FT Markets Data
Prosperity Bancshares, Inc

PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER 2026 EARNINGS

  • 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 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 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





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


$

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 endedMarch 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 at
Dec 31,
2025



Balance at
Mar 31,
2026



Balance at
Acquisition
Date



Balance at
Dec 31,
2025



Balance at
Mar 31,
2026



Balance at
Acquisition
Date



Balance at
Dec 31,
2025



Balance at
Mar 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 FDIC

special 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

%

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/prosperity-bancshares-inc-reports-first-quarter-2026-earnings-302756561.html

SOURCE Prosperity Bancshares, Inc.