Prosperity Bancshares' third-quarter 2014 earnings surpassed the
Zacks Consensus Estimate. Commendable growth in loans and deposits
along with improved revenue generation augmented the overall
results. However, mounting expenses as well as provision for credit
losses continued to be the weak factors. We expect the company's
inclination towards acquisitions and organic expansion to pave the
way for future growth. Moreover, the company's strong balance sheet
position and steady capital deployment activities remain
impressive. Nonetheless, weak cost control, significant exposure to
the real estate loan portfolio and stringent regulations are
expected to keep the financials under pressure in the near term.
Houston, TX-based Prosperity Bancshares, Inc. was formed in 1983
as a vehicle to acquire the former Allied Bank in Edna, TX, which
was chartered in 1949 as The First National Bank of Edna and is
presently known as Prosperity Bank. The financial holding company,
pursuant to the Gramm-Leach-Bliley Act, derives substantially all
of its revenues and income from its bank subsidiary Prosperity
Prosperity Bank provides a wide range of financial products and
services traditional loan and deposit products to small and
medium-sized businesses and consumers. The company provides loans
to businesses in the range of $0.1 million to $8.0 million. As of
Sep 30, 2014, Prosperity Bank operated 245 full-service banking
Since its inception, Prosperity Bancshares has been growing
considerably through the acquisition of community banks and
branches of other banks. Moreover, since 1998, the company has
closed nearly 30 deals.
The major buyouts include Commercial Bancshares, Inc. in 2001,
First Capital Bankers, Inc. in 2005, Texas United Bancshares, Inc
in 2007, Franklin Bank in 2008 and First Bank in 2010. Further in
2012, Prosperity Bancshares completed the acquisition of Texas
Bankers, Inc., The Bank Arlington, American State Financial
Corporation and Bellaire-based Community National Bank.
In 2013, Prosperity Bancshares completed the acquisitions of
East Texas Financial Services Inc., Coppermark Bancshares, Inc. and
In Apr 2014, Prosperity Bancshares acquired F&M
Bancorporation Inc. in a cash-cum-stock deal valued at $252.4
As of Sep 30, 2014, Prosperity Bancshares had total assets of
$21.1 billion, cash and cash equivalents of $331.4 million, total
loans of $9.4 billion, total deposits of $17.0 billion and
shareholders' equity of $3.2 billion. As of the same date, the
company had 3,057 employees.
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