Prosperity Bancshares Inc. (PRSP), the parent company of Prosperity Bank, reported net income for the quarter ended Sep 30, 2009, of $29.3 million or 63 cents per common share, an increase of 89.8%, compared with the corresponding prior-year quarter. This was higher than the Zacks Consensus Estimate of 61 cents per share.
Returns on average assets, average common equity and average tangible common equity for the three months ended Sep 30, 2009, were 1.32%, 8.93% and 29.34%, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale of securities and assets and impairment charge on securities) was 44.46% for the most recent quarter.
Net interest income before provision for credit losses for the quarter increased 33.9% to $77.4 million compared with $57.8 million during the same period in 2008. The increase was attributable primarily to a 35.7% increase in average earning assets primarily due to the assumption of certain deposits and acquisition of certain assets of Franklin Bank from the FDIC.
Prosperity’s FDIC deposit insurance assessments for 2008 were approximately $1.4 million. The expected full year 2009 FDIC deposit insurance assessment is currently projected to be between $8.0 million and $9.0 million pre-tax, based upon deposit balances at Sep 30, 2009.
Average loans increased 4.3% or $141.8 million to $3.431 billion for the quarter, compared with $3.289 billion for the same period in 2008.
Deposits at Sep 30, 2009, were $7.118 billion, an increase of $2.013 billion or 39.4%, compared with $5.105 billion at Sep 30, 2008. Linked quarter deposits decreased $139.902 million or 1.9% from $7.258 billion at Jun 30, 2009.
Construction loans at the end of the quarter totaled $564.1 million, consisting of approximately $152 million of single family residential construction loans; $77 million of land development loans; $84 million of raw land loans; $104 million of residential lot loans; $48 million of commercial lot loans; and $99 million of commercial and other construction loans. This is a decrease of $49.280 million from construction loans at Jun 30, 2009.
Non-performing assets totaled $21.9 million or 0.29% of average earning assets at Sep 30, 2009, compared with $14.5 million or 0.26% of average earning assets at Sep 30, 2008 and $19.6 million or 0.26% of average earnings assets at Jun 30, 2009. The allowance for credit losses was 1.39% of total loans at Sep 30, 2009, compared with 1.05% at Sep 30, 2008, and 1.23% of total loans at Jun 30, 2009.
Prosperity Bancshares is a registered bank holding company that derives substantially all of its revenues and income from the operation of First Prosperity Bank. The bank is a full service bank that provides a broad line of financial products and services to small and medium sized businesses and consumers through full-service banking locations, three of which are located in the greater Houston metropolitan area. Major Competitors are Cullen/Frost Bankers Inc. (CFR) and Texas Capital BancShares Inc. (TCBI).
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