Prosperity Bancshares' third-quarter earnings marginally beat the
Zacks Consensus Estimate. Results were aided by higher net interest
income, partially offset by decreased non-interest income as well
as a rise in operating expenses and provision for credit losses.
Further, improvement in capital and profitability ratios as well as
loan and deposit balances were the tailwinds for the quarter. We
believe continued synergies from ongoing acquisitions and organic
expansion will benefit the company going forward. However, a still
low interest-rate environment, sluggish economic growth,
significant exposure to the real estate loan portfolio, and
stringent regulations are expected to dent the company's financials
in the near term.
Houston, Texas-based Prosperity Bancshares, Inc. was formed in
1983 as a vehicle to acquire the former Allied Bank in Edna, Texas,
which was chartered in 1949 as The First National Bank of Edna and
is now 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, 2013, Prosperity Bank operated 218 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 more than 25 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 Jan 2013, Prosperity Bancshares completed its merger with
East Texas Financial Services Inc. and its fully-owned subsidiary,
First Federal Bank Texas.
In Apr 2013, Prosperity Bancshares announced the completion of
its merger with Coppermark Bancshares, Inc and the latter's
fully-owned subsidiary Coppermark Bank.
In Nov 2013, Prosperity Bancshares completed its merger with
Victoria, Texas-based FVNB Corp. and its fully owned subsidiary,
First Victoria National Bank.
As of Sep 30, 2013, Prosperity Bancshares had total assets of
$16.1 billion, cash and cash equivalents of $271.1 million, net
loans of $6.1 billion, total deposits of $12.5 billion and
shareholders' equity of $2.4 billion. As of the same date, the
company had 2,454 employees.
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