

Savings and money market deposits

 

 

8,815,892

 

 

 

45,192

 

 

2.03%

 

 

 

8,977,824

 

 

 

44,446

 

 

1.96%

 

 

9,805,024

 

 

 

27,929

 

 

1.13%

 

 

Certificates and other time deposits

 

 

3,442,115

 

 

 

32,988

 

 

3.80%

 

 

 

3,172,178

 

 

 

26,441

 

 

3.31%

 

 

2,066,085

 

 

 

4,895

 

 

0.94%

 

 

Other borrowings

 

 

4,028,263

 

 

 

52,386

 

 

5.16%

 

 

 

4,671,449

 

 

 

62,190

 

 

5.28%

 

 

1,465,533

 

 

 

14,682

 

 

3.97%

 

 

Securities sold under repurchase agreements

 

 

300,317

 

 

 

2,094

 

 

2.77%

 

 

 

389,149

 

 

 

2,533

 

 

2.58%

 

 

441,405

 

 

 

1,725

 

 

1.55%

 

 

Subordinated debentures

 

 

 

 

 

 

 

 

 

 

 

2,578

 

 

 

38

 

 

5.85%

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

21,409,285

 

 

 

139,449

 

 

2.58%

 

(N)

 

21,981,663

 

 

 

140,830

 

 

2.54%

(N)

 

19,621,719

 

 

 

52,455

 

 

1.06%

 

(N)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

9,960,240

 

 

 

 

 

 

 

 

 

10,269,162

 

 

 

 

 

 

 

 

11,064,714

 

 

 

 

 

 

 

 

Allowance for credit losses on off-balance sheet credit exposures

 

 

36,503

 

 

 

 

 

 

 

 

 

36,504

 

 

 

 

 

 

 

 

29,947

 

 

 

 

 

 

 

 

Other liabilities

 

 

323,344

 

 

 

 

 

 

 

 

 

290,217

 

 

 

 

 

 

 

 

224,512

 

 

 

 

 

 

 

 

Total liabilities

 

 

31,729,372

 

 

 

 

 

 

 

 

 

32,577,546

 

 

 

 

 

 

 

 

30,940,892

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

7,085,839

 

 

 

 

 

 

 

 

 

7,024,493

 

 

 

 

 

 

 

 

6,677,010

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

38,815,211

 

 

 

 

 

 

 

 

$

39,602,039

 

 

 

 

 

 

 

$

37,617,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income and margin

 

 

 

 

$

236,983

 

 

2.74%

 

 

 

 

 

$

239,524

 

 

2.71%

 

 

 

 

$

256,137

 

 

3.04%

 

 

Non-GAAP to GAAP reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustment

 

 

 

 

 

952

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

440

 

 

 

 

 

Net interest income and margin
     (tax equivalent basis)

 

 

 

 

$

237,935

 

 

2.75%

 

 

 

 

 

$

240,524

 

 

2.72%

 

 

 

 

$

256,577

 

 

3.05%

 

 

 

(L) Annualized and based on an actual 365-day basis.

(M) Yield on securities was impacted by net premium amortization of $6,428, $6,897 and $8,703 for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 1.76%, 1.73% and 0.68% for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

 

Page 12


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

 

Year-to-Date

 

 

 

 

Dec 31, 2023

 

Dec 31, 2022

 

 

 

 

Average
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

(O)

Average
Balance

 

 

Interest
Earned/
Interest
Paid

 

 

Average
Yield/
Rate

 

(O)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

6,508

 

 

$

452

 

 

6.95%

 

$

3,420

 

 

$

164

 

 

4.80%

 

 

Loans held for investment

 

 

19,754,541

 

 

 

1,089,743

 

 

5.52%

 

 

17,155,082

 

 

 

788,504

 

 

4.60%

 

 

Loans held for investment - Warehouse Purchase Program

 

 

815,853

 

 

 

58,801

 

 

7.21%

 

 

1,051,237

 

 

 

42,521

 

 

4.04%

 

 

Total loans

 

 

20,576,902

 

 

 

1,148,996

 

 

5.58%

 

 

18,209,739

 

 

 

831,189

 

 

4.56%

 

 

Investment securities

 

 

13,719,899

 

 

 

283,302

 

 

2.06%

(P)

 

14,613,799

 

 

 

260,416

 

 

1.78%

 

(P)

Federal funds sold and other earning assets

 

 

248,691

 

 

 

12,245

 

 

4.92%

 

 

709,270

 

 

 

3,230

 

 

0.46%

 

 

Total interest-earning assets

 

 

34,545,492

 

 

 

1,444,543

 

 

4.18%

 

 

33,532,808

 

 

 

1,094,835

 

 

3.26%

 

 

Allowance for credit losses on loans

 

 

(314,350

)

 

 

 

 

 

 

 

(283,997

)

 

 

 

 

 

 

 

Noninterest-earning assets

 

 

4,741,815

 

 

 

 

 

 

 

 

4,475,434

 

 

 

 

 

 

 

 

Total assets

 

$

38,972,957

 

 

 

 

 

 

 

$

37,724,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

5,150,049

 

 

$

19,554

 

 

0.38%

 

$

6,299,924

 

 

$

10,175

 

 

0.16%

 

 

Savings and money market deposits

 

 

9,129,845

 

 

 

168,184

 

 

1.84%

 

 

10,384,178

 

 

 

45,907

 

 

0.44%

 

 

Certificates and other time deposits

 

 

2,832,754

 

 

 

84,607

 

 

2.99%

 

 

2,322,754

 

 

 

12,030

 

 

0.52%

 

 

Other borrowings

 

 

4,008,616

 

 

 

206,323

 

 

5.15%

 

 

543,107

 

 

 

18,851

 

 

3.47%

 

 

Securities sold under repurchase agreements

 

 

389,313

 

 

 

9,404

 

 

2.42%

 

 

457,553

 

 

 

2,641

 

 

0.58%

 

 

Subordinated debentures

 

 

1,031

 

 

 

38

 

 

3.69%

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

21,511,608

 

 

 

488,110

 

 

2.27%

(Q)

 

20,007,516

 

 

 

89,604

 

 

0.45%

 

(Q)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

10,224,241

 

 

 

 

 

 

 

 

10,903,539

 

 

 

 

 

 

 

 

Allowance for credit losses on off-balance sheet credit exposures

 

 

33,271

 

 

 

 

 

 

 

 

29,947

 

 

 

 

 

 

 

 

Other liabilities

 

 

253,047

 

 

 

 

 

 

 

 

204,574

 

 

 

 

 

 

 

 

Total liabilities

 

 

32,022,167

 

 

 

 

 

 

 

 

31,145,576

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

6,950,790

 

 

 

 

 

 

 

 

6,578,669

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

38,972,957

 

 

 

 

 

 

 

$

37,724,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income and margin

 

 

 

 

$

956,433

 

 

2.77%

 

 

 

 

$

1,005,231

 

 

3.00%

 

 

Non-GAAP to GAAP reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustment

 

 

 

 

 

3,640

 

 

 

 

 

 

 

 

1,815

 

 

 

 

 

Net interest income and margin (tax equivalent basis)

 

 

 

 

$

960,073

 

 

2.78%

 

 

 

 

$

1,007,046

 

 

3.00%

 

 

 

(O) Based on an actual 365-day basis.

(P) Yield on securities was impacted by net premium amortization of $27,840 and $42,957 for the years ended December 31, 2023 and 2022, respectively.

(Q) Total cost of funds, including noninterest bearing deposits, was 1.54% and 0.29% for the years ended December 31, 2023 and 2022, respectively.

 

 

Page 13


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 

Three Months Ended

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

YIELD TREND (R)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

7.47

%

 

 

6.54

%

 

 

6.87

%

 

 

6.58

%

 

 

6.09

%

Loans held for investment

 

5.68

%

 

 

5.62

%

 

 

5.48

%

 

 

5.24

%

 

 

4.98

%

Loans held for investment - Warehouse Purchase Program

 

7.46

%

 

 

7.32

%

 

 

7.09

%

 

 

6.88

%

 

 

6.02

%

Total loans

 

5.75

%

 

 

5.70

%

 

 

5.55

%

 

 

5.29

%

 

 

5.02

%

Investment securities (S)

 

2.07

%

 

 

2.05

%

 

 

2.07

%

 

 

2.07

%

 

 

1.96

%

Federal funds sold and other earning assets

 

5.68

%

 

 

5.33

%

 

 

4.69

%

 

 

4.74

%

 

 

3.63

%

Total interest-earning assets

 

4.35

%

 

 

4.30

%

 

 

4.15

%

 

 

3.92

%

 

 

3.67

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

0.56

%

 

 

0.43

%

 

 

0.30

%

 

 

0.26

%

 

 

0.22

%

Savings and money market deposits

 

2.03

%

 

 

1.96

%

 

 

1.88

%

 

 

1.50

%

 

 

1.13

%

Certificates and other time deposits

 

3.80

%

 

 

3.31

%

 

 

2.59

%

 

 

1.59

%

 

 

0.94

%

Other borrowings

 

5.16

%

 

 

5.28

%

 

 

5.20

%

 

 

4.83

%

 

 

3.97

%

Securities sold under repurchase agreements

 

2.77

%

 

 

2.58

%

 

 

2.43

%

 

 

1.99

%

 

 

1.55

%

Subordinated debentures

 

 

 

 

5.85

%

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

2.58

%

 

 

2.54

%

 

 

2.28

%

 

 

1.63

%

 

 

1.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin

 

2.74

%

 

 

2.71

%

 

 

2.72

%

 

 

2.92

%

 

 

3.04

%

Net Interest Margin (tax equivalent)

 

2.75

%

 

 

2.72

%

 

 

2.73

%

 

 

2.93

%

 

 

3.05

%

 

(R) Annualized and based on average balances on an actual 365-day basis.

(S) Yield on securities was impacted by net premium amortization of $6,428, $6,897, $7,131, $7,384 and $8,703 for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

Page 14


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

Balance Sheet Averages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for sale

 

$

9,828

 

 

$

9,832

 

 

$

3,910

 

 

$

2,343

 

 

$

1,758

 

Loans held for investment

 

 

20,370,915

 

 

 

20,496,075

 

 

 

19,802,751

 

 

 

18,317,712

 

 

 

17,818,769

 

Loans held for investment - Warehouse Purchase Program

 

 

770,481

 

 

 

972,936

 

 

 

898,768

 

 

 

617,822

 

 

 

747,007

 

Total loans

 

 

21,151,224

 

 

 

21,478,843

 

 

 

20,705,429

 

 

 

18,937,877

 

 

 

18,567,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

13,074,243

 

 

 

13,512,137

 

 

 

13,976,818

 

 

 

14,332,509

 

 

 

14,715,516

 

Federal funds sold and other earning assets

 

 

125,295

 

 

 

125,690

 

 

 

150,300

 

 

 

600,048

 

 

 

101,986

 

Total interest-earning assets

 

 

34,350,762

 

 

 

35,116,670

 

 

 

34,832,547

 

 

 

33,870,434

 

 

 

33,385,036

 

Allowance for credit losses on loans

 

 

(346,493

)

 

 

(343,967

)

 

 

(283,594

)

 

 

(282,316

)

 

 

(282,546

)

Cash and due from banks

 

 

302,864

 

 

 

301,201

 

 

 

281,593

 

 

 

319,960

 

 

 

306,235

 

Goodwill

 

 

3,396,224

 

 

 

3,387,293

 

 

 

3,291,659

 

 

 

3,231,637

 

 

 

3,231,637

 

Core deposit intangibles, net

 

 

65,986

 

 

 

69,551

 

 

 

48,616

 

 

 

50,208

 

 

 

52,591

 

Other real estate

 

 

4,781

 

 

 

6,301

 

 

 

2,712

 

 

 

2,083

 

 

 

2,075

 

Fixed assets, net

 

 

370,900

 

 

 

367,814

 

 

 

357,593

 

 

 

342,380

 

 

 

338,572

 

Other assets

 

 

670,187

 

 

 

697,176

 

 

 

756,500

 

 

 

643,467

 

 

 

584,302

 

Total assets

 

$

38,815,211

 

 

$

39,602,039

 

 

$

39,287,626

 

 

$

38,177,853

 

 

$

37,617,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

9,960,240

 

 

$

10,269,162

 

 

$

10,274,819

 

 

$

10,389,980

 

 

$

11,064,714

 

Interest-bearing demand deposits

 

 

4,822,698

 

 

 

4,768,485

 

 

 

5,147,453

 

 

 

5,877,641

 

 

 

5,843,672

 

Savings and money market deposits

 

 

8,815,892

 

 

 

8,977,824

 

 

 

9,156,047

 

 

 

9,579,679

 

 

 

9,805,024

 

Certificates and other time deposits

 

 

3,442,115

 

 

 

3,172,178

 

 

 

2,652,064

 

 

 

2,045,580

 

 

 

2,066,085

 

Total deposits

 

 

27,040,945

 

 

 

27,187,649

 

 

 

27,230,383

 

 

 

27,892,880

 

 

 

28,779,495

 

Other borrowings

 

 

4,028,263

 

 

 

4,671,449

 

 

 

4,427,914

 

 

 

2,887,011

 

 

 

1,465,533

 

Securities sold under repurchase agreements

 

 

300,317

 

 

 

389,149

 

 

 

441,303

 

 

 

427,887

 

 

 

441,405

 

Subordinated debentures

 

 

 

 

 

2,578

 

 

 

1,547

 

 

 

 

 

 

 

Allowance for credit losses on off-balance sheet credit exposures

 

 

36,503

 

 

 

36,504

 

 

 

30,022

 

 

 

29,947

 

 

 

29,947

 

Other liabilities

 

 

323,344

 

 

 

290,217

 

 

 

220,775

 

 

 

180,685

 

 

 

224,512

 

Shareholders' equity

 

 

7,085,839

 

 

 

7,024,493

 

 

 

6,935,682

 

 

 

6,759,443

 

 

 

6,677,010

 

Total liabilities and equity

 

$

38,815,211

 

 

$

39,602,039

 

 

$

39,287,626

 

 

$

38,177,853

 

 

$

37,617,902

 

 

Page 15


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 

 

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

 

Dec 31, 2022

Period End Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$1,936,717

9.2%

 

$2,153,391

10.1%

 

$2,245,620

10.5%

 

$2,074,078

10.7%

 

$2,165,263

11.6%

Warehouse purchase program

 

822,245

3.9%

 

912,327

4.3%

 

1,148,883

5.3%

 

799,115

4.1%

 

740,620

3.9%

Construction, land development and other land loans

 

3,076,591

14.5%

 

3,200,479

14.9%

 

3,215,016

14.8%

 

2,899,980

15.0%

 

2,805,438

14.9%

1-4 family residential

 

7,207,226

34.0%

 

7,032,593

32.8%

 

6,780,813

31.3%

 

6,055,532

31.3%

 

5,774,814

30.6%

Home equity

 

960,852

4.5%

 

969,498

4.5%

 

977,070

4.5%

 

959,124

5.0%

 

966,410

5.1%

Commercial real estate (includes multi-family residential)

 

5,662,948

26.7%

 

5,606,837

26.2%

 

5,676,526

26.2%

 

5,133,693

26.6%

 

4,986,211

26.5%

Agriculture (includes farmland)

 

816,043

3.9%

 

801,933

3.7%

 

804,376

3.7%

 

721,395

3.7%

 

688,033

3.6%

Consumer and other

 

329,593

1.6%

 

306,018

1.4%

 

305,207

1.4%

 

288,300

1.5%

 

283,559

1.5%

Energy

 

368,323

1.7%

 

449,637

2.1%

 

500,435

2.3%

 

403,142

2.1%

 

429,479

2.3%

Total loans

 

$21,180,538

 

 

$21,432,713

 

 

$21,653,946

 

 

$19,334,359

 

 

$18,839,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit Types

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing DDA

 

$9,776,572

36.0%

 

$10,281,893

37.6%

 

$10,364,921

37.9%

 

$10,108,348

37.4%

 

$10,915,448

38.2%

Interest-bearing DDA

 

5,115,945

18.8%

 

4,797,259

17.6%

 

4,953,090

18.1%

 

5,332,086

19.8%

 

5,986,203

21.0%

Money market

 

5,859,701

21.6%

 

5,892,505

21.6%

 

5,904,160

21.5%

 

6,021,449

22.3%

 

6,164,025

21.6%

Savings

 

2,881,397

10.6%

 

3,005,936

11.0%

 

3,179,351

11.6%

 

3,304,482

12.2%

 

3,471,970

12.2%

Certificates and other time deposits

 

3,546,194

13.0%

 

3,335,207

12.2%

 

2,979,364

10.9%

 

2,237,871

8.3%

 

1,995,885

7.0%

Total deposits

 

$27,179,809

 

 

$27,312,800

 

 

$27,380,886

 

 

$27,004,236

 

 

$28,533,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan to Deposit Ratio

 

77.9%

 

 

78.5%

 

 

79.1%

 

 

71.6%

 

 

66.0%

 

 

Page 16


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 

Construction Loans

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family residential construction

 

$

1,088,636

 

 

35.4

%

 

$

1,157,016

 

 

36.1

%

 

$

1,244,631

 

 

38.7

%

 

$

1,179,883

 

 

40.7

%

 

$

1,097,176

 

 

39.1

%

Land development

 

 

367,849

 

 

12.0

%

 

 

359,518

 

 

11.2

%

 

 

310,199

 

 

9.7

%

 

 

222,511

 

 

7.7

%

 

 

181,747

 

 

6.5

%

Raw land

 

 

328,365

 

 

10.7

%

 

 

340,659

 

 

10.7

%

 

 

359,228

 

 

11.2

%

 

 

326,168

 

 

11.2

%

 

 

332,603

 

 

11.9

%

Residential lots

 

 

222,591

 

 

7.2

%

 

 

216,659

 

 

6.8

%

 

 

216,706

 

 

6.7

%

 

 

226,600

 

 

7.8

%

 

 

243,942

 

 

8.7

%

Commercial lots

 

 

155,415

 

 

5.0

%

 

 

154,425

 

 

4.8

%

 

 

158,278

 

 

4.9

%

 

 

167,151

 

 

5.8

%

 

 

177,378

 

 

6.3

%

Commercial construction and other

 

 

914,436

 

 

29.7

%

 

 

973,022

 

 

30.4

%

 

 

927,025

 

 

28.8

%

 

 

777,678

 

 

26.8

%

 

 

772,606

 

 

27.5

%

Net unaccreted discount

 

 

(701

)

 

 

 

 

(820

)

 

 

 

 

(1,051

)

 

 

 

 

(11

)

 

 

 

 

(14

)

 

 

Total construction loans

 

$

3,076,591

 

 

 

 

$

3,200,479

 

 

 

 

$

3,215,016

 

 

 

 

$

2,899,980

 

 

 

 

$

2,805,438

 

 

 

 

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2023

 

Houston

 

 

Dallas

 

 

Austin

 

 

OK City

 

 

Tulsa

 

 

Other (T)

 

 

Total

 

 

Collateral Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shopping center/retail

$

353,014

 

 

$

287,131

 

 

$

59,778

 

 

$

15,231

 

 

$

14,662

 

 

$

290,654

 

 

$

1,020,470

 

 

Commercial and industrial buildings

 

164,582

 

 

 

101,957

 

 

 

25,833

 

 

 

31,071

 

 

 

18,242

 

 

 

269,728

 

 

 

611,413

 

 

Office buildings

 

84,064

 

 

 

222,729

 

 

 

54,147

 

 

 

48,961

 

 

 

3,934

 

 

 

97,328

 

 

 

511,163

 

 

Medical buildings

 

75,533

 

 

 

17,124

 

 

 

1,740

 

 

 

43,605

 

 

 

33,186

 

 

 

57,860

 

 

 

229,048

 

 

Apartment buildings

 

138,011

 

 

 

127,623

 

 

 

41,696

 

 

 

14,215

 

 

 

13,543

 

 

 

212,276

 

 

 

547,364

 

 

Hotel

 

111,974

 

 

 

86,862

 

 

 

39,550

 

 

 

18,281

 

 

 

 

 

 

169,238

 

 

 

425,905

 

 

Other

 

92,153

 

 

 

62,468

 

 

 

41,769

 

 

 

8,381

 

 

 

1,662

 

 

 

78,384

 

 

 

284,817

 

 

Total

$

1,019,331

 

 

$

905,894

 

 

$

264,513

 

 

$

179,745

 

 

$

85,229

 

 

$

1,175,468

 

 

$

3,630,180

 

(U)

 

 

Acquired Loans

 

Non-PCD Loans

 

 

PCD Loans

 

 

Total Acquired Loans

 

 

Balance at
Acquisition
Date

 

 

Balance at
Sept 30,
2023

 

 

Balance at
Dec 31,
2023

 

 

Balance at
Acquisition
Date

 

 

Balance at
Sept 30,
2023

 

 

Balance at
Dec 31,
2023

 

 

Balance at
Acquisition
Date

 

 

Balance at
Sept 30,
2023

 

 

Balance at
Dec 31,
2023

 

Loan marks:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired banks (V)

$

345,599

 

 

$

871

 

 

$

506

 

 

$

320,052

 

 

$

2,685

 

 

$

2,594

 

 

$

665,651

 

 

$

3,556

 

 

$

3,100

 

FirstCapital Bank (W)

 

22,648

 

 

 

20,672

 

 

 

19,486

 

 

 

7,790

 

 

 

6,658

 

 

 

5,320

 

 

 

30,438

 

 

 

27,330

 

 

 

24,806

 

Total

 

368,247

 

 

 

21,543

 

 

 

19,992

 

 

 

327,842

 

 

 

9,343

 

 

 

7,914

 

 

 

696,089

 

 

 

30,886

 

 

 

27,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired portfolio loan balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired banks (V)

 

12,286,159

 

 

 

1,104,770

 

 

 

1,043,525

 

 

 

689,573

 

 

 

62,053

 

 

 

58,310

 

 

 

12,975,732

 

 

 

1,166,823

 

 

 

1,101,835

 

FirstCapital Bank (W)

 

1,021,694

 

 

 

855,052

 

 

 

780,284

 

 

 

627,991

 

 

 

558,271

 

 

 

475,343

 

 

 

1,649,685

 

 

 

1,413,323

 

 

 

1,255,627

 

Total

 

13,307,853

 

 

 

1,959,822

 

 

 

1,823,809

 

 

 

1,317,564

 

 

 

620,324

 

 

 

533,653

 

 

 

14,625,417

 

 (X)

 

2,580,146

 

 

 

2,357,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired portfolio loan balances less loan marks

$

12,939,606

 

 

$

1,938,279

 

 

$

1,803,817

 

 

$

989,722

 

 

$

610,981

 

 

$

525,739

 

 

$

13,929,328

 

 

$

2,549,260

 

 

$

2,329,556

 

 

(T) Includes other MSA and non-MSA regions.

(U) Represents a portion of total commercial real estate loans of $5.663 billion as of December 31, 2023.

(V) Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank and LegacyTexas Bank.

(W) FirstCapital Bank merger was completed on May 1, 2023. The Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.4 million at acquisition date, which were subject to subsequent fair value adjustments.

(X) Actual principal balances acquired.

 

Page 17


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 

Three Months Ended

 

 

Year-to-Date

 

 

Dec 31, 2023

 

 

Sep 30, 2023

 

 

Jun 30, 2023

 

 

Mar 31, 2023

 

 

Dec 31, 2022

 

 

Dec 31, 2023

 

 

Dec 31, 2022

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

$

68,688

 

 

$

59,729

 

 

$

57,723

 

 

$

22,496

 

 

$

19,614

 

 

$

68,688

 

 

$

19,614

 

Accruing loans 90 or more days past due

 

2,195

 

 

 

397

 

 

 

1,744

 

 

 

 

 

 

5,917

 

 

 

2,195

 

 

 

5,917

 

Total nonperforming loans

 

70,883

 

 

 

60,126

 

 

 

59,467

 

 

 

22,496

 

 

 

25,531

 

 

 

70,883

 

 

 

25,531

 

Repossessed assets

 

76

 

 

 

35

 

 

 

153

 

 

 

 

 

 

 

 

 

76

 

 

 

 

Other real estate

 

1,708

 

 

 

9,320

 

 

 

3,107

 

 

 

1,989

 

 

 

1,963

 

 

 

1,708

 

 

 

1,963

 

Total nonperforming assets

$

72,667

 

 

$

69,481

 

 

$

62,727

 

 

$

24,485

 

 

$

27,494

 

 

$

72,667

 

 

$

27,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (includes energy)

$

8,957

 

 

$

22,219

 

 

$

24,027

 

 

$

2,832

 

 

$

3,921

 

 

$

8,957

 

 

$

3,921

 

Construction, land development and other land loans

 

17,343

 

 

 

8,684

 

 

 

4,245

 

 

 

3,210

 

 

 

6,166

 

 

 

17,343

 

 

 

6,166

 

1-4 family residential (includes home equity)

 

26,096

 

 

 

23,708

 

 

 

19,609

 

 

 

16,951

 

 

 

15,326

 

 

 

26,096

 

 

 

15,326

 

Commercial real estate (includes multi-family residential)

 

18,775

 

 

 

13,341

 

 

 

13,504

 

 

 

1,051

 

 

 

1,649

 

 

 

18,775

 

 

 

1,649

 

Agriculture (includes farmland)

 

1,460

 

 

 

1,511

 

 

 

1,284

 

 

 

432

 

 

 

421

 

 

 

1,460

 

 

 

421

 

Consumer and other

 

36

 

 

 

18

 

 

 

58

 

 

 

9

 

 

 

11

 

 

 

36

 

 

 

11

 

Total

$

72,667

 

 

$

69,481

 

 

$

62,727

 

 

$

24,485

 

 

$

27,494

 

 

$

72,667

 

 

$

27,494

 

Number of loans/properties

 

292

 

 

 

260

 

 

 

241

 

 

 

190

 

 

 

170

 

 

 

292

 

 

 

170

 

Allowance for credit losses on loans

$

332,362

 

 

$

351,495

 

 

$

345,209

 

 

$

282,191

 

 

$

281,576

 

 

$

332,362

 

 

$

281,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (includes energy)

$

16,123

 

 

$

1,594

 

 

$

160

 

 

$

(1,472

)

 

$

(643

)

 

$

16,405

 

 

$

(841

)

Construction, land development and other land loans

 

(5

)

 

 

(5

)

 

 

50

 

 

 

(13

)

 

 

(5

)

 

 

27

 

 

 

416

 

1-4 family residential (includes home equity)

 

20

 

 

 

(78

)

 

 

(70

)

 

 

(140

)

 

 

(55

)

 

 

(268

)

 

 

(202

)

Commercial real estate (includes multi-family residential)

 

1,590

 

 

 

570

 

 

 

14,957

 

 

 

(1

)

 

 

74

 

 

 

17,116

 

 

 

860

 

Agriculture (includes farmland)

 

 

 

 

 

 

 

(78

)

 

 

(6

)

 

 

(14

)

 

 

(84

)

 

 

(7

)

Consumer and other

 

1,405

 

 

 

1,327

 

 

 

1,046

 

 

 

1,017

 

 

 

1,246

 

 

 

4,795

 

 

 

4,578

 

Total

$

19,133

 

 

$

3,408

 

 

$

16,065

 

 

$

(615

)

 

$

603

 

 

$

37,991

 

 

$

4,804

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to average interest-earning assets

 

0.21

%

 

 

0.20

%

 

 

0.18

%

 

 

0.07

%

 

 

0.08

%

 

 

0.21

%

 

 

0.08

%

Nonperforming assets to loans and other real estate

 

0.34

%

 

 

0.32

%

 

 

0.29

%

 

 

0.13

%

 

 

0.15

%

 

 

0.34

%

 

 

0.15

%

Net charge-offs to average loans (annualized)

 

0.36

%

 

 

0.06

%

 

 

0.31

%

 

(0.01%)

 

 

 

0.01

%

 

 

0.18

%

 

 

0.03

%

Allowance for credit losses on loans to total loans

 

1.57

%

 

 

1.64

%

 

 

1.59

%

 

 

1.46

%

 

 

1.49

%

 

 

1.57

%

 

 

1.49

%

Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans (G)

 

1.63

%

 

 

1.71

%

 

 

1.68

%

 

 

1.52

%

 

 

1.56

%

 

 

1.63

%

 

 

1.56

%

 

 

Page 18


 

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

(Dollars and share amounts in thousands, except per share data)

NOTES TO SELECTED FINANCIAL DATA

Prosperity’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and the FDIC special assessment, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, merger related expenses and the FDIC special assessment. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Dec 31,
2023

 

 

Sep 30,
2023

 

 

Jun 30,
2023

 

 

Mar 31,
2023

 

 

Dec 31,
2022

 

 

Dec 31,
2023

 

 

Dec 31,
2022

 

Reconciliation of diluted earnings per share to diluted earnings per share excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (unadjusted)

 

$

1.02

 

 

$

1.20

 

 

$

0.94

 

 

$

1.37

 

 

$

1.51

 

 

$

4.51

 

 

$

5.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

95,476

 

 

$

112,208

 

 

$

86,938

 

 

$

124,694

 

 

$

137,880

 

 

$

419,316

 

 

$

524,516

 

Merger related provision for credit losses, net of tax(Y)

 

 

 

 

 

 

 

 

14,647

 

 

 

 

 

 

 

 

 

14,647

 

 

 

 

Merger related expenses, net of tax(Y)

 

 

220

 

 

 

872

 

 

 

10,184

 

 

 

679

 

 

 

215

 

 

 

11,955

 

 

 

215

 

FDIC special assessment, net of tax(Y)

 

 

15,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,736

 

 

 

 

Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax(Y):

 

$

111,432

 

 

$

113,080

 

 

$

111,769

 

 

$

125,373

 

 

$

138,095

 

 

$

461,654

 

 

$

524,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

 

93,715

 

 

 

93,720

 

 

 

92,930

 

 

 

91,207

 

 

 

91,287

 

 

 

92,902

 

 

 

91,604

 

Merger related provision for credit losses, net of tax, per diluted common share(Y)

 

$

 

 

$

 

 

$

0.16

 

 

$

 

 

$

 

 

$

0.16

 

 

$

 

Merger related expenses, net of tax, per diluted common share(Y)

 

$

 

 

$

0.01

 

 

$

0.11

 

 

$

0.01

 

 

$

 

 

$

0.13

 

 

$

 

FDIC special assessment, net of tax, per diluted common share(Y)

 

$

0.17

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

0.17

 

 

$

 

Diluted earnings per share excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:(Y)

 

$

1.19

 

 

$

1.21

 

 

$

1.21

 

 

$

1.38

 

 

$

1.51

 

 

$

4.97

 

 

$

5.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of return on average assets to return on average assets excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (unadjusted)

 

 

0.98

%

 

 

1.13

%

 

 

0.89

%

 

 

1.31

%

 

 

1.47

%

 

 

1.08

%

 

 

1.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax(Y):

 

$

111,432

 

 

$

113,080

 

 

$

111,769

 

 

$

125,373

 

 

$

138,095

 

 

$

461,654

 

 

$

524,731

 

Average total assets

 

$

38,815,211

 

 

$

39,602,039

 

 

$

39,287,626

 

 

$

38,177,853

 

 

$

37,617,902

 

 

$

38,972,957

 

 

$

37,724,245

 

Return on average assets excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (Y)

 

 

1.15

%

 

 

1.14

%

 

 

1.14

%

 

 

1.31

%

 

 

1.47

%

 

 

1.18

%

 

 

1.39

%

(Y) Calculated assuming a federal tax rate of 21.0%.

Page 19


 

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Dec 31,
2023

 

 

Sep 30,
2023

 

 

Jun 30,
2023

 

 

Mar 31,
2023

 

 

Dec 31,
2022

 

 

Dec 31,
2023

 

 

Dec 31,
2022

 

Reconciliation of return on average common equity to return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common equity (unadjusted)

 

 

5.39

%

 

 

6.39

%

 

 

5.01

%

 

 

7.38

%

 

 

8.26

%

 

 

6.03

%

 

 

7.97

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax, and FDIC special assessment, net of tax(Y)

 

$

111,432

 

 

$

113,080

 

 

$

111,769

 

 

$

125,373

 

 

$

138,095

 

 

$

461,654

 

 

$

524,731

 

Average shareholders' equity

 

$

7,085,839

 

 

$

7,024,493

 

 

$

6,935,682

 

 

$

6,759,443

 

 

$

6,677,010

 

 

$

6,950,790

 

 

$

6,578,669

 

Return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (Y)

 

 

6.29

%

 

 

6.44

%

 

 

6.45

%

 

 

7.42

%

 

 

8.27

%

 

 

6.64

%

 

 

7.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of return on average common equity to return on average tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

95,476

 

 

$

112,208

 

 

$

86,938

 

 

$

124,694

 

 

$

137,880

 

 

$

419,316

 

 

$

524,516

 

Average shareholders' equity

 

$

7,085,839

 

 

$

7,024,493

 

 

$

6,935,682

 

 

$

6,759,443

 

 

$

6,677,010

 

 

$

6,950,790

 

 

$

6,578,669

 

Less: Average goodwill and other intangible assets

 

 

(3,462,210

)

 

 

(3,456,844

)

 

 

(3,340,275

)

 

 

(3,281,845

)

 

 

(3,284,228

)

 

 

(3,385,984

)

 

 

(3,288,068

)

Average tangible shareholders’ equity

 

$

3,623,629

 

 

$

3,567,649

 

 

$

3,595,407

 

 

$

3,477,598

 

 

$

3,392,782

 

 

$

3,564,806

 

 

$

3,290,601

 

Return on average tangible common equity (F)

 

 

10.54

%

 

 

12.58

%

 

 

9.67

%

 

 

14.34

%

 

 

16.26

%

 

 

11.76

%

 

 

15.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of return on average common equity to return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax(Y)

 

$

111,432

 

 

$

113,080

 

 

$

111,769

 

 

$

125,373

 

 

$

138,095

 

 

$

461,654

 

 

$

524,731

 

Average shareholders' equity

 

$

7,085,839

 

 

$

7,024,493

 

 

$

6,935,682

 

 

$

6,759,443

 

 

$

6,677,010

 

 

$

6,950,790

 

 

$

6,578,669

 

Less: Average goodwill and other intangible assets

 

 

(3,462,210

)

 

 

(3,456,844

)

 

 

(3,340,275

)

 

 

(3,281,845

)

 

 

(3,284,228

)

 

 

(3,385,984

)

 

 

(3,288,068

)

Average tangible shareholders’ equity

 

$

3,623,629

 

 

$

3,567,649

 

 

$

3,595,407

 

 

$

3,477,598

 

 

$

3,392,782

 

 

$

3,564,806

 

 

$

3,290,601

 

Return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (Y)

 

 

12.30

%

 

 

12.68

%

 

 

12.43

%

 

 

14.42

%

 

 

16.28

%

 

 

12.95

%

 

 

15.95

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of book value per share to tangible book value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

$

7,079,330

 

 

$

7,032,677

 

 

$

6,968,116

 

 

$

6,739,117

 

 

$

6,699,374

 

 

$

7,079,330

 

 

$

6,699,374

 

Less: Goodwill and other intangible assets

 

 

(3,460,080

)

 

 

(3,464,012

)

 

 

(3,454,826

)

 

 

(3,280,610

)

 

 

(3,282,984

)

 

 

(3,460,080

)

 

 

(3,282,984

)

Tangible shareholders’ equity

 

$

3,619,250

 

 

$

3,568,665

 

 

$

3,513,290

 

 

$

3,458,507

 

 

$

3,416,390

 

 

$

3,619,250

 

 

$

3,416,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end shares outstanding

 

 

93,722

 

 

 

93,717

 

 

 

93,721

 

 

 

90,693

 

 

 

91,314

 

 

 

93,722

 

 

 

91,314

 

Tangible book value per share

 

$

38.62

 

 

$

38.08

 

 

$

37.49

 

 

$

38.13

 

 

$

37.41

 

 

$

38.62

 

 

$

37.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible shareholders’ equity

 

$

3,619,250

 

 

$

3,568,665

 

 

$

3,513,290

 

 

$

3,458,507

 

 

$

3,416,390

 

 

$

3,619,250

 

 

$

3,416,390

 

Total assets

 

$

38,547,877

 

 

$

39,295,684

 

 

$

39,905,131

 

 

$

37,829,232

 

 

$

37,689,829

 

 

$

38,547,877

 

 

$

37,689,829

 

Less: Goodwill and other intangible assets

 

 

(3,460,080

)

 

 

(3,464,012

)

 

 

(3,454,826

)

 

 

(3,280,610

)

 

 

(3,282,984

)

 

 

(3,460,080

)

 

 

(3,282,984

)

Tangible assets

 

$

35,087,797

 

 

$

35,831,672

 

 

$

36,450,305

 

 

$

34,548,622

 

 

$

34,406,845

 

 

$

35,087,797

 

 

$

34,406,845

 

Period end tangible equity to period end tangible assets ratio

 

 

10.31

%

 

 

9.96

%

 

 

9.64

%

 

 

10.01

%

 

 

9.93

%

 

 

10.31

%

 

 

9.93

%

 

 

 

 

Page 20


 

 

 

Three Months Ended

 

 

Year-to-Date

 

 

 

Dec 31,
2023

 

 

Sep 30,
2023

 

 

Jun 30,
2023

 

 

Mar 31,
2023

 

 

Dec 31,
2022

 

 

Dec 31,
2023

 

 

Dec 31,
2022

 

Reconciliation of allowance for credit losses to total loans to allowance for credit losses on loans to total loans excluding Warehouse Purchase Program:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans

 

$

332,362

 

 

$

351,495

 

 

$

345,209

 

 

$

282,191

 

 

$

281,576

 

 

$

332,362

 

 

$

281,576

 

Total loans

 

$

21,180,538

 

 

$

21,432,713

 

 

$

21,653,946

 

 

$

19,334,359

 

 

$

18,839,827

 

 

$

21,180,538

 

 

$

18,839,827

 

Less: Warehouse Purchase Program loans

 

 

(822,245

)

 

 

(912,327

)

 

 

(1,148,883

)

 

 

(799,115

)

 

 

(740,620

)

 

 

(822,245

)

 

 

(740,620

)

Total loans less Warehouse Purchase Program

 

$

20,358,293

 

 

$

20,520,386

 

 

$

20,505,063

 

 

$

18,535,244

 

 

$

18,099,207

 

 

$

20,358,293

 

 

$

18,099,207

 

Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program

 

 

1.63

%

 

 

1.71

%

 

 

1.68

%

 

 

1.52

%

 

 

1.56

%

 

 

1.63

%

 

 

1.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of efficiency ratio to efficiency ratio excluding net gains and losses on the sale or write down of assets and securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

152,171

 

 

$

135,657

 

 

$

145,870

 

 

$

123,000

 

 

$

119,244

 

 

$

556,698

 

 

$

484,186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

236,983

 

 

$

239,524

 

 

$

236,459

 

 

$

243,467

 

 

$

256,137

 

 

$

956,433

 

 

$

1,005,231

 

Noninterest income

 

 

36,568

 

 

 

38,743

 

 

 

39,688

 

 

 

38,266

 

 

 

37,724

 

 

 

153,265

 

 

 

145,128

 

Less: net (loss) gain on sale or write down of assets

 

 

(84

)

 

 

(45

)

 

 

1,994

 

 

 

121

 

 

 

2,087

 

 

 

1,986

 

 

 

3,934

 

Noninterest income excluding net gains and losses on the sale or write down of assets and securities

 

 

36,652

 

 

 

38,788

 

 

 

37,694

 

 

 

38,145

 

 

 

35,637

 

 

 

151,279

 

 

 

141,194

 

Total income excluding net gains and losses on the sale or write down of assets and securities

 

$

273,635

 

 

$

278,312

 

 

$

274,153

 

 

$

281,612

 

 

$

291,774

 

 

$

1,107,712

 

 

$

1,146,425

 

Efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities

 

 

55.61

%

 

 

48.74

%

 

 

53.21

%

 

 

43.68

%

 

 

40.87

%

 

 

50.26

%

 

 

42.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, merger related expenses and FDIC special assessment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

152,171

 

 

$

135,657

 

 

$

145,870

 

 

$

123,000

 

 

$

119,244

 

 

$

556,698

 

 

$

484,186

 

Less: merger related expenses

 

 

278

 

 

 

1,104

 

 

 

12,891

 

 

 

860

 

 

 

272

 

 

 

15,133

 

 

 

272

 

Less: FDIC special assessment

 

 

19,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,919

 

 

 

 

Noninterest expense excluding merger related expenses and FDIC special assessment

 

$

131,974

 

 

$

134,553

 

 

$

132,979

 

 

$

122,140

 

 

$

118,972

 

 

$

521,646

 

 

$

483,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

236,983

 

 

$

239,524

 

 

$

236,459

 

 

$

243,467

 

 

$

256,137

 

 

$

956,433

 

 

$

1,005,231

 

Noninterest income

 

 

36,568

 

 

 

38,743

 

 

 

39,688

 

 

 

38,266

 

 

 

37,724

 

 

 

153,265

 

 

 

145,128

 

Less: net (loss) gain on sale or write down of assets

 

 

(84

)

 

 

(45

)

 

 

1,994

 

 

 

121

 

 

 

2,087

 

 

 

1,986

 

 

 

3,934

 

Noninterest income excluding net gains and losses on the sale or write down of assets and securities

 

 

36,652

 

 

 

38,788

 

 

 

37,694

 

 

 

38,145

 

 

 

35,637

 

 

 

151,279

 

 

 

141,194

 

Total income excluding net gains and losses on the sale or write down of assets and securities

 

$

273,635

 

 

$

278,312

 

 

$

274,153

 

 

$

281,612

 

 

$

291,774

 

 

$

1,107,712

 

 

$

1,146,425

 

Efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, merger related expenses and FDIC special assessment

 

 

48.23

%

 

 

48.35

%

 

 

48.51

%

 

 

43.37

%

 

 

40.78

%

 

 

47.09

%

 

 

42.21

%

 

Page 21