Core Viewpoint - Prosperity Bancshares (NYSE: PB) has experienced a decline of approximately 5% in its share value since the last update in the summer, indicating a frustrating performance for investors [1]. Company Performance - The recent performance of Prosperity Bancshares' shares contrasts with the company's business performance, suggesting that the market may not be accurately reflecting the underlying business fundamentals [1]. Investment Strategy - The investment approach favored is a long-term, buy-and-hold strategy, particularly focusing on stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1].

Key Takeaways Prosperity Bancshares' Q3 earnings of $1.45 matched estimates, rising 8.2% year over year.Higher NII, nil provisions and lower expenses drove PB's quarterly results.The board raised the dividend by 3.5% and continued share repurchases under the 2025 program.Shares of Prosperity Bancshares, Inc. (PB) gained 2.9% yesterday following the announcement of solid third-quarter 2025 results. Earnings of $1.45 were in line with the Zacks Consensus Estimate. The bottom line grew 8.2% year over year.Resu ...

Prosperity Bancshares (NYSE:PB) Q3 2025 Earnings Call October 29, 2025 11:30 AM ET Company ParticipantsAsylbek Osmonov - CFOKevin Hanigan - President and COOTim Timanus, Jr. - ChairmanBen Gerlinger - VP of Equity ResearchDavid Zalman - Senior Chairman and CEOMichael Rose - Managing Director of Equity ResearchJon Arfstrom - Associate Director of US ResearchCatherine Mealor - Managing DirectorCharlotte Rasche - SEVP and General CounselJared Shaw - Managing DirectorConference Call ParticipantsDave Rochester - ...

Prosperity Bancshares (NYSE:PB) Q3 2025 Earnings Call October 29, 2025 11:30 AM ET Company ParticipantsAsylbek Osmonov - CFOKevin Hanigan - President and COOTim Timanus, Jr. - ChairmanBen Gerlinger - VP of Equity ResearchDavid Zalman - Senior Chairman and CEOMichael Rose - Managing Director of Equity ResearchJon Arfstrom - Associate Director of US ResearchCatherine Mealor - Managing DirectorCharlotte Rasche - SEVP and General CounselJared Shaw - Managing DirectorConference Call ParticipantsDave Rochester - ...

Financial Data and Key Metrics Changes - Prosperity Bancshares reported net income of $137.6 million for Q3 2025, an increase from $127.3 million in Q3 2024, reflecting a year-over-year growth of 10.2% [5] - Net income per diluted common share increased to $1.45 for Q3 2025, up 8.2% from $1.34 in Q3 2024 [6] - The net interest margin on a tax-equivalent basis improved to 3.24% for Q3 2025, compared to 2.95% for the same period in 2024, marking a 29 basis points increase [12] Business Line Data and Key Metrics Changes - Loans outstanding were approximately $22.028 billion at September 30, 2025, down from $22.197 billion at June 30, 2025, indicating a decrease of $169 million [15] - Non-interest income for Q3 2025 was $41.2 million, slightly down from $43 million in Q2 2025 [12] - Non-interest expense was $138.6 million for Q3 2025, compared to $140.3 million for the same period in 2024 [12] Market Data and Key Metrics Changes - Deposits increased to $27.7 billion at September 30, 2025, up by $308 million or 1.1% from $27.4 billion at June 30, 2025 [8] - Non-performing assets totaled $119 million, representing 0.54% of loans and other real estate, an increase from $110 million or 0.50% at June 30, 2025 [14] Company Strategy and Development Direction - The company signed a definitive merger agreement with Southwest Bancshares Inc., which will expand its footprint in the San Antonio metro area and enhance its market share [4] - The company is also pursuing a merger with American Bank Holding Corporation to strengthen its presence in South Texas [4] - The management emphasized a focus on core deposits and maintaining a healthy loan-to-deposit ratio, currently at 80% [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Texas economy, noting it remains one of the strongest and most diverse economies in the world, with a GDP of approximately $2.7 trillion [9] - The competitive lending environment is described as aggressive, with management opting to be prudent in loan pricing to protect net interest margins [24] - Future loan growth is expected to be modest, with a projection of low single digits for the next year, influenced by ongoing acquisitions [22] Other Important Information - The Board of Directors approved an increase in the fourth quarter 2025 dividend to $0.60 per share from $0.58 per share [5] - The company does not have any brokered deposits, which is a positive indicator of its deposit quality [8] Q&A Session Summary Question: Outlook for loan growth - Management indicated that loans are down slightly year-to-date and expect a flat quarter due to competitive pricing and elevated payoffs [21] Question: Buyback activity - Management stated that buyback activity will be price-dependent and expressed a desire to be more active in the near future [29] Question: Hiring more lenders - Management confirmed ongoing efforts to hire more lenders to bolster loan growth, while maintaining a focus on quality [37] Question: Margin outlook - Management remains optimistic about margin expansion over the next 12 to 36 months, despite potential rate cuts [45] Question: Deposit competition - Management is comfortable with the current loan-to-deposit ratio and emphasized the importance of core deposits [101]

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Investor Presentation Third Quarter 2025 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 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; quality could deteriorate; action ...

Core Insights - Prosperity Bancshares reported quarterly earnings of $1.45 per share, matching the Zacks Consensus Estimate, and showing an increase from $1.34 per share a year ago [1] - The company posted revenues of $314.67 million for the quarter ended September 2025, which was 0.6% below the Zacks Consensus Estimate, but up from $302.79 million year-over-year [2] - The stock has underperformed the market, losing about 16% since the beginning of the year compared to the S&P 500's gain of 17.2% [3] Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [1] - The current consensus EPS estimate for the upcoming quarter is $1.42, with expected revenues of $335.32 million, and for the current fiscal year, the estimate is $5.69 on $1.27 billion in revenues [7] Market Outlook - The estimate revisions trend for Prosperity Bancshares was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The outlook for the industry, specifically the Banks - Southwest sector, is currently in the top 26% of Zacks industries, suggesting a favorable environment for stocks in this category [8]

Financial Performance - Net income for Q3 2025 was $137.6 million, an increase of 8.1% from $127.3 million in Q3 2024[2] - Earnings per diluted common share for Q3 2025 were $1.45, up 8.2% from $1.34 in Q3 2024[2] - Net income available to common shareholders for Q3 2025 was $137,556,000, up from $135,155,000 in Q2 2025, reflecting a 1.78% increase[71] - Net income for Q3 2025 reached $137.556 million, compared to $135.155 million in Q2 2025 and $130.225 million in Q1 2025, with a year-to-date total of $402.936 million versus $349.310 million in 2024[103] - Return on average assets for Q3 2025 was 1.44%, slightly up from 1.41% in Q2 2025[71] - Return on average assets for Q3 2025 was 1.44%, an increase from 1.41% in Q2 2025 and 1.34% in Q1 2025[103] - Return on average common equity (unadjusted) for Q3 2025 was 7.18%, up from 7.13% in Q2 2025 and 6.94% in Q1 2025[104] - Year-to-date net interest income reached $806,539, compared to $758,721 in the previous year, a growth of 6.3%[105] Asset and Loan Management - Total assets were $38.330 billion as of September 30, 2025, a decrease from $40.115 billion a year earlier[23] - Loans were $22.028 billion at September 30, 2025, down $353.1 million from $22.381 billion a year earlier[24] - Total loans held for investment decreased to $20,738,294 thousand as of September 30, 2025, from $20,903,944 thousand as of June 30, 2025, representing a decline of approximately 0.8%[66] - The total loan portfolio reached $22.03 billion, a slight decrease from $22.20 billion in the previous quarter[92] - The 1-4 family residential loans accounted for 33.9% of the total loan portfolio, totaling $7.46 billion, consistent with the previous quarter[92] - Nonaccrual loans increased to $105,529 thousand in Q3 2025 from $102,031 thousand in Q2 2025, representing a 2.5% increase[100] - Total nonperforming loans rose to $105,797 thousand in Q3 2025, up from $102,607 thousand in Q2 2025, indicating a 2.3% increase[100] Deposits and Funding - Deposits increased by $308.7 million during Q3 2025, representing a 4.5% annualized growth[4] - Total deposits rose to $27,782,094 thousand at the end of September 2025, up from $27,473,411 thousand at the end of June 2025, marking an increase of about 1.1%[66] - Noninterest-bearing deposits increased to $9,522,028 thousand as of September 30, 2025, compared to $9,426,657 thousand as of June 30, 2025, indicating a growth of approximately 1.0%[66] - The loan to deposit ratio stood at 79.3%, down from 80.8% in the previous quarter, indicating a slight increase in deposits relative to loans[92] Credit Quality and Allowance for Losses - Nonperforming assets were low at 0.36% of average interest-earning assets for Q3 2025[4] - The allowance for credit losses on loans was $377.3 million at September 30, 2025, compared to $392.0 million a year earlier[26] - The allowance for credit losses on loans was $339.6 million, or 1.54% of total loans, as of September 30, 2025, a decrease from 1.56% at June 30, 2025, and 1.58% at September 30, 2024[27] - Net charge-offs for the three months ended September 30, 2025, were $6.5 million, compared to $3.0 million for the previous quarter and $5.5 million for the same period in 2024[28] - The allowance for credit losses on loans decreased to $339,626 thousand in Q3 2025 from $346,084 thousand in Q2 2025, a decline of 1.3%[100] Mergers and Acquisitions - The company signed a definitive merger agreement with Southwest Bancshares, Inc., adding 4 branches in the San Antonio metro area[3] - Prosperity Bancshares signed a merger agreement with Southwest Bancshares, Inc., with a total consideration valued at approximately $268.9 million based on a closing price of $65.97 on September 29, 2025[33] - Prosperity Bancshares also announced a merger agreement with American Bank Holding Corporation, with a total consideration valued at approximately $321.5 million based on a closing price of $72.40 on July 16, 2025[35] - The company plans to file a registration statement with the SEC for the proposed transaction with Southwest, which will include a proxy statement/prospectus for shareholders[45] - The integration of Southwest's and American's businesses into Prosperity may face delays or increased costs, impacting the expected synergies from the transactions[44] Dividends and Shareholder Returns - The board approved a dividend increase of 3.45% to $0.60 per share for Q4 2025, marking the 22nd consecutive annual increase[4] - Prosperity Bancshares declared a fourth quarter 2025 cash dividend of $0.60 per share, an increase of $0.02 per share, or 3.45%, from the prior quarter[30] - Prosperity Bancshares announced a stock repurchase program to acquire up to 5% of its outstanding common stock, approximately 4.8 million shares, by January 21, 2026[31] Operational Efficiency - The efficiency ratio improved to 44.06% in Q3 2025 from 44.80% in Q2 2025, indicating better cost management[71] - Total noninterest expense for Q3 2025 was $138,635,000, marginally up from $138,565,000 in Q2 2025, reflecting a 0.05% increase[70] - Noninterest income for the quarter was $41,238, slightly down from $41,099 year-over-year, a decrease of 0.3%[105]

Accessibility StatementSkip Navigation As of June 30, 2025, Prosperity Bancshares, Inc. is a $38.417 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and small to medium sized businesses throughout Texas and Oklahoma. Prosperity currently operates 283 full-service banking locations: 62 in the Houston area including The Woodlands; 33 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; ...