Prosperity Bancshares in Houston surpassed Wall Street estimates for the third quarter, fueled by two recent acquisitions.
The $21.1 billion-asset bank earned $76.6 million, or 38% more than the same period last year. Earnings were $1.10 per share, beating a poll of Bloomberg analysts by 3 cents.
Year-over-year comparisons are skewed, in part, by two deals that closed in the past twelve months. Prosperity bought the $2.5 billion-asset First Victoria National Bank in November. The bank also closed on its purchase of the $2.4 billion-asset F&M Bank & Trust in April.
Both transactions drove up Prosperity's loan balances, which jumped 52% from a year earlier, to $9.4 billion.
Interest income rose 39%, to $175.7 million. The net interest margin expanded by 26 basis points, 3.85%.
The acquisitions also generated additional fee-based revenue. Noninterest income increased 40% from a year earlier, to $30.2 million, because of additional brokerage products and service charges.
Operating expenses grew 39%, to $85.5 million.