NYSE$PB

Prosperity Bancshares Inc. · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Prosperity Bancshares, Inc. reported an increase in net income and earnings per share for the fourth quarter of 2022, driven by growth in loans and securities interest income.

Prosperity Bancshares, Inc. reported a net income of $137.9 million for Q4 2022, an increase of 8.7% compared to Q4 2021. Earnings per diluted share rose to $1.51, a 9.4% increase year-over-year. The company saw growth in loans, excluding certain programs, and maintained low nonperforming assets.

  • Net income for the fourth quarter reached $137.9 million, with earnings per share (diluted) at $1.51.
  • Fourth quarter net income increased by 8.7% compared to the same period in 2021.
  • Loans, excluding specific programs, increased by $518.5 million, representing a 3.0% growth during the quarter.
  • Nonperforming assets remained low, accounting for 0.08% of fourth quarter average interest-earning assets.

Headline financials

Total Revenue

$294M

Previous: $281M+4.8%
EPS (adj)

$1.51

Previous: $1.38+9.4%
Efficiency Ratio

40.9%

Previous: 42.8%-4.5%
ROAA

1.5%

Previous: 1.4%+7.3%
Capital Expenditures

$8.17M

Previous: $4.06M+101.1%
Free Cash Flow

-$8.65M

Previous: $71M-112.2%
Net Income

$138M

Previous: $127M+8.7%
Operating Income

$175M

Previous: $161M+8.5%
Cash & Equivalents

$424M

Previous: $2.55B-83.4%
Total Assets

$37.7B

Previous: $37.8B-0.4%
Stock-Based Comp

$3.31M

Previous: $3.08M+7.3%

Revenue & EPS history

Prosperity · Revenue · Quarterly

$294M

Q4 2022+4.8%vs Q4 2021
Beat estimate in 6 of 15 quarters(40%)
ActualEstimate

Revenue by segment

Prosperity · $37.6M total across 9 segments · Q2 2022

  • Card Income
    $8.88M
  • NSF Fees
    $8.48M
  • Other Noninterest Income
    $7.17M
  • Deposit Charges
    $6.37M
  • Trust Income
    $2.88M
  • BOLI Income
    $1.29M
  • Net Gain/Loss on Assets
    $1.11M
  • Brokerage Income
    $917K
  • Mortgage Income
    $502K

Forward guidance

Prosperity expects loan growth to continue in 2023, driven by new loans and existing loans not paying off as quickly. They anticipate the economies in Texas and Oklahoma will outperform other states, leading to increased infrastructure, building, housing, and financing needs.

Tailwinds

  • Continued growth in loans is expected in 2023.
  • Consumer spending remains strong, particularly in tourism, restaurant, and hospitality sectors.
  • Texas and Oklahoma economies are expected to outperform other states.
  • Companies and individuals continue to move to Texas and Oklahoma due to lower tax rates and a business-friendly environment.
  • Anticipated increase in infrastructure, building, housing, and financing needs.

Headwinds

  • Real estate sales and pricing have been affected by the increase in rates.
  • Net interest margin at some banks has improved immediately because of higher rates.
  • Bond portfolio yielded 1.96% during the fourth quarter of 2022.
  • Decrease in PPP fees and interest income of $8.5 million.
  • Decrease in loan discount accretion of $4.5 million.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

+0.7%

Avg return

Earnings day

+0.8%

Avg return

5 days after

+2.4%

Avg return

30 days after

57%

39 / 68 earnings

Positive

+15.6%

Q4 2015

Best reaction

-7.4%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.3%-1.4%-0.7%
Q4 2025-7.4%-4.4%-3.5%
Q3 2025+2.7%+5.2%+8.6%
Q1 2025+0.2%+0.8%+3.9%
Q4 2024-0.7%-1.8%-4.0%
Q3 2024+1.3%+2.1%+16.1%
Q2 2024+4.3%+3.2%+5.4%
Q1 2024+2.3%-0.2%-1.0%
Q4 2023-0.1%+2.4%-3.7%
Q3 2023+8.9%+7.8%+17.4%
Q2 2023+1.4%+3.3%-8.2%
Q1 2023+5.7%+3.9%-1.4%
Q4 2022+2.7%+1.9%+1.8%
Q3 2022-5.1%-3.3%+2.9%
Q2 2022+0.1%+2.4%+0.0%
Q1 2022+2.9%+3.1%+11.6%
Q4 2021-2.8%-3.5%-1.9%
Q3 2021-1.2%+3.1%-4.2%
Q2 2021+2.6%-1.6%+4.2%
Q1 2021-1.9%-3.6%-2.6%
Q4 2020-0.5%-0.1%+7.3%
Q3 2020-1.2%+3.1%+16.8%
Q2 2020+1.7%+0.6%+0.4%
Q1 2020+10.6%+7.6%+20.7%
Q4 2019+4.9%+5.4%-4.6%
Q3 2019+2.4%+2.4%-2.4%
Q2 2019+2.5%+1.7%-6.5%
Q1 2019-0.2%+2.3%-5.0%
Q4 2018+0.1%+3.2%+5.2%
Q3 2018+0.3%+3.6%+10.4%
Q2 2018-1.0%+0.6%+7.1%
Q1 2018-4.7%-5.3%-2.6%
Q4 2017+1.0%+1.0%+1.4%
Q3 2017+3.7%+1.5%+0.3%
Q2 2017-3.9%-2.8%-6.2%
Q1 2017-2.0%-3.6%-9.0%
Q4 2016+3.4%-0.5%+1.8%
Q3 2016-2.0%-2.3%+15.7%
Q2 2016-3.5%-7.2%+1.0%
Q1 2016+0.0%
Q4 2015+15.6%
Q3 2015+2.8%
Q2 2015-4.4%
Q1 2015-3.0%
Q4 2014+1.3%
Q3 2014+1.7%
Q2 2014-3.0%
Q1 2014-2.4%
Q4 2013+4.9%
Q3 2013-2.6%
Q2 2013+0.6%
Q1 2013+0.5%
Q4 2012-1.9%
Q3 2012+6.4%
Q2 2012-1.2%
Q1 2012+0.5%
Q4 2011+3.2%
Q3 2011-4.3%
Q2 2011+2.9%
Q1 2010+1.7%
Q1 2011+1.2%
Q4 2010-1.0%
Q4 2008-1.0%
Q4 2009-1.0%
Q3 2010+2.3%
Q3 2009+2.3%
Q2 2010-0.0%
Q2 2009-0.0%

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