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Prosperity Bancshares in Houston surpassed Wall Street estimates for the third quarter, fueled by two recent acquisitions.
October 29 -
A recent oil and gas boom in Texas that has captivated banks' attention is also drawing the eye of regulators as they become concerned how far institutions will go to win loans and hire specialists within the energy industry.
May 16 -
The big oil lender faces a classic dilemma: extend more credit to energy companies in need of more capital, or lock down to guard against a prolonged downturn.
January 16
Prosperity Bancshares in Houston
The $21.5 billion-asset company's fourth-quarter earnings jumped 24% from a year earlier, to $78.2 million. Earnings of $1.12 a share beat the average estimate of analysts polled by Bloomberg by 4 cents.
The results come as Prosperity's stock price has taken a hit from plummeting oil prices. Prosperity shares, which have fallen about 30% since November, were up 1% by midday Friday.
"We believe the stock price decline is due to investor sentiment regarding the decrease in crude oil prices," David Zalman, the company's chairman and chief executive, said in a press release. "We have reviewed our energy credits and have not seen any negative effects in the loan portfolio to date."
It may take up to nine months to see the impact of oil price declines on the company's balance sheet, Zalman said.
Prosperity's loan book grew 19%, to $9.2 billion, partially because of two acquisitions. The company bought the $2.4 billion-asset F&M Bank in April and the $2.5 billion-asset First Victoria National Bank in November 2013.
Lending growth pushed net interest income up 22%, to $177.8 billion. The net interest margin expanded by 9 basis points, to 3.85%. The company cut its loan-loss provision by 19%, to $6.4 million.
Fee-based revenue also boosted profits, rising 20%, to $30.1 million.
Higher salary costs contributed to a hike in operating expenses, which grew 24%, to $84.8 million.
