Prosperity Bancshares in Houston sought to reassure investors Wednesday that the financial impact of Hurricane Harvey on its business was under control.
The $22 billion-asset company’s third-quarter net income fell 1% from a year earlier to $67.9 million. Earnings per share of 98 cents were a penny better than the mean of analysts' estimates compiled by FactSet Research Systems.
All but one of Prosperity’s 94 branches in the Houston, Corpus Christi and Beaumont areas in Texas have been reopened since Harvey hit in August. Prosperity has “experienced manageable financial impact related to Hurricane Harvey,” the company said in a news release Wednesday.
“Our lenders have visited with every loan relationship we have in the affected areas in excess of $1 million,” Chairman and CEO David Zalman said in the release. “The vast majority of our customers affected had flood insurance and/or business interruption insurance.”
Net interest income after the loan-loss provision fell 2% to $149 million. Prosperity increased its provision to $6.9 million from $2 million “given the increased risk on loan performance and the possibility of some adverse economic impact from the storm,” Zalman said.
Loans grew 4% to $9.9 billion. About 2.9% of Prosperity’s loan book, or $292 million, was tied to the oil and gas industry, down from about 3.2% a year ago.
Noninterest income dropped 3% to $28.8 million on lower mortgage and brokerage income. Prosperity also waived some ATM, overdraft and late payment fees for customers who live in areas hit by the hurricane.
Noninterest expense fell 2% to $77.5 million from a decrease in amortization of core deposit intangibles.