EX-99.1 2 d562146dex991.htm EX-99.1 EX-99.1
Acquisition of FVNB Corp.
July 1, 2013
Exhibit 99.1

2
“Safe Harbor”
Statement
“Safe Harbor”
Statement
under the Private Securities Litigation Reform Act of 1995
Statements contained in this presentation which are not
historical facts and which pertain to future operating results
of
Prosperity
Bancshares
®
and
its
subsidiaries
constitute
“forward-looking
statements”
within
the
meaning
of
the
Private Securities Litigation reform Act of 1995. These
forward-looking statements involve significant risks and
uncertainties. Actual results may differ materially from the
results discussed in these forward-looking statements. Factors
that might cause such a difference include, but are not limited
to, those discussed in the company’s periodic filings with the
SEC.
Copies
of
the
SEC
filings
for
Prosperity
Bancshares
®
may be downloaded from the Internet at no charge from
www.prosperitybankusa.com.

3
Strategic Rationale
Strategic Rationale
•
Strengthens
Prosperity’s
position
in
the
economically
attractive
Gulf
Coast
and
Central
regions
of
Texas:
–
Complimentary franchises and markets
–
Similar cultures and operating philosophies
–
Enhances market share in existing Victoria and Bryan/College Station markets
–
Adds to the North Houston footprint near The Woodlands, where Exxon Mobil is building their 400 acre headquarters to house
10,000+ employees
–
–
$540 million trust assets under management at year end 2012, significantly enhancing current trust business
(1) Per Cetera Financial Institutions rankings
•
Diversifies Prosperity’s revenue stream with FVNB’s brokerage and trust businesses
•
Meaningful accretion to earnings per share
•
Prosperity will remain well-capitalized
•
Following the merger, Prosperity will be the 39th largest U.S. headquartered banking institution
FVNB
ranks
#1
against
peers,
#5
overall
in
brokerage
commissions
(1)

4
Strengthens Texas Franchise
Strengthens Texas Franchise
Source: SNL Financial
* Branch count excludes duplicative drive-thru locations and includes one FVNB loan production office in Sugar Land
(2)
PB (222)*
FVNB (34)*
Pro Forma Branch Footprint
Victoria
Midland
Odessa

5
Enhances Market Share
Enhances Market Share
Source: SNL Financial
Note: Deposit data as of June 30, 2012; Pro forma for pending and completed transactions
* Branch count excludes duplicative drive-thru locations and includes one FVNB loan production office in Sugar Land
Texas Deposit Market Share
Number
Deposits in
Market
of
Market
Share
Rank
Institution (ST)
Branches
($mm)
(%)
1
JPMorgan Chase & Co. (NY)
681
106,289
20.6
2
Bank of America Corp. (NC)
437
79,784
15.5
3
Wells Fargo & Co. (CA)
689
56,269
10.9
4
BBVA
374
28,035
5.4
5
Cullen/Frost Bankers Inc. (TX)
131
17,365
3.4
Pro Forma
250
13,219
2.6
6
Prosperity Bancshares Inc. (TX)*
216
11,243
2.2
7
Capital One Financial Corp. (VA)
174
9,972
1.9
8
Comerica Inc. (TX)
139
9,563
1.9
9
Zions Bancorp. (UT)
97
9,424
1.8
10
International Bancshares Corp. (TX)
169
6,921
1.3
11
Texas Capital Bancshares Inc. (TX)
13
6,264
1.2
12
BOK Financial Corp. (OK)
47
4,604
0.9
13
Citigroup Inc. (NY)
100
4,177
0.8
14
Regions Financial Corp. (AL)
84
3,985
0.8
15
Hilltop Holdings Inc. (TX)
33
3,963
0.8
23
FVNB Corp. (TX)*
34
1,976
0.4
Top 15
3,384
357,858
69.3
Total
6,858
516,072
100.0

6
Growing Markets of Operation
Growing Markets of Operation
(1)
(2)
Victoria & Coastal Cities
Bryan / College Station & San Antonio / Austin Corridor
Houston and Surrounding Area
•
Expected capital investment of $28 billion in the Eagle Ford Shale play in 2013
•
•
$1 billion TPCO Pipe plant is under construction and is estimated to create 400 to 600 jobs
•
Cheniere Energy is set to begin construction of a liquefied natural gas plant on the La Quinta ship channel, which will have
production capacity of 13.5 million tons per year
•
Home to Texas A&M University and Blinn College which enroll approximately 50,000 and 15,000 students every year,
respectively
•
G-Con Biopharmaceutical Manufacturing facility is open and projected to add 150 six figure salary jobs to the Bryan /
College Station community
•
Construction of a 3,500 acre bio medical complex is underway along Highway 47
•
600,000 square foot Sysco Foods distribution center completed and will house 600+ employees
•
Exxon Mobil is expected to complete a 400 acre facility by 2015 which will house over 10,000 relocated employees in The
Woodlands market
•
Ben E. King, Noble Drilling, Team Industrial Services, BP America, Shell, Transwestern and Worley Parsons added over
5,000 new jobs to the South / West Houston market
•
The Walker County market is home to Sam Houston State University, the fastest growing four-year institution in Texas,
which enrolls approximately 18,500 every semester
Construction
of
the
1.1
million
square
foot
Caterpillar
plant
in
Victoria

7
•
Founded in 1867, First Victoria
National Bank is the oldest
independent bank in Texas
•
Operates 34 locations across the
Gulf Coast and Central regions
of Texas
•
Consistent growth and
profitability through the cycle
•
Established presence in
economically and
demographically attractive
markets
Source: SNL Financial and FVNB company documents
Financial Highlights –
FVNB Corp.
Financial Highlights –
FVNB Corp.
Year ended,
Quarter ended,
Dollars in thousands
12/31/10
12/31/11
12/31/12
03/31/13
Balance
Sheet
Total Assets
1,732,919
$
1,912,657
$
2,390,445
$
2,410,497
$      
Gross Loans HFI
1,295,322
1,327,800
1,615,819
1,607,681
Securities
246,343
270,103
372,644
379,451
Deposits
1,527,680
1,698,404
2,132,369
2,147,212
Total Equity
123,701
159,689
205,777
212,387
Tangible
Common
Equity
94,619
113,244
140,388
147,153
Balance
Sheet
Ratio
Loans / Deposits (%)
84.8
78.2
75.8
74.9
Tangible Common Equity / Tangible Assets (%)
5.55
6.01
5.99
6.23
Leverage Ratio (%)
7.85
8.95
8.33
8.73
Tier 1 Capital Ratio (%)
10.10
12.18
11.92
12.48
Total Capital Ratio (%)
11.36
13.44
13.18
13.74
Income
Statement
Net Interest Income
62,882
$    
66,265
$    
75,608
$    
21,350
$           
Provision Expense
11,750
7,100
6,150
1,000
Noninterest Income
23,886
24,718
26,493
6,582
Noninterest Expense
59,035
62,816
67,123
17,494
Net Income Available to Common
11,312
14,636
19,058
6,380
Profitability
Return on Average Assets (%)
0.69
0.83
0.93
1.10
Return on Average Tangible Common Equity (%)
12.9
14.4
15.9
17.9
Net
Interest
Margin
-
FTE
(%)
4.27
4.07
4.09
4.01
Efficiency Ratio (%)
68.0
69.0
65.7
62.6
Fee Income / Operating Revenue (%)
27.5
27.2
25.9
23.6
Ratios

8
Pro Forma Loan Composition
Pro Forma Loan Composition
Prosperity Bancshares, Inc.
FVNB Corp.
Pro Forma
Loan Portfolio ($000)
Amount
%
Residential R.E.
$1,409,967
23.1%
Commercial R.E.
2,633,869
43.1%
Construction
728,639
11.9%
Commercial & Industrial
965,505
15.8%
Consumer & Other
372,602
6.1%
Total Loans & Leases
$6,110,582
100.0%
Loan Portfolio ($000)
Amount
%
Residential R.E.
$362,477
22.5%
Commercial R.E.
583,850
36.3%
Construction
174,641
10.9%
Commercial & Industrial
299,509
18.6%
Consumer & Other
187,204
11.6%
Total Loans & Leases
$1,607,681
100.0%
Loan Portfolio ($000)
Amount
%
Residential R.E.
$1,772,444
23.0%
Commercial R.E.
3,217,719
41.7%
Construction
903,280
11.7%
Commercial & Industrial
1,265,014
16.4%
Consumer & Other
559,806
7.3%
Total Loans & Leases
$7,718,263
100.0%
Yield on Loans: 6.08%
Loans / Deposits: 47.6%
Yield on Loans: 5.34%
Loans / Deposits: 74.9%
Yield on Loans: 5.93%
Loans / Deposits: 51.5%
Sources: SNL Financial and FVNB company documents; Data as of March 31, 2013
Note: Pro forma loan composition excludes fair value purchase accounting adjustments; Loan to deposit ratio excludes purchase accounting adjustments
Prosperity loan composition pro forma for Coppermark Bancshares, Inc. acquisition and excludes fair value purchase accounting adjustments; Loan to deposit ratio excludes purchase accounting adjustments
Residential
R.E.
23.1%
Commercial
R.E.
43.1%
Construction
11.9%
Commercial
& Industrial
15.8%
Consumer &
Other
6.1%
Residential
R.E.
22.5%
Commercial
R.E.
36.3%
Construction
10.9%
Commercial
& Industrial
18.6%
Consumer &
Other
11.6%
Residential
R.E.
23.0%
Commercial
R.E.
41.7%
Construction
11.7%
Commercial
& Industrial
16.4%
Consumer &
Other
7.3%

9
Pro Forma Deposit Composition
Pro Forma Deposit Composition
Prosperity Bancshares, Inc.
FVNB Corp.
Pro Forma
Deposit Portfolio ($000)
Amount
%
Demand Deposits
$3,292,545
25.7%
NOW & Other
2,597,300
20.2%
MMDA & Savings
4,368,729
34.0%
Retail Time Deposits
1,175,772
9.2%
Jumbo Time Deposits
1,396,901
10.9%
Total Deposits
$12,831,247
100.0%
Deposit Portfolio ($000)
Amount
%
Demand Deposits
$517,839
24.1%
NOW & Other
153,297
7.1%
MMDA & Savings
1,035,746
48.2%
Retail Time Deposits
219,045
10.2%
Jumbo Time Deposits
221,285
10.3%
Total Deposits
$2,147,212
100.0%
Deposit Portfolio ($000)
Amount
%
Demand Deposits
$3,810,384
25.4%
NOW & Other
2,750,597
18.4%
MMDA & Savings
5,404,475
36.1%
Retail Time Deposits
1,394,817
9.3%
Jumbo Time Deposits
1,618,186
10.8%
Total Deposits
$14,978,459
100.0%
Cost of Deposits: 0.30%
Cost of Deposits: 0.35%
Cost of Deposits: 0.30%
Demand
Deposits
25.7%
NOW &
Other
20.2%
MMDA &
Savings
34.0%
Retail Time
Deposits
9.2%
Jumbo Time
Deposits
10.9%
Demand
Deposits
24.1%
NOW &
Other
7.1%
MMDA &
Savings
48.2%
Retail Time
Deposits
10.2%
Jumbo Time
Deposits
10.3%
Demand
Deposits
25.4%
NOW &
Other
18.4%
MMDA &
Savings
36.1%
Retail Time
Deposits
9.3%
Jumbo Time
Deposits
10.8%
Source: SNL Financial and FVNB company documents; Data as of March 31, 2013
Note: Pro forma deposit composition excludes fair value purchase accounting adjustments
Prosperity deposit composition pro forma for Coppermark Bancshares, Inc. acquisition and excludes purchase accounting adjustments
FVNB deposit data per regulatory filings; Sweep accounts data supplemented by company documents

10
Transaction Terms
Transaction Terms
Merger Partner:
FVNB Corp. (“FVNB”)
Aggregate Deal Value:
$374.2 million
(1)
Consideration Structure:
5,570,818 shares of Prosperity and $91.25 million of cash
Consideration Mix:
76% stock / 24% cash
(1)
Termination Fee:
$15.0 million plus expenses incurred by Prosperity up to $750,000
Required Approvals:
Customary regulatory approval; FVNB shareholder approval
Due Diligence:
Completed
Anticipated Closing:
Fourth quarter of 2013
(1)
Based on Prosperity’s closing stock price on June 26, 2013

Aggregate Deal Value ($mm)
$374.2
Transaction Multiples
LTM Earnings ($21.1mm)
17.7x
2013 Annualized Earnings ($25.5mm)
14.7x
Book Value ($194.4mm)
1.92x
Tangible Book Value ($147.2mm)
2.54x
Core Deposit Premium ($1,925.9mm)
11.8%
11
Transaction Summary
Transaction Summary
Source: FVNB company documents; Balance sheet data as of March 31, 2013
(1)
Based on Prosperity’s closing stock price on June 26, 2013
(2)
Equal to aggregate deal value less FVNB’s tangible common equity as a percentage of core deposits; Core deposits defined as total deposits less jumbo time deposits (greater than $100,000)
(1)
(2)

12
Management Retention
Management Retention
Prosperity Bank has placed a very high value on the existing FVNB leadership team and has extended
numerous individual employment offer agreements to members of FVNB.  Among them, the following
executive leaders will join Prosperity Bank in the following capacity:
FVNB Member
Current Role
Prosperity Bank Position
Chairman & CEO
M. Russell Marshall
Kenneth Vickers
John Zacek
Chief  Lending Officer
Executive Vice President
of the Victoria Region
Chairman –
Wealth Management/Private Banking
Senior Executive Vice President
Executive Loan Committee
President –
South Texas Area

13
Financial Impact
Financial Impact
Source: SNL Financial and FVNB company documents
Note: Prosperity Bancshares, Inc. pro forma for Coppermark Bancshares, Inc. acquisition and subsequent $300 million borrowings pay down
(1)
Includes estimated purchase accounting adjustments; Includes impact of $18.0 million SBLF redemption
Prosperity Bancshares, Inc.
FVNB Corp.
Pro Forma
(1)
Financial Impact
03/31/13
03/31/13
12/31/13
Balance Sheet ($mm)
Total Assets
$16,107.7
$2,410.5
$18,574.1
Gross Loans HFI
6,094.7
1,607.7
7,677.5
Total Deposits
12,879.4
2,147.2
15,007.9
Tangible Common Equity
944.0
147.2
1,132.9
Regulatory Capital (%)
TCE / TA (%)
6.39%
6.23%
6.65%
Leverage Ratio (%)
7.02%
8.73%
7.47%
Tier 1 Capital Ratio (%)
13.64%
12.48%
13.76%
Total Capital Ratio (%)
14.38%
13.74%
14.37%