Prosperity Bancshares (PB) investor relations material

Executive summary

• Completed the merger of Stellar Bancorp, Inc. on July 1, 2026, following earlier acquisitions of American Bank Holding Corporation and Southwest Bancshares, Inc. in 2026, expanding the branch network and leadership.

• Net income for Q2 2026 was $168.6 million, or $162.7 million excluding non-recurring items, up 20.4% year-over-year; diluted EPS was $1.67, or $1.62 adjusted, up 14.1%.

• Total assets reached $43.87 billion at June 30, 2026, up 14.2% year-over-year, with pro forma assets exceeding $53 billion post-Stellar merger.

• Declared a $0.60 cash dividend for Q3 2026 and repurchased 1.04 million shares year-to-date.

Financial highlights

• Net interest income for Q2 2026 was $330.6 million, up 23.5% year-over-year; net interest margin rose 29 bps to 3.47%.

• Noninterest income for Q2 2026 was $60.7 million, up 41.2% year-over-year, including an $8.2 million gain from Visa stock exchange.

• Noninterest expense for Q2 2026 was $176.2 million, up $37.6 million year-over-year, mainly due to higher salaries and merger-related costs.

• Efficiency ratio for Q2 2026 improved to 45.99%; adjusted efficiency ratio was 45.79%.

• Allowance for credit losses on loans was $382.8 million (1.53% of total loans); 1.61% excluding Warehouse Purchase Program loans.

Outlook and guidance

• Management expects continued growth through internal expansion and integration of recent acquisitions, with a focus on operational efficiency.

• NIM guidance for year-end 2026 is 3.70–3.75%, with 2027 guidance at 3.80–3.85%.

• Loan growth expected to remain flat for the remainder of 2026, with construction loan fundings boosting growth in 2027.

• Non-interest expense for Q3 2026 projected at $244–$250 million, including Stellar operations.

• Cost savings from integrations expected to total $100–$110 million pre-tax when fully realized.