Prosperity Bancshares(US:PB)2025-08-07 19:47Financial Position - Total assets decreased to $38.42 billion as of June 30, 2025, down from $39.57 billion at December 31, 2024, representing a decline of 2.9%[160] - Total deposits decreased to $27.47 billion, a decline of $907.9 million or 3.2% from $28.38 billion at December 31, 2024[160] - Total liabilities decreased to $31.13 billion as of June 30, 2025, from $32.22 billion as of June 30, 2024, a reduction of approximately 3.4%[186] - Total shareholders' equity rose to $7.60 billion, an increase of $161.2 million or 2.2% from $7.44 billion at December 31, 2024[160] Loans and Credit Quality - Total loans increased slightly to $22.20 billion, up by $48.2 million or 0.2% from $22.15 billion at December 31, 2024[160] - Total loans held for investment increased slightly to $20.93 billion for the six months ended June 30, 2025, from $20.87 billion for the same period in 2024[186] - Nonperforming assets increased by $28.9 million to $110.5 million at June 30, 2025, compared to $81.5 million at December 31, 2024[218] - Total nonperforming loans amounted to $102.6 million as of June 30, 2025, with nonaccrual loans at $102.0 million[219] - The allowance for credit losses on loans was 337.3% of total nonperforming loans at June 30, 2025, down from 463.9% at December 31, 2024[220] Income and Revenue - For the quarter ended June 30, 2025, net income available to common shareholders was $135.2 million, an increase of $23.6 million or 21.1% compared to $111.6 million for the same period in 2024[172] - Net interest income remains the largest source of revenue, influenced by interest rates and the volume of earning assets[158] - Net interest income before the provision for credit losses was $267.7 million for the quarter ended June 30, 2025, an increase of $8.9 million or 3.5% compared to $258.8 million for the same period in 2024[174] - Noninterest income totaled $43.0 million for the three months ended June 30, 2025, a decrease of $3.0 million or 6.6% compared to $46.0 million for the same period in 2024[196] Interest Rates and Margins - The net interest margin on a tax-equivalent basis was 3.18% for the quarter ended June 30, 2025, an increase of 24 basis points compared to 2.94% for the same period in 2024[177] - The net interest margin improved to 3.16% for the six months ended June 30, 2025, compared to 2.86% for the same period in 2024[186] - Average interest-bearing liabilities were $21.03 billion for the quarter ended June 30, 2025, a decrease of $1.45 billion or 6.5% compared to $22.48 billion for the same period in 2024[176] Acquisitions and Mergers - The merger with Lone Star State Bancshares, effective April 1, 2024, added $1.38 billion in total assets, $1.08 billion in total loans, and $1.24 billion in total deposits[161] - The upcoming acquisition of American Bank Holding Corporation is valued at approximately $321.5 million, based on Bancshares' closing price of $72.40 on July 16, 2025[164] - The Company recognized $106.7 million in goodwill as of June 30, 2025, related to the Lone Star merger[162] Expenses and Taxation - Noninterest expense for Q2 2025 was $138.6 million, down $14.3 million or 9.3% from $152.8 million in Q2 2024, primarily due to lower regulatory assessments and merger-related expenses[199] - Income tax expense increased to $37.0 million in Q2 2025, up $5.7 million or 18.2% from $31.3 million in Q2 2024[202] - The effective tax rate for Q2 2025 was 21.5%, down from 21.9% in Q2 2024[202] Market Risk Management - The Company manages market risk primarily through interest rate risk strategies approved by the Board of Directors[280] - The Company employs simulation analysis to assess the impact of market changes on net interest income and market value[281] - There have been no material changes in the Company's market risk exposures since the disclosures in the 2024 Form 10-K[281] Capital Ratios - The Company's CET1 capital ratio is 17.10%, significantly above the minimum required of 4.50% and the well-capitalized standard of 7.00%[278] - The Company's total capital ratio stands at 18.35%, exceeding the minimum required of 8.00% and the well-capitalized standard of 10.50%[278] - The Company's Tier 1 capital to average assets (leverage ratio) is 11.62%, well above the required minimum of 4.00%[278]