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Prosperity Bancshares (PB) Down 1.5% Despite Q4 Earnings Beat
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Prosperity Bancshares Inc.’s (PB - Free Report) fourth-quarter 2021 earnings per share of $1.38 surpassed the Zacks Consensus Estimate by a penny. However, the bottom line declined 6.8% from the prior-year quarter’s figure.
The company did not record any provisions in the reported quarter, which was a major positive. Marginally lower expenses and strong capital position were other tailwinds. However, a decline in revenues, lower loan balance and shrinking net interest margin hurt results. Shares of the company lost 1.5% following the release.
Net income available to common shareholders was $126.8 million, down 7.5% year over year.
In 2021, earnings of $5.60 per share matched the consensus estimate but decreased 1.4% from the 2020 level. Net income of $519.3 million was down 1.8%.
Revenues & Expenses Decline
Net revenues for the fourth quarter were $280.5 million, down 4.6% from the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $279.6 million.
In 2021, total revenues decreased 2.6% to $1.13 billion. Yet the top line matched the consensus estimate.
Net interest income (NII) was $244.8 million, down 5% year over year. Net interest margin (NIM), on a tax-equivalent basis, contracted 52 basis points (bps) to 2.97%.
Non-interest income totaled $35.8 million, down 2.2%. The decline was due to a fall in mortgage income and other non-interest income.
Non-interest expenses decreased marginally from $120.2 million in the prior-year quarter to $119.5 million. The reported quarter recorded fall in all components except credit and debit cards, data processing and software amortization expenses, regulatory assessments, and FDIC insurance, depreciation and communications. Also in the quarter, the company recorded a net loss on the sale or write-down of other real estates against a gain in the prior-year quarter.
As of Dec 31, 2021, total loans were $18.6 billion, down 1.8% from the end of the previous quarter. Deposits totaled $30.8 billion, up 4.5%.
Strong Credit Quality
As in the year-ago quarter, the company did not record any provision for credit losses in the reported quarter as well. As of Dec 31, 2021, total non-performing assets were $28.1 million, plunging 52.9% from the prior-year quarter end.
The ratio of allowance for credit losses to total loans was 1.54%, down 2 bps year over year. Net charge-offs were $0.81 million, down significantly from $7.6 million recorded in the year-ago period.
Capital Ratios Improve
As of Dec 31, 2021, the Tier-1 risk-based capital ratio was 15.10%, up from 13.74% as of Dec 31, 2020. The total risk-based capital ratio was 15.45% compared with the prior year’s 14.23%.
Profitability Ratios Deteriorate
At the end of the fourth quarter, the annualized return on average assets was 1.37%, down from 1.63% witnessed at the end of the prior-year quarter. Annualized return on common equity was 7.91%, down from the year-earlier period’s 8.98%.
Share Repurchase
In 2021, the company repurchased 767,134 shares at an average price of $67.87 per share.
Our Take
The company’s solid capital position, strong loan and deposit balances, and impressive credit quality are expected to keep supporting its financials in the quarters ahead. Nonetheless, margin pressure due to low rates and elevated expenses remains concerning.
Prosperity Bancshares, Inc. Price, Consensus and EPS Surprise
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflected a rise of 7.1% from the prior-year quarter.
F.N.B.’s results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in NII was the undermining factor.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2021 earnings per share of $1.41 surpassed the Zacks Consensus Estimate of $1.14. The bottom line also jumped 58.4% from the prior-year quarter.
BankUnited’s results primarily benefited from higher revenues, and a rise in loans and deposit balances. However, a rise in expenses and poor credit quality were the undermining factors.
SVB Financial Group’s fourth-quarter 2021 adjusted earnings per share of $6.56 comfortably outpaced the Zacks Consensus Estimate of $6.29. In the year-ago quarter, the company recorded earnings of $7.40 per share.
SVB Financial’s results primarily benefited from growth in revenues. Loans and deposit balances witnessed sequential improvement. However, a rise in expenses and lower NIM were the undermining factors.
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Prosperity Bancshares (PB) Down 1.5% Despite Q4 Earnings Beat
Prosperity Bancshares Inc.’s (PB - Free Report) fourth-quarter 2021 earnings per share of $1.38 surpassed the Zacks Consensus Estimate by a penny. However, the bottom line declined 6.8% from the prior-year quarter’s figure.
The company did not record any provisions in the reported quarter, which was a major positive. Marginally lower expenses and strong capital position were other tailwinds. However, a decline in revenues, lower loan balance and shrinking net interest margin hurt results. Shares of the company lost 1.5% following the release.
Net income available to common shareholders was $126.8 million, down 7.5% year over year.
In 2021, earnings of $5.60 per share matched the consensus estimate but decreased 1.4% from the 2020 level. Net income of $519.3 million was down 1.8%.
Revenues & Expenses Decline
Net revenues for the fourth quarter were $280.5 million, down 4.6% from the prior-year quarter. The top line, however, beat the Zacks Consensus Estimate of $279.6 million.
In 2021, total revenues decreased 2.6% to $1.13 billion. Yet the top line matched the consensus estimate.
Net interest income (NII) was $244.8 million, down 5% year over year. Net interest margin (NIM), on a tax-equivalent basis, contracted 52 basis points (bps) to 2.97%.
Non-interest income totaled $35.8 million, down 2.2%. The decline was due to a fall in mortgage income and other non-interest income.
Non-interest expenses decreased marginally from $120.2 million in the prior-year quarter to $119.5 million. The reported quarter recorded fall in all components except credit and debit cards, data processing and software amortization expenses, regulatory assessments, and FDIC insurance, depreciation and communications. Also in the quarter, the company recorded a net loss on the sale or write-down of other real estates against a gain in the prior-year quarter.
As of Dec 31, 2021, total loans were $18.6 billion, down 1.8% from the end of the previous quarter. Deposits totaled $30.8 billion, up 4.5%.
Strong Credit Quality
As in the year-ago quarter, the company did not record any provision for credit losses in the reported quarter as well. As of Dec 31, 2021, total non-performing assets were $28.1 million, plunging 52.9% from the prior-year quarter end.
The ratio of allowance for credit losses to total loans was 1.54%, down 2 bps year over year. Net charge-offs were $0.81 million, down significantly from $7.6 million recorded in the year-ago period.
Capital Ratios Improve
As of Dec 31, 2021, the Tier-1 risk-based capital ratio was 15.10%, up from 13.74% as of Dec 31, 2020. The total risk-based capital ratio was 15.45% compared with the prior year’s 14.23%.
Profitability Ratios Deteriorate
At the end of the fourth quarter, the annualized return on average assets was 1.37%, down from 1.63% witnessed at the end of the prior-year quarter. Annualized return on common equity was 7.91%, down from the year-earlier period’s 8.98%.
Share Repurchase
In 2021, the company repurchased 767,134 shares at an average price of $67.87 per share.
Our Take
The company’s solid capital position, strong loan and deposit balances, and impressive credit quality are expected to keep supporting its financials in the quarters ahead. Nonetheless, margin pressure due to low rates and elevated expenses remains concerning.
Prosperity Bancshares, Inc. Price, Consensus and EPS Surprise
Prosperity Bancshares, Inc. price-consensus-eps-surprise-chart | Prosperity Bancshares, Inc. Quote
Prosperity Bancshares currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflected a rise of 7.1% from the prior-year quarter.
F.N.B.’s results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in NII was the undermining factor.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2021 earnings per share of $1.41 surpassed the Zacks Consensus Estimate of $1.14. The bottom line also jumped 58.4% from the prior-year quarter.
BankUnited’s results primarily benefited from higher revenues, and a rise in loans and deposit balances. However, a rise in expenses and poor credit quality were the undermining factors.
SVB Financial Group’s fourth-quarter 2021 adjusted earnings per share of $6.56 comfortably outpaced the Zacks Consensus Estimate of $6.29. In the year-ago quarter, the company recorded earnings of $7.40 per share.
SVB Financial’s results primarily benefited from growth in revenues. Loans and deposit balances witnessed sequential improvement. However, a rise in expenses and lower NIM were the undermining factors.