PROSPERITY BANCSHARES, INC.® REPORTS FOURTH QUARTER 2024 EARNINGS

Rhea-AI Summary

Prosperity Bancshares (NYSE: PB) reported strong Q4 2024 financial results with net income of $130.1 million, a 36.2% increase from Q4 2023. Earnings per diluted share reached $1.37, up 34.3% year-over-year. The bank's performance showed notable improvements with net interest margin increasing to 3.05%, up 30 basis points from Q4 2023.

Key highlights include noninterest-bearing deposits of $9.8 billion (34.5% of total deposits), a $700 million decrease in borrowings during Q4, and low nonperforming assets at 0.23% of average interest-earning assets. The bank maintained strong capital ratios with return on average assets of 1.31%, return on average common equity of 7.00%, and return on average tangible common equity of 13.50%.

The board approved a 2025 Stock Repurchase Program covering up to 5% of outstanding common stock. Additionally, the bank completed the merger with Lone Star State Bancshares on April 1, 2024, expanding its presence in West Texas with 5 new banking offices.

Positive

• Net income increased 36.2% YoY to $130.1 million in Q4 2024
• EPS grew 34.3% YoY to $1.37 in Q4 2024
• Net interest margin improved 30 basis points YoY to 3.05%
• Borrowings decreased by $700 million in Q4 2024
• Strong deposit base with 34.5% in noninterest-bearing accounts
• Successfully completed Lone Star merger, adding 5 banking offices

Negative

• Linked quarter loans decreased by $231.6 million
• Nonperforming assets increased to $81.5 million from $72.7 million YoY

Insights

Financial Analyst

Prosperity Bancshares delivered impressive Q4 results that demonstrate strengthening fundamentals across key metrics. The 36.2% YoY earnings growth to $130.1 million was driven by multiple factors worthy of detailed examination.

The NIM expansion to 3.05% represents a significant achievement, driven by asset repricing and reduced funding costs. The $700 million reduction in borrowings during Q4 showcases effective balance sheet management. The deposit franchise remains a core strength, with 34.5% noninterest-bearing deposits providing a stable, low-cost funding base.

Asset quality metrics remain exceptionally strong:

• NPAs at just 0.23% of average interest-earning assets
• Allowance coverage of 1.67% excluding warehouse loans
• Net charge-offs of only $2.6 million in Q4

The bank's strategic positioning in Texas and Oklahoma markets provides unique advantages. The reported population growth of 563,000 in Texas during 2024 and 209 corporate relocations since 2018 create a robust growth backdrop. This demographic tailwind, combined with business-friendly policies and no state income tax, supports the bank's organic growth prospects.

Capital deployment strategy appears well-balanced, with the new 5% share repurchase authorization providing flexibility while maintaining strong capital ratios. The $0.58 quarterly dividend reflects confidence in sustainable earnings power.

• Fourth quarter earnings per share (diluted) of $1.37, an increase of 34.3% compared to fourth quarter 2023
• Fourth quarter net income of $130.1 million
• Fourth quarter net interest margin increased 30 basis points to 3.05% compared to fourth quarter 2023
• Noninterest-bearing deposits of $9.8 billion, representing 34.5% of total deposits
• Borrowings decreased $700.0 million during fourth quarter 2024
• Allowance for credit losses on loans and on off-balance sheet credit exposure of $389.5 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.67%⁽¹⁾
• Nonperforming assets remain low at 0.23% of fourth quarter average interest-earning assets
• Return (annualized) on fourth quarter average assets of 1.31%, average common equity of 7.00% and average tangible common equity of 13.50%⁽¹⁾
• Approved 2025 Stock Repurchase Program covering up to 5% of outstanding common stock
• Prosperity Bank named Best Overall Bank in Texas by Money for 2025

HOUSTON, Jan. 29, 2025 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE: PB), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of $130.1 million for the quarter ended December 31, 2024 compared with $95.5 million for the same period in 2023. Net income per diluted common share was $1.37 for the quarter ended December 31, 2024 compared with $1.02 for the same period in 2023. The annualized return on fourth quarter average assets was 1.31%. Additionally, deposits increased $293.7 million and borrowings decreased $700.0 million during the fourth quarter of 2024. Nonperforming assets decreased $8.4 million during the fourth quarter of 2024 and remain low at 0.23% of fourth quarter average interest-earning assets. On April 1, 2024, Lone Star State Bancshares, Inc. ("Lone Star") merged with Prosperity Bancshares and Lone Star State Bank of West Texas ("Lone Star Bank") merged with Prosperity Bank (collectively, the "Merger").

"We are excited about the growth and future of our company.  The Texas and Oklahoma economies are some of the best in the country.  Texas has no state income tax and both Texas and Oklahoma have a business-friendly political climate.  The Texas population grew more than any other state in 2024, with the addition of 563,000 people, bringing the total population to 31,290,831.  Further, according to Forbes in July 2024, there have been 209 corporate relocations to Texas since 2018.  All of this bodes well for our future growth," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"Prosperity has a strong capital position that provides opportunities to participate in mergers and acquisitions, repurchase stock or fund organic growth without the need for additional capital. We believe that our net interest margin should continue to expand to a more normal ratio as our assets continue to reprice, thereby increasing our earnings per share. We also have strong core deposits, with 34.5% of our deposits in noninterest-bearing accounts," stated Zalman.

"I would like to thank all our customers, associates, directors, and shareholders for helping build such a successful bank," concluded Zalman.

Results of Operations for the Three Months Ended December 31, 2024

Net income was $130.1 million⁽²⁾ for the  three months ended December 31, 2024 compared with $95.5 million⁽³⁾ for the same period in 2023, an increase of $34.6 million or 36.2%. Net income per diluted common share was $1.37 for the three months ended December 31, 2024 compared with $1.02 for the same period in 2023, an increase of 34.3%. The changes were primarily due to an increase in net interest income and a decrease in the Federal Deposit Insurance Corporation ("FDIC") special assessment, partially offset by an increase in salaries and benefits. On a linked quarter basis, net income was $130.1 million⁽²⁾ for the three months ended December 31, 2024 compared with $127.3 million⁽⁴⁾ for the three months ended September 30, 2024, an increase of $2.8 million or 2.2%. Net income per diluted common share was $1.37 for the three months ended December 31, 2024 compared with $1.34 for the three months ended September 30, 2024. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2024 were 1.31%, 7.00% and 13.50%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 46.10%⁽¹⁾ for the three months ended December 31, 2024.

Net interest income before provision for credit losses was $267.8 million for the three months ended December 31, 2024 compared with $237.0 million for the same period in 2023,  an increase of $30.8 million or 13.0%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. Net interest income before provision for credit losses increased $6.1 million or 2.3% to $267.8 million for the three months ended December 31, 2024 compared with $261.7 million for the three months ended September 30, 2024. The change was primarily due to a decrease in the average balances on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average balances and average rates on loans and a decrease in the average balances on investment securities.

The net interest margin on a tax equivalent basis was 3.05% for the three months ended December 31, 2024 compared with 2.75% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. The net interest margin on a tax equivalent basis was 3.05% for the three months ended December 31, 2024 compared with 2.95% for the three months ended September 30, 2024. The change was primarily due to a decrease in the average balances on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average balances and average rates on loans and a decrease in the average balances on investment securities.

Noninterest income was $39.8 million for the three months ended December 31, 2024 compared with $36.6 million for the same period in 2023, an increase of $3.3 million or 8.9%. The change was primarily due to an increase in nonsufficient funds ("NSF") fees, an increase in service charges on deposit accounts and an increase in the net gain (loss) on sale or write-down of assets. Noninterest income was $39.8 million for the three months ended December 31, 2024 compared with $41.1 million for the three months ended September 30, 2024, a decrease of $1.3 million or 3.1%.

Noninterest expense was $141.5 million for the three months ended December 31, 2024 compared with $152.2 million for the same period in 2023, a decrease of $10.6 million or 7.0%, primarily due to a decrease in the FDIC special assessment, partially offset by an increase in salaries and benefits and an increase in credit and debit card, data processing and software amortization. Noninterest expense was $141.5 million for the three months ended December 31, 2024 compared with $140.3 million for the three months ended September 30, 2024, an increase of $1.2 million or 0.9%.

Results of Operations for the Year Ended December 31, 2024

Net income was $479.4 million⁽⁵⁾ for the year ended December 31, 2024 compared with $419.3 million⁽⁶⁾ for the same period in 2023, an increase of $60.1 million or 14.3%. Net income per diluted common share was $5.05 for the year ended December 31, 2024 compared with $4.51 for the same period in 2023, an increase of 12.0%. Net income and net income per diluted common share for the year ended December 31, 2024 were impacted by an increase in net interest income, a decrease in the FDIC special assessment of $16.3 million, a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.2 million, a decrease in merger related provision for credit losses of $9.5 million and a decrease in merger related expenses of $10.7 million, and increases in noninterest income and noninterest expense related to nine months of Lone Star Bank operations. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2024 were 1.21%, 6.56% and 12.73%⁽¹⁾, respectively. 

Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $484.0 million⁽¹⁾ or $5.11⁽¹⁾ per diluted common share for the year ended December 31, 2024, and annualized returns on average assets, average common equity and average tangible common equity for the same period were 1.22%⁽¹⁾, 6.63%⁽¹⁾ and 12.85%⁽¹⁾, respectively. Prosperity's efficiency ratio was 48.43%⁽¹⁾ for the year ended December 31, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 47.75%⁽¹⁾.

Net interest income before provision for credit losses for the year ended December 31, 2024 was $1.026 billion compared with $956.4 million for the same period in 2023, an increase of $70.1 million or 7.3%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion of $9.4 million and a decrease in the average balance and rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

The net interest margin on a tax equivalent basis for the year ended December 31, 2024 was 2.93% compared with 2.78% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion of $9.4 million and a decrease in the average balance and rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

Noninterest income was $165.8 million for the year ended December 31, 2024 compared with $153.3 million for the same period in 2023, an increase of $12.5 million or 8.2%, primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.2 million and increases in service charges on deposit accounts, partially offset by a decrease in other noninterest income.

Noninterest expense was $570.6 million for the year ended December 31, 2024 compared with $556.7 million for the same period in 2023, an increase of $13.9 million or 2.5%, primarily due to an increase in salaries and benefits, an increase in credit and debit card, data processing and software amortization and additional expenses related to nine months of  Lone Star Bank operations, partially offset by a decrease in the FDIC special assessment of $16.3 million and a decrease in merger related expenses of $10.7 million.

Balance Sheet Information

At December 31, 2024, Prosperity had $39.567 billion in total assets, an increase of $1.019 billion or 2.6%, compared with $38.548 billion at December 31, 2023. Linked quarter total assets decreased by $548.6 million compared with $40.115 billion at September 30, 2024.

Loans were $22.149 billion at December 31, 2024, an increase of $968.7 million or 4.6%, compared with $21.181 billion at December 31, 2023, primarily due to the Merger. Linked quarter loans decreased $231.6 million from $22.381 billion at September 30, 2024. Loans, excluding Warehouse Purchase Program loans, were $21.068 billion at December 31, 2024 compared with $20.358 billion at December 31, 2023, an increase of $710.0 million or 3.5%, and compared with $21.152 billion at September 30, 2024, a decrease of $83.8 million.

Deposits were $28.381 billion at December 31, 2024, an increase of $1.202 billion or 4.4%, compared with $27.180 billion at December 31, 2023, primarily due to the Merger. Linked quarter deposits increased $293.7 million or 1.0% (4.2% annualized) from $28.088 billion at September 30, 2024.

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

Balance Sheet Data (at period end)
(In thousands)
		Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Loans acquired (including new production since acquisition date):
Lone Star Bank		$	1,057,618			$	1,109,783			$	1,084,559			$	—			$	—
Prosperity Bank
Warehouse Purchase Program loans			1,080,903				1,228,706				1,081,403				864,924				822,245
All other loans			20,010,688				20,042,363				20,154,853				20,400,323				20,358,293
Total loans		$	22,149,209			$	22,380,852			$	22,320,815			$	21,265,247			$	21,180,538
Deposits assumed (including new deposits since acquisition date):
Lone Star Bank		$	1,093,536			$	1,136,216			$	1,187,821			$	—			$	—
All other deposits			27,287,802				26,951,395				26,745,265				27,175,518				27,179,809
Total deposits		$	28,381,338			$	28,087,611			$	27,933,086			$	27,175,518			$	27,179,809

Excluding loans acquired in the Merger and new production at the acquired banking centers since April 1, 2024, loans at December 31, 2024 decreased $88.9 million compared with December 31, 2023 and decreased $179.5 million compared with September 30, 2024.

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since April 1, 2024, deposits at December 31, 2024 increased by $108.0 million compared with December 31, 2023 and increased by $336.4 million compared with September 30, 2024.

Asset Quality

Nonperforming assets totaled $81.5 million or 0.23% of quarterly average interest-earning assets at December 31, 2024 compared with $72.7 million or 0.21% of quarterly average interest-earning assets at December 31, 2023 and $89.9 million or 0.25% of quarterly average interest-earning assets at September 30, 2024.

The allowance for credit losses on loans and off-balance sheet credit exposures was $389.5 million at December 31, 2024 compared with $368.9 million at December 31, 2023 and $392.0 million at September 30, 2024. There was no provision for credit losses for the three months ended December 31, 2024 and 2023, and a provision for credit losses of $9.1 million and $18.5 million for the years ended December 31, 2024 and 2023, respectively. As a result of the loans acquired in the Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures. 

The allowance for credit losses on loans was $351.8 million or 1.59% of total loans at December 31, 2024 compared with $332.4 million or 1.57% of total loans at December 31, 2023 and $354.4 million or 1.58% of total loans at September 30, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.67%⁽¹⁾ at December 31, 2024 compared with 1.63%⁽¹⁾ at December 31, 2023 and 1.68%⁽¹⁾ at September 30, 2024.

Net charge-offs were $2.6 million for the three months ended December 31, 2024 compared with net charge-offs of $19.1 million for the three months ended December 31, 2023 and net charge-offs of $5.5 million for the three months ended September 30, 2024. For the fourth quarter of 2024, $1.5 million of reserves on resolved purchased credit deteriorated ("PCD") loans without any related charge-offs were released to the general reserve.

Net charge-offs were $14.6 million for the year ended December 31, 2024 compared with $38.0 million for the year ended December 31, 2023. Net charge-offs for the year ended December 31, 2024 included $3.4 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the Merger. Further, $15.4 million of reserves on resolved PCD loans were released to the general reserve.

Visa Class B-1 Stock Exchange

During the second quarter 2024, Prosperity tendered all of its shares of Visa, Inc. ("Visa") Class B-1 common stock in exchange for a combination of Visa Class B-2 common stock and Visa Class C common stock, pursuant to the terms and subject to the conditions of the public offering of Visa to exchange its Class B-1 common stock for a combination of shares of its Class B-2 common stock and Class C common stock, which expired on May 3, 2024. Prosperity recorded an unrealized gain of $20.6 million during the second quarter 2024 based on the conversion privilege of the Class C common stock and the closing price of Visa Class A common stock. In the exchange, Prosperity received 48,492 shares of Class B-2 stock, recorded at zero cost basis, and 19,245 shares of Class C common stock and has subsequently sold all shares of Class C stock.

Dividend

Prosperity Bancshares declared a first quarter 2025 cash dividend of $0.58 per share to be paid on April 1, 2025, to all shareholders of record as of March 14, 2025.

Stock Repurchase Program

On January 21, 2025, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.8 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 21, 2026, at the discretion of management. Under its 2024 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended December 31, 2024, and approximately 1.2 million shares of its common stock at an average weighted price of $60.35 per share during the year ended December 31, 2024.

Merger of Lone Star State Bancshares, Inc.

On April 1, 2024, Prosperity completed the merger of Lone Star and its wholly owned subsidiary Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 full-service 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.

Pursuant to the terms of the definitive agreement, Prosperity issued 2,376,182 shares of Prosperity common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star in the second quarter of 2024. This resulted in goodwill of $106.7 million as of December 31, 2024, which does not include all the subsequent fair value adjustments that have not yet been finalized.

Conference Call

Prosperity's management team will host a conference call on Wednesday, January 29, 2025, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's fourth quarter 2024 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 7777695.

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

Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of December 31, 2024, Prosperity Bancshares, Inc.^® is a $39.567 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 283 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; 31 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; 15 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 credit 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 credit 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, 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 any 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; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; 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, 2023, 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 $3.3 million, net of tax, primarily comprised of loan discount accretion of $3.6 million for the three months ended December 31, 2024.
(3)	Includes purchase accounting adjustments of $2.6 million, net of tax, primarily comprised of loan discount accretion of $2.5 million, merger related expenses of $278 thousand, and the FDIC special assessment of $19.9 million for the three months ended December 31, 2023.
(4)	Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $4.8 million for the three months ended September 30, 2024.
(5)	Includes purchase accounting adjustments of $15.7 million, net of tax, primarily comprised of loan discount accretion of $17.5 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.5 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.2 million for the year ended December 31, 2024.
(6)	Includes purchase accounting adjustments of $8.1 million, net of tax, primarily comprised of loan discount accretion of $8.0 million, merger related provision for credit losses of $18.5 million, merger related expenses of $15.1 million, and the FDIC special assessment of $19.9 million for the year ended December 31, 2023.

 

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

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023
Balance Sheet Data (at period end)
Loans held for sale		$	10,690			$	6,113			$	9,951			$	6,380			$	5,734
Loans held for investment			21,057,616				21,146,033				21,229,461				20,393,943				20,352,559
Loans held for investment - Warehouse Purchase Program			1,080,903				1,228,706				1,081,403				864,924				822,245
Total loans			22,149,209				22,380,852				22,320,815				21,265,247				21,180,538
Investment securities(A)			11,094,424				11,300,756				11,702,139				12,301,138				12,803,896
Federal funds sold			292				208				234				250				260
Allowance for credit losses on loans			(351,805)				(354,397)				(359,852)				(330,219)				(332,362)
Cash and due from banks			1,972,175				2,209,863				1,507,604				1,086,444				458,153
Goodwill			3,503,129				3,504,388				3,504,107				3,396,402				3,396,086
Core deposit intangibles, net			66,047				70,178				74,324				60,757				63,994
Other real estate owned			5,701				5,757				4,960				2,204				1,708
Fixed assets, net			371,238				373,812				377,394				372,333				369,992
Other assets			756,328				623,903				630,569				601,964				605,612
Total assets		$	39,566,738			$	40,115,320			$	39,762,294			$	38,756,520			$	38,547,877
Noninterest-bearing deposits		$	9,798,438			$	9,811,361			$	9,706,505			$	9,526,535			$	9,776,572
Interest-bearing deposits			18,582,900				18,276,250				18,226,581				17,648,983				17,403,237
Total deposits			28,381,338				28,087,611				27,933,086				27,175,518				27,179,809
Other borrowings			3,200,000				3,900,000				3,900,000				3,900,000				3,725,000
Securities sold under repurchase agreements			221,913				228,896				233,689				261,671				309,277
Allowance for credit losses on off-balance sheet credit exposures			37,646				37,646				37,646				36,503				36,503
Other liabilities			287,346				499,918				374,429				278,284				217,958
Total liabilities			32,128,243				32,754,071				32,478,850				31,651,976				31,468,547
Shareholders' equity(B)			7,438,495				7,361,249				7,283,444				7,104,544				7,079,330
Total liabilities and equity		$	39,566,738			$	40,115,320			$	39,762,294			$	38,756,520			$	38,547,877

(A)	Includes $(2,056), $(1,070), $(2,007), $(2,954) and $(1,770) in unrealized losses on available for sale securities for the quarterly periods ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.
(B)	Includes $(1,624), $(845), $(1,586), $(2,333) and $(1,398) in after-tax unrealized losses on available for sale securities for the quarterly periods ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (In thousands)
		Three Months Ended																				Year-to-Date
		Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Dec 31, 2024				Dec 31, 2023
Income Statement Data
Interest income:
Loans		$	333,055			$	337,451			$	336,428			$	306,228			$	306,562			$	1,313,162			$	1,148,996
Securities(C)			58,260				59,617				62,428				66,421				68,077				246,726				283,302
Federal funds sold and other earning assets			19,630				20,835				14,095				9,265				1,793				63,825				12,245
Total interest income			410,945				417,903				412,951				381,914				376,432				1,623,713				1,444,543
Interest expense:
Deposits			102,050				107,758				106,124				92,692				84,969				408,624				272,345
Other borrowings			39,620				46,792				46,282				48,946				52,386				181,640				206,323
Securities sold under repurchase agreements			1,501				1,662				1,759				2,032				2,094				6,954				9,404
Subordinated debentures			—				—				—				—				—				—				38
Total interest expense			143,171				156,212				154,165				143,670				139,449				597,218				488,110
Net interest income			267,774				261,691				258,786				238,244				236,983				1,026,495				956,433
Provision for credit losses			—				—				9,066				—				—				9,066				18,540
Net interest income after provision for credit losses			267,774				261,691				249,720				238,244				236,983				1,017,429				937,893
Noninterest income:
Nonsufficient funds (NSF) fees			9,960				9,016				8,153				8,288				8,365				35,417				33,691
Credit card, debit card and ATM card income			9,443				9,620				9,384				8,861				9,314				37,308				36,471
Service charges on deposit accounts			6,992				6,664				6,436				6,406				6,316				26,498				24,582
Trust income			3,514				3,479				3,601				4,156				3,360				14,750				13,269
Mortgage income			779				962				745				610				542				3,096				2,298
Brokerage income			1,063				1,258				1,186				1,235				1,059				4,742				4,275
Bank owned life insurance income			2,020				2,028				1,885				2,047				1,882				7,980				6,653
Net gain (loss) on sale or write-down of assets			584				3,178				(903)				(35)				(84)				2,824				1,986
Net gain on sale or write-up of securities			—				224				10,723				298				—				11,245				—
Other noninterest income			5,482				4,670				4,793				7,004				5,814				21,949				30,040
Total noninterest income			39,837				41,099				46,003				38,870				36,568				165,809				153,265
Noninterest expense:
Salaries and benefits			88,631				88,367				89,584				85,771				80,486				352,353				328,430
Net occupancy and equipment			8,957				9,291				8,915				8,623				9,093				35,786				35,517
Credit and debit card, data processing and software amortization			12,342				11,985				11,998				10,975				10,741				47,300				41,570
Regulatory assessments and FDIC insurance			5,789				5,726				10,317				5,538				24,940				27,370				40,165
Core deposit intangibles amortization			4,131				4,146				4,156				3,237				3,559				15,670				12,676
Depreciation			4,791				4,741				4,836				4,686				4,607				19,054				18,283
Communications			3,450				3,360				3,485				3,402				3,572				13,697				14,413
Other real estate expense			255				12				69				187				165				523				(88)
Net (gain) loss on sale or write-down of other real estate			(610)				(97)				31				(138)				34				(814)				(746)
Merger related expenses			—				63				4,381				—				278				4,444				15,133
Other noninterest expense			13,809				12,744				15,070				13,567				14,696				55,190				51,345
Total noninterest expense			141,545				140,338				152,842				135,848				152,171				570,573				556,698
Income before income taxes			166,066				162,452				142,881				141,266				121,380				612,665				534,460
Provision for income taxes			35,990				35,170				31,279				30,840				25,904				133,279				115,144
Net income available to common shareholders		$	130,076			$	127,282			$	111,602			$	110,426			$	95,476			$	479,386			$	419,316

(C)	Interest income on securities was reduced by net premium amortization of $5,609, $5,574, $5,831, $5,822 and $6,428 for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and $22,836 and $27,840 for the years ended December 31, 2024, and 2023, respectively.

 

Prosperity Bancshares, Inc. ® Financial Highlights (Unaudited) (Dollars and share amounts in thousands, except per share data and market prices)
		Three Months Ended																				Year-to-Date
		Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Dec 31, 2024				Dec 31, 2023
Profitability
Net income (D) (E)		$	130,076			$	127,282			$	111,602			$	110,426			$	95,476			$	479,386			$	419,316
Basic earnings per share		$	1.37			$	1.34			$	1.17			$	1.18			$	1.02			$	5.05			$	4.51
Diluted earnings per share		$	1.37			$	1.34			$	1.17			$	1.18			$	1.02			$	5.05			$	4.51
Return on average assets (F) (J)			1.31	%			1.28	%			1.12	%			1.13	%			0.98	%			1.21	%			1.08	%
Return on average common equity (F) (J)			7.00	%			6.93	%			6.10	%			6.20	%			5.39	%			6.56	%			6.03	%
Return on average tangible common equity (F) (G) (J)			13.50	%			13.50	%			11.81	%			12.06	%			10.54	%			12.73	%			11.76	%
Tax equivalent net interest margin (D) (E) (H)			3.05	%			2.95	%			2.94	%			2.79	%			2.75	%			2.93	%			2.78	%
Efficiency ratio (G) (I) (K)			46.10	%			46.87	%			51.82	%			49.07	%			55.61	%			48.43	%			50.26	%
Liquidity and Capital Ratios
Equity to assets			18.80	%			18.35	%			18.32	%			18.33	%			18.37	%			18.80	%			18.37	%
Common equity tier 1 capital			16.42	%			15.84	%			15.42	%			15.75	%			15.54	%			16.42	%			15.54	%
Tier 1 risk-based capital			16.42	%			15.84	%			15.42	%			15.75	%			15.54	%			16.42	%			15.54	%
Total risk-based capital			17.67	%			17.09	%			16.67	%			17.00	%			16.56	%			17.67	%			16.56	%
Tier 1 leverage capital			10.82	%			10.52	%			10.29	%			10.37	%			10.39	%			10.82	%			10.39	%
Period end tangible equity to period end tangible assets (G)			10.75	%			10.36	%			10.24	%			10.33	%			10.31	%			10.75	%			10.31	%
Other Data
Weighted-average shares used in computing earnings per common share
Basic			95,264				95,261				95,765				93,706				93,715				95,000				92,902
Diluted			95,264				95,261				95,765				93,706				93,715				95,000				92,902
Period end shares outstanding			95,275				95,261				95,262				93,525				93,722				95,275				93,722
Cash dividends paid per common share		$	0.58			$	0.56			$	0.56			$	0.56			$	0.56			$	2.26			$	2.21
Book value per common share		$	78.07			$	77.27			$	76.46			$	75.96			$	75.54			$	78.07			$	75.54
Tangible book value per common share (G)		$	40.61			$	39.75			$	38.89			$	39.00			$	38.62			$	40.61			$	38.62
Common Stock Market Price
High		$	86.76			$	74.87			$	66.18			$	68.88			$	68.79			$	86.76			$	78.76
Low		$	68.94			$	58.66			$	57.16			$	60.08			$	49.60			$	57.16			$	49.60
Period end closing price		$	75.35			$	72.07			$	61.14			$	65.78			$	67.73			$	75.35			$	67.73
Employees – FTE (excluding overtime)			3,916				3,896				3,902				3,901				3,850				3,916				3,850
Number of banking centers			283				287				288				283				285				283				285

 

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

	Three Months Ended										Year-to-Date
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024		Dec 31, 2023
Loan discount accretion
Non-PCD	$2,761		$3,616		$4,797		$1,312		$1,543		$12,486		$4,825
PCD	$850		$1,212		$2,394		$548		$937		$5,004		$3,221
Securities net accretion	$528		$555		$564		$561		$598		$2,208		$1,648
Time deposits amortization	$(21)		$(40)		$4		$(97)		$(150)		$(154)		$(600)

(E)	Using effective tax rate of 21.7%, 21.6%, 21.9%, 21.8% and 21.3% for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively, and 21.8% and 21.5% for the years ended December 31, 2024 and 2023, 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 366-day or 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, write-down or write-up of assets and securities. Additionally, taxes are not part of this calculation.
(J)	For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
(K)	For calculations of the efficiency ratio excluding merger related expenses and FDIC special assessment refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
YIELD ANALYSIS		Three Months Ended
		Dec 31, 2024										Sep 30, 2024										Dec 31, 2023
		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		$	8,571			$	144			6.68 %		$	7,913			$	137			6.89 %		$	9,828			$	185			7.47 %
Loans held for investment			21,038,694				313,863			5.93 %			21,107,139				316,939			5.97 %			20,370,915				291,882			5.68 %
Loans held for investment - Warehouse Purchase Program			1,137,113				19,048			6.66 %			1,114,681				20,375			7.27 %			770,481				14,495			7.46 %
Total loans			22,184,378				333,055			5.97 %			22,229,733				337,451			6.04 %			21,151,224				306,562			5.75 %
Investment securities			11,265,535				58,260			2.06 %	(M)		11,612,193				59,617			2.04 %	(M)		13,074,243				68,077			2.07 %	(M)
Federal funds sold and other earning assets			1,628,050				19,630			4.80 %			1,531,788				20,835			5.41 %			125,295				1,793			5.68 %
Total interest-earning assets			35,077,963				410,945			4.66 %			35,373,714				417,903			4.70 %			34,350,762				376,432			4.35 %
Allowance for credit losses on loans			(353,560)										(358,237)										(346,493)
Noninterest-earning assets			4,902,996										4,873,725										4,810,942
Total assets		$	39,627,399									$	39,889,202									$	38,815,211
Interest-bearing liabilities:
Interest-bearing demand deposits		$	4,845,174			$	8,535			0.70 %		$	4,774,975			$	9,251			0.77 %		$	4,822,698			$	6,789			0.56 %
Savings and money market deposits			8,915,410				47,089			2.10 %			8,908,315				49,824			2.23 %			8,815,892				45,192			2.03 %
Certificates and other time deposits			4,552,445				46,426			4.06 %			4,564,232				48,683			4.24 %			3,442,115				32,988			3.80 %
Other borrowings			3,332,609				39,620			4.73 %			3,900,000				46,792			4.77 %			4,028,263				52,386			5.16 %
Securities sold under repurchase agreements			231,240				1,501			2.58 %			242,813				1,662			2.72 %			300,317				2,094			2.77 %
Total interest-bearing liabilities			21,876,878				143,171			2.60 %	(N)		22,390,335				156,212			2.78 %	(N)		21,409,285				139,449			2.58 %	(N)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			9,829,912										9,680,785										9,960,240
Allowance for credit losses on off-balance sheet credit exposures			37,646										37,646										36,503
Other liabilities			454,298										433,171										323,344
Total liabilities			32,198,734										32,541,937										31,729,372
Shareholders' equity			7,428,665										7,347,265										7,085,839
Total liabilities and shareholders' equity		$	39,627,399									$	39,889,202									$	38,815,211
Net interest income and margin						$	267,774			3.04 %						$	261,691			2.94 %						$	236,983			2.74 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							767										808										952
Net interest income and margin      (tax equivalent basis)						$	268,541			3.05 %						$	262,499			2.95 %						$	237,935			2.75 %

(L)	Annualized and based on an actual 366-day or 365-day basis.
(M)	Yield on securities was impacted by net premium amortization of $5,609, $5,574 and $6,428 for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(N)	Total cost of funds, including noninterest bearing deposits, was 1.80%, 1.94% and 1.76% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
YIELD ANALYSIS		Year-to-Date
		Dec 31, 2024												Dec 31, 2023
		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		$	7,603			$	522			6.87 %				$	6,508			$	452			6.95 %
Loans held for investment			20,973,042				1,242,836			5.93 %					19,754,541				1,089,743			5.52 %
Loans held for investment - Warehouse Purchase Program			973,206				69,804			7.17 %					815,853				58,801			7.21 %
Total loans			21,953,851				1,313,162			5.98 %					20,576,902				1,148,996			5.58 %
Investment securities			11,934,793				246,726			2.07 %			(P)		13,719,899				283,302			2.06 %	(P)
Federal funds sold and other earning assets			1,216,728				63,825			5.25 %					248,691				12,245			4.92 %
Total interest-earning assets			35,105,372				1,623,713			4.63 %					34,545,492				1,444,543			4.18 %
Allowance for credit losses on loans			(344,167)												(314,350)
Noninterest-earning assets			4,839,630												4,741,815
Total assets		$	39,600,835											$	38,972,957
Interest-bearing liabilities:
Interest-bearing demand deposits		$	4,900,189			$	35,342			0.72 %				$	5,150,049			$	19,554			0.38 %
Savings and money market deposits			8,949,010				194,317			2.17 %					9,129,845				168,184			1.84 %
Certificates and other time deposits			4,301,763				178,965			4.16 %					2,832,754				84,607			2.99 %
Other borrowings			3,802,910				181,640			4.78 %					4,008,616				206,323			5.15 %
Securities sold under repurchase agreements			257,171				6,954			2.70 %					389,313				9,404			2.42 %
Subordinated debentures			—				—				—				1,031				38			3.69 %
Total interest-bearing liabilities			22,211,043				597,218			2.69 %			(Q)		21,511,608				488,110			2.27 %	(Q)
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			9,683,980												10,224,241
Allowance for credit losses on off-balance sheet credit exposures			37,134												33,271
Other liabilities			363,607												253,047
Total liabilities			32,295,764												32,022,167
Shareholders' equity			7,305,071												6,950,790
Total liabilities and shareholders' equity		$	39,600,835											$	38,972,957
Net interest income and margin						$	1,026,495			2.92 %								$	956,433			2.77 %
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment							3,183												3,640
Net interest income and margin (tax equivalent basis)						$	1,029,678			2.93 %								$	960,073			2.78 %

(O)	Based on an actual 366-day or 365-day basis.
(P)	Yield on securities was impacted by net premium amortization of $22,836 and $27,840 for the years ended December 31, 2024 and 2023, respectively.
(Q)	Total cost of funds, including noninterest bearing deposits, was 1.87% and 1.54% for the years ended December 31, 2024 and 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended
	Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023
YIELD TREND (R)
Interest-Earning Assets:
Loans held for sale		6.68	%			6.89	%			7.10	%			6.77	%			7.47	%
Loans held for investment		5.93	%			5.97	%			6.02	%			5.77	%			5.68	%
Loans held for investment - Warehouse Purchase Program		6.66	%			7.27	%			7.42	%			7.51	%			7.46	%
Total loans		5.97	%			6.04	%			6.08	%			5.83	%			5.75	%
Investment securities (S)		2.06	%			2.04	%			2.06	%			2.10	%			2.07	%
Federal funds sold and other earning assets		4.80	%			5.41	%			5.52	%			5.54	%			5.68	%
Total interest-earning assets		4.66	%			4.70	%			4.68	%			4.45	%			4.35	%
Interest-Bearing Liabilities:
Interest-bearing demand deposits		0.70	%			0.77	%			0.76	%			0.66	%			0.56	%
Savings and money market deposits		2.10	%			2.23	%			2.22	%			2.13	%			2.03	%
Certificates and other time deposits		4.06	%			4.24	%			4.27	%			4.05	%			3.80	%
Other borrowings		4.73	%			4.77	%			4.77	%			4.82	%			5.16	%
Securities sold under repurchase agreements		2.58	%			2.72	%			2.74	%			2.76	%			2.77	%
Total interest-bearing liabilities		2.60	%			2.78	%			2.76	%			2.62	%			2.58	%
Net Interest Margin		3.04	%			2.94	%			2.94	%			2.78	%			2.74	%
Net Interest Margin (tax equivalent)		3.05	%			2.95	%			2.94	%			2.79	%			2.75	%

(R)	Annualized and based on average balances on an actual 366-day or 365-day basis.
(S)	Yield on securities was impacted by net premium amortization of $5,609, $5,574, $5,831, $5,822 and $6,428 for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Three Months Ended
		Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023
Balance Sheet Averages
Loans held for sale		$	8,571			$	7,913			$	8,446			$	5,467			$	9,828
Loans held for investment			21,038,694				21,107,139				21,328,824				20,415,316				20,370,915
Loans held for investment - Warehouse Purchase Program			1,137,113				1,114,681				917,026				720,650				770,481
Total loans			22,184,378				22,229,733				22,254,296				21,141,433				21,151,224
Investment securities			11,265,535				11,612,193				12,179,074				12,693,268				13,074,243
Federal funds sold and other earning assets			1,628,050				1,531,788				1,026,251				672,840				125,295
Total interest-earning assets			35,077,963				35,373,714				35,459,621				34,507,541				34,350,762
Allowance for credit losses on loans			(353,560)				(358,237)				(332,904)				(331,708)				(346,493)
Cash and due from banks			317,420				304,911				295,077				315,612				302,864
Goodwill			3,505,030				3,504,300				3,482,448				3,396,177				3,396,224
Core deposit intangibles, net			68,167				72,330				59,979				62,482				65,986
Other real estate			6,778				5,339				3,071				2,319				4,781
Fixed assets, net			373,561				375,626				377,369				372,458				370,900
Other assets			632,040				611,219				604,187				610,649				670,187
Total assets		$	39,627,399			$	39,889,202			$	39,948,848			$	38,935,530			$	38,815,211
Noninterest-bearing deposits		$	9,829,912			$	9,680,785			$	9,780,211			$	9,443,249			$	9,960,240
Interest-bearing demand deposits			4,845,174				4,774,975				4,839,194				5,143,585				4,822,698
Savings and money market deposits			8,915,410				8,908,315				9,084,051				8,889,077				8,815,892
Certificates and other time deposits			4,552,445				4,564,232				4,400,922				3,683,815				3,442,115
Total deposits			28,142,941				27,928,307				28,104,378				27,159,726				27,040,945
Other borrowings			3,332,609				3,900,000				3,900,000				4,083,132				4,028,263
Securities sold under repurchase agreements			231,240				242,813				258,637				296,437				300,317
Allowance for credit losses on off-balance sheet credit exposures			37,646				37,646				36,729				36,503				36,503
Other liabilities			454,298				433,171				327,847				238,480				323,344
Shareholders' equity			7,428,665				7,347,265				7,321,257				7,121,252				7,085,839
Total liabilities and equity		$	39,627,399			$	39,889,202			$	39,948,848			$	38,935,530			$	38,815,211

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
		Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023
Period End Balances
Loan Portfolio
Commercial and industrial		$1,962,111	8.8 %		$1,970,844	8.8 %		$2,023,531	9.1 %		$1,932,534	9.1 %		$1,936,717	9.2 %
Warehouse purchase program		1,080,903	4.9 %		1,228,706	5.5 %		1,081,403	4.8 %		864,924	4.1 %		822,245	3.9 %
Construction, land development and other land loans		2,859,281	12.9 %		2,814,521	12.6 %		2,828,372	12.7 %		2,876,588	13.5 %		3,076,591	14.5 %
1-4 family residential		7,581,450	34.2 %		7,557,858	33.8 %		7,496,485	33.6 %		7,331,251	34.5 %		7,207,226	34.0 %
Home equity		906,139	4.1 %		919,676	4.1 %		930,428	4.2 %		950,169	4.5 %		960,852	4.5 %
Commercial real estate (includes multi-family residential)		5,800,985	26.2 %		5,869,687	26.2 %		5,961,884	26.7 %		5,631,460	26.5 %		5,662,948	26.7 %
Agriculture (includes farmland)		1,033,546	4.7 %		1,033,224	4.6 %		1,037,361	4.6 %		813,092	3.8 %		816,043	3.9 %
Consumer and other		378,817	1.7 %		413,548	1.8 %		340,611	1.5 %		326,915	1.5 %		329,593	1.6 %
Energy		545,977	2.5 %		572,788	2.6 %		620,740	2.8 %		538,314	2.5 %		368,323	1.7 %
Total loans		$22,149,209			$22,380,852			$22,320,815			$21,265,247			$21,180,538
Deposit Types
Noninterest-bearing DDA		$9,798,438	34.5 %		$9,811,361	34.9 %		$9,706,505	34.7 %		$9,526,535	35.1 %		$9,776,572	36.0 %
Interest-bearing DDA		5,182,035	18.3 %		4,800,758	17.1 %		4,762,730	17.1 %		4,867,247	17.9 %		5,115,945	18.8 %
Money market		6,229,022	21.9 %		6,166,792	22.0 %		6,180,769	22.1 %		6,134,221	22.6 %		5,859,701	21.6 %
Savings		2,685,496	9.5 %		2,707,982	9.6 %		2,765,197	9.9 %		2,830,117	10.4 %		2,881,397	10.6 %
Certificates and other time deposits		4,486,347	15.8 %		4,600,718	16.4 %		4,517,885	16.2 %		3,817,398	14.0 %		3,546,194	13.0 %
Total deposits		$28,381,338			$28,087,611			$27,933,086			$27,175,518			$27,179,809
Loan to Deposit Ratio		78.0 %			79.7 %			79.9 %			78.3 %			77.9 %

 

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
Construction Loans
		Dec 31, 2024							Sep 30, 2024							Jun 30, 2024							Mar 31, 2024							Dec 31, 2023
Single family residential construction		$	778,067			27.2	%		$	836,571			29.7	%		$	940,381			33.2	%		$	1,031,163			35.8	%		$	1,088,636			35.4	%
Land development			260,158			9.1	%			256,571			9.1	%			241,639			8.5	%			290,243			10.1	%			367,849			12.0	%
Raw land			278,892			9.7	%			263,411			9.4	%			291,112			10.3	%			311,265			10.8	%			328,365			10.7	%
Residential lots			209,850			7.3	%			217,920			7.7	%			222,343			7.9	%			224,901			7.8	%			222,591			7.2	%
Commercial lots			59,044			2.1	%			58,472			2.1	%			60,264			2.1	%			59,691			2.1	%			155,415			5.0	%
Commercial construction and other			1,274,619			44.6	%			1,183,127			42.0	%			1,074,361			38.0	%			959,687			33.4	%			914,436			29.7	%
Net unaccreted discount			(1,349)							(1,551)							(1,728)							(362)							(701)
Total construction loans		$	2,859,281						$	2,814,521						$	2,828,372						$	2,876,588						$	3,076,591

 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2024
	Houston				Dallas				Austin				OK City				Tulsa				Other (T)				Total
Collateral Type
Shopping center/retail	$	344,055			$	256,356			$	57,090			$	15,746			$	13,607			$	339,865			$	1,026,719
Commercial and industrial buildings		140,411				110,911				22,433				35,081				16,347				282,227				607,410
Office buildings		98,017				220,871				88,601				46,841				3,553				83,749				541,632
Medical buildings		75,021				16,087				1,684				42,747				29,340				77,895				242,774
Apartment buildings		93,512				120,066				64,620				12,691				12,966				210,558				514,413
Hotel		110,790				105,085				31,414				11,685				—				188,618				447,592
Other		175,305				53,479				19,687				7,577				6,931				94,800				357,779
Total	$	1,037,111			$	882,855			$	285,529			$	172,368			$	82,744			$	1,277,712			$	3,738,319		(U)

 

Acquired Loans
	Non-PCD Loans												PCD Loans												Total Acquired Loans
	Balance at Acquisition Date				Balance at Sep 30, 2024				Balance at Dec 31, 2024				Balance at Acquisition Date				Balance at Sep 30, 2024				Balance at Dec 31, 2024				Balance at Acquisition Date				Balance at Sep 30, 2024				Balance at Dec 31, 2024
Loan marks:
Acquired banks (V)	$	368,247			$	14,903			$	14,201			$	327,842			$	6,361			$	5,931			$	696,089			$	21,264			$	20,132
Lone Star Bank (W)		20,378				15,709				13,644				4,558				1,913				1,459				24,936				17,622				15,103
Total		388,625				30,612				27,845				332,400				8,274				7,390				721,025				38,886				35,235
Acquired portfolio loan balances:
Acquired banks (V)		13,307,853				1,446,161				1,353,801				1,317,564				413,864				389,794				14,625,417				1,860,025				1,743,595
Lone Star Bank (W)		1,016,128				868,114				735,828				59,109				54,793				50,230				1,075,237				922,907				786,058
Total		14,323,981				2,314,275				2,089,629				1,376,673				468,657				440,024				15,700,654		(X)		2,782,932				2,529,653
Acquired portfolio loan balances less loan marks	$	13,935,356			$	2,283,663			$	2,061,784			$	1,044,273			$	460,383			$	432,634			$	14,979,629			$	2,744,046			$	2,494,418

(T)	Includes other MSA and non-MSA regions.
(U)	Represents a portion of total commercial real estate loans of $5.801 billion as of December 31, 2024.
(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, LegacyTexas Bank and FirstCapital Bank.
(W)	The Merger was completed on April 1, 2024 and resulted in the addition of $1.075 billion in loans with related purchase accounting adjustments of $24.9 million at acquisition date, which were subject to subsequent fair value adjustments.
(X)	Actual principal balances acquired.

  

Prosperity Bancshares, Inc.® Financial Highlights (Unaudited) (Dollars in thousands)
	Three Months Ended																				Year-to-Date
	Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024				Dec 31, 2023				Dec 31, 2024				Dec 31, 2023
Asset Quality
Nonaccrual loans	$	73,647			$	83,969			$	84,175			$	78,475			$	68,688			$	73,647			$	68,688
Accruing loans 90 or more days past due		2,189				20				322				3,035				2,195				2,189				2,195
Total nonperforming loans		75,836				83,989				84,497				81,510				70,883				75,836				70,883
Repossessed assets		4				177				113				97				76				4				76
Other real estate		5,701				5,757				4,960				2,204				1,708				5,701				1,708
Total nonperforming assets	$	81,541			$	89,923			$	89,570			$	83,811			$	72,667			$	81,541			$	72,667
Nonperforming assets:
Commercial and industrial (includes energy)	$	10,080			$	13,642			$	16,340			$	10,199			$	8,957			$	10,080			$	8,957
Construction, land development and other land loans		4,481				4,053				4,895				15,826				17,343				4,481				17,343
1-4 family residential (includes home equity)		44,824				36,660				33,935				30,206				26,096				44,824				26,096
Commercial real estate (includes multi-family residential)		18,861				32,803				31,776				23,720				18,775				18,861				18,775
Agriculture (includes farmland)		3,208				2,686				2,550				3,714				1,460				3,208				1,460
Consumer and other		87				79				74				146				36				87				36
Total	$	81,541			$	89,923			$	89,570			$	83,811			$	72,667			$	81,541			$	72,667
Number of loans/properties		368				346				349				319				292				368				292
Allowance for credit losses on loans	$	351,805			$	354,397			$	359,852			$	330,219			$	332,362			$	351,805			$	332,362
Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	405			$	3,309			$	2,777			$	283			$	16,123			$	6,774			$	16,405
Construction, land development and other land loans		294				378				109				(2)				(5)				779				27
1-4 family residential (includes home equity)		180				409				425				457				20				1,471				(268)
Commercial real estate (includes multi-family residential)		362				258				(381)				(17)				1,590				222				17,116
Agriculture (includes farmland)		5				(116)				214				23				—				126				(84)
Consumer and other		1,346				1,217				1,224				1,399				1,405				5,186				4,795
Total	$	2,592			$	5,455			$	4,368			$	2,143			$	19,133			$	14,558			$	37,991
Asset Quality Ratios
Nonperforming assets to average interest-earning assets		0.23	%			0.25	%			0.25	%			0.24	%			0.21	%			0.23	%			0.21	%
Nonperforming assets to loans and other real estate		0.37	%			0.40	%			0.40	%			0.39	%			0.34	%			0.37	%			0.34	%
Net charge-offs to average loans (annualized)		0.05	%			0.10	%			0.08	%			0.04	%			0.36	%			0.07	%			0.18	%
Allowance for credit losses on loans to total loans		1.59	%			1.58	%			1.61	%			1.55	%			1.57	%			1.59	%			1.57	%
Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans (G)		1.67	%			1.68	%			1.69	%			1.62	%			1.63	%			1.67	%			1.63	%

Prosperity Bancshares, Inc.^®
Notes to Selected Financial Data (Unaudited)
(Dollars and share amounts in thousands, except per share data)

NOTES TO SELECTED FINANCIAL DATA

Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax; return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program loans; the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses and FDIC special assessment. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

		Three Months Ended										Year-to-Date
		Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024		Dec 31, 2023
Reconciliation of diluted earnings per share to diluted earnings per share excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax:
Diluted earnings per share (unadjusted)		$                     1.37		$                     1.34		$                     1.17		$                     1.18		$                     1.02		$                     5.05		$                     4.51
Net income		$               130,076		$               127,282		$                111,602		$                110,426		$                 95,476		$                479,386		$                419,316
Merger related provision for credit losses, net of tax(Y)		—		—		7,162		—		—		7,162		14,647
Merger related expenses, net of tax(Y)		—		50		3,461		—		220		3,511		11,955
FDIC special assessment, net of tax(Y)		—		—		2,807		—		15,736		2,807		15,736
Net gain on sale or write-up of securities, net of tax(Y)		—		(177)		(8,472)		(235)		—		(8,884)		—
Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Y):		$              130,076		$               127,155		$                116,560		$               110,191		$               111,432		$                483,982		$                461,654
Weighted average diluted shares outstanding		95,264		95,261		95,765		93,706		93,715		95,000		92,902
Merger related provision for credit losses, net of tax, per diluted common share(Y)		$                       —		$                       —		$                     0.07		$                       —		$                       —		$                     0.08		$                     0.16
Merger related expenses, net of tax, per diluted common share(Y)		$                       —		$                       —		$                     0.04		$                       —		$                       —		$                     0.04		$                     0.13
FDIC special assessment, net of tax, per diluted common share(Y)		$                       —		$                       —		$                     0.03		$                       —		$                    0.17		$                     0.03		$                     0.17
Net gain on sale or write-up of securities, net of tax, per diluted common share(Y)		$                       —		$                       —		$                    (0.09)		$                       —		$                       —		$                   (0.09)		$                        —
Diluted earnings per share excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax:(Y)		$                     1.37		$                     1.34		$                     1.22		$                     1.18		$                    1.19		$                     5.11		$                     4.97
Reconciliation of return on average assets to return on average assets excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax:
Return on average assets (unadjusted)		1.31 %		1.28 %		1.12 %		1.13 %		0.98 %		1.21 %		1.08 %
Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Y):		$                130,076		$                127,155		$                116,560		$                110,191		$                111,432		$                483,982		$                461,654
Average total assets		$           39,627,399		$           39,889,202		$           39,948,848		$           38,935,530		$           38,815,211		$           39,600,835		$           38,972,957
Return on average assets excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Y)		1.31 %		1.28 %		1.17 %		1.13 %		1.15 %		1.22 %		1.18 %
(Y) Calculated assuming a federal tax rate of 21.0%.
		Three Months Ended										Year-to-Date
		Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024		Dec 31, 2023
Reconciliation of return on average common equity to return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax:
Return on average common equity (unadjusted)		7.00 %		6.93 %		6.10 %		6.20 %		5.39 %		6.56 %		6.03 %
Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Y):		$                130,076		$                127,155		$                116,560		$                110,191		$                 111,432		$                483,982		$                461,654
Average shareholders' equity		$             7,428,665		$             7,347,265		$             7,321,257		$             7,121,252		$             7,085,839		$             7,305,071		$             6,950,790
Return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Y)		7.00 %		6.92 %		6.37 %		6.19 %		6.29 %		6.63 %		6.64 %
Reconciliation of return on average common equity to return on average tangible common equity:
Net income		$                130,076		$                127,282		$                111,602		$                110,426		$                  95,476		$                479,386		$                419,316
Average shareholders' equity		$             7,428,665		$             7,347,265		$             7,321,257		$             7,121,252		$             7,085,839		$             7,305,071		$             6,950,790
Less: Average goodwill and other intangible assets		(3,573,197)		(3,576,630)		(3,542,427)		(3,458,659)		(3,462,210)		(3,537,930)		(3,385,984)
Average tangible shareholders' equity		$             3,855,468		$             3,770,635		$             3,778,830		$             3,662,593		$             3,623,629		$             3,767,141		$             3,564,806
Return on average tangible common equity (F)		13.50 %		13.50 %		11.81 %		12.06 %		10.54 %		12.73 %		11.76 %
Reconciliation of return on average common equity to return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:
Net income excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Y):		$                130,076		$                127,155		$                116,560		$                110,191		$                111,432		$                483,982		$                461,654
Average shareholders' equity		$             7,428,665		$             7,347,265		$             7,321,257		$             7,121,252		$             7,085,839		$             7,305,071		$             6,950,790
Less: Average goodwill and other intangible assets		(3,573,197)		(3,576,630)		(3,542,427)		(3,458,659)		(3,462,210)		(3,537,930)		(3,385,984)
Average tangible shareholders' equity		$             3,855,468		$             3,770,635		$             3,778,830		$             3,662,593		$             3,623,629		$             3,767,141		$             3,564,806
Return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Y)		13.50 %		13.49 %		12.34 %		12.03 %		12.30 %		12.85 %		12.95 %
Reconciliation of book value per share to tangible book value per share:
Shareholders' equity		$             7,438,495		$             7,361,249		$             7,283,444		$             7,104,544		$             7,079,330		$             7,438,495		$             7,079,330
Less: Goodwill and other intangible assets		(3,569,176)		(3,574,566)		(3,578,431)		(3,457,159)		(3,460,080)		(3,569,176)		(3,460,080)
Tangible shareholders' equity		$             3,869,319		$             3,786,683		$             3,705,013		$             3,647,385		$             3,619,250		$             3,869,319		$             3,619,250
Period end shares outstanding		95,275		95,261		95,262		93,525		93,722		95,275		93,722
Tangible book value per share		$                    40.61		$                    39.75		$                    38.89		$                    39.00		$                    38.62		$                    40.61		$                    38.62
Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:
Tangible shareholders' equity		$             3,869,319		$             3,786,683		$             3,705,013		$             3,647,385		$             3,619,250		$             3,869,319		$             3,619,250
Total assets		$           39,566,738		$           40,115,320		$           39,762,294		$           38,756,520		$           38,547,877		$           39,566,738		$           38,547,877
Less: Goodwill and other intangible assets		(3,569,176)		(3,574,566)		(3,578,431)		(3,457,159)		(3,460,080)		(3,569,176)		(3,460,080)
Tangible assets		$           35,997,562		$           36,540,754		$           36,183,863		$           35,299,361		$           35,087,797		$           35,997,562		$           35,087,797
Period end tangible equity to period end tangible assets ratio		10.75 %		10.36 %		10.24 %		10.33 %		10.31 %		10.75 %		10.31 %
		Three Months Ended										Year-to-Date
		Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024		Dec 31, 2023
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		$                351,805		$                354,397		$                359,852		$                330,219		$                332,362		$                351,805		$                332,362
Total loans		$           22,149,209		$           22,380,852		$           22,320,815		$           21,265,247		$           21,180,538		$           22,149,209		$           21,180,538
Less: Warehouse Purchase Program loans		(1,080,903)		(1,228,706)		(1,081,403)		(864,924)		(822,245)		(1,080,903)		(822,245)
Total loans less Warehouse Purchase Program		$           21,068,306		$           21,152,146		$           21,239,412		$           20,400,323		$           20,358,293		$           21,068,306		$           20,358,293
Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program		1.67 %		1.68 %		1.69 %		1.62 %		1.63 %		1.67 %		1.63 %
Reconciliation of efficiency ratio to efficiency ratio excluding net gains and losses on the sale, write-down  or write-up of assets and securities:
Noninterest expense		$                141,545		$                140,338		$                152,842		$                135,848		$                152,171		$                570,573		$                556,698
Net interest income		$                267,774		$                261,691		$                258,786		$                238,244		$                236,983		$             1,026,495		$                956,433
Noninterest income		39,837		41,099		46,003		38,870		36,568		165,809		153,265
Less: net (loss) gain on sale or write-down of assets		584		3,178		(903)		(35)		(84)		2,824		1,986
Less: net gain on sale or write-up of securities		—		224		10,723		298		—		11,245		—
Noninterest income excluding net gains and losses on the sale, write-down or write-up of assets and securities		39,253		37,697		36,183		38,607		36,652		151,740		151,279
Total income excluding net gains and losses on the sale, write-down or write-up of assets and securities		$                307,027		$                299,388		$                294,969		$                276,851		$                273,635		$             1,178,235		$             1,107,712
Efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities		46.10 %		46.87 %		51.82 %		49.07 %		55.61 %		48.43 %		50.26 %
Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses and FDIC special assessment:
Noninterest expense		$                141,545		$                140,338		$                152,842		$                135,848		$                152,171		$                570,573		$                556,698
Less: merger related expenses		—		63		4,381		—		278		4,444		15,133
Less: FDIC special assessment		—		—		3,554		—		19,919		3,554		19,919
Noninterest expense excluding merger related expenses and FDIC special assessment		$                141,545		$                140,275		$                144,907		$                135,848		$                131,974		$                562,575		$                521,646
Net interest income		$                267,774		$                261,691		$                258,786		$                238,244		$                236,983		$             1,026,495		$                956,433
Noninterest income		39,837		41,099		46,003		38,870		36,568		165,809		153,265
Less: net (loss) gain on sale or write down of assets		584		3,178		(903)		(35)		(84)		2,824		1,986
Less: net gain on sale or write-up of securities		—		224		10,723		298		—		11,245		—
Noninterest income excluding net gains and losses on the sale, write-down or write-up of assets and securities		39,253		37,697		36,183		38,607		36,652		151,740		151,279
Total income excluding net gains and losses on the sale, write-down or write-up of assets and securities		$                307,027		$                299,388		$                294,969		$                276,851		$                273,635		$             1,178,235		$             1,107,712
Efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets and securities, merger related expenses and FDIC special assessment		46.10 %		46.85 %		49.13 %		49.07 %		48.23 %		47.75 %		47.09 %

 

 

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SOURCE Prosperity Bancshares, Inc.

FAQ

What was Prosperity Bancshares' (PB) earnings per share in Q4 2024?

Prosperity Bancshares reported earnings per share (diluted) of $1.37 in Q4 2024, representing a 34.3% increase from $1.02 in Q4 2023.

How much did PB's net interest margin improve in Q4 2024?

The net interest margin increased by 30 basis points to 3.05% in Q4 2024 compared to 2.75% in Q4 2023.

What is the size of Prosperity Bancshares' 2025 stock repurchase program?

The 2025 stock repurchase program covers up to 5% of outstanding common stock, approximately 4.8 million shares, over a one-year period expiring January 21, 2026.

How did PB's nonperforming assets perform in Q4 2024?

Nonperforming assets were $81.5 million or 0.23% of quarterly average interest-earning assets in Q4 2024, decreasing $8.4 million during the quarter.

What was the impact of the Lone Star merger on PB's operations?

The Lone Star merger, completed April 1, 2024, added 5 full-service banking offices in West Texas and contributed $1.06 billion in loans and $1.09 billion in deposits as of December 31, 2024.