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Prosperity Bancshares Inc.’s PB first-quarter 2025 adjusted earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.35. Moreover, the bottom line compared favorably with adjusted EPS of $1.18 in the prior-year quarter.
Results benefited from an increase in net interest income (NII) and adjusted non-interest income. During the quarter, provisions remained nil. However, a rise in expenses was a major headwind. Also, a lower loan and deposit balance was another negative.
Net income available to common shareholders was $130.2 million, up from $110.4 million in the year-ago quarter.
Quarterly adjusted total revenues were $306.7 million, which increased 10.7% from the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $307.1 million.
NII was $265.4 million, up 11.4% year over year. Net interest margin (NIM), on a tax-equivalent basis, expanded 35 basis points to 3.14%. Our estimates for NII and NIM were pegged at $269.5 million and 3.22%, respectively.
Non-interest income was $41.3 million, up 6.3%. The rise was driven by an increase in almost all the non-interest income components except credit card, debit card and ATM card income, trust income, and net loss on sale or write-down of assets. Our estimate for the metric was pegged at $37.3 million. Adjusted non-interest income was $41.5 million, up 7.6% from the prior-year quarter.
Non-interest expenses increased 3.3% to $140.3 million. The rise was mainly attributed to an increase in all the cost components except other real estate expense and other non-interest expense. Our estimate for non-interest expenses was $142.6 million.
The adjusted efficiency ratio was 45.71%, which decreased from 49.07% in the prior year quarter. A decline in the efficiency ratio indicates better profitability.
As of March 31, 2025, total loans were $22 billion, which declined marginally from the prior quarter. Total deposits were $28.03 billion, which declined 1.2% sequentially. Our estimates for total loans and total deposits were $22.4 billion and $28.32 billion, respectively.
As of March 31, 2025, total non-performing assets were $81.4 million, which fell from $83.8 million in the prior-year quarter. The ratio of allowance for credit losses to total loans was 1.59%, up from 1.55% year over year.
Net charge-offs were $2.7 million compared with $2.1 million in the year-ago period.
The company did not record any provision for credit losses during the reported quarter, similar to the year-ago quarter.
As of March 31, 2025, the common equity tier 1 capital ratio was 16.97%, up from 15.75% in the prior year quarter. The total risk-based capital ratio was 18.22%, up from 17.00%.
At the end of the first quarter, the annualized return on average assets was 1.34%, up from 1.13% at the end of the prior-year quarter. Also, the annualized return on average common equity was 6.94%, which increased from 6.20%.
Prosperity Bancshares' emphasis on strategic acquisitions is expected to contribute to its long-term financial strength. Decent loans, a solid deposit mix, and improving fee income are likely to support the top line. However, a liability-sensitive balance sheet and elevated expenses remain near-term concerns.
Prosperity Bancshares, Inc. price-consensus-eps-surprise-chart | Prosperity Bancshares, Inc. Quote
PB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
East West Bancorp, Inc.’s EWBC first-quarter 2025 adjusted EPS of $2.09 beat the Zacks Consensus Estimate of $2.05. Moreover, the bottom line increased marginally from the prior-year quarter’s level. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
EWBC’s results were primarily aided by an increase in NII and non-interest income. Also, loan balances increased sequentially in the quarter. However, higher provisions and non-interest expenses alongside lower deposits were headwinds.
Zions Bancorporation’s ZION first-quarter 2025 adjusted EPS of $1.24 beat the Zacks Consensus Estimate of $1.20. Moreover, the bottom line surged 29.2% from the year-ago quarter.
Results were primarily aided by higher NII and non-interest income. Also, higher loans were another positive. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds for ZION.
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This article originally published on Zacks Investment Research (zacks.com).
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