Company Overview - Prosperity Bancshares (PB) is headquartered in Houston and operates in the Finance sector, experiencing a price change of -10.87% since the start of the year [3] - The company currently pays a dividend of $0.58 per share, resulting in a dividend yield of 3.45%, which is significantly higher than the Banks - Southwest industry's yield of 1.16% and the S&P 500's yield of 1.69% [3] Dividend Performance - The annualized dividend of Prosperity Bancshares is $2.32, reflecting a 2.7% increase from the previous year [4] - Over the past 5 years, the company has increased its dividend 5 times, achieving an average annual increase of 4.82% [4] - The current payout ratio is 45%, indicating that the company pays out 45% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - For the fiscal year 2025, the Zacks Consensus Estimate projects earnings of $5.79 per share, with an expected increase of 13.31% from the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - While high-growth firms and tech start-ups typically do not offer dividends, established companies like Prosperity Bancshares are viewed as strong dividend options [7] - The stock currently holds a Zacks Rank of 3 (Hold), indicating it is a compelling investment opportunity due to its strong dividend profile [7]

For the quarter ended March 2025, Prosperity Bancshares (PB) reported revenue of $306.68 million, up 10.7% over the same period last year. EPS came in at $1.37, compared to $1.18 in the year-ago quarter.The reported revenue represents a surprise of -0.14% over the Zacks Consensus Estimate of $307.12 million. With the consensus EPS estimate being $1.35, the EPS surprise was +1.48%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to dete ...

Prosperity Bancshares (PB) came out with quarterly earnings of $1.37 per share, beating the Zacks Consensus Estimate of $1.35 per share. This compares to earnings of $1.18 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 1.48%. A quarter ago, it was expected that this financial holding company would post earnings of $1.33 per share when it actually produced earnings of $1.37, delivering a surprise of 3.01%. Over the last four ...

Financial Performance - First quarter earnings per share (diluted) increased by 16.1% to $1.37 compared to the first quarter of 2024[2] - Net income for the first quarter rose 17.9% to $130.2 million compared to $110.4 million in the same period last year[2] - Net income available to common shareholders for the quarter was $130,225 thousand, compared to $130,076 thousand in the previous quarter, an increase of 0.11%[51] - Net income for Q1 2025 reached $130.225 million, compared to $130.076 million in Q4 2024 and $110.426 million in Q1 2024, reflecting a year-over-year increase of 18%[85] Asset and Loan Growth - Total assets at March 31, 2025, were $38.765 billion, an increase of $8.2 million year-over-year[20] - Loans increased by 3.3% to $21.978 billion compared to $21.265 billion at March 31, 2024[21] - Total loans reached $21,842,882, with interest earned of $319,023, reflecting an average yield of 5.92%[62] - Total loans amounted to $21.978 billion, down from $22.149 billion in the previous quarter, indicating a reduction in lending activity[88] Deposit and Interest Metrics - Deposits rose by 3.1% to $28.027 billion compared to $27.176 billion at March 31, 2024[23] - Interest expense on deposits decreased to $95,597 thousand from $102,050 thousand, a decrease of 6.06%[51] - The total cost of funds, including noninterest-bearing deposits, was 1.66% for the three months ended March 31, 2025, down from 1.80% in the previous quarter[63] Noninterest Income and Expenses - Noninterest income grew by 6.3% to $41.3 million compared to $38.9 million in the first quarter of 2024[16] - Noninterest income increased to $41,301 thousand from $39,837 thousand, an increase of 3.66%[51] - Noninterest expense for the quarter was $140.301 million, a slight decrease from $141.545 million in the previous quarter, indicating cost control measures[88] Credit Quality and Allowance for Losses - Nonperforming assets remained low at 0.24% of quarterly average interest-earning assets[27] - The allowance for credit losses on loans was $349.1 million, or 1.59% of total loans[29] - The allowance for credit losses on loans was $349.101 million, representing 1.59% of total loans as of March 31, 2025[83] - Net charge-offs for the three months ended March 31, 2025, were $2.704 million, with a net charge-off ratio of 0.05%[83] Mergers and Acquisitions - Prosperity completed the merger with Lone Star State Bancshares on April 1, 2024, which included 5 full-service banking offices in West Texas[33] - The merger involved issuing 2,376,182 shares of common stock and approximately $64.1 million in cash, resulting in goodwill of $106.7 million as of March 31, 2025[34] - The merger completed on April 1, 2024, added $1.075 billion in loans, with related purchase accounting adjustments of $24.9 million[79] Capital and Equity - Shareholders' equity increased to $7,517,061 thousand from $7,438,495 thousand, an increase of 1.06%[47] - Common equity tier 1 capital ratio was 16.97% as of March 31, 2025, an increase from 16.42% in the previous quarter[53] - Tangible book value per share increased to $41.48 in Q1 2025 from $40.61 in Q4 2024[86] Operational Efficiency - The efficiency ratio improved to 45.71% for the three months ended March 31, 2025, compared to 46.10% in the previous quarter[53] - The efficiency ratio, excluding certain items, is used by the company for internal planning and forecasting purposes, reflecting its focus on operational performance[84] - The efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, improved to 45.71% from 46.10% in the previous quarter, demonstrating enhanced operational efficiency[88] Future Outlook and Guidance - Forward-looking statements indicate expectations for future economic performance, including revenues and earnings per share, but are subject to inherent uncertainties and risks[42] - The company emphasizes the importance of reviewing consolidated financial statements in their entirety, as non-GAAP measures should not be considered substitutes for GAAP measures[38]

Core Insights - Prosperity Bancshares reported a net income of $130.2 million for Q1 2025, a 17.9% increase from $110.4 million in Q1 2024, with diluted earnings per share rising to $1.37 from $1.18 [1][7] - The net interest margin improved to 3.14% in Q1 2025, up from 2.79% in Q1 2024, driven by higher asset repricing [9][11] - The company maintained strong asset quality with nonperforming assets at 0.24% of average interest-earning assets [21] Financial Performance - Net interest income before provision for credit losses was $265.4 million for Q1 2025, an increase of 11.4% from $238.2 million in Q1 2024 [8][11] - Noninterest income rose to $41.3 million in Q1 2025, a 6.3% increase compared to $38.9 million in Q1 2024 [10][11] - Noninterest expense increased to $140.3 million in Q1 2025, up 3.3% from $135.8 million in Q1 2024, primarily due to salary increases related to the merger [13][11] Balance Sheet Highlights - Total assets as of March 31, 2025, were $38.765 billion, a slight increase from $38.757 billion a year earlier [14] - Loans increased to $21.978 billion, up 3.3% from $21.265 billion in Q1 2024, largely due to the merger [15][11] - Deposits reached $28.027 billion, a 3.1% increase from $27.176 billion in Q1 2024 [16][11] Capital and Asset Quality - The tangible equity to tangible assets ratio was 11.2%, with tangible equity amounting to $3.952 billion [4][11] - The allowance for credit losses on loans was $349.1 million, representing 1.59% of total loans [23][11] - Net charge-offs for Q1 2025 were $2.7 million, compared to $2.1 million in Q1 2024 [24][11] Market Recognition - Prosperity Bancshares has been recognized as one of Forbes' Best Banks since 2010 and was named the "Best Overall Bank in Texas" for 2024-2025 [3][11] - The company was also ranked among "America's Best Regional Banks" by Newsweek in 2025 [3][11] Economic Context - The Texas economy is experiencing solid employment growth and increased sales tax revenue, indicating a favorable economic environment for banking operations [5][11] - Despite uncertainties related to tariffs, management remains optimistic based on customer feedback regarding future outlooks and plans [6][11]

Core Viewpoint - Prosperity Bancshares (PB) is expected to report quarterly earnings of $1.35 per share, a 14.4% increase year-over-year, with revenues projected at $307.12 million, reflecting a 10.8% increase compared to the same period last year [1] Earnings Projections - The consensus EPS estimate has been revised 0.1% lower over the last 30 days, indicating a reevaluation by analysts [2] - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3] Key Financial Metrics - Analysts predict an 'Efficiency Ratio' of 46.4%, down from 49.1% a year ago [5] - The 'Average balance - Total interest-earning assets' is estimated at $34.45 billion, slightly lower than the previous year's $34.51 billion [5] - 'Total nonperforming assets' are expected to be $83.48 million, down from $83.81 million last year, while 'Total nonperforming loans' are projected at $77.67 million, compared to $81.51 million a year ago [6] Capital Ratios - The 'Tier 1 Leverage Capital Ratio' is expected to be 10.8%, up from 10.4% last year [7] - The 'Tier 1 Risk-based Capital Ratio' is forecasted at 16.4%, compared to 15.8% in the same quarter last year [7] - The 'Total Risk-based Capital Ratio' is projected to reach 17.7%, up from 17.1% a year ago [7] Income Estimates - 'Total Noninterest Income' is estimated at $38.34 million, down from $38.87 million last year [8] - 'Net Interest Income' is expected to be $269.00 million, compared to $238.24 million in the same quarter last year [8] - 'Net Interest Income (Tax Equivalent Basis)' is projected at $269.14 million, up from $239.05 million a year ago [9] - 'Credit card, debit card and ATM card income' is expected to reach $9.09 million, compared to $8.86 million last year [9] - 'Nonsufficient funds (NSF) fees' are projected at $9.10 million, up from $8.29 million in the same quarter last year [10] Stock Performance - Over the past month, Prosperity Bancshares shares have recorded a return of -6.7%, compared to the Zacks S&P 500 composite's -5.6% change [12] - Based on its Zacks Rank 3 (Hold), PB is expected to perform in line with the overall market in the upcoming period [12]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Prosperity Bancshares, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Prosperity Bancshares is expected to report earnings of $1.35 per share, reflecting a +14.4% year-over-year change, with revenues projected at $307.12 million, up 10.8% from the previous year [3] - The earnings report is scheduled for April 23, 2025, and could influence stock movement based on whether results exceed or fall short of expectations [2] Estimate Revisions - The consensus EPS estimate has been revised down by 0.14% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Prosperity Bancshares is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.53% [10][11] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8] - Prosperity Bancshares has a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11] Historical Performance - In the last reported quarter, Prosperity Bancshares exceeded the expected earnings of $1.33 per share by delivering $1.37, resulting in a surprise of +3.01% [12] - The company has beaten consensus EPS estimates in each of the last four quarters [13] Industry Comparison - BOK Financial, a peer in the Zacks Banks - Southwest industry, is expected to report earnings of $2.01 per share, with a year-over-year change of +5.2% and revenues of $518.5 million, up 13.9% [17] - BOK Financial's consensus EPS estimate has remained unchanged, but a lower Most Accurate Estimate has resulted in a negative Earnings ESP of -0.50%, combined with a Zacks Rank of 4, making it difficult to predict an earnings beat [18]

Financial Performance - The Company reported total assets of $1.38 billion, total loans of $1.07 billion, and total deposits of $1.24 billion from the recent acquisition of Lone Star State Bancshares, Inc.[17] - The merger with First Bancshares of Texas, Inc. resulted in total assets of $2.14 billion, total loans of $1.65 billion, and total deposits of $1.71 billion as of March 31, 2023[19] - Total loans increased to $22.15 billion as of December 31, 2024, up by $968.7 million or 4.6% from $21.18 billion at December 31, 2023[37] - The Company declared quarterly dividends aggregating $2.26 per share for 2024, compared to $2.21 per share for 2023[198] - The Company repurchased approximately 1.2 million shares of its common stock at an average price of $60.35 per share during the year ended December 31, 2024[205] Operational Efficiency - The Company's average cost of funds was 1.87%, and the average cost of deposits was 1.47% for the year ended December 31, 2024[31] - The Company plans to maintain stringent cost control practices to enhance operational efficiency[39] - The Company is focusing on cross-selling efforts to increase product offerings to existing customers[40] - The Company has maintained profitability every year since its inception, including during adverse economic conditions in Texas and Oklahoma[15] Regulatory Compliance - Regulatory compliance is critical, with the Company subject to extensive federal and state regulations impacting its operations[43] - The Federal Reserve Board requires bank holding companies to act as a source of strength for their banking subsidiaries[53] - The Company must adhere to limitations on dividends and share repurchases as mandated by federal and state laws[48] - The Company is committed to maintaining sound banking practices to avoid regulatory penalties and ensure financial stability[57] - The Company and the Bank are required to maintain a minimum leverage ratio of 4%[69] Capital and Risk Management - As of December 31, 2024, the Company's CET1 ratio to risk-weighted assets was 16.42%, Tier 1 capital to risk-weighted assets was 16.42%, total capital to risk-weighted assets was 17.67%, and Tier 1 capital to average quarterly assets (leverage ratio) was 10.82%[75] - The capital conservation buffer required is 2.5% above each minimum risk-based capital ratio to absorb losses during economic stress[70] - The Company and the Bank's regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer in 2024[75] - The Company maintains an allowance for credit losses to cover estimated losses in its loan portfolio, but this may not be sufficient if actual credit losses exceed expectations[115] Cybersecurity and Technology - The Company’s cybersecurity risk management program is designed to protect sensitive data and mitigate risks across various operational areas[182] - The Company has not experienced any cybersecurity incidents that materially impacted its business strategy or financial condition to date[187] - The Company is subject to evolving cybersecurity regulations, with significant penalties for non-compliance[98] - The SEC requires disclosure of material cybersecurity incidents within four business days, impacting the Company's reporting obligations[99] - Cybersecurity threats are evolving, and the Company's measures to prevent cyberattacks may not fully mitigate risks, potentially leading to significant financial and reputational damage[147] Market and Competitive Environment - The banking business remains highly competitive, with the Company emphasizing customer service and technology to maintain its market position[42] - The Company faces intense competition from various financial institutions, which could adversely affect its growth and profitability[178] - The market for acquisitions remains highly competitive, and the Company may struggle to find suitable candidates for growth, impacting its strategic objectives[138] Economic and Credit Risks - The Company's profitability is significantly influenced by local economic conditions in Texas and Oklahoma, where slower population or income growth could adversely affect its financial performance[117] - The Company faces increased credit risks associated with commercial real estate loans, which typically have larger balances and are more sensitive to economic conditions[121] - The Company is exposed to risks from geopolitical events and economic conditions, which could impact borrowers' ability to repay loans and the overall credit quality of its portfolio[112] - The Company's loan portfolio, particularly in energy lending, is vulnerable to declines in oil and natural gas prices, which could lead to increased loan delinquencies[124] Environmental and Social Governance (ESG) - Climate change poses immediate and long-term risks, including operational, credit, and reputational risks, which could adversely affect the Company's financial condition[165] - Increasing scrutiny regarding Environmental, Social, and Governance (ESG) practices may impose additional costs and regulatory risks on the Company[168] Legal and Litigation Risks - The Company is subject to claims and litigation related to intellectual property, which could result in substantial damages and increased operating expenses[159] - Legal actions regarding fiduciary responsibilities may lead to significant financial liabilities and adversely affect market perception and customer demand[161]

Group 1 - Zacks Premium offers various tools to help investors become more confident and informed, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] - The Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum, helping investors identify stocks likely to outperform the market in the next 30 days [2][3] Group 2 - Each stock is rated from A to F based on its value, growth, and momentum characteristics, with A being the highest score indicating a better chance of outperforming [3] - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales [3][4] - The Growth Score assesses a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] - The Momentum Score evaluates trends in stock price and earnings outlook, using factors like one-week price change and monthly earnings estimate changes [5] Group 3 - The VGM Score combines the three Style Scores to identify stocks with attractive value, strong growth forecasts, and promising momentum, serving as a useful indicator alongside the Zacks Rank [6] - The Zacks Rank utilizes earnings estimate revisions to simplify the process of building a winning portfolio, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988, outperforming the S&P 500 [7][8] Group 4 - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for the highest probability of success [10] - Stocks with a 3 (Hold) rank should also have Style Scores of A or B to maximize upside potential [10][11] Group 5 - Prosperity Bancshares, Inc. is a financial holding company based in Houston, TX, primarily deriving revenue from its bank subsidiary, Prosperity Bank [12] - Prosperity Bancshares has a Zacks Rank of 3 (Hold) and a VGM Score of B, with a Value Style Score of B due to a forward P/E ratio of 13.37, making it attractive for value investors [13] - The company has seen upward revisions in earnings estimates, with the Zacks Consensus Estimate increasing by $0.02 to $5.82 per share for fiscal 2025, and an average earnings surprise of 2.6% [13][14]

Company Overview - Prosperity Bancshares, Inc. is a financial holding company based in Houston, TX, formed in 1983, primarily deriving its revenues from its bank subsidiary, Prosperity Bank [12]. Zacks Rank and Style Scores - Prosperity Bancshares holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [13]. - The company has a Value Style Score of B, supported by attractive valuation metrics, including a forward P/E ratio of 13.84, which may appeal to value investors [13]. Earnings Estimates - In the last 60 days, two analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing to $5.80 per share [13]. - Prosperity Bancshares has an average earnings surprise of 2.6%, suggesting a positive trend in earnings performance [13]. Investment Consideration - With a solid Zacks Rank and strong Value and VGM Style Scores, Prosperity Bancshares is recommended for investors' consideration [14].