Prosperity Bancshares (PB) has an efficiency ratio most other banks could only dream about.

The secret to its success? A demanding chief financial officer who tracks every penny, officials at the Houston company say.

The $18.6 billion-asset Prosperity reported an efficiency ratio of 41.6% in 2013, meaning costs ate up about 42 cents of every $1 of revenue. Other banks struggle to get that number down to 60%.

But Prosperity also has something other banks don't have — David Hollaway, its longtime CFO.

Expense control is "real easy. It's a product we've got; it's named David Hollaway," Chief Executive David Zalman joked during a recent investor presentation. "And David doesn't pay for anything."

Prosperity survived the financial crisis in the 1980s, which underscored that "you had to be efficient to survive" and left "an imprint on our staff that we had at the time and just was built in our DNA," Hollaway said during the same presentation.

All of Prosperity's more than 200 branches receive a daily financial report, and "people are rewarded for adhering to budget and can be penalized for not doing so," said Eddie Safady, area chairman of central Texas. "But once you really take a look at the things that you thought were important and then you realize they really weren't, you can control those dollars."

Officials at a bank that Prosperity had bought learned this lesson the hard way. Zalman overheard a conversation between Hollaway and the acquired bank's president about certain expenses not making the cut.

"I heard all this ranting and raving and hollering. I said — what the heck is going on in here?" Zalman said. "And the president was hollering because David had taken away — I don't know if it was his popcorn or what. And then he said: 'Well, what about the hot chocolate or something?' And David said: 'Well, is that for the customer or is that for the employees?' And then he was ranting and raving again."

Demands for facial tissue have also fallen on deaf ears, though Hollaway was willing to give in in another area.

"I did get him to buy some better toilet paper, though," Zalman joked.

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