Prosperity Bancshares To Benefit From Merger

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About: Prosperity Bancshares, Inc. (PB)
by: Sheen Bay Research
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Sheen Bay Research
Research analyst, macro, ETF investing, banks
Summary

Acquisition of LegacyTexas Bank is expected to boost earnings due to a rise in earning assets and expansion in non-interest income.

Operating expenses are expected to be elevated in the first half of 2020 before the system conversion of LegacyTexas.

Quarterly dividend is expected to be increased to $0.48 in the last quarter of 2020. Forward dividend yield of 2.6% is expected.

The current market price is quite close to the one-year ahead target price, therefore it seems best to wait for a price dip.

Prosperity Banchsares (PB) completed the acquisition of LegacyTexas Bank in November 2019, which is expected to push up earnings by a high single digit growth rate in 2020. The merger will support earnings