Prosperity Bancshares (PB) investor relations material

Executive summary

• Q3 net income was $141.5M and diluted EPS $1.18; excluding merger expenses and specified non-recurring items, net income was $200.8M and EPS $1.67, up 45.9% and 15.2% YoY.

• Three 2026 mergers drove much of the scale increase; September 30 assets were $54.1B, loans $32.1B and deposits $41.2B. Stellar Bancorp merger closed July 1.

• Tax-equivalent NIM rose 26 bps QoQ to 3.73%; annualized net charge-offs were 0.05% of average loans.

Financial highlights

• Net interest income before credit-loss provision was $443.0M, up 62.0% YoY; noninterest income was $52.7M, up 27.8%, and noninterest expense was $308.6M.

• Q3 loans rose $7.03B, or 28.1%, QoQ, and deposits rose $8.63B, or 26.5%, primarily reflecting the Stellar merger.

• 9M net income was $426.3M, up 5.8% YoY, and diluted EPS was $3.99 versus $4.23; adjusted 9M net income was $513.3M and adjusted EPS $4.81.

• Total securities were $13.6B, with a 2.92% yield and 3.86 modified duration; average yearly cash flow was ~ $2.2B.

Segment performance

• Loan mix: commercial real estate 33.4%, 1–4 family 27.6%, C&I 13.0%, construction 13.3%, agriculture 3.5% and energy 1.9%.

• Houston represented 38.6% of loans excluding WPP, Dallas/Fort Worth 20.5%, Central Texas 10.1%, and South and West Texas 7.7% each.

• Fixed-rate loans were 38.1% of the portfolio, variable-rate 31.8% and floating-rate 30.2%; average life was ~3.2 years.

• CRE and construction lending was conservatively underwritten to collateral cost; 41% of CRE was owner-occupied, with average CRE balance of $1.2M.