Filed by Prosperity Bancshares, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Companies: Community National Bank
Commission File No. 1-35388
East Texas Financial Services, Inc.
Commission File No. 333-179100
PRESS RELEASE | For more information contact: | |
Prosperity Bancshares, Inc.® | Dan Rollins | |
Prosperity Bank Plaza | President and Chief Operating Officer | |
4295 San Felipe | 281.269.7199 | |
Houston, Texas 77027 | dan.rollins@prosperitybanktx.com |
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
REPORTS STRONG
SECOND QUARTER EARNINGS
| 2Q12 Earnings Per Share of $0.78 (diluted) an increase of 4.0% |
| 2012 YTD loan growth of 4.9% (9.8% annualized) |
| 2012 YTD deposit growth of 4.1% (8.3% annualized) |
| Tangible Common Equity Ratio of 7.08% |
| Non-Performing Assets remain low at 0.12% of 2Q12 Average Earning Assets |
HOUSTON, July 27, 2012. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank®, reported net income for the quarter ended June 30, 2012 of $36.972 million or $0.78 per diluted common share, an increase in net income of $1.880 million or 5.4%, compared with $35.092 million or $0.75 per diluted common share for the same period in 2011.
I am very pleased to be able to announce our outstanding results for the second quarter of 2012, particularly during the current economic environment when our industry is so challenged, commented David Zalman, Chairman and Chief Executive Officer. I am proud of our team of bankers and their ability to attract quality customers to our bank. In fact, over the past three months, our lenders produced more loans than we have ever produced during a calendar quarter in the history of our bank.
During the past quarter, we completed our merger with Billy and Cathy Allens team at The Bank Arlington. This additional location in the Dallas/Fort Worth CMSA will allow us to continue our growth in that market. On July 1, we completed our merger with American State Financial Corporation. W.R. Collier and his team provide us with an excellent platform for future growth in West Texas. We now have major operations in Lubbock, Midland/Odessa and Abilene and believe the American State Bank leadership team, including Mike Epps, Tony Whitehead, Mike Marshall and Gary Galbraith, brings vast knowledge of these markets to our team. Finally, we are excited about our recently announced, and fifth in the past year, merger agreement with Community National Bank in Bellaire, Texas, located in the heart of the Houston MSA. Randy Dobbs and John James along with their team will help us continue our growth in Houston, continued Zalman.
While we are excited about our recent mergers, our team remains focused on growing our bank by providing the highest level of service to our customers. We remain excited about our future and strive to continue building shareholder value, concluded Zalman.
Prosperitys management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. 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.
Page 1 of 21
Results of operations for the three months ended June 30, 2012
For the three months ended June 30, 2012, net income was $36.972 million compared with $35.092 million for the same period in 2011. Net income per diluted common share was $0.78 for the three months ended June 30, 2012 and $0.75 for the same period in 2011. Returns on average assets, average common equity and average tangible common equity, each on an annualized basis, for the three months ended June 30, 2012 were 1.35%, 9.06% and 21.70%, respectively. Prosperitys efficiency ratio (excluding net gains and losses on the sale of securities and assets) was 41.94% for the three months ended June 30, 2012.
Net interest income before provision for credit losses for the quarter ended June 30, 2012 increased 0.04% to $83.666 million compared with $83.630 million during the same period in 2011. The net interest margin on a tax equivalent basis decreased to 3.55% for the three months ended June 30, 2012 compared with 4.06% for the same period in 2011. On a linked quarter basis, the tax equivalent net interest margin decreased nine basis points to 3.55% for the three months ended June 30, 2012 from 3.64% reported for the three months ended March 31, 2012.
Non-interest income increased $126,000 or 0.9% to $13.656 million for the three months ended June 30, 2012 compared with $13.530 million during the same period in 2011. The change was due to an increase in debit card and ATM card income and a decrease in loss on sale of securities partially offset by a reduction in NSF fees.
Non-interest expense decreased $1.7 million or 4.1% to $40.788 million for the three months ended June 30, 2012 compared with $42.514 million during the same period in 2011. The decrease was primarily attributable to a reduction in regulatory assessments and FDIC insurance.
Average loans increased 7.8% or $283.096 million to $3.914 billion for the quarter ended June 30, 2012 compared with $3.631 billion for the same period of 2011. Linked quarter average loans increased 2.5% or $95.361 million from $3.819 billion at March 31, 2012.
Average deposits increased 8.8% or $683.271 million to $8.436 billion for the quarter ended June 30, 2012 compared with $7.752 billion for the same period of 2011. Linked quarter average deposits increased 0.09% or $7.160 million from $8.429 billion at March 31, 2012.
Loans at June 30, 2012 were $3.950 billion, an increase of $285.084 million or 7.8%, compared with $3.665 billion at June 30, 2011 and an increase of $184.426 million or 4.9% (9.8% annualized) compared with $3.766 billion at December 31, 2011. Linked quarter loans increased $75.470 million or 1.9% (7.8% annualized) at June 30, 2012 compared with loans of $3.875 billion at March 31, 2012. As reflected in the table below, loan growth was impacted by the acquisition of Texas Bankers, Inc. and The Bank Arlington. Excluding loans acquired in these acquisitions, year to date loan growth increased 7.1% on an annualized basis.
Deposits at June 30, 2012 were $8.395 billion, an increase of $726.890 million or 9.5%, compared with $7.668 billion at June 30, 2011 and an increase of $334.328 million or 4.1% (8.3% annualized) compared with $8.060 billion at December 31, 2011. Linked quarter deposits decreased $149.869 million or 1.8% at June 30, 2012 compared with deposits of $8.544 billion at March 31, 2012. As reflected in the table below, deposit growth was impacted by the acquisition of Texas Bankers, Inc. and The Bank Arlington. Excluding deposits assumed in these acquisitions, year to date deposit growth increased 5.9% on an annualized basis.
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The table below provides detail on loans acquired and deposits assumed in the Texas Bankers, Inc. and The Bank Arlington transactions completed on January 1, 2012 and April 1, 2012, respectively:
Balance Sheet Data (at period end) | June 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | June 30, 2011 | ||||||||||||
(In thousands) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Loans: |
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Acquired with Texas Bankers, Inc. |
$ | 28,421 | $ | 27,053 | $ | | $ | | ||||||||
Acquired with The Bank Arlington |
22,542 | | | | ||||||||||||
All other |
3,899,369 | 3,847,809 | 3,765,906 | 3,665,248 | ||||||||||||
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Total Loans |
$ | 3,950,332 | $ | 3,874,862 | $ | 3,765,906 | $ | 3,665,248 | ||||||||
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Deposits: |
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Assumed with Texas Bankers, Inc. |
$ | 62,739 | $ | 63,681 | $ | | $ | | ||||||||
Assumed with The Bank Arlington |
33,505 | | | | ||||||||||||
All other |
8,298,338 | 8,480,770 | 8,060,254 | 7,667,692 | ||||||||||||
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Total Deposits |
$ | 8,394,582 | $ | 8,544,451 | $ | 8,060,254 | $ | 7,667,692 | ||||||||
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At June 30, 2012, Prosperity had $10.737 billion in total assets, $3.950 billion in loans and $8.395 billion in deposits. Assets, loans and deposits at June 30, 2012 increased 11.2%, 7.8% and 9.5%, respectively, compared with June 30, 2011.
Results of operations for the six months ended June 30, 2012
For the six months ended June 30, 2012, net income was $73.459 million compared with $68.970 million for the same period in 2011. Net income per diluted common share was $1.55 for the six months ended June 30, 2012 compared with $1.47 for the same period in 2011. Returns on average assets, average common equity and average tangible common equity, each on an annualized basis, for the six months ended June 30, 2012 were 1.37%, 9.10% and 22.12%, respectively. Prosperitys efficiency ratio (excluding net gains and losses on the sale of securities and assets) was 42.09% for the six months ended June 30, 2012.
Net interest income before provision for credit losses for the six months ended June 30, 2012 increased $1.469 million or 0.9%, to $165.512 million compared with $164.043 million during the same period in 2011. The increase was attributable primarily to a 13.0% increase in average earning assets over the same period.
Non-interest income increased $204,000 or 0.7% to $27.601 million for the six months ended June 30, 2012 compared with $27.397 million for the same period in 2011. The increase was mainly due to an increase in ATM and debit card income and a decrease in net loss on the sale of other real estate and net loss on sale of securities partially offset by a decrease in NSF fees.
Non-interest expense decreased $2.962 million or 3.5% to $81.247 million for the six months ended June 30, 2012 compared with $84.209 million for the same period in 2011. The decrease was primarily attributable to a decrease in regulatory assessments and FDIC insurance, partially offset by an increase in other real estate expense.
Asset Quality
Non-performing assets totaled $11.873 million or 0.12% of average earning assets for the three months ended June 30, 2012 compared with $12.680 million or 0.15% of average earning assets for the three months ended June 30, 2011, and $14.873 million or 0.16% of average earnings assets for the three months March 31, 2012. The allowance for credit losses was 1.28% of total loans at June 30, 2012 compared with 1.42% at June 30, 2011 and 1.33% of total loans at March 31, 2012.
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Non-performing assets | June 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | |||||||||||||||||||||
(Dollars in thousands) | Amount | # | Amount | # | Amount | # | ||||||||||||||||||
Commercial |
$ | 394 | 12 | $ | 690 | 15 | $ | 767 | 17 | |||||||||||||||
Construction |
4,056 | 30 | 4,116 | 26 | 4,649 | 28 | ||||||||||||||||||
1-4 family (including home equity) |
2,284 | 28 | 3,207 | 35 | 3,689 | 38 | ||||||||||||||||||
Commercial real estate (including multi-family) |
5,077 | 12 | 6,773 | 16 | 2,877 | 9 | ||||||||||||||||||
Agriculture and agriculture real estate |
44 | 3 | 67 | 4 | 49 | 3 | ||||||||||||||||||
Consumer |
18 | 3 | 20 | 5 | 21 | 4 | ||||||||||||||||||
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Total |
$ | 11,873 | 88 | $ | 14,873 | 101 | $ | 12,052 | 99 | |||||||||||||||
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Net charge-offs (Dollars in thousands) |
Three Months Ended June 30, 2012 |
Three Months Ended Mar 31, 2012 |
Three Months Ended Dec 31, 2011 |
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Commercial |
$ | 180 | $ | (15 | ) | $ | 843 | |||||
Construction |
1,179 | 22 | | |||||||||
1-4 family (including home equity) |
90 | 50 | 676 | |||||||||
Commercial real estate (including multi-family) |
296 | 18 | 218 | |||||||||
Agriculture and agriculture real estate |
(3 | ) | | 153 | ||||||||
Consumer |
118 | 27 | 179 | |||||||||
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Total |
$ | 1,860 | $ | 102 | $ | 2,069 | ||||||
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The provision for credit losses was $600,000 for the three months ended June 30, 2012 compared to $1.400 million for the three months ended June 30, 2011. Net charge offs were $1.860 million for the three months ended June 30, 2012 compared to $1.229 million for the three months ended June 30, 2011.
The provision for credit losses was $750,000 for the six months ended June 30, 2012 compared to $3.100 million for the six months ended June 30, 2011. Net charge offs were $1.962 million for the six months ended June 30, 2012 compared to $2.753 million for the six months ended June 30, 2011.
Conference Call
Prosperitys management team will host a conference call on Friday, July 27, 2012 at 10:30 a.m. Eastern Daylight Time (9:30 a.m. Central Daylight Time) to discuss Prosperitys second quarter earnings. Individuals and investment professionals may participate in the call by dialing 800-894-5910, the reference code is PBTX.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperitys website at www.prosperitybanktx.com. The webcast may be accessed directly from Prosperitys home page under News and Events.
Pending Acquisition of Community National Bank
On June 27, 2012, Prosperity announced the signing of a definitive agreement to acquire Community National Bank, Bellaire, Texas. This is the fifth acquisition announced by Prosperity within the past nine months. Community National Bank operates one (1) banking office in Bellaire, Texas, in the Houston Metropolitan Area. As of June 30, 2012, Community National Bank reported total assets of $180.6 million, total loans of $68.6 million and total deposits of $162.6 million.
Under the terms of the definitive agreement, Prosperity will issue up to 372,396 shares of Prosperity common stock plus $11.4 million in cash for all outstanding shares of Community National Bank capital stock, subject to certain conditions and potential adjustments. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the Community National Bank shareholders.
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Pending Acquisition of East Texas Financial Services, Inc.
On December 9, 2011, Prosperity entered into a definitive agreement to acquire East Texas Financial Services, Inc. (OTC BB: FFBT) and its wholly-owned subsidiary, First Federal Bank Texas (Firstbank). Firstbank operates four (4) banking offices in the Tyler MSA, including three locations in Tyler, Texas and one location in Gilmer, Texas. As of June 30, 2012, Firstbank reported total assets of $196.2 million, total loans of $143.6 million and total deposits of $120.9 million.
Under the terms of the definitive agreement, Prosperity will issue up to 531,000 shares of Company common stock for all outstanding shares of East Texas Financial Services capital stock, subject to certain conditions and potential adjustments. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the stockholders of East Texas Financial Services. On May 4, 2012, East Texas Financial Services and each of its directors were named defendants in a suit brought by East Texas Financial Corporation (ETFC), a shareholder of East Texas Financial Services, to block the proposed merger. The suit was dismissed on July 18, 2012. The closing date of the transaction is uncertain at this time.
Acquisition of American State Financial Corporation
On July 1, 2012, Prosperity completed the previously announced acquisition of American State Financial Corporation and its wholly owned subsidiary American State Bank (collectively referred to as ASB). American State Bank operated thirty-seven (37) full service banking offices in eighteen (18) counties across West Texas. As of June 30, 2012, ASB, on a consolidated basis, reported total assets of $3.16 billion, total loans of $1.24 billion and total deposits of $2.51 billion.
Under the terms of the agreement, Prosperity issued 8,524,835 shares of Prosperity common stock plus $178.5 million in cash for all outstanding shares of American State Financial Corporation capital stock which resulted in a premium of $240.4 million.
Acquisition of The Bank Arlington
On April 1, 2012, Prosperity completed the previously announced acquisition of The Bank Arlington. The Bank Arlington operated one (1) banking office in Arlington, Texas, in the Dallas/Fort Worth CMSA. As of March 31, 2012, The Bank Arlington reported total assets of $37.3 million, total loans of $22.8 million and total deposits of $33.2 million.
Under the terms of the agreement, Prosperity issued 135,389 shares of Prosperity common stock for all outstanding shares of The Bank Arlington capital stock which resulted in a premium of $2.8 million.
Acquisition of Texas Bankers, Inc.
On January 1, 2012, Prosperity completed the previously announced acquisition of Texas Bankers, Inc. and its wholly-owned subsidiary, Bank of Texas, Austin, Texas. The three (3) Bank of Texas banking offices in the Austin, Texas CMSA consisted of a location in Rollingwood, which was consolidated with Prosperitys Westlake location and remains in Bank of Texas Rollingwood banking office; one banking center in downtown Austin, which was consolidated into Prosperitys downtown Austin location; and another banking center in Thorndale. Prosperity now operates thirty-four (34) banking centers in the Central Texas area including Austin and San Antonio. Texas Bankers, Inc. reported, on a consolidated basis, total assets of $77.0 million, total loans of $27.6 million and total deposits of $70.4 million as of December 31, 2011.
Under the terms of the agreement, Prosperity issued 314,953 shares of Prosperity common stock for all outstanding shares of Texas Bankers capital stock which resulted in a premium of $5.2 million.
Prosperity Bancshares, Inc.®
Prosperity Bancshares Inc.®, recently named Americas Best Bank by Forbes, is a $13.9 billion Houston, Texas based regional financial holding company, formed in 1983. Operating under a community banking philosophy and seeking to develop broad customer relationships based on service and convenience, Prosperity offers a variety of traditional loan and deposit products to its customers, which consist primarily of small and medium sized businesses and consumers. In addition to established banking products, Prosperity offers a complete line of services including: Internet Banking services at http://www.prosperitybanktx.com, Retail Brokerage Services, MasterMoney Debit Cards, and 24 hour voice response banking. Prosperity currently operates two hundred thirteen (213) full service banking locations; fifty-nine (59) in the Houston area; twenty (20) in the South Texas area including Corpus Christi and Victoria; thirty-five (35) in the Dallas/Fort Worth area; twenty-one (21) in the East Texas area; thirty-four (34) in the Central Texas area including Austin and San Antonio; thirty-four (34) in the West Texas area including Lubbock, Midland/Odessa and Abilene; and ten (10) in the Bryan/College Station area.
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Bryan/College Station Area - Bryan Bryan-East Bryan-North Caldwell College Station Greens Prairie Madisonville Navasota Rock Prairie Wellborn Road
Central Texas Area -
Austin - 183 Allandale Cedar Park Congress Lakeway Liberty Hill Northland Oak Hill Parmer Lane Research Blvd Westlake
Other Central Texas Locations - Bastrop Cuero Dime Box Dripping Springs Elgin Flatonia Georgetown Gonzales Hallettsville Kingsland La Grange Lexington New Braunfels Pleasanton Round Rock San Antonio Schulenburg Seguin Smithville Thorndale Weimar Yoakum Yorktown
Dallas/Fort Worth Area -
Dallas - Abrams Centre Balch Springs Camp Wisdom Cedar Hill Central Expressway East Renner Frisco Frisco-West Independence |
Kiest McKinney McKinney-Stonebridge Midway Preston Forest Preston Road Red Oak Sachse The Colony Turtle Creek Westmoreland
Fort Worth - Haltom City Keller Roanoke Stockyards
Other Dallas/Fort Worth Locations - Arlington Azle Ennis Gainesville Glen Rose Grandbury Mesquite Muenster Sanger Waxahachie Weatherford
East Texas Area -
Athens Athens-South Blooming Grove Canton Carthage Corsicana Crockett Eustace Grapeland Gun Barrel City Jacksonville Kerens Longview Mount Vernon Palestine Rusk Seven Points Teague Tyler Tyler-University Winnsboro
Houston Area -
Houston - Aldine Allen Parkway Bellaire Beltway Clear Lake Copperfield Cypress |
Downtown Eastex Fairfield First Colony Gessner Gladebrook Harrisburg Heights Highway 6 West Hillcroft Little York Medical Center Memorial Drive Northside Pasadena Pecan Grove Piney Point River Oaks Royal Oaks Sugar Land SW Medical Center Tanglewood Uptown Waugh Drive West University Woodcreek
Other Houston Area Locations - Angleton Bay City Beaumont Cinco Ranch Cleveland East Bernard El Campo Dayton Galveston Groves Hempstead Hitchcock Katy Liberty Magnolia Mont Belvieu Nederland Needville Shadow Creek Sweeny Tomball Waller West Columbia Wharton Winnie Wirt
South Texas Area -
Corpus Christi - Airline Carmel Northwest Saratoga Water Street
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Other South Texas Locations - Alice Aransas Pass Beeville Edna Goliad Kingsville Mathis Padre Island Palacios Port Lavaca Portland Rockport Sinton Victoria Victoria-North
West Texas Area -
Abilene - Antilley Road Barrow Street Cypress Street Judge Ely Mockingbird
Lubbock - 4th Street 66th Street 82nd Street 86th Street 98th Street Avenue Q North University Texas Tech Student Union
Midland - Wadley Wall Street
Odessa - Grandview Grant Kermit Highway Parkway
Other West Texas Locations - Big Spring Brownfield Brownwood Cisco Comanche Early Floydada Gorman Levelland Littlefield Merkel Plainview San Angelo Slaton Snyder |
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In connection with the proposed merger of Community National Bank into Prosperity Bank, Prosperity will file with the Securities and Exchange Commission a registration statement on Form S-4 to register the shares of Prosperitys common stock to be issued to the shareholders of Community National Bank. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of Community National Bank seeking their approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, COMMUNITY NATIONAL BANK AND THE PROPOSED TRANSACTION.
In connection with the proposed merger of East Texas Financial Services, Inc. into Prosperity, Prosperity has filed with the Securities and Exchange Commission a registration statement on Form S-4 to register the shares of Prosperitys common stock to be issued to the stockholders of East Texas Financial Services. The registration statement includes a proxy statement/prospectus which was sent to the stockholders of East Texas Financial Services seeking their approval of the proposed transaction.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, EAST TEXAS FINANCIAL SERVICES AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these documents through the website maintained by the Securities and Exchange Commission at http://www.sec.gov. Documents filed with the SEC by Prosperity will be available free of charge by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations. Prosperitys telephone number is (281) 269-7199.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperitys management on the conference call may contain, forward-looking statements within the meaning of the securities laws that are based on current expectations, assumptions, estimates and projections about Prosperity, and its subsidiaries. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperitys control, that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. 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; 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); a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperitys securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate fluctuations and interest rate fluctuations; weather; and the stock price volatility associated with small-cap companies. These and various other factors are discussed in Prosperitys Annual Report on Form 10-K for the year ended December 31, 2011 and other reports and statements Prosperity has filed with the SEC. Copies of the SEC filings for Prosperity Bancshares® may be downloaded from the Internet at no charge from www.prosperitybanktx.com.
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Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
Three Months Ended | ||||||||||||||||
June 30, 2012 |
Mar 31, 2012 |
Dec 31, 2011 |
Sept 30, 2011 |
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Selected Earnings and Per Share Data | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Total interest income |
$ | 92,874 | $ | 91,616 | $ | 89,658 | $ | 93,189 | ||||||||
Total interest expense |
9,208 | 9,770 | 9,571 | 10,651 | ||||||||||||
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Net interest income |
83,666 | 81,846 | 80,087 | 82,538 | ||||||||||||
Provision for credit losses |
600 | 150 | 1,150 | 950 | ||||||||||||
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Net interest income after provision for credit losses |
83,066 | 81,696 | 78,937 | 81,588 | ||||||||||||
Total non-interest income |
13,656 | 13,945 | 14,065 | 14,581 | ||||||||||||
Total non-interest expense |
40,788 | 40,459 | 38,385 | 41,151 | ||||||||||||
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Net income before taxes |
55,934 | 55,182 | 54,617 | 55,018 | ||||||||||||
Federal income taxes |
18,962 | 18,695 | 18,211 | 18,645 | ||||||||||||
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Net income |
$ | 36,972 | $ | 36,487 | $ | 36,406 | $ | 36,373 | ||||||||
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Basic earnings per share |
$ | 0.78 | $ | 0.77 | $ | 0.78 | $ | 0.78 | ||||||||
Diluted earnings per share |
$ | 0.78 | $ | 0.77 | $ | 0.77 | $ | 0.77 | ||||||||
Period end shares outstanding |
47,474 | 47,297 | 46,910 | 46,893 | ||||||||||||
Weighted average shares outstanding (basic) |
47,456 | 47,238 | 46,893 | 46,890 | ||||||||||||
Weighted average shares outstanding (diluted) |
47,608 | 47,411 | 47,028 | 47,033 |
Page 8 of 21
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2012 |
June 30, 2011 |
June 30, 2012 |
June 30, 2011 |
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Balance Sheet Averages | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Total loans |
$ | 3,914,352 | $ | 3,631,256 | $ | 3,866,672 | $ | 3,574,207 | ||||||||
Investment securities |
5,635,810 | 4,707,217 | 5,414,033 | 4,692,639 | ||||||||||||
Federal funds sold and other temporary investments |
20,916 | 13,218 | 73,536 | 13,200 | ||||||||||||
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Total earning assets |
9,571,078 | 8,351,691 | 9,354,241 | 8,280,046 | ||||||||||||
Allowance for credit losses |
(50,746 | ) | (51,861 | ) | (51,174 | ) | (51,780 | ) | ||||||||
Cash and due from banks |
134,055 | 125,150 | 146,016 | 131,445 | ||||||||||||
Goodwill |
932,112 | 924,537 | 930,265 | 924,475 | ||||||||||||
Core deposit intangibles (CDI) |
18,465 | 25,728 | 19,283 | 26,714 | ||||||||||||
Other real estate |
10,178 | 9,743 | 9,408 | 11,236 | ||||||||||||
Fixed assets, net |
165,784 | 159,919 | 164,487 | 159,592 | ||||||||||||
Other assets |
138,263 | 133,661 | 133,723 | 134,423 | ||||||||||||
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|||||||||
Total assets |
$ | 10,919,189 | $ | 9,678,568 | $ | 10,706,249 | $ | 9,616,151 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-interest bearing deposits |
$ | 2,069,965 | $ | 1,770,664 | $ | 2,020,453 | $ | 1,721,967 | ||||||||
Interest bearing deposits |
6,365,796 | 5,981,826 | 6,411,728 | 6,003,693 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
8,435,761 | 7,752,490 | 8,432,181 | 7,725,660 | ||||||||||||
Securities sold under repurchase agreements |
98,968 | 68,413 | 76,136 | 60,058 | ||||||||||||
Federal funds purchased and other borrowings |
610,499 | 218,310 | 441,630 | 205,201 | ||||||||||||
Junior subordinated debentures |
85,055 | 85,055 | 85,055 | 88,059 | ||||||||||||
Other liabilities |
56,742 | 54,915 | 57,523 | 52,956 | ||||||||||||
Shareholders equity(A) |
1,632,164 | 1,499,385 | 1,613,724 | 1,484,217 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and equity |
$ | 10,919,189 | $ | 9,678,568 | $ | 10,706,249 | $ | 9,616,151 | ||||||||
|
|
|
|
|
|
|
|
(A) | Includes $12,599 and $14,337 in after-tax unrealized gains on available for sale securities for the three month periods ending June 30, 2012 and June 30, 2011, respectively, and $13,012 and $14,243 for the six months ending June 30, 2012 and June 30, 2011, respectively. |
Page 9 of 21
Prosperity Bancshares, Inc. ®
Financial Highlights
(Dollars in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2012 |
June 30, 2011 |
June 30, 2012 |
June 30, 2011 |
|||||||||||||
Income Statement Data | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Interest on loans |
$ | 54,793 | $ | 53,703 | $ | 108,010 | $ | 105,903 | ||||||||
Interest on securities |
38,072 | 41,919 | 76,393 | 83,123 | ||||||||||||
Interest on federal funds sold and other temporary investments |
9 | 30 | 87 | 35 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest income |
92,874 | 95,652 | 184,490 | 189,061 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest expense - deposits |
8,083 | 11,064 | 16,874 | 22,576 | ||||||||||||
Interest expense - debentures |
648 | 598 | 1,311 | 1,745 | ||||||||||||
Interest expense - other |
477 | 360 | 793 | 697 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense |
9,208 | 12,022 | 18,978 | 25,018 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income (B) |
83,666 | 83,630 | 165,512 | 164,043 | ||||||||||||
Provision for credit losses |
600 | 1,400 | 750 | 3,100 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income after provision for credit losses |
83,066 | 82,230 | 164,762 | 160,943 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-sufficient funds (NSF) fees |
5,167 | 6,226 | 10,556 | 12,333 | ||||||||||||
Debit card and ATM card income |
4,292 | 3,809 | 8,128 | 7,261 | ||||||||||||
Service charges on deposit accounts |
2,432 | 2,511 | 4,873 | 4,994 | ||||||||||||
Net gain on sale of assets |
70 | 195 | 63 | 360 | ||||||||||||
Net (loss) gain on sale of ORE |
(165 | ) | (366 | ) | 253 | (526 | ) | |||||||||
Net loss on sale of securities |
| (581 | ) | | (581 | ) | ||||||||||
Other non-interest income |
1,860 | 1,736 | 3,728 | 3,556 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-interest income |
13,656 | 13,530 | 27,601 | 27,397 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Salaries and benefits (C) |
23,572 | 23,994 | 46,824 | 47,198 | ||||||||||||
CDI amortization |
1,595 | 1,943 | 3,290 | 3,977 | ||||||||||||
Net occupancy and equipment |
3,492 | 3,547 | 7,049 | 7,195 | ||||||||||||
Depreciation |
2,028 | 2,037 | 4,063 | 4,058 | ||||||||||||
Data processing and software amortization |
1,906 | 1,780 | 3,438 | 3,452 | ||||||||||||
Regulatory assessments and FDIC insurance |
1,659 | 2,894 | 3,207 | 5,895 | ||||||||||||
Other real estate |
383 | 294 | 1,074 | 586 | ||||||||||||
Other non-interest expense |
6,153 | 6,025 | 12,302 | 11,848 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-interest expense |
40,788 | 42,514 | 81,247 | 84,209 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income before taxes |
55,934 | 53,246 | 111,116 | 104,131 | ||||||||||||
Federal income taxes |
18,962 | 18,154 | 37,657 | 35,161 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to common shareholders |
$ | 36,972 | $ | 35,092 | $ | 73,459 | $ | 68,970 | ||||||||
|
|
|
|
|
|
|
|
(B) | Net interest income on a tax equivalent basis would be $84,498 and $84,603 for the three months ended June 30, 2012 and June 30, 2011, respectively, and $167,240 and $165,905 for the six months ended June 30, 2012 and June 30, 2011, respectively. |
(C) | Salaries and benefits includes stock-based compensation expense of $946 and $936 for the three months ended June 30, 2012 and June 30, 2011, respectively, and $2,161 and $1,643 for the six months ended June 30, 2012 and June 30, 2011, respectively. |
Page 10 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars and share amounts in thousands, except per share data)
As of and for the Three Months Ended |
As of and for the Six Months Ended |
|||||||||||||||
June 30, 2012 |
June 30, 2011 |
June 30, 2012 |
June 30, 2011 |
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Common Share and Other Data |
||||||||||||||||
Employees - FTE |
1,666 | 1,675 | 1,666 | 1,675 | ||||||||||||
Book value per share |
$ | 34.63 | $ | 32.24 | $ | 34.63 | $ | 32.24 | ||||||||
Tangible book value per share |
$ | 14.60 | $ | 11.99 | $ | 14.60 | $ | 11.99 | ||||||||
Period end shares outstanding |
47,474 | 46,888 | 47,474 | 46,888 | ||||||||||||
Weighted average shares outstanding (basic) |
47,456 | 46,864 | 47,347 | 46,799 | ||||||||||||
Weighted average shares outstanding (diluted) |
47,608 | 47,057 | 47,508 | 47,001 | ||||||||||||
Non-performing Assets (at period end) |
||||||||||||||||
Non-accrual loans |
$ | 1,624 | $ | 3,518 | $ | 1,624 | $ | 3,518 | ||||||||
Accruing loans 90 or more days past due |
| 306 | | 306 | ||||||||||||
Restructured loans |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-performing loans |
1,624 | 3,824 | 1,624 | 3,824 | ||||||||||||
Repossessed assets |
13 | 15 | 13 | 15 | ||||||||||||
Other real estate |
10,236 | 8,841 | 10,236 | 8,841 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total non-performing assets |
$ | 11,873 | $ | 12,680 | $ | 11,873 | $ | 12,680 | ||||||||
Allowance for credit losses at end of period |
$ | 50,382 | $ | 51,932 | $ | 50,382 | $ | 51,932 | ||||||||
Net charge-offs |
$ | 1,860 | $ | 1,229 | $ | 1,962 | $ | 2,753 | ||||||||
Basic earnings per share |
$ | 0.78 | $ | 0.75 | $ | 1.55 | $ | 1.47 | ||||||||
Diluted earnings per share |
$ | 0.78 | $ | 0.75 | $ | 1.55 | $ | 1.47 |
Page 11 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2012 |
June 30, 2011 |
June 30, 2012 |
June 30, 2011 |
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Performance Ratios |
||||||||||||||||
Return on average assets (annualized) |
1.35 | % | 1.45 | % | 1.37 | % | 1.43 | % | ||||||||
Return on average common equity (annualized) |
9.06 | % | 9.36 | % | 9.10 | % | 9.29 | % | ||||||||
Return on average tangible common equity (annualized) |
21.70 | % | 25.56 | % | 22.12 | % | 25.88 | % | ||||||||
Net interest margin (D) (tax equivalent) (annualized) |
3.55 | % | 4.06 | % | 3.60 | % | 4.04 | % | ||||||||
Efficiency ratio (E) |
41.94 | % | 43.58 | % | 42.09 | % | 43.94 | % | ||||||||
Asset Quality Ratios |
||||||||||||||||
Non-performing assets to average earning assets |
0.12 | % | 0.15 | % | 0.13 | % | 0.15 | % | ||||||||
Non-performing assets to loans and other real estate |
0.30 | % | 0.35 | % | 0.30 | % | 0.35 | % | ||||||||
Net charge-offs to average loans |
0.05 | % | 0.03 | % | 0.05 | % | 0.08 | % | ||||||||
Allowance for credit losses to total loans |
1.28 | % | 1.42 | % | 1.28 | % | 1.42 | % | ||||||||
Common Stock Market Price |
||||||||||||||||
High |
$ | 47.31 | $ | 46.75 | $ | 47.66 | $ | 46.75 | ||||||||
Low |
$ | 39.87 | $ | 40.83 | $ | 39.66 | $ | 38.23 | ||||||||
Period end market price |
$ | 42.03 | $ | 43.82 | $ | 42.03 | $ | 43.82 |
(D) | Net interest margin for all periods presented is calculated on an actual 365 day or 366 day basis. |
(E) | The efficiency ratio is calculated by dividing total non-interest expense (excluding provision for credit losses) by net interest income plus non-interest income (excluding net gains and losses on the sale of securities and assets). Additionally, taxes are not part of this calculation. |
Page 12 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
June 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sept 30, 2011 | June 30, 2011 | ||||||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||
Loan Portfolio |
||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 491,907 | 12.5 | % | $ | 475,860 | 12.3 | % | $ | 439,854 | 11.7 | % | $ | 451,541 | 12.1 | % | $ | 455,791 | 12.9 | % | ||||||||||||||||||||
Construction |
466,884 | 11.8 | % | 484,295 | 12.5 | % | 482,140 | 12.8 | % | 490,193 | 13.1 | % | 483,581 | 13.2 | % | |||||||||||||||||||||||||
1-4 family residential |
1,084,936 | 27.4 | % | 1,036,318 | 26.7 | % | 1,007,266 | 26.8 | % | 981,388 | 26.3 | % | 941,250 | 25.7 | % | |||||||||||||||||||||||||
Home equity |
154,147 | 3.9 | % | 149,597 | 3.9 | % | 146,999 | 3.8 | % | 139,553 | 3.7 | % | 131,213 | 3.6 | % | |||||||||||||||||||||||||
Commercial real estate |
1,484,787 | 37.6 | % | 1,473,925 | 38.0 | % | 1,441,226 | 38.3 | % | 1,426,704 | 38.2 | % | 1,411,501 | 38.5 | % | |||||||||||||||||||||||||
Agriculture (includes agriculture real estate) |
192,462 | 4.9 | % | 178,474 | 4.6 | % | 170,234 | 4.5 | % | 168,011 | 4.5 | % | 160,780 | 4.4 | % | |||||||||||||||||||||||||
Consumer |
75,209 | 1.9 | % | 76,393 | 2.0 | % | 78,187 | 2.1 | % | 80,240 | 2.1 | % | 81,132 | 2.2 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total Loans |
$ | 3,950,332 | $ | 3,874,862 | $ | 3,765,906 | $ | 3,737,630 | $ | 3,665,248 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Deposit Types |
||||||||||||||||||||||||||||||||||||||||
Non-interest bearing DDA |
$ | 2,083,910 | 24.8 | % | $ | 2,088,749 | 24.4 | % | $ | 1,972,226 | 24.5 | % | $ | 1,861,907 | 23.9 | % | $ | 1,788,756 | 23.3 | % | ||||||||||||||||||||
Interest bearing DDA |
1,684,492 | 20.1 | % | 1,671,760 | 19.6 | % | 1,532,701 | 19.0 | % | 1,332,914 | 17.1 | % | 1,358,649 | 17.7 | % | |||||||||||||||||||||||||
Money Market |
2,206,220 | 26.3 | % | 2,312,107 | 27.1 | % | 2,042,243 | 25.3 | % | 1,995,248 | 25.6 | % | 1,878,679 | 24.5 | % | |||||||||||||||||||||||||
Savings |
581,480 | 6.9 | % | 554,211 | 6.5 | % | 514,780 | 6.4 | % | 498,451 | 6.4 | % | 471,082 | 6.1 | % | |||||||||||||||||||||||||
Time < $100 |
909,616 | 10.8 | % | 938,911 | 11.0 | % | 968,806 | 12.0 | % | 1,005,672 | 12.9 | % | 1,037,492 | 13.6 | % | |||||||||||||||||||||||||
Time > $100 |
928,864 | 11.1 | % | 978,713 | 11.5 | % | 1,029,498 | 12.8 | % | 1,104,547 | 14.1 | % | 1,133,034 | 14.8 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total Deposits |
$ | 8,394,582 | $ | 8,544,451 | $ | 8,060,254 | $ | 7,798,739 | $ | 7,667,692 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Loan to Deposit Ratio |
47.1 | % | 45.3 | % | 46.7 | % | 47.9 | % | 47.8 | % | ||||||||||||||||||||||||||||||
Construction Loans |
||||||||||||||||||||||||||||||||||||||||
Single family residential construction |
$ | 143,600 | 30.8 | % | $ | 142,584 | 29.4 | % | $ | 136,030 | 28.2 | % | $ | 126,926 | 25.9 | % | $ | 124,995 | 25.8 | % | ||||||||||||||||||||
Land development |
39,704 | 8.5 | % | 41,177 | 8.5 | % | 43,084 | 8.9 | % | 44,400 | 9.1 | % | 46,405 | 9.6 | % | |||||||||||||||||||||||||
Raw land |
51,070 | 10.9 | % | 63,006 | 13.0 | % | 61,177 | 12.7 | % | 64,178 | 13.1 | % | 69,769 | 14.4 | % | |||||||||||||||||||||||||
Residential lots |
86,201 | 18.5 | % | 88,054 | 18.2 | % | 86,848 | 18.0 | % | 88,600 | 18.1 | % | 86,515 | 17.9 | % | |||||||||||||||||||||||||
Commercial lots |
49,454 | 10.6 | % | 51,642 | 10.7 | % | 49,645 | 10.3 | % | 54,016 | 11.0 | % | 54,419 | 11.3 | % | |||||||||||||||||||||||||
Commercial construction and other |
96,854 | 20.7 | % | 97,832 | 20.2 | % | 105,356 | 21.9 | % | 112,073 | 22.8 | % | 101,478 | 21.0 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total Construction Loans |
$ | 466,884 | $ | 484,295 | $ | 482,140 | $ | 490,193 | $ | 483,581 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Page 13 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
June 30, 2012 |
Mar 31, 2012 |
Dec 31, 2011 |
Sept 30, 2011 |
June 30, 2011 |
||||||||||||||||
Balance Sheet Data (at period end) |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Total loans |
$ | 3,950,332 | $ | 3,874,862 | $ | 3,765,906 | $ | 3,737,630 | $ | 3,665,248 | ||||||||||
Investment securities (F) |
5,400,044 | 5,646,529 | 4,658,936 | 4,430,530 | 4,641,664 | |||||||||||||||
Federal funds sold |
133 | 445 | 642 | 294 | 350 | |||||||||||||||
Allowance for credit losses |
(50,382 | ) | (51,642 | ) | (51,594 | ) | (52,513 | ) | (51,932 | ) | ||||||||||
Cash and due from banks |
152,678 | 151,467 | 212,800 | 211,261 | 145,910 | |||||||||||||||
Goodwill |
932,965 | 929,161 | 924,537 | 924,537 | 924,537 | |||||||||||||||
Core deposit intangibles |
17,706 | 19,301 | 20,996 | 22,874 | 24,799 | |||||||||||||||
Other real estate |
10,236 | 7,718 | 8,328 | 8,216 | 8,841 | |||||||||||||||
Fixed assets, net |
166,273 | 162,676 | 159,656 | 160,099 | 160,119 | |||||||||||||||
Other assets |
157,366 | 149,438 | 122,464 | 124,159 | 137,611 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 10,737,351 | $ | 10,889,955 | $ | 9,822,671 | $ | 9,567,087 | $ | 9,657,147 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Demand deposits |
$ | 2,083,910 | $ | 2,088,749 | $ | 1,972,226 | $ | 1,861,907 | $ | 1,788,756 | ||||||||||
Interest bearing deposits |
6,310,672 | 6,455,702 | 6,088,028 | 5,936,832 | 5,878,936 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
8,394,582 | 8,544,451 | 8,060,254 | 7,798,739 | 7,667,692 | |||||||||||||||
Securities sold under repurchase agreements |
122,743 | 58,481 | 54,883 | 66,166 | 91,288 | |||||||||||||||
Federal funds purchased and other borrowings |
437,278 | 527,536 | 12,790 | 13,583 | 248,839 | |||||||||||||||
Junior subordinated debentures |
85,055 | 85,055 | 85,055 | 85,055 | 85,055 | |||||||||||||||
Other liabilities |
53,876 | 64,899 | 42,424 | 62,205 | 52,625 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
9,093,534 | 9,280,422 | 8,255,406 | 8,025,748 | 8,145,499 | |||||||||||||||
Shareholders equity (G) |
1,643,817 | 1,609,533 | 1,567,265 | 1,541,339 | 1,511,648 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 10,737,351 | $ | 10,889,955 | $ | 9,822,671 | $ | 9,567,087 | $ | 9,657,147 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(F) | Includes $17,709, $19,542, $20,726, $24,278 and $23,647 in unrealized gains on available for sale securities for the quarterly periods ending June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively. |
(G) | Includes $11,511, $12,702, $13,472, $15,781 and $15,371 in after-tax unrealized gains on available for sale securities for the quarterly periods ending June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively. |
Page 14 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
(Dollars in thousands)
Three Months Ended | ||||||||||||||||||||
June 30, 2012 |
Mar 31, 2012 |
Dec 31, 2011 |
Sept 30, 2011 |
June 30, 2011 |
||||||||||||||||
Income Statement Data | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Interest on loans |
$ | 54,793 | $ | 53,217 | $ | 58,899 | $ | 54,471 | $ | 53,703 | ||||||||||
Interest on securities |
38,072 | 38,321 | 35,719 | 38,714 | 41,943 | |||||||||||||||
Interest on federal funds sold and other earning assets |
9 | 78 | 40 | 4 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest income |
92,874 | 91,616 | 89,658 | 93,189 | 95,652 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense - deposits |
8,083 | 8,791 | 8,682 | 9,717 | 11,064 | |||||||||||||||
Interest expense - debentures |
648 | 663 | 632 | 607 | 598 | |||||||||||||||
Interest expense - other |
477 | 316 | 257 | 327 | 360 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest expense |
9,208 | 9,770 | 9,571 | 10,651 | 12,022 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
83,666 | 81,846 | 80,087 | 82,538 | 83,630 | |||||||||||||||
Provision for credit losses |
600 | 150 | 1,150 | 950 | 1,400 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income after provision for credit losses |
83,066 | 81,696 | 78,937 | 81,588 | 82,230 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-sufficient funds (NSF) fees |
5,167 | 5,389 | 5,860 | 6,249 | 6,226 | |||||||||||||||
Debit card and ATM card income |
4,292 | 3,836 | 4,189 | 3,941 | 3,809 | |||||||||||||||
Service charges on deposit accounts |
2,432 | 2,441 | 2,515 | 2,472 | 2,511 | |||||||||||||||
Net gain (loss) on sale of assets |
70 | (7 | ) | | 17 | 195 | ||||||||||||||
Net (loss) gain on sale of ORE |
(165 | ) | 418 | (473 | ) | 95 | (366 | ) | ||||||||||||
Net loss on sale of securities |
| | | | (581 | ) | ||||||||||||||
Other non-interest income |
1,860 | 1,868 | 1,974 | 1,807 | 1,736 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-interest income |
13,656 | 13,945 | 14,065 | 14,581 | 13,530 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Salaries and benefits |
23,572 | 23,252 | 21,258 | 23,601 | 23,994 | |||||||||||||||
CDI amortization |
1,595 | 1,695 | 1,879 | 1,924 | 1,943 | |||||||||||||||
Net occupancy and equipment |
3,492 | 3,557 | 3,655 | 3,784 | 3,547 | |||||||||||||||
Depreciation |
2,028 | 2,035 | 2,051 | 2,041 | 2,037 | |||||||||||||||
Data processing and software amortization |
1,906 | 1,532 | 1,417 | 1,954 | 1,780 | |||||||||||||||
Regulatory assessments and FDIC insurance |
1,659 | 1,548 | 1,518 | 1,488 | 2,894 | |||||||||||||||
ORE expense |
383 | 691 | 680 | 235 | 294 | |||||||||||||||
Other non-interest expense |
6,153 | 6,149 | 5,927 | 6,124 | 6,025 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-interest expense |
40,788 | 40,459 | 38,385 | 41,151 | 42,514 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income before taxes |
55,934 | 55,182 | 54,617 | 55,018 | 53,246 | |||||||||||||||
Federal income taxes |
18,962 | 18,695 | 18,211 | 18,645 | 18,154 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income available to common shareholders |
$ | 36,972 | $ | 36,487 | $ | 36,406 | $ | 36,373 | $ | 35,092 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Page 15 of 21
Prosperity Bancshares, Inc.®
Financial Highlights
Three Months Ended | ||||||||||||||||||||
June 30, 2012 |
Mar 31, 2012 |
Dec 31, 2011 |
Sept 30, 2011 |
June 30, 2011 |
||||||||||||||||
Comparative Quarterly Asset Quality, Performance & Capital Ratios | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Return on average assets (annualized) |
1.35 | % | 1.39 | % | 1.50 | % | 1.52 | % | 1.45 | % | ||||||||||
Return on average common equity (annualized) |
9.06 | % | 9.15 | % | 9.35 | % | 9.51 | % | 9.36 | % | ||||||||||
Return on average tangible equity (annualized) |
21.70 | % | 22.57 | % | 23.86 | % | 25.03 | % | 25.56 | % | ||||||||||
Net interest margin (tax equivalent) (annualized) |
3.55 | % | 3.64 | % | 3.82 | % | 4.02 | % | 4.06 | % | ||||||||||
Employees - FTE |
1,666 | 1,690 | 1,664 | 1,678 | 1,675 | |||||||||||||||
Efficiency ratio |
41.94 | % | 42.23 | % | 40.77 | % | 42.38 | % | 43.58 | % | ||||||||||
Non-performing assets to average earning assets |
0.12 | % | 0.16 | % | 0.14 | % | 0.16 | % | 0.15 | % | ||||||||||
Non-performing assets to loans and other real estate |
0.30 | % | 0.38 | % | 0.32 | % | 0.36 | % | 0.35 | % | ||||||||||
Net charge-offs to average loans |
0.05 | % | 0.00 | % | 0.06 | % | 0.01 | % | 0.03 | % | ||||||||||
Allowance for credit losses to total loans |
1.28 | % | 1.33 | % | 1.37 | % | 1.40 | % | 1.42 | % | ||||||||||
Book value per share |
$ | 34.63 | $ | 34.03 | $ | 33.41 | $ | 32.87 | $ | 32.24 | ||||||||||
Tangible book value per share |
$ | 14.60 | $ | 13.98 | $ | 13.25 | $ | 12.67 | $ | 11.99 | ||||||||||
Tier 1 risk-based capital |
16.42 | % | 15.70 | % | 15.90 | % | 15.47 | % | 14.72 | % | ||||||||||
Total risk-based capital |
17.49 | % | 16.80 | % | 17.09 | % | 16.69 | % | 15.93 | % | ||||||||||
Tier 1 leverage capital |
7.69 | % | 7.68 | % | 7.89 | % | 7.70 | % | 7.24 | % | ||||||||||
Tangible equity to tangible assets |
7.08 | % | 6.65 | % | 7.00 | % | 6.89 | % | 6.46 | % | ||||||||||
Equity to assets |
15.31 | % | 14.78 | % | 15.96 | % | 16.11 | % | 15.65 | % |
Page 16 of 21
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
Three Months Ended June 30, 2012 | Three Months Ended June 30, 2011 | |||||||||||||||||||||||
YIELD ANALYSIS | Average Balance |
Interest Earned / Interest Paid |
Average Yield/ Rate |
Average Balance |
Interest Earned / Interest Paid |
Average Yield/ Rate |
||||||||||||||||||
Interest Earning Assets: |
||||||||||||||||||||||||
Loans |
$ | 3,914,352 | $ | 54,793 | 5.63 | % | $ | 3,631,256 | $ | 53,703 | 5.93 | % | ||||||||||||
Investment securities |
5,635,810 | 38,072 | 2.70 | % | 4,707,217 | 41,919 | 3.56 | % | ||||||||||||||||
Federal funds sold and other earning assets |
20,916 | 9 | 0.17 | % | 13,218 | 30 | 0.91 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest earning assets |
9,571,078 | $ | 92,874 | 3.90 | % | 8,351,691 | $ | 95,652 | 4.59 | % | ||||||||||||||
|
|
|
|
|||||||||||||||||||||
Allowance for credit losses |
(50,746 | ) | (51,861 | ) | ||||||||||||||||||||
Non-interest earning assets |
1,398,857 | 1,378,738 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 10,919,189 | $ | 9,678,568 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest Bearing Liabilities: |
||||||||||||||||||||||||
Interest bearing demand deposits |
$ | 1,706,176 | $ | 2,089 | 0.49 | % | $ | 1,403,331 | $ | 2,061 | 0.59 | % | ||||||||||||
Savings and money market deposits |
2,779,524 | 2,444 | 0.35 | % | 2,403,330 | 3,348 | 0.56 | % | ||||||||||||||||
Certificates and other time deposits |
1,880,096 | 3,550 | 0.76 | % | 2,175,165 | 5,655 | 1.04 | % | ||||||||||||||||
Securities sold under repurchase agreements |
98,968 | 59 | 0.24 | % | 68,413 | 110 | 0.64 | % | ||||||||||||||||
Federal funds purchased and other borrowings |
610,499 | 418 | 0.28 | % | 218,310 | 250 | 0.46 | % | ||||||||||||||||
Junior subordinated debentures |
85,055 | 648 | 3.06 | % | 85,055 | 598 | 2.82 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest bearing liabilities |
$ | 7,160,318 | $ | 9,208 | 0.52 | % | $ | 6,353,604 | $ | 12,022 | 0.76 | % | ||||||||||||
|
|
|
|
|||||||||||||||||||||
Non-interest bearing liabilities: |
||||||||||||||||||||||||
Non-interest bearing demand deposits |
$ | 2,069,965 | $ | 1,770,664 | ||||||||||||||||||||
Other liabilities |
56,742 | 54,915 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities |
$ | 9,287,025 | $ | 8,179,183 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Shareholders equity |
$ | 1,632,164 | $ | 1,499,385 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 10,919,189 | $ | 9,678,568 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Income & Margin |
$ | 83,666 | 3.52 | % | $ | 83,630 | 4.02 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Income & Margin (tax equivalent) |
$ | 84,498 | 3.55 | % | $ | 84,603 | 4.06 | % | ||||||||||||||||
|
|
|
|
Page 17 of 21
Prosperity Bancshares, Inc.®
Supplemental Financial Data (Unaudited)
(Dollars in thousands)
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2011 | |||||||||||||||||||||||
YIELD ANALYSIS | Average Balance |
Interest Earned / Interest Paid |
Average Yield/ Rate |
Average Balance |
Interest Earned / Interest Paid |
Average Yield/ Rate |
||||||||||||||||||
Interest Earning Assets: |
||||||||||||||||||||||||
Loans |
$ | 3,866,672 | $ | 108,010 | 5.62 | % | $ | 3,574,207 | $ | 105,903 | 5.98 | % | ||||||||||||
Investment securities |
5,414,033 | 76,393 | 2.82 | % | 4,692,639 | 83,123 | 3.54 | % | ||||||||||||||||
Federal funds sold and other earning assets |
73,536 | 87 | 0.24 | % | 13,200 | 35 | 0.53 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest earning assets |
9,354,241 | $ | 184,490 | 3.97 | % | 8,280,046 | $ | 189,061 | 4.60 | % | ||||||||||||||
|
|
|
|
|||||||||||||||||||||
Allowance for credit losses |
(51,174 | ) | (51,780 | ) | ||||||||||||||||||||
Non-interest earning assets |
1,403,182 | 1,387,885 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 10,706,249 | $ | 9,616,151 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest Bearing Liabilities: |
||||||||||||||||||||||||
Interest bearing demand deposits |
$ | 1,700,208 | $ | 4,152 | 0.49 | % | $ | 1,446,008 | $ | 4,299 | 0.60 | % | ||||||||||||
Savings and money market deposits |
2,785,936 | 5,033 | 0.36 | % | 2,381,326 | 6,684 | 0.57 | % | ||||||||||||||||
Certificates and other time deposits |
1,925,584 | 7,689 | 0.80 | % | 2,176,359 | 11,593 | 1.07 | % | ||||||||||||||||
Securities sold under repurchase agreements |
76,136 | 96 | 0.25 | % | 60,058 | 179 | 0.60 | % | ||||||||||||||||
Federal funds purchased and other borrowings |
441,630 | 697 | 0.32 | % | 205,201 | 518 | 0.51 | % | ||||||||||||||||
Junior subordinated debentures |
85,055 | 1,311 | 3.10 | % | 88,059 | 1,745 | 4.00 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest bearing liabilities |
$ | 7,014,549 | $ | 18,978 | 0.54 | % | $ | 6,357,011 | $ | 25,018 | 0.79 | % | ||||||||||||
|
|
|
|
|||||||||||||||||||||
Non-interest bearing liabilities: |
||||||||||||||||||||||||
Non-interest bearing demand deposits |
$ | 2,020,453 | $ | 1,721,967 | ||||||||||||||||||||
Other liabilities |
57,523 | 52,956 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities |
$ | 9,092,525 | $ | 8,131,934 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Shareholders equity |
$ | 1,613,724 | $ | 1,484,217 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 10,706,249 | $ | 9,616,151 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Income & Margin |
$ | 165,512 | 3.56 | % | $ | 164,043 | 4.00 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net Interest Income & Margin (tax equivalent) |
$ | 167,240 | 3.60 | % | $ | 165,905 | 4.04 | % | ||||||||||||||||
|
|
|
|
Page 18 of 21
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA
Prosperitys management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity and the tangible equity to tangible assets ratio for internal planning and forecasting purposes. Prosperity has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperitys financial results and Prosperity believes that its presentation, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Prosperitys business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and 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.
Page 19 of 21
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands)
Three Months Ended | ||||||||||||||||||||
Jun 30, 2012 |
Mar 31, 2012 |
Dec 31, 2011 |
Sept 30, 2011 |
June 30, 2011 |
||||||||||||||||
Return on average tangible common equity: |
|
|||||||||||||||||||
Net income |
$ | 36,972 | $ | 36,487 | $ | 36,406 | $ | 36,373 | $ | 35,092 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average shareholders equity |
1,632,164 | 1,595,284 | 1,556,845 | 1,529,718 | 1,499,385 | |||||||||||||||
Less: Average goodwill and other intangible assets |
(950,577 | ) | (948,519 | ) | (946,427 | ) | (948,351 | ) | (950,265 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average tangible shareholders equity |
$ | 681,587 | $ | 646,765 | $ | 610,418 | $ | 581,367 | $ | 549,120 | ||||||||||
Return on average tangible common equity (annualized): |
21.70 | % | 22.57 | % | 23.86 | % | 25.03 | % | 25.56 | % | ||||||||||
Tangible book value per share: |
||||||||||||||||||||
Shareholders equity |
$ | 1,643,817 | $ | 1,609,533 | $ | 1,567,265 | $ | 1,541,339 | $ | 1,511,648 | ||||||||||
Less: Goodwill and other intangible assets |
(950,671 | ) | (948,462 | ) | (945,533 | ) | (947,411 | ) | (949,336 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible shareholders equity |
$ | 693,146 | $ | 661,071 | $ | 621,732 | $ | 593,928 | $ | 562,312 | ||||||||||
Period end shares outstanding |
47,474 | 47,297 | 46,910 | 46,893 | 46,888 | |||||||||||||||
Tangible book value per share: |
$ | 14.60 | $ | 13.98 | $ | 13.25 | $ | 12.67 | $ | 11.99 | ||||||||||
Tangible equity to tangible assets ratio: |
||||||||||||||||||||
Tangible shareholders equity |
$ | 693,146 | $ | 661,071 | $ | 621,732 | $ | 593,928 | $ | 562,312 | ||||||||||
Total assets |
$ | 10,737,351 | $ | 10,889,955 | $ | 9,822,671 | $ | 9,567,087 | $ | 9,657,147 | ||||||||||
Less: Goodwill and other intangible assets |
(950,671 | ) | (948,462 | ) | (945,533 | ) | (947,411 | ) | (949,336 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible assets |
$ | 9,786,680 | $ | 9,941,493 | $ | 8,877,138 | $ | 8,619,676 | $ | 8,707,811 | ||||||||||
Tangible equity to tangible assets ratio: |
7.08 | % | 6.65 | % | 7.00 | % | 6.89 | % | 6.46 | % |
Page 20 of 21
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
Six Months Ended | ||||||||
June 30, 2012 | June 30, 2011 | |||||||
Return on average tangible common equity: |
||||||||
Net income |
$ | 73,459 | $ | 68,970 | ||||
|
|
|
|
|||||
Average shareholders equity |
1,613,724 | 1,484,217 | ||||||
Less: Average goodwill and other intangible assets |
(949,548 | ) | (951,189 | ) | ||||
|
|
|
|
|||||
Average tangible shareholders equity |
$ | 664,176 | $ | 533,028 | ||||
Return on average tangible common equity (annualized): |
22.12 | % | 25.88 | % | ||||
Tangible book value per share: |
||||||||
Shareholders equity |
$ | 1,643,817 | $ | 1,511,648 | ||||
Less: Goodwill and other intangible assets |
(950,671 | ) | (949,336 | ) | ||||
|
|
|
|
|||||
Tangible shareholders equity |
$ | 693,146 | $ | 562,312 | ||||
Period end shares outstanding |
47,474 | 46,888 | ||||||
Tangible book value per share: |
$ | 14.60 | $ | 11.99 | ||||
Tangible equity to tangible assets ratio: |
||||||||
Tangible shareholders equity |
$ | 693,146 | $ | 562,312 | ||||
Total assets |
$ | 10,737,351 | $ | 9,657,147 | ||||
Less: Goodwill and other intangible assets |
(950,671 | ) | (949,336 | ) | ||||
|
|
|
|
|||||
Tangible assets |
$ | 9,786,680 | $ | 8,707,811 | ||||
Tangible equity to tangible assets ratio: |
7.08 | % | 6.46 | % |
Page 21 of 21