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Dec 31, 2020
Prosperity Q4 2020 Earnings Report
Reported increase in earnings per share and net income compared to the same period in 2019.
Key Takeaways
Prosperity Bancshares reported a strong fourth quarter with net income of $137.1 million, an increase of 59.2% compared to the same period in 2019. Earnings per diluted common share increased by 46.5% to $1.48. Deposits also saw growth, increasing by $901.3 million or 3.4% during the quarter.
Fourth quarter earnings per share (diluted) of $1.48, an increase of 46.5% compared to the fourth quarter 2019
Fourth quarter net income of $137.1 million
Deposits increased $901.3 million or 3.4% (13.6% annualized) during the fourth quarter 2020
Nonperforming assets remain low at 0.20% of fourth quarter average interest-earning assets
Forward Guidance
Prosperity Bancshares anticipates facing challenges such as potential increases in tax rates and the continuation of low interest rates, which may affect net interest margin. However, they believe a steeper yield curve could help mitigate these issues, and they expect Texas to outperform other states in growth over the next several years.
Positive Outlook
- Texas and Oklahoma continue to benefit from a pro-business attitude.
- Companies continue to move to Texas, with HP and Oracle announcing a headquarters move and other companies, such as Tesla, announcing a major expansion into Texas.
- The Federal Reserve Bank of Dallas has projected a nationwide 5% GDP growth by year-end 2021 and an unemployment rate of 4.5%, noting that the first half of the year will be slower, with an expected increase in the second half of the year.
- We believe Texas will have a higher growth rate and outperform other states over the next several years.
- A steeper yield curve could help to mitigate both issues.
Challenges Ahead
- We expect that we will face several challenges over the next few years, such as higher tax rates that will affect income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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