Prosperity Bancshares, Inc. (PB) Bundle
A Brief History of Prosperity Bancshares, Inc.
Prosperity Bancshares, Inc. (NYSE: PB) is a Texas-based bank holding company that has seen significant growth and evolution over the years. As of 2024, the company has established itself as a key player in the banking sector, driven by strategic acquisitions and robust financial performance.
Acquisition of Lone Star State Bancshares
On April 1, 2024, Prosperity Bancshares completed the merger with Lone Star State Bancshares, which included the acquisition of Lone Star State Bank of West Texas. This strategic move was aimed at expanding Prosperity's footprint in Texas and enhancing its competitive position in the market.
Financial Performance Overview
As of September 30, 2024, Prosperity Bancshares reported significant growth in its financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $127.3 million | $112.2 million | +13.4% |
| Earnings per Share (Diluted) | $1.34 | $1.20 | +11.7% |
| Total Assets | $40.115 billion | $39.296 billion | +2.1% |
| Total Loans | $22.381 billion | $21.433 billion | +4.4% |
| Total Deposits | $28.088 billion | $27.313 billion | +2.8% |
Net Interest Income and Margins
For the three months ended September 30, 2024, Prosperity reported a net interest income of $261.7 million, a 9.3% increase from $239.5 million in the same period in 2023. The company’s net interest margin on a tax-equivalent basis was 2.95%, compared to 2.72% in Q3 2023.
Operational Efficiency
The efficiency ratio for Prosperity Bancshares improved to 46.87% for Q3 2024, compared to 48.74% for Q3 2023, reflecting better cost management and operational effectiveness.
Capital and Shareholder Returns
As of September 30, 2024, Prosperity's common equity tier 1 capital ratio stood at 15.84%, indicating strong capitalization. The company has consistently returned value to its shareholders, with dividends declared increasing to $0.58 per share in Q4 2024 from $0.56 in the previous quarters.
Market Position and Growth Prospects
The Texas economy, which is experiencing significant growth, has positioned Prosperity Bancshares favorably for future expansion. The company continues to leverage its strategic location and robust financial health to capitalize on market opportunities.
Conclusion
Prosperity Bancshares, Inc. continues to demonstrate strong financial performance and strategic growth through acquisitions and effective management, solidifying its position as a leading bank in Texas.
A Who Owns Prosperity Bancshares, Inc. (PB)
Ownership Structure
As of 2024, Prosperity Bancshares, Inc. (PB) has a diversified ownership structure comprising institutional investors, retail investors, and company insiders. The following table details the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.45% |
| Institutional Investor | BlackRock, Inc. | 7.90% |
| Institutional Investor | State Street Corporation | 4.75% |
| Retail Investor | Individual Shareholders (Combined) | 40.00% |
| Company Insider | David Zalman (CEO) | 1.20% |
| Company Insider | Other Executive Officers | 1.50% |
| Institutional Investor | Invesco Ltd. | 3.60% |
| Institutional Investor | Wellington Management Co. LLP | 5.10% |
| Institutional Investor | Geode Capital Management, LLC | 2.85% |
| Others | Other Institutional Investors | 24.75% |
Recent Developments
In 2024, Prosperity Bancshares completed the merger with Lone Star State Bancshares, which significantly impacted its ownership structure and asset base. Following the merger, total assets increased to approximately $40.115 billion as of September 30, 2024, reflecting a growth of $819.6 million or 2.1% compared to the previous year.
Stock Performance and Dividends
The company has demonstrated a stable dividend policy, with a recent increase in the fourth quarter 2024 dividend to $0.58 per share from $0.56 per share. This marks the 21st consecutive annual increase, with a compound annual growth rate in dividends declared from 2003 to 2024 of 11.1%.
Financial Highlights
For the third quarter ended September 30, 2024, Prosperity Bancshares reported:
| Financial Metric | Value |
|---|---|
| Net Income | $127.3 million |
| Earnings Per Share (EPS) | $1.34 |
| Return on Average Assets (ROAA) | 1.28% |
| Return on Average Common Equity (ROACE) | 6.93% |
| Net Interest Margin | 2.95% |
| Total Loans | $22.381 billion |
| Total Deposits | $28.088 billion |
Conclusion on Ownership and Market Position
Prosperity Bancshares continues to see robust investor interest, bolstered by its recent merger activities and consistent financial performance. The ownership structure reflects a healthy mix of institutional and retail investors, with key stakeholders actively participating in the company's growth trajectory.
Prosperity Bancshares, Inc. (PB) Mission Statement
Overview of Mission Statement
The mission of Prosperity Bancshares, Inc. is to provide exceptional financial services and solutions that enhance the quality of life for its customers and communities. The company is committed to fostering an environment that promotes growth, stability, and prosperity for its stakeholders.
Core Values
- Customer Focus: Prioritizing the needs and satisfaction of customers in all operations.
- Integrity: Upholding the highest standards of honesty and responsibility.
- Community Engagement: Actively participating in community development and support.
- Innovation: Embracing technology and new ideas to improve service delivery.
- Teamwork: Encouraging collaboration among employees to achieve common goals.
Financial Performance as of 2024
As of September 30, 2024, Prosperity Bancshares reported significant financial growth, reflecting its commitment to its mission. The following table summarizes key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $127.3 million | $112.2 million | +13.4% |
| Earnings per Share (Diluted) | $1.34 | $1.20 | +11.7% |
| Net Interest Income | $261.7 million | $239.5 million | +9.3% |
| Total Assets | $40.115 billion | $39.296 billion | +2.1% |
| Total Deposits | $28.088 billion | $27.313 billion | +2.8% |
Efficiency and Returns
Prosperity Bancshares has demonstrated strong operational efficiency and profitability, as indicated by the following metrics for the third quarter of 2024:
| Metric | Q3 2024 |
|---|---|
| Return on Average Assets | 1.28% |
| Return on Average Common Equity | 6.93% |
| Return on Average Tangible Common Equity | 13.50% |
| Efficiency Ratio | 46.87% |
Strategic Initiatives
Prosperity Bancshares is focused on strategic growth through mergers and acquisitions, notably the recent merger with Lone Star State Bancshares, which enhances its market position and service capabilities. The company continues to prioritize:
- Expansion of banking services across Texas and Oklahoma.
- Investment in technology to improve customer service and operational efficiency.
- Strengthening community ties through local initiatives and support programs.
Dividend Policy
In line with its commitment to return value to shareholders, Prosperity Bancshares has increased its quarterly dividend to $0.58 per share for the fourth quarter of 2024, marking the 21st consecutive annual increase with a compound annual growth rate of 11.1% since 2003.
How Prosperity Bancshares, Inc. (PB) Works
Overview of Operations
Prosperity Bancshares, Inc. operates as the parent company of Prosperity Bank, providing a range of banking services. The firm primarily focuses on commercial and retail banking, including loans, deposits, and wealth management services.
Financial Performance
For the third quarter of 2024, Prosperity Bancshares reported:
- Net income of $127.3 million, or $1.34 per diluted common share.
- Net interest income before provision for credit losses of $261.7 million.
- Annualized return on average assets of 1.28%.
- Annualized return on average common equity of 6.93%.
- Annualized return on average tangible common equity of 13.50%.
- Efficiency ratio of 46.87%.
Balance Sheet Highlights
As of September 30, 2024, Prosperity Bancshares had:
- Total assets of $40.115 billion.
- Total loans amounting to $22.381 billion.
- Total deposits of $28.088 billion.
- Nonperforming assets at 0.25% of average interest-earning assets.
| Balance Sheet Data | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 |
|---|---|---|---|---|---|
| Total Assets | $40.115 billion | $39.762 billion | $39.296 billion | $38.815 billion | $39.296 billion |
| Total Loans | $22.381 billion | $22.321 billion | $21.433 billion | $21.180 billion | $21.433 billion |
| Total Deposits | $28.088 billion | $27.933 billion | $27.176 billion | $27.180 billion | $27.313 billion |
Loan and Deposit Growth
During the third quarter of 2024:
- Loans increased by $60.0 million.
- Deposits increased by $154.5 million.
Dividend Policy
The Board of Directors approved a fourth quarter 2024 dividend increase to $0.58 per share from $0.56 per share, reflecting a compound annual growth rate in dividends declared of 11.1% since 2003.
Asset Quality
The allowance for credit losses was $392.0 million as of September 30, 2024, representing 1.68% of total loans, excluding Warehouse Purchase Program loans.
Market Performance
As of September 30, 2024, the stock market performance metrics included:
- Period end closing price of $72.07.
- 52-week high of $74.87 and low of $58.66.
Employee and Banking Center Data
As of September 30, 2024, Prosperity Bancshares employed 3,896 people and operated 287 banking centers.
How Prosperity Bancshares, Inc. (PB) Makes Money
Revenue Sources
Prosperity Bancshares generates revenue primarily through two main streams: net interest income and noninterest income.
Net Interest Income
For the three months ended September 30, 2024, Prosperity Bancshares reported a net interest income of $261.7 million, an increase of 9.3% from $239.5 million in the same period in 2023. The net interest margin on a tax-equivalent basis was 2.95% compared to 2.72% in the previous year.
Loan Portfolio
The total loans outstanding as of September 30, 2024, were $22.381 billion, representing an increase of 4.4% from $21.433 billion a year prior. The average yield on loans was 6.04% for the third quarter of 2024.
Interest-Earning Assets
The breakdown of interest-earning assets for the three months ended September 30, 2024, is as follows:
| Asset Type | Amount (in thousands) | Yield (%) |
|---|---|---|
| Loans | $22,237,890 | 5.89% |
| Investment Securities | $12,161,391 | 2.07% |
| Federal Funds Sold and Other Earning Assets | $1,153,335 | 5.12% |
| Total Interest-Earning Assets | $35,552,616 | 4.56% |
Noninterest Income
For the nine months ended September 30, 2024, Prosperity's noninterest income totaled $126.0 million, up from $116.7 million in the same period in 2023. This increase was primarily driven by a gain on Visa Class B-1 stock exchange and an increase in trust income.
Major Components of Noninterest Income
The major components of noninterest income for the three months ended September 30, 2024, include:
| Income Source | Amount (in thousands) |
|---|---|
| Nonsufficient Funds (NSF) Fees | $9,016 |
| Trust Income | $3,479 |
| Mortgage Income | $962 |
| Brokerage Income | $1,258 |
| Bank Owned Life Insurance Income | $2,028 |
| Net Gain on Sale or Write-Down of Assets | $3,178 |
| Net Gain on Sale or Write-Up of Securities | $224 |
| Other Noninterest Income | $4,670 |
| Total Noninterest Income | $41,099 |
Operational Expenses
For the nine months ended September 30, 2024, noninterest expenses were $429.0 million, an increase of 6.1% compared to $404.5 million for the same period in 2023. Major contributors to this increase included salaries and benefits and additional expenses related to the operations of Lone Star Bank.
Financial Performance Metrics
Key financial performance metrics for Prosperity Bancshares for the three months ended September 30, 2024, include:
| Metric | Value |
|---|---|
| Net Income | $127.3 million |
| Earnings per Share (Diluted) | $1.34 |
| Return on Average Assets | 1.28% |
| Return on Average Common Equity | 6.93% |
| Return on Average Tangible Common Equity | 13.50% |
| Efficiency Ratio | 46.87% |
Asset Quality
As of September 30, 2024, the allowance for credit losses on loans was $392.0 million, and nonperforming assets represented 0.25% of average interest-earning assets.
Prosperity Bancshares continues to leverage its strong position in the Texas and Oklahoma markets, with a focus on growing its loan portfolio and optimizing its operational efficiency.
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Article updated on 8 Nov 2024
Resources:
- Prosperity Bancshares, Inc. (PB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Prosperity Bancshares, Inc. (PB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Prosperity Bancshares, Inc. (PB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.