- The loan portfolio will likely decline further before recovering in the second half of the year on the back of economic factors.
- The majority of the loan portfolio will re-price soon after every rate hike, which will benefit the top line.
- However, a worsening asset mix, long-duration bond portfolio, and rate-sensitive deposit portfolio will likely limit net interest income’s sensitivity to rate changes.
- The year-end target price suggests a small upside from the current market price. Further, PB is offering a modest dividend yield.
For further details see:
Prosperity Bancshares: Higher Rates Help Earnings, But Persistent Loan Declines Remain Worrisome