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Prosperity Bancshares Inc.’s PB 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%.