Profits at Prosperity Bancshares (PB) in Houston grew by more than a third thanks to recent acquisitions as well as organic loan growth.
The company reported earnings of $67.1 million in the first quarter, a 36% increase from the same period a year earlier. Prosperity's per-share earnings of $1.01 beat the estimates of analysts polled by Bloomberg by 2 cents.
Prosperity's net interest income climbed 33%, to $143.7 million. Its acquisitions of Coppermark Bancshares and FVNB Corp. last year propelled a 47% increase in its loan portfolio, which reached $7.8 billion. Prosperity also reported solid organic loan growth.
"Excluding loans acquired in acquisitions, loans at March 31, 2014 grew 8.2% compared with March 31, 2013," Prosperity Chairman and Chief Executive David Zalman said in a press release Wednesday.
Net interest margin climbed 20 basis points, to 3.42%.
Noninterest income rose 22%, to $28.6 million. Prosperity attributed the increase partly to gains from the sale of a credit card- and merchant-processing unit, as well as gains from the sale of real property. Prosperity's expanded customer base as a result of its 2013 acquisitions also drove higher revenue from fees and service charges.
Noninterest expense swelled 27%, to $71 million, largely because of merger-related expenses.
Prosperity slashed its loan-loss provision by 79%, to $600,000. But its net chargeoffs rose 150%, to $786,000.
Meanwhile, the $18.9 billion-asset company completed its acquisition of the Tulsa, Okla.-based F&M Bancorp. on April 1. Prosperity gained $2.4 billion in assets, $1.7 billion in loans and $2.3 billion in deposits in the deal.