This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Lean and Mean Bank Stocks

5. Prosperity Bancshares

Prosperity Bancshares (PB - Get Report) of Houston has seen its stock return 46% this year through Friday's close at $60.73.

The shares trade for 3.8 times their reported June 30 tangible book value of $16.05, and for 15.2 times the consensus 2014 earnings estimate of $4.00 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $3.58. Based on a quarterly payout of 21.5 cents, the shares have a dividend yield of 1.42%.

The company's efficiency ratio during the 12-month period ended Sept. 30 was 42.13%, according to Thomson Reuters Bank Insight.

Prosperity had $16.3 billion in total assets as of June 30. On Aug. 29 the company announced an agreement to acquire F&M Bancorporation of Tulsa, Okla., for roughly $244 million in stock and cash. F&M had $2.4 billion in assets as of June 30, with 10 F&M Bank branches in the Tulsa area and three in Dallas. The deal is expected to close during the first quarter of 2014.

Prosperity also has a deal in place to acquire FVNB Corp. of Victoria, Texas, for about $287.5 million in stock and cash. FVNB had $2.4 billion in assets, with 34 First Victory National Bank offices, including 12 branches in the Houston area, and one loan production office.

Following the announcement of the F&M deal, KBW analyst Jefferson Harralson reiterated his "outperform" rating for Prosperity Bancshares, with a price target of $65, saying in a note to clients that "By our estimates, the deal is 2.8% accretive to 2014 EPS assuming the deal closes at the end of the first quarter and 1.25% accretive to tangible book value ."

For the 12-month period ended June 30, Prosperity's operating return on average assets (ROA) was 1.27%, while its return on average tangible common equity (ROTCE) was 23.43%, according to Thomson Reuters Bank Insight. That's the highest ROTCE among the five efficient bank holding companies listed here, reflecting a relatively low tangible common equity ratio of 6.50% as of June 30.

PB Chart PB data by YCharts

Interested in more on Prosperity Bancshares? See TheStreet Ratings' report card for this stock.

2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.42 0.06%
DFS $56.80 -0.60%
PB $51.99 0.50%
SBNY $127.54 1.10%
WFC $54.50 -0.07%

Markets

DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs