PROSPERITY BANCSHARES, INC.®

REPORTS FIRST QUARTER

2021 EARNINGS

•

First quarter earnings per share (diluted) of $1.44, an increase of 3.6% compared to the first quarter 2020

•

First quarter net income of $133.3 million

•

Deposits increased $1.403 billion or 5.1% (20.5% annualized) during the first quarter 2021

•

Allowance for credit losses to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.89%(1)

•

Nonperforming assets remain low at 0.15% of first quarter average interest-earning assets

•

Return (annualized) on first quarter average assets of 1.54%

•

Returns (annualized) on first quarter average common equity of 8.60% and average tangible common equity of 18.43%(1)

•

First quarter efficiency ratio of 41.25%(1)

•

Prosperity Bancshares was ranked Number 2 in Forbes' 2021 America's Best Banks

HOUSTON, April 28, 2021. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, 'Prosperity'), reported net income for the quarter ended March 31, 2021 of $133.3 million compared with $130.8 million for the same period in 2020. Net income per diluted common share was $1.44 compared with $1.39 for the same period in 2020 and the annualized return on first quarter average assets was 1.54%. Additionally, deposits increased $1.403 billion or 5.1% (20.5% annualized) during the first quarter 2021 and nonperforming assets remain low at 0.15% of first quarter average interest-earning assets.

'With the hard work of our entire team, the combination of Prosperity and LegacyTexas has continued to bear fruit, as reflected in our positive results for the first quarter of 2021,' said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

'Prosperity Bank was ranked as the number 2 Best Bank in America for 2021 and in the Top 10 of Forbes' America's Best Banks since 2010. I want to congratulate and thank all of our customers, associates, directors and shareholders for helping us achieve this great honor,' continued Zalman.

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(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.

Page 1 of 17

'Texas and Oklahoma both have bright futures. According to the Dallas Federal Reserve, Texas now has the fastest growing population in the nation. Further, the Dallas Federal Reserve is projecting over 6% job growth, meaning over 700,000 new jobs, in Texas for 2021 and Texas is expected to outperform most of the other states for the next three years. Companies continue to move to Texas, with HP and Oracle announcing headquarter moves and other companies, such as Tesla, announcing a major expansion into Texas. Oklahoma is also projected to have population growth for 2021 and has seen expansion of many of the large businesses operating in the state, including Boeing, American Airlines, Costco and Amazon. Consumer spending in Oklahoma is above early 2020 levels and retail job additions and new housing permits are higher than the average U.S. rate,' added Zalman.

'We are carefully monitoring office building, hospitality and oil and gas loans, but continue to participate in these areas with experienced borrowers that can withstand the volatility of their industries,' stated Zalman.

'I want to thank all our associates for helping create the success we have had. We have a strong team and a deep bench at Prosperity, and we will continue to work hard to improve everyone's quality of life and shareholder value,' concluded Zalman.

Results of Operations for the Three Months Ended March 31, 2021

Net income was $133.3 million(2) for the three months ended March 31, 2021 compared with $130.8 million(3) for the same period in 2020, an increase of $2.5 million or 1.9%. Net income per diluted common share was $1.44 for the three months ended March 31, 2021 compared with $1.39 for the same period in 2020, an increase of 3.6%. On a linked quarter basis, net income decreased $3.8 million or 2.8% to $133.3 million(2) compared with $137.1 million(4) for the three months ended December 31, 2020. Net income per diluted common share was $1.44 for the three months ended March 31, 2021 compared with $1.48 for the three months ended December 31, 2020, a decrease of 2.7%. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2021 were 1.54%, 8.60% and 18.43%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 41.25%(1) for the three months ended March 31, 2021.

Net interest income before provision for credit losses for the three months ended March 31, 2021 was $254.6 million compared with $256.0 million for the same period in 2020, a decrease of $1.4 million or 0.6%. The decrease was primarily due to a decrease in the average rate on interest-earning assets and a decrease in loan discount accretion of $12.1 million, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $254.6 million compared with $257.6 million for the three months ended December 31, 2020, a decrease of $3.1 million or 1.2%. The decrease was primarily due to a decrease in the average loan balance, partially offset by a decrease in the average rate on interest-bearing liabilities and an increase in average investment securities balance.

The net interest margin on a tax equivalent basis was 3.41% for the three months ended March 31, 2021 compared with 3.81% for the same period in 2020. The change was primarily due to an increase in lower yielding Warehouse Purchase Program and Paycheck Protection Program ('PPP') loans, a $12.1 million decrease in loan discount accretion, higher net premium amortization on securities and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, the net interest margin on a tax equivalent basis was 3.41% for the three months ended March 31, 2021 compared with 3.49% for the three months ended December 31, 2020. This change was primarily due to a higher net premium amortization on securities and higher cash balances due to excess liquidity.

Noninterest income was $34.0 million for the three months ended March 31, 2021 compared with $34.4 million for the same period in 2020. On a linked quarter basis, noninterest income decreased $2.5 million or 6.9% to $34.0 million compared with $36.5 million for the three months ended December 31, 2020. This decrease was primarily due to decreases in nonsufficient funds ('NSF') fees and other noninterest income.

Noninterest expense was $119.1 million for the three months ended March 31, 2021 compared with $124.7 million for the same period in 2020, a decrease of $5.7 million or 4.5%, primarily due to decreases in data processing, other noninterest expenses and net occupancy and equipment, partially offset by an increase in salaries and benefits. On a linked quarter basis, noninterest expense decreased $1.1 million or 0.9% to $119.1 million compared with $120.2 million for the three months ended December 31, 2020. This decrease was primarily due to a decrease in other noninterest expense and a net gain on sale of other real estate, partially offset by an increase in salaries and benefits.

______________

(2) Includes purchase accounting adjustments of $13.2 million, net of tax, primarily comprised of loan discount accretion of $16.3 million for the three months ended March 31, 2021.

(3) Includes purchase accounting adjustments of $24.1 million, net of tax, primarily comprised of loan discount accretion of $28.5 million, and merger related expenses of $544 thousand for the three months ended March 31, 2020.

(4) Includes purchase accounting adjustments of $13.3 million, net of tax, primarily comprised of loan discount accretion of $16.1 million for the three months ended December 31, 2020.

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Balance Sheet Information

At March 31, 2021, Prosperity had $35.558 billion in total assets, an increase of $3.815 billion or 12.0% compared with $31.743 billion at March 31, 2020.

Loans at March 31, 2021 were $19.639 billion, an increase of $511.7 million or 2.7%, compared with $19.127 billion at March 31, 2020, primarily due to an increase in Warehouse Purchase Program loans. Linked quarter loans decreased $608.1 million or 3.0% from $20.247 billion at December 31, 2020, primarily due to a decrease in Warehouse Purchase Program loans. At March 31, 2021, Prosperity had $1.139 billion of PPP loans.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At March 31, 2021, oil and gas loans totaled $503.9 million (net of discount and excluding PPP loans totaling $142.6 million) or 2.6% of total loans, of which $289.4 million were production loans and $214.5 million were servicing loans, compared with total oil and gas loans of $718.7 million (net of discount) or 3.8% of total loans at March 31, 2020, of which $435.1 million were production loans and $283.6 million were servicing loans. In addition, as of March 31, 2021, Prosperity had total unfunded commitments to oil and gas companies of $248.1 million compared with total unfunded commitments to oil and gas companies of $389.5 million as of March 31, 2020. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Additionally, Prosperity extends credit to hotels and restaurants. At March 31, 2021, loans to hotels totaled $401.2 million (excluding PPP loans totaling $13.1 million) or 2.0% of total loans, and loans to restaurants totaled $208.7 million (excluding PPP loans totaling $125.2 million) or 1.1% of total loans.

Deposits at March 31, 2021 were $28.763 billion, an increase of $4.937 billion or 20.7%, compared with $23.826 billion at March 31, 2020. Linked quarter deposits increased $1.403 billion or 5.1% (20.5% annualized) from $27.360 billion at December 31, 2020.

Asset Quality

Nonperforming assets totaled $44.2 million or 0.15% of quarterly average interest-earning assets at March 31, 2021, compared with $67.2 million or 0.25% of quarterly average interest-earning assets at March 31, 2020, and $59.6 million or 0.20% of quarterly average interest-earning assets at December 31, 2020.

The allowance for credit losses on loans was $307.2 million or 1.56% of total loans at March 31, 2021 compared to $316.1 million or 1.56% of total loans at December 31, 2020 and $327.2 million or 1.71% of total loans at March 31, 2020. The allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and PPP loans, was 1.89%(1) at March 31, 2021 compared with 1.92%(1) at December 31, 2020 and 1.88%(1) at March 31, 2020.

There was no provision for credit losses for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.

Net charge-offs were $8.9 million for the three months ended March 31, 2021 compared with net charge-offs of $801 thousand for the three months ended March 31, 2020 and net charge-offs of $7.6 million for the three months ended December 31, 2020. Net charge-offs for the first quarter of 2021 included $7.1 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Further, an additional $4.2 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Dividend

Prosperity Bancshares declared a second quarter cash dividend of $0.49 per share to be paid on July 1, 2021 to all shareholders of record as of June 15, 2021.

COVID-19 Pandemic

In December 2019, a novel strain of coronavirus disease ('COVID-19') was first reported in Wuhan, Hubei Province, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. On March 13, 2020, the U.S. President announced a national emergency relating to the pandemic, which has since been extended. On April 5, 2021, the Governor of Texas further extended the proclamation certifying that COVID-19 poses an imminent threat of disaster in the state and declaring a state of disaster for all counties in Texas while lifting restrictions on all businesses and activities in the state. On April 11, 2021, the Governor of Oklahoma further extended the executive order that declared an emergency caused by the impending threat of COVID-19 to the people of Oklahoma while lifting restrictions on all businesses and activities in the state. Prosperity Bank (the 'Bank') continues to monitor the latest developments regarding COVID-19. The COVID-19 pandemic has resulted in significant economic uncertainties

Page 3 of 17

that have had, and could continue to have, an adverse impact on Prosperity's operating income, financial condition and cash flows. The extent to which the COVID-19 pandemic will impactProsperity'soperations and financial results during 2021 cannot be reasonably or reliably estimated at this time.

The health and safety of the Bank's associates, customers, and communities are of utmost importance; and Prosperity has taken additional measures in an effort to ensure this safety, including restricting nonessential employee travel, expanding remote access availability, distancing work stations, professional cleaning of its facilities, and signs and distancing reminders for customers in the banking centers. Further, Prosperity remains committed to providing uninterrupted and reliable banking service and has business continuity plans and protocols in place to ensure critical operations are able to continue without disruption.

In response to the COVID-19 pandemic, on March 27, 2020 the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (the 'CARES Act') into law. The CARES Act provides assistance for American workers, families and small businesses. The Paycheck Protection Program, established by the CARES Act and implemented by the Small Business Administration ('SBA') with support from the Department of the Treasury, provides small businesses with funds to pay payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities and are 100% guaranteed by the SBA. On June 5, 2020, the President signed the Paycheck Protection Program Flexibility Act of 2020 ('PPP Flexibility Act'), which modified the covered expense period from eight weeks to 24 weeks, extended the maturity date of the loans out to five years and gave greater flexibility to employers having difficulty hiring workers. PPP loans originated prior to June 5, 2020, have a two-year term and earn interest at 1%. PPP loans originated on and after June 5, 2020, have a minimum five-year term, which can be extended for up to five additional years if the lender and borrower both agree. On December 27, 2020, the Consolidated Appropriations Act of 2021 ('CAA') was signed into law, which extended certain provisions of the CARES Act, provided additional funding and contained new relief provisions. The CAA extended the PPP application period to March 31, 2021 and permits eligible companies to obtain a second PPP loan ('second draw') under terms specified in the CAA, with a maximum amount of $2.0 million and limit of one second draw loan. Second draw PPP borrowers are eligible for loan forgiveness on the same terms as the first draw PPP borrowers. Lenders that were permitted to approve first draw PPP loans are permitted to approve second draw loans. Additionally, the Bank is entitled to a per loan processing fee based on a tiered schedule ranging from 5% to 1% of the loan balance for the first draw PPP loans and the CAA established pre-determined fees for processing and servicing the second draw PPP loans. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which added an additional $7.25 billion in PPP funding. On March 30, 2021, the PPP Extension Act of 2021 was signed into law, which extended the PPP application filing deadline from March 31, 2021 to May 31, 2021 and extended the authorization of loans to June 30, 2021. Since the implementation of the PPP in 2020, Prosperity has obtained SBA approvals on approximately 18,500 loans totaling $1.980 billion and, as of March 31, 2021, had an outstanding balance of 9,621 loans totaling $1.139 billion after remittance.

Also, in response to the COVID-19 pandemic, Prosperity has provided relief to its loan customers through loan extensions and deferrals. Under the CARES Act and the CAA, banks may elect to deem that loan modifications do not result in troubled debt restructurings if they are (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the COVID-19 national emergency declaration by the President of the United States or (B) January 1, 2022. Additionally, other short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not troubled debt restructurings under Accounting Standards Codification ('ASC') Subtopic 310-40 and federal banking agencies' interagency guidance. These modifications include modifications such as principal and interest payment deferrals, temporary interest only payment terms, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. Prosperity's troubled debt restructurings do not include loan modifications related to COVID-19. Beginning in mid-March of 2020, Prosperity began offering deferral and modification of principal and/or interest payments to selected borrowers on a case-by-case basis. As of March 31, 2021, Prosperity had approximately $316.7 million in outstanding loans subject to deferral and modification agreements.

Conference Call

Prosperity's management team will host a conference call on Wednesday, April 28, 2021 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2021 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 1669484.

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

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Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of March 31, 2021, Prosperity Bancshares, Inc.® is a $35.558 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.

As of March 31, 2021, Prosperity operated 275 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 65 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; 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. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as 'aim,' 'anticipate,' 'estimate,' 'expect,' 'goal,' 'guidance,' 'intend,' 'is anticipated,' 'is expected,' 'is intended,' 'objective,' 'plan,' 'projected,' 'projection,' 'will affect,' 'will be,' 'will continue,' 'will decrease,' 'will grow,' 'will impact,' 'will increase,' 'will incur,' 'will reduce,' 'will remain,' 'will result,' 'would be,' variations of such words or phrases (including where the word 'could,' 'may,' or 'would' is used rather than the word 'will' in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. These forward‑looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks, including LegacyTexas Financial Group and LegacyTexas Bank (collectively 'LegacyTexas'); 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

Page 5 of 17

not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, including the LegacyTexas 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; the effect, impact, potential duration or other implications of the COVID-19 pandemic; and weather. These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2020 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission ('SEC'). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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Bryan/College Station Area

Frisco-West

Kerens

Hempstead

98th Street

Bryan

Garland

Longview

Hitchcock

Avenue Q

Bryan-29th Street

Grapevine

Mount Vernon

Liberty

North University

Bryan-East

Grapevine Main

Palestine

Magnolia

Texas Tech Student Union

Bryan-North

Kiest

Rusk

Magnolia Parkway

Caldwell

Lake Highlands

Seven Points

Mont Belvieu

Midland

College Station

McKinney

Teague

Nederland

Wadley

Crescent Point

McKinney Eldorado

Tyler-Beckham

Needville

Wall Street

Hearne

McKinney Redbud

Tyler-South Broadway

Rosenberg

Huntsville

North Carrolton

Tyler-University

Shadow Creek

Odessa

Madisonville

Oak Cliff

Winnsboro

Spring

Grandview

Navasota

Park Cities

Tomball

Grant

New Waverly

Plano

Houston Area

Waller

Kermit Highway

Rock Prairie

Plano-West

Houston

West Columbia

Parkway

Southwest Parkway

Preston Forest

Aldine

Wharton

Tower Point

Preston Parker

Alief

Winnie

Other West Texas Area

Wellborn Road

Preston Royal

Bellaire

Wirt

Locations

Red Oak

Beltway

Big Spring

Central Texas Area

Richardson

Clear Lake

South Texas Area -

Brownfield

Austin

Richardson-West

Copperfield

Corpus Christi

Brownwood

Allandale

Rosewood Court

Cypress

Calallen

Cisco

Cedar Park

The Colony

Downtown

Carmel

Comanche

Congress

Tollroad

Eastex

Northwest

Early

Lakeway

Trinity Mills

Fairfield

Saratoga

Floydada

Liberty Hill

Turtle Creek

First Colony

Timbergate

Gorman

Northland

West 15th Plano

Fry Road

Water Street

Levelland

Oak Hill

West Allen

Gessner

Littlefield

Research Blvd

Westmoreland

Gladebrook

Victoria

Merkel

Westlake

Wylie

Grand Parkway

Victoria Main

Plainview

Heights

Victoria-Navarro

San Angelo

Other Central Texas Area

Fort Worth

Highway 6 West

Victoria-North

Slaton

Locations

Haltom City

Little York

Victoria Salem

Snyder

Bastrop

Hulen

Medical Center

Canyon Lake

Keller

Memorial Drive

Other South Texas Area

Oklahoma

Dime Box

Museum Place

Northside

Locations

Central Oklahoma Area

Dripping Springs

Renaissance Square

Pasadena

Alice

Oklahoma City

Elgin

Roanoke

Pecan Grove

Aransas Pass

23rd Street

Flatonia

Stockyards

Pin Oak

Beeville

Expressway

Georgetown

River Oaks

Colony Creek

I-240

Gruene

Other Dallas/Fort Worth Area

Sugar Land

Cuero

Memorial

Kingsland

Locations

SW Medical Center

Edna

La Grange

Arlington

Tanglewood

Goliad

Other Central Oklahoma Area

Lexington

Azle

The Plaza

Gonzales

Locations

New Braunfels

Ennis

Uptown

Hallettsville

Edmond

Pleasanton

Flower Mound

Waugh Drive

Kingsville

Norman

Round Rock

Gainesville

Westheimer

Mathis

San Antonio

Glen Rose

West University

Padre Island

Tulsa Area

Schulenburg

Granbury

Woodcreek

Palacios

Tulsa

Seguin

Grand Prairie

Port Lavaca

Garnett

Smithville

Jacksboro

Katy

Portland

Harvard

Thorndale

Mesquite

Cinco Ranch

Rockport

Memorial

Weimar

Muenster

Katy-Spring Green

Sinton

Sheridan

Runaway Bay

Taft

S. Harvard

Dallas/Fort Worth Area

Sanger

The Woodlands

Yoakum

Utica Tower

Dallas

Waxahachie

The Woodlands-College Park

Yorktown

Yale

14th Street Plano

Weatherford

The Woodlands-I-45

Abrams Centre

The Woodlands-Research Forest

West Texas Area

Other Tulsa Area Locations

Addison

East Texas Area

Abilene

Owasso

Allen

Athens

Other Houston Area

Antilley Road

Balch Springs

Blooming Grove

Locations

Barrow Street

Camp Wisdom

Canton

Angleton

Cypress Street

Carrollton

Carthage

Bay City

Judge Ely

Cedar Hill

Corsicana

Beaumont

Mockingbird

Coppell

Crockett

Cleveland

East Plano

Eustace

East Bernard

Lubbock

Euless

Gilmer

El Campo

4th Street

Frisco

Grapeland

Dayton

66th Street

Frisco Gaylord

Gun Barrel City

Galveston

82nd Street

Frisco Warren

Jacksonville

Groves

86th Street

- - -

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Balance Sheet Data (at period end)

Loans held for sale

$

20,991

$

46,777

$

51,694

$

39,516

$

65,035

Loans held for investment

17,345,506

17,357,788

18,013,333

18,428,474

17,348,398

Loans held for investment - Warehouse Purchase Program

2,272,389

2,842,379

2,730,614

2,557,183

1,713,762

Total loans

19,638,886

20,246,944

20,795,641

21,025,173

19,127,195

Investment securities(A)

10,088,002

8,542,820

7,431,495

7,717,586

8,295,495

Federal funds sold

8,986

553

56,469

568

676

Allowance for credit losses

(307,210

)

(316,068

)

(323,635

)

(324,205

)

(327,206

)

Cash and due from banks

1,947,235

1,342,996

1,031,193

332,873

381,458

Goodwill

3,231,636

3,231,636

3,231,692

3,231,964

3,223,144

Core deposit intangibles, net

70,304

73,235

76,478

79,748

83,041

Other real estate owned

462

10,593

11,548

6,160

5,452

Fixed assets, net

326,970

323,572

325,994

324,975

327,293

Other assets

553,147

602,994

560,724

571,807

626,951

Total assets

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

$

31,743,499

Noninterest-bearing deposits

$

9,820,445

$

9,151,233

$

8,998,328

$

9,040,257

$

7,461,323

Interest-bearing deposits

18,942,660

18,209,259

17,460,878

17,112,431

16,365,034

Total deposits

28,763,105

27,360,492

26,459,206

26,152,688

23,826,357

Other borrowings

-

-

2,570

103,131

1,338,429

Securities sold under repurchase agreements

377,106

389,583

380,274

365,335

344,695

Subordinated notes

-

-

125,146

125,365

125,585

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

166,414

148,584

165,579

242,061

222,912

Total liabilities

29,336,572

27,928,606

27,162,722

27,018,527

25,887,925

Shareholders' equity(B)

6,221,846

6,130,669

6,034,877

5,948,122

5,855,574

Total liabilities and equity

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

$

31,743,499

(A) Includes $970, $974, $(442), $(1,767) and $(3,421) in unrealized gains (losses) on available for sale securities for the quarterly periods ended March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.

(B) Includes $766, $770, $(349), $(1,396) and $(2,703) in after-tax unrealized gains (losses) on available for sale securities for the quarterly periods ended March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.

Page 8 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Income Statement Data

Interest income:

Loans

$

233,075

$

241,625

$

244,255

$

242,772

$

247,243

Securities(C)

38,677

36,721

38,033

43,776

48,282

Federal funds sold and other earning assets

351

301

144

45

713

Total interest income

272,103

278,647

282,432

286,593

296,238

Interest expense:

Deposits

17,362

19,757

22,458

25,269

35,018

Other borrowings

-

33

52

533

2,932

Securities sold under repurchase agreements

159

224

309

337

757

Subordinated notes and trust preferred

-

999

1,500

1,499

1,500

Total interest expense

17,521

21,013

24,319

27,638

40,207

Net interest income

254,582

257,634

258,113

258,955

256,031

Provision for credit losses

-

-

10,000

10,000

-

Net interest income after provision for credit losses

254,582

257,634

248,113

248,955

256,031

Noninterest income:

Nonsufficient funds (NSF) fees

6,687

8,051

7,156

5,645

9,443

Credit card, debit card and ATM card income

8,031

8,193

8,315

7,263

7,474

Service charges on deposit accounts

5,978

6,046

5,920

5,790

6,104

Trust income

2,837

2,192

2,502

2,242

2,662

Mortgage income

3,307

3,989

2,958

1,820

2,010

Brokerage income

711

642

628

584

650

Bank owned life insurance income

1,292

1,252

1,449

1,508

1,545

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

(79

)

(675

)

(528

)

(3,945

)

(385

)

Other noninterest income

5,244

6,857

6,524

4,768

4,885

Total noninterest income

34,008

36,547

34,924

25,675

34,388

Noninterest expense:

Salaries and benefits

80,037

77,809

75,068

79,109

77,282

Net occupancy and equipment

7,833

8,223

8,644

9,190

8,980

Credit and debit card, data processing and software amortization

8,233

8,442

8,776

11,690

11,421

Regulatory assessments and FDIC insurance

2,670

2,670

2,512

2,601

2,078

Core deposit intangibles amortization

2,931

3,243

3,270

3,293

3,363

Depreciation

4,540

4,261

4,605

4,598

4,768

Communications

2,899

2,931

3,027

3,324

3,195

Other real estate expense

244

279

258

40

46

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

(887

)

(195

)

(137

)

4

(130

)

Merger related expenses

-

-

-

7,474

544

Other noninterest expense

10,576

12,542

11,896

13,045

13,194

Total noninterest expense

119,076

120,205

117,919

134,368

124,741

Income before income taxes

169,514

173,976

165,118

140,262

165,678

Provision for income taxes

36,205

36,885

35,054

9,361

34,830

Net income available to common shareholders

$

133,309

$

137,091

$

130,064

$

130,901

$

130,848

(C) Interest income on securities was reduced by net premium amortization of $12,844, $11,509, $10,089, $9,224 and $8,005 for the three-month periods ended March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.

Page 9 of 17

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Profitability

Net income (D) (E)

$

133,309

$

137,091

$

130,064

$

130,901

$

130,848

Basic earnings per share

$

1.44

$

1.48

$

1.40

$

1.41

$

1.39

Diluted earnings per share

$

1.44

$

1.48

$

1.40

$

1.41

$

1.39

Return on average assets (F)

1.54

%

1.63

%

1.58

%

1.61

%

(J)

1.67

%

(J)

Return on average common equity (F)

8.60

%

8.98

%

8.64

%

8.84

%

(J)

8.86

%

(J)

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

18.43

%

19.57

%

19.19

%

19.98

%

(J)

20.16

%

(J)

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

3.41

%

3.49

%

3.57

%

3.69

%

3.81

%

Efficiency ratio (G) (I)

41.25

%

40.77

%

40.17

%

46.56

%

(K)

42.90

%

(K)

Liquidity and Capital Ratios

Equity to assets

17.50

%

18.00

%

18.18

%

18.04

%

18.45

%

Common equity tier 1 capital

14.60

%

13.74

%

13.17

%

12.29

%

12.27

%

Tier 1 risk-based capital

14.60

%

13.74

%

13.17

%

12.29

%

12.27

%

Total risk-based capital

15.07

%

14.23

%

14.28

%

13.36

%

12.81

%

Tier 1 leverage capital

9.68

%

9.67

%

9.57

%

9.41

%

9.49

%

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

9.05

%

9.19

%

9.12

%

8.89

%

8.96

%

Other Data

Weighted-average shares used in computing earnings per common share

Basic

92,854

92,559

92,656

92,658

94,371

Diluted

92,854

92,559

92,656

92,658

94,371

Period end shares outstanding

92,929

92,571

92,562

92,660

92,652

Cash dividends paid per common share

$

0.49

$

0.49

$

0.46

$

0.46

$

0.46

Book value per common share

$

66.95

$

66.23

$

65.20

$

64.19

$

63.20

Tangible book value per common share (G)

$

31.42

$

30.53

$

29.46

$

28.45

$

27.52

Common Stock Market Price

High

$

83.02

$

70.38

$

60.63

$

72.95

$

75.22

Low

$

66.45

$

50.43

$

48.80

$

43.68

$

42.02

Period end closing price

$

76.16

$

69.36

$

51.83

$

59.38

$

48.25

Employees - FTE (excluding overtime)

3,724

3,756

3,716

3,793

3,801

Number of banking centers

275

275

275

275

285

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

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Loan discount accretion

ASC 310-20

$13,314

$13,514

$16,729

$17,999

$22,463

ASC 310-30

$3,027

$2,545

$5,805

$6,267

$6,019

Securities net amortization

$111

$66

$116

$203

$194

Time deposits amortization

$507

$790

$1,240

$1,793

$2,270

(E) Using effective tax rate of 21.4%, 21.2%, 21.2%, 6.7% and 21.0% for the three-month periods ended March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively. Net income for the second quarter of 2020 includes a tax benefit for NOL due to the CARES Act.

(F) Interim periods annualized.

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

(H) Net interest margin for all periods presented is based on average balances on an actual 365 day or 366 day basis.

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

(J) For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit, 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, 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.

Page 10 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Mar 31, 2020

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

$

33,327

$

238

2.90%

$

42,856

$

348

3.23%

$

66,917

$

623

3.80%

Loans held for investment

17,279,066

213,978

5.02%

17,700,756

220,357

4.95%

17,263,098

236,517

5.51%

Loans held for investment - Warehouse Purchase Program

2,369,601

18,859

3.23%

2,603,455

20,920

3.20%

1,120,324

10,094

3.62%

Total Loans

19,681,994

233,075

4.80%

20,347,067

241,625

4.72%

18,450,339

247,243

5.39%

Investment securities

9,148,841

38,677

1.71%

(M)

8,001,679

36,721

1.83%

(M)

8,434,196

48,282

2.30%

(M)

Federal funds sold and other earning assets

1,506,645

351

0.09%

1,094,487

301

0.11%

223,631

713

1.28%

Total interest-earning assets

30,337,480

272,103

3.64%

29,443,233

278,647

3.76%

27,108,166

296,238

4.40%

Allowance for credit losses

(315,590

)

(322,138

)

(328,005

)

Noninterest-earning assets

4,522,470

4,569,811

4,577,251

Total assets

$

34,544,360

$

33,690,906

$

31,357,412

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,112,469

$

5,943

0.39%

$

5,545,298

$

5,301

0.38%

$

4,990,386

$

7,096

0.57%

Savings and money market deposits

9,420,064

5,753

0.25%

9,170,179

6,985

0.30%

7,965,440

14,122

0.71%

Certificates and other time deposits

3,031,621

5,666

0.76%

3,047,475

7,471

0.98%

3,404,748

13,800

1.63%

Other borrowings

-

-

-

2,435

33

5.39%

832,961

2,932

1.42%

Securities sold under repurchase agreements

376,662

159

0.17%

376,779

224

0.24%

366,615

757

0.83%

Subordinated notes and trust preferred

-

-

-

81,570

999

4.87%

125,694

1,500

4.80%

Total interest-bearing liabilities

18,940,816

17,521

0.38%

(N)

18,223,736

21,013

0.46%

(N)

17,685,834

40,207

0.91%

(N)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

9,206,791

9,103,742

7,491,798

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

13,009

Other liabilities

169,138

224,907

262,523

Total liabilities

28,346,692

27,582,332

25,453,164

Shareholders' equity

6,197,668

6,108,574

5,904,248

Total liabilities and shareholders' equity

$

34,544,360

$

33,690,906

$

31,357,412

Net interest income and margin

$

254,582

3.40%

$

257,634

3.48%

$

256,031

3.80%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

635

664

723

Net interest income and margin (tax equivalent basis)

$

255,217

3.41%

$

258,298

3.49%

$

256,754

3.81%

(L) Annualized and based on an actual 365 day or 366 day basis.

(M) Yield on securities was impacted by net premium amortization of $12,844, $11,509 and $8,005 for the three-month periods ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 0.25%, 0.31% and 0.64% for the three-month periods ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

Page 11 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

YIELD TREND (O)

Interest-Earning Assets:

Loans held for sale

2.90

%

3.23

%

3.30

%

3.32

%

3.80

%

Loans held for investment

5.02

%

4.95

%

4.91

%

5.06

%

5.51

%

Loans held for investment - Warehouse Purchase Program

3.23

%

3.20

%

3.18

%

3.10

%

3.62

%

Total loans

4.80

%

4.72

%

4.72

%

4.87

%

5.39

%

Investment securities (P)

1.71

%

1.83

%

1.99

%

2.19

%

2.30

%

Federal funds sold and other earning assets

0.09

%

0.11

%

0.09

%

0.10

%

1.28

%

Total interest-earning assets

3.64

%

3.76

%

3.90

%

4.08

%

4.40

%

Interest-Bearing Liabilities:

Interest-bearing demand deposits

0.39

%

0.38

%

0.38

%

0.38

%

0.57

%

Savings and money market deposits

0.25

%

0.30

%

0.35

%

0.41

%

0.71

%

Certificates and other time deposits

0.76

%

0.98

%

1.23

%

1.48

%

1.63

%

Other borrowings

-

5.39

%

1.49

%

0.45

%

1.42

%

Securities sold under repurchase agreements

0.17

%

0.24

%

0.32

%

0.37

%

0.83

%

Subordinated notes and trust preferred

-

4.87

%

4.76

%

4.80

%

4.80

%

Total interest-bearing liabilities

0.38

%

0.46

%

0.54

%

0.63

%

0.91

%

Net Interest Margin

3.40

%

3.48

%

3.56

%

3.68

%

3.80

%

Net Interest Margin (tax equivalent)

3.41

%

3.49

%

3.57

%

3.69

%

3.81

%

(O) Annualized and based on average balances on an actual 365 day or 366 day basis.

(P) Yield on securities was impacted by net premium amortization of $12,844, $11,509, $10,089, $9,224 and $8,005 for the three-month periods ended March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.

Page 12 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Balance Sheet Averages

Loans held for sale

$

33,327

$

42,856

$

50,606

$

63,338

$

66,917

Loans held for investment

17,279,066

17,700,756

18,267,559

18,135,226

17,263,098

Loans held for investment - Warehouse Purchase Program

2,369,601

2,603,455

2,279,461

1,843,097

1,120,324

Total Loans

19,681,994

20,347,067

20,597,626

20,041,661

18,450,339

Investment securities

9,148,841

8,001,679

7,603,762

8,054,008

8,434,196

Federal funds sold and other earning assets

1,506,645

1,094,487

618,228

172,761

223,631

Total interest-earning assets

30,337,480

29,443,233

28,819,616

28,268,430

27,108,166

Allowance for credit losses

(315,590

)

(322,138

)

(321,424

)

(325,720

)

(328,005

)

Cash and due from banks

308,787

289,579

267,887

247,426

321,832

Goodwill

3,233,231

3,231,850

3,231,976

3,223,469

3,223,633

Core deposit intangibles, net

71,763

74,919

78,269

81,539

84,865

Other real estate

6,385

14,573

8,061

5,666

5,837

Fixed assets, net

326,004

325,485

325,958

327,811

325,337

Other assets

576,300

633,405

570,495

676,105

615,747

Total assets

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

$

31,357,412

Noninterest-bearing deposits

$

9,206,791

$

9,103,742

$

8,980,814

$

8,583,734

$

7,491,798

Interest-bearing demand deposits

6,112,469

5,545,298

5,221,722

4,949,023

4,990,376

Savings and money market deposits

9,420,064

9,170,179

8,937,751

8,537,352

7,965,440

Certificates and other time deposits

3,031,621

3,047,475

3,103,290

3,224,196

3,404,748

Total deposits

27,770,945

26,866,694

26,243,577

25,294,305

23,852,362

Other borrowings

-

2,435

13,898

474,867

832,961

Securities sold under repurchase agreements

376,662

376,779

378,888

365,077

366,615

Subordinated notes and trust preferred

-

81,570

125,256

125,475

125,694

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

13,009

Other liabilities

169,138

224,907

167,532

289,899

262,523

Shareholders' equity

6,197,668

6,108,574

6,021,740

5,925,156

5,904,248

Total liabilities and equity

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

$

31,357,412

Page 13 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Period End Balances

Loan Portfolio

Commercial and industrial

$

2,104,116

10.7

%

$

2,210,003

10.9

%

$

2,171,302

10.5

%

$

2,214,742

10.5

%

$

2,500,110

13.1

%

Warehouse purchase program

2,272,389

11.6

%

2,842,379

14.0

%

2,730,614

13.1

%

2,557,183

12.2

%

1,713,762

9.0

%

Construction, land development and other land loans

2,031,355

10.4

%

1,956,960

9.7

%

2,081,762

10.0

%

2,033,037

9.7

%

2,051,021

10.7

%

1-4 family residential

4,310,437

21.9

%

4,253,331

21.0

%

4,189,852

20.1

%

4,184,972

19.9

%

3,993,138

20.9

%

Home equity

554,278

2.8

%

504,207

2.5

%

477,552

2.3

%

437,098

2.1

%

516,003

2.6

%

Commercial real estate (includes multi-family residential)

5,858,475

29.8

%

6,078,764

30.0

%

6,179,901

29.7

%

6,550,086

31.2

%

6,576,213

34.4

%

Agriculture (includes farmland)

571,783

2.9

%

581,352

2.9

%

598,972

2.9

%

612,694

2.9

%

635,295

3.3

%

Consumer and other

293,023

1.5

%

344,028

1.7

%

367,231

1.8

%

403,462

1.9

%

423,000

2.2

%

Energy

503,947

2.6

%

512,735

2.5

%

604,698

2.9

%

639,402

3.0

%

718,653

3.8

%

Paycheck Protection Program

1,139,083

5.8

%

963,185

4.8

%

1,393,757

6.7

%

1,392,497

6.6

%

-

-

Total loans

$

19,638,886

$

20,246,944

$

20,795,641

$

21,025,173

$

19,127,195

Deposit Types

Noninterest-bearing DDA

$

9,820,445

34.1

%

$

9,151,233

33.4

%

$

8,998,328

34.0

%

$

9,040,257

34.6

%

$

7,461,323

31.3

%

Interest-bearing DDA

6,158,641

21.4

%

5,899,051

21.6

%

5,297,802

20.0

%

5,130,495

19.6

%

4,980,090

20.9

%

Money market

6,714,889

23.4

%

6,381,014

23.3

%

6,324,127

23.9

%

6,148,206

23.5

%

5,341,525

22.4

%

Savings

3,083,447

10.7

%

2,863,086

10.5

%

2,772,492

10.5

%

2,722,718

10.4

%

2,716,247

11.4

%

Certificates and other time deposits

2,985,683

10.4

%

3,066,108

11.2

%

3,066,457

11.6

%

3,111,012

11.9

%

3,327,172

14.0

%

Total deposits

$

28,763,105

$

27,360,492

$

26,459,206

$

26,152,688

$

23,826,357

Loan to Deposit Ratio

68.3

%

74.0

%

78.6

%

80.4

%

80.3

%

Page 14 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Construction Loans

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Single family residential construction

$

590,223

29.1

%

$

579,761

29.6

%

$

654,933

31.5

%

$

710,401

34.9

%

$

655,191

31.9

%

Land development

97,267

4.8

%

103,307

5.3

%

114,937

5.5

%

114,748

5.6

%

110,853

5.4

%

Raw land

243,394

12.0

%

247,628

12.7

%

240,154

11.5

%

274,159

13.5

%

265,943

12.9

%

Residential lots

176,884

8.6

%

158,441

8.1

%

137,615

6.6

%

144,765

7.1

%

136,861

6.7

%

Commercial lots

137,512

6.8

%

114,427

5.8

%

109,569

5.3

%

103,267

5.1

%

106,036

5.2

%

Commercial construction and other

786,192

38.7

%

753,587

38.5

%

825,053

39.6

%

687,618

33.8

%

778,731

37.9

%

Net unaccreted discount

(117

)

(191

)

(499

)

(1,921

)

(2,594

)

Total construction loans

$

2,031,355

$

1,956,960

$

2,081,762

$

2,033,037

$

2,051,021

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2021

Houston

Dallas

Austin

OK City

Tulsa

Other (Q)

Total

Collateral Type

Shopping center/retail

$

379,908

$

300,615

$

52,933

$

20,114

$

31,387

$

292,494

$

1,077,451

Commercial and industrial buildings

163,816

91,356

19,499

20,448

18,256

174,502

487,877

Office buildings

166,801

496,162

35,465

74,682

5,000

77,391

855,501

Medical buildings

36,347

29,333

2,660

24,011

24,004

58,362

174,717

Apartment buildings

330,576

357,804

24,347

14,388

8,835

169,704

905,654

Hotel

69,280

72,206

43,581

28,996

-

132,810

346,873

Other

80,641

58,865

27,713

8,154

3,865

62,117

241,355

Total

$

1,227,369

$

1,406,341

$

206,198

$

190,793

$

91,347

$

967,380

$

4,089,428

(R)

Acquired Loans

Non-PCD Loans

PCD Loans

Total Acquired Loans

Balance at

Acquisition

Date

Balance at

Dec 31, 2020

Balance at

Mar 31, 2021

Balance at

Acquisition

Date

Balance at

Dec 31, 2020

Balance at

Mar 31, 2021

Balance at

Acquisition

Date

Balance at

Dec 31, 2020

Balance at

Mar 31, 2021

Loan marks:

Acquired banks (S)

$

229,080

$

5,973

$

5,225

$

142,128

$

-

$

-

$

371,208

$

5,973

$

5,225

LegacyTexas merger(T)

116,519

33,614

21,060

177,924

14,216

11,157

294,443

47,830

32,217

Total

345,599

39,587

26,285

320,052

14,216

(V)

11,157

665,651

53,803

37,442

Acquired portfolio loan balances:

Acquired banks (S)

5,690,998

266,036

229,040

275,221

3,523

3,306

5,966,219

269,559

232,346

LegacyTexas merger(T)

6,595,161

3,603,169

3,110,630

414,352

192,108

159,885

7,009,513

3,795,277

3,270,515

Total

12,286,159

3,869,205

3,339,670

689,573

195,631

163,191

12,975,732

(U)

4,064,836

3,502,861

Acquired portfolio loan balances less loan marks

$

11,940,560

$

3,829,618

$

3,313,385

$

369,521

$

181,415

$

152,034

$

12,310,081

$

4,011,033

$

3,465,419

(Q) Includes other MSA and non-MSA regions.

(R) Represents a portion of total commercial real estate loans of $5.858 billion as of March 31, 2021.

(S) 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 and Tradition Bank.

(T) The merger of LegacyTexas Financial Group, Inc. ('LegacyTexas') into Prosperity Bancshares, Inc. and LegacyTexas Bank into Prosperity Bank was completed on November 1, 2019. During the fourth quarter of 2019, LegacyTexas added $7.010 billion in loans with related purchase accounting adjustments of $294.4 million at acquisition date.

(U) Actual principal balances acquired.

(V) ASU 2016-13 became effective for Prosperity on January 1, 2020.

Page 15 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Asset Quality

Nonaccrual loans

$

43,025

$

47,185

$

57,412

$

62,904

$

58,194

Accruing loans 90 or more days past due

313

1,699

462

8,691

3,255

Total nonperforming loans

43,338

48,884

57,874

71,595

61,449

Repossessed assets

362

93

120

187

278

Other real estate

462

10,593

11,548

6,160

5,452

Total nonperforming assets

$

44,162

$

59,570

$

69,542

$

77,942

$

67,179

Nonperforming assets:

Commercial and industrial (includes energy)

$

11,290

$

16,176

$

17,273

$

15,238

$

15,987

Construction, land development and other land loans

1,692

1,566

2,633

10,530

1,125

1-4 family residential (includes home equity)

11,920

25,830

29,953

29,812

28,996

Commercial real estate (includes multi-family residential)

16,896

12,315

16,069

20,748

20,155

Agriculture (includes farmland)

803

2,075

1,931

1,501

896

Consumer and other

1,561

1,608

1,683

113

20

Total

$

44,162

$

59,570

$

69,542

$

77,942

$

67,179

Number of loans/properties

167

208

198

213

198

Allowance for credit losses at end of period

$

307,210

$

316,068

$

323,635

$

324,205

$

327,206

Net charge-offs (recoveries):

Commercial and industrial (includes energy)

$

1,584

$

4,085

$

8,344

$

12,206

$

(28

)

Construction, land development and other land loans

(5

)

(110

)

478

(6

)

(12

)

1-4 family residential (includes home equity)

47

1,982

252

51

5

Commercial real estate (includes multi-family residential)

6,589

626

676

-

(81

)

Agriculture (includes farmland)

33

(4

)

(17

)

(3

)

(1

)

Consumer and other

610

988

837

753

918

Total

$

8,858

$

7,567

$

10,570

$

13,001

$

801

Asset Quality Ratios

Nonperforming assets to average interest-earning assets

0.15

%

0.20

%

0.24

%

0.28

%

0.25

%

Nonperforming assets to loans and other real estate

0.22

%

0.29

%

0.33

%

0.37

%

0.35

%

Net charge-offs to average loans (annualized)

0.18

%

0.15

%

0.21

%

0.26

%

0.02

%

Allowance for credit losses to total loans

1.56

%

1.56

%

1.56

%

1.54

%

1.71

%

Allowance for credit losses to total loans, excluding Warehouse Purchase Program loans and Paycheck Protection Program loans (G)

1.89

%

1.92

%

1.94

%

1.90

%

1.88

%

Page 16 of 17

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

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

NOTES TO SELECTED FINANCIAL DATA

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

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Reconciliation of diluted earnings per share to diluted earnings per share, excluding merger related expenses, net of tax, and NOL tax benefit:

Net income

$

133,309

$

137,091

$

130,064

$

130,901

$

130,848

Add: merger related expenses, net of tax(W)

-

-

-

5,904

430

Less: NOL tax benefit (X)

-

-

-

(20,145

)

-

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (W) (X)

$

133,309

$

137,091

$

130,064

$

116,660

$

131,278

Weighted average diluted shares outstanding

92,854

92,559

92,656

92,658

94,371

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

$

-

$

-

$

-

$

0.06

$

-

NOL tax benefit per diluted share (W)

$

-

$

-

$

-

$

(0.22

)

$

-

Diluted earnings per share, excluding merger related expenses, net of tax, and NOL tax benefit (W) (X)

$

1.44

$

1.48

$

1.40

$

1.25

$

1.39

Reconciliation of return on average assets to return on average assets excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (W) (X)

$

133,309

$

137,091

$

130,064

$

116,660

$

131,278

Average total assets

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

$

31,357,412

Return on average assets excluding merger related expenses, net of tax, and NOL tax benefit (F) (W) (X)

1.54

%

1.63

%

1.58

%

1.44

%

1.67

%

Reconciliation of return on average common equity to return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (W) (X)

$

133,309

$

137,091

$

130,064

$

116,660

$

131,278

Average shareholders' equity

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

5,904,248

Return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit (F) (W) (X)

8.60

%

8.98

%

8.64

%

7.88

%

8.89

%

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

Net income

$

133,309

$

137,091

$

130,064

$

130,901

$

130,848

Average shareholders' equity

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

5,904,248

Less: Average goodwill and other intangible assets

(3,304,994

)

(3,306,769

)

(3,310,245

)

(3,305,008

)

(3,308,498

)

Average tangible shareholders' equity

$

2,892,674

$

2,801,805

$

2,711,495

$

2,620,148

$

2,595,750

Return on average tangible common equity(F)

18.43

%

19.57

%

19.19

%

19.98

%

20.16

%

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

(X) Net income for the second quarter of 2020 includes a tax benefit for NOL related to the CARES Act.

Page 17 of 17

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Reconciliation of return on average common equity to return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (W) (X)

$

133,309

$

137,091

$

130,064

$

116,660

$

131,278

Average shareholders' equity

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

5,904,248

Less: Average goodwill and other intangible assets

(3,304,994

)

(3,306,769

)

(3,310,245

)

(3,305,008

)

(3,308,498

)

Average tangible shareholders' equity

$

2,892,674

$

2,801,805

$

2,711,495

$

2,620,148

$

2,595,750

Return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit (F) (W) (X)

18.43

%

19.57

%

19.19

%

17.81

%

20.23

%

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

Shareholders' equity

$

6,221,846

$

6,130,669

$

6,034,877

$

5,948,122

$

5,855,574

Less: Goodwill and other intangible assets

(3,301,940

)

(3,304,871

)

(3,308,170

)

(3,311,712

)

(3,306,185

)

Tangible shareholders' equity

$

2,919,906

$

2,825,798

$

2,726,707

$

2,636,410

$

2,549,389

Period end shares outstanding

92,929

92,571

92,562

92,660

92,652

Tangible book value per share

$

31.42

$

30.53

$

29.46

$

28.45

$

27.52

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

Tangible shareholders' equity

$

2,919,906

$

2,825,798

$

2,726,707

$

2,636,410

$

2,549,389

Total assets

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

$

31,743,499

Less: Goodwill and other intangible assets

(3,301,940

)

(3,304,871

)

(3,308,170

)

(3,311,712

)

(3,306,185

)

Tangible assets

$

32,256,478

$

30,754,404

$

29,889,429

$

29,654,937

$

28,437,314

Period end tangible equity to period end tangible assets ratio

9.05

%

9.19

%

9.12

%

8.89

%

8.96

%

Reconciliation of allowance for credit losses to total loans to allowance for credit losses to total loans, excluding Warehouse Purchase Program and Paycheck Protection Program loans:

Allowance for credit losses

$

307,210

$

316,068

$

323,635

$

324,205

$

327,206

Total loans

$

19,638,886

$

20,246,944

$

20,795,641

$

21,025,173

$

19,127,195

Less: Warehouse Purchase Program loans

(2,272,389

)

(2,842,379

)

(2,730,614

)

(2,557,183

)

(1,713,762

)

Less: Paycheck Protection Program loans

(1,139,083

)

(963,185

)

(1,393,757

)

(1,392,497

)

-

Total loans less Warehouse Purchase Program and Paycheck Protection Program loans

$

16,227,414

$

16,441,380

$

16,671,270

$

17,075,493

$

17,413,433

Allowance for credit losses to total loans, excluding Warehouse Purchase Program and Paycheck Protection Program loans

1.89

%

1.92

%

1.94

%

1.90

%

1.88

%

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets and taxes:

Noninterest expense

$

119,076

$

120,205

$

117,919

$

134,368

$

124,741

Net interest income

$

254,582

$

257,634

$

258,113

$

258,955

$

256,031

Noninterest income

34,008

36,547

34,924

25,675

34,388

Less: net loss on sale or write down of assets

(79

)

(675

)

(528

)

(3,945

)

(385

)

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

34,087

37,222

35,452

29,620

34,773

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

$

288,669

$

294,856

$

293,565

$

288,575

$

290,804

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

41.25

%

40.77

%

40.17

%

46.56

%

42.90

%

Page 18 of 17

Three Months Ended

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets, taxes and merger related expenses:

Noninterest expense

$

119,076

$

120,205

$

117,919

$

134,368

$

124,741

Less: merger related expenses

-

-

-

7,474

544

Noninterest expense excluding merger related expenses

$

119,076

$

120,205

$

117,919

$

126,894

$

124,197

Net interest income

$

254,582

$

257,634

$

258,113

$

258,955

$

256,031

Noninterest income

34,008

36,547

34,924

25,675

34,388

Less: net loss on sale or write down of assets

(79

)

(675

)

(528

)

(3,945

)

(385

)

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

34,087

37,222

35,452

29,620

34,773

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

$

288,669

$

294,856

$

293,565

$

288,575

$

290,804

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

41.25

%

40.77

%

40.17

%

43.97

%

42.71

%

Page 19 of 17

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Disclaimer

Prosperity Bancshares Inc. published this content on 28 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2021 10:35:08 UTC.