PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2024 EARNINGS
Board approved increase in dividend of 3.57% to $0.58 for fourth quarter 2024, representing the 21st consecutive annual increase, with a compound annual growth rate of 11.1%
Net income of $127.3 million and diluted earnings per share of $1.34 for third quarter 2024
Net interest margin increased 23 basis points to 2.95% compared to third quarter 2023
Deposits increased $154.5 million and loans increased $60.0 million during third quarter 2024
Noninterest-bearing deposits of $9.8 billion, representing 34.9% of total deposits
Allowance for credit losses on loans and on off-balance sheet credit exposure of $392.0 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.68%(1)
Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets
Return (annualized) on third quarter average assets of 1.28%, average common equity of 6.93% and average tangible common equity of 13.50%(1)
HOUSTON, Oct. 23, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE:PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $127.3 million for the quarter ended September 30, 2024 compared with $112.2 million for the same period in 2023. Net income per diluted common share was $1.34 for the quarter ended September 30, 2024 compared with $1.20 for the same period in 2023. The annualized return on third quarter average assets was 1.28%. Additionally, deposits increased $154.5 million and loans increased $60.0 million during the third quarter of 2024. Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets. On April 1, 2024, Lone Star State Bancshares, Inc. ("Lone Star") merged with Prosperity Bancshares and Lone Star State Bank of West Texas ("Lone Star Bank") merged with Prosperity Bank (collectively, the "LSSB Merger").
"I am pleased to announce that the Board of Directors approved increasing the fourth quarter 2024 dividend to $0.58 per share from $0.56 per share that was paid in the prior four quarters. The increase reflects the continued confidence the Board has in our company and our markets. The compound annual growth rate in dividends declared from 2003 to 2024 was 11.1%," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.
"We continue to share our success with our shareholders through the payment of dividends and opportunistic stock repurchases, while also continuing to grow our capital. Our tangible capital increased $218 million from September 30, 2023, to September 30, 2024. This is the amount Prosperity retained after paying $212 million in dividends and repurchasing $75 million of our common stock during this period, reflecting Prosperity's stable earnings. Further, Prosperity's tangible book value per share has a compound annual growth rate of 11% for the last 21 years, or since 2003," added Zalman.
"The $2.4 trillion Texas economy is the eighth-largest among the nations of the world, larger than Russia, Canada and Italy, among others. An estimated 1,000 to 1,300 people move to Texas every day. Based on US Census Bureau data, in 2023, 473,453 people moved to Texas, which equates to approximately 40,000 per month or 1,300 per day," added Zalman.
"The Texas and Oklahoma economies continue to benefit from companies relocating from states with higher taxes and more regulation. This, combined with people moving to the states, requires additional housing and infrastructure, a driver for loans and increased business opportunities. We believe our bank is located in two of the best states we can be for future growth and continued prosperity," concluded Zalman.
Results of Operations for the Three Months Ended September 30, 2024
For the three months ended September 30, 2024, net income was $127.3 million(2) or $1.34 per diluted common share compared with $112.2 million(3) or $1.20 per diluted common share for the same period in 2023, an increase of $15.1 million or 13.4%. The change was primarily due to an increase in net interest income, partially offset by an increase in noninterest expense related to three months of Lone Star Bank operations. For the three months ended September 30, 2024, net income was $127.3 million(2) or $1.34 per diluted common share compared with $111.6 million(4) or $1.17 per diluted common share for the three months ended June 30, 2024, an increase of $15.7 million or 14.0%. The change was primarily due to higher net interest income, lower merger related provision for credit losses and lower merger related expenses, partially offset by lower net gain on sale or write-up of securities. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2024 were 1.28%, 6.93% and 13.50%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 46.87%(1) for the three months ended September 30, 2024.
Net interest income before provision for credit losses was $261.7 million for the three months ended September 30, 2024 compared with $239.5 million for the same period in 2023, an increase of $22.2 million or 9.3%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. Net interest income before provision for credit losses increased $2.9 million or 1.1% to $261.7 million for the three months ended September 30, 2024 compared with $258.8 million for the three months ended June 30, 2024.
The net interest margin on a tax equivalent basis was 2.95% for the three months ended September 30, 2024 compared with 2.72% for the same period in 2023 and 2.94% for the three months ended June 30, 2024. The year-to-year change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.
Noninterest income was $41.1 million for the three months ended September 30, 2024 compared $38.7 million for the same period in 2023, an increase of $2.4 million or 6.1%. The change was primarily due to an increase in the net gain (loss) on sale or write-down of assets, partially offset by a decrease in other noninterest income. Noninterest income was $41.1 million for the three months ended September 30, 2024 compared with $46.0 million for the three months ended June 30, 2024, a decrease of $4.9 million or 10.7%. The change was primarily due to lower net gain on sale or write-up of securities, partially offset by an increase in net gain (loss) on sale or write-down of assets.
Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $135.7 million for the same period in 2023, an increase of $4.7 million or 3.5%, primarily due to an increase in salaries and benefits, an increase in credit and debit card, data processing and software amortization, and additional expenses related to three months of Lone Star Bank operations, partially offset by a decrease in merger related expenses. Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $152.8 million for the three months ended June 30, 2024, a decrease of $12.5 million or 8.2%, primarily due to a decrease in FDIC special assessment, a decrease in merger related expenses and a decrease in other noninterest expense.
Results of Operations for the Nine Months Ended September 30, 2024
For the nine months ended September 30, 2024, net income was $349.3 million(5) or $3.68 per diluted common share compared with $323.8 million(6) or $3.50 per diluted common share for the same period in 2023. Net income and net income per diluted common share for the nine months ended September 30, 2024 was impacted by an increase in net interest income, a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.2 million, lower merger related provision for credit losses and a decrease in merger related expenses, partially offset by a FDIC special assessment of $3.6 million and an increase in noninterest expenses related to six months of Lone Star Bank operations. Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2024 were 1.16%, 6.40% and 12.43%(1), respectively.
Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $353.9 million(1) or $3.74(1) per diluted common share for the nine months ended September 30, 2024 and annualized returns on average assets, average common equity and average tangible common equity for the same period were 1.18%(1), 6.49%(1) and 12.59%(1), respectively. Prosperity's efficiency ratio was 49.25%(1) for the nine months ended September 30, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 48.33%(1).
Net interest income before provision for credit losses for the nine months ended September 30, 2024 was $758.7 million compared with $719.5 million for the same period in 2023, an increase of $39.3 million or 5.5%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.
The net interest margin on a tax equivalent basis for the nine months ended September 30, 2024 was 2.86% compared with 2.79% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. The increases in the average balances on loans and deposits were primarily due to the LSSB Merger.
Noninterest income was $126.0 million for the nine months ended September 30, 2024 compared with $116.7 million for the same period in 2023, an increase of $9.3 million or 7.9%, primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales, and an increase in trust income, partially offset by a decrease in other noninterest income.
Noninterest expense was $429.0 million for the nine months ended September 30, 2024 compared with $404.5 million for the same period in 2023, an increase of $24.5 million or 6.1%, primarily due to a FDIC special assessment of $3.6 million, an increase in salaries and benefits and additional expenses related to six months of Lone Star Bank operations and nine months of FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") operations, partially offset by a decrease in merger related expenses.
Balance Sheet Information
At September 30, 2024, Prosperity had $40.115 billion in total assets, an increase of $819.6 million or 2.1%, compared with $39.296 billion at September 30, 2023. Linked quarter total assets increased by $353.0 million or 0.9% compared with $39.762 billion at June 30, 2024.
Loans were $22.381 billion at September 30, 2024, an increase of $948.1 million or 4.4%, compared with $21.433 billion at September 30, 2023. Linked quarter loans increased $60.0 million or 0.3% (1.1% annualized) from $22.321 billion at June 30, 2024. Loans, excluding Warehouse Purchase Program loans, were $21.152 billion at September 30, 2024 compared with $20.520 billion at September 30, 2023, an increase of $631.8 million or 3.1%, and compared with $21.239 billion at June 30, 2024, a decrease of $87.3 million.
Deposits were $28.088 billion at September 30, 2024, an increase of $774.8 million or 2.8%, compared with $27.313 billion at September 30, 2023. Linked quarter deposits increased $154.5 million or 0.6% (2.2% annualized) from $27.933 billion at June 30, 2024.
The table below provides detail on the impact of loans acquired and deposits assumed in the LSSB Merger:
Balance Sheet Data (at period end)
(In thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Loans acquired (including new production since acquisition date):
Lone Star Bank
$
1,109,783
$
1,084,559
$
—
$
—
$
—
Prosperity Bank
Warehouse Purchase Program loans
1,228,706
1,081,403
864,924
822,245
912,327
All other loans
20,042,363
20,154,853
20,400,323
20,358,293
20,520,386
Total loans
$
22,380,852
$
22,320,815
$
21,265,247
$
21,180,538
$
21,432,713
Deposits assumed (including new deposits since acquisition date):
Lone Star Bank
$
1,136,216
$
1,187,821
$
—
$
—
$
—
All other deposits
26,951,395
26,745,265
27,175,518
27,179,809
27,312,800
Total deposits
$
28,087,611
$
27,933,086
$
27,175,518
$
27,179,809
$
27,312,800
As reflected in the table above, loan and deposit growth was impacted by the LSSB Merger.
Excluding loans acquired in the LSSB Merger and new production at the acquired banking centers since April 1, 2024, loans at September 30, 2024 decreased $161.6 million compared with September 30, 2023 and increased $34.8 million compared with June 30, 2024.
Excluding deposits assumed in the LSSB Merger and new deposits generated at the acquired banking centers since April 1, 2024, deposits at September 30, 2024 decreased by $361.4 million compared with September 30, 2023 and increased by $206.1 million compared with June 30, 2024.
Asset Quality
Nonperforming assets totaled $89.9 million or 0.25% of quarterly average interest-earning assets at September 30, 2024 compared with $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 and $89.6 million or 0.25% of quarterly average interest-earning assets at June 30, 2024, with a significant portion of the balance for each period attributable to acquired loans.
The allowance for credit losses on loans and off-balance sheet credit exposures was $392.0 million at September 30, 2024 compared with $388.0 million at September 30, 2023 and $397.5 million at June 30, 2024. There was no provision for credit losses for the three months ended September 30, 2024 and 2023, and a provision for credit losses of $9.1 million and $18.5 million for the nine months ended September 30, 2024 and 2023, respectively. As a result of the loans acquired in the LSSB Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures.
The allowance for credit losses on loans was $354.4 million or 1.58% of total loans at September 30, 2024 compared with $351.5 million or 1.64% of total loans at September 30, 2023 and $359.9 million or 1.61% of total loans at June 30, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.68%(1) at September 30, 2024 compared with 1.71%(1) at September 30, 2023 and 1.69%(1) at June 30, 2024.
Net charge-offs were $5.5 million for the three months ended September 30, 2024 compared with net charge-offs of $3.4 million for the three months ended September 30, 2023 and net charge-offs of $4.4 million for the three months ended June 30, 2024. Net charge-offs for the third quarter of 2024 included $1.4 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Further, $5.0 million of reserves on resolved PCD loans without any related charge-offs was released to the general reserve.
Net charge-offs were $12.0 million for the nine months ended September 30, 2024 compared with $18.9 million for the nine months ended September 30, 2023. Net charge-offs for the nine months ended September 30, 2024 included $3.3 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the LSSB Merger. Further, $13.9 million of reserves on resolved PCD loans was released to the general reserve.
Visa Class B-1 Stock Exchange
During the second quarter 2024, Prosperity tendered all of its shares of Visa, Inc. ("Visa") Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock, pursuant to the terms and subject to the conditions of the public offering of Visa to exchange its Class B-1 common stock for a combination of shares of its Class B-2 common stock and Class C common stock, which expired on May 3, 2024. Prosperity recorded an unrealized gain of $20.6 million during the second quarter 2024 based on the conversion privilege of the Class C common stock and the closing price of Visa Class A common stock. In the exchange, Prosperity received 48,492 shares of Class B-2 stock, recorded at zero cost basis, and 19,245 shares of Class C common stock and has subsequently sold all shares of Class C stock.
Dividend
Prosperity Bancshares declared a fourth quarter 2024 cash dividend of $0.58 per share to be paid on January 2, 2025, to all shareholders of record as of December 13, 2024, an increase of $0.02 per share, or 3.57%, from the prior quarter.
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 2024 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended September 30, 2024, and approximately 1.2 million shares of its common stock at an average weighted price of $60.35 per share during the nine months ended September 30, 2024.
Merger of Lone Star State Bancshares, Inc.
On April 1, 2024, Prosperity completed the merger of Lone Star and its wholly owned subsidiary Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 full-service 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.
Pursuant to the terms of the definitive agreement, Prosperity issued 2,376,182 shares of Prosperity common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star in the second quarter of 2024. This resulted in goodwill of $108.0 million as of September 30, 2024, which does not include all the subsequent fair value adjustments that have not yet been finalized.
Conference Call
Prosperity's management team will host a conference call on Wednesday, October 23, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2024 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 7527596.
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, FDIC special assessment, net of tax, and net gain on the sale or write-up of securities, 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, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses, and FDIC special assessment. Prosperity believes these non-GAAP financial measures provide information useful to investors in 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 September 30, 2024, Prosperity Bancshares, Inc.® is a $40.115 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 287 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; 31 in the Central Texas area including Austin and San Antonio; 43 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area and 5 in the West Texas area currently doing business as Lone Star Bank.
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 credit 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 credit 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, 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 any 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; 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 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 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, 2023, 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.
(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.
(2)
Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $4.8 million for the three months ended September 30, 2024.
(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 $6.1 million, net of tax, primarily comprised of loan discount accretion of $7.2 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $10.7 million for the three months ended June 30, 2024.
(5)
Includes purchase accounting adjustments of $12.4 million, net of tax, primarily comprised of loan discount accretion of $13.9 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.2 million for the nine months ended September 30, 2024.
(6)
Includes purchase accounting adjustments of $5.6 million, net of tax, primarily comprised of loan discount accretion of $5.6 million, merger related provision for credit losses of $18.5 million and merger related expenses of $14.9 million for the nine months ended September 30, 2023.
Bryan/College Station Area
Grapevine
Teague
Rosenberg
Midland
Bryan
Grapevine Main
Tyler-Beckham
Shadow Creek
North
Bryan-29th Street
Kiest
Tyler-South Broadway
Spring
Wadley
Bryan-East
Lake Highlands
Tyler-University
Tomball
Wall Street
Bryan-North
McKinney
Winnsboro
Waller
West
Caldwell
McKinney Eldorado
West Columbia
College Station
McKinney Redbud
Houston Area
Wharton
Odessa
Hearne
North Carrolton
Houston
Winnie
Grant
Huntsville
Park Cities
Aldine
Wirt
Kermit Highway
Madisonville
Plano
Alief
Parkway
Navasota
Plano-West
Bellaire
South Texas Area -
New Waverly
Preston Forest
Beltway
Corpus Christi
Wichita Falls
Rock Prairie
Preston Parker
Clear Lake
Calallen
Cattlemans
Southwest Parkway
Preston Royal
Copperfield
Carmel
Kell
Tower Point
Red Oak
Cypress
Northwest
Wellborn Road
Richardson
Downtown
Saratoga
Other West Texas Area
Richardson-West
Eastex
Timbergate
Locations
Central Texas Area
Rosewood Court
Fairfield
Water Street
Big Spring
Austin
The Colony
First Colony
Brownfield
Cedar Park
Tollroad
Fry Road
Victoria
Brownwood
Congress
Trinity Mills
Gessner
Victoria Main
Burkburnett
Lakeway
Turtle Creek
Gladebrook
Victoria-Navarro
Byers
Liberty Hill
West 15th Plano
Grand Parkway
Victoria-North
Cisco
Northland
West Allen
Heights
Victoria Salem
Comanche
Oak Hill
Westmoreland
Highway 6 West
Early
Research Blvd
Wylie
Little York
Other South Texas Area
Floydada
Westlake
Medical Center
Locations
Gorman
Fort Worth
Memorial Drive
Alice
Henrietta
Other Central Texas Area
Haltom City
Northside
Aransas Pass
Levelland
Locations
Hulen
Pasadena
Beeville
Littlefield
Bastrop
Keller
Pecan Grove
Colony Creek
Merkel
Canyon Lake
Museum Place
Pin Oak
Cuero
Plainview
Dime Box
Renaissance Square
River Oaks
Edna
San Angelo
Dripping Springs
Roanoke
Sugar Land
Goliad
Slaton
Elgin
Stockyards
SW Medical Center
Gonzales
Snyder
Flatonia
Tanglewood
Hallettsville
Fredericksburg
Other Dallas/Fort Worth Area
The Plaza
Kingsville
Lone Star West Texas Area
Georgetown
Locations
Uptown
Mathis
Big Spring
Gruene
Arlington
Waugh Drive
Padre Island
Brownfield
Horseshoe Bay
Azle
Westheimer
Palacios
Lubbock
Kingsland
Ennis
West University
Port Lavaca
Midland
La Grange
Gainesville
Woodcreek
Portland
Odessa
Lexington
Glen Rose
Rockport
Marble Falls
Granbury
Katy
Sinton
Oklahoma
New Braunfels
Grand Prairie
Cinco Ranch
Taft
Central Oklahoma Area
Pleasanton
Jacksboro
Katy-Spring Green
Yoakum
Oklahoma City
Round Rock
Mesquite
Yorktown
23rd Street
San Antonio
Muenster
The Woodlands
Expressway
Schulenburg
Runaway Bay
The Woodlands-College Park
West Texas Area
I-240
Seguin
Sanger
The Woodlands-I-45
Abilene
Memorial
Smithville
Waxahachie
The Woodlands-Research Forest
Antilley Road
Thorndale
Weatherford
Barrow Street
Other Central Oklahoma Area
Weimar
Other Houston Area
Cypress Street
Locations
East Texas Area
Locations
Judge Ely
Edmond
Dallas/Fort Worth Area
Athens
Angleton
Mockingbird
Norman
Dallas
Blooming Grove
Bay City
14th Street Plano
Canton
Beaumont
Amarillo
Tulsa Area
Abrams Centre
Carthage
Cleveland
Hillside
Tulsa
Addison
Corsicana
East Bernard
Soncy
Garnett
Allen
Crockett
El Campo
Harvard
Balch Springs
Eustace
Dayton
Lubbock
Memorial
Camp Wisdom
Gilmer
Galveston
4th Street
Sheridan
Carrollton
Grapeland
Groves
66th Street
S. Harvard
Cedar Hill
Gun Barrel City
Hempstead
82nd Street
Utica Tower
Coppell
Jacksonville
Hitchcock
86th Street
Yale
East Plano
Kerens
Liberty
98th Street
Euless
Longview
Magnolia
Avenue Q
Other Tulsa Area Locations
Frisco
Mount Vernon
Magnolia Parkway
Milwaukee
Owasso
Frisco Warren
Palestine
Mont Belvieu
North University
Frisco-West
Rusk
Nederland
Texas Tech Student Union
Garland
Seven Points
Needville
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Balance Sheet Data (at period end)
Loans held for sale
$
6,113
$
9,951
$
6,380
$
5,734
$
10,187
Loans held for investment
21,146,033
21,229,461
20,393,943
20,352,559
20,510,199
Loans held for investment - Warehouse Purchase Program
1,228,706
1,081,403
864,924
822,245
912,327
Total loans
22,380,852
22,320,815
21,265,247
21,180,538
21,432,713
Investment securities(A)
11,300,756
11,702,139
12,301,138
12,803,896
13,192,742
Federal funds sold
208
234
250
260
234
Allowance for credit losses on loans
(354,397)
(359,852)
(330,219)
(332,362)
(351,495)
Cash and due from banks
2,209,863
1,507,604
1,086,444
458,153
512,239
Goodwill
3,504,388
3,504,107
3,396,402
3,396,086
3,396,459
Core deposit intangibles, net
70,178
74,324
60,757
63,994
67,553
Other real estate owned
5,757
4,960
2,204
1,708
9,320
Fixed assets, net
373,812
377,394
372,333
369,992
370,237
Other assets
623,903
630,569
601,964
605,612
665,682
Total assets
$
40,115,320
$
39,762,294
$
38,756,520
$
38,547,877
$
39,295,684
Noninterest-bearing deposits
$
9,811,361
$
9,706,505
$
9,526,535
$
9,776,572
$
10,281,893
Interest-bearing deposits
18,276,250
18,226,581
17,648,983
17,403,237
17,030,907
Total deposits
28,087,611
27,933,086
27,175,518
27,179,809
27,312,800
Other borrowings
3,900,000
3,900,000
3,900,000
3,725,000
4,250,000
Securities sold under repurchase agreements
228,896
233,689
261,671
309,277
300,714
Subordinated debentures
—
—
—
—
—
Allowance for credit losses on off-balance sheet credit exposures
37,646
37,646
36,503
36,503
36,503
Other liabilities
499,918
374,429
278,284
217,958
362,990
Total liabilities
32,754,071
32,478,850
31,651,976
31,468,547
32,263,007
Shareholders' equity(B)
7,361,249
7,283,444
7,104,544
7,079,330
7,032,677
Total liabilities and equity
$
40,115,320
$
39,762,294
$
38,756,520
$
38,547,877
$
39,295,684
(A)
Includes $(1,070), $(2,007), $(2,954), $(1,770) and $(2,442) in unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.
(B)
Includes $(845), $(1,586), $(2,333), $(1,398) and $(1,930) in after-tax unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
Three Months Ended
Year-to-Date
Sep 30,2024
Jun 30,2024
Mar 31,2024
Dec 31,2023
Sep 30,2023
Sep 30,2024
Sep 30,2023
Income Statement Data
Interest income:
Loans
$
337,451
$
336,428
$
306,228
$
306,562
$
308,678
$
980,107
$
842,434
Securities(C)
59,617
62,428
66,421
68,077
69,987
188,466
215,225
Federal funds sold and other earning assets
20,835
14,095
9,265
1,793
1,689
44,195
10,452
Total interest income
417,903
412,951
381,914
376,432
380,354
1,212,768
1,068,111
Interest expense:
Deposits
107,758
106,124
92,692
84,969
76,069
306,574
187,376
Other borrowings
46,792
46,282
48,946
52,386
62,190
142,020
153,937
Securities sold under repurchase agreements
1,662
1,759
2,032
2,094
2,533
5,453
7,310
Subordinated debentures
—
—
—
—
38
—
38
Total interest expense
156,212
154,165
143,670
139,449
140,830
454,047
348,661
Net interest income
261,691
258,786
238,244
236,983
239,524
758,721
719,450
Provision for credit losses
—
9,066
—
—
—
9,066
18,540
Net interest income after provision for credit losses
261,691
249,720
238,244
236,983
239,524
749,655
700,910
Noninterest income:
Nonsufficient funds (NSF) fees
9,016
8,153
8,288
8,365
8,719
25,457
25,326
Credit card, debit card and ATM card income
9,620
9,384
8,861
9,314
9,285
27,865
27,157
Service charges on deposit accounts
6,664
6,436
6,406
6,316
6,262
19,506
18,266
Trust income
3,479
3,601
4,156
3,360
3,326
11,236
9,909
Mortgage income
962
745
610
542
857
2,317
1,756
Brokerage income
1,258
1,186
1,235
1,059
1,067
3,679
3,216
Bank owned life insurance income
2,028
1,885
2,047
1,882
1,864
5,960
4,771
Net gain (loss) on sale or write-down of assets
3,178
(903)
(35)
(84)
(45)
2,240
2,070
Net gain on sale or write-up of securities
224
10,723
298
—
—
11,245
—
Other noninterest income
4,670
4,793
7,004
5,814
7,408
16,467
24,226
Total noninterest income
41,099
46,003
38,870
36,568
38,743
125,972
116,697
Noninterest expense:
Salaries and benefits
88,367
89,584
85,771
80,486
85,423
263,722
247,944
Net occupancy and equipment
9,291
8,915
8,623
9,093
9,464
26,829
26,424
Credit and debit card, data processing and software amortization
11,985
11,998
10,975
10,741
10,919
34,958
30,829
Regulatory assessments and FDIC insurance
5,726
10,317
5,538
24,940
5,155
21,581
15,225
Core deposit intangibles amortization
4,146
4,156
3,237
3,559
3,576
11,539
9,117
Depreciation
4,741
4,836
4,686
4,607
4,585
14,263
13,676
Communications
3,360
3,485
3,402
3,572
3,686
10,247
10,841
Other real estate expense
12
69
187
165
153
268
(253)
Net (gain) loss on sale or write-down ofother real estate
(97)
31
(138)
34
(734)
(204)
(780)
Merger related expenses
63
4,381
—
278
1,104
4,444
14,855
Other noninterest expense
12,744
15,070
13,567
14,696
12,326
41,381
36,649
Total noninterest expense
140,338
152,842
135,848
152,171
135,657
429,028
404,527
Income before income taxes
162,452
142,881
141,266
121,380
142,610
446,599
413,080
Provision for income taxes
35,170
31,279
30,840
25,904
30,402
97,289
89,240
Net income available to common shareholders
$
127,282
$
111,602
$
110,426
$
95,476
$
112,208
$
349,310
$
323,840
(C)
Interest income on securities was reduced by net premium amortization of $5,574, $5,831, $5,822, $6,428 and $6,897 for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and $17,227 and $21,412 for the nine months ended September 30, 2024 and 2023, respectively.
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
Sep 30,2024
Jun 30,2024
Mar 31,2024
Dec 31,2023
Sep 30,2023
Sep 30,2024
Sep 30,2023
Profitability
Net income (D) (E)
$
127,282
$
111,602
$
110,426
$
95,476
$
112,208
$
349,310
$
323,840
Basic earnings per share
$
1.34
$
1.17
$
1.18
$
1.02
$
1.20
