Core Viewpoint - Prosperity Bancshares, Inc. reported strong financial results for the second quarter of 2024, driven by the recent merger with Lone Star State Bancshares, Inc. and an increase in net interest income, despite incurring merger-related expenses and provisions for credit losses. Financial Performance - Net income for the second quarter of 2024 was $111.6 million, up from $86.9 million in the same period of 2023, with diluted earnings per share increasing to $1.17 from $0.94 [1][2] - Excluding merger-related provisions and expenses, net income was $116.6 million, or $1.22 per diluted share [1][2] - Net interest income before provision for credit losses was $258.8 million, an increase of $20.5 million or 8.6% from the previous quarter [1][2] - The net interest margin increased to 2.94% from 2.79% in the previous quarter and 2.73% in the same period last year [1][2] Loan and Deposit Growth - Total loans increased by $1.06 billion, or 5.0%, during the second quarter of 2024, with loans excluding Warehouse Purchase Program loans rising by $839.1 million, or 4.1% [1][2] - Total deposits increased by $757.6 million, or 2.8%, with noninterest-bearing deposits comprising 34.7% of total deposits [1][2] Asset Quality - The allowance for credit losses on loans was $397.5 million, representing 1.69% of total loans, with nonperforming assets remaining low at 0.25% of average interest-earning assets [1][3] - Net charge-offs for the first half of 2024 were $6.5 million, down from $15.5 million in the same period of 2023 [5] Merger Impact - The merger with Lone Star State Bancshares was completed on April 1, 2024, resulting in the issuance of 2,376,182 shares of Prosperity common stock and approximately $64.1 million in cash [1][8] - Goodwill from the merger was recorded at $107.7 million, with core deposit intangibles recognized at $17.7 million as of June 30, 2024 [1][8] Shareholder Returns - The company returned $284.6 million to shareholders over the past twelve months, including $74.8 million through share repurchases and $209.8 million through cash dividends [1][2] - A cash dividend of $0.56 per share was declared for the third quarter of 2024, payable on October 1, 2024 [7] Market Position - Prosperity Bancshares operates 288 full-service banking locations across Texas and Oklahoma, focusing on community banking and providing a range of financial services [10]

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Prosperity Bancshares (PB) , which belongs to the Zacks Banks - Southwest industry, could be a great candidate to consider. This financial holding company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 1.73%. For the most recent quarter, Prosp ...

HOUSTON, July 17, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB) today announced that its Board of Directors declared a quarterly common stock dividend of $0.56 per share for the third quarter of 2024, payable October 1, 2024, to shareholders of record as of September 13, 2024. Prosperity Bancshares, Inc.® As of March 31, 2024, Prosperity Bancshares, Inc.® is a $38.757 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consume ...

Core Viewpoint - The upcoming earnings report for Prosperity Bancshares, scheduled for July 24, 2024, is critical for stock movement, with expectations of revenue growth and potential earnings surprises influencing investor sentiment [1][9]. Financial Estimates - Revenues for Prosperity Bancshares are projected at $290.55 million, reflecting a year-over-year increase of 5.2% [2]. - The consensus EPS estimate for the quarter has been revised down by 0.45% over the last 30 days, indicating a reassessment by analysts [2]. - The expected quarterly earnings per share (EPS) is $1.20, representing a year-over-year decline of 0.8% [11]. Earnings Surprise Potential - The Zacks Earnings ESP for Prosperity Bancshares is +0.56%, suggesting a likelihood of beating the consensus EPS estimate [15][16]. - Historically, the company has beaten consensus EPS estimates in the last four quarters, indicating a strong track record of positive surprises [18]. Analyst Sentiment - The Zacks Rank for Prosperity Bancshares is currently 3 (Hold), which may influence the stock's performance [5]. - Analysts have recently become more optimistic about the company's earnings prospects, as indicated by the positive Earnings ESP [15]. Industry Context - In comparison, Banc of California is expected to report a significant year-over-year decline in earnings of 40.6%, with revenues projected at $271.42 million, up 258.7% from the previous year [20].

Prosperity Bancshares remains focused on its organic growth strategy. Though the company's net revenues dipped in 2023 and in the first quarter of 2024, the metric experienced a compound annual growth rate (CAGR) of 7.9% over the four years ended 2023. The growth was primarily driven by solid loan balances, strategic buyouts, and modest fee income growth. Similarly, earlier this year, WaFd Inc. (WAFD) acquired Luther Burbank Corporation. The acquisition will be almost 8% accretive to WAFD's earnings in fisc ...

Prosperity Bancshares in Focus Earnings growth looks solid for PB for this fiscal year. The Zacks Consensus Estimate for 2024 is $5 per share, representing a year-over-year earnings growth rate of 0.60%. Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the curr ...

Prosperity Bancshares (NYSE:PB) is a Houston-based bank and was founded in 1983. Of the many small- to medium-sized banks that I deal with, I think this one is among the most attractive in terms of dividend. It has been growing its dividend for 20 years in a row, and the average cost of deposits is very low compared to that paid by peers. Since my last article, the net interest margin is finally recovering, and in the coming months the buyback may continue. The only negative note is the low growth in the lo ...

Core Viewpoint - Prosperity Bancshares, Inc. (PB) is positioned for growth through strategic acquisitions, strong loan and deposit performance, and efforts to enhance fee income, although challenges such as pressure on net interest margin (NIM) and weak mortgage income persist [1][5]. Group 1: Growth Strategy - PB's organic growth strategy shows promise, with a 7.9% compound annual growth rate (CAGR) in net revenues over the last four years ending in 2023, despite a dip in 2021, 2023, and Q1 2024 [2]. - The company aims to improve its deposit mix, with non-interest-bearing deposits comprising 35.1% of total deposits as of March 31, 2024 [2]. - Total revenues are projected to grow at a CAGR of 10.1% by 2026, with total loans expected to increase by 3.5% in 2024 [2]. Group 2: Acquisitions - Acquisitions are crucial for PB's expansion, having completed over 30 deals since 1998, including the recent acquisition of Lone Star State Bancshares in April 2024 and First Bancshares of Texas in the previous year [3]. - These acquisitions are anticipated to be accretive to earnings, and management is actively pursuing further opportunities for inorganic growth due to a strong balance sheet [3]. Group 3: Financial Position - As of March 31, 2024, PB's other borrowings stood at $3.9 billion, with cash and due from banks at $1.1 billion, indicating a focus on debt repayment initiatives [4]. - The company is expected to manage its debt obligations effectively, even in the face of potential economic downturns, supported by decent earnings strength [4]. Group 4: Margin and Mortgage Income Concerns - PB's NIM decreased to 2.78% in 2023 from 3% in 2022, with continued pressure expected in Q1 2024 due to a liability-sensitive balance sheet [5]. - The company faces uncertainty in its mortgage banking business, with high mortgage rates negatively impacting origination volumes and refinancing activities, leading to a decline in mortgage income in 2021 and 2022 [6]. - Although mortgage income is projected to rise to $3.1 million in 2024 (a 34.2% increase), it is unlikely to return to 2020 and 2021 levels in the near term [6].

```markdown [PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Prosperity Bancshares, Inc.'s unaudited consolidated financial statements for Q1 2024, detailing balance sheets, income, and cash flows, highlighting total assets of **$38.76 billion**, net income of **$110.4 million**, and shareholders' equity of **$7.10 billion** [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to **$38.76 billion** from **$38.55 billion** at year-end 2023, driven by a rise in cash and cash equivalents. Total loans saw a slight increase to **$21.27 billion**, while total deposits remained stable at **$27.18 billion**. Shareholders' equity grew to **$7.10 billion** Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$38,756,520** | **$38,547,877** | **+0.5%** | | Total Cash and Cash Equivalents | $1,086,694 | $458,413 | +137.1% | | Loans, net | $20,935,028 | $20,848,176 | +0.4% | | Total Securities | $12,301,138 | $12,803,896 | -3.9% | | Goodwill | $3,396,402 | $3,396,086 | +0.0% | | **Total Liabilities** | **$31,651,976** | **$31,468,547** | **+0.6%** | | Total Deposits | $27,175,518 | $27,179,809 | -0.0% | | Other Borrowings | $3,900,000 | $3,725,000 | +4.7% | | **Total Shareholders' Equity** | **$7,104,544** | **$7,079,330** | **+0.4%** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) For the first quarter of 2024, net income was **$110.4 million**, a decrease from **$124.7 million** in the first quarter of 2023. The decline was primarily due to a **2.1%** drop in net interest income to **$238.2 million**, driven by higher interest expense on deposits and borrowings. Diluted earnings per share fell to **$1.18** from **$1.37** year-over-year Q1 2024 vs. Q1 2023 Income Statement (Unaudited) | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Income | $381,914 | $327,309 | +16.7% | | Total Interest Expense | $143,670 | $83,842 | +71.4% | | **Net Interest Income** | **$238,244** | **$243,467** | **-2.1%** | | Provision for Credit Losses | $0 | $0 | N/A | | Total Noninterest Income | $38,870 | $38,266 | +1.6% | | Total Noninterest Expense | $135,848 | $123,000 | +10.4% | | **Net Income** | **$110,426** | **$124,694** | **-11.4%** | | **Diluted EPS** | **$1.18** | **$1.37** | **-13.9%** | [Consolidated Statements of Changes in Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased to **$7.10 billion** at March 31, 2024, from **$7.08 billion** at December 31, 2023. The growth was driven by **$110.4 million** in net income, partially offset by **$52.4 million** in cash dividends (**$0.56** per share) and **$35.3 million** in common stock repurchases - Key activities impacting shareholders' equity in Q1 2024 included net income of **$110.4 million**, cash dividends of **$52.4 million**, and common stock repurchases totaling **$35.3 million**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2024, the company experienced a net increase in cash and cash equivalents of **$628.3 million**. This was primarily driven by net cash provided by investing activities of **$405.3 million**, mainly from proceeds from securities, and net cash from operating activities of **$187.4 million**. Financing activities provided a net cash inflow of **$35.5 million** Q1 2024 Cash Flow Summary (Unaudited) | Cash Flow Category | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | | Net Cash Provided by Operating Activities | $187,400 | | Net Cash Provided by Investing Activities | $405,337 | | Net Cash Provided by Financing Activities | $35,544 | | **Net Increase in Cash and Cash Equivalents** | **$628,281** | | Cash and Cash Equivalents, Beginning of Period | $458,413 | | **Cash and Cash Equivalents, End of Period** | **$1,086,694** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies and financial statement line items, covering the securities portfolio with significant unrealized losses, loan portfolio breakdown, credit quality metrics, and details on recent acquisitions - The Held-to-Maturity securities portfolio had an amortized cost of **$12.0 billion** but a fair value of only **$10.5 billion** as of March 31, 2024, reflecting significant unrealized losses of **$1.5 billion** primarily due to changes in market interest rates[31](index=31&type=chunk) - Total nonperforming assets increased to **$83.8 million** (**0.39%** of total loans and other real estate) at March 31, 2024, up from **$72.7 million** (**0.34%**) at December 31, 2023[53](index=53&type=chunk)[55](index=55&type=chunk) - The allowance for credit losses on loans decreased to **$330.2 million** at March 31, 2024, from **$332.4 million** at year-end 2023. No provision for credit losses was recorded in Q1 2024 or Q1 2023[88](index=88&type=chunk) - The company completed the merger with First Bancshares of Texas, Inc. on May 1, 2023, and subsequently completed the merger with Lone Star State Bancshares, Inc. on April 1, 2024[144](index=144&type=chunk)[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, noting a net income decrease to **$110.4 million** due to lower net interest margin and higher noninterest expenses, while maintaining a strong capital position and pursuing strategic growth - The company's growth strategy is based on three main components: internal growth, efficient operations, and strategic acquisitions[156](index=156&type=chunk) - Net income for Q1 2024 was **$110.4 million** (**$1.18** per diluted share), down from **$124.7 million** (**$1.37** per diluted share) in Q1 2023, primarily due to decreased net interest income and increased noninterest expense[167](index=167&type=chunk) - The net interest margin on a tax-equivalent basis decreased by **14 basis points** to **2.79%** in Q1 2024 compared to **2.93%** in Q1 2023[172](index=172&type=chunk) [Results of Operations](index=54&type=section&id=MD%26A%20-%20Results%20of%20Operations) In Q1 2024, net interest income fell **2.1%** year-over-year to **$238.2 million** due to rising interest expenses. No provision for credit losses was recorded. Noninterest income saw a modest increase of **1.6%** to **$38.9 million**, while noninterest expense rose **10.4%** to **$135.8 million**, largely driven by costs associated with the FB Merger. The effective tax rate was **21.8%** Change in Net Interest Income (Q1 2024 vs Q1 2023) | Component | Change due to Volume (in thousands) | Change due to Rate (in thousands) | Total Change (in thousands) | | :--- | :--- | :--- | :--- | | **Increase in Interest Income** | **$21,547** | **$33,058** | **$54,605** | | **Increase in Interest Expense** | **$17,144** | **$42,684** | **$59,828** | | **Decrease in Net Interest Income** | **$4,403** | **$(9,626)** | **$(5,223)** | - There was no provision for credit losses for the three months ended March 31, 2024 and 2023[180](index=180&type=chunk) - Noninterest expense increased by **$12.8 million** (**10.4%**) YoY, primarily due to increases in salaries, benefits, and data processing costs related to the FB Merger[185](index=185&type=chunk) [Financial Condition](index=60&type=section&id=MD%26A%20-%20Financial%20Condition) As of March 31, 2024, the company's financial condition remained strong. Total loans increased slightly to **$21.27 billion**. Nonperforming assets rose to **$83.8 million** from **$72.7 million** at year-end 2023. The allowance for credit losses stood at **$330.2 million**, or **1.55%** of total loans. Deposits were stable at **$27.18 billion**. The company maintained a well-capitalized position with a CET1 ratio of **15.75%** - Total loans increased by **$84.7 million** (**0.4%**) to **$21.27 billion** at March 31, 2024, compared to December 31, 2023[193](index=193&type=chunk) - Nonperforming assets increased by **$11.1 million** to **$83.8 million** at March 31, 2024, with the majority of the balance attributable to acquired loans[207](index=207&type=chunk) - The allowance for credit losses on loans as a percentage of total nonperforming loans was **405.1%** at March 31, 2024[209](index=209&type=chunk) - The company participated in the Federal Reserve's Bank Term Funding Program (BTFP), with an outstanding balance of **$3.90 billion** as of March 31, 2024[242](index=242&type=chunk) - The company and its bank subsidiary remained well-capitalized, with a CET1 capital ratio of **15.75%** and a Tier 1 leverage ratio of **10.37%** for the holding company as of March 31, 2024[263](index=263&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risk, primarily interest rate risk, with no material changes reported from the 2023 Annual Report on Form 10-K - There have been no material changes in the Company's market risk exposures from those disclosed in the 2023 Form 10-K[266](index=266&type=chunk) [Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report[267](index=267&type=chunk) - There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[268](index=268&type=chunk) [PART II—OTHER INFORMATION](index=83&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal actions, with management expecting no material adverse effect on financial statements from ultimate liabilities - The company states that any potential liability from ongoing legal actions is not expected to have a material adverse effect on its financial statements[270](index=270&type=chunk) [Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported compared to the company's 2023 Annual Report on Form 10-K - No material changes in risk factors were reported compared to the 2023 Annual Report on Form 10-K[271](index=271&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2024, the company repurchased **567,692** common shares at a weighted average price of **$62.12**, as part of a plan to repurchase up to **4.7 million** shares expiring in January 2025 Q1 2024 Share Repurchases | Period | Total Shares Purchased | Weighted Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | — | $ — | | February 2024 | 567,692 | $62.12 | | March 2024 | — | $ — | | **Total Q1 2024** | **567,692** | **$62.12** | - As of March 31, 2024, **4,137,070** shares remained available for repurchase under the current plan[272](index=272&type=chunk) [Other Information](index=83&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement for the company's common stock during Q1 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2024[275](index=275&type=chunk) [Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and Inline XBRL documents ```

Prosperity Bancshares, Inc. (NYSE:PB) Q1 2024 Earnings Conference Call April 24, 2024 11:30 AM ET Company Participants Charlotte Rasche - EVP and General Counsel David Zalman - Senior Chairman and CEO Asylbek Osmonov - CFO Tim Timanus - Chairman Kevin Hanigan - President and COO Conference Call Participants Peter Winter - D.A. Davidson Michael Rose - Raymond James Dave Rochester - Compass Point Catherine Mealor - KBW Brandon King - Truist Manan Gosalia - Morgan Stanley Jared Shaw - Barclays Jon Arfstrom - R ...