PROSPERITY BANCSHARES, INC.® REPORTS SECOND QUARTER 2024 EARNINGS

• Completed the merger of Lone Star State Bancshares, Inc. on April 1, 2024
• Net income of $111.6 million and diluted earnings per share of $1.17 for second quarter 2024
• Net income of $116.6 million⁽¹⁾ and diluted earnings per share of $1.22⁽¹⁾, excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales and FDIC special assessment
• Net interest margin increased 15 basis points to 2.94% during second quarter 2024
• Loans increased $1.06 billion or 5.0% during second quarter 2024
• Loans, excluding Warehouse Purchase Program loans, increased $839.1 million or 4.1% during second quarter 2024
• Deposits increased $757.6 million or 2.8% during second quarter 2024
• Noninterest-bearing deposits of $9.7 billion, representing 34.7% of total deposits
• Allowance for credit losses on loans and on off-balance sheet credit exposure of $397.5 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.69%⁽¹⁾
• Nonperforming assets remain low at 0.25% of second quarter average interest-earning assets
• Repurchased 671 thousand shares of common stock during second quarter 2024, and 1.2 million shares during 2024

HOUSTON, July 24, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE: PB), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of $111.6 million for the quarter ended June 30, 2024 compared with $86.9 million for the same period in 2023. Net income per diluted common share was $1.17 for the quarter ended June 30, 2024 compared with $0.94 for the same period in 2023. On April 1, 2024, Lone Star State Bancshares, Inc. ("Lone Star") merged with Prosperity Bancshares and Lone Star State Bank of West Texas ("Lone Star Bank") merged with Prosperity Bank (collectively, the "LSSB Merger"). During the second quarter 2024, Prosperity incurred a merger related provision for credit losses of $9.1 million, or $0.07⁽¹⁾ per diluted common share, merger related expenses of $4.4 million, or $0.04⁽¹⁾ per diluted common share, and a Federal Deposit Insurance Corporation ("FDIC") special assessment of $3.6 million, or $0.03⁽¹⁾ per diluted common share, partially offset by a net gain of $10.7 million, or $0.09⁽¹⁾ per diluted common share as a result of the exchange and conversion of Visa Class B-1 stock and the sale of investment securities. Excluding these charges and the net gain, earnings per diluted common share was $1.22⁽¹⁾ for the second quarter of 2024. Additionally, loans, excluding Warehouse Purchase Program loans, increased $839.1 million or 4.1% during the second quarter of 2024, primarily due to the Merger.

The annualized return on second quarter average assets was 1.12%; and the annualized return on second quarter average assets excluding merger related provision and expenses, net of tax, gain on Visa Class B-1 stock exchange net of investment securities sales, net of tax, and FDIC special assessment, net of tax, was 1.17%⁽¹⁾. Nonperforming assets remain low at 0.25% of second quarter average interest-earning assets.

"We want to welcome the customers and associates from Lone Star State Bank of West Texas and are excited about our partnership. As previously announced, on April 1, 2024, Prosperity completed the merger of Lone Star State Bancshares, Inc. and its wholly owned subsidiary, Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 banking offices in the West Texas area," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We are also pleased to report that our net interest income before provision for credit losses was $258.8 million for the three months ended June 30, 2024, compared with $238.2 million for the three months ended March 31, 2024, an increase of $20.5 million or 8.6%.  In addition, our net interest margin on a tax equivalent basis was 2.94% for the three months ended June 30, 2024, compared with 2.79% for the three months ended March 31, 2024, and 2.73% for the same period in 2023. As mentioned on prior calls, these are the results we expected, and we anticipate these tailwinds to continue to be positive for the near future," added Zalman.

"We are optimistic about the future and confident in our ability to create meaningful long-term value for our shareholders.  Over the last twelve months, we have returned $284.6 million to shareholders - $74.8 million through share repurchases and $209.8 million through cash dividends," stated Zalman.

"Texas continues to shine as more people and companies move to the state because of the business-friendly political structure and no state income tax," continued Zalman.

"Prosperity continues to focus on building core customer relationships, maintaining sound asset quality and operating the bank in an efficient manner, while investing in ever-changing technology and product distribution channels.  Thank you to all of our customers, shareholders and associates who make this possible," concluded Zalman.

Results of Operations for the Three Months Ended June 30, 2024

For the three months ended June 30, 2024, net income was $111.6 million⁽²⁾ or $1.17 per diluted common share compared with $110.4 million⁽³⁾ or $1.18 per diluted common share for the three months ended March 31, 2024. Net income and net income per diluted common share for the second quarter of 2024 was impacted by an increase in net interest income and a gain on Visa Class B-1 stock exchange net of investment securities sales of $10.7 million, partially offset by a merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, a FDIC special assessment of $3.6 million and an increase in noninterest expenses related to three months of Lone Star Bank operations. For the three months ended June 30, 2024, net income was $111.6 million⁽²⁾ or $1.17 per diluted common share compared with $86.9 million⁽⁴⁾ or $0.94 per diluted common share for the same period in 2023.  Annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2024 were 1.12%, 6.10% and 11.81%⁽¹⁾, respectively.

Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $116.6 million⁽¹⁾ or $1.22⁽¹⁾ per diluted common share for the three months ended June 30, 2024, and annualized returns on average assets, average common equity and average tangible common equity were 1.17%⁽¹⁾, 6.37%⁽¹⁾ and 12.34%⁽¹⁾, respectively, for the same period. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 51.82%⁽¹⁾ for the three months ended June 30, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 49.13%⁽¹⁾.

Net interest income before provision for credit losses was $258.8 million for the three months ended June 30, 2024 compared with $238.2 million for the three months ended March 31, 2024, an increase of $20.5 million or 8.6%.  Net interest income before provision for credit losses increased $22.3 million or 9.4% to $258.8 million for the three months ended June 30, 2024 compared with $236.5 million for the same period in 2023. The change for both periods was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets, an increase in loan discount accretion, and a decrease in the average balances on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

The net interest margin on a tax equivalent basis was 2.94% for the three months ended June 30, 2024 compared with 2.79% for the three months ended March 31, 2024 and 2.73% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets, an increase in loan discount accretion, and a decrease in the average balances on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. The increases in the average balances on loans and deposits were primarily due to the LSSB Merger.

Noninterest income was $46.0 million for the three months ended June 30, 2024 compared with $38.9 million for the three months ended March 31, 2024, an increase of $7.1 million or 18.4%.  Noninterest income was $46.0 million for the three months ended June 30, 2024 compared $39.7 million for the same period in 2023, an increase of $6.3 million or 15.9%. The increase for both periods was primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales, partially offset by the change in the net (loss) gain on sale or write-down of assets and a decrease in other noninterest income.

Noninterest expense was $152.8 million for the three months ended June 30, 2024 compared with $135.8 million for the three months ended March 31, 2024, an increase of $17.0 million or 12.5%, primarily due to a FDIC special assessment of $3.6 million, an increase in merger related expenses, an increase in salaries and benefits and an increase in additional expenses related to three months of Lone Star Bank operations. Noninterest expense was $152.8 million for the three months ended June 30, 2024 compared with $145.9 million for the same period in 2023, an increase of $7.0 million or 4.8%, primarily due to a FDIC special assessment of $3.6 million, an increase in salaries and benefits and an increase in additional expenses related to three months of Lone Star Bank operations, partially offset by a decrease in merger expenses.

Results of Operations for the Six Months Ended June 30, 2024

For the six months ended June 30, 2024, net income was $222.0 million⁽⁵⁾ or $2.34 per diluted common share compared with $211.6 million⁽⁶⁾ or $2.30 per diluted common share for the same period in 2023. Net income and net income per diluted common share for the six months ended June 30, 2024 was impacted by an increase in net interest income, a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.0 million, lower merger related provision for credit losses and a decrease in merger related expenses, partially offset by a FDIC special assessment of $3.6 million and an increase in noninterest expenses related to three months of Lone Star Bank operations. Returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2024 were 1.13%, 6.15% and 11.93%⁽¹⁾, respectively.

Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $226.8 million⁽¹⁾ or $2.39⁽¹⁾ per diluted common share for the six months ended June 30, 2024 and annualized returns on average assets, average common equity and average tangible common equity for the same period were 1.15%⁽¹⁾, 6.28%⁽¹⁾ and 12.19%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write-down of assets and securities) was 50.49%⁽¹⁾ for the six months ended June 30, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 49.10%⁽¹⁾.

Net interest income before provision for credit losses for the six months ended June 30, 2024 was $497.0 million compared with $479.9 million for the same period in 2023, an increase of $17.1 million or 3.6%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and an increase in loan discount accretion, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

The net interest margin on a tax equivalent basis for the six months ended June 30, 2024 was 2.87% compared with 2.83% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans and an increase in the average balances on federal funds sold and other earning assets and an increase in loan discount accretion, partially offset by an increase in the average balances and rates on interest-bearing deposits. The increases in the average balances on loans and deposits were primarily due to the LSSB Merger.

Noninterest income was $84.9 million for the six months ended June 30, 2024 compared with $78.0 million for the same period in 2023, an increase of $6.9 million or 8.9%, primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales and an increase in trust income, partially offset by the change in the net (loss) gain on sale or write-down of assets and a decrease in other noninterest income.

Noninterest expense was $288.7 million for the six months ended June 30, 2024 compared with $268.9 million for the same period in 2023, an increase of $19.8 million or 7.4%, primarily due to a FDIC special assessment of $3.6 million, an increase in salaries and benefits and an increase in additional expenses related to three months of Lone Star Bank operations, partially offset by a decrease in merger expenses.

Balance Sheet Information

At June 30, 2024, Prosperity had $39.762 billion in total assets, a decrease of $142.8 million or 0.4%, compared with $39.905 billion at June 30, 2023. Linked quarter total assets increased by $1.006 billion or 2.6% compared with $38.757 billion at March 31, 2024, primarily due to the LSSB Merger. 

Loans were $22.321 billion at June 30, 2024, an increase of $666.9 million or 3.1%, compared with $21.654 billion at June 30, 2023. Linked quarter loans increased $1.056 billion or 5.0% from $21.265 billion at March 31, 2024. Loans increased primarily due to the LSSB Merger. Loans, excluding Warehouse Purchase Program loans, were $21.239 billion at June 30, 2024 compared with $20.505 billion at June 30, 2023, an increase of $734.3 million or 3.6%, and compared with $20.400 billion at March 31, 2024, an increase of $839.1 million or 4.1%.

Deposits were $27.933 billion at June 30, 2024, an increase of $552.2 million or 2.0%, compared with $27.381 billion at June 30, 2023. Linked quarter deposits increased $757.6 million or 2.8% from $27.176 billion at March 31, 2024. The increases were primarily due to the LSSB Merger.

The table below provides detail on the impact of loans acquired and deposits assumed in the FirstCapital Bank and Lone Star Bank mergers completed on May 1, 2023 and April 1, 2024, respectively:

Balance Sheet Data (at period end)
(In thousands)
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Loans acquired (including new production since acquisition date):
FirstCapital Bank		$	1,209,936			$	1,302,582			$	1,376,356			$	1,494,378			$	1,590,137
Lone Star Bank			1,084,559				—				—				—				—
Prosperity Bank
Warehouse Purchase Program loans			1,081,403				864,924				822,245				912,327				1,148,883
All other loans			18,944,917				19,097,741				18,981,937				19,026,008				18,914,926
Total loans		$	22,320,815			$	21,265,247			$	21,180,538			$	21,432,713			$	21,653,946
Deposits assumed (including new deposits since acquisition date):
FirstCapital Bank		$	1,317,130			$	1,449,166			$	1,517,217			$	1,625,691			$	1,481,831
Lone Star Bank			1,187,821				—				—				—				—
All other deposits			25,428,135				25,726,352				25,662,592				25,687,109				25,899,055
Total deposits		$	27,933,086			$	27,175,518			$	27,179,809			$	27,312,800			$	27,380,886

 

As reflected in the table above, loan and deposit growth was impacted by the FirstCapital Bank and Lone Star Bank mergers.

Excluding loans acquired in these acquisitions and new production at the acquired banking centers since the respective acquisition dates, loans at June 30, 2024 decreased $37.5 million compared with June 30, 2023 and increased $63.7 million compared with March 31, 2024. Excluding loans acquired in these acquisitions and new production at the acquired banking centers since the respective acquisition dates and Warehouse Purchase Program loans, loans at June 30, 2024 increased $30.0 million compared with June 30, 2023 and decreased $152.8 million compared with March 31, 2024.

Excluding deposits assumed in these acquisitions and new deposits generated at the acquired banking centers since the respective acquisition dates, deposits at June 30, 2024 decreased by $470.9 million or 1.8% compared with June 30, 2023 and decreased by $298.2 million or 1.2% compared with March 31, 2024.

Asset Quality

Nonperforming assets totaled $89.6 million or 0.25% of quarterly average interest-earning assets at June 30, 2024 compared with $83.8 million or 0.24% of quarterly average interest-earning assets at March 31, 2024 and $62.7 million or 0.18% of quarterly average interest-earning assets at June 30, 2023, with a significant portion of the balance for each period attributable to acquired loans.

The allowance for credit losses on loans and off-balance sheet credit exposures was $397.5 million at June 30, 2024 compared with $381.7 million at June 30, 2023 and $366.7 million at March 31, 2024. The provision for credit losses was $9.1 million for the six months ended June 30, 2024 compared with an $18.5 million provision for credit losses for the six months ended June 30, 2023 and no provision for credit losses for the three months ended March 31, 2024 and 2023. As a result of the loans acquired in the LSSB Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures. 

The allowance for credit losses on loans was $359.9 million or 1.61% of total loans at June 30, 2024 compared with $345.2 million or 1.59% of total loans at June 30, 2023 and $330.2 million or 1.55% of total loans at March 31, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.69%⁽¹⁾ at June 30, 2024 compared with 1.68%⁽¹⁾ at June 30, 2023 and 1.62%⁽¹⁾ at March 31, 2024.

Net charge-offs were $4.4 million for the three months ended June 30, 2024 compared with net charge-offs of $2.1 million for the three months ended March 31, 2024 and net charge-offs of $16.1 million for the three months ended June 30, 2023. Net charge-offs for the second quarter of 2024 included $878 thousand related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the LSSB Merger. Further, $4.8 million of reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Net charge-offs were $6.5 million for the six months ended June 30, 2024 compared with $15.5 million for the six months ended June 30, 2023. Net charge-offs for the six months ended June 30, 2024 included $1.9 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the LSSB Merger. Further, $8.9 million of reserves on resolved PCD loans was released to the general reserve.

Visa Class B-1 Stock Exchange

During the second quarter 2024, Prosperity tendered all of its shares of Visa, Inc. ("Visa") Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock, pursuant to the terms and subject to the conditions of the public offering of Visa to exchange its Class B-1 common stock for a combination of shares of its Class B-2 common stock and Class C common stock, which expired on May 3, 2024. Prosperity recorded an unrealized gain of $20.6 million during the second quarter 2024 based on the conversion privilege of the Class C common stock and the closing price of Visa Class A common stock.  In the exchange, Prosperity received 48,492 shares of Class B-2 stock, recorded at zero cost basis, and 19,245 shares of Class C common stock and subsequently sold 6,415 shares of Class C stock.  Prosperity intends to sell all remaining shares of Class C stock as permitted by the exchange agreement.

Dividend

Prosperity Bancshares declared a third quarter 2024 cash dividend of $0.56 per share to be paid on October 1, 2024, to all shareholders of record as of September 13, 2024.

Stock Repurchase Program

On January 16, 2024, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.7 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 16, 2025, at the discretion of management. Under its 2024 stock repurchase program, Prosperity Bancshares repurchased approximately 671 thousand shares of its common stock at an average weighted price of $58.86 per share during the three months ended June 30, 2024 and approximately 1.2 million shares of its common stock at an average weighted price of $60.35 per share during the six months ended June 30, 2024.

Merger of Lone Star State Bancshares, Inc.

On April 1, 2024, Prosperity completed the merger of Lone Star and its wholly owned subsidiary Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 full-service banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas.

Pursuant to the terms of the definitive agreement, Prosperity issued 2,376,182 shares of Prosperity common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star in the second quarter of 2024. This resulted in goodwill of $107.7 million as of June 30, 2024, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $17.7 million of core deposit intangibles as of June 30, 2024.

Merger of First Bancshares of Texas, Inc.

On May 1, 2023, Prosperity completed the merger (the "FB Merger") of First Bancshares and its wholly owned subsidiary FirstCapital Bank of Texas, N.A. ("FirstCapital Bank"), headquartered in Midland, Texas. FirstCapital Bank operated 16 full-service banking offices in six different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas.

Pursuant to the terms of the definitive agreement, Prosperity issued 3,583,370 shares of Prosperity common stock plus approximately $91.5 million in cash for all outstanding shares of First Bancshares. This resulted in goodwill of $164.8 million as of June 30, 2024, which was subject to all final subsequent fair value adjustments. During the second quarter of 2023, Prosperity completed the operational conversion of FirstCapital Bank.

Conference Call

Prosperity's management team will host a conference call on Wednesday, July 24, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's second quarter 2024 earnings. 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 8564977.

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 June 30, 2024, Prosperity Bancshares, Inc.^® is a $39.762 billion Houston, 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 288 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 44 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; 8 in the Tulsa, Oklahoma area and 5 in the West Texas area currently doing business as Lone Star Bank.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, 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 Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for credit losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for credit losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of any proposed transactions, 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 currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of Prosperity's control, 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); the possibility that the anticipated benefits of an acquisition transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; 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; and the effect, impact, potential duration or other implications of weather and climate-related events. Prosperity disclaims 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 factors are discussed in Prosperity's Annual Report on Form 10-K for the year ended December 31, 2023, and other reports and statements Prosperity has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

(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 $6.1 million, net of tax, primarily comprised of loan discount accretion of $7.2 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $10.7 million for the three months ended June 30, 2024.
(3)	Includes purchase accounting adjustments of $2.4 million, net of tax, primarily comprised of loan discount accretion of $2.4 million, merger related provision for credit losses of $18.5 million and merger related expenses of $12.9 million for the three months ended June 30, 2023.
(4)	Includes purchase accounting adjustments of $2.0 million, net of tax, primarily comprised of loan discount accretion of $1.9 million for the three months ended March 31, 2024.
(5)	Includes purchase accounting adjustments of $8.1 million, net of tax, primarily comprised of loan discount accretion of $9.1 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.0 million for the six months ended June 30, 2024.
(6)	Includes purchase accounting adjustments of $3.1 million, net of tax, primarily comprised of loan discount accretion of $3.3 million, merger related provision for credit losses of $18.5 million and merger related expenses of $13.8 million for the six months ended June 30, 2023.

 

Bryan/College Station Area		Grapevine Main		Tyler-South Broadway		Tomball		West
Bryan		Kiest		Tyler-University		Waller
Bryan-29th Street		Lake Highlands		Winnsboro		West Columbia		Odessa
Bryan-East		McKinney				Wharton		Grandview
Bryan-North		McKinney Eldorado		Houston Area		Winnie		Grant
Caldwell		McKinney Redbud		Houston		Wirt		Kermit Highway
College Station		North Carrolton		Aldine				Parkway
Hearne		Park Cities		Alief		South Texas Area -
Huntsville		Plano		Bellaire		Corpus Christi		Wichita Falls
Madisonville		Plano-West		Beltway		Calallen		Cattlemans
Navasota		Preston Forest		Clear Lake		Carmel		Kell
New Waverly		Preston Parker		Copperfield		Northwest
Rock Prairie		Preston Royal		Cypress		Saratoga		Other West Texas Area
Southwest Parkway		Red Oak		Downtown		Timbergate		Locations
Tower Point		Richardson		Eastex		Water Street		Big Spring
Wellborn Road		Richardson-West		Fairfield				Brownfield
		Rosewood Court		First Colony		Victoria		Brownwood
Central Texas Area		The Colony		Fry Road		Victoria Main		Burkburnett
Austin		Tollroad		Gessner		Victoria-Navarro		Byers
Cedar Park		Trinity Mills		Gladebrook		Victoria-North		Cisco
Congress		Turtle Creek		Grand Parkway		Victoria Salem		Comanche
Lakeway		West 15th Plano		Heights				Early
Liberty Hill		West Allen		Highway 6 West		Other South Texas Area		Floydada
Northland		Westmoreland		Little York		Locations		Gorman
Oak Hill		Wylie		Medical Center		Alice		Henrietta
Research Blvd				Memorial Drive		Aransas Pass		Levelland
Westlake		Fort Worth		Northside		Beeville		Littlefield
		Haltom City		Pasadena		Colony Creek		Merkel
Other Central Texas Area		Hulen		Pecan Grove		Cuero		Plainview
Locations		Keller		Pin Oak		Edna		San Angelo
Bastrop		Museum Place		River Oaks		Goliad		Slaton
Canyon Lake		Renaissance Square		Sugar Land		Gonzales		Snyder
Dime Box		Roanoke		SW Medical Center		Hallettsville
Dripping Springs		Stockyards		Tanglewood		Kingsville		Lone Star West Texas Area
Elgin				The Plaza		Mathis		Big Spring
Flatonia		Other Dallas/Fort Worth Area		Uptown		Padre Island		Brownfield
Fredericksburg		Locations		Waugh Drive		Palacios		Lubbock
Georgetown		Arlington		Westheimer		Port Lavaca		Midland
Gruene		Azle		West University		Portland		Odessa
Horseshoe Bay		Ennis		Woodcreek		Rockport
Kingsland		Gainesville				Sinton		Oklahoma
La Grange		Glen Rose		Katy		Taft		Central Oklahoma Area
Lexington		Granbury		Cinco Ranch		Yoakum		Oklahoma City
Marble Falls		Grand Prairie		Katy-Spring Green		Yorktown		23rd Street
New Braunfels		Jacksboro						Expressway
Pleasanton		Mesquite		The Woodlands		West Texas Area		I-240
Round Rock		Muenster		The Woodlands-College Park		Abilene		Memorial
San Antonio		Runaway Bay		The Woodlands-I-45		Antilley Road
Schulenburg		Sanger		The Woodlands-Research Forest		Barrow Street		Other Central Oklahoma Area
Seguin		Waxahachie				Cypress Street		Locations
Smithville		Weatherford		Other Houston Area		Judge Ely		Edmond
Thorndale				Locations		Mockingbird		Norman
Weimar		East Texas Area		Angleton
		Athens		Bay City		Amarillo		Tulsa Area
Dallas/Fort Worth Area		Blooming Grove		Beaumont		Hillside		Tulsa
Dallas		Canton		Cleveland		Soncy		Garnett
14th Street Plano		Carthage		East Bernard				Harvard
Abrams Centre		Corsicana		El Campo		Lubbock		Memorial
Addison		Crockett		Dayton		4th Street		Sheridan
Allen		Eustace		Galveston		66th Street		S. Harvard
Balch Springs		Gilmer		Groves		82nd Street		Utica Tower
Camp Wisdom		Grapeland		Hempstead		86th Street		Yale
Carrollton		Gun Barrel City		Hitchcock		98th Street
Cedar Hill		Jacksonville		Liberty		Avenue Q		Other Tulsa Area Locations
Coppell		Kerens		Magnolia		Milwaukee		Owasso
East Plano		Longview		Magnolia Parkway		North University
Euless		Mount Vernon		Mont Belvieu		Texas Tech Student Union
Frisco		Palestine		Nederland
Frisco Warren		Rusk		Needville		Midland
Frisco-West		Seven Points		Rosenberg		North
Garland		Teague		Shadow Creek		Wadley
Grapevine		Tyler-Beckham		Spring		Wall Street

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023
Balance Sheet Data (at period end)
Loans held for sale		$	9,951			$	6,380			$	5,734			$	10,187			$	10,656
Loans held for investment			21,229,461				20,393,943				20,352,559				20,510,199				20,494,407
Loans held for investment - Warehouse Purchase Program			1,081,403				864,924				822,245				912,327				1,148,883
Total loans			22,320,815				21,265,247				21,180,538				21,432,713				21,653,946
Investment securities(A)			11,702,139				12,301,138				12,803,896				13,192,742				13,667,319
Federal funds sold			234				250				260				234				181
Allowance for credit losses on loans			(359,852)				(330,219)				(332,362)				(351,495)				(345,209)
Cash and due from banks			1,507,604				1,086,444				458,153				512,239				396,848
Goodwill			3,504,107				3,396,402				3,396,086				3,396,459				3,383,698
Core deposit intangibles, net			74,324				60,757				63,994				67,553				71,128
Other real estate owned			4,960				2,204				1,708				9,320				3,107
Fixed assets, net			377,394				372,333				369,992				370,237				365,299
Other assets			630,569				601,964				605,612				665,682				708,814
Total assets		$	39,762,294			$	38,756,520			$	38,547,877			$	39,295,684			$	39,905,131
Noninterest-bearing deposits		$	9,706,505			$	9,526,535			$	9,776,572			$	10,281,893			$	10,364,921
Interest-bearing deposits			18,226,581				17,648,983				17,403,237				17,030,907				17,015,965
Total deposits			27,933,086				27,175,518				27,179,809				27,312,800				27,380,886
Other borrowings			3,900,000				3,900,000				3,725,000				4,250,000				4,800,000
Securities sold under repurchase agreements			233,689				261,671				309,277				300,714				434,160
Subordinated debentures			—				—				—				—				3,093
Allowance for credit losses on off-balance sheet credit exposures			37,646				36,503				36,503				36,503				36,503
Other liabilities			374,429				278,284				217,958				362,990				282,373
Total liabilities			32,478,850				31,651,976				31,468,547				32,263,007				32,937,015
Shareholders' equity(B)			7,283,444				7,104,544				7,079,330				7,032,677				6,968,116
Total liabilities and equity		$	39,762,294			$	38,756,520			$	38,547,877			$	39,295,684			$	39,905,131

(A)	Includes $(2,007), $(2,954), $(1,770), $(2,442) and $(3,393) in unrealized losses on available for sale securities for the quarterly periods ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively.
(B)	Includes $(1,586), $(2,333), $(1,398), $(1,930) and $(2,681) in after-tax unrealized losses on available for sale securities for the quarterly periods ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Three Months Ended																				Year-to-Date
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
Income Statement Data
Interest income:
Loans		$	336,428			$	306,228			$	306,562			$	308,678			$	286,638			$	642,656			$	533,756
Securities(C)			62,428				66,421				68,077				69,987				72,053				128,849				145,238
Federal funds sold and other earning assets			14,095				9,265				1,793				1,689				1,757				23,360				8,763
Total interest income			412,951				381,914				376,432				380,354				360,448				794,865				687,757
Interest expense:
Deposits			106,124				92,692				84,969				76,069				63,964				198,816				111,307
Other borrowings			46,282				48,946				52,386				62,190				57,351				95,228				91,747
Securities sold under repurchase agreements			1,759				2,032				2,094				2,533				2,674				3,791				4,777
Subordinated debentures			—				—				—				38				—				—				—
Total interest expense			154,165				143,670				139,449				140,830				123,989				297,835				207,831
Net interest income			258,786				238,244				236,983				239,524				236,459				497,030				479,926
Provision for credit losses			9,066				—				—				—				18,540				9,066				18,540
Net interest income after provision for credit losses			249,720				238,244				236,983				239,524				217,919				487,964				461,386
Noninterest income:
Nonsufficient funds (NSF) fees			8,153				8,288				8,365				8,719				8,512				16,441				16,607
Credit card, debit card and ATM card income			9,384				8,861				9,314				9,285				9,206				18,245				17,872
Service charges on deposit accounts			6,436				6,406				6,316				6,262				6,078				12,842				12,004
Trust income			3,601				4,156				3,360				3,326				3,358				7,757				6,583
Mortgage income			745				610				542				857				661				1,355				899
Brokerage income			1,186				1,235				1,059				1,067				1,000				2,421				2,149
Bank owned life insurance income			1,885				2,047				1,882				1,864				1,553				3,932				2,907
Net (loss) gain on sale or write-down of assets			(903)				(35)				(84)				(45)				1,994				(938)				2,115
Net gain on sale or write-up of securities			10,723				298				—				—				—				11,021				—
Other noninterest income			4,793				7,004				5,814				7,408				7,326				11,797				16,818
Total noninterest income			46,003				38,870				36,568				38,743				39,688				84,873				77,954
Noninterest expense:
Salaries and benefits			89,584				85,771				80,486				85,423				84,723				175,355				162,521
Net occupancy and equipment			8,915				8,623				9,093				9,464				8,935				17,538				16,960
Credit and debit card, data processing and software amortization			11,998				10,975				10,741				10,919				10,344				22,973				19,910
Regulatory assessments and FDIC insurance			10,317				5,538				24,940				5,155				5,097				15,855				10,070
Core deposit intangibles amortization			4,156				3,237				3,559				3,576				3,167				7,393				5,541
Depreciation			4,836				4,686				4,607				4,585				4,658				9,522				9,091
Communications			3,485				3,402				3,572				3,686				3,693				6,887				7,155
Other real estate expense			69				187				165				153				(464)				256				(406)
Net (gain) loss on sale or write-down of other real estate			31				(138)				34				(734)				(33)				(107)				(46)
Merger related expenses			4,381				—				278				1,104				12,891				4,381				13,751
Other noninterest expense			15,070				13,567				14,696				12,326				12,859				28,637				24,323
Total noninterest expense			152,842				135,848				152,171				135,657				145,870				288,690				268,870
Income before income taxes			142,881				141,266				121,380				142,610				111,737				284,147				270,470
Provision for income taxes			31,279				30,840				25,904				30,402				24,799				62,119				58,838
Net income available to common shareholders		$	111,602			$	110,426			$	95,476			$	112,208			$	86,938			$	222,028			$	211,632

(C)	Interest income on securities was reduced by net premium amortization of $5,831, $5,822, $6,428, $6,897 and $7,131 for the three months ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively and $11,653 and $14,515 for the six months ended June 30, 2024 and 2023, 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
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
Profitability
Net income (D) (E)		$	111,602			$	110,426			$	95,476			$	112,208			$	86,938			$	222,028			$	211,632
Basic earnings per share		$	1.17			$	1.18			$	1.02			$	1.20			$	0.94			$	2.34			$	2.30
Diluted earnings per share		$	1.17			$	1.18			$	1.02			$	1.20			$	0.94			$	2.34			$	2.30
Return on average assets (F)(J)			1.12	%			1.13	%			0.98	%			1.13	%			0.89	%			1.13	%			1.09	%
Return on average common equity (F)(J)			6.10	%			6.20	%			5.39	%			6.39	%			5.01	%			6.15	%			6.18	%
Return on average tangible common equity (F) (G)(J)			11.81	%			12.06	%			10.54	%			12.58	%			9.67	%			11.93	%			11.97	%
Tax equivalent net interest margin (D) (E) (H)			2.94	%			2.79	%			2.75	%			2.72	%			2.73	%			2.87	%			2.83	%
Efficiency ratio (G) (I)(K)			51.82	%			49.07	%			55.61	%			48.74	%			53.21	%			50.49	%			48.38	%
Liquidity and Capital Ratios
Equity to assets			18.32	%			18.33	%			18.37	%			17.90	%			17.46	%			18.32	%			17.46	%
Common equity tier 1 capital			15.42	%			15.75	%			15.54	%			14.98	%			14.49	%			15.42	%			14.48	%
Tier 1 risk-based capital			15.42	%			15.75	%			15.54	%			14.98	%			14.49	%			15.42	%			14.48	%
Total risk-based capital			16.67	%			17.00	%			16.56	%			16.05	%			15.52	%			16.67	%			15.51	%
Tier 1 leverage capital			10.29	%			10.37	%			10.39	%			10.03	%			9.96	%			10.29	%			9.96	%
Period end tangible equity to period end tangible assets (G)			10.24	%			10.33	%			10.31	%			9.96	%			9.64	%			10.24	%			9.64	%
Other Data
Weighted-average shares used in computing earnings per common share
Basic			95,765				93,706				93,715				93,720				92,930				94,735				92,073
Diluted			95,765				93,706				93,715				93,720				92,930				94,735				92,073
Period end shares outstanding			95,262				93,525				93,722				93,717				93,721				95,262				93,721
Cash dividends paid per common share		$	0.56			$	0.56			$	0.56			$	0.55			$	0.55			$	1.12			$	1.10
Book value per common share		$	76.46			$	75.96			$	75.54			$	75.04			$	74.35			$	76.46			$	74.35
Tangible book value per common share (G)		$	38.89			$	39.00			$	38.62			$	38.08			$	37.49			$	38.89			$	37.49
Common Stock Market Price
High		$	66.18			$	68.88			$	68.79			$	63.65			$	63.13			$	68.88			$	78.76
Low		$	57.16			$	60.08			$	49.60			$	52.62			$	55.12			$	57.16			$	55.12
Period end closing price		$	61.14			$	65.78			$	67.73			$	54.58			$	56.48			$	61.14			$	56.48
Employees – FTE (excluding overtime)			3,902				3,901				3,850				3,853				3,710				3,902				3,710
Number of banking centers			288				283				285				285				286				288				286

(D)	Includes purchase accounting adjustments for the periods presented as follows:

	Three Months Ended										Year-to-Date
	Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2023		Jun 30, 2024		Jun 30, 2023
Loan discount accretion
Non-PCD	$4,797		$1,312		$1,543		$1,508		$1,242		$6,109		$1,774
PCD	$2,394		$548		$937		$767		$1,178		$2,942		$1,517
Securities net accretion	$564		$561		$598		$626		$426		$1,125		$424
Time deposits amortization	$4		$(97)		$(150)		$(210)		$(187)		$(93)		$(240)

(E)	Using effective tax rate of 21.9%, 21.8%, 21.3%, 21.3% and 22.2% for the three months ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively, and 21.9% and 21.8% for the six months ended June 30, 2024 and 2023, 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 366-day or 365-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
		Jun 30, 2024												Mar 31, 2024												Jun 30, 2023
		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		$	8,446			$	149			7.10 %				$	5,467			$	92			6.77 %				$	3,910			$	67			6.87 %
Loans held for investment			21,328,824				319,361			6.02 %					20,415,316				292,673			5.77 %					19,802,751				270,688			5.48 %
Loans held for investment - Warehouse Purchase Program			917,026				16,918			7.42 %					720,650				13,463			7.51 %					898,768				15,883			7.09 %
Total loans			22,254,296				336,428			6.08 %					21,141,433				306,228			5.83 %					20,705,429				286,638			5.55 %
Investment securities			12,179,074				62,428			2.06 %			(M)		12,693,268				66,421			2.10 %			(M)		13,976,818				72,053			2.07 %			(M)
Federal funds sold and other earning assets			1,026,251				14,095			5.52 %					672,840				9,265			5.54 %					150,300				1,757			4.69 %
Total interest-earning assets			35,459,621				412,951			4.68 %					34,507,541				381,914			4.45 %					34,832,547				360,448			4.15 %
Allowance for credit losses on loans			(332,904)												(331,708)												(283,594)
Noninterest-earning assets			4,822,131												4,759,697												4,738,673
Total assets		$	39,948,848											$	38,935,530											$	39,287,626
Interest-bearing liabilities:
Interest-bearing demand deposits		$	4,839,194			$	9,133			0.76 %				$	5,143,585			$	8,423			0.66 %				$	5,147,453			$	3,791			0.30 %
Savings and money market deposits			9,084,051				50,252			2.22 %					8,889,077				47,152			2.13 %					9,156,047				43,025			1.88 %
Certificates and other time deposits			4,400,922				46,739			4.27 %					3,683,815				37,117			4.05 %					2,652,064				17,148			2.59 %
Other borrowings			3,900,000				46,282			4.77 %					4,083,132				48,946			4.82 %					4,427,914				57,351			5.20 %
Securities sold under repurchase agreements			258,637				1,759			2.74 %					296,437				2,032			2.76 %					441,303				2,674			2.43 %
Subordinated debentures			—				—				—				—				—				—				1,547				—				—
Total interest-bearing liabilities			22,482,804				154,165			2.76 %			(N)		22,096,046				143,670			2.62 %			(N)		21,826,328				123,989			2.28 %			(N)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			9,780,211												9,443,249												10,274,819
Allowance for credit losses on off-balance sheet credit exposures			36,729												36,503												30,022
Other liabilities			327,847												238,480												220,775
Total liabilities			32,627,591												31,814,278												32,351,944
Shareholders' equity			7,321,257												7,121,252												6,935,682
Total liabilities and shareholders' equity		$	39,948,848											$	38,935,530											$	39,287,626
Net interest income and margin						$	258,786			2.94 %								$	238,244			2.78 %								$	236,459			2.72 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							800												808												854
Net interest income and margin      (tax equivalent basis)						$	259,586			2.94 %								$	239,052			2.79 %								$	237,313			2.73 %

(L)	Annualized and based on an actual 366-day or 365-day basis.
(M)	Yield on securities was impacted by net premium amortization of $5,831, $5,822 and $7,131 for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
(N)	Total cost of funds, including noninterest bearing deposits, was 1.92%, 1.83% and 1.55% for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
YIELD ANALYSIS		Year-to-Date
		Jun 30, 2024												Jun 30, 2023
		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		$	6,957			$	241			6.97 %				$	3,131			$	105			6.76 %
Loans held for investment			20,872,069				612,034			5.90 %					19,064,334				507,294			5.37 %
Loans held for investment - Warehouse Purchase Program			818,838				30,381			7.46 %					759,071				26,357			7.00 %
Total loans			21,697,864				642,656			5.96 %					19,826,536				533,756			5.43 %
Investment securities			12,436,171				128,849			2.08 %			(P)		14,153,681				145,238			2.07 %			(P)
Federal funds sold and other earning assets			849,546				23,360			5.53 %					373,931				8,763			4.73 %
Total interest-earning assets			34,983,581				794,865			4.57 %					34,354,148				687,757			4.04 %
Allowance for credit losses on loans			(332,306)												(282,959)
Noninterest-earning assets			4,790,888												4,667,547
Total assets		$	39,442,163											$	38,738,736
Interest-bearing liabilities:
Interest-bearing demand deposits		$	4,991,390			$	17,556			0.71 %				$	5,510,530			$	7,583			0.28 %
Savings and money market deposits			8,986,565				97,404			2.18 %					9,366,694				78,546			1.69 %
Certificates and other time deposits			4,042,369				83,856			4.17 %					2,350,498				25,178			2.16 %
Other borrowings			3,991,566				95,228			4.80 %					3,661,719				91,747			5.05 %
Securities sold under repurchase agreements			277,537				3,791			2.75 %					434,632				4,777			2.22 %
Subordinated debentures			—				—				—				774				—				—
Total interest-bearing liabilities			22,289,427				297,835			2.69 %			(Q)		21,324,847				207,831			1.97 %			(Q)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			9,611,730												10,332,082
Allowance for credit losses on off-balance sheet credit exposures			36,616												29,985
Other liabilities			283,139												203,769
Total liabilities			32,220,912												31,890,683
Shareholders' equity			7,221,251												6,848,053
Total liabilities and shareholders' equity		$	39,442,163											$	38,738,736
Net interest income and margin						$	497,030			2.86 %								$	479,926			2.82 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							1,608												1,687
Net interest income and margin (tax equivalent basis)						$	498,638			2.87 %								$	481,613			2.83 %

(O)	Based on an actual 366-day or 365-day basis.
(P)	Yield on securities was impacted by net premium amortization of $11,653 and $14,515 for the six months ended June 30, 2024 and 2023, respectively.
(Q)	Total cost of funds, including noninterest bearing deposits, was 1.88% and 1.32% for the six months ended June 30, 2024 and 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended
	Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023
YIELD TREND (R)
Interest-Earning Assets:
Loans held for sale		7.10	%			6.77	%			7.47	%			6.54	%			6.87	%
Loans held for investment		6.02	%			5.77	%			5.68	%			5.62	%			5.48	%
Loans held for investment - Warehouse Purchase Program		7.42	%			7.51	%			7.46	%			7.32	%			7.09	%
Total loans		6.08	%			5.83	%			5.75	%			5.70	%			5.55	%
Investment securities (S)		2.06	%			2.10	%			2.07	%			2.05	%			2.07	%
Federal funds sold and other earning assets		5.52	%			5.54	%			5.68	%			5.33	%			4.69	%
Total interest-earning assets		4.68	%			4.45	%			4.35	%			4.30	%			4.15	%
Interest-Bearing Liabilities:
Interest-bearing demand deposits		0.76	%			0.66	%			0.56	%			0.43	%			0.30	%
Savings and money market deposits		2.22	%			2.13	%			2.03	%			1.96	%			1.88	%
Certificates and other time deposits		4.27	%			4.05	%			3.80	%			3.31	%			2.59	%
Other borrowings		4.77	%			4.82	%			5.16	%			5.28	%			5.20	%
Securities sold under repurchase agreements		2.74	%			2.76	%			2.77	%			2.58	%			2.43	%
Subordinated debentures		—				—				—				5.85	%			—
Total interest-bearing liabilities		2.76	%			2.62	%			2.58	%			2.54	%			2.28	%
Net Interest Margin		2.94	%			2.78	%			2.74	%			2.71	%			2.72	%
Net Interest Margin (tax equivalent)		2.94	%			2.79	%			2.75	%			2.72	%			2.73	%

(R)	Annualized and based on average balances on an actual 366-day or 365-day basis.
(S)	Yield on securities was impacted by net premium amortization of $5,831, $5,822, $6,428, $6,897 and $7,131 for the three months ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023 and June 30, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Three Months Ended
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023
Balance Sheet Averages
Loans held for sale		$	8,446			$	5,467			$	9,828			$	9,832			$	3,910
Loans held for investment			21,328,824				20,415,316				20,370,915				20,496,075				19,802,751
Loans held for investment - Warehouse Purchase Program			917,026				720,650				770,481				972,936				898,768
Total loans			22,254,296				21,141,433				21,151,224				21,478,843				20,705,429
Investment securities			12,179,074				12,693,268				13,074,243				13,512,137				13,976,818
Federal funds sold and other earning assets			1,026,251				672,840				125,295				125,690				150,300
Total interest-earning assets			35,459,621				34,507,541				34,350,762				35,116,670				34,832,547
Allowance for credit losses on loans			(332,904)				(331,708)				(346,493)				(343,967)				(283,594)
Cash and due from banks			295,077				315,612				302,864				301,201				281,593
Goodwill			3,482,448				3,396,177				3,396,224				3,387,293				3,291,659
Core deposit intangibles, net			59,979				62,482				65,986				69,551				48,616
Other real estate			3,071				2,319				4,781				6,301				2,712
Fixed assets, net			377,369				372,458				370,900				367,814				357,593
Other assets			604,187				610,649				670,187				697,176				756,500
Total assets		$	39,948,848			$	38,935,530			$	38,815,211			$	39,602,039			$	39,287,626
Noninterest-bearing deposits		$	9,780,211			$	9,443,249			$	9,960,240			$	10,269,162			$	10,274,819
Interest-bearing demand deposits			4,839,194				5,143,585				4,822,698				4,768,485				5,147,453
Savings and money market deposits			9,084,051				8,889,077				8,815,892				8,977,824				9,156,047
Certificates and other time deposits			4,400,922				3,683,815				3,442,115				3,172,178				2,652,064
Total deposits			28,104,378				27,159,726				27,040,945				27,187,649				27,230,383
Other borrowings			3,900,000				4,083,132				4,028,263				4,671,449				4,427,914
Securities sold under repurchase agreements			258,637				296,437				300,317				389,149				441,303
Subordinated debentures			—				—				—				2,578				1,547
Allowance for credit losses on off-balance sheet credit exposures			36,729				36,503				36,503				36,504				30,022
Other liabilities			327,847				238,480				323,344				290,217				220,775
Shareholders' equity			7,321,257				7,121,252				7,085,839				7,024,493				6,935,682
Total liabilities and equity		$	39,948,848			$	38,935,530			$	38,815,211			$	39,602,039			$	39,287,626

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2023
Period End Balances
Loan Portfolio
Commercial and industrial		$2,023,531	9.1 %		$1,932,534	9.1 %		$1,936,717	9.2 %		$2,153,391	10.1 %		$2,245,620	10.5 %
Warehouse purchase program		1,081,403	4.8 %		864,924	4.1 %		822,245	3.9 %		912,327	4.3 %		1,148,883	5.3 %
Construction, land development and other land loans		2,828,372	12.7 %		2,876,588	13.5 %		3,076,591	14.5 %		3,200,479	14.9 %		3,215,016	14.8 %
1-4 family residential		7,496,485	33.6 %		7,331,251	34.5 %		7,207,226	34.0 %		7,032,593	32.8 %		6,780,813	31.3 %
Home equity		930,428	4.2 %		950,169	4.5 %		960,852	4.5 %		969,498	4.5 %		977,070	4.5 %
Commercial real estate (includes multi-family residential)		5,961,884	26.7 %		5,631,460	26.5 %		5,662,948	26.7 %		5,606,837	26.2 %		5,676,526	26.2 %
Agriculture (includes farmland)		1,037,361	4.6 %		813,092	3.8 %		816,043	3.9 %		801,933	3.7 %		804,376	3.7 %
Consumer and other		340,611	1.5 %		326,915	1.5 %		329,593	1.6 %		306,018	1.4 %		305,207	1.4 %
Energy		620,740	2.8 %		538,314	2.5 %		368,323	1.7 %		449,637	2.1 %		500,435	2.3 %
Total loans		$22,320,815			$21,265,247			$21,180,538			$21,432,713			$21,653,946
Deposit Types
Noninterest-bearing DDA		$9,706,505	34.7 %		$9,526,535	35.1 %		$9,776,572	36.0 %		$10,281,893	37.6 %		$10,364,921	37.9 %
Interest-bearing DDA		4,762,730	17.1 %		4,867,247	17.9 %		5,115,945	18.8 %		4,797,259	17.6 %		4,953,090	18.1 %
Money market		6,180,769	22.1 %		6,134,221	22.6 %		5,859,701	21.6 %		5,892,505	21.6 %		5,904,160	21.5 %
Savings		2,765,197	9.9 %		2,830,117	10.4 %		2,881,397	10.6 %		3,005,936	11.0 %		3,179,351	11.6 %
Certificates and other time deposits		4,517,885	16.2 %		3,817,398	14.0 %		3,546,194	13.0 %		3,335,207	12.2 %		2,979,364	10.9 %
Total deposits		$27,933,086			$27,175,518			$27,179,809			$27,312,800			$27,380,886
Loan to Deposit Ratio		79.9 %			78.3 %			77.9 %			78.5 %			79.1 %

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
Construction Loans
		Jun 30, 2024							Mar 31, 2024							Dec 31, 2023							Sep 30, 2023							Jun 30, 2023
Single family residential construction		$	940,381			33.2	%		$	1,031,163			35.8	%		$	1,088,636			35.4	%		$	1,157,016			36.1	%		$	1,244,631			38.7	%
Land development			241,639			8.5	%			290,243			10.1	%			367,849			12.0	%			359,518			11.2	%			310,199			9.7	%
Raw land			291,112			10.3	%			311,265			10.8	%			328,365			10.7	%			340,659			10.7	%			359,228			11.2	%
Residential lots			222,343			7.9	%			224,901			7.8	%			222,591			7.2	%			216,659			6.8	%			216,706			6.7	%
Commercial lots			60,264			2.1	%			59,691			2.1	%			155,415			5.0	%			154,425			4.8	%			158,278			4.9	%
Commercial construction and other			1,074,361			38.0	%			959,687			33.4	%			914,436			29.7	%			973,022			30.4	%			927,025			28.8	%
Net unaccreted discount			(1,728)							(362)							(701)							(820)							(1,051)
Total construction loans		$	2,828,372						$	2,876,588						$	3,076,591						$	3,200,479						$	3,215,016

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of June 30, 2024
	Houston				Dallas				Austin				OK City				Tulsa				Other (T)				Total
Collateral Type
Shopping center/retail	$	348,870			$	280,071			$	58,647			$	15,289			$	13,897			$	280,447			$	997,221
Commercial and industrial buildings		137,531				110,561				27,016				35,320				17,520				210,784				538,732
Office buildings		94,784				218,221				87,915				47,777				3,746				91,537				543,980
Medical buildings		80,149				17,847				1,712				43,383				31,092				61,423				235,606
Apartment buildings		141,505				127,928				17,749				14,169				15,120				197,712				514,183
Hotel		108,891				99,805				32,910				17,775				—				161,340				420,721
Other		176,995				57,368				36,284				8,118				1,593				82,988				363,346
Total	$	1,088,725			$	911,801			$	262,233			$	181,831			$	82,968			$	1,086,231			$	3,613,789		(U)

 

Acquired Loans
	Non-PCD Loans												PCD Loans												Total Acquired Loans
	Balance at Acquisition Date				Balance at Mar 31, 2024				Balance at Jun 30, 2024				Balance at Acquisition Date				Balance at Mar 31, 2024				Balance at Jun 30, 2024				Balance at Acquisition Date				Balance at Mar 31, 2024				Balance at Jun 30, 2024
Loan marks:
Acquired banks (V)	$	345,599			$	245			$	(920)			$	320,052			$	2,503			$	2,412			$	665,651			$	2,748			$	1,492
FirstCapital Bank (W)		22,648				18,436				17,210				7,790				4,858				4,305				30,438				23,294				21,515
Lone Star Bank (X)		20,378				—				17,960				4,558				—				2,790				24,936				—				20,750
Total		388,625				18,681				34,250				332,400				7,361				9,507				721,025				26,042				43,757
Acquired portfolio loan balances:
Acquired banks (V)		12,286,159				977,286				875,474				689,573				56,982				57,417				12,975,732				1,034,268				932,891
FirstCapital Bank (W)		1,021,694				699,277				652,527				627,991				438,092				395,743				1,649,685				1,137,369				1,048,270
Lone Star Bank (X)		1,016,128				—				919,865				59,109				—				59,075				1,075,237				—				978,940
Total		14,323,981				1,676,563				2,447,866				1,376,673				495,074				512,235				15,700,654		(Y)		2,171,637				2,960,101
Acquired portfolio loan balances less loan marks	$	13,935,356			$	1,657,882			$	2,413,616			$	1,044,273			$	487,713			$	502,728			$	14,979,629			$	2,145,595			$	2,916,344

(T)	Includes other MSA and non-MSA regions.
(U)	Represents a portion of total commercial real estate loans of $5.962 billion as of June 30, 2024.
(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 and LegacyTexas Bank.
(W)	The FB Merger was completed on May 1, 2023. The FB Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.4 million at acquisition date, which were subject to subsequent fair value adjustments.
(X)	The LSSB Merger was completed on April 1, 2024. The LSSB Merger resulted in the addition of $1.075 billion in loans with related purchase    accounting adjustments of $24.9 million at acquisition date, which were subject to subsequent fair value adjustments.
(Y)	Actual principal balances acquired.

  

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended																				Year-to-Date
	Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
Asset Quality
Nonaccrual loans	$	84,175			$	78,475			$	68,688			$	59,729			$	57,723			$	84,175			$	57,723
Accruing loans 90 or more days past due		322				3,035				2,195				397				1,744				322				1,744
Total nonperforming loans		84,497				81,510				70,883				60,126				59,467				84,497				59,467
Repossessed assets		113				97				76				35				153				113				153
Other real estate		4,960				2,204				1,708				9,320				3,107				4,960				3,107
Total nonperforming assets	$	89,570			$	83,811			$	72,667			$	69,481			$	62,727			$	89,570			$	62,727
Nonperforming assets:
Commercial and industrial (includes energy)	$	16,340			$	10,199			$	8,957			$	22,219			$	24,027			$	16,340			$	24,027
Construction, land development and other land loans		4,895				15,826				17,343				8,684				4,245				4,895				4,245
1-4 family residential (includes home equity)		33,935				30,206				26,096				23,708				19,609				33,935				19,609
Commercial real estate (includes multi-family residential)		31,776				23,720				18,775				13,341				13,504				31,776				13,504
Agriculture (includes farmland)		2,550				3,714				1,460				1,511				1,284				2,550				1,284
Consumer and other		74				146				36				18				58				74				58
Total	$	89,570			$	83,811			$	72,667			$	69,481			$	62,727			$	89,570			$	62,727
Number of loans/properties		349				319				292				260				241				349				241
Allowance for credit losses on loans	$	359,852			$	330,219			$	332,362			$	351,495			$	345,209			$	359,852			$	345,209
Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	2,777			$	283			$	16,123			$	1,594			$	160			$	3,060			$	(1,312)
Construction, land development and other land loans		109				(2)				(5)				(5)				50				107				37
1-4 family residential (includes home equity)		425				457				20				(78)				(70)				882				(210)
Commercial real estate (includes multi-family residential)		(381)				(17)				1,590				570				14,957				(398)				14,956
Agriculture (includes farmland)		214				23				—				—				(78)				237				(84)
Consumer and other		1,224				1,399				1,405				1,327				1,046				2,623				2,063
Total	$	4,368			$	2,143			$	19,133			$	3,408			$	16,065			$	6,511			$	15,450
Asset Quality Ratios
Nonperforming assets to average interest-earning assets		0.25	%			0.24	%			0.21	%			0.20	%			0.18	%			0.26	%			0.18	%
Nonperforming assets to loans and other real estate		0.40	%			0.39	%			0.34	%			0.32	%			0.29	%			0.40	%			0.29	%
Net charge-offs to average loans (annualized)		0.08	%			0.04	%			0.36	%			0.06	%			0.31	%			0.06	%			0.16	%
Allowance for credit losses on loans to total loans		1.61	%			1.55	%			1.57	%			1.64	%			1.59	%			1.61	%			1.59	%
Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans (G)		1.69	%			1.62	%			1.63	%			1.71	%			1.68	%			1.69	%			1.68	%

 

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
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
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)		$	1.17			$	1.18			$	1.02			$	1.20			$	0.94			$	2.34			$	2.30
Net income		$	111,602			$	110,426			$	95,476			$	112,208			$	86,938			$	222,028			$	211,632
Merger related provision for credit losses, net of tax(Z)			7,162				—				—				—				14,647				7,162				14,647
Merger related expenses, net of tax(Z)			3,461				—				220				872				10,184				3,461				10,863
FDIC special assessment, net of tax(Z)			2,807				—				15,736				—				—				2,807				—
Net gain on sale or write-up of securities, net of tax(Z)			(8,472)				(235)				—				—				—				(8,707)				—
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(Z):		$	116,560			$	110,191			$	111,432			$	113,080			$	111,769			$	226,751			$	237,142
Weighted average diluted shares outstanding			95,765				93,706				93,715				93,720				92,930				94,735				92,073
Merger related provision for credit losses, net of tax, per diluted common share(Z)		$	0.07			$	—			$	—			$	—			$	0.16			$	0.07			$	0.16
Merger related expenses, net of tax, per diluted common share(Z)		$	0.04			$	—			$	—			$	0.01			$	0.11			$	0.04				0.12
FDIC special assessment, net of tax, per diluted common share(Z)		$	0.03			$	—			$	0.17			$	—			$	—			$	0.03			$	—
Net gain on sale or write-up of securities, net of tax, per diluted common share(Z)		$	(0.09)			$	—			$	—			$	—			$	—			$	(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:(Z)		$	1.22			$	1.18			$	1.19			$	1.21			$	1.21			$	2.39			$	2.58
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)			1.12	%			1.13	%			0.98	%			1.13	%			0.89	%			1.13	%			1.09	%
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(Z):		$	116,560			$	110,191			$	111,432			$	113,080			$	111,769			$	226,751			$	237,142
Average total assets		$	39,948,848			$	38,935,530			$	38,815,211			$	39,602,039			$	39,287,626			$	39,442,163			$	38,738,736
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) (Z)			1.17	%			1.13	%			1.15	%			1.14	%			1.14	%			1.15	%			1.22	%
(Z) Calculated assuming a federal tax rate of 21.0%.
		Three Months Ended																				Year-to-Date
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
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)			6.10	%			6.20	%			5.39	%			6.39	%			5.01	%			6.15	%			6.18	%
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(Z):		$	116,560			$	110,191			$	111,432			$	113,080			$	111,769			$	226,751			$	237,142
Average shareholders' equity		$	7,321,257			$	7,121,252			$	7,085,839			$	7,024,493			$	6,935,682			$	7,221,251			$	6,848,053
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) (Z)			6.37	%			6.19	%			6.29	%			6.44	%			6.45	%			6.28	%			6.93	%
Reconciliation of return on average common equity to return on average tangible common equity:
Net income		$	111,602			$	110,426			$	95,476			$	112,208			$	86,938			$	222,028			$	211,632
Average shareholders' equity		$	7,321,257			$	7,121,252			$	7,085,839			$	7,024,493			$	6,935,682			$	7,221,251			$	6,848,053
Less: Average goodwill and other intangible assets			(3,542,427)				(3,458,659)				(3,462,210)				(3,456,844)				(3,340,275)				(3,500,542)				(3,311,222)
Average tangible shareholders' equity		$	3,778,830			$	3,662,593			$	3,623,629			$	3,567,649			$	3,595,407			$	3,720,709			$	3,536,831
Return on average tangible common equity (F)			11.81	%			12.06	%			10.54	%			12.58	%			9.67	%			11.93	%			11.97	%
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(Z):		$	116,560			$	110,191			$	111,432			$	113,080			$	111,769			$	226,751			$	237,142
Average shareholders' equity		$	7,321,257			$	7,121,252			$	7,085,839			$	7,024,493			$	6,935,682			$	7,221,251			$	6,848,053
Less: Average goodwill and other intangible assets			(3,542,427)				(3,458,659)				(3,462,210)				(3,456,844)				(3,340,275)				(3,500,542)				(3,311,222)
Average tangible shareholders' equity		$	3,778,830			$	3,662,593			$	3,623,629			$	3,567,649			$	3,595,407			$	3,720,709			$	3,536,831
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) (Z)			12.34	%			12.03	%			12.30	%			12.68	%			12.43	%			12.19	%			13.41	%
Reconciliation of book value per share to tangible book value per share:
Shareholders' equity		$	7,283,444			$	7,104,544			$	7,079,330			$	7,032,677			$	6,968,116			$	7,283,444			$	6,968,116
Less: Goodwill and other intangible assets			(3,578,431)				(3,457,159)				(3,460,080)				(3,464,012)				(3,454,826)				(3,578,431)				(3,454,826)
Tangible shareholders' equity		$	3,705,013			$	3,647,385			$	3,619,250			$	3,568,665			$	3,513,290			$	3,705,013			$	3,513,290
Period end shares outstanding			95,262				93,525				93,722				93,717				93,721				95,262				93,721
Tangible book value per share		$	38.89			$	39.00			$	38.62			$	38.08			$	37.49			$	38.89			$	37.49
Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:
Tangible shareholders' equity		$	3,705,013			$	3,647,385			$	3,619,250			$	3,568,665			$	3,513,290			$	3,705,013			$	3,513,290
Total assets		$	39,762,294			$	38,756,520			$	38,547,877			$	39,295,684			$	39,905,131			$	39,762,294			$	39,905,131
Less: Goodwill and other intangible assets			(3,578,431)				(3,457,159)				(3,460,080)				(3,464,012)				(3,454,826)				(3,578,431)				(3,454,826)
Tangible assets		$	36,183,863			$	35,299,361			$	35,087,797			$	35,831,672			$	36,450,305			$	36,183,863			$	36,450,305
Period end tangible equity to period end tangible assets ratio			10.24	%			10.33	%			10.31	%			9.96	%			9.64	%			10.24	%			9.64	%
		Three Months Ended																				Year-to-Date
		Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Sep 30, 2023				Jun 30, 2023				Jun 30, 2024				Jun 30, 2023
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		$	359,852			$	330,219			$	332,362			$	351,495			$	345,209			$	359,852			$	345,209
Total loans		$	22,320,815			$	21,265,247			$	21,180,538			$	21,432,713			$	21,653,946			$	22,320,815			$	21,653,946
Less: Warehouse Purchase Program loans			(1,081,403)				(864,924)				(822,245)				(912,327)				(1,148,883)				(1,081,403)				(1,148,883)
Total loans less Warehouse Purchase Program		$	21,239,412			$	20,400,323			$	20,358,293			$	20,520,386			$	20,505,063			$	21,239,412			$	20,505,063
Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program			1.69	%			1.62	%			1.63	%			1.71	%			1.68	%			1.69	%			1.68	%
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		$	152,842			$	135,848			$	152,171			$	135,657			$	145,870			$	288,690			$	268,870
Net interest income		$	258,786			$	238,244			$	236,983			$	239,524			$	236,459			$	497,030			$	479,926
Noninterest income			46,003				38,870				36,568				38,743				39,688				84,873				77,954
Less: net (loss) gain on sale or write-down of assets			(903)				(35)				(84)				(45)				1,994				(938)				2,115
Less: net gain on sale or write-up of securities			10,723				298				—				—				—				11,021				—
Noninterest income excluding net gains and losses on the sale, write-down or write-up of assets and securities			36,183				38,607				36,652				38,788				37,694				74,790				75,839
Total income excluding net gains and losses on the sale, write-down or write-up of assets and securities		$	294,969			$	276,851			$	273,635			$	278,312			$	274,153			$	571,820			$	555,765
Efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities			51.82	%			49.07	%			55.61	%			48.74	%			53.21	%			50.49	%			48.38	%
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		$	152,842			$	135,848			$	152,171			$	135,657			$	145,870			$	288,690			$	268,870
Less: merger related expenses			4,381				—				278				1,104				12,891				4,381				13,751
Less: FDIC special assessment			3,554				—				19,919				—				—				3,554				—
Noninterest expense excluding merger related expenses and FDIC special assessment		$	144,907			$	135,848			$	131,974			$	134,553			$	132,979			$	280,755			$	255,119
Net interest income		$	258,786			$	238,244			$	236,983			$	239,524			$	236,459			$	497,030			$	479,926
Noninterest income			46,003				38,870				36,568				38,743				39,688				84,873				77,954
Less: net (loss) gain on sale or write down of assets			(903)				(35)				(84)				(45)				1,994				(938)				2,115
Less: net gain on sale or write-up of securities			10,723				298				—				—				—				11,021				—
Noninterest income excluding net gains and losses on the sale, write-down or write-up of assets and securities			36,183				38,607				36,652				38,788				37,694				74,790				75,839
Total income excluding net gains and losses on the sale, write-down or write-up of assets and securities		$	294,969			$	276,851			$	273,635			$	278,312			$	274,153			$	571,820			$	555,765
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			49.13	%			49.07	%			48.23	%			48.35	%			48.51	%			49.10	%			45.90	%

 

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