Prosperity Bancshares' first-quarter 2014 earnings outpaced the
Zacks Consensus Estimate. Results benefited mainly from increased
revenues and lower provision for credit losses, which was however,
partly offset by a rise in expenses. Further, while improvement in
loan and deposit balances was the tailwind, asset quality was a
mixed bag. We believe that synergies from acquisitions and organic
expansion will continue to benefit the company going forward.
Additionally, a strong balance sheet position will likely enable
Prosperity Bancshares to deploy capital meaningfully. However, a
still low interest-rate environment, rising operating expenses,
significant exposure to the real estate loan portfolio and
stringent regulations will likely weigh on the company's financials
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
Mar 31, 2014, Prosperity Bank operated 236 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 Mar 31, 2014, Prosperity Bancshares had total assets of
$18.9 billion, cash and cash equivalents of $350.2.4 million, net
loans of $7.6 billion, total deposits of $15.5 billion and
shareholders' equity of $2.8 billion. As of the same date, the
company had 2,888 employees.
Prosperity Bancshares Inc. (PB): Read the Full
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