Prosperity Bancshares in Houston reported record profits in the second quarter as two recent acquisitions substantially boosted interest and fee income.
The $21.2 billion-asset company reported net income of $75.5 million for the second quarter, up 40% from the same quarter in 2013. Earnings per share of $1.08 beat estimates of analysts polled by Bloomberg by six cents.
At June 30, loans were up 51% from the prior year, to $9.3 billion, and deposits had increased 38%, to $17.3 billion. Net interest income increased 47%, to $174 million, primarily due to a 31% rise in average interest-earning assets. The net interest margin was up 40 basis points, to 3.83%.
Noninterest income climbed 35% from a year earlier, to $34 million. Prosperity attributed the gain to increased fees and service charges from deposit accounts. A 128% increase in trust income as well as a 433% jump in brokerage income also boosted the noninterest income.
Noninterest expenses increased 45%, to $89 million, as the mergers increased headcount, as well as its occupancy and equipment costs.
Prosperity recorded a quarterly loan loss provision of $6.3 million, compared to $2.6 million a year ago. Net chargeoffs were down 89% from a year earlier, to $155,000.
Prosperity's shares were trading at $60.94 late Friday, down 0.9% from Thursday's closing price.