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PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2023 EARNINGS

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Prosperity Bancshares, Inc. reports net income of $112.2 million for Q3 2023, a decrease compared to the same period last year. Dividend increased by 1.82% to $0.56 per share for Q4 2023. Deposits increased by $259.9 million in Q3 2023. Nonperforming assets remain low at 0.20% of average interest-earning assets. Pending merger with Lone Star State Bancshares, Inc. announced.
Positive
  • Dividend increased by 1.82% to $0.56 per share for Q4 2023
  • Deposits increased by $259.9 million in Q3 2023
  • Nonperforming assets remain low at 0.20% of average interest-earning assets
Negative
  • Net income decreased to $112.2 million for Q3 2023 compared to the same period last year
  • Board approved increase in dividend of 1.82% to $0.56 for the fourth quarter 2023, representing the 20th annual increase with a compounded annual growth rate of 11.5%
  • Net income of $112.2 million and diluted earnings per share of $1.20 for third quarter 2023
  • Deposits, excluding public funds deposits, increased $259.9 million during third quarter 2023, with no brokered deposits purchased
  • Noninterest-bearing deposits of $10.3 billion, representing 37.6% of total deposits
  • Loans, excluding Warehouse Purchase Program loans and loans acquired in the Merger, increased $111.1 million during third quarter 2023
  • Net interest margin was stable at 2.72%, a 1 basis point decrease from second quarter 2023
  • Nonperforming assets remain low at 0.20% of third quarter average interest-earning assets
  • Pending merger of Lone Star State Bancshares, Inc., Lubbock, Texas

HOUSTON, Oct. 25, 2023 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $112.2 million for the quarter ended September 30, 2023 compared with $135.8 million for the same period in 2022. Net income per diluted common share was $1.20 for the quarter ended September 30, 2023 compared with $1.49 for the same period in 2022.  Additionally, loans, excluding Warehouse Purchase Program loans and loans acquired in the merger of First Bancshares of Texas, Inc. ("First Bancshares") into Prosperity Bancshares, increased $111.1 million during the third quarter of 2023. The annualized return on third quarter average assets was 1.13%. Nonperforming assets remain low at 0.20% of third quarter average interest-earning assets. On May 1, 2023, First Bancshares merged with Prosperity Bancshares and FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") merged with Prosperity Bank (collectively, the "Merger").

"I am pleased to announce that the Board of Directors approved raising the fourth quarter 2023 dividend to $0.56 per share from $0.55 per share that was paid in the prior four quarters. The increase reflects the continued confidence the Board has in our company and our markets. The compounded annual growth rate in dividends declared from 2003 - 2023 was 11.5%," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We continue to share our success with our shareholders through the payment of dividends and opportunistic stock repurchases, while also continuing to grow our capital. Our tangible capital increased $243 million from September 30, 2022 to September 30, 2023.  This is the amount Prosperity retained after paying $203 million in dividends and repurchasing $72 million of our common stock during this period, reflecting Prosperity's stable earnings," added Zalman.

"After a more challenging time in the first quarter 2023 due to the large bank failures outside of Prosperity's markets, Prosperity's deposits stabilized during the third quarter. Total deposits, excluding Public Funds, increased $260 million during the third quarter and our noninterest-bearing deposits represented a strong 37.6% of total deposits. Importantly, this was achieved without the purchase of any brokered deposits," continued Zalman.

"Interest rates have continued to increase and there are signs of the economy slowing and overall loan growth moderating as intended by the Federal Reserve's actions. Prosperity's asset quality remains sound, while our allowance for credit losses on loans and off-balance sheet credit exposures was $388 million as of September 30, 2023," stated Zalman.

"Although there are signs of a slowdown, we believe the overall economy is still in fairly good shape, and we are excited for our future. Thank you to all our customers, shareholders, directors and associates for all your support," concluded Zalman.

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

Net income was $112.2 million(2) for the three months ended September 30, 2023 compared with $86.9 million(3) for the three months ended June 30, 2023. The change was primarily due to higher net interest income, no provision for credit losses and lower merger related expenses. Net income per diluted common share was $1.20 for the three months ended September 30, 2023 compared with $0.94 for the three months ended June 30, 2023. Net income and net income per diluted common share for the second quarter of 2023 was impacted by merger related provision for credit losses of $18.5 million and merger related expenses of $12.9 million. Net income was $112.2 million(2) for the three months ended September 30, 2023 compared with $135.8 million(4) for the same period in 2022. The change was primarily due to an increase in interest expense and noninterest expense, partially offset by increases in loan interest income and noninterest income. Net income per diluted common share was $1.20 for the three months ended September 30, 2023 compared with $1.49 for the same period in 2022. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2023 were 1.13%, 6.39% and 12.58%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 48.74%(1) for the three months ended September 30, 2023; and excluding merger related expenses, the efficiency ratio was 48.35%(1).

Net interest income before provision for credit losses was $239.5 million for the three months ended September 30, 2023 compared with $236.5 million for the three months ended June 30, 2023, an increase of $3.1 million or 1.3%. Net interest income before provision for credit losses decreased $21.2 million or 8.1% to $239.5 million for the three months ended September 30, 2023 compared with $260.7 million for the same period in 2022. The change was primarily due to an increase in the 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.

The net interest margin on a tax equivalent basis was 2.72% for the three months ended September 30, 2023 compared with 2.73% for the three months ended June 30, 2023. The net interest margin on a tax equivalent basis was 2.72% for the three months ended September 30, 2023 compared with 3.11% for the same period in 2022. The change was primarily due to an increase in the 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.

 Noninterest income was $38.7 million for the three months ended September 30, 2023 compared with $39.7 million for the three months ended June 30, 2023, a decrease of $945 thousand or 2.4%. Noninterest income increased $4.1 million or 11.7% to $38.7 million for the three months ended September 30, 2023 compared with $34.7 million for the same period in 2022, primarily due to increases in other noninterest income, bank owned life insurance income, mortgage income and debit card fee income.

 Noninterest expense was $135.7 million for the three months ended September 30, 2023 compared with  $145.9 million for the three months ended June 30, 2023, a decrease of $10.2 million  or 7.0% . The change was primarily due to the decrease in merger related expenses. Noninterest expense increased $13.4 million or 11.0% to $135.7 million for the three months ended September 30, 2023 compared with $122.2 million for the same period in 2022. The change was primarily due to the Merger.

Results of Operations for the Nine Months Ended September 30, 2023

Net income was $323.8 million(5) for the nine months ended September 30, 2023 compared with $386.6 million(6) for the same period in 2022. The change was primarily due to lower net interest income, merger related provision for credit losses of $18.5 million and merger related expenses of $14.9 million. Net income per diluted common share was $3.50 for the nine months ended September 30, 2023 compared with $4.22 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 nine months ended September 30, 2023 were 1.11%, 6.25% and 12.17%(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 nine months ended September 30, 2023 were 1.20%(1), 6.76%(1) and 13.16%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 48.50%(1) for the nine months ended September 30, 2023. Excluding merger related expenses, the efficiency ratio was 46.72% (1).

Net interest income before provision for credit losses for the nine months ended September 30, 2023 was $719.5 million compared with $749.1 million for the same period in 2022, a decrease of $29.6 million or 4.0%.  The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in the average rates on interest-bearing deposits, partially offset by increases in the average balances and average rates on loans held for investment and an increase in average rates on investment securities.

The net interest margin on a tax equivalent basis for the nine months ended September 30, 2023 was 2.79% compared with 2.99% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on other borrowings and an increase in average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans held for investment and an increase in average rates on investment securities.

Noninterest income was $116.7 million for the nine months ended September 30, 2023 compared with $107.4 million for the same period in 2022, an increase of $9.3 million or 8.7%, primarily due to the Merger.

Noninterest expense was $404.5 million for the nine months ended September 30, 2023 compared with $364.9 million for the same period in 2022, an increase of $39.6 million or 10.8%, primarily due to the Merger.

Balance Sheet Information

At September 30, 2023, Prosperity had $39.296 billion in total assets, an increase of $1.452 billion or 3.8%, compared with $37.844 billion at September 30, 2022.

Loans were $21.433 billion at September 30, 2023, a decrease of $221.2 million or 1.0% from $21.654 billion at June 30, 2023. Loans increased $2.926 billion or 15.8%  compared with $18.506 billion at September 30, 2022.  Loans, excluding Warehouse Purchase Program loans, were $20.520 billion at September 30, 2023 compared to $20.505 billion at June 30, 2023, an increase of $15.3 million, and compared to $17.584 billion at September 30, 2022, an increase of $2.937 billion or 16.7%.

Deposits were $27.313 billion at September 30, 2023, a decrease of $68.1 million or 0.2%  compared with $27.381 billion at June 30, 2023.  Deposits, excluding public funds deposits, were $24.945 billion at September 30, 2023  compared to $24.685 billion at June 30, 2023, an increase of $259.9 million. Deposits decreased $1.987 billion or 6.8%, compared with $29.300 billion at September 30, 2022, primarily due to a decrease in business deposits and public fund 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)


















Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022




(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


















Loans acquired (including new production since
acquisition date):
















FirstCapital Bank


$

1,494,378



$

1,590,137



$

—



$

—



$

—


Prosperity - Warehouse Purchase Program loans



912,327




1,148,883




799,115




740,620




922,764


Prosperity - All other loans



19,026,008




18,914,926




18,535,244




18,099,207




17,583,524


Total loans


$

21,432,713



$

21,653,946



$

19,334,359



$

18,839,827



$

18,506,288


















Deposits assumed (including new deposits since
acquisition date):
















FirstCapital Bank


$

1,625,691



$

1,481,831



$

—



$

—



$

—


All other deposits



25,687,109




25,899,055




27,004,236




28,533,531




29,300,095


Total deposits


$

27,312,800



$

27,380,886



$

27,004,236



$

28,533,531



$

29,300,095


Excluding loans acquired in the Merger and new production by the acquired lending operations since May 1, 2023, loans at September 30, 2023 decreased $125.5 million or 0.6% compared with June 30, 2023 and grew $1.432 billion or 7.7% compared with September 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 September 30, 2023 grew $111.1 million or 0.6% (2.3% annualized) compared with June 30, 2023 and $1.442 billion or 8.2% compared with September 30, 2022.

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since May 1, 2023, deposits at September 30, 2023 decreased by $211.9 million or 0.8% compared with June 30, 2023 and decreased by $3.613 billion or 12.3% compared with September 30, 2022.

Asset Quality

Nonperforming assets totaled $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 compared with $62.7 million or 0.18% of quarterly average interest-earning assets at June 30, 2023 and $19.9 million or 0.06% of quarterly average interest-earning assets at September 30, 2022. The increase during 2023 was primarily due to the Merger and an increase in other real estate.

The allowance for credit losses on loans and off-balance sheet credit exposures was $388.0 million at September 30, 2023 compared with $312.1 million at September 30, 2022 and $381.7 million at June 30, 2023.  There was no provision for credit losses for the three months ended September 30, 2023 and a provision for credit losses of $18.5 million for the nine months ended September 30, 2023 compared to no provision for credit losses for the three and nine months ended September 30, 2022. As a result of the loans acquired in the Merger, the nine months ended September 30, 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 $351.5 million or 1.64% of total loans at September 30, 2023 compared with $282.2 million or 1.52% of total loans at September 30, 2022 and $345.2 million or 1.59% of total loans at June 30, 2023. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.71%(1) at September 30, 2023 compared with 1.60%(1) at September 30, 2022 and 1.68%(1) at June 30, 2023.

Net charge-offs were $3.4 million for the three months ended September 30, 2023 compared with net charge-offs of $16.1 million for the three months ended June 30, 2023 and net charge-offs of $1.8 million for the three months ended September 30, 2022. Net charge-offs for the third quarter of 2023 included $298 thousand related to resolved purchased credit deteriorated ("PCD") loans. Additionally, reserves on PCD loans increased by $9.7 million due to revised Day One accounting for PCD loans at the time of the Merger. Further, $12.5 million of reserves on resolved PCD loans was released to the general reserve.

Net charge-offs were $18.9 million for the nine months ended September 30, 2023 compared with $4.2 million for the nine months ended September 30, 2022. Net charge-offs for the nine months ended September 30, 2023 included $15.0 million related to one commercial real estate loan obtained in a previous merger. Additionally, reserves on PCD loans increased by $76.8 million due to the Merger and $16.2 million of reserves on resolved PCD loans was released to the general reserve.

Dividend

Prosperity Bancshares declared a fourth quarter 2023 cash dividend of $0.56 per share to be paid on January 2, 2024, to all shareholders of record as of December 15, 2023, an increase of $0.01 per share, or 1.82%, from the prior quarter.

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 zero shares of its common stock during the three months ended September 30, 2023, and approximately 1.21 million shares of its common stock at an average weighted price of $59.88 per share during the nine months ended September 30, 2023.

Redemption of Outstanding Subordinated Notes

On September 18, 2023, $3.1 million in subordinated notes assumed in the Merger were redeemed. The redemption was funded by dividends from Prosperity Bank.

Merger of First Bancshares of Texas, Inc.

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

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

Pending Merger of Lone Star State Bancshares, Inc.

On October 11, 2022, Prosperity Bancshares and Lone Star State Bancshares, Inc. ("Lone Star") jointly announced the signing of a definitive merger agreement whereby Lone Star, the parent company of Lone Star State Bank of West Texas ("Lone Star Bank") will merge with and into Prosperity. Lone Star Bank operates 5 banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of September 30, 2023, Lone Star, on a consolidated basis, reported total assets of $1.270 billion, total loans of $1.095 billion and total deposits of $1.115 billion.

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

Conference Call

Prosperity's management team will host a conference call on Wednesday, October 25, 2023, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third 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 0411202.

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 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 September 30, 2023, Prosperity Bancshares, Inc.® is a $39.296 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 $2.5 million, net of tax, primarily comprised of loan discount accretion of $2.3 million, and merger related expenses of $1.1 million for the three months ended September 30, 2023.

3.

Includes purchase accounting adjustments of $2.4 million, net of tax, primarily comprised of loan discount accretion of $2.4 million, merger related provision for credit losses of $18.5 million and merger related expenses of $12.9 million for the three months ended June 30, 2023.

4.

Includes purchase accounting adjustments of $997 thousand, net of tax, primarily comprised of loan discount accretion of $1.2 million for the three months ended September 30, 2022.

5.

Includes purchase accounting adjustments of $5.6 million, net of tax, primarily comprised of loan discount accretion of $5.6 million, merger related provision for credit losses of $18.5 million and merger related expenses of $14.9 million for the nine months ended September 30, 2023.

6.

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.

 

Bryan/College Station Area


Frisco-West


Rusk


Nederland


Texas Tech Student Union

Bryan


Garland


Seven Points


Needville



Bryan-29th Street


Grapevine


Teague


Rosenberg


Midland

Bryan-East


Grapevine Main


Tyler-Beckham


Shadow Creek


North

Bryan-North


Kiest


Tyler-South Broadway


Spring


Wadley

Caldwell


Lake Highlands


Tyler-University


Tomball


Wall Street

College Station


McKinney


Winnsboro


Waller


West

Crescent Point


McKinney Eldorado




West Columbia



Hearne


McKinney Redbud


Houston Area


Wharton


Odessa

Huntsville


North Carrolton


Houston


Winnie


Grandview

Madisonville


Park Cities


Aldine


Wirt


Grant

Navasota


Plano


Alief




Kermit Highway

New Waverly


Plano-West


Bellaire


South Texas Area -


Parkway

Rock Prairie


Preston Forest


Beltway


Corpus Christi



Southwest Parkway


Preston Parker


Clear Lake


Calallen


Wichita Falls

Tower Point


Preston Royal


Copperfield


Carmel


Cattlemans

Wellborn Road


Red Oak


Cypress


Northwest


Kell



Richardson


Downtown


Saratoga



Central Texas Area


Richardson-West


Eastex


Timbergate


Other West Texas Area

Austin


Rosewood Court


Fairfield


Water Street


Locations

Allandale


The Colony


First Colony




Big Spring

Cedar Park


Tollroad


Fry Road


Victoria


Brownfield

Congress


Trinity Mills


Gessner


Victoria Main


Brownwood

Lakeway


Turtle Creek


Gladebrook


Victoria-Navarro


Burkburnett

Liberty Hill


West 15th Plano


Grand Parkway


Victoria-North


Byers

Northland


West Allen


Heights


Victoria Salem


Cisco

Oak Hill


Westmoreland


Highway 6 West




Comanche

Research Blvd


Wylie


Little York


Other South Texas Area


Early

Westlake




Medical Center


 Locations


Floydada



Fort Worth


Memorial Drive


Alice


Gorman

Other Central Texas Area


Haltom City


Northside


Aransas Pass


Henrietta

Locations


Hulen


Pasadena


Beeville


Levelland

Bastrop


Keller


Pecan Grove


Colony Creek


Littlefield

Canyon Lake


Museum Place


Pin Oak


Cuero


Merkel

Dime Box


Renaissance Square


River Oaks


Edna


Plainview

Dripping Springs


Roanoke


Sugar Land


Goliad


San Angelo

Elgin


Stockyards


SW Medical Center


Gonzales


Slaton

Flatonia




Tanglewood


Hallettsville


Snyder

Fredericksburg


Other Dallas/Fort Worth Area


The Plaza


Kingsville



Georgetown


Locations


Uptown


Mathis


Oklahoma

Gruene


Arlington


Waugh Drive


Padre Island


Central Oklahoma Area

Horseshoe Bay


Azle


Westheimer


Palacios


Oklahoma City

Kingsland


Ennis


West University


Port Lavaca


23rd Street

La Grange


Gainesville


Woodcreek


Portland


Expressway

Lexington


Glen Rose




Rockport


I-240

Marble Falls


Granbury


Katy


Sinton


Memorial

New Braunfels


Grand Prairie


Cinco Ranch


Taft



Pleasanton


Jacksboro


Katy-Spring Green


Yoakum


Other Central Oklahoma Area

Round Rock


Mesquite




Yorktown


 Locations

San Antonio


Muenster


The Woodlands




Edmond

Schulenburg


Runaway Bay


The Woodlands-College Park


West Texas Area


Norman

Seguin


Sanger


The Woodlands-I-45


Abilene



Smithville


Waxahachie


The Woodlands-Research Forest


Antilley Road


Tulsa Area

Thorndale


Weatherford




Barrow Street


Tulsa

Weimar




Other Houston Area


Cypress Street





East Texas Area


Locations


Judge Ely


Garnett

Dallas/Fort Worth Area


Athens


Angleton


Mockingbird


Harvard

Dallas


Blooming Grove


Bay City




Memorial

14th Street Plano


Canton


Beaumont


Amarillo


Sheridan

Abrams Centre


Carthage


Cleveland


Hillside


S. Harvard

Addison


Corsicana


East Bernard


Soncy


Utica Tower

Allen


Crockett


El Campo




Yale

Balch Springs


Eustace


Dayton


Lubbock



Camp Wisdom


Gilmer


Galveston


4th Street


Other Tulsa Area Locations

Carrollton


Grapeland


Groves


66th Street


Owasso

Cedar Hill


Gun Barrel City


Hempstead


82nd Street



Coppell


Jacksonville


Hitchcock


86th Street



East Plano


Kerens


Liberty


98th Street



Euless


Longview


Magnolia


Avenue Q



Frisco


Mount Vernon


Magnolia Parkway


Milwaukee



Frisco Warren


Palestine


Mont Belvieu


North University



 - - -

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)






Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022


Balance Sheet Data (at period end)
















Loans held for sale


$

10,187



$

10,656



$

1,603



$

554



$

2,871


Loans held for investment



20,510,199




20,494,407




18,533,641




18,098,653




17,580,653


Loans held for investment - Warehouse Purchase Program



912,327




1,148,883




799,115




740,620




922,764


Total loans



21,432,713




21,653,946




19,334,359




18,839,827




18,506,288


















Investment securities(A)



13,192,742




13,667,319




14,071,545




14,476,005




14,806,487


Federal funds sold



234




181




222




301




244


Allowance for credit losses on loans



(351,495)




(345,209)




(282,191)




(281,576)




(282,179)


Cash and due from banks



512,239




396,848




405,331




423,832




602,152


Goodwill



3,396,459




3,383,698




3,231,636




3,231,636




3,231,636


Core deposit intangibles, net



67,553




71,128




48,974




51,348




53,906


Other real estate owned



9,320




3,107




1,989




1,963




1,758


Fixed assets, net



370,237




365,299




345,149




339,453




337,099


Other assets



665,682




708,814




672,218




607,040




586,111


Total assets


$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502


















Noninterest-bearing deposits


$

10,281,893



$

10,364,921



$

10,108,348



$

10,915,448



$

11,154,143


Interest-bearing deposits



17,030,907




17,015,965




16,895,888




17,618,083




18,145,952


Total deposits



27,312,800




27,380,886




27,004,236




28,533,531




29,300,095


Other borrowings



4,250,000




4,800,000




3,365,000




1,850,000




1,165,000


Securities sold under repurchase agreements



300,714




434,160




434,261




428,134




454,304


Subordinated debentures



—




3,093




—




—




—


Allowance for credit losses on off-balance sheet credit
exposures



36,503




36,503




29,947




29,947




29,947


Other liabilities



362,990




282,373




256,671




148,843




282,514


Total liabilities



32,263,007




32,937,015




31,090,115




30,990,455




31,231,860


Shareholders' equity(B)



7,032,677




6,968,116




6,739,117




6,699,374




6,611,642


Total liabilities and equity


$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502


(A)

Includes $(2,442), $(3,393), $(4,399), $(4,396) and $(296) in unrealized losses on available for sale securities for the quarterly periods ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.

(B)

Includes $(1,930), $(2,681), $(3,476), $(3,473) and $(234) in after-tax unrealized losses on available for sale securities for the quarterly periods ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)






Three Months Ended



Year-to-Date




Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2023



Sep 30,
2022


Income Statement Data






















Interest income:






















Loans


$

308,678



$

286,638



$

247,118



$

235,126



$

210,268



$

842,434



$

596,063


Securities(C)



69,987




72,053




73,185




72,533




68,761




215,225




187,883


Federal funds sold and other earning
assets



1,689




1,757




7,006




933




525




10,452




2,297


Total interest income



380,354




360,448




327,309




308,592




279,554




1,068,111




786,243
























Interest expense:






















Deposits



76,069




63,964




47,343




36,048




14,669




187,376




32,064


Other borrowings



62,190




57,351




34,396




14,682




3,719




153,937




4,169


Securities sold under repurchase
agreements



2,533




2,674




2,103




1,725




487




7,310




916


Subordinated debentures



38




—




—




—




—




38




—


Total interest expense



140,830




123,989




83,842




52,455




18,875




348,661




37,149


Net interest income



239,524




236,459




243,467




256,137




260,679




719,450




749,094


Provision for credit losses



—




18,540




—




—




—




18,540




—


Net interest income after provision for credit
losses



239,524




217,919




243,467




256,137




260,679




700,910




749,094
























Noninterest income:






















Nonsufficient funds (NSF) fees



8,719




8,512




8,095




8,519




8,887




25,326




25,495


Credit card, debit card and ATM card
income



9,285




9,206




8,666




8,816




8,889




27,157




25,948


Service charges on deposit accounts



6,262




6,078




5,926




5,932




6,222




18,266




18,798


Trust income



3,326




3,358




3,225




3,498




3,174




9,909




8,752


Mortgage income



857




661




238




102




340




1,756




1,297


Brokerage income



1,067




1,000




1,149




905




940




3,216




2,749


Bank owned life insurance income



1,864




1,553




1,354




1,329




1,214




4,771




3,790


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



(45)




1,994




121




2,087




50




2,070




1,847


Other noninterest income



7,408




7,326




9,492




6,536




4,972




24,226




18,728


Total noninterest income



38,743




39,688




38,266




37,724




34,688




116,697




107,404
























Noninterest expense:






















Salaries and benefits



85,423




84,723




77,798




75,353




79,578




247,944




239,360


Net occupancy and equipment



9,464




8,935




8,025




8,147




8,412




26,424




24,299


Credit and debit card, data processing
and software amortization



10,919




10,344




9,566




9,716




9,516




30,829




27,611


Regulatory assessments and FDIC
insurance



5,155




5,097




4,973




2,873




2,807




15,225




8,508


Core deposit intangibles amortization



3,576




3,167




2,374




2,558




2,577




9,117




7,778


Depreciation



4,585




4,658




4,433




4,438




4,436




13,676




13,522


Communications



3,686




3,693




3,462




3,506




3,374




10,841




9,499


Other real estate expense



153




(464)




58




154




198




(253)




607


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



(734)




(33)




(13)




(63)




(213)




(780)




(820)


Merger related expenses



1,104




12,891




860




272




—




14,855




—


Other noninterest expense



12,326




12,859




11,464




12,290




11,529




36,649




34,578


Total noninterest expense



135,657




145,870




123,000




119,244




122,214




404,527




364,942


Income before income taxes



142,610




111,737




158,733




174,617




173,153




413,080




491,556


Provision for income taxes



30,402




24,799




34,039




36,737




37,333




89,240




104,920


Net income available to common
shareholders


$

112,208



$

86,938



$

124,694



$

137,880



$

135,820



$

323,840



$

386,636


(C)

Interest income on securities was reduced by net premium amortization of $6,897, $7,131, $7,384, $8,703 and $9,947 for the three months ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively, and $21,412 and $34,254 for the nine months ended September 30, 2023 and 2022, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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




Three Months Ended



Year-to-Date




Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2023



Sep 30,
2022
























Profitability






















Net income (D) (E)


$

112,208



$

86,938



$

124,694



$

137,880



$

135,820



$

323,840



$

386,636
























Basic earnings per share


$

1.20



$

0.94



$

1.37



$

1.51



$

1.49



$

3.50



$

4.22


Diluted earnings per share


$

1.20



$

0.94



$

1.37



$

1.51



$

1.49



$

3.50



$

4.22
























Return on average assets (F)



1.13

%

(J)


0.89

%

(J)


1.31

%

(J)


1.47

%

(J)


1.45

%



1.11

%

(J)


1.37

%

Return on average common equity (F)



6.39

%

(J)


5.01

%

(J)


7.38

%

(J)


8.26

%

(J)


8.24

%



6.25

%

(J)


7.88

%

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



12.58

%

(J)


9.67

%

(J)


14.34

%

(J)


16.26

%

(J)


16.44

%



12.17

%

(J)


15.83

%

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



2.72

%



2.73

%



2.93

%



3.05

%



3.11

%



2.79

%



2.99

%

Efficiency ratio (G) (I)



48.74

%

(K)


53.21

%

(K)


43.68

%

(K)


40.87

%

(K)


41.38

%



48.50

%

(K)


42.70

%























Liquidity and Capital Ratios






















Equity to assets



17.90

%



17.46

%



17.81

%



17.78

%



17.47

%



17.90

%



17.47

%

Common equity tier 1 capital



14.98

%



14.49

%



15.59

%



15.88

%



15.44

%



14.98

%



15.44

%

Tier 1 risk-based capital



14.98

%



14.49

%



15.59

%



15.88

%



15.44

%



14.98

%



15.44

%

Total risk-based capital



16.05

%



15.52

%



16.41

%



16.51

%



16.09

%



16.05

%



16.09

%

Tier 1 leverage capital



10.03

%



9.96

%



10.06

%



10.16

%



9.94

%



10.03

%



9.94

%

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



9.96

%



9.64

%



10.01

%



9.93

%



9.62

%



9.96

%



9.62

%























Other Data






















Weighted-average shares used in
computing earnings per common share






















Basic



93,720




92,930




91,207




91,287




91,209




92,628




91,710


Diluted



93,720




92,930




91,207




91,287




91,209




92,628




91,710


Period end shares outstanding



93,717




93,721




90,693




91,314




91,210




93,717




91,210


Cash dividends paid per common share


$

0.55



$

0.55



$

0.55



$

0.55



$

0.52



$

1.65



$

1.56


Book value per common share


$

75.04



$

74.35



$

74.31



$

73.37



$

72.49



$

75.04



$

72.49


Tangible book value per common
share (G)


$

38.08



$

37.49



$

38.13



$

37.41



$

36.47



$

38.08



$

36.47
























Common Stock Market Price






















High


$

63.65



$

63.13



$

78.76



$

76.32



$

77.93



$

78.76



$

80.46


Low


$

52.62



$

55.12



$

58.25



$

66.71



$

65.37



$

52.62



$

64.69


Period end closing price


$

54.58



$

56.48



$

61.52



$

72.68



$

66.68



$

54.58



$

66.68


Employees – FTE (excluding
overtime)



3,853




3,710




3,651




3,633




3,592




3,853




3,592


Number of banking centers



285




286




272




272




272




285




272


 

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



Three Months Ended


Year-to-Date


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Sep 30, 2023


Sep 30, 2022

Loan discount accretion














Non-PCD

$1,508


$1,242


$532


$603


$912


$3,282


$5,321

PCD

$767


$1,178


$339


$310


$322


$2,284


$1,167

Securities net accretion
     (amortization)

$626


$426


$(2)


$(12)


$(40)


$1,050


$(104)

Time deposits amortization

$(210)


$(187)


$(53)


$(59)


$(68)


$(450)


$(252)

(E)

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

(F)

Interim periods annualized.

(G)

Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(H)

Net interest margin for all periods presented is based on average balances on an actual 365-day basis.

(I)

Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation.

(J)

For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, 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





Sep 30, 2023


Jun 30, 2023



Sep 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


$

9,832



$

162



6.54 %


$

3,910



$

67



6.87 %



$

4,136



$

57



5.47 %



Loans held for investment



20,496,075




290,566



5.62 %



19,802,751




270,688



5.48 %




17,275,866




199,417



4.58 %



Loans held for investment -
Warehouse Purchase Program



972,936




17,950



7.32 %



898,768




15,883



7.09 %




938,589




10,794



4.56 %



Total loans



21,478,843




308,678



5.70 %



20,705,429




286,638



5.55 %




18,218,591




210,268



4.58 %



Investment securities



13,512,137




69,987



2.05 %

(M)


13,976,818




72,053



2.07 %


(M)


14,962,847




68,761



1.82 %


(M)

Federal funds sold and other
earning assets



125,690




1,689



5.33 %



150,300




1,757



4.69 %




87,859




525



2.37 %



Total interest-earning assets



35,116,670




380,354



4.30 %



34,832,547




360,448



4.15 %




33,269,297




279,554



3.33 %



Allowance for credit losses on
loans



(343,967)









(283,594)










(283,244)









Noninterest-earning assets



4,829,336









4,738,673










4,480,512









Total assets


$

39,602,039








$

39,287,626









$

37,466,565





































Interest-bearing liabilities:




























Interest-bearing demand
deposits


$

4,768,485



$

5,182



0.43 %


$

5,147,453



$

3,791



0.30 %



$

6,155,511



$

2,345



0.15 %



Savings and money market
deposits



8,977,824




44,446



1.96 %



9,156,047




43,025



1.88 %




10,172,986




9,479



0.37 %



Certificates and other time
deposits



3,172,178




26,441



3.31 %



2,652,064




17,148



2.59 %




2,185,529




2,845



0.52 %



Other borrowings



4,671,449




62,190



5.28 %



4,427,914




57,351



5.20 %




577,828




3,719



2.55 %



Securities sold under
repurchase agreements



389,149




2,533



2.58 %



441,303




2,674



2.43 %




473,584




487



0.41 %



Subordinated debentures



2,578




38



5.85 %



1,547




—




—




—




—




—



Total interest-bearing
liabilities



21,981,663




140,830



2.54 %

(N)


21,826,328




123,989



2.28 %


(N)


19,565,438




18,875



0.38 %


(N)





























Noninterest-bearing liabilities:




























Noninterest-bearing demand
deposits



10,269,162









10,274,819










11,048,856









Allowance for credit losses on
off-balance sheet credit
exposures



36,504









30,022










29,947









Other liabilities



290,217









220,775










231,812









Total liabilities



32,577,546









32,351,944










30,876,053









Shareholders' equity



7,024,493









6,935,682










6,590,512









Total liabilities and
shareholders' equity


$

39,602,039








$

39,287,626









$

37,466,565





































Net interest income and margin





$

239,524



2.71 %





$

236,459



2.72 %






$

260,679



3.11 %



Non-GAAP to GAAP
reconciliation:




























Tax equivalent adjustment






1,000









854










458






Net interest income and margin
     (tax equivalent basis)





$

240,524



2.72 %





$

237,313



2.73 %






$

261,137



3.11 %







































(L)

Annualized and based on an actual 365-day basis.

(M)

Yield on securities was impacted by net premium amortization of $6,897, $7,131 and $9,947 for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

(N)

Total cost of funds, including noninterest bearing deposits, was 1.73%, 1.55% and 0.24% for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

 




YIELD ANALYSIS


Year-to-Date





Sep 30, 2023


Sep 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


$

5,389



$

267



6.62 %


$

3,980



$

137



4.60 %



Loans held for investment



19,546,826




797,861



5.46 %



16,931,422




564,736



4.46 %



Loans held for investment - Warehouse Purchase Program



831,143




44,306



7.13 %



1,153,762




31,190



3.61 %



Total loans



20,383,358




842,434



5.53 %



18,089,164




596,063



4.41 %



Investment securities



13,937,483




215,225



2.06 %

(P)


14,579,521




187,883



1.72 %


(P)

Federal funds sold and other earning assets



290,275




10,452



4.81 %



913,923




2,297



0.34 %



Total interest-earning assets



34,611,116




1,068,111



4.13 %



33,582,608




786,243



3.13 %



Allowance for credit losses on loans



(303,518)









(284,486)









Noninterest-earning assets



4,722,064









4,462,318









Total assets


$

39,029,662








$

37,760,440




























Interest-bearing liabilities:



















Interest-bearing demand deposits


$

5,260,463



$

12,765



0.32 %


$

6,453,810



$

6,951



0.14 %



Savings and money market deposits



9,235,646




122,992



1.78 %



10,579,351




17,978



0.23 %



Certificates and other time deposits



2,627,402




51,619



2.63 %



2,409,251




7,135



0.40 %



Other borrowings



4,001,994




153,937



5.14 %



232,253




4,169



2.40 %



Securities sold under repurchase agreements



419,304




7,310



2.33 %



462,994




916



0.26 %



Subordinated debentures



1,375




38



3.69 %



—




—




—



Total interest-bearing liabilities



21,546,184




348,661



2.16 %

(Q)


20,137,659




37,149



0.25 %


(Q)




















Noninterest-bearing liabilities:



















Noninterest-bearing demand deposits



10,310,878









10,848,605









Allowance for credit losses on off-balance sheet credit
exposures



32,181









29,947









Other liabilities



232,903









198,196









Total liabilities



32,122,146









31,214,407









Shareholders' equity



6,907,516









6,546,033









Total liabilities and shareholders' equity



39,029,662








$

37,760,440




























Net interest income and margin





$

719,450



2.78 %





$

749,094



2.98 %



Non-GAAP to GAAP reconciliation:



















Tax equivalent adjustment






2,866









1,375






Net interest income and margin (tax equivalent basis)





$

722,316



2.79 %





$

750,469



2.99 %



























(O)

Annualized and based on an actual 365-day basis.

(P)

Yield on securities was impacted by net premium amortization of $21,412 and $34,254 for the nine months ended September 30, 2023 and 2022, respectively.

(Q)

Total cost of funds, including noninterest bearing deposits, was 1.46% and 0.16% for the nine months ended September 30, 2023 and 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022


YIELD TREND (R)






























Interest-Earning Assets:















Loans held for sale


6.54

%



6.87

%



6.58

%



6.09

%



5.47

%

Loans held for investment


5.62

%



5.48

%



5.24

%



4.98

%



4.58

%

Loans held for investment - Warehouse
Purchase Program


7.32

%



7.09

%



6.88

%



6.02

%



4.56

%

Total loans


5.70

%



5.55

%



5.29

%



5.02

%



4.58

%

Investment securities (S)


2.05

%



2.07

%



2.07

%



1.96

%



1.82

%

Federal funds sold and other earning assets


5.33

%



4.69

%



4.74

%



3.63

%



2.37

%

Total interest-earning assets


4.30

%



4.15

%



3.92

%



3.67

%



3.33

%
















Interest-Bearing Liabilities:















Interest-bearing demand deposits


0.43

%



0.30

%



0.26

%



0.22

%



0.15

%

Savings and money market deposits


1.96

%



1.88

%



1.50

%



1.13

%



0.37

%

Certificates and other time deposits


3.31

%



2.59

%



1.59

%



0.94

%



0.52

%

Other borrowings


5.28

%



5.20

%



4.83

%



3.97

%



2.55

%

Securities sold under repurchase agreements


2.58

%



2.43

%



1.99

%



1.55

%



0.41

%

Subordinated debentures


5.85

%



—




—




—




—


Total interest-bearing liabilities


2.54

%



2.28

%



1.63

%



1.06

%



0.38

%
















Net Interest Margin


2.71

%



2.72

%



2.92

%



3.04

%



3.11

%

Net Interest Margin (tax equivalent)


2.72

%



2.73

%



2.93

%



3.05

%



3.11

%

(R)

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

(S)

Yield on securities was impacted by net premium amortization of $6,897, $7,131, $7,384, $8,703 and $9,947 for the three months ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Three Months Ended




Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022


Balance Sheet Averages
















Loans held for sale


$

9,832



$

3,910



$

2,343



$

1,758



$

4,136


Loans held for investment



20,496,075




19,802,751




18,317,712




17,818,769




17,275,866


Loans held for investment - Warehouse Purchase
Program



972,936




898,768




617,822




747,007




938,589


Total Loans



21,478,843




20,705,429




18,937,877




18,567,534




18,218,591


















Investment securities



13,512,137




13,976,818




14,332,509




14,715,516




14,962,847


Federal funds sold and other earning assets



125,690




150,300




600,048




101,986




87,859


Total interest-earning assets



35,116,670




34,832,547




33,870,434




33,385,036




33,269,297


Allowance for credit losses on loans



(343,967)




(283,594)




(282,316)




(282,546)




(283,244)


Cash and due from banks



301,201




281,593




319,960




306,235




302,479


Goodwill



3,387,293




3,291,659




3,231,637




3,231,637




3,231,637


Core deposit intangibles, net



69,551




48,616




50,208




52,591




55,158


Other real estate



6,301




2,712




2,083




2,075




1,652


Fixed assets, net



367,814




357,593




342,380




338,572




336,657


Other assets



697,176




756,500




643,467




584,302




552,929


Total assets


$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565


















Noninterest-bearing deposits


$

10,269,162



$

10,274,819



$

10,389,980



$

11,064,714



$

11,048,856


Interest-bearing demand deposits



4,768,485




5,147,453




5,877,641




5,843,672




6,155,511


Savings and money market deposits



8,977,824




9,156,047




9,579,679




9,805,024




10,172,986


Certificates and other time deposits



3,172,178




2,652,064




2,045,580




2,066,085




2,185,529


Total deposits



27,187,649




27,230,383




27,892,880




28,779,495




29,562,882


Other borrowings



4,671,449




4,427,914




2,887,011




1,465,533




577,828


Securities sold under repurchase agreements



389,149




441,303




427,887




441,405




473,584


Subordinated debentures



2,578




1,547




—




—




—


Allowance for credit losses on off-balance sheet
credit exposures



36,504




30,022




29,947




29,947




29,947


Other liabilities



290,217




220,775




180,685




224,512




231,812


Shareholders' equity



7,024,493




6,935,682




6,759,443




6,677,010




6,590,512


Total liabilities and equity


$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)




Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022

Period End Balances
































Loan Portfolio
















Commercial and industrial


$2,153,391

10.1 %


$2,245,620

10.5 %


$2,074,078

10.7 %


$2,165,263

11.6 %


$2,197,033

11.9 %

Warehouse purchase program


912,327

4.3 %


1,148,883

5.3 %


799,115

4.1 %


740,620

3.9 %


922,764

5.0 %

Construction, land development and other land loans


3,200,479

14.9 %


3,215,016

14.8 %


2,899,980

15.0 %


2,805,438

14.9 %


2,659,552

14.4 %

1-4 family residential


7,032,593

32.8 %


6,780,813

31.3 %


6,055,532

31.3 %


5,774,814

30.6 %


5,447,993

29.4 %

Home equity


969,498

4.5 %


977,070

4.5 %


959,124

5.0 %


966,410

5.1 %


943,197

5.1 %

Commercial real estate (includes multi-family
residential)


5,606,837

26.2 %


5,676,526

26.2 %


5,133,693

26.6 %


4,986,211

26.5 %


4,966,243

26.8 %

Agriculture (includes farmland)


801,933

3.7 %


804,376

3.7 %


721,395

3.7 %


688,033

3.6 %


670,603

3.6 %

Consumer and other


306,018

1.4 %


305,207

1.4 %


288,300

1.5 %


283,559

1.5 %


288,834

1.6 %

Energy


449,637

2.1 %


500,435

2.3 %


403,142

2.1 %


429,479

2.3 %


410,069

2.2 %

Total loans


$21,432,713



$21,653,946



$19,334,359



$18,839,827



$18,506,288


















Deposit Types
















Noninterest-bearing DDA


$10,281,893

37.6 %


$10,364,921

37.9 %


$10,108,348

37.4 %


$10,915,448

38.2 %


$11,154,143

38.1 %

Interest-bearing DDA


4,797,259

17.6 %


4,953,090

18.1 %


5,332,086

19.8 %


5,986,203

21.0 %


6,027,157

20.6 %

Money market


5,892,505

21.6 %


5,904,160

21.5 %


6,021,449

22.3 %


6,164,025

21.6 %


6,438,787

22.0 %

Savings


3,005,936

11.0 %


3,179,351

11.6 %


3,304,482

12.2 %


3,471,970

12.2 %


3,563,776

12.1 %

Certificates and other time deposits


3,335,207

12.2 %


2,979,364

10.9 %


2,237,871

8.3 %


1,995,885

7.0 %


2,116,232

7.2 %

Total deposits


$27,312,800



$27,380,886



$27,004,236



$28,533,531



$29,300,095


















Loan to Deposit Ratio


78.5 %



79.1 %



71.6 %



66.0 %



63.2 %


 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)


Construction Loans






Sep 30, 2023



Jun 30, 2023



Mar 31, 2023



Dec 31, 2022



Sep 30, 2022




























Single family residential
construction


$

1,157,016



36.1

%


$

1,244,631



38.7

%


$

1,179,883



40.7

%


$

1,097,176



39.1

%


$

1,004,000



37.8

%

Land development



359,518



11.2

%



310,199



9.7

%



222,511



7.7

%



181,747



6.5

%



145,303



5.5

%

Raw land



340,659



10.7

%



359,228



11.2

%



326,168



11.2

%



332,603



11.9

%



343,066



12.9

%

Residential lots



216,659



6.8

%



216,706



6.7

%



226,600



7.8

%



243,942



8.7

%



237,714



8.9

%

Commercial lots



154,425



4.8

%



158,278



4.9

%



167,151



5.8

%



177,378



6.3

%



181,679



6.8

%

Commercial construction and
other



973,022



30.4

%



927,025



28.8

%



777,678



26.8

%



772,606



27.5

%



747,803



28.1

%

Net unaccreted discount



(820)






(1,051)






(11)






(14)






(13)




Total construction loans


$

3,200,479





$

3,215,016





$

2,899,980





$

2,805,438





$

2,659,552




 

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







Houston



Dallas



Austin



OK City



Tulsa



Other (T)



Total



Collateral Type






















Shopping center/retail

$

361,709



$

292,848



$

58,698



$

15,726



$

18,395



$

308,878



$

1,056,254



Commercial and industrial
buildings


167,443




107,883




28,842




31,577




18,603




277,084




631,432



Office buildings


84,275




225,240




27,842




50,338




4,025




99,204




490,924



Medical buildings


76,022




17,303




1,797




44,259




34,377




53,835




227,593



Apartment buildings


140,523




128,758




17,143




13,649




8,436




165,892




474,401



Hotel


113,176




87,973




36,371




18,535




—




169,185




425,240



Other


89,175




68,161




43,088




9,104




1,737




78,827




290,092



Total

$

1,032,323



$

928,166



$

213,781



$

183,188



$

85,573



$

1,152,905



$

3,595,936


(U)

 

Acquired Loans





Non-PCD Loans



PCD Loans



Total Acquired Loans



Balance at
Acquisition
Date



Balance at
Jun 30,
2023



Balance at
Sept 30,
2023



Balance at
Acquisition
Date



Balance at
Jun 30,
2023



Balance at
Sept 30,
2023



Balance at
Acquisition
Date



Balance at
Jun 30,
2023



Balance at
Sept 30,
2023


Loan marks:



























Acquired banks (V)

$

345,599



$

1,208



$

871



$

320,052



$

2,776



$

2,685



$

665,651



$

3,984



$

3,556


FirstCapital Bank (W)


22,648




21,844




20,672




7,790




7,334




6,658




30,438




29,178




27,330


Total


368,247




23,052




21,543




327,842




10,110




9,343




696,089




33,162




30,886





























Acquired portfolio loan
balances:



























Acquired banks (V)


12,286,159




1,174,855




1,104,770




689,573




61,484




62,053




12,975,731




1,236,339




1,166,823


FirstCapital Bank (W)


1,021,694




953,646




855,052




627,991




599,865




558,271




1,649,685




1,553,511




1,413,323


Total


13,307,853




2,128,501




1,959,822




1,317,564




661,349




620,324




14,625,416


 (X)


2,789,850




2,580,146





























Acquired portfolio loan
balances less loan marks

$

12,939,606



$

2,105,449



$

1,938,279



$

989,722



$

651,239



$

610,981



$

13,929,327



$

2,756,688



$

2,549,260


(T)

Includes other MSA and non-MSA regions.

(U)

Represents a portion of total commercial real estate loans of $5.607 billion as of September 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. The Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.4 million at acquisition date, which were subject to subsequent fair value adjustments.

(X)

Actual principal balances acquired.

 

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)





Three Months Ended



Year-to-Date



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2023



Sep 30,
2022


Asset Quality





















Nonaccrual loans

$

59,729



$

57,723



$

22,496



$

19,614



$

17,729



$

59,729



$

17,729


Accruing loans 90 or more days past due


397




1,744




-




5,917




378




397




378


Total nonperforming loans


60,126




59,467




22,496




25,531




18,107




60,126




18,107


Repossessed assets


35




153




—




—




13




35




13


Other real estate


9,320




3,107




1,989




1,963




1,758




9,320




1,758


Total nonperforming assets

$

69,481



$

62,727



$

24,485



$

27,494



$

19,878



$

69,481



$

19,878























Nonperforming assets:





















Commercial and industrial (includes energy)

$

22,219



$

24,027



$

2,832



$

3,921



$

2,376



$

22,219



$

2,376


Construction, land development and other
land loans


8,684




4,245




3,210




6,166




1,712




8,684




1,712


1-4 family residential (includes home equity)


23,708




19,609




16,951




15,326




13,986




23,708




13,986


Commercial real estate (includes multi-
family residential)


13,341




13,504




1,051




1,649




1,364




13,341




1,364


Agriculture (includes farmland)


1,511




1,284




432




421




434




1,511




434


Consumer and other


18




58




9




11




6




18




6


Total

$

69,481



$

62,727



$

24,485



$

27,494



$

19,878



$

69,481



$

19,878


Number of loans/properties


260




241




190




170




150




260




150


Allowance for credit losses on loans

$

351,495



$

345,209



$

282,191



$

281,576



$

282,179



$

351,495



$

282,179























Net charge-offs (recoveries):





















Commercial and industrial (includes energy)

$

1,594



$

160



$

(1,472)



$

(643)



$

(15)



$

282



$

(198)


Construction, land development and other land
loans


(5)




50




(13)




(5)




(4)




32




421


1-4 family residential (includes home equity)


(78)




(70)




(140)




(55)




(202)




(288)




(147)


Commercial real estate (includes multi-
family residential)


570




14,957




(1)




74




757




15,526




786


Agriculture (includes farmland)


—




(78)




(6)




(14)




119




(84)




7


Consumer and other


1,327




1,046




1,017




1,246




1,125




3,390




3,332


Total

$

3,408



$

16,065



$

(615)



$

603



$

1,780



$

18,858



$

4,201























Asset Quality Ratios





















Nonperforming assets to average interest-
earning assets


0.20

%



0.18

%



0.07

%



0.08

%



0.06

%



0.20

%



0.06

%

Nonperforming assets to loans and other real
estate


0.32

%



0.29

%



0.13

%



0.15

%



0.11

%



0.32

%



0.11

%

Net charge-offs to average loans (annualized)


0.06

%



0.31

%



-0.01

%



0.01

%



0.04

%



0.12

%



0.03

%

Allowance for credit losses on loans to total
loans


1.64

%



1.59

%



1.46

%



1.49

%



1.52

%



1.64

%



1.52

%

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


1.71

%



1.68

%



1.52

%



1.56

%



1.60

%



1.71

%



1.61

%

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 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. 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




Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2023



Sep 30,
2022


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)



1.13 %




0.89 %




1.31 %




1.47 %




1.45 %




1.11 %




1.37 %
























Net income


$

112,208



$

86,938



$

124,694



$

137,880



$

135,820



$

323,840



$

386,636


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



—




14,647




—




—




—




14,647




—


Merger related expenses, net of tax(Y)



872




10,184




679




215




—




11,735




—


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


$

113,080



$

111,769



$

125,373



$

138,095



$

135,820



$

350,222



$

386,636


Average total assets


$

39,602,039



$

39,287,626



$

38,177,853



$

37,617,902



$

37,466,565



$

39,029,662



$

37,760,440


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

%



1.14

%



1.31

%



1.47

%



1.45

%



1.20

%



1.37

%























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)



6.39

%



5.01

%



7.38

%



8.26

%



8.24

%



6.25

%



7.88

%























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


$

113,080



$

111,769



$

125,373



$

138,095



$

135,820



$

350,222



$

386,636


Average shareholders' equity


$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,907,516



$

6,546,033


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



6.44

%



6.45

%



7.42

%



8.27

%



8.24

%



6.76

%



7.88

%






























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






















Net income


$

112,208



$

86,938



$

124,694



$

137,880



$

135,820



$

323,840



$

386,636


Average shareholders' equity


$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,907,516



$

6,546,033


Less: Average goodwill and other intangible assets



(3,456,844)




(3,340,275)




(3,281,845)




(3,284,228)




(3,286,795)




(3,360,296)




(3,289,362)


Average tangible shareholders' equity


$

3,567,649



$

3,595,407



$

3,477,598



$

3,392,782



$

3,303,717



$

3,547,220



$

3,256,671


Return on average tangible common equity (F)



12.58

%



9.67

%



14.34

%



16.26

%



16.44

%



12.17

%



15.83

%






























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





















































Three Months Ended



Year-to-Date



Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2022



Sep 30,
2022


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)


$

113,080



$

111,769



$

125,373



$

138,095



$

135,820



$

350,222



$

386,636


Average shareholders' equity


$

7,024,493



$

6,935,682



$

6,759,443



$

6,677,010



$

6,590,512



$

6,907,516



$

6,546,033


Less: Average goodwill and other intangible assets



(3,456,844)




(3,340,275)




(3,281,845)




(3,284,228)




(3,286,795)




(3,360,296)




(3,289,362)


Average tangible shareholders' equity


$

3,567,649



$

3,595,407



$

3,477,598



$

3,392,782



$

3,303,717



$

3,547,220



$

3,256,671


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)



12.68

%



12.43

%



14.42

%



16.28

%



16.44

%



13.16

%



15.83

%























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






















Shareholders' equity


$

7,032,677



$

6,968,116



$

6,739,117



$

6,699,374



$

6,611,642



$

7,032,677



$

6,611,642


Less: Goodwill and other intangible assets



(3,464,012)




(3,454,826)




(3,280,610)




(3,282,984)




(3,285,542)




(3,464,012)




(3,285,541)


Tangible shareholders' equity


$

3,568,665



$

3,513,290



$

3,458,507



$

3,416,390



$

3,326,100



$

3,568,665



$

3,326,101
























Period end shares outstanding



93,717




93,721




90,693




91,314




91,210




93,717




91,210


Tangible book value per share


$

38.08



$

37.49



$

38.13



$

37.41



$

36.47



$

38.08



$

36.47
























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






















Tangible shareholders' equity


$

3,568,665



$

3,513,290



$

3,458,507



$

3,416,390



$

3,326,100



$

3,568,665



$

3,326,101


Total assets


$

39,295,684



$

39,905,131



$

37,829,232



$

37,689,829



$

37,843,502



$

39,295,684



$

37,843,502


Less: Goodwill and other intangible assets



(3,464,012)




(3,454,826)




(3,280,610)




(3,282,984)




(3,285,542)




(3,464,012)




(3,285,541)


Tangible assets


$

35,831,672



$

36,450,305



$

34,548,622



$

34,406,845



$

34,557,960



$

35,831,672



$

34,557,961


Period end tangible equity to period end tangible assets
ratio



9.96

%



9.64

%



10.01

%



9.93

%



9.62

%



9.96

%



9.62

%























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


$

351,495



$

345,209



$

282,191



$

281,576



$

282,179



$

351,495



$

282,179


Total loans


$

21,432,713



$

21,653,946



$

19,334,359



$

18,839,827



$

18,506,288



$

21,432,713



$

18,506,288


Less: Warehouse Purchase Program loans



(912,327)




(1,148,883)




(799,115)




(740,620)




(922,764)




(912,327)




(922,764)


Total loans less Warehouse Purchase Program


$

20,520,386



$

20,505,063



$

18,535,244



$

18,099,207



$

17,583,524



$

20,520,386



$

17,583,524


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



1.71

%



1.68

%



1.52

%



1.56

%



1.60

%



1.71

%



1.60

%























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






















Noninterest expense


$

135,657



$

145,870



$

123,000



$

119,244



$

122,214



$

404,527



$

364,942
























Net interest income


$

239,524



$

236,459



$

243,467



$

256,137



$

260,679



$

719,450



$

749,094


Noninterest income



38,743




39,688




38,266




37,724




34,688




116,697




107,404


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



(45)




1,994




121




2,087




50




2,070




1,847


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



38,788




37,694




38,145




35,637




34,638




114,627




105,557


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


$

278,312



$

274,153



$

281,612



$

291,774



$

295,317



$

834,077



$

854,651


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



48.74

%



53.21

%



43.68

%



40.87

%



41.38

%



48.50

%



42.70

%
































Three Months Ended



Year-to-Date




Sep 30,
2023



Jun 30,
2023



Mar 31,
2023



Dec 31,
2022



Sep 30,
2022



Sep 30,
2023



Sep 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


$

135,657



$

145,870



$

123,000



$

119,244



$

122,214



$

404,527



$

364,942


Less: merger related expenses



1,104




12,891




860




272




—




14,855




—


Noninterest expense excluding merger related expenses


$

134,553



$

132,979



$

122,140



$

118,972



$

122,214



$

389,672



$

364,942
























Net interest income


$

239,524



$

236,459



$

243,467



$

256,137



$

260,679



$

719,450



$

749,094


Noninterest income



38,743




39,688




38,266




37,724




34,688




116,697




107,404


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



(45)




1,994




121




2,087




50




2,070




1,847


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



38,788




37,694




38,145




35,637




34,638




114,627




105,557


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


$

278,312



$

274,153



$

281,612



$

291,774



$

295,317



$

834,077



$

854,651


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



48.35

%



48.51

%



43.37

%



40.78

%



41.38

%



46.72

%



42.70

%

     

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/prosperity-bancshares-inc-reports-third-quarter-2023-earnings-301966773.html

SOURCE Prosperity Bancshares, Inc.

FAQ

What is the dividend for Q4 2023?

The dividend for Q4 2023 is $0.56 per share.

How much did deposits increase in Q3 2023?

Deposits increased by $259.9 million in Q3 2023.

What is the percentage of nonperforming assets?

Nonperforming assets account for 0.20% of average interest-earning assets.

Is there a pending merger?

Yes, there is a pending merger with Lone Star State Bancshares, Inc.

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