PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2022 EARNINGS

Rhea-AI Summary

Prosperity Bancshares reported a net income of $135.8 million for Q3 2022, marking a 5.7% increase from Q2 2022, with earnings per share of $1.49. Loans, excluding certain programs, rose by $530.8 million or 3.1% (12.5% annualized). The bank's net interest margin increased to 3.11%. A 5.8% dividend increase to $0.55 was also announced. Notably, agreements for mergers with First Bancshares of Texas and Lone Star State Bancshares were signed, projected to elevate total assets over $6 billion.

Positive

• Net income increased by $7.3 million or 5.7% quarter-over-quarter.
• Loans (excluding certain programs) grew by $530.8 million or 3.1% (12.5% annualized).
• Net interest margin rose to 3.11%, indicating improved earnings.
• Increase in dividend by 5.8% to $0.55 per share.
• Signing of merger agreements expected to enhance market presence and asset base.

Negative

• Net income for the nine months decreased to $386.6 million from $392.5 million YoY.
• Loan balance declined by $451.4 million or 2.4% year-over-year.

• Third quarter net income of $135.8 million and earnings per share (diluted) of $1.49
• Third quarter net income increased $7.3 million or 5.7% compared to the second quarter 2022
• Loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, increased $530.8 million or 3.1% (12.5% annualized) during the third quarter
• Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.61%⁽¹⁾
• Nonperforming assets remain low at 0.06% of third quarter average interest-earning assets
• Return (annualized) on third quarter average assets of 1.45%, average common equity of 8.24% and average tangible common equity of 16.44%⁽¹⁾
• Net interest margin on a tax equivalent basis increased 14 basis points to 3.11% during the third quarter
• Increase in dividend of 5.8% to $0.55 for the fourth quarter 2022
• Announced the signing of a definitive merger agreement with First Bancshares of Texas, Inc., headquartered in Midland, Texas
• Announced the signing of a definitive merger agreement with Lone Star State Bancshares, Inc., headquartered in Lubbock, Texas

HOUSTON, Oct. 26, 2022 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE: PB), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of  $135.8 million for the quarter ended September 30, 2022 compared with $128.6 million for the same period in 2021. Net income per diluted common share was $1.49 for the quarter ended September 30, 2022 compared with $1.39 for the same period in 2021, an increase of 7.2%, and the annualized return on third quarter average assets was 1.45%. Additionally, loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program ("PPP") loans, increased $530.8 million or 3.1% (12.5% annualized) during the third quarter of 2022. Nonperforming assets remain low at 0.06% of third quarter average interest-earning assets.  

"This is an exciting time for Prosperity. On October 11, 2022, we announced the signing of definitive merger agreements with First Bancshares of Texas, Inc., headquartered in Midland, Texas and Lone Star State Bancshares, Inc., headquartered in Lubbock, Texas. On a pro forma basis, we will have over $6 billion in assets located in our West Texas market, and the number one market share in the combined Midland and Odessa markets and the number three market share in Lubbock," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We also recently announced that the Board of Directors voted to increase the fourth quarter 2022 dividend to $0.55 a share. This represents a 6.0% increase in dividends declared in 2022 compared with 2021. The increase reflects the confidence the Board has in the continuing success of our company and in the communities we serve," continued Zalman.

"With the Federal Reserve continuing to raise rates, our net interest margin continues to increase, which improves our earnings. This trend should continue as our assets reprice over time. We saw strong loan growth for the quarter, with loans, excluding Warehouse Purchase Program and PPP loans, increasing 12.5% on an annualized basis.  Our asset quality continues to be one of the best in banking with nonperforming assets of 0.06% of quarterly average interest-earning assets as of September 30, 2022," added Zalman.

"Individuals and businesses continue to move to Texas and Oklahoma because of lower tax rates and a pro-business political environment," stated Zalman.

"We are excited with our performance and the recently announced merger transactions and look forward to continuing to build our company. I want to thank our customers for their business and loyalty and our associates and board members for their work and dedication," concluded Zalman.

Results of Operations for the Three Months Ended September 30, 2022

Net income was $135.8 million⁽²⁾ for the three months ended September 30, 2022 compared with $128.6 million⁽³⁾ for the same period in 2021, an increase of $7.2 million or 5.6%. The change was primarily due to an increase in securities interest income, partially offset by a decrease in loan interest income (including a decrease in PPP fees and interest income of $13.9 million), a decrease in loan discount accretion of $4.1 million, and an increase in interest expense. Net income per diluted common share was $1.49 for the three months ended September 30, 2022 compared with $1.39 for the same period in 2021. On a linked quarter basis, net income was $135.8 million⁽²⁾ for the three months ended September 30, 2022 compared with $128.5 million⁽⁴⁾ for the three months ended June 30, 2022, an increase of $7.3 million or 5.7%. The change was primarily due to an increase in loan interest income and securities interest income, partially offset by an increase in interest expense. Net income per diluted common share was $1.49 for the three months ended September 30, 2022 compared with $1.40 for the three months ended June 30, 2022. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2022 were 1.45%, 8.24% and 16.44%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 41.38%⁽¹⁾ for the three months ended September 30, 2022.

Net interest income before provision for credit losses for the three months ended September 30, 2022 was $260.7 million compared with $248.6 million for the same period in 2021, an increase of $12.1 million or 4.9%. The change was primarily due to an increase in the average balance and average rates on investment securities and an increase in the average balance on loans held for investment, partially offset by a decrease in loan discount accretion of $4.1 million, a decrease in PPP fees and interest income of $13.9 million, and an increase in the average rates on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $260.7 million compared with $248.5 million for the three months ended June 30, 2022, an increase of $12.2 million or 4.9%. The change was primarily due to an increase in the average balances and average rates on loans and average rates on investment securities, partially offset by an increase in the average rates on interest-bearing liabilities.

The net interest margin on a tax equivalent basis was 3.11% for the three months ended September 30, 2022 compared with 3.10% for the same period in 2021 and 2.97% for the three months ended June 30, 2022. The linked quarter increase was primarily due to higher average balances and average rates on loans and average rates on investment securities, partially offset by an increase in the average rates on interest-bearing liabilities.

Noninterest income was $34.7 million for the three months ended September 30, 2022 compared with $34.6 million for the same period in 2021. On a linked quarter basis, noninterest income was $34.7 million compared with $37.6 million for the three months ended June 30, 2022, a decrease of $2.9 million or 7.7%, primarily due to decreases in net gain on the sale or write-down of assets and other noninterest income.

Noninterest expense was $122.2 million for the three months ended September 30, 2022 compared with $119.8 million for the same period in 2021, an increase of $2.4 million or 2.0%, primarily due to an increase in salaries and credit and debit card, data processing and software amortization.  On a linked quarter basis, noninterest expense decreased $664 thousand to $122.2 million compared with $122.9 million for the three months ended June 30, 2022.

Results of Operations for the Nine Months Ended September 30, 2022

Net income was $386.6 million⁽⁵⁾ for the nine months ended September 30, 2022 compared with $392.5 million⁽⁶⁾ for the same period in 2021. Net income per diluted common share was $4.22 for the nine months ended September 30, 2022 compared with $4.23 for the same period in 2021. Annualized returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2022 were 1.37%, 7.88% and 15.83%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 42.70%⁽¹⁾ for the nine months ended September 30, 2022.

Net interest income before provision for credit losses for the nine months ended September 30, 2022 was $749.1 million compared with $748.5 million for the prior year, an increase of $546 thousand.

The net interest margin on a tax equivalent basis for the nine months ended September 30, 2022 was 2.99% compared with 3.20% for the same period in 2021. The change was primarily due to a decrease in loan discount accretion of $27.4 million and a decrease in PPP fees and interest income of $36.1 million, partially offset by an increase in the average balances and rates on investment securities and a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $107.4 million for the nine months ended September 30, 2022 compared with $104.2 million for the same period in 2021, an increase of $3.2 million or 3.1%. The increase was primarily due to an increase in NSF income, a net gain on the sale or write-down of assets and an increase in trust income, partially offset by a decrease in mortgage income.

Noninterest expense was $364.9 million for the nine months ended September 30, 2022 compared with $354.1 million for the same period in 2021, an increase of $10.9 million or 3.1%. The increase was primarily due to an increase in salaries and benefits, the change in net loss (gain) on sale or write-down of other real estate and an increase in credit and debit card and data processing expense.

Balance Sheet Information

At September 30, 2022, Prosperity had $37.844 billion in total assets, an increase of $1.331 billion or 3.6%, compared with $36.512 billion at September 30, 2021.

Loans at September 30, 2022 were $18.506 billion, a decrease of $451.4 million or 2.4%, compared with $18.958 billion at September 30, 2021, primarily due to decreases in Warehouse Purchase Program, PPP and commercial real estate loans, partially offset by increases in 1-4 family residential and construction, land development and other land loans. Linked quarter loans increased $297.4 million or 1.6% (6.5% annualized) from $18.209 billion at June 30, 2022. Excluding Warehouse Purchase Program and PPP loans, loans at September 30, 2022 were $17.575 billion compared to $16.594 billion at September 30, 2021, an increase of $980.7 million or 5.9%. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, increased $530.8 million or 3.1% (12.5% annualized) from $17.044 billion at June 30, 2022.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At September 30, 2022, oil and gas loans totaled $410.1 million (net of discount and excluding PPP loans totaling $4.7 million) or 2.2% of total loans, of which $190.3 million were production loans and $219.7 million were servicing loans, compared with total oil and gas loans of $569.3 million (net of discount and excluding PPP loans totaling $55.8 million) or 3.0% of total loans at September 30, 2021, of which $352.4 million were production loans and $216.9 million were servicing loans. In addition, as of September 30, 2022, Prosperity had total unfunded commitments to oil and gas companies of $463.3 million compared with total unfunded commitments to oil and gas companies of $363.3 million as of September 30, 2021. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Deposits at September 30, 2022 were $29.300 billion, a decrease of $151.6 million or 0.5%, compared with $29.452 billion at September 30, 2021. Linked quarter deposits decreased $565.5 million or 1.9% from $29.866 billion at June 30, 2022, primarily due to a decrease in public fund deposits. Prosperity generally experiences seasonality with its public fund deposits, as public fund customers use the tax dollars they receive in December and January throughout the year, resulting in lower deposit balances in the second and third quarters of the year. On a linked quarter basis, noninterest-bearing deposits increased by $122.0 million.

Asset Quality

Nonperforming assets totaled $19.9 million or 0.06% of quarterly average interest-earning assets at September 30, 2022 compared with $36.5 million or 0.11% of quarterly average interest-earning assets at September 30, 2021 and $22.2 million or 0.07% of quarterly average interest-earning assets at June 30, 2022.

The allowance for credit losses on loans and off-balance sheet credit exposures was $312.1 million at September 30, 2022 compared with $317.1 million at September 30, 2021 and $313.9 million at June 30, 2022. There was no provision for credit losses for the three and nine months ended September 30, 2022 and 2021.

The allowance for credit losses on loans was $282.2 million or 1.52% of total loans at September 30, 2022 compared with $287.2 million or 1.51% of total loans at September 30, 2021 and $284.0 million or 1.56% of total loans at June 30, 2022. Excluding Warehouse Purchase Program and PPP loans, the allowance for credit losses on loans to total loans was 1.61%⁽¹⁾ at September 30, 2022 compared with 1.73%⁽¹⁾ at September 30, 2021 and 1.67%⁽¹⁾ at June 30, 2022.

Net charge-offs were $1.8 million for the three months ended September 30, 2022 compared with net charge-offs of $15.7 million for the three months ended September 30, 2021 and net charge-offs of $1.2 million for the three months ended June 30, 2022. During the third quarter of 2022, net charge-offs did not include any purchased credit deteriorated ("PCD") loans and $16 thousand of specific reserves on resolved PCD loans was released to the general reserve.

Net charge-offs were $4.2 million for the nine months ended September 30, 2022 compared with $28.9 million for the nine months ended September 30, 2021. Net charge-offs for the nine months ended September 30, 2022 did not include any PCD loans and $2.0 million of specific reserves on resolved PCD loans was released to the general reserve during the period.

Dividend

Prosperity Bancshares declared a fourth quarter cash dividend of $0.55 per share to be paid on January 3, 2023, to all shareholders of record as of December 15, 2022, an increase of $0.03 per share, or 5.8%, from the prior quarter.

Stock Repurchase Program

On January 18, 2022, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.61 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 18, 2023, at the discretion of management. Under its 2022 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended September 30, 2022 and 981,884 shares of its common stock at an average weighted price of $66.90 per share during the nine months ended September 30, 2022.

Pending Acquisition of First Bancshares of Texas, Inc.

On October 11, 2022, Prosperity Bancshares and First Bancshares of Texas, Inc. ("First Bancshares") jointly announced the signing of a definitive merger agreement whereby First Bancshares, the parent company of FirstCapital Bank of Texas, N.A., ("FirstCapital Bank") will merge with and into Prosperity. FirstCapital Bank operates 16 banking offices in 6 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.  As of June 30, 2022, First Bancshares, on a consolidated basis, reported total assets of $2.121 billion, total loans of $1.589 billion and total deposits of $1.781 billion.

Under the terms of the merger agreement, Prosperity will issue 3,583,370 shares of Prosperity common stock plus $93.4 million in cash for all outstanding shares of First Bancshares 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 $341.6 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of First Bancshares. The transaction is expected to close during the first quarter of 2023, although delays could occur.

Pending Acquisition 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, 2022, Lone Star, on a consolidated basis, reported total assets of $1.305 billion, total loans of $933.5 million and total deposits of $1.174 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 and approval of the shareholders of Lone Star. The transaction is expected to close during the first quarter of 2023, although delays could occur.

Conference Call

Prosperity's management team will host a conference call on Wednesday, October 26, 2022, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2022 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7408913.

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

Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of September 30, 2022, Prosperity Bancshares, Inc.^® is a $37.844 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma.  Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

Prosperity currently operates 272 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of each of the proposed transactions, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. These forward‑looking statements are not guarantees of future performance and are 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. Many possible events or factors could adversely affect the future financial results and performance of Prosperity, First Bancshares, Lone Star or the combined company and could cause those results or performance to differ materially from those expressed in or implied by the forward-looking statements. Such risks and uncertainties include, among others: the occurrence of any event, change or other circumstance that could give rise to the right of a party to terminate the merger agreement with First Bancshares or Lone Star, as applicable, the outcome of any legal proceedings that may be instituted against Prosperity, First Bancshares or Lone Star, delays in completing either of the transactions, the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of each of the transactions) or First Bancshares shareholder approval or Lone Star shareholder approval or to satisfy any of the other conditions to the transactions on a timely basis or at all, the possibility that the anticipated benefits of the transactions are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors generally, or specifically in the West Texas area and the West, North and Central Texas area where First Bancshares and Lone Star, respectively, do a majority of their respective business and Prosperity has a significant presence, the possibility that the transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transactions, Prosperity's ability to complete the acquisition and integration of First Bancshares and of Lone Star successfully, and the dilution caused by Prosperity's issuance of additional shares of its common stock in connection with the transactions. 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, 2021, 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.

Additional Information about the First Bancshares Merger and Where to Find It

In connection with the proposed merger of First Bancshares into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to be issued to the shareholders of First Bancshares. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of First Bancshares seeking their approval of the proposed transaction.

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, FIRST BANCSHARES AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. You will also be able to obtain these documents, when they are filed, free of charge, from Prosperity at http://www.prosperitybankusa.com. Copies of the proxy statement/prospectus can also be obtained, when it becomes available, free of charge, by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, (281) 269-7199 or to First Bancshares of Texas, Inc., 310 West Wall Street, Suite 1200, Midland, Texas 79701, Attention: Ken Burgess, (844) 322-8392.

Additional Information about the Lone Star Merger and Where to Find It

In connection with the proposed merger of Lone Star into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity common stock to be issued to the shareholders of Lone Star. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of Lone Star seeking their approval of the proposed transaction.

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, LONE STAR AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. You will also be able to obtain these documents, when they are filed, free of charge, from Prosperity at http://www.prosperitybankusa.com. Copies of the proxy statement/prospectus can also be obtained, when it becomes available, free of charge, by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, (281) 269-7199 or to Lone Star State Bancshares, Inc., 6220 Milwaukee Avenue, Lubbock, Texas 79424, Attention: Alan Lackey, (806) 771-7717.

Participants in the Solicitation

Prosperity, First Bancshares and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Bancshares in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available. 

Prosperity, Lone Star and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lone Star in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available. 

Additional information about Prosperity and its directors and executive officers may be found in the definitive proxy statement of Prosperity relating to its 2022 Annual Meeting of Shareholders filed with the SEC on March 14, 2022, and other documents filed by Prosperity with the SEC. These documents can be obtained free of charge from the sources described above.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

 

______________
(1)	Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
(2)	Includes purchase accounting adjustments of $997 thousand, net of tax, primarily comprised of loan discount accretion of $1.2 million for the three months ended September 30, 2022.
(3)	Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $5.4 million for the three months ended September 30, 2021.
(4)	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.
(5)	Includes purchase accounting adjustments of $5.2 million, net of tax, primarily comprised of loan discount accretion of $6.5 million for the nine months ended September 30, 2022.
(6)	Includes purchase accounting adjustments of $27.3 million, net of tax, primarily comprised of loan discount accretion of $33.9 million for the nine months ended September 30, 2021.

 

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

 - - -

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
Balance Sheet Data (at period end)
Loans held for sale		$	2,871			$	3,350			$	2,810			$	7,274			$	10,197
Loans held for investment			17,580,653				17,067,871				16,720,173				16,833,171				16,949,486
Loans held for investment - Warehouse Purchase    Program			922,764				1,137,623				1,344,541				1,775,699				1,998,049
Total loans			18,506,288				18,208,844				18,067,524				18,616,144				18,957,732
Investment securities(A)			14,806,487				14,912,313				14,798,127				12,818,901				12,629,368
Federal funds sold			244				201				274				241				237
Allowance for credit losses on loans			(282,179)				(283,959)				(285,163)				(286,380)				(287,187)
Cash and due from banks			602,152				393,716				1,560,321				2,547,739				1,055,386
Goodwill			3,231,636				3,231,636				3,231,636				3,231,636				3,231,636
Core deposit intangibles, net			53,906				56,483				59,064				61,684				64,539
Other real estate owned			1,758				1,555				1,705				622				150
Fixed assets, net			337,099				335,939				336,075				319,799				322,799
Other assets			586,111				530,528				501,623				523,584				537,459
Total assets		$	37,843,502			$	37,387,256			$	38,271,186			$	37,833,970			$	36,512,119
Noninterest-bearing deposits		$	11,154,143			$	11,032,184			$	10,776,652			$	10,750,034			$	10,326,489
Interest-bearing deposits			18,145,952				18,833,434				20,291,658				20,021,728				19,125,163
Total deposits			29,300,095				29,865,618				31,068,310				30,771,762				29,451,652
Other borrowings			1,165,000				300,000				—				—				—
Securities sold under repurchase agreements			454,304				481,785				440,891				448,099				440,969
Allowance for credit losses on off-balance sheet    credit exposures			29,947				29,947				29,947				29,947				29,947
Other liabilities			282,514				188,079				227,614				156,926				244,110
Total liabilities			31,231,860				30,865,429				31,766,762				31,406,734				30,166,678
Shareholders' equity(B)			6,611,642				6,521,827				6,504,424				6,427,236				6,345,441
Total liabilities and equity		$	37,843,502			$	37,387,256			$	38,271,186			$	37,833,970			$	36,512,119

(A)	Includes $(296), $1,517, $2,115, $2,290 and $2,483 in unrealized (losses) gains on available for sale securities for the quarterly periods ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.
(B)	Includes $(234), $1,198 $1,671, $1,809 and $1,961 in after-tax unrealized (losses) gains on available for sale securities for the quarterly periods ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Three Months Ended																				Year-to-Date
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
Income Statement Data
Interest income:
Loans		$	210,268			$	192,770			$	193,025			$	206,209			$	213,821			$	596,063			$	663,699
Securities(C)			68,761				64,111				55,011				46,857				46,217				187,883				128,602
Federal funds sold and other earning assets			525				925				847				563				302				2,297				993
Total interest income			279,554				257,806				248,883				253,629				260,340				786,243				793,294
Interest expense:
Deposits			14,669				8,641				8,754				8,685				11,578				32,064				44,228
Other borrowings			3,719				450				—				—				—				4,169				—
Securities sold under repurchase agreements			487				244				185				184				195				916				518
Total interest expense			18,875				9,335				8,939				8,869				11,773				37,149				44,746
Net interest income			260,679				248,471				239,944				244,760				248,567				749,094				748,548
Provision for credit losses			—				—				—				—				—				—				—
Net interest income after provision for credit losses			260,679				248,471				239,944				244,760				248,567				749,094				748,548
Noninterest income:
Nonsufficient funds (NSF) fees			8,887				8,484				8,124				8,401				7,962				25,495				21,209
Credit card, debit card and ATM card income			8,889				8,880				8,179				8,894				8,837				25,948				25,786
Service charges on deposit accounts			6,222				6,365				6,211				6,237				6,115				18,798				18,155
Trust income			3,174				2,875				2,703				2,698				2,467				8,752				7,580
Mortgage income			340				502				455				685				1,396				1,297				7,617
Brokerage income			940				917				892				953				861				2,749				2,367
Bank owned life insurance income			1,214				1,293				1,283				1,317				1,325				3,790				3,911
Net gain (loss) on sale or write-down of assets			50				1,108				689				1,165				255				1,847				(68)
Other noninterest income			4,972				7,170				6,586				5,407				5,427				18,728				17,652
Total noninterest income			34,688				37,594				35,122				35,757				34,645				107,404				104,209
Noninterest expense:
Salaries and benefits			79,578				80,371				79,411				76,496				78,412				239,360				234,060
Net occupancy and equipment			8,412				8,039				7,848				8,140				8,165				24,299				24,044
Credit and debit card, data processing and    software amortization			9,516				9,246				8,849				9,050				9,103				27,611				26,054
Regulatory assessments and FDIC insurance			2,807				2,851				2,850				2,801				2,497				8,508				7,837
Core deposit intangibles amortization			2,577				2,581				2,620				2,855				2,878				7,778				8,696
Depreciation			4,436				4,539				4,547				4,518				4,524				13,522				13,577
Communications			3,374				3,206				2,919				3,134				3,013				9,499				8,894
Other real estate expense			198				195				214				24				30				607				472
Net loss (gain) on sale or write-down of other    real estate			(213)				14				(621)				2				4				(820)				(2,722)
Other noninterest expense			11,529				11,836				11,213				12,518				11,189				34,578				33,170
Total noninterest expense			122,214				122,878				119,850				119,538				119,815				364,942				354,082
Income before income taxes			173,153				163,187				155,216				160,979				163,397				491,556				498,675
Provision for income taxes			37,333				34,697				32,890				34,192				34,807				104,920				106,165
Net income available to common shareholders		$	135,820			$	128,490			$	122,326			$	126,787			$	128,590			$	386,636			$	392,510

(C)	Interest income on securities was reduced by net premium amortization of $9,947, $11,450, $12,857, $16,006 and $15,141 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and $34,254 and $42,421 for the nine months ended September 30, 2022 and September 30, 2021, 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
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
Profitability
Net income (D) (E)		$	135,820			$	128,490			$	122,326			$	126,787			$	128,590			$	386,636			$	392,510
Basic earnings per share		$	1.49			$	1.40			$	1.33			$	1.38			$	1.39			$	4.22			$	4.23
Diluted earnings per share		$	1.49			$	1.40			$	1.33			$	1.38			$	1.39			$	4.22			$	4.23
Return on average assets (F)			1.45	%			1.36	%			1.29	%			1.37	%			1.42	%			1.37	%			1.47	%
Return on average common equity (F)			8.24	%			7.84	%			7.54	%			7.91	%			8.07	%			7.88	%			8.32	%
Return on average tangible common equity (F) (G)			16.44	%			15.73	%			15.30	%			16.26	%			16.72	%			15.83	%			17.53	%
Tax equivalent net interest margin (D) (E) (H)			3.11	%			2.97	%			2.88	%			2.97	%			3.10	%			2.99	%			3.20	%
Efficiency ratio (G) (I)			41.38	%			43.12	%			43.68	%			42.79	%			42.34	%			42.70	%			41.52	%
Liquidity and Capital Ratios
Equity to assets			17.47	%			17.44	%			17.00	%			16.99	%			17.38	%			17.47	%			17.38	%
Common equity tier 1 capital			15.44	%	(J)		15.26	%	(J)		15.32	%	(J)		15.10	%			14.84	%			15.44	%	(J)		14.84	%
Tier 1 risk-based capital			15.44	%	(J)		15.26	%	(J)		15.32	%	(J)		15.10	%			14.84	%			15.44	%	(J)		14.84	%
Total risk-based capital			16.09	%	(J)		15.91	%	(J)		15.99	%	(J)		15.45	%			15.20	%			16.09	%	(J)		15.20	%
Tier 1 leverage capital			9.94	%	(J)		9.58	%	(J)		9.44	%	(J)		9.62	%			9.55	%			9.94	%	(J)		9.55	%
Period end tangible equity to period end tangible    assets (G)			9.62	%			9.48	%			9.19	%			9.07	%			9.18	%			9.62	%			9.18	%
Other Data
Weighted-average shares used in computing    earnings per common share
Basic			91,209				91,772				92,161				92,162				92,683				91,710				92,823
Diluted			91,209				91,772				92,161				92,162				92,683				91,710				92,823
Period end shares outstanding			91,210				91,196				92,160				92,170				92,160				91,210				92,160
Cash dividends paid per common share		$	0.52			$	0.52			$	0.52			$	0.52			$	0.49			$	1.56			$	1.47
Book value per common share		$	72.49			$	71.51			$	70.58			$	69.73			$	68.85			$	72.49			$	68.85
Tangible book value per common share (G)		$	36.47			$	35.46			$	34.87			$	34.00			$	33.09			$	36.47			$	33.09
Common Stock Market Price
High		$	77.93			$	73.50			$	80.46			$	78.67			$	72.97			$	80.46			$	83.02
Low		$	65.37			$	64.69			$	69.08			$	68.53			$	64.40			$	64.69			$	64.40
Period end closing price		$	66.68			$	68.27			$	69.38			$	72.35			$	71.13			$	66.68			$	71.13
Employees – FTE (excluding overtime)			3,592				3,576				3,595				3,704				3,625				3,592				3,625
Number of banking centers			272				272				272				273				273				272				273

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

 

	Three Months Ended										Year-to-Date
	Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Loan discount accretion
ASC 310-20	$912		$(265)		$4,674		$4,635		$3,761		$5,321		$26,805
ASC 310-30	$322		$324		$521		$731		$1,618		$1,167		$7,107
Securities net amortization	$40		$12		$52		$139		$136		$104		$418
Time deposits amortization	$68		$84		$100		$127		$201		$252		$1,035

(E)	Using effective tax rate of 21.6%, 21.3%, 21.2%, 21.2% and 21.3% for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively, and 21.3% for the nine months ended September 30, 2022 and September 30, 2021.
(F)	Interim periods annualized.
(G)	Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
(H)	Net interest margin for all periods presented is based on average balances on an actual 365-day basis.
(I)	Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation.
(J)	Beginning on January 1, 2022, the cumulative amount of the current expected credit loss ("CECL") transition adjustments is being phased in over a three-year transition period.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited)   (Dollars in thousands)
YIELD ANALYSIS		Three Months Ended
		Sep 30, 2022												Jun 30, 2022												Sep 30, 2021
		Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)	Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)	Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(K)
Interest-earning assets:
Loans held for sale		$	4,136			$	57			5.47 %				$	3,199			$	40			5.02 %				$	11,714			$	91			3.08 %
Loans held for investment			17,275,866				199,417			4.58 %					16,799,609				182,286			4.35 %					17,102,998				199,019			4.62 %
Loans held for investment - Warehouse    Purchase Program			938,589				10,794			4.56 %					1,257,521				10,444			3.33 %					1,836,252				14,711			3.18 %
Total Loans			18,218,591				210,268			4.58 %					18,060,329				192,770			4.28 %					18,950,964				213,821			4.48 %
Investment securities			14,962,847				68,761			1.82 %			(L)		14,989,666				64,111			1.72 %			(L)		12,184,964				46,217			1.50 %			(L)
Federal funds sold and other earning assets			87,859				525			2.37 %					540,907				925			0.69 %					734,787				302			0.16 %
Total interest-earning assets			33,269,297				279,554			3.33 %					33,590,902				257,806			3.08 %					31,870,715				260,340			3.24 %
Allowance for credit losses on loans			(283,244)												(284,550)												(301,011)
Noninterest-earning assets			4,480,512												4,448,060												4,728,965
Total assets		$	37,466,565											$	37,754,412											$	36,298,669
Interest-bearing liabilities:
Interest-bearing demand deposits		$	6,155,511			$	2,345			0.15 %				$	6,437,614			$	2,154			0.13 %				$	6,089,678			$	3,614			0.24 %
Savings and money market deposits			10,172,986				9,479			0.37 %					10,702,273				4,473			0.17 %					9,944,664				4,522			0.18 %
Certificates and other time deposits			2,185,529				2,845			0.52 %					2,409,663				2,014			0.34 %					2,897,123				3,442			0.47 %
Other borrowings			577,828				3,719			2.55 %					112,582				450			1.60 %					—				—				—
Securities sold under repurchase agreements			473,584				487			0.41 %					463,108				244			0.21 %					448,338				195			0.17 %
Total interest-bearing liabilities			19,565,438				18,875			0.38 %			(M)		20,125,240				9,335			0.19 %			(M)		19,379,803				11,773			0.24 %			(M)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			11,048,856												10,855,802												10,286,062
Allowance for credit losses on off-balance    sheet credit exposures			29,947												29,947												29,947
Other liabilities			231,812												186,344												229,502
Total liabilities			30,876,053												31,197,333												29,925,314
Shareholders' equity			6,590,512												6,557,079												6,373,355
Total liabilities and shareholders' equity		$	37,466,565											$	37,754,412											$	36,298,669
Net interest income and margin						$	260,679			3.11 %								$	248,471			2.97 %								$	248,567			3.09 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							458												445												551
Net interest income and margin (tax    equivalent basis)						$	261,137			3.11 %								$	248,916			2.97 %								$	249,118			3.10 %

(K)	Annualized and based on an actual 365-day basis.
(L)	Yield on securities was impacted by net premium amortization of $9,947, $11,450 and $15,141 for the three months ended September 30, 2022, June 31, 2022 and September 30, 2021, respectively.
(M)	Total cost of funds, including noninterest bearing deposits, was 0.24%, 0.12% and 0.16% for the three months ended September 30, 2022, June 31, 2022 and September 30, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited)   (Dollars in thousands)
YIELD ANALYSIS		Year-to-Date
		Sep 30, 2022												Sep 30, 2021
		Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(N)	Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate			(N)
Interest-earning assets:
Loans held for sale		$	3,980			$	137			4.60 %				$	19,507			$	439			3.01 %
Loans held for investment			16,931,422				564,736			4.46 %					17,228,462				613,813			4.76 %
Loans held for investment - Warehouse Purchase    Program			1,153,762				31,190			3.61 %					2,061,432				49,447			3.21 %
Total loans			18,089,164				596,063			4.41 %					19,309,401				663,699			4.60 %
Investment securities			14,579,521				187,883			1.72 %			(O)		10,849,373				128,602			1.58 %			(O)
Federal funds sold and other earning assets			913,923				2,297			0.34 %					1,151,647				993			0.12 %
Total interest-earning assets			33,582,608				786,243			3.13 %					31,310,421				793,294			3.39 %
Allowance for credit losses on loans			(284,486)												(307,500)
Noninterest-earning assets			4,462,318												4,644,874
Total assets		$	37,760,440											$	35,647,795
Interest-bearing liabilities:
Interest-bearing demand deposits		$	6,453,810			$	6,951			0.14 %				$	6,160,988			$	15,028			0.33 %
Savings and money market deposits			10,579,351				17,978			0.23 %					9,747,706				15,765			0.22 %
Certificates and other time deposits			2,409,251				7,135			0.40 %					2,969,151				13,435			0.60 %
Other borrowings			232,253				4,169			2.40 %					—				—				—
Securities sold under repurchase agreements			462,994				916			0.26 %					403,254				518			0.17 %
Total interest-bearing liabilities			20,137,659				37,149			0.25 %			(P)		19,281,099				44,746			0.31 %			(P)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			10,848,605												9,855,599
Allowance for credit losses on off-balance sheet credit    exposures			29,947												29,947
Other liabilities			198,196												194,347
Total liabilities			31,214,407												29,360,992
Shareholders' equity			6,546,033												6,286,803
Total liabilities and shareholders' equity			37,760,440											$	35,647,795
Net interest income and margin						$	749,094			2.98 %								$	748,548			3.20 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							1,375												1,772
Net interest income and margin (tax equivalent basis)						$	750,469			2.99 %								$	750,320			3.20 %

(N)	Annualized and based on an actual 365-day basis.
(O)	Yield on securities was impacted by net premium amortization of $34,254 and $42,421 for the nine months ended September 30, 2022 and 2021, respectively.
(P)	Total cost of funds, including noninterest bearing deposits, was 0.16% and 0.21% for the nine months ended September 30, 2022 and 2021, respectively.

  

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended
	Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
YIELD TREND (Q)
Interest-Earning Assets:
Loans held for sale		5.47	%			5.02	%			3.52	%			3.20	%			3.08	%
Loans held for investment		4.58	%			4.35	%			4.44	%			4.53	%			4.62	%
Loans held for investment - Warehouse Purchase    Program		4.56	%			3.33	%			3.18	%			3.12	%			3.18	%
Total loans		4.58	%			4.28	%			4.35	%			4.40	%			4.48	%
Investment securities (R)		1.82	%			1.72	%			1.62	%			1.46	%			1.50	%
Federal funds sold and other earning assets		2.37	%			0.69	%			0.16	%			0.16	%			0.16	%
Total interest-earning assets		3.33	%			3.08	%			2.98	%			3.07	%			3.24	%
Interest-Bearing Liabilities:
Interest-bearing demand deposits		0.15	%			0.13	%			0.15	%			0.14	%			0.24	%
Savings and money market deposits		0.37	%			0.17	%			0.15	%			0.15	%			0.18	%
Certificates and other time deposits		0.52	%			0.34	%			0.35	%			0.38	%			0.47	%
Other borrowings		2.55	%			1.60	%			—				—				—
Securities sold under repurchase agreements		0.41	%			0.21	%			0.17	%			0.17	%			0.17	%
Total interest-bearing liabilities		0.38	%			0.19	%			0.17	%			0.18	%			0.24	%
Net Interest Margin		3.11	%			2.97	%			2.87	%			2.96	%			3.09	%
Net Interest Margin (tax equivalent)		3.11	%			2.97	%			2.88	%			2.97	%			3.10	%

(Q)	Annualized and based on average balances on an actual 365-day basis.
(R)	Yield on securities was impacted by net premium amortization of $9,947, $11,450, $12,857, $16,006 and $15,141 for the three months ended September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Three Months Ended
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021
Balance Sheet Averages
Loans held for sale		$	4,136			$	3,199			$	4,611			$	8,794			$	11,714
Loans held for investment			17,275,866				16,799,609				16,712,690				16,830,163				17,102,998
Loans held for investment - Warehouse Purchase    Program			938,589				1,257,521				1,268,715				1,772,971				1,836,252
Total Loans			18,218,591				18,060,329				17,986,016				18,611,928				18,950,964
Investment securities			14,962,847				14,989,666				13,772,974				12,751,857				12,184,964
Federal funds sold and other earning assets			87,859				540,907				2,135,503				1,393,859				734,787
Total interest-earning assets			33,269,297				33,590,902				33,894,493				32,757,644				31,870,715
Allowance for credit losses on loans			(283,244)				(284,550)				(285,692)				(287,191)				(301,011)
Cash and due from banks			302,479				309,223				326,552				329,406				570,765
Goodwill			3,231,637				3,231,637				3,231,637				3,231,637				3,231,637
Core deposit intangibles, net			55,158				57,728				60,346				63,091				65,955
Other real estate			1,652				1,639				1,893				321				279
Fixed assets, net			336,657				336,242				327,297				321,524				323,584
Other assets			552,929				511,591				510,944				530,603				536,745
Total assets		$	37,466,565			$	37,754,412			$	38,067,470			$	36,947,035			$	36,298,669
Noninterest-bearing deposits		$	11,048,856			$	10,855,802			$	10,636,624			$	10,587,441			$	10,286,062
Interest-bearing demand deposits			6,155,511				6,437,614				6,775,114				6,196,283				6,089,678
Savings and money market deposits			10,172,986				10,702,273				10,870,461				10,286,650				9,944,664
Certificates and other time deposits			2,185,529				2,409,663				2,637,529				2,766,123				2,897,123
Total deposits			29,562,882				30,405,352				30,919,728				29,836,497				29,217,527
Other borrowings			577,828				112,582				—				—				—
Securities sold under repurchase agreements			473,584				463,108				452,054				432,981				448,338
Allowance for credit losses on off-balance sheet    credit exposures			29,947				29,947				29,947				29,947				29,947
Other liabilities			231,812				186,344				176,360				234,746				229,502
Shareholders' equity			6,590,512				6,557,079				6,489,381				6,412,864				6,373,355
Total liabilities and equity		$	37,466,565			$	37,754,412			$	38,067,470			$	36,947,035			$	36,298,669

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Sep 30, 2022							Jun 30, 2022							Mar 31, 2022							Dec 31, 2021							Sep 30, 2021
Period End Balances
Loan Portfolio
Commercial and industrial		$	2,188,029			11.8	%		$	2,155,727			11.8	%		$	2,007,783			11.1	%		$	2,050,631			11.0	%		$	1,841,899			9.7	%
Warehouse purchase program			922,764			5.0	%			1,137,623			6.2	%			1,344,541			7.4	%			1,775,699			9.5	%			1,998,049			10.6	%
Construction, land development and    other land loans			2,659,552			14.4	%			2,460,526			13.5	%			2,327,837			12.9	%			2,299,715			12.4	%			2,269,417			12.0	%
1-4 family residential			5,447,993			29.4	%			5,156,200			28.3	%			4,970,620			27.5	%			4,860,419			26.1	%			4,709,468			24.8	%
Home equity			943,197			5.1	%			932,725			5.1	%			870,130			4.8	%			808,289			4.4	%			746,426			3.9	%
Commercial real estate (includes    multi-family residential)			4,966,243			26.8	%			4,967,662			27.3	%			5,150,555			28.5	%			5,251,368			28.2	%			5,550,841			29.3	%
Agriculture (includes farmland)			670,603			3.6	%			665,960			3.7	%			617,418			3.4	%			620,338			3.3	%			631,497			3.3	%
Consumer and other			288,834			1.6	%			274,532			1.5	%			246,433			1.4	%			288,496			1.6	%			274,980			1.5	%
Energy			410,069			2.2	%			430,339			2.4	%			445,949			2.5	%			491,305			2.6	%			569,314			3.0	%
Paycheck Protection Program			9,004			0.1	%			27,550			0.2	%			86,258			0.5	%			169,884			0.9	%			365,841			1.9	%
Total loans		$	18,506,288						$	18,208,844						$	18,067,524						$	18,616,144						$	18,957,732
Deposit Types
Noninterest-bearing DDA		$	11,154,143			38.1	%		$	11,032,184			36.9	%		$	10,776,652			34.7	%		$	10,750,034			34.9	%		$	10,326,489			35.0	%
Interest-bearing DDA			6,027,157			20.6	%			6,331,314			21.2	%			6,603,934			21.2	%			6,741,092			21.9	%			6,088,923			20.7	%
Money market			6,438,787			22.0	%			6,646,726			22.3	%			7,603,329			24.5	%			7,178,904			23.3	%			6,864,664			23.3	%
Savings			3,563,776			12.1	%			3,597,820			12.0	%			3,543,300			11.4	%			3,401,727			11.1	%			3,293,850			11.2	%
Certificates and other time deposits			2,116,232			7.2	%			2,257,574			7.6	%			2,541,095			8.2	%			2,700,005			8.8	%			2,877,726			9.8	%
Total deposits		$	29,300,095						$	29,865,618						$	31,068,310						$	30,771,762						$	29,451,652
Loan to Deposit Ratio			63.2	%						61.0	%						58.2	%						60.5	%						64.4	%

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
Construction Loans
		Sep 30, 2022							Jun 30, 2022							Mar 31, 2022							Dec 31, 2021							Sep 30, 2021
Single family residential construction		$	1,004,000			37.8	%		$	911,443			37.0	%		$	816,072			35.0	%		$	728,393			31.7	%		$	659,248			29.0	%
Land development			145,303			5.5	%			133,398			5.4	%			103,853			4.5	%			99,099			4.3	%			92,623			4.1	%
Raw land			343,066			12.9	%			316,750			12.9	%			310,987			13.4	%			322,673			14.0	%			315,803			13.9	%
Residential lots			237,714			8.9	%			223,703			9.1	%			212,029			9.1	%			206,978			9.0	%			195,201			8.6	%
Commercial lots			181,679			6.8	%			184,794			7.5	%			183,760			7.9	%			184,901			8.0	%			169,189			7.5	%
Commercial construction and other			747,803			28.1	%			690,453			28.1	%			701,148			30.1	%			757,687			33.0	%			837,436			36.9	%
Net unaccreted discount			(13)							(15)							(12)							(16)							(83)
Total construction loans		$	2,659,552						$	2,460,526						$	2,327,837						$	2,299,715						$	2,269,417

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of September 30, 2022
	Houston				Dallas				Austin				OK City				Tulsa				Other (S)				Total
Collateral Type
Shopping center/retail	$	422,432			$	257,332			$	50,427			$	18,868			$	27,159			$	276,875			$	1,053,093
Commercial and industrial buildings		160,956				78,735				18,646				32,753				16,267				166,892				474,249
Office buildings		92,541				322,061				26,391				68,836				4,378				64,189				578,396
Medical buildings		82,266				20,237				2,525				20,961				39,028				51,973				216,990
Apartment buildings		79,475				64,631				12,259				13,995				8,239				147,840				326,439
Hotel		92,257				68,683				44,188				28,364				—				131,290				364,782
Other		73,549				76,947				32,797				7,512				2,593				71,337				264,735
Total	$	1,003,476			$	888,626			$	187,233			$	191,289			$	97,664			$	910,396			$	3,278,684		(T)

 

Acquired Loans
		Non-PCD Loans												PCD Loans												Total Acquired Loans
		Balance at Acquisition Date				Balance at Jun 30, 2022				Balance at Sep 30, 2022				Balance at Acquisition Date				Balance at Jun 30, 2022				Balance at Sep 30, 2022				Balance at Acquisition Date				Balance at Jun 30, 2022				Balance at Sep 30, 2022
Loan marks:
Acquired banks (U)		$	345,599			$	3,734			$	2,836			$	320,052			$	3,993			$	3,671			$	665,651			$	7,727			$	6,507
Acquired portfolio loan balances:
Acquired banks (U)			12,286,159				1,559,270				1,410,748				689,573				68,125				66,613				12,975,732		(V)		1,627,395				1,477,361
Acquired portfolio loan balances less    loan marks		$	11,940,560			$	1,555,536			$	1,407,912			$	369,521			$	64,132			$	62,942			$	12,310,081			$	1,619,668			$	1,470,854

(S)	Includes other MSA and non-MSA regions.
(T)	Represents a portion of total commercial real estate loans of $4.966 billion as of September 30, 2022.
(U)	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.
(V)	Actual principal balances acquired.

  

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended																				Year-to-Date
	Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
Asset Quality
Nonaccrual loans	$	17,729			$	20,619			$	21,765			$	26,269			$	35,035			$	17,729			$	35,035
Accruing loans 90 or more days past due		378				13				3,695				887				1,038				378				1,038
Total nonperforming loans		18,107				20,632				25,460				27,156				36,073				18,107				36,073
Repossessed assets		13				—				19				310				326				13				326
Other real estate		1,758				1,555				1,705				622				150				1,758				150
Total nonperforming assets	$	19,878			$	22,187			$	27,184			$	28,088			$	36,549			$	19,878			$	36,549
Nonperforming assets:
Commercial and industrial (includes energy)	$	2,376			$	2,964			$	4,403			$	6,150			$	8,199			$	2,376			$	8,199
Construction, land development and other land    loans		1,712				1,866				1,761				1,841				803				1,712				803
1-4 family residential (includes home equity)		13,986				14,335				11,899				11,990				11,117				13,986				11,117
Commercial real estate (includes multi-family    residential)		1,364				2,448				7,685				7,276				15,691				1,364				15,691
Agriculture (includes farmland)		434				567				1,402				816				643				434				643
Consumer and other		6				7				34				15				96				6				96
Total	$	19,878			$	22,187			$	27,184			$	28,088			$	36,549			$	19,878			$	36,549
Number of loans/properties		150				160				147				157				155				150				155
Allowance for credit losses on loans	$	282,179			$	283,959			$	285,163			$	286,380			$	287,187			$	282,179			$	287,187
Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	(15)			$	(197)			$	14			$	177			$	3,763			$	(198)			$	8,876
Construction, land development and other land    loans		(4)				(5)				430				(162)				(4)				421				(114)
1-4 family residential (includes home equity)		(202)				(32)				87				(72)				66				(147)				107
Commercial real estate (includes multi-family    residential)		757				395				(366)				(10)				11,180				786				18,286
Agriculture (includes farmland)		119				(9)				(103)				(102)				(63)				7				(39)
Consumer and other		1,125				1,052				1,155				976				755				3,332				1,765
Total	$	1,780			$	1,204			$	1,217			$	807			$	15,697			$	4,201			$	28,881
Asset Quality Ratios
Nonperforming assets to average interest-earning    assets		0.06	%			0.07	%			0.08	%			0.09	%			0.11	%			0.06	%			0.12	%
Nonperforming assets to loans and other real estate		0.11	%			0.12	%			0.15	%			0.15	%			0.19	%			0.11	%			0.19	%
Net charge-offs to average loans (annualized)		0.04	%			0.03	%			0.03	%			0.02	%			0.33	%			0.03	%			0.20	%
Allowance for credit losses on loans to total loans		1.52	%			1.56	%			1.58	%			1.54	%			1.51	%			1.52	%			1.51	%
Allowance for credit losses on loans to total loans,    excluding Warehouse Purchase Program loans    and Paycheck Protection Program loans (G)		1.61	%			1.67	%			1.71	%			1.72	%			1.73	%			1.61	%			1.73	%

 

Prosperity Bancshares, Inc.® Notes to Selected Financial Data (Unaudited) (Dollars and share amounts in thousands, except per share data)
NOTES TO SELECTED FINANCIAL DATA
Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses on loans to total loans (excluding Warehouse Purchase Program loans and PPP loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.
		Three Months Ended																				Year-to-Date
		Sep 30, 2022				Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Sep 30, 2022				Sep 30, 2021
Reconciliation of return on average common equity to    return on average tangible common equity:
Net income		$	135,820			$	128,490			$	122,326			$	126,787			$	128,590			$	386,636			$	392,510
Average shareholders' equity		$	6,590,512			$	6,557,079			$	6,489,381			$	6,412,864			$	6,373,355			$	6,546,033			$	6,286,803
Less: Average goodwill and other intangible assets			(3,286,795)				(3,289,365)				(3,291,983)				(3,294,728)				(3,297,592)				(3,289,362)				(3,300,990)
Average tangible shareholders' equity		$	3,303,717			$	3,267,714			$	3,197,398			$	3,118,136			$	3,075,763			$	3,256,671			$	2,985,813
Return on average tangible common equity (F)			16.44	%			15.73	%			15.30	%			16.26	%			16.72	%			15.83	%			17.53	%
Reconciliation of book value per share to tangible book    value per share:
Shareholders' equity		$	6,611,642			$	6,521,827			$	6,504,424			$	6,427,236			$	6,345,441			$	6,611,642			$	6,345,441
Less: Goodwill and other intangible assets			(3,285,541)				(3,288,119)				(3,290,700)				(3,293,320)				(3,296,175)				(3,285,541)				(3,296,175)
Tangible shareholders' equity		$	3,326,101			$	3,233,708			$	3,213,724			$	3,133,916			$	3,049,266			$	3,326,101			$	3,049,266
Period end shares outstanding			91,210				91,196				92,160				92,170				92,160				91,210				92,160
Tangible book value per share		$	36.47			$	35.46			$	34.87			$	34.00			$	33.09			$	36.47			$	33.09
Reconciliation of equity to assets ratio to period end    tangible equity to period end tangible assets ratio:
Tangible shareholders' equity		$	3,326,101			$	3,233,708			$	3,213,724			$	3,133,916			$	3,049,266			$	3,326,101			$	3,049,266
Total assets		$	37,843,502			$	37,387,256			$	38,271,186			$	37,833,970			$	36,512,119			$	37,843,502			$	36,512,119
Less: Goodwill and other intangible assets			(3,285,541)				(3,288,119)				(3,290,700)				(3,293,320)				(3,296,175)				(3,285,541)				(3,296,175)
Tangible assets		$	34,557,961			$	34,099,137			$	34,980,486			$	34,540,650			$	33,215,944			$	34,557,961			$	33,215,944
Period end tangible equity to period end tangible assets    ratio			9.62	%			9.48	%			9.19	%			9.07	%			9.18	%			9.62	%			9.18	%
Reconciliation of allowance for credit losses to total    loans to allowance for credit losses on loans to total    loans excluding Warehouse Purchase Program and    Paycheck Protection Program loans:
Allowance for credit losses on loans		$	282,179			$	283,959			$	285,163			$	286,380			$	287,187			$	282,179			$	287,187
Total loans		$	18,506,288			$	18,208,844			$	18,067,524			$	18,616,144			$	18,957,732			$	18,506,288			$	18,957,732
Less: Warehouse Purchase Program loans			(922,764)				(1,137,623)				(1,344,541)				(1,775,699)				(1,998,049)				(922,764)				(1,998,049)
Less: Paycheck Protection Program loans			(9,004)				(27,550)				(86,258)				(169,884)				(365,841)				(9,004)				(365,841)
Total loans less Warehouse Purchase Program and    Paycheck Protection Program loans		$	17,574,520			$	17,043,671			$	16,636,725			$	16,670,561			$	16,593,842			$	17,574,520			$	16,593,842
Allowance for credit losses on loans to total loans    excluding Warehouse Purchase Program and Paycheck    Protection Program loans			1.61	%			1.67	%			1.71	%			1.72	%			1.73	%			1.61	%			1.73	%
Reconciliation of efficiency ratio to efficiency ratio    excluding net gains and losses on the sale of assets    and securities:
Noninterest expense		$	122,214			$	122,878			$	119,850			$	119,538			$	119,815			$	364,942			$	354,082
Net interest income		$	260,679			$	248,471			$	239,944			$	244,760			$	248,567			$	749,094			$	748,548
Noninterest income			34,688				37,594				35,122				35,757				34,645				107,404				104,209
Less: net gain (loss) on sale or write down of assets			50				1,108				689				1,165				255				1,847				(68)
Noninterest income excluding net gains and losses on the    sale or write down of assets and securities			34,638				36,486				34,433				34,592				34,390				105,557				104,277
Total income excluding net gains and losses on the    sale or write down of assets and securities		$	295,317			$	284,957			$	274,377			$	279,352			$	282,957			$	854,651			$	852,825
Efficiency ratio, excluding net gains and losses on the sale    or write down of assets and securities			41.38	%			43.12	%			43.68	%			42.79	%			42.34	%			42.70	%			41.52	%

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/prosperity-bancshares-inc-reports-third-quarter-2022-earnings-301659313.html

SOURCE Prosperity Bancshares, Inc.

FAQ

What was Prosperity Bancshares' net income for Q3 2022?

Prosperity Bancshares reported a net income of $135.8 million for Q3 2022.

How much did loans increase in Q3 2022 for Prosperity Bancshares?

Loans, excluding certain programs, increased by $530.8 million or 3.1% in Q3 2022.

What is the new dividend amount for Prosperity Bancshares?

The board declared a dividend of $0.55 per share, a 5.8% increase.

What are the details of the merger agreements announced by Prosperity Bancshares?

Prosperity signed merger agreements with First Bancshares of Texas and Lone Star State Bancshares, aiming to create a combined asset base exceeding $6 billion.

What was the net interest margin for Prosperity Bancshares in Q3 2022?

The net interest margin for Q3 2022 was reported at 3.11%.