Prosperity Bancshares (NASDAQ:PRSP) EPS Outlook Better on NIM, Loan Growth

Citing a modest expansion of NIM and loan growth for Prosperity Bancshares (NASDAQ:PRSP), FBR boosted their full year EPS on the company.

FBR says, "We are raising our FY11 EPS estimate to $2.89 from $2.83, based on our improved outlook for loan growth and modest NIM expansion, and reducing our FY12 EPS estimate from $3.20 to $3.10. Better-than-expected loan growth advances the company toward its goal of growing loans $1B by EOY 2012. To achieve this goal, we expect that PRSP will need to prevail as an acquirer in a hotly contested Texas bank M&A market, which is being targeted by both in-state and out-of-state banks. Last week's $1B sale of Sterling Bancshares (Nasdaq: SBIB)(Market Perform) to Comerica (NYSE: CMA)(Market Perform) for 3.7x TBV (loan mark adjusted) sets the benchmark for Texas M&A and may help jump start M&A activity in Texas while positively impacting Prosperity's valuation."

FBR Capital maintains a "Market Perform" rating on Prosperity Bancshares (NASDAQ:PRSP), which closed Monday at $41.63, up $0.83, or 2.11 percent. FBR increased their price target on Prosperity from $37 to $44.