PROSPERITY BANCSHARES, INC.®

REPORTS FIRST QUARTER

2022 EARNINGS

•

First quarter net income of $122.3 million and earnings per share (diluted) of $1.33

•

Deposits increased $296.5 million or 1.0% (3.9% annualized) during the first quarter 2022

•

Allowance for credit losses on loans and on off-balance sheet credit exposure of $315.1 million

•

Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.71%(1)

•

Nonperforming assets remain low at 0.08% of first quarter average interest-earning assets

•

Return (annualized) on first quarter average assets of 1.29%

•

Returns (annualized) on first quarter average common equity of 7.54% and average tangible common equity of 15.30%(1)

•

Prosperity Bancshares was ranked Number 6 in Forbes' 2022 America's Best Banks

HOUSTON, April 27, 2022. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $122.3 million for the quarter ended March 31, 2022 compared with $133.3 million for the same period in 2021. Net income per diluted common share was $1.33 for the quarter ended March 31, 2022, compared with $1.44 for the same period in 2021, and the annualized return on first quarter average assets was 1.29%. Nonperforming assets remain low at 0.08% of first quarter average interest-earning assets.

"Each year, Forbes assesses the 100 largest banks in the United States on growth, credit quality and earnings, as well as other factors, for its America's Best Banks list. Prosperity Bank has been ranked in the Top 10 since the list's inception in 2010. We have twice been ranked number 1, were ranked number 2 in 2021 and are ranked number 6 for 2022. It is a testament to Prosperity's performance, culture, vision and consistency and distinguishes us among most banks" said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"I wish to congratulate and thank all our customers, associates and directors for helping us achieve this great honor," added Zalman.

"On a year-over-year basis, excluding Warehouse Purchase Program and Paycheck Protection Program ("PPP") loans, loans grew $409.3 million or 2.5% and deposits were up $2.3 billion or 8.0% for the same period. On a linked quarter basis, deposits increased $296.5 million or 3.9% annualized and loans were slightly down as we continue to see significant payoffs despite strong loan production," continued Zalman.

______________

(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

"Companies and individuals continue to move to Texas and Oklahoma primarily because of lower tax rates and a favorable pro-business political environment. The overall economy remains strong despite concerns around higher interest rates, inflation, supply chain issues and the war between Russia and Ukraine," stated Zalman.

"Prosperity has a talented team, deep bench, strong earnings, a solid capital position and a fortress balance sheet. We will continue working to help our customers and associates succeed and to build shareholder value," concluded Zalman.

Results of Operations for the Three Months Ended March 31, 2022

Net income was $122.3 million(2) for the three months ended March 31, 2022 compared with $133.3 million(3) for the same period in 2021. The change was primarily due to a decrease in loan interest income (including a decrease in PPP fees) and loan discount accretion of $11.1 million, partially offset by an increase in securities interest income and a decrease in interest expense. Net income per diluted common share was $1.33 for the three months ended March 31, 2022 compared with $1.44 for the same period in 2021. On a linked quarter basis, net income was $122.3 million(2) for the three months ended March 31, 2022 compared with $126.8 million(4) for the three months ended December 31, 2021. The change was primarily due to a decrease in loan interest income (including a decrease in PPP fees), partially offset by an increase in securities interest income. Net income per diluted common share was $1.33 for the three months ended March 31, 2022 compared with $1.38 for the three months ended December 31, 2021. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2022 were 1.29%, 7.54% and 15.30%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 43.68%(1) for the three months ended March 31, 2022.

Net interest income before provision for credit losses for the three months ended March 31, 2022 was $239.9 million compared with $254.6 million for the same period in 2021. The change was primarily due to a decrease in the average balance and average rate on loans and a decrease in loan discount accretion of $11.1 million, partially offset by an increase in the average investment securities balance and a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $239.9 million compared with $244.8 million for the three months ended December 31, 2021.

The net interest margin on a tax equivalent basis was 2.88% for the three months ended March 31, 2022 compared with 3.41% for the same period in 2021. The change was primarily due to lower average rates on loans, a decrease in loan discount accretion of $11.1 million and an increase in the average balance on investment securities, 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 2.88% for the three months ended March 31, 2022 compared with 2.97% for the three months ended December 31, 2021. The change was primarily due to lower average rates on loans and higher cash balances due to excess liquidity, partially offset by higher average balance and rates on investment securities.

Noninterest income was $35.1 million for the three months ended March 31, 2022 compared with $34.0 million for the same period in 2021, an increase of $1.1 million or 3.3%. This change was primarily due to an increase in nonsufficient funds fees, an increase in other noninterest income and a net gain on the sale of assets, partially offset by a decrease in mortgage income. On a linked quarter basis, noninterest income was $35.1 million compared with $35.8 million for the three months ended December 31, 2021.

Noninterest expense was $119.9 million for the three months ended March 31, 2022 compared with $119.1 million for the same period in 2021 and $119.5 million for the three months ended December 31, 2021.

Balance Sheet Information

At March 31, 2022, Prosperity had $38.271 billion in total assets, an increase of $2.713 billion or 7.6% compared with $35.558 billion at March 31, 2021.

Loans at March 31, 2022 were $18.068 billion, a decrease of $1.571 billion or 8.0%, compared with $19.639 billion at March 31, 2021, primarily due to a decrease in PPP, Warehouse Purchase Program and commercial real estate loans, partially offset by an increase in 1-4 family residential loans. Linked quarter loans decreased $548.6 million or 2.9% from $18.616 billion at December 31, 2021, primarily due to Warehouse Purchase Program loans. At March 31, 2022, Prosperity had $86.3 million of PPP loans compared to $1.139 billion of PPP loans at March 31, 2021 and $169.9 million of PPP loans at December 31, 2021. Excluding Warehouse Purchase Program and PPP loans, loans at March 31, 2022 were $16.637 billion compared to $16.227 billion at March 31, 2021, an

______________

(2)

Includes purchase accounting adjustments of $4.1 million, net of tax, primarily comprised of loan discount accretion of $5.2 million for the three months ended March 31, 2022.

(3)

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.

(4)

Includes purchase accounting adjustments of $4.2 million, net of tax, primarily comprised of loan discount accretion of $5.4 million for the three months ended December 31, 2021.

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increase of $409.3 million or 2.5%.Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, decreased $33.8 million from $16.671 billion at December 31, 2021.

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, 2022, oil and gas loans totaled $445.9 million (net of discount and excluding PPP loans totaling $17.0 million) or 2.5% of total loans, of which $251.5 million were production loans and $194.4 million were servicing loans, compared with total oil and gas loans of $503.9 million (net of discount and excluding PPP loans totaling $142.6 million) or 2.6% of total loans at March 31, 2021 of which $289.4 million were production loans and $214.5 million were servicing loans. In addition, as of March 31, 2022, Prosperity had total unfunded commitments to oil and gas companies of $417.0 million compared with total unfunded commitments to oil and gas companies of $248.1 million as of March 31, 2021. 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, 2022, loans to hotels totaled $392.0 million (excluding PPP loans totaling $512 thousand) or 2.2% of total loans, a decrease of $9.2 million or 2.3%, compared with $401.2 million (excluding PPP loans totaling $13.1 million) or 2.0% of total loans at March 31, 2021. At March 31, 2022, loans to restaurants totaled $193.2 million (excluding PPP loans totaling $12.3 million) or 1.1% of total loans, a decrease of $15.5 million or 7.4%, compared with $208.7 million (excluding PPP loans totaling $125.2 million) or 1.1% of total loans at March 31, 2021.

Deposits at March 31, 2022 were $31.068 billion, an increase of $2.305 billion or 8.0%, compared with $28.763 billion at March 31, 2021. Linked quarter deposits increased $296.5 million or 1.0% (3.9% annualized) from $30.772 billion at December 31, 2021.

Asset Quality

Nonperforming assets totaled $27.2 million or 0.08% of quarterly average interest-earning assets at March 31, 2022, compared with $44.2 million or 0.15% of quarterly average interest-earning assets at March 31, 2021 and $28.1 million or 0.09% of quarterly average interest-earning assets at December 31, 2021.

The allowance for credit losses on loans and off-balance sheet credit exposures was $315.1 million at March 31, 2022 compared with $337.2 million at March 31, 2021 and $316.3 million at December 31, 2021.

The allowance for credit losses on loans was $285.2 million or 1.58% of total loans at March 31, 2022 compared with $307.2 million or 1.56% of total loans at March 31, 2021 and $286.4 million or 1.54% of total loans at December 31, 2021. Excluding Warehouse Purchase Program and PPP loans, the allowance for credit losses on loans to total loans was 1.71%(1) at March 31, 2022 compared with 1.89%(1) at March 31, 2021 and 1.72%(1) at December 31, 2021.

There was no provision for credit losses for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

Net charge-offs were $1.2 million for the three months ended March 31, 2022, compared with net charge-offs of $8.9 million for the three months ended March 31, 2021 and net charge-offs of $807 thousand for the three months ended December 31, 2021. During the first quarter of 2022, net charge-offs did not include any purchased credit deteriorated ("PCD") loans and $553 thousand of specific reserves on resolved PCD loans was released to the general reserve.

Dividend

Prosperity Bancshares declared a first quarter cash dividend of $0.52 per share to be paid on July 1, 2022, to all shareholders of record as of June 15, 2022.

COVID-19 Pandemic

Prosperity continues to monitor the latest developments regarding COVID-19. As of March 31, 2022, pandemic-related restrictions on all business and activities in the states of Texas and Oklahoma remained lifted. The COVID-19 pandemic has resulted in significant economic uncertainties that have had, and could continue to have, an adverse impact on Prosperity's operating income, financial condition and cash flows.

Since the implementation of the Paycheck Protection Program in 2020, Prosperity has obtained SBA approvals on approximately 18,700 loans totaling $2.036 billion and, as of March 31, 2022, had an outstanding balance of 819 loans totaling $86.3 million.

Also, in response to the COVID-19 pandemic, Prosperity has provided relief to its loan customers through loan extensions and deferrals. 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, 2022, Prosperity had approximately $29.0 million in outstanding loans subject to deferral and modification agreements.

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Conference Call

Prosperity's management team will host a conference call on Wednesday, April 27, 2022, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2022 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 4266827.

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

Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of March 31, 2022, Prosperity Bancshares, Inc.® is a $38.271 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

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

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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.

Page 4

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; 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; 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, 2021, 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

Garland

Palestine

Magnolia

Texas Tech Student Union

Bryan

Grapevine

Rusk

Magnolia Parkway

Bryan-29th Street

Grapevine Main

Seven Points

Mont Belvieu

Midland

Bryan-East

Kiest

Teague

Nederland

Wadley

Bryan-North

Lake Highlands

Tyler-Beckham

Needville

Wall Street

Caldwell

McKinney

Tyler-South Broadway

Rosenberg

College Station

McKinney Eldorado

Tyler-University

Shadow Creek

Odessa

Crescent Point

McKinney Redbud

Winnsboro

Spring

Grandview

Hearne

North Carrolton

Tomball

Grant

Huntsville

Park Cities

Houston Area

Waller

Kermit Highway

Madisonville

Plano

Houston

West Columbia

Parkway

Navasota

Plano-West

Aldine

Wharton

New Waverly

Preston Forest

Alief

Winnie

Other West Texas Area

Rock Prairie

Preston Parker

Bellaire

Wirt

Locations

Southwest Parkway

Preston Royal

Beltway

Big Spring

Tower Point

Red Oak

Clear Lake

South Texas Area -

Brownfield

Wellborn Road

Richardson

Copperfield

Corpus Christi

Brownwood

Richardson-West

Cypress

Calallen

Cisco

Central Texas Area

Rosewood Court

Downtown

Carmel

Comanche

Austin

The Colony

Eastex

Northwest

Early

Allandale

Tollroad

Fairfield

Saratoga

Floydada

Cedar Park

Trinity Mills

First Colony

Timbergate

Gorman

Congress

Turtle Creek

Fry Road

Water Street

Levelland

Lakeway

West 15th Plano

Gessner

Littlefield

Liberty Hill

West Allen

Gladebrook

Victoria

Merkel

Northland

Westmoreland

Grand Parkway

Victoria Main

Plainview

Oak Hill

Wylie

Heights

Victoria-Navarro

San Angelo

Research Blvd

Highway 6 West

Victoria-North

Slaton

Westlake

Fort Worth

Little York

Victoria Salem

Snyder

Haltom City

Medical Center

Other Central Texas Area

Hulen

Memorial Drive

Other South Texas Area

Oklahoma

Locations

Keller

Northside

Locations

Central Oklahoma Area

Bastrop

Museum Place

Pasadena

Alice

Oklahoma City

Canyon Lake

Renaissance Square

Pecan Grove

Aransas Pass

23rd Street

Dime Box

Roanoke

Pin Oak

Beeville

Expressway

Dripping Springs

Stockyards

River Oaks

Colony Creek

I-240

Elgin

Sugar Land

Cuero

Memorial

Flatonia

Other Dallas/Fort Worth Area

SW Medical Center

Edna

Georgetown

Locations

Tanglewood

Goliad

Other Central Oklahoma Area

Gruene

Arlington

The Plaza

Gonzales

Locations

Kingsland

Azle

Uptown

Hallettsville

Edmond

La Grange

Ennis

Waugh Drive

Kingsville

Norman

Lexington

Gainesville

Westheimer

Mathis

New Braunfels

Glen Rose

West University

Padre Island

Tulsa Area

Pleasanton

Granbury

Woodcreek

Palacios

Tulsa

Round Rock

Grand Prairie

Port Lavaca

Garnett

San Antonio

Jacksboro

Katy

Portland

Harvard

Schulenburg

Mesquite

Cinco Ranch

Rockport

Memorial

Seguin

Muenster

Katy-Spring Green

Sinton

Sheridan

Smithville

Runaway Bay

Taft

S. Harvard

Thorndale

Sanger

The Woodlands

Yoakum

Utica Tower

Weimar

Waxahachie

The Woodlands-College Park

Yorktown

Yale

Weatherford

The Woodlands-I-45

Dallas/Fort Worth Area

The Woodlands-Research Forest

West Texas Area

Other Tulsa Area Locations

Dallas

East Texas Area

Abilene

Owasso

14th Street Plano

Athens

Other Houston Area

Antilley Road

Abrams Centre

Blooming Grove

Locations

Barrow Street

Addison

Canton

Angleton

Cypress Street

Allen

Carthage

Bay City

Judge Ely

Balch Springs

Corsicana

Beaumont

Mockingbird

Camp Wisdom

Crockett

Cleveland

Carrollton

Eustace

East Bernard

Lubbock

Cedar Hill

Gilmer

El Campo

4th Street

Coppell

Grapeland

Dayton

66th Street

East Plano

Gun Barrel City

Galveston

82nd Street

Euless

Jacksonville

Groves

86th Street

Frisco

Kerens

Hempstead

98th Street

Frisco Warren

Longview

Hitchcock

Avenue Q

Frisco-West

Mount Vernon

Liberty

North University

- - -

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Balance Sheet Data (at period end)

Loans held for sale

$

2,810

$

7,274

$

10,197

$

9,080

$

20,991

Loans held for investment

16,720,173

16,833,171

16,949,486

17,147,146

17,345,506

Loans held for investment - Warehouse Purchase Program

1,344,541

1,775,699

1,998,049

2,095,559

2,272,389

Total loans

18,067,524

18,616,144

18,957,732

19,251,785

19,638,886

Investment securities(A)

14,798,127

12,818,901

12,629,368

11,918,691

10,088,002

Federal funds sold

274

241

237

281

8,986

Allowance for credit losses on loans

(285,163

)

(286,380

)

(287,187

)

(302,884

)

(307,210

)

Cash and due from banks

1,560,321

2,547,739

1,055,386

1,059,879

1,947,235

Goodwill

3,231,636

3,231,636

3,231,636

3,231,636

3,231,636

Core deposit intangibles, net

59,064

61,684

64,539

67,417

70,304

Other real estate owned

1,705

622

150

144

462

Fixed assets, net

336,075

319,799

322,799

324,502

326,970

Other assets

501,623

523,584

537,459

548,473

553,147

Total assets

$

38,271,186

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

Noninterest-bearing deposits

$

10,776,652

$

10,750,034

$

10,326,489

$

10,099,149

$

9,820,445

Interest-bearing deposits

20,291,658

20,021,728

19,125,163

19,011,092

18,942,660

Total deposits

31,068,310

30,771,762

29,451,652

29,110,241

28,763,105

Securities sold under repurchase agreements

440,891

448,099

440,969

433,069

377,106

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

227,614

156,926

244,110

216,330

166,414

Total liabilities

31,766,762

31,406,734

30,166,678

29,789,587

29,336,572

Shareholders' equity(B)

6,504,424

6,427,236

6,345,441

6,310,337

6,221,846

Total liabilities and equity

$

38,271,186

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

(A) Includes $2,115, $2,290, $2,483, $1,394 and $970 in unrealized gains on available for sale securities for the quarterly periods ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

(B) Includes $1,671, $1,809, $1,961, $1,101 and $766 in after-tax unrealized gains on available for sale securities for the quarterly periods ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Income Statement Data

Interest income:

Loans

$

193,025

$

206,209

$

213,821

$

216,803

$

233,075

Securities(C)

55,011

46,857

46,217

43,708

38,677

Federal funds sold and other earning assets

847

563

302

340

351

Total interest income

248,883

253,629

260,340

260,851

272,103

Interest expense:

Deposits

8,754

8,685

11,578

15,288

17,362

Securities sold under repurchase agreements

185

184

195

164

159

Total interest expense

8,939

8,869

11,773

15,452

17,521

Net interest income

239,944

244,760

248,567

245,399

254,582

Provision for credit losses

-

-

-

-

-

Net interest income after provision for credit losses

239,944

244,760

248,567

245,399

254,582

Noninterest income:

Nonsufficient funds (NSF) fees

8,124

8,401

7,962

6,560

6,687

Credit card, debit card and ATM card income

8,179

8,894

8,837

8,918

8,031

Service charges on deposit accounts

6,211

6,237

6,115

6,062

5,978

Trust income

2,703

2,698

2,467

2,276

2,837

Mortgage income

455

685

1,396

2,914

3,307

Brokerage income

892

953

861

795

711

Bank owned life insurance income

1,283

1,317

1,325

1,294

1,292

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

689

1,165

255

(244

)

(79

)

Other noninterest income

6,586

5,407

5,427

6,981

5,244

Total noninterest income

35,122

35,757

34,645

35,556

34,008

Noninterest expense:

Salaries and benefits

79,411

76,496

78,412

75,611

80,037

Net occupancy and equipment

7,848

8,140

8,165

8,046

7,833

Credit and debit card, data processing and software amortization

8,849

9,050

9,103

8,718

8,233

Regulatory assessments and FDIC insurance

2,850

2,801

2,497

2,670

2,670

Core deposit intangibles amortization

2,620

2,855

2,878

2,887

2,931

Depreciation

4,547

4,518

4,524

4,513

4,540

Communications

2,919

3,134

3,013

2,982

2,899

Other real estate expense

214

24

30

198

244

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

(621

)

2

4

(1,839

)

(887

)

Other noninterest expense

11,213

12,518

11,189

11,405

10,576

Total noninterest expense

119,850

119,538

119,815

115,191

119,076

Income before income taxes

155,216

160,979

163,397

165,764

169,514

Provision for income taxes

32,890

34,192

34,807

35,153

36,205

Net income available to common shareholders

$

122,326

$

126,787

$

128,590

$

130,611

$

133,309

(C) Interest income on securities was reduced by net premium amortization of $12,857, $16,006, $15,141, $14,436 and $12,844 for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

Page 8

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Profitability

Net income (D) (E)

$

122,326

$

126,787

$

128,590

$

130,611

$

133,309

Basic earnings per share

$

1.33

$

1.38

$

1.39

$

1.41

$

1.44

Diluted earnings per share

$

1.33

$

1.38

$

1.39

$

1.41

$

1.44

Return on average assets (F)

1.29

%

1.37

%

1.42

%

1.45

%

1.54

%

Return on average common equity (F)

7.54

%

7.91

%

8.07

%

8.31

%

8.60

%

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

15.30

%

16.26

%

16.72

%

17.49

%

18.43

%

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

2.88

%

2.97

%

3.10

%

3.11

%

3.41

%

Efficiency ratio (G) (I)

43.68

%

42.79

%

42.34

%

40.96

%

41.25

%

Liquidity and Capital Ratios

Equity to assets

17.00

%

16.99

%

17.38

%

17.48

%

17.50

%

Common equity tier 1 capital

15.32

%

(J)

15.10

%

14.84

%

15.26

%

14.60

%

Tier 1 risk-based capital

15.32

%

(J)

15.10

%

14.84

%

15.26

%

14.60

%

Total risk-based capital

15.99

%

(J)

15.45

%

15.20

%

15.71

%

15.07

%

Tier 1 leverage capital

9.44

%

(J)

9.62

%

9.55

%

9.50

%

9.68

%

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

9.19

%

9.07

%

9.18

%

9.18

%

9.05

%

Other Data

Weighted-average shares used in computing earnings per common share

Basic

92,161

92,162

92,683

92,935

92,854

Diluted

92,161

92,162

92,683

92,935

92,854

Period end shares outstanding

92,160

92,170

92,160

92,935

92,929

Cash dividends paid per common share

$

0.52

$

0.52

$

0.49

$

0.49

$

0.49

Book value per common share

$

70.58

$

69.73

$

68.85

$

67.90

$

66.95

Tangible book value per common share (G)

$

34.87

$

34.00

$

33.09

$

32.40

$

31.42

Common Stock Market Price

High

$

80.46

$

78.67

$

72.97

$

78.06

$

83.02

Low

$

69.08

$

68.53

$

64.40

$

69.83

$

66.45

Period end closing price

$

69.38

$

72.35

$

71.13

$

71.80

$

76.16

Employees - FTE (excluding overtime)

3,595

3,704

3,625

3,724

3,724

Number of banking centers

272

273

273

274

275

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

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Loan discount accretion

ASC 310-20

$4,674

$4,635

$3,761

$9,731

$13,313

ASC 310-30

$521

$731

$1,618

$2,462

$3,027

Securities net amortization

$52

$139

$136

$171

$111

Time deposits amortization

$100

$127

$201

$327

$507

(E) Using effective tax rate of 21.2%, 21.2%, 21.3%, 21.2% and 21.4% for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

(F) Interim periods annualized.

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

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

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

(J) Beginning on January 1, 2022, the cumulative amount of the current expected credit loss ("CECL") transition adjustments will be phased in over a three-year transition period.

Page 9

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Mar 31, 2021

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(K)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(K)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(K)

Interest-earning assets:

Loans held for sale

$

4,611

$

40

3.52%

$

8,794

$

71

3.20%

$

33,327

$

238

2.90%

Loans held for investment

16,712,690

183,033

4.44%

16,830,163

192,200

4.53%

17,279,066

213,978

5.02%

Loans held for investment - Warehouse Purchase Program

1,268,715

9,952

3.18%

1,772,971

13,938

3.12%

2,369,601

18,859

3.23%

Total Loans

17,986,016

193,025

4.35%

18,611,928

206,209

4.40%

19,681,994

233,075

4.80%

Investment securities

13,772,974

55,011

1.62%

(L)

12,751,857

46,857

1.46%

(L)

9,148,841

38,677

1.71%

(L)

Federal funds sold and other earning assets

2,135,503

847

0.16%

1,393,859

563

0.16%

1,506,645

351

0.09%

Total interest-earning assets

33,894,493

248,883

2.98%

32,757,644

253,629

3.07%

30,337,480

272,103

3.64%

Allowance for credit losses on loans

(285,692

)

(287,191

)

(315,590

)

Noninterest-earning assets

4,458,669

4,476,582

4,522,470

Total assets

$

38,067,470

$

36,947,035

$

34,544,360

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,775,114

$

2,452

0.15%

$

6,196,283

$

2,187

0.14%

$

6,112,469

$

5,943

0.39%

Savings and money market deposits

10,870,461

4,026

0.15%

10,286,650

3,817

0.15%

9,420,064

5,753

0.25%

Certificates and other time deposits

2,637,529

2,276

0.35%

2,766,123

2,681

0.38%

3,031,621

5,666

0.76%

Securities sold under repurchase agreements

452,054

185

0.17%

432,981

184

0.17%

376,662

159

0.17%

Total interest-bearing liabilities

20,735,158

8,939

0.17%

(M)

19,682,037

8,869

0.18%

(M)

18,940,816

17,521

0.38%

(M)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

10,636,624

10,587,441

9,206,791

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

Other liabilities

176,360

234,746

169,138

Total liabilities

31,578,089

30,534,171

28,346,692

Shareholders' equity

6,489,381

6,412,864

6,197,668

Total liabilities and shareholders' equity

$

38,067,470

$

36,947,035

$

34,544,360

Net interest income and margin

$

239,944

2.87%

$

244,760

2.96%

$

254,582

3.40%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

472

457

635

Net interest income and margin (tax equivalent basis)

$

240,416

2.88%

$

245,217

2.97%

$

255,217

3.41%

(K) Annualized and based on an actual 365-day basis.

(L) Yield on securities was impacted by net premium amortization of $12,857, $16,006 and $12,844 for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

(M) Total cost of funds, including noninterest bearing deposits, was 0.12%, 0.12% and 0.25% for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

Page 10

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

YIELD TREND (N)

Interest-Earning Assets:

Loans held for sale

3.52

%

3.20

%

3.08

%

3.19

%

2.90

%

Loans held for investment

4.44

%

4.53

%

4.62

%

4.65

%

5.02

%

Loans held for investment - Warehouse Purchase Program

3.18

%

3.12

%

3.18

%

3.21

%

3.23

%

Total loans

4.35

%

4.40

%

4.48

%

4.50

%

4.80

%

Investment securities (O)

1.62

%

1.46

%

1.50

%

1.57

%

1.71

%

Federal funds sold and other earning assets

0.16

%

0.16

%

0.16

%

0.11

%

0.09

%

Total interest-earning assets

2.98

%

3.07

%

3.24

%

3.30

%

3.64

%

Interest-Bearing Liabilities:

Interest-bearing demand deposits

0.15

%

0.14

%

0.24

%

0.35

%

0.39

%

Savings and money market deposits

0.15

%

0.15

%

0.18

%

0.22

%

0.25

%

Certificates and other time deposits

0.35

%

0.38

%

0.47

%

0.58

%

0.76

%

Securities sold under repurchase agreements

0.17

%

0.17

%

0.17

%

0.17

%

0.17

%

Total interest-bearing liabilities

0.17

%

0.18

%

0.24

%

0.32

%

0.38

%

Net Interest Margin

2.87

%

2.96

%

3.09

%

3.10

%

3.40

%

Net Interest Margin (tax equivalent)

2.88

%

2.97

%

3.10

%

3.11

%

3.41

%

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

(O) Yield on securities was impacted by net premium amortization of $12,857, $16,006, $15,141, $14,436 and $12,844 for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

Page 11

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Balance Sheet Averages

Loans held for sale

$

4,611

$

8,794

$

11,714

$

13,716

$

33,327

Loans held for investment

16,712,690

16,830,163

17,102,998

17,305,259

17,279,066

Loans held for investment - Warehouse Purchase Program

1,268,715

1,772,971

1,836,252

1,984,305

2,369,601

Total Loans

17,986,016

18,611,928

18,950,964

19,303,280

19,681,994

Investment securities

13,772,974

12,751,857

12,184,964

11,180,948

9,148,841

Federal funds sold and other earning assets

2,135,503

1,393,859

734,787

1,221,993

1,506,645

Total interest-earning assets

33,894,493

32,757,644

31,870,715

31,706,221

30,337,480

Allowance for credit losses on loans

(285,692

)

(287,191

)

(301,011

)

(306,059

)

(315,590

)

Cash and due from banks

326,552

329,406

570,765

521,737

308,787

Goodwill

3,231,637

3,231,637

3,231,637

3,231,637

3,233,231

Core deposit intangibles, net

60,346

63,091

65,955

68,830

71,763

Other real estate

1,893

321

279

3,001

6,385

Fixed assets, net

327,297

321,524

323,584

326,570

326,004

Other assets

510,944

530,603

536,745

544,085

576,300

Total assets

$

38,067,470

$

36,947,035

$

36,298,669

$

36,096,022

$

34,544,360

Noninterest-bearing deposits

$

10,636,624

$

10,587,441

$

10,286,062

$

10,062,085

$

9,206,791

Interest-bearing demand deposits

6,775,114

6,196,283

6,089,678

6,281,068

6,112,469

Savings and money market deposits

10,870,461

10,286,650

9,944,664

9,872,624

9,420,064

Certificates and other time deposits

2,637,529

2,766,123

2,897,123

2,980,186

3,031,621

Total deposits

30,919,728

29,836,497

29,217,527

29,195,963

27,770,945

Securities sold under repurchase agreements

452,054

432,981

448,338

383,975

376,662

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

176,360

234,746

229,502

198,748

169,138

Shareholders' equity

6,489,381

6,412,864

6,373,355

6,287,389

6,197,668

Total liabilities and equity

$

38,067,470

$

36,947,035

$

36,298,669

$

36,096,022

$

34,544,360

Page 12

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Period End Balances

Loan Portfolio

Commercial and industrial

$

2,007,783

11.1

%

$

2,050,631

11.0

%

$

1,841,899

9.7

%

$

2,021,951

10.5

%

$

2,104,116

10.7

%

Warehouse purchase program

1,344,541

7.4

%

1,775,699

9.5

%

1,998,049

10.6

%

2,095,559

10.9

%

2,272,389

11.6

%

Construction, land development and other land loans

2,327,837

12.9

%

2,299,715

12.4

%

2,269,417

12.0

%

2,147,474

11.2

%

2,031,355

10.4

%

1-4 family residential

4,970,620

27.5

%

4,860,419

26.1

%

4,709,468

24.8

%

4,531,589

23.5

%

4,310,437

21.9

%

Home equity

870,130

4.8

%

808,289

4.4

%

746,426

3.9

%

637,431

3.3

%

554,278

2.8

%

Commercial real estate (includes multi-family residential)

5,150,555

28.5

%

5,251,368

28.2

%

5,550,841

29.3

%

5,681,184

29.5

%

5,858,475

29.8

%

Agriculture (includes farmland)

617,418

3.4

%

620,338

3.3

%

631,497

3.3

%

590,135

3.1

%

571,783

2.9

%

Consumer and other

246,433

1.4

%

288,496

1.6

%

274,980

1.5

%

264,652

1.4

%

293,023

1.5

%

Energy

445,949

2.5

%

491,305

2.6

%

569,314

3.0

%

501,821

2.6

%

503,947

2.6

%

Paycheck Protection Program

86,258

0.5

%

169,884

0.9

%

365,841

1.9

%

779,989

4.0

%

1,139,083

5.8

%

Total loans

$

18,067,524

$

18,616,144

$

18,957,732

$

19,251,785

$

19,638,886

Deposit Types

Noninterest-bearing DDA

$

10,776,652

34.7

%

$

10,750,034

34.9

%

$

10,326,489

35.0

%

$

10,099,149

34.7

%

$

9,820,445

34.1

%

Interest-bearing DDA

6,603,934

21.2

%

6,741,092

21.9

%

6,088,923

20.7

%

6,185,115

21.2

%

6,158,641

21.4

%

Money market

7,603,329

24.5

%

7,178,904

23.3

%

6,864,664

23.3

%

6,706,252

23.0

%

6,714,889

23.4

%

Savings

3,543,300

11.4

%

3,401,727

11.1

%

3,293,850

11.2

%

3,160,606

10.9

%

3,083,447

10.7

%

Certificates and other time deposits

2,541,095

8.2

%

2,700,005

8.8

%

2,877,726

9.8

%

2,959,119

10.2

%

2,985,683

10.4

%

Total deposits

$

31,068,310

$

30,771,762

$

29,451,652

$

29,110,241

$

28,763,105

Loan to Deposit Ratio

58.2

%

60.5

%

64.4

%

66.1

%

68.3

%

Page 13

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Construction Loans

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Single family residential construction

$

816,072

35.0

%

$

728,393

31.7

%

$

659,248

29.0

%

$

624,954

29.1

%

$

590,223

29.1

%

Land development

103,853

4.5

%

99,099

4.3

%

92,623

4.1

%

97,709

4.6

%

97,267

4.8

%

Raw land

310,987

13.4

%

322,673

14.0

%

315,803

13.9

%

245,484

11.4

%

243,394

12.0

%

Residential lots

212,029

9.1

%

206,978

9.0

%

195,201

8.6

%

165,645

7.7

%

176,884

8.6

%

Commercial lots

183,760

7.9

%

184,901

8.0

%

169,189

7.5

%

153,714

7.2

%

137,512

6.8

%

Commercial construction and other

701,148

30.1

%

757,687

33.0

%

837,436

36.9

%

860,069

40.0

%

786,192

38.7

%

Net unaccreted discount

(12

)

(16

)

(83

)

(101

)

(117

)

Total construction loans

$

2,327,837

$

2,299,715

$

2,269,417

$

2,147,474

$

2,031,355

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2022

Houston

Dallas

Austin

OK City

Tulsa

Other (P)

Total

Collateral Type

Shopping center/retail

$

326,121

$

279,776

$

45,751

$

16,548

$

28,018

$

271,861

$

968,075

Commercial and industrial buildings

158,618

78,634

17,496

22,983

17,583

162,506

457,820

Office buildings

121,213

376,630

42,520

70,277

4,648

70,284

685,572

Medical buildings

108,561

18,452

2,570

19,882

41,190

69,449

260,104

Apartment buildings

153,768

88,583

10,989

14,937

35,603

173,764

477,644

Hotel

85,057

70,170

44,833

28,538

-

141,223

369,821

Other

77,727

69,152

26,433

7,649

2,755

71,389

255,105

Total

$

1,031,065

$

981,397

$

190,592

$

180,814

$

129,797

$

960,476

$

3,474,141

(Q)

Acquired Loans

Non-PCD Loans

PCD Loans

Total Acquired Loans

Balance at

Acquisition

Date

Balance at

Dec 31, 2021

Balance at

Mar 31, 2022

Balance at

Acquisition

Date

Balance at

Dec 31, 2021

Balance at

Mar 31, 2022

Balance at

Acquisition

Date

Balance at

Dec 31, 2021

Balance at

Mar 31, 2022

Loan marks:

Acquired banks (R)

$

345,599

$

8,143

$

3,469

$

320,052

$

4,838

$

4,317

$

665,651

$

12,981

$

7,786

Acquired portfolio loan balances:

Acquired banks (R)

12,286,159

2,094,039

1,868,511

689,573

83,909

72,992

12,975,732

(S)

2,177,948

1,941,503

Acquired portfolio loan balances less loan marks

$

11,940,560

$

2,085,896

$

1,865,042

$

369,521

$

79,071

$

68,675

$

12,310,081

$

2,164,967

$

1,933,717

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

(Q) Represents a portion of total commercial real estate loans of $5.151 billion as of March 31, 2022.

(R) Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank and LegacyTexas Bank.

(S) Actual principal balances acquired.

Page 14

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Asset Quality

Nonaccrual loans

$

21,765

$

26,269

$

35,035

$

32,880

$

43,025

Accruing loans 90 or more days past due

3,695

887

1,038

330

313

Total nonperforming loans

25,460

27,156

36,073

33,210

43,338

Repossessed assets

19

310

326

310

362

Other real estate

1,705

622

150

144

462

Total nonperforming assets

$

27,184

$

28,088

$

36,549

$

33,664

$

44,162

Nonperforming assets:

Commercial and industrial (includes energy)

$

4,403

$

6,150

$

8,199

$

8,613

$

11,290

Construction, land development and other land loans

1,761

1,841

803

1,423

1,692

1-4 family residential (includes home equity)

11,899

11,990

11,117

11,681

11,920

Commercial real estate (includes multi-family residential)

7,685

7,276

15,691

11,266

16,896

Agriculture (includes farmland)

1,402

816

643

661

803

Consumer and other

34

15

96

20

1,561

Total

$

27,184

$

28,088

$

36,549

$

33,664

$

44,162

Number of loans/properties

147

157

155

152

167

Allowance for credit losses on loans

$

285,163

$

286,380

$

287,187

$

302,884

$

307,210

Net charge-offs (recoveries):

Commercial and industrial (includes energy)

$

14

$

177

$

3,763

$

3,529

$

1,584

Construction, land development and other land loans

430

(162

)

(4

)

(105

)

(5

)

1-4 family residential (includes home equity)

87

(72

)

66

(6

)

47

Commercial real estate (includes multi-family residential)

(366

)

(10

)

11,180

517

6,589

Agriculture (includes farmland)

(103

)

(102

)

(63

)

(9

)

33

Consumer and other

1,155

976

755

400

610

Total

$

1,217

$

807

$

15,697

$

4,326

$

8,858

Asset Quality Ratios

Nonperforming assets to average interest-earning assets

0.08

%

0.09

%

0.11

%

0.11

%

0.15

%

Nonperforming assets to loans and other real estate

0.15

%

0.15

%

0.19

%

0.17

%

0.22

%

Net charge-offs to average loans (annualized)

0.03

%

0.02

%

0.33

%

0.09

%

0.18

%

Allowance for credit losses on loans to total loans

1.58

%

1.54

%

1.51

%

1.57

%

1.56

%

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

1.71

%

1.72

%

1.73

%

1.85

%

1.89

%

Page 15

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

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

NOTES TO SELECTED FINANCIAL DATA

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

Three Months Ended

Mar 31, 2022

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

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

Net income

$

122,326

$

126,787

$

128,590

$

130,611

$

133,309

Average shareholders' equity

$

6,489,381

$

6,412,864

$

6,373,355

$

6,287,389

$

6,197,668

Less: Average goodwill and other intangible assets

(3,291,983

)

(3,294,728

)

(3,297,592

)

(3,300,467

)

(3,304,994

)

Average tangible shareholders' equity

$

3,197,398

$

3,118,136

$

3,075,763

$

2,986,922

$

2,892,674

Return on average tangible common equity(F)

15.30

%

16.26

%

16.72

%

17.49

%

18.43

%

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

Shareholders' equity

$

6,504,424

$

6,427,236

$

6,345,441

$

6,310,337

$

6,221,846

Less: Goodwill and other intangible assets

(3,290,700

)

(3,293,320

)

(3,296,175

)

(3,299,053

)

(3,301,940

)

Tangible shareholders' equity

$

3,213,724

$

3,133,916

$

3,049,266

$

3,011,284

$

2,919,906

Period end shares outstanding

92,160

92,170

92,160

92,935

92,929

Tangible book value per share

$

34.87

$

34.00

$

33.09

$

32.40

$

31.42

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

Tangible shareholders' equity

$

3,213,724

$

3,133,916

$

3,049,266

$

3,011,284

$

2,919,906

Total assets

$

38,271,186

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

Less: Goodwill and other intangible assets

(3,290,700

)

(3,293,320

)

(3,296,175

)

(3,299,053

)

(3,301,940

)

Tangible assets

$

34,980,486

$

34,540,650

$

33,215,944

$

32,800,871

$

32,256,478

Period end tangible equity to period end tangible assets ratio

9.19

%

9.07

%

9.18

%

9.18

%

9.05

%

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

Allowance for credit losses on loans

$

285,163

$

286,380

$

287,187

$

302,884

$

307,210

Total loans

$

18,067,524

$

18,616,144

$

18,957,732

$

19,251,785

$

19,638,886

Less: Warehouse Purchase Program loans

(1,344,541

)

(1,775,699

)

(1,998,049

)

(2,095,559

)

(2,272,389

)

Less: Paycheck Protection Program loans

(86,258

)

(169,884

)

(365,841

)

(779,989

)

(1,139,083

)

Total loans less Warehouse Purchase Program and Paycheck Protection Program loans

$

16,636,725

$

16,670,561

$

16,593,842

$

16,376,237

$

16,227,414

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

1.71

%

1.72

%

1.73

%

1.85

%

1.89

%

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

Noninterest expense

$

119,850

$

119,538

$

119,815

$

115,191

$

119,076

Net interest income

$

239,944

$

244,760

$

248,567

$

245,399

$

254,582

Noninterest income

35,122

35,757

34,645

35,556

34,008

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

689

1,165

255

(244

)

(79

)

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

34,433

34,592

34,390

35,800

34,087

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

$

274,377

$

279,352

$

282,957

$

281,199

$

288,669

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

43.68

%

42.79

%

42.34

%

40.96

%

41.25

%

Page 16

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Prosperity Bancshares Inc. published this content on 27 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2022 10:34:23 UTC.