📣 The Announcement — Mega Merger Year

Prosperity Bancshares, Inc. (NYSE: PB) reported its first quarter 2026 earnings, marking a period of massive expansion and corporate restructuring. The company is undergoing a rapid growth phase, driven by two major mergers in Q1 2026: the integration of American Bank Holding Corporation and Southwest Bancshares, Inc.

👉 The most important takeaway is that while the official reported Net Income was $116.3 million, the underlying operational strength—excluding merger costs—was much higher, reaching $149.9 million.

These mergers are significantly expanding Prosperity’s scale, boosting its total assets by $4.855 billion (a 12.5% increase) and expanding its physical reach across Texas and Oklahoma.

🤝 The Deal Flow — A Merger Machine

This quarter saw Prosperity complete two foundational integrations and announce a third massive one. The company is executing a "roll-up" strategy, which means acquiring smaller regional banks to become a larger, more powerful entity.

• American Merger: Completed on January 1, 2026, integrating American Bank Holding Corporation and its subsidiary, American Bank, N.A.
• Southwest Merger: Completed on February 1, 2026, bringing in Southwest Bancshares, Inc.
• Stellar Merger: This is the biggest upcoming deal. Prosperity received all regulatory approvals for the merger with Stellar Bancorp, Inc. This deal is expected to close on or about July 1, 2026.

👉 Stellar is a major addition. Under the terms, Prosperity will issue 0.3803 shares of PB and $11.36 in cash for each outstanding share of Stellar common stock, valuing the transaction at approximately $2.002 billion.

📊 Financial Health Indicators

The financial figures show robust growth, directly fueled by the acquisitions and the subsequent increase in assets. Prosperity is successfully growing its core business metrics while maintaining excellent credit standards.

• Loans: Increased by $3.354 billion (16.4%) quarter-over-quarter.
• Deposits: Increased by $4.150 billion (14.6%) quarter-over-quarter.
• Credit Risk: The institution maintains strong asset quality, with Nonperforming Assets (NPA) remaining low at 0.33% of average interest-earning assets.
• Credit Allowance: The allowance for credit losses on loans to total loans (excluding the Warehouse Purchase Program) was kept at 1.61%, demonstrating proactive risk management.

💰 The Financial Deep Dive — Reading the Numbers

When analyzing bank earnings, investors must look past the headline number. Because the quarter was dominated by massive merger costs, the official GAAP net income figures are misleading.

• The GAAP Picture: The reported Net Income for Q1 2026 was $116.3 million (down from $130.2 million in 2025).
• The Adjusted Picture (The Real Story): The GAAP figures were hit by $42.5 million in merger-related expenses. When analysts exclude this cost, the Net Income jumps to $149.9 million, leading to a Diluted EPS of $1.50 (vs. $1.16 reported).
• Efficiency Ratio: The efficiency ratio, which measures how much it costs the bank to operate, improved significantly when adjusting for merger expenses, falling to 47.58%.

👉 By ignoring the merger charges, we get a much clearer picture of Prosperity's core earning power and efficient operation.

📈 Strategic Growth & Future Bets

Prosperity is focused on not just growing its size, but also enhancing its shareholder value and its digital infrastructure.

• Capital Investment: The company completed a core system conversion in February 2026, which is a massive, necessary upgrade that ensures its technology can handle its expanded size.
• Shareholder Return: Prosperity recently repurchased approximately 837,000 shares of its common stock, spending a total of $57.1 million.
• Recognition: The company received industry praise, named in Forbes’ 2026 America's Best Banks and ranked among "America's Best Regional Banks" by Newsweek in 2026.
• Dividend: Prosperity declared a Q2 2026 cash dividend of $0.60 per share, payable on July 1, 2026.

🌍 Industry Context — The Texas Advantage

Prosperity Bank operates in a highly favorable market: Texas. CEO David Zalman emphasized that the company benefits from a strong, diverse economy fueled by energy, technology, manufacturing, and trade/logistics.

👉 The Texas market, with no state income tax and continuous population growth, provides a supportive, high-growth environment that positions Prosperity for continued future success.

🧠 The Analogy

Merging banks is like a construction crew systematically buying up smaller, existing buildings across a city. Each small bank is a separate building, but Prosperity is the master developer. By buying them out and integrating them under one roof (the "core system conversion"), they are not just buying bricks and mortar; they are buying the customer base, the local relationships, and the guaranteed, steady cash flow that makes the entire city—and the bank—stronger and bigger.

🧩 Final Takeaway

Prosperity is a major consolidation play, successfully using mergers (American, Southwest, and Stellar) to rapidly grow its size, customer base, and geographic reach. While merger costs temporarily depress quarterly profits, the core business metrics and strategic momentum indicate strong operational health and massive growth potential.

PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER 2026 EARNINGS News provided by Prosperity Bancshares, Inc. Apr 29, 2026, 06:30 ET Share this article Share toX Share this article Share toX Completed the merger of American Bank Holding Corporation on January 1, 2026 Completed the merger of Southwest Bancshares, Inc. on February 1, 2026 Net income of $116.3 million and diluted earnings per share of $1.16 for first quarter 2026; excluding merger related expenses of $42.5 million, net income was $149.9 million(1) and diluted earnings per share were $1.50(1) First quarter net interest margin increased 21 basis points to 3.51% compared to 3.30% for fourth quarter 2025 Loans, excluding Warehouse Purchase Program loans, increased $3.354 billion or 16.4% during first quarter 2026 Deposits increased $4.150 billion or 14.6% during first quarter 2026 Allowance for credit losses on loans and on off-balance sheet credit exposure of $421.5 million and allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program, of 1.61%(1) Nonperforming assets remain low at 0.33% of first quarter average interest-earning assets Completed core system conversion in February 2026 Received all necessary regulatory approvals for the pending merger of Stellar Bancorp, Inc. Named in Forbes' 2026 America's Best Banks and is ranked among "America's Best Regional Banks" by Newsweek in 2026 HOUSTON, April 29, 2026 /PRNewswire/ -- Prosperity Bancshares, Inc.® (NYSE: PB) ("Prosperity Bancshares"), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income of $116.3 million for the quarter ended March 31, 2026, compared with $130.2 million for the same period in 2025. Net income per diluted common share was $1.16 for the quarter ended March 31, 2026, compared with $1.37 for the same period in 2025. On January 1, 2026, American Bank Holding Corporation ("American") merged with Prosperity Bancshares and American Bank, N.A. ("American Bank") merged with Prosperity Bank (collectively, the "American Merger"), and on February 1, 2026, Southwest Bancshares, Inc. ("Southwest") merged with Prosperity Bancshares and Texas Partners Bank ("Texas Partners") merged with Prosperity Bank (collectively, the "Southwest Merger", and together with the American Merger, the "Mergers"). During the first quarter of 2026, Prosperity incurred merger related expenses of $42.5 million, or $0.34(1)per diluted common share. Excluding these charges, net income was $149.9(1) million and earnings per diluted common share was $1.50(1) for the first quarter of 2026. Additionally, during the first quarter of 2026, loans, excluding Warehouse Purchase Program loans, increased $3.354 billion or 16.4%, and deposits increased $4.150 billion or 14.6%, with both increases primarily due to the Mergers. The annualized return on first quarter average assets was 1.10%. Nonperforming assets remain low at 0.33% of first quarter average interest-earning assets. "The first quarter of 2026 was impactful for the company and I am excited to announce that during the quarter we completed the merger of American Bank Holding Corporation on January 1, 2026, completed the merger of Southwest Bancshares, Inc. on February 1, 2026 and announced the merger of Stellar Bancorp, Inc. on January 28, 2026, for which we have now received all necessary regulatory approvals and expect to complete on July 1, 2026. Additionally, we completed a core system conversion in February," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer. "We and others believe that Prosperity is doing the right thing. Prosperity has been ranked as one of Forbes America's Best Banks for 2026, and since the list's inception in 2010, was ranked in the Top 10 for 14 consecutive years. Prosperity has also been recognized by Newsweek as one of "America's Best Regional Banks" and was ranked 15th in S&P Global Market Intelligence's "Top 50 US Public Bank Ranking" for 2025," continued Zalman. "In an effort to continue to enhance shareholder value, Prosperity Bancshares repurchased approximately 837,000 shares of its common stock at an average weighted price of $68.15 per share for a total of $57.1 million during the first quarter of 2026," added Zalman. "Texas and Oklahoma continue to benefit from strong economies and are home to 57 Fortune 500 headquartered companies. Texas also benefits from diversification in various industries, including energy (oil, gas, renewables), technology, manufacturing, trade/logistics (major ports), healthcare and finance. Further, its business-friendly environment, no state income tax, population growth that support spending and workforce expansion and key role in trade and cross-border commerce position it well for 2026 and the future," stated Zalman. "While Texas continues to outperform the Unites States on output growth, the labor market has cooled after years of expansion. The growth in 2026 is expected to be steady, although the state's size, diversity and policy advantages position it well for a rebound," concluded Zalman. Results of Operations for the Three Months Ended March 31, 2026 For the three months ended March 31, 2026, net income was $116.3 million(2) or $1.16 per diluted common share compared with $130.2 million(3) or $1.37 per diluted common share for the same period in 2025. On a linked quarter basis, net income was $116.3 million(2) or $1.16 per diluted common share for the three months ended March 31, 2026, compared with $139.9 million(4) or $1.49 per diluted common share for the three months ended December 31, 2025. Net income and net income per diluted common share for the first quarter of 2026 were impacted by the Mergers and merger related expenses of $42.5 million. Excluding these charges, net income was $149.9(1) million and earnings per diluted common share was $1.50(1) for the three months ended March 31, 2026. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2026 were 1.10%, 5.70% and 10.59%(1), respectively. Excluding merger related expenses, net of tax, annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2026, were 1.42%(1), 7.35%(1) and 13.65%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 59.16%(1) for the three months ended March 31, 2026, and excluding merger related expenses, the efficiency ratio was 47.58%(1). Net interest income before provision for credit losses was $321.2 million for the three months ended March 31, 2026, compared with $265.4 million for the same period in 2025, an increase of $55.8 million or 21.0%. The net interest margin on a tax equivalent basis was 3.51% for the three months ended March 31, 2026, compared with 3.14% for the same period in 2025. Net interest income before provision for credit losses increased $46.2 million or 16.8% to $321.2 million for the three months ended March 31, 2026, compared with $275.0 million for the three months ended December 31, 2025. The net interest margin on a tax equivalent basis was 3.51% for the three months ended March 31, 2026, compared with 3.30% for the three months ended December 31, 2025. The change for both periods were primarily due to the repricing of assets and the impact of the Mergers. Noninterest income was $46.5 million for the three months ended March 31, 2026, compared with $41.3 million for the same period in 2025, an increase of $5.2 million or 12.5%. Noninterest income was $46.5 million for the three months ended March 31, 2026, compared with $42.8 million for the three months ended December 31, 2025, an increase of $3.7 million or 8.6%. The change for both periods was primarily due to the Mergers. Noninterest expense was $217.3 million for the three months ended March 31, 2026, compared with $140.3 million for the same period in 2025, an increase of $77.0 million. Noninterest expense was $217.3 million for the three months ended March 31, 2026, compared with $138.7 million for the three months ended December 31, 2025, an increase of $78.6 million. The change for both periods was primarily due to an increase in merger related expenses of $42.5 million, an increase in salaries and benefits and an increase in additional expenses related to three months of American operations and two months of Southwest operations. Balance Sheet Information Prosperity had $43.619 billion in total assets at March 31, 2026, an increase of $4.855 billion or 12.5%, compared with $38.765 billion at March 31, 2025. Linked quarter total assets increased by $5.156 billion or 13.4% compared with $38.463 billion at December 31, 2025. Total assets increased primarily due to the Mergers. Loans were $25.288 billion at March 31, 2026, an increase of $3.310 billion or 15.1% from $21.978 billion at March 31, 2025. Linked quarter loans increased $3.483 billion or 16.0% from $21.805 billion at December 31, 2025. Loans increased primarily due to the Mergers. Loans, excluding Warehouse Purchase Program loans, were $23.855 billion at March 31, 2026, compared with $20.920 billion at March 31, 2025, an increase of $2.935 billion or 14.0%, and compared with $20.501 billion at December 31, 2025, an increase of $3.354 billion or 16.4%. Deposits were $32.633 billion at March 31, 2026, an increase of $4.606 billion or 16.4%, from $28.027 billion at March 31, 2025. Linked quarter deposits increased $4.150 billion or 14.6% from $28.482 billion at December 31, 2025. Deposits increased primarily due to the Mergers. Asset Quality Nonperforming assets totaled $122.1 million or 0.33% of quarterly average interest-earning assets at March 31, 2026, compared with $81.4 million or 0.24% of quarterly average interest-earning assets at March 31, 2025 and $150.8 million or 0.46% of quarterly average interest-earning assets at December 31, 2025. The allowance for credit losses on loans and off-balance sheet credit exposures was $421.5 million at March 31, 2026, compared with $386.7 million at March 31, 2025 and $371.4 million at December 31, 2025. There was no provision for credit losses for the three months ended March 31, 2026, March 31, 2025 and December 31, 2025. The allowance for credit losses on loans was $383.8 million or 1.52% of total loans at March 31, 2026, compared with $349.1 million or 1.59% of total loans at March 31, 2025 and $333.7 million or 1.53% of total loans at December 31, 2025. The allowance for credit losses on loans increased during the first quarter of 2026 due to the Mergers, of which $47.5 million was attributable to the American Merger and $43.9 million was attributable to the Southwest Merger. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.61%(1) at March 31, 2026, compared with 1.67%(1) at March 31, 2025 and 1.63%(1) at December 31, 2025. Net charge-offs were $41.3 million for the three months ended March 31, 2026, compared with net charge-offs of $2.7 million for the three months ended March 31, 2025 and net charge-offs of $5.9 million for the three months ended December 31, 2025. Net charge-offs for the first quarter 2026 included a $33.8 million increase in net charge-offs for commercial and industrial loans. Net charge-offs for the first quarter of 2026 included $2.0 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $49.0 million due to Day One accounting for PCD loans at the time of the Mergers. Further, $2.0 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve. Dividend Prosperity Bancshares declared a second quarter 2026 cash dividend of $0.60 per share to be paid on July 1, 2026, to all shareholders of record as of June 15, 2026. Stock Repurchase Program On January 26, 2026, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.87 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 26, 2027, at the discretion of management. Under its 2026 stock repurchase program, Prosperity Bancshares repurchased approximately 837,000 shares of its common stock at an average weighted price of $68.15 per share for a total of $57.1 million during the three months ended March 31, 2026. Pending Acquisition of Stellar Bancorp, Inc. On January 28, 2026, Prosperity Bancshares and Stellar Bancorp, Inc. ("Stellar") jointly announced the signing of an Agreement and Plan of Merger (the "Merger Agreement"), which provides that Stellar, the parent company of Stellar Bank ("Stellar Bank"), will merge with and into Prosperity Bancshares, and Stellar Bank will merge with and into Prosperity Bank. Stellar Bank operates 52 banking offices in greater Houston and Beaumont, Texas and surrounding areas. Under the terms and subject to the conditions of the Merger Agreement, Prosperity Bancshares will issue 0.3803 shares of its common stock and $11.36 in cash for each outstanding share of Stellar common stock. Based on Prosperity Bancshares' closing price of $72.90 on January 27, 2026, the total consideration was valued at approximately $2.002 billion. Prosperity has received all necessary regulatory approvals for the acquisition of Stellar and Stellar Bank, and the transaction is expected to be completed on or about July 1, 2026, subject to approval by Stellar shareholders and the satisfaction or waiver of other customary closing conditions set for in the Merger Agreement. Acquisition of Southwest Bancshares, Inc. On February 1, 2026, Prosperity completed the acquisition of Southwest and its wholly owned subsidiary Texas Partners, headquartered in San Antonio, Texas. Texas Partners operated 11 banking offices in Central Texas including its main office in San Antonio, and banking offices in the San Antonio area, Austin and the Hill Country. Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,094,974 shares of its common stock for all outstanding shares of Southwest common stock in the first quarter of 2026. This resulted in goodwill of $134.1 million as of March 31, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $33.8 million of core deposit intangibles as of March 31, 2026. Acquisition of American Bank Holding Corporation On January 1, 2026, Prosperity completed the acquisition of American and its wholly owned subsidiary American Bank, headquartered in Corpus Christi, Texas. American Bank operated 18 banking offices and two loan production offices in South and Central Texas including its main office in Corpus Christi, and banking offices in San Antonio, Austin, Victoria and the greater Corpus Christi area including Port Aransas and Rockport and a loan production office in Houston, Texas. Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,439,938 shares of its common stock for all outstanding shares of American common stock in the first quarter of 2026. This resulted in goodwill of $185.0 million as of March 31, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $31.1 million of core deposit intangibles as of March 31, 2026. Conference Call Prosperity's management team will host a conference call on Wednesday, April 29, 2026, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2026 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7638209. Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity's Investor Relations page by selecting "Presentations, Webcasts & Calls" from the menu and following the instructions. Non-GAAP Financial Measures Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related expenses, net of tax, and FDIC special assessment, 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 the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets, merger related expenses, and FDIC special assessment. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and their presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Prosperity's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Please refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures. Prosperity Bancshares, Inc. ® As of March 31, 2026, Prosperity Bancshares, Inc.® is a $43.619 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 312 full-service banking locations: 62 in the Houston area, including The Woodlands; 36 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 22 in the East Texas area; 28 in the Central Texas area including Austin and San Antonio; 45 in the West Texas area including Lubbock, Midland-Odessa, Abilene; Amarillo and Wichita Falls; 15 in the Bryan/College Station area, 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area; 18 in the Central, South Texas and San Antonio areas doing business as American Bank and 11 in the San Antonio area doing business as Texas Partners Bank. Cautionary Notes on Forward-Looking Statements "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains, and the remarks by Prosperity's management on the conference call may contain, statements regarding the proposed transaction between Prosperity Bancshares, Inc. ("Prosperity") and Stellar Bancorp, Inc. ("Stellar"); future financial and operating results; benefits and synergies of the proposed transaction; future opportunities for Prosperity; the issuance of common stock of Prosperity contemplated by the Agreement and Plan of Merger by and between Prosperity and Stellar (the "Merger Agreement"); the expected timing of the closing of the proposed transaction contemplated by the Merger Agreement; the ability of the parties to complete the proposed transaction considering the various closing conditions and any other statements about future expectations that constitute forward-looking statements within the meaning of the federal securities laws, including the meaning of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), 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, Stellar and their respective subsidiaries or related to the proposed transaction between Prosperity and Stellar and are subject to significant risks and uncertainties that could cause actual results to differ materially from the results expressed in such statements. These forward-looking statements may include information about Prosperity's and Stellar'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 and Stellar's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's and Stellar'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 and Stellar's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's and Stellar'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. 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 the control of Prosperity and Stellar, 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); a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs; and the effect, impact, potential duration or other implications of weather and climate-related events. Many possible events or factors could adversely affect the future financial results and performance of Prosperity, Stellar or the combined company and could cause those results or performance to differ materially from those expressed in or implied by the forward-looking statements. Such risks and uncertainties include, among others: (1) the risk that the cost savings and synergies from the proposed transaction may not be fully realized or may take longer than anticipated to be realized, (2) disruption to Prosperity's and Stellar's businesses as a result of the announcements and pendency of the proposed transaction, (3) the risk that the integration of Stellar's businesses and operations into Prosperity will be materially delayed or will be more costly or difficult than expected, or that Prosperity is otherwise unable to successfully integrate Stellar's business into its own, including as a result of unexpected factors or events, (4) the failure to obtain the necessary approval by the shareholders of Stellar, (5) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the proposed transaction, (6) the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in closing the proposed transaction or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (7) the dilution caused by the issuances of additional shares of Prosperity's common stock in the proposed transaction, (8) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (9) the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against Prosperity before or after the proposed transaction, or against Stellar, (10) diversion of management's attention from ongoing business operations and (11) general competitive, economic, political and market conditions and other factors that may affect future results of Prosperity and Stellar. Prosperity and Stellar disclaim 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 risks, uncertainties, assumptions, and factors are discussed in the respective Annual Reports on Form 10-K for the year ended December 31, 2025, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed by Prosperity or Stellar and in other filings made by Prosperity and Stellar with the Securities and Exchange Commission (the "SEC") from time to time. Additional Information about the Transaction and Where to Find It In connection with the proposed transaction, Prosperity has filed with the SEC a registration statement (the "Registration Statement") on Form S-4 (File No. 333-294882) to register the shares of Prosperity common stock to be issued to the shareholders of Stellar in connection with the proposed transaction. The Registration Statement includes a prospectus of Prosperity and a proxy statement of Stellar (the "proxy statement/prospectus"), which has been sent to the shareholders of Stellar in connection with the proposed transaction. The Registration Statement was declared effective on April 21, 2026, at which time Prosperity filed a final prospectus and Stellar filed a definitive proxy statement. The mailing of the proxy statement/prospectus to Stellar shareholders commenced on April 23, 2026. This communication is not a substitute for the Registration Statement, the proxy statement/prospectus or any other document that may be filed by Prosperity or Stellar with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY/STATEMENT PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain the Registration Statement and the proxy statement/prospectus and other documents that are filed with the SEC by Prosperity or Stellar, as applicable, free of charge from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank. Participants in the Solicitation Prosperity, Stellar and certain of their directors and executive officers and other employees may be deemed to be participants in the solicitation of proxies from Stellar's shareholders in connection with the proposed transaction. Information about the directors and executive officers of Prosperity and their ownership of Prosperity common stock is contained in the definitive proxy statement for Prosperity's 2026 annual meeting of shareholders (the "Prosperity Annual Meeting Proxy Statement"), which was filed with the SEC on March 16, 2026, including under the headings "Item 1. Election of Directors," "Corporate Governance," "Executive Compensation and Other Matters," "Item 3. Advisory Vote on Executive Compensation," and "Beneficial Ownership of Common Stock by Management of the Company and Principal Shareholders." Information about the directors and executive officers of Stellar and their ownership of Stellar common stock is contained in Amendment No. 1 to the Annual Report on Form 10-K for the year ended December 31, 2025 of Stellar (the "Stellar 10-K/A"), which was filed with the SEC on April 17, 2026. Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of Stellar in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, is included in the proxy statement/prospectus relating to the proposed transaction filed with the SEC. To the extent holdings of securities by potential participants (or the identity of such participants) have changed since the information printed in the Prosperity Annual Meeting Proxy Statement or the Stellar 10-K/A, such information has been or will be reflected on Statements of Change in Ownership on Forms 3 and 4 filed with the SEC, as applicable. Free copies of the proxy statement/prospectus relating to the proposed transaction and free copies of the other SEC filings to which reference is made in this paragraph may be obtained from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank. No Offer or Solicitation This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law. (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 $4.8 million, net of tax, primarily comprised of loan discount accretion of $3.7 million and merger related provision for credit losses of $42.5 million for the three months ended March 31, 2026. (3) Includes purchase accounting adjustments of $3.2 million, net of tax, primarily comprised of loan discount accretion of $3.3 million for the three months ended March 31, 2025. (4) Includes purchase accounting adjustments of $2.7 million, net of tax, primarily comprised of loan discount accretion of $3.1 million for the three months ended December 31, 2025. Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(In thousands) Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Balance Sheet Data (at period end) Loans held for sale $ 21,925 $ 14,155 $ 11,297 $ 6,004 $ 9,764 Loans held for investment 23,832,909 20,486,415 20,738,294 20,903,944 20,909,913 Loans held for investment - Warehouse Purchase Program 1,433,152 1,304,798 1,278,178 1,287,440 1,057,893 Total loans 25,287,986 21,805,368 22,027,769 22,197,388 21,977,570 Investment securities(A) 11,951,591 10,613,425 10,232,462 10,608,104 10,792,731 Federal funds sold 209 217 210 197 221 Allowance for credit losses on loans (383,840) (333,742) (339,626) (346,084) (349,101) Cash and due from banks 1,547,967 1,747,511 1,766,115 1,304,993 1,694,637 Goodwill 3,822,283 3,503,127 3,503,127 3,503,127 3,503,127 Core deposit intangibles, net 111,243 51,605 55,194 58,796 62,406 Other real estate owned 13,257 13,296 13,750 7,874 8,012 Fixed assets, net 429,775 383,449 378,776 374,602 373,273 Other assets 838,712 679,169 692,692 708,355 701,799 Total assets $ 43,619,183 $ 38,463,425 $ 38,330,469 $ 38,417,352 $ 38,764,675 Noninterest-bearing deposits $ 10,580,920 $ 9,467,911 $ 9,522,028 $ 9,426,657 $ 9,675,915 Interest-bearing deposits 22,051,836 19,014,573 18,260,066 18,046,754 18,350,884 Total deposits 32,632,756 28,482,484 27,782,094 27,473,411 28,026,799 Other borrowings 2,200,000 1,950,000 2,400,000 2,900,000 2,700,000 Securities sold under repurchase agreements 176,099 201,216 185,797 183,572 216,086 Subordinated notes and junior subordinated debentures 76,186 — — — — Allowance for credit losses on off-balance sheet credit exposures 37,646 37,646 37,646 37,646 37,646 Other liabilities 288,645 175,939 259,994 222,987 267,083 Total liabilities 35,411,332 30,847,285 30,665,531 30,817,616 31,247,614 Shareholders' equity(B) 8,207,851 7,616,140 7,664,938 7,599,736 7,517,061 Total liabilities and equity $ 43,619,183 $ 38,463,425 $ 38,330,469 $ 38,417,352 $ 38,764,675 (A) Includes $44, ($375), ($1,987), ($1,657) and ($1,374) in unrealized gain (losses) on available for sale securities for the quarterly periods ended March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025, and March 31, 2025, respectively. (B) Includes $35, ($296), ($1,570), ($1,309) and ($1,085) in after-tax unrealized gain (losses) on available for sale securities for the quarterly periods ended March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025, and March 31, 2025, respectively. Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(In thousands) Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Income Statement Data Interest income: Loans $ 361,756 $ 321,516 $ 329,445 $ 325,490 $ 319,023 Securities(C) 70,531 56,767 58,207 57,836 57,886 Federal funds sold and other earning assets 9,488 8,364 10,455 9,438 15,896 Total interest income 441,775 386,647 398,107 392,764 392,805 Interest expense: Deposits 104,237 94,625 95,965 93,790 95,597 Other borrowings 14,783 16,028 27,613 30,101 30,492 Securities sold under repurchase agreements 902 1,041 1,094 1,151 1,334 Subordinated notes and junior subordinated debentures 703 — — — — Total interest expense 120,625 111,694 124,672 125,042 127,423 Net interest income 321,150 274,953 273,435 267,722 265,382 Provision for credit losses — — — — — Net interest income after provision for credit losses 321,150 274,953 273,435 267,722 265,382 Noninterest income: Nonsufficient funds (NSF) fees 10,867 9,715 9,805 8,885 9,147 Credit card, debit card and ATM card income 9,483 9,462 9,446 9,761 8,739 Service charges on deposit accounts 8,680 7,618 7,317 7,645 7,408 Trust income 4,922 3,662 3,526 3,859 3,601 Mortgage income 1,280 954 931 965 1,009 Brokerage income 1,568 1,570 1,328 1,225 1,262 Bank owned life insurance income 2,598 2,117 2,111 1,985 2,115 Net gain (loss) on sale or write-down of assets 318 35 3 1,414 (235) Other noninterest income 6,758 7,647 6,771 7,243 8,255 Total noninterest income 46,474 42,780 41,238 42,982 41,301 Noninterest expense: Salaries and benefits 109,211 88,384 87,949 87,296 89,476 Net occupancy and equipment 10,654 9,379 9,395 9,168 9,146 Credit and debit card, data processing and software amortization 18,114 12,621 12,515 12,056 11,422 Regulatory assessments and FDIC insurance 6,041 1,600 5,198 5,508 5,789 Core deposit intangibles amortization 5,259 3,588 3,602 3,610 3,641 Depreciation 5,548 5,155 4,966 4,779 4,774 Communications 3,834 3,528 3,480 3,507 3,473 Other real estate expense 341 219 314 204 140 Net (gain) loss on sale or write-down of other real estate (41) 109 (81) (222) (30) Merger related expenses 42,516 268 62 — — Other noninterest expense 15,810 13,861 11,235 12,659 12,470 Total noninterest expense 217,287 138,712 138,635 138,565 140,301 Income before income taxes 150,337 179,021 176,038 172,139 166,382 Provision for income taxes 34,070 39,114 38,482 36,984 36,157 Net income available to common shareholders $ 116,267 $ 139,907 $ 137,556 $ 135,155 $ 130,225 (C) Interest income on securities was reduced by net premium amortization of $3,829, $4,668, $2,877, $4,926, and $5,027 for the three months ended March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025, and March 31, 2025, respectively. Prosperity Bancshares, Inc. ®Financial Highlights (Unaudited)(Dollars and share amounts in thousands, except per share data and market prices) Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Profitability Net income (D) (E) $ 116,267 $ 139,907 $ 137,556 $ 135,155 $ 130,225 Basic earnings per share $ 1.16 $ 1.49 $ 1.45 $ 1.42 $ 1.37 Diluted earnings per share $ 1.16 $ 1.49 $ 1.45 $ 1.42 $ 1.37 Return on average assets (F) (J) 1.10 % 1.49 % 1.44 % 1.41 % 1.34 % Return on average common equity (F) (J) 5.70 % 7.30 % 7.18 % 7.13 % 6.94 % Return on average tangible common equity (F) (G) (J) 10.59 % 13.61 % 13.43 % 13.44 % 13.23 % Tax equivalent net interest margin (D) (E) (H) 3.51 % 3.30 % 3.24 % 3.18 % 3.14 % Efficiency ratio (G) (I) (K) 59.16 % 43.66 % 44.06 % 44.80 % 45.71 % Liquidity and Capital Ratios Equity to assets 18.82 % 19.80 % 20.00 % 19.78 % 19.39 % Common equity tier 1 capital 15.44 % 17.55 % 17.53 % 17.10 % 16.92 % Tier 1 risk-based capital 15.44 % 17.55 % 17.53 % 17.10 % 16.92 % Total risk-based capital 16.69 % 18.80 % 18.78 % 18.35 % 18.17 % Tier 1 leverage capital 11.22 % 11.93 % 11.90 % 11.62 % 11.20 % Period end tangible equity to period end tangible assets (G) 10.77 % 11.63 % 11.81 % 11.58 % 11.23 % Other Data Weighted-average shares used in computing earnings per common share Basic 99,825 94,044 95,093 95,277 95,266 Diluted 99,825 94,044 95,093 95,277 95,266 Period end shares outstanding 100,835 93,058 94,993 95,277 95,258 Cash dividends paid per common share $ 0.60 $ 0.60 $ 0.58 $ 0.58 $ 0.58 Book value per common share $ 81.40 $ 81.84 $ 80.69 $ 79.76 $ 78.91 Tangible book value per common share (G) $ 42.39 $ 43.64 $ 43.23 $ 42.38 $ 41.48 Common Stock Market Price High $ 77.20 $ 73.90 $ 75.44 $ 74.56 $ 82.75 Low $ 63.20 $ 61.07 $ 64.27 $ 61.57 $ 68.96 Period end closing price $ 67.18 $ 69.11 $ 66.35 $ 70.24 $ 71.37 Employees – FTE (excluding overtime) 4,429 3,941 3,937 3,921 3,898 Number of banking centers 312 283 283 283 284 (D) Includes purchase accounting adjustments for the periods presented as follows: Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Loan discount accretion Purchased seasoned loans ("PS loans") $2,562 $2,926 $2,242 $2,486 $2,615 PCD $1,186 $205 $613 $638 $677 Securities net accretion $1,573 $342 $1,475 $409 $705 Time deposits amortization $(699) $(1) $(1) $(2) $(9) (E) Using effective tax rate of 22.7%, 21.8%, 21.9%, 21.5% and 21.7% for the three months ended March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025 and March 31, 2025, respectively. (F) Interim periods annualized. (G) Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure. (H) Net interest margin for all periods presented is based on average balances on an actual 365-day basis. (I) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale, 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 expenses, net of tax, and FDIC special assessment, 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 Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 AverageBalance InterestEarned/InterestPaid AverageYield/Rate (L) AverageBalance InterestEarned/InterestPaid AverageYield/Rate (L) AverageBalance InterestEarned/InterestPaid AverageYield/Rate (L) Interest-earning assets: Loans held for sale $ 15,800 $ 238 6.11 % $ 11,077 $ 175 6.27 % $ 7,570 $ 127 6.80 % Loans held for investment 23,469,020 344,596 5.95 % 20,603,235 302,679 5.83 % 20,959,226 305,068 5.90 % Loans held for investment - Warehouse Purchase Program 1,207,793 16,922 5.68 % 1,258,036 18,662 5.89 % 876,086 13,828 6.40 % Total loans 24,692,613 361,756 5.94 % 21,872,348 321,516 5.83 % 21,842,882 319,023 5.92 % Investment securities 11,469,762 70,531 2.49 % (M) 10,378,696 56,767 2.17 % (M) 11,017,400 57,886 2.13 % (M) Federal funds sold and other earning assets 1,026,015 9,488 3.75 % 830,926 8,364 3.99 % 1,443,220 15,896 4.47 % Total interest-earning assets 37,188,390 441,775 4.82 % 33,081,970 386,647 4.64 % 34,303,502 392,805 4.64 % Allowance for credit losses on loans (330,133) (337,892) (350,715) Noninterest-earning assets 5,361,351 4,921,850 5,004,291 Total assets $ 42,219,608 $ 37,665,928 $ 38,957,078 Interest-bearing liabilities: Interest-bearing demand deposits $ 6,266,423 $ 13,993 0.91 % $ 4,812,342 $ 9,088 0.75 % $ 5,224,796 $ 9,019 0.70 % Savings and money market deposits 10,583,184 50,719 1.94 % 9,054,281 44,771 1.96 % 9,007,286 45,645 2.06 % Certificates and other time deposits 4,830,369 39,525 3.32 % 4,519,742 40,766 3.58 % 4,426,521 40,933 3.75 % Other borrowings 1,620,556 14,783 3.70 % 1,595,652 16,028 3.99 % 2,776,667 30,492 4.45 % Securities sold under repurchase agreements 177,719 902 2.06 % 185,289 1,041 2.23 % 217,945 1,334 2.48 % Subordinated notes and junior subordinated debentures 63,673 703 4.48 % — — — — — — Total interest-bearing liabilities 23,541,924 120,625 2.08 % (N) 20,167,306 111,694 2.20 % (N) 21,653,215 127,423 2.39 % (N) Noninterest-bearing liabilities: Noninterest-bearing demand deposits 10,260,022 9,543,581 9,504,540 Allowance for credit losses on off-balance sheet credit exposures 38,070 37,646 37,646 Other liabilities 218,810 248,593 255,876 Total liabilities 34,058,826 29,997,126 31,451,277 Shareholders' equity 8,160,782 7,668,802 7,505,801 Total liabilities and shareholders' equity $ 42,219,608 $ 37,665,928 $ 38,957,078 Net interest income and margin $ 321,150 3.50 % $ 274,953 3.30 % $ 265,382 3.14 % Non-GAAP to GAAP reconciliation: Tax equivalent adjustment 575 514 587 Net interest income and margin (tax equivalent basis) $ 321,725 3.51 % $ 275,467 3.30 % $ 265,969 3.14 % (L) Annualized and based on an actual 365-day basis. (M) Yield on securities was impacted by net premium amortization of $3,829, $4,668, and $5,027 for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, respectively. (N) Total cost of funds, including noninterest bearing deposits, was 1.45%, 1.49% and 1.66% for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, respectively. Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(Dollars in thousands) Three Months Ended Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 YIELD TREND (O) Interest-Earning Assets: Loans held for sale 6.11 % 6.27 % 6.64 % 6.79 % 6.80 % Loans held for investment 5.95 % 5.83 % 5.90 % 5.88 % 5.90 % Loans held for investment - Warehouse Purchase Program 5.68 % 5.89 % 6.31 % 6.34 % 6.40 % Total loans 5.94 % 5.83 % 5.92 % 5.91 % 5.92 % Investment securities (P) 2.49 % 2.17 % 2.19 % 2.13 % 2.13 % Federal funds sold and other earning assets 3.75 % 3.99 % 4.44 % 4.50 % 4.47 % Total interest-earning assets 4.82 % 4.64 % 4.71 % 4.66 % 4.64 % Interest-Bearing Liabilities: Interest-bearing demand deposits 0.91 % 0.75 % 0.76 % 0.74 % 0.70 % Savings and money market deposits 1.94 % 1.96 % 2.07 % 2.05 % 2.06 % Certificates and other time deposits 3.32 % 3.58 % 3.60 % 3.59 % 3.75 % Other borrowings 3.70 % 3.99 % 4.42 % 4.44 % 4.45 % Securities sold under repurchase agreements 2.06 % 2.23 % 2.32 % 2.37 % 2.48 % Subordinated notes and junior subordinated debentures 4.48 % — — — — Total interest-bearing liabilities 2.08 % 2.20 % 2.39 % 2.38 % 2.39 % Net Interest Margin 3.50 % 3.30 % 3.23 % 3.18 % 3.14 % Net Interest Margin (tax equivalent) 3.51 % 3.30 % 3.24 % 3.18 % 3.14 % (O) Annualized and based on average balances on an actual 365-day basis. (P) Yield on securities was impacted by net premium amortization of $3,829, $4,668, $2,877, $4,926 and $5,027 for the three months ended March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025, and March 31, 2025, respectively. Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(Dollars in thousands) Three Months Ended Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Balance Sheet Averages Loans held for sale $ 15,800 $ 11,077 $ 8,371 $ 9,813 $ 7,570 Loans held for investment 23,469,020 20,603,235 20,851,896 20,907,400 20,959,226 Loans held for investment - Warehouse Purchase Program 1,207,793 1,258,036 1,217,579 1,179,307 876,086 Total loans 24,692,613 21,872,348 22,077,846 22,096,520 21,842,882 Investment securities 11,469,762 10,378,696 10,530,807 10,867,856 11,017,400 Federal funds sold and other earning assets 1,026,015 830,926 934,318 841,933 1,443,220 Total interest-earning assets 37,188,390 33,081,970 33,542,971 33,806,309 34,303,502 Allowance for credit losses on loans (330,133) (337,892) (343,872) (348,310) (350,715) Cash and due from banks 391,668 311,541 291,809 294,379 326,066 Goodwill 3,718,640 3,503,127 3,503,127 3,503,127 3,503,128 Core deposit intangibles, net 50,089 53,553 56,956 60,739 64,293 Other real estate 14,690 14,004 11,533 8,749 7,105 Fixed assets, net 423,530 380,254 377,680 374,486 374,448 Other assets 762,734 659,371 689,659 691,735 729,251 Total assets $ 42,219,608 $ 37,665,928 $ 38,129,863 $ 38,391,214 $ 38,957,078 Noninterest-bearing deposits $ 10,260,022 $ 9,543,581 $ 9,451,153 $ 9,508,845 $ 9,504,540 Interest-bearing demand deposits 6,266,423 4,812,342 4,656,452 4,807,864 5,224,796 Savings and money market deposits 10,583,184 9,054,281 8,977,585 8,944,897 9,007,286 Certificates and other time deposits 4,830,369 4,519,742 4,422,996 4,366,510 4,426,521 Total deposits 31,939,998 27,929,946 27,508,186 27,628,116 28,163,143 Other borrowings 1,620,556 1,595,652 2,480,435 2,717,583 2,776,667 Securities sold under repurchase agreements 177,719 185,289 187,462 194,577 217,945 Subordinated notes and junior subordinated debentures 63,673 — — — — Allowance for credit losses on off-balance sheet credit exposures 38,070 37,646 37,646 37,646 37,646 Other liabilities 218,810 248,593 258,156 227,002 255,876 Shareholders' equity 8,160,782 7,668,802 7,657,978 7,586,290 7,505,801 Total liabilities and equity $ 42,219,608 $ 37,665,928 $ 38,129,863 $ 38,391,214 $ 38,957,078 Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(Dollars in thousands) Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Period End Balances Loan Portfolio Commercial and industrial $ 2,759,190 10.9 % $ 1,864,337 8.6 % $ 1,879,282 8.5 % $ 1,897,117 8.6 % $ 1,915,124 8.7 % Warehouse purchase program 1,433,152 5.7 % 1,304,798 6.0 % 1,278,178 5.8 % 1,287,440 5.8 % 1,057,893 4.8 % Construction, land development and other land loans 3,253,389 12.9 % 2,741,455 12.6 % 2,865,279 13.0 % 2,873,238 12.9 % 2,845,082 13.0 % 1-4 family residential 7,876,021 31.1 % 7,430,929 34.1 % 7,461,900 33.9 % 7,530,816 33.9 % 7,576,350 34.5 % Home equity 846,739 3.3 % 843,708 3.8 % 848,740 3.9 % 869,370 3.9 % 896,529 4.1 % Commercial real estate (includes multi-family residential) 7,126,212 28.2 % 5,776,397 26.5 % 5,796,937 26.3 % 5,827,645 26.3 % 5,783,410 26.3 % Agriculture (includes farmland) 1,064,540 4.2 % 1,027,904 4.7 % 1,019,589 4.6 % 1,029,250 4.6 % 1,013,960 4.6 % Consumer and other 406,680 1.6 % 376,241 1.7 % 366,027 1.7 % 368,747 1.7 % 378,821 1.7 % Energy 522,063 2.1 % 439,599 2.0 % 511,837 2.3 % 513,765 2.3 % 510,401 2.3 % Total loans $ 25,287,986 $ 21,805,368 $ 22,027,769 $ 22,197,388 $ 21,977,570 Deposit Types Noninterest-bearing DDA $ 10,580,920 32.4 % $ 9,467,911 33.2 % $ 9,522,028 34.3 % $ 9,426,657 34.3 % $ 9,675,915 34.5 % Interest-bearing DDA 6,345,797 19.5 % 5,365,795 18.8 % 4,766,146 17.2 % 4,708,251 17.1 % 4,931,769 17.6 % Money market 8,163,557 25.0 % 6,538,213 23.0 % 6,402,591 23.0 % 6,302,770 23.0 % 6,339,509 22.6 % Savings 2,743,732 8.4 % 2,592,873 9.1 % 2,616,196 9.4 % 2,667,859 9.7 % 2,703,736 9.7 % Certificates and other time deposits 4,798,750 14.7 % 4,517,692 15.9 % 4,475,133 16.1 % 4,367,874 15.9 % 4,375,870 15.6 % Total deposits $ 32,632,756 $ 28,482,484 $ 27,782,094 $ 27,473,411 $ 28,026,799 Loan to Deposit Ratio 77.5 % 76.6 % 79.3 % 80.8 % 78.4 % Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(Dollars in thousands)Construction Loans Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Single family residential construction $ 690,393 21.2 % $ 613,288 22.4 % $ 665,194 23.2 % $ 696,569 24.2 % $ 727,417 25.6 % Land development 407,811 12.5 % 252,650 9.2 % 248,616 8.7 % 227,254 7.9 % 225,784 7.9 % Raw land 276,693 8.5 % 220,169 8.0 % 230,021 8.0 % 248,380 8.7 % 261,918 9.2 % Residential lots 249,071 7.7 % 199,709 7.3 % 203,396 7.1 % 217,835 7.6 % 219,115 7.7 % Commercial lots 61,691 1.9 % 59,683 2.2 % 59,853 2.1 % 55,176 1.9 % 56,343 2.0 % Commercial construction and other 1,567,640 48.2 % 1,396,850 50.9 % 1,459,255 50.9 % 1,428,985 49.7 % 1,355,587 47.6 % Net unaccreted premium (discount) 90 (894) (1,056) (961) (1,082) Total construction loans $ 3,253,389 $ 2,741,455 $ 2,865,279 $ 2,873,238 $ 2,845,082 Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2026 Houston Dallas Austin OK City Tulsa Other (Q) Total Collateral Type Shopping center/retail $ 237,105 $ 218,672 $ 60,763 $ 16,078 $ 10,018 $ 364,143 $ 906,779 Commercial and industrial buildings 213,914 104,905 31,958 32,429 11,380 301,121 695,707 Office buildings 149,264 292,193 77,325 42,683 4,364 114,900 680,729 Medical buildings 112,178 23,961 25,942 42,033 25,393 74,690 304,197 Apartment buildings 144,493 83,548 101,393 9,566 12,568 224,751 576,319 Hotel 119,709 117,533 36,689 12,740 — 252,738 539,409 Other 192,874 70,247 153,285 4,638 6,663 433,289 860,996 Total $ 1,169,537 $ 911,059 $ 487,355 $ 160,167 $ 70,386 $ 1,765,632 $ 4,564,136 (R) Acquired Loans PS Loans PCD Loans Total Acquired Loans Balance at Acquisition Date Balance atDec 31,2025 Balance atMar 31,2026 Balance at AcquisitionDate Balance atDec 31,2025 Balance atMar 31,2026 Balance at AcquisitionDate Balance atDec 31,2025 Balance atMar 31,2026 Loan marks: Acquired banks (S) $ 388,625 $ 17,479 $ 15,064 $ 332,400 $ 5,267 $ 5,053 $ 721,025 $ 22,746 $ 20,117 American Bank (T) 15,473 — 15,902 1,923 — 1,297 17,396 — 17,199 Texas Partners Bank (U) 38,467 — 37,626 2,422 — 2,090 40,889 — 39,716 Total 442,565 17,479 68,592 336,745 5,267 $ 8,440 779,310 22,746 77,032 Acquired portfolio loan balances: Acquired banks (S) 14,323,981 1,498,731 1,331,556 1,376,673 300,010 293,365 15,700,654 (V) 1,798,741 1,624,921 American Bank (T) 1,810,982 — 1,684,101 93,300 — 89,055 1,904,282 — 1,773,156 Texas Partners Bank (U) 1,864,565 — 1,769,908 76,199 — 70,248 1,940,764 — 1,840,156 Total 17,999,528 1,498,731 4,785,565 1,546,172 300,010 452,668 19,545,700 1,798,741 5,238,233 Acquired portfolio loan balances less loan marks $ 17,556,963 $ 1,481,252 $ 4,716,973 $ 1,209,427 $ 294,743 $ 444,228 $ 18,766,390 $ 1,775,995 $ 5,161,201 (Q) Includes other MSA and non-MSA regions. (R) Represents a portion of total commercial real estate loans of $7.126 billion as of March 31, 2026. (S) Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank, LegacyTexas Bank, FirstCapital Bank and Lone Star Bank. (T) The American Merger was completed on January 1, 2026. The American Merger resulted in the addition of $1.904 billion in loans with related purchase accounting adjustments of $17.4 million at acquisition date. (U) The Southwest Merger was completed on February 1, 2026. The Southwest Merger resulted in the addition of $1.941 billion in loans with related purchase accounting adjustments of $40.9 million at acquisition date. (V) Actual principal balances acquired. Prosperity Bancshares, Inc.®Financial Highlights (Unaudited)(Dollars in thousands) Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Asset Quality Nonaccrual loans $ 106,473 $ 137,217 $ 105,529 $ 102,031 $ 73,287 Accruing loans 90 or more days past due 2,241 317 268 576 91 Total nonperforming loans 108,714 137,534 105,797 102,607 73,378 Repossessed assets 136 12 16 6 29 Other real estate 13,257 13,296 13,750 7,874 8,012 Total nonperforming assets $ 122,107 $ 150,842 $ 119,563 $ 110,487 $ 81,419 Nonperforming assets: Commercial and industrial (includes energy) $ 17,495 $ 57,237 $ 27,880 $ 27,680 $ 8,966 Construction, land development and other land loans 2,054 2,183 583 1,859 1,952 1-4 family residential (includes home equity) 63,168 60,296 57,241 50,501 42,481 Commercial real estate (includes multi-family residential) 17,880 9,215 11,471 12,865 12,257 Agriculture (includes farmland) 16,259 16,713 17,080 17,547 15,725 Consumer and other 5,251 5,198 5,308 35 38 Total $ 122,107 $ 150,842 $ 119,563 $ 110,487 $ 81,419 Number of loans/properties 484 449 424 392 363 Allowance for credit losses on loans $ 383,840 $ 333,742 $ 339,626 $ 346,084 $ 349,101 Net charge-offs (recoveries): Commercial and industrial (includes energy) $ 39,225 $ 5,388 $ 3,341 $ 1,044 $ 330 Construction, land development and other land loans — (154) 34 (3) (156) 1-4 family residential (includes home equity) 862 175 853 342 1,051 Commercial real estate (includes multi-family residential) (121) (665) 1,015 55 178 Agriculture (includes farmland) 52 (5) (40) (14) — Consumer and other 1,291 1,145 1,255 1,593 1,301 Total $ 41,309 $ 5,884 $ 6,458 $ 3,017 $ 2,704 Asset Quality Ratios Nonperforming assets to average interest-earning assets 0.33 % 0.46 % 0.36 % 0.33 % 0.24 % Nonperforming assets to loans and other real estate 0.48 % 0.69 % 0.54 % 0.50 % 0.37 % Net charge-offs to average loans (annualized) 0.67 % 0.11 % 0.12 % 0.05 % 0.05 % Allowance for credit losses on loans to total loans 1.52 % 1.53 % 1.54 % 1.56 % 1.59 % Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans (G) 1.61 % 1.63 % 1.64 % 1.66 % 1.67 % Prosperity Bancshares, Inc.®Notes to Selected Financial Data (Unaudited)(Dollars and share amounts in thousands, except per share data) NOTES TO SELECTED FINANCIAL DATA Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, for internal planning and forecasting purposes, Prosperity reviews each of diluted earnings per share, return on average assets, return on average common equity, and return on average tangible common equity, in each case excluding merger related expenses, net of tax, and FDIC special assessment, 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 the efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets, 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 Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Reconciliation of diluted earnings per share to diluted earnings per share excluding merger related expenses, net of tax, and FDIC special assessment, net of tax: Diluted earnings per share (unadjusted) $ 1.16 $ 1.49 $ 1.45 $ 1.42 $ 1.37 Net income $ 116,267 $ 139,907 $ 137,556 $ 135,155 $ 130,225 Merger related expenses, net of tax(W) 33,588 212 49 — — FDIC special assessment, net of tax(W) — (2,807) — — — Net income excluding merger related expenses, net of tax, and FDIC special assessment, net of tax(W): $ 149,855 $ 137,312 $ 137,605 $ 135,155 $ 130,225 Weighted average diluted shares outstanding 99,825 94,044 95,093 95,277 95,266 Merger related expenses, net of tax, per diluted common share(W) $ 0.34 $ — $ — $ — $ — FDIC special assessment, net of tax, per diluted common share(W) $ — $ (0.03) $ — $ — $ — Diluted earnings per share excluding merger related expenses, net of tax, and FDIC special assessment, net of tax:(W) $ 1.50 $ 1.46 $ 1.45 $ 1.42 $ 1.37 Reconciliation of return on average assets to return on average assets excluding merger related expenses, net of tax, and FDIC special assessment, net of tax: Return on average assets (unadjusted) 1.10 % 1.49 % 1.44 % 1.41 % 1.34 % Net income excluding merger related expenses, net of tax, and FDICspecial assessment, net of tax(W): $ 149,855 $ 137,312 $ 137,605 $ 135,155 $ 130,225 Average total assets $ 42,219,608 $ 37,665,928 $ 38,129,863 $ 38,391,214 $ 38,957,078 Return on average assets excluding merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (W) 1.42 % 1.46 % 1.44 % 1.41 % 1.34 % Reconciliation of return on average common equity to return on average common equity excluding merger related expenses, net of tax, and FDIC special assessment, net of tax: Return on average common equity (unadjusted) 5.70 % 7.30 % 7.18 % 7.13 % 6.94 % Net income excluding merger related expenses, net of tax, and FDIC special assessment, net of tax(W): $ 149,855 $ 137,312 $ 137,605 $ 135,155 $ 130,225 Average shareholders' equity $ 8,160,782 $ 7,668,802 $ 7,657,978 $ 7,586,290 $ 7,505,801 Return on average common equity excluding merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (W) 7.35 % 7.16 % 7.19 % 7.13 % 6.94 % Reconciliation of return on average common equity to return on average tangible common equity: Net income $ 116,267 $ 139,907 $ 137,556 $ 135,155 $ 130,225 Average shareholders' equity $ 8,160,782 $ 7,668,802 $ 7,657,978 $ 7,586,290 $ 7,505,801 Less: Average goodwill and other intangible assets (3,768,729) (3,556,680) (3,560,083) (3,563,866) (3,567,421) Average tangible shareholders' equity $ 4,392,053 $ 4,112,122 $ 4,097,895 $ 4,022,424 $ 3,938,380 Return on average tangible common equity (F) 10.59 % 13.61 % 13.43 % 13.44 % 13.23 % (W) Calculated assuming a federal tax rate of 21.0%. Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Reconciliation of return on average common equity to return on average tangible common equity excluding merger related expenses, net of tax, and FDIC special assessment, net of tax: Net income excluding merger related expenses, net of tax, and FDIC special assessment, net of tax(W): $ 149,855 $ 137,312 $ 137,605 $ 135,155 $ 130,225 Average shareholders' equity $ 8,160,782 $ 7,668,802 $ 7,657,978 $ 7,586,290 $ 7,505,801 Less: Average goodwill and other intangible assets (3,768,729) (3,556,680) (3,560,083) (3,563,866) (3,567,421) Average tangible shareholders' equity $ 4,392,053 $ 4,112,122 $ 4,097,895 $ 4,022,424 $ 3,938,380 Return on average tangible common equity excluding merger related expenses, net of tax, and FDIC special assessment, net of tax (F) (W) 13.65 % 13.36 % 13.43 % 13.44 % 13.23 % Reconciliation of book value per share to tangible book value per share: Shareholders' equity $ 8,207,851 $ 7,616,140 $ 7,664,938 $ 7,599,736 $ 7,517,061 Less: Goodwill and other intangible assets (3,933,526) (3,554,732) (3,558,321) (3,561,923) (3,565,533) Tangible shareholders' equity $ 4,274,325 $ 4,061,408 $ 4,106,617 $ 4,037,813 $ 3,951,528 Period end shares outstanding 100,835 93,058 94,993 95,277 95,258 Tangible book value per share $ 42.39 $ 43.64 $ 43.23 $ 42.38 $ 41.48 Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio: Tangible shareholders' equity $ 4,274,325 $ 4,061,408 $ 4,106,617 $ 4,037,813 $ 3,951,528 Total assets $ 43,619,183 $ 38,463,425 $ 38,330,469 $ 38,417,352 $ 38,764,675 Less: Goodwill and other intangible assets (3,933,526) (3,554,732) (3,558,321) (3,561,923) (3,565,533) Tangible assets $ 39,685,657 $ 34,908,693 $ 34,772,148 $ 34,855,429 $ 35,199,142 Period end tangible equity to period end tangible assets ratio 10.77 % 11.63 % 11.81 % 11.58 % 11.23 % 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 $ 383,840 $ 333,742 $ 339,626 $ 346,084 $ 349,101 Total loans $ 25,287,986 $ 21,805,368 $ 22,027,769 $ 22,197,388 $ 21,977,570 Less: Warehouse Purchase Program loans (1,433,152) (1,304,798) (1,278,178) (1,287,440) (1,057,893) Total loans less Warehouse Purchase Program $ 23,854,834 $ 20,500,570 $ 20,749,591 $ 20,909,948 $ 20,919,677 Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program 1.61 % 1.63 % 1.64 % 1.66 % 1.67 % Reconciliation of efficiency ratio to efficiency ratio excluding net gains and losses on the sale, write-down or write-up of assets: Noninterest expense $ 217,287 $ 138,712 $ 138,635 $ 138,565 $ 140,301 Net interest income $ 321,150 $ 274,953 $ 273,435 $ 267,722 $ 265,382 Noninterest income 46,474 42,780 41,238 42,982 41,301 Less: net gain (loss) on sale or write-down of assets 318 35 3 1,414 (235) Noninterest income excluding net gains and losses on the sale, write-down or write-up of assets 46,156 42,745 41,235 41,568 41,536 Total income excluding net gains and losses on the sale, write-down or write-up of assets $ 367,306 $ 317,698 $ 314,670 $ 309,290 $ 306,918 Efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets 59.16 % 43.66 % 44.06 % 44.80 % 45.71 % Three Months Ended Mar 31,2026 Dec 31,2025 Sep 30,2025 Jun 30,2025 Mar 31,2025 Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets, merger related expenses and FDIC special assessment: Noninterest expense $ 217,287 $ 138,712 $ 138,635 $ 138,565 $ 140,301 Less: merger related expenses 42,516 268 62 — — Less: FDIC special assessment — (3,554) — — — Noninterest expense excluding merger related expenses and FDIC special assessment $ 174,771 $ 141,998 $ 138,573 $ 138,565 $ 140,301 Net interest income $ 321,150 $ 274,953 $ 273,435 $ 267,722 $ 265,382 Noninterest income 46,474 42,780 41,238 42,982 41,301 Less: net gain (loss) on sale or write down of assets 318 35 3 1,414 (235) Noninterest income excluding net gains and losses on the sale, write- down or write-up of assets 46,156 42,745 41,235 41,568 41,536 Total income excluding net gains and losses on the sale, write-down or write-up of assets $ 367,306 $ 317,698 $ 314,670 $ 309,290 $ 306,918 Efficiency ratio, excluding net gains and losses on the sale, write-down or write-up of assets, merger related expenses and FDIC special assessment 47.58 % 44.70 % 44.04 % 44.80 % 45.71 % SOURCE Prosperity Bancshares, Inc. 21% more press release views with Request a Demo × Modal title