Prosperity Bancshares (PB) in Houston reported a 20% boost in profit after announcing two deals in the third quarter.
The $16.1 billion-asset company earned $55.3 million in the quarter, up from $46.2 million in the same period of 2012, it announced Wednesday. Per-share earnings of 91 cents beat the estimates of analysts polled by Bloomberg by 1 cent.
Net interest income rose 18%, to $126.5 million, driven by a 22% expansion of the bank's loan portfolio to $6.2 billion. Earlier this year, Prosperity closed acquisitions of Coppermark Bancshares in Oklahoma City and East Texas Financial Services in Tyler, Texas, which together added about $1.3 billion to Prosperity's books.
Prosperity's net interest margin widened by 7 basis points, to 3.52%. The bank increased its provision for loan losses to $4 million from $1.8 million, while net chargeoffs fell to $288,000 from $1.3 million.
Noninterest income fell 9%, to $21.6 million, as overdraft and card fees slipped. Prosperity attributed the decline to the swipe-fee cap established by the Dodd-Frank Act's Durbin Amendment, which went into effect July 1.
Noninterest expense rose 8%, to $61.5 million, as compensation costs increased by about $5.2 million, to $37.1 million. The rise was mostly due to the expense of integrating of Coppermark and East Texas Financial Service, Prosperity said.
In the second quarter, Prosperity agreed to buy FVNB Corp in Victoria, Texas, for $380 million and F&M Bancorp in Tulsa, Okla., for $47 million. The two deals would add about $4.9 billion to Prosperity's asset base, it said.