Prosperity Bancshares Q2 net income up 21% as margins expand

Overview

• Prosperity Bancshares Q2 net income rises 21.1% to $135.2 mln

• EPS for Q2 increases 21.4% to $1.42, net interest margin at 3.18%

• Co had recently announced merger with American Bank Holding Corporation

Outlook

• Prosperity sees cautious enthusiasm from customers

• Company anticipates positive tailwinds over next 12-24 months

• Company expects merger to strengthen presence in South and Central Texas

• Prosperity highlights business-friendly environment in Texas and Oklahoma attracting companies

Result Drivers

• NET INTEREST MARGIN - Increases 24 basis points to 3.18% as interest-bearing assets continued to reprice

• LOAN GROWTH - Loans increased by $219.8 mln during Q2, reflecting cautious customer enthusiasm

• MERGER EXPENSES - Lower merger-related expenses contributed to improved net income

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Prosperity Bancshares Inc is $83.00, about 12.2% above its July 22 closing price of $72.89

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

Press Release: ID:nPn5fGr7Ba