Prosperity Bancshares in Houston reported a 4.23% dip in fourth-quarter profit on lower levels of loan discount accretion.

The $22 billion-asset company's net income fell 10% to $70.5 million year over year in the quarter. Earnings per share fell 10% to $1.01.

Net interest income after the provision for credit losses fell 11% to $152.8 million. The amount of loan discount accretion fell 73% to $7.8 million. Total loans rose 2% to $9.44 billion. The net interest margin contracted 65 basis points to 3.24%.

The provision for credit losses dropped to $500,000 from $6.35 million Net chargeoffs fell to $119,000 from $3.20 million.

Oil and gas loans totaled $399.1 million in the quarter, or 4.2% of total loans, down from 5.4% a year earlier.

"Although the Texas economy is challenged by the energy downturn, it is a much more diversified economy than it was in the 1980's," Chairman and Chief Executive David Zalman said in a news release Wednesday, pointing to growth in the medical, petrochemical and technology sectors.

Noninterest income rose 3.07% to $30.3 million on higher mortgage banking and credit card, debit card and ATM fees.

Noninterest expense decreased 7.29% to $77.9 million on lower salaries and FDIC insurance assessments.

The company also reported that one of its directors, William Fagan, died Sunday. He joined the bank in 2002 with its acquisition of Paradigm Bank.

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