PROSPERITY BANCSHARES, INC.®

REPORTS FOURTH QUARTER

2021 EARNINGS

•

Fourth quarter net income of $126.8 million and earnings per share (diluted) of $1.38

•

Loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, increased $76.7 million or 0.5% (1.8% annualized) during the fourth quarter 2021

•

Loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, increased $229.2 million or 1.4% during 2021

•

Deposits increased $1.320 billion or 4.5% (17.9% annualized) during the fourth quarter 2021

•

Deposits increased $3.411 billion or 12.5% during 2021

•

Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.72%(1)

•

Nonperforming assets remain low at 0.09% of fourth quarter average interest-earning assets

•

Return (annualized) on fourth quarter average assets of 1.37%

•

Returns (annualized) on fourth quarter average common equity of 7.91% and average tangible common equity of 16.26%(1)

HOUSTON, January 26, 2022. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $126.8 million for the quarter ended December 31, 2021 compared with $137.1 million for the same period in 2020. Net income per diluted common share was $1.38 for the quarter ended December 31, 2021, compared with $1.48 for the same period in 2020, and the annualized return on fourth quarter average assets was 1.37%. Additionally, loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program ("PPP") loans, increased $76.7 million or 0.5% (1.8% annualized) and deposits increased $1.320 billion or 4.5% (17.9% annualized) during the fourth quarter of 2021. Nonperforming assets remain low at 0.09% of fourth quarter average interest-earning assets.

"We believe that Texas and Oklahoma will have a higher growth rate and outperform other states over the next several years. Companies and individuals continue to move to Texas and Oklahoma because of lower tax rates and a business-friendly political environment, and we believe that will continue, which should benefit our bank. We expect that companies will need more infrastructure and buildings, people will need more housing and consumer staples, and both will need banks to finance the growth," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

______________

(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.

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"Our bank continues to show strong deposit growth, with over $3.4 billion added in 2021, and a strong return on assets of 1.37% and return on average tangible equity of 16.26%. Our asset quality continues to be one of the best in the industry. We predict loans will grow given the vibrant economy and the bank's net interest margin should improve going forward with potential rate hikes forecasted by the Federal Reserve. I would like to thank all our customers, associates, and directors for helping us build such a successful bank," concluded Zalman.

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

Net income was $126.8 million(2) for the three months ended December 31, 2021 compared with $137.1 million(3) for the same period in 2020, a decrease of $10.3 million or 7.5%. The change was primarily due to a decrease in loan interest income and loan discount accretion of $10.7 million, partially offset by an increase in securities interest income and a decrease in interest expense. Net income per diluted common share was $1.38 for the three months ended December 31, 2021 compared with $1.48 for the same period in 2020, a decrease of 6.8%. On a linked quarter basis, net income was $126.8 million(2) for the three months ended December 31, 2021 compared with $128.6 million(4) for the three months ended September 30, 2021. Net income per diluted common share was $1.38 for the three months ended December 31, 2021 compared with $1.39 for the three months ended September 30, 2021. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2021 were 1.37%, 7.91% and 16.26%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 42.79%(1) for the three months ended December 31, 2021.

Net interest income before provision for credit losses for the three months ended December 31, 2021 was $244.8 million compared with $257.6 million for the same period in 2020, a decrease of $12.9 million or 5.0%. 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 $10.7 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 $244.8 million compared with $248.6 million for the three months ended September 30, 2021.

The net interest margin on a tax equivalent basis was 2.97% for the three months ended December 31, 2021 compared with 3.49% for the same period in 2020. The change was primarily due to lower average rates on loans and investment securities and a decrease in loan discount accretion of $10.7 million, 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 2.97% for the three months ended December 31, 2021 compared with 3.10% for the three months ended September 30, 2021. The change was primarily due to lower average rates on loans and investment securities, and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $35.8 million for the three months ended December 31, 2021 compared with $36.5 million for the same period in 2020, a decrease of $790 thousand or 2.2%. This change was primarily due to a decrease in mortgage income and a decrease in other noninterest income, partially offset by the net gain on sale of assets compared to prior year's net loss on write-down of assets. On a linked quarter basis, noninterest income increased $1.1 million or 3.2% to $35.8 million compared with $34.6 million for the three months ended September 30, 2021. This change was primarily due to an increase in net gain on sale of assets and an increase in nonsufficient funds ("NSF") fees, partially offset by a decrease in mortgage income.

Noninterest expense was $119.5 million for the three months ended December 31, 2021 compared with $120.2 million for the same period in 2020 and $119.8 million for the three months ended September 30, 2021.

Results of Operations for the Year Ended December 31, 2021

Net income was $519.3 million(5) for the year ended December 31, 2021 compared with $528.9 million(6) for the same period in 2020, a decrease of $9.6 million or 1.8%. Net income per diluted common share was $5.60 for the year ended December 31, 2021 compared with $5.68 for the same period in 2020, a decrease of 1.4%. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2021 were 1.44%, 8.21% and 17.18%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 41.83%(1) for the year ended December 31, 2021.

______________

(2)

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.

(3)

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.

(4)

Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $5.4 million for the three months ended September 30, 2021.

(5)

Includes purchase accounting adjustments of $31.5 million, net of tax, primarily comprised of loan discount accretion of $39.3 million for the year ended December 31, 2021.

(6)

Includes purchase accounting adjustments of $76.5 million, net of tax, primarily comprised of loan discount accretion of $91.3 million, and merger related expenses of $8.0 million and tax benefit for NOL of $20.1 million for the year ended December 31, 2020.

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Net interest income before provision for credit losses for the year ended December 31, 2021 was $993.3 million compared with $1.031 billion for the same period in 2020, a decrease of $37.4 million or 3.6%. The change was primarily due to lower average rates on loans and a decrease in loan discount accretion of $52.1 million, partially offset by an increase in the average investment securities balance and a decrease in the average rate on interest-bearing liabilities.

The net interest margin on a tax equivalent basis for the year ended December 31, 2021 was 3.14% compared with 3.64% for the same period in 2020. The change was primarily due to lower average rates on loans and investment securities, a decrease in loan discount accretion of $52.1 million, and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $140.0 million for the year ended December 31, 2021 compared with $131.5 million for the same period in 2020, an increase of $8.4 million or6.4%. This increase was primarily due to the net gain on sale of assets compared to prior year's net loss on write-down of assets and an increase in credit card, debit card and ATM card income, partially offset by a decrease in mortgage income.

Noninterest expense was $473.6 million for the year ended December 31, 2021 compared with $497.2 million for the same period in 2020, a decrease of $23.6 million or 4.7%. The change was primarily due to decreases in merger related expenses, data processing, net occupancy and equipment and other noninterest expense as a result of efficiencies gained following the LegacyTexas Bank system conversion during the second quarter of 2020 and net gains on sale of other real estate of $2.7 million.

Balance Sheet Information

At December 31, 2021, Prosperity had $37.834 billion in total assets, an increase of $3.775 billion or 11.1% compared with $34.059 billion at December 31, 2020.

Loans at December 31, 2021 were $18.616 billion, a decrease of $1.631 billion or 8.1%, compared with $20.247 billion at December 31, 2020, primarily due to a decrease in Warehouse Purchase Program, commercial real estate and PPP loans, partially offset by an increase in 1-4 family residential loans. Linked quarter loans decreased $341.6 million or 1.8% from $18.958 billion at September 30, 2021. At December 31, 2021, the Company had $169.9 million of PPP loans compared to $963.2 million of PPP loans at December 31, 2020 and $365.8 million of PPP loans at September 30, 2021. Excluding Warehouse Purchase Program and PPP loans, loans at December 31, 2021 were $16.671 billion compared to $16.441 billion at December 31, 2020, an increase of $229.2 million or 1.4%. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, increased $76.7 million or 0.5% (1.8% annualized) from $16.594 billion at September 30, 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 December 31, 2021, oil and gas loans totaled $491.3 million (net of discount and excluding PPP loans totaling $27.9 million) or 2.6% of total loans, of which $294.1 million were production loans and $197.2 million were servicing loans, compared with total oil and gas loans of $512.7 million (net of discount and excluding PPP loans totaling $88.7 million) or 2.5% of total loans at December 31, 2020, of which $285.8 million were production loans and $226.9 million were servicing loans. In addition, as of December 31, 2021, Prosperity had total unfunded commitments to oil and gas companies of $419.0 million compared with total unfunded commitments to oil and gas companies of $243.2 million as of December 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 December 31, 2021, loans to hotels totaled $386.4 million (excluding PPP loans totaling $920 thousand) or 2.1% of total loans, a decrease of $7.4 million or 1.9%, compared with $393.8 million (excluding PPP loans totaling $6.5 million) at December 31, 2020. At December 31, 2021, loans to restaurants totaled $201.7 million (excluding PPP loans totaling $29.3 million) or 1.1% of total loans, a decrease of $13.0 million or 6.1%, compared with $214.7 million (excluding PPP loans totaling $83.6 million) at December 31, 2020.

Deposits at December 31, 2021 were $30.772 billion, an increase of $3.411 billion or 12.5%, compared with $27.360 billion at December 31, 2020. Linked quarter deposits increased $1.320 billion or 4.5% (17.9% annualized) from $29.452 billion at September 30, 2021.

Asset Quality

Nonperforming assets totaled $28.1 million or 0.09% of quarterly average interest-earning assets at December 31, 2021, compared with $59.6 million or 0.20% of quarterly average interest-earning assets at December 31, 2020 and $36.5 million or 0.11% of quarterly average interest-earning assets at September 30, 2021.

The allowance for credit losses on loans and off-balance sheet credit exposures was $316.3 million at December 31, 2021 compared with $346.0 million at December 31, 2020 and with $317.1 million at September 30, 2021.

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The allowance for credit losses on loans was $286.4 million or 1.54% of total loans at December 31, 2021 compared with$316.1million or 1.56% of total loans at December 31, 2020 and with $287.2 million or 1.51% of total loans at September 30, 2021.Excluding Warehouse Purchase Program andPPP loans, the allowance for credit losses on loans to total loanswas 1.72%(1) at December 31, 2021 compared with1.92%(1) at December 31, 2020 and 1.73%(1) at September 30, 2021.

There was no provision for credit losses for the three month periods ended December 31, 2021, December 31, 2020 and September 30, 2021. There was no provision for credit losses for the year ended December 31, 2021 compared with $20.0 million for the year ended December 31, 2020.

Net charge-offs were $807 thousand for the three months ended December 31, 2021 compared with net charge-offs of $7.6 million for the three months ended December 31, 2020 and net charge-offs of $15.7 million for the three months ended September 30, 2021. Net charge-offs for the fourth quarter of 2021 did not include any purchased credit deteriorated ("PCD") loans and $1.7 million of specific reserves on resolved PCD loans was released to the general reserve.

Net charge-offs were $29.7 million for the year ended December 31, 2021 compared with $31.9 million for the year ended December 31, 2020. Net charge-offs for the year ended December 31, 2021 included $12.7 million related to resolved PCD loans and $10.8 million related to the partial charge-off of one commercial real estate loan obtained through acquisition. The PCD loans had specific reserves of $12.9 million, of which $9.9 million was allocated to the charge-offs and $3.0 million was moved to the general reserve. Further, an additional $21.6 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Dividend

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

Stock Repurchase Program

On January 18, 2022, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately

4.6 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 18, 2023, at the discretion of management. Under its 2021 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended December 31, 2021 and 767,134 shares of its common stock at an average weighted price of $67.87 per share during the year ended December 31, 2021.

COVID-19 Pandemic

Prosperity continues to monitor the latest developments regarding COVID-19. As of December 31, 2021, 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 December 31, 2021, had an outstanding balance of 1,512 loans totaling $169.9 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 December 31, 2021, Prosperity had approximately $29.5 million in outstanding loans subject to deferral and modification agreements.

Conference Call

Prosperity's management team will host a conference call on Wednesday, January 26, 2022 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's fourth 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 0033886.

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.

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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 on loans 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 December 31, 2021, Prosperity Bancshares, Inc.® is a $37.834 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 273 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 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. 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;

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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, 2020, Quarterly Report on Form 10-Q for the period ended September 30, 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

Mount Vernon

Liberty

North University

Bryan

Grapevine

Palestine

Magnolia

Texas Tech Student Union

Bryan-29th Street

Grapevine Main

Rusk

Magnolia Parkway

Bryan-East

Kiest

Seven Points

Mont Belvieu

Midland

Bryan-North

Lake Highlands

Teague

Nederland

Wadley

Caldwell

McKinney

Tyler-Beckham

Needville

Wall Street

College Station

McKinney Eldorado

Tyler-South Broadway

Rosenberg

Crescent Point

McKinney Redbud

Tyler-University

Shadow Creek

Odessa

Hearne

North Carrolton

Winnsboro

Spring

Grandview

Huntsville

Oak Cliff

Tomball

Grant

Madisonville

Park Cities

Houston Area

Waller

Kermit Highway

Navasota

Plano

Houston

West Columbia

Parkway

New Waverly

Plano-West

Aldine

Wharton

Rock Prairie

Preston Forest

Alief

Winnie

Other West Texas Area

Southwest Parkway

Preston Parker

Bellaire

Wirt

Locations

Tower Point

Preston Royal

Beltway

Big Spring

Wellborn Road

Red Oak

Clear Lake

South Texas Area -

Brownfield

Richardson

Copperfield

Corpus Christi

Brownwood

Central Texas Area

Richardson-West

Cypress

Calallen

Cisco

Austin

Rosewood Court

Downtown

Carmel

Comanche

Allandale

The Colony

Eastex

Northwest

Early

Cedar Park

Tollroad

Fairfield

Saratoga

Floydada

Congress

Trinity Mills

First Colony

Timbergate

Gorman

Lakeway

Turtle Creek

Fry Road

Water Street

Levelland

Liberty Hill

West 15th Plano

Gessner

Littlefield

Northland

West Allen

Gladebrook

Victoria

Merkel

Oak Hill

Westmoreland

Grand Parkway

Victoria Main

Plainview

Research Blvd

Wylie

Heights

Victoria-Navarro

San Angelo

Westlake

Highway 6 West

Victoria-North

Slaton

Fort Worth

Little York

Victoria Salem

Snyder

Other Central Texas Area

Haltom City

Medical Center

Locations

Hulen

Memorial Drive

Other South Texas Area

Oklahoma

Bastrop

Keller

Northside

Locations

Central Oklahoma Area

Canyon Lake

Museum Place

Pasadena

Alice

Oklahoma City

Dime Box

Renaissance Square

Pecan Grove

Aransas Pass

23rd Street

Dripping Springs

Roanoke

Pin Oak

Beeville

Expressway

Elgin

Stockyards

River Oaks

Colony Creek

I-240

Flatonia

Sugar Land

Cuero

Memorial

Georgetown

Other Dallas/Fort Worth Area

SW Medical Center

Edna

Gruene

Locations

Tanglewood

Goliad

Other Central Oklahoma Area

Kingsland

Arlington

The Plaza

Gonzales

Locations

La Grange

Azle

Uptown

Hallettsville

Edmond

Lexington

Ennis

Waugh Drive

Kingsville

Norman

New Braunfels

Gainesville

Westheimer

Mathis

Pleasanton

Glen Rose

West University

Padre Island

Tulsa Area

Round Rock

Granbury

Woodcreek

Palacios

Tulsa

San Antonio

Grand Prairie

Port Lavaca

Garnett

Schulenburg

Jacksboro

Katy

Portland

Harvard

Seguin

Mesquite

Cinco Ranch

Rockport

Memorial

Smithville

Muenster

Katy-Spring Green

Sinton

Sheridan

Thorndale

Runaway Bay

Taft

S. Harvard

Weimar

Sanger

The Woodlands

Yoakum

Utica Tower

Waxahachie

The Woodlands-College Park

Yorktown

Yale

Dallas/Fort Worth Area

Weatherford

The Woodlands-I-45

Dallas

The Woodlands-Research Forest

West Texas Area

Other Tulsa Area Locations

14th Street Plano

East Texas Area

Abilene

Owasso

Abrams Centre

Athens

Other Houston Area

Antilley Road

Addison

Blooming Grove

Locations

Barrow Street

Allen

Canton

Angleton

Cypress Street

Balch Springs

Carthage

Bay City

Judge Ely

Camp Wisdom

Corsicana

Beaumont

Mockingbird

Carrollton

Crockett

Cleveland

Cedar Hill

Eustace

East Bernard

Lubbock

Coppell

Gilmer

El Campo

4th Street

East Plano

Grapeland

Dayton

66th Street

Euless

Gun Barrel City

Galveston

82nd Street

Frisco

Jacksonville

Groves

86th Street

Frisco Warren

Kerens

Hempstead

98th Street

Frisco-West

Longview

Hitchcock

Avenue Q

- - -

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Balance Sheet Data (at period end)

Loans held for sale

$

7,274

$

10,197

$

9,080

$

20,991

$

46,777

Loans held for investment

16,833,171

16,949,486

17,147,146

17,345,506

17,357,788

Loans held for investment - Warehouse Purchase Program

1,775,699

1,998,049

2,095,559

2,272,389

2,842,379

Total loans

18,616,144

18,957,732

19,251,785

19,638,886

20,246,944

Investment securities(A)

12,818,901

12,629,368

11,918,691

10,088,002

8,542,820

Federal funds sold

241

237

281

8,986

553

Allowance for credit losses on loans

(286,380

)

(287,187

)

(302,884

)

(307,210

)

(316,068

)

Cash and due from banks

2,547,739

1,055,386

1,059,879

1,947,235

1,342,996

Goodwill

3,231,636

3,231,636

3,231,636

3,231,636

3,231,636

Core deposit intangibles, net

61,684

64,539

67,417

70,304

73,235

Other real estate owned

622

150

144

462

10,593

Fixed assets, net

319,799

322,799

324,502

326,970

323,572

Other assets

523,584

537,459

548,473

553,147

602,994

Total assets

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

$

34,059,275

Noninterest-bearing deposits

$

10,750,034

$

10,326,489

$

10,099,149

$

9,820,445

$

9,151,233

Interest-bearing deposits

20,021,728

19,125,163

19,011,092

18,942,660

18,209,259

Total deposits

30,771,762

29,451,652

29,110,241

28,763,105

27,360,492

Other borrowings

-

-

-

-

-

Securities sold under repurchase agreements

448,099

440,969

433,069

377,106

389,583

Subordinated notes

-

-

-

-

-

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

156,926

244,110

216,330

166,414

148,584

Total liabilities

31,406,734

30,166,678

29,789,587

29,336,572

27,928,606

Shareholders' equity(B)

6,427,236

6,345,441

6,310,337

6,221,846

6,130,669

Total liabilities and equity

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

$

34,059,275

(A) Includes $2,290, $2,483, $1,394, $970 and $974 in unrealized gains on available for sale securities for the quarterly periods ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

(B) Includes $1,809, $1,961, $1,101, $766 and $769 in after-tax unrealized gains on available for sale securities for the quarterly periods ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

Page 8

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

Income Statement Data

Interest income:

Loans

$

206,209

$

213,821

$

216,803

$

233,075

$

241,625

$

869,908

$

975,895

Securities(C)

46,857

46,217

43,708

38,677

36,721

175,459

166,812

Federal funds sold and other earning assets

563

302

340

351

301

1,556

1,203

Total interest income

253,629

260,340

260,851

272,103

278,647

1,046,923

1,143,910

Interest expense:

Deposits

8,685

11,578

15,288

17,362

19,757

52,913

102,502

Other borrowings

-

-

-

-

33

-

3,550

Securities sold under repurchase agreements

184

195

164

159

224

702

1,627

Subordinated notes and trust preferred

-

-

-

-

999

-

5,498

Total interest expense

8,869

11,773

15,452

17,521

21,013

53,615

113,177

Net interest income

244,760

248,567

245,399

254,582

257,634

993,308

1,030,733

Provision for credit losses

-

-

-

-

-

-

20,000

Net interest income after provision for credit losses

244,760

248,567

245,399

254,582

257,634

993,308

1,010,733

Noninterest income:

Nonsufficient funds (NSF) fees

8,401

7,962

6,560

6,687

8,051

29,610

30,295

Credit card, debit card and ATM card income

8,894

8,837

8,918

8,031

8,193

34,680

31,245

Service charges on deposit accounts

6,237

6,115

6,062

5,978

6,046

24,392

23,860

Trust income

2,698

2,467

2,276

2,837

2,192

10,278

9,598

Mortgage income

685

1,396

2,914

3,307

3,989

8,302

10,777

Brokerage income

953

861

795

711

642

3,320

2,504

Bank owned life insurance income

1,317

1,325

1,294

1,292

1,252

5,228

5,754

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

1,165

255

(244

)

(79

)

(675

)

1,097

(5,533

)

Other noninterest income

5,407

5,427

6,981

5,244

6,857

23,059

23,034

Total noninterest income

35,757

34,645

35,556

34,008

36,547

139,966

131,534

Noninterest expense:

Salaries and benefits

76,496

78,412

75,611

80,037

77,809

310,556

309,268

Net occupancy and equipment

8,140

8,165

8,046

7,833

8,223

32,184

35,037

Credit and debit card, data processing and software amortization

9,050

9,103

8,718

8,233

8,442

35,104

40,329

Regulatory assessments and FDIC insurance

2,801

2,497

2,670

2,670

2,670

10,638

9,861

Core deposit intangibles amortization

2,855

2,878

2,887

2,931

3,243

11,551

13,169

Depreciation

4,518

4,524

4,513

4,540

4,261

18,095

18,232

Communications

3,134

3,013

2,982

2,899

2,931

12,028

12,477

Other real estate expense

24

30

198

244

279

496

623

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

2

4

(1,839

)

(887

)

(195

)

(2,720

)

(458

)

Merger related expenses

-

-

-

-

-

-

8,018

Other noninterest expense

12,518

11,189

11,405

10,576

12,542

45,688

50,677

Total noninterest expense

119,538

119,815

115,191

119,076

120,205

473,620

497,233

Income before income taxes

160,979

163,397

165,764

169,514

173,976

659,654

645,034

Provision for income taxes

34,192

34,807

35,153

36,205

36,885

140,357

116,130

Net income available to common shareholders

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

528,904

(C) Interest income on securities was reduced by net premium amortization of $16,006, $15,141, $14,436, $12,844 and $11,509 for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and $58,427 and $38,827 for the years ended December 31, 2021 and December 31, 2020, respectively.

Page 9

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

Profitability

Net income (D) (E)

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

528,904

Basic earnings per share

$

1.38

$

1.39

$

1.41

$

1.44

$

1.48

$

5.60

$

5.68

Diluted earnings per share

$

1.38

$

1.39

$

1.41

$

1.44

$

1.48

$

5.60

$

5.68

Return on average assets (F)

1.37

%

1.42

%

1.45

%

1.54

%

1.63

%

1.44

%

1.62

%

(J)

Return on average common equity (F)

7.91

%

8.07

%

8.31

%

8.60

%

8.98

%

8.21

%

8.85

%

(J)

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

16.26

%

16.72

%

17.49

%

18.43

%

19.57

%

17.18

%

19.83

%

(J)

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

2.97

%

3.10

%

3.11

%

3.41

%

3.49

%

3.14

%

3.64

%

Efficiency ratio (G) (I)

42.79

%

42.34

%

40.96

%

41.25

%

40.77

%

41.83

%

42.58

%

(K)

Liquidity and Capital Ratios

Equity to assets

16.99

%

17.38

%

17.48

%

17.50

%

18.00

%

16.99

%

18.00

%

Common equity tier 1 capital

15.10

%

14.84

%

15.26

%

14.60

%

13.74

%

15.10

%

13.74

%

Tier 1 risk-based capital

15.10

%

14.84

%

15.26

%

14.60

%

13.74

%

15.10

%

13.74

%

Total risk-based capital

15.45

%

15.20

%

15.71

%

15.07

%

14.23

%

15.45

%

14.23

%

Tier 1 leverage capital

9.62

%

9.55

%

9.50

%

9.68

%

9.67

%

9.62

%

9.67

%

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

9.07

%

9.18

%

9.18

%

9.05

%

9.19

%

9.07

%

9.19

%

Other Data

Weighted-average shares used in computing earnings per common share

Basic

92,162

92,683

92,935

92,854

92,559

92,657

93,058

Diluted

92,162

92,683

92,935

92,854

92,559

92,657

93,058

Period end shares outstanding

92,170

92,160

92,935

92,929

92,571

92,170

92,571

Cash dividends paid per common share

$

0.52

$

0.49

$

0.49

$

0.49

$

0.49

$

1.99

$

1.87

Book value per common share

$

69.73

$

68.85

$

67.90

$

66.95

$

66.23

$

69.73

$

66.23

Tangible book value per common share (G)

$

34.00

$

33.09

$

32.40

$

31.42

$

30.53

$

34.00

$

30.53

Common Stock Market Price

High

$

78.67

$

72.97

$

78.06

$

83.02

$

70.38

$

83.02

$

75.22

Low

$

68.53

$

64.40

$

69.83

$

66.45

$

50.43

$

64.40

$

42.02

Period end closing price

$

72.35

$

71.13

$

71.80

$

76.16

$

69.36

$

72.35

$

69.36

Employees - FTE (excluding overtime)

3,704

3,625

3,724

3,724

3,756

3,704

3,756

Number of banking centers

273

273

274

275

275

273

275

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

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

Loan discount accretion

ASC 310-20

$4,635

$3,761

$9,731

$13,313

$13,514

$31,440

$70,705

ASC 310-30

$731

$1,618

$2,462

$3,027

$2,545

$7,838

$20,636

Securities net amortization

$139

$136

$171

$111

$66

$557

$579

Time deposits amortization

$127

$201

$327

$507

$790

$1,162

$6,093

(E) Using effective tax rate of 21.2%, 21.3%, 21.2%, 21.4% and 21.2% for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and 21.3% and 18.0% for the years ended December 31, 2021 and December 31, 2020, respectively. Net income for the second quarter of 2020 includes a tax benefit for NOL related 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

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Three Months Ended

Dec 31, 2021

Sep 30, 2021

Dec 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

$

8,794

$

71

3.20%

$

11,714

$

91

3.08%

$

42,856

$

348

3.23%

Loans held for investment

16,830,163

192,200

4.53%

17,102,998

199,019

4.62%

17,700,756

220,357

4.95%

Loans held for investment - Warehouse Purchase Program

1,772,971

13,938

3.12%

1,836,252

14,711

3.18%

2,603,455

20,920

3.20%

Total Loans

18,611,928

206,209

4.40%

18,950,964

213,821

4.48%

20,347,067

241,625

4.72%

Investment securities

12,751,857

46,857

1.46%

(M)

12,184,964

46,217

1.50%

(M)

8,001,679

36,721

1.83%

(M)

Federal funds sold and other earning assets

1,393,859

563

0.16%

734,787

302

0.16%

1,094,487

301

0.11%

Total interest-earning assets

32,757,644

253,629

3.07%

31,870,715

260,340

3.24%

29,443,233

278,647

3.76%

Allowance for credit losses on loans

(287,191

)

(301,011

)

(322,138

)

Noninterest-earning assets

4,476,582

4,728,965

4,569,811

Total assets

$

36,947,035

$

36,298,669

$

33,690,906

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,196,283

$

2,187

0.14%

$

6,089,678

$

3,614

0.24%

$

5,545,298

$

5,301

0.38%

Savings and money market deposits

10,286,650

3,817

0.15%

9,944,664

4,522

0.18%

9,170,179

6,985

0.30%

Certificates and other time deposits

2,766,123

2,681

0.38%

2,897,123

3,442

0.47%

3,047,475

7,471

0.98%

Other borrowings

-

-

-

-

-

-

2,435

33

5.39%

Securities sold under repurchase agreements

432,981

184

0.17%

448,338

195

0.17%

376,779

224

0.24%

Subordinated notes

-

-

-

-

-

-

81,570

999

4.87%

Total interest-bearing liabilities

19,682,037

8,869

0.18%

(N)

19,379,803

11,773

0.24%

(N)

18,223,736

21,013

0.46%

(N)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

10,587,441

10,286,062

9,103,742

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

Other liabilities

234,746

229,502

224,907

Total liabilities

30,534,171

29,925,314

27,582,332

Shareholders' equity

6,412,864

6,373,355

6,108,574

Total liabilities and shareholders' equity

$

36,947,035

$

36,298,669

$

33,690,906

Net interest income and margin

$

244,760

2.96%

$

248,567

3.09%

$

257,634

3.48%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

457

551

664

Net interest income and margin (tax equivalent basis)

$

245,217

2.97%

$

249,118

3.10%

$

258,298

3.49%

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

(M) Yield on securities was impacted by net premium amortization of $16,006, $15,141, and $11,509 for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 0.12%, 0.16%, and 0.31% for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

Page 11

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Year-to-Date

Dec 31, 2021

Dec 31, 2020

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(O)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(O)

Interest-earning assets:

Loans held for sale

$

16,807

$

510

3.03%

$

55,883

$

1,923

3.44%

Loans held for investment

17,128,069

806,012

4.71%

17,842,438

910,532

5.10%

Loans held for investment - Warehouse Purchase Program

1,988,724

63,386

3.19%

1,964,206

63,440

3.23%

Total loans

19,133,600

869,908

4.55%

19,862,527

975,895

4.91%

Investment securities

11,328,903

175,459

1.55%

(P)

8,022,205

166,812

2.08%

(P)

Federal funds sold and other earning assets

1,212,698

1,556

0.13%

529,075

1,203

0.23%

Total interest-earning assets

31,675,201

1,046,923

3.31%

28,413,807

1,143,910

4.03%

Allowance for credit losses on loans

(302,381

)

(324,308

)

Noninterest-earning assets

4,602,458

4,555,851

Total assets

$

35,975,278

$

32,645,350

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,169,864

$

17,215

0.28%

$

5,177,736

$

22,046

0.43%

Savings and money market deposits

9,883,549

19,582

0.20%

8,654,874

37,685

0.44%

Certificates and other time deposits

2,917,976

16,116

0.55%

3,194,274

42,771

1.34%

Other borrowings

-

-

-

329,276

3,550

1.08%

Securities sold under repurchase agreements

410,747

702

0.17%

371,872

1,627

0.44%

Subordinated notes

-

-

-

114,499

5,498

4.80%

Total interest-bearing liabilities

19,382,136

53,615

0.28%

(Q)

17,842,531

113,177

0.63%

(Q)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

10,036,519

8,558,385

Allowance for credit losses on off-balance sheet credit exposures

29,947

25,735

Other liabilities

204,522

244,047

Total liabilities

29,653,124

26,670,698

Shareholders' equity

6,322,154

5,974,652

Total liabilities and shareholders' equity

35,975,278

$

32,645,350

Net interest income and margin

$

993,308

3.14%

$

1,030,733

3.63%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

2,229

2,735

Net interest income and margin (tax equivalent basis)

$

995,537

3.14%

$

1,033,468

3.64%

(O) Based on an actual 365-day or 366-day basis.

(P) Yield on securities was impacted by net premium amortization of $58,427 and $38,827 for the years ended December 31, 2021 and 2020, respectively.

(Q) Total cost of funds, including noninterest bearing deposits, was 0.18% and 0.43% for the years ended December 31, 2021 and 2020, respectively.

Page 12

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

YIELD TREND (R)

Interest-Earning Assets:

Loans held for sale

3.20

%

3.08

%

3.19

%

2.90

%

3.23

%

Loans held for investment

4.53

%

4.62

%

4.65

%

5.02

%

4.95

%

Loans held for investment - Warehouse Purchase Program

3.12

%

3.18

%

3.21

%

3.23

%

3.20

%

Total loans

4.40

%

4.48

%

4.50

%

4.80

%

4.72

%

Investment securities (S)

1.46

%

1.50

%

1.57

%

1.71

%

1.83

%

Federal funds sold and other earning assets

0.16

%

0.16

%

0.11

%

0.09

%

0.11

%

Total interest-earning assets

3.07

%

3.24

%

3.30

%

3.64

%

3.76

%

Interest-Bearing Liabilities:

Interest-bearing demand deposits

0.14

%

0.24

%

0.35

%

0.39

%

0.38

%

Savings and money market deposits

0.15

%

0.18

%

0.22

%

0.25

%

0.30

%

Certificates and other time deposits

0.38

%

0.47

%

0.58

%

0.76

%

0.98

%

Other borrowings

-

-

-

-

5.39

%

Securities sold under repurchase agreements

0.17

%

0.17

%

0.17

%

0.17

%

0.24

%

Subordinated notes

-

-

-

-

4.87

%

Total interest-bearing liabilities

0.18

%

0.24

%

0.32

%

0.38

%

0.46

%

Net Interest Margin

2.96

%

3.09

%

3.10

%

3.40

%

3.48

%

Net Interest Margin (tax equivalent)

2.97

%

3.10

%

3.11

%

3.41

%

3.49

%

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

(S) Yield on securities was impacted by net premium amortization of $16,006, $15,141, $14,436, $12,844 and $11,509 for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

Page 13

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Balance Sheet Averages

Loans held for sale

$

8,794

$

11,714

$

13,716

$

33,327

$

42,856

Loans held for investment

16,830,163

17,102,998

17,305,259

17,279,066

17,700,756

Loans held for investment - Warehouse Purchase Program

1,772,971

1,836,252

1,984,305

2,369,601

2,603,455

Total Loans

18,611,928

18,950,964

19,303,280

19,681,994

20,347,067

Investment securities

12,751,857

12,184,964

11,180,948

9,148,841

8,001,679

Federal funds sold and other earning assets

1,393,859

734,787

1,221,993

1,506,645

1,094,487

Total interest-earning assets

32,757,644

31,870,715

31,706,221

30,337,480

29,443,233

Allowance for credit losses on loans

(287,191

)

(301,011

)

(306,059

)

(315,590

)

(322,138

)

Cash and due from banks

329,406

570,765

521,737

308,787

289,579

Goodwill

3,231,637

3,231,637

3,231,637

3,233,231

3,231,850

Core deposit intangibles, net

63,091

65,955

68,830

71,763

74,919

Other real estate

321

279

3,001

6,385

14,573

Fixed assets, net

321,524

323,584

326,570

326,004

325,485

Other assets

530,603

536,745

544,085

576,300

633,405

Total assets

$

36,947,035

$

36,298,669

$

36,096,022

$

34,544,360

$

33,690,906

Noninterest-bearing deposits

$

10,587,441

$

10,286,062

$

10,062,085

$

9,206,791

$

9,103,742

Interest-bearing demand deposits

6,196,283

6,089,678

6,281,068

6,112,469

5,545,298

Savings and money market deposits

10,286,650

9,944,664

9,872,624

9,420,064

9,170,179

Certificates and other time deposits

2,766,123

2,897,123

2,980,186

3,031,621

3,047,475

Total deposits

29,836,497

29,217,527

29,195,963

27,770,945

26,866,694

Other borrowings

-

-

-

-

2,435

Securities sold under repurchase agreements

432,981

448,338

383,975

376,662

376,779

Subordinated notes

-

-

-

-

81,570

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

234,746

229,502

198,748

169,138

224,907

Shareholders' equity

6,412,864

6,373,355

6,287,389

6,197,668

6,108,574

Total liabilities and equity

$

36,947,035

$

36,298,669

$

36,096,022

$

34,544,360

$

33,690,906

Page 14

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Period End Balances

Loan Portfolio

Commercial and industrial

$

2,050,631

11.0

%

$

1,841,899

9.7

%

$

2,021,951

10.5

%

$

2,104,116

10.7

%

$

2,210,003

10.9

%

Warehouse purchase program

1,775,699

9.5

%

1,998,049

10.6

%

2,095,559

10.9

%

2,272,389

11.6

%

2,842,379

14.0

%

Construction, land development and other land loans

2,299,715

12.4

%

2,269,417

12.0

%

2,147,474

11.2

%

2,031,355

10.4

%

1,956,960

9.7

%

1-4 family residential

4,860,419

26.1

%

4,709,468

24.8

%

4,531,589

23.5

%

4,310,437

21.9

%

4,253,331

21.0

%

Home equity

808,289

4.4

%

746,426

3.9

%

637,431

3.3

%

554,278

2.8

%

504,207

2.5

%

Commercial real estate (includes multi-family residential)

5,251,368

28.2

%

5,550,841

29.3

%

5,681,184

29.5

%

5,858,475

29.8

%

6,078,764

30.0

%

Agriculture (includes farmland)

620,338

3.3

%

631,497

3.3

%

590,135

3.1

%

571,783

2.9

%

581,352

2.9

%

Consumer and other

288,496

1.6

%

274,980

1.5

%

264,652

1.4

%

293,023

1.5

%

344,028

1.7

%

Energy

491,305

2.6

%

569,314

3.0

%

501,821

2.6

%

503,947

2.6

%

512,735

2.5

%

Paycheck Protection Program

169,884

0.9

%

365,841

1.9

%

779,989

4.0

%

1,139,083

5.8

%

963,185

4.8

%

Total loans

$

18,616,144

$

18,957,732

$

19,251,785

$

19,638,886

$

20,246,944

Deposit Types

Noninterest-bearing DDA

$

10,750,034

34.9

%

$

10,326,489

35.0

%

$

10,099,149

34.7

%

$

9,820,445

34.1

%

$

9,151,233

33.4

%

Interest-bearing DDA

6,741,092

21.9

%

6,088,923

20.7

%

6,185,115

21.2

%

6,158,641

21.4

%

5,899,051

21.6

%

Money market

7,178,904

23.3

%

6,864,664

23.3

%

6,706,252

23.0

%

6,714,889

23.4

%

6,381,014

23.3

%

Savings

3,401,727

11.1

%

3,293,850

11.2

%

3,160,606

10.9

%

3,083,447

10.7

%

2,863,086

10.5

%

Certificates and other time deposits

2,700,005

8.8

%

2,877,726

9.8

%

2,959,119

10.2

%

2,985,683

10.4

%

3,066,108

11.2

%

Total deposits

$

30,771,762

$

29,451,652

$

29,110,241

$

28,763,105

$

27,360,492

Loan to Deposit Ratio

60.5

%

64.4

%

66.1

%

68.3

%

74.0

%

Page 15

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Construction Loans

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Single family residential construction

$

728,393

31.7

%

$

659,248

29.0

%

$

624,954

29.1

%

$

590,223

29.1

%

$

579,761

29.6

%

Land development

99,099

4.3

%

92,623

4.1

%

97,709

4.6

%

97,267

4.8

%

103,307

5.3

%

Raw land

322,673

14.0

%

315,803

13.9

%

245,484

11.4

%

243,394

12.0

%

247,628

12.7

%

Residential lots

206,978

9.0

%

195,201

8.6

%

165,645

7.7

%

176,884

8.6

%

158,441

8.1

%

Commercial lots

184,901

8.0

%

169,189

7.5

%

153,714

7.2

%

137,512

6.8

%

114,427

5.8

%

Commercial construction and other

757,687

33.0

%

837,436

36.9

%

860,069

40.0

%

786,192

38.7

%

753,587

38.5

%

Net unaccreted discount

(16

)

(83

)

(101

)

(117

)

(191

)

Total construction loans

$

2,299,715

$

2,269,417

$

2,147,474

$

2,031,355

$

1,956,960

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

Houston

Dallas

Austin

OK City

Tulsa

Other (T)

Total

Collateral Type

Shopping center/retail

$

338,333

$

295,795

$

43,084

$

17,404

$

28,424

$

285,351

$

1,008,391

Commercial and industrial buildings

156,430

75,850

17,850

22,957

17,848

158,717

449,652

Office buildings

110,424

423,035

23,515

70,651

4,761

77,452

709,838

Medical buildings

96,724

21,552

2,594

22,871

43,311

65,361

252,413

Apartment buildings

120,376

199,421

12,842

15,669

34,737

139,622

522,667

Hotel

86,187

68,438

41,308

28,958

-

140,210

365,101

Other

74,949

68,338

28,468

7,932

3,735

72,608

256,030

Total

$

983,423

$

1,152,429

$

169,661

$

186,442

$

132,816

$

939,321

$

3,564,092

(U)

Acquired Loans

Non-PCD Loans

PCD Loans

Total Acquired Loans

Balance at

Acquisition

Date

Balance at

Sep 30, 2021

Balance at

Dec 31, 2021

Balance at

Acquisition

Date

Balance at

Sep 30, 2021

Balance at

Dec 31, 2021

Balance at

Acquisition

Date

Balance at

Sep 30, 2021

Balance at

Dec 31, 2021

Loan marks:

Acquired banks (V)

$

345,599

$

12,774

$

8,143

$

320,052

$

5,569

$

4,838

$

665,651

$

18,343

$

12,981

Acquired portfolio loan balances:

Acquired banks (V)

12,286,159

2,585,926

2,094,039

689,573

89,833

83,909

12,975,732

(W)

2,675,759

2,177,948

Acquired portfolio loan balances less loan marks

$

11,940,560

$

2,573,152

$

2,085,896

$

369,521

$

84,264

$

79,071

$

12,310,081

$

2,657,416

$

2,164,967

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

(U) Represents a portion of total commercial real estate loans of $5.251 billion as of December 31, 2021.

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

(W) Actual principal balances acquired.

Page 16

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

Asset Quality

Nonaccrual loans

$

26,269

$

35,035

$

32,880

$

43,025

$

47,185

$

26,269

$

47,185

Accruing loans 90 or more days past due

887

1,038

330

313

1,699

887

1,699

Total nonperforming loans

27,156

36,073

33,210

43,338

48,884

27,156

48,884

Repossessed assets

310

326

310

362

93

310

93

Other real estate

622

150

144

462

10,593

622

10,593

Total nonperforming assets

$

28,088

$

36,549

$

33,664

$

44,162

$

59,570

$

28,088

$

59,570

Nonperforming assets:

Commercial and industrial (includes energy)

$

6,150

$

8,199

$

8,613

$

11,290

$

16,176

$

6,150

$

16,176

Construction, land development and other land loans

1,841

803

1,423

1,692

1,566

1,841

1,566

1-4 family residential (includes home equity)

11,990

11,117

11,681

11,920

25,830

11,990

25,830

Commercial real estate (includes multi-family residential)

7,276

15,691

11,266

16,896

12,315

7,276

12,315

Agriculture (includes farmland)

816

643

661

803

2,075

816

2,075

Consumer and other

15

96

20

1,561

1,608

15

1,608

Total

$

28,088

$

36,549

$

33,664

$

44,162

$

59,570

$

28,088

$

59,570

Number of loans/properties

157

155

152

167

208

157

208

Allowance for credit losses on loans

$

286,380

$

287,187

$

302,884

$

307,210

$

316,068

$

286,380

$

316,068

Net charge-offs (recoveries):

Commercial and industrial (includes energy)

$

177

$

3,763

$

3,529

$

1,584

$

4,085

$

9,053

$

24,607

Construction, land development and other land loans

(162

)

(4

)

(105

)

(5

)

(110

)

(276

)

350

1-4 family residential (includes home equity)

(72

)

66

(6

)

47

1,982

35

2,290

Commercial real estate (includes multi-family residential)

(10

)

11,180

517

6,589

626

18,276

1,221

Agriculture (includes farmland)

(102

)

(63

)

(9

)

33

(4

)

(141

)

(25

)

Consumer and other

976

755

400

610

988

2,741

3,496

Total

$

807

$

15,697

$

4,326

$

8,858

$

7,567

$

29,688

$

31,939

Asset Quality Ratios

Nonperforming assets to average interest-earning assets

0.09

%

0.11

%

0.11

%

0.15

%

0.20

%

0.09

%

0.21

%

Nonperforming assets to loans and other real estate

0.15

%

0.19

%

0.17

%

0.22

%

0.29

%

0.15

%

0.29

%

Net charge-offs to average loans (annualized)

0.02

%

0.33

%

0.09

%

0.18

%

0.15

%

0.16

%

0.16

%

Allowance for credit losses on loans to total loans

1.54

%

1.51

%

1.57

%

1.56

%

1.56

%

1.54

%

1.56

%

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

1.72

%

1.73

%

1.85

%

1.89

%

1.92

%

1.72

%

1.92

%

Page 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 on loans 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 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

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 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

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

528,904

Add: merger related expenses net of tax(X)

-

-

-

-

-

-

6,334

Less: NOL tax benefit (Y)

-

-

-

-

-

-

(20,145

)

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

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

515,093

Weighted average diluted shares outstanding

92,162

92,683

92,935

92,854

92,559

92,657

93,058

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

$

-

$

-

$

-

$

-

$

-

$

-

$

0.07

NOL tax benefit per diluted share (X)

$

-

$

-

$

-

$

-

$

-

$

-

$

(0.22

)

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

$

1.38

$

1.39

$

1.41

$

1.44

$

1.48

$

5.60

$

5.54

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 (X) (Y)

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

515,093

Average total assets

$

36,947,035

$

36,298,669

$

36,096,022

$

34,544,360

$

33,690,906

$

35,975,278

$

32,645,350

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

1.37

%

1.42

%

1.45

%

1.54

%

1.63

%

1.44

%

1.58

%

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 (X) (Y)

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

515,903

Average shareholders' equity

$

6,412,864

$

6,373,355

$

6,287,389

$

6,197,668

$

6,108,574

$

6,322,154

$

5,974,652

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

7.91

%

8.07

%

8.31

%

8.60

%

8.98

%

8.21

%

8.62

%

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

Net income

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

528,904

Average shareholders' equity

$

6,412,864

$

6,373,355

$

6,287,389

$

6,197,668

$

6,108,574

$

6,322,154

$

5,974,652

Less: Average goodwill and other intangible assets

(3,294,728

)

(3,297,592

)

(3,300,467

)

(3,304,994

)

(3,306,769

)

(3,299,412

)

(3,307,639

)

Average tangible shareholders' equity

$

3,118,136

$

3,075,763

$

2,986,922

$

2,892,674

$

2,801,805

$

3,022,742

$

2,667,013

Return on average tangible common equity(F)

16.26

%

16.72

%

17.49

%

18.43

%

19.57

%

17.18

%

19.83

%

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

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

Page 18

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 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 (X) (Y)

$

126,787

$

128,590

$

130,611

$

133,309

$

137,091

$

519,297

$

515,093

Average shareholders' equity

$

6,412,864

$

6,373,355

$

6,287,389

$

6,197,668

$

6,108,574

$

6,322,154

$

5,974,652

Less: Average goodwill and other intangible assets

(3,294,728

)

(3,297,592

)

(3,300,467

)

(3,304,994

)

(3,306,769

)

(3,299,412

)

(3,307,639

)

Average tangible shareholders' equity

$

3,118,136

$

3,075,763

$

2,986,922

$

2,892,674

$

2,801,805

$

3,022,742

$

2,667,013

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

16.26

%

16.72

%

17.49

%

18.43

%

19.57

%

17.18

%

19.31

%

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

Shareholders' equity

$

6,427,236

$

6,345,441

$

6,310,337

$

6,221,846

$

6,130,669

$

6,427,236

$

6,130,669

Less: Goodwill and other intangible assets

(3,293,320

)

(3,296,175

)

(3,299,053

)

(3,301,940

)

(3,304,871

)

(3,293,320

)

(3,304,871

)

Tangible shareholders' equity

$

3,133,916

$

3,049,266

$

3,011,284

$

2,919,906

$

2,825,798

$

3,133,916

$

2,825,798

Period end shares outstanding

92,170

92,160

92,935

92,929

92,571

92,170

92,571

Tangible book value per share

$

34.00

$

33.09

$

32.40

$

31.42

$

30.53

$

34.00

30.53

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

Tangible shareholders' equity

$

3,133,916

$

3,049,266

$

3,011,284

$

2,919,906

$

2,825,798

$

3,133,916

$

2,825,798

Total assets

$

37,833,970

$

36,512,119

$

36,099,924

$

35,558,418

$

34,059,275

$

37,833,970

$

34,059,275

Less: Goodwill and other intangible assets

(3,293,320

)

(3,296,175

)

(3,299,053

)

(3,301,940

)

(3,304,871

)

(3,293,320

)

(3,304,871

)

Tangible assets

$

34,540,650

$

33,215,944

$

32,800,871

$

32,256,478

$

30,754,404

$

34,540,650

$

30,754,404

Period end tangible equity to period end tangible assets ratio

9.07

%

9.18

%

9.18

%

9.05

%

9.19

%

9.07

%

9.19

%

Reconciliation of allowance for credit losses on loans 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

$

286,380

$

287,187

$

302,884

$

307,210

$

316,068

$

286,380

$

316,068

Total loans

$

18,616,144

$

18,957,732

$

19,251,785

$

19,638,886

$

20,246,944

$

18,616,144

$

20,246,944

Less: Warehouse Purchase Program loans

(1,775,699

)

(1,998,049

)

(2,095,559

)

(2,272,389

)

(2,842,379

)

(1,775,699

)

(2,842,379

)

Less: Paycheck Protection Program loans

(169,884

)

(365,841

)

(779,989

)

(1,139,083

)

(963,185

)

(169,884

)

(963,185

)

Total loans less Warehouse Purchase Program and Paycheck Protection Program loans

$

16,670,561

$

16,593,842

$

16,376,237

$

16,227,414

$

16,441,380

$

16,670,561

$

16,441,380

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

1.72

%

1.73

%

1.85

%

1.89

%

1.92

%

1.72

%

1.92

%

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

Noninterest expense

$

119,538

$

119,815

$

115,191

$

119,076

$

120,205

$

473,620

$

497,233

Net interest income

$

244,760

$

248,567

$

245,399

$

254,582

$

257,634

$

993,308

$

1,030,733

Noninterest income

35,757

34,645

35,556

34,008

36,547

139,966

131,534

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

1,165

255

(244

)

(79

)

(675

)

1,097

(5,533

)

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

34,592

34,390

35,800

34,087

37,222

138,869

137,067

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

$

279,352

$

282,957

$

281,199

$

288,669

$

294,856

$

1,132,177

$

1,167,800

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

42.79

%

42.34

%

40.96

%

41.25

%

40.77

%

41.83

%

42.58

%

Page 19

Three Months Ended

Year-to-Date

Dec 31, 2021

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 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

$

119,538

$

119,815

$

115,191

$

119,076

$

120,205

$

473,620

$

497,233

Less: merger related expenses

-

-

-

-

-

-

8,018

Noninterest expense excluding merger related expenses

$

119,538

$

119,815

$

115,191

$

119,076

$

120,205

$

473,620

$

489,215

Net interest income

$

244,760

$

248,567

$

245,399

$

254,582

$

257,634

$

993,308

$

1,030,733

Noninterest income

35,757

34,645

35,556

34,008

36,547

139,966

131,534

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

1,165

255

(244

)

(79

)

(675

)

1,097

(5,533

)

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

34,592

34,390

35,800

34,087

37,222

138,869

137,067

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

$

279,352

$

282,957

$

281,199

$

288,669

$

294,856

$

1,132,177

$

1,167,800

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

42.79

%

42.34

%

40.96

%

41.25

%

40.77

%

41.83

%

41.89

%

Page 20

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Prosperity Bancshares Inc. published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 11:35:06 UTC.