First quarter net income of $124.7 million and earnings per share (diluted) of $1.37
Loans, excluding Warehouse Purchase Program loans, increased $436.0 million or 2.4% (9.6% annualized) during first quarter 2023
Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans, of 1.52%⁽¹⁾
Nonperforming assets remain low at 0.07% of first quarter average interest-earning assets
Return (annualized) on first quarter average assets of 1.31%, average common equity of 7.38%, average tangible common equity of 14.34%⁽¹⁾, and efficiency ratio of 43.68%
Repurchased 611,263 shares of common stock during the first quarter of 2023
Prosperity Bancshares was ranked Number 6 in Forbes' 2023 America's Best Banks
Received all necessary regulatory approvals for the acquisition of First Bancshares of Texas, Inc., Midland, Texas
Pending acquisition of Lone Star State Bancshares, Inc., Lubbock, Texas

HOUSTON, April 26, 2023 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (NYSE:PB), the parent company of Prosperity Bank^® (collectively, "Prosperity"), reported net income of $124.7 million for the quarter ended March 31, 2023 compared with $122.3 million for the same period in 2022. Net income per diluted common share was $1.37 for the quarter ended March 31, 2023 compared with $1.33 for the same period in 2022, an increase of 3.0%, and the annualized return on first quarter average assets was 1.31%. Additionally, loans, excluding Warehouse Purchase Program loans, increased $436.0 million or 2.4% (9.6% annualized) during the first quarter of 2023. Nonperforming assets remain low at 0.07% of first quarter average interest-earning assets.

"Prosperity continued to show strong earnings despite the failures of Silicon Valley Bank and Signature Bank and the overall pressures on the banking system. Net income was $124.7 million for the three months ended March 31, 2023, compared with $122.3 million for the same period in 2022, an increase of $2.4 million or 1.9%. Loans, excluding Warehouse Purchase Program loans, increased 9.6% annualized for the quarter, while nonperforming assets remained low at 0.07% of first quarter average interest-earning assets. Prosperity repurchased 611,263 of its shares in the first quarter. We are also pleased to announce that we received all necessary regulatory and shareholder approvals for the acquisition of First Bancshares of Texas, Inc.," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"As we all are aware, the market was flooded with excess funds the last few years during the COVID-19 pandemic and now the Federal Reserve is reducing the money supply in its efforts to lower inflation. In turn, most banks saw a loss of deposits during the quarter, including from some customers who were concerned with liquidity after the failure of SVB and Signature Bank. Prosperity has established lines of credit at the Federal Home Loan Bank and the Federal Reserve in the amount of $14.7 billion, of which $11.3 billion is currently available. This is approximately $4 billion in excess of our uninsured and pledged deposits," added Zalman.

"Texas and Oklahoma continue to do well. Texas' population increased by approximately 470,000 in 2022, continuing a steady uptick. From 2002 to 2022, Texas gained over 9 million residents, more than any other state and almost 3 million more than Florida, the next largest gaining state. Texas and Oklahoma continue to benefit from strong economies and are home to 56 Fortune 500 headquartered companies. Texas now has more Fortune 500 companies than any other state including New York and California," continued Zalman.

"Each year, Forbes judges the 100 largest banks in the United States on growth, credit quality, earnings, as well as other factors, for its America's Best Banks list. Prosperity Bank has been ranked in the Top 10 since the list's inception in 2010. We have twice been ranked number 1, were ranked number 2 in 2021 and are ranked number 6 for 2023. It is a testament to Prosperity's performance, culture, vision and consistency and distinguishes us among most banks. I congratulate and thank all our customers, associates and directors for helping us achieve this honor," stated Zalman.

"Prosperity has a talented team, deep bench, strong earnings, a solid capital position and a fortress balance sheet. We will continue working to help our customers and associates succeed and to build shareholder value," concluded Zalman.

Results of Operations for the Three Months Ended March 31, 2023

Net income was $124.7 million⁽²⁾ for the three months ended March 31, 2023 compared with $122.3 million⁽³⁾ for the same period in 2022, an increase of $2.4 million or 1.9%. The change was primarily due to an increase in interest income from loans, securities and federal funds sold and other earning assets, partially offset by a decrease in SBA Paycheck Protection Program ("PPP") loans fees and interest income of $3.6 million, a decrease in loan discount accretion of $4.3 million and an increase in interest expense. Net income per diluted common share was $1.37 for the three months ended March 31, 2023 compared with $1.33 for the same period in 2022, an increase of 3.0%. On a linked quarter basis, net income was $124.7 million⁽²⁾ for the three months ended March 31, 2023 compared with $137.9 million⁽⁴⁾ for the three months ended December 31, 2022. The change was primarily due to a decrease in net interest income. Net income per diluted common share was $1.37 for the three months ended March 31, 2023 compared with $1.51 for the three months ended December 31, 2022. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2023 were 1.31%, 7.38% and 14.34%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and securities) was 43.68%⁽¹⁾ for the three months ended March 31, 2023.

Net interest income before provision for credit losses for the three months ended March 31, 2023 was $243.5 million compared with $239.9 million for the same period in 2022, an increase of $3.5 million or 1.5%. The change was primarily due to an increase in the average balances and average rates on loans held for investment and investment securities, partially offset by a decrease in PPP fees and interest income of $3.6 million, a decrease in loan discount accretion of $4.3 million, an increase in average borrowings and an increase in the average rates on interest-bearing deposits. On a linked quarter basis, net interest income before provision for credit losses was $243.5 million compared with $256.1 million for the three months ended December 31, 2022, a decrease of $12.7 million or 4.9%. The change was primarily due to an increase in the average balances and average rates on borrowings and an increase in average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans held for investment and federal funds sold and other earning assets.

The net interest margin on a tax equivalent basis was 2.93% for the three months ended March 31, 2023 compared with 2.88% for the same period in 2022. The change was primarily due to an increase in the average balances and average rates on loans held for investment and investment securities and an increase in average rates on federal funds sold and other earnings assets, partially offset by a decrease in PPP fees and interest income of $3.6 million, a decrease in loan discount accretion of $4.3 million, an increase in average borrowings and an increase in the average rates on interest-bearing deposits. On a linked quarter basis, the net interest margin on a tax equivalent basis was 2.93% for the three months ended March 31, 2023 compared with 3.05% for the three months ended December 31, 2022. The change was primarily due to an increase in the average balances and average rates on borrowings and increase in average rates on interest-bearing deposits, partially offset by an increase in the average balances and average rates on loans held for investment and federal funds sold and other earning assets.

Noninterest income was $38.3 million for the three months ended March 31, 2023 compared with $35.1 million for the same period in 2022, an increase of $3.1 million or 9.0%. This change was primarily due to an increase in trust income and in other noninterest income. On a linked quarter basis, noninterest income was $38.3 million compared with $37.7 million for the three months ended December 31, 2022, an increase of $542 thousand or 1.4%.

Noninterest expense was $123.0 million for the three months ended March 31, 2023 compared with $119.9 million for the same period in 2022, an increase of $3.2 million or 2.6%. The change was primarily due to increases in regulatory assessments and FDIC insurance and merger related expenses, partially offset by a decrease in salaries and benefits. On a linked quarter basis, noninterest expense increased $3.8 million or 3.1% to $123.0 million compared with $119.2 million for the three months ended December 31, 2022. This change was primarily due to increases in salaries and benefits and regulatory assessments and FDIC insurance, partially offset by a decrease in other noninterest expense.

Balance Sheet Information

At March 31, 2023, Prosperity had $37.829 billion in total assets, a decrease of $442.0 million or 1.2%, compared with $38.271 billion at March 31, 2022.

Loans at March 31, 2023 were $19.334 billion, an increase of $494.5 million or 2.6% (10.5% annualized) from $18.840 billion at December 31, 2022, primarily due to increases in 1-4 family residential and commercial real estate loans. Loans increased $1.267 billion or 7.0%, compared with $18.068 billion at March 31, 2022, primarily due to increases in 1-4 family residential loans, and construction, land development and other land loans, partially offset by decreases in Warehouse Purchase Program loans and PPP loans. Loans, excluding Warehouse Purchase Program loans, at March 31, 2023 were $18.535 billion compared to $18.099 billion at December 31, 2022, an increase of $436.0 million or 2.4% (9.6% annualized), and compared to $16.723 billion at March 31, 2022, an increase of $1.812 billion or 10.8%.

Deposits at March 31, 2023 were $27.004 billion, a decrease of $1.529 billion or 5.4% compared with $28.534 billion at December 31, 2022 primarily due to a decrease in business demand deposits and public fund deposits. Deposits decreased $4.064 billion or 13.1%, compared with $31.068 billion at March 31, 2022, primarily due to a decrease in public fund deposits.

Asset Quality

Nonperforming assets totaled $24.5 million or 0.07% of quarterly average interest-earning assets at March 31, 2023 compared with $27.5 million or 0.08% of quarterly average interest-earning assets at December 31, 2022 and $27.2 million or 0.08% of quarterly average interest-earning assets at March 31, 2022.

The allowance for credit losses on loans and off-balance sheet credit exposures was $312.1 million at March 31, 2023 compared with $311.5 million at December 31, 2022 and $315.1 million at March 31, 2022. There was no provision for credit losses for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.

The allowance for credit losses on loans was $282.2 million or 1.46% of total loans at March 31, 2023 compared with $281.6 million or 1.49% of total loans at December 31, 2022 and $285.2 million or 1.58% of total loans at March 31, 2022. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.52%(1) at March 31, 2023 compared with 1.56%(1) at December 31, 2022 and 1.71%(1) at March 31, 2022.

Net recoveries were $615 thousand for the three months ended March 31, 2023 compared with net charge-offs of $603 thousand for three months ended December 31, 2022 and net charge-offs of $1.2 million for the three months ended March 31, 2022. During the first quarter of 2023, net recoveries did not include any purchased credit deteriorated ("PCD") loans and $241 thousand of specific reserves on resolved PCD loans was released to the general reserve.

Dividend

Prosperity Bancshares declared a second quarter 2023 cash dividend of $0.55 per share to be paid on July 3, 2023, to all shareholders of record as of June 15, 2023.

Stock Repurchase Program

On January 17, 2023, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.6 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 17, 2024, at the discretion of management. Under its 2023 stock repurchase program, Prosperity Bancshares repurchased 611,263 shares of its common stock at an average weighted price of $62.20 per share during the three months ended March 31, 2023.

Pending Acquisition of First Bancshares of Texas, Inc.

On October 11, 2022, Prosperity Bancshares and First Bancshares of Texas, Inc. ("First Bancshares") jointly announced the signing of a definitive merger agreement whereby First Bancshares, the parent company of FirstCapital Bank of Texas, N.A. ("FirstCapital Bank") will merge with and into Prosperity. FirstCapital Bank operates 16 full-service banking offices in 6 different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas. As of March 31, 2023, First Bancshares, on a consolidated basis, reported total assets of $2.141 billion, total loans of $1.653 billion and total deposits of $1.712 billion.

Under the terms of the merger agreement, Prosperity will issue 3,583,370 shares of Prosperity common stock plus $93.4 million in cash for all outstanding shares of First Bancshares capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $341.6 million. Prosperity has received all necessary regulatory approvals for the acquisition of First Bancshares, and the shareholders of First Bancshares approved the transaction on March 3, 2023. The transaction is expected to become effective on May 1, 2023, subject to customary closing conditions.

Pending Acquisition of Lone Star State Bancshares, Inc.

On October 11, 2022, Prosperity Bancshares and Lone Star State Bancshares, Inc. ("Lone Star") jointly announced the signing of a definitive merger agreement whereby Lone Star, the parent company of Lone Star State Bank of West Texas ("Lone Star Bank") will merge with and into Prosperity. Lone Star Bank operates 5 banking offices in the West Texas area, including its main office in Lubbock, and 1 banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of March 31, 2023, Lone Star, on a consolidated basis, reported total assets of $1.383 billion, total loans of $1.032 billion and total deposits of $1.231 billion.

Under the terms of the merger agreement, Prosperity will issue 2,376,182 shares of Prosperity common stock plus $64.1 million in cash for all outstanding shares of Lone Star capital stock, subject to certain conditions and potential adjustments. Based on Prosperity's closing price of $69.27 on October 7, 2022, the total consideration was valued at approximately $228.7 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals. The shareholders of Lone Star approved the transaction on March 28, 2023. The transaction is expected to close during the second quarter of 2023, although delays could occur.

Conference Call

Prosperity's management team will host a conference call on Wednesday, April 26, 2023, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2023 earnings. Individuals and investment professionals may participate in the call by dialing 877-885-0477 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7001408.

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 home page by selecting "Presentations, Webcasts & Calls" from the menu on the Investor Relations link and following the instructions.

Non-GAAP Financial Measures

Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews return on average tangible common equity; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program loans; and the efficiency ratio excluding net gains and losses on the sale or write down of assets and securities, for internal planning and forecasting purposes. 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, provides a more complete understanding of factors and trends affecting Prosperity's business and allows 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, 2023, Prosperity Bancshares, Inc.^® is a $37.829 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 272 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, 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 Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity'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 future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, including the pending transactions with First Bancshares and Lone Star, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of each of the proposed transactions, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. 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 Prosperity's control, 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, including First Bancshares and Lone Star; 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); the possibility that the anticipated benefits of an acquisition transaction, including the pending transactions with First Bancshares and Lone Star, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; 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; the effect, impact, potential duration or other implications of the COVID-19 pandemic; and weather. Prosperity disclaims 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 factors are discussed in Prosperity's Annual Report on Form 10-K for the year ended December 31, 2022, and other reports and statements Prosperity has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

(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 $728 thousand, net of tax, primarily comprised of loan discount accretion of $871 thousand, and merger related expenses of $860 thousand for the three months ended March 31, 2023.
(3)	Includes purchase accounting adjustments of $4.1 million, net of tax, primarily comprised of loan discount accretion of $5.2 million for the three months ended March 31, 2022.
(4)	Includes purchase accounting adjustments of $758 thousand, net of tax, primarily comprised of loan discount accretion of $913 thousand, and merger related expenses of $272 thousand for the three months ended December 31, 2022.

Bryan/College Station Area	Garland	Palestine	Magnolia	Texas Tech Student Union
Bryan	Grapevine	Rusk	Magnolia Parkway
Bryan-29^th Street	Grapevine Main	Seven Points	Mont Belvieu	Midland
Bryan-East	Kiest	Teague	Nederland	Wadley
Bryan-North	Lake Highlands	Tyler-Beckham	Needville	Wall Street
Caldwell	McKinney	Tyler-South Broadway	Rosenberg
College Station	McKinney Eldorado	Tyler-University	Shadow Creek	Odessa
Crescent Point	McKinney Redbud	Winnsboro	Spring	Grandview
Hearne	North Carrolton		Tomball	Grant
Huntsville	Park Cities	Houston Area	Waller	Kermit Highway
Madisonville	Plano	Houston	West Columbia	Parkway
Navasota	Plano-West	Aldine	Wharton
New Waverly	Preston Forest	Alief	Winnie	Other West Texas Area
Rock Prairie	Preston Parker	Bellaire	Wirt	Locations
Southwest Parkway	Preston Royal	Beltway		Big Spring
Tower Point	Red Oak	Clear Lake	South Texas Area -	Brownfield
Wellborn Road	Richardson	Copperfield	Corpus Christi	Brownwood
	Richardson-West	Cypress	Calallen	Cisco
Central Texas Area	Rosewood Court	Downtown	Carmel	Comanche
Austin	The Colony	Eastex	Northwest	Early
Allandale	Tollroad	Fairfield	Saratoga	Floydada
Cedar Park	Trinity Mills	First Colony	Timbergate	Gorman
Congress	Turtle Creek	Fry Road	Water Street	Levelland
Lakeway	West 15th Plano	Gessner		Littlefield
Liberty Hill	West Allen	Gladebrook	Victoria	Merkel
Northland	Westmoreland	Grand Parkway	Victoria Main	Plainview
Oak Hill	Wylie	Heights	Victoria-Navarro	San Angelo
Research Blvd		Highway 6 West	Victoria-North	Slaton
Westlake	Fort Worth	Little York	Victoria Salem	Snyder
	Haltom City	Medical Center
Other Central Texas Area	Hulen	Memorial Drive	Other South Texas Area	Oklahoma
Locations	Keller	Northside	Locations	Central Oklahoma Area
Bastrop	Museum Place	Pasadena	Alice	Oklahoma City
Canyon Lake	Renaissance Square	Pecan Grove	Aransas Pass	23^rdStreet
Dime Box	Roanoke	Pin Oak	Beeville	Expressway
Dripping Springs	Stockyards	River Oaks	Colony Creek	I-240
Elgin		Sugar Land	Cuero	Memorial
Flatonia	Other Dallas/Fort Worth Area	SW Medical Center	Edna
Georgetown	Locations	Tanglewood	Goliad	Other Central Oklahoma Area
Gruene	Arlington	The Plaza	Gonzales	Locations
Kingsland	Azle	Uptown	Hallettsville	Edmond
La Grange	Ennis	Waugh Drive	Kingsville	Norman
Lexington	Gainesville	Westheimer	Mathis
New Braunfels	Glen Rose	West University	Padre Island	Tulsa Area
Pleasanton	Granbury	Woodcreek	Palacios	Tulsa
Round Rock	Grand Prairie		Port Lavaca	Garnett
San Antonio	Jacksboro	Katy	Portland	Harvard
Schulenburg	Mesquite	Cinco Ranch	Rockport	Memorial
Seguin	Muenster	Katy-Spring Green	Sinton	Sheridan
Smithville	Runaway Bay		Taft	S. Harvard
Thorndale	Sanger	The Woodlands	Yoakum	Utica Tower
Weimar	Waxahachie	The Woodlands-College Park	Yorktown	Yale
	Weatherford	The Woodlands-I-45
Dallas/Fort Worth Area		The Woodlands-Research Forest	West Texas Area	Other Tulsa Area Locations
Dallas	East Texas Area		Abilene	Owasso
14th Street Plano	Athens	Other Houston Area	Antilley Road
Abrams Centre	Blooming Grove	Locations	Barrow Street
Addison	Canton	Angleton	Cypress Street
Allen	Carthage	Bay City	Judge Ely
Balch Springs	Corsicana	Beaumont	Mockingbird
Camp Wisdom	Crockett	Cleveland
Carrollton	Eustace	East Bernard	Lubbock
Cedar Hill	Gilmer	El Campo	4th Street
Coppell	Grapeland	Dayton	66th Street
East Plano	Gun Barrel City	Galveston	82nd Street
Euless	Jacksonville	Groves	86th Street
Frisco	Kerens	Hempstead	98^th Street
Frisco Warren	Longview	Hitchcock	Avenue Q
Frisco-West	Mount Vernon	Liberty	North University

- - -

Prosperity Bancshares, Inc.^®
Financial Highlights (Unaudited)
(In thousands)

	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Balance Sheet Data (at period end)
Loans held for sale	$	1,603	$	554	$	2,871	$	3,350	$	2,810
Loans held for investment		18,533,641		18,098,653		17,580,653		17,067,871		16,720,173
Loans held for investment - Warehouse Purchase Program		799,115		740,620		922,764		1,137,623		1,344,541
Total loans		19,334,359		18,839,827		18,506,288		18,208,844		18,067,524

Investment securities^(A)		14,071,545		14,476,005		14,806,487		14,912,313		14,798,127
Federal funds sold		222		301		244		201		274
Allowance for credit losses on loans		(282,191)		(281,576)		(282,179)		(283,959)		(285,163)
Cash and due from banks		405,331		423,832		602,152		393,716		1,560,321
Goodwill		3,231,636		3,231,636		3,231,636		3,231,636		3,231,636
Core deposit intangibles, net		48,974		51,348		53,906		56,483		59,064
Other real estate owned		1,989		1,963		1,758		1,555		1,705
Fixed assets, net		345,149		339,453		337,099		335,939		336,075
Other assets		672,218		607,040		586,111		530,528		501,623
Total assets	$	37,829,232	$	37,689,829	$	37,843,502	$	37,387,256	$	38,271,186

Noninterest-bearing deposits	$	10,108,348	$	10,915,448	$	11,154,143	$	11,032,184	$	10,776,652
Interest-bearing deposits		16,895,888		17,618,083		18,145,952		18,833,434		20,291,658
Total deposits		27,004,236		28,533,531		29,300,095		29,865,618		31,068,310
Other borrowings		3,365,000		1,850,000		1,165,000		300,000		—
Securities sold under repurchase agreements		434,261		428,134		454,304		481,785		440,891
Allowance for credit losses on off-balance sheet credit exposures		29,947		29,947		29,947		29,947		29,947
Other liabilities		256,671		148,843		282,514		188,079		227,614
Total liabilities		31,090,115		30,990,455		31,231,860		30,865,429		31,766,762
Shareholders' equity^(B)		6,739,117		6,699,374		6,611,642		6,521,827		6,504,424
Total liabilities and equity	$	37,829,232	$	37,689,829	$	37,843,502	$	37,387,256	$	38,271,186


(A)	Includes $(4,399), $(4,396), $(296), $1,517 and $2,115 in unrealized (losses) gains on available for sale securities for the quarterly periods ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively.
(B)	Includes $(3,476), $(3,473), $(234), $1,198 and $1,671 in after-tax unrealized (losses) gains on available for sale securities for the quarterly periods ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively.

Prosperity Bancshares, Inc.^®
Financial Highlights (Unaudited)
(In thousands)

	Three Months Ended
	Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022
Income Statement Data
Interest income:
Loans	$	247,118	$	235,126	$	210,268	$	192,770	$	193,025
Securities^(C)		73,185		72,533		68,761		64,111		55,011
Federal funds sold and other earning assets		7,006		933		525		925		847
Total interest income		327,309		308,592		279,554		257,806		248,883

Interest expense:
Deposits		47,343		36,048		14,669		8,641		8,754
Other borrowings		34,396		14,682		3,719		450		—
Securities sold under repurchase agreements		2,103		1,725		487		244		185
Total interest expense		83,842		52,455		18,875		9,335		8,939
Net interest income		243,467		256,137		260,679		248,471		239,944
Provision for credit losses		—		—		—		—		—
Net interest income after provision for credit losses		243,467		256,137		260,679		248,471		239,944

Noninterest income:
Nonsufficient funds (NSF) fees		8,095		8,519		8,887		8,484		8,124
Credit card, debit card and ATM card income		8,666		8,816		8,889		8,880		8,179
Service charges on deposit accounts		5,926		5,932		6,222		6,365		6,211
Trust income		3,225		3,498		3,174		2,875		2,703
Mortgage income		238		102		340		502		455
Brokerage income		1,149		905		940		917		892
Bank owned life insurance income		1,354		1,329		1,214		1,293		1,283
Net gain on sale or write-down of assets		121		2,087		50		1,108		689
Other noninterest income		9,492		6,536		4,972		7,170		6,586
Total noninterest income		38,266		37,724		34,688		37,594		35,122

Noninterest expense:
Salaries and benefits		77,798		75,353		79,578		80,371		79,411
Net occupancy and equipment		8,025		8,147		8,412		8,039		7,848
Credit and debit card, data processing and software amortization		9,566		9,716		9,516		9,246		8,849
Regulatory assessments and FDIC insurance		4,973		2,873		2,807		2,851		2,850
Core deposit intangibles amortization		2,374		2,558		2,577		2,581		2,620
Depreciation		4,433		4,438		4,436		4,539		4,547
Communications		3,462		3,506		3,374		3,206		2,919
Other real estate expense		58		154		198		195		214
Net (gain) loss on sale or write-down of other real estate		(13)		(63)		(213)		14		(621)
Merger related expenses		860		272		—		—		—
Other noninterest expense		11,464		12,290		11,529		11,836		11,213
Total noninterest expense		123,000		119,244		122,214		122,878		119,850
Income before income taxes		158,733		174,617		173,153		163,187		155,216
Provision for income taxes		34,039		36,737		37,333		34,697		32,890
Net income available to common shareholders	$	124,694	$	137,880	$	135,820	$	128,490	$	122,326


(C)	Interest income on securities was reduced by net premium amortization of $7,384, $8,703, $9,947, $11,450 and $12,857 for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, 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, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022

Profitability
Net income ^(D) (E)	$	124,694		$	137,880		$	135,820		$	128,490		$	122,326

Basic earnings per share	$	1.37		$	1.51		$	1.49		$	1.40		$	1.33
Diluted earnings per share	$	1.37		$	1.51		$	1.49		$	1.40		$	1.33

Return on average assets ^(F)		1.31	%		1.47	%		1.45	%		1.36	%		1.29	%
Return on average common equity ^(F)		7.38	%		8.26	%		8.24	%		7.84	%		7.54	%
Return on average tangible common equity ^(F) ^(G)		14.34	%		16.26	%		16.44	%		15.73	%		15.30	%
Tax equivalent net interest margin ^{(D) (E)} ^(H)		2.93	%		3.05	%		3.11	%		2.97	%		2.88	%
Efficiency ratio ^{(G) (I)}		43.68	%		40.87	%		41.38	%		43.12	%		43.68	%

Liquidity and Capital Ratios
Equity to assets		17.81	%		17.78	%		17.47	%		17.44	%		17.00	%
Common equity tier 1 capital		15.59	%		15.88	%		15.44	%		15.26	%		15.32	%
Tier 1 risk-based capital		15.59	%		15.88	%		15.44	%		15.26	%		15.32	%
Total risk-based capital		16.41	%		16.51	%		16.09	%		15.91	%		15.99	%
Tier 1 leverage capital		10.06	%		10.16	%		9.94	%		9.58	%		9.44	%
Period end tangible equity to period end tangible assets ^(G)		10.01	%		9.93	%		9.62	%		9.48	%		9.19	%

Other Data
Weighted-average shares used in computing earnings per common share
Basic		91,207			91,287			91,209			91,772			92,161
Diluted		91,207			91,287			91,209			91,772			92,161
Period end shares outstanding		90,693			91,314			91,210			91,196			92,160
Cash dividends paid per common share	$	0.55		$	0.55		$	0.52		$	0.52		$	0.52
Book value per common share	$	74.31		$	73.37		$	72.49		$	71.51		$	70.58
Tangible book value per common share ^(G)	$	38.13		$	37.41		$	36.47		$	35.46		$	34.87

Common Stock Market Price
High	$	78.76		$	76.32		$	77.93		$	73.50		$	80.46
Low	$	58.25		$	66.71		$	65.37		$	64.69		$	69.08
Period end closing price	$	61.52		$	72.68		$	66.68		$	68.27		$	69.38
Employees – FTE (excluding overtime)		3,651			3,633			3,592			3,576			3,595
Number of banking centers		272			272			272			272			272

(D) Includes purchase accounting adjustments for the periods presented as follows:

	Three Months Ended
	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022
Loan discount accretion
ASC 310-20	$532	$603	$912	$(265)	$4,674
ASC 310-30	$339	$310	$322	$324	$521
Securities net amortization	$2	$12	$40	$12	$52
Time deposits amortization	$53	$59	$68	$84	$100


(E)	Using effective tax rate of 21.4%, 21.0%, 21.6%, 21.3% and 21.2% for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, 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 or write down of assets and securities. Additionally, taxes are not part of this calculation.

Prosperity Bancshares, Inc.^®
Financial Highlights (Unaudited)
(Dollars in thousands)

YIELD ANALYSIS	Three Months Ended
	Mar 31, 2023						Dec 31, 2022						Mar 31, 2022
	Average Balance		Interest Earned/ Interest Paid		Average Yield/ Rate	^(J)	Average Balance		Interest Earned/ Interest Paid		Average Yield/ Rate	^(J)	Average Balance		Interest Earned/ Interest Paid		Average Yield/ Rate		^(J)
Interest-earning assets:
Loans held for sale	$	2,343	$	38	6.58 %		$	1,758	$	27	6.09 %		$	4,611	$	40	3.52 %
Loans held for investment		18,317,712		236,606	5.24 %			17,818,769		223,768	4.98 %			16,712,690		183,033	4.44 %
Loans held for investment - Warehouse Purchase Program		617,822		10,474	6.88 %			747,007		11,331	6.02 %			1,268,715		9,952	3.18 %
Total Loans		18,937,877		247,118	5.29 %			18,567,534		235,126	5.02 %			17,986,016		193,025	4.35 %
Investment securities		14,332,509		73,185	2.07 %	^(K)		14,715,516		72,533	1.96 %	^(K)		13,772,974		55,011	1.62 %		^(K)
Federal funds sold and other earning assets		600,048		7,006	4.74 %			101,986		933	3.63 %			2,135,503		847	0.16 %
Total interest-earning assets		33,870,434		327,309	3.92 %			33,385,036		308,592	3.67 %			33,894,493		248,883	2.98 %
Allowance for credit losses on loans		(282,316)						(282,546)						(285,692)
Noninterest-earning assets		4,589,735						4,515,412						4,458,669
Total assets	$	38,177,853					$	37,617,902					$	38,067,470

Interest-bearing liabilities:
Interest-bearing demand deposits	$	5,877,641	$	3,792	0.26 %		$	5,843,672	$	3,224	0.22 %		$	6,775,114	$	2,452	0.15 %
Savings and money market deposits		9,579,679		35,521	1.50 %			9,805,024		27,929	1.13 %			10,870,461		4,026	0.15 %
Certificates and other time deposits		2,045,580		8,030	1.59 %			2,066,085		4,895	0.94 %			2,637,529		2,276	0.35 %
Other borrowings		2,887,011		34,396	4.83 %			1,465,533		14,682	3.97 %			—		—		—
Securities sold under repurchase agreements		427,887		2,103	1.99 %			441,405		1,725	1.55 %			452,054		185	0.17 %
Total interest-bearing liabilities		20,817,798		83,842	1.63 %	^(L)		19,621,719		52,455	1.06 %	^(L)		20,735,158		8,939	0.17 %		^(L)

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		10,389,980						11,064,714						10,636,624
Allowance for credit losses on off-balance sheet credit exposures		29,947						29,947						29,947
Other liabilities		180,685						224,512						176,360
Total liabilities		31,418,410						30,940,892						31,578,089
Shareholders' equity		6,759,443						6,677,010						6,489,381
Total liabilities and shareholders' equity	$	38,177,853					$	37,617,902					$	38,067,470

Net interest income and margin			$	243,467	2.92 %				$

PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER 2023 EARNINGS