Filed by Prosperity Bancshares, Inc.
Pursuant to rule 425 under Securities Act of 1933
Subject Company: F&M Bancorporation Inc.
Commission File No. 333-193026
| PRESS RELEASE | For more information contact: | |
| Prosperity Bancshares, Inc.® | David Zalman | |
| Prosperity Bank Plaza | Chairman and Chief Executive Officer | |
| 4295 San Felipe | 281.269.7199 | |
| Houston, Texas 77027 | david.zalman@prosperitybankusa.com | |
FOR IMMEDIATE RELEASE
PROSPERITY BANCSHARES, INC.®
REPORTS RECORD FOURTH QUARTER
2013 EARNINGS
| • | Named Best Bank in America for 2014 by Forbes Magazine |
| • | Fourth quarter 2013 earnings per share (diluted) increased 15.3% to $0.98 compared with the fourth quarter 2012 |
| • | Net income increased $14.705 million or 30.5% compared with the fourth quarter 2012 |
| • | Completed the acquisition of First Victoria National Bank |
| • | Nonperforming assets remain low at 0.15% of fourth quarter average earning assets |
| • | Loans increased $2.595 billion or 50.1% compared with 2012 |
| • | Deposits increased $3.649 billion or 31.3% compared with 2012 |
HOUSTON, January 24, 2014. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, “Prosperity”), reported net income for the quarter ended December 31, 2013, of $62.971 million or $0.98 per diluted common share, an increase in net income of $14.705 million or 30.5%, compared with $48.266 million, and an increase in diluted earnings per share of 15.3%, compared with $0.85 per diluted common share for the same period in 2012. Prosperity also reported net income for the year ended December 31, 2013 of $221.398 million or $3.65 per diluted common share, up 31.9% from 2012 net income of $167.901 million and up 13.0% from 2012 diluted earnings per common share of $3.23.
“I am very excited to announce the great results and accomplishments for the fourth quarter and full year 2013. We were again selected by Forbes magazine as the #1 Best Bank in America. All of our Associates and Directors have worked very hard and this honor recognizes them for that,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer.
“We completed the merger and operational integration of First Victoria National Bank, with assets in excess of $2 billion and a footprint complimentary to Prosperity. We are very excited about the relationship and all of their team members have been great to work with. I know that all the associates with First Victoria will help take us to another level and share in our success going forward,” continued Zalman.
“We look forward to our pending merger with F&M Bancorporation and its wholly owned subsidiary (“F&M Bank”) headquartered in Tulsa, Oklahoma, which we hope to close at the end of the first quarter or very early in the second quarter of this year. The pending merger with F&M Bank, combined with our recent merger of Coppermark Bank in Oklahoma City will increase our market share substantially in Oklahoma and increase our ability to compete more effectively from a size standpoint,” added Zalman.
Page 1 of 20
“We could not be more pleased with our earnings per share for 2013 increasing 13.0% to $3.65 compared with 2012 diluted earnings per share of $3.23. Including acquisitions, our loans increased $2.595 billion or 50.1% and our deposits increased $3.649 billion or 31.3% when compared with the fourth quarter of 2012. These are excellent results and this achievement could not be done without all the hard work of our Associates and Directors. I appreciate all that has been done by everyone to make us the Best Bank in America,” concluded Zalman.
Prosperity’s 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. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30). 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.
Results of operations for the three months ended December 31, 2013
For the three months ended December 31, 2013, net income was $62.971 million compared with $48.266 million for the same period in 2012. Net income per diluted common share was $0.98 for the three months ended December 31, 2013 compared with $0.85 for the same period in 2012. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2013 were 1.42%, 9.53% and 23.97%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 40.21% for the three months ended December 31, 2013.
Net interest income before provision for credit losses for the quarter ended December 31, 2013, increased 34.3% to $145.469 million compared with $108.301 million during the same period in 2012. The increase was primarily due to a 23.2% increase in average interest-earning assets for the same period. Linked quarter net interest income before provision for credit losses increased 15.0% or $18.936 million to $145.469 million compared with $126.533 million during the three months ended September 30, 2013. The net interest margin on a tax equivalent basis increased to 3.82% for the three months ended December 31, 2013, compared with 3.53% for the same period in 2012 and 3.59% for the three months ended September 30, 2013. Excluding purchase accounting adjustments, the net interest margin on a tax equivalent basis increased on a linked quarter basis from 3.19% for the quarter ended September 30, 2013 to 3.35% for the quarter ended December 31, 2013.
Noninterest income increased $1.052 million or 4.4% to $25.158 million for the three months ended December 31, 2013, compared with $24.106 million for the same period in 2012. The increase was primarily due to the acquisitions of FVNB Corp. and First Victoria National Bank (collectively “FVNB”) on November 1, 2013, Coppermark Bancshares, Inc. and Coppermark Bank (collectively “Coppermark”) on April 1, 2013 and East Texas Financial Services on January 1, 2013, partially offset by a decrease in debit card income as a result of a Durbin Amendment that became effective on July 1, 2013. This Federal Reserve rule is applicable to financial institutions that have assets of $10 billion or more and imposes limits on the amount of interchange, or swipe, fees that can be collected. On a linked quarter basis, noninterest income increased 16.7% or $3.604 million.
Noninterest expense increased $11.624 million or 20.4% to $68.592 million for the three months ended December 31, 2013, compared with $56.968 million for the same period in 2012. The increase was primarily due to additional noninterest expenses associated with the acquisitions of FVNB, Coppermark and East Texas Financial Services. On a linked quarter basis, noninterest expense increased 11.5% or $7.055 million due mainly to the acquisition of FVNB and one-time pre-tax merger expenses of $2.032 million primarily related to the FVNB acquisition.
Loans at December 31, 2013 were $7.775 billion, an increase of $2.595 billion or 50.1%, compared with $5.180 billion at December 31, 2012. Linked quarter loans increased $1.593 billion or 25.8% from $6.183 billion at September 30, 2013.
Deposits at December 31, 2013 were $15.291 billion, an increase of $3.649 billion or 31.3% compared with $11.642 billion at December 31, 2012. Linked quarter deposits increased $2.835 billion or 22.8% from $12.456 billion at September 30, 2013.
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Average loans increased 40.8% or $2.098 billion to $7.238 billion for the quarter ended December 31, 2013, compared with $5.140 billion for the same period in 2012. On a linked quarter basis, average loans increased 17.3% or $1.065 billion from $6.173 billion for the quarter ended September 30, 2013. Average deposits increased 26.0% to $14.191 billion for the quarter ended December 31, 2013, compared with $11.259 billion for the same period of 2012. On a linked quarter basis, average deposits increased 14.1% or $1.758 billion from $12.432 billion for the quarter ended September 30, 2013.
Results of operations for the twelve months ended December 31, 2013
For the twelve months ended December 31, 2013, net income was $221.398 million compared with $167.901 million for the same period in 2012. Net income per diluted common share was $3.65 for the twelve months ended December 31, 2013 compared with $3.23 for the same period in 2012. Returns on average assets, average common equity and average tangible common equity for the twelve months ended December 31, 2013 were 1.36%, 9.31%, and 22.52%, respectively. Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and securities and taxes) was 41.60% for the twelve months ended December 31, 2013.
Net interest income before provision for credit losses for the twelve months ended December 31, 2013 increased $118.120 million or 31.0% to $498.826 million compared with $380.706 million during the same period in 2012. The increase was attributable primarily to a 29.6% increase in average earning assets over the same period.
Noninterest income increased $19.892 million or 26.3% to $95.427 million for the twelve months ended December 31, 2013 compared with $75.535 million for the same period in 2012. The increase was primarily due to the full year effect of the acquisition of American State Bank (“ASB”), including their trust department and home loan center, in addition to the East Texas Financial Services, Coppermark and FVNB acquisitions completed in 2013.
Noninterest expense increased $48.739 million or 24.6% to $247.196 million for the twelve months ended December 31, 2013 compared with $198.457 million for the same period in 2012. This increase in noninterest expense was the result of the completion of three acquisitions in 2013 and the full year effect of the ASB acquisition. Additionally, total noninterest expense for the twelve months ended December 31, 2013 included one-time pre-tax merger expenses of $3.203 million.
Average loans increased 37.4% or $1.689 billion to $6.203 billion for the twelve months ended December 31, 2013, compared with $4.514 billion for the same period in 2012. Average deposits increased 30.9% to $12.764 billion for the twelve months ended December 31, 2013, compared with $9.749 billion for the same period in 2012.
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The table below provides detail on loans acquired and deposits assumed in the Community National Bank (“Community National”), East Texas Financial Services, Coppermark and FVNB acquisitions completed on October 1, 2012, January 1, 2013, April 1, 2013 and November 1, 2013, respectively:
Balance Sheet Data (at period end)
(In thousands)
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Loans acquired (including new production since respective acquisition dates): |
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| Community National |
$ | 59,992 | $ | 62,673 | $ | 61,722 | $ | 61,966 | $ | 63,940 | ||||||||||
| East Texas Financial Services |
99,281 | 104,403 | 111,626 | 117,863 | — | |||||||||||||||
| Coppermark |
616,333 | 688,656 | 772,965 | — | — | |||||||||||||||
| FVNB |
1,588,238 | — | — | — | — | |||||||||||||||
| All other |
5,411,377 | 5,326,857 | 5,226,170 | 5,083,195 | 5,116,000 | |||||||||||||||
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| Total loans |
$ | 7,775,221 | $ | 6,182,589 | $ | 6,172,483 | $ | 5,263,024 | $ | 5,179,940 | ||||||||||
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| Deposits assumed (including new deposits since respective acquisition dates): |
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| Community National |
$ | 159,302 | $ | 154,378 | $ | 156,210 | $ | 156,274 | $ | 160,404 | ||||||||||
| East Texas Financial Services |
81,200 | 90,649 | 88,289 | 98,359 | — | |||||||||||||||
| Coppermark |
1,031,993 | 1,073,567 | 1,087,137 | — | — | |||||||||||||||
| FVNB |
2,239,415 | — | — | — | — | |||||||||||||||
| All other |
11,779,361 | 11,137,205 | 11,177,014 | 11,458,834 | 11,481,440 | |||||||||||||||
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| Total deposits |
$ | 15,291,271 | $ | 12,455,799 | $ | 12,508,650 | $ | 11,713,467 | $ | 11,641,844 | ||||||||||
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As reflected in the table above, loan and deposit growth was impacted by the acquisitions of Community National, East Texas Financial Services, Coppermark and FVNB. Excluding loans acquired in these acquisitions and new production at the acquired banking centers since the respective acquisition dates, loans at December 31, 2013 grew 5.8% compared with December 31, 2012 and 1.6% (6.3% annualized) on a linked quarter basis. Excluding deposits assumed in these acquisitions and new deposits generated at the acquired banking centers since the respective acquisition dates, deposits at December 31, 2013 grew 2.6% compared with December 31, 2012 and increased 5.8% (23.1% annualized) on a linked quarter basis.
At December 31, 2013, Prosperity had $18.642 billion in total assets, $7.775 billion in loans and $15.291 billion in deposits. Assets, loans and deposits at December 31, 2013 increased by 27.8%, 50.1% and 31.3%, respectively, compared with their respective levels at December 31, 2012.
Asset Quality
Nonperforming assets totaled $22.504 million or 0.15% of quarterly average earning assets at December 31, 2013, compared with $13.015 million or 0.10% of quarterly average earning assets at December 31, 2012, and $12.687 million or 0.09% of quarterly average earning assets at September 30, 2013. The allowance for credit losses was 0.87% of total loans at December 31, 2013, 1.01% of total loans at December 31, 2012 and 0.97% of total loans at September 30, 2013. Excluding loans acquired that are accounted for under ASC Topics 310-20 and 310-30, the allowance for credit losses was 1.25% and 1.20% of remaining loans as of December 31, 2013 and September 30, 2013, respectively. Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
The provision for credit losses was $7.865 million for the three months ended December 31, 2013 compared with $4.025 million for the three months ended September 30, 2013 and $3.550 million for the three months ended December 31, 2012. The provision for credit losses was $17.240 million for the twelve months ended December 31, 2013 compared with $6.100 million for the twelve months ended December 31, 2012.
Net charge offs were $496 thousand for the three months ended December 31, 2013 compared with $288 thousand for the three months ended September 30, 2013 and $1.913 million for the three months ended December 31, 2012. Net charge offs were $2.522 million for the twelve months ended December 31, 2013 compared with $5.130 million for the twelve months ended December 31, 2012.
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Conference Call
Prosperity’s management team will host a conference call on Friday, January 24, 2014 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) to discuss Prosperity’s fourth quarter 2013 earnings. Individuals and investment professionals may participate in the call by dialing 866-952-1906, the reference code is PBUS.
Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website at http://www.prosperitybankusa.com. The webcast may be accessed directly from Prosperity’s home page by clicking the “About Us” tab and then the “Presentations & Calls” link.
Pending Acquisition of F&M Bancorporation
On August 29, 2013, Prosperity announced the signing of a definitive merger agreement with F&M Bancorporation Inc. (“FMBC”) and its wholly-owned subsidiary The F&M Bank & Trust Company (collectively, “F&M Bank”) headquartered in Tulsa, Oklahoma. F&M Bank operates 13 banking offices; 10 in Tulsa, Oklahoma and surrounding areas (including 1 loan production office) and 3 in Dallas, Texas. As of December 31, 2013, FMBC on a consolidated basis, reported total assets of $2.568 billion, total loans of $1.761 billion and total deposits of $2.332 billion.
Under the terms of the definitive agreement, Prosperity will issue approximately 3,298,246 shares of Prosperity common stock plus $47.000 million in cash for all outstanding shares of FMBC capital stock, subject to certain conditions and potential adjustments. The transaction is subject to customary closing conditions, including the receipt of customary regulatory approvals and approval by FMBC’s shareholders.
Acquisition of FVNB Corp.
On November 1, 2013, Prosperity completed the acquisition of FVNB Corp. and its wholly-owned subsidiary First Victoria National Bank (collectively, “FVNB”) headquartered in Victoria, Texas. First Victoria National Bank operated 33 banking offices; 4 in Victoria, Texas; 7 in the South Texas area including Corpus Christi; 6 in the Bryan/College Station area; 5 in the Central Texas area including New Braunfels; and 11 in the Houston area including The Woodlands and Huntsville. As of September 30, 2013, FVNB, on a consolidated basis, reported total assets of $2.473 billion, total loans of $1.648 billion and total deposits of $2.195 billion.
Pursuant to the terms of the acquisition agreement, Prosperity issued 5,570,667 shares of Prosperity common stock plus $91.250 million in cash for all outstanding shares of FVNB Corp. capital stock, which resulted in a premium of $278.3 million.
Acquisition of Coppermark Bancshares, Inc.
On April 1, 2013, Prosperity completed the acquisition of Coppermark Bancshares, Inc. and its wholly-owned subsidiary, Coppermark Bank (collectively, “Coppermark”) headquartered in Oklahoma City, Oklahoma. Coppermark operated 9 full-service banking offices; 6 in Oklahoma City, Oklahoma and surrounding areas and 3 in the Dallas, Texas area. As of March 31, 2013, Coppermark reported, on a consolidated basis, total assets of $1.2 billion, total loans of $847.6 million and total deposits of $1.1 billion.
Pursuant to the terms of the acquisition agreement, Prosperity issued 3,258,718 shares of Prosperity common stock plus $60.0 million in cash for all outstanding shares of Coppermark Bancshares capital stock, which resulted in a premium of $91.7 million.
Acquisition of East Texas Financial Services, Inc.
On January 1, 2013, Prosperity completed the acquisition of East Texas Financial Services, Inc. (OTC BB: FFBT) and its wholly-owned subsidiary, First Federal Bank Texas (“Firstbank”). Firstbank operated 4 banking offices in the Tyler MSA, including 3 locations in Tyler, Texas and 1 location in Gilmer, Texas. As of December 31, 2012, East Texas Financial Services reported, on a consolidated basis, total assets of $165.0 million, total loans of $129.3 million and total deposits of $112.3 million.
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Pursuant to the terms of the acquisition agreement, Prosperity issued 530,940 shares of Prosperity common stock for all outstanding shares of East Texas Financial Services capital stock, which resulted in a premium of $7.0 million.
Acquisition of Community National Bank
On October 1, 2012, Prosperity completed the acquisition of Community National Bank, Bellaire, Texas. Community National operated 1 banking office in Bellaire, Texas, in the Houston Metropolitan Area. As of September 30, 2012, Community National reported total assets of $183.0 million, total loans of $68.0 million and total deposits of $164.6 million.
Pursuant to the terms of the acquisition agreement, Prosperity issued 372,282 shares of Prosperity common stock plus $11.4 million in cash for all outstanding shares of Community National capital stock, which resulted in a premium of $10.6 million.
Prosperity Bancshares, Inc. ®
Prosperity Bancshares Inc. ® is a $18.642 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.prosperitybankusa.com, Retail Brokerage Services, Credit Cards, MasterMoney Debit Cards, 24 hour voice response banking, Trust and Wealth Management; and Mobile Banking. Prosperity currently operates 238 full-service banking locations; 63 in the Houston area, including The Woodlands and Huntsville; 26 in the South Texas area including Corpus Christi and Victoria; 35 in the Dallas/Fort Worth area; 22 in the East Texas area; 36 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area and 6 in the Central Oklahoma area.
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| Bryan/College Station Area - | McKinney | Gladebrook | Colony Creek | |||
| Bryan | McKinney-Stonebridge | Heights | Edna | |||
| Bryan-29th Street | Midway | Highway 6 West | Goliad | |||
| Bryan-East | Plano | Little York | Kingsville | |||
| Bryan-North | Preston Forest | Medical Center | Mathis | |||
| Caldwell | Preston Road | Memorial Drive | Padre Island | |||
| College Station | Red Oak | Northside | Palacios | |||
| Crescent Point | Sachse | Pasadena | Port Lavaca | |||
| Hearne | The Colony | Pecan Grove | Portland | |||
| Huntsville | Turtle Creek | River Oaks | Rockport | |||
| Madisonville | Westmoreland | Sugar Land | Sinton | |||
| Navasota | SW Medical Center | Taft | ||||
| New Waverly | Fort Worth - | Tanglewood | Victoria | |||
| Rock Prairie | Haltom City | Uptown | Victoria-Navarro | |||
| Southwest Parkway | Keller | Waugh Drive | Victoria-North | |||
| Tower Point | Roanoke | Westheimer | Victoria-North #2 | |||
| Wellborn Road | Stockyards | West University | ||||
| Woodcreek | West Texas Area - | |||||
| Central Texas Area - | Other Dallas/Fort Worth | Abilene - | ||||
| Austin - | Locations - | Other Houston Area | Antilley Road | |||
| 183 | Arlington | Locations - | Barrow Street | |||
| Allandale | Azle | Angleton | Cypress Street | |||
| Cedar Park | Ennis | Bay City | Judge Ely | |||
| Congress | Gainesville | Beaumont | Mockingbird | |||
| Lakeway | Glen Rose | Cinco Ranch | ||||
| Liberty Hill | Granbury | Cleveland | Lubbock - | |||
| Northland | Mesquite | East Bernard | 4th Street | |||
| Oak Hill | Muenster | El Campo | 66th Street | |||
| Parmer Lane | Sanger | Dayton | 82nd Street | |||
| Research Blvd | Waxahachie | Galveston | 86th Street | |||
| Westlake | Weatherford | Groves | 98th Street | |||
| Hempstead | Avenue Q | |||||
| Other Central Texas Locations - | East Texas Area - | Hitchcock | North University | |||
| Bastrop | Athens | Katy | Texas Tech Student Union | |||
| Canyon Lake | Blooming Grove | Katy-S. Mason Road | ||||
| Cuero | Canton | Katy-Spring Green | Midland - | |||
| Dime Box | Carthage | Liberty | Wadley | |||
| Dripping Springs | Corsicana | Magnolia | Wall Street | |||
| Elgin | Crockett | Magnolia Parkway | ||||
| Flatonia | Eustace | Mont Belvieu | Odessa - | |||
| Georgetown | Gilmer | Nederland | Grandview | |||
| Gonzales | Grapeland | Needville | Grant | |||
| Gruene | Gun Barrel City | Rosenberg | Kermit Highway | |||
| Hallettsville | Jacksonville | Shadow Creek | Parkway | |||
| Kingsland | Kerens | Spring | ||||
| La Grange | Longview | Sweeny | Other West Texas Locations - | |||
| Lexington | Mount Vernon | The Woodlands-I-45 | Big Spring | |||
| New Braunfels | Palestine | The Woodlands-Research Forest | Brownfield | |||
| Pleasanton | Rusk | Tomball | Brownwood | |||
| Round Rock | Seven Points | Waller | Cisco | |||
| San Antonio | Teague | West Columbia | Comanche | |||
| Schulenburg | Tyler-Beckham | Wharton | Early | |||
| Seguin | Tyler-South Broadway | Winnie | Floydada | |||
| Smithville | Tyler-University | Wirt | Gorman | |||
| Thorndale | Winnsboro | Levelland | ||||
| Weimar | South Texas Area - | Littlefield | ||||
| Yoakum | Houston Area - | Corpus Christi - | Merkel | |||
| Yorktown | Houston - | Airline | Plainview | |||
| Aldine | Calallen | San Angelo | ||||
| Dallas/Fort Worth Area - | Allen Parkway | Carmel | Slaton | |||
| Dallas - | Bellaire | Northwest | Snyder | |||
| Abrams Centre | Beltway | Saratoga | ||||
| Balch Springs | Clear Lake | Timbergate | Oklahoma | |||
| Camp Wisdom | Copperfield | Water Street | 23rd Street | |||
| Cedar Hill | Cypress | Edmond | ||||
| Dallas – Central Expressway | Downtown | Other South Texas | Expressway | |||
| Frisco | Eastex | Locations - | I-240 | |||
| Frisco-West | Fairfield | Alice | Memorial | |||
| Independence | First Colony | Aransas Pass | Norman | |||
| Kiest | Gessner | Beeville |
- - -
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In connection with the proposed merger of F&M Bancorporation Inc. into Prosperity Bancshares, Inc., Prosperity Bancshares filed with the Securities and Exchange Commission a registration statement on Form S-4 to register the shares of Prosperity’s common stock to be issued to the shareholders of F&M Bancorporation. The registration statement included a proxy statement/prospectus which will be sent to the shareholders of F&M Bancorporation 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, F&M BANCORPORATION INC. 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. Prosperity’s 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 Prosperity’s 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 Prosperity’s control, which 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 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 fluctuations and interest rate fluctuations; and weather. These and various other factors are discussed in Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2012 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 http://www.prosperitybankusa.com.
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Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | ||||||||||||||||
| Balance Sheet Data |
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| (at period end) |
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| Total loans |
$ | 7,775,221 | $ | 6,182,589 | $ | 6,172,483 | $ | 5,263,024 | $ | 5,179,940 | ||||||||||
| Investment securities(A) |
8,224,448 | 7,771,345 | 8,017,884 | 7,985,811 | 7,442,065 | |||||||||||||||
| Federal funds sold |
400 | 1,121 | 606 | 835 | 352 | |||||||||||||||
| Allowance for credit losses |
(67,282 | ) | (59,913 | ) | (56,176 | ) | (55,049 | ) | (52,564 | ) | ||||||||||
| Cash and due from banks |
380,990 | 269,987 | 250,542 | 180,577 | 325,952 | |||||||||||||||
| Goodwill |
1,674,209 | 1,351,782 | 1,350,834 | 1,235,743 | 1,217,162 | |||||||||||||||
| Core deposit intangibles |
37,912 | 25,233 | 26,688 | 26,514 | 26,159 | |||||||||||||||
| Other real estate |
7,299 | 7,432 | 10,244 | 9,913 | 7,234 | |||||||||||||||
| Fixed assets, net |
282,925 | 232,240 | 227,455 | 206,829 | 205,268 | |||||||||||||||
| Other assets |
325,906 | 272,463 | 270,158 | 227,117 | 232,005 | |||||||||||||||
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| Total assets |
$ | 18,642,028 | $ | 16,054,279 | $ | 16,270,718 | $ | 15,081,314 | $ | 14,583,573 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Demand deposits |
$ | 4,108,835 | $ | 3,368,357 | $ | 3,283,082 | $ | 2,995,828 | $ | 3,016,205 | ||||||||||
| Interest-bearing deposits |
11,182,436 | 9,087,442 | 9,225,568 | 8,717,639 | 8,625,639 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
15,291,271 | 12,455,799 | 12,508,650 | 11,713,467 | 11,641,844 | |||||||||||||||
| Securities sold under repurchase agreements |
364,357 | 431,969 | 481,170 | 470,241 | 454,502 | |||||||||||||||
| Federal funds purchased and other borrowings |
10,689 | 605,951 | 781,215 | 576,768 | 256,753 | |||||||||||||||
| Junior subordinated debentures |
124,231 | 85,055 | 85,055 | 85,055 | 85,055 | |||||||||||||||
| Other liabilities |
64,662 | 86,393 | 69,346 | 86,328 | 56,030 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
15,855,210 | 13,665,167 | 13,925,436 | 12,931,859 | 12,494,184 | |||||||||||||||
| Shareholders’ equity(B) |
2,786,818 | 2,389,112 | 2,345,282 | 2,149,455 | 2,089,389 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 18,642,028 | $ | 16,054,279 | $ | 16,270,718 | $ | 15,081,314 | $ | 14,583,573 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (A) | Includes $7,512, $8,588, $9,724, $12,054 and $13,824, in unrealized gains on available for sale securities for the quarterly periods ending December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
| (B) | Includes $4,883, $5,582, $6,321, $7,835 and $8,986, in after-tax unrealized gains on available for sale securities for the quarterly periods ending December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
Page 9 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
| Income Statement Data |
||||||||||||||||||||||||||||
| Interest income: |
||||||||||||||||||||||||||||
| Loans |
$ | 110,575 | $ | 94,236 | $ | 89,842 | $ | 81,464 | $ | 82,727 | $ | 376,117 | $ | 271,324 | ||||||||||||||
| Securities(C) |
45,100 | 41,961 | 39,384 | 36,548 | 34,956 | 162,993 | 148,374 | |||||||||||||||||||||
| Federal funds sold and other earning assets |
76 | 16 | 76 | 19 | 36 | 187 | 144 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total interest income |
155,751 | 136,213 | 129,302 | 118,031 | 117,719 | 539,297 | 419,842 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest expense: |
||||||||||||||||||||||||||||
| Deposits |
9,048 | 8,314 | 9,170 | 8,690 | 8,217 | 35,222 | 34,486 | |||||||||||||||||||||
| Junior subordinated debentures |
730 | 610 | 606 | 605 | 631 | 2,551 | 2,593 | |||||||||||||||||||||
| Securities sold under repurchase agreements |
280 | 317 | 312 | 292 | 294 | 1,201 | 705 | |||||||||||||||||||||
| Other borrowings |
224 | 439 | 472 | 362 | 276 | 1,497 | 1,352 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total interest expense |
10,282 | 9,680 | 10,560 | 9,949 | 9,418 | 40,471 | 39,136 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net interest income |
145,469 | 126,533 | 118,742 | 108,082 | 108,301 | 498,826 | 380,706 | |||||||||||||||||||||
| Provision for credit losses |
7,865 | 4,025 | 2,550 | 2,800 | 3,550 | 17,240 | 6,100 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net interest income after provision for credit losses |
137,604 | 122,508 | 116,192 | 105,282 | 104,751 | 481,586 | 374,606 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Noninterest income: |
||||||||||||||||||||||||||||
| Nonsufficient funds (NSF) fees |
9,669 | 8,649 | 8,346 | 8,509 | 9,292 | 35,173 | 29,113 | |||||||||||||||||||||
| Credit card, debit card and ATM card income |
4,662 | 4,307 | 7,007 | 6,487 | 6,683 | 22,463 | 21,057 | |||||||||||||||||||||
| Service charges on deposit accounts |
3,460 | 3,169 | 3,304 | 2,931 | 2,877 | 12,864 | 11,112 | |||||||||||||||||||||
| Trust income |
1,542 | 901 | 896 | 1,017 | 915 | 4,356 | 1,746 | |||||||||||||||||||||
| Mortgage income |
549 | 931 | 1,567 | 991 | 1,120 | 4,038 | 2,681 | |||||||||||||||||||||
| Brokerage income |
719 | 233 | 263 | 303 | 154 | 1,518 | 648 | |||||||||||||||||||||
| Bank owned life insurance income |
1,011 | 916 | 932 | 776 | 1,242 | 3,635 | 2,673 | |||||||||||||||||||||
| Net gain (loss) on sale of assets |
40 | 126 | (180 | ) | 1 | (244 | ) | (13 | ) | (231 | ) | |||||||||||||||||
| Net gain (loss) on sale of other real estate |
196 | (864 | ) | 237 | (105 | ) | (113 | ) | (536 | ) | (457 | ) | ||||||||||||||||
| Other noninterest income |
3,310 | 3,186 | 2,902 | 2,531 | 2,180 | 11,929 | 7,193 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total noninterest income |
25,158 | 21,554 | 25,274 | 23,441 | 24,106 | 95,427 | 75,535 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Noninterest expense: |
||||||||||||||||||||||||||||
| Salaries and benefits |
40,633 | 37,135 | 37,517 | 33,209 | 31,980 | 148,494 | 115,505 | |||||||||||||||||||||
| Core deposit intangibles amortization |
1,594 | 1,455 | 1,341 | 1,755 | 1,932 | 6,145 | 7,229 | |||||||||||||||||||||
| Net occupancy and equipment |
4,893 | 5,094 | 4,669 | 4,278 | 4,812 | 18,934 | 16,475 | |||||||||||||||||||||
| Depreciation |
3,072 | 2,679 | 2,464 | 2,378 | 2,491 | 10,593 | 8,923 | |||||||||||||||||||||
| Debit card, data processing and software amortization |
3,333 | 2,756 | 3,249 | 2,570 | 3,106 | 11,908 | 9,445 | |||||||||||||||||||||
| Regulatory assessments and FDIC insurance |
2,771 | 2,516 | 2,579 | 2,395 | 2,365 | 10,261 | 7,679 | |||||||||||||||||||||
| Communications (includes telephone, courier and postage) |
2,468 | 2,397 | 2,410 | 2,196 | 2,381 | 9,471 | 8,158 | |||||||||||||||||||||
| Other real estate expense |
176 | 75 | 237 | 223 | 465 | 711 | 1,810 | |||||||||||||||||||||
| Other noninterest expense |
9,652 | 7,430 | 6,834 | 6,763 | 7,436 | 30,679 | 23,233 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total noninterest expense |
68,592 | 61,537 | 61,300 | 55,767 | 56,968 | 247,196 | 198,457 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income before taxes |
94,170 | 82,525 | 80,166 | 72,956 | 71,889 | 329,817 | 251,684 | |||||||||||||||||||||
| Federal income taxes |
31,199 | 27,247 | 26,322 | 23,651 | 23,623 | 108,419 | 83,783 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income available to common shareholders |
$ | 62,971$ | $ | 55,278 | $ | 53,844 | $ | 49,305 | $ | 48,266 | $ | 221,398 | $ | 167,901 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (C) | Interest income on securities was reduced by net premium amortization of $12,017, $ 15,136, $ 18,838, $22,710 and $ 23,992 for the three month periods ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and $ 68,701 and $ 66,889 for the years ended December 31, 2013 and 2012, respectively. |
Page 10 of 20
Prosperity Bancshares, Inc. ®
Financial Highlights (Unaudited)
(Dollars and share amounts in thousands, except per share data and market prices)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
| Profitability |
||||||||||||||||||||||||||||
| Net income |
$ | 62,971 | $ | 55,278 | $ | 53,844 | $ | 49,305 | $ | 48,266 | $ | 221,398 | $ | 167,901 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Basic earnings per share |
$ | 0.98 | $ | 0.92 | $ | 0.89 | $ | 0.87 | $ | 0.86 | $ | 3.66 | $ | 3.24 | ||||||||||||||
| Diluted earnings per share |
$ | 0.98 | $ | 0.91 | $ | 0.89 | $ | 0.86 | $ | 0.85 | $ | 3.65 | $ | 3.23 | ||||||||||||||
| Return on average assets (D) |
1.42 | % | 1.37 | % | 1.33 | % | 1.33 | % | 1.36 | % | 1.36 | % | 1.35 | % | ||||||||||||||
| Return on average common equity (D) |
9.53 | % | 9.31 | % | 9.27 | % | 9.23 | % | 9.28 | % | 9.31 | % | 9.10 | % | ||||||||||||||
| Return on average tangible common equity (D) (E) |
23.97 | % | 22.14 | % | 22.32 | % | 22.30 | % | 22.92 | % | 22.52 | % | 21.93 | % | ||||||||||||||
| Tax equivalent net interest margin (F) |
3.82 | % | 3.59 | % | 3.43 | % | 3.42 | % | 3.53 | % | 3.58 | % | 3.53 | % | ||||||||||||||
| Efficiency ratio(G) |
40.21 | % | 41.59 | % | 42.51 | % | 42.40 | % | 42.95 | % | 41.60 | % | 43.48 | % | ||||||||||||||
| Liquidity and Capital Ratios |
||||||||||||||||||||||||||||
| Equity to assets |
14.95 | % | 14.88 | % | 14.41 | % | 14.25 | % | 14.33 | % | 14.95 | % | 14.33 | % | ||||||||||||||
| Tier 1 risk-based capital |
13.29 | % | 14.74 | % | 14.15 | % | 14.77 | % | 14.40 | % | 13.29 | % | 14.40 | % | ||||||||||||||
| Total risk-based capital |
14.03 | % | 15.55 | % | 14.91 | % | 15.61 | % | 15.22 | % | 14.03 | % | 15.22 | % | ||||||||||||||
| Tier 1 leverage capital |
7.44 | % | 7.37 | % | 7.07 | % | 7.10 | % | 7.10 | % | 7.44 | % | 7.10 | % | ||||||||||||||
| Tangible equity to tangible assets(E) |
6.35 | % | 6.90 | % | 6.50 | % | 6.42 | % | 6.34 | % | 6.35 | % | 6.34 | % | ||||||||||||||
| Other Data |
||||||||||||||||||||||||||||
| Shares used in computed earnings per share |
||||||||||||||||||||||||||||
| Basic |
64,024 | 60,344 | 60,250 | 56,988 | 56,427 | 60,421 | 51,794 | |||||||||||||||||||||
| Diluted |
64,173 | 60,504 | 60,394 | 57,134 | 56,554 | 60,578 | 51,941 | |||||||||||||||||||||
| Period end shares outstanding |
66,048 | 60,383 | 60,315 | 57,014 | 56,447 | 66,048 | 56,447 | |||||||||||||||||||||
| Cash dividends paid per common share |
$ | 0.240 | $ | 0.215 | $ | 0.215 | $ | 0.215 | $ | 0.215 | $ | 0.885 | $ | 0.800 | ||||||||||||||
| Book value per share |
$ | 42.19 | $ | 39.57 | $ | 38.88 | $ | 37.70 | $ | 37.02 | $ | 42.19 | $ | 37.02 | ||||||||||||||
| Tangible book value per |
$ | 16.27 | $ | 16.76 | $ | 16.05 | $ | 15.56 | $ | 14.99 | $ | 16.27 | $ | 14.99 | ||||||||||||||
| Common Stock Market Price |
||||||||||||||||||||||||||||
| High |
$ | 65.07 | $ | 61.99 | $ | 52.38 | $ | 47.56 | $ | 43.54 | $ | 65.07 | $ | 47.66 | ||||||||||||||
| Low |
61.53 | 51.85 | 44.33 | 42.38 | 38.56 | 42.38 | 38.56 | |||||||||||||||||||||
| Period end market price |
63.39 | 61.84 | 51.79 | 47.39 | 42.00 | 63.39 | 42.00 | |||||||||||||||||||||
| Net charge-offs |
$ | 496 | $ | 288 | $ | 1,423 | $ | 315 | $ | 1,913 | $ | 2,522 | $ | 5,130 | ||||||||||||||
| Employees – FTE |
2,995 | 2,454 | 2,496 | 2,304 | 2,266 | 2,995 | 2,266 | |||||||||||||||||||||
| Number of banking centers |
238 | 218 | 219 | 224 | 217 | 238 | 217 | |||||||||||||||||||||
| (D) | Interim periods annualized. |
| (E) | Refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconcilation of this non-GAAP financial measure. |
| (F) | Net interest margin for all periods presented is calculated on an actual 365 day basis or 366 day basis. |
| (G) | Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale of assets and securities. Additionally, taxes are not part of this calculation. |
Page 11 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Dec 31, 2012 | ||||||||||||||||||||||||||||||||||
| Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
||||||||||||||||||||||||||||
| Interest-Earning Assets: |
||||||||||||||||||||||||||||||||||||
| Loans |
$ | 7,238,438 | $ | 110,575 | 6.06 | % | $ | 6,173,394 | $ | 94,236 | 6.06 | % | $ | 5,140,163 | $ | 82,727 | 6.40 | % | ||||||||||||||||||
| Investment securities |
7,992,673 | 45,100 | 2.24 | %(H) | 8,015,221 | 41,961 | 2.08 | %(H) | 7,228,418 | 34,956 | 1.92 | %(H) | ||||||||||||||||||||||||
| Federal funds sold and other earning assets |
103,413 | 76 | 0.29 | % | 27,451 | 16 | 0.22 | % | 75,135 | 36 | 0.19 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-earning assets |
15,334,524 | $ | 155,751 | 4.03 | % | 14,216,066 | $ | 136,213 | 3.80 | % | 12,443,716 | $ | 117,719 | 3.76 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Allowance for credit losses |
(60,170 | ) | (56,765 | ) | (50,775 | ) | ||||||||||||||||||||||||||||||
| Noninterest-earning assets |
2,502,276 | 2,034,968 | 1,844,756 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 17,776,630 | $ | 16,194,269 | $ | 14,237,697 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Interest-Bearing Liabilities: |
||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits |
$ | 2,963,899 | $ | 1,899 | 0.25 | % | $ | 2,400,555 | $ | 1,708 | 0.28 | % | $ | 2,328,969 | $ | 1,803 | 0.31 | % | ||||||||||||||||||
| Savings and money market deposits |
4,654,044 | 3,049 | 0.26 | % | 4,233,911 | 2,911 | 0.27 | % | 3,600,109 | 2,580 | 0.29 | % | ||||||||||||||||||||||||
| Certificates and other time deposits |
2,712,699 | 4,100 | 0.60 | % | 2,489,848 | 3,695 | 0.59 | % | 2,366,155 | 3,834 | 0.64 | % | ||||||||||||||||||||||||
| Securities sold under repurchase agreements |
398,100 | 280 | 0.28 | % | 455,276 | 317 | 0.28 | % | 459,998 | 294 | 0.25 | % | ||||||||||||||||||||||||
| Federal funds purchased and other borrowings |
210,492 | 224 | 0.42 | % | 772,083 | 439 | 0.23 | % | 272,239 | 276 | 0.40 | % | ||||||||||||||||||||||||
| Junior subordinated debentures |
111,172 | 730 | 2.61 | % | 85,055 | 610 | 2.85 | % | 85,055 | 631 | 2.95 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing liabilities |
11,050,406 | 10,282 | 0.37 | %(I) | 10,436,728 | 9,680 | 0.37 | %(I) | 9,112,525 | 9,418 | 0.41 | %(I) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Noninterest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits |
3,860,296 | 3,308,158 | 2,963,998 | |||||||||||||||||||||||||||||||||
| Other liabilities |
223,394 | 73,571 | 80,085 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities |
15,134,096 | 13,818,457 | 12,156,608 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Shareholders’ equity |
2,642,534 | 2,375,812 | 2,081,089 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 17,776,630 | $ | 16,194,269 | $ | 14,237,697 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income and margin |
$ | 145,469 | 3.76 | % | $ | 126,533 | 3.53 | % | $ | 108,301 | 3.46 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Non-GAAP to GAAP reconciliation: |
||||||||||||||||||||||||||||||||||||
| Tax equivalent adjustment |
2,152 | 2,028 | 2,099 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income and margin (tax equivalent basis) |
$ | 147,621 | 3.82 | % | $ | 128,561 | 3.59 | % | $ | 110,400 | 3.53 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (H) | Yield on securities was impacted by net premium amortization of $12,017, $15,136 and $23,992 for the three month periods ended December 31, 2013, September 30, 2013 and December 31, 2012, respectively. |
| (I) | Total cost of funds, including noninterest bearing deposits, was 0.27%, 0.28% and 0.31% for the three months ended December 31, 2013, September 30, 2013 and December 31, 2012, respectively. |
Page 12 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
YIELD ANALYSIS
| Year Ended | ||||||||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||||||||
| Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Paid |
Average Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||||
| Interest-Earning Assets: |
||||||||||||||||||||||||
| Loans |
$ | 6,202,897 | $ | 376,117 | 6.06 | % | $ | 4,514,171 | $ | 271,324 | 6.01 | % | ||||||||||||
| Investment securities |
7,932,782 | 162,993 | 2.05 | %(J) | 6,364,917 | 148,374 | 2.33 | %(J) | ||||||||||||||||
| Federal funds sold and other earning assets |
50,318 | 187 | 0.37 | % | 68,900 | 144 | 0.21 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-earning assets |
14,185,997 | $ | 539,297 | 3.80 | % | 10,947,988 | $ | 419,842 | 3.83 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Allowance for credit losses |
(57,001 | ) | (51,770 | ) | ||||||||||||||||||||
| Noninterest-earning assets |
2,126,918 | 1,536,448 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 16,255,914 | $ | 12,432,666 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Interest-Bearing Liabilities: |
||||||||||||||||||||||||
| Interest-bearing demand deposits |
$ | 2,651,320 | $ | 7,917 | 0.30 | % | $ | 1,979,345 | $ | 8,228 | 0.42 | % | ||||||||||||
| Savings and money market deposits |
4,237,323 | 11,961 | 0.28 | % | 3,174,256 | 10,600 | 0.33 | % | ||||||||||||||||
| Certificates and other time deposits |
2,530,065 | 15,344 | 0.61 | % | 2,152,382 | 15,658 | 0.73 | % | ||||||||||||||||
| Securities sold under repurchase agreements |
443,231 | 1,201 | 0.27 | % | 263,689 | 705 | 0.27 | % | ||||||||||||||||
| Federal funds purchased and other borrowings |
470,854 | 1,497 | 0.32 | % | 416,925 | 1,352 | 0.32 | % | ||||||||||||||||
| Junior subordinated debentures |
91,584 | 2,551 | 2.79 | % | 85,055 | 2,593 | 3.05 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest bearing liabilities |
10,424,377 | 40,471 | 0.39 | %(K) | 8,071,652 | 39,136 | 0.48 | %(K) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Noninterest-bearing liabilities: |
||||||||||||||||||||||||
| Noninterest-bearing demand deposits |
3,345,594 | 2,442,860 | ||||||||||||||||||||||
| Other liabilities |
107,709 | 73,820 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
13,877,680 | 10,588,332 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Shareholders’ equity |
2,378,234 | 1,844,334 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 16,255,914 | $ | 12,432,666 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income and margin |
$ | 498,826 | 3.52 | % | $ | 380,706 | 3.48 | % | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Non-GAAP to GAAP reconciliation: |
||||||||||||||||||||||||
| Tax equivalent adjustment |
8,368 | 5,965 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income and margin (tax equivalent basis) |
$ | 507,194 | $ | 3.58 | % | $ | 386,671 | 3.53 | % | |||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| (J) | Yield on securities was impacted by net premium amortization of $68,701 and $66,889 for the years ended December 31, 2013 and 2012, respectively. |
| (K) | Total cost of funds, including noninterest bearing deposits, was 0.29% and 0.37% for the years ended December 31, 2013 and 2012, respectively. |
Page 13 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
| Adjustment to Loan Yield (L) |
||||||||||||||||||||||||||||
| Interest on loans, as reported |
$ | 110,575 | $ | 94,236 | $ | 89,842 | $ | 81,464 | $ | 82,727 | $ | 376,117 | $ | 271,324 | ||||||||||||||
| Less: Purchase accounting adjustment-loan discount accretion |
(19,979 | ) | (16,421 | ) | (12,031 | ) | (14,292 | ) | (14,523 | ) | (62,723 | ) | (26,413 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest on loans without discount accretion |
$ | 90,596 | $ | 77,815 | $ | 77,811 | $ | 67,172 | $ | 68,204 | $ | 313,394 | $ | 244,911 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average loans |
$ | 7,238,438 | $ | 6,173,394 | $ | 6,114,598 | $ | 5,263,784 | $ | 5,140,163 | $ | 6,202,897 | $ | 4,514,171 | ||||||||||||||
| Loan yield without discount accretion |
4.97 | % | 5.00 | % | 5.10 | % | 5.18 | % | 5.28 | % | 5.05 | % | 5.43 | % | ||||||||||||||
| Loan yield, as reported |
6.06 | % | 6.06 | % | 5.89 | % | 6.28 | % | 6.40 | % | 6.06 | % | 6.01 | % | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
| Adjustment to Securities Yield (L) |
||||||||||||||||||||||||||||
| Interest on securities, as reported |
$ | 45,100 | $ | 41,961 | $ | 39,384 | $ | 36,548 | $ | 34,956 | $ | 162,993 | $ | 148,374 | ||||||||||||||
| Add: Purchase accounting adjustment-securities amortization |
1,892 | 2,275 | 2,599 | 3,106 | 3,540 | 9,872 | 6,991 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Interest on securities including amortization |
$ | 46,992 | $ | 44,236 | $ | 41,983 | $ | 39,654 | $ | 38,496 | $ | 172,865 | $ | 155,365 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average securities |
$ | 7,992,673 | $ | 8,015,221 | $ | 7,964,157 | $ | 7,755,567 | $ | 7,228,418 | $ | 7,932,782 | $ | 6,364,917 | ||||||||||||||
| Securities yield without purchase accounting adjustment |
2.33 | % | 2.19 | % | 2.11 | % | 2.07 | % | 2.12 | % | 2.18 | % | 2.44 | % | ||||||||||||||
| Securities yield, as reported |
2.24 | % | 2.08 | % | 1.98 | % | 1.91 | % | 1.92 | % | 2.05 | % | 2.33 | % | ||||||||||||||
| Net Interest Margin (tax equivalent basis, excluding purchase accounting adjustments to yield) |
3.35 | % | 3.19 | % | 3.09 | % | 3.08 | % | 3.18 | % | 3.20 | % | 3.35 | % | ||||||||||||||
| Net Interest Margin (tax equivalent basis), as reported |
3.82 | % | 3.59 | % | 3.43 | % | 3.42 | % | 3.53 | % | 3.58 | % | 3.53 | % | ||||||||||||||
| Net income available to common shareholders, as reported |
$ | 62,971 | $ | 55,278 | $ | 53,844 | $ | 49,305 | $ | 48,266 | $ | 221,398 | $ | 167,901 | ||||||||||||||
| Less: Purchase accounting adjustments, net of tax (M) |
(12,095 | ) | (9,476 | ) | (6,335 | ) | (7,560 | ) | (7,374 | ) | (35,476 | ) | (12,957 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income available to common shareholders, adjusted |
$ | 50,876 | $ | 45,802 | $ | 47,509 | $ | 41,745 | $ | 40,892 | $ | 185,922 | $ | 154,944 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Acquired Loans Accounted for | Acquired Loans Accounted for | Total Loans Accounted for | ||||||||||||||||||||||||||||||||||
| Under ASC 310-20 | Under ASC 310-30 | Under ASC 310-20 and 310-30 | ||||||||||||||||||||||||||||||||||
| Balance at | Balance at | Balance at | ||||||||||||||||||||||||||||||||||
| Acquisition | Balance at | Balance at | Acquisition | Balance at | Balance at | Acquisition | Balance at | Balance at | ||||||||||||||||||||||||||||
| Date | Sep 30, 2013 | Dec 31, 2013 | Date | Sep 30, 2013 | Dec 31, 2013 | Date | Sep 30, 2013 | Dec 31, 2013 | ||||||||||||||||||||||||||||
| Loan marks: |
||||||||||||||||||||||||||||||||||||
| Previouly acquired banks (N) |
$ | 81,328 | $ | 32,842 | $ | 28,040 | $ | 28,764 | $ | 21,977 | $ | 20,741 | $ | 110,092 | $ | 54,819 | $ | 48,781 | ||||||||||||||||||
| 2013 acquisitions (O) |
78,299 | 19,101 | 59,758 | 34,783 | 19,122 | 24,756 | 113,082 | 38,223 | 84,514 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
$ | 159,627 | $ | 51,943 | $ | 87,798 | $ | 63,547 | $ | 41,099 | $ | 45,497 | $ | 223,174 | $ | 93,042 | $ | 133,295 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Acquired portfolio loan balances: |
||||||||||||||||||||||||||||||||||||
| Previouly acquired banks (N) |
$ | 1,298,380 | $ | 602,128 | $ | 522,620 | $ | 57,979 | $ | 39,715 | $ | 37,724 | $ | 1,356,359 | $ | 641,843 | $ | 560,344 | ||||||||||||||||||
| 2013 acquisitions (O) |
2,541,268 | 595,119 | 1,936,355 | 77,300 | 37,639 | 49,256 | 2,618,568 | 632,758 | 1,985,611 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
$ | 3,839,648 | $ | 1,197,247 | $ | 2,458,975 | $ | 135,279 | $ | 77,354 | $ | 86,980 | $ | 3,974,927 | (P) | $ | 1,274,601 | $ | 2,545,955 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| (L) | Non-GAAP financial measure. |
| (M) | Using effective tax rate of 33.1%, 33.0%, 32.8%, 32.4% and 32.9% for the three month periods ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively, and 32.9% and 33.3% for the years ended December 31, 2013 and 2012, respectively. |
| (N) | Includes Bank of Texas, Bank Arlington, ASB and Community National, all of which were acquired in 2012. |
| (O) | Includes East Texas Financial Services, Coppermark and FVNB. FVNB added $1.634 billion in loans with related loan marks of $60.228 million at acquisition date. |
| (P) | Actual principal balances acquired. |
Page 14 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
| Three Months Ended | ||||||||||||||||||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
| YIELD TREND |
||||||||||||||||||||
| Interest-Earning Assets: |
||||||||||||||||||||
| Loans |
6.06 | % | 6.06 | % | 5.89 | % | 6.28 | % | 6.40 | % | ||||||||||
| Investment securities (Q) |
2.24 | % | 2.08 | % | 1.98 | % | 1.91 | % | 1.92 | % | ||||||||||
| Federal funds sold and other earning assets |
0.29 | % | 0.22 | % | 0.87 | % | 0.22 | % | 0.19 | % | ||||||||||
| Total interest-earning assets |
4.03 | % | 3.80 | % | 3.67 | % | 3.67 | % | 3.76 | % | ||||||||||
| Interest-Bearing Liabilities: |
||||||||||||||||||||
| Interest-bearing demand deposits |
0.25 | % | 0.28 | % | 0.33 | % | 0.34 | % | 0.31 | % | ||||||||||
| Savings and money market deposits |
0.26 | % | 0.27 | % | 0.30 | % | 0.30 | % | 0.29 | % | ||||||||||
| Certificates and other time deposits |
0.60 | % | 0.59 | % | 0.61 | % | 0.62 | % | 0.64 | % | ||||||||||
| Securities sold under repurchase agreements |
0.28 | % | 0.28 | % | 0.27 | % | 0.26 | % | 0.25 | % | ||||||||||
| Federal funds purchased and other borrowings |
0.42 | % | 0.23 | % | 0.35 | % | 0.41 | % | 0.40 | % | ||||||||||
| Junior subordinated debentures |
2.61 | % | 2.85 | % | 2.86 | % | 2.88 | % | 2.95 | % | ||||||||||
| Total interest-bearing liabilities |
0.37 | % | 0.37 | % | 0.40 | % | 0.42 | % | 0.41 | % | ||||||||||
| Net Interest Margin |
3.76 | % | 3.53 | % | 3.37 | % | 3.36 | % | 3.46 | % | ||||||||||
| Net Interest Margin (tax equivalent) |
3.82 | % | 3.59 | % | 3.43 | % | 3.42 | % | 3.53 | % | ||||||||||
| (Q) | Yield on securities was impacted by net premium amortization of $12,017, $15,136, $18,838, $22,710 and $23,992 for the three month periods ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively. |
Page 15 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(In thousands)
| Three Months Ended | ||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | June 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | ||||||||||||||||
| Balance Sheet Averages |
||||||||||||||||||||
| Total loans |
$ | 7,238,438 | $ | 6,173,394 | $ | 6,114,598 | $ | 5,263,784 | $ | 5,140,163 | ||||||||||
| Investment securities |
7,992,673 | 8,015,221 | 7,964,157 | 7,755,567 | 7,228,418 | |||||||||||||||
| Federal funds sold and other earning assets |
103,413 | 27,451 | 35,113 | 34,793 | 75,135 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest-earning assets |
15,334,524 | 14,216,066 | 14,113,868 | 13,054,144 | 12,443,716 | |||||||||||||||
| Allowance for credit losses |
(60,170 | ) | (56,765 | ) | (57,754 | ) | (53,242 | ) | (50,775 | ) | ||||||||||
| Cash and due from banks |
232,666 | 189,082 | 279,271 | 206,990 | 198,797 | |||||||||||||||
| Goodwill |
1,560,905 | 1,351,236 | 1,331,568 | 1,226,332 | 1,211,596 | |||||||||||||||
| Core deposit intangibles |
30,641 | 25,938 | 25,893 | 25,244 | 27,108 | |||||||||||||||
| Other real estate |
7,254 | 9,494 | 19,605 | 11,789 | 9,571 | |||||||||||||||
| Fixed assets, net |
251,688 | 231,480 | 223,769 | 207,517 | 206,869 | |||||||||||||||
| Other assets |
419,122 | 227,738 | 234,710 | 171,589 | 190,815 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 17,776,630 | $ | 16,194,269 | $ | 16,170,930 | $ | 14,850,363 | $ | 14,237,697 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Noninterest-bearing deposits |
$ | 3,860,296 | $ | 3,308,158 | $ | 3,295,211 | $ | 2,939,621 | $ | 2,963,998 | ||||||||||
| Interest-bearing demand deposits |
2,963,899 | 2,400,555 | 2,580,750 | 2,659,489 | 2,328,969 | |||||||||||||||
| Savings and money market deposits |
4,654,044 | 4,233,911 | 4,261,466 | 3,790,416 | 3,600,109 | |||||||||||||||
| Certificates and other time deposits |
2,712,699 | 2,489,848 | 2,543,895 | 2,370,499 | 2,366,155 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
14,190,938 | 12,432,472 | 12,681,322 | 11,760,025 | 11,259,231 | |||||||||||||||
| Securities sold under repurchase agreements |
398,100 | 455,276 | 471,430 | 448,542 | 459,998 | |||||||||||||||
| Federal funds purchased and other borrowings |
210,492 | 772,083 | 541,034 | 358,120 | 272,239 | |||||||||||||||
| Junior subordinated debentures |
111,172 | 85,055 | 85,055 | 85,055 | 85,055 | |||||||||||||||
| Other liabilities |
223,394 | 73,571 | 69,741 | 62,716 | 80,085 | |||||||||||||||
| Shareholders’ equity |
2,642,534 | 2,375,812 | 2,322,348 | 2,135,905 | 2,081,089 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 17,776,630 | $ | 16,194,269 | $ | 16,170,930 | $ | 14,850,363 | $ | 14,237,697 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Page 16 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||||||||||||||||
| Period End Balances |
||||||||||||||||||||||||||||||||||||||||
| Loan Portfolio |
||||||||||||||||||||||||||||||||||||||||
| Commercial and other |
$ | 1,322,975 | 17.0 | % | $ | 1,028,799 | 16.6 | % | $ | 999,677 | 16.2 | % | $ | 760,531 | 14.5 | % | $ | 798,882 | 15.4 | % | ||||||||||||||||||||
| Construction |
865,511 | 11.1 | % | 703,193 | 11.4 | % | 694,585 | 11.2 | % | 575,307 | 10.9 | % | 550,768 | 10.6 | % | |||||||||||||||||||||||||
| 1-4 family residential |
1,870,365 | 24.2 | % | 1,503,771 | 24.4 | % | 1,452,268 | 23.7 | % | 1,338,936 | 25.5 | % | 1,255,765 | 24.3 | % | |||||||||||||||||||||||||
| Home equity |
261,355 | 3.4 | % | 211,742 | 3.4 | % | 208,739 | 3.4 | % | 203,815 | 3.9 | % | 186,801 | 3.6 | % | |||||||||||||||||||||||||
| Commercial real estate |
2,753,797 | 35.3 | % | 2,304,862 | 37.2 | % | 2,390,820 | 38.6 | % | 1,993,518 | 37.8 | % | 1,990,642 | 38.4 | % | |||||||||||||||||||||||||
| Agriculture (includes farmland) |
531,258 | 6.8 | % | 321,518 | 5.2 | % | 314,945 | 5.1 | % | 286,789 | 5.4 | % | 285,637 | 5.5 | % | |||||||||||||||||||||||||
| Consumer |
169,960 | 2.2 | % | 108,704 | 1.8 | % | 111,449 | 1.8 | % | 104,128 | 2.0 | % | 111,445 | 2.2 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total loans |
$ | 7,775,221 | $ | 6,182,589 | $ | 6,172,483 | $ | 5,263,024 | $ | 5,179,940 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Deposit Types |
||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing DDA |
$ | 4,108,835 | 26.9 | % | $ | 3,368,357 | 27.0 | % | $ | 3,283,082 | 26.0 | % | $ | 2,995,828 | 25.6 | % | $ | 3,016,205 | 25.9 | % | ||||||||||||||||||||
| Interest-bearing DDA |
3,470,316 | 22.7 | % | 2,366,997 | 19.0 | % | 2,483,428 | 19.9 | % | 2,521,998 | 21.5 | % | 2,626,331 | 22.6 | % | |||||||||||||||||||||||||
| Money market |
3,320,062 | 21.7 | % | 2,834,172 | 22.8 | % | 2,868,880 | 23.0 | % | 2,509,501 | 21.4 | % | 2,362,454 | 20.3 | % | |||||||||||||||||||||||||
| Savings |
1,571,504 | 10.3 | % | 1,413,153 | 11.3 | % | 1,371,214 | 11.0 | % | 1,345,044 | 11.5 | % | 1,293,552 | 11.1 | % | |||||||||||||||||||||||||
| Certificates and other time deposits |
2,820,554 | 18.4 | % | 2,473,120 | 19.9 | % | 2,502,046 | 20.1 | % | 2,341,096 | 20.0 | % | 2,343,302 | 20.1 | % | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total deposits |
$ | 15,291,271 | $ | 12,455,799 | $ | 12,508,650 | $ | 11,713,467 | $ | 11,641,844 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Loan to Deposit Ratio |
50.8 | % | 49.6 | % | 49.3 | % | 44.9 | % | 44.5 | % | ||||||||||||||||||||||||||||||
| Construction Loans |
||||||||||||||||||||||||||||||||||||||||
| Single family residential construction |
$ | 271,491 | 30.9 | % | $ | 239,980 | 33.5 | % | $ | 234,257 | 32.9 | % | $ | 177,218 | 30.6 | % | $ | 161,401 | 29.2 | % | ||||||||||||||||||||
| Land development |
83,820 | 9.6 | % | 60,927 | 8.6 | % | 63,857 | 9.0 | % | 42,520 | 7.4 | % | 42,199 | 7.6 | % | |||||||||||||||||||||||||
| Raw land |
48,996 | 5.6 | % | 52,789 | 7.4 | % | 59,701 | 8.4 | % | 46,672 | 8.1 | % | 58,794 | 10.6 | % | |||||||||||||||||||||||||
| Residential lots |
122,449 | 14.0 | % | 95,361 | 13.4 | % | 91,018 | 12.8 | % | 93,598 | 16.2 | % | 92,697 | 16.8 | % | |||||||||||||||||||||||||
| Commercial lots |
103,878 | 11.9 | % | 58,085 | 8.2 | % | 60,960 | 8.6 | % | 64,394 | 11.2 | % | 63,716 | 11.5 | % | |||||||||||||||||||||||||
| Commercial construction and other |
244,124 | 28.0 | % | 204,940 | 28.9 | % | 200,633 | 28.3 | % | 153,047 | 26.5 | % | 134,427 | 24.3 | % | |||||||||||||||||||||||||
| Net unaccreted discount |
(9,247 | ) | (8,889 | ) | (15,841 | ) | (2,142 | ) | (2,466 | ) | ||||||||||||||||||||||||||||||
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| Total construction loans |
$ | 865,511 | $ | 703,193 | $ | 694,585 | $ | 575,307 | $ | 550,768 | ||||||||||||||||||||||||||||||
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Page 17 of 20
Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
(Dollars in thousands)
| Three Months Ended | ||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | ||||||||||||||||
| Asset Quality |
||||||||||||||||||||
| Nonaccrual loans |
$ | 10,231 | $ | 4,954 | $ | 4,295 | $ | 7,529 | $ | 5,382 | ||||||||||
| Accruing loans 90 or more days past due |
4,947 | 283 | 325 | 642 | 331 | |||||||||||||||
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| Total nonperforming loans |
15,178 | 5,237 | 4,620 | 8,171 | 5,713 | |||||||||||||||
| Repossessed assets |
27 | 18 | — | 49 | 68 | |||||||||||||||
| Other real estate |
7,299 | 7,432 | 10,244 | 9,913 | 7,234 | |||||||||||||||
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| Total nonperforming assets |
$ | 22,504 | $ | 12,687 | $ | 14,864 | $ | 18,133 | $ | 13,015 | ||||||||||
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| Nonperforming assets: |
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| Commercial |
$ | 3,153 | $ | 1,223 | $ | 1,191 | $ | 3,896 | $ | 1,568 | ||||||||||
| Construction |
4,558 | 4,611 | 5,898 | 3,678 | 3,522 | |||||||||||||||
| 1-4 family (including home equity) |
6,279 | 2,441 | 2,112 | 3,746 | 3,081 | |||||||||||||||
| Commercial real estate (including multi-family) |
8,033 | 4,233 | 4,330 | 5,533 | 2,608 | |||||||||||||||
| Agriculture |
279 | 23 | 1,213 | 1,183 | 1,463 | |||||||||||||||
| Consumer and other |
202 | 156 | 120 | 97 | 773 | |||||||||||||||
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| Total |
$ | 22,504 | $ | 12,687 | $ | 14,864 | $ | 18,133 | $ | 13,015 | ||||||||||
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| Number of loans/properties |
203 | 128 | 123 | 124 | 116 | |||||||||||||||
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| Allowance for credit losses at end of period |
$ | 67,282 | $ | 59,913 | $ | 56,176 | $ | 55,049 | $ | 52,564 | ||||||||||
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| Net charge-offs: |
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| Commercial |
$ | 7 | $ | 119 | $ | 148 | $ | 59 | $ | 205 | ||||||||||
| Construction |
(12 | ) | (30 | ) | 124 | (56 | ) | 21 | ||||||||||||
| 1-4 family (including home equity) |
21 | 15 | 35 | 102 | 65 | |||||||||||||||
| Commercial real estate (including multi-family) |
(311 | ) | (471 | ) | 801 | (57 | ) | 1,012 | ||||||||||||
| Agriculture |
(85 | ) | 13 | 13 | (7 | ) | 70 | |||||||||||||
| Consumer and other |
876 | 642 | 302 | 274 | 540 | |||||||||||||||
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| Total |
$ | 496 | $ | 288 | $ | 1,423 | $ | 315 | $ | 1,913 | ||||||||||
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| Asset Quality Ratios |
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| Nonperforming assets to average earning assets |
0.15 | % | 0.09 | % | 0.11 | % | 0.14 | % | 0.10 | % | ||||||||||
| Nonperforming assets to loans and other real estate |
0.29 | % | 0.20 | % | 0.24 | % | 0.34 | % | 0.25 | % | ||||||||||
| Net charge-offs to average loans (annualized) |
0.03 | % | 0.02 | % | 0.09 | % | 0.02 | % | 0.15 | % | ||||||||||
| Allowance for credit losses to total loans |
0.87 | % | 0.97 | % | 0.91 | % | 1.05 | % | 1.01 | % | ||||||||||
| Allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30) (E) |
1.25 | % | 1.20 | % | 1.18 | % | 1.25 | % | 1.22 | % | ||||||||||
Page 18 of 20
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands, except per share data)
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA
Prosperity’s 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. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30). 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 Prosperity’s financial results and Prosperity believes that its presentation, together with the accompanying reconciliations, provides a 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 measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. 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.
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Dec 31, 2013 | Dec 31, 2012 | ||||||||||||||||||||||
| Return on average tangible common equity: |
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| Net income |
$ | 62,971 | $ | 55,278 | $ | 53,844 | $ | 49,305 | $ | 48,266 | $ | 221,398 | $ | 167,901 | ||||||||||||||
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| Average shareholders’ equity |
$ | 2,642,534 | $ | 2,375,812 | $ | 2,322,348 | $ | 2,135,905 | $ | 2,081,089 | $ | 2,378,234 | $ | 1,844,334 | ||||||||||||||
| Less: Average goodwill and other intangible assets |
(1,591,546 | ) | (1,377,174 | ) | (1,357,461 | ) | (1,251,576 | ) | (1,238,704 | ) | (1,395,323 | ) | (1,078,804 | ) | ||||||||||||||
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| Average tangible shareholders’ equity |
$ | 1,050,988 | $ | 998,638 | $ | 964,887 | $ | 884,329 | $ | 842,385 | $ | 982,911 | $ | 765,530 | ||||||||||||||
| Return on average tangible common equity: |
23.97 | % | 22.14 | % | 22.32 | % | 22.30 | % | 22.92 | % | 22.52 | % | 21.93 | % | ||||||||||||||
| Tangible book value per share: |
||||||||||||||||||||||||||||
| Shareholders’ equity |
$ | 2,786,818 | $ | 2,389,112 | $ | 2,345,282 | $ | 2,149,455 | $ | 2,089,389 | $ | 2,786,818 | $ | 2,089,389 | ||||||||||||||
| Less: Goodwill and other intangible assets |
(1,712,121 | ) | (1,377,015 | ) | (1,377,522 | ) | (1,262,257 | ) | (1,243,321 | ) | (1,712,121 | ) | (1,243,321 | ) | ||||||||||||||
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| Tangible shareholders’ equity |
$ | 1,074,697 | $ | 1,012,097 | $ | 967,760 | $ | 887,198 | $ | 846,068 | $ | 1,074,697 | $ | 846,068 | ||||||||||||||
| Period end shares outstanding |
66,048 | 60,383 | 60,315 | 57,014 | 56,447 | 66,048 | 56,447 | |||||||||||||||||||||
| Tangible book value per share: |
$ | 16.27 | $ | 16.76 | $ | 16.05 | $ | 15.56 | $ | 14.99 | $ | 16.27 | $ | 14.99 | ||||||||||||||
| Tangible equity to tangible assets ratio: |
||||||||||||||||||||||||||||
| Tangible shareholders’ equity |
$ | 1,074,697 | $ | 1,012,097 | $ | 967,760 | $ | 887,198 | $ | 846,068 | $ | 1,074,697 | $ | 846,068 | ||||||||||||||
| Total assets |
$ | 18,642,028 | $ | 16,054,279 | $ | 16,270,718 | $ | 15,081,314 | $ | 14,583,573 | $ | 18,642,028 | $ | 14,583,573 | ||||||||||||||
| Less: Goodwill and other intangible assets |
(1,712,121 | ) | (1,377,015 | ) | (1,377,522 | ) | (1,262,257 | ) | (1,243,321 | ) | (1,712,121 | ) | (1,243,321 | ) | ||||||||||||||
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| Tangible assets |
$ | 16,929,907 | $ | 14,677,264 | $ | 14,893,196 | $ | 13,819,057 | $ | 13,340,252 | $ | 16,929,907 | $ | 13,340,252 | ||||||||||||||
| Tangible equity to tangible assets ratio: |
6.35 | % | 6.90 | % | 6.50 | % | 6.42 | % | 6.34 | % | 6.35 | % | 6.34 | % | ||||||||||||||
Page 19 of 20
Prosperity Bancshares, Inc.®
Notes to Selected Financial Data (Unaudited)
(Dollars in thousands)
| Dec 31, 2013 | Sep 30, 2013 | Dec 31, 2012 | ||||||||||
| Allowance for credit losses to total loans, excluding acquired loans: |
||||||||||||
| Allowance for credit losses |
$ | 67,282 | $ | 59,913 | $ | 52,564 | ||||||
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| Total loans |
$ | 7,775,221 | $ | 6,182,589 | $ | 5,179,940 | ||||||
| Less: Fair value of acquired loans accounted for under ASC |
||||||||||||
| Topics 310-20 and 310-30 (does not include new production) |
$ | 2,412,660 | $ | 1,181,559 | $ | 887,953 | ||||||
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| Total loans less acquired loans |
$ | 5,362,561 | $ | 5,001,030 | $ | 4,291,987 | ||||||
| Allowance for credit losses to total loans, excluding acquired loans (non-GAAP basis) |
1.25 | % | 1.20 | % | 1.22 | % | ||||||
Page 20 of 20