PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER 2022 EARNINGS

Rhea-AI Summary

Prosperity Bancshares reported Q1 2022 net income of $122.3 million or $1.33 per share, down from $133.3 million and $1.44 in Q1 2021. Deposits rose by $296.5 million (1.0%, 3.9% annualized) while loans decreased by 2.9% linked quarter. Nonperforming assets remain low at 0.08% of average interest-earning assets. The allowance for credit losses on loans stands at 1.71%. Prosperity was ranked #6 in Forbes' America's Best Banks for 2022, highlighting its strong performance.

Positive

• Deposits increased by $296.5 million in Q1 2022, indicating strong customer confidence.
• Nonperforming assets remain low at 0.08%, reflecting strong asset quality.
• Ranked #6 in Forbes' 2022 America's Best Banks, showcasing overall performance excellence.

Negative

• Net income declined to $122.3 million from $133.3 million in Q1 2021, indicating decreased profitability.
• Loan balances decreased by 2.9% from the previous quarter, signaling potential market challenges.
• Net interest margin dropped to 2.88% from 3.41% year-over-year, reflecting pressure on loan rates.

- First quarter net income of $122.3 million and earnings per share (diluted) of $1.33

- Deposits increased $296.5 million or 1.0% (3.9% annualized) during the first quarter 2022

- Allowance for credit losses on loans and on off-balance sheet credit exposure of $315.1 million

- Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.71%⁽¹⁾

- Nonperforming assets remain low at 0.08% of first quarter average interest-earning assets

- Return (annualized) on first quarter average assets of 1.29%

- Returns (annualized) on first quarter average common equity of 7.54% and average tangible common equity of 15.30%⁽¹⁾

- Prosperity Bancshares was ranked Number 6 in Forbes' 2022 America's Best Banks

HOUSTON, April 27, 2022 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE: PB), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of  $122.3 million for the quarter ended March 31, 2022 compared with $133.3 million for the same period in 2021. Net income per diluted common share was $1.33 for the quarter ended March 31, 2022, compared with $1.44 for the same period in 2021, and the annualized return on first quarter average assets was 1.29%. Nonperforming assets remain low at 0.08% of first quarter average interest-earning assets.

"Each year, Forbes assesses the 100 largest banks in the United States on growth, credit quality and earnings, as well as other factors, for its America's Best Banks list.  Prosperity Bank has been ranked in the Top 10 since the list's inception in 2010.  We have twice been ranked number 1, were ranked number 2 in 2021 and are ranked number 6 for 2022.  It is a testament to Prosperity's performance, culture, vision and consistency and distinguishes us among most banks" said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"I wish to congratulate and thank all our customers, associates and directors for helping us achieve this great honor," added Zalman.

"On a year-over-year basis, excluding Warehouse Purchase Program and Paycheck Protection Program ("PPP") loans, loans grew $409.3 million or 2.5% and deposits were up $2.3 billion or 8.0% for the same period. On a linked quarter basis, deposits increased $296.5 million or 3.9% annualized and loans were slightly down as we continue to see significant payoffs despite strong loan production," continued Zalman.

"Companies and individuals continue to move to Texas and Oklahoma primarily because of lower tax rates and a favorable pro-business political environment.  The overall economy remains strong despite concerns around higher interest rates, inflation, supply chain issues and the war between Russia and Ukraine," stated Zalman.

"Prosperity has a talented team, deep bench, strong earnings, a solid capital position and a fortress balance sheet.  We will continue working to help our customers and associates succeed and to build shareholder value," concluded Zalman.

Results of Operations for the Three Months Ended March 31, 2022

Net income was $122.3 million⁽²⁾ for the three months ended March 31, 2022 compared with $133.3 million⁽³⁾ for the same period in 2021. The change was primarily due to a decrease in loan interest income (including a decrease in PPP fees) and loan discount accretion of $11.1 million, partially offset by an increase in securities interest income and a decrease in interest expense. Net income per diluted common share was $1.33 for the three months ended March 31, 2022 compared with $1.44 for the same period in 2021. On a linked quarter basis, net income was $122.3 million⁽²⁾ for the three months ended March 31, 2022 compared with $126.8 million⁽⁴⁾ for the three months ended December 31, 2021. The change was primarily due to a decrease in loan interest income (including a decrease in PPP fees), partially offset by an increase in securities interest income. Net income per diluted common share was $1.33 for the three months ended March 31, 2022 compared with $1.38 for the three months ended December 31, 2021. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2022 were 1.29%, 7.54% and 15.30%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 43.68%⁽¹⁾ for the three months ended March 31, 2022.

Net interest income before provision for credit losses for the three months ended March 31, 2022 was $239.9 million compared with $254.6 million for the same period in 2021. The change was primarily due to a decrease in the average balance and average rate on loans and a decrease in loan discount accretion of $11.1 million, partially offset by an increase in the average investment securities balance and a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $239.9 million compared with $244.8 million for the three months ended December 31, 2021.

The net interest margin on a tax equivalent basis was 2.88% for the three months ended March 31, 2022 compared with 3.41% for the same period in 2021. The change was primarily due to lower average rates on loans, a decrease in loan discount accretion of $11.1 million and an increase in the average balance on investment securities, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, the net interest margin on a tax equivalent basis was 2.88% for the three months ended March 31, 2022 compared with 2.97% for the three months ended December 31, 2021. The change was primarily due to lower average rates on loans and higher cash balances due to excess liquidity, partially offset by higher average balance and rates on investment securities.

Noninterest income was $35.1 million for the three months ended March 31, 2022 compared with $34.0 million for the same period in 2021, an increase of $1.1 million or 3.3%. This change was primarily due to an increase in nonsufficient funds fees, an increase in other noninterest income and a net gain on the sale of assets, partially offset by a decrease in mortgage income. On a linked quarter basis, noninterest income was $35.1 million compared with $35.8 million for the three months ended December 31, 2021.

Noninterest expense was $119.9 million for the three months ended March 31, 2022 compared with $119.1 million for the same period in 2021 and $119.5 million for the three months ended December 31, 2021.

Balance Sheet Information

At March 31, 2022, Prosperity had $38.271 billion in total assets, an increase of $2.713 billion or 7.6% compared with $35.558 billion at March 31, 2021.

Loans at March 31, 2022 were $18.068 billion, a decrease of $1.571 billion or 8.0%, compared with $19.639 billion at March 31, 2021, primarily due to a decrease in PPP, Warehouse Purchase Program and commercial real estate loans, partially offset by an increase in 1-4 family residential loans. Linked quarter loans decreased $548.6 million or 2.9% from $18.616 billion at December 31, 2021, primarily due to Warehouse Purchase Program loans. At March 31, 2022, Prosperity had $86.3 million of PPP loans compared to $1.139 billion of PPP loans at March 31, 2021 and $169.9 million of PPP loans at December 31, 2021. Excluding Warehouse Purchase Program and PPP loans, loans at March 31, 2022 were $16.637 billion compared to $16.227 billion at March 31, 2021, an increase of $409.3 million or 2.5%. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, decreased $33.8 million from $16.671 billion at December 31, 2021.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At March 31, 2022, oil and gas loans totaled $445.9 million (net of discount and excluding PPP loans totaling $17.0 million) or 2.5% of total loans, of which $251.5 million were production loans and $194.4 million were servicing loans, compared with total oil and gas loans of $503.9 million (net of discount and excluding PPP loans totaling $142.6 million) or 2.6% of total loans at March 31, 2021 of which $289.4 million were production loans and $214.5 million were servicing loans. In addition, as of March 31, 2022, Prosperity had total unfunded commitments to oil and gas companies of $417.0 million compared with total unfunded commitments to oil and gas companies of $248.1 million as of March 31, 2021. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Additionally, Prosperity extends credit to hotels and restaurants. At March 31, 2022, loans to hotels totaled $392.0 million (excluding PPP loans totaling $512 thousand) or 2.2% of total loans, a decrease of $9.2 million or 2.3%, compared with $401.2 million (excluding PPP loans totaling $13.1 million) or 2.0% of total loans at March 31, 2021.  At March 31, 2022, loans to restaurants totaled $193.2 million (excluding PPP loans totaling $12.3 million) or 1.1% of total loans, a decrease of $15.5 million or 7.4%, compared with $208.7 million (excluding PPP loans totaling $125.2 million) or 1.1% of total loans at March 31, 2021.

Deposits at March 31, 2022 were $31.068 billion, an increase of $2.305 billion or 8.0%, compared with $28.763 billion at March 31, 2021. Linked quarter deposits increased $296.5 million or 1.0% (3.9% annualized) from $30.772 billion at December 31, 2021.

Asset Quality

Nonperforming assets totaled $27.2 million or 0.08% of quarterly average interest-earning assets at March 31, 2022, compared with $44.2 million or 0.15% of quarterly average interest-earning assets at March 31, 2021 and $28.1 million or 0.09% of quarterly average interest-earning assets at December 31, 2021.

The allowance for credit losses on loans and off-balance sheet credit exposures was $315.1 million at March 31, 2022 compared with $337.2 million at March 31, 2021 and $316.3 million at December 31, 2021.

The allowance for credit losses on loans was $285.2 million or 1.58% of total loans at March 31, 2022 compared with $307.2 million or 1.56% of total loans at March 31, 2021 and $286.4 million or 1.54% of total loans at December 31, 2021. Excluding Warehouse Purchase Program and PPP loans, the allowance for credit losses on loans to total loans was 1.71%⁽¹⁾ at March 31, 2022 compared with 1.89%⁽¹⁾ at March 31, 2021 and 1.72%⁽¹⁾ at December 31, 2021.

There was no provision for credit losses for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

Net charge-offs were $1.2 million for the three months ended March 31, 2022, compared with net charge-offs of $8.9 million for the three months ended March 31, 2021 and net charge-offs of $807 thousand for the three months ended December 31, 2021. During the first quarter of 2022, net charge-offs did not include any purchased credit deteriorated ("PCD") loans and $553 thousand of specific reserves on resolved PCD loans was released to the general reserve.

Dividend

Prosperity Bancshares declared a first quarter cash dividend of $0.52 per share to be paid on July 1, 2022, to all shareholders of record as of June 15, 2022.

COVID-19 Pandemic

Prosperity continues to monitor the latest developments regarding COVID-19. As of March 31, 2022,  pandemic-related restrictions on all business and activities in the states of Texas and Oklahoma remained lifted. The COVID-19 pandemic has resulted in significant economic uncertainties that have had, and could continue to have, an adverse impact on Prosperity's operating income, financial condition and cash flows.

Since the implementation of the Paycheck Protection Program in 2020, Prosperity has obtained SBA approvals on approximately 18,700 loans totaling $2.036 billion and, as of March 31, 2022, had an outstanding balance of 819 loans totaling $86.3 million.

Also, in response to the COVID-19 pandemic, Prosperity has provided relief to its loan customers through loan extensions and deferrals. Prosperity's troubled debt restructurings do not include loan modifications related to COVID-19. Beginning in mid-March of 2020, Prosperity began offering deferral and modification of principal and/or interest payments to selected borrowers on a case-by-case basis. As of March 31, 2022, Prosperity had approximately $29.0 million in outstanding loans subject to deferral and modification agreements.

Conference Call

Prosperity's management team will host a conference call on Wednesday, April 27, 2022, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2022 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 4266827.

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 home page by selecting "Presentations, Webcasts & Calls" from the menu on the Investor Relations link and following the instructions.

Non-GAAP Financial Measures

Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; and the efficiency ratio excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. 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 March 31, 2022, Prosperity Bancshares, Inc.^® is a $38.271 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 272 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; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

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. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "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 loan 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 loan losses, 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 the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. These forward–looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. 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; the effect, impact, potential duration or other implications of the COVID-19 pandemic; and weather. These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2021, and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity Bancshares 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 $4.1 million, net of tax, primarily comprised of loan discount accretion of $5.2 million for the three months ended March 31, 2022.
(3)	Includes purchase accounting adjustments of $13.2 million, net of tax, primarily comprised of loan discount accretion of $16.3 million for the three months ended March 31, 2021.
(4)	Includes purchase accounting adjustments of $4.2 million, net of tax, primarily comprised of loan discount accretion of $5.4 million for the three months ended December 31, 2021.

 

 

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

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Balance Sheet Data (at period end)
Loans held for sale		$	2,810			$	7,274			$	10,197			$	9,080			$	20,991
Loans held for investment			16,720,173				16,833,171				16,949,486				17,147,146				17,345,506
Loans held for investment - Warehouse Purchase      Program			1,344,541				1,775,699				1,998,049				2,095,559				2,272,389
Total loans			18,067,524				18,616,144				18,957,732				19,251,785				19,638,886
Investment securities(A)			14,798,127				12,818,901				12,629,368				11,918,691				10,088,002
Federal funds sold			274				241				237				281				8,986
Allowance for credit losses on loans			(285,163)				(286,380)				(287,187)				(302,884)				(307,210)
Cash and due from banks			1,560,321				2,547,739				1,055,386				1,059,879				1,947,235
Goodwill			3,231,636				3,231,636				3,231,636				3,231,636				3,231,636
Core deposit intangibles, net			59,064				61,684				64,539				67,417				70,304
Other real estate owned			1,705				622				150				144				462
Fixed assets, net			336,075				319,799				322,799				324,502				326,970
Other assets			501,623				523,584				537,459				548,473				553,147
Total assets		$	38,271,186			$	37,833,970			$	36,512,119			$	36,099,924			$	35,558,418
Noninterest-bearing deposits		$	10,776,652			$	10,750,034			$	10,326,489			$	10,099,149			$	9,820,445
Interest-bearing deposits			20,291,658				20,021,728				19,125,163				19,011,092				18,942,660
Total deposits			31,068,310				30,771,762				29,451,652				29,110,241				28,763,105
Securities sold under repurchase agreements			440,891				448,099				440,969				433,069				377,106
Allowance for credit losses on off-balance sheet      credit exposures			29,947				29,947				29,947				29,947				29,947
Other liabilities			227,614				156,926				244,110				216,330				166,414
Total liabilities			31,766,762				31,406,734				30,166,678				29,789,587				29,336,572
Shareholders' equity(B)			6,504,424				6,427,236				6,345,441				6,310,337				6,221,846
Total liabilities and equity		$	38,271,186			$	37,833,970			$	36,512,119			$	36,099,924			$	35,558,418

(A)	Includes $2,115, $2,290, $2,483, $1,394 and $970 in unrealized gains on available for sale securities for the quarterly periods ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.
(B)	Includes $1,671, $1,809, $1,961, $1,101 and $766 in after-tax unrealized gains on available for sale securities for the quarterly periods ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Three Months Ended
		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Income Statement Data
Interest income:
Loans		$	193,025			$	206,209			$	213,821			$	216,803			$	233,075
Securities(C)			55,011				46,857				46,217				43,708				38,677
Federal funds sold and other earning assets			847				563				302				340				351
Total interest income			248,883				253,629				260,340				260,851				272,103
Interest expense:
Deposits			8,754				8,685				11,578				15,288				17,362
Securities sold under repurchase agreements			185				184				195				164				159
Total interest expense			8,939				8,869				11,773				15,452				17,521
Net interest income			239,944				244,760				248,567				245,399				254,582
Provision for credit losses			—				—				—				—				—
Net interest income after provision for credit losses			239,944				244,760				248,567				245,399				254,582
Noninterest income:
Nonsufficient funds (NSF) fees			8,124				8,401				7,962				6,560				6,687
Credit card, debit card and ATM card income			8,179				8,894				8,837				8,918				8,031
Service charges on deposit accounts			6,211				6,237				6,115				6,062				5,978
Trust income			2,703				2,698				2,467				2,276				2,837
Mortgage income			455				685				1,396				2,914				3,307
Brokerage income			892				953				861				795				711
Bank owned life insurance income			1,283				1,317				1,325				1,294				1,292
Net gain (loss) on sale or write-down of assets			689				1,165				255				(244)				(79)
Other noninterest income			6,586				5,407				5,427				6,981				5,244
Total noninterest income			35,122				35,757				34,645				35,556				34,008
Noninterest expense:
Salaries and benefits			79,411				76,496				78,412				75,611				80,037
Net occupancy and equipment			7,848				8,140				8,165				8,046				7,833
Credit and debit card, data processing and software           amortization			8,849				9,050				9,103				8,718				8,233
Regulatory assessments and FDIC insurance			2,850				2,801				2,497				2,670				2,670
Core deposit intangibles amortization			2,620				2,855				2,878				2,887				2,931
Depreciation			4,547				4,518				4,524				4,513				4,540
Communications			2,919				3,134				3,013				2,982				2,899
Other real estate expense			214				24				30				198				244
Net (gain) loss on sale or write-down of other real estate			(621)				2				4				(1,839)				(887)
Other noninterest expense			11,213				12,518				11,189				11,405				10,576
Total noninterest expense			119,850				119,538				119,815				115,191				119,076
Income before income taxes			155,216				160,979				163,397				165,764				169,514
Provision for income taxes			32,890				34,192				34,807				35,153				36,205
Net income available to common shareholders		$	122,326			$	126,787			$	128,590			$	130,611			$	133,309

(C)	Interest income on securities was reduced by net premium amortization of $12,857, $16,006, $15,141, $14,436 and $12,844 for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

 

Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars and share amounts in thousands, except per share data and market prices)
		Three Months Ended
		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Profitability
Net income (D) (E)		$	122,326			$	126,787			$	128,590			$	130,611			$	133,309
Basic earnings per share		$	1.33			$	1.38			$	1.39			$	1.41			$	1.44
Diluted earnings per share		$	1.33			$	1.38			$	1.39			$	1.41			$	1.44
Return on average assets (F)			1.29	%			1.37	%			1.42	%			1.45	%			1.54	%
Return on average common equity (F)			7.54	%			7.91	%			8.07	%			8.31	%			8.60	%
Return on average tangible common equity (F) (G)			15.30	%			16.26	%			16.72	%			17.49	%			18.43	%
Tax equivalent net interest margin (D) (E) (H)			2.88	%			2.97	%			3.10	%			3.11	%			3.41	%
Efficiency ratio (G) (I)			43.68	%			42.79	%			42.34	%			40.96	%			41.25	%
Liquidity and Capital Ratios
Equity to assets			17.00	%			16.99	%			17.38	%			17.48	%			17.50	%
Common equity tier 1 capital			15.32	%	(J)		15.10	%			14.84	%			15.26	%			14.60	%
Tier 1 risk-based capital			15.32	%	(J)		15.10	%			14.84	%			15.26	%			14.60	%
Total risk-based capital			15.99	%	(J)		15.45	%			15.20	%			15.71	%			15.07	%
Tier 1 leverage capital			9.44	%	(J)		9.62	%			9.55	%			9.50	%			9.68	%
Period end tangible equity to period end tangible assets (G)			9.19	%			9.07	%			9.18	%			9.18	%			9.05	%
Other Data
Weighted-average shares used in computing earnings per      common share
Basic			92,161				92,162				92,683				92,935				92,854
Diluted			92,161				92,162				92,683				92,935				92,854
Period end shares outstanding			92,160				92,170				92,160				92,935				92,929
Cash dividends paid per common share		$	0.52			$	0.52			$	0.49			$	0.49			$	0.49
Book value per common share		$	70.58			$	69.73			$	68.85			$	67.90			$	66.95
Tangible book value per common share (G)		$	34.87			$	34.00			$	33.09			$	32.40			$	31.42
Common Stock Market Price
High		$	80.46			$	78.67			$	72.97			$	78.06			$	83.02
Low		$	69.08			$	68.53			$	64.40			$	69.83			$	66.45
Period end closing price		$	69.38			$	72.35			$	71.13			$	71.80			$	76.16
Employees – FTE (excluding overtime)			3,595				3,704				3,625				3,724				3,724
Number of banking centers			272				273				273				274				275

 

(D) Includes purchase accounting adjustments for the periods presented as follows:
	Three Months Ended
	Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021
Loan discount accretion
ASC 310-20	$4,674		$4,635		$3,761		$9,731		$13,313
ASC 310-30	$521		$731		$1,618		$2,462		$3,027
Securities net amortization	$52		$139		$136		$171		$111
Time deposits amortization	$100		$127		$201		$327		$507

(E)	Using effective tax rate of 21.2%, 21.2%, 21.3%, 21.2% and 21.4% for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, 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 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 or write down of assets and securities. Additionally, taxes are not part of this calculation.
(J)	Beginning on January 1, 2022, the cumulative amount of the current expected credit loss ("CECL") transition adjustments will be phased in over a three-year transition period.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
YIELD ANALYSIS		Three Months Ended
		Mar 31, 2022												Dec 31, 2021												Mar 31, 2021
		Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)	Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)	Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)
Interest-earning assets:
Loans held for sale		$	4,611			$	40			3.52%				$	8,794			$	71			3.20%				$	33,327			$	238			2.90%
Loans held for investment			16,712,690				183,033			4.44%					16,830,163				192,200			4.53%					17,279,066				213,978			5.02%
Loans held for investment - Warehouse      Purchase Program			1,268,715				9,952			3.18%					1,772,971				13,938			3.12%					2,369,601				18,859			3.23%
Total Loans			17,986,016				193,025			4.35%					18,611,928				206,209			4.40%					19,681,994				233,075			4.80%
Investment securities			13,772,974				55,011			1.62%			(L)		12,751,857				46,857			1.46%			(L)		9,148,841				38,677			1.71%			(L)
Federal funds sold and other earning assets			2,135,503				847			0.16%					1,393,859				563			0.16%					1,506,645				351			0.09%
Total interest-earning assets			33,894,493				248,883			2.98%					32,757,644				253,629			3.07%					30,337,480				272,103			3.64%
Allowance for credit losses on loans			(285,692)												(287,191)												(315,590)
Noninterest-earning assets			4,458,669												4,476,582												4,522,470
Total assets		$	38,067,470											$	36,947,035											$	34,544,360
Interest-bearing liabilities:
Interest-bearing demand deposits		$	6,775,114			$	2,452			0.15%				$	6,196,283			$	2,187			0.14%				$	6,112,469			$	5,943			0.39%
Savings and money market deposits			10,870,461				4,026			0.15%					10,286,650				3,817			0.15%					9,420,064				5,753			0.25%
Certificates and other time deposits			2,637,529				2,276			0.35%					2,766,123				2,681			0.38%					3,031,621				5,666			0.76%
Securities sold under repurchase agreements			452,054				185			0.17%					432,981				184			0.17%					376,662				159			0.17%
Total interest-bearing liabilities			20,735,158				8,939			0.17%			(M)		19,682,037				8,869			0.18%			(M)		18,940,816				17,521			0.38%			(M)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			10,636,624												10,587,441												9,206,791
Allowance for credit losses on off-balance      sheet credit exposures			29,947												29,947												29,947
Other liabilities			176,360												234,746												169,138
Total liabilities			31,578,089												30,534,171												28,346,692
Shareholders' equity			6,489,381												6,412,864												6,197,668
Total liabilities and shareholders' equity		$	38,067,470											$	36,947,035											$	34,544,360
Net interest income and margin						$	239,944			2.87%								$	244,760			2.96%								$	254,582			3.40%
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							472												457												635
Net interest income and margin (tax      equivalent basis)						$	240,416			2.88%								$	245,217			2.97%								$	255,217			3.41%

(K)	Annualized and based on an actual 365-day basis.
(L)	Yield on securities was impacted by net premium amortization of $12,857, $16,006 and $12,844 for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.
(M)	Total cost of funds, including noninterest bearing deposits, was 0.12%, 0.12% and 0.25% for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended
	Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
YIELD TREND (N)
Interest-Earning Assets:
Loans held for sale		3.52	%			3.20	%			3.08	%			3.19	%			2.90	%
Loans held for investment		4.44	%			4.53	%			4.62	%			4.65	%			5.02	%
Loans held for investment - Warehouse Purchase      Program		3.18	%			3.12	%			3.18	%			3.21	%			3.23	%
Total loans		4.35	%			4.40	%			4.48	%			4.50	%			4.80	%
Investment securities (O)		1.62	%			1.46	%			1.50	%			1.57	%			1.71	%
Federal funds sold and other earning assets		0.16	%			0.16	%			0.16	%			0.11	%			0.09	%
Total interest-earning assets		2.98	%			3.07	%			3.24	%			3.30	%			3.64	%
Interest-Bearing Liabilities:
Interest-bearing demand deposits		0.15	%			0.14	%			0.24	%			0.35	%			0.39	%
Savings and money market deposits		0.15	%			0.15	%			0.18	%			0.22	%			0.25	%
Certificates and other time deposits		0.35	%			0.38	%			0.47	%			0.58	%			0.76	%
Securities sold under repurchase agreements		0.17	%			0.17	%			0.17	%			0.17	%			0.17	%
Total interest-bearing liabilities		0.17	%			0.18	%			0.24	%			0.32	%			0.38	%
Net Interest Margin		2.87	%			2.96	%			3.09	%			3.10	%			3.40	%
Net Interest Margin (tax equivalent)		2.88	%			2.97	%			3.10	%			3.11	%			3.41	%

(N)	Annualized and based on average balances on an actual 365-day basis.
(O)	Yield on securities was impacted by net premium amortization of $12,857, $16,006, $15,141, $14,436 and $12,844 for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Three Months Ended
		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Balance Sheet Averages
Loans held for sale		$	4,611			$	8,794			$	11,714			$	13,716			$	33,327
Loans held for investment			16,712,690				16,830,163				17,102,998				17,305,259				17,279,066
Loans held for investment - Warehouse Purchase      Program			1,268,715				1,772,971				1,836,252				1,984,305				2,369,601
Total Loans			17,986,016				18,611,928				18,950,964				19,303,280				19,681,994
Investment securities			13,772,974				12,751,857				12,184,964				11,180,948				9,148,841
Federal funds sold and other earning assets			2,135,503				1,393,859				734,787				1,221,993				1,506,645
Total interest-earning assets			33,894,493				32,757,644				31,870,715				31,706,221				30,337,480
Allowance for credit losses on loans			(285,692)				(287,191)				(301,011)				(306,059)				(315,590)
Cash and due from banks			326,552				329,406				570,765				521,737				308,787
Goodwill			3,231,637				3,231,637				3,231,637				3,231,637				3,233,231
Core deposit intangibles, net			60,346				63,091				65,955				68,830				71,763
Other real estate			1,893				321				279				3,001				6,385
Fixed assets, net			327,297				321,524				323,584				326,570				326,004
Other assets			510,944				530,603				536,745				544,085				576,300
Total assets		$	38,067,470			$	36,947,035			$	36,298,669			$	36,096,022			$	34,544,360
Noninterest-bearing deposits		$	10,636,624			$	10,587,441			$	10,286,062			$	10,062,085			$	9,206,791
Interest-bearing demand deposits			6,775,114				6,196,283				6,089,678				6,281,068				6,112,469
Savings and money market deposits			10,870,461				10,286,650				9,944,664				9,872,624				9,420,064
Certificates and other time deposits			2,637,529				2,766,123				2,897,123				2,980,186				3,031,621
Total deposits			30,919,728				29,836,497				29,217,527				29,195,963				27,770,945
Securities sold under repurchase agreements			452,054				432,981				448,338				383,975				376,662
Allowance for credit losses on off-balance sheet      credit exposures			29,947				29,947				29,947				29,947				29,947
Other liabilities			176,360				234,746				229,502				198,748				169,138
Shareholders' equity			6,489,381				6,412,864				6,373,355				6,287,389				6,197,668
Total liabilities and equity		$	38,067,470			$	36,947,035			$	36,298,669			$	36,096,022			$	34,544,360

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Mar 31, 2022							Dec 31, 2021							Sep 30, 2021							Jun 30, 2021							Mar 31, 2021
Period End Balances
Loan Portfolio
Commercial and industrial		$	2,007,783			11.1	%		$	2,050,631			11.0	%		$	1,841,899			9.7	%		$	2,021,951			10.5	%		$	2,104,116			10.7	%
Warehouse purchase program			1,344,541			7.4	%			1,775,699			9.5	%			1,998,049			10.6	%			2,095,559			10.9	%			2,272,389			11.6	%
Construction, land development and      other land loans			2,327,837			12.9	%			2,299,715			12.4	%			2,269,417			12.0	%			2,147,474			11.2	%			2,031,355			10.4	%
1-4 family residential			4,970,620			27.5	%			4,860,419			26.1	%			4,709,468			24.8	%			4,531,589			23.5	%			4,310,437			21.9	%
Home equity			870,130			4.8	%			808,289			4.4	%			746,426			3.9	%			637,431			3.3	%			554,278			2.8	%
Commercial real estate (includes      multi-family residential)			5,150,555			28.5	%			5,251,368			28.2	%			5,550,841			29.3	%			5,681,184			29.5	%			5,858,475			29.8	%
Agriculture (includes farmland)			617,418			3.4	%			620,338			3.3	%			631,497			3.3	%			590,135			3.1	%			571,783			2.9	%
Consumer and other			246,433			1.4	%			288,496			1.6	%			274,980			1.5	%			264,652			1.4	%			293,023			1.5	%
Energy			445,949			2.5	%			491,305			2.6	%			569,314			3.0	%			501,821			2.6	%			503,947			2.6	%
Paycheck Protection Program			86,258			0.5	%			169,884			0.9	%			365,841			1.9	%			779,989			4.0	%			1,139,083			5.8	%
Total loans		$	18,067,524						$	18,616,144						$	18,957,732						$	19,251,785						$	19,638,886
Deposit Types
Noninterest-bearing DDA		$	10,776,652			34.7	%		$	10,750,034			34.9	%		$	10,326,489			35.0	%		$	10,099,149			34.7	%		$	9,820,445			34.1	%
Interest-bearing DDA			6,603,934			21.2	%			6,741,092			21.9	%			6,088,923			20.7	%			6,185,115			21.2	%			6,158,641			21.4	%
Money market			7,603,329			24.5	%			7,178,904			23.3	%			6,864,664			23.3	%			6,706,252			23.0	%			6,714,889			23.4	%
Savings			3,543,300			11.4	%			3,401,727			11.1	%			3,293,850			11.2	%			3,160,606			10.9	%			3,083,447			10.7	%
Certificates and other time deposits			2,541,095			8.2	%			2,700,005			8.8	%			2,877,726			9.8	%			2,959,119			10.2	%			2,985,683			10.4	%
Total deposits		$	31,068,310						$	30,771,762						$	29,451,652						$	29,110,241						$	28,763,105
Loan to Deposit Ratio			58.2	%						60.5	%						64.4	%						66.1	%						68.3	%

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
Construction Loans
		Mar 31, 2022							Dec 31, 2021							Sep 30, 2021							Jun 30, 2021							Mar 31, 2021
Single family residential construction		$	816,072			35.0	%		$	728,393			31.7	%		$	659,248			29.0	%		$	624,954			29.1	%		$	590,223			29.1	%
Land development			103,853			4.5	%			99,099			4.3	%			92,623			4.1	%			97,709			4.6	%			97,267			4.8	%
Raw land			310,987			13.4	%			322,673			14.0	%			315,803			13.9	%			245,484			11.4	%			243,394			12.0	%
Residential lots			212,029			9.1	%			206,978			9.0	%			195,201			8.6	%			165,645			7.7	%			176,884			8.6	%
Commercial lots			183,760			7.9	%			184,901			8.0	%			169,189			7.5	%			153,714			7.2	%			137,512			6.8	%
Commercial construction and other			701,148			30.1	%			757,687			33.0	%			837,436			36.9	%			860,069			40.0	%			786,192			38.7	%
Net unaccreted discount			(12)							(16)							(83)							(101)							(117)
Total construction loans		$	2,327,837						$	2,299,715						$	2,269,417						$	2,147,474						$	2,031,355

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2022
	Houston				Dallas				Austin				OK City				Tulsa				Other (P)				Total
Collateral Type
Shopping center/retail	$	326,121			$	279,776			$	45,751			$	16,548			$	28,018			$	271,861			$	968,075
Commercial and industrial buildings		158,618				78,634				17,496				22,983				17,583				162,506				457,820
Office buildings		121,213				376,630				42,520				70,277				4,648				70,284				685,572
Medical buildings		108,561				18,452				2,570				19,882				41,190				69,449				260,104
Apartment buildings		153,768				88,583				10,989				14,937				35,603				173,764				477,644
Hotel		85,057				70,170				44,833				28,538				—				141,223				369,821
Other		77,727				69,152				26,433				7,649				2,755				71,389				255,105
Total	$	1,031,065			$	981,397			$	190,592			$	180,814			$	129,797			$	960,476			$	3,474,141		(Q)

 

Acquired Loans
		Non-PCD Loans												PCD Loans												Total Acquired Loans
		Balance at Acquisition Date				Balance at Dec 31, 2021				Balance at Mar 31, 2022				Balance at Acquisition Date				Balance at Dec 31, 2021				Balance at Mar 31, 2022				Balance at Acquisition Date				Balance at Dec 31, 2021				Balance at Mar 31, 2022
Loan marks:
Acquired banks (R)		$	345,599			$	8,143			$	3,469			$	320,052			$	4,838			$	4,317			$	665,651			$	12,981			$	7,786
Acquired portfolio loan balances:
Acquired banks (R)			12,286,159				2,094,039				1,868,511				689,573				83,909				72,992				12,975,732		(S)		2,177,948				1,941,503
Acquired portfolio loan balances less      loan marks		$	11,940,560			$	2,085,896			$	1,865,042			$	369,521			$	79,071			$	68,675			$	12,310,081			$	2,164,967			$	1,933,717

(P)	Includes other MSA and non-MSA regions.
(Q)	Represents a portion of total commercial real estate loans of $5.151 billion as of March 31, 2022.
(R)	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.
(S)	Actual principal balances acquired.

  

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended
	Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Asset Quality
Nonaccrual loans	$	21,765			$	26,269			$	35,035			$	32,880			$	43,025
Accruing loans 90 or more days past due		3,695				887				1,038				330				313
Total nonperforming loans		25,460				27,156				36,073				33,210				43,338
Repossessed assets		19				310				326				310				362
Other real estate		1,705				622				150				144				462
Total nonperforming assets	$	27,184			$	28,088			$	36,549			$	33,664			$	44,162
Nonperforming assets:
Commercial and industrial (includes energy)	$	4,403			$	6,150			$	8,199			$	8,613			$	11,290
Construction, land development and other land loans		1,761				1,841				803				1,423				1,692
1-4 family residential (includes home equity)		11,899				11,990				11,117				11,681				11,920
Commercial real estate (includes multi-family residential)		7,685				7,276				15,691				11,266				16,896
Agriculture (includes farmland)		1,402				816				643				661				803
Consumer and other		34				15				96				20				1,561
Total	$	27,184			$	28,088			$	36,549			$	33,664			$	44,162
Number of loans/properties		147				157				155				152				167
Allowance for credit losses on loans	$	285,163			$	286,380			$	287,187			$	302,884			$	307,210
Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	14			$	177			$	3,763			$	3,529			$	1,584
Construction, land development and other land loans		430				(162)				(4)				(105)				(5)
1-4 family residential (includes home equity)		87				(72)				66				(6)				47
Commercial real estate (includes multi-family residential)		(366)				(10)				11,180				517				6,589
Agriculture (includes farmland)		(103)				(102)				(63)				(9)				33
Consumer and other		1,155				976				755				400				610
Total	$	1,217			$	807			$	15,697			$	4,326			$	8,858
Asset Quality Ratios
Nonperforming assets to average interest-earning assets		0.08	%			0.09	%			0.11	%			0.11	%			0.15	%
Nonperforming assets to loans and other real estate		0.15	%			0.15	%			0.19	%			0.17	%			0.22	%
Net charge-offs to average loans (annualized)		0.03	%			0.02	%			0.33	%			0.09	%			0.18	%
Allowance for credit losses on loans to total loans		1.58	%			1.54	%			1.51	%			1.57	%			1.56	%
Allowance for credit losses on loans to total loans, excluding      Warehouse Purchase Program loans and Paycheck Protection      Program loans (G)		1.71	%			1.72	%			1.73	%			1.85	%			1.89	%

 

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, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. 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 on loans to total loans (excluding Warehouse Purchase Program loans and PPP loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.
		Three Months Ended
		Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Mar 31, 2021
Reconciliation of return on average common equity to return on      average tangible common equity:
Net income		$	122,326			$	126,787			$	128,590			$	130,611			$	133,309
Average shareholders' equity		$	6,489,381			$	6,412,864			$	6,373,355			$	6,287,389			$	6,197,668
Less: Average goodwill and other intangible assets			(3,291,983)				(3,294,728)				(3,297,592)				(3,300,467)				(3,304,994)
Average tangible shareholders' equity		$	3,197,398			$	3,118,136			$	3,075,763			$	2,986,922			$	2,892,674
Return on average tangible common equity (F)			15.30	%			16.26	%			16.72	%			17.49	%			18.43	%
Reconciliation of book value per share to tangible book value per      share:
Shareholders' equity		$	6,504,424			$	6,427,236			$	6,345,441			$	6,310,337			$	6,221,846
Less: Goodwill and other intangible assets			(3,290,700)				(3,293,320)				(3,296,175)				(3,299,053)				(3,301,940)
Tangible shareholders' equity		$	3,213,724			$	3,133,916			$	3,049,266			$	3,011,284			$	2,919,906
Period end shares outstanding			92,160				92,170				92,160				92,935				92,929
Tangible book value per share		$	34.87			$	34.00			$	33.09			$	32.40			$	31.42
Reconciliation of equity to assets ratio to period end tangible equity      to period end tangible assets ratio:
Tangible shareholders' equity		$	3,213,724			$	3,133,916			$	3,049,266			$	3,011,284			$	2,919,906
Total assets		$	38,271,186			$	37,833,970			$	36,512,119			$	36,099,924			$	35,558,418
Less: Goodwill and other intangible assets			(3,290,700)				(3,293,320)				(3,296,175)				(3,299,053)				(3,301,940)
Tangible assets		$	34,980,486			$	34,540,650			$	33,215,944			$	32,800,871			$	32,256,478
Period end tangible equity to period end tangible assets ratio			9.19	%			9.07	%			9.18	%			9.18	%			9.05	%
Reconciliation of allowance for credit losses to total loans to      allowance for credit losses on loans to total loans excluding      Warehouse Purchase Program and Paycheck Protection Program      loans:
Allowance for credit losses on loans		$	285,163			$	286,380			$	287,187			$	302,884			$	307,210
Total loans		$	18,067,524			$	18,616,144			$	18,957,732			$	19,251,785			$	19,638,886
Less: Warehouse Purchase Program loans			(1,344,541)				(1,775,699)				(1,998,049)				(2,095,559)				(2,272,389)
Less: Paycheck Protection Program loans			(86,258)				(169,884)				(365,841)				(779,989)				(1,139,083)
Total loans less Warehouse Purchase Program and Paycheck           Protection Program loans		$	16,636,725			$	16,670,561			$	16,593,842			$	16,376,237			$	16,227,414
Allowance for credit losses on loans to total loans excluding Warehouse      Purchase Program and Paycheck Protection Program loans			1.71	%			1.72	%			1.73	%			1.85	%			1.89	%
Reconciliation of efficiency ratio to efficiency ratio excluding net      gains and losses on the sale of assets and securities:
Noninterest expense		$	119,850			$	119,538			$	119,815			$	115,191			$	119,076
Net interest income		$	239,944			$	244,760			$	248,567			$	245,399			$	254,582
Noninterest income			35,122				35,757				34,645				35,556				34,008
Less: net gain (loss) on sale or write down of assets			689				1,165				255				(244)				(79)
Noninterest income excluding net gains and losses on the sale or write      down of assets and securities			34,433				34,592				34,390				35,800				34,087
Total income excluding net gains and losses on the sale or write           down of assets and securities		$	274,377			$	279,352			$	282,957			$	281,199			$	288,669
Efficiency ratio, excluding net gains and losses on the sale or write down      of assets and securities			43.68	%			42.79	%			42.34	%			40.96	%			41.25	%

 

 

 

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SOURCE Prosperity Bancshares, Inc.

FAQ

What were Prosperity Bancshares' earnings for Q1 2022?

Prosperity Bancshares reported earnings of $122.3 million or $1.33 per share for Q1 2022.

How much did deposits increase in Q1 2022 for PB?

Deposits increased by $296.5 million, which is 1.0% or 3.9% annualized.

What is the status of nonperforming assets for PB?

Nonperforming assets were low at 0.08% of average interest-earning assets.

What were the highlights of Prosperity's financial performance in Q1 2022?

The bank was ranked #6 in Forbes' 2022 America's Best Banks and reported strong customer deposits.

What challenges did Prosperity Bancshares face in Q1 2022?

The bank experienced a decline in net income compared to Q1 2021 and a decrease in loan balances.