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Dec 31, 2023
Prosperity Q4 2023 Earnings Report
Prosperity Bancshares reported a decrease in net income and earnings per share for Q4 2023 due to increased interest and noninterest expenses, including an FDIC special assessment and merger-related costs.
Key Takeaways
Prosperity Bancshares reported a net income of $95.5 million, or $1.02 per diluted share, for Q4 2023. Excluding the FDIC special assessment and merger-related expenses, net income was $111.4 million, or $1.19 per diluted share. The quarter was impacted by a $19.9 million FDIC special assessment. Net interest margin increased slightly to 2.75%.
Net income was $95.5 million, or $1.02 per diluted share; excluding FDIC special assessment and merger costs, net income was $111.4 million, or $1.19 per diluted share.
Loans, excluding Warehouse Purchase Program loans, increased by $2.259 billion, or 12.5% during 2023.
Borrowings decreased by $525.0 million during the fourth quarter 2023.
Net interest margin increased 3 basis points to 2.75% during the fourth quarter 2023.
Forward Guidance
Prosperity expects net interest margin to expand to historically normal levels as assets reprice, increasing earnings per share, and anticipates a strong core deposit base with 36% of deposits in noninterest-bearing accounts.
Positive Outlook
- Net interest margin will continue to expand to historically normal levels.
- Asset repricing will increase earnings per share.
- Company has a strong core deposit base.
- 36% of deposits are in noninterest-bearing accounts.
- Company has flexibility in pursuing strategic opportunities.
Challenges Ahead
- Recent interest rate increases.
- Increase in interest expense.
- Increase in noninterest expense.
- FDIC special assessment of $19.9 million.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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