Prosperity Bancshares Q1 Earnings Beat on Higher NII & Fee Income

Core Viewpoint - Prosperity Bancshares Inc. reported strong first-quarter 2025 adjusted earnings per share (EPS) of $1.37, surpassing estimates and showing year-over-year growth, driven by increased net interest income and adjusted non-interest income [1][2] Financial Performance - Adjusted total revenues for the quarter reached$306.7 million, a 10.7% increase from the prior-year quarter, although it slightly missed the Zacks Consensus Estimate of $307.1 million [3] - Net interest income (NII) was$265.4 million, reflecting an 11.4% year-over-year increase, with the net interest margin (NIM) expanding by 35 basis points to 3.14% [3] - Non-interest income amounted to $41.3 million, up 6.3$140.3 million, primarily due to increases in various cost components, while the adjusted efficiency ratio improved to 45.71% from 49.07% year-over-year, indicating better profitability [5] Asset and Deposit Trends - As of March 31, 2025, total loans were $22 billion, showing a slight decline from the previous quarter, while total deposits decreased by 1.2$28.03 billion [6] Credit Quality - Total non-performing assets decreased to $81.4 million from$83.8 million year-over-year, with the allowance for credit losses to total loans ratio increasing to 1.59% [7] Capital and Profitability Ratios - The common equity tier 1 capital ratio improved to 16.97% from 15.75% year-over-year, and the total risk-based capital ratio rose to 18.22% from 17.00% [8] - The annualized return on average assets increased to 1.34% from 1.13%, and the return on average common equity rose to 6.94% from 6.20% [8] Strategic Outlook - The company's focus on strategic acquisitions is expected to enhance long-term financial strength, supported by a solid loan and deposit mix, along with improving fee income [9]