PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2026 EARNINGS

• Completed the merger of Stellar Bancorp, Inc. into Prosperity Bancshares on July 1, 2026
• Board approved increase in dividend of 6.67%, or $0.04, to $0.64 per share for fourth quarter 2026, representing the 23rd consecutive annual dividend increase, with a compound annual growth rate of 10.4%
• Third quarter net interest margin increased 26 basis points to 3.73% compared to second quarter 2026 and 49 basis points compared to third quarter 2025
• Net income of $141.5 million and diluted earnings per share of $1.18 for third quarter 2026
• Net income of $200.8 million⁽¹⁾ and diluted earnings per share of $1.67⁽¹⁾ excluding merger related expenses and other non-recurring items, for third quarter 2026
• Loans increased $7.03 billion or 28.1% and deposits increased $8.63 billion or 26.5% during third quarter 2026
• Noninterest-bearing deposits of $13.8 billion, representing 33.6% of total deposits
• Allowance for credit losses on loans and on off-balance sheet credit exposure of $629.6 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans, of 1.91%⁽¹⁾
• Nonperforming assets remain low at 0.41% of third quarter average interest-earning assets
• Repurchased 457 thousand shares of common stock during third quarter 2026, and 1.5 million shares during 2026

HOUSTON, Oct. 28, 2026. /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE: PB) ("Prosperity Bancshares"), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of $141.5 million for the quarter ended September 30, 2026, compared with $137.6 million for the same period in 2025. Net income per diluted common share was $1.18 for the quarter ended September 30, 2026, compared with $1.45 for the same period in 2025. On January 1, 2026, American Bank Holding Corporation ("American") merged into Prosperity Bancshares, and American Bank, N.A. ("American Bank") merged into Prosperity Bank (collectively, the "American Merger"). On February 1, 2026, Southwest Bancshares, Inc. ("Southwest") merged into Prosperity Bancshares, and Texas Partners Bank ("Texas Partners") merged into Prosperity Bank (collectively, the "Southwest Merger"). On July 1, 2026, Stellar Bancorp, Inc. ("Stellar") merged into Prosperity Bancshares, and Stellar Bank ("Stellar Bank") merged into Prosperity Bank (collectively, the "Stellar Merger", and together with the American Merger and the Southwest Merger, the "Mergers"). During the third quarter of 2026, Prosperity incurred merger related expenses of $69.7 million, or $0.46⁽¹⁾ per diluted common share and an out of state tax settlement of $5.0 million, or $0.04⁽¹⁾ per diluted common share, partially offset by a gain of $927 thousand, or $0.01⁽¹⁾ per diluted common share as a result of the exchange and conversion of Visa Inc. ("Visa") Class B-2 stock. Excluding the merger related expenses, net of tax, the tax settlement, and the net gain, net of tax, net income was $200.8⁽¹⁾ million and net income per diluted common share was $1.67⁽¹⁾ for the third quarter of 2026. The annualized return on third quarter average assets was 1.06%. Nonperforming assets remained low at 0.41% of third quarter average interest-earning assets.

"I am pleased to announce that the Board of Directors approved increasing the fourth quarter 2026 dividend to $0.64 per share from the $0.60 per share that was paid in the prior four quarters, an increase of 6.7%.  The increase reflects the continued confidence the Board has in our company and our markets. The compound annual growth rate in dividends declared from 2003 to 2026 was 10.4%. 

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," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We are extremely proud of this year's growth and would like to highlight the following results. Prosperity had $54.1 billion in total assets at September 30, 2026, an increase of $15.8 billion or 41.1% compared with $38.3 billion at September 30, 2025.  Loans were $32.1 billion at September 30, 2026, an increase of $10.0 billion or 45.5% compared with $22.0 billion at September 30, 2025, and deposits were $41.2 billion at September 30, 2026, an increase of $13.4 billion or 48.4% compared with $27.8 billion at September 30, 2025," stated Zalman.

"These increases primarily reflect our three recent mergers. We are highlighting their magnitude because they demonstrate the expertise of our associates, who have extensive experience executing acquisitions and integrating the acquired institutions. Our greater scale strengthens our competitiveness, improves efficiency, and enables technology investments that would be difficult for a smaller bank," continued Zalman.

"We remain focused on completing the operational integration of Texas Partners Bank and Stellar Bank and delivering the outcomes we believe are possible. We are extremely excited about our future as a larger bank, including the potential growth in earnings," added Zalman.

"The Texas and Oklahoma economies continue to expand in late 2026 despite labor supply constraints and headwinds from inflation and energy prices. Texas has a growing population of 31.7 million and continues to attract people and businesses with its business-friendly state government and lack of a state income tax. Major construction projects across Texas include new data centers, factories producing various products from chips to new drugs, and SpaceX and Tesla projects. Both states remain attractive places to live and do business," stated Zalman.

"I want to thank our customers, associates, directors and shareholders for their hard work, loyalty and support, which have been essential to our success. Our strong fundamentals and resolve position us to continue building this great bank," concluded Zalman.

Results of Operations for the Three Months Ended September 30, 2026

For the three months ended September 30, 2026, net income was $141.5 million⁽²⁾ or $1.18 per diluted common share compared with $137.6 million⁽³⁾or $1.45 per diluted common share for the same period in 2025. Net income and net income per diluted common share for the third quarter of 2026 were primarily impacted by an increase in net interest income due to the Mergers, partially offset by an increase in merger related expenses, an increase in noninterest expenses related to the Mergers and an increase in provision for income taxes due to an increase in nondeductible merger related expenses and an out of state tax settlement. The $5.0 million tax settlement resulted in a higher than normal effective tax rate of 24.4%. On a linked quarter basis, net income was $141.5 million⁽²⁾ or $1.18 per diluted common share for the three months ended September 30, 2026, compared with $168.6 million⁽⁴⁾ or $1.67 for the three months ended June 30, 2026. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2026, were 1.06%, 5.77% and 11.14%⁽¹⁾, respectively.

Excluding the merger related expenses, net of tax, the out of state tax settlement, and the gain on the Visa Class B-2 stock exchange, net of tax, net income was $200.8⁽¹⁾million and earnings per diluted common share was $1.67⁽¹⁾ for the three months ended September 30, 2026, and annualized returns on average assets, average common equity and average tangible common equity were 1.50%⁽¹⁾, 8.19%⁽¹⁾ and 15.81%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 62.05%⁽¹⁾ for the three months ended September 30, 2026, and excluding merger related expenses, the efficiency ratio was 48.03%⁽¹⁾.

Net interest income before provision for credit losses was $443.0 million for the three months ended September 30, 2026, compared with $273.4 million for the same period in 2025, an increase of $169.5 million or 62.0%. The net interest margin on a tax equivalent basis was 3.73% for the three months ended September 30, 2026, compared with 3.24% for the same period in 2025. The changes to both measures were primarily due to the impact of the Mergers, the repricing of assets, and a decrease in the average balance and average rate on other borrowings. Net interest income before provision for credit losses increased $112.4 million or 34.0% to $443.0 million for the three months ended September 30, 2026, compared with $330.6 million for the three months ended June 30, 2026. The net interest margin on a tax equivalent basis was 3.73% for the three months ended September 30, 2026, compared with 3.47% for the three months ended June 30, 2026. The increases in both measures were primarily due to the Mergers.

Noninterest income was $52.7 million for the three months ended September 30, 2026, compared with $41.2 million for the same period in 2025, an increase of $11.5 million or 27.8%. The change was primarily due to the Mergers, partially offset by a net loss on the sale and write-down of assets. Noninterest income was $52.7 million for the three months ended September 30, 2026, compared with $60.7 million for the three months ended June 30, 2026, a decrease of $8.0 million or 13.2%. The change was primarily due to lower net gain on sale or write-up of securities and an increase in net loss on sale or write-down of assets.

Noninterest expense was $308.6 million for the three months ended September 30, 2026, compared with $138.6 million for the same period in 2025, an increase of $170.0 million. The change was primarily due to increases in merger related expenses, salaries and benefits and additional expenses related to the Mergers. Noninterest expense was $308.6 million for the three months ended September 30, 2026, compared with $176.2 million for the three months ended June 30, 2026, an increase of $132.4 million, which was primarily due to an increase in merger related expenses and an increase in additional expenses related to three months of Stellar operations.

Results of Operations for the Nine Months Ended September 30, 2026

For the nine months ended September 30, 2026, net income was $426.3 million⁽⁵⁾ compared with $402.9 million⁽⁶⁾ for the same period in 2025, an increase of $23.4 million or 5.8%. Net income per diluted common share was $3.99 for the nine months ended September 30, 2026, compared with $4.23 for the same period in 2025. Net income and net income per diluted common share for the nine months ended September 30, 2026, were impacted by the Mergers, merger related expenses of $113.0 million, a gain on the Visa Class B-2 stock exchange net of investment securities sales of $9.2 million and an increase in provision for income taxes due to an increase in nondeductible merger related expenses and an out of state tax settlement. Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2026, were 1.22%, 6.49% and 12.33%⁽¹⁾, respectively.

Excluding the merger related expenses, net of tax, the out of state tax settlement, and gain on the Visa Class B-2 stock exchange net of investment securities sales, net of tax, net income was $513.3⁽¹⁾ million and earnings per diluted common share was $4.81⁽¹⁾ for the nine months ended September 30, 2026, and annualized returns on average assets, average common equity and average tangible common equity were 1.47%⁽¹⁾, 7.82⁽¹⁾ and 14.84⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write-down of assets and securities) was 56.27%⁽¹⁾ for the nine months ended September 30, 2026; and excluding merger related expenses, the efficiency ratio was 47.21%⁽¹⁾.

Net interest income before provision for credit losses for the nine months ended September 30, 2026, was $1.095 billion compared with $806.5 million for the same period in 2025, an increase of $288.1 million or 35.7%. The net interest margin on a tax equivalent basis for the nine months ended September 30, 2026, was 3.58% compared with 3.19% for the same period in 2025. The changes to both measures were primarily due to the repricing of assets, the impact of the Mergers and a decrease in the average balance and average rate on other borrowings.

Noninterest income was $159.9 million for the nine months ended September 30, 2026, compared with $125.5 million for the same period in 2025, an increase of $34.4 million or 27.4%, primarily due to the Mergers and a gain on Visa Class B-2 stock exchange net of investment securities sales of $9.2 million.

Noninterest expense was $702.1 million for the nine months ended September 30, 2026, compared with $417.5 million for the same period in 2025, an increase of $284.6 million, primarily due to an increase in merger related expenses of $113.0 million, an increase in salaries and benefits and an increase in additional expenses related to nine months of American operations, eight months of Southwest operations and three months of Stellar operations.

Balance Sheet Information

Prosperity had $54.101 billion in total assets at September 30, 2026, an increase of $15.771 billion or 41.1%, compared with $38.330 billion at September 30, 2025, primarily due to the Mergers. Linked quarter total assets increased by $10.229 billion or 23.3% compared with $43.873 billion at June 30, 2026, primarily due to the Stellar Merger.

Loans were $32.060 billion at September 30, 2026, an increase of $10.033 billion or 45.5% from $22.028 billion at September 30, 2025, primarily due to the Mergers. Linked quarter loans increased $7.032 billion or 28.1% from $25.028 billion at June 30, 2026, primarily due to the Stellar Merger. Loans, excluding Warehouse Purchase Program loans, were $30.929 billion at September 30, 2026, compared with $20.750 billion at September 30, 2025, an increase of $10.179 billion or 49.1%, and compared with $23.738 billion at June 30, 2026, an increase of $7.191 billion or 30.3%.

Deposits were $41.231 billion at September 30, 2026, an increase of $13.449 billion or 48.4% from $27.782 billion at September 30, 2025, primarily due to the Mergers. Linked quarter deposits increased $8.631 billion or 26.5% from $32.600 billion at June 30, 2026, primarily due to the Stellar Merger.

Asset Quality

Nonperforming assets totaled $193.9 million or 0.41% of quarterly average interest-earning assets at September 30, 2026, compared with $119.6 million or 0.36% of quarterly average interest-earning assets at September 30, 2025 and $130.6 million or 0.34% of quarterly average interest-earning assets at June 30, 2026. The amounts at September 30, 2026 and June 30, 2026 were impacted by nonperforming assets acquired in the Mergers.

The allowance for credit losses on loans and off-balance sheet credit exposures was $629.6 million at September 30, 2026, compared with $377.3 million at September 30, 2025, and $420.5 million at June 30, 2026. There was no provision for credit losses for the three months and nine months ended September 30, 2026 and 2025.

The allowance for credit losses on loans was $592.0 million or 1.85% of total loans at September 30, 2026, compared with $339.6 million or 1.54% of total loans at September 30, 2025, and $382.8 million or 1.53% of total loans at June 30, 2026. The allowance for credit losses on loans increased during the nine months ended September 30, 2026 due to the Mergers, of which $47.5 million was attributable to the American Merger, $45.1 million was attributable to the Southwest Merger, and $213.5 million was attributable to the Stellar Merger. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.91%⁽¹⁾ at September 30, 2026, compared with 1.64%⁽¹⁾ at September 30, 2025, and 1.61%⁽¹⁾ at June 30, 2026.

Net charge-offs were $4.4 million for the three months ended September 30, 2026, compared with net charge-offs of $6.5 million for the three months ended September 30, 2025, and $2.2 million for the three months ended June 30, 2026. Net charge-offs for the three months ended September 30, 2026, included $1.7 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Additionally, due to the Stellar Merger, reserves increased by Day One accounting for PCD loans of $146.1 million and Day One accounting for purchased seasoned loans ("PSLs") of $67.4 million. For the three months ended September 30, 2026, $7.6 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Net charge-offs were $47.9 million for the nine months ended September 30, 2026, compared with net charge-offs of $12.2 million for the nine months ended September 30, 2025. Net charge-offs for the nine months ended September 30, 2026, included a $37.7 million increase in net charge-offs for commercial and industrial loans. Additionally, due to the Mergers, reserves increased by Day One accounting for PCD loans of $199.5 million and Day One accounting for PSLs of $106.7 million. Further, $20.1 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Visa Class B-2 Stock Exchange

During 2026, Prosperity tendered all of its shares of Visa Class B-2 common stock in exchange for a combination of Visa Class B-3 common stock and Visa Class C common stock, pursuant to the terms and subject to the conditions of Visa's public exchange offer, which expired on May 8, 2026. During the nine months ended September 30, 2026, Prosperity recorded a gain of $13.2 million based on the conversion privilege of the Class C common stock, the closing price of Visa Class A common stock and the subsequent sale. In the exchange, Prosperity received 24,246 shares of Class B-3 stock, recorded at zero cost basis, and 9,137 shares of Class C common stock and has subsequently sold all shares of Class C stock. 

Dividend

Prosperity Bancshares declared a fourth quarter 2026 cash dividend of $0.64 per share to be paid on January 4, 2027, to all shareholders of record as of December 15, 2026, an increase of $0.04 per share, or 6.67%, from the prior quarter.

Stock Repurchase Program

On January 26, 2026, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.87 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 26, 2027, at the discretion of management. Under its 2026 stock repurchase program, Prosperity Bancshares repurchased approximately 457 thousand shares of its common stock at an average weighted price of $69.62 per share for a total of $31.8 million during the three months ended September 30, 2026, and approximately 1.5 million shares of its common stock at an average weighted price of $68.63 per share for a total of $102.6 million during the nine months ended September 30, 2026.

Acquisition of Stellar Bancorp, Inc.

On July 1, 2026, Prosperity Bancshares completed the acquisition of Stellar and its wholly owned subsidiary Stellar Bank, headquartered in Houston, Texas. Stellar Bank operated 52 banking offices including its main office in Houston and banking offices in the Houston, Beaumont and East Texas areas and in Dallas, Texas. As of June 30, 2026, Stellar, on a consolidated basis, reported total assets of $10.413 billion, total loans of $7.510 billion and total deposits of $8.716 billion.

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 19,371,499 shares of its common stock and paid approximately $578.66 million in cash for all outstanding shares of Stellar common stock. This resulted in goodwill of $898.2 million as of September 30, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $184.0 million of core deposit intangibles as of September 30, 2026.

Acquisition of Southwest Bancshares, Inc.

On February 1, 2026, Prosperity completed the acquisition of Southwest and its wholly owned subsidiary Texas Partners, headquartered in San Antonio, Texas. Texas Partners operated 11 banking offices in Central Texas including its main office in San Antonio, and banking offices in the San Antonio area, Austin and the Hill Country.

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,094,974 shares of its common stock for all outstanding shares of Southwest common stock. This resulted in goodwill of $141.5 million as of September 30, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $33.8 million of core deposit intangibles as of September 30, 2026.

Acquisition of American Bank Holding Corporation

On January 1, 2026, Prosperity completed the acquisition of American and its wholly owned subsidiary American Bank, headquartered in Corpus Christi, Texas. American Bank operated 18 banking offices and two loan production offices in South and Central Texas including its main office in Corpus Christi, and banking offices in San Antonio, Austin, Victoria and the greater Corpus Christi area including Port Aransas and Rockport and a loan production office in Houston, Texas.

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,439,938 shares of its common stock for all outstanding shares of American common stock. This resulted in goodwill of $185.7 million as of September 30, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $31.1 million of core deposit intangibles as of September 30, 2026. During the third quarter of 2026, Prosperity completed the operational integration of American Bank.

Conference Call

Prosperity's management team will host a conference call on Wednesday, October 28, 2026, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2026 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 0372441.

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 expenses, net of tax, FDIC special assessment, net of tax, net gain on the sale or write-up of securities, net of tax, and the out of state tax settlement; 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 and securities, write-down or write-up of assets; 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, provide a more complete understanding of factors and trends affecting Prosperity's business and allow 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, 2026, Prosperity Bancshares, Inc.^® is a $54.101 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 352 full-service banking locations: 62 in the Houston area, including The Woodlands; 40 in the South Texas area including Corpus Christi and Victoria; 60 in the Dallas/Fort Worth area; 20 in the East Texas area; 26 in the Central Texas area including Austin; 7 in the San Antonio area; 45 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; 8 in the Tulsa, Oklahoma area; 11 in the Central Texas area and San Antonio area doing business as Texas Partners Bank; and 52 in the Houston and Dallas areas doing business as Stellar Bank.

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; changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs; 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, 2025, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

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 expenses, net of tax, FDIC special assessment, net of tax, net gain on sale or write-up of securities, net of tax, and the out of state tax settlement; 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. 

 

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