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PROSPERITY BANCSHARES, INC.® REPORTS FOURTH QUARTER 2023 EARNINGS

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Prosperity Bancshares, Inc. reported a net income of $95.5 million for the fourth quarter of 2023, with diluted earnings per share of $1.02. Excluding special assessments and merger-related expenses, net income was $111.4 million and diluted earnings per share was $1.19. Loans increased by $2.259 billion during 2023, and noninterest-bearing deposits represented 36.0% of total deposits. The net interest margin increased to 2.75% in the fourth quarter of 2023. Nonperforming assets remained low at 0.21% of fourth quarter average interest-earning assets. The pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas was approved, and a 2024 Stock Repurchase Program covering up to 5% of outstanding common stock was announced.
Positive
  • Net income of $95.5 million for the fourth quarter of 2023
  • Diluted earnings per share of $1.02
  • Excluding special assessments and merger-related expenses, net income was $111.4 million
  • Diluted earnings per share was $1.19
  • Loans increased by $2.259 billion during 2023
  • Noninterest-bearing deposits represented 36.0% of total deposits
  • Net interest margin increased to 2.75% in the fourth quarter of 2023
  • Nonperforming assets remained low at 0.21% of fourth quarter average interest-earning assets
  • Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas approved
  • 2024 Stock Repurchase Program covering up to 5% of outstanding common stock announced
Negative
  • None.

Insights

The reported net income of $95.5 million and diluted earnings per share (EPS) of $1.02 for the fourth quarter of 2023 by Prosperity Bancshares, Inc. indicates a decline when compared to the same period in the previous year. The FDIC special assessment, a consequence of the banking industry's recent turmoil, has impacted the earnings, reducing EPS by approximately $0.17. However, when adjusted for this one-time expense and merger-related costs, the adjusted EPS of $1.19 provides a clearer picture of the company's operational performance.

Prosperity’s loan growth, excluding Warehouse Purchase Program loans, is a robust indicator of the bank's lending business expansion, with a significant 12.5% increase over the year. This growth, even when excluding the loans acquired from the merger, suggests an organic growth rate of 4.9%, reflecting strong demand for the bank's lending services. The decrease in borrowings by $525 million and the increase in net interest margin by 3 basis points to 2.75%, amidst a rising interest rate environment, are positive signals for the bank's interest income and margin stability.

The allowance for credit losses ratio of 1.63% is a critical metric for assessing the bank's risk management practices. This ratio, along with the low nonperforming assets at 0.21% of interest-earning assets, indicates that the bank maintains a healthy credit quality in its loan portfolio. The approved stock repurchase program covering up to 5% of outstanding common stock is a shareholder-friendly move, often seen as a signal of management's confidence in the company's valuation and future prospects.

Prosperity Bancshares' performance and strategic developments, such as the pending merger with Lone Star State Bancshares and the completed merger with First Bancshares, are significant for the regional banking sector. Mergers and acquisitions in this space are crucial for growth and competitive positioning. The successful integration of First Bancshares and the potential synergies from the Lone Star merger could enhance Prosperity’s market share and operational efficiencies.

The high proportion of noninterest-bearing deposits at 36% of total deposits is a competitive advantage for Prosperity, as it reduces the cost of funds and can bolster net interest margin, especially in a fluctuating interest rate environment. This strategic positioning could attract more investors looking for banks with stable deposit bases and the potential for higher profitability.

The context of the FDIC special assessment reflects broader economic and regulatory challenges facing the banking industry. The assessment was made necessary by the high-profile bank failures in early 2023, which have increased regulatory scrutiny on bank risk management practices. Prosperity Bancshares' ability to absorb such costs and still post an adjusted net income growth signifies resilience amidst economic headwinds.

The reported increase in the net interest margin, albeit modest, is particularly noteworthy in the current economic climate where the Federal Reserve's monetary policy has been tightening. This could indicate the bank's effective asset-liability management and pricing strategy, which are essential for maintaining profitability during periods of interest rate volatility.

  • Net income of $95.5 million and diluted earnings per share of $1.02 for fourth quarter 2023; excluding the FDIC special assessment of $19.9 million and merger related expenses, net income was $111.4 million(1) and diluted earnings per share was $1.19(1)
  • Loans, excluding Warehouse Purchase Program loans, increased $2.259 billion or 12.5% during 2023
  • Loans, excluding Warehouse Purchase Program loans and loans acquired in the merger of First Bancshares of Texas, Inc, increased $882.7 million or 4.9% during 2023
  • Noninterest-bearing deposits of $9.8 billion, representing 36.0% of total deposits
  • Borrowings decreased by $525.0 million during the fourth quarter 2023
  • Net interest margin increased 3 basis points to 2.75% during the fourth quarter 2023
  • Allowance for credit losses on loans and on off-balance sheet credit exposure of $368.9 million and allowance for credit losses to total loans, excluding Warehouse Purchase Program, of 1.63%(1)
  • Nonperforming assets remain low at 0.21% of fourth quarter average interest-earning assets
  • Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas
  • Approved 2024 Stock Repurchase Program covering up to 5% of outstanding common stock

HOUSTON, Jan. 24, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $95.5 million for the quarter ended December 31, 2023 compared with $137.9 million for the same period in 2022. Net income per diluted common share was $1.02 for the quarter ended December 31, 2023 compared with $1.51 for the same period in 2022.  During the fourth quarter of 2023, Prosperity incurred a Federal Deposit Insurance Corporation ("FDIC") special assessment of $19.9 million, or $0.17(1) per diluted common share net of tax, which was assessed by the FDIC to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in early 2023. Excluding this assessment and merger related expenses, net income was $111.4 million(1) and earnings per diluted common share was $1.19(1) for the fourth quarter of 2023. The annualized return on fourth quarter average assets was 0.98%; excluding the FDIC special assessment, net of tax, and merger related expenses, net of tax, the return was 1.15%. Nonperforming assets remain low at 0.21% of fourth quarter average interest-earning assets. On May 1, 2023, First Bancshares of Texas, Inc. ("First Bancshares") merged with Prosperity Bancshares and FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") merged with Prosperity Bank (collectively, the "Merger").

"We remain excited about the growth and future of our company. Prosperity operates in two of the best economies in the U.S. Even with the recent interest rate increases, economic activity and job growth in Texas and Oklahoma remain solid," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"Prosperity has a strong capital position that provides us with flexibility in pursuing strategic opportunities, such as mergers and acquisitions and the repurchase of our stock when appropriate. We expect that our net interest margin will continue to expand to our historically normal level as our assets reprice over the next several years, increasing our earnings per share. Further, we have a strong core deposit base, with 36% of our deposits in noninterest-bearing accounts," concluded Zalman.

Results of Operations for the Three Months Ended December 31, 2023

For the three months ended December 31, 2023, net income was $95.5 million(2) or $1.02 per diluted common share compared with $112.2 million(3) or $1.20 per diluted common share for the three months ended September 30, 2023. The three months ended December 31, 2023 was impacted by the FDIC special assessment of $19.9 million and merger related expenses. For the three months ended December 31, 2023, net income was $95.5 million(2) or $1.02 per diluted common share compared with $137.9 million(4) or $1.51 per diluted common share for the same period in 2022. The change was primarily due to an increase in interest expense and an increase in noninterest expense that includes the FDIC special assessment, partially offset by an increase in loan interest income. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2023 were 0.98%, 5.39% and 10.54%(1), respectively.

Excluding the FDIC special assessment, net of tax, and merger related expenses, net of tax, net income was $111.4 million(1) or $1.19(1) per diluted common share for the three months ended December 31, 2023 and annualized returns on average assets, average common equity and average tangible common equity were 1.15%(1), 6.29%(1) and 12.30%(1), respectively, for the same period. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 55.61%(1) for the three months ended December 31, 2023; and, excluding the FDIC special assessment and merger related expenses, the efficiency ratio was 48.23%(1).

Net interest income before provision for credit losses was $237.0 million for the three months ended December 31, 2023 compared with $239.5 million for the three months ended September 30, 2023. Net interest income before provision for credit losses decreased $19.2 million or 7.5% to $237.0 million for the three months ended December 31, 2023 compared with $256.1 million for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

The net interest margin on a tax equivalent basis was 2.75% for the three months ended December 31, 2023 compared with 2.72% for the three months ended September 30, 2023. The net interest margin on a tax equivalent basis was 2.75% for the three months ended December 31, 2023 compared with 3.05% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

Noninterest income was $36.6 million for the three months ended December 31, 2023 compared with $38.7 million for the three months ended September 30, 2023 and $37.7 million for the three months ended December 31, 2022.

Noninterest expense was $152.2 million for the three months ended December 31, 2023 compared with $135.7 million for the three months ended September 30, 2023, an increase of $16.5 million or 12.2%. The change was primarily due to the FDIC special assessment of $19.9 million and an increase in other noninterest expense, partially offset by a decrease in salaries and benefits. Noninterest expense was $152.2 million for the three months ended December 31, 2023 compared with $119.2 million for the same period in 2022, an increase of $32.9 million or 27.6%. The change was primarily due to the FDIC special assessment of $19.9 million and additional expenses related to the Merger.

Results of Operations for the Year Ended December 31, 2023

For the year ended December 31, 2023, net income was $419.3 million(5) or $4.51 per diluted common share compared with $524.5 million(6) or $5.73 per diluted common share for the same period in 2022. The change was primarily due to lower net interest income, the FDIC special assessment of $19.9 million, merger related provision for credit losses of $18.5 million, merger related expenses of $15.1 million and additional expenses related to the Merger. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2023 were 1.08%, 6.03% and 11.76%(1), respectively. Excluding the FDIC special assessment, net of tax, merger related provision for credit losses, net of tax, and merger related expenses, net of tax, net income was $461.7 million(1) or $4.97(1) per diluted common share for the year ended December 31, 2023 and returns on average assets, average common equity and average tangible common equity for the same period were 1.18%(1), 6.64%(1) and 12.95%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 50.26%(1) for the year ended December 31, 2023; and, excluding the FDIC special assessment and merger related expenses, the efficiency ratio was 47.09% (1).

Net interest income before provision for credit losses for the year ended December 31, 2023 was $956.4 million compared with $1.005 billion for the same period in 2022, a decrease of $48.8 million or 4.9%. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by increases in the average balances and average rates on loans.

The net interest margin on a tax equivalent basis for the year ended December 31, 2023 was 2.78% compared with 3.00% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans.

Noninterest income was $153.3 million for the year ended December 31, 2023 compared with $145.1 million for the same period in 2022, an increase of $8.1 million or 5.6%, primarily due to the Merger, partially offset by lower net gain on sale or write-down of assets.

Noninterest expense was $556.7 million for the year ended December 31, 2023 compared with $484.2 million for the same period in 2022, an increase of $72.5 million or 15.0%, primarily due to the FDIC special assessment of $19.9 million, merger related expenses of $15.1 million and additional expenses related to the Merger.

Balance Sheet Information

At December 31, 2023, Prosperity had $38.548 billion in total assets, an increase of $858.0 million or 2.3%, compared with $37.690 billion at December 31, 2022.

Loans were $21.181 billion at December 31, 2023, an increase of $2.341 billion or 12.4%, compared with $18.840 billion at December 31, 2022. Linked quarter loans decreased $252.2 million or 1.2% from $21.433 billion at September 30, 2023. Loans, excluding Warehouse Purchase Program loans, were $20.358 billion at December 31, 2023 compared with $18.099 billion at December 31, 2022, an increase of $2.259 billion or 12.5%, and compared with $20.520 billion at September 30, 2023, a decrease of $162.1 million.

Deposits were $27.180 billion at December 31, 2023, decreased $1.354 billion or 4.7%, compared with $28.534 billion at December 31, 2022, primarily due to a decrease in business deposits and public fund deposits, partially offset by an increase in Merger acquired deposits. Linked quarter deposits decreased $133.0 million or 0.5% from $27.313 billion at September 30, 2023.

The table below provides detail on the impact of loans acquired and deposits assumed in the Merger.

Balance Sheet Data (at period end)
















(In thousands)


















Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022




(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


Loans acquired (including new production since acquisition date):
















FirstCapital Bank


$

1,376,356



$

1,494,378



$

1,590,137



$

—



$

—


Prosperity - Warehouse Purchase Program loans



822,245




912,327




1,148,883




799,115




740,620


Prosperity - All other loans



18,981,937




19,026,008




18,914,926




18,535,244




18,099,207


Total loans


$

21,180,538



$

21,432,713



$

21,653,946



$

19,334,359



$

18,839,827


















Deposits assumed (including new deposits since acquisition date):
















FirstCapital Bank


$

1,517,217



$

1,625,691



$

1,481,831



$

—



$

—


All other deposits



25,662,592




25,687,109




25,899,055




27,004,236




28,533,531


Total deposits


$

27,179,809



$

27,312,800



$

27,380,886



$

27,004,236



$

28,533,531


Excluding loans acquired in the Merger and new production since May 1, 2023 by the acquired lending operations, loans at December 31, 2023 grew $964.4 million or 5.1% compared with December 31, 2022 and decreased $134.2 million or 0.7% compared with September 30, 2023. Excluding loans acquired in the Merger, new production since May 1, 2023 by the acquired lending operations and Warehouse Purchase Program loans, loans at December 31, 2023 grew $882.7 million or 4.9% compared with December 31, 2022 and decreased $44.1 million or 0.2% compared with September 30, 2023.

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since May 1, 2023, deposits at December 31, 2023 decreased by $2.871 billion or 10.1% compared with December 31, 2022 and decreased by $24.5 million or 0.1% compared with September 30, 2023.

Asset Quality

Nonperforming assets totaled $72.7 million or 0.21% of quarterly average interest-earning assets at December 31, 2023 compared with $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 and $27.5 million or 0.08% of quarterly average interest-earning assets at December 31, 2022. The increase during 2023 was primarily due to the Merger.

The allowance for credit losses on loans and off-balance sheet credit exposures was $368.9 million at December 31, 2023 compared with $311.5 million at December 31, 2022 and $388.0 million at September 30, 2023. There was no provision for credit losses for the three months ended December 31, 2023 and a provision for credit losses of $18.5 million for the year ended December 31, 2023 compared to no provision for credit losses for the three months and year ended December 31, 2022. The $18.5 million provision was made as a result of the loans acquired in the Merger, and included a $12.0 million provision for credit losses on loans and a $6.5 million provision for credit losses on off-balance sheet credit exposures. 

The allowance for credit losses on loans was $332.4 million or 1.57% of total loans at December 31, 2023 compared with $281.6 million or 1.49% of total loans at December 31, 2022 and $351.5 million or 1.64% of total loans at September 30, 2023. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.63%(1) at December 31, 2023 compared with 1.56%(1) at December 31, 2022 and 1.71%(1) at September 30, 2023.

Net charge-offs were $19.1 million for the three months ended December 31, 2023 compared with net charge-offs of $3.4 million for the three months ended September 30, 2023 and net charge-offs of $603 thousand for the three months ended December 31, 2022. Net charge-offs for the fourth quarter of 2023 included $16.3 million related to resolved purchased credit deteriorated ("PCD") loans. The PCD loans had reserves of $16.2 million assigned as of the acquisition date. Additionally, $7.4 million of reserves on resolved PCD loans was released to the general reserve.

Net charge-offs were $38.0 million for the year ended December 31, 2023 compared with $4.8 million for the year ended December 31, 2022. Net charge-offs for the year ended December 31, 2023 included $16.6 million related to resolved PCD loans and $15.0 million related to one commercial real estate loan acquired in a previous merger. The PCD loans had reserves of $16.3 million assigned as of the acquisition date. Additionally, reserves on PCD loans increased by $76.8 million due to the Merger and $23.5 million of reserves on resolved PCD loans was released to the general reserve.

Dividend

Prosperity Bancshares declared a first quarter 2024 cash dividend of $0.56 per share to be paid on April 1, 2024, to all shareholders of record as of March 15, 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 2023 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended December 31, 2023, and approximately 1.21 million shares of its common stock at an average weighted price of $59.88 per share during the year ended December 31, 2023.

Merger of First Bancshares of Texas, Inc.

On May 1, 2023, Prosperity completed the merger of First Bancshares and its wholly owned subsidiary 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 $164.5 million as of December 31, 2023, which was subject to subsequent fair value adjustments. During the second quarter of 2023, Prosperity completed the operational conversion of FirstCapital Bank.

Pending Merger of Lone Star State Bancshares, Inc.

On October 11, 2022, Prosperity Bancshares and Lone Star State Bancshares, Inc. ("Lone Star") jointly announced the signing of a definitive merger agreement whereby Lone Star, the parent company of Lone Star State Bank of West Texas ("Lone Star Bank") will merge with and into Prosperity. Lone Star Bank operates 5 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. As of December 31, 2023, Lone Star, on a consolidated basis, reported total assets of $1.372 billion, total loans of $1.081 billion and total deposits of $1.211 billion.

Under the terms of the merger agreement, Prosperity will issue 2,376,182 shares of Prosperity common stock plus $64.1 million in cash for all outstanding shares of Lone Star capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $228.7 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals. The shareholders of Lone Star approved the transaction on March 28, 2023.

Conference Call

Prosperity's management team will host a conference call on Wednesday, January 24, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's fourth quarter 2023 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 6674169.

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

Prosperity Bancshares, Inc. ®

As of December 31, 2023, Prosperity Bancshares, Inc.® is a $38.548 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 285 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; 32 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; 16 in the Bryan/College Station area, 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area.

PROSPERITY BANCSHARES, INC. (PRNewsfoto/Prosperity Bancshares, Inc.)

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 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, 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, including the pending transaction with Lone Star, 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 each of the 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, including Lone Star; 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, including the pending transaction with Lone Star, 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, 2022, 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 $2.6 million, net of tax, primarily comprised of loan discount accretion of $2.5 million, merger related expenses of $278 thousand, and the FDIC special assessment of $19.9 million for the three months ended December 31, 2023.

(3)

Includes purchase accounting adjustments of $2.5 million, net of tax, primarily comprised of loan discount accretion of $2.3 million, and merger related expenses of $1.1 million for the three months ended September 30, 2023.

(4)

Includes purchase accounting adjustments of $758 thousand, net of tax, primarily comprised of loan discount accretion of $913 thousand for the three months ended December 31, 2022.

(5)

Includes purchase accounting adjustments of $8.1 million, net of tax, primarily comprised of loan discount accretion of $8.0 million, merger related provision for credit losses of $18.5 million, merger related expenses of $15.1 million, and the FDIC special assessment of $19.9 million for the year ended December 31, 2023.

(6)

Includes purchase accounting adjustments of $6.0 million, net of tax, primarily comprised of loan discount accretion of $7.4 million for the year ended December 31, 2022.

 

Bryan/College Station Area


Frisco-West


Rusk


Nederland


Texas Tech Student Union

Bryan


Garland


Seven Points


Needville



Bryan-29th Street


Grapevine


Teague


Rosenberg


Midland

Bryan-East


Grapevine Main


Tyler-Beckham


Shadow Creek


North

Bryan-North


Kiest


Tyler-South Broadway


Spring


Wadley

Caldwell


Lake Highlands


Tyler-University


Tomball


Wall Street

College Station


McKinney


Winnsboro


Waller


West

Crescent Point


McKinney Eldorado




West Columbia



Hearne


McKinney Redbud


Houston Area


Wharton


Odessa

Huntsville


North Carrolton


Houston


Winnie


Grandview

Madisonville


Park Cities


Aldine


Wirt


Grant

Navasota


Plano


Alief




Kermit Highway

New Waverly


Plano-West


Bellaire


South Texas Area -


Parkway

Rock Prairie


Preston Forest


Beltway


Corpus Christi



Southwest Parkway


Preston Parker


Clear Lake


Calallen


Wichita Falls

Tower Point


Preston Royal


Copperfield


Carmel


Cattlemans

Wellborn Road


Red Oak


Cypress


Northwest


Kell



Richardson


Downtown


Saratoga



Central Texas Area


Richardson-West


Eastex


Timbergate


Other West Texas Area

Austin


Rosewood Court


Fairfield


Water Street


Locations

Allandale


The Colony


First Colony




Big Spring

Cedar Park


Tollroad


Fry Road


Victoria


Brownfield

Congress


Trinity Mills


Gessner


Victoria Main


Brownwood

Lakeway


Turtle Creek


Gladebrook


Victoria-Navarro


Burkburnett

Liberty Hill


West 15th Plano


Grand Parkway


Victoria-North


Byers

Northland


West Allen


Heights


Victoria Salem


Cisco

Oak Hill


Westmoreland


Highway 6 West




Comanche

Research Blvd


Wylie


Little York


Other South Texas Area


Early

Westlake




Medical Center


 Locations


Floydada



Fort Worth


Memorial Drive


Alice


Gorman

Other Central Texas Area


Haltom City


Northside


Aransas Pass


Henrietta

Locations


Hulen


Pasadena


Beeville


Levelland

Bastrop


Keller


Pecan Grove


Colony Creek


Littlefield

Canyon Lake


Museum Place


Pin Oak


Cuero


Merkel

Dime Box


Renaissance Square


River Oaks


Edna


Plainview

Dripping Springs


Roanoke


Sugar Land


Goliad


San Angelo

Elgin


Stockyards


SW Medical Center


Gonzales


Slaton

Flatonia




Tanglewood


Hallettsville


Snyder

Fredericksburg


Other Dallas/Fort Worth Area


The Plaza


Kingsville



Georgetown


Locations


Uptown


Mathis


Oklahoma

Gruene


Arlington


Waugh Drive


Padre Island


Central Oklahoma Area

Horseshoe Bay


Azle


Westheimer


Palacios


Oklahoma City

Kingsland


Ennis


West University


Port Lavaca


23rd Street

La Grange


Gainesville


Woodcreek


Portland


Expressway

Lexington


Glen Rose




Rockport


I-240

Marble Falls


Granbury


Katy


Sinton


Memorial

New Braunfels


Grand Prairie


Cinco Ranch


Taft



Pleasanton


Jacksboro


Katy-Spring Green


Yoakum


Other Central Oklahoma Area

Round Rock


Mesquite




Yorktown


 Locations

San Antonio


Muenster


The Woodlands




Edmond

Schulenburg


Runaway Bay


The Woodlands-College Park


West Texas Area


Norman

Seguin


Sanger


The Woodlands-I-45


Abilene



Smithville


Waxahachie


The Woodlands-Research Forest


Antilley Road


Tulsa Area

Thorndale


Weatherford




Barrow Street


Tulsa

Weimar




Other Houston Area


Cypress Street


Garnett



East Texas Area


Locations


Judge Ely


Harvard

Dallas/Fort Worth Area


Athens


Angleton


Mockingbird


Memorial

Dallas


Blooming Grove


Bay City




Sheridan

14th Street Plano


Canton


Beaumont


Amarillo


S. Harvard

Abrams Centre


Carthage


Cleveland


Hillside


Utica Tower

Addison


Corsicana


East Bernard


Soncy


Yale

Allen


Crockett


El Campo





Balch Springs


Eustace


Dayton


Lubbock


Other Tulsa Area Locations

Camp Wisdom


Gilmer


Galveston


4th Street


Owasso

Carrollton


Grapeland


Groves


66th Street



Cedar Hill


Gun Barrel City


Hempstead


82nd Street



Coppell


Jacksonville


Hitchcock


86th Street



East Plano


Kerens


Liberty


98th Street



Euless


Longview


Magnolia


Avenue Q



Frisco


Mount Vernon


Magnolia Parkway


Milwaukee



Frisco Warren


Palestine


Mont Belvieu


North University



 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)




Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022


Balance Sheet Data (at period end)
















Loans held for sale


$

5,734



$

10,187



$

10,656



$

1,603



$

554


Loans held for investment



20,352,559




20,510,199




20,494,407




18,533,641




18,098,653


Loans held for investment - Warehouse Purchase Program



822,245




912,327




1,148,883




799,115




740,620


Total loans



21,180,538




21,432,713




21,653,946




19,334,359




18,839,827


















Investment securities(A)



12,803,896




13,192,742




13,667,319




14,071,545




14,476,005


Federal funds sold



260




234




181




222




301


Allowance for credit losses on loans



(332,362)




(351,495)




(345,209)




(282,191)




(281,576)


Cash and due from banks



458,153




512,239




396,848




405,331




423,832


Goodwill



3,396,086




3,396,459




3,383,698




3,231,636




3,231,636


Core deposit intangibles, net



63,994




67,553




71,128




48,974




51,348


Other real estate owned



1,708




9,320




3,107




1,989




1,963


Fixed assets, net



369,992




370,237




365,299




345,149




339,453


Other assets



605,612




665,682




708,814




672,218




607,040


Total assets


$

38,547,877



$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829


















Noninterest-bearing deposits


$

9,776,572



$

10,281,893



$

10,364,921



$

10,108,348



$

10,915,448


Interest-bearing deposits



17,403,237




17,030,907




17,015,965




16,895,888




17,618,083


Total deposits



27,179,809




27,312,800




27,380,886




27,004,236




28,533,531


Other borrowings



3,725,000




4,250,000




4,800,000




3,365,000




1,850,000


Securities sold under repurchase agreements



309,277




300,714




434,160




434,261




428,134


Subordinated debentures



—




—




3,093




—




—


Allowance for credit losses on off-balance sheet credit exposures



36,503




36,503




36,503




29,947




29,947


Other liabilities



217,958




362,990




282,373




256,671




148,843


Total liabilities



31,468,547




32,263,007




32,937,015




31,090,115




30,990,455


Shareholders' equity(B)



7,079,330




7,032,677




6,968,116




6,739,117




6,699,374


Total liabilities and equity


$

38,547,877



$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829




(A)

Includes $(1,770), $(2,442), $(3,393), $(4,399) and $(4,396) in unrealized losses on available for sale securities for the quarterly periods ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

(B)

Includes $(1,398), $(1,930), $(2,681), $(3,476) and $(3,473) in after-tax unrealized losses on available for sale securities for the quarterly periods ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)




Three Months Ended



Year-to-Date




Dec 31,
2023



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Dec 31,
2023



Dec 31,
2022


Income Statement Data






















Interest income:






















Loans


$

306,562



$

308,678



$

286,638



$

247,118



$

235,126



$

1,148,996



$

831,189


Securities(C)



68,077




69,987




72,053




73,185




72,533




283,302




260,416


Federal funds sold and other earning assets



1,793




1,689




1,757




7,006




933




12,245




3,230


Total interest income



376,432




380,354




360,448




327,309




308,592




1,444,543




1,094,835
























Interest expense:






















Deposits



84,969




76,069




63,964




47,343




36,048




272,345




68,112


Other borrowings



52,386




62,190




57,351




34,396




14,682




206,323




18,851


Securities sold under repurchase agreements



2,094




2,533




2,674




2,103




1,725




9,404




2,641


Subordinated debentures



—




38




—




—




—




38




—


Total interest expense



139,449




140,830




123,989




83,842




52,455




488,110




89,604


Net interest income



236,983




239,524




236,459




243,467




256,137




956,433




1,005,231


Provision for credit losses



—




—




18,540




—




—




18,540




—


Net interest income after provision for credit losses



236,983




239,524




217,919




243,467




256,137




937,893




1,005,231
























Noninterest income:






















Nonsufficient funds (NSF) fees



8,365




8,719




8,512




8,095




8,519




33,691




34,014


Credit card, debit card and ATM card income



9,314




9,285




9,206




8,666




8,816




36,471




34,764


Service charges on deposit accounts



6,316




6,262




6,078




5,926




5,932




24,582




24,730


Trust income



3,360




3,326




3,358




3,225




3,498




13,269




12,250


Mortgage income



542




857




661




238




102




2,298




1,399


Brokerage income



1,059




1,067




1,000




1,149




905




4,275




3,654


Bank owned life insurance income



1,882




1,864




1,553




1,354




1,329




6,653




5,119


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



(84)




(45)




1,994




121




2,087




1,986




3,934


Other noninterest income



5,814




7,408




7,326




9,492




6,536




30,040




25,264


Total noninterest income



36,568




38,743




39,688




38,266




37,724




153,265




145,128
























Noninterest expense:






















Salaries and benefits



80,486




85,423




84,723




77,798




75,353




328,430




314,713


Net occupancy and equipment



9,093




9,464




8,935




8,025




8,147




35,517




32,446


Credit and debit card, data processing and software amortization



10,741




10,919




10,344




9,566




9,716




41,570




37,327


Regulatory assessments and FDIC insurance



24,940




5,155




5,097




4,973




2,873




40,165




11,381


Core deposit intangibles amortization



3,559




3,576




3,167




2,374




2,558




12,676




10,336


Depreciation



4,607




4,585




4,658




4,433




4,438




18,283




17,960


Communications



3,572




3,686




3,693




3,462




3,506




14,413




13,005


Other real estate expense



165




153




(464)




58




154




(88)




761


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



34




(734)




(33)




(13)




(63)




(746)




(883)


Merger related expenses



278




1,104




12,891




860




272




15,133




272


Other noninterest expense



14,696




12,326




12,859




11,464




12,290




51,345




46,868


Total noninterest expense



152,171




135,657




145,870




123,000




119,244




556,698




484,186


Income before income taxes



121,380




142,610




111,737




158,733




174,617




534,460




666,173


Provision for income taxes



25,904




30,402




24,799




34,039




36,737




115,144




141,657


Net income available to common shareholders


$

95,476



$

112,208



$

86,938



$

124,694



$

137,880



$

419,316



$

524,516




(C)

Interest income on securities was reduced by net premium amortization of $6,428, $6,897, $7,131, $7,384 and $8,703 for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and $27,840 and $42,957 for the years ended December 31, 2023 and 2022, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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




Three Months Ended



Year-to-Date




Dec 31,
2023



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Dec 31,
2023



Dec 31,
2022
























Profitability






















Net income (D) (E)


$

95,476



$

112,208



$

86,938



$

124,694



$

137,880



$

419,316



$

524,516
























Basic earnings per share


$

1.02



$

1.20



$

0.94



$

1.37



$

1.51



$

4.51



$

5.73


Diluted earnings per share


$

1.02



$

1.20



$

0.94



$

1.37



$

1.51



$

4.51



$

5.73
























Return on average assets (F) (J)



0.98

%



1.13

%



0.89

%



1.31

%



1.47

%



1.08

%



1.39

%

Return on average common equity (F) (J)



5.39

%



6.39

%



5.01

%



7.38

%



8.26

%



6.03

%



7.97

%

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



10.54

%



12.58

%



9.67

%



14.34

%



16.26

%



11.76

%



15.94

%

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



2.75

%



2.72

%



2.73

%



2.93

%



3.05

%



2.78

%



3.00

%

Efficiency ratio (G) (I) (K)



55.61

%



48.74

%



53.21

%



43.68

%



40.87

%



50.26

%



42.23

%























Liquidity and Capital Ratios






















Equity to assets



18.37

%



17.90

%



17.46

%



17.81

%



17.78

%



18.37

%



17.78

%

Common equity tier 1 capital



15.54

%



14.98

%



14.49

%



15.59

%



15.88

%



15.54

%



15.88

%

Tier 1 risk-based capital



15.54

%



14.98

%



14.49

%



15.59

%



15.88

%



15.54

%



15.88

%

Total risk-based capital



16.56

%



16.05

%



15.52

%



16.41

%



16.51

%



16.56

%



16.51

%

Tier 1 leverage capital



10.39

%



10.03

%



9.96

%



10.06

%



10.16

%



10.39

%



10.16

%

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



10.31

%



9.96

%



9.64

%



10.01

%



9.93

%



10.31

%



9.93

%























Other Data






















Weighted-average shares used in computing earnings per common share






















Basic



93,715




93,720




92,930




91,207




91,287




92,902




91,604


Diluted



93,715




93,720




92,930




91,207




91,287




92,902




91,604


Period end shares outstanding



93,722




93,717




93,721




90,693




91,314




93,722




91,314


Cash dividends paid per common share


$

0.56



$

0.55



$

0.55



$

0.55



$

0.55



$

2.21



$

2.11


Book value per common share


$

75.54



$

75.04



$

74.35



$

74.31



$

73.37



$

75.54



$

73.37


Tangible book value per common share (G)


$

38.62



$

38.08



$

37.49



$

38.13



$

37.41



$

38.62



$

37.41
























Common Stock Market Price






















High


$

68.79



$

63.65



$

63.13



$

78.76



$

76.32



$

78.76



$

80.46


Low


$

49.60



$

52.62



$

55.12



$

58.25



$

66.71



$

49.60



$

64.69


Period end closing price


$

67.73



$

54.58



$

56.48



$

61.52



$

72.68



$

67.73



$

72.68


Employees – FTE (excluding overtime)



3,850




3,853




3,710




3,651




3,633




3,850




3,633


Number of banking centers



285




285




286




272




272




285




272


 

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



Three Months Ended


Year-to-Date


Dec 31,

2023


Sep 30,

2023


Jun 30,

2023


Mar 31,

2023


Dec 31,

2022


Dec 31,

2023


Dec 31,

2022

Loan discount accretion














Non-PCD

$1,543


$1,508


$1,242


$532


$603


$4,825


$5,924

PCD

$937


$767


$1,178


$339


$310


$3,221


$1,477

Securities net accretion (amortization)

$598


$626


$426


$(2)


$(12)


$1,648


$116

Time deposits amortization

$(150)


$(210)


$(187)


$(53)


$(59)


$(600)


$(311)



(E)

Using effective tax rate of 21.3%, 21.3%, 22.2%, 21.4% and 21.0% for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and 21.5% and 21.3% for the years ended December 31, 2023 and 2022, 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)

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, and FDIC special assessment, net of tax, refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K)

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

 

Prosperity Bancshares, Inc.® 

Financial Highlights (Unaudited) 

(Dollars in thousands) 


YIELD ANALYSIS


Three Months Ended





Dec 31, 2023



Sep 30, 2023


Dec 31, 2022





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


$

9,828



$

185



7.47 %



$

9,832



$

162



6.54 %


$

1,758



$

27



6.09 %



Loans held for investment



20,370,915




291,882



5.68 %




20,496,075




290,566



5.62 %



17,818,769




223,768



4.98 %



Loans held for investment - Warehouse Purchase Program



770,481




14,495



7.46 %




972,936




17,950



7.32 %



747,007




11,331



6.02 %



Total loans



21,151,224




306,562



5.75 %




21,478,843




308,678



5.70 %



18,567,534




235,126



5.02 %



Investment securities



13,074,243




68,077



2.07 %


(M)


13,512,137




69,987



2.05 %

(M)


14,715,516




72,533



1.96 %


(M)

Federal funds sold and other earning assets



125,295




1,793



5.68 %




125,690




1,689



5.33 %



101,986




933



3.63 %



Total interest-earning assets



34,350,762




376,432



4.35 %




35,116,670




380,354



4.30 %



33,385,036




308,592



3.67 %



Allowance for credit losses on loans



(346,493)










(343,967)









(282,546)









Noninterest-earning assets



4,810,942










4,829,336









4,515,412









Total assets


$

38,815,211









$

39,602,039








$

37,617,902





































Interest-bearing liabilities:




























Interest-bearing demand deposits


$

4,822,698



$

6,789



0.56 %



$

4,768,485



$

5,182



0.43 %


$

5,843,672



$

3,224



0.22 %



Savings and money market deposits



8,815,892




45,192



2.03 %




8,977,824




44,446



1.96 %



9,805,024




27,929



1.13 %



Certificates and other time deposits



3,442,115




32,988



3.80 %




3,172,178




26,441



3.31 %



2,066,085




4,895



0.94 %



Other borrowings



4,028,263




52,386



5.16 %




4,671,449




62,190



5.28 %



1,465,533




14,682



3.97 %



Securities sold under repurchase agreements



300,317




2,094



2.77 %




389,149




2,533



2.58 %



441,405




1,725



1.55 %



Subordinated debentures



—




—




—




2,578




38



5.85 %



—




—




—



Total interest-bearing liabilities



21,409,285




139,449



2.58 %


(N)


21,981,663




140,830



2.54 %

(N)


19,621,719




52,455



1.06 %


(N)





























Noninterest-bearing liabilities:




























Noninterest-bearing demand deposits



9,960,240










10,269,162









11,064,714









Allowance for credit losses on off-balance sheet credit exposures



36,503










36,504









29,947









Other liabilities



323,344










290,217









224,512









Total liabilities



31,729,372










32,577,546









30,940,892









Shareholders' equity



7,085,839










7,024,493









6,677,010









Total liabilities and shareholders' equity


$

38,815,211









$

39,602,039








$

37,617,902





































Net interest income and margin





$

236,983



2.74 %






$

239,524



2.71 %





$

256,137



3.04 %



Non-GAAP to GAAP reconciliation:




























Tax equivalent adjustment






952










1,000









440






Net interest income and margin
     (tax equivalent basis)





$

237,935



2.75 %






$

240,524



2.72 %





$

256,577



3.05 %









































(L)

Annualized and based on an actual 365-day basis.

(M)

Yield on securities was impacted by net premium amortization of $6,428, $6,897 and $8,703 for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

(N)

Total cost of funds, including noninterest bearing deposits, was 1.76%, 1.73% and 0.68% for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

 

Prosperity Bancshares, Inc.® 

Financial Highlights (Unaudited) 

(Dollars in thousands) 


YIELD ANALYSIS


Year-to-Date





Dec 31, 2023


Dec 31, 2022





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


$

6,508



$

452



6.95 %


$

3,420



$

164



4.80 %



Loans held for investment



19,754,541




1,089,743



5.52 %



17,155,082




788,504



4.60 %



Loans held for investment - Warehouse Purchase Program



815,853




58,801



7.21 %



1,051,237




42,521



4.04 %



Total loans



20,576,902




1,148,996



5.58 %



18,209,739




831,189



4.56 %



Investment securities



13,719,899




283,302



2.06 %

(P)


14,613,799




260,416



1.78 %


(P)

Federal funds sold and other earning assets



248,691




12,245



4.92 %



709,270




3,230



0.46 %



Total interest-earning assets



34,545,492




1,444,543



4.18 %



33,532,808




1,094,835



3.26 %



Allowance for credit losses on loans



(314,350)









(283,997)









Noninterest-earning assets



4,741,815









4,475,434









Total assets


$

38,972,957








$

37,724,245




























Interest-bearing liabilities:



















Interest-bearing demand deposits


$

5,150,049



$

19,554



0.38 %


$

6,299,924



$

10,175



0.16 %



Savings and money market deposits



9,129,845




168,184



1.84 %



10,384,178




45,907



0.44 %



Certificates and other time deposits



2,832,754




84,607



2.99 %



2,322,754




12,030



0.52 %



Other borrowings



4,008,616




206,323



5.15 %



543,107




18,851



3.47 %



Securities sold under repurchase agreements



389,313




9,404



2.42 %



457,553




2,641



0.58 %



Subordinated debentures



1,031




38



3.69 %



—




—




—



Total interest-bearing liabilities



21,511,608




488,110



2.27 %

(Q)


20,007,516




89,604



0.45 %


(Q)




















Noninterest-bearing liabilities:



















Noninterest-bearing demand deposits



10,224,241









10,903,539









Allowance for credit losses on off-balance sheet credit exposures



33,271









29,947









Other liabilities



253,047









204,574









Total liabilities



32,022,167









31,145,576









Shareholders' equity



6,950,790









6,578,669









Total liabilities and shareholders' equity


$

38,972,957








$

37,724,245




























Net interest income and margin





$

956,433



2.77 %





$

1,005,231



3.00 %



Non-GAAP to GAAP reconciliation:



















Tax equivalent adjustment






3,640









1,815






Net interest income and margin (tax equivalent basis)





$

960,073



2.78 %





$

1,007,046



3.00 %





























(O)

Based on an actual 365-day basis.

(P)

Yield on securities was impacted by net premium amortization of $27,840 and $42,957 for the years ended December 31, 2023 and 2022, respectively.

(Q)

Total cost of funds, including noninterest bearing deposits, was 1.54% and 0.29% for the years ended December 31, 2023 and 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022


YIELD TREND (R)






























Interest-Earning Assets:















Loans held for sale


7.47

%



6.54

%



6.87

%



6.58

%



6.09

%

Loans held for investment


5.68

%



5.62

%



5.48

%



5.24

%



4.98

%

Loans held for investment - Warehouse Purchase Program


7.46

%



7.32

%



7.09

%



6.88

%



6.02

%

Total loans


5.75

%



5.70

%



5.55

%



5.29

%



5.02

%

Investment securities (S)


2.07

%



2.05

%



2.07

%



2.07

%



1.96

%

Federal funds sold and other earning assets


5.68

%



5.33

%



4.69

%



4.74

%



3.63

%

Total interest-earning assets


4.35

%



4.30

%



4.15

%



3.92

%



3.67

%
















Interest-Bearing Liabilities:















Interest-bearing demand deposits


0.56

%



0.43

%



0.30

%



0.26

%



0.22

%

Savings and money market deposits


2.03

%



1.96

%



1.88

%



1.50

%



1.13

%

Certificates and other time deposits


3.80

%



3.31

%



2.59

%



1.59

%



0.94

%

Other borrowings


5.16

%



5.28

%



5.20

%



4.83

%



3.97

%

Securities sold under repurchase agreements


2.77

%



2.58

%



2.43

%



1.99

%



1.55

%

Subordinated debentures


—




5.85

%



—




—




—


Total interest-bearing liabilities


2.58

%



2.54

%



2.28

%



1.63

%



1.06

%
















Net Interest Margin


2.74

%



2.71

%



2.72

%



2.92

%



3.04

%

Net Interest Margin (tax equivalent)


2.75

%



2.72

%



2.73

%



2.93

%



3.05

%



(R)

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

(S)

Yield on securities was impacted by net premium amortization of $6,428, $6,897, $7,131, $7,384 and $8,703 for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Three Months Ended




Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022


Balance Sheet Averages
















Loans held for sale


$

9,828



$

9,832



$

3,910



$

2,343



$

1,758


Loans held for investment



20,370,915




20,496,075




19,802,751




18,317,712




17,818,769


Loans held for investment - Warehouse Purchase Program



770,481




972,936




898,768




617,822




747,007


Total loans



21,151,224




21,478,843




20,705,429




18,937,877




18,567,534


















Investment securities



13,074,243




13,512,137




13,976,818




14,332,509




14,715,516


Federal funds sold and other earning assets



125,295




125,690




150,300




600,048




101,986


Total interest-earning assets



34,350,762




35,116,670




34,832,547




33,870,434




33,385,036


Allowance for credit losses on loans



(346,493)




(343,967)




(283,594)




(282,316)




(282,546)


Cash and due from banks



302,864




301,201




281,593




319,960




306,235


Goodwill



3,396,224




3,387,293




3,291,659




3,231,637




3,231,637


Core deposit intangibles, net



65,986




69,551




48,616




50,208




52,591


Other real estate



4,781




6,301




2,712




2,083




2,075


Fixed assets, net



370,900




367,814




357,593




342,380




338,572


Other assets



670,187




697,176




756,500




643,467




584,302


Total assets


$

38,815,211



$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902


















Noninterest-bearing deposits


$

9,960,240



$

10,269,162



$

10,274,819



$

10,389,980



$

11,064,714


Interest-bearing demand deposits



4,822,698




4,768,485




5,147,453




5,877,641




5,843,672


Savings and money market deposits



8,815,892




8,977,824




9,156,047




9,579,679




9,805,024


Certificates and other time deposits



3,442,115




3,172,178




2,652,064




2,045,580




2,066,085


Total deposits



27,040,945




27,187,649




27,230,383




27,892,880




28,779,495


Other borrowings



4,028,263




4,671,449




4,427,914




2,887,011




1,465,533


Securities sold under repurchase agreements



300,317




389,149




441,303




427,887




441,405


Subordinated debentures



—




2,578




1,547




—




—


Allowance for credit losses on off-balance sheet credit exposures



36,503




36,504




30,022




29,947




29,947


Other liabilities



323,344




290,217




220,775




180,685




224,512


Shareholders' equity



7,085,839




7,024,493




6,935,682




6,759,443




6,677,010


Total liabilities and equity


$

38,815,211



$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022

Period End Balances
































Loan Portfolio
















Commercial and industrial


$1,936,717

9.2 %


$2,153,391

10.1 %


$2,245,620

10.5 %


$2,074,078

10.7 %


$2,165,263

11.6 %

Warehouse purchase program


822,245

3.9 %


912,327

4.3 %


1,148,883

5.3 %


799,115

4.1 %


740,620

3.9 %

Construction, land development and other land loans


3,076,591

14.5 %


3,200,479

14.9 %


3,215,016

14.8 %


2,899,980

15.0 %


2,805,438

14.9 %

1-4 family residential


7,207,226

34.0 %


7,032,593

32.8 %


6,780,813

31.3 %


6,055,532

31.3 %


5,774,814

30.6 %

Home equity


960,852

4.5 %


969,498

4.5 %


977,070

4.5 %


959,124

5.0 %


966,410

5.1 %

Commercial real estate (includes multi-family residential)


5,662,948

26.7 %


5,606,837

26.2 %


5,676,526

26.2 %


5,133,693

26.6 %


4,986,211

26.5 %

Agriculture (includes farmland)


816,043

3.9 %


801,933

3.7 %


804,376

3.7 %


721,395

3.7 %


688,033

3.6 %

Consumer and other


329,593

1.6 %


306,018

1.4 %


305,207

1.4 %


288,300

1.5 %


283,559

1.5 %

Energy


368,323

1.7 %


449,637

2.1 %


500,435

2.3 %


403,142

2.1 %


429,479

2.3 %

Total loans


$21,180,538



$21,432,713



$21,653,946



$19,334,359



$18,839,827


















Deposit Types
















Noninterest-bearing DDA


$9,776,572

36.0 %


$10,281,893

37.6 %


$10,364,921

37.9 %


$10,108,348

37.4 %


$10,915,448

38.2 %

Interest-bearing DDA


5,115,945

18.8 %


4,797,259

17.6 %


4,953,090

18.1 %


5,332,086

19.8 %


5,986,203

21.0 %

Money market


5,859,701

21.6 %


5,892,505

21.6 %


5,904,160

21.5 %


6,021,449

22.3 %


6,164,025

21.6 %

Savings


2,881,397

10.6 %


3,005,936

11.0 %


3,179,351

11.6 %


3,304,482

12.2 %


3,471,970

12.2 %

Certificates and other time deposits


3,546,194

13.0 %


3,335,207

12.2 %


2,979,364

10.9 %


2,237,871

8.3 %


1,995,885

7.0 %

Total deposits


$27,179,809



$27,312,800



$27,380,886



$27,004,236



$28,533,531


















Loan to Deposit Ratio


77.9 %



78.5 %



79.1 %



71.6 %



66.0 %


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Construction Loans




Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022




























Single family residential construction


$

1,088,636



35.4

%


$

1,157,016



36.1

%


$

1,244,631



38.7

%


$

1,179,883



40.7

%


$

1,097,176



39.1

%

Land development



367,849



12.0

%



359,518



11.2

%



310,199



9.7

%



222,511



7.7

%



181,747



6.5

%

Raw land



328,365



10.7

%



340,659



10.7

%



359,228



11.2

%



326,168



11.2

%



332,603



11.9

%

Residential lots



222,591



7.2

%



216,659



6.8

%



216,706



6.7

%



226,600



7.8

%



243,942



8.7

%

Commercial lots



155,415



5.0

%



154,425



4.8

%



158,278



4.9

%



167,151



5.8

%



177,378



6.3

%

Commercial construction and other



914,436



29.7

%



973,022



30.4

%



927,025



28.8

%



777,678



26.8

%



772,606



27.5

%

Net unaccreted discount



(701)






(820)






(1,051)






(11)






(14)




Total construction loans


$

3,076,591





$

3,200,479





$

3,215,016





$

2,899,980





$

2,805,438




 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2023



Houston



Dallas



Austin



OK City



Tulsa



Other (T)



Total



Collateral Type






















Shopping center/retail

$

353,014



$

287,131



$

59,778



$

15,231



$

14,662



$

290,654



$

1,020,470



Commercial and industrial buildings


164,582




101,957




25,833




31,071




18,242




269,728




611,413



Office buildings


84,064




222,729




54,147




48,961




3,934




97,328




511,163



Medical buildings


75,533




17,124




1,740




43,605




33,186




57,860




229,048



Apartment buildings


138,011




127,623




41,696




14,215




13,543




212,276




547,364



Hotel


111,974




86,862




39,550




18,281




—




169,238




425,905



Other


92,153




62,468




41,769




8,381




1,662




78,384




284,817



Total

$

1,019,331



$

905,894



$

264,513



$

179,745



$

85,229



$

1,175,468



$

3,630,180


(U)

 

Acquired Loans



Non-PCD Loans



PCD Loans



Total Acquired Loans



Balance at
Acquisition
Date



Balance at
Sept 30,
2023



Balance at
Dec 31,
2023



Balance at
Acquisition
Date



Balance at
Sept 30,
2023



Balance at
Dec 31,
2023



Balance at
Acquisition
Date



Balance at
Sept 30,
2023



Balance at
Dec 31,
2023


Loan marks:



























Acquired banks (V)

$

345,599



$

871



$

506



$

320,052



$

2,685



$

2,594



$

665,651



$

3,556



$

3,100


FirstCapital Bank (W)


22,648




20,672




19,486




7,790




6,658




5,320




30,438




27,330




24,806


Total


368,247




21,543




19,992




327,842




9,343




7,914




696,089




30,886




27,906





























Acquired portfolio loan balances:



























Acquired banks (V)


12,286,159




1,104,770




1,043,525




689,573




62,053




58,310




12,975,732




1,166,823




1,101,835


FirstCapital Bank (W)


1,021,694




855,052




780,284




627,991




558,271




475,343




1,649,685




1,413,323




1,255,627


Total


13,307,853




1,959,822




1,823,809




1,317,564




620,324




533,653




14,625,417


 (X)


2,580,146




2,357,462





























Acquired portfolio loan balances less loan marks

$

12,939,606



$

1,938,279



$

1,803,817



$

989,722



$

610,981



$

525,739



$

13,929,328



$

2,549,260



$

2,329,556




(T)

Includes other MSA and non-MSA regions.

(U)

Represents a portion of total commercial real estate loans of $5.663 billion as of December 31, 2023.

(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)

FirstCapital Bank merger was completed on May 1, 2023. The 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)

Actual principal balances acquired.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Year-to-Date



Dec 31, 2023



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Dec 31, 2023



Dec 31, 2022


Asset Quality





















Nonaccrual loans

$

68,688



$

59,729



$

57,723



$

22,496



$

19,614



$

68,688



$

19,614


Accruing loans 90 or more days past due


2,195




397




1,744




—




5,917




2,195




5,917


Total nonperforming loans


70,883




60,126




59,467




22,496




25,531




70,883




25,531


Repossessed assets


76




35




153




—




—




76




—


Other real estate


1,708




9,320




3,107




1,989




1,963




1,708




1,963


Total nonperforming assets

$

72,667



$

69,481



$

62,727



$

24,485



$

27,494



$

72,667



$

27,494























Nonperforming assets:





















Commercial and industrial (includes energy)

$

8,957



$

22,219



$

24,027



$

2,832



$

3,921



$

8,957



$

3,921


Construction, land development and other land loans


17,343




8,684




4,245




3,210




6,166




17,343




6,166


1-4 family residential (includes home equity)


26,096




23,708




19,609




16,951




15,326




26,096




15,326


Commercial real estate (includes multi-family residential)


18,775




13,341




13,504




1,051




1,649




18,775




1,649


Agriculture (includes farmland)


1,460




1,511




1,284




432




421




1,460




421


Consumer and other


36




18




58




9




11




36




11


Total

$

72,667



$

69,481



$

62,727



$

24,485



$

27,494



$

72,667



$

27,494


Number of loans/properties


292




260




241




190




170




292




170


Allowance for credit losses on loans

$

332,362



$

351,495



$

345,209



$

282,191



$

281,576



$

332,362



$

281,576























Net charge-offs (recoveries):





















Commercial and industrial (includes energy)

$

16,123



$

1,594



$

160



$

(1,472)



$

(643)



$

16,405



$

(841)


Construction, land development and other land loans


(5)




(5)




50




(13)




(5)




27




416


1-4 family residential (includes home equity)


20




(78)




(70)




(140)




(55)




(268)




(202)


Commercial real estate (includes multi-family residential)


1,590




570




14,957




(1)




74




17,116




860


Agriculture (includes farmland)


—




—




(78)




(6)




(14)




(84)




(7)


Consumer and other


1,405




1,327




1,046




1,017




1,246




4,795




4,578


Total

$

19,133



$

3,408



$

16,065



$

(615)



$

603



$

37,991



$

4,804























Asset Quality Ratios





















Nonperforming assets to average interest-earning assets


0.21

%



0.20

%



0.18

%



0.07

%



0.08

%



0.21

%



0.08

%

Nonperforming assets to loans and other real estate


0.34

%



0.32

%



0.29

%



0.13

%



0.15

%



0.34

%



0.15

%

Net charge-offs to average loans (annualized)


0.36

%



0.06

%



0.31

%


(0.01 %)




0.01

%



0.18

%



0.03

%

Allowance for credit losses on loans to total loans


1.57

%



1.64

%



1.59

%



1.46

%



1.49

%



1.57

%



1.49

%

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


1.63

%



1.71

%



1.68

%



1.52

%



1.56

%



1.63

%



1.56

%

 

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, and the FDIC special assessment, 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 or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, merger related expenses and the FDIC special assessment. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.



Three Months Ended



Year-to-Date




Dec 31,
2023



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Dec 31,
2023



Dec 31,
2022


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, and FDIC special assessment, net of tax:






















Diluted earnings per share (unadjusted)


$

1.02



$

1.20



$

0.94



$

1.37



$

1.51



$

4.51



$

5.73
























Net income


$

95,476



$

112,208



$

86,938



$

124,694



$

137,880



$

419,316



$

524,516


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



—




—




14,647




—




—




14,647




—


Merger related expenses, net of tax(Y)



220




872




10,184




679




215




11,955




215


FDIC special assessment, net of tax(Y)



15,736




—




—




—




—




15,736




—


Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax(Y):


$

111,432



$

113,080



$

111,769



$

125,373



$

138,095



$

461,654



$

524,731
























Weighted average diluted shares outstanding



93,715




93,720




92,930




91,207




91,287




92,902




91,604


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


$

—



$

—



$

0.16



$

—



$

—



$

0.16



$

—


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


$

—



$

0.01



$

0.11



$

0.01



$

—



$

0.13



$

—


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


$

0.17



$

—



$

—



$

—



$

—



$

0.17



$

—


Diluted earnings per share excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:(Y)


$

1.19



$

1.21



$

1.21



$

1.38



$

1.51



$

4.97



$

5.73














































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, and FDIC special assessment, net of tax:






















Return on average assets (unadjusted)



0.98

%



1.13

%



0.89

%



1.31

%



1.47

%



1.08

%



1.39

%























Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax(Y):


$

111,432



$

113,080



$

111,769



$

125,373



$

138,095



$

461,654



$

524,731


Average total assets


$

38,815,211



$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902



$

38,972,957



$

37,724,245


Return on average assets excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (Y)



1.15

%



1.14

%



1.14

%



1.31

%



1.47

%



1.18

%



1.39

%






























(Y) Calculated assuming a federal tax rate of 21.0%.




Three Months Ended



Year-to-Date




Dec 31,
2023



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Dec 31,
2023



Dec 31,
2022


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, and FDIC special assessment, net of tax:






















Return on average common equity (unadjusted)



5.39

%



6.39

%



5.01

%



7.38

%



8.26

%



6.03

%



7.97

%























Net income, excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax, and FDIC special assessment, net of tax(Y)


$

111,432



$

113,080



$

111,769



$

125,373



$

138,095



$

461,654



$

524,731


Average shareholders' equity


$

7,085,839



$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,950,790



$

6,578,669


Return on average 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 (F) (Y)



6.29

%



6.44

%



6.45

%



7.42

%



8.27

%



6.64

%



7.98

%























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






















Net income


$

95,476



$

112,208



$

86,938



$

124,694



$

137,880



$

419,316



$

524,516


Average shareholders' equity


$

7,085,839



$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,950,790



$

6,578,669


Less: Average goodwill and other intangible assets



(3,462,210)




(3,456,844)




(3,340,275)




(3,281,845)




(3,284,228)




(3,385,984)




(3,288,068)


Average tangible shareholders' equity


$

3,623,629



$

3,567,649



$

3,595,407



$

3,477,598



$

3,392,782



$

3,564,806



$

3,290,601


Return on average tangible common equity (F)



10.54

%



12.58

%



9.67

%



14.34

%



16.26

%



11.76

%



15.94

%























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, and FDIC special assessment, net of tax(Y)


$

111,432



$

113,080



$

111,769



$

125,373



$

138,095



$

461,654



$

524,731


Average shareholders' equity


$

7,085,839



$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,950,790



$

6,578,669


Less: Average goodwill and other intangible assets



(3,462,210)




(3,456,844)




(3,340,275)




(3,281,845)




(3,284,228)




(3,385,984)




(3,288,068)


Average tangible shareholders' equity


$

3,623,629



$

3,567,649



$

3,595,407



$

3,477,598



$

3,392,782



$

3,564,806



$

3,290,601


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 (F) (Y)



12.30

%



12.68

%



12.43

%



14.42

%



16.28

%



12.95

%



15.95

%























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






















Shareholders' equity


$

7,079,330



$

7,032,677



$

6,968,116



$

6,739,117



$

6,699,374



$

7,079,330



$

6,699,374


Less: Goodwill and other intangible assets



(3,460,080)




(3,464,012)




(3,454,826)




(3,280,610)




(3,282,984)




(3,460,080)




(3,282,984)


Tangible shareholders' equity


$

3,619,250



$

3,568,665



$

3,513,290



$

3,458,507



$

3,416,390



$

3,619,250



$

3,416,390
























Period end shares outstanding



93,722




93,717




93,721




90,693




91,314




93,722




91,314


Tangible book value per share


$

38.62



$

38.08



$

37.49



$

38.13



$

37.41



$

38.62



$

37.41
























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






















Tangible shareholders' equity


$

3,619,250



$

3,568,665



$

3,513,290



$

3,458,507



$

3,416,390



$

3,619,250



$

3,416,390


Total assets


$

38,547,877



$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829



$

38,547,877



$

37,689,829


Less: Goodwill and other intangible assets



(3,460,080)




(3,464,012)




(3,454,826)




(3,280,610)




(3,282,984)




(3,460,080)




(3,282,984)


Tangible assets


$

35,087,797



$

35,831,672



$

36,450,305



$

34,548,622



$

34,406,845



$

35,087,797



$

34,406,845


Period end tangible equity to period end tangible assets ratio



10.31

%



9.96

%



9.64

%



10.01

%



9.93

%



10.31

%



9.93

%
































Three Months Ended



Year-to-Date




Dec 31,
2023



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Dec 31,
2023



Dec 31,
2022


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


$

332,362



$

351,495



$

345,209



$

282,191



$

281,576



$

332,362



$

281,576


Total loans


$

21,180,538



$

21,432,713



$

21,653,946



$

19,334,359



$

18,839,827



$

21,180,538



$

18,839,827


Less: Warehouse Purchase Program loans



(822,245)




(912,327)




(1,148,883)




(799,115)




(740,620)




(822,245)




(740,620)


Total loans less Warehouse Purchase Program


$

20,358,293



$

20,520,386



$

20,505,063



$

18,535,244



$

18,099,207



$

20,358,293



$

18,099,207


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



1.63

%



1.71

%



1.68

%



1.52

%



1.56

%



1.63

%



1.56

%























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






















Noninterest expense


$

152,171



$

135,657



$

145,870



$

123,000



$

119,244



$

556,698



$

484,186
























Net interest income


$

236,983



$

239,524



$

236,459



$

243,467



$

256,137



$

956,433



$

1,005,231


Noninterest income



36,568




38,743




39,688




38,266




37,724




153,265




145,128


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



(84)




(45)




1,994




121




2,087




1,986




3,934


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



36,652




38,788




37,694




38,145




35,637




151,279




141,194


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


$

273,635



$

278,312



$

274,153



$

281,612



$

291,774



$

1,107,712



$

1,146,425


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



55.61

%



48.74

%



53.21

%



43.68

%



40.87

%



50.26

%



42.23

%























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






















Noninterest expense


$

152,171



$

135,657



$

145,870



$

123,000



$

119,244



$

556,698



$

484,186


Less: merger related expenses



278




1,104




12,891




860




272




15,133




272


Less: FDIC special assessment



19,919




—




—




—




—




19,919




—


Noninterest expense excluding merger related expenses and FDIC special assessment


$

131,974



$

134,553



$

132,979



$

122,140



$

118,972



$

521,646



$

483,914
























Net interest income


$

236,983



$

239,524



$

236,459



$

243,467



$

256,137



$

956,433



$

1,005,231


Noninterest income



36,568




38,743




39,688




38,266




37,724




153,265




145,128


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



(84)




(45)




1,994




121




2,087




1,986




3,934


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



36,652




38,788




37,694




38,145




35,637




151,279




141,194


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


$

273,635



$

278,312



$

274,153



$

281,612



$

291,774



$

1,107,712



$

1,146,425


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



48.23

%



48.35

%



48.51

%



43.37

%



40.78

%



47.09

%



42.21

%






























 

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