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Jun 30, 2020
Prosperity Q2 2020 Earnings Report
Reported strong second quarter earnings, driven by strategic acquisitions and organic growth.
Key Takeaways
Prosperity Bancshares, Inc. reported a strong second quarter with a net income of $130.9 million, or $1.41 per diluted share, driven by strategic acquisitions and organic growth. Loans increased by 9.9% and deposits increased by 9.8% during the quarter. The company also completed the operational conversion of LegacyTexas Bank.
Earnings per share (diluted) increased 19.5% compared to the second quarter 2019.
Net income for the second quarter reached $130.9 million.
Loans increased $1.898 billion, representing a 9.9% growth during the second quarter.
Deposits saw an increase of $2.326 billion, or 9.8%, during the second quarter.
Prosperity
Prosperity
Forward Guidance
Prosperity Bancshares is positive about its future, remaining focused on addressing the changing operating environment and economy while taking care of customers and associates.
Positive Outlook
- Fourth quarter 2021 GDP is forecasted to be 4.8% compared to fourth quarter 2020.
- The unemployment rate is forecasted to be 6.9% for the fourth quarter 2021 compared with 9.4% for fourth quarter 2020.
- Completed the operational integration of Legacy on schedule in early June.
- Approved 11,972 PPP loans for a total of $1.411 billion.
- Team members from Legacy have been excellent and contributed to a smooth integration.
Challenges Ahead
- The Blue-Chip Consensus forecast estimates that fourth quarter 2020 GDP will end at (5.6%) compared with fourth quarter 2019.
- The Blue-Chip Consensus forecast estimates an unemployment rate of 9.4% for the fourth quarter 2020.
- Net charge offs were $13.0 million.
- NSF fees and credit card, debit card and ATM income were negatively impacted by the pandemic.
- COVID-19 pandemic has resulted in significant economic uncertainties that could negatively impact Prosperity’s operating income, financial condition and cash flows.