Prosperity Bancshares (PB) Acquisition presentation summary

Transaction overview

• Announced acquisition of American Bank Holding Corporation for $321.5 million in an all-stock deal, issuing 4,439,981 shares, with potential downward adjustments.

• American Bank will merge into Prosperity Bank, expanding the branch network to 301 locations and increasing total assets to $41.3 billion.

• Transaction multiples include 2.26x price/tangible book value and 15.0x price/2025 estimated EPS, with expected EPS accretion of 2.0% in 2026 and 3.8% in 2027.

• Tangible book value per share dilution is projected at 2.2%, with an earnback period of approximately three years.

• Closing is anticipated in Q4 2025 or Q1 2026, subject to regulatory and shareholder approvals.

Strategic rationale and market impact

• Acquisition strengthens presence in Corpus Christi and significantly expands the San Antonio metro footprint with seven new branches.

• Pro forma deposits reach $30.3 billion, with a loans/deposits ratio of 78.2% and a cost of deposits at 1.40%.

• Enhances market share in key Texas regions, including Corpus Christi, San Antonio, Austin, and Victoria.

• American Bank brings a well-established wealth management business with over $550 million in assets under management.

• Management teams with deep local knowledge will complement the expanded footprint and client relationships.

Financial and operational highlights

• American Bank's Q1 2025 financials: $2.5 billion in assets, $1.8 billion in loans, $2.3 billion in deposits, 5.76% TCE/TA, and 0.88% core ROAA.

• Pro forma loan portfolio yield is 5.97%, with a diversified mix across commercial, industrial, and consumer segments.

• Targeted cost savings of 40% of ABHC's 2025 projected non-interest expense, phased in over two years.

• $21 million gross loan credit mark and $26 million pre-tax loan write-down to be accreted into earnings over five years.

• One-time transaction expenses estimated at $25 million pre-tax.