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Prosperity Bancshares Inc

PROSPERITY BANCSHARES, INC.® REPORTS FOURTH QUARTER 2025 EARNINGS

  • Announced the signing of a definitive merger agreement to acquire Stellar Bancorp, Inc., headquartered in Houston, Texas
  • Net income of $139.9 million and earnings per share (diluted) of $1.49 for fourth quarter 2025
  • Net income of $542.8 million, increased 13.2%, and earnings per share (diluted) of $5.72, increased 13.3%, for the year ended December 31, 2025 compared with the same period 2024
  • Fourth quarter net interest margin increased 25 basis points to 3.30% compared to 3.05% for fourth quarter 2024
  • Deposits increased $700.4 million during fourth quarter 2025, or 10.1% annualized
  • Allowance for credit losses on loans and on off-balance sheet credit exposure of $371.4 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.63%(1)
  • Nonperforming assets remain low at 0.46% of fourth quarter average interest-earning assets
  • Return (annualized) on fourth quarter average assets of 1.49% and average tangible common equity of 13.61%(1)
  • Completed the acquisition of American Bank Holding Corporation on January 1, 2026
  • Received all necessary regulatory and shareholder approvals for the pending acquisition of Southwest Bancshares, Inc., San Antonio, Texas
  • Repurchased 2.0 million shares of common stock for $137.2 million during fourth quarter 2025, and 2.3 million shares of common stock for $157.1 million during 2025
  • Approved 2026 Stock Repurchase Program covering up to 5% of outstanding common stock

HOUSTON , Jan. 28, 2026 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB) ("Prosperity Bancshares"), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $139.9 million for the quarter ended December 31, 2025, compared with $130.1 million for the same period in 2024. Net income per diluted common share was $1.49 for the quarter ended December 31, 2025, compared with $1.37 for the same period in 2024. The annualized return on fourth quarter average assets was 1.49%. Additionally, deposits increased $700.4 million during the fourth quarter of 2025. Nonperforming assets remain low at 0.46% of fourth quarter average interest-earning assets. On January 1, 2026, American Bank Holding Corporation ("American") merged with Prosperity Bancshares and American Bank, N.A. ("American Bank") merged with Prosperity Bank (collectively, the "Prosperity/American Merger").

"I am excited to announce that on January 1, 2026, Prosperity completed the merger with our new partner American and its wholly owned subsidiary American Bank, headquartered in Corpus Christi, Texas. In connection with that transaction, we are pleased that Patt Wallace, the daughter of one of the founding families of the bank, and Steve Rafaelle, the CEO of American Bank, have joined our Bank Board of Directors," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We have also received all regulatory and shareholder approvals for the merger with Southwest Bancshares, the parent company of Texas Partners Bank and expect the transaction will be effective on February 1, 2026. In connection with the Southwest deal, we are pleased that Gene Dawson, Interim Chairman of Southwest Bancshares and Chairman of the nationally recognized Pape-Dawson engineering firm will be joining our Bank Board of Directors. To further add to our San Antonio presence, Charlie Amato has joined our Bank Board of Directors. In addition to his successful business, Charlie previously served as a board member of Federal Reserve Board of Dallas, San Antonio Branch, a Regent of the Texas State University System and is an investor in the San Antonio Spurs," continued Zalman.

"When Prosperity went public in 1998, we were a small community bank in rural Texas with less than $500 million in assets. For 27 years, we have remained disciplined and focused on the same strategy. Delivering shareholder value by prioritizing low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A," added Zalman.

"This morning's announcement that Prosperity is acquiring Stellar Bancorp is consistent with that strategy and this transaction marks an important milestone for the company. Our combined Houston bank deposit rank increases from number 9 to number 5, making us the largest Texas-based bank in the market and 2nd largest by bank deposits in the state," stated Zalman.

"Importantly, Stellar Bancorp is a well-run bank with similar credit discipline and an envious noninterest-bearing deposit mix. It has scarcity value, a quality balance sheet and earnings power. As a result, we view the transaction as a low-risk combination that significantly enhances our Texas footprint," concluded Zalman.

Results of Operations for the Three Months Ended December 31, 2025

Net income was $139.9 million(2) for the three months ended December 31, 2025, compared with $130.1 million(3) for the same period in 2024, an increase of $9.8 million or 7.6%. Net income per diluted common share was $1.49 for the three months ended December 31, 2025, compared with $1.37 for the same period in 2024, an increase of 8.8%. The changes were primarily due to an increase in net interest income and a decrease in Federal Deposit Insurance Corporation ("FDIC") special assessment, partially offset by an increase in provision for income taxes. On a linked quarter basis, net income was $139.9 million(2) for the three months ended December 31, 2025, compared with $137.6 million(4) for the three months ended September 30, 2025, an increase of $2.4 million or 1.7%. Net income per diluted common share was $1.49 for the three months ended December 31, 2025, compared with $1.45 for the three months ended September 30, 2025, an increase of 2.8%. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2025, were 1.49%, 7.30% and 13.61%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 43.66%(1) for the three months ended December 31, 2025.

Net interest income before provision for credit losses was $275.0 million for the three months ended December 31, 2025, compared with $267.8 million for the same period in 2024, an increase of $7.2 million or 2.7%. The net interest margin on a tax equivalent basis was 3.30% for the three months ended December 31, 2025, compared with 3.05% for the same period in 2024. The changes to both measures were primarily due to a decrease in the average balances and average rates on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average balances and average rates on loans and federal funds sold and other earning assets. Net interest income before provision for credit losses increased $1.5 million to $275.0 million for the three months ended December 31, 2025, compared with $273.4 million for the three months ended September 30, 2025. The net interest margin on a tax equivalent basis was 3.30% for the three months ended December 31, 2025, compared with 3.24% for the three months ended September 30, 2025. The changes to both measures were primarily due to a decrease in the average balances and average rates on other borrowings, partially offset by a decrease in the average balances and average rates on loans and federal funds sold and other earning assets.

Noninterest income was $42.8 million for the three months ended December 31, 2025, compared with $39.8 million for the same period in 2024, an increase of $2.9 million, primarily due to increases in other noninterest income and service charges on deposit accounts. Noninterest income was $42.8 million for the three months ended December 31, 2025, compared with $41.2 million for the three months ended September 30, 2025, an increase of $1.5 million.

Noninterest expense was $138.7 million for the three months ended December 31, 2025, compared with $141.5 million for the same period in 2024, a decrease of $2.8 million, primarily due to a reversal of the 2024 FDIC special assessment, partially offset by a change in the net loss on sale or write-down of other real estate and an excise tax expense due to stock repurchases. Noninterest expense was $138.7 million for the three months ended December 31, 2025, and $138.6 million for the three months ended September 30, 2025.

Results of Operations for the Year Ended December 31, 2025

For the year ended December 31, 2025, net income was $542.8 million(5) compared with $479.4 million(6) for the same period in 2024, an increase of $63.5 million or 13.2%. Net income per diluted common share was $5.72 for the year ended December 31, 2025, compared with $5.05 for the same period in 2024, an increase of 13.3%. The changes were primarily due to an increase in net interest income, lower merger related provision and expenses, and lower regulatory assessments and FDIC insurance, partially offset by a decrease in net gain on sale or write-up of securities. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2025, were 1.42%, 7.14% and 13.43%(1), respectively.

Net interest income before provision for credit losses for the year ended December 31, 2025, was $1.081 billion compared with $1.026 billion for the same period in 2024, an increase of $55.0 million or 5.4%. The net interest margin on a tax equivalent basis for the year ended December 31, 2025, was 3.22% compared with 2.93% for the same period in 2024. The changes to both measures were primarily due to a decrease in the average balances and average rates on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average balances and average rates on federal funds sold and other earning assets, a decrease in the average balances on investment securities, a decrease in the average rates on loans and a decrease in loan discount accretion of $5.1 million.

Noninterest income was $168.3 million for the year ended December 31, 2025, compared with $165.8 million for the same period in 2024, an increase of $2.5 million, primarily due to increases in other noninterest income and service charges on deposit accounts, partially offset by a decrease in net gain on sale or write-up of securities. 

Noninterest expense was $556.2 million for the year ended December 31, 2025, compared with $570.6 million for the same period in 2024, a decrease of $14.4 million, primarily due lower regulatory assessments and FDIC insurance, a reversal of the 2024 FDIC special assessment, a decrease in other noninterest expense and a decrease in merger related expenses.

Balance Sheet Information

Prosperity had $38.463 billion in total assets at December 31, 2025, compared with $38.330 billion at September 30, 2025, and $39.567 billion at December 31, 2024. The year-over-year decrease was primarily due to the reduction in borrowings by $1.250 billion from December 31, 2024 to December 31, 2025.

Loans were $21.805 billion at December 31, 2025, a decrease of $222.4 million from $22.028 billion at September 30, 2025. Loans decreased $343.8 million from $22.149 billion at December 31, 2024.

Loans, excluding Warehouse Purchase Program loans, were $20.501 billion at December 31, 2025, compared with $20.750 billion at September 30, 2025, a decrease of $249.0 million, and compared with $21.068 billion at December 31, 2024, a decrease of $567.7 million.

Deposits were $28.482 billion at December 31, 2025, an increase of $700.4 million from $27.782 billion at September 30, 2025. Deposits increased $101.1 million from $28.381 billion at December 31, 2024.

Asset Quality

Nonperforming assets totaled $150.8 million or 0.46% of quarterly average interest-earning assets at December 31, 2025, compared with $119.6 million or 0.36% of quarterly average interest-earning assets at September 30, 2025, and $81.5 million or 0.23% of quarterly average interest-earning assets at December 31, 2024.

The allowance for credit losses on loans and off-balance sheet credit exposures was $371.4 million at December 31, 2025, compared with $377.3 million at September 30, 2025, and $389.5 million at December 31, 2024. There was no provision for credit losses for the three months and year ended December 31, 2025, compared with no provision for credit losses for the three months ended December 31, 2024, and a $9.1 million provision for credit losses related to acquisitions for the year ended December 31, 2024.

The allowance for credit losses on loans was $333.7 million or 1.53% of total loans at December 31, 2025, compared with $339.6 million or 1.54% of total loans at September 30, 2025, and $351.8 million or 1.59% of total loans at December 31, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.63%(1) at December 31, 2025, compared with 1.64%(1) at September 30, 2025, and 1.67%(1) at December 31, 2024.

Net charge-offs were $5.9 million for the three months ended December 31, 2025, compared with net charge-offs of $6.5 million for the three months ended September 30, 2025, and net charge-offs of $2.6 million for the three months ended December 31, 2024. For the three months ended December 31, 2025, $3.9 million of reserves on resolved purchased credit deteriorated ("PCD") loans without any related charge-offs were released to the general reserve. 

Net charge-offs were $18.1 million for the year ended December 31, 2025, compared with net charge-offs of $14.6 million for the year ended December 31, 2024. For the year ended December 31, 2025, $18.9 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Dividend

Prosperity Bancshares declared a first quarter 2026 cash dividend of $0.60 per share to be paid on April 1, 2026, to all shareholders of record as of March 13, 2026.

Stock Repurchase Program

On January 26, 2026, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.87 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 26, 2027, at the discretion of management. Under its 2025 stock repurchase program, Prosperity Bancshares repurchased approximately 2.04 million shares of its common stock at an average weighted price of $67.10 per share during the three months ended December 31, 2025, and approximately 2.34 million shares of its common stock at an average weighted price of $67.04 per share during the year ended December 31, 2025.

Pending Acquisition of Stellar Bancorp, Inc.

On January 28, 2026, Prosperity Bancshares and Stellar Bancorp, Inc. ("Stellar") jointly announced the signing of a definitive merger agreement whereby Stellar, the parent company of Stellar Bank ("Stellar Bank") will merge with and into Prosperity Bancshares. Stellar Bank operates 52 banking offices in greater Houston and Beaumont, Texas and surrounding areas. As of December 31, 2025, Stellar, on a consolidated basis, reported total assets of $10.807 billion, total loans of $7.301 billion and total deposits of $9.021 billion.

Under the terms and subject to the conditions of the definitive agreement, Prosperity Bancshares will issue 0.3803 shares of Prosperity Bancshares common stock and $11.36 in cash for each outstanding share of Stellar common stock. Based on Prosperity Bancshares' closing price of $72.90 on January 27, 2026, the total consideration was valued at approximately $2.002 billion.

Pending Acquisition of Southwest Bancshares, Inc.

On October 1, 2025, Prosperity Bancshares and Southwest Bancshares, Inc. ("Southwest") jointly announced the signing of a definitive merger agreement (the "Prosperity/Southwest Merger Agreement") whereby Southwest, a Texas corporation and bank holding company of Texas Partners Bank ("Texas Partners"), will merge with and into Prosperity Bancshares and Texas Partners will merge with and into Prosperity Bank. Texas Partners operates 11 banking offices in Central Texas including its main office in San Antonio, and banking offices in the San Antonio area, Austin and the Hill Country. As of December 31, 2025, Southwest, on a consolidated basis, reported total assets of $2.426 billion, total loans of $1.941 billion and total deposits of $2.187 billion.

Under the terms and subject to the conditions of the Prosperity/Southwest Merger Agreement, Prosperity Bancshares will issue 4,062,520 shares of Prosperity Bancshares common stock for all outstanding shares of Southwest common stock and restricted stock awards, subject to certain potential adjustments. Southwest warrants and in-the-money Southwest stock options that are outstanding at the closing will be converted into cash payments based on the value of the merger consideration (less the applicable exercise price), as calculated pursuant to the terms of the Prosperity/Southwest Merger Agreement. Based on Prosperity Bancshares' closing price of $65.97 on September 29, 2025, the total consideration was valued at approximately $268.9 million. Prosperity has received all necessary regulatory approvals for the acquisition of Southwest, and the shareholders of Southwest approved the transaction on January 22, 2026. The transaction is expected to become effective on February 1, 2026, subject to customary closing conditions.

Acquisition of American Bank Holding Corporation

On January 1, 2026, Prosperity completed the acquisition of American and its wholly owned subsidiary American Bank, headquartered in Corpus Christi, Texas. American Bank operated 18 banking offices and 2 loan production offices in South and Central Texas including its main office in Corpus Christi, and banking offices in San Antonio, Austin, Victoria and the greater Corpus Christi area including Port Aransas and Rockport and a loan production office in Houston, Texas. As of December 31, 2025, American, on a consolidated basis, reported total assets of $2.506 billion, total loans of $1.907 billion and total deposits of $2.271 billion.

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,439,938 shares of Prosperity Bancshares common stock to the former shareholders and award holders of American in the first quarter of 2026.

Conference Call

Prosperity's management team will host a conference call on Wednesday, January 28, 2026, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's fourth quarter 2025 earnings and the Stellar acquisition announcement. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 0259843.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity's Investor Relations page by selecting "Presentations, Webcasts & Calls" from the menu and following the instructions.

Non-GAAP Financial Measures

Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on the sale or write-up of securities, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses, and FDIC special assessment. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity's business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Please refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Prosperity Bancshares, Inc. ®

As of December 31, 2025, Prosperity Bancshares, Inc.® is a $38.463 billionHouston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

Prosperity currently operates 301 full-service banking locations: 62 in the Houston area, including The Woodlands; 36 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 22 in the East Texas area; 28 in the Central Texas area including Austin and San Antonio; 45 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area and 18 in the Central, South Texas and San Antonio areas currently doing business as American Bank.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains, and the remarks by Prosperity's management on the conference call may contain, statements regarding the proposed transaction between Prosperity Bancshares, Inc. ("Prosperity") and Stellar Bancorp, Inc. ("Stellar"); future financial and operating results; benefits and synergies of the proposed transaction; future opportunities for Prosperity; the issuance of common stock of Prosperity contemplated by the Agreement and Plan of Merger by and between Prosperity and Stellar (the "Merger Agreement"); the expected filing by Prosperity with the Securities and Exchange Commission (the "SEC") of a registration statement on Form S-4 (the "Registration Statement") and a prospectus of Prosperity and a proxy statement of Stellar to be included therein (the "Proxy Statement/Prospectus"); the expected timing of the closing of the proposed transaction; the ability of the parties to complete the proposed transaction considering the various closing conditions and any other statements about future expectations that constitute forward-looking statements within the meaning of the federal securities laws, including the meaning of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "believe," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates, and projections about Prosperity, Stellar and their respective subsidiaries or related to the proposed transaction between Prosperity and Stellar and are subject to significant risks and uncertainties that could cause actual results to differ materially from the results expressed in such statements. 

These forward-looking statements may include information about Prosperity's and Stellar's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's and Stellar's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's and Stellar's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's and Stellar's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's and Stellar's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement.

These forward-looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity and Stellar currently believe to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of the control of Prosperity and Stellar, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs; and the effect, impact, potential duration or other implications of weather and climate-related events. Many possible events or factors could adversely affect the future financial results and performance of Prosperity, Stellar or the combined company and could cause those results or performance to differ materially from those expressed in or implied by the forward-looking statements. Such risks and uncertainties include, among others: (1) the risk that the cost savings and synergies from the proposed transaction may not be fully realized or may take longer than anticipated to be realized, (2) disruption to Prosperity's and Stellar's businesses as a result of the announcements and pendency of the proposed transaction, (3) the risk that the integration of Stellar's businesses and operations into Prosperity will be materially delayed or will be more costly or difficult than expected, or that Prosperity is otherwise unable to successfully integrate Stellar's business into its own, including as a result of unexpected factors or events, (4) the failure to obtain the necessary approval by the shareholders of Stellar, (5) the ability by Prosperity and/or Stellar to obtain required governmental approvals of the proposed transaction on the timeline expected, or at all, and the risk that such approvals may result in the imposition of conditions that could adversely affect Prosperity after the closing of the proposed transaction or adversely affect the expected benefits of the proposed transaction, (6) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the proposed transaction, (7) the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in closing the proposed transaction or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (8) the dilution caused by the issuances of additional shares of Prosperity's common stock in the proposed transaction, (9) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (10) the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against Prosperity before or after the proposed transaction, or against Stellar, (11) diversion of management's attention from ongoing business operations and (12) general competitive, economic, political and market conditions and other factors that may affect future results of Prosperity and Stellar. Prosperity and Stellar disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other risks, uncertainties, assumptions, and factors are discussed in the respective Annual Reports on Form 10-K for the year ended December 31, 2024, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed by Prosperity or Stellar and in other filings made by Prosperity and Stellar with the SEC from time to time.

Additional Information about the Transaction and Where to Find It

Prosperity intends to file with the SEC the Registration Statement on Form S-4 to register the shares of Prosperity common stock to be issued to the shareholders of Stellar in connection with the proposed transaction. The Registration Statement will include the Proxy Statement/Prospectus which will be sent to the shareholders of Stellar in connection with the proposed transaction.  This communication is not a substitute for the Registration Statement, the Proxy Statement/Prospectus or any other document that may be filed by Prosperity or Stellar with the SEC.  INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY/STATEMENT PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders will be able to obtain the Registration Statement and the Proxy Statement/Prospectus (when available) and other documents that are filed with the SEC by Prosperity or Stellar, as applicable, free of charge from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank.

Participants in the Solicitation

Prosperity, Stellar and certain of their directors and executive officers and other employees may be deemed to be participants in the solicitation of proxies from Stellar's shareholders in connection with the proposed transaction. Information about the directors and executive officers of Prosperity and their ownership of Prosperity common stock is contained in the definitive proxy statement for Prosperity's 2025 annual meeting of shareholders (the "Prosperity Annual Meeting Proxy Statement"), which was filed with the SEC on March 13, 2025, including under the headings "Item 1. Election of Directors," "Corporate Governance," "Executive Compensation and Other Matters," "Item 3. Advisory Vote on Executive Compensation," and "Beneficial Ownership of Common Stock by Management of the Company and Principal Shareholders." Information about the directors and executive officers of Stellar and their ownership of Stellar common stock is contained in the definitive proxy statement for Stellar's 2025 annual meeting of shareholders (the "Stellar Annual Meeting Proxy Statement"), which was filed with the SEC on April 10, 2025, including under the headings "Proposal 1: Election of Directors," "Certain Corporate Governance Matters," "Executive Compensation and Other Matters," "Executive Compensation Payments and Awards," "Proposal 4: Advisory Vote on the Compensation of the Company's Named Executive Officers ("Say-on-Pay Resolution")," and "Beneficial Ownership of the Company's Common Stock by Management and Principal Shareholders of the Company." Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of Stellar in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be included in the Proxy Statement/Prospectus relating to the proposed transaction when it is filed with the SEC. To the extent holdings of securities by potential participants (or the identity of such participants) have changed since the information printed in the Prosperity Annual Meeting Proxy Statement or the Stellar Annual Meeting Proxy Statement, such information has been or will be reflected on Statements of Change in Ownership on Forms 3 and 4 filed with the SEC, as applicable. Free copies of the Proxy Statement/Prospectus relating to the proposed transaction and free copies of the other SEC filings to which reference is made in this paragraph may be obtained from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law.



(1)

Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(2)

Includes purchase accounting adjustments of $2.7 million, net of tax, primarily comprised of loan discount accretion of $3.1 million for the three months ended December 31, 2025.

(3)

Includes purchase accounting adjustments of $3.3 million, net of tax, primarily comprised of loan discount accretion of $3.6 million for the three months ended December 31, 2024.

(4)

Includes purchase accounting adjustments of $3.4 million, net of tax, primarily comprised of loan discount accretion of $2.9 million for the three months ended September 30, 2025.

(5)

Includes purchase accounting adjustments of $12.1 million, net of tax, primarily comprised of loan discount accretion of $12.4 million for the year ended December 31, 2025.

(6)

Includes purchase accounting adjustments of $15.7 million, net of tax, primarily comprised of loan discount accretion of $17.5 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.5 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.2 million for the year ended December 31, 2024.

 

Bryan/College Station Area


North Carrolton


Bellaire


Timbergate


Sherwood Way

Bryan


Park Cities


Beltway


Water Street



Bryan-29th Street


Plano


Clear Lake




Wichita Falls

Bryan-East


Plano-West


Copperfield


Victoria


Cattlemans

Bryan-North


Preston Forest


Cypress


Victoria Main


Kell

Caldwell


Preston Parker


Downtown


Victoria-Navarro



College Station


Preston Royal


Eastex


Victoria-North


Other West Texas Area

Hearne


Red Oak


Fairfield


Victoria Salem


Locations

Huntsville


Richardson


First Colony




Big Spring

Madisonville


Richardson-West


Fry Road


Other South Texas Area


Big Spring - East

Navasota


Rosewood Court


Gessner


 Locations


Brownfield

New Waverly


The Colony


Gladebrook


Alice


Brownwood

Rock Prairie


Tollroad


Grand Parkway


Aransas Pass


Burkburnett

Southwest Parkway


Trinity Mills


Heights


Bay City


Byers

Tower Point


Turtle Creek


Highway 6 West


Beeville


Cisco

Wellborn Road


West 15th Plano


Little York


Colony Creek


Comanche



West Allen


Medical Center


Cuero


Early

Central Texas Area


Westmoreland


Memorial Drive


East Bernard


Floydada

Austin


Wylie


Northside


Edna


Gorman

Cedar Park




Pasadena


El Campo


Henrietta

Congress


Fort Worth


Pecan Grove


Flatonia


Levelland

Lakeway


Haltom City


Pin Oak


Goliad


Littlefield

Liberty Hill


Hulen


River Oaks


Gonzales


Merkel

Northland


Keller


Sugar Land


Hallettsville


Plainview

Oak Hill


Museum Place


SW Medical Center


Kingsville


Slaton

Research Blvd


Renaissance Square


Tanglewood


Mathis


Snyder

Westlake


Roanoke


The Plaza


Padre Island





Stockyards


Uptown


Palacios


Oklahoma

Other Central Texas Area




Waugh Drive


Port Lavaca


Central Oklahoma Area

Locations


Other Dallas/Fort Worth Area


Westheimer


Portland


Oklahoma City

Bastrop


Locations


West University


Rockport


23rd Street

Canyon Lake


Arlington


Woodcreek


Schulenburg


Expressway

Dime Box


Azle




Sinton


I-240

Dripping Springs


Ennis


Katy


Taft


Memorial

Elgin


Gainesville


Cinco Ranch


Weimar



Fredericksburg


Glen Rose


Katy-Spring Green


Yoakum


Other Central Oklahoma Area

Georgetown


Granbury




Yorktown


 Locations

Gruene


Grand Prairie


The Woodlands




Edmond

Horseshoe Bay


Jacksboro


The Woodlands-College Park


West Texas Area


Norman

Kingsland


Mesquite


The Woodlands-I-45


Abilene



La Grange


Muenster


The Woodlands-Research Forest


Antilley Road


Tulsa Area

Lexington


Runaway Bay




Barrow Street


Tulsa

Marble Falls


Sanger


Other Houston Area


Cypress Street


Garnett

New Braunfels


Waxahachie


Locations


Judge Ely


Harvard

Pleasanton


Weatherford


Angleton


Mockingbird


Memorial

Round Rock




Beaumont




Sheridan

San Antonio


East Texas Area


Cleveland


Amarillo


S. Harvard

Seguin


Athens


Dayton


Hillside


Utica Tower

Smithville


Blooming Grove


Galveston


Soncy


Yale

Thorndale


Canton


Groves







Carthage


Hempstead


Lubbock


Other Tulsa Area Locations

Dallas/Fort Worth Area


Corsicana


Hitchcock


4th Street


Owasso

Dallas


Crockett


Liberty


66th Street



14th Street Plano


Eustace


Magnolia


82nd Street


American Bank - Central Texas Area

Abrams Centre


Gilmer


Magnolia Parkway


86th Street


Austin Westlake

Addison


Grapeland


Mont Belvieu


110th Street


Concord

Allen


Gun Barrel City


Nederland


Avenue Q


Converse

Balch Springs


Jacksonville


Needville


Milwaukee


New Braunfels

Camp Wisdom


Kerens


Rosenberg


North University


San Antonio 281

Carrollton


Longview


Shadow Creek


Texas Tech Student Union


Downtown

Cedar Hill


Mount Vernon


Spring




East Central

Coppell


Palestine


Tomball


Midland


Universal City

East Plano


Rusk


Waller


North



Frisco


Seven Points


West Columbia


Wadley


American Bank - South Texas Area

Frisco Warren


Teague


Wharton


Wall Street


South

Frisco-West


Tyler-Beckham


Winnie


West


Padre Island

Garland


Tyler-South Broadway


Wirt




Shoreline

Grapevine


Tyler-University




Odessa


Port Aransas

Grapevine Main


Winnsboro


South Texas Area -


Grant


Alameda

Kiest




Corpus Christi


Kermit Highway


Bay

Lake Highlands


Houston Area


Calallen


Parkway


Saratoga

McKinney


Houston


Carmel




Rockport

McKinney Eldorado


Aldine


Northwest


San Angelo


Goliad

McKinney Redbud


Alief


Saratoga


College Hills


Victoria

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(In thousands)




Dec 31, 2025



Sep 30, 2025



Jun 30, 2025



Mar 31, 2025



Dec 31, 2024


Balance Sheet Data (at period end)
















Loans held for sale


$

14,155



$

11,297



$

6,004



$

9,764



$

10,690


Loans held for investment



20,486,415




20,738,294




20,903,944




20,909,913




21,057,616


Loans held for investment - Warehouse Purchase Program



1,304,798




1,278,178




1,287,440




1,057,893




1,080,903


Total loans



21,805,368




22,027,769




22,197,388




21,977,570




22,149,209


















Investment securities(A)



10,613,425




10,232,462




10,608,104




10,792,731




11,094,424


Federal funds sold



217




210




197




221




292


Allowance for credit losses on loans



(333,742)




(339,626)




(346,084)




(349,101)




(351,805)


Cash and due from banks



1,747,511




1,766,115




1,304,993




1,694,637




1,972,175


Goodwill



3,503,127




3,503,127




3,503,127




3,503,127




3,503,129


Core deposit intangibles, net



51,605




55,194




58,796




62,406




66,047


Other real estate owned



13,296




13,750




7,874




8,012




5,701


Fixed assets, net



383,449




378,776




374,602




373,273




371,238


Other assets



679,169




692,692




708,355




701,799




756,328


Total assets


$

38,463,425



$

38,330,469



$

38,417,352



$

38,764,675



$

39,566,738


















Noninterest-bearing deposits


$

9,467,911



$

9,522,028



$

9,426,657



$

9,675,915



$

9,798,438


Interest-bearing deposits



19,014,573




18,260,066




18,046,754




18,350,884




18,582,900


Total deposits



28,482,484




27,782,094




27,473,411




28,026,799




28,381,338


Other borrowings



1,950,000




2,400,000




2,900,000




2,700,000




3,200,000


Securities sold under repurchase agreements



201,216




185,797




183,572




216,086




221,913


Allowance for credit losses on off-balance sheet credit exposures



37,646




37,646




37,646




37,646




37,646


Other liabilities



175,939




259,994




222,987




267,083




287,346


Total liabilities



30,847,285




30,665,531




30,817,616




31,247,614




32,128,243


Shareholders' equity(B)



7,616,140




7,664,938




7,599,736




7,517,061




7,438,495


Total liabilities and equity


$

38,463,425



$

38,330,469



$

38,417,352



$

38,764,675



$

39,566,738




(A)

Includes ($375), ($1,987), ($1,657), ($1,374) and ($2,056) in unrealized losses on available for sale securities for the quarterly periods ended December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.

(B)

Includes ($296), ($1,570), ($1,309), ($1,085) and ($1,624) in after-tax unrealized losses on available for sale securities for the quarterly periods ended December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(In thousands)




Three Months Ended



Year-to-Date




Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024


Income Statement Data






















Interest income:






















Loans


$

321,516



$

329,445



$

325,490



$

319,023



$

333,055



$

1,295,474



$

1,313,162


Securities(C)



56,767




58,207




57,836




57,886




58,260




230,696




246,726


Federal funds sold and other earning assets



8,364




10,455




9,438




15,896




19,630




44,153




63,825


Total interest income



386,647




398,107




392,764




392,805




410,945




1,570,323




1,623,713
























Interest expense:






















Deposits



94,625




95,965




93,790




95,597




102,050




379,977




408,624


Other borrowings



16,028




27,613




30,101




30,492




39,620




104,234




181,640


Securities sold under repurchase agreements



1,041




1,094




1,151




1,334




1,501




4,620




6,954


Total interest expense



111,694




124,672




125,042




127,423




143,171




488,831




597,218


Net interest income



274,953




273,435




267,722




265,382




267,774




1,081,492




1,026,495


Provision for credit losses



—




—




—




—




—




—




9,066


Net interest income after provision for credit losses



274,953




273,435




267,722




265,382




267,774




1,081,492




1,017,429
























Noninterest income:






















Nonsufficient funds (NSF) fees



9,715




9,805




8,885




9,147




9,960




37,552




35,417


Credit card, debit card and ATM card income



9,462




9,446




9,761




8,739




9,443




37,408




37,308


Service charges on deposit accounts



7,618




7,317




7,645




7,408




6,992




29,988




26,498


Trust income



3,662




3,526




3,859




3,601




3,514




14,648




14,750


Mortgage income



954




931




965




1,009




779




3,859




3,096


Brokerage income



1,570




1,328




1,225




1,262




1,063




5,385




4,742


Bank owned life insurance income



2,117




2,111




1,985




2,115




2,020




8,328




7,980


Net gain (loss) on sale or write-down of assets



35




3




1,414




(235)




584




1,217




2,824


Net gain on sale or write-up of securities



—




—




—




—




—




—




11,245


Other noninterest income



7,647




6,771




7,243




8,255




5,482




29,916




21,949


Total noninterest income



42,780




41,238




42,982




41,301




39,837




168,301




165,809
























Noninterest expense:






















Salaries and benefits



88,384




87,949




87,296




89,476




88,631




353,105




352,353


Net occupancy and equipment



9,379




9,395




9,168




9,146




8,957




37,088




35,786


Credit and debit card, data processing and
software amortization



12,621




12,515




12,056




11,422




12,342




48,614




47,300


Regulatory assessments and FDIC insurance



1,600




5,198




5,508




5,789




5,789




18,095




27,370


Core deposit intangibles amortization



3,588




3,602




3,610




3,641




4,131




14,441




15,670


Depreciation



5,155




4,966




4,779




4,774




4,791




19,674




19,054


Communications



3,528




3,480




3,507




3,473




3,450




13,988




13,697


Other real estate expense



219




314




204




140




255




877




523


Net loss (gain) on sale or write-down of other
real estate



109




(81)




(222)




(30)




(610)




(224)




(814)


Merger related expenses



268




62




—




—




—




330




4,444


Other noninterest expense



13,861




11,235




12,659




12,470




13,809




50,225




55,190


Total noninterest expense



138,712




138,635




138,565




140,301




141,545




556,213




570,573


Income before income taxes



179,021




176,038




172,139




166,382




166,066




693,580




612,665


Provision for income taxes



39,114




38,482




36,984




36,157




35,990




150,737




133,279


Net income available to common shareholders


$

139,907



$

137,556



$

135,155



$

130,225



$

130,076



$

542,843



$

479,386




(C)

Interest income on securities was reduced by net premium amortization of $4,668, $2,877, $4,926, $5,027, and $5,609 for the three months ended December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively, and $17,498 and $22,836 for the year ended December 31, 2025, and 2024, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars and share amounts in thousands, except per share data and market prices)




Three Months Ended



Year-to-Date




Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024
























Profitability






















Net income (D) (E)


$

139,907



$

137,556



$

135,155



$

130,225



$

130,076



$

542,843



$

479,386
























Basic earnings per share


$

1.49



$

1.45



$

1.42



$

1.37



$

1.37



$

5.72



$

5.05


Diluted earnings per share


$

1.49



$

1.45



$

1.42



$

1.37



$

1.37



$

5.72



$

5.05
























Return on average assets (F)(J)



1.49

%



1.44

%



1.41

%



1.34

%



1.31

%



1.42

%



1.21

%

Return on average common equity (F)(J)



7.30

%



7.18

%



7.13

%



6.94

%



7.00

%



7.14

%



6.56

%

Return on average tangible common
equity (F) (G)(J)



13.61

%



13.43

%



13.44

%



13.23

%



13.50

%



13.43

%



12.73

%

Tax equivalent net interest margin (D) (E) (H)



3.30

%



3.24

%



3.18

%



3.14

%



3.05

%



3.22

%



2.93

%

Efficiency ratio (G) (I)(K)



43.66

%



44.06

%



44.80

%



45.71

%



46.10

%



44.55

%



48.43

%























Liquidity and Capital Ratios






















Equity to assets



19.80

%



20.00

%



19.78

%



19.39

%



18.80

%



19.80

%



18.80

%

Common equity tier 1 capital



17.55

%



17.53

%



17.10

%



16.92

%



16.42

%



17.55

%



16.42

%

Tier 1 risk-based capital



17.55

%



17.53

%



17.10

%



16.92

%



16.42

%



17.55

%



16.42

%

Total risk-based capital



18.80

%



18.78

%



18.35

%



18.17

%



17.67

%



18.80

%



17.67

%

Tier 1 leverage capital



11.93

%



11.90

%



11.62

%



11.20

%



10.82

%



11.93

%



10.82

%

Period end tangible equity to period end
tangible assets (G)



11.63

%



11.81

%



11.58

%



11.23

%



10.75

%



11.63

%



10.75

%























Other Data






















Weighted-average shares used in
computing earnings per common share






















Basic



94,044




95,093




95,277




95,266




95,264




94,917




95,000


Diluted



94,044




95,093




95,277




95,266




95,264




94,917




95,000


Period end shares outstanding



93,058




94,993




95,277




95,258




95,275




93,058




95,275


Cash dividends paid per common share


$

0.60



$

0.58



$

0.58



$

0.58



$

0.58



$

2.34



$

2.26


Book value per common share


$

81.84



$

80.69



$

79.76



$

78.91



$

78.07



$

81.84



$

78.07


Tangible book value per common share (G)


$

43.64



$

43.23



$

42.38



$

41.48



$

40.61



$

43.64



$

40.61
























Common Stock Market Price






















High


$

73.90



$

75.44



$

74.56



$

82.75



$

86.76



$

82.75



$

86.76


Low


$

61.07



$

64.27



$

61.57



$

68.96



$

68.94



$

61.07



$

57.16


Period end closing price


$

69.11



$

66.35



$

70.24



$

71.37



$

75.35



$

69.11



$

75.35


Employees – FTE (excluding overtime)



3,941




3,937




3,921




3,898




3,916




3,941




3,916


Number of banking centers



283




283




283




284




283




283




283




(D)

Includes purchase accounting adjustments for the periods presented as follows:




Three Months Ended


Year-to-Date


Dec 31,

2025


Sep 30,

2025


Jun 30,

2025


Mar 31,

2025


Dec 31,

2024


Dec 31,

2025


Dec 31,

2024

Loan discount accretion














Non-PCD

$2,926


$2,242


$2,486


$2,615


$2,761


$10,269


$12,486

PCD

$205


$613


$638


$677


$850


$2,133


$5,004

Securities net accretion

$342


$1,475


$409


$705


$528


$2,931


$2,208

Time deposits amortization

$(1)


$(1)


$(2)


$(9)


$(21)


$(13)


$(154)



(E)

Using effective tax rate of 21.8%, 21.9%, 21.5%, 21.7% and 21.7% for the three months ended December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025 and December 31, 2024, respectively, and 21.7% and 21.8% for the year ended December 31, 2025, and 2024, respectively.

(F) 

Interim periods annualized.

(G)

Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(H)

Net interest margin for all periods presented is based on average balances on an actual 365-day or 366-day basis.

(I) 

Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale, write-down or write-up of assets and securities. Additionally, taxes are not part of this calculation.

(J) 

For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K)

For calculations of the efficiency ratio excluding merger related expenses and FDIC special assessment refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)


YIELD ANALYSIS


Three Months Ended




Dec 31, 2025


Sep 30, 2025


Dec 31, 2024




Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(L)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(L)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(L)

Interest-earning assets:


























Loans held for sale


$

11,077



$

175



6.27 %


$

8,371



$

140



6.64 %


$

8,571



$

144



6.68 %


Loans held for investment



20,603,235




302,679



5.83 %



20,851,896




309,949



5.90 %



21,038,694




313,863



5.93 %


Loans held for investment -
Warehouse Purchase Program



1,258,036




18,662



5.89 %



1,217,579




19,356



6.31 %



1,137,113




19,048



6.66 %


Total loans



21,872,348




321,516



5.83 %



22,077,846




329,445



5.92 %



22,184,378




333,055



5.97 %


Investment securities



10,378,696




56,767



2.17 %

(M)


10,530,807




58,207



2.19 %

(M)


11,265,535




58,260



2.06 %

(M)

Federal funds sold and other
earning assets



830,926




8,364



3.99 %



934,318




10,455



4.44 %



1,628,050




19,630



4.80 %


Total interest-earning assets



33,081,970




386,647



4.64 %



33,542,971




398,107



4.71 %



35,077,963




410,945



4.66 %


Allowance for credit losses on
loans



(337,892)









(343,872)









(353,560)








Noninterest-earning assets



4,921,850









4,930,764









4,902,996








Total assets


$

37,665,928








$

38,129,863








$

39,627,399


































Interest-bearing liabilities:


























Interest-bearing demand deposits


$

4,812,342



$

9,088



0.75 %


$

4,656,452



$

8,951



0.76 %


$

4,845,174



$

8,535



0.70 %


Savings and money market
deposits



9,054,281




44,771



1.96 %



8,977,585




46,934



2.07 %



8,915,410




47,089



2.10 %


Certificates and other time
deposits



4,519,742




40,766



3.58 %



4,422,996




40,080



3.60 %



4,552,445




46,426



4.06 %


Other borrowings



1,595,652




16,028



3.99 %



2,480,435




27,613



4.42 %



3,332,609




39,620



4.73 %


Securities sold under repurchase
agreements



185,289




1,041



2.23 %



187,462




1,094



2.32 %



231,240




1,501



2.58 %


Total interest-bearing liabilities



20,167,306




111,694



2.20 %

(N)


20,724,930




124,672



2.39 %

(N)


21,876,878




143,171



2.60 %

(N)



























Noninterest-bearing liabilities:


























Noninterest-bearing demand
deposits



9,543,581









9,451,153









9,829,912








Allowance for credit losses on
off-balance sheet credit
exposures



37,646









37,646









37,646








Other liabilities



248,593









258,156









454,298








Total liabilities



29,997,126









30,471,885









32,198,734








Shareholders' equity



7,668,802









7,657,978









7,428,665








Total liabilities and
shareholders' equity


$

37,665,928








$

38,129,863








$

39,627,399


































Net interest income and margin





$

274,953



3.30 %





$

273,435



3.23 %





$

267,774



3.04 %


Non-GAAP to GAAP
reconciliation:


























Tax equivalent adjustment






514









807









767





Net interest income and margin
     (tax equivalent basis)





$

275,467



3.30 %





$

274,242



3.24 %





$

268,541



3.05 %




(L)

Annualized and based on an actual 365-day or 366-day basis.

(M)

Yield on securities was impacted by net premium amortization of $4,668, $2,877, and $5,609 for the three months ended December 31, 2025, September 30, 2025, and December 31, 2024, respectively.

(N)

Total cost of funds, including noninterest bearing deposits, was 1.49%, 1.64% and 1.80% for the three months ended December 31, 2025, September 30, 2025, and December 31, 2024, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)


YIELD ANALYSIS


Year-to-Date




Dec 31, 2025


Dec 31, 2024




Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(O)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(O)

Interest-earning assets:


















Loans held for sale


$

9,215



$

608



6.60 %


$

7,603



$

522



6.87 %


Loans held for investment



20,829,523




1,224,368



5.88 %



20,973,042




1,242,836



5.93 %


Loans held for investment - Warehouse Purchase
Program



1,134,031




70,498



6.22 %



973,206




69,804



7.17 %


Total loans



21,972,769




1,295,474



5.90 %



21,953,851




1,313,162



5.98 %


Investment securities



10,696,480




230,696



2.16 %

(P)


11,934,793




246,726



2.07 %

(P)

Federal funds sold and other earning assets



1,010,707




44,153



4.37 %



1,216,728




63,825



5.25 %


Total interest-earning assets



33,679,956




1,570,323



4.66 %



35,105,372




1,623,713



4.63 %


Allowance for credit losses on loans



(345,158)









(344,167)








Noninterest-earning assets



4,946,200









4,839,630








Total assets


$

38,280,998








$

39,600,835


























Interest-bearing liabilities:


















Interest-bearing demand deposits


$

4,873,634



$

35,917



0.74 %


$

4,900,189



$

35,342



0.72 %


Savings and money market deposits



8,996,090




183,146



2.04 %



8,949,010




194,317



2.17 %


Certificates and other time deposits



4,434,168




160,914



3.63 %



4,301,763




178,965



4.16 %


Other borrowings



2,389,589




104,234



4.36 %



3,802,910




181,640



4.78 %


Securities sold under repurchase agreements



196,205




4,620



2.35 %



257,171




6,954



2.70 %


Total interest-bearing liabilities



20,889,686




488,831



2.34 %

(Q)


22,211,043




597,218



2.69 %

(Q)



















Noninterest-bearing liabilities:


















Noninterest-bearing demand deposits



9,501,997









9,683,980








Allowance for credit losses on off-balance sheet credit
exposures



37,646









37,134








Other liabilities



246,359









363,607








Total liabilities



30,675,688









32,295,764








Shareholders' equity



7,605,310









7,305,071








Total liabilities and shareholders' equity


$

38,280,998








$

39,600,835


























Net interest income and margin





$

1,081,492



3.21 %





$

1,026,495



2.92 %


Non-GAAP to GAAP reconciliation:


















Tax equivalent adjustment






2,185









3,183





Net interest income and margin (tax equivalent basis)





$

1,083,677



3.22 %





$

1,029,678



2.93 %




(O)

Based on an actual 365-day or 366-day basis.

(P)

Yield on securities was impacted by net premium amortization of $17,498 and $22,836 for the year ended December 31, 2025, and 2024, respectively.

(Q)

Total cost of funds, including noninterest bearing deposits, was 1.61% and 1.87% for the year ended December 31, 2025, and 2024, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Dec 31, 2025



Sep 30, 2025



Jun 30, 2025



Mar 31, 2025



Dec 31, 2024


YIELD TREND (R)






























Interest-Earning Assets:















Loans held for sale


6.27

%



6.64

%



6.79

%



6.80

%



6.68

%

Loans held for investment


5.83

%



5.90

%



5.88

%



5.90

%



5.93

%

Loans held for investment - Warehouse
Purchase Program


5.89

%



6.31

%



6.34

%



6.40

%



6.66

%

Total loans


5.83

%



5.92

%



5.91

%



5.92

%



5.97

%

Investment securities (S)


2.17

%



2.19

%



2.13

%



2.13

%



2.06

%

Federal funds sold and other earning assets


3.99

%



4.44

%



4.50

%



4.47

%



4.80

%

Total interest-earning assets


4.64

%



4.71

%



4.66

%



4.64

%



4.66

%
















Interest-Bearing Liabilities:















Interest-bearing demand deposits


0.75

%



0.76

%



0.74

%



0.70

%



0.70

%

Savings and money market deposits


1.96

%



2.07

%



2.05

%



2.06

%



2.10

%

Certificates and other time deposits


3.58

%



3.60

%



3.59

%



3.75

%



4.06

%

Other borrowings


3.99

%



4.42

%



4.44

%



4.45

%



4.73

%

Securities sold under repurchase agreements


2.23

%



2.32

%



2.37

%



2.48

%



2.58

%

Total interest-bearing liabilities


2.20

%



2.39

%



2.38

%



2.39

%



2.60

%
















Net Interest Margin


3.30

%



3.23

%



3.18

%



3.14

%



3.04

%

Net Interest Margin (tax equivalent)


3.30

%



3.24

%



3.18

%



3.14

%



3.05

%



(R)

Annualized and based on average balances on an actual 365-day or 366-day basis.

(S)

Yield on securities was impacted by net premium amortization of $4,668, $2,877, $4,926, $5,027 and $5,609 for the three months ended December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)




Three Months Ended




Dec 31, 2025



Sep 30, 2025



Jun 30, 2025



Mar 31, 2025



Dec 31, 2024


Balance Sheet Averages
















Loans held for sale


$

11,077



$

8,371



$

9,813



$

7,570



$

8,571


Loans held for investment



20,603,235




20,851,896




20,907,400




20,959,226




21,038,694


Loans held for investment - Warehouse Purchase
Program



1,258,036




1,217,579




1,179,307




876,086




1,137,113


Total loans



21,872,348




22,077,846




22,096,520




21,842,882




22,184,378


















Investment securities



10,378,696




10,530,807




10,867,856




11,017,400




11,265,535


Federal funds sold and other earning assets



830,926




934,318




841,933




1,443,220




1,628,050


Total interest-earning assets



33,081,970




33,542,971




33,806,309




34,303,502




35,077,963


Allowance for credit losses on loans



(337,892)




(343,872)




(348,310)




(350,715)




(353,560)


Cash and due from banks



311,541




291,809




294,379




326,066




317,420


Goodwill



3,503,127




3,503,127




3,503,127




3,503,128




3,505,030


Core deposit intangibles, net



53,553




56,956




60,739




64,293




68,167


Other real estate



14,004




11,533




8,749




7,105




6,778


Fixed assets, net



380,254




377,680




374,486




374,448




373,561


Other assets



659,371




689,659




691,735




729,251




632,040


Total assets


$

37,665,928



$

38,129,863



$

38,391,214



$

38,957,078



$

39,627,399


















Noninterest-bearing deposits


$

9,543,581



$

9,451,153



$

9,508,845



$

9,504,540



$

9,829,912


Interest-bearing demand deposits



4,812,342




4,656,452




4,807,864




5,224,796




4,845,174


Savings and money market deposits



9,054,281




8,977,585




8,944,897




9,007,286




8,915,410


Certificates and other time deposits



4,519,742




4,422,996




4,366,510




4,426,521




4,552,445


Total deposits



27,929,946




27,508,186




27,628,116




28,163,143




28,142,941


Other borrowings



1,595,652




2,480,435




2,717,583




2,776,667




3,332,609


Securities sold under repurchase agreements



185,289




187,462




194,577




217,945




231,240


Allowance for credit losses on off-balance sheet
credit exposures



37,646




37,646




37,646




37,646




37,646


Other liabilities



248,593




258,156




227,002




255,876




454,298


Shareholders' equity



7,668,802




7,657,978




7,586,290




7,505,801




7,428,665


Total liabilities and equity


$

37,665,928



$

38,129,863



$

38,391,214



$

38,957,078



$

39,627,399


 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)




Dec 31, 2025



Sep 30, 2025



Jun 30, 2025



Mar 31, 2025



Dec 31, 2024


Period End Balances




















































Loan Portfolio


























Commercial and
industrial


$

1,864,337



8.6

%


$

1,879,282



8.5

%


$

1,897,117



8.6

%


$

1,915,124



8.7

%


$

1,962,111



8.8

%

Warehouse purchase
program



1,304,798



6.0

%



1,278,178



5.8

%



1,287,440



5.8

%



1,057,893



4.8

%



1,080,903



4.9

%

Construction, land
development and other
land loans



2,741,455



12.6

%



2,865,279



13.0

%



2,873,238



12.9

%



2,845,082



13.0

%



2,859,281



12.9

%

1-4 family residential



7,430,929



34.1

%



7,461,900



33.9

%



7,530,816



33.9

%



7,576,350



34.5

%



7,581,450



34.2

%

Home equity



843,708



3.8

%



848,740



3.9

%



869,370



3.9

%



896,529



4.1

%



906,139



4.1

%

Commercial real estate
(includes multi-family
residential)



5,776,397



26.5

%



5,796,937



26.3

%



5,827,645



26.3

%



5,783,410



26.3

%



5,800,985



26.2

%

Agriculture (includes
farmland)



1,027,904



4.7

%



1,019,589



4.6

%



1,029,250



4.6

%



1,013,960



4.6

%



1,033,546



4.7

%

Consumer and other



376,241



1.7

%



366,027



1.7

%



368,747



1.7

%



378,821



1.7

%



378,817



1.7

%

Energy



439,599



2.0

%



511,837



2.3

%



513,765



2.3

%



510,401



2.3

%



545,977



2.5

%

Total loans


$

21,805,368





$

22,027,769





$

22,197,388





$

21,977,570





$

22,149,209






























Deposit Types


























Noninterest-bearing
DDA


$

9,467,911



33.2

%


$

9,522,028



34.3

%


$

9,426,657



34.3

%


$

9,675,915



34.5

%


$

9,798,438



34.5

%

Interest-bearing DDA



5,365,795



18.8

%



4,766,146



17.2

%



4,708,251



17.1

%



4,931,769



17.6

%



5,182,035



18.3

%

Money market



6,538,213



23.0

%



6,402,591



23.0

%



6,302,770



23.0

%



6,339,509



22.6

%



6,229,022



21.9

%

Savings



2,592,873



9.1

%



2,616,196



9.4

%



2,667,859



9.7

%



2,703,736



9.7

%



2,685,496



9.5

%

Certificates and other
time deposits



4,517,692



15.9

%



4,475,133



16.1

%



4,367,874



15.9

%



4,375,870



15.6

%



4,486,347



15.8

%

Total deposits


$

28,482,484





$

27,782,094





$

27,473,411





$

28,026,799





$

28,381,338






























Loan to Deposit Ratio



76.6

%





79.3

%





80.8

%





78.4

%





78.0

%



 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)


Construction Loans


































Dec 31, 2025



Sep 30, 2025



Jun 30, 2025



Mar 31, 2025



Dec 31, 2024




























Single family residential
construction


$

613,288



22.4

%


$

665,194



23.2

%


$

696,569



24.2

%


$

727,417



25.6

%


$

778,067



27.2

%

Land development



252,650



9.2

%



248,616



8.7

%



227,254



7.9

%



225,784



7.9

%



260,158



9.1

%

Raw land



220,169



8.0

%



230,021



8.0

%



248,380



8.7

%



261,918



9.2

%



278,892



9.7

%

Residential lots



199,709



7.3

%



203,396



7.1

%



217,835



7.6

%



219,115



7.7

%



209,850



7.3

%

Commercial lots



59,683



2.2

%



59,853



2.1

%



55,176



1.9

%



56,343



2.0

%



59,044



2.1

%

Commercial construction and other



1,396,850



50.9

%



1,459,255



50.9

%



1,428,985



49.7

%



1,355,587



47.6

%



1,274,619



44.6

%

Net unaccreted discount



(894)






(1,056)






(961)






(1,082)






(1,349)




Total construction loans


$

2,741,455





$

2,865,279





$

2,873,238





$

2,845,082





$

2,859,281




 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2025



Houston



Dallas



Austin



OK City



Tulsa



Other (T)



Total



Collateral Type






















Shopping center/retail

$

235,413



$

232,707



$

56,771



$

15,277



$

10,103



$

324,838



$

875,109



Commercial and industrial
buildings


178,079




99,941




21,201




32,892




11,709




250,095




593,917



Office buildings


105,380




275,630




67,950




43,406




4,115




97,139




593,620



Medical buildings


105,572




16,583




1,626




42,405




26,358




64,697




257,241



Apartment buildings


163,772




125,836




115,077




10,914




12,734




213,785




642,118



Hotel


111,368




128,965




29,744




13,055




—




163,981




447,113



Other


175,802




63,257




83,831




5,568




6,767




77,319




412,544



Total

$

1,075,386



$

942,919



$

376,200



$

163,517



$

71,786



$

1,191,854



$

3,821,662


(U)

 

Acquired Loans



Non-PCD Loans



PCD Loans



Total Acquired Loans



Balance at
Acquisition
Date



Balance at
Sep 30,
2025



Balance at
Dec 31,
2025



Balance at
Acquisition
Date



Balance at
Sep 30,
2025



Balance at
Dec 31,
2025



Balance at
Acquisition
Date



Balance at
Sep 30,
2025



Balance at
Dec 31,
2025


Loan marks:



























Acquired banks (V)

$

388,625



$

20,406



$

17,479



$

332,400



$

5,472



$

5,267



$

721,025



$

25,878



$

22,746





























Acquired portfolio
loan balances:



























Acquired banks (V)


14,323,981




1,609,115




1,498,731




1,376,673




350,644




300,010




15,700,654


 (W)


1,959,759




1,798,741





























Acquired portfolio
loan balances less
loan marks

$

13,935,356



$

1,588,709



$

1,481,252



$

1,044,273



$

345,172



$

294,743



$

14,979,629



$

1,933,881



$

1,775,995




(T)

Includes other MSA and non-MSA regions.

(U)

Represents a portion of total commercial real estate loans of $5.776 billion as of December 31, 2025.

(V)

Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank, LegacyTexas Bank, FirstCapital Bank and Lone Star Bank.

(W)

Actual principal balances acquired.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Year-to-Date



Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024


Asset Quality





















Nonaccrual loans

$

137,217



$

105,529



$

102,031



$

73,287



$

73,647



$

137,217



$

73,647


Accruing loans 90 or more days past due


317




268




576




91




2,189




317




2,189


Total nonperforming loans


137,534




105,797




102,607




73,378




75,836




137,534




75,836


Repossessed assets


12




16




6




29




4




12




4


Other real estate


13,296




13,750




7,874




8,012




5,701




13,296




5,701


Total nonperforming assets

$

150,842



$

119,563



$

110,487



$

81,419



$

81,541



$

150,842



$

81,541























Nonperforming assets:





















Commercial and industrial (includes energy)

$

57,237



$

27,880



$

27,680



$

8,966



$

10,080



$

57,237



$

10,080


Construction, land development and other
land loans


2,183




583




1,859




1,952




4,481




2,183




4,481


1-4 family residential (includes home
equity)


60,296




57,241




50,501




42,481




44,824




60,296




44,824


Commercial real estate (includes multi-
family residential)


9,215




11,471




12,865




12,257




18,861




9,215




18,861


Agriculture (includes farmland)


16,713




17,080




17,547




15,725




3,208




16,713




3,208


Consumer and other


5,198




5,308




35




38




87




5,198




87


Total

$

150,842



$

119,563



$

110,487



$

81,419



$

81,541



$

150,842



$

81,541


Number of loans/properties


449




424




392




363




368




449




368


Allowance for credit losses on loans

$

333,742



$

339,626



$

346,084



$

349,101



$

351,805



$

333,742



$

351,805























Net charge-offs (recoveries):





















Commercial and industrial (includes
energy)

$

5,388



$

3,341



$

1,044



$

330



$

405



$

10,103



$

6,774


Construction, land development and other
land loans


(154)




34




(3)




(156)




294




(279)




779


1-4 family residential (includes home
equity)


175




853




342




1,051




180




2,421




1,471


Commercial real estate (includes multi-
family residential)


(665)




1,015




55




178




362




583




222


Agriculture (includes farmland)


(5)




(40)




(14)




—




5




(59)




126


Consumer and other


1,145




1,255




1,593




1,301




1,346




5,294




5,186


Total

$

5,884



$

6,458



$

3,017



$

2,704



$

2,592



$

18,063



$

14,558























Asset Quality Ratios





















Nonperforming assets to average interest-
earning assets


0.46

%



0.36

%



0.33

%



0.24

%



0.23

%



0.45

%



0.23

%

Nonperforming assets to loans and other real
estate


0.69

%



0.54

%



0.50

%



0.37

%



0.37

%



0.69

%



0.37

%

Net charge-offs to average loans (annualized)


0.11

%



0.12

%



0.05

%



0.05

%



0.05

%



0.08

%



0.07

%

Allowance for credit losses on loans to total
loans


1.53

%



1.54

%



1.56

%



1.59

%



1.59

%



1.53

%



1.59

%

Allowance for credit losses on loans to total
loans, excluding Warehouse Purchase Program
loans (G)


1.63

%



1.64

%



1.66

%



1.67

%



1.67

%



1.63

%



1.67

%

 

Prosperity Bancshares, Inc.®
 Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands, except per share data)

NOTES TO SELECTED FINANCIAL DATA

Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses and FDIC special assessment. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

 

Three Months Ended



Year-to-Date




Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024


Reconciliation of diluted earnings per share to
diluted earnings per share excluding merger
related provision for credit losses, net of tax,
merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or
write-up of securities, net of tax:






















Diluted earnings per share (unadjusted)


$

1.49



$

1.45



$

1.42



$

1.37



$

1.37



$

5.72



$

5.05
























Net income


$

139,907



$

137,556



$

135,155



$

130,225



$

130,076



$

542,843



$

479,386


Merger related provision for credit losses, net of
tax(X)



—




—




—




—




—




—




7,162


Merger related expenses, net of tax(X)



212




49




—




—




—




261




3,511


FDIC special assessment, net of tax(X)



(2,807)




—




—




—




—




(2,807)




2,807


Net gain on sale or write-up of securities, net of
tax(X)



—




—




—




—




—




—




(8,884)


Net income excluding merger related provision for
credit losses, net of tax, merger related expenses, net
of tax, FDIC special assessment, net of tax, and net
gain on sale or write-up of securities, net of tax(X):


$

137,312



$

137,605



$

135,155



$

130,225



$

130,076



$

540,297



$

483,982
























Weighted average diluted shares outstanding



94,044




95,093




95,277




95,266




95,264




94,917




95,000


Merger related provision for credit losses, net of tax,
per diluted common share(X)


$

—



$

—



$

—



$

—



$

—



$

—



$

0.08


Merger related expenses, net of tax, per diluted
common share(X)


$

—



$

—



$

—



$

—



$

—



$

—



$

0.04


FDIC special assessment, net of tax, per diluted
common share(X)


$

(0.03)



$

—



$

—



$

—



$

—



$

(0.03)



$

0.03


Net gain on sale or write-up of securities, net of tax,
per diluted common
share(X)


$

—



$

—



$

—



$

—



$

—



$

—



$

(0.09)


Diluted earnings per share excluding merger related
provision for credit losses, net of tax, merger related
expenses, net of tax, FDIC special assessment, net
of tax, and net gain on sale or write-up of securities,
net of tax:(X)


$

1.46



$

1.45



$

1.42



$

1.37



$

1.37



$

5.69



$

5.11
























Reconciliation of return on average assets to
return on average assets excluding merger
related provision for credit losses, net of tax,
merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or
write-up of securities, net of tax:






















Return on average assets (unadjusted)



1.49

%



1.44

%



1.41

%



1.34

%



1.31

%



1.42

%



1.21

%























Net income excluding merger related provision for
credit losses, net of tax, merger related expenses, net
of tax, FDIC special assessment, net of tax, and net
gain on sale or write-up of securities, net of tax(X):


$

137,312



$

137,605



$

135,155



$

130,225



$

130,076



$

540,297



$

483,982


Average total assets


$

37,665,928



$

38,129,863



$

38,391,214



$

38,957,078



$

39,627,399



$

38,280,998



$

39,600,835


Return on average assets excluding merger related
provision for credit losses, net of tax, merger related
expenses, net of tax, FDIC special assessment, net
of tax, and net gain on sale or write-up of securities,
net of tax (F) (X)



1.46

%



1.44

%



1.41

%



1.34

%



1.31

%



1.41

%



1.22

%






























(X)

Calculated assuming a federal tax rate of 21.0%.







































Three Months Ended



Year-to-Date





Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024



Reconciliation of return on average common
equity to return on average common equity
excluding merger related provision for credit
losses, net of tax, merger related expenses, net of
tax, FDIC special assessment, net of tax, and net
gain on sale or write-up of securities, net of tax:























Return on average common equity (unadjusted)



7.30

%



7.18

%



7.13

%



6.94

%



7.00

%



7.14

%



6.56

%

























Net income excluding merger related provision for
credit losses, net of tax, merger related expenses, net
of tax, FDIC special assessment, net of tax, and net
gain on sale or write-up of securities, net of tax(X):


$

137,312



$

137,605



$

135,155



$

130,225



$

130,076



$

540,297



$

483,982



Average shareholders' equity


$

7,668,802



$

7,657,978



$

7,586,290



$

7,505,801



$

7,428,665



$

7,605,310



$

7,305,071



Return on average common equity excluding merger
related provision for credit losses, net of tax, merger
related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-
up of securities, net of tax (F) (X)



7.16

%



7.19

%



7.13

%



6.94

%



7.00

%



7.10

%



6.63

%

























Reconciliation of return on average common
equity to return on average tangible common
equity:























Net income


$

139,907



$

137,556



$

135,155



$

130,225



$

130,076



$

542,843



$

479,386



Average shareholders' equity


$

7,668,802



$

7,657,978



$

7,586,290



$

7,505,801



$

7,428,665



$

7,605,310



$

7,305,071



Less: Average goodwill and other intangible assets



(3,556,680)




(3,560,083)




(3,563,866)




(3,567,421)




(3,573,197)




(3,561,978)




(3,537,930)



Average tangible shareholders' equity


$

4,112,122



$

4,097,895



$

4,022,424



$

3,938,380



$

3,855,468



$

4,043,332



$

3,767,141



Return on average tangible common equity (F)



13.61

%



13.43

%



13.44

%



13.23

%



13.50

%



13.43

%



12.73

%

























Reconciliation of return on average common
equity to return on average tangible common
equity excluding merger related provision for
credit losses, net of tax, merger related expenses,
net of tax, and FDIC special assessment, net of
tax:























Net income excluding merger related provision for
credit losses, net of tax, merger related expenses, net
of tax, FDIC special assessment, net of tax, and net
gain on sale or write-up of securities, net of tax(X):


$

137,312



$

137,605



$

135,155



$

130,225



$

130,076



$

540,297



$

483,982



Average shareholders' equity


$

7,668,802



$

7,657,978



$

7,586,290



$

7,505,801



$

7,428,665



$

7,605,310



$

7,305,071



Less: Average goodwill and other intangible assets



(3,556,680)




(3,560,083)




(3,563,866)




(3,567,421)




(3,573,197)




(3,561,978)




(3,537,930)



Average tangible shareholders' equity


$

4,112,122



$

4,097,895



$

4,022,424



$

3,938,380



$

3,855,468



$

4,043,332



$

3,767,141



Return on average tangible common equity
excluding merger related provision for credit losses,
net of tax, merger related expenses, net of tax, FDIC
special assessment, net of tax, and net gain on sale
or write-up of securities, net of tax (F) (X)



13.36

%



13.43

%



13.44

%



13.23

%



13.50

%



13.36

%



12.85

%

























Reconciliation of book value per share to tangible
book value per share:























Shareholders' equity


$

7,616,140



$

7,664,938



$

7,599,736



$

7,517,061



$

7,438,495



$

7,616,140



$

7,438,495



Less: Goodwill and other intangible assets



(3,554,732)




(3,558,321)




(3,561,923)




(3,565,533)




(3,569,176)




(3,554,732)




(3,569,176)



Tangible shareholders' equity


$

4,061,408



$

4,106,617



$

4,037,813



$

3,951,528



$

3,869,319



$

4,061,408



$

3,869,319


























Period end shares outstanding



93,058




94,993




95,277




95,258




95,275




93,058




95,275



Tangible book value per share


$

43.64



$

43.23



$

42.38



$

41.48



$

40.61



$

43.64



$

40.61



















Three Months Ended



Year-to-Date




Dec 31,
2025



Sep 30,
2025



Jun 30,
2025



Mar 31,
2025



Dec 31,
2024



Dec 31,
2025



Dec 31,
2024


Reconciliation of equity to assets ratio to period
end tangible equity to period end tangible assets
ratio:






















Tangible shareholders' equity


$

4,061,408



$

4,106,617



$

4,037,813



$

3,951,528



$

3,869,319



$

4,061,408



$

3,869,319


Total assets


$

38,463,425



$

38,330,469



$

38,417,352



$

38,764,675



$

39,566,738



$

38,463,425



$

39,566,738


Less: Goodwill and other intangible assets



(3,554,732)




(3,558,321)




(3,561,923)




(3,565,533)




(3,569,176)




(3,554,732)




(3,569,176)


Tangible assets


$

34,908,693



$

34,772,148



$

34,855,429



$

35,199,142



$

35,997,562



$

34,908,693



$

35,997,562


Period end tangible equity to period end tangible
assets ratio



11.63

%



11.81

%



11.58

%



11.23

%



10.75

%



11.63

%



10.75

%























Reconciliation of allowance for credit losses to
total loans to allowance for credit losses on loans
to total loans excluding Warehouse Purchase
Program:






















Allowance for credit losses on loans


$

333,742



$

339,626



$

346,084



$

349,101



$

351,805



$

333,742



$

351,805


Total loans


$

21,805,368



$

22,027,769



$

22,197,388



$

21,977,570



$

22,149,209



$

21,805,368



$

22,149,209


Less: Warehouse Purchase Program loans



(1,304,798)




(1,278,178)




(1,287,440)




(1,057,893)




(1,080,903)




(1,304,798)




(1,080,903)


Total loans less Warehouse Purchase Program


$

20,500,570



$

20,749,591



$

20,909,948



$

20,919,677



$

21,068,306



$

20,500,570



$

21,068,306


Allowance for credit losses on loans to total loans
excluding Warehouse Purchase Program



1.63

%



1.64

%



1.66

%



1.67

%



1.67

%



1.63

%



1.67

%























Reconciliation of efficiency ratio to efficiency
ratio excluding net gains and losses on the sale,
write-down  or write-up of assets and securities:






















Noninterest expense


$

138,712



$

138,635



$

138,565



$

140,301



$

141,545



$

556,213



$

570,573
























Net interest income


$

274,953



$

273,435



$

267,722



$

265,382



$

267,774



$

1,081,492



$

1,026,495


Noninterest income



42,780




41,238




42,982




41,301




39,837




168,301




165,809


Less: net gain (loss) on sale or write-down of
assets



35




3




1,414




(235)




584




1,217




2,824


Less: net gain on sale or write-up of securities



—




—




—




—




—




—




11,245


Noninterest income excluding net gains and losses
on the sale, write-down or write-up of assets and
securities



42,745




41,235




41,568




41,536




39,253




167,084




151,740


Total income excluding net gains and losses on
the sale, write-down or write-up of assets and
securities


$

317,698



$

314,670



$

309,290



$

306,918



$

307,027



$

1,248,576



$

1,178,235


Efficiency ratio, excluding net gains and losses on
the sale, write-down or write-up of assets and
securities



43.66

%



44.06

%



44.80

%



45.71

%



46.10

%



44.55

%



48.43

%























Reconciliation of efficiency ratio to efficiency
ratio, excluding net gains and losses on the sale,
write-down or write-up of assets and securities,
merger related expenses and FDIC special
assessment:






















Noninterest expense


$

138,712



$

138,635



$

138,565



$

140,301



$

141,545



$

556,213



$

570,573


Less: merger related expenses



268




62




—




—




—




330




4,444


Less: FDIC special assessment



(3,554)




—




—




—




—




(3,554)




3,554


Noninterest expense excluding merger related
expenses and FDIC special assessment


$

141,998



$

138,573



$

138,565



$

140,301



$

141,545



$

559,437



$

562,575
























Net interest income


$

274,953



$

273,435



$

267,722



$

265,382



$

267,774



$

1,081,492



$

1,026,495


Noninterest income



42,780




41,238




42,982




41,301




39,837




168,301




165,809


Less: net gain (loss) on sale or write down of
assets



35




3




1,414




(235)




584




1,217




2,824


Less: net gain on sale or write-up of securities



—




—




—




—




—




—




11,245


Noninterest income excluding net gains and losses
on the sale, write-down or write-up of assets and
securities



42,745




41,235




41,568




41,536




39,253




167,084




151,740


Total income excluding net gains and losses on
the sale, write-down or write-up of assets and
securities


$

317,698



$

314,670



$

309,290



$

306,918



$

307,027



$

1,248,576



$

1,178,235


Efficiency ratio, excluding net gains and losses on
the sale, write-down or write-up of assets and
securities, merger related expenses and FDIC 
special assessment



44.70

%



44.04

%



44.80

%



45.71

%



46.10

%



44.81

%



47.75

%

 

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SOURCE Prosperity Bancshares, Inc.