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PROSPERITY BANCSHARES, INC.® REPORTS SECOND QUARTER 2023 EARNINGS

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Prosperity Bancshares, Inc. (NYSE: PB) reported net income of $86.9 million and diluted earnings per share of $0.94 for the second quarter of 2023, impacted by merger-related charges. Loans increased by $1.970 billion or 10.6%, deposits increased by $376.7 million or 1.4%. Nonperforming assets remain low at 0.18% of second quarter average interest-earning assets. The company completed the merger of First Bancshares of Texas, Inc. and FirstCapital Bank of Texas, N.A., and has a pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas.
Positive
  • Loans increased by $1.970 billion or 10.6%
  • Nonperforming assets remain low at 0.18% of second quarter average interest-earning assets
  • Completed the merger and operational conversion of First Bancshares of Texas, Inc.
  • Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas
Negative
  • Net income lower than previous quarters due to increased cost of funds
  • Merger-related charges impacted earnings
  • Net income of $86.9 million and diluted earnings per share of $0.94 for second quarter 2023; excluding merger related provision and expenses of $31.4 million, diluted earnings per share of $1.21(1)
  • Loans, excluding Warehouse Purchase Program loans, increased $1.970 billion or 10.6% during second quarter 2023
  • Deposits increased $376.7 million or 1.4% during the second quarter 2023
  • Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans, of 1.68%(1)
  • Nonperforming assets remain low at 0.18% of second quarter average interest-earning assets
  • Repurchased 595 thousand shares of common stock during the second quarter of 2023, and 1.2 million shares during the first six months of 2023
  • Completed the merger and operational conversion of First Bancshares of Texas, Inc.
  • Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas

HOUSTON, July 26, 2023 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $86.9 million for the quarter ended June 30, 2023 compared with $128.5 million for the same period in 2022. Net income per diluted common share was $0.94 for the quarter ended June 30, 2023 compared with $1.40 for the same period in 2022.  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"). During the second quarter of 2023, Prosperity incurred a merger related provision for credit losses of $18.5 million, or $0.16(1) per diluted common share, and merger related expenses of $12.9 million, or $0.11(1) per diluted common share. Excluding these charges, earnings per diluted common share was $1.21(1) for the second quarter of 2023. Additionally, loans, excluding Warehouse Purchase Program loans, increased $1.970 billion or 10.6% during the second quarter of 2023, primarily due to the Merger. The annualized return on second quarter average assets was 0.89%, and the annualized return on second quarter average assets excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax was 1.14%(1). Nonperforming assets remain low at 0.18% of second quarter average interest-earning assets.

"I am pleased to announce that on May 1, 2023, Prosperity completed the merger of First Bancshares of Texas 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," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"For the second quarter of 2023, Prosperity's net income was impacted by merger related charges. Excluding those charges, our earnings remain strong but are lower than previous quarters, primarily because of the timing differences in that our cost of funds has increased faster than our earning assets have repriced. The good news is that based on our models, we show our net interest margin improving in a 12 month and 24-month time period to more normal levels. However, if rates increase more than we anticipate, this could change. Together with our model projections, strong capital position, liquidity, earnings, strong cost controls and sound asset quality, we believe opportunities remain for continued growth and expansion. I would like to welcome our new associates and thank our current associates for the all the hard work and integrity they show every day taking care of our customers," concluded Zalman.

Results of Operations for the Three Months Ended June 30, 2023

Net income was $86.9 million(2) for the three months ended June 30, 2023 compared with $128.5 million(3) for the same period in 2022, and was impacted by merger related provision for credit losses of $18.5 million and merger related expenses of $12.9 million. Net income per diluted common share was $0.94 for the three months ended June 30, 2023 compared with $1.40 for the same period in 2022, and was also impacted by merger related provision and expenses. On a linked quarter basis, net income was $86.9 million(2) for the three months ended June 30, 2023 compared with $124.7 million(4) for the three months ended March 31, 2023.  The change was primarily due to the Merger. Net income per diluted common share was $0.94 for the three months ended June 30, 2023 compared with $1.37 for the three months ended March 31, 2023. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2023 were 0.89%, 5.01% and 9.67%(1), respectively. Excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax, annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2023 were 1.14%(1), 6.45%(1) and 12.43%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 53.21%(1) for the three months ended June 30, 2023; and excluding merger related expenses, the efficiency ratio was 48.51%(1).

Net interest income before provision for credit losses for the three months ended June 30, 2023 was $236.5 million compared with $248.5 million for the same period in 2022, a decrease of $12.0 million or 4.8%. The change was primarily due to an increase in average balances and rates on 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 held for investment and an increase in average rates on investment securities. On a linked quarter basis, net interest income before provision for credit losses was $236.5 million compared with $243.5 million for the three months ended March 31, 2023, a decrease of $7.0 million or 2.9%. The change was primarily due to an increase in the average balances and average rates on other borrowings, an increase in average rates on interest-bearing deposits and a decrease in average federal funds sold and other earning assets, partially offset by an increase in the average balances and average rates on loans.

The net interest margin on a tax equivalent basis was 2.73% for the three months ended June 30, 2023 compared with 2.97% for the same period in 2022. The change was primarily due to an increase in average balances and average rates on 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 held for investment and an increase in average rates on investment securities. On a linked quarter basis, the net interest margin on a tax equivalent basis was 2.73% for the three months ended June 30, 2023 compared with 2.93% for the three months ended March 31, 2023. The change was primarily due to an increase in the average balances and average rates on other borrowings, an increase in average rates on interest-bearing deposits and a decrease in average federal funds sold and other earning assets, partially offset by an increase in the average balances and average rates on loans.

Noninterest income was $39.7 million for the three months ended June 30, 2023 compared with $37.6 million for the same period in 2022, an increase of $2.1 million or 5.6%.  On a linked quarter basis, noninterest income was $39.7 million compared with $38.3 million for the three months ended March 31, 2023, an increase of $1.4 million or 3.7%.

Noninterest expense was $145.9 million for the three months ended June 30, 2023 compared with $122.9 million for the same period in 2022, an increase of $23.0 million or 18.7%. On a linked quarter basis, noninterest expense increased $22.9 million  or 18.6% to $145.9 million compared with $123.0 million for the three months ended March 31, 2023. The change for both periods was primarily due to an increase in merger related expenses, an increase in salaries and benefits and an increase in additional expenses related to two months of FirstCapital Bank operations.

Results of Operations for the Six Months Ended June 30, 2023

Net income was $211.6 million(5) for the six months ended June 30, 2023 compared with $250.8 million(6) for the same period in 2022, and was impacted by merger related provision for credit losses of $18.5 million and merger related expenses of $13.8 million. Net income per diluted common share was $2.30 for the six months ended June 30, 2023 compared with $2.73 for the same period in 2022, and was also impacted by merger related provision and expenses. Annualized returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2023 were 1.09%, 6.18% and 11.97%(1), respectively. Excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax, annualized returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2023 were 1.22%(1), 6.93%(1) and 13.41%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 48.38%(1) for the six months ended June 30, 2023; excluding merger related expenses, the efficiency ratio was 45.90% (1).

Net interest income before provision for credit losses for the six months ended June 30, 2023 was $479.9 million compared with $488.4 million for the the same period in 2022, a decrease of $8.5 million or 1.7%.  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 increases in the average balances and increases in average rates on loans held for investment and on investment securities.

The net interest margin on a tax equivalent basis for the six months ended June 30, 2023 was 2.83% compared with 2.92% for the same period in 2022. The changes were primarily due to an increase in the average balances and average rates on interest-bearing liabilities, partially offset by an increase in average balances and average rates on loans and an increase in average rates on investment securities.

Noninterest income was $78.0 million for the six months ended June 30, 2023 compared with $72.7 million for the same period in 2022, an increase of $5.2 million or 7.2%, primarily due to increases in trust income, credit card, debit card and ATM income and other noninterest income.

Noninterest expense was $268.9 million for the six months ended June 30, 2023 compared with $242.7 million for the same period in 2022, an increase of $26.1 million or 10.8%. The change was primarily due to $13.8 million of merger related expenses, an increase in Federal Deposit Insurance Corporation assessments of $4.4 million and an increase in additional expenses related to two months of FirstCapital Bank operations. 

Balance Sheet Information

At June 30, 2023, Prosperity had $39.905 billion in total assets, an increase of $2.518 billion or 6.7%, compared with $37.387 billion at June 30, 2022.

Loans were $21.654 billion at June 30, 2023, an increase of $2.320 billion or 12.0% from $19.334 billion at March 31, 2023. Loans increased $3.445 billion or 18.9%  compared with $18.209 billion at June 30, 2022.  Loans, excluding Warehouse Purchase Program loans, were $20.505 billion at June 30, 2023 compared to $18.535 billion at March 31, 2023, an increase of $1.970 billion or 10.6%, and compared to $17.071 billion at  June 30, 2022, an increase of $3.434 billion or 20.1%. 

Deposits were $27.381 billion at June 30, 2023, an increase of $376.7 million or 1.4%  compared with $27.004 billion at March 31, 2023.  Deposits decreased $2.485 billion or 8.3%, compared with $29.866 billion at June 30, 2022, primarily due to a decrease in public fund deposits and business deposits, partially offset by an increase in Merger acquired deposits.

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)


















Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022




(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


















Loans acquired (including new production since acquisition date):
















FirstCapital Bank


$

1,590,137



$

—



$

—



$

—



$

—


Prosperity - Warehouse Purchase Program loans



1,148,883




799,115




740,620




922,764




1,137,623


Prosperity - All other loans



18,914,926




18,535,244




18,099,207




17,583,524




17,071,221


Total loans


$

21,653,946



$

19,334,359



$

18,839,827



$

18,506,288



$

18,208,844


















Deposits assumed (including new deposits since acquisition date):
















FirstCapital Bank


$

1,481,831



$

—



$

—



$

—



$

—


All other deposits



25,899,055




27,004,236




28,533,531




29,300,095




29,865,618


Total deposits


$

27,380,886



$

27,004,236



$

28,533,531



$

29,300,095



$

29,865,618


 

Excluding loans acquired in the Merger and new production by the acquired lending operations since May 1, 2023, loans at June 30, 2023 grew $729.5 million or 3.8% compared with March 31, 2023 and $1.855 billion or 10.2% compared with June 30, 2022. Excluding loans acquired in the Merger and new production by the acquired lending operations since May 1, 2023 and Warehouse Purchase Program loans, loans at June 30, 2023 grew $379.7 million or 2.0% (8.2% annualized) compared with March 31, 2023 and $1.844 billion or 10.8% compared with June 30, 2022.

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since May 1, 2023, deposits at June 30, 2023 decreased by $1.105 billion or 4.1% compared with March 31, 2023 and decreased by $3.967 billion or 13.3% compared with June 30, 2022.

Asset Quality

Nonperforming assets totaled $62.7 million or 0.18% of quarterly average interest-earning assets at June 30, 2023 compared with $22.2 million or 0.07% of quarterly average interest-earning assets at June 30, 2022 and $24.5 million or 0.07% of quarterly average interest-earning assets at March 31, 2023. The increase during the second quarter of 2023 was primarily due to the Merger and two loans that were placed on nonaccrual status during the quarter, one of which is under contract for sale.

The allowance for credit losses on loans and off-balance sheet credit exposures was $381.7 million at June 30, 2023 compared with $313.9 million at June 30, 2022 and $312.1 million at March 31, 2023.  The provision for credit losses was $18.5 million for the three and six months ended June 30, 2023 compared to no provision for credit losses for the three and six months ended June 30, 2022. As a result of the loans acquired in the Merger, the second quarter of 2023 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 $345.2 million or 1.59% of total loans at June 30, 2023 compared with $284.0 million or 1.56% of total loans at June 30, 2022 and $282.2 million or 1.46% of total loans at March 31, 2023. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.68%(1) at June 30, 2023 compared with 1.66%(1) at June 30, 2022 and 1.52%(1) at March 31, 2023.

Net charge-offs were $16.1 million for the three months ended June 30, 2023 compared with net charge-offs of $1.2 million for the three months ended June 30, 2022 and net recoveries of $615 thousand for the three months ended March 31, 2023.  Net charge-offs for the second quarter of 2023 included $15.0 million related to one commercial real estate loan obtained in a previous merger. Additionally, $3.5 million of specific reserves on resolved purchased credit deteriorated ("PCD") loans without any related charge-offs was released to the general reserve. 

Net charge-offs were $15.5 million for the six months ended June 30, 2023 compared with $2.4 million for the six months ended June 30, 2022. Net charge-offs for the six months ended June 30, 2023 included $15.0 million related to one commercial real estate loan obtained in a previous merger. Additionally, $3.7 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Dividend

Prosperity Bancshares declared a third quarter 2023 cash dividend of $0.55 per share to be paid on October 2, 2023, to all shareholders of record as of September 15, 2023.

Stock Repurchase Program

On January 17, 2023, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.6 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 17, 2024, at the discretion of management. Under its 2023 stock repurchase program, Prosperity Bancshares repurchased approximately 595 thousand shares of its common stock at an average weighted price of $57.49 per share during the three months ended June 30, 2023 and approximately 1.21 million shares of its common stock at an average weighted price of $59.88 per share during the six months ended June 30, 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, which resulted in goodwill of $152.1 million as of June 30, 2023. Additionally, Prosperity recognized $25.3 million of core deposit intangibles as of June 30, 2023. The goodwill balance as of June 30, 2023 does not include subsequent fair value adjustments that are still being finalized. 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 June 30, 2023, Lone Star, on a consolidated basis, reported total assets of $1.276 billion, total loans of $1.072 billion and total deposits of $1.117 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. The transaction is expected to close during the third quarter of 2023, although delays could occur.

Conference Call

Prosperity's management team will host a conference call on Wednesday, July 26, 2023, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's second quarter 2023 earnings. Individuals and investment professionals may participate in the call by dialing 877-885-0477 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7557443.

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, Prosperity reviews diluted earnings per share excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average assets excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average common equity excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average tangible common equity; return on average tangible common equity excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; 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 and merger related expenses, 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 June 30, 2023, Prosperity Bancshares, Inc.® is a $39.905 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 $2.4 million, net of tax, primarily comprised of loan discount accretion of $2.4 million, merger related provision for credit losses of $18.5 million and merger related expenses of $12.9 million for the three months ended June 30, 2023.

(3)

Includes purchase accounting adjustments of $103 thousand, net of tax, primarily comprised of loan discount accretion of $59 thousand for the three months ended June 30, 2022.

(4)

Includes purchase accounting adjustments of $728 thousand, net of tax, primarily comprised of loan discount accretion of $871 thousand, and merger related expenses of $860 thousand for the three months ended March 31, 2023.

(5)

Includes purchase accounting adjustments of $3.1 million, net of tax, primarily comprised of loan discount accretion of $3.3 million, merger related provision for credit losses of $18.5 million and merger related expenses of $13.8 million for the six months ended June 30, 2023.

(6)

Includes purchase accounting adjustments of $4.2 million, net of tax, primarily comprised of loan discount accretion of $5.3 million for the six months ended June 30, 2022.

 

Bryan/College Station Area


Frisco-West


Palestine


Mont Belvieu


North University

Bryan


Garland


Rusk


Nederland


Texas Tech Student Union

Bryan-29th Street


Grapevine


Seven Points


Needville



Bryan-East


Grapevine Main


Teague


Rosenberg


Midland

Bryan-North


Kiest


Tyler-Beckham


Shadow Creek


North

Caldwell


Lake Highlands


Tyler-South Broadway


Spring


Wadley

College Station


LBJ


Tyler-University


Tomball


Wall Street

Crescent Point


McKinney


Winnsboro


Waller


West

Hearne


McKinney Eldorado




West Columbia



Huntsville


McKinney Redbud


Houston Area


Wharton


Odessa

Madisonville


North Carrolton


Houston


Winnie


Grandview

Navasota


Park Cities


Aldine


Wirt


Grant

New Waverly


Plano


Alief




Kermit Highway

Rock Prairie


Plano-West


Bellaire


South Texas Area -


Parkway

Southwest Parkway


Preston Forest


Beltway


Corpus Christi



Tower Point


Preston Parker


Clear Lake


Calallen


Wichita Falls

Wellborn Road


Preston Royal


Copperfield


Carmel


Cattlemans



Red Oak


Cypress


Northwest


Kell

Central Texas Area


Richardson


Downtown


Saratoga



Austin


Richardson-West


Eastex


Timbergate


Other West Texas Area

Allandale


Rosewood Court


Fairfield


Water Street


Locations

Cedar Park


The Colony


First Colony




Big Spring

Congress


Tollroad


Fry Road


Victoria


Brownfield

Lakeway


Trinity Mills


Gessner


Victoria Main


Brownwood

Liberty Hill


Turtle Creek


Gladebrook


Victoria-Navarro


Burkburnett

Northland


West 15th Plano


Grand Parkway


Victoria-North


Byers

Oak Hill


West Allen


Heights


Victoria Salem


Cisco

Research Blvd


Westmoreland


Highway 6 West




Comanche

Westlake


Wylie


Little York


Other South Texas Area


Early





Medical Center


 Locations


Floydada

Other Central Texas Area


Fort Worth


Memorial Drive


Alice


Gorman

Locations


Haltom City


Northside


Aransas Pass


Henrietta

Bastrop


Hulen


Pasadena


Beeville


Levelland

Canyon Lake


Keller


Pecan Grove


Colony Creek


Littlefield

Dime Box


Museum Place


Pin Oak


Cuero


Merkel

Dripping Springs


Renaissance Square


River Oaks


Edna


Plainview

Elgin


Roanoke


Sugar Land


Goliad


San Angelo

Flatonia


Stockyards


SW Medical Center


Gonzales


Slaton

Fredericksburg




Tanglewood


Hallettsville


Snyder

Georgetown


Other Dallas/Fort Worth Area


The Plaza


Kingsville



Gruene


Locations


Uptown


Mathis


Oklahoma

Horseshoe Bay


Arlington


Waugh Drive


Padre Island


Central Oklahoma Area

Kingsland


Azle


Westheimer


Palacios


Oklahoma City

La Grange


Ennis


West University


Port Lavaca


23rd Street

Lexington


Gainesville


Woodcreek


Portland


Expressway

Marble Falls


Glen Rose




Rockport


I-240

New Braunfels


Granbury


Katy


Sinton


Memorial

Pleasanton


Grand Prairie


Cinco Ranch


Taft



Round Rock


Jacksboro


Katy-Spring Green


Yoakum


Other Central Oklahoma Area

San Antonio


Mesquite




Yorktown


 Locations

Schulenburg


Muenster


The Woodlands




Edmond

Seguin


Runaway Bay


The Woodlands-College Park


West Texas Area


Norman

Smithville


Sanger


The Woodlands-I-45


Abilene



Thorndale


Waxahachie


The Woodlands-Research Forest


Antilley Road


Tulsa Area

Weimar


Weatherford




Barrow Street


Tulsa





Other Houston Area


Cypress Street



Dallas/Fort Worth Area


East Texas Area


Locations


Judge Ely


Garnett

Dallas


Athens


Angleton


Mockingbird


Harvard

14th Street Plano


Blooming Grove


Bay City




Memorial

Abrams Centre


Canton


Beaumont


Amarillo


Sheridan

Addison


Carthage


Cleveland


Hillside


S. Harvard

Allen


Corsicana


East Bernard


Soncy


Utica Tower

Balch Springs


Crockett


El Campo




Yale

Camp Wisdom


Eustace


Dayton


Lubbock



Carrollton


Gilmer


Galveston


4th Street


Other Tulsa Area Locations

Cedar Hill


Grapeland


Groves


66th Street


Owasso

Coppell


Gun Barrel City


Hempstead


82nd Street



East Plano


Jacksonville


Hitchcock


86th Street



Euless


Kerens


Liberty


98th Street



Frisco


Longview


Magnolia


Avenue Q



 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)




Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022


Balance Sheet Data (at period end)
















Loans held for sale


$

10,656



$

1,603



$

554



$

2,871



$

3,350


Loans held for investment



20,494,407




18,533,641




18,098,653




17,580,653




17,067,871


Loans held for investment - Warehouse Purchase Program



1,148,883




799,115




740,620




922,764




1,137,623


Total loans



21,653,946




19,334,359




18,839,827




18,506,288




18,208,844


















Investment securities(A)



13,667,319




14,071,545




14,476,005




14,806,487




14,912,313


Federal funds sold



181




222




301




244




201


Allowance for credit losses on loans



(345,209)




(282,191)




(281,576)




(282,179)




(283,959)


Cash and due from banks



396,848




405,331




423,832




602,152




393,716


Goodwill



3,383,698




3,231,636




3,231,636




3,231,636




3,231,636


Core deposit intangibles, net



71,128




48,974




51,348




53,906




56,483


Other real estate owned



3,107




1,989




1,963




1,758




1,555


Fixed assets, net



365,299




345,149




339,453




337,099




335,939


Other assets



708,814




672,218




607,040




586,111




530,528


Total assets


$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502



$

37,387,256


















Noninterest-bearing deposits


$

10,364,921



$

10,108,348



$

10,915,448



$

11,154,143



$

11,032,184


Interest-bearing deposits



17,015,965




16,895,888




17,618,083




18,145,952




18,833,434


Total deposits



27,380,886




27,004,236




28,533,531




29,300,095




29,865,618


Other borrowings



4,800,000




3,365,000




1,850,000




1,165,000




300,000


Securities sold under repurchase agreements



434,160




434,261




428,134




454,304




481,785


Subordinated debentures



3,093




—




—




—




—


Allowance for credit losses on off-balance sheet credit exposures



36,503




29,947




29,947




29,947




29,947


Other liabilities



282,373




256,671




148,843




282,514




188,079


Total liabilities



32,937,015




31,090,115




30,990,455




31,231,860




30,865,429


Shareholders' equity(B)



6,968,116




6,739,117




6,699,374




6,611,642




6,521,827


Total liabilities and equity


$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502



$

37,387,256



(A)

Includes $(3,393), $(4,399), $(4,396), $(296) and $1,517  in unrealized (losses) gains on available for sale securities for the quarterly periods ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.

(B)

Includes $(2,681), $(3,476), $(3,473), $(234) and $1,198 in after-tax unrealized (losses) gains on available for sale securities for the quarterly periods ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)




Three Months Ended



Year-to-Date




Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Jun 30,
2022



Jun 30,
2023



Jun 30,
2022


Income Statement Data






















Interest income:






















Loans


$

286,638



$

247,118



$

235,126



$

210,268



$

192,770



$

533,756



$

385,795


Securities(C)



72,053




73,185




72,533




68,761




64,111




145,238




119,122


Federal funds sold and other earning assets



1,757




7,006




933




525




925




8,763




1,772


Total interest income



360,448




327,309




308,592




279,554




257,806




687,757




506,689
























Interest expense:






















Deposits



63,964




47,343




36,048




14,669




8,641




111,307




17,395


Other borrowings



57,351




34,396




14,682




3,719




450




91,747




450


Securities sold under repurchase agreements



2,674




2,103




1,725




487




244




4,777




429


Subordinated debentures



—




—




—




—




—




—




—


Total interest expense



123,989




83,842




52,455




18,875




9,335




207,831




18,274


Net interest income



236,459




243,467




256,137




260,679




248,471




479,926




488,415


Provision for credit losses



18,540




—




—




—




—




18,540




—


Net interest income after provision for credit
losses



217,919




243,467




256,137




260,679




248,471




461,386




488,415
























Noninterest income:






















Nonsufficient funds (NSF) fees



8,512




8,095




8,519




8,887




8,484




16,607




16,608


Credit card, debit card and ATM card
income



9,206




8,666




8,816




8,889




8,880




17,872




17,059


Service charges on deposit accounts



6,078




5,926




5,932




6,222




6,365




12,004




12,576


Trust income



3,358




3,225




3,498




3,174




2,875




6,583




5,578


Mortgage income



661




238




102




340




502




899




957


Brokerage income



1,000




1,149




905




940




917




2,149




1,809


Bank owned life insurance income



1,553




1,354




1,329




1,214




1,293




2,907




2,576


Net gain on sale or write-down of assets



1,994




121




2,087




50




1,108




2,115




1,797


Other noninterest income



7,326




9,492




6,536




4,972




7,170




16,818




13,756


Total noninterest income



39,688




38,266




37,724




34,688




37,594




77,954




72,716
























Noninterest expense:






















Salaries and benefits



84,723




77,798




75,353




79,578




80,371




162,521




159,782


Net occupancy and equipment



8,935




8,025




8,147




8,412




8,039




16,960




15,887


Credit and debit card, data processing and
software amortization



10,344




9,566




9,716




9,516




9,246




19,910




18,095


Regulatory assessments and FDIC insurance



5,097




4,973




2,873




2,807




2,851




10,070




5,701


Core deposit intangibles amortization



3,167




2,374




2,558




2,577




2,581




5,541




5,201


Depreciation



4,658




4,433




4,438




4,436




4,539




9,091




9,086


Communications



3,693




3,462




3,506




3,374




3,206




7,155




6,125


Other real estate expense



(464)




58




154




198




195




(406)




409


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



(33)




(13)




(63)




(213)




14




(46)




(607)


Merger related expenses



12,891




860




272




—




—




13,751




—


Other noninterest expense



12,859




11,464




12,290




11,529




11,836




24,323




23,049


Total noninterest expense



145,870




123,000




119,244




122,214




122,878




268,870




242,728


Income before income taxes



111,737




158,733




174,617




173,153




163,187




270,470




318,403


Provision for income taxes



24,799




34,039




36,737




37,333




34,697




58,838




67,587


Net income available to common shareholders


$

86,938



$

124,694



$

137,880



$

135,820



$

128,490



$

211,632



$

250,816




(C)

Interest income on securities was reduced by net premium amortization of $7,131, $7,384, $8,703, $9,947 and $11,450 for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and $14,515 and $24,307 for the six months ended June 30, 2023 and June 30, 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




Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Jun 30,
2022



Jun 30,
2023



Jun 30,
2022
























Profitability






















Net income (D) (E)


$

86,938



$

124,694



$

137,880



$

135,820



$

128,490



$

211,632



$

250,816
























Basic earnings per share


$

0.94



$

1.37



$

1.51



$

1.49



$

1.40



$

2.30



$

2.73


Diluted earnings per share


$

0.94



$

1.37



$

1.51



$

1.49



$

1.40



$

2.30



$

2.73
























Return on average assets (F)



0.89

%

(J)


1.31

%

(J)


1.47

%

(J)


1.45

%



1.36

%



1.09

%

(J)


1.32

%

Return on average common equity (F)



5.01

%

(J)


7.38

%

(J)


8.26

%

(J)


8.24

%



7.84

%



6.18

%

(J)


7.69

%

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



9.67

%

(J)


14.34

%

(J)


16.26

%

(J)


16.44

%



15.73

%



11.97

%

(J)


15.52

%

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



2.73

%



2.93

%



3.05

%



3.11

%



2.97

%



2.83

%



2.92

%

Efficiency ratio (G) (I)



53.21

%

(K)


43.68

%

(K)


40.87

%

(K)


41.38

%



43.12

%



48.38

%

(K)


43.40

%























Liquidity and Capital Ratios






















Equity to assets



17.46

%



17.81

%



17.78

%



17.47

%



17.44

%



17.46

%



17.44

%

Common equity tier 1 capital



14.48

%



15.59

%



15.88

%



15.44

%



15.26

%



14.48

%



15.26

%

Tier 1 risk-based capital



14.48

%



15.59

%



15.88

%



15.44

%



15.26

%



14.48

%



15.26

%

Total risk-based capital



15.51

%



16.41

%



16.51

%



16.09

%



15.91

%



15.51

%



15.91

%

Tier 1 leverage capital



9.96

%



10.06

%



10.16

%



9.94

%



9.58

%



9.96

%



9.58

%

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



9.64

%



10.01

%



9.93

%



9.62

%



9.48

%



9.64

%



9.48

%























Other Data






















Weighted-average shares used in computing
earnings per common share






















Basic



92,930




91,207




91,287




91,209




91,772




92,073




91,965


Diluted



92,930




91,207




91,287




91,209




91,772




92,073




91,965


Period end shares outstanding



93,721




90,693




91,314




91,210




91,196




93,721




91,196


Cash dividends paid per common share


$

0.55



$

0.55



$

0.55



$

0.52



$

0.52



$

1.10



$

1.04


Book value per common share


$

74.35



$

74.31



$

73.37



$

72.49



$

71.51



$

74.35



$

71.51


Tangible book value per common share (G)


$

37.49



$

38.13



$

37.41



$

36.47



$

35.46



$

37.49



$

35.46
























Common Stock Market Price






















High


$

63.13



$

78.76



$

76.32



$

77.93



$

73.50



$

78.76



$

80.46


Low


$

55.12



$

58.25



$

66.71



$

65.37



$

64.69



$

55.12



$

64.69


Period end closing price


$

56.48



$

61.52



$

72.68



$

66.68



$

68.27



$

56.48



$

68.27


Employees – FTE (excluding overtime)



3,710




3,651




3,633




3,592




3,576




3,710




3,576


Number of banking centers



286




272




272




272




272




286




272



(D)

Includes purchase accounting adjustments for the periods presented as follows:


Three Months Ended


Year-to-Date


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Jun 30, 2022


Jun 30, 2023


Jun 30, 2022

Loan discount accretion














Non-PCD

$1,242


$532


$603


$912


$(265)


$1,774


$4,409

PCD

$1,178


$339


$310


$322


$324


$1,517


$845

Securities net amortization

$(426)


$2


$12


$40


$12


$(424)


$64

Time deposits amortization

$187


$53


$59


$68


$84


$240


$184



(E)

Using effective tax rate of 22.2%, 21.4%, 21.0%, 21.6% and 21.3% for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and 21.8% and 21.2% for the six months ended June 30, 2023 and June 30, 2022.

(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, and merger related expenses, 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 provision for credit losses, net of tax, and merger related expenses, 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.

 

Prosperity Bancshares, Inc.® 

Financial Highlights (Unaudited) 

(Dollars in thousands) 


YIELD ANALYSIS


Three Months Ended





Jun 30, 2023



Mar 31, 2023



Jun 30, 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


$

3,910



$

67



6.87 %



$

2,343



$

38



6.58 %



$

3,199



$

40



5.02 %



Loans held for investment



19,802,751




270,688



5.48 %




18,317,712




236,606



5.24 %




16,799,609




182,286



4.35 %



Loans held for investment -
Warehouse Purchase Program



898,768




15,883



7.09 %




617,822




10,474



6.88 %




1,257,521




10,444



3.33 %



Total loans



20,705,429




286,638



5.55 %




18,937,877




247,118



5.29 %




18,060,329




192,770



4.28 %



Investment securities



13,976,818




72,053



2.07 %


(M)


14,332,509




73,185



2.07 %


(M)


14,989,666




64,111



1.72 %


(M)

Federal funds sold and other
earning assets



150,300




1,757



4.69 %




600,048




7,006



4.74 %




540,907




925



0.69 %



Total interest-earning assets



34,832,547




360,448



4.15 %




33,870,434




327,309



3.92 %




33,590,902




257,806



3.08 %



Allowance for credit losses on
loans



(283,594)










(282,316)










(284,550)









Noninterest-earning assets



4,738,673










4,589,735










4,448,060









Total assets


$

39,287,626









$

38,177,853









$

37,754,412






































Interest-bearing liabilities:





























Interest-bearing demand deposits


$

5,147,453



$

3,791



0.30 %



$

5,877,641



$

3,792



0.26 %



$

6,437,614



$

2,154



0.13 %



Savings and money market
deposits



9,156,047




43,025



1.88 %




9,579,679




35,521



1.50 %




10,702,273




4,473



0.17 %



Certificates and other time
deposits



2,652,064




17,148



2.59 %




2,045,580




8,030



1.59 %




2,409,663




2,014



0.34 %



Other borrowings



4,427,914




57,351



5.20 %




2,887,011




34,396



4.83 %




112,582




450



1.60 %



Securities sold under repurchase
agreements



441,303




2,674



2.43 %




427,887




2,103



1.99 %




463,108




244



0.21 %



Subordinated debentures



1,547




—




—




—




—




—




—




—




—



Total interest-bearing liabilities



21,826,328




123,989



2.28 %


(N)


20,817,798




83,842



1.63 %


(N)


20,125,240




9,335



0.19 %


(N)






























Noninterest-bearing liabilities:





























Noninterest-bearing demand
deposits



10,274,819










10,389,980










10,855,802









Allowance for credit losses on
off-balance sheet credit
exposures



30,022










29,947










29,947









Other liabilities



220,775










180,685










186,344









Total liabilities



32,351,944










31,418,410










31,197,333









Shareholders' equity



6,935,682










6,759,443










6,557,079









Total liabilities and
shareholders' equity


$

39,287,626









$

38,177,853









$

37,754,412






































Net interest income and margin





$

236,459



2.72 %






$

243,467



2.92 %






$

248,471



2.97 %



Non-GAAP to GAAP
reconciliation:





























Tax equivalent adjustment






854










833










445






Net interest income and margin
     (tax equivalent basis)





$

237,313



2.73 %






$

244,300



2.93 %






$

248,916



2.97 %











































(L)

Annualized and based on an actual 365-day basis.

(M)

Yield on securities was impacted by net premium amortization of $7,131, $7,384 and $11,450 for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

(N)

Total cost of funds, including noninterest bearing deposits, was 1.55%, 1.09% and 0.12% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

 

Prosperity Bancshares, Inc.® 

Financial Highlights (Unaudited) 

(Dollars in thousands) 


YIELD ANALYSIS


Year-to-Date





Jun 30, 2023



Jun 30, 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


$

3,131



$

105



6.76 %



$

3,901



$

80



4.14 %



Loans held for investment



19,064,334




507,294



5.37 %




16,756,345




365,319



4.40 %



Loans held for investment - Warehouse Purchase Program



759,071




26,357



7.00 %




1,263,132




20,396



3.26 %



Total loans



19,826,536




533,756



5.43 %




18,023,378




385,795



4.32 %



Investment securities



14,153,681




145,238



2.07 %


(P)


14,384,681




119,122



1.67 %


(P)

Federal funds sold and other earning assets



373,931




8,763



4.73 %




1,333,800




1,772



0.27 %



Total interest-earning assets



34,354,148




687,757



4.04 %




33,741,859




506,689



3.03 %



Allowance for credit losses on loans



(282,959)










(285,118)









Noninterest-earning assets



4,667,547










4,453,117









Total assets


$

38,738,736









$

37,909,858





























Interest-bearing liabilities:




















Interest-bearing demand deposits


$

5,510,530



$

7,583



0.28 %



$

6,605,431



$

4,606



0.14 %



Savings and money market deposits



9,366,694




78,546



1.69 %




10,785,902




8,499



0.16 %



Certificates and other time deposits



2,350,498




25,178



2.16 %




2,522,966




4,290



0.34 %



Other borrowings



3,661,719




91,747



5.05 %




56,602




450



1.60 %



Securities sold under repurchase agreements



434,632




4,777



2.22 %




457,612




429



0.19 %



Subordinated debentures



774




—




—




—




—




—



Total interest-bearing liabilities



21,324,847




207,831



1.97 %


(Q)


20,428,513




18,274



0.18 %


(Q)





















Noninterest-bearing liabilities:




















Noninterest-bearing demand deposits



10,332,082










10,746,819









Allowance for credit losses on off-balance sheet credit
exposures



29,985










29,947









Other liabilities



203,769










181,157









Total liabilities



31,890,683










31,386,436









Shareholders' equity



6,848,053










6,523,422









Total liabilities and shareholders' equity



38,738,736









$

37,909,858





























Net interest income and margin





$

479,926



2.82 %






$

488,415



2.92 %



Non-GAAP to GAAP reconciliation:




















Tax equivalent adjustment






1,687










917






Net interest income and margin (tax equivalent basis)





$

481,613



2.83 %






$

489,332



2.92 %































(O)

Annualized and based on an actual 365-day basis.

(P)

Yield on securities was impacted by net premium amortization of $14,515 and $24,307 for the six months ended June 30, 2023 and 2022, respectively.

(Q)

Total cost of funds, including noninterest bearing deposits, was 1.32% and 0.12% for the six months ended June 30, 2023 and 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022


YIELD TREND (R)






























Interest-Earning Assets:















Loans held for sale


6.87

%



6.58

%



6.09

%



5.47

%



5.02

%

Loans held for investment


5.48

%



5.24

%



4.98

%



4.58

%



4.35

%

Loans held for investment - Warehouse
Purchase Program


7.09

%



6.88

%



6.02

%



4.56

%



3.33

%

Total loans


5.55

%



5.29

%



5.02

%



4.58

%



4.28

%

Investment securities (S)


2.07

%



2.07

%



1.96

%



1.82

%



1.72

%

Federal funds sold and other earning assets


4.69

%



4.74

%



3.63

%



2.37

%



0.69

%

Total interest-earning assets


4.15

%



3.92

%



3.67

%



3.33

%



3.08

%
















Interest-Bearing Liabilities:















Interest-bearing demand deposits


0.30

%



0.26

%



0.22

%



0.15

%



0.13

%

Savings and money market deposits


1.88

%



1.50

%



1.13

%



0.37

%



0.17

%

Certificates and other time deposits


2.59

%



1.59

%



0.94

%



0.52

%



0.34

%

Other borrowings


5.20

%



4.83

%



3.97

%



2.55

%



1.60

%

Securities sold under repurchase agreements


2.43

%



1.99

%



1.55

%



0.41

%



0.21

%

Subordinated debentures


—




—




—




—




—


Total interest-bearing liabilities


2.28

%



1.63

%



1.06

%



0.38

%



0.19

%
















Net Interest Margin


2.72

%



2.92

%



3.04

%



3.11

%



2.97

%

Net Interest Margin (tax equivalent)


2.73

%



2.93

%



3.05

%



3.11

%



2.97

%



(R)

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

(S)

Yield on securities was impacted by net premium amortization of $7,131, $7,384, $8,703, $9,947 and $11,450 for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Three Months Ended




Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022


Balance Sheet Averages
















Loans held for sale


$

3,910



$

2,343



$

1,758



$

4,136



$

3,199


Loans held for investment



19,802,751




18,317,712




17,818,769




17,275,866




16,799,609


Loans held for investment - Warehouse Purchase
Program



898,768




617,822




747,007




938,589




1,257,521


Total Loans



20,705,429




18,937,877




18,567,534




18,218,591




18,060,329


















Investment securities



13,976,818




14,332,509




14,715,516




14,962,847




14,989,666


Federal funds sold and other earning assets



150,300




600,048




101,986




87,859




540,907


Total interest-earning assets



34,832,547




33,870,434




33,385,036




33,269,297




33,590,902


Allowance for credit losses on loans



(283,594)




(282,316)




(282,546)




(283,244)




(284,550)


Cash and due from banks



281,593




319,960




306,235




302,479




309,223


Goodwill



3,291,659




3,231,637




3,231,637




3,231,637




3,231,637


Core deposit intangibles, net



48,616




50,208




52,591




55,158




57,728


Other real estate



2,712




2,083




2,075




1,652




1,639


Fixed assets, net



357,593




342,380




338,572




336,657




336,242


Other assets



756,500




643,467




584,302




552,929




511,591


Total assets


$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565



$

37,754,412


















Noninterest-bearing deposits


$

10,274,819



$

10,389,980



$

11,064,714



$

11,048,856



$

10,855,802


Interest-bearing demand deposits



5,147,453




5,877,641




5,843,672




6,155,511




6,437,614


Savings and money market deposits



9,156,047




9,579,679




9,805,024




10,172,986




10,702,273


Certificates and other time deposits



2,652,064




2,045,580




2,066,085




2,185,529




2,409,663


Total deposits



27,230,383




27,892,880




28,779,495




29,562,882




30,405,352


Other borrowings



4,427,914




2,887,011




1,465,533




577,828




112,582


Securities sold under repurchase agreements



441,303




427,887




441,405




473,584




463,108


Subordinated debentures



1,547




—




—




—




—


Allowance for credit losses on off-balance sheet credit
exposures



30,022




29,947




29,947




29,947




29,947


Other liabilities



220,775




180,685




224,512




231,812




186,344


Shareholders' equity



6,935,682




6,759,443




6,677,010




6,590,512




6,557,079


Total liabilities and equity


$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565



$

37,754,412


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Jun 30, 2022

Period End Balances
































Loan Portfolio
















Commercial and industrial


$2,245,620

10.5 %


$2,074,078

10.7 %


$2,165,263

11.6 %


$2,197,033

11.9 %


$2,183,277

12.0 %

Warehouse purchase program


1,148,883

5.3 %


799,115

4.1 %


740,620

3.9 %


922,764

5.0 %


1,137,623

6.2 %

Construction, land development and other land loans


3,215,016

14.8 %


2,899,980

15.0 %


2,805,438

14.9 %


2,659,552

14.4 %


2,460,526

13.5 %

1-4 family residential


6,780,813

31.3 %


6,055,532

31.3 %


5,774,814

30.6 %


5,447,993

29.4 %


5,156,200

28.3 %

Home equity


977,070

4.5 %


959,124

5.0 %


966,410

5.1 %


943,197

5.1 %


932,725

5.1 %

Commercial real estate (includes multi-family
residential)


5,676,526

26.2 %


5,133,693

26.6 %


4,986,211

26.5 %


4,966,243

26.8 %


4,967,662

27.3 %

Agriculture (includes farmland)


804,376

3.7 %


721,395

3.7 %


688,033

3.6 %


670,603

3.6 %


665,960

3.7 %

Consumer and other


305,207

1.4 %


288,300

1.5 %


283,559

1.5 %


288,834

1.6 %


274,532

1.5 %

Energy


500,435

2.3 %


403,142

2.1 %


429,479

2.3 %


410,069

2.2 %


430,339

2.4 %

Total loans


$21,653,946



$19,334,359



$18,839,827



$18,506,288



$18,208,844


















Deposit Types
















Noninterest-bearing DDA


$10,364,921

37.9 %


$10,108,348

37.4 %


$10,915,448

38.2 %


$11,154,143

38.1 %


$11,032,184

36.9 %

Interest-bearing DDA


4,953,090

18.1 %


5,332,086

19.8 %


5,986,203

21.0 %


6,027,157

20.6 %


6,331,314

21.2 %

Money market


5,904,160

21.5 %


6,021,449

22.3 %


6,164,025

21.6 %


6,438,787

22.0 %


6,646,726

22.3 %

Savings


3,179,351

11.6 %


3,304,482

12.2 %


3,471,970

12.2 %


3,563,776

12.1 %


3,597,820

12.0 %

Certificates and other time deposits


2,979,364

10.9 %


2,237,871

8.3 %


1,995,885

7.0 %


2,116,232

7.2 %


2,257,574

7.6 %

Total deposits


$27,380,886



$27,004,236



$28,533,531



$29,300,095



$29,865,618


















Loan to Deposit Ratio


79.1 %



71.6 %



66.0 %



63.2 %



61.0 %


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)


Construction Loans




Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022




























Single family residential
construction


$

1,244,631



38.7

%


$

1,179,883



40.7

%


$

1,097,176



39.1

%


$

1,004,000



37.8

%


$

911,443



37.0

%

Land development



310,199



9.7

%



222,511



7.7

%



181,747



6.5

%



145,303



5.5

%



133,398



5.4

%

Raw land



359,228



11.2

%



326,168



11.2

%



332,603



11.9

%



343,066



12.9

%



316,750



12.9

%

Residential lots



216,706



6.7

%



226,600



7.8

%



243,942



8.7

%



237,714



8.9

%



223,703



9.1

%

Commercial lots



158,278



4.9

%



167,151



5.8

%



177,378



6.3

%



181,679



6.8

%



184,794



7.5

%

Commercial construction and other



927,025



28.8

%



777,678



26.8

%



772,606



27.5

%



747,803



28.1

%



690,453



28.1

%

Net unaccreted discount



(1,051)






(11)






(14)






(13)






(15)




Total construction loans


$

3,215,016





$

2,899,980





$

2,805,438





$

2,659,552





$

2,460,526




 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of June 30, 2023



Houston



Dallas



Austin



OK City



Tulsa



Other (T)



Total



Collateral Type






















Shopping center/retail

$

373,900



$

281,847



$

59,128



$

29,016



$

18,882



$

312,841



$

1,075,614



Commercial and industrial
buildings


170,181




110,798




29,482




43,950




14,714




256,246




625,371



Office buildings


81,491




227,950




25,751




66,157




4,132




100,329




505,810



Medical buildings


79,536




17,707




3,757




25,514




35,555




54,935




217,004



Apartment buildings


166,554




130,937




17,770




13,550




8,555




165,768




503,134



Hotel


118,798




89,146




39,351




25,585




—




171,692




444,572



Other


86,007




91,433




43,997




7,893




1,762




79,522




310,614



Total

$

1,076,467



$

949,818



$

219,236



$

211,665



$

83,600



$

1,141,333



$

3,682,119


(U)

 

Acquired Loans



Non-PCD Loans



PCD Loans



Total Acquired Loans



Balance at
Acquisition
Date



Balance at
Mar 31,
2023



Balance at
Jun 30,
2023



Balance at
Acquisition
Date



Balance at
Mar 31,
2023



Balance at
Jun 30,
2023



Balance at
Acquisition
Date



Balance at
Mar 31,
2023



Balance at
Jun 30,
2023


Loan marks:



























Acquired banks (V)

$

345,599



$

1,701



$

1,208



$

320,052



$

3,022



$

2,776



$

665,651



$

4,723



$

3,984


FirstCapital Bank (W)


22,593




—




21,844




8,336




—




7,334




30,929




—




29,178


Total


368,192




1,701




23,052




328,388




3,022




10,110




696,580




4,723




33,162





























Acquired portfolio loan
balances:



























Acquired banks (V)


12,286,159




1,249,921




1,174,855




689,573




58,549




61,484




12,975,732




1,308,470




1,236,339


FirstCapital Bank (W)


1,035,768




—




953,646




613,917




—




599,865




1,649,685




—




1,553,511


Total


13,321,927




1,249,921




2,128,501




1,303,490




58,549




661,349




14,625,417


 (X)


1,308,470




2,789,850





























Acquired portfolio loan
balances less loan marks

$

12,953,735



$

1,248,220



$

2,105,449



$

975,102



$

55,527



$

651,239



$

13,928,837



$

1,303,747



$

2,756,688




(T)

Includes other MSA and non-MSA regions.

(U)

Represents a portion of total commercial real estate loans of $5.677 billion as of June 30, 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. During the second quarter of 2023, the Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.9 million at acquisition date.

(X)

Actual principal balances acquired.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Year-to-Date



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022



Jun 30, 2022



Jun 30, 2023



Jun 30, 2022


Asset Quality





















Nonaccrual loans

$

57,723



$

22,496



$

19,614



$

17,729



$

20,619



$

57,723



$

20,619


Accruing loans 90 or more days past due


1,744




—




5,917




378




13




1,744




13


Total nonperforming loans


59,467




22,496




25,531




18,107




20,632




59,467




20,632


Repossessed assets


153




—




—




13




—




153




—


Other real estate


3,107




1,989




1,963




1,758




1,555




3,107




1,555


Total nonperforming assets

$

62,727



$

24,485



$

27,494



$

19,878



$

22,187



$

62,727



$

22,187























Nonperforming assets:





















Commercial and industrial (includes energy)

$

24,027



$

2,832



$

3,921



$

2,376



$

2,964



$

24,027



$

2,964


Construction, land development and other land loans


4,245




3,210




6,166




1,712




1,866




4,245




1,866


1-4 family residential (includes home equity)


19,609




16,951




15,326




13,986




14,335




19,609




14,335


Commercial real estate (includes multi-family
residential)


13,504




1,051




1,649




1,364




2,448




13,504




2,448


Agriculture (includes farmland)


1,284




432




421




434




567




1,284




567


Consumer and other


58




9




11




6




7




58




7


Total

$

62,727



$

24,485



$

27,494



$

19,878



$

22,187



$

62,727



$

22,187


Number of loans/properties


241




190




170




150




160




241




160


Allowance for credit losses on loans

$

345,209



$

282,191



$

281,576



$

282,179



$

283,959



$

345,209



$

283,959























Net charge-offs (recoveries):





















Commercial and industrial (includes energy)

$

160



$

(1,472)



$

(643)



$

(15)



$

(197)



$

(1,312)



$

(183)


Construction, land development and other land loans


50




(13)




(5)




(4)




(5)




37




425


1-4 family residential (includes home equity)


(70)




(140)




(55)




(202)




(32)




(210)




55


Commercial real estate (includes multi-family
residential)


14,957




(1)




74




757




395




14,956




29


Agriculture (includes farmland)


(78)




(6)




(14)




119




(9)




(84)




(112)


Consumer and other


1,046




1,017




1,246




1,125




1,052




2,063




2,207


Total

$

16,065



$

(615)



$

603



$

1,780



$

1,204



$

15,450



$

2,421























Asset Quality Ratios





















Nonperforming assets to average interest-earning assets


0.18

%



0.07

%



0.08

%



0.06

%



0.07

%



0.18

%



0.07

%

Nonperforming assets to loans and other real estate


0.29

%



0.13

%



0.15

%



0.11

%



0.12

%



0.29

%



0.12

%

Net charge-offs to average loans (annualized)


0.31

%



-0.01

%



0.01

%



0.04

%



0.03

%



0.16

%



0.03

%

Allowance for credit losses on loans to total loans


1.59

%



1.46

%



1.49

%



1.52

%



1.56

%



1.59

%



1.56

%

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


1.68

%



1.52

%



1.56

%



1.60

%



1.66

%



1.68

%



1.66

%

 

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 diluted earnings per share excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average assets excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average common equity excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; return on average tangible common equity; return on average tangible common equity excluding merger related provision for credit losses, net of tax, and merger related expenses, net of tax; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program; 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 and merger related expenses, 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 to total loans (excluding Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

 



Three Months Ended



Year-to-Date




Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Jun 30,
2022



Jun 30,
2023



Jun 30,
2022


Reconciliation of diluted earnings per share to diluted
earnings per share excluding merger related provision
for credit losses, net of tax, and merger related
expenses, net of tax:






















Diluted earnings per share (unadjusted)


$

0.94



$

1.37



$

1.51



$

1.49



$

1.40



$

2.30



$

2.73
























Net income


$

86,938



$

124,694



$

137,880



$

135,820



$

128,490



$

211,632



$

250,816


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



14,647




—




—




—




—




14,647




—


Merger related expenses, net of tax(Y)



10,184




679




215




—




—




10,863




—


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


$

111,769



$

125,373



$

138,095



$

135,820



$

128,490



$

237,142



$

250,816
























Weighted average diluted shares outstanding



92,930




91,207




91,287




91,209




91,772




92,073




91,965


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


$

0.16



$

—



$

—



$

—



$

—



$

0.16




—


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


$

0.11



$

0.01



$

—



$

—



$

—



$

0.12




—


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


$

1.21



$

1.38



$

1.51



$

1.49



$

1.40



$

2.58



$

2.73
























Reconciliation of return on average assets to
return on average assets excluding merger related
provision for credit losses, net of tax, and merger
related expenses, net of tax:






















Return on average assets (unadjusted)



0.89

%



1.31

%



1.47

%



1.45

%



1.36

%



1.09

%



1.32

%























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


$

111,769



$

125,373



$

138,095



$

135,820



$

128,490



$

237,142



$

250,816


Average total assets


$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565



$

37,754,412



$

38,738,736



$

37,909,858


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



1.14

%



1.31

%



1.47

%



1.45

%



1.36

%



1.22

%



1.32

%























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






















Return on average common equity (unadjusted)



5.01

%



7.38

%



8.26

%



8.24

%



7.84

%



6.18

%



7.69

%























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


$

111,769



$

125,373



$

138,095



$

135,820



$

128,490



$

237,142



$

250,816


Average shareholders' equity


$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,557,079



$

6,848,053



$

6,523,422


Return on average common equity excluding merger
related provision for credit losses, net of tax, and
merger related expenses, net of tax (F) (Y)



6.45

%



7.42

%



8.27

%



8.24

%



7.84

%



6.93

%



7.69

%





























































Three Months Ended



Year-to-Date




Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Jun 30,
2022



Jun 30,
2023



Jun 30,
2022


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






















Net income


$

86,938



$

124,694



$

137,880



$

135,820



$

128,490



$

211,632



$

250,816


Average shareholders' equity


$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,557,079



$

6,848,053



$

6,523,422


Less: Average goodwill and other intangible assets



(3,340,275)




(3,281,845)




(3,284,228)




(3,286,795)




(3,289,365)




(3,311,222)




(3,290,667)


Average tangible shareholders' equity


$

3,595,407



$

3,477,598



$

3,392,782



$

3,303,717



$

3,267,714



$

3,536,831



$

3,232,755


Return on average tangible common equity (F)



9.67

%



14.34

%



16.26

%



16.44

%



15.73

%



11.97

%



15.52

%























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






















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


$

111,769



$

125,373



$

138,095



$

135,820



$

128,490



$

237,142



$

250,816


Average shareholders' equity


$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,557,079



$

6,848,053



$

6,523,422


Less: Average goodwill and other intangible assets



(3,340,275)




(3,281,845)




(3,284,228)




(3,286,795)




(3,289,365)




(3,311,222)




(3,290,667)


Average tangible shareholders' equity


$

3,595,407



$

3,477,598



$

3,392,782



$

3,303,717



$

3,267,714



$

3,536,831



$

3,232,755


Return on average tangible common equity excluding
merger related provision for credit losses, net of tax, and
merger related expenses, net of tax (F) (Y)



12.43

%



14.42

%



16.28

%



16.44

%



15.73

%



13.41

%



15.52

%























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






















Shareholders' equity


$

6,968,116



$

6,739,117



$

6,699,374



$

6,611,642



$

6,521,827



$

6,968,116



$

6,521,827


Less: Goodwill and other intangible assets



(3,454,826)




(3,280,610)




(3,282,984)




(3,285,542)




(3,288,119)




(3,454,826)




(3,288,119)


Tangible shareholders' equity


$

3,513,290



$

3,458,507



$

3,416,390



$

3,326,100



$

3,233,708



$

3,513,290



$

3,233,708
























Period end shares outstanding



93,721




90,693




91,314




91,210




91,196




93,721




91,196


Tangible book value per share


$

37.49



$

38.13



$

37.41



$

36.47



$

35.46



$

37.49



$

35.46
























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






















Tangible shareholders' equity


$

3,513,290



$

3,458,507



$

3,416,390



$

3,326,100



$

3,233,708



$

3,513,290



$

3,233,708


Total assets


$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502



$

37,387,256



$

39,905,131



$

37,387,256


Less: Goodwill and other intangible assets



(3,454,826)




(3,280,610)




(3,282,984)




(3,285,542)




(3,288,119)




(3,454,826)




(3,288,119)


Tangible assets


$

36,450,305



$

34,548,622



$

34,406,845



$

34,557,960



$

34,099,137



$

36,450,305



$

34,099,137


Period end tangible equity to period end tangible assets ratio



9.64

%



10.01

%



9.93

%



9.62

%



9.48

%



9.64

%



9.48

%























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


$

345,209



$

282,191



$

281,576



$

282,179



$

283,959



$

345,209



$

283,959


Total loans


$

21,653,946



$

19,334,359



$

18,839,827



$

18,506,288



$

18,208,844



$

21,653,946



$

18,208,844


Less: Warehouse Purchase Program loans



(1,148,883)




(799,115)




(740,620)




(922,764)




(1,137,623)




(1,148,883)




(1,137,623)


Total loans less Warehouse Purchase Program


$

20,505,063



$

18,535,244



$

18,099,207



$

17,583,524



$

17,071,221



$

20,505,063



$

17,071,221


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



1.68

%



1.52

%



1.56

%



1.60

%



1.66

%



1.68

%



1.66

%























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






















Noninterest expense


$

145,870



$

123,000



$

119,244



$

122,214



$

122,878



$

268,870



$

242,728
























Net interest income


$

236,459



$

243,467



$

256,137



$

260,679



$

248,471



$

479,926



$

488,415


Noninterest income



39,688




38,266




37,724




34,688




37,594




77,954




72,716


Less: net gain on sale or write down of assets



1,994




121




2,087




50




1,108




2,115




1,797


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



37,694




38,145




35,637




34,638




36,486




75,839




70,919


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


$

274,153



$

281,612



$

291,774



$

295,317



$

284,957



$

555,765



$

559,334


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



53.21

%



43.68

%



40.87

%



41.38

%



43.12

%



48.38

%



43.40

%





























































Three Months Ended



Year-to-Date




Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Jun 30,
2022



Jun 30,
2023



Jun 30,
2022


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






















Noninterest expense


$

145,870



$

123,000



$

119,244



$

122,214



$

122,878



$

268,870



$

242,728


Less: merger related expenses



12,891




860




272




—




—




13,751




—


Noninterest expense excluding merger related expenses


$

132,979



$

122,140



$

118,972



$

122,214



$

122,878



$

255,119



$

242,728
























Net interest income


$

236,459



$

243,467



$

256,137



$

260,679



$

248,471



$

479,926



$

488,415


Noninterest income



39,688




38,266




37,724




34,688




37,594




77,954




72,716


Less: net gain on sale or write down of assets



1,994




121




2,087




50




1,108




2,115




1,797


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



37,694




38,145




35,637




34,638




36,486




75,839




70,919


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


$

274,153



$

281,612



$

291,774



$

295,317



$

284,957



$

555,765



$

559,334


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



48.51

%



43.37

%



40.78

%



41.38

%



43.12

%



45.90

%



43.40

%

 



(Y)

Calculated assuming a federal tax rate of 21.0%.

 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/prosperity-bancshares-inc-reports-second-quarter-2023-earnings-301885849.html

SOURCE Prosperity Bancshares, Inc.

FAQ

What were Prosperity Bancshares, Inc.'s net income and diluted earnings per share for the second quarter of 2023?

Prosperity Bancshares, Inc. reported net income of $86.9 million and diluted earnings per share of $0.94 for the second quarter of 2023, impacted by merger-related charges.

What was the impact of the merger on loans and deposits?

Loans increased by $1.970 billion or 10.6%, and deposits increased by $376.7 million or 1.4%.

What did Prosperity Bancshares, Inc. complete in the second quarter of 2023?

Prosperity Bancshares, Inc. completed the merger and operational conversion of First Bancshares of Texas, Inc., with a pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas.

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