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Prosperity Bancshares Inc

PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2024 EARNINGS

  • Board approved increase in dividend of 3.57% to $0.58 for fourth quarter 2024, representing the 21st consecutive annual increase, with a compound annual growth rate of 11.1%
  • Net income of $127.3 million and diluted earnings per share of $1.34 for third quarter 2024
  • Net interest margin increased 23 basis points to 2.95% compared to third quarter 2023
  • Deposits increased $154.5 million and loans increased $60.0 million during third quarter 2024
  • Noninterest-bearing deposits of $9.8 billion, representing 34.9% of total deposits
  • Allowance for credit losses on loans and on off-balance sheet credit exposure of $392.0 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.68%(1)
  • Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets
  • Return (annualized) on third quarter average assets of 1.28%, average common equity of 6.93% and average tangible common equity of 13.50%(1)

HOUSTON , Oct. 23, 2024 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $127.3 million for the quarter ended September 30, 2024 compared with $112.2 million for the same period in 2023. Net income per diluted common share was $1.34 for the quarter ended September 30, 2024 compared with $1.20 for the same period in 2023. The annualized return on third quarter average assets was 1.28%. Additionally, deposits increased $154.5 million and loans increased $60.0 million during the third quarter of 2024. Nonperforming assets remain low at 0.25% of third quarter average interest-earning assets. On April 1, 2024, Lone Star State Bancshares, Inc. ("Lone Star") merged with Prosperity Bancshares and Lone Star State Bank of West Texas ("Lone Star Bank") merged with Prosperity Bank (collectively, the "LSSB Merger").

"I am pleased to announce that the Board of Directors approved increasing the fourth quarter 2024 dividend to $0.58 per share from $0.56 per share that was paid in the prior four quarters. The increase reflects the continued confidence the Board has in our company and our markets. The compound annual growth rate in dividends declared from 2003 to 2024 was 11.1%," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"We continue to share our success with our shareholders through the payment of dividends and opportunistic stock repurchases, while also continuing to grow our capital. Our tangible capital increased $218 million from September 30, 2023, to September 30, 2024. This is the amount Prosperity retained after paying $212 million in dividends and repurchasing $75 million of our common stock during this period, reflecting Prosperity's stable earnings. Further, Prosperity's tangible book value per share has a compound annual growth rate of 11% for the last 21 years, or since 2003," added Zalman.

"The $2.4 trillionTexas economy is the eighth-largest among the nations of the world, larger than Russia, Canada and Italy, among others. An estimated 1,000 to 1,300 people move to Texas every day. Based on US Census Bureau data, in 2023, 473,453 people moved to Texas, which equates to approximately 40,000 per month or 1,300 per day," added Zalman.

"The Texas and Oklahoma economies continue to benefit from companies relocating from states with higher taxes and more regulation. This, combined with people moving to the states, requires additional housing and infrastructure, a driver for loans and increased business opportunities. We believe our bank is located in two of the best states we can be for future growth and continued prosperity," concluded Zalman.

Results of Operations for the Three Months Ended September 30, 2024

For the three months ended September 30, 2024, net income was $127.3 million(2) or $1.34 per diluted common share compared with $112.2 million(3) or $1.20 per diluted common share for the same period in 2023, an increase of $15.1 million or 13.4%. The change was primarily due to an increase in net interest income, partially offset by an increase in noninterest expense related to three months of Lone Star Bank operations. For the three months ended September 30, 2024, net income was $127.3 million(2) or $1.34 per diluted common share compared with $111.6 million(4) or $1.17 per diluted common share for the three months ended June 30, 2024, an increase of $15.7 million or 14.0%. The change was primarily due to higher net interest income, lower merger related provision for credit losses and lower merger related expenses, partially offset by lower net gain on sale or write-up of securities. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2024 were 1.28%, 6.93% and 13.50%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 46.87%(1) for the three months ended September 30, 2024.

Net interest income before provision for credit losses was $261.7 million for the three months ended September 30, 2024 compared with $239.5 million for the same period in 2023,  an increase of $22.2 million or 9.3%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. Net interest income before provision for credit losses increased $2.9 million or 1.1% to $261.7 million for the three months ended September 30, 2024 compared with $258.8 million for the three months ended June 30, 2024.

The net interest margin on a tax equivalent basis was 2.95% for the three months ended September 30, 2024 compared with 2.72% for the same period in 2023 and 2.94% for the three months ended June 30, 2024. The year-to-year change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances on federal funds sold and other earning assets and a decrease in the average balances and rate on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

Noninterest income was $41.1 million for the three months ended September 30, 2024 compared $38.7 million for the same period in 2023, an increase of $2.4 million or 6.1%. The change was primarily due to an increase in the net gain (loss) on sale or write-down of assets, partially offset by a decrease in other noninterest income. Noninterest income was $41.1 million for the three months ended September 30, 2024 compared with $46.0 million for the three months ended June 30, 2024, a decrease of $4.9 million or 10.7%. The change was primarily due to lower net gain on sale or write-up of securities, partially offset by an increase in net gain (loss) on sale or write-down of assets.

Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $135.7 million for the same period in 2023, an increase of $4.7 million or 3.5%, primarily due to an increase in salaries and benefits, an increase in credit and debit card, data processing and software amortization, and additional expenses related to three months of Lone Star Bank operations, partially offset by a decrease in merger related expenses. Noninterest expense was $140.3 million for the three months ended September 30, 2024 compared with $152.8 million for the three months ended June 30, 2024, a decrease of $12.5 million or 8.2%, primarily due to a decrease in FDIC special assessment, a decrease in merger related expenses and a decrease in other noninterest expense.

Results of Operations for the Nine Months Ended September 30, 2024

For the nine months ended September 30, 2024, net income was $349.3 million(5) or $3.68 per diluted common share compared with $323.8 million(6) or $3.50 per diluted common share for the same period in 2023. Net income and net income per diluted common share for the nine months ended September 30, 2024 was impacted by an increase in net interest income, a gain on Visa Class B-1 stock exchange net of investment securities sales of $11.2 million, lower merger related provision for credit losses and a decrease in merger related expenses, partially offset by a FDIC special assessment of $3.6 million and an increase in noninterest expenses related to six months of Lone Star Bank operations. Returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2024 were 1.16%, 6.40% and 12.43%(1), respectively. 

Excluding merger related provision and expenses, gain on Visa Class B-1 stock exchange net of investment securities sales, and FDIC special assessment, each net of tax, net income was $353.9 million(1) or $3.74(1) per diluted common share for the nine months ended September 30, 2024 and annualized returns on average assets, average common equity and average tangible common equity for the same period were 1.18%(1), 6.49%(1) and 12.59%(1), respectively. Prosperity's efficiency ratio was 49.25%(1) for the nine months ended September 30, 2024; and excluding merger related expenses and FDIC special assessment, the efficiency ratio was 48.33%(1).

Net interest income before provision for credit losses for the nine months ended September 30, 2024 was $758.7 million compared with $719.5 million for the same period in 2023, an increase of $39.3 million or 5.5%. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits.

The net interest margin on a tax equivalent basis for the nine months ended September 30, 2024 was 2.86% compared with 2.79% for the same period in 2023. The change was primarily due to an increase in the average balances and average rates on loans, an increase in the average balances and average rates on federal funds sold and other earning assets, an increase in loan discount accretion and a decrease in the average rates on other borrowings, partially offset by a decrease in the average balances on investment securities and an increase in the average balances and rates on interest-bearing deposits. The increases in the average balances on loans and deposits were primarily due to the LSSB Merger.

Noninterest income was $126.0 million for the nine months ended September 30, 2024 compared with $116.7 million for the same period in 2023, an increase of $9.3 million or 7.9%, primarily due to a gain on Visa Class B-1 stock exchange net of investment securities sales, and an increase in trust income, partially offset by a decrease in other noninterest income.

Noninterest expense was $429.0 million for the nine months ended September 30, 2024 compared with $404.5 million for the same period in 2023, an increase of $24.5 million or 6.1%, primarily due to a FDIC special assessment of $3.6 million, an increase in salaries and benefits and additional expenses related to six months of  Lone Star Bank operations and nine months of FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") operations, partially offset by a decrease in merger related expenses.

Balance Sheet Information

At September 30, 2024, Prosperity had $40.115 billion in total assets, an increase of $819.6 million or 2.1%, compared with $39.296 billion at September 30, 2023. Linked quarter total assets increased by $353.0 million or 0.9% compared with $39.762 billion at June 30, 2024.

Loans were $22.381 billion at September 30, 2024, an increase of $948.1 million or 4.4%, compared with $21.433 billion at September 30, 2023. Linked quarter loans increased $60.0 million or 0.3% (1.1% annualized) from $22.321 billion at June 30, 2024. Loans, excluding Warehouse Purchase Program loans, were $21.152 billion at September 30, 2024 compared with $20.520 billion at September 30, 2023, an increase of $631.8 million or 3.1%, and compared with $21.239 billion at June 30, 2024, a decrease of $87.3 million.

Deposits were $28.088 billion at September 30, 2024, an increase of $774.8 million or 2.8%, compared with $27.313 billion at September 30, 2023. Linked quarter deposits increased $154.5 million or 0.6% (2.2% annualized) from $27.933 billion at June 30, 2024.

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

Balance Sheet Data (at period end)








(In thousands)


















Sep 30, 2024



Jun 30, 2024



Mar 31, 2024



Dec 31, 2023



Sep 30, 2023




(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


Loans acquired (including new production since acquisition
date):
















Lone Star Bank


$

1,109,783



$

1,084,559



$

—



$

—



$

—


Prosperity Bank
















Warehouse Purchase Program loans



1,228,706




1,081,403




864,924




822,245




912,327


All other loans



20,042,363




20,154,853




20,400,323




20,358,293




20,520,386


Total loans


$

22,380,852



$

22,320,815



$

21,265,247



$

21,180,538



$

21,432,713


















Deposits assumed (including new deposits since acquisition
date):
















Lone Star Bank


$

1,136,216



$

1,187,821



$

—



$

—



$

—


All other deposits



26,951,395




26,745,265




27,175,518




27,179,809




27,312,800


Total deposits


$

28,087,611



$

27,933,086



$

27,175,518



$

27,179,809



$

27,312,800


 

As reflected in the table above, loan and deposit growth was impacted by the LSSB Merger.

Excluding loans acquired in the LSSB Merger and new production at the acquired banking centers since April 1, 2024, loans at September 30, 2024 decreased $161.6 million compared with September 30, 2023 and increased $34.8 million compared with June 30, 2024.

Excluding deposits assumed in the LSSB Merger and new deposits generated at the acquired banking centers since April 1, 2024, deposits at September 30, 2024 decreased by $361.4 million compared with September 30, 2023 and increased by $206.1 million compared with June 30, 2024.

Asset Quality

Nonperforming assets totaled $89.9 million or 0.25% of quarterly average interest-earning assets at September 30, 2024 compared with $69.5 million or 0.20% of quarterly average interest-earning assets at September 30, 2023 and $89.6 million or 0.25% of quarterly average interest-earning assets at June 30, 2024, with a significant portion of the balance for each period attributable to acquired loans.

The allowance for credit losses on loans and off-balance sheet credit exposures was $392.0 million at September 30, 2024 compared with $388.0 million at September 30, 2023 and $397.5 million at June 30, 2024. There was no provision for credit losses for the three months ended  September 30, 2024  and 2023, and a provision for credit losses of $9.1 million and $18.5 million for the nine months ended  September 30, 2024  and 2023, respectively. As a result of the loans acquired in the LSSB Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures. 

The allowance for credit losses on loans was $354.4 million or 1.58% of total loans at September 30, 2024 compared with $351.5 million or 1.64% of total loans at September 30, 2023 and $359.9 million or 1.61% of total loans at June 30, 2024. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.68%(1) at September 30, 2024 compared with 1.71%(1) at September 30, 2023 and 1.69%(1) at June 30, 2024.

Net charge-offs were $5.5 million for the three months ended September 30, 2024 compared with net charge-offs of $3.4 million for the three months ended September 30, 2023 and net charge-offs of $4.4 million for the three months ended June 30, 2024. Net charge-offs for the third quarter of 2024 included $1.4 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Further, $5.0 million of reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Net charge-offs were $12.0 million for the nine months ended September 30, 2024 compared with $18.9 million for the nine months ended September 30, 2023. Net charge-offs for the nine months ended September 30, 2024 included $3.3 million related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $26.1 million due to Day One accounting for PCD loans at the time of the LSSB Merger. Further, $13.9 million of reserves on resolved PCD loans was released to the general reserve.

Visa Class B-1 Stock Exchange

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

Dividend

Prosperity Bancshares declared a fourth quarter 2024 cash dividend of $0.58 per share to be paid on January 2, 2025, to all shareholders of record as of December 13, 2024, an increase of $0.02 per share, or 3.57%, from the prior quarter.

Stock Repurchase Program

On January 16, 2024, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.7 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 16, 2025, at the discretion of management. Under its 2024 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended September 30, 2024, and approximately 1.2 million shares of its common stock at an average weighted price of $60.35 per share during the nine months ended September 30, 2024.

Merger of Lone Star State Bancshares, Inc.

On April 1, 2024, Prosperity completed the merger of Lone Star and its wholly owned subsidiary Lone Star Bank, headquartered in Lubbock, Texas. Lone Star Bank operated 5 full-service banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas.

Pursuant to the terms of the definitive agreement, Prosperity issued 2,376,182 shares of Prosperity common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star in the second quarter of 2024. This resulted in goodwill of $108.0 million as of September 30, 2024, which does not include all the subsequent fair value adjustments that have not yet been finalized.

Conference Call

Prosperity's management team will host a conference call on Wednesday, October 23, 2024, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's third quarter 2024 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7527596.

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

Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of September 30, 2024, Prosperity Bancshares, Inc.® is a $40.115 billionHouston, 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 287 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 43 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area and 5 in the West Texas area currently doing business as Lone Star Bank.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public.  Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "believe," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for credit losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for credit losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of any proposed transactions, and statements about the assumptions underlying any such statement. These forward‑looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of Prosperity's control, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and the effect, impact, potential duration or other implications of weather and climate-related events. Prosperity disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other factors are discussed in Prosperity's Annual Report on Form 10-K for the year ended December 31, 2023, and other reports and statements Prosperity has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

(1)

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

(2)

Includes purchase accounting adjustments of $4.3 million, net of tax, primarily comprised of loan discount accretion of $4.8 million for the three months ended September 30, 2024.

(3)

Includes purchase accounting adjustments of $2.5 million, net of tax, primarily comprised of loan discount accretion of $2.3 million, and merger related expenses of $1.1 million for the three months ended September 30, 2023.

(4)

Includes purchase accounting adjustments of $6.1 million, net of tax, primarily comprised of loan discount accretion of $7.2 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $10.7 million for the three months ended June 30, 2024.

(5)

Includes purchase accounting adjustments of $12.4 million, net of tax, primarily comprised of loan discount accretion of $13.9 million, merger related provision for credit losses of $9.1 million, merger related expenses of $4.4 million, FDIC special assessment of $3.6 million, and net gain on sale or write-up of securities of $11.2 million for the nine months ended September 30, 2024.

(6)

Includes purchase accounting adjustments of $5.6 million, net of tax, primarily comprised of loan discount accretion of $5.6 million, merger related provision for credit losses of $18.5 million and merger related expenses of $14.9 million for the nine months ended September 30, 2023.

 

Bryan/College Station Area


Grapevine


Teague


Rosenberg


Midland

Bryan


Grapevine Main


Tyler-Beckham


Shadow Creek


North

Bryan-29th Street


Kiest


Tyler-South Broadway


Spring


Wadley

Bryan-East


Lake Highlands


Tyler-University


Tomball


Wall Street

Bryan-North


McKinney


Winnsboro


Waller


West

Caldwell


McKinney Eldorado




West Columbia



College Station


McKinney Redbud


Houston Area


Wharton


Odessa

Hearne


North Carrolton


Houston


Winnie


Grant

Huntsville


Park Cities


Aldine


Wirt


Kermit Highway

Madisonville


Plano


Alief




Parkway

Navasota


Plano-West


Bellaire


South Texas Area -



New Waverly


Preston Forest


Beltway


Corpus Christi


Wichita Falls

Rock Prairie


Preston Parker


Clear Lake


Calallen


Cattlemans

Southwest Parkway


Preston Royal


Copperfield


Carmel


Kell

Tower Point


Red Oak


Cypress


Northwest



Wellborn Road


Richardson


Downtown


Saratoga


Other West Texas Area



Richardson-West


Eastex


Timbergate


Locations

Central Texas Area


Rosewood Court


Fairfield


Water Street


Big Spring

Austin


The Colony


First Colony




Brownfield

Cedar Park


Tollroad


Fry Road


Victoria


Brownwood

Congress


Trinity Mills


Gessner


Victoria Main


Burkburnett

Lakeway


Turtle Creek


Gladebrook


Victoria-Navarro


Byers

Liberty Hill


West 15th Plano


Grand Parkway


Victoria-North


Cisco

Northland


West Allen


Heights


Victoria Salem


Comanche

Oak Hill


Westmoreland


Highway 6 West




Early

Research Blvd


Wylie


Little York


Other South Texas Area


Floydada

Westlake




Medical Center


 Locations


Gorman



Fort Worth


Memorial Drive


Alice


Henrietta

Other Central Texas Area


Haltom City


Northside


Aransas Pass


Levelland

Locations


Hulen


Pasadena


Beeville


Littlefield

Bastrop


Keller


Pecan Grove


Colony Creek


Merkel

Canyon Lake


Museum Place


Pin Oak


Cuero


Plainview

Dime Box


Renaissance Square


River Oaks


Edna


San Angelo

Dripping Springs


Roanoke


Sugar Land


Goliad


Slaton

Elgin


Stockyards


SW Medical Center


Gonzales


Snyder

Flatonia




Tanglewood


Hallettsville



Fredericksburg


Other Dallas/Fort Worth Area


The Plaza


Kingsville


Lone Star West Texas Area

Georgetown


Locations


Uptown


Mathis


Big Spring

Gruene


Arlington


Waugh Drive


Padre Island


Brownfield

Horseshoe Bay


Azle


Westheimer


Palacios


Lubbock

Kingsland


Ennis


West University


Port Lavaca


Midland

La Grange


Gainesville


Woodcreek


Portland


Odessa

Lexington


Glen Rose




Rockport



Marble Falls


Granbury


Katy


Sinton


Oklahoma

New Braunfels


Grand Prairie


Cinco Ranch


Taft


Central Oklahoma Area

Pleasanton


Jacksboro


Katy-Spring Green


Yoakum


Oklahoma City

Round Rock


Mesquite




Yorktown


23rd Street

San Antonio


Muenster


The Woodlands




Expressway

Schulenburg


Runaway Bay


The Woodlands-College Park


West Texas Area


I-240

Seguin


Sanger


The Woodlands-I-45


Abilene


Memorial

Smithville


Waxahachie


The Woodlands-Research Forest


Antilley Road



Thorndale


Weatherford




Barrow Street


Other Central Oklahoma Area

Weimar




Other Houston Area


Cypress Street


 Locations



East Texas Area


Locations


Judge Ely


Edmond

Dallas/Fort Worth Area


Athens


Angleton


Mockingbird


Norman

Dallas


Blooming Grove


Bay City





14th Street Plano


Canton


Beaumont


Amarillo


Tulsa Area

Abrams Centre


Carthage


Cleveland


Hillside


Tulsa

Addison


Corsicana


East Bernard


Soncy


Garnett

Allen


Crockett


El Campo




Harvard

Balch Springs


Eustace


Dayton


Lubbock


Memorial

Camp Wisdom


Gilmer


Galveston


4th Street


Sheridan

Carrollton


Grapeland


Groves


66th Street


S. Harvard

Cedar Hill


Gun Barrel City


Hempstead


82nd Street


Utica Tower

Coppell


Jacksonville


Hitchcock


86th Street


Yale

East Plano


Kerens


Liberty


98th Street



Euless


Longview


Magnolia


Avenue Q


Other Tulsa Area Locations

Frisco


Mount Vernon


Magnolia Parkway


Milwaukee


Owasso

Frisco Warren


Palestine


Mont Belvieu


North University



Frisco-West


Rusk


Nederland


Texas Tech Student Union



Garland


Seven Points


Needville














 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(In thousands)






Sep 30, 2024



Jun 30, 2024



Mar 31, 2024



Dec 31, 2023



Sep 30, 2023


Balance Sheet Data (at period end)
















Loans held for sale


$

6,113



$

9,951



$

6,380



$

5,734



$

10,187


Loans held for investment



21,146,033




21,229,461




20,393,943




20,352,559




20,510,199


Loans held for investment - Warehouse Purchase Program



1,228,706




1,081,403




864,924




822,245




912,327


Total loans



22,380,852




22,320,815




21,265,247




21,180,538




21,432,713


















Investment securities(A)



11,300,756




11,702,139




12,301,138




12,803,896




13,192,742


Federal funds sold



208




234




250




260




234


Allowance for credit losses on loans



(354,397)




(359,852)




(330,219)




(332,362)




(351,495)


Cash and due from banks



2,209,863




1,507,604




1,086,444




458,153




512,239


Goodwill



3,504,388




3,504,107




3,396,402




3,396,086




3,396,459


Core deposit intangibles, net



70,178




74,324




60,757




63,994




67,553


Other real estate owned



5,757




4,960




2,204




1,708




9,320


Fixed assets, net



373,812




377,394




372,333




369,992




370,237


Other assets



623,903




630,569




601,964




605,612




665,682


Total assets


$

40,115,320



$

39,762,294



$

38,756,520



$

38,547,877



$

39,295,684


















Noninterest-bearing deposits


$

9,811,361



$

9,706,505



$

9,526,535



$

9,776,572



$

10,281,893


Interest-bearing deposits



18,276,250




18,226,581




17,648,983




17,403,237




17,030,907


Total deposits



28,087,611




27,933,086




27,175,518




27,179,809




27,312,800


Other borrowings



3,900,000




3,900,000




3,900,000




3,725,000




4,250,000


Securities sold under repurchase agreements



228,896




233,689




261,671




309,277




300,714


Subordinated debentures



—




—




—




—




—


Allowance for credit losses on off-balance sheet credit exposures



37,646




37,646




36,503




36,503




36,503


Other liabilities



499,918




374,429




278,284




217,958




362,990


Total liabilities



32,754,071




32,478,850




31,651,976




31,468,547




32,263,007


Shareholders' equity(B)



7,361,249




7,283,444




7,104,544




7,079,330




7,032,677


Total liabilities and equity


$

40,115,320



$

39,762,294



$

38,756,520



$

38,547,877



$

39,295,684




(A)

Includes $(1,070), $(2,007), $(2,954), $(1,770) and $(2,442) in unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.

(B)

Includes $(845), $(1,586), $(2,333), $(1,398) and $(1,930) in after-tax unrealized losses on available for sale securities for the quarterly periods ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(In thousands)






Three Months Ended



Year-to-Date




Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023


Income Statement Data






















Interest income:






















Loans


$

337,451



$

336,428



$

306,228



$

306,562



$

308,678



$

980,107



$

842,434


Securities(C)



59,617




62,428




66,421




68,077




69,987




188,466




215,225


Federal funds sold and other earning assets



20,835




14,095




9,265




1,793




1,689




44,195




10,452


Total interest income



417,903




412,951




381,914




376,432




380,354




1,212,768




1,068,111
























Interest expense:






















Deposits



107,758




106,124




92,692




84,969




76,069




306,574




187,376


Other borrowings



46,792




46,282




48,946




52,386




62,190




142,020




153,937


Securities sold under repurchase agreements



1,662




1,759




2,032




2,094




2,533




5,453




7,310


Subordinated debentures



—




—




—




—




38




—




38


Total interest expense



156,212




154,165




143,670




139,449




140,830




454,047




348,661


Net interest income



261,691




258,786




238,244




236,983




239,524




758,721




719,450


Provision for credit losses



—




9,066




—




—




—




9,066




18,540


Net interest income after provision for credit losses



261,691




249,720




238,244




236,983




239,524




749,655




700,910
























Noninterest income:






















Nonsufficient funds (NSF) fees



9,016




8,153




8,288




8,365




8,719




25,457




25,326


Credit card, debit card and ATM card income



9,620




9,384




8,861




9,314




9,285




27,865




27,157


Service charges on deposit accounts



6,664




6,436




6,406




6,316




6,262




19,506




18,266


Trust income



3,479




3,601




4,156




3,360




3,326




11,236




9,909


Mortgage income



962




745




610




542




857




2,317




1,756


Brokerage income



1,258




1,186




1,235




1,059




1,067




3,679




3,216


Bank owned life insurance income



2,028




1,885




2,047




1,882




1,864




5,960




4,771


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



3,178




(903)




(35)




(84)




(45)




2,240




2,070


Net gain on sale or write-up of securities



224




10,723




298




—




—




11,245




—


Other noninterest income



4,670




4,793




7,004




5,814




7,408




16,467




24,226


Total noninterest income



41,099




46,003




38,870




36,568




38,743




125,972




116,697
























Noninterest expense:






















Salaries and benefits



88,367




89,584




85,771




80,486




85,423




263,722




247,944


Net occupancy and equipment



9,291




8,915




8,623




9,093




9,464




26,829




26,424


Credit and debit card, data processing and software amortization



11,985




11,998




10,975




10,741




10,919




34,958




30,829


Regulatory assessments and FDIC insurance



5,726




10,317




5,538




24,940




5,155




21,581




15,225


Core deposit intangibles amortization



4,146




4,156




3,237




3,559




3,576




11,539




9,117


Depreciation



4,741




4,836




4,686




4,607




4,585




14,263




13,676


Communications



3,360




3,485




3,402




3,572




3,686




10,247




10,841


Other real estate expense



12




69




187




165




153




268




(253)


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



(97)




31




(138)




34




(734)




(204)




(780)


Merger related expenses



63




4,381




—




278




1,104




4,444




14,855


Other noninterest expense



12,744




15,070




13,567




14,696




12,326




41,381




36,649


Total noninterest expense



140,338




152,842




135,848




152,171




135,657




429,028




404,527


Income before income taxes



162,452




142,881




141,266




121,380




142,610




446,599




413,080


Provision for income taxes



35,170




31,279




30,840




25,904




30,402




97,289




89,240


Net income available to common shareholders


$

127,282



$

111,602



$

110,426



$

95,476



$

112,208



$

349,310



$

323,840




(C)

Interest income on securities was reduced by net premium amortization of $5,574, $5,831, $5,822, $6,428 and $6,897 for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and $17,227 and $21,412 for the nine months ended September 30, 2024 and 2023, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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






Three Months Ended



Year-to-Date




Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023
























Profitability






















Net income (D) (E)


$

127,282



$

111,602



$

110,426



$

95,476



$

112,208



$

349,310



$

323,840
























Basic earnings per share


$

1.34



$

1.17



$

1.18



$

1.02



$

1.20



$

3.68



$

3.50


Diluted earnings per share


$

1.34



$

1.17



$

1.18



$

1.02



$

1.20



$

3.68



$

3.50
























Return on average assets (F)(J)



1.28

%



1.12

%



1.13

%



0.98

%



1.13

%



1.16

%



1.11

%

Return on average common equity (F)(J)



6.93

%



6.10

%



6.20

%



5.39

%



6.39

%



6.40

%



6.25

%

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



13.50

%



11.81

%



12.06

%



10.54

%



12.58

%



12.43

%



12.17

%

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



2.95

%



2.94

%



2.79

%



2.75

%



2.72

%



2.86

%



2.79

%

Efficiency ratio (G) (I)(K)



46.87

%



51.82

%



49.07

%



55.61

%



48.74

%



49.25

%



48.50

%























Liquidity and Capital Ratios






















Equity to assets



18.35

%



18.32

%



18.33

%



18.37

%



17.90

%



18.35

%



17.90

%

Common equity tier 1 capital



15.84

%



15.42

%



15.75

%



15.54

%



14.98

%



15.84

%



14.98

%

Tier 1 risk-based capital



15.84

%



15.42

%



15.75

%



15.54

%



14.98

%



15.84

%



14.98

%

Total risk-based capital



17.10

%



16.67

%



17.00

%



16.56

%



16.05

%



17.10

%



16.05

%

Tier 1 leverage capital



10.52

%



10.29

%



10.37

%



10.39

%



10.03

%



10.52

%



10.03

%

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



10.36

%



10.24

%



10.33

%



10.31

%



9.96

%



10.36

%



9.96

%























Other Data






















Weighted-average shares used in computing
earnings per common share






















Basic



95,261




95,765




93,706




93,715




93,720




94,912




92,628


Diluted



95,261




95,765




93,706




93,715




93,720




94,912




92,628


Period end shares outstanding



95,261




95,262




93,525




93,722




93,717




95,261




93,717


Cash dividends paid per common share


$

0.56



$

0.56



$

0.56



$

0.56



$

0.55



$

1.68



$

1.65


Book value per common share


$

77.27



$

76.46



$

75.96



$

75.54



$

75.04



$

77.27



$

75.04


Tangible book value per common share (G)


$

39.75



$

38.89



$

39.00



$

38.62



$

38.08



$

39.75



$

38.08
























Common Stock Market Price






















High


$

74.87



$

66.18



$

68.88



$

68.79



$

63.65



$

74.87



$

78.76


Low


$

58.66



$

57.16



$

60.08



$

49.60



$

52.62



$

57.16



$

52.62


Period end closing price


$

72.07



$

61.14



$

65.78



$

67.73



$

54.58



$

72.07



$

54.58


Employees – FTE (excluding overtime)



3,896




3,902




3,901




3,850




3,853




3,896




3,853


Number of banking centers



287




288




283




285




285




287




285



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



Three Months Ended


Year-to-Date


Sep 30,

2024


Jun 30,

2024


Mar 31,

2024


Dec 31,

2023


Sep 30,

2023


Sep 30,

2024


Sep 30,

2023

Loan discount accretion














Non-PCD

$3,616


$4,797


$1,312


$1,543


$1,508


$9,725


$3,282

PCD

$1,212


$2,394


$548


$937


$767


$4,154


$2,284

Securities net accretion

$555


$564


$561


$598


$626


$1,680


$1,050

Time deposits amortization

$(40)


$4


$(97)


$(150)


$(210)


$(133)


$(450)



(E)

Using effective tax rate of 21.6%, 21.9%, 21.8%, 21.3% and 21.3% for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and 21.8% and 21.6% for the nine months ended September 30, 2024 and 2023, respectively.

(F)

Interim periods annualized.

(G)

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

(H)

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

(I)

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

(J)

For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K)

For calculations of the efficiency ratio excluding merger related expenses and FDIC special assessment refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)

 




YIELD ANALYSIS


Three Months Ended




Sep 30, 2024



Jun 30, 2024



Sep 30, 2023




Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate


(L)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate


(L)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(L)

Interest-earning assets:




























Loans held for sale


$

7,913



$

137



6.89 %



$

8,446



$

149



7.10 %



$

9,832



$

162



6.54 %


Loans held for investment



21,107,139




316,939



5.97 %




21,328,824




319,361



6.02 %




20,496,075




290,566



5.62 %


Loans held for investment - Warehouse Purchase Program



1,114,681




20,375



7.27 %




917,026




16,918



7.42 %




972,936




17,950



7.32 %


Total loans



22,229,733




337,451



6.04 %




22,254,296




336,428



6.08 %




21,478,843




308,678



5.70 %


Investment securities



11,612,193




59,617



2.04 %


(M)


12,179,074




62,428



2.06 %


(M)


13,512,137




69,987



2.05 %

(M)

Federal funds sold and other earning assets



1,531,788




20,835



5.41 %




1,026,251




14,095



5.52 %




125,690




1,689



5.33 %


Total interest-earning assets



35,373,714




417,903



4.70 %




35,459,621




412,951



4.68 %




35,116,670




380,354



4.30 %


Allowance for credit losses on loans



(358,237)










(332,904)










(343,967)








Noninterest-earning assets



4,873,725










4,822,131










4,829,336








Total assets


$

39,889,202









$

39,948,848









$

39,602,039




































Interest-bearing liabilities:




























Interest-bearing demand deposits


$

4,774,975



$

9,251



0.77 %



$

4,839,194



$

9,133



0.76 %



$

4,768,485



$

5,182



0.43 %


Savings and money market deposits



8,908,315




49,824



2.23 %




9,084,051




50,252



2.22 %




8,977,824




44,446



1.96 %


Certificates and other time deposits



4,564,232




48,683



4.24 %




4,400,922




46,739



4.27 %




3,172,178




26,441



3.31 %


Other borrowings



3,900,000




46,792



4.77 %




3,900,000




46,282



4.77 %




4,671,449




62,190



5.28 %


Securities sold under repurchase agreements



242,813




1,662



2.72 %




258,637




1,759



2.74 %




389,149




2,533



2.58 %


Subordinated debentures



—




—




—




—




—




—




2,578




38



5.85 %


Total interest-bearing liabilities



22,390,335




156,212



2.78 %


(N)


22,482,804




154,165



2.76 %


(N)


21,981,663




140,830



2.54 %

(N)





























Noninterest-bearing liabilities:




























Noninterest-bearing demand deposits



9,680,785










9,780,211










10,269,162








Allowance for credit losses on off-balance sheet credit exposures



37,646










36,729










36,504








Other liabilities



433,171










327,847










290,217








Total liabilities



32,541,937










32,627,591










32,577,546








Shareholders' equity



7,347,265










7,321,257










7,024,493








Total liabilities and shareholders' equity


$

39,889,202









$

39,948,848









$

39,602,039




































Net interest income and margin





$

261,691



2.94 %






$

258,786



2.94 %






$

239,524



2.71 %


Non-GAAP to GAAP reconciliation:




























Tax equivalent adjustment






808










800










1,000





Net interest income and margin
     (tax equivalent basis)





$

262,499



2.95 %






$

259,586



2.94 %






$

240,524



2.72 %








































(L)

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

(M)

Yield on securities was impacted by net premium amortization of $5,574, $5,831 and $6,897 for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

(N)

Total cost of funds, including noninterest bearing deposits, was 1.94%, 1.92% and 1.73% for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)

 




YIELD ANALYSIS


Year-to-Date




Sep 30, 2024



Sep 30, 2023




Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate


(O)

Average
Balance



Interest
Earned/
Interest
Paid



Average
Yield/
Rate

(O)

Interest-earning assets:



















Loans held for sale


$

7,278



$

378



6.94 %



$

5,389



$

267



6.62 %


Loans held for investment



21,312,440




928,973



5.82 %




19,546,826




797,861



5.46 %


Loans held for investment - Warehouse Purchase Program



918,172




50,756



7.38 %




831,143




44,306



7.13 %


Total loans



22,237,890




980,107



5.89 %




20,383,358




842,434



5.53 %


Investment securities



12,161,391




188,466



2.07 %


(P)


13,937,483




215,225



2.06 %

(P)

Federal funds sold and other earning assets



1,153,335




44,195



5.12 %




290,275




10,452



4.81 %


Total interest-earning assets



35,552,616




1,212,768



4.56 %




34,611,116




1,068,111



4.13 %


Allowance for credit losses on loans



(341,659)










(303,518)








Noninterest-earning assets



4,823,938










4,722,064








Total assets


$

40,034,895









$

39,029,662



























Interest-bearing liabilities:



















Interest-bearing demand deposits


$

4,947,514



$

26,807



0.72 %



$

5,260,463



$

12,765



0.32 %


Savings and money market deposits



9,060,992




147,228



2.17 %




9,235,646




122,992



1.78 %


Certificates and other time deposits



4,356,700




132,539



4.06 %




2,627,402




51,619



2.63 %


Other borrowings



3,960,821




142,020



4.79 %




4,001,994




153,937



5.14 %


Securities sold under repurchase agreements



265,878




5,453



2.74 %




419,304




7,310



2.33 %


Subordinated debentures



—




—




—




1,375




38



3.69 %


Total interest-bearing liabilities



22,591,905




454,047



2.68 %


(Q)


21,546,184




348,661



2.16 %

(Q)




















Noninterest-bearing liabilities:



















Noninterest-bearing demand deposits



9,759,927










10,310,878








Allowance for credit losses on off-balance sheet credit exposures



36,994










32,181








Other liabilities



372,060










232,903








Total liabilities



32,760,886










32,122,146








Shareholders' equity



7,274,009










6,907,516








Total liabilities and shareholders' equity


$

40,034,895









$

39,029,662



























Net interest income and margin





$

758,721



2.85 %






$

719,450



2.78 %


Non-GAAP to GAAP reconciliation:



















Tax equivalent adjustment






2,416










2,866





Net interest income and margin (tax equivalent basis)





$

761,137



2.86 %






$

722,316



2.79 %




























(O)

Based on an actual 366-day or 365-day basis.

(P)

Yield on securities was impacted by net premium amortization of $17,227 and $21,412 for the nine months ended September 30, 2024 and 2023, respectively.

(Q)

Total cost of funds, including noninterest bearing deposits, was 1.87% and 1.46% for the nine months ended September 30, 2024 and 2023, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)



Three Months Ended



Sep 30, 2024



Jun 30, 2024



Mar 31, 2024



Dec 31, 2023



Sep 30, 2023


YIELD TREND (R)






























Interest-Earning Assets:















Loans held for sale


6.89

%



7.10

%



6.77

%



7.47

%



6.54

%

Loans held for investment


5.97

%



6.02

%



5.77

%



5.68

%



5.62

%

Loans held for investment - Warehouse
Purchase Program


7.27

%



7.42

%



7.51

%



7.46

%



7.32

%

Total loans


6.04

%



6.08

%



5.83

%



5.75

%



5.70

%

Investment securities (S)


2.04

%



2.06

%



2.10

%



2.07

%



2.05

%

Federal funds sold and other earning assets


5.41

%



5.52

%



5.54

%



5.68

%



5.33

%

Total interest-earning assets


4.70

%



4.68

%



4.45

%



4.35

%



4.30

%
















Interest-Bearing Liabilities:















Interest-bearing demand deposits


0.77

%



0.76

%



0.66

%



0.56

%



0.43

%

Savings and money market deposits


2.23

%



2.22

%



2.13

%



2.03

%



1.96

%

Certificates and other time deposits


4.24

%



4.27

%



4.05

%



3.80

%



3.31

%

Other borrowings


4.77

%



4.77

%



4.82

%



5.16

%



5.28

%

Securities sold under repurchase agreements


2.72

%



2.74

%



2.76

%



2.77

%



2.58

%

Subordinated debentures


—




—




—




—




5.85

%

Total interest-bearing liabilities


2.78

%



2.76

%



2.62

%



2.58

%



2.54

%
















Net Interest Margin


2.94

%



2.94

%



2.78

%



2.74

%



2.71

%

Net Interest Margin (tax equivalent)


2.95

%



2.94

%



2.79

%



2.75

%



2.72

%



(R)

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

(S)

Yield on securities was impacted by net premium amortization of $5,574, $5,831, $5,822, $6,428 and $6,897 for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023 and September 30, 2023, respectively.

 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)






Three Months Ended




Sep 30, 2024



Jun 30, 2024



Mar 31, 2024



Dec 31, 2023



Sep 30, 2023


Balance Sheet Averages
















Loans held for sale


$

7,913



$

8,446



$

5,467



$

9,828



$

9,832


Loans held for investment



21,107,139




21,328,824




20,415,316




20,370,915




20,496,075


Loans held for investment - Warehouse Purchase
Program



1,114,681




917,026




720,650




770,481




972,936


Total loans



22,229,733




22,254,296




21,141,433




21,151,224




21,478,843


















Investment securities



11,612,193




12,179,074




12,693,268




13,074,243




13,512,137


Federal funds sold and other earning assets



1,531,788




1,026,251




672,840




125,295




125,690


Total interest-earning assets



35,373,714




35,459,621




34,507,541




34,350,762




35,116,670


Allowance for credit losses on loans



(358,237)




(332,904)




(331,708)




(346,493)




(343,967)


Cash and due from banks



304,911




295,077




315,612




302,864




301,201


Goodwill



3,504,300




3,482,448




3,396,177




3,396,224




3,387,293


Core deposit intangibles, net



72,330




59,979




62,482




65,986




69,551


Other real estate



5,339




3,071




2,319




4,781




6,301


Fixed assets, net



375,626




377,369




372,458




370,900




367,814


Other assets



611,219




604,187




610,649




670,187




697,176


Total assets


$

39,889,202



$

39,948,848



$

38,935,530



$

38,815,211



$

39,602,039


















Noninterest-bearing deposits


$

9,680,785



$

9,780,211



$

9,443,249



$

9,960,240



$

10,269,162


Interest-bearing demand deposits



4,774,975




4,839,194




5,143,585




4,822,698




4,768,485


Savings and money market deposits



8,908,315




9,084,051




8,889,077




8,815,892




8,977,824


Certificates and other time deposits



4,564,232




4,400,922




3,683,815




3,442,115




3,172,178


Total deposits



27,928,307




28,104,378




27,159,726




27,040,945




27,187,649


Other borrowings



3,900,000




3,900,000




4,083,132




4,028,263




4,671,449


Securities sold under repurchase agreements



242,813




258,637




296,437




300,317




389,149


Subordinated debentures



—




—




—




—




2,578


Allowance for credit losses on off-balance sheet credit
exposures



37,646




36,729




36,503




36,503




36,504


Other liabilities



433,171




327,847




238,480




323,344




290,217


Shareholders' equity



7,347,265




7,321,257




7,121,252




7,085,839




7,024,493


Total liabilities and equity


$

39,889,202



$

39,948,848



$

38,935,530



$

38,815,211



$

39,602,039


 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)




Sep 30, 2024


Jun 30, 2024


Mar 31, 2024


Dec 31, 2023


Sep 30, 2023

Period End Balances
































Loan Portfolio
















Commercial and industrial


$1,970,844

8.8 %


$2,023,531

9.1 %


$1,932,534

9.1 %


$1,936,717

9.2 %


$2,153,391

10.1 %

Warehouse purchase program


1,228,706

5.5 %


1,081,403

4.8 %


864,924

4.1 %


822,245

3.9 %


912,327

4.3 %

Construction, land development and other land loans


2,814,521

12.6 %


2,828,372

12.7 %


2,876,588

13.5 %


3,076,591

14.5 %


3,200,479

14.9 %

1-4 family residential


7,557,858

33.8 %


7,496,485

33.6 %


7,331,251

34.5 %


7,207,226

34.0 %


7,032,593

32.8 %

Home equity


919,676

4.1 %


930,428

4.2 %


950,169

4.5 %


960,852

4.5 %


969,498

4.5 %

Commercial real estate (includes multi-family residential)


5,869,687

26.2 %


5,961,884

26.7 %


5,631,460

26.5 %


5,662,948

26.7 %


5,606,837

26.2 %

Agriculture (includes farmland)


1,033,224

4.6 %


1,037,361

4.6 %


813,092

3.8 %


816,043

3.9 %


801,933

3.7 %

Consumer and other


413,548

1.8 %


340,611

1.5 %


326,915

1.5 %


329,593

1.6 %


306,018

1.4 %

Energy


572,788

2.6 %


620,740

2.8 %


538,314

2.5 %


368,323

1.7 %


449,637

2.1 %

Total loans


$22,380,852



$22,320,815



$21,265,247



$21,180,538



$21,432,713


















Deposit Types
















Noninterest-bearing DDA


$9,811,361

34.9 %


$9,706,505

34.7 %


$9,526,535

35.1 %


$9,776,572

36.0 %


$10,281,893

37.6 %

Interest-bearing DDA


4,800,758

17.1 %


4,762,730

17.1 %


4,867,247

17.9 %


5,115,945

18.8 %


4,797,259

17.6 %

Money market


6,166,792

22.0 %


6,180,769

22.1 %


6,134,221

22.6 %


5,859,701

21.6 %


5,892,505

21.6 %

Savings


2,707,982

9.6 %


2,765,197

9.9 %


2,830,117

10.4 %


2,881,397

10.6 %


3,005,936

11.0 %

Certificates and other time deposits


4,600,718

16.4 %


4,517,885

16.2 %


3,817,398

14.0 %


3,546,194

13.0 %


3,335,207

12.2 %

Total deposits


$28,087,611



$27,933,086



$27,175,518



$27,179,809



$27,312,800


















Loan to Deposit Ratio


79.7 %



79.9 %



78.3 %



77.9 %



78.5 %


 

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)




Construction Loans






Sep 30, 2024



Jun 30, 2024



Mar 31, 2024



Dec 31, 2023



Sep 30, 2023




























Single family residential construction


$

836,571



29.7

%


$

940,381



33.2

%


$

1,031,163



35.8

%


$

1,088,636



35.4

%


$

1,157,016



36.1

%

Land development



256,571



9.1

%



241,639



8.5

%



290,243



10.1

%



367,849



12.0

%



359,518



11.2

%

Raw land



263,411



9.4

%



291,112



10.3

%



311,265



10.8

%



328,365



10.7

%



340,659



10.7

%

Residential lots



217,920



7.7

%



222,343



7.9

%



224,901



7.8

%



222,591



7.2

%



216,659



6.8

%

Commercial lots



58,472



2.1

%



60,264



2.1

%



59,691



2.1

%



155,415



5.0

%



154,425



4.8

%

Commercial construction and other



1,183,127



42.0

%



1,074,361



38.0

%



959,687



33.4

%



914,436



29.7

%



973,022



30.4

%

Net unaccreted discount



(1,551)






(1,728)






(362)






(701)






(820)




Total construction loans


$

2,814,521





$

2,828,372





$

2,876,588





$

3,076,591





$

3,200,479




 

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of September 30, 2024







Houston



Dallas



Austin



OK City



Tulsa



Other (T)



Total



Collateral Type






















Shopping center/retail

$

365,720



$

263,161



$

58,574



$

15,161



$

13,648



$

324,444



$

1,040,708



Commercial and industrial
buildings


141,749




114,151




22,622




34,900




17,150




291,397




621,969



Office buildings


99,817




215,635




91,439




46,970




3,651




95,542




553,054



Medical buildings


82,161




16,906




1,699




43,107




30,230




71,716




245,819



Apartment buildings


113,670




128,055




18,335




14,618




14,937




244,729




534,344



Hotel


106,115




99,032




32,554




17,506




—




191,873




447,080



Other


174,867




56,237




28,891




7,709




1,555




94,037




363,296



Total

$

1,084,099



$

893,177



$

254,114



$

179,971



$

81,171



$

1,313,738



$

3,806,270


(U)

 

Acquired Loans





Non-PCD Loans



PCD Loans



Total Acquired Loans



Balance at
Acquisition
Date



Balance at
Jun 30,
2024



Balance at
Sep 30,
2024



Balance at
Acquisition
Date



Balance at
Jun 30,
2024



Balance at
Sep 30,
2024



Balance at
Acquisition
Date



Balance at
Jun 30,
2024



Balance at
Sep 30,
2024


Loan marks:



























Acquired banks (V)

$

345,599



$

(920)



$

(950)



$

320,052



$

2,412



$

2,320



$

665,651



$

1,492



$

1,370


FirstCapital Bank (W)


22,648




17,210




15,853




7,790




4,305




4,041




30,438




21,515




19,894


Lone Star Bank (X)


20,378




17,960




15,709




4,558




2,790




1,913




24,936




20,750




17,622


Total


388,625




34,250




30,612




332,400




9,507




8,274




721,025




43,757




38,886





























Acquired portfolio loan
balances:



























Acquired banks (V)


12,286,159




875,474




845,545




689,573




57,417




57,780




12,975,732




932,891




903,325


FirstCapital Bank (W)


1,021,694




652,527




600,616




627,991




395,743




356,084




1,649,685




1,048,270




956,700


Lone Star Bank (X)


1,016,128




919,865




868,114




59,109




59,075




54,793




1,075,237




978,940




922,907


Total


14,323,981




2,447,866




2,314,275




1,376,673




512,235




468,657




15,700,654


 (Y)


2,960,101




2,782,932





























Acquired portfolio loan
balances less loan marks

$

13,935,356



$

2,413,616



$

2,283,663



$

1,044,273



$

502,728



$

460,383



$

14,979,629



$

2,916,344



$

2,744,046




(T)

Includes other MSA and non-MSA regions.

(U)

Represents a portion of total commercial real estate loans of $5.870 billion as of September 30, 2024.

(V)

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

(W)

On May 1, 2023, Prosperity completed the merger (the "FB Merger") of First Bancshares and its wholly owned subsidiary FirstCapital Bank. The FB Merger resulted in the addition of $1.650 billion in loans with related purchase accounting adjustments of $30.4 million at acquisition date, which were subject to subsequent fair value adjustments.

(X)

The LSSB Merger was completed on April 1, 2024 and resulted in the addition of $1.075 billion in loans with related purchase accounting adjustments of $24.9 million at acquisition date, which were subject to subsequent fair value adjustments.

(Y)

Actual principal balances acquired.

  

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars in thousands)





Three Months Ended



Year-to-Date



Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023


Asset Quality





















Nonaccrual loans

$

83,969



$

84,175



$

78,475



$

68,688



$

59,729



$

83,969



$

59,729


Accruing loans 90 or more days past due


20




322




3,035




2,195




397




20




397


Total nonperforming loans


83,989




84,497




81,510




70,883




60,126




83,989




60,126


Repossessed assets


177




113




97




76




35




177




35


Other real estate


5,757




4,960




2,204




1,708




9,320




5,757




9,320


Total nonperforming assets

$

89,923



$

89,570



$

83,811



$

72,667



$

69,481



$

89,923



$

69,481























Nonperforming assets:





















Commercial and industrial (includes energy)

$

13,642



$

16,340



$

10,199



$

8,957



$

22,219



$

13,642



$

22,219


Construction, land development and other land
loans


4,053




4,895




15,826




17,343




8,684




4,053




8,684


1-4 family residential (includes home equity)


36,660




33,935




30,206




26,096




23,708




36,660




23,708


Commercial real estate (includes multi-family
residential)


32,803




31,776




23,720




18,775




13,341




32,803




13,341


Agriculture (includes farmland)


2,686




2,550




3,714




1,460




1,511




2,686




1,511


Consumer and other


79




74




146




36




18




79




18


Total

$

89,923



$

89,570



$

83,811



$

72,667



$

69,481



$

89,923



$

69,481


Number of loans/properties


346




349




319




292




260




346




260


Allowance for credit losses on loans

$

354,397



$

359,852



$

330,219



$

332,362



$

351,495



$

354,397



$

351,495























Net charge-offs (recoveries):





















Commercial and industrial (includes energy)

$

3,309



$

2,777



$

283



$

16,123



$

1,594



$

6,369



$

282


Construction, land development and other land
loans


378




109




(2)




(5)




(5)




485




32


1-4 family residential (includes home equity)


409




425




457




20




(78)




1,291




(288)


Commercial real estate (includes multi-family
residential)


258




(381)




(17)




1,590




570




(140)




15,526


Agriculture (includes farmland)


(116)




214




23




—




—




121




(84)


Consumer and other


1,217




1,224




1,399




1,405




1,327




3,840




3,390


Total

$

5,455



$

4,368



$

2,143



$

19,133



$

3,408



$

11,966



$

18,858























Asset Quality Ratios





















Nonperforming assets to average interest-earning
assets


0.25

%



0.25

%



0.24

%



0.21

%



0.20

%



0.25

%



0.20

%

Nonperforming assets to loans and other real estate


0.40

%



0.40

%



0.39

%



0.34

%



0.32

%



0.40

%



0.32

%

Net charge-offs to average loans (annualized)


0.10

%



0.08

%



0.04

%



0.36

%



0.06

%



0.07

%



0.12

%

Allowance for credit losses on loans to total loans


1.58

%



1.61

%



1.55

%



1.57

%



1.64

%



1.58

%



1.64

%

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


1.68

%



1.69

%



1.62

%



1.63

%



1.71

%



1.68

%



1.71

%

 

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

NOTES TO SELECTED FINANCIAL DATA

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

Three Months Ended



Year-to-Date




Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023


Reconciliation of diluted earnings per share to diluted earnings
per share excluding merger related provision for credit losses,
net of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of
securities, net of tax:






















Diluted earnings per share (unadjusted)


$

1.34



$

1.17



$

1.18



$

1.02



$

1.20



$

3.68



$

3.50
























Net income


$

127,282



$

111,602



$

110,426



$

95,476



$

112,208



$

349,310



$

323,840


Merger related provision for credit losses, net of tax(Z)



—




7,162




—




—




—




7,162




14,647


Merger related expenses, net of tax(Z)



50




3,461




—




220




872




3,511




11,735


FDIC special assessment, net of tax(Z)



—




2,807




—




15,736




—




2,807




—


Net gain on sale or write-up of securities, net of tax(Z)



(177)




(8,472)




(235)




—




—




(8,884)




—


Net income excluding merger related provision for credit losses, net
of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Z):


$

127,155



$

116,560



$

110,191



$

111,432



$

113,080



$

353,906



$

350,222
























Weighted average diluted shares outstanding



95,261




95,765




93,706




93,715




93,720




94,912




92,628


Merger related provision for credit losses, net of tax, per diluted common share(Z)


$

—



$

0.07



$

—



$

—



$

—



$

0.08



$

0.16


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


$

—



$

0.04



$

—



$

—



$

0.01



$

0.04



$

0.13


FDIC special assessment, net of tax, per diluted common share(Z)


$

—



$

0.03



$

—



$

0.17



$

—



$

0.03



$

—


Net gain on sale or write-up of securities, net of tax, per diluted common share(Z)


$

—



$

(0.09)



$

—



$

—



$

—



$

(0.09)



$

—


Diluted earnings per share excluding merger related provision for
credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax:(Z)


$

1.34



$

1.22



$

1.18



$

1.19



$

1.21



$

3.74



$

3.79
























Reconciliation of return on average assets to return on average
assets excluding merger related provision for credit losses, net
of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of
securities, net of tax:






















Return on average assets (unadjusted)



1.28

%



1.12

%



1.13

%



0.98

%



1.13

%



1.16

%



1.11

%























Net income excluding merger related provision for credit losses, net
of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Z):


$

127,155



$

116,560



$

110,191



$

111,432



$

113,080



$

353,906



$

350,222


Average total assets


$

39,889,202



$

39,948,848



$

38,935,530



$

38,815,211



$

39,602,039



$

40,034,895



$

39,029,662


Return on average assets excluding merger related provision for
credit losses, net of tax, merger related expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Z)



1.28

%



1.17

%



1.13

%



1.15

%



1.14

%



1.18

%



1.20

%






























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




























































Three Months Ended



Year-to-Date




Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023


Reconciliation of return on average common equity to return on average common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax,
FDIC special assessment, net of tax, and net gain on sale or
write-up of securities, net of tax:






















Return on average common equity (unadjusted)



6.93

%



6.10

%



6.20

%



5.39

%



6.39

%



6.40

%



6.25

%























Net income excluding merger related provision for credit losses, net
of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of
securities, net of tax(Z):


$

127,155



$

116,560



$

110,191



$

111,432



$

113,080



$

353,906



$

350,222


Average shareholders' equity


$

7,347,265



$

7,321,257



$

7,121,252



$

7,085,839



$

7,024,493



$

7,274,009



$

6,907,516


Return on average common equity excluding merger related
provision for credit losses, net of tax, merger related expenses, net
of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Z)



6.92

%



6.37

%



6.19

%



6.29

%



6.44

%



6.49

%



6.76

%























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






















Net income


$

127,282



$

111,602



$

110,426



$

95,476



$

112,208



$

349,310



$

323,840


Average shareholders' equity


$

7,347,265



$

7,321,257



$

7,121,252



$

7,085,839



$

7,024,493



$

7,274,009



$

6,907,516


Less: Average goodwill and other intangible assets



(3,576,630)




(3,542,427)




(3,458,659)




(3,462,210)




(3,456,844)




(3,526,501)




(3,360,296)


Average tangible shareholders' equity


$

3,770,635



$

3,778,830



$

3,662,593



$

3,623,629



$

3,567,649



$

3,747,508



$

3,547,220


Return on average tangible common equity (F)



13.50

%



11.81

%



12.06

%



10.54

%



12.58

%



12.43

%



12.17

%























Reconciliation of return on average common equity to return on average tangible common equity excluding merger related provision for credit losses, net of tax, merger related expenses, net of tax, and FDIC special assessment, net of tax:






















Net income excluding merger related provision for credit losses, net
of tax, merger related expenses, net of tax, FDIC special
assessment, net of tax, and net gain on sale or write-up of securities, net of tax(Z):


$

127,155



$

116,560



$

110,191



$

111,432



$

113,080



$

353,906



$

350,222


Average shareholders' equity


$

7,347,265



$

7,321,257



$

7,121,252



$

7,085,839



$

7,024,493



$

7,274,009



$

6,907,516


Less: Average goodwill and other intangible assets



(3,576,630)




(3,542,427)




(3,458,659)




(3,462,210)




(3,456,844)




(3,526,501)




(3,360,296)


Average tangible shareholders' equity


$

3,770,635



$

3,778,830



$

3,662,593



$

3,623,629



$

3,567,649



$

3,747,508



$

3,547,220


Return on average tangible common equity excluding merger
related provision for credit losses, net of tax, merger related
expenses, net of tax, FDIC special assessment, net of tax, and net gain on sale or write-up of securities, net of tax (F) (Z)



13.49

%



12.34

%



12.03

%



12.30

%



12.68

%



12.59

%



13.16

%























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






















Shareholders' equity


$

7,361,249



$

7,283,444



$

7,104,544



$

7,079,330



$

7,032,677



$

7,361,249



$

7,032,677


Less: Goodwill and other intangible assets



(3,574,566)




(3,578,431)




(3,457,159)




(3,460,080)




(3,464,012)




(3,574,566)




(3,464,012)


Tangible shareholders' equity


$

3,786,683



$

3,705,013



$

3,647,385



$

3,619,250



$

3,568,665



$

3,786,683



$

3,568,665
























Period end shares outstanding



95,261




95,262




93,525




93,722




93,717




95,261




93,717


Tangible book value per share


$

39.75



$

38.89



$

39.00



$

38.62



$

38.08



$

39.75



$

38.08
























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






















Tangible shareholders' equity


$

3,786,683



$

3,705,013



$

3,647,385



$

3,619,250



$

3,568,665



$

3,786,683



$

3,568,665


Total assets


$

40,115,320



$

39,762,294



$

38,756,520



$

38,547,877



$

39,295,684



$

40,115,320



$

39,295,684


Less: Goodwill and other intangible assets



(3,574,566)




(3,578,431)




(3,457,159)




(3,460,080)




(3,464,012)




(3,574,566)




(3,464,012)


Tangible assets


$

36,540,754



$

36,183,863



$

35,299,361



$

35,087,797



$

35,831,672



$

36,540,754



$

35,831,672


Period end tangible equity to period end tangible assets ratio



10.36

%



10.24

%



10.33

%



10.31

%



9.96

%



10.36

%



9.96

%
































Three Months Ended



Year-to-Date




Sep 30,
2024



Jun 30,
2024



Mar 31,
2024



Dec 31,
2023



Sep 30,
2023



Sep 30,
2024



Sep 30,
2023


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






















Allowance for credit losses on loans


$

354,397



$

359,852



$

330,219



$

332,362



$

351,495



$

354,397



$

351,495


Total loans


$

22,380,852



$

22,320,815



$

21,265,247



$

21,180,538



$

21,432,713



$

22,380,852



$

21,432,713


Less: Warehouse Purchase Program loans



(1,228,706)




(1,081,403)




(864,924)




(822,245)




(912,327)




(1,228,706)




(912,327)


Total loans less Warehouse Purchase Program


$

21,152,146



$

21,239,412



$

20,400,323



$

20,358,293



$

20,520,386



$

21,152,146



$

20,520,386


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



1.68

%



1.69

%



1.62

%



1.63

%



1.71

%



1.68

%



1.71

%























Reconciliation of efficiency ratio to efficiency ratio excluding
net gains and losses on the sale, write-down  or write-up of
assets and securities:






















Noninterest expense


$

140,338



$

152,842



$

135,848



$

152,171



$

135,657



$

429,028



$

404,527
























Net interest income


$

261,691



$

258,786



$

238,244



$

236,983



$

239,524



$

758,721



$

719,450


Noninterest income



41,099




46,003




38,870




36,568




38,743




125,972




116,697


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



3,178




(903)




(35)




(84)




(45)




2,240




2,070


Less: net gain on sale or write-up of securities



224




10,723




298




—




—




11,245




—


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



37,697




36,183




38,607




36,652




38,788




112,487




114,627


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


$

299,388



$

294,969



$

276,851



$

273,635



$

278,312



$

871,208



$

834,077


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



46.87

%



51.82

%



49.07

%



55.61

%



48.74

%



49.25

%



48.50

%























Reconciliation of efficiency ratio to efficiency ratio, excluding
net gains and losses on the sale, write-down or write-up of assets
and securities, merger related expenses and FDIC special
assessment:






















Noninterest expense


$

140,338



$

152,842



$

135,848



$

152,171



$

135,657



$

429,028



$

404,527


Less: merger related expenses



63




4,381




—




278




1,104




4,444




14,855


Less: FDIC special assessment



—




3,554




—




19,919




—




3,554




—


Noninterest expense excluding merger related expenses and FDIC special assessment


$

140,275



$

144,907



$

135,848



$

131,974



$

134,553



$

421,030



$

389,672
























Net interest income


$

261,691



$

258,786



$

238,244



$

236,983



$

239,524



$

758,721



$

719,450


Noninterest income



41,099




46,003




38,870




36,568




38,743




125,972




116,697


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



3,178




(903)




(35)




(84)




(45)




2,240




2,070


Less: net gain on sale or write-up of securities



224




10,723




298




—




—




11,245




—


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



37,697




36,183




38,607




36,652




38,788




112,487




114,627


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


$

299,388



$

294,969



$

276,851



$

273,635



$

278,312



$

871,208



$

834,077


Efficiency ratio, excluding net gains and losses on the sale, write-
down or write-up of assets and securities, merger related expenses and FDIC special assessment



46.85

%



49.13

%



49.07

%



48.23

%



48.35

%



48.33

%



46.72

%

 

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SOURCE Prosperity Bancshares, Inc.