Prosperity Bancshares: Recession-Resistant Dividend Growth Machine In The Lone Star State

Prosperity Bancshares, Inc. (PB) is a Houston, Texas-based retail bank. The company operates 243 full-service locations over most of the state of Texas as well as central Oklahoma (Tulsa and Oklahoma City). Despite its widespread presence across the state, Prosperity only accounts for about 3% of deposit market share in Texas, giving it plenty of room for growth.
Source: Smart Asset
Over its lifespan, Prosperity has been the banking equivalent of Ms. Pac Man, gobbling up smaller banks one after the other. It has successfully acquired and integrated 42 banks over the past two decades. The latest addition is of LegacyTexas Financial Corp. (LTXB), an overall well-run, ~$385 million revenue per year bank based in Plano that has struggled recently, revising down guidance several times in the last year.
Nonperforming loans are very low at around 0.21% for Q2 2019. Insider ownership is relatively high at 4.9% of the shares outstanding (~$236 million). And total assets have never experienced a significant pullback in its 20.5-year history.
What's more, and what is of particular interest to me as a dividend growth investor, is Prosperity's impressive track record of rising dividends. Annual payout growth has averaged 10%+ over the last 10 years.
Source: Seeking Alpha
Looking at the above graph, one would never guess that we had an economy-crippling recession right in the middle of this time period. Prosperity just kept plugging along. But it wasn't just dividends... Read more

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