UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 001-35388

PROSPERITY BANCSHARES, INC.®

(Exact name of registrant as specified in its charter)

Texas	74-2331986
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Prosperity Bank Plaza
4295 San Felipe, Houston, Texas	77027
(Address of principal executive offices)	(Zip Code)

(281) 269-7199

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $1.00 per share	PB	New York Stock Exchange, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2025, there were 95,000,432 outstanding shares of the registrant’s Common Stock, par value $1.00 per share.

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

INDEX TO FORM 10-Q

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	3
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	59
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
Signatures		62

2

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2025			2024
	(unaudited)
	(Dollars in thousands, except par value)
ASSETS
Cash and due from banks	$	1,304,993		$	1,972,175
Federal funds sold		197			292
Total cash and cash equivalents		1,305,190			1,972,467
Available for sale securities, at fair value		342,108			336,960
Held to maturity securities, at cost (fair value of $9,156,024 and $9,382,479, respectively)		10,265,996			10,757,464
Total securities		10,608,104			11,094,424
Loans held for sale		6,004			10,690
Loans held for investment		20,903,944			21,057,616
Loans held for investment - Warehouse Purchase Program		1,287,440			1,080,903
Total loans		22,197,388			22,149,209
Less: allowance for credit losses on loans		(346,084	)		(351,805	)
Loans, net		21,851,304			21,797,404
Accrued interest receivable		101,606			104,367
Goodwill		3,503,127			3,503,129
Core deposit intangibles, net		58,796			66,047
Bank premises and equipment, net		374,602			371,238
Other real estate owned		7,874			5,701
Bank owned life insurance (BOLI)		389,380			386,247
Federal Home Loan Bank of Dallas stock		125,900			138,200
Other assets		91,469			127,514
TOTAL ASSETS	$	38,417,352		$	39,566,738
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	9,426,657		$	9,798,438
Interest-bearing		18,046,754			18,582,900
Total deposits		27,473,411			28,381,338
Other borrowings		2,900,000			3,200,000
Securities sold under repurchase agreements		183,572			221,913
Accrued interest payable		32,837			41,910
Allowance for credit losses on off-balance sheet credit exposures		37,646			37,646
Other liabilities		190,150			245,436
Total liabilities		30,817,616			32,128,243
COMMITMENTS AND CONTINGENCIES		—			—
SHAREHOLDERS’ EQUITY:
Preferred stock, $1 par value; 20,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $1 par value; 200,000,000 shares authorized; 95,276,800 issued and outstanding at June 30, 2025; 95,275,279 shares issued and outstanding at December 31, 2024		95,277			95,276
Capital surplus		3,802,680			3,796,622
Retained earnings		3,703,088			3,548,221
Accumulated other comprehensive loss —net unrealized loss on available for sale securities, net of tax benefit of $(348) and $(432), respectively		(1,309	)		(1,624	)
Total shareholders’ equity		7,599,736			7,438,495
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	38,417,352		$	39,566,738

See notes to consolidated financial statements.

3

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025		2024
	(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees	$	325,490		$	336,428		$	644,513	$	642,656
Securities		57,836			62,428			115,722		128,849
Federal funds sold and other earning assets		9,438			14,095			25,334		23,360
Total interest income		392,764			412,951			785,569		794,865
INTEREST EXPENSE:
Deposits		93,790			106,124			189,387		198,816
Other borrowings		30,101			46,282			60,593		95,228
Securities sold under repurchase agreements		1,151			1,759			2,485		3,791
Total interest expense		125,042			154,165			252,465		297,835
NET INTEREST INCOME		267,722			258,786			533,104		497,030
PROVISION FOR CREDIT LOSSES		—			9,066			—		9,066
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		267,722			249,720			533,104		487,964
NONINTEREST INCOME:
Nonsufficient funds (NSF) fees		8,885			8,153			18,032		16,441
Credit card, debit card and ATM card income		9,761			9,384			18,500		18,245
Service charges on deposit accounts		7,645			6,436			15,053		12,842
Trust income		3,859			3,601			7,460		7,757
Mortgage income		965			745			1,974		1,355
Brokerage income		1,225			1,186			2,487		2,421
Net gain (loss) on sale or write-down of assets		1,414			(903	)		1,179		(938	)
Net gain on sale or write-up of securities		—			10,723			—		11,021
Other		9,228			6,678			19,598		15,729
Total noninterest income		42,982			46,003			84,283		84,873
NONINTEREST EXPENSE:
Salaries and employee benefits		87,296			89,584			176,772		175,355
Net occupancy and equipment		9,168			8,915			18,314		17,538
Credit and debit card, data processing and software amortization		12,056			11,998			23,478		22,973
Regulatory assessments and FDIC insurance		5,508			10,317			11,297		15,855
Core deposit intangibles amortization		3,610			4,156			7,251		7,393
Depreciation		4,779			4,836			9,553		9,522
Communications		3,507			3,485			6,980		6,887
Net other real estate income		(18	)		100			92		149
Merger related expenses		—			4,381			—		4,381
Other		12,659			15,070			25,129		28,637
Total noninterest expense		138,565			152,842			278,866		288,690
INCOME BEFORE INCOME TAXES		172,139			142,881			338,521		284,147
PROVISION FOR INCOME TAXES		36,984			31,279			73,141		62,119
NET INCOME	$	135,155		$	111,602		$	265,380	$	222,028
EARNINGS PER SHARE:
Basic	$	1.42		$	1.17		$	2.79	$	2.34
Diluted	$	1.42		$	1.17		$	2.79	$	2.34

See notes to consolidated financial statements.

4

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
	(Dollars in thousands)
Net income	$	135,155		$	111,602		$	265,380		$	222,028
Other comprehensive (loss) income, before tax:
Securities available for sale:
Change in unrealized (loss) gain during the period		(283	)		946			399			(238	)
Total other comprehensive (loss) income		(283	)		946			399			(238	)
Deferred tax benefit (expense) related to other comprehensive (loss) income		59			(199	)		(84	)		50
Other comprehensive (loss) income, net of tax		(224	)		747			315			(188	)
Comprehensive income	$	134,931		$	112,349		$	265,695		$	221,840

See notes to consolidated financial statements.

5

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

											Accumulated
											Other			Total
	Common Stock				Capital			Retained			Comprehensive			Shareholders’
	Shares		Amount		Surplus			Earnings			Income (Loss)			Equity
	(In thousands, except share and per share data)
Three Months Ended
BALANCE AT MARCH 31, 2025		95,258,217	$	95,259	$	3,799,692		$	3,623,195		$	(1,085	)	$	7,517,061
Net income									135,155						135,155
Other comprehensive loss												(224	)		(224	)
Common stock issued in connection with the granting of restricted stock awards, net		18,583		18		(18	)								—
Stock based compensation expense						3,006									3,006
Cash dividends declared, $0.58 per share									(55,262	)					(55,262	)
BALANCE AT JUNE 30, 2025		95,276,800	$	95,277	$	3,802,680		$	3,703,088		$	(1,309	)	$	7,599,736
Six Months Ended
BALANCE AT DECEMBER 31, 2024		95,275,279	$	95,276	$	3,796,622		$	3,548,221		$	(1,624	)	$	7,438,495
Net income									265,380						265,380
Other comprehensive income												315			315
Common stock issued in connection with the granting of restricted stock awards, net		1,521		1		(1	)								—
Stock based compensation expense						6,059									6,059
Cash dividends declared, $1.16 per share									(110,513	)					(110,513	)
BALANCE AT JUNE 30, 2025		95,276,800	$	95,277	$	3,802,680		$	3,703,088		$	(1,309	)	$	7,599,736

													Accumulated
													Other			Total
	Common Stock						Capital			Retained			Comprehensive			Shareholders’
	Shares			Amount			Surplus			Earnings			Income (Loss)			Equity
	(In thousands, except share and per share data)
Three Months Ended
BALANCE AT MARCH 31, 2024		93,525,291		$	93,525		$	3,672,090		$	3,341,262		$	(2,333	)	$	7,104,544
Net income											111,602						111,602
Other comprehensive income														747			747
Common stock issued in connection with the granting of restricted stock awards, net		31,500			32			(32	)								—
Common stock issued in connection with the acquisition of Lone Star State Bancshares, Inc.		2,376,143			2,376			153,927									156,303
Common stock repurchase		(670,518	)		(670	)		(38,814	)								(39,484	)
Stock based compensation expense								3,134									3,134
Cash dividends declared, $0.56 per share											(53,402	)					(53,402	)
BALANCE AT JUNE 30, 2024		95,262,416		$	95,263		$	3,790,305		$	3,399,462		$	(1,586	)	$	7,283,444
Six Months Ended
BALANCE AT DECEMBER 31, 2023		93,722,383		$	93,723		$	3,703,795		$	3,283,210		$	(1,398	)	$	7,079,330
Net income											222,028						222,028
Other comprehensive loss														(188	)		(188	)
Common stock issued in connection with the granting of restricted stock awards, net		402,100			402			(402	)								—
Common stock issued in connection with the acquisition of Lone Star State Bancshares, Inc.		2,376,143			2,376			153,927									156,303
Common stock repurchase		(1,238,210	)		(1,238	)		(73,528	)								(74,766	)
Stock based compensation expense								6,513									6,513
Cash dividends declared, $1.12 per share											(105,776	)					(105,776	)
BALANCE AT JUNE 30, 2024		95,262,416		$	95,263		$	3,790,305		$	3,399,462		$	(1,586	)	$	7,283,444

See notes to consolidated financial statements.

6

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30,
	2025			2024
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	265,380		$	222,028
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and core deposit intangibles amortization		16,804			16,915
Provision for credit losses		—			9,066
Net amortization of premium on investments		9,953			11,653
Net gain on sale of investment securities		—			(11,021	)
Net gain on sale of other real estate and repossessed assets		(252	)		(107	)
Net (gain) loss on sale or write down of premises and equipment		(1,179	)		938
Net accretion of discount on loans		(6,416	)		(9,051	)
Net amortization of premium on deposits		(11	)		(93	)
Net gain on sale of loans		(1,976	)		(1,358	)
Proceeds from sale of loans held for sale		79,067			63,974
Originations of loans held for sale		(72,929	)		(66,833	)
Stock based compensation expense		6,059			6,513
Decrease in accrued interest receivable and other assets		50,011			17,168
(Decrease) increase in accrued interest payable and other liabilities		(68,162	)		144,102
Net cash provided by operating activities		276,349			403,894
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities, sales and principal paydowns of held to maturity securities		754,742			990,755
Purchase of held to maturity securities		(274,634	)		(28,826	)
Proceeds from maturities, sales and principal paydowns of available for sale securities		10,005,257			11,199,310
Purchase of available for sale securities		(10,008,602	)		(11,020,422	)
Originations of Warehouse Purchase Program loans		(7,611,180	)		(6,759,124	)
Proceeds from pay-offs of Warehouse Purchase Program loans		7,404,643			6,499,966
Net decrease in loans held for investment		147,813			171,972
Purchase of bank premises and equipment		(13,490	)		(11,888	)
Proceeds from sale of bank premises, equipment and other real estate		6,801			1,037
Proceeds from insurance claims		1,794			1,049
Net cash provided by the purchase of Lone Star State Bancshares, Inc.		—			169,855
Net cash provided by investing activities		413,144			1,213,684
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing deposits		(371,781	)		(475,810	)
Net decrease in interest-bearing deposits		(536,135	)		(11,213	)
Net (repayments) proceeds from other short-term borrowings		(300,000	)		175,000
Net decrease in securities sold under repurchase agreements		(38,341	)		(75,588	)
Repurchase of common stock		—			(74,766	)
Payments of cash dividends		(110,513	)		(105,776	)
Net cash used in financing activities		(1,356,770	)		(568,153	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(667,277	)		1,049,425
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,972,467			458,413
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,305,190		$	1,507,838
NONCASH ACTIVITIES:
Acquisition of real estate through foreclosure of collateral	$	6,853		$	3,897
SUPPLEMENTAL INFORMATION:
Income taxes paid	$	160,444		$	28,344
Interest paid		261,538			203,089

See notes to consolidated financial statements

7

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

1. BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Prosperity Bancshares, Inc.® (“Bancshares”) and its wholly-owned subsidiary, Prosperity Bank® (the “Bank,” and together with Bancshares, the “Company”). All intercompany transactions and balances have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis; and all such adjustments are of a normal recurring nature. These financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the six-month period ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other period.

The Company’s banking operations are considered by management to be aggregated in one reportable operating segment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280. The Chief Executive Officer is designated as the Company’s chief operating decision maker (“CODM”), that evaluates banking operations and decides how to allocate resources based on consolidated net income that is also reported on the Company’s consolidated statement of income. Consolidated net income is used to monitor the Company’s revenue streams, significant expenses and to compare budget to actual results in assessing performance of the Company’s banking operations. Interest expense, provision for credit losses and salaries and employee benefits are considered significant segment expenses and are listed on the accompanying consolidated statements of income. As the Company’s operations consist of one reportable operating segment, the segment assets are reflected on the accompanying consolidated balance sheets as “total assets.”

2. INCOME PER COMMON SHARE

The following table illustrates the computation of basic and diluted earnings per share:

	Three Months Ended June 30,								Six Months Ended June 30,
	2025				2024				2025				2024
	Amount		Per Share Amount		Amount		Per Share Amount		Amount		Per Share Amount		Amount		Per Share Amount
	(Amounts in thousands, except per share data)
Net income	$	135,155			$	111,602			$	265,380			$	222,028
Basic:
Weighted average shares outstanding		95,277	$	1.42		95,765	$	1.17		95,271	$	2.79		94,735	$	2.34
Diluted:
Weighted average shares outstanding		95,277	$	1.42		95,765	$	1.17		95,271	$	2.79		94,735	$	2.34

There were no stock options outstanding at June 30, 2025 or exercisable during the three and six months ended June 30, 2025 or 2024 that would have had an anti-dilutive effect on the above computation.

8

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

3. NEW ACCOUNTING STANDARDS

Accounting Standards Updates (“ASU”)

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. The Company does not expect the adoption of ASU 2024-03 to have a significant impact on its financial statements.

ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. ASU 2024-01 clarifies the scope application of profits interest and similar awards by adding illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of FASB ASC 718, “Compensation—Stock Compensation.” However, this amendment does not change the intent of that guidance, nor how it should be applied. The ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. ASU 2024-01 became effective for the Company on December 31, 2024, and did not have a significant impact on the Company’s financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income. ASU 2023-09 focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For public business entities the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025, and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The Company does not expect the adoption of ASU 2023-09 to have a significant impact on its financial statements.

ASU 2023-07, Segment Reporting (Topic 280)—Improvement to Reportable Segment Disclosures. ASU 2023-07 amends the disclosure requirements related to segment reporting primarily through enhanced disclosure about significant segment expenses that are regularly provided to the CODM and by requiring disclosure of segment information on an annual and interim basis. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 became effective for the Company on December 31, 2024, and did not have a significant impact on the Company’s financial statements.

ASU 2023-06, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU 2023-06 amends the FASB ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. The Company does not expect the adoption of ASU 2023-06 to have a significant impact on its financial statements.

9

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

4. SECURITIES

The amortized cost and fair value of investment securities were as follows:

	June 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	13,650	$	2,903	$	—		$	16,553
Collateralized mortgage obligations		222,874		—		(3,789	)		219,085
Mortgage-backed securities		107,241		59		(830	)		106,470
Total	$	343,765	$	2,962	$	(4,619	)	$	342,108
Held to Maturity
U.S. Government agencies	$	5,946	$	—	$	(16	)	$	5,930
States and political subdivisions		80,190		219		(2,142	)		78,267
Corporate debt securities		12,000		—		(2,520	)		9,480
Collateralized mortgage obligations		228,852		88		(16,247	)		212,693
Mortgage-backed securities		9,939,008		4,705		(1,094,059	)		8,849,654
Total	$	10,265,996	$	5,012	$	(1,114,984	)	$	9,156,024

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	2,035	$	(60	)	$	16,325
Collateralized mortgage obligations		216,142		81		(3,233	)		212,990
Mortgage-backed securities		108,524		41		(920	)		107,645
Total	$	339,016	$	2,157	$	(4,213	)	$	336,960
Held to Maturity
U.S. Government agencies	$	5,861	$	—	$	(44	)	$	5,817
States and political subdivisions		98,125		220		(2,510	)		95,835
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		232,345		—		(24,128	)		208,217
Mortgage-backed securities		10,409,133		380		(1,345,063	)		9,064,450
Total	$	10,757,464	$	600	$	(1,375,585	)	$	9,382,479

The investment securities portfolio is measured for expected credit losses by segregating the portfolio into two general classifications and applying the appropriate expected credit losses methodology. Investment securities classified as available for sale or held to maturity are evaluated for expected credit losses under FASB ASC Topic 326, “Financial Instruments – Credit Losses” (“CECL”).

Available for sale securities. For available for sale securities in an unrealized loss position, the amount of the expected credit losses recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the expected credit losses will be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the expected credit losses will be separated into the amount representing the credit-related portion of the impairment loss (“credit loss”) and the noncredit portion of the impairment loss (“noncredit portion”). The amount of the total expected credit losses related to the credit loss is determined based on the difference between the present value of cash flows expected to be collected and the amortized cost basis and such difference is recognized in earnings. The amount of the total expected credit losses related to the noncredit portion is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the expected credit losses recognized in earnings will become the new amortized cost basis of the investment.

10

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

As of June 30, 2025, management does not have the intent to sell any of the securities classified as available for sale before a recovery of cost. In addition, management believes it is more likely than not that the Company will not be required to sell any of its investment securities before a recovery of cost. The unrealized losses are largely due to changes in market interest rates and spread relationships since the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of June 30, 2025, management believes that there is no potential for credit losses on available for sale securities.

Held to maturity securities. The Company’s held to maturity investments include mortgage-related bonds issued by either the Government National Mortgage Corporation (“Ginnie Mae”), Federal National Mortgage Association (“Fannie Mae”) or Federal Home Loan Mortgage Corporation (“Freddie Mac”). Ginnie Mae-issued securities are explicitly guaranteed by the U.S. government, while Fannie Mae- and Freddie Mac-issued securities are fully guaranteed by those respective United States government-sponsored agencies and conditionally guaranteed by the full faith and credit of the United States. The Company’s held to maturity securities also include taxable and tax-exempt municipal securities issued primarily by school districts, utility districts and municipalities located in Texas. The Company’s investment in municipal securities is exposed to credit risk. The securities are highly rated by major rating agencies and regularly reviewed by management. A significant portion are guaranteed or insured by either the Texas Permanent School Fund, Assured Guaranty or Build America Mutual. As of June 30, 2025, the Company’s municipal securities represent 0.8% of the securities portfolio. Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities. Accordingly, as of June 30, 2025, management believes that there is no potential for material credit losses on held to maturity securities.

Securities with unrealized losses, segregated by length of time, that have been in a continuous loss position were as follows:

	June 30, 2025
	Less than 12 Months					12 Months or More					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
Collateralized mortgage obligations	$	66,621	$	(357	)	$	142,720	$	(3,432	)	$	209,341	$	(3,789	)
Mortgage-backed securities		9,676		(55	)		93,177		(775	)		102,853		(830	)
Total	$	76,297	$	(412	)	$	235,897	$	(4,207	)	$	312,194	$	(4,619	)
Held to Maturity
U.S. Government agencies	$	5,930	$	(16	)	$	—	$	—		$	5,930	$	(16	)
States and political subdivisions		9,908		(34	)		34,654		(2,108	)		44,562		(2,142	)
Corporate debt securities		—		—			9,480		(2,520	)		9,480		(2,520	)
Collateralized mortgage obligations		26,962		(96	)		172,831		(16,151	)		199,793		(16,247	)
Mortgage-backed securities		182,819		(2,432	)		8,201,868		(1,091,627	)		8,384,687		(1,094,059	)
Total	$	225,619	$	(2,578	)	$	8,418,833	$	(1,112,406	)	$	8,644,452	$	(1,114,984	)

11

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

	December 31, 2024
	Less than 12 Months					12 Months or More					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	2,040	$	(60	)	$	—	$	—		$	2,040	$	(60	)
Collateralized mortgage obligations		47,114		(307	)		125,942		(2,926	)		173,056		(3,233	)
Mortgage-backed securities		6,837		(53	)		89,513		(867	)		96,350		(920	)
Total	$	55,991	$	(420	)	$	215,455	$	(3,793	)	$	271,446	$	(4,213	)
Held to Maturity
U.S. Government agencies	$	5,817	$	(44	)	$	—	$	—		$	5,817	$	(44	)
States and political subdivisions		23,270		(113	)		47,943		(2,397	)		71,213		(2,510	)
Corporate debt securities		—		—			8,160		(3,840	)		8,160		(3,840	)
Collateralized mortgage obligations		28,362		(663	)		179,855		(23,465	)		208,217		(24,128	)
Mortgage-backed securities		331,265		(4,647	)		8,646,541		(1,340,416	)		8,977,806		(1,345,063	)
Total	$	388,714	$	(5,467	)	$	8,882,499	$	(1,370,118	)	$	9,271,213	$	(1,375,585	)

At June 30, 2025 and December 31, 2024, there were 865 securities and 949 securities, respectively, in an unrealized loss position for 12 months or more.

The table below summarizes the amortized cost and fair value of investment securities at June 30, 2025, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations at any time with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	16,053	$	16,042	$	—	$	—
Due after one year through five years		41,405		41,020		—		—
Due after five years through ten years		33,293		30,052		13,650		16,553
Due after ten years		7,385		6,563		—		—
Subtotal		98,136		93,677		13,650		16,553
Mortgage-backed securities and collateralized mortgage obligations		10,167,860		9,062,347		330,115		325,555
Total	$	10,265,996	$	9,156,024	$	343,765	$	342,108

At June 30, 2025 and December 31, 2024, the Company did not own securities of any one issuer (other than the U.S. government and its agencies) for which aggregate adjusted cost exceeded 10% of the consolidated shareholders’ equity at such respective dates.

Securities with an amortized cost of $7.75 billion and $10.26 billion and a fair value of $6.88 billion and $8.91 billion at June 30, 2025 and December 31, 2024, respectively, were pledged to collateralize public deposits and for other purposes required or permitted by law.

The Company recorded no gain or loss on the sale of investment securities for the three and six months ended June 30, 2025. The Company recorded a $9.7 million and $9.4 million net loss on the sale of investment securities for the three and six months ended June 30, 2024, respectively. As of June 30, 2025, the Company did not own any non-agency collateralized mortgage obligations.

12

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The loan portfolio consists of various types of loans and is categorized by major type as follows:

	June 30, 2025		December 31, 2024
	(Dollars in thousands)
Residential mortgage loans held for sale	$	6,004	$	10,690
Commercial and industrial		2,410,882		2,508,088
Real estate:
Construction, land development and other land loans		2,873,238		2,859,281
1-4 family residential (includes home equity)		8,394,183		8,476,899
Commercial real estate (includes multi-family residential)		5,827,645		5,800,985
Farmland		672,871		681,883
Agriculture		356,378		351,663
Consumer and other		368,747		378,817
Total loans held for investment, excluding Warehouse Purchase Program		20,903,944		21,057,616
Warehouse Purchase Program		1,287,440		1,080,903
Total loans, including Warehouse Purchase Program	$	22,197,388	$	22,149,209

Concentrations of Credit. Most of the Company’s lending activity occurs within the states of Texas and Oklahoma. Commercial real estate loans, 1-4 family residential loans and construction, land development and other land loans made up 81.8% and 81.3% of the Company’s total loan portfolio, excluding Warehouse Purchase Program loans, at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, excluding Warehouse Purchase Program loans, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

Related Party Loans. As of June 30, 2025 and December 31, 2024, loans outstanding to directors, officers and their affiliates totaled $248 thousand and $266 thousand, respectively. All transactions between the Company and such related parties are conducted in the ordinary course of business and made on the same terms and conditions as similar transactions with unaffiliated persons.

An analysis of activity with respect to these related party loans is as follows:

	As of and for the six months ended June 30, 2025			As of and for the year ended December 31, 2024
	(Dollars in thousands)
Beginning balance on January 1	$	266		$	292
New loans		7			5
Repayments		(25	)		(31	)
Ending balance	$	248		$	266

Nonperforming Assets and Nonaccrual and Past Due Loans. The Company has several procedures in place to assist it in maintaining the overall quality of its loan portfolio. The Company has established underwriting guidelines to be followed by its officers, including requiring appraisals on loans collateralized by real estate. The Company also monitors its delinquency levels for any negative or adverse trends. Nevertheless, the Company’s loan portfolio could become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.

The Company generally places a loan on nonaccrual status and ceases accruing interest when the payment of principal or interest is delinquent for 90 days, or earlier in some cases; unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

With respect to potential problem loans, an evaluation of the borrower’s overall financial condition is made, together with an appraisal for loans collateralized by real estate, to determine the need, if any, for possible write-downs or appropriate additions to the allowance for credit losses.

13

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

An aging analysis of past due loans, segregated by category of loan, is presented below:

	June 30, 2025
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Construction, land development and other land loans	$	12,465	$	162	$	12,627	$	734	$	2,859,877	$	2,873,238
Warehouse Purchase Program loans		—		—		—		—		1,287,440		1,287,440
Agriculture and agriculture real estate (includes farmland)		4,663		82		4,745		17,465		1,007,039		1,029,249
1-4 family (includes home equity) (1)		48,448		—		48,448		44,861		8,306,878		8,400,187
Commercial real estate (includes multi-family residential)		11,495		—		11,495		11,594		5,804,556		5,827,645
Commercial and industrial		20,631		332		20,963		27,348		2,362,571		2,410,882
Consumer and other		2,085		—		2,085		29		366,633		368,747
Total	$	99,787	$	576	$	100,363	$	102,031	$	21,994,994	$	22,197,388

	December 31, 2024
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Construction, land development and other land loans	$	21,464	$	267	$	21,731	$	2,079	$	2,835,471	$	2,859,281
Warehouse Purchase Program loans		—		—		—		—		1,080,903		1,080,903
Agriculture and agriculture real estate (includes farmland)		4,554		575		5,129		2,634		1,025,783		1,033,546
1-4 family (includes home equity) (1)		49,391		—		49,391		42,048		8,396,150		8,487,589
Commercial real estate (includes multi-family residential)		15,692		—		15,692		18,455		5,766,838		5,800,985
Commercial and industrial		26,852		1,347		28,199		8,348		2,471,541		2,508,088
Consumer and other		478		—		478		83		378,256		378,817
Total	$	118,431	$	2,189	$	120,620	$	73,647	$	21,954,942	$	22,149,209

(1)Includes $6.0 million and $10.7 million of residential mortgage loans held for sale at June 30, 2025 and December 31, 2024, respectively.

14

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The following table presents information regarding nonperforming assets as of the dates indicated:

	June 30, 2025			December 31, 2024
	(Dollars in thousands)
Nonaccrual loans (1)	$	102,031		$	73,647
Accruing loans 90 or more days past due		576			2,189
Total nonperforming loans		102,607			75,836
Repossessed assets		6			4
Other real estate		7,874			5,701
Total nonperforming assets	$	110,487		$	81,541
Nonperforming assets to total loans and other real estate		0.50	%		0.37	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.53	%		0.39	%
Nonaccrual loans to total loans		0.46	%		0.33	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.49	%		0.35	%

(1)There were no nonperforming Warehouse Purchase Program loans or Warehouse Purchase Program lines of credit for the periods presented.

The Company had $110.5 million in nonperforming assets at June 30, 2025 compared with $81.5 million at December 31, 2024. Nonperforming assets were 0.50% of total loans and other real estate at June 30, 2025 and 0.37% of total loans and other real estate at December 31, 2024. The Company had $102.0 million in nonaccrual loans at June 30, 2025 compared with $73.6 million at December 31, 2024.

Acquired Loans. Acquired loans were preliminarily recorded at fair value based on a discounted cash flow valuation methodology that considers, among other things, interest rates, projected default rates, loss given default, and recovery rates. Projected default rates, loss given default, and recovery rates for purchased credit deteriorated (“PCD”) loans primarily impact the related allowance, as opposed to the fair value mark. During the valuation process, the Company identified PCD and Non-PCD loans in the acquired loan portfolios. Loans acquired with evidence of credit quality deterioration since origination as of the acquisition date were accounted for as PCD. PCD loan identification considers the following factors: payment history and past due status, debt service coverage, loan grading, collateral values and other factors that may indicate deterioration of credit quality as of the acquisition date when compared to the origination date. Non-PCD loan identification considers the following factors: account types, remaining terms, annual interest rates or coupons, current market rates, interest types, past delinquencies, timing of principal and interest payments, loan to value ratios, loss exposures and remaining balances. Accretion of purchased discounts on PCD and Non-PCD loans will be recognized based on payment structure and the contractual maturity of individual loans.

15

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

PCD Loans. The recorded investment in PCD loans included in the consolidated balance sheet and the related outstanding balance as of the dates indicated are presented in the table below. The outstanding balance represents the total amount owed as of June 30, 2025 and December 31, 2024.

	June 30, 2025			December 31, 2024
	(Dollars in thousands)
PCD loans:
Outstanding balance	$	387,143		$	440,024
Discount		(6,075	)		(7,390	)
Recorded investment	$	381,068		$	432,634

Changes in the accretable yield for acquired PCD loans for the three and six months ended June 30, 2025 and 2024 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(Dollars in thousands)
Balance at beginning of period	$	6,713		$	7,361		$	7,390		$	7,914
Additions		—			4,558			—			4,558
Accretion charge-offs		—			(18	)		—			(23	)
Accretion		(638	)		(2,394	)		(1,315	)		(2,942	)
Balance at June 30,	$	6,075		$	9,507		$	6,075		$	9,507

Income recognition on PCD loans is subject to the timing and amount of future cash flows. PCD loans for which the Company is accruing interest income are not considered nonperforming or impaired. The PCD discount reflected above as of June 30, 2025, represents the amount of discount available to be recognized as income.

Non-PCD Loans. The recorded investment in Non-PCD loans included in the consolidated balance sheet and the related outstanding balance as of the dates indicated are presented in the table below. The outstanding balance represents the total amount owed as of June 30, 2025 and December 31, 2024.

	June 30, 2025			December 31, 2024
	(Dollars in thousands)
Non-PCD loans:
Outstanding balance	$	1,786,602		$	2,089,629
Discount		(22,766	)		(27,845	)
Recorded investment	$	1,763,836		$	2,061,784

Changes in the discount accretion for Non-PCD loans for the three and six months ended June 30, 2025 and 2024 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(Dollars in thousands)
Balance at beginning of period	$	25,250		$	18,681		$	27,845		$	19,992
Additions		—			20,378			—			20,378
Accretion recoveries (charge-offs)		2			(12	)		22			(11	)
Accretion		(2,486	)		(4,797	)		(5,101	)		(6,109	)
Balance at June 30,	$	22,766		$	34,250		$	22,766		$	34,250

16

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

Credit Quality Indicators. As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks loan grades to be used as credit quality indicators. The following is a general description of the loan grades used:

Grade 1—Credits in this category have risk potential that is virtually nonexistent. These loans may be secured by insured certificates of deposit, insured savings accounts, U.S. Government securities and highly rated municipal bonds.

Grade 2—Credits in this category are of the highest quality. These borrowers represent top rated companies and individuals with unquestionable financial standing with excellent global cash flow coverage, net worth, liquidity and collateral coverage.

Grade 3—Credits in this category are not immune from risk but are well protected by the collateral and paying capacity of the borrower. These loans may exhibit a minor unfavorable credit factor, but the overall credit is sufficiently strong to minimize the possibility of loss.

Grade 4—Credits in this category are considered to be of acceptable credit quality with moderately greater risk than Grade 3 and receiving closer monitoring. Loans in this category have sources of repayment that remain sufficient to preclude a larger than normal probability of default and secondary sources are likewise currently of sufficient quantity, quality, and liquidity to protect the Company against loss of principal and interest. These borrowers have specific risk factors, but the overall strength of the credit is acceptable based on other mitigating credit and/or collateral factors and can repay the debt in the normal course of business.

Grade 5—Credits in this category constitute an undue and unwarranted credit risk; however, the factors do not rise to a level of substandard. These credits have potential weaknesses and/or declining trends that, if not corrected, could expose the Company to risk at a future date. These loans are monitored on the Company’s internally-generated watch list and evaluated on a quarterly basis.

Grade 6—Credits in this category are considered “substandard” but “non-impaired” loans in accordance with regulatory guidelines. Loans in this category have well-defined weakness that, if not corrected, could make default of principal and interest possible. Loans in this category are still accruing interest and may be dependent upon secondary sources of repayment and/or collateral liquidation.

Grade 7—Credits in this category are deemed “substandard” and “impaired” pursuant to regulatory guidelines. As such, the Company has determined that it is probable that less than 100% of the contractual principal and interest will be collected. These loans are individually evaluated for a specific reserve and will typically have the accrual of interest stopped.

Grade 8—Credits in this category include “doubtful” loans in accordance with regulatory guidance. Such loans are no longer accruing interest and factors indicate a loss is imminent. These loans are also deemed “impaired.” While a specific reserve may be in place while the loan and collateral are being evaluated, these loans are typically charged down to an amount the Company estimates is collectible.

Grade 9—Credits in this category are deemed a “loss” in accordance with regulatory guidelines and have been charged off or charged down. The Company may continue collection efforts and may have partial recovery in the future.

17

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The following tables present loans by risk grade, by category of loan and year of origination/renewal at June 30, 2025.

	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Construction, Land Development and Other Land Loans
Grade 1	$	274	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	274
Grade 2		—		—		659		139		—		13		—		—		811
Grade 3		441,971		552,385		324,163		335,752		157,548		57,530		110,247		849		1,980,445
Grade 4		30,416		122,532		199,392		291,566		79,910		18,311		45,440		—		787,567
Grade 5		2,723		250		13		—		352		5,346		912		—		9,596
Grade 6		7,262		525		—		—		146		460		—		—		8,393
Grade 7		—		—		—		82		—		186		—		—		268
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		11,930		11,700		8,159		29,856		5,733		3,258		15,248		—		85,884
Total	$	494,576	$	687,392	$	532,386	$	657,395	$	243,689	$	85,104	$	171,847	$	849	$	2,873,238
Current-period gross write-offs	$	—	$	82	$	—	$	—	$	—	$	—	$	—	$	—	$	82
Agriculture and Agriculture Real Estate (includes Farmland)
Grade 1	$	3,003	$	1,520	$	346	$	8	$	7	$	2	$	9,226	$	—	$	14,112
Grade 2		—		—		8		45		—		552		—		—		605
Grade 3		98,098		105,904		70,970		166,396		80,789		119,280		154,960		226		796,623
Grade 4		34,478		31,885		13,690		17,798		26,794		12,667		28,211		—		165,523
Grade 5		1,369		1,525		45		241		623		1,358		—		—		5,161
Grade 6		—		—		—		—		—		656		—		—		656
Grade 7		—		1,796		—		1,514		—		385		250		—		3,945
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		14,382		14,277		19		2,346		1,422		5,120		5,058		—		42,624
Total	$	151,330	$	156,907	$	85,078	$	188,348	$	109,635	$	140,020	$	197,705	$	226	$	1,029,249
Current-period gross write-offs	$	—	$	29	$	—	$	—	$	8	$	—	$	—	$	—	$	37
1-4 Family (includes Home Equity) (1)
Grade 1	$	—	$	—	$	70	$	138	$	—	$	106	$	—	$	—	$	314
Grade 2		—		—		506		1,010		140		2,042		—		—		3,698
Grade 3		222,803		526,947		1,530,991		2,127,012		1,799,587		1,872,142		96,821		2,848		8,179,151
Grade 4		6,715		11,689		18,532		18,607		27,701		66,708		2,804		—		152,756
Grade 5		132		488		679		2,356		2,442		2,665		76		—		8,838
Grade 6		—		132		370		400		201		2,734		—		—		3,837
Grade 7		—		212		5,292		14,237		7,307		17,521		95		—		44,664
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		47		32		1,616		3,093		279		1,862		—		—		6,929
Total	$	229,697	$	539,500	$	1,558,056	$	2,166,853	$	1,837,657	$	1,965,780	$	99,796	$	2,848	$	8,400,187
Current-period gross write-offs	$	—	$	—	$	483	$	467	$	51	$	25	$	442	$	—	$	1,468

18

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Commercial Real Estate (includes Multi-Family Residential)
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		387		—		—		763		—		751		6,523		—		8,424
Grade 3		217,566		312,016		385,826		882,609		746,270		1,067,147		51,582		—		3,663,016
Grade 4		98,326		51,622		97,967		417,711		216,346		672,776		9,210		300		1,564,258
Grade 5		3,511		27,256		1,023		19,537		12,271		180,937		—		—		244,535
Grade 6		4,732		28,076		4,942		4,858		1,969		79,856		—		—		124,433
Grade 7		—		1,069		—		1,576		3,855		1,021		—		—		7,521
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		21,034		36,645		15,932		55,576		42,290		43,981		—		—		215,458
Total	$	345,556	$	456,684	$	505,690	$	1,382,630	$	1,023,001	$	2,046,469	$	67,315	$	300	$	5,827,645
Current-period gross write-offs	$	—	$	74	$	342	$	33	$	—	$	—	$	50	$	—	$	499
Commercial and Industrial
Grade 1	$	22,560	$	25,250	$	3,590	$	1,056	$	2,054	$	673	$	47,178	$	—	$	102,361
Grade 2		—		1,578		506		6,831		—		1,558		9,678		—		20,151
Grade 3		173,577		264,443		167,051		135,397		96,679		211,646		880,871		3,519		1,933,183
Grade 4		8,642		34,903		26,999		25,956		5,665		23,723		81,067		1,494		208,449
Grade 5		145		4,244		149		18,114		550		2,327		8,752		—		34,281
Grade 6		75		1,335		8,495		3,053		451		213		39,131		3,624		56,377
Grade 7		—		737		4,117		227		83		167		20,596		—		25,927
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		76		1,254		749		8,503		808		1,842		16,921		—		30,153
Total	$	205,075	$	333,744	$	211,656	$	199,137	$	106,290	$	242,149	$	1,104,194	$	8,637	$	2,410,882
Current-period gross write-offs	$	—	$	515	$	160	$	273	$	104	$	85	$	1,440	$	—	$	2,577
Consumer and Other
Grade 1	$	16,520	$	12,960	$	3,624	$	1,209	$	888	$	278	$	1,772	$	—	$	37,251
Grade 2		9,986		99,954		10,503		13,789		—		1,740		2		—		135,974
Grade 3		32,418		20,183		19,593		27,975		16,556		11,206		39,251		2		167,184
Grade 4		11		537		1,232		42		875		16,326		9,083		100		28,206
Grade 5		—		—		—		—		—		—		88		—		88
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		21		3		—		—		—		—		24
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		13		5		2		—		20
Total	$	58,935	$	133,634	$	34,973	$	43,018	$	18,332	$	29,555	$	50,198	$	102	$	368,747
Current-period gross write-offs	$	3,022	$	46	$	81	$	38	$	—	$	244	$	66	$	5	$	3,502

19

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Warehouse Purchase Program
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		—		—		—		—		—		—		—
Grade 3		1,287,440		—		—		—		—		—		—		—		1,287,440
Grade 4		—		—		—		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		—		—		—		—		—		—		—
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		—		—		—		—		—
Total	$	1,287,440	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,287,440
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Grade 1	$	42,357	$	39,730	$	7,630	$	2,411	$	2,949	$	1,059	$	58,176	$	—	$	154,312
Grade 2		10,373		101,532		12,182		22,577		140		6,656		16,203		—		169,663
Grade 3		2,473,873		1,781,878		2,498,594		3,675,141		2,897,429		3,338,951		1,333,732		7,444		18,007,042
Grade 4		178,588		253,168		357,812		771,680		357,291		810,511		175,815		1,894		2,906,759
Grade 5		7,880		33,763		1,909		40,248		16,238		192,633		9,828		—		302,499
Grade 6		12,069		30,068		13,807		8,311		2,767		83,919		39,131		3,624		193,696
Grade 7		—		3,814		9,430		17,639		11,245		19,280		20,941		—		82,349
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		47,469		63,908		26,475		99,374		50,545		56,068		37,229		—		381,068
Total	$	2,772,609	$	2,307,861	$	2,927,839	$	4,637,381	$	3,338,604	$	4,509,077	$	1,691,055	$	12,962	$	22,197,388
Current-period gross write-offs	$	3,022	$	746	$	1,066	$	811	$	163	$	354	$	1,998	$	5	$	8,165

(1)Includes $6.0 million of residential mortgage loans held for sale at June 30, 2025.

Allowance for Credit Losses on Loans. The allowance for credit losses is adjusted through charges to earnings in the form of a provision for credit losses. Management has established an allowance for credit losses which it believes is adequate to cover expected losses in the Company’s loan portfolio as of June 30, 2025. The amount of the allowance for credit losses on loans is affected by the following: (1) charge-offs of loans that occur when loans are deemed uncollectible and decrease the allowance, (2) recoveries on loans previously charged off that increase the allowance, (3) provisions for credit losses charged to earnings that increase the allowance, and (4) provision releases returned to earnings that decrease the allowance. Based on an evaluation of the loan portfolio and consideration of the factors listed below, management presents a quarterly review of the allowance for credit losses to the Bank’s Board of Directors, indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance. Although management believes it uses the best information available to make determinations with respect to the allowance for credit losses, future adjustments may be necessary if economic conditions or borrower performance differ from the assumptions used in making the initial determinations.

The Company’s allowance for credit losses on loans consists of two components: (1) a specific valuation allowance based on expected losses on specifically identified loans and (2) a general valuation allowance based on historical lifetime loan loss experience, current economic conditions, reasonable and supportable forecasted economic conditions and other qualitative risk factors both internal and external to the Company.

20

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

In setting the specific valuation allowance, the Company follows a loan review program to evaluate the credit risk in the total loan portfolio and assigns risk grades to each loan. Through this loan review process, the Company maintains an internal list of impaired loans, which along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for credit losses. All loans that have been identified as impaired are reviewed on a quarterly basis in order to determine whether a specific reserve is required. For certain impaired loans, the Company allocates a specific loan loss reserve primarily based on the value of the collateral securing the impaired loan in accordance with CECL. The specific reserves are determined on an individual loan basis. Loans for which specific reserves are provided are excluded from the general valuation allowance described below.

In connection with this review of the loan portfolio, the Company considers risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements include:

•for 1-4 family residential mortgage loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of collateral;

•for commercial real estate loans and multifamily residential loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral and the volatility of income, property value and future operating results typical of properties of that type;

•for construction, land development and other land loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, experience and ability of the developer and loan to value ratio;

•for commercial and industrial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category and the value, nature and marketability of collateral;

•for the Warehouse Purchase Program, the capitalization and liquidity of the mortgage banking client, the operating experience, the client’s satisfactory underwriting of purchased loans and the consistent timeliness by the client of loan resale to investors;

•for agriculture real estate loans, the experience and financial capability of the borrower, projected debt service coverage of the operations of the borrower and loan to value ratio; and

•for non-real estate agriculture loans, the operating results, experience and financial capability of the borrower, historical and expected market conditions and the value, nature and marketability of collateral.

In addition, for each category, the Company considers secondary sources of income and the financial strength and credit history of the borrower and any guarantors.

In determining the amount of the general valuation allowance, management considers factors such as historical lifetime loan loss experience, concentration risk of specific loan types, the volume, growth and composition of the Company’s loan portfolio, current economic conditions and reasonable and supportable forecasted economic conditions that may affect borrower ability to pay and the value of collateral, the evaluation of the Company’s loan portfolio through its internal loan review process, other qualitative risk factors both internal and external to the Company and other relevant factors in accordance with CECL. Historical lifetime loan loss experience is determined by utilizing an open-pool (“cumulative loss rate”) methodology. Adjustments to the historical lifetime loan loss experience are made for differences in current loan pool risk characteristics such as portfolio concentrations, delinquency, non-accrual, and watch list levels, as well as changes in current and forecasted economic conditions such as unemployment rates, property and collateral values, and other indices relating to economic activity. The utilization of reasonable and supportable forecasts includes an immediate reversion to lifetime historical loss rates. Based on a review of these factors for each loan type, the Company applies an estimated percentage to the outstanding balance of each loan type, excluding any loan that has a specific reserve. Allocation of a portion of the allowance to one category of loans does not preclude its availability to cover expected losses in other categories.

21

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The following table details activity in the allowance for credit losses on loans by category of loan for the three and six months ended June 30, 2025 and 2024.

	Construction, Land Development and Other Land Loans			Agriculture and Agriculture Real Estate (includes Farmland)			1-4 Family (includes Home Equity)			Commercial Real Estate (includes Multi-Family Residential)			Commercial and Industrial			Consumer and Other			Total
	(Dollars in thousands)
Allowance for credit losses on loans:
Three Months Ended
Balance March 31, 2025	$	80,580		$	26,097		$	83,895		$	90,307		$	60,174		$	8,048		$	349,101
Provision for credit losses on loans		(2,765	)		737			(1,448	)		(1,131	)		3,126			1,481			—
Charge-offs		(82	)		(37	)		(410	)		(112	)		(1,636	)		(1,945	)		(4,222	)
Recoveries		85			51			68			57			592			352			1,205
Net (charge-offs) recoveries		3			14			(342	)		(55	)		(1,044	)		(1,593	)		(3,017	)
Balance June 30, 2025	$	77,818		$	26,848		$	82,105		$	89,121		$	62,256		$	7,936		$	346,084
Six Months Ended
Balance December 31, 2024	$	77,984		$	27,693		$	80,735		$	92,147		$	65,500		$	7,746		$	351,805
Provision for credit losses on loans		(325	)		(859	)		2,763			(2,793	)		(1,870	)		3,084			—
Charge-offs		(82	)		(37	)		(1,468	)		(499	)		(2,577	)		(3,502	)		(8,165	)
Recoveries		241			51			75			266			1,203			608			2,444
Net (charge-offs) recoveries		159			14			(1,393	)		(233	)		(1,374	)		(2,894	)		(5,721	)
Balance June 30, 2025	$	77,818		$	26,848		$	82,105		$	89,121		$	62,256		$	7,936		$	346,084
Allowance for credit losses on loans:
Three Months Ended
Balance March 31, 2024	$	82,158		$	12,627		$	79,664		$	87,213		$	61,616		$	6,941		$	330,219
Initial allowance on loans purchased with credit deterioration		942			14,309			344			4,306			6,176			1			26,078
Provision for credit losses on loans		(6,215	)		2,757			1,106			3,828			5,097			1,350			7,923
Charge-offs		(109	)		(400	)		(433	)		(511	)		(3,176	)		(1,488	)		(6,117	)
Recoveries		—			186			8			892			399			264			1,749
Net (charge-offs) recoveries		(109	)		(214	)		(425	)		381			(2,777	)		(1,224	)		(4,368	)
Balance June 30, 2024	$	76,776		$	29,479		$	80,689		$	95,728		$	70,112		$	7,068		$	359,852
Six Months Ended
Balance December 31, 2023	$	87,775		$	11,380		$	77,652		$	88,664		$	59,832		$	7,059		$	332,362
Initial allowance on loans purchased with credit deterioration		942			14,309			344			4,306			6,176			1			26,078
Provision for credit losses on loans		(11,834	)		4,027			3,575			2,360			7,164			2,631			7,923
Charge-offs		(109	)		(522	)		(894	)		(511	)		(4,536	)		(3,146	)		(9,718	)
Recoveries		2			285			12			909			1,476			523			3,207
Net (charge-offs) recoveries		(107	)		(237	)		(882	)		398			(3,060	)		(2,623	)		(6,511	)
Balance June 30, 2024	$	76,776		$	29,479		$	80,689		$	95,728		$	70,112		$	7,068		$	359,852

22

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The allowance for credit losses on loans as of June 30, 2025 totaled $346.1 million or 1.56% of total loans, including acquired loans with discounts, a decrease $5.7 million or 1.6% compared to the allowance for credit losses on loans totaling $351.8 million or 1.59% of total loans, including acquired loans with discounts, as of December 31, 2024.

There was no provision for credit losses for the three and six months ended June 30, 2025 compared to $9.1 million provision for credit losses for the three and six months ended June 30, 2024, related to the merger of Lone Star State Bancshares, Inc. (“Lone Star”) with Bancshares and the merger of Lone Star State Bank of West Texas (“Lone Star Bank”) with the Bank, both effective on April 1, 2024 (collectively, the “Lone Star Merger”). As a result of the loans acquired in the Lone Star Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures.

Net charge-offs were $3.0 million for the three months ended June 30, 2025 compared to net charge-offs of $4.4 million for the three months ended June 30, 2024. For the three months ended June 30, 2025, $2.1 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Net charge-offs were $5.7 million for the six months ended June 30, 2025 compared with $6.5 million for the six months ended June 30, 2024. For the six months ended June 30, 2025, $10.4 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures. The allowance for credit losses on off-balance sheet credit exposures estimates expected credit losses over the contractual period in which there is exposure to credit risk via a contractual obligation to extend credit, except when an obligation is unconditionally cancellable by the Company. The allowance is adjusted by provisions for credit losses charged to earnings that increase the allowance, or by provision releases returned to earnings that decrease the allowance. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on the commitments expected to fund. The estimate of commitments expected to fund is affected by historical analysis of utilization rates. The expected credit loss rates applied to the commitments expected to fund are affected by the general valuation allowance utilized for outstanding balances with the same underlying assumptions and drivers. As of June 30, 2025 and December 31, 2024, the Company had $37.6 million in allowance for credit losses on off-balance sheet credit exposures. The allowance for credit losses on off-balance sheet credit exposures is a separate line item on the Company’s consolidated balance sheet. As of June 30, 2025, the Company had $1.56 billion in commitments expected to fund.

The following table represents a rollforward of the allowance for credit losses on off-balance sheet credit exposures for the three and six months ended June 30, 2025 and 2024.

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)
Balance at beginning of period	$	37,646	$	36,503	$	37,646	$	36,503
Provision for credit losses on off-balance sheet credit exposures		—		1,143		—		1,143
Balance at end of period	$	37,646	$	37,646	$	37,646	$	37,646

Loan Modifications Made to Borrowers Experiencing Financial Difficulty. The Company evaluates all restructurings, including restructurings for borrowers experiencing financial difficulty, to determine whether they result in a new loan or a continuation of an existing loan. In accordance with CECL, the Company only establishes a specific reserve for modifications to borrowers experiencing financial difficulty when the loan is identified as impaired. The effect of most modifications of loans made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The Company adjusts the terms of loans for certain borrowers when it believes such changes will help its customers manage their loan obligations and increase the collectability of the loans.

23

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

Modifications of loans made to borrowers experiencing financial difficulty may include but are not limited to changes in committed loan amount, interest rate, amortization, note maturity, borrower, guarantor, collateral, forbearance, forgiveness of principal or interest, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The approval of modifications of loans for borrowers experiencing financial difficulty is handled on a case-by-case basis.

The following table displays the amortized cost of loans that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2025 and 2024, presented by category of loan and type of modification.

	Term Extension		Interest Rate Reduction		Total		Percent of Total Class of Loans
	(Dollars in thousands)
Three Months Ended June 30, 2025
Commercial real estate (includes multi-family residential)	$	—	$	—	$	—		0.0	%
Agriculture and agriculture real estate (includes farmland)		—		—		—		0.0	%
Total	$	—	$	—	$	—		0.0	%
Six Months Ended June 30, 2025
Commercial real estate (includes multi-family residential)	$	680	$	23,205	$	23,885		0.4	%
Agriculture and agriculture real estate (includes farmland)		158		—		158		0.0	%
Total	$	838	$	23,205	$	24,043		0.4	%

	Term Extension		Interest Rate Reduction		Total		Percent of Total Class of Loans
	(Dollars in thousands)
Three Months Ended June 30, 2024
Commercial and industrial	$	2,489	$	—	$	2,489		0.1	%
Agriculture and agriculture real estate (includes farmland)		650		—		650		0.1	%
Total	$	3,139	$	—	$	3,139		0.1	%
Six Months Ended June 30, 2024
Commercial and industrial	$	2,902	$	—	$	2,902		0.1	%
Agriculture and agriculture real estate (includes farmland)		11,650		—		11,650		1.1	%
Total	$	14,552	$	—	$	14,552		0.4	%

The financial effects of the modifications of loans made to borrowers experiencing financial difficulty were not significant during the three and six months ended June 30, 2025 and 2024. Furthermore, such modifications did not significantly impact the Company’s determination of the allowance for credit losses during those periods.

The Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2025 that subsequently defaulted and were modified in the twelve months prior to default. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

24

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

6. FAIR VALUE

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair values represent the estimated price that would be received from selling an asset or paid to transfer a liability, otherwise known as an “exit price.” Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets. FASB ASC Topic 820, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Fair Value Hierarchy

The Company groups financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities) or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability.

The fair value disclosures below represent the Company’s estimates based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding current economic conditions, risk characteristics of the various instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in the above methodologies and assumptions could significantly affect the estimates.

25

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The following tables present fair values for assets and liabilities measured at fair value on a recurring basis:

	As of June 30, 2025
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	16,553	$	—	$	16,553
Collateralized mortgage obligations		—		219,085		—		219,085
Mortgage-backed securities		—		106,470		—		106,470
Derivative financial instruments:
Interest rate lock commitments	$	—	$	309	$	—	$	309
Forward mortgage-backed securities trades		—		3		—		3
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		944		—		944
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		116		—		116
Loan customer counterparty		—		949		—		949
Financial institution counterparty		—		—		—		—

	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	16,325	$	—	$	16,325
Collateralized mortgage obligations		—		212,990		—		212,990
Mortgage-backed securities		—		107,645		—		107,645
Derivative financial instruments:
Interest rate lock commitments	$	—	$	144	$	—	$	144
Forward mortgage-backed securities trades		—		75		—		75
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		686		—		686
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	1	$	—	$	1
Forward mortgage-backed securities trades		—		37		—		37
Loan customer counterparty		—		693		—		693
Financial institution counterparty		—		—		—		—

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These instruments include other real estate owned, repossessed assets, held to maturity debt securities, loans held for sale and impaired loans, which are included as loans held for investment. For the three and six months ended June 30, 2025, the Company had additions to other real estate owned of $1.8 million and $6.9 million, respectively, of which $1.6 million and $6.1 million, respectively, were outstanding as of June 30, 2025. For the three and six months ended June 30, 2025, the Company had additions to impaired loans of $34.6 million and $56.6 million, respectively, of which $34.6 million and $54.8 million, respectively, were outstanding as of June 30, 2025. The remaining financial assets and liabilities measured at fair value on a non-recurring basis that were recorded in 2025 and remained outstanding at June 30, 2025 were not significant.

26

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The following tables present carrying and fair value information of financial instruments as of the dates indicated:

	As of June 30, 2025
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	1,304,993	$	1,304,993	$	—	$	—	$	1,304,993
Federal funds sold		197		197		—		—		197
Held to maturity securities		10,265,996		—		9,156,024		—		9,156,024
Loans held for sale		6,004		—		6,004		—		6,004
Loans held for investment, net of allowance		20,557,860		—		—		19,538,644		19,538,644
Loans held for investment - Warehouse Purchase Program		1,287,440		—		1,287,440		—		1,287,440
Other real estate owned		7,874		—		7,874		—		7,874
Liabilities
Deposits:
Noninterest-bearing	$	9,426,657	$	—	$	9,426,657	$	—	$	9,426,657
Interest-bearing		18,046,754		—		18,024,232		—		18,024,232
Other borrowings		2,900,000		—		2,900,000		—		2,900,000
Securities sold under repurchase agreements		183,572		—		183,571		—		183,571

	As of December 31, 2024
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	1,972,175	$	1,972,175	$	—	$	—	$	1,972,175
Federal funds sold		292		292		—		—		292
Held to maturity securities		10,757,464		—		9,382,479		—		9,382,479
Loans held for sale		10,690		—		10,690		—		10,690
Loans held for investment, net of allowance		20,705,811		—		—		19,379,556		19,379,556
Loans held for investment - Warehouse Purchase Program		1,080,903		—		1,080,903		—		1,080,903
Other real estate owned		5,701		—		5,701		—		5,701
Liabilities
Deposits:
Noninterest-bearing	$	9,798,438	$	—	$	9,798,438	$	—	$	9,798,438
Interest-bearing		18,582,900		—		18,559,227		—		18,559,227
Other borrowings		3,200,000		—		3,200,000		—		3,200,000
Securities sold under repurchase agreements		221,913		—		221,902		—		221,902

The following is a description of the fair value estimates, methods and assumptions that are used by the Company in estimating the fair values of financial instruments.

Loans held for sale— Loans held for sale are carried at the lower of cost or estimated fair value. Fair value for consumer mortgages held for sale is based on commitments on hand from investors or prevailing market prices. As such, the Company classifies loans held for sale subjected to nonrecurring fair value adjustments as Level 2.

Loans held for investment— The Company does not record loans at fair value on a recurring basis. As such, valuation techniques discussed herein for loans are primarily for estimating fair value disclosures. The Company’s discounted cash flow calculation to determine fair value considers internal and market-based information such as prepayment risk, cost of funds and

27

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

liquidity. From time to time, the Company records nonrecurring fair value adjustments to impaired loans to reflect (1) partial write-downs that are based on the observable market price or current appraised value of the collateral, or (2) the full charge-off of the loan carrying value. Where appraisals are not available, estimated cash flows are discounted using a rate commensurate with the credit risk associated with those cash flows. Assumptions regarding credit risk, cash flows and discount rates are judgmentally determined using available market information and specific borrower information.

The Company classifies the estimated fair value of loans held for investment as Level 3.

Other real estate owned— Other real estate owned is primarily foreclosed properties securing residential loans and commercial real estate loans. Foreclosed assets are adjusted to fair value less estimated costs to sell upon transfer of the loans to other real estate owned. Subsequently, these assets are carried at the lower of carrying value or fair value less estimated costs to sell. Other real estate carried at fair value based on an observable market price or a current appraised value is classified by the Company as Level 2. When management determines that the fair value of other real estate requires additional adjustments, either as a result of a non-current appraisal or when there is no observable market price, the Company classifies the other real estate as Level 3.

The fair value estimates presented herein are based on information available to management at June 30, 2025. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

7. GOODWILL AND CORE DEPOSIT INTANGIBLES

Changes in the carrying amount of the Company’s goodwill and core deposit intangibles for the six months ended June 30, 2025 and the year ended December 31, 2024 were as follows:

	Goodwill			Core Deposit Intangibles
	(Dollars in thousands)
Balance as of December 31, 2023	$	3,396,086		$	63,994
Less:
Amortization		—			(15,670	)
Add:
Measurement period adjustment of First Bancshares merger		316			—
Lone Star merger		106,727			17,723
Balance as of December 31, 2024		3,503,129			66,047
Less:
Amortization		—			(7,251	)
Add:
Measurement period adjustment of Lone Star merger		(2	)		—
Balance as of June 30, 2025	$	3,503,127		$	58,796

Goodwill is recorded as of the acquisition date of each entity. The Company may record subsequent adjustments to goodwill for amounts undeterminable at acquisition date, such as deferred taxes and real estate valuations, and therefore the goodwill amounts may change accordingly. The Company initially records the total premium paid on acquisitions as goodwill. After finalizing the valuation, core deposit intangibles are identified and reclassified from goodwill to core deposit intangibles on the balance sheet. This reclassification has no effect on total assets, liabilities, shareholders’ equity, net income or cash flows. Management performs an evaluation annually, and more frequently if a triggering event occurs, of whether any impairment of the goodwill or core deposit intangibles has occurred. If any such impairment is determined, a write-down is recorded. As of June 30, 2025, there was no impairment recorded on goodwill and core deposit intangibles.

The measurement period for the Company to determine the fair value of acquired identifiable assets and assumed liabilities will be at the end of the earlier of (1) twelve months from the date of acquisition or (2) as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the date of acquisition.

28

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

Core deposit intangibles are being amortized on a non-pro rata basis over their estimated lives, which the Company believes is between 10 and 15 years. Amortization expense related to intangible assets totaled $3.6 million and $4.2 million for the three months ended June 30, 2025 and 2024, respectively, and $7.3 million and $7.4 million for the six months ended June 30, 2025 and 2024, respectively. The estimated aggregate future amortization expense for core deposit intangibles remaining as of June 30, 2025 is as follows (dollars in thousands):

Remaining 2025	$	7,190
2026		12,763
2027		11,262
2028		9,958
2029		7,610
Thereafter		10,013
Total	$	58,796

8. STOCK–BASED COMPENSATION

At June 30, 2025, Bancshares had one active stock-based incentive compensation plan with awards outstanding.

On March 3, 2020, Bancshares’ Board of Directors established the Prosperity Bancshares, Inc. 2020 Stock Incentive Plan (the “2020 Plan”), which was approved by Bancshares’ shareholders on April 21, 2020. The 2020 Plan authorizes the issuance of up to 2,500,000 shares of common stock upon the exercise of options or pursuant to the grant or exercise, as the case may be, of other awards granted under the 2020 Plan, including incentive stock options, nonqualified stock options, stock appreciation rights, shares of restricted stock and restricted stock units. As of June 30, 2025, 461,131 shares of issued restricted stock have vested and 531,807 shares of issued restricted stock remain unvested.

As of June 30, 2025, the Company had no stock options outstanding.

Stock-based compensation expense related to restricted stock was $3.0 million and $3.1 million during the three months ended June 30, 2025 and 2024, and $6.1 million and $6.5 million during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was $15.1 million of total unrecognized compensation expense related to stock-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 1.66 years.

9. CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ITEMS

Contractual Obligations

The Company’s contractual obligations and other commitments to make future payments (other than deposit obligations and securities sold under repurchase agreements) as of June 30, 2025 are summarized below.

Federal Home Loan Bank Borrowings

The Company’s future cash payments associated with its contractual obligations pursuant to its Federal Home Loan Bank (“FHLB”) advances as of June 30, 2025 are summarized below.

	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
FHLB advances	$	2,900,000	$	—	$	—	$	—	$	2,900,000

29

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

Leases

The Company’s leases relate primarily to operating leases for office space and banking centers. The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of 1 to 15 years, which may include the option to extend the lease when it is reasonably certain for the Company to exercise that option. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental collateralized borrowing rate to determine the present value of lease payments. Short-term leases and leases with variable lease costs are immaterial and the Company has one sublease arrangement. Sublease income was $750 thousand and $828 thousand for the three months ended June 30, 2025 and 2024, respectively, and $1.6 million and $1.7 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, operating lease ROU assets and lease liabilities were approximately $29.8 million. ROU assets and lease liabilities were classified as other assets and other liabilities, respectively.

As of June 30, 2025, the weighted average of remaining lease terms of the Company’s operating leases was 5.8 years. The weighted average discount rate used to determine the lease liabilities as of June 30, 2025 for the Company’s operating leases was 3.1%. Cash paid for the Company’s operating leases was $2.9 million for each of the three months ended June 30, 2025 and 2024, respectively, and was $5.9 million and $5.8 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, the Company obtained $690 thousand in ROU assets in exchange for lease liabilities for two operating leases.

The Company’s future undiscounted cash payments associated with its operating leases as of June 30, 2025 are summarized below (dollars in thousands).

Remaining 2025	$	5,258
2026		9,507
2027		6,505
2028		3,529
2029		2,179
2030		1,715
Thereafter		8,826
Total undiscounted lease payments	$	37,519

Off-Balance Sheet Items

In the normal course of business, the Company enters into various transactions that, in accordance with GAAP, are not included in its consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.

The Company’s commitments associated with outstanding standby letters of credit, unused capacity on Warehouse Purchase Program loans and commitments to extend credit expiring by period as of June 30, 2025 are summarized below. Since commitments associated with letters of credit, unused capacity on Warehouse Purchase Program loans and commitments to extend credit may expire unused, the amounts shown may not necessarily reflect the actual future cash funding requirements.

	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
Standby letters of credit	$	55,305	$	19,255	$	1,338	$	76	$	75,974
Unused capacity on Warehouse Purchase Program loans		831,559		—		—		—		831,559
Commitments to extend credit		1,531,374		943,135		96,860		1,140,935		3,712,304
Total	$	2,418,238	$	962,390	$	98,198	$	1,141,011	$	4,619,837

30

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The Company records an allowance for credit losses on off-balance sheet credit exposure that is adjusted through an entry to provision for credit losses on the Company’s consolidated statement of income. At June 30, 2025 and December 31, 2024, this allowance, reported as a separate line item on the Company’s consolidated balance sheet, totaled $37.6 million.

10. OTHER COMPREHENSIVE (LOSS) INCOME

The tax effects allocated to each component of other comprehensive (loss) income were as follows:

	Three Months Ended March 31,
	2025								2024
	Before Tax Amount			Tax Effect		Net of Tax Amount			Before Tax Amount		Tax Effect			Net of Tax Amount
	(Dollars in thousands)
Other comprehensive (loss) income:
Securities available for sale:
Change in unrealized (loss) gain during period	$	(283	)	$	59	$	(224	)	$	946	$	(199	)	$	747
Total securities available for sale		(283	)		59		(224	)		946		(199	)		747
Total other comprehensive (loss) income	$	(283	)	$	59	$	(224	)	$	946	$	(199	)	$	747

	Six Months Ended June 30,
	2025							2024
	Before Tax Amount		Tax Effect			Net of Tax Amount		Before Tax Amount			Tax Effect		Net of Tax Amount
	(Dollars in thousands)
Other comprehensive income (loss):
Securities available for sale:
Change in unrealized gain (loss) during period	$	399	$	(84	)	$	315	$	(238	)	$	50	$	(188	)
Total securities available for sale		399		(84	)		315		(238	)		50		(188	)
Total other comprehensive income (loss)	$	399	$	(84	)	$	315	$	(238	)	$	50	$	(188	)

Activity in accumulated other comprehensive loss associated with securities available for sale, net of tax, was as follows:

	Securities Available for Sale			Accumulated Other Comprehensive Income (Loss)
	(Dollars in thousands)
Balance at December 31, 2024	$	(1,624	)	$	(1,624	)
Other comprehensive income		315			315
Balance at June 30, 2025	$	(1,309	)	$	(1,309	)
Balance at December 31, 2023	$	(1,398	)	$	(1,398	)
Other comprehensive loss		(188	)		(188	)
Balance at June 30, 2024	$	(1,586	)	$	(1,586	)

31

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

11. DERIVATIVE FINANCIAL INSTRUMENTS

The following table provides the outstanding notional balances and fair values of outstanding derivative positions at June 30, 2025 and December 31, 2024.

	June 30, 2025						December 31, 2024
	Outstanding Notional Balance		Asset Derivative Fair Value		Liability Derivative Fair Value		Outstanding Notional Balance		Asset Derivative Fair Value		Liability Derivative Fair Value
	(Dollars in thousands)
Interest rate lock commitments	$	11,345	$	309	$	—	$	7,042	$	144	$	1
Forward mortgage-backed securities trades		17,750		3		116		18,500		75		37
Commercial loan interest rate swaps and caps:
Loan customer counterparty		41,663		—		949		30,732		—		693
Financial institution counterparty		41,663		944		—		30,732		686		—

These financial instruments are not designated as hedging instruments and are used for asset and liability management and commercial customers’ financing needs. All derivatives are carried at fair value in either other assets or other liabilities, and all related cash flows are reported in the operating section of the consolidated statements of cash flows.

Interest rate lock commitments (“IRLCs”) — In the normal course of business, the Company enters into interest rate lock commitments with consumers to originate mortgage loans at a specified interest rate. These commitments, which contain fixed expiration dates, offer the borrower an interest rate guarantee provided the loan meets underwriting guidelines and closes within the timeframe established by the Company.

Forward mortgage-backed securities trades — The Company manages the changes in fair value associated with changes in interest rates related to IRLCs by using forward sold commitments known as forward mortgage-backed securities trades. These instruments are typically entered into at the time the interest rate lock commitment is made.

Interest rate swaps and caps — These derivative positions relate to transactions in which the Company enters into an interest rate swap or cap with a customer, while at the same time entering into an offsetting interest rate swap or cap with another financial institution. An interest rate swap transaction allows the Company’s customer to effectively convert a variable rate loan to a fixed rate. In connection with each swap, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution a similar fixed interest rate on the same notional amount and receive substantially the same variable interest rate on the same notional amount. In connection with each interest rate cap, the Company sells a cap to the customer and agrees to pay interest if the underlying index exceeds the strike price defined in the cap agreement. Simultaneously the Company purchases a cap with matching terms from another financial institution that agrees to pay the Company if the underlying index exceeds the strike price.

The commercial loan customer counterparty weighted average received and paid interest rates for interest rate swaps outstanding at June 30, 2025 and December 31, 2024 are presented in the following table.

	Weighted-Average Interest Rate
	June 30, 2025						December 31, 2024
	Received			Paid			Received			Paid
Loan customer counterparty		5.55	%		6.53	%		5.03	%		6.77	%

The Company’s credit exposure on interest rate swaps is limited to the net favorable value of all swaps by each counterparty, which was approximately $944 thousand at June 30, 2025 and $686 thousand at December 31, 2024. This credit exposure is partly mitigated as transactions with customers are secured by the collateral, if any, securing the underlying transaction being hedged. The Company’s credit exposure, net of collateral pledged, relating to interest rate swaps with upstream financial institution counterparties was zero at June 30, 2025. A credit support annex is in place and allows the Company to call collateral from upstream financial institution counterparties. Collateral levels are monitored and adjusted on a regular basis for changes in interest rate swap values. The Company’s cash collateral pledged for interest rate swaps was $350 thousand at June 30, 2025 and zero at December 31, 2024.

32

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

The initial and subsequent changes in the fair value of IRLCs and the forward sales of mortgage-backed securities are recorded in mortgage income. These gains and losses were not attributable to instrument-specific credit risk. For interest rate swaps and caps, because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on its results of operations. Income (loss) for the three and six months ended June 30, 2025 and 2024 was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Derivatives not designated as hedging instruments	2025			2024			2025			2024
	(Dollars in thousands)
Interest rate lock commitments	$	(3	)	$	(109	)	$	165		$	(71	)
Forward mortgage-backed securities trades		23			129			(207	)		325

12. ACQUISITION

Merger of Lone Star State Bancshares, Inc. — Effective April 1, 2024, the Company completed the merger of Lone Star into Bancshares and the subsequent merger of its wholly owned subsidiary, Lone Star Bank into the Bank (collectively, the “Lone Star Merger”). Lone Star Bank operated five full-service banking offices in the West Texas area, including its main office in Lubbock, and one banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of March 31, 2024, Lone Star, on a consolidated basis, reported total assets of $1.38 billion, total loans of $1.08 billion and total deposits of $1.24 billion. The acquisition was not considered significant to the Company’s financial statements and therefore pro forma financial data and related disclosures are not included.

Pursuant to the terms of the definitive agreement, Bancshares issued 2,376,182 shares of its common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star. This resulted in goodwill of $106.7 million as of June 30, 2025, which reflected all final subsequent fair value adjustments. Goodwill represents the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair value of liabilities assumed. Additionally, the Company recognized $17.7 million of core deposit intangibles as of June 30, 2025. In October 2024, the Company completed the operational conversion of Lone Star Bank.

13. SUBSEQUENT EVENTS

Agreement to Acquire American Bank Holding Corporation — On July 18, 2025, Bancshares and American Bank Holding Corporation (“American”) jointly announced the signing of a definitive merger agreement (the “Merger Agreement”) whereby American, a Texas corporation and bank holding company of American Bank, N.A. (“American Bank”), will merge with and into Bancshares and American Bank will merge with and into the Bank. American Bank operates 18 banking offices and 2 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. As of March 31, 2025, American, on a consolidated basis, reported total assets of $2.52 billion, total loans of $1.75 billion and total deposits of $2.27 billion.

Under the terms of the Merger Agreement, Bancshares will issue 4,439,981 shares of its common stock for all outstanding shares of American common stock, subject to certain potential adjustments. Based on Bancshares’ closing price of $72.40 on July 16, 2025, the total consideration was valued at approximately $321.5 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of American. The transaction is expected to close during the fourth quarter of 2025 or the first quarter of 2026.

Enactment of the One Big Beautiful Bill Act — On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”), which included certain modifications to U.S. tax law, was enacted into law. The Company is currently evaluating the provisions of the OBBB Act but does not expect it to have a material impact on the Company’s Consolidated Financial Statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Cautionary Notice Regarding Forward-Looking Statements

Statements and financial discussion and analysis contained in this quarterly report on Form 10-Q that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the Company’s control. Forward-looking statements can be identified by words such as “believes,” “intends,” “expects,” “plans,” “will” and similar references to future periods. Many possible events or factors could affect the future financial results and performance of the Company and could cause such results or performance to differ materially from those expressed in the forward-looking statements. These possible events or factors include, but are not limited to:

•changes in the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations resulting in, among other things, a deterioration in credit quality or reduced demand for credit, including the result and effect on the Company’s loan portfolio and allowance for credit losses;

•adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, the Company’s stock price, liquidity and regulatory responses to these developments (including increases in the cost of the Company’s deposit insurance assessments);

•the Company’s ability to effectively manage its liquidity risk and the availability of capital and funding;

•volatility in interest rates and market prices, which could reduce the Company’s net interest margins, asset valuations and expense expectations;

•prolonged periods of high inflation and their effects on the Company’s business, profitability and stock price;

•changes in the levels of loan prepayments and the resulting effects on the value of the Company’s loan portfolio;

•changes in local economic and business conditions, including fluctuations in the price of oil, natural gas and other commodities, which adversely affect the Company’s customers and their ability to transact profitable business with the Company, including the ability of the Company’s borrowers to repay their loans according to their terms or a change in the value of the related collateral;

•the potential impacts of climate change;

•increased competition for deposits and loans adversely affecting balances, rates and terms;

•the timing, impact and other uncertainties of any future acquisitions, including the pending acquisition of American, and the Company’s ability to identify suitable future acquisition candidates, the success or failure in the integration of their operations, and the ability to enter new markets successfully and capitalize on growth opportunities;

•the risk that the regulatory environment may not be conducive to or may prohibit the consummation of future mergers and/or business combinations, may increase the length of time and amount of resources required to consummate such transactions, and the potential to reduce anticipated benefits from such mergers or combinations;

•the possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on the results of operations;

•increased credit risk in the Company’s assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of the total loan portfolio;

•the concentration of the Company’s loan portfolio in loans collateralized by residential and commercial real estate;

•the failure of assumptions underlying the establishment of and provisions made to the allowance for credit losses, including such assumptions related to potential or recent acquisitions;

•changes in the availability of funds resulting in increased costs or reduced liquidity;

•a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company’s securities portfolio;

•increased asset levels and changes in the composition of assets and the resulting impact on the Company’s capital levels and regulatory capital ratios;

•the Company’s ability to acquire, operate and maintain cost effective and efficient systems without incurring unexpectedly difficult or expensive but necessary technological changes;

34

•the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels;

•government intervention in the U.S. financial system;

•changes in statutes and government regulations or their interpretations applicable to financial holding companies and the Company’s present and future banking and other subsidiaries, including changes in tax requirements and tax rates;

•the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters;

•the Company’s ability to identify and address cybersecurity risks such as data security breaches, malware, “denial of service” attacks, “hacking”, and identity theft, a failure of which could disrupt business and result in significant losses or adverse effects to the Company’s reputation;

•poor performance by, or breach of the operational or security systems of, third-party vendors and other service providers;

•risks related to the use of new technologies, including artificial intelligence and machine learning;

•exposure to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to the Company under that relationship or under any other arrangement;

•the failure of analytical and forecasting models and tools used by the Company to estimate expected credit losses and to measure the fair value of financial instruments;

•additional risks from new lines of businesses or new products and services;

•risks related to potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings or enforcement actions, including those related to cybersecurity breaches, intellectual property or fiduciary responsibilities;

•the failure of the Company’s enterprise risk management framework to identify or address risks adequately;

•potential risk of environmental liability associated with lending activities;

•changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs;

•acts of terrorism, an outbreak of hostilities, or other international or domestic calamities, civil unrest, insurrections, other political, economic or diplomatic developments, including those caused by public health issues, outbreaks of diseases and pandemics, weather or other acts of God and other matters beyond the Company’s control; and

•other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, or in the Company’s other reports and documents filed with the Securities and Exchange Commission.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes it has chosen these assumptions or bases in good faith and that they are reasonable. However, the Company cautions that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. Therefore, the Company cautions against placing undue reliance on its forward-looking statements. The forward-looking statements speak only as of the date the statements are made. The Company undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of the Company’s balance sheets and statements of income. This section should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in Part I, Item 1 of this report and with the consolidated financial statements and accompanying notes and other detailed information appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

OVERVIEW

Prosperity Bancshares, Inc., a Texas corporation (“Bancshares”), is a registered financial holding company that derives substantially all of its revenues and income from the operation of its bank subsidiary, Prosperity Bank (the “Bank,” and together with Bancshares, the “Company”). The Bank provides a wide array of financial products and services to businesses and consumers throughout Texas and Oklahoma. As of June 30, 2025, the Bank operated 283 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 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; and 8 in

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the Tulsa, Oklahoma area. The Company’s principal executive office is located at Prosperity Bank Plaza, 4295 San Felipe in Houston, Texas, and its telephone number is (281) 269-7199. The Company’s website address is www.prosperitybankusa.com. Information contained on the Company’s website is not incorporated by reference into this quarterly report on Form 10-Q and is not part of this or any other report.

The Company generates the majority of its revenues from interest income on loans, service charges and fees on customer accounts and income from investment in securities. The revenues are partially offset by interest expense paid on deposits and other borrowings and noninterest expenses such as administrative and occupancy expenses. Net interest income is the difference between interest income on earning assets such as loans and securities and interest expense on liabilities such as deposits and borrowings which are used to fund those assets. Net interest income is the Company’s largest source of revenue. The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities impact net interest income and margin.

Three principal components of the Company’s growth strategy are internal growth, efficient operations and acquisitions, including strategic merger transactions. The Company focuses on continual internal growth. The Company maintains separate data with respect to each banking center’s net interest income, efficiency ratio, deposit growth and loan growth for purposes of measuring its overall profitability. The Company also focuses on maintaining efficiency and stringent cost control practices and policies. The Company has centralized many of its critical operations, such as data processing and loan processing. Management believes that this centralized infrastructure can accommodate substantial additional growth and achieve necessary controls while enabling the Company to minimize operational costs through certain economies of scale. The Company also intends to continue to seek expansion opportunities. The Company’s banking operations are considered by management to be aggregated in one reportable operating segment. For more information about the Company’s segment reporting, refer to Note 1 to the consolidated financial statements.

Total assets were $38.42 billion at June 30, 2025 compared with $39.57 billion at December 31, 2024. Total loans were $22.20 billion at June 30, 2025 compared with $22.15 billion at December 31, 2024, an increase of $48.2 million or 0.2%. Total deposits were $27.47 billion at June 30, 2025 compared with $28.38 billion at December 31, 2024, a decrease of $907.9 million or 3.2%. Total shareholders’ equity was $7.60 billion at June 30, 2025 compared with $7.44 billion at December 31, 2024, an increase of $161.2 million or 2.2%.

RECENT ACQUISITION

Merger of Lone Star State Bancshares, Inc. — Effective April 1, 2024, the Company completed the merger of Lone Star State Bancshares, Inc. (“Lone Star”) into Bancshares and the subsequent merger of its wholly owned subsidiary, Lone Star State Bank of West Texas (“Lone Star Bank”), into the Bank (collectively, the “Lone Star Merger”). Lone Star operated five full-service banking offices in the West Texas area, including its main office in Lubbock, and one banking center in each of Brownfield, Midland, Odessa and Big Spring, Texas. As of March 31, 2024, Lone Star, on a consolidated basis, reported total assets of $1.38 billion, total loans of $1.08 billion and total deposits of $1.24 billion.

Pursuant to the terms of the definitive agreement, Bancshares issued 2,376,182 shares of its common stock plus approximately $64.1 million in cash for all outstanding shares of Lone Star. This resulted in goodwill of $106.7 million as of June 30, 2025, which reflected all final subsequent fair value adjustments. Goodwill represents the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair value of liabilities assumed. Additionally, the Company recognized $17.7 million of core deposit intangibles as of June 30, 2025. In October 2024, the Company completed the operational conversion of Lone Star Bank.

RECENT DEVELOPMENTS

Agreement to Acquire American Bank Holding Corporation — On July 18, 2025, Bancshares and American Bank Holding Corporation (“American”) jointly announced the signing of a definitive merger agreement (the “Merger Agreement”) whereby American, a Texas Corporation and bank holding company of American Bank, N.A. (“American Bank”), will merge with and into Bancshares and American Bank will merge with and into the Bank. American Bank operates 18 banking offices and 2 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. As of March 31, 2025, American, on a consolidated basis, reported total assets of $2.52 billion, total loans of $1.75 billion and total deposits of $2.27 billion.

Under the terms of the Merger Agreement, Bancshares will issue 4,439,981 shares of its common stock for all outstanding shares of American common stock, subject to certain potential adjustments. Based on Bancshares’ closing price of $72.40 on July 16, 2025, the total consideration was valued at approximately $321.5 million. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of American. The transaction is expected to close during the fourth quarter of 2025 or the first quarter of 2026.

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Enactment of the One Big Beautiful Bill Act — On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”), which included certain modifications to U.S. tax law, was enacted into law. The Company is currently evaluating the provisions of the OBBB Act but does not expect it to have a material impact on the Company’s Consolidated Financial Statements.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with GAAP requires the Company to establish accounting policies and make estimates that affect amounts reported in the consolidated financial statements. An accounting estimate requires assumptions and judgments about uncertain matters that could have a material effect on the consolidated financial statements. Estimates are made using facts and circumstances known at a point in time. Changes in those facts and circumstances could produce results substantially different from those estimates. The Company’s accounting policies are described in detail in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The Company believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity:

Business Combinations—Generally, acquisitions are accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations”. A business combination occurs when the Company acquires net assets that constitute a business and obtains control over that business. Business combinations are effected through the transfer of consideration consisting of cash and/or common stock and are accounted for using the acquisition method. Accordingly, the assets and liabilities of the acquired business are recorded at their respective fair values at the acquisition date. Determining the fair value of assets and liabilities, especially the loan portfolio, is a process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are subject to refinement for up to one year after the closing date of the acquisition as information relative to closing date fair values becomes available. The results of operations of an acquired entity are included in the Company’s consolidated results from the acquisition date, and prior periods are not restated.

Allowance for Credit Losses—The allowance for credit losses is accounted for in accordance with FASB ASC Topic 326, “Financial Instruments-Credit Losses” (“CECL”), which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology. CECL requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is an allowance available for losses on loans and held-to-maturity securities that is deducted from the amortized cost basis to estimate the net amount expected to be collected. The allowance for credit losses is adjusted through charges to earnings in the form of a provision for credit losses. All losses are charged to the allowance when the loss actually occurs or when a determination is made that such a loss is likely and can be reasonably estimated. Recoveries are credited to the allowance at the time of recovery.

The Company’s allowance for credit losses consists of two elements: (1) specific valuation allowances based on expected losses on impaired loans and certain purchased credit deteriorated loans (“PCD”) loans; and (2) a general valuation allowance based on historical lifetime loan loss experience, current economic conditions, reasonable and supportable forecasted economic conditions and other qualitative risk factors both internal and external to the Company. Management has established an allowance for credit losses which it believes is adequate to cover expected losses in the Company’s loan portfolio. Based on an evaluation of the portfolio, management presents a quarterly review of the allowance for credit losses to the Bank’s Board of Directors, indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance. In making its evaluation, management considers factors such as historical lifetime loan loss experience, the amount of nonperforming assets and related collateral, the volume, growth and composition of the portfolio, current economic conditions and reasonable and supportable forecasted economic conditions that may affect borrower ability to pay and the value of collateral, the evaluation of the portfolio through its internal loan review process and other relevant factors. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. Charge-offs occur when loans are deemed to be uncollectible.

The Company evaluates all restructurings, including restructurings for borrowers experiencing financial difficulty, to determine whether they result in a new loan or a continuation of an existing loan. In accordance with CECL, the Company only establishes a specific reserve for modifications of loans made to borrowers experiencing financial difficulty when the loan is identified as impaired. The effect of most modifications of loans made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The Company adjusts the terms of loans for certain borrowers when it believes such changes will help its customers manage their loan obligations and increase the collectability of the loans. Modifications of loans made to borrowers experiencing financial difficulty may include but are not limited to changes in committed loan amount, interest rate, amortization, note maturity, borrower, guarantor, collateral, forbearance, forgiveness of principal or interest, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The approval of modifications of loans for borrowers experiencing financial difficulty are handled on a case-by-case basis. For further discussion of the methodology used in the determination of the allowance for credit losses on loans, see “Accounting for Acquired

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Loans and the Allowance for Acquired Credit Losses” below and “Financial Condition—Allowance for Credit Losses on Loans” below.

Accounting for Acquired Loans and the Allowance for Acquired Credit Losses—The Company accounts for its acquisitions using the acquisition method of accounting. Accordingly, the assets, including loans, and liabilities of the acquired entity are recorded at their fair values at the acquisition date. The fair value estimates associated with acquired loans, based on a discounted cash flow model, include estimates related to market interest rates and undiscounted projections of future cash flows that incorporate expectations of prepayments and the amount and timing of principal, interest and other cash flows, as well as any shortfalls thereof. For further discussion of the methodology used in the determination of the allowance for credit losses for acquired loans, see “Financial Condition—Allowance for Credit Losses on Loans” below. For further discussion of the Company’s acquisition and loan accounting, see Note 5 to the consolidated financial statements.

RESULTS OF OPERATIONS

For the quarter ended June 30, 2025, net income available to common shareholders was $135.2 million compared with $111.6 million for the same period in 2024, an increase of $23.6 million or 21.1%. Net income per diluted common share was $1.42 for the quarter ended June 30, 2025 compared with $1.17 for the same period in 2024, an increase of 21.4%. The changes were primarily due to an increase in net interest income, a decrease in merger related provision and expenses and lower regulatory assessments and FDIC insurance, partially offset by a decrease in net gain on sale or write-up of securities. The Company posted annualized returns on average common equity of 7.13% and 6.10%, annualized returns on average assets of 1.41% and 1.12% and efficiency ratios of 44.80% and 51.82% for the quarters ended June 30, 2025 and 2024, respectively. The efficiency ratio is calculated by dividing total noninterest expense (excluding net gains and losses on the sale, write down or write up of assets and securities) by the sum of net interest income and noninterest income. Because the ratio is a measure of revenues and expenses resulting from the Company’s lending activities and fee-based banking services, net gains and losses on the sale, write-up or write-down of assets and securities are not included. Additionally, taxes are not part of this calculation.

For the six months ended June 30, 2025, net income available to common shareholders was $265.4 million compared with $222.0 million for the six months ended June 30, 2024, an increase of $43.4 million or 19.5%. Net income per diluted common share was $2.79 for the six months ended June 30, 2025 compared with $2.34 for the six months ended June 30, 2024, an increase of 19.2%. The changes were primarily due to an increase in net interest income, lower merger related provision and expenses, and lower regulatory assessments and FDIC insurance, partially offset by a decrease on net gain on sale or write-up of securities. The Company posted annualized returns on average common equity of 7.03% and 6.15%, annualized returns on average assets of 1.37% and 1.13% and efficiency ratios of 45.26% and 50.49% for the six months ended June 30, 2025 and 2024, respectively.

Net Interest Income

The Company’s net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a “volume change.” It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as a “rate change.”

For the Three Months Ended June 30, 2025

Net interest income before the provision for credit losses was $267.7 million for the quarter ended June 30, 2025, an increase of $8.9 million or 3.5% compared with $258.8 million for the same period in 2024. The change was primarily due to a decrease in the average balances and average rates on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average rates on loans, a decrease in the average balances on investment securities and a decrease in the average balances and average rates on federal funds sold and other earning assets.

Interest income on loans was $325.5 million for the quarter ended June 30, 2025, a decrease of $10.9 million or 3.3% compared with $336.4 million for the same period in 2024, primarily due to a decrease in the average rates on loans.

Interest income on securities was $57.8 million for the quarter ended June 30, 2025, a decrease of $4.6 million or 7.4% compared with $62.4 million for the same period in 2024, primarily due to a decrease in the average balances on investment securities.

Average interest-bearing liabilities were $21.03 billion for the quarter ended June 30, 2025, a decrease of $1.45 billion or 6.5% compared with $22.48 billion for the same period in 2024, primarily due to decreases in other borrowings and interest-earning deposits. The average rate on interest-bearing liabilities was 2.38% for the quarter ended June 30, 2025, a decrease of 38 basis points compared with 2.76% for the same period in 2024.

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The net interest margin on a tax-equivalent basis was 3.18% for the quarter ended June 30, 2025, an increase of 24 basis points compared with 2.94% for the same period in 2024. The change was primarily due to a decrease in the average balances and average rates on other borrowings and a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average rates on loans and a decrease in the average balances on investment securities.

For the Six Months Ended June 30, 2025

Net interest income before the provision for credit losses was $533.1 million for the six months ended June 30, 2025, an increase of $36.1 million or 7.3% compared with $497.0 million for the same period in 2024. The change was primarily due to a decrease in the average balances and average rates on other borrowings, a decrease in the average rates on interest-bearing deposits and an increase in the average balances on loans, partially offset by a decrease in the average balances on investment securities.

Interest income on loans was $644.5 million for the six months ended June 30, 2025, an increase of $1.9 million or 0.3% compared with $642.7 million for the same period in 2024.

Interest income on securities was $115.7 million for the six months ended June 30, 2025, a decrease of $13.1 million or 10.2% compared with $128.8 million for the same period in 2024, primarily due to a decrease in the average balances on investment securities.

Average interest-bearing liabilities were $21.34 billion for the six months ended June 30, 2025, a decrease of $948.8 million or 4.3% compared with $22.29 billion for the same period in 2024, primarily due to a decrease in other borrowings partially offset by an increase in interest-bearing deposits. The average rate on interest-bearing liabilities was 2.39% for the six months ended June 30, 2025, a decrease of 30 basis points compared with 2.69% for the same period in 2024.

The net interest margin on a tax-equivalent basis was 3.16% for the six months ended June 30, 2025, an increase of 29 basis points compared with 2.87% for the six months ended June 30, 2024. The change was primarily due to a decrease in the average balances and average rates on other borrowings, a decrease in the average rates on interest-bearing deposits, partially offset by a decrease in the average balances on investment securities.

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The following tables present, for the periods indicated, the total dollar amount of average balances, interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities and the resultant rates. Except as indicated in the footnotes, no tax-equivalent adjustments were made and all average balances are daily average balances. Any nonaccruing loans have been included in the tables as loans carrying a zero yield.

	Three Months Ended June 30,
	2025								2024
	Average Outstanding Balance			Interest Earned/Paid		Average Yield/Rate (1)			Average Outstanding Balance			Interest Earned/Paid		Average Yield/Rate (1)
	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans held for sale	$	9,813		$	166		6.79	%	$	8,446		$	149		7.10	%
Loans held for investment		20,907,400			306,671		5.88	%		21,328,824			319,362		6.02	%
Loans held for investment - Warehouse Purchase Program		1,179,307			18,653		6.34	%		917,026			16,917		7.42	%
Total loans		22,096,520			325,490		5.91	%		22,254,296			336,428		6.08	%
Investment securities		10,867,856			57,836		2.13	%		12,179,074			62,428		2.06	%
Federal funds sold and other earning assets		841,933			9,438		4.50	%		1,026,251			14,095		5.52	%
Total interest-earning assets		33,806,309			392,764		4.66	%		35,459,621			412,951		4.68	%
Allowance for credit losses on loans		(348,310	)							(332,904	)
Noninterest-earning assets		4,933,215								4,822,131
Total assets	$	38,391,214							$	39,948,848
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	4,807,864		$	8,859		0.74	%	$	4,839,194		$	9,133		0.76	%
Savings and money market deposits		8,944,897			45,796		2.05	%		9,084,051			50,252		2.22	%
Certificates and other time deposits		4,366,510			39,135		3.59	%		4,400,922			46,739		4.27	%
Other borrowings		2,717,583			30,101		4.44	%		3,900,000			46,282		4.77	%
Securities sold under repurchase agreements		194,577			1,151		2.37	%		258,637			1,759		2.74	%
Total interest-bearing liabilities		21,031,431			125,042		2.38	%		22,482,804			154,165		2.76	%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits		9,508,845								9,780,211
Allowance for credit losses on off-balance sheet credit exposures		37,646								36,729
Other liabilities		227,002								327,847
Total liabilities		30,804,924								32,627,591
Shareholders' equity		7,586,290								7,321,257
Total liabilities and shareholders' equity	$	38,391,214							$	39,948,848
Net interest rate spread							2.28	%							1.92	%
Net interest income and margin (2) (3)				$	267,722		3.18	%				$	258,786		2.94	%
Net interest income and margin (tax equivalent) (4)				$	268,296		3.18	%				$	259,586		2.94	%

(1)Annualized and based on average balances on an actual 365-day or 366-day basis for the three months ended June 30, 2025 and 2024.

(2)Yield is based on amortized cost and does not include any component of unrealized gains or losses.

(3)The net interest margin is equal to net interest income divided by average interest-earning assets.

(4)In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 21% and other applicable effective tax rates.

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	Six Months Ended June 30,
	2025								2024
	Average Outstanding Balance			Interest Earned/Paid		Average Yield/Rate (1)			Average Outstanding Balance			Interest Earned/Paid		Average Yield/Rate (1)
	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans held for sale	$	8,698		$	293		6.79	%	$	6,957		$	241		6.97	%
Loans held for investment		20,933,170			611,739		5.89	%		20,872,069			612,034		5.90	%
Loans held for investment - Warehouse Purchase Program		1,028,534			32,481		6.37	%		818,838			30,381		7.46	%
Total loans		21,970,402			644,513		5.92	%		21,697,864			642,656		5.96	%
Investment securities		10,942,215			115,722		2.13	%		12,436,171			128,849		2.08	%
Federal funds sold and other earning assets		1,140,915			25,334		4.48	%		849,546			23,360		5.53	%
Total interest-earning assets		34,053,532			785,569		4.65	%		34,983,581			794,865		4.57	%
Allowance for credit losses on loans		(349,506	)							(332,306	)
Noninterest-earning assets		4,967,987								4,790,888
Total assets	$	38,672,013							$	39,442,163
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	5,015,178		$	17,878		0.72	%	$	4,991,390		$	17,556		0.71	%
Savings and money market deposits		8,975,919			91,441		2.05	%		8,986,565			97,404		2.18	%
Certificates and other time deposits		4,396,350			80,068		3.67	%		4,042,369			83,856		4.17	%
Other borrowings		2,746,961			60,593		4.45	%		3,991,566			95,228		4.80	%
Securities sold under repurchase agreements		206,197			2,485		2.43	%		277,537			3,791		2.75	%
Total interest-bearing liabilities		21,340,605			252,465		2.39	%		22,289,427			297,835		2.69	%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits		9,506,704								9,611,730
Allowance for credit losses on off-balance sheet credit exposures		37,646								36,616
Other liabilities		240,789								283,139
Total liabilities		31,125,744								32,220,912
Shareholders' equity		7,546,269								7,221,251
Total liabilities and shareholders' equity	$	38,672,013							$	39,442,163
Net interest rate spread							2.26	%							1.88	%
Net interest income and margin (2) (3)				$	533,104		3.16	%				$	497,030		2.86	%
Net interest income and margin (tax equivalent) (4)				$	534,265		3.16	%				$	498,638		2.87	%

(1)Annualized and based on average balances on an actual 365-day or 366-day basis for the six months ended June 30, 2025 and 2024.

(2)Yield is based on amortized cost and does not include any component of unrealized gains or losses.

(3)The net interest margin is equal to net interest income divided by average interest-earning assets.

(4)In order to make pretax income and resultant yields on tax-exempt investments and loans comparable to those on taxable investments and loans, a tax-equivalent adjustment has been computed using a federal income tax rate of 21% and other applicable effective tax rates.

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The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes in interest rates. For purposes of this table, changes in interest income and interest expense related to purchase accounting adjustments and changes attributable to both rate and volume which cannot be segregated have been allocated to rate.

	Three Months Ended June 30,									Six Months Ended June 30,
	2025 vs. 2024									2025 vs. 2024
	Increase									Increase
	(Decrease)									(Decrease)
	Due to Change in									Due to Change in
	Volume			Rate			Total			Volume			Rate			Total
	(Dollars in thousands)
Interest-Earning Assets:
Loans held for sale	$	24		$	(7	)	$	17		$	60		$	(8	)	$	52
Loans held for investment (1)		(6,327	)		(6,364	)		(12,691	)		1,787			(2,082	)		(295	)
Loans held for investment - Warehouse Purchase Program		4,852			(3,116	)		1,736			7,759			(5,659	)		2,100
Investment securities (1)		(6,740	)		2,148			(4,592	)		(15,436	)		2,309			(13,127	)
Federal funds sold and other earning assets		(2,538	)		(2,119	)		(4,657	)		7,990			(6,016	)		1,974
Total (decrease) increase in interest income		(10,729	)		(9,458	)		(20,187	)		2,160			(11,456	)		(9,296	)
Interest-Bearing Liabilities:
Interest-bearing demand deposits		(59	)		(215	)		(274	)		83			239			322
Savings and money market deposits		(772	)		(3,684	)		(4,456	)		(115	)		(5,848	)		(5,963	)
Certificates and other time deposits (1)		(366	)		(7,238	)		(7,604	)		7,323			(11,111	)		(3,788	)
Other borrowings		(14,070	)		(2,111	)		(16,181	)		(29,611	)		(5,024	)		(34,635	)
Securities sold under repurchase agreements		(437	)		(171	)		(608	)		(972	)		(334	)		(1,306	)
Total (decrease) increase in interest expense		(15,704	)		(13,419	)		(29,123	)		(23,292	)		(22,078	)		(45,370	)
Increase in net interest income	$	4,975		$	3,961		$	8,936		$	25,452		$	10,622		$	36,074

(1)Includes impact of purchase accounting adjustments.

Provision for Credit Losses

Management actively monitors the Company’s asset quality and provides specific loss provisions when necessary. Provisions for credit losses are charged to income to bring the total allowance for credit losses on loans and off-balance sheet credit exposures to a level deemed appropriate by management of the Company based on such factors as historical lifetime credit loss experience, the amount of nonperforming loans and related collateral, the volume growth and composition of the loan portfolio, current economic conditions and reasonable and supportable forecasted economic conditions that may affect borrower ability to pay and the value of collateral, the evaluation of the loan portfolio through the internal loan review process and other relevant factors.

Loans are charged off against the allowance for credit losses when appropriate. Although management believes it uses the best information available to make determinations with respect to the provision for credit losses, future adjustments may be necessary if economic conditions differ from the assumptions used in making the initial determinations.

There was no provision for credit losses for the three and six months ended June 30, 2025 compared to $9.1 million provision for credit losses for the three and six months ended June 30, 2024. As a result of the loans acquired in the Lone Star Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures.

Net charge-offs were $3.0 million for the quarter ended June 30, 2025 compared with net charge-offs of $4.4 million for the quarter ended June 30, 2024. For the three months ended June 30, 2025, $2.1 million of reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

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Net charge-offs were $5.7 million for the six months ended June 30, 2025 compared with $6.5 million for the six months ended June 30, 2024. For the six months ended June 30, 2025, $10.4 million of reserves on resolved PCD loans was released to the general reserve.

Noninterest Income

The Company’s primary sources of recurring noninterest income are credit, debit and ATM card income, nonsufficient funds fees and service charges on deposit accounts. Additionally, the Company generates recurring noninterest income from its various additional products and services, including trust services, mortgage lending, brokerage and independent sales organization sponsorship operations. Noninterest income does not include loan origination fees, which are recognized over the life of the related loan as an adjustment to yield using the interest method.

Noninterest income totaled $43.0 million for the three months ended June 30, 2025 compared with $46.0 million for the same period in 2024, a decrease of $3.0 million or 6.6%, primarily due to a decrease in net gain on sale or write-down of securities, partially offset by an increase in other noninterest income, increase in service charges on deposit accounts and a higher net gain on sale or write-down of assets. Noninterest income totaled $84.3 million for the six months ended June 30, 2025 compared with $84.9 million for the six months ended June 30, 2024, a decrease of $590 thousand or 0.7%.

The following table presents, for the periods indicated, the major categories of noninterest income:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
	(Dollars in thousands)
Nonsufficient funds fees	$	8,885	$	8,153		$	18,032	$	16,441
Credit card, debit card and ATM card income		9,761		9,384			18,500		18,245
Service charges on deposit accounts		7,645		6,436			15,053		12,842
Trust income		3,859		3,601			7,460		7,757
Mortgage income		965		745			1,974		1,355
Brokerage income		1,225		1,186			2,487		2,421
Bank owned life insurance income		1,985		1,885			4,100		3,932
Net gain (loss) on sale or write-down of assets		1,414		(903	)		1,179		(938	)
Net gain on sale or write-up of securities		—		10,723			—		11,021
Other		7,243		4,793			15,498		11,797
Total noninterest income	$	42,982	$	46,003		$	84,283	$	84,873

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Noninterest Expense

Noninterest expense totaled $138.6 million for the three months ended June 30, 2025 compared with $152.8 million for the same period in 2024, a decrease of $14.3 million or 9.3%, primarily due to decreases in regulatory assessments and FDIC insurance and decreases in merger related expenses, salaries and benefits and other noninterest expense, which were higher in the second quarter of 2024 due to the Lone Star Merger. Noninterest expense totaled $278.9 million for the six months ended June 30, 2025 compared with $288.7 million for the six months ended June 30, 2024, a decrease of $9.8 million or 3.4%, primarily due to decreases in regulatory assessment and FDIC insurance, merger related expenses and other noninterest expense.

The following table presents, for the periods indicated, the major categories of noninterest expense:

	Three Months Ended June 30,					Six Months Ended June 30,
	2025			2024		2025		2024
	(Dollars in thousands)
Salaries and employee benefits (1)	$	87,296		$	89,584	$	176,772	$	175,355
Non-staff expenses:
Net occupancy and equipment		9,168			8,915		18,314		17,538
Credit and debit card, data processing and software amortization		12,056			11,998		23,478		22,973
Regulatory assessments and FDIC insurance		5,508			10,317		11,297		15,855
Core deposit intangibles amortization		3,610			4,156		7,251		7,393
Depreciation		4,779			4,836		9,553		9,522
Communications (2)		3,507			3,485		6,980		6,887
Net other real estate income (3)		(18	)		100		92		149
Merger related expenses		—			4,381		—		4,381
Other		12,659			15,070		25,129		28,637
Total noninterest expense	$	138,565		$	152,842	$	278,866	$	288,690

(1)Includes stock-based compensation expense of $3.0 million and $3.1 million for the three months ended June 30, 2025 and 2024, respectively, and $6.1 million and $6.5 million for the six months ended June 30, 2025 and 2024, respectively.

(2)Communications expense includes telephone, data circuits, postage and courier expenses.

(3)Net other real estate income is comprised of rental expense, rental income and gains and losses on sales of real estate.

Income Taxes

The amount of federal and state income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the amount of nondeductible expenses. Income tax expense totaled $37.0 million for the three months ended June 30, 2025 compared with $31.3 million for the same period in 2024, an increase of $5.7 million or 18.2%. Income tax expense totaled $73.1 million for the six months ended June 30, 2025 compared with $62.1 million for the same period in 2024, an increase of $11.0 million or 17.7%. The Company’s effective tax rate for the three months ended June 30, 2025 and 2024 was 21.5% and 21.9%, respectively. The Company’s effective tax rate for the six months ended June 30, 2025 and 2024 was 21.6% and 21.9%, respectively.

FINANCIAL CONDITION

Loan Portfolio

The Company separates its loan portfolio into two general categories of loans: (1) “originated loans,” which are loans originated by the Company and made pursuant to the Company’s loan policy and procedures in effect at the time the loan was made, and (2) “acquired loans,” which are loans acquired in a business combination and recorded at fair value at acquisition date. Those acquired loans that are renewed or substantially modified after the date of the business combination are referred to as “re-underwritten acquired loans.” If a renewal or substantial modification of an acquired loan is underwritten by the Company with a new credit analysis, the loan may no longer be categorized as an acquired loan. For example, acquired loans to one borrower may be combined into a new loan with a new loan number and categorized as an originated loan. Acquired loans with a fair value discount or premium at the date of the business combination that remained at the reporting date are referred to as “fair-valued acquired loans.” All fair-valued acquired loans are further categorized into PCD loans and “Non-PCD loans.” Acquired loans with evidence of credit quality deterioration as of the acquisition date when compared to the origination date are classified as PCD loans.

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The following tables summarize the Company’s originated and acquired loan portfolios broken out into originated loans, re-underwritten acquired loans, Non-PCD loans and PCD loans, as of the dates indicated.

	June 30, 2025
			Acquired Loans
	Originated Loans		Re-Underwritten Acquired Loans		Non-PCD Loans		PCD Loans		Total Loans
	(Dollars in thousands)
Residential mortgage loans held for sale	$	6,004	$	—	$	—	$	—	$	6,004
Commercial and industrial		1,690,812		542,377		147,540		30,153		2,410,882
Warehouse purchase program		1,287,440		—		—		—		1,287,440
Real estate:
Construction, land development and other land loans		2,522,145		183,278		81,931		85,884		2,873,238
1-4 family residential (includes home equity)		7,572,762		193,293		621,199		6,929		8,394,183
Commercial real estate (includes multi-family residential)		4,383,050		394,550		834,587		215,458		5,827,645
Farmland		561,927		22,756		66,077		22,111		672,871
Agriculture		254,506		76,086		5,273		20,513		356,378
Consumer and other		350,116		11,382		7,229		20		368,747
Total loans held for investment		18,622,758		1,423,722		1,763,836		381,068		22,191,384
Total	$	18,628,762	$	1,423,722	$	1,763,836	$	381,068	$	22,197,388

	December 31, 2024
			Acquired Loans
	Originated Loans		Re-Underwritten Acquired Loans		Non-PCD Loans		PCD Loans		Total Loans
	(Dollars in thousands)
Residential mortgage loans held for sale	$	10,690	$	—	$	—	$	—	$	10,690
Commercial and industrial		1,676,205		573,129		228,320		30,434		2,508,088
Warehouse purchase program		1,080,903		—		—		—		1,080,903
Real estate:
Construction, land development and other land loans		2,451,888		203,098		95,402		108,893		2,859,281
1-4 family residential (includes home equity)		7,588,289		204,846		676,339		7,425		8,476,899
Commercial real estate (includes multi-family residential)		4,255,559		368,320		942,962		234,144		5,800,985
Farmland		550,760		18,000		89,725		23,398		681,883
Agriculture		206,457		97,481		19,426		28,299		351,663
Consumer and other		359,186		9,980		9,610		41		378,817
Total loans held for investment		18,169,247		1,474,854		2,061,784		432,634		22,138,519
Total	$	18,179,937	$	1,474,854	$	2,061,784	$	432,634	$	22,149,209

At June 30, 2025, total loans were $22.20 billion, an increase of $48.2 million or 0.2% compared with $22.15 billion at December 31, 2024. Loans at June 30, 2025 included $6.0 million of loans held for sale and $1.29 billion of Warehouse Purchase Program loans compared with $10.7 million of loans held for sale and $1.08 billion of Warehouse Purchase Program loans at December 31, 2024. At June 30, 2025, loans represented 57.8% of total assets compared with 56.0% of total assets at December 31, 2024.

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The loan portfolio consists of various types of loans categorized by major type as follows:

(i) Commercial and Industrial Loans. In nearly all cases, the Company’s commercial loans are made in the Company’s market areas and are underwritten based on the borrower’s ability to service the debt from income. Working capital loans are primarily collateralized by short-term assets whereas term loans are primarily collateralized by long-term assets. As a general practice, term loans are secured by any available real estate, equipment or other assets owned by the borrower. Both working capital and term loans are typically supported by a personal guaranty of a principal. In general, commercial loans involve more credit risk than residential mortgage loans and commercial mortgage loans and, therefore, usually yield a higher return. The increased risk in commercial loans is due to the type of collateral securing these loans as well as the expectation that commercial loans generally will be serviced principally from the operations of the business, and those operations may not be successful. Historical trends have shown these types of loans to have higher delinquencies than mortgage loans. As a result of these additional complexities, variables and risks, commercial loans require more thorough underwriting and servicing than other types of loans.

Included in commercial and industrial loans are (1) commitments to oil and gas producers largely secured by proven, developed and producing reserves and (2) commitments to service, equipment and midstream companies secured mainly by accounts receivable, inventory and equipment. Mineral reserve values supporting commitments to producers are normally re-determined semi-annually using reserve studies prepared by a third-party and verified by the Company’s oil and gas engineer. Accounts receivable and inventory borrowing bases for service companies are typically re-determined monthly. Funding requests by both producers and service companies are monitored relative to the most recently determined borrowing base.

(ii) Commercial Real Estate. The Company makes commercial real estate loans collateralized by owner-occupied and nonowner-occupied real estate to finance the purchase of real estate. The Company’s commercial real estate loans are collateralized by first liens on real estate, typically have variable interest rates (or five year or less fixed rates) and amortize over a 15- to 25-year period. Payments on loans secured by nonowner-occupied properties are often dependent on the successful operation or management of the properties. Accordingly, repayment of these loans may be subject to adverse conditions in the real estate market or the economy to a greater extent than other types of loans. The Company seeks to minimize these risks in a variety of ways, including giving careful consideration to the property’s operating history, future operating projections, current and projected occupancy, location and physical condition, in connection with underwriting these loans. The underwriting analysis also includes credit verification, analysis of global cash flow, appraisals and a review of the financial condition of the borrower and guarantor. Loans to hotels and restaurants are included in commercial real estate loans.

(iii) 1-4 Family Residential Loans. The Company’s lending activities also include the origination of 1-4 family residential mortgage loans (including home equity loans) collateralized by owner-occupied and nonowner-occupied residential properties located in the Company’s market areas. The Company offers a variety of mortgage loan portfolio products which generally are amortized over five to 30 years. Loans collateralized by 1-4 family residential real estate generally have been originated in amounts of no more than 89% of appraised value. The Company requires mortgage title insurance, as well as hazard, wind and/or flood insurance as appropriate. The Company prefers to retain residential mortgage loans for its own account rather than selling them into the secondary market. By doing so, the Company incurs interest rate risk as well as the risks associated with non-payments on such loans. The Company’s mortgage department also offers a variety of mortgage loan products which are generally amortized over 30 years, including FHA and VA loans, which are sold to secondary market investors.

(iv) Construction, Land Development and Other Land Loans. The Company makes loans to finance the construction of residential and nonresidential properties. Construction loans generally are collateralized by first liens on real estate and have variable interest rates. The Company conducts periodic inspections, either directly or through an agent, prior to approval of periodic draws on these loans. Underwriting guidelines similar to those described above are also used in the Company’s construction lending activities, with heightened analysis of construction and/or development costs. Construction loans involve additional risks attributable to the fact that loan funds are advanced upon the security of a project under construction, and the project is of uncertain value prior to its completion. Because of uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation on real property, it can be difficult to accurately evaluate the total funds required to complete a project and the related loan to value ratio. As a result of these uncertainties, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If the Company is forced to foreclose on a project prior to completion, the Company may not be able to recover all of the unpaid portion of the loan. In addition, the Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time. Although the Company has underwriting procedures designed to identify what it believes to be acceptable levels of risks in construction lending, these procedures may not prevent losses from the risks described above.

46

(v) Warehouse Purchase Program. The Warehouse Purchase Program allows unaffiliated mortgage originators (“Clients”) to close 1-4 family real estate loans in their own name and manage their cash flow needs until the loans are sold to investors. The Company’s Clients are strategically targeted for their experienced management teams and analyzed for the expected profitability of each Client’s business model over the long term. The Clients are located across the U.S. and originate mortgage loans primarily through traditional retail and/or wholesale business models using underwriting standards as required by United States government-sponsored enterprise agencies, “Agencies” such as the Federal National Mortgage Association (“Fannie Mae”), private investors to which the mortgage loans are ultimately sold and/or mortgage insurers.

Although not subject to any legally binding commitment, when the Company makes a purchase decision, it acquires a 100% participation interest in the mortgage loans originated by its Clients. Individual mortgage loans are warehoused in the Company’s portfolio only for a short duration, averaging less than 30 days. When instructed by a Client that a warehoused loan has been sold to an investor, the Company delivers the note to the investor that pays the Company, which in turn remits the net sales proceeds to the Client.

(vi) Agriculture Loans. The Company provides agriculture loans for short-term livestock and crop production, including rice, cotton, milo and corn, farm equipment financing and agriculture real estate financing. The Company evaluates agriculture borrowers primarily based on their historical profitability, level of experience in their particular industry segment, overall financial capacity and the availability of secondary collateral to withstand economic and natural variations common to the industry. Because agriculture loans present a higher level of risk associated with events caused by nature, the Company routinely makes on-site visits and inspections in order to identify and monitor such risks.

(vii) Consumer Loans. Consumer loans made by the Company include direct “A”-credit automobile loans, recreational vehicle loans, boat loans, home improvement loans, personal loans (collateralized and uncollateralized) and deposit account collateralized loans. The terms of these loans typically range from 12 to 180 months and vary based upon the nature of collateral and size of loan. Generally, consumer loans entail greater risk than do real estate secured loans, particularly in the case of consumer loans that are unsecured or collateralized by rapidly depreciating assets such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan balance. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness, personal bankruptcy or death. Furthermore, the application of various federal and state laws may limit the amount which can be recovered on such loans.

The Company maintains an independent loan review department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Nonperforming Assets

Nonperforming assets include loans on nonaccrual status, accruing loans 90 days or more past due, repossessed assets and real estate which has been acquired through foreclosure and is awaiting disposition. Nonperforming assets do not include PCD loans unless the loan has deteriorated since the acquisition date.

The Company generally places a loan on nonaccrual status and ceases accruing interest when the payment of principal or interest is delinquent for 90 days, or earlier in some cases, unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

Nonperforming assets increased $28.9 million to $110.5 million at June 30, 2025 compared with $81.5 million at December 31, 2024.

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The following tables present information regarding nonperforming assets differentiated among originated loans, re-underwritten acquired loans, Non-PCD loans and PCD loans, as of the dates indicated:

	June 30, 2025
				Acquired Loans
	Originated Loans			Re-Underwritten Acquired Loans			Non-PCD Loans			PCD Loans			Total
	(Dollars in thousands)
Nonaccrual loans (1)	$	51,449		$	20,886		$	10,014		$	19,682		$	102,031
Accruing loans 90 or more days past due		244			332			—			—			576
Total nonperforming loans		51,693			21,218			10,014			19,682			102,607
Repossessed assets		—			—			6			—			6
Other real estate		6,615			44			910			305			7,874
Total nonperforming assets	$	58,308		$	21,262		$	10,930		$	19,987		$	110,487
Nonperforming assets to total loans and other real estate		0.31	%		1.49	%		0.62	%		5.24	%		0.50	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.34	%		1.49	%		0.62	%		5.24	%		0.53	%
Nonaccrual loans to total loans		0.28	%		1.47	%		0.57	%		5.16	%		0.46	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.30	%		1.47	%		0.57	%		5.16	%		0.49	%

	December 31, 2024
				Acquired Loans
	Originated Loans			Re-Underwritten Acquired Loans			Non-PCD Loans			PCD Loans			Total
	(Dollars in thousands)
Nonaccrual loans (1)	$	46,280		$	4,216		$	7,138		$	16,013		$	73,647
Accruing loans 90 or more days past due		2,189			—			—			—			2,189
Total nonperforming loans		48,469			4,216			7,138			16,013			75,836
Repossessed assets		—			—			4			—			4
Other real estate		3,174			—			854			1,673			5,701
Total nonperforming assets	$	51,643		$	4,216		$	7,996		$	17,686		$	81,541
Nonperforming assets to total loans and other real estate		0.28	%		0.29	%		0.39	%		4.07	%		0.37	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.30	%		0.29	%		0.39	%		4.07	%		0.39	%
Nonaccrual loans to total loans		0.25	%		0.29	%		0.35	%		3.70	%		0.33	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.27	%		0.29	%		0.35	%		3.70	%		0.35	%

(1)There were no nonperforming Warehouse Purchase Program loans or Warehouse Purchase Program lines of credit for the periods presented.

Nonperforming assets were 0.50% of total loans and other real estate at June 30, 2025 and 0.37% of total loans and other real estate at December 31, 2024. The allowance for credit losses on loans as a percentage of total nonperforming loans was 337.3% at June 30, 2025 and 463.9% at December 31, 2024.

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Allowance for Credit Losses on Loans

The allowance for credit losses is adjusted through charges to earnings in the form of a provision for credit losses. Management has established an allowance for credit losses on loans which it believes is adequate to cover expected losses in the Company’s loan portfolio as of June 30, 2025. The amount of the allowance for credit losses on loans is affected by the following: (1) charge-offs of loans that occur when loans are deemed uncollectible and decrease the allowance, (2) recoveries on loans previously charged off that increase the allowance, (3) provisions for credit losses charged to earnings that increase the allowance, and (4) provision releases returned to earnings that decrease the allowance. Based on an evaluation of the loan portfolio and consideration of the factors listed below, management presents a quarterly review of the allowance for credit losses to the Bank’s Board of Directors, indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance. Although management believes it uses the best information available to make determinations with respect to the allowance for credit losses, future adjustments may be necessary if economic conditions or borrower performance differ from the assumptions used in making the initial determinations.

The Company’s allowance for credit losses on loans consists of two components: (1) a specific valuation allowance based on expected lifetime losses on specifically identified loans and (2) a general valuation allowance based on historical lifetime loan loss experience, current economic conditions, reasonable and supportable forecasted economic conditions and other qualitative risk factors both internal and external to the Company.

In setting the specific valuation allowance, the Company follows a loan review program to evaluate the credit risk in the total loan portfolio and assigns risk grades to each loan. Through this loan review process, the Company maintains an internal list of impaired loans which, along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for credit losses. All loans that have been identified as impaired are reviewed on a quarterly basis in order to determine whether a specific reserve is required. For certain impaired loans, the Company allocates a specific loan loss reserve primarily based on the value of the collateral securing the impaired loan. The specific reserves are determined on an individual loan basis. Loans for which specific reserves are provided are excluded from the general valuation allowance described below.

In determining the amount of the general valuation allowance, management considers factors such as historical lifetime loan loss experience, concentration risk of specific loan types, the volume, growth and composition of the Company’s loan portfolio, current economic conditions and reasonable and supportable forecasted economic conditions that may affect borrower ability to pay and the value of collateral, the evaluation of the Company’s loan portfolio through its internal loan review process, other qualitative risk factors both internal and external to the Company and other relevant factors. Historical lifetime loan loss experience is determined by utilizing an open-pool (“cumulative loss rate”) methodology. Adjustments to the historical lifetime loan loss experience are made for differences in current loan pool risk characteristics such as portfolio concentrations, delinquency, non-accrual, and watch list levels, as well as changes in current and forecasted economic conditions such as unemployment rates, property and collateral values, and other indices relating to economic activity. The utilization of reasonable and supportable forecasts includes an immediate reversion to lifetime historical loss rates. Based on a review of these factors for each loan type, the Company applies an estimated percentage to the outstanding balance of each loan type, excluding any loan that has a specific reserve. Allocation of a portion of the allowance to one category of loans does not preclude its availability to cover expected losses in other categories.

A change in the allowance for credit losses can be attributable to several factors, most notably (1) specific reserves identified for impaired and PCD loans, (2) historical lifetime credit loss information, (3) changes in current and forecasted environmental factors and (4) growth in the balance of loans.

Changes in the Company’s asset quality are reflected in the allowance in several ways. Specific reserves that are calculated on a loan-by-loan basis and the qualitative assessment of all other loans reflect current changes in the credit quality of the loan portfolio. Historical lifetime credit losses, on the other hand, are based on an open-pool (“cumulative loss rate”) methodology, which is then applied to estimate lifetime credit losses in the loan portfolio. A deterioration in the credit quality of the loan portfolio in the current period would increase the historical lifetime loss rate to be applied in future periods, just as an improvement in credit quality would decrease the historical lifetime loss rate.

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The allowance for credit losses is further determined by the size of the loan portfolio subject to the allowance methodology and environmental factors that include Company-specific risk indicators and general economic conditions, both of which are constantly changing. The Company evaluates the economic and portfolio-specific factors on a quarterly basis to determine a qualitative component of the general valuation allowance. The factors include current economic metrics, reasonable and supportable forecasted economic metrics, business conditions, delinquency trends, credit concentrations, nature and volume of the portfolio and other adjustments for items not covered by specific reserves and historical lifetime loss experience. Management’s assessment of qualitative factors is a statistically based approach to determine the loss rate adjustment associated with such factors. Based on the Company’s actual historical lifetime loan loss experience relative to economic and loan portfolio-specific factors at the time the losses occurred, management is able to identify the expected level of lifetime losses as of the date of measurement. The correlation of historical loss experience with current and forecasted economic conditions provides an estimate of lifetime losses that has not been previously factored into the general valuation allowance by the determination of specific reserves and lifetime historical losses. Additionally, the Company considers qualitative factors not easily quantified and the possibility of model imprecision.

Utilizing the aggregation of specific reserves, historical loss experience and a qualitative component, management is able to determine the valuation allowance to reflect the full lifetime loss.

The Company accounts for its acquisitions using the acquisition method of accounting. Accordingly, the assets, including loans, and liabilities of the acquired entity are recorded at their fair values at the acquisition date. These fair value estimates associated with acquired loans, and based on a discounted cash flow model, include estimates related to market interest rates and undiscounted projections of future cash flows that incorporate expectations of prepayments and the amount and timing of principal, interest and other cash flows, as well as any shortfalls thereof.

Non-PCD loans that were not deemed impaired subsequent to the acquisition date are considered non-impaired and are evaluated as part of the general valuation allowance.

Non-PCD loans that have deteriorated to an impaired status subsequent to acquisition are evaluated for a specific reserve on a quarterly basis which, when identified, is added to the allowance for credit losses. The Company reviews impaired Non-PCD loans on a loan-by-loan basis and determines the specific reserve based on the difference between the recorded investment in the loan and one of three factors: expected future cash flows, observable market price or fair value of the collateral. Because essentially all of the Company’s impaired Non-PCD loans have been collateral-dependent, the amount of the specific reserve historically has been determined by comparing the fair value of the collateral securing the Non-PCD loan with the recorded investment in such loan. In the future, the Company will continue to analyze impaired Non-PCD loans on a loan-by-loan basis and may use an alternative measurement method to determine the specific reserve, as appropriate and in accordance with applicable accounting standards.

PCD loans are monitored individually or on a pooled basis quarterly to assess for changes in expected cash flows subsequent to acquisition. If a deterioration in cash flows is identified, an increase to the PCD reserves for that individual loan or pool of loans may be required. PCD loans were recorded at their acquisition date fair values, which were based on expected cash flows and considers estimates of expected future credit losses. The Company’s estimates of loan fair values at the acquisition date may be adjusted for a period of up to one year as the Company continues to evaluate its estimate of expected future cash flows at the acquisition date. If the Company determines that losses arose after the acquisition date, the additional losses will be reflected as a provision for credit losses.

As described in the section captioned “Critical Accounting Estimates” above, the Company’s determination of the allowance for credit losses involves a high degree of judgment and complexity. The Company’s analysis of qualitative, or environmental, factors on pools of loans with common risk characteristics, in combination with the quantitative historical lifetime loss information and specific reserves, provides the Company with an estimate of lifetime losses. The allowance must reflect changes in the balance of loans subject to the allowance methodology, as well as the estimated lifetime losses associated with those loans.

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The following tables present, as of and for the periods indicated, information regarding the allowance for credit losses on loans differentiated between originated loans and acquired loans. Reported net charge-offs may include those from Non-PCD loans and PCD loans, but only if the total charge-off required is greater than the remaining discount.

	As of and for the Six Months Ended June 30, 2025
	Originated Loans			Acquired Loans			Total
	(Dollars in thousands)
Average loans outstanding	$	18,064,360		$	3,906,042		$	21,970,402
Gross loans outstanding at end of period	$	18,628,762		$	3,568,626		$	22,197,388
Allowance for credit losses on loans at beginning of period	$	227,238		$	124,567		$	351,805
Provision for credit losses		13,748			(13,748	)		—
Charge-offs:
Commercial and industrial		(2,411	)		(166	)		(2,577	)
Real estate and agriculture		(1,673	)		(413	)		(2,086	)
Consumer and other		(3,286	)		(216	)		(3,502	)
Recoveries:
Commercial and industrial		515			688			1,203
Real estate and agriculture		267			366			633
Consumer and other		551			57			608
Net (charge-offs) recoveries(1)		(6,037	)		316			(5,721	)
Allowance for credit losses on loans at end of period	$	234,949		$	111,135		$	346,084
Ratio of allowance to end of period loans		1.26	%		3.11	%		1.56	%
Ratio of allowance to end of period loans, excluding Warehouse Purchase Program		1.35	%		3.11	%		1.66	%
Ratio of net charge-offs (recoveries) to average loans (annualized)		0.07	%		(0.02	%)		0.05	%
Ratio of allowance to end of period nonperforming loans		454.5	%		218.3	%		337.3	%
Ratio of allowance to end of period nonaccrual loans		456.7	%		219.7	%		339.2	%

	As of and for the Six Months Ended June 30, 2024
	Originated Loans			Acquired Loans			Total
	(Dollars in thousands)
Average loans outstanding	$	17,915,348		$	3,782,516		$	21,697,864
Gross loans outstanding at end of period	$	18,081,719		$	4,239,096		$	22,320,815
Allowance for credit losses on loans at beginning of period	$	222,413		$	109,949		$	332,362
Initial allowance on loans purchased with credit deterioration		—			26,078			26,078
Provision for credit losses		5,559			2,364			7,923
Charge-offs:
Commercial and industrial		(1,065	)		(3,471	)		(4,536	)
Real estate and agriculture		(799	)		(1,237	)		(2,036	)
Consumer and other		(2,863	)		(283	)		(3,146	)
Recoveries:
Commercial and industrial		240			1,236			1,476
Real estate and agriculture		4			1,204			1,208
Consumer and other		441			82			523
Net (charge-offs) recoveries(1)		(4,042	)		(2,469	)		(6,511	)
Allowance for credit losses on loans at end of period	$	223,930		$	135,922		$	359,852
Ratio of allowance to end of period loans		1.24	%		3.21	%		1.61	%
Ratio of allowance to end of period loans, excluding Warehouse Purchase Program		1.32	%		3.21	%		1.69	%
Ratio of net charge-offs (recoveries) to average loans (annualized)		0.05	%		0.13	%		0.06	%
Ratio of allowance to end of period nonperforming loans		558.8	%		306.0	%		425.9	%
Ratio of allowance to end of period nonaccrual loans		558.8	%		308.2	%		427.5	%

(1)There was no net charge-off activity on Warehouse Purchase Program loans during the periods presented.

The Company had gross charge-offs on originated loans of $7.4 million during the six months ended June 30, 2025. Partially offsetting these charge-offs were recoveries on originated loans of $1.3 million. Gross charge-offs on acquired loans were $795

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thousand during the six months ended June 30, 2025. Offsetting these charge-offs were recoveries on acquired loans of $1.1 million. Total charge-offs for the six months ended June 30, 2025 were $8.2 million, partially offset by total recoveries of $2.4 million.

The following table shows the allocation of the net charge-offs and net recoveries among various categories of loans as of the dates indicated.

	Six Months Ended June 30
	2025						2024
	Amount			Ratio of Net Charge-offs (Recoveries) to Average Loans (Annualized)			Amount			Ratio of Net Charge-offs (Recoveries) to Average Loans (Annualized)
	(Dollars in thousands)
Balance of net (charge-offs) recoveries applicable to:
Commercial and industrial	$	(1,374	)		0.01	%	$	(3,060	)		0.03	%
Real estate:
Construction, land development and other land loans		159			(0.00	%)		(107	)		0.00	%
1-4 family residential (including home equity)		(1,393	)		0.01	%		(882	)		0.01	%
Commercial real estate (including multi-family residential)		(233	)		0.00	%		398			0.00	%
Agriculture (includes farmland)		14			(0.00	%)		(237	)		0.00	%
Consumer and other		(2,894	)		0.03	%		(2,623	)		0.02	%
Total net (charge-offs) recoveries	$	(5,721	)		0.05	%	$	(6,511	)		0.06	%

The following tables show the allocation of the allowance for credit losses on loans among various categories of loans disaggregated between originated loans, re-underwritten acquired loans, Non-PCD loans and PCD loans at the dates indicated. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which future losses may occur. The total allowance is available to cover expected losses from any loan category, regardless of whether allocated to an originated loan or an acquired loan.

	June 30, 2025
			Acquired Loans
	Originated Loans		Re-Underwritten Acquired Loans		Non-PCD Loans		PCD Loans		Total Allowance		Percent of Loans to Total Loans(1)
	(Dollars in thousands)
Balance of allowance for credit losses on loans applicable to:
Commercial and industrial	$	35,112	$	18,593	$	3,545	$	5,006	$	62,256		11.5	%
Real estate		181,838		11,086		18,020		38,100		249,044		81.8	%
Agriculture and agriculture real estate		10,416		2,003		653		13,776		26,848		4.9	%
Consumer and other		7,583		240		109		4		7,936		1.8	%
Total allowance for credit losses on loans	$	234,949	$	31,922	$	22,327	$	56,886	$	346,084		100.0	%

	December 31, 2024
			Acquired Loans
	Originated Loans		Re-Underwritten Acquired Loans		Non-PCD Loans		PCD Loans		Total Allowance		Percent of Loans to Total Loans(1)
	(Dollars in thousands)
Balance of allowance for credit losses on loans applicable to:
Commercial and industrial	$	34,528	$	18,003	$	5,159	$	7,810	$	65,500		11.9	%
Real estate		176,668		11,676		18,514		44,008		250,866		81.4	%
Agriculture and agriculture real estate		8,646		2,385		1,143		15,519		27,693		4.9	%
Consumer and other		7,396		199		137		14		7,746		1.8	%
Total allowance for credit losses on loans	$	227,238	$	32,263	$	24,953	$	67,351	$	351,805		100.0	%

(1)Loans outstanding as of a percentage of total loans, excluding Warehouse Purchase Program loans.

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The allowance for credit losses on loans totaled $346.1 million at June 30, 2025 compared with $351.8 million at December 31, 2024, a decrease of $5.7 million or 1.6%. The allowance for credit losses on loans totaled 1.56% of total loans at June 30, 2025 and 1.59% of total loans at December 31, 2024.

At June 30, 2025, $234.9 million of the allowance for credit losses on loans was attributable to originated loans, an increase of $7.7 million or 3.4% compared with $227.2 million of the allowance at December 31, 2024. At June 30, 2025, $31.9 million of the allowance for credit losses on loans was attributable to re-underwritten acquired loans compared with $32.3 million of the allowance at December 31, 2024, a decrease of $341 thousand or 1.1%. At June 30, 2025, $22.3 million of the allowance for credit losses on loans was attributable to Non-PCD loans compared with $25.0 million of the allowance at December 31, 2024, a decrease of $2.6 million or 10.5%. At June 30, 2025, $56.9 million of the allowance for credit losses on loans was attributable to PCD loans compared with $67.4 million of the allowance at December 31, 2024, a decrease of $10.5 million or 15.5%.

At June 30, 2025, the Company had $28.8 million of total outstanding accretable discounts on Non-PCD loans and PCD loans. The Company believes that the allowance for credit losses on loans at June 30, 2025 is adequate to cover expected losses that may be realized from the loan portfolio as of such date. Nevertheless, the Company could sustain losses in future periods which could be substantial in relation to the size of the allowance at June 30, 2025.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The allowance for credit losses on off-balance sheet credit exposures estimates expected credit losses over the contractual period in which there is exposure to credit risk via a contractual obligation to extend credit, except when an obligation is unconditionally cancelable by the Company. The allowance is adjusted by provisions for credit losses charged to earnings that increase the allowance, or by provision releases returned to earnings that decrease the allowance. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on the commitments expected to fund. The estimate of commitments expected to fund is affected by historical analysis of utilization rates. The expected credit loss rates applied to the commitments expected to fund are affected by the general valuation allowance utilized for outstanding balances with the same underlying assumptions and drivers. As of June 30, 2025 and December 31, 2024, the Company had $37.6 million in allowance for credit losses on off-balance sheet credit exposures. The allowance for credit losses on off-balance sheet credit exposures is a separate line item on the Company’s consolidated balance sheet.

The following table represents a rollforward of the allowance for credit losses on off-balance sheet credit exposures as of the dates indicated.

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)
Balance at beginning of period	$	37,646	$	36,503	$	37,646	$	36,503
Provision for credit losses on off-balance sheet credit exposures		—		1,143		—		1,143
Balance at end of period	$	37,646	$	37,646	$	37,646	$	37,646

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Securities

The carrying cost of securities totaled $10.61 billion at June 30, 2025 compared with $11.09 billion at December 31, 2024, a decrease of $486.3 million or 4.4%. At June 30, 2025, securities represented 27.6% of total assets compared with 28.0% of total assets at December 31, 2024.

The amortized cost and fair value of investment securities were as follows:

	June 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	13,650	$	2,903	$	—		$	16,553
Collateralized mortgage obligations		222,874		—		(3,789	)		219,085
Mortgage-backed securities		107,241		59		(830	)		106,470
Total	$	343,765	$	2,962	$	(4,619	)	$	342,108
Held to Maturity
U.S. Government agencies	$	5,946	$	—	$	(16	)	$	5,930
States and political subdivisions		80,190		219		(2,142	)		78,267
Corporate debt securities		12,000		—		(2,520	)		9,480
Collateralized mortgage obligations		228,852		88		(16,247	)		212,693
Mortgage-backed securities		9,939,008		4,705		(1,094,059	)		8,849,654
Total	$	10,265,996	$	5,012	$	(1,114,984	)	$	9,156,024

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	2,035	$	(60	)	$	16,325
Collateralized mortgage obligations		216,142		81		(3,233	)		212,990
Mortgage-backed securities		108,524		41		(920	)		107,645
Total	$	339,016	$	2,157	$	(4,213	)	$	336,960
Held to Maturity
U.S. Government agencies	$	5,861	$	—	$	(44	)	$	5,817
States and political subdivisions		98,125		220		(2,510	)		95,835
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		232,345		—		(24,128	)		208,217
Mortgage-backed securities		10,409,133		380		(1,345,063	)		9,064,450
Total	$	10,757,464	$	600	$	(1,375,585	)	$	9,382,479

The investment securities portfolio is measured for expected credit losses by segregating the portfolio into two general classifications and applying the appropriate expected credit losses methodology. Investment securities classified as available for sale or held to maturity are evaluated for expected credit losses under CECL.

Available for sale securities. For available for sale securities in an unrealized loss position, the amount of the expected credit losses recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the expected credit losses will be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the expected credit losses will be separated into the amount representing the credit-related portion of the impairment loss (“credit loss”) and the noncredit portion of the impairment loss (“noncredit portion”). The amount of the total expected credit losses related to the credit loss is determined based on the difference between the present value of cash flows expected to be collected and the amortized cost basis, and such difference is recognized in earnings. The amount of the total expected credit losses related to the noncredit portion is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the expected credit losses recognized in earnings will become the new amortized cost basis of the investment.

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As of June 30, 2025, management does not have the intent to sell any of the securities classified as available for sale before a recovery of cost. In addition, management believes it is more likely than not that the Company will not be required to sell any of its investment securities before a recovery of cost. The unrealized losses are largely due to changes in market interest rates and spread relationships since the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of June 30, 2025, management believes that there is no potential for credit losses on available for sale securities.

Held to maturity securities. The Company’s held to maturity investments include mortgage-related bonds issued by either the Government National Mortgage Corporation (“Ginnie Mae”), Fannie Mae or Federal Home Loan Mortgage Corporation (“Freddie Mac”). Ginnie Mae-issued securities are explicitly guaranteed by the U.S. government, while Fannie Mae- and Freddie Mac-issued securities are fully guaranteed by those respective United States government-sponsored agencies, and conditionally guaranteed by the full faith and credit of the United States. The Company’s held to maturity securities also include taxable and tax-exempt municipal securities issued primarily by school districts, utility districts and municipalities located in Texas. The Company’s investment in municipal securities is exposed to credit risk. The securities are highly rated by major rating agencies and regularly reviewed by management. A significant portion are guaranteed or insured by either the Texas Permanent School Fund, Assured Guaranty or Build America Mutual. As of June 30, 2025 the Company’s municipal securities represent 0.8% of the securities portfolio. Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities. Accordingly, as of June 30, 2025, management believes that there is no potential for material credit losses on held to maturity securities.

Deposits

Total deposits were $27.47 billion at June 30, 2025 compared with $28.38 billion at December 31, 2024, a decrease of $907.9 million or 3.2%. Total noninterest-bearing deposits were $9.43 billion at June 30, 2025 compared with $9.80 billion at December 31, 2024, a decrease of $371.8 million or 3.8%. Interest-bearing deposits were $18.05 billion at June 30, 2025 compared with $18.58 billion at December 31, 2024, a decrease of $536.1 million or 2.9%.

Average deposits for the six months ended June 30, 2025 were $27.89 billion, an increase of $262.1 million or 0.9% compared with $27.63 billion for the six months ended June 30, 2024. The ratio of average interest-bearing deposits to total average deposits was 65.9% and 65.2% during the first six months of 2025 and 2024, respectively.

The following table summarizes the daily average balances and weighted average rates paid on deposits for the periods indicated below:

	Six Months Ended June 30,
	2025					2024
	Average Balance		Average Rate (1)			Average Balance		Average Rate (1)
	(Dollars in thousands)
Interest-bearing demand deposits	$	5,015,178		0.72	%	$	4,991,390		0.71	%
Regular savings		2,672,948		0.71	%		2,817,928		0.71	%
Money market savings		6,302,971		2.63	%		6,168,637		2.85	%
Certificates, IRAs and other time deposits		4,396,350		3.67	%		4,042,369		4.17	%
Total interest-bearing deposits		18,387,447		2.08	%		18,020,324		2.22	%
Noninterest-bearing demand deposits		9,506,704					9,611,730
Total deposits	$	27,894,151		1.37	%	$	27,632,054		1.45	%

(1)Annualized and based on average balances on an actual 365-day or 366-day basis for the six months ended June 30, 2025 and 2024.

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Other Borrowings

The following table presents the Company’s borrowings as of the dates indicated:

	June 30, 2025		December 31, 2024
	(Dollars in thousands)
FHLB advances	$	2,900,000	$	3,200,000
Securities sold under repurchase agreements		183,572		221,913
Total	$	3,083,572	$	3,421,913

FHLB advances and long-term notes payable— The Company has an available line of credit with the Federal Home Loan Bank of Dallas (“FHLB”), which allows the Company to borrow on a collateralized basis. The Company’s FHLB advances are typically considered short-term borrowings and are used to manage liquidity as needed. Maturing advances are replaced by drawing on available cash, making additional borrowings or through increased customer deposits. At June 30, 2025, the Company had total borrowing capacity of $7.60 billion under this line. FHLB advances of $2.90 billion were outstanding at June 30, 2025, with a weighted average interest rate of 4.41%. At June 30, 2025, the Company had no FHLB long-term notes payable balance outstanding.

Securities sold under repurchase agreements— At June 30, 2025, the Company had $183.6 million in securities sold under repurchase agreements with banking customers compared with $221.9 million at December 31, 2024, a decrease of $38.3 million or 17.3%. Repurchase agreements are generally settled on the following business day; however, approximately $375 thousand of the repurchase agreements outstanding at June 30, 2025 have a maturity term of 24 months. All securities sold under repurchase agreements are collateralized by certain pledged securities.

Liquidity

Liquidity involves the Company’s ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate the Company on an ongoing basis and manage unexpected events. The Company’s largest source of funds is deposits and its largest use of funds is loans. The Company does not expect a change in the source or use of its funds in the future. Although access to purchased funds from correspondent banks is available and has been utilized on occasion to take advantage of investment opportunities, the Company does not generally rely on this external funding source. The cash and federal funds sold position, supplemented by amortizing investment and loan portfolios, has generally created an adequate liquidity position.

As of June 30, 2025, the Company had outstanding $3.71 billion in commitments to extend credit, $76.0 million in commitments associated with outstanding standby letters of credit and $831.6 million in commitments associated with unused capacity on Warehouse Purchase Program loans. Since commitments associated with letters of credit, unused capacity on Warehouse Purchase Program loans and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.

The Company has no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature.

Asset liquidity is provided by cash and assets which are readily marketable or which will mature in the near future. As of June 30, 2025, the Company had cash and cash equivalents of $1.31 billion compared with $1.97 billion at December 31, 2024, a decrease of $667.3 million or 33.8%. The decrease was primarily due to a net decrease in deposits of $907.9 million, net repayments from other short-term borrowings of $300.0 million, cash dividend payments of $110.5 million and net increase in loans of $58.7 million, partially offset by net proceeds from maturities, sales and principal paydowns of investment securities of $476.8 million and net cash provided by operating activities of $276.3 million.

Share Repurchases

On January 21, 2025, Bancshares announced a stock repurchase program under which it could repurchase up to 5%, or approximately 4.8 million shares, of its outstanding common stock over a one-year period expiring on January 21, 2026, at the discretion of management. Under the stock repurchase program, Bancshares may repurchase shares from time to time at prevailing market prices, through open-market purchases or privately negotiated transactions, depending upon market conditions. Repurchases under this program may also be made in transactions outside the safe harbor during a pending merger, acquisition or similar transaction. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. Shares of stock repurchased are held as authorized but unissued shares. Bancshares is not obligated to purchase any particular number of shares, and Bancshares may

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suspend, modify or terminate the program at any time and for any reason without prior notice. No share repurchases were made during the three and six months ended June 30, 2025.

Contractual Obligations

The Company’s contractual obligations and other commitments to make future payments (other than deposit obligations and securities sold under repurchase agreements) as of June 30, 2025 are summarized below.

Federal Home Loan Bank Borrowings

The Company’s future cash payments associated with its contractual obligations pursuant to its FHLB Advances as of June 30, 2025 are summarized below.

	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
FHLB advances	$	2,900,000	$	—	$	—	$	—	$	2,900,000

Leases

The Company’s leases relate primarily to operating leases for office space and banking centers. The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of 1 to 15 years, which may include the option to extend the lease when it is reasonably certain for the Company to exercise that option. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental collateralized borrowing rate to determine the present value of lease payments. Short-term leases and leases with variable lease costs are immaterial, and the Company has one sublease arrangement. Sublease income was $750 thousand and $828 thousand for the three months ended June 30, 2025 and 2024 and $1.6 million and $1.7 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, operating lease ROU assets and lease liabilities were approximately $29.8 million. ROU assets and lease liabilities were classified as other assets and other liabilities, respectively.

As of June 30, 2025, the weighted average of remaining lease terms of the Company’s operating leases was 5.8 years. The weighted average discount rate used to determine the lease liabilities as of June 30, 2025 for the Company’s operating leases was 3.1%. Cash paid for the Company’s operating leases was $2.9 million for the three months ended June 30, 2025 and 2024, respectively, and $5.9 million and $5.8 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, the Company obtained $690 thousand in ROU assets in exchange for lease liabilities for two operating leases.

The Company’s future undiscounted cash payments associated with its operating leases as of June 30, 2025 are summarized below (dollars in thousands).

Remaining 2025	$	5,258
2026		9,507
2027		6,505
2028		3,529
2029		2,179
2030		1,715
Thereafter		8,826
Total undiscounted lease payments	$	37,519

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Off-Balance Sheet Items

In the normal course of business, the Company enters into various transactions that, in accordance with GAAP, are not included in its consolidated balance sheets. The Company enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.

The Company’s commitments associated with outstanding standby letters of credit, unused capacity on Warehouse Purchase Program loans and commitments to extend credit expiring by period as of June 30, 2025 are summarized below. Since commitments associated with letters of credit, unused capacity on Warehouse Purchase Program loans and commitments to extend credit may expire unused, the amounts shown may not necessarily reflect the actual future cash funding requirements.

	1 year or less		More than 1 year but less than 3 years		3 years or more but less than 5 years		5 years or more		Total
	(Dollars in thousands)
Standby letters of credit	$	55,305	$	19,255	$	1,338	$	76	$	75,974
Unused capacity on Warehouse Purchase Program loans		831,559		—		—		—		831,559
Commitments to extend credit		1,531,374		943,135		96,860		1,140,935		3,712,304
Total	$	2,418,238	$	962,390	$	98,198	$	1,141,011	$	4,619,837

Allowance for Credit Losses on Off-balance Sheet Credit Exposures. The Company records an allowance for credit losses on off-balance sheet credit exposure that is adjusted through an entry to provision for credit losses on the Company’s consolidated statement of income. At June 30, 2025 and December 31, 2024, this allowance, reported as a separate line item on the Company’s consolidated balance sheet, totaled $37.6 million.

Capital Resources

Total shareholders’ equity was $7.60 billion at June 30, 2025 compared with $7.44 billion at December 31, 2024, an increase of $161.2 million or 2.2%. The increase was primarily the result of net income of $265.4 million, partially offset by dividend payments of $110.5 million.

The Basel III Capital Rules require the Company and the Bank to maintain a capital conservation buffer, composed entirely of common equity tier 1 capital (“CET1”), of 2.5%, effectively resulting in minimum ratios of (1) CET1 to risk-weighted assets of 7.0%, (2) Tier 1 capital to risk-weighted assets of 8.5%, (3) total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of 10.5% and (4) Tier 1 capital to average quarterly assets as reported on consolidated financial statements (known as the “leverage ratio”) of 4.0%.

The CET1, Tier 1 and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets include total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items. The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, excluding goodwill and other intangible assets. A financial institution with a conservation buffer of less than the required amount will be subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers.

Financial institutions are categorized by the FDIC based on minimum Common Equity Tier 1, Tier 1 risk-based, total risk-based and Tier 1 leverage ratios. As of June 30, 2025, the Bank’s capital ratios were above the levels required for the Bank to be designated as “well capitalized.”

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The following table provides a comparison of the Company’s and the Bank’s risk-weighted and leverage capital ratios to the minimum and well-capitalized regulatory standards as of June 30, 2025:

	Minimum Required For Capital Adequacy Purposes				Minimum Required Plus Capital Conservation Buffer			To Be Categorized As Well Capitalized Under Prompt Corrective Action Provisions			Actual Ratio as of June 30, 2025
The Company
CET1 capital (to risk-weighted assets)		4.50	%			7.00	%	N/A				17.10	%
Tier 1 capital (to risk-weighted assets)		6.00	%			8.50	%	N/A				17.10	%
Total capital (to risk-weighted assets)		8.00	%			10.50	%	N/A				18.35	%
Tier 1 capital (to average assets) (leverage)		4.00	%	(1)		4.00	%	N/A				11.62	%
The Bank
CET1 capital (to risk-weighted assets)		4.50	%			7.00	%		6.50	%		16.10	%
Tier 1 capital (to risk-weighted assets)		6.00	%			8.50	%		8.00	%		16.10	%
Total capital (to risk-weighted assets)		8.00	%			10.50	%		10.00	%		17.35	%
Tier 1 capital (to average assets) (leverage)		4.00	%	(2)		4.00	%		5.00	%		10.94	%

(1)The Federal Reserve Board may require the Company to maintain a leverage ratio above the required minimum.

(2)The FDIC may require the Bank to maintain a leverage ratio above the required minimum.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company manages market risk, which for the Company is primarily interest rate risk, through its Asset Liability Committee consisting of senior officers of the Company, in accordance with policies approved by the Company’s Board of Directors.

The Company uses simulation analysis to examine the potential effects of market changes on net interest income and market value. The Company considers macroeconomic variables, Company strategy, liquidity and other factors as it quantifies market risk. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Interest Rate Sensitivity and Market Risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 27, 2025 (the “2024 Form 10-K”), for further discussion. There have been no material changes in the Company’s market risk exposures that would affect the quantitative and qualitative disclosures from those disclosed in the 2024 Form 10-K and presented as of December 31, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were effective as of the end of the period covered by this report.

Changes in internal control over financial reporting. There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Bancshares and the Bank are defendants, from time to time, in legal actions arising from transactions conducted in the ordinary course of business. After consultations with legal counsel, Bancshares and the Bank believe that the ultimate liability, if any, arising from such actions will not have a material adverse effect on their financial statements.

ITEM 1A. RISK FACTORS

There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a. None.

b. None.

c. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—Share Repurchases” in Item 2 of Part I of this report for information regarding Bancshares’ stock repurchase program. No repurchases of Bancshares’ common stock were made during the second quarter of 2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

c. Insider Trading Arrangements and Policies.

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K) with respect to Bancshares common stock.

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ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Articles of Incorporation of Prosperity Bancshares, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-63267) (the “Registration Statement”))
3.2	Articles of Amendment to Amended and Restated Articles of Incorporation of Prosperity Bancshares, Inc. (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (File No. 001-35388))
3.3	Amended and Restated Bylaws of Prosperity Bancshares, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 20, 2019 (File No. 001-35388))
4.1	Form of certificate representing shares of Bancshares common stock (incorporated herein by reference to Exhibit 4 to the Registration Statement)
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (formatted as Inline XBRL and contained in Exhibits 101)

* Filed with this Quarterly Report on Form 10-Q.

** Furnished with this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PROSPERITY BANCSHARES, INC. ®         (Registrant)
Date: 8/7/2025	/S/ DAVID ZALMAN
	David Zalman
	Senior Chairman and Chief Executive Officer
Date: 8/7/2025	/S/ ASYLBEK OSMONOV
	Asylbek Osmonov
	Chief Financial Officer

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