pb-ex991_6.htm

HOUSTON, January 26, 2022. Prosperity Bancshares, Inc.^® (NYSE: PB), the parent company of Prosperity Bank^® (collectively, “Prosperity”), reported net income of $126.8 million for the quarter ended December 31, 2021 compared with $137.1 million for the same period in 2020. Net income per diluted common share was $1.38 for the quarter ended December 31, 2021, compared with $1.48 for the same period in 2020, and the annualized return on fourth quarter average assets was 1.37%. Additionally, loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program (“PPP”) loans, increased $76.7 million or 0.5% (1.8% annualized) and deposits increased $1.320 billion or 4.5% (17.9% annualized) during the fourth quarter of 2021. Nonperforming assets remain low at 0.09% of fourth quarter average interest-earning assets.

“We believe that Texas and Oklahoma will have a higher growth rate and outperform other states over the next several years. Companies and individuals continue to move to Texas and Oklahoma because of lower tax rates and a business-friendly political environment, and we believe that will continue, which should benefit our bank. We expect that companies will need more infrastructure and buildings, people will need more housing and consumer staples, and both will need banks to finance the growth,” said David Zalman, Prosperity’s Senior Chairman and Chief Executive Officer.

“Our bank continues to show strong deposit growth, with over $3.4 billion added in 2021, and a strong return on assets of 1.37% and return on average tangible equity of 16.26%. Our asset quality continues to be one of the best in the industry. We predict loans will grow given the vibrant economy and the bank’s net interest margin should improve going forward with potential rate hikes forecasted by the Federal Reserve. I would like to thank all our customers, associates, and directors for helping us build such a successful bank,” concluded Zalman.

Net income was $126.8 million⁽²⁾ for the three months ended December 31, 2021 compared with $137.1 million⁽³⁾ for the same period in 2020, a decrease of $10.3 million or 7.5%. The change was primarily due to a decrease in loan interest income and loan discount accretion of $10.7 million, partially offset by an increase in securities interest income and a decrease in interest expense. Net income per diluted common share was $1.38 for the three months ended December 31, 2021 compared with $1.48 for the same period in 2020, a decrease of 6.8%. On a linked quarter basis, net income was $126.8 million⁽²⁾ for the three months ended December 31, 2021 compared with $128.6 million⁽⁴⁾ for the three months ended September 30, 2021. Net income per diluted common share was $1.38 for the three months ended December 31, 2021 compared with $1.39 for the three months ended September 30, 2021. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended December 31, 2021 were 1.37%, 7.91% and 16.26%⁽¹⁾, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 42.79%⁽¹⁾ for the three months ended December 31, 2021.

Net interest income before provision for credit losses for the three months ended December 31, 2021 was $244.8 million compared with $257.6 million for the same period in 2020, a decrease of $12.9 million or 5.0%. The change was primarily due to a decrease in the average balance and average rate on loans and a decrease in loan discount accretion of $10.7 million, partially offset by an increase in the average investment securities balance and a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $244.8 million compared with $248.6 million for the three months ended September 30, 2021.

The net interest margin on a tax equivalent basis was 2.97% for the three months ended December 31, 2021 compared with 3.49% for the same period in 2020. The change was primarily due to lower average rates on loans and investment securities and a decrease in loan discount accretion of $10.7 million, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, the net interest margin on a tax equivalent basis was 2.97% for the three months ended December 31, 2021 compared with 3.10% for the three months ended September 30, 2021. The change was primarily due to lower average rates on loans and investment securities, and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $35.8 million for the three months ended December 31, 2021 compared with $36.5 million for the same period in 2020, a decrease of $790 thousand or 2.2%. This change was primarily due to a decrease in mortgage income and a decrease in other noninterest income, partially offset by the net gain on sale of assets compared to prior year’s net loss on write-down of assets. On a linked quarter basis, noninterest income increased $1.1 million or 3.2% to $35.8 million compared with $34.6 million for the three months ended September 30, 2021. This change was primarily due to an increase in net gain on sale of assets and an increase in nonsufficient funds (“NSF”) fees, partially offset by a decrease in mortgage income.

Noninterest expense was $119.5 million for the three months ended December 31, 2021 compared with $120.2 million for the same period in 2020 and $119.8 million for the three months ended September 30, 2021.

Net income was $519.3 million⁽⁵⁾ for the year ended December 31, 2021 compared with $528.9 million⁽⁶⁾ for the same period in 2020, a decrease of $9.6 million or 1.8%. Net income per diluted common share was $5.60 for the year ended December 31, 2021 compared with $5.68 for the same period in 2020, a decrease of 1.4%. Returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2021 were 1.44%, 8.21% and 17.18%⁽¹⁾, respectively. Prosperity’s efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 41.83%⁽¹⁾ for the year ended December 31, 2021.

Net interest income before provision for credit losses for the year ended December 31, 2021 was $993.3 million compared with $1.031 billion for the same period in 2020, a decrease of $37.4 million or 3.6%. The change was primarily due to lower average rates on loans and a decrease in loan discount accretion of $52.1 million, partially offset by an increase in the average investment securities balance and a decrease in the average rate on interest-bearing liabilities.

The net interest margin on a tax equivalent basis for the year ended December 31, 2021 was 3.14% compared with 3.64% for the same period in 2020. The change was primarily due to lower average rates on loans and investment securities, a decrease in loan discount accretion of $52.1 million, and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $140.0 million for the year ended December 31, 2021 compared with $131.5 million for the same period in 2020, an increase of $8.4 million or 6.4%. This increase was primarily due to the net gain on sale of assets compared to prior year’s net loss on write-down of assets and an increase in credit card, debit card and ATM card income, partially offset by a decrease in mortgage income.

Noninterest expense was $473.6 million for the year ended December 31, 2021 compared with $497.2 million for the same period in 2020, a decrease of $23.6 million or 4.7%. The change was primarily due to decreases in merger related expenses, data processing, net occupancy and equipment and other noninterest expense as a result of efficiencies gained following the LegacyTexas Bank system conversion during the second quarter of 2020 and net gains on sale of other real estate of $2.7 million.

At December 31, 2021, Prosperity had $37.834 billion in total assets, an increase of $3.775 billion or 11.1% compared with $34.059 billion at December 31, 2020.

Loans at December 31, 2021 were $18.616 billion, a decrease of $1.631 billion or 8.1%, compared with $20.247 billion at December 31, 2020, primarily due to a decrease in Warehouse Purchase Program, commercial real estate and PPP loans, partially offset by an increase in 1-4 family residential loans. Linked quarter loans decreased $341.6 million or 1.8% from $18.958 billion at September 30, 2021. At December 31, 2021, the Company had $169.9 million of PPP loans compared to $963.2 million of PPP loans at December 31, 2020 and $365.8 million of PPP loans at September 30, 2021. Excluding Warehouse Purchase Program and PPP loans, loans at December 31, 2021 were $16.671 billion compared to $16.441 billion at December 31, 2020, an increase of $229.2 million or 1.4%. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, increased $76.7 million or 0.5% (1.8% annualized) from $16.594 billion at September 30, 2021.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At December 31, 2021, oil and gas loans totaled $491.3 million (net of discount and excluding PPP loans totaling $27.9 million) or 2.6% of total loans, of which $294.1 million were production loans and $197.2 million were servicing loans, compared with total oil and gas loans of $512.7 million (net of discount and excluding PPP loans totaling $88.7 million) or 2.5% of total loans at December 31, 2020, of which $285.8 million were production loans and $226.9 million were servicing loans. In addition, as of December 31, 2021, Prosperity had total unfunded commitments to oil and gas companies of $419.0 million compared with total unfunded commitments to oil and gas companies of $243.2 million as of December 31, 2020. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Additionally, Prosperity extends credit to hotels and restaurants. At December 31, 2021, loans to hotels totaled $386.4 million (excluding PPP loans totaling $920 thousand) or 2.1% of total loans, a decrease of $7.4 million or 1.9%, compared with $393.8 million (excluding PPP loans totaling $6.5 million) at December 31, 2020. At December 31, 2021, loans to restaurants totaled $201.7 million (excluding PPP loans totaling $29.3 million) or 1.1% of total loans, a decrease of $13.0 million or 6.1%, compared with $214.7 million (excluding PPP loans totaling $83.6 million) at December 31, 2020.

Deposits at December 31, 2021 were $30.772 billion, an increase of $3.411 billion or 12.5%, compared with $27.360 billion at December 31, 2020. Linked quarter deposits increased $1.320 billion or 4.5% (17.9% annualized) from $29.452 billion at September 30, 2021.

Nonperforming assets totaled $28.1 million or 0.09% of quarterly average interest-earning assets at December 31, 2021, compared with $59.6 million or 0.20% of quarterly average interest-earning assets at December 31, 2020 and $36.5 million or 0.11% of quarterly average interest-earning assets at September 30, 2021.

The allowance for credit losses on loans and off-balance sheet credit exposures was $316.3 million at December 31, 2021 compared with $346.0 million at December 31, 2020 and with $317.1 million at September 30, 2021.

The allowance for credit losses on loans was $286.4 million or 1.54% of total loans at December 31, 2021 compared with $316.1 million or 1.56% of total loans at December 31, 2020 and with $287.2 million or 1.51% of total loans at September 30, 2021. Excluding Warehouse Purchase Program and PPP loans, the allowance for credit losses on loans to total loans was 1.72%⁽¹⁾ at December 31, 2021 compared with 1.92%⁽¹⁾ at December 31, 2020 and 1.73%⁽¹⁾ at September 30, 2021.

There was no provision for credit losses for the three month periods ended December 31, 2021, December 31, 2020 and September 30, 2021. There was no provision for credit losses for the year ended December 31, 2021 compared with $20.0 million for the year ended December 31, 2020.

Net charge-offs were $807 thousand for the three months ended December 31, 2021 compared with net charge-offs of $7.6 million for the three months ended December 31, 2020 and net charge-offs of $15.7 million for the three months ended September 30, 2021. Net charge-offs for the fourth quarter of 2021 did not include any purchased credit deteriorated (“PCD”) loans and $1.7 million of specific reserves on resolved PCD loans was released to the general reserve.

Net charge-offs were $29.7 million for the year ended December 31, 2021 compared with $31.9 million for the year ended December 31, 2020. Net charge-offs for the year ended December 31, 2021 included $12.7 million related to resolved PCD loans and $10.8 million related to the partial charge-off of one commercial real estate loan obtained through acquisition. The PCD loans had specific reserves of $12.9 million, of which $9.9 million was allocated to the charge-offs and $3.0 million was moved to the general reserve. Further, an additional $21.6 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Prosperity Bancshares declared a first quarter cash dividend of $0.52 per share to be paid on April 1, 2022 to all shareholders of record as of March 15, 2022.

On January 18, 2022, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately

4.6 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 18, 2023, at the discretion of management. Under its 2021 stock repurchase program, Prosperity Bancshares repurchased zero shares of its common stock during the three months ended December 31, 2021 and 767,134 shares of its common stock at an average weighted price of $67.87 per share during the year ended December 31, 2021.

Prosperity continues to monitor the latest developments regarding COVID-19. As of December 31, 2021, pandemic-related restrictions on all business and activities in the states of Texas and Oklahoma remained lifted. The COVID-19 pandemic has resulted in significant economic uncertainties that have had, and could continue to have, an adverse impact on Prosperity’s operating income, financial condition and cash flows.

Since the implementation of the Paycheck Protection Program in 2020, Prosperity has obtained SBA approvals on approximately 18,700 loans totaling $2.036 billion and, as of December 31, 2021, had an outstanding balance of 1,512 loans totaling $169.9 million.

Also, in response to the COVID-19 pandemic, Prosperity has provided relief to its loan customers through loan extensions and deferrals. Prosperity’s troubled debt restructurings do not include loan modifications related to COVID-19. Beginning in mid-March of 2020, Prosperity began offering deferral and modification of principal and/or interest payments to selected borrowers on a case-by-case basis. As of December 31, 2021, Prosperity had approximately $29.5 million in outstanding loans subject to deferral and modification agreements.

Prosperity’s management team will host a conference call on Wednesday, January 26, 2022 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity’s fourth quarter 2021 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 0033886.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity’s home page by selecting “Presentations, Webcasts & Calls” from the menu on the Investor Relations link and following the instructions.

Prosperity’s management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews diluted earnings per share excluding merger related expenses net of tax, and net operating loss (“NOL”) tax benefit; return on average assets excluding merger related expenses net of tax, and NOL tax benefit; return on average common equity excluding merger related expenses net of tax, and NOL tax benefit; return on average tangible common equity; return on average tangible common equity excluding merger related expenses net of tax, and NOL tax benefit; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities and merger related expenses, for internal planning and forecasting purposes. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity’s financial results and their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity’s business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Please refer to the “Notes to Selected Financial Data” at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

As of December 31, 2021, Prosperity Bancshares, Inc.^® is a $37.834 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

Prosperity currently operates 273 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity’s management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may,” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity’s possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity’s future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity’s loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity’s future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity’s operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity’s operating income, financial condition and cash flows. These forward‑looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors;

changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity’s securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; the effect, impact, potential duration or other implications of the COVID-19 pandemic; and weather. These and various other factors are discussed in Prosperity Bancshares’ Annual Report on Form 10-K for the year ended December 31, 2020, Quarterly Report on Form 10-Q for the period ended September 30, 2021 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission (“SEC”). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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

	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Balance Sheet Data (at period end)
Loans held for sale	$	7,274		$	10,197		$	9,080		$	20,991		$	46,777
Loans held for investment		16,833,171			16,949,486			17,147,146			17,345,506			17,357,788
Loans held for investment - Warehouse Purchase Program		1,775,699			1,998,049			2,095,559			2,272,389			2,842,379
Total loans		18,616,144			18,957,732			19,251,785			19,638,886			20,246,944

Investment securities^(A)		12,818,901			12,629,368			11,918,691			10,088,002			8,542,820
Federal funds sold		241			237			281			8,986			553
Allowance for credit losses on loans		(286,380	)		(287,187	)		(302,884	)		(307,210	)		(316,068	)
Cash and due from banks		2,547,739			1,055,386			1,059,879			1,947,235			1,342,996
Goodwill		3,231,636			3,231,636			3,231,636			3,231,636			3,231,636
Core deposit intangibles, net		61,684			64,539			67,417			70,304			73,235
Other real estate owned		622			150			144			462			10,593
Fixed assets, net		319,799			322,799			324,502			326,970			323,572
Other assets		523,584			537,459			548,473			553,147			602,994
Total assets	$	37,833,970		$	36,512,119		$	36,099,924		$	35,558,418		$	34,059,275

Noninterest-bearing deposits	$	10,750,034		$	10,326,489		$	10,099,149		$	9,820,445		$	9,151,233
Interest-bearing deposits		20,021,728			19,125,163			19,011,092			18,942,660			18,209,259
Total deposits		30,771,762			29,451,652			29,110,241			28,763,105			27,360,492
Other borrowings		—			—			—			—			—
Securities sold under repurchase agreements		448,099			440,969			433,069			377,106			389,583
Subordinated notes		—			—			—			—			—
Allowance for credit losses on off-balance sheet credit exposures		29,947			29,947			29,947			29,947			29,947
Other liabilities		156,926			244,110			216,330			166,414			148,584
Total liabilities		31,406,734			30,166,678			29,789,587			29,336,572			27,928,606
Shareholders' equity^(B)		6,427,236			6,345,441			6,310,337			6,221,846			6,130,669
Total liabilities and equity	$	37,833,970		$	36,512,119		$	36,099,924		$	35,558,418		$	34,059,275

(A) Includes $2,290, $2,483, $1,394, $970 and $974 in unrealized gains on available for sale securities for the quarterly periods ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

(B) Includes $1,809, $1,961, $1,101, $766 and $769 in after-tax unrealized gains on available for sale securities for the quarterly periods ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

	Three Months Ended													Year-to-Date
	Dec 31, 2021		Sep 30, 2021		Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
Income Statement Data
Interest income:
Loans	$	206,209	$	213,821	$	216,803		$	233,075		$	241,625		$	869,908		$	975,895
Securities^(C)		46,857		46,217		43,708			38,677			36,721			175,459			166,812
Federal funds sold and other earning assets		563		302		340			351			301			1,556			1,203
Total interest income		253,629		260,340		260,851			272,103			278,647			1,046,923			1,143,910

Interest expense:
Deposits		8,685		11,578		15,288			17,362			19,757			52,913			102,502
Other borrowings		—		—		—			—			33			—			3,550
Securities sold under repurchase agreements		184		195		164			159			224			702			1,627
Subordinated notes and trust preferred		—		—		—			—			999			—			5,498
Total interest expense		8,869		11,773		15,452			17,521			21,013			53,615			113,177
Net interest income		244,760		248,567		245,399			254,582			257,634			993,308			1,030,733
Provision for credit losses		—		—		—			—			—			—			20,000
Net interest income after provision for credit losses		244,760		248,567		245,399			254,582			257,634			993,308			1,010,733

Noninterest income:
Nonsufficient funds (NSF) fees		8,401		7,962		6,560			6,687			8,051			29,610			30,295
Credit card, debit card and ATM card income		8,894		8,837		8,918			8,031			8,193			34,680			31,245
Service charges on deposit accounts		6,237		6,115		6,062			5,978			6,046			24,392			23,860
Trust income		2,698		2,467		2,276			2,837			2,192			10,278			9,598
Mortgage income		685		1,396		2,914			3,307			3,989			8,302			10,777
Brokerage income		953		861		795			711			642			3,320			2,504
Bank owned life insurance income		1,317		1,325		1,294			1,292			1,252			5,228			5,754
Net gain (loss) on sale or write-down of assets		1,165		255		(244	)		(79	)		(675	)		1,097			(5,533	)
Other noninterest income		5,407		5,427		6,981			5,244			6,857			23,059			23,034
Total noninterest income		35,757		34,645		35,556			34,008			36,547			139,966			131,534

Noninterest expense:
Salaries and benefits		76,496		78,412		75,611			80,037			77,809			310,556			309,268
Net occupancy and equipment		8,140		8,165		8,046			7,833			8,223			32,184			35,037
Credit and debit card, data processing and software amortization		9,050		9,103		8,718			8,233			8,442			35,104			40,329
Regulatory assessments and FDIC insurance		2,801		2,497		2,670			2,670			2,670			10,638			9,861
Core deposit intangibles amortization		2,855		2,878		2,887			2,931			3,243			11,551			13,169
Depreciation		4,518		4,524		4,513			4,540			4,261			18,095			18,232
Communications		3,134		3,013		2,982			2,899			2,931			12,028			12,477
Other real estate expense		24		30		198			244			279			496			623
Net loss (gain) on sale or write-down of other real estate		2		4		(1,839	)		(887	)		(195	)		(2,720	)		(458	)
Merger related expenses		—		—		—			—			—			—			8,018
Other noninterest expense		12,518		11,189		11,405			10,576			12,542			45,688			50,677
Total noninterest expense		119,538		119,815		115,191			119,076			120,205			473,620			497,233
Income before income taxes		160,979		163,397		165,764			169,514			173,976			659,654			645,034
Provision for income taxes		34,192		34,807		35,153			36,205			36,885			140,357			116,130
Net income available to common shareholders	$	126,787	$	128,590	$	130,611		$	133,309		$	137,091		$	519,297		$	528,904

(C) Interest income on securities was reduced by net premium amortization of $16,006, $15,141, $14,436, $12,844 and $11,509 for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and $58,427 and $38,827 for the years ended December 31, 2021 and December 31, 2020, respectively.

(Dollars and share amounts in thousands, except per share data and market prices)

	Three Months Ended															Year-to-Date
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020

Profitability
Net income ^(D) (E)	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	528,904

Basic earnings per share	$	1.38		$	1.39		$	1.41		$	1.44		$	1.48		$	5.60		$	5.68
Diluted earnings per share	$	1.38		$	1.39		$	1.41		$	1.44		$	1.48		$	5.60		$	5.68

Return on average assets ^(F)		1.37	%		1.42	%		1.45	%		1.54	%		1.63	%		1.44	%		1.62	%	^(J)
Return on average common equity ^(F)		7.91	%		8.07	%		8.31	%		8.60	%		8.98	%		8.21	%		8.85	%	^(J)
Return on average tangible common equity ^(F)^(G)		16.26	%		16.72	%		17.49	%		18.43	%		19.57	%		17.18	%		19.83	%	^(J)
Tax equivalent net interest margin ^{(D) (E)}^(H)		2.97	%		3.10	%		3.11	%		3.41	%		3.49	%		3.14	%		3.64	%
Efficiency ratio ^{(G) (I)}		42.79	%		42.34	%		40.96	%		41.25	%		40.77	%		41.83	%		42.58	%	^(K)

Liquidity and Capital Ratios
Equity to assets		16.99	%		17.38	%		17.48	%		17.50	%		18.00	%		16.99	%		18.00	%
Common equity tier 1 capital		15.10	%		14.84	%		15.26	%		14.60	%		13.74	%		15.10	%		13.74	%
Tier 1 risk-based capital		15.10	%		14.84	%		15.26	%		14.60	%		13.74	%		15.10	%		13.74	%
Total risk-based capital		15.45	%		15.20	%		15.71	%		15.07	%		14.23	%		15.45	%		14.23	%
Tier 1 leverage capital		9.62	%		9.55	%		9.50	%		9.68	%		9.67	%		9.62	%		9.67	%
Period end tangible equity to period end tangible assets ^(G)		9.07	%		9.18	%		9.18	%		9.05	%		9.19	%		9.07	%		9.19	%

Other Data
Weighted-average shares used in computing earnings per common share
Basic		92,162			92,683			92,935			92,854			92,559			92,657			93,058
Diluted		92,162			92,683			92,935			92,854			92,559			92,657			93,058
Period end shares outstanding		92,170			92,160			92,935			92,929			92,571			92,170			92,571
Cash dividends paid per common share	$	0.52		$	0.49		$	0.49		$	0.49		$	0.49		$	1.99		$	1.87
Book value per common share	$	69.73		$	68.85		$	67.90		$	66.95		$	66.23		$	69.73		$	66.23
Tangible book value per common share ^(G)	$	34.00		$	33.09		$	32.40		$	31.42		$	30.53		$	34.00		$	30.53

Common Stock Market Price
High	$	78.67		$	72.97		$	78.06		$	83.02		$	70.38		$	83.02		$	75.22
Low	$	68.53		$	64.40		$	69.83		$	66.45		$	50.43		$	64.40		$	42.02
Period end closing price	$	72.35		$	71.13		$	71.80		$	76.16		$	69.36		$	72.35		$	69.36
Employees – FTE (excluding overtime)		3,704			3,625			3,724			3,724			3,756			3,704			3,756
Number of banking centers		273			273			274			275			275			273			275

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

(E) Using effective tax rate of 21.2%, 21.3%, 21.2%, 21.4% and 21.2% for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and 21.3% and 18.0% for the years ended December 31, 2021 and December 31, 2020, respectively. Net income for the second quarter of 2020 includes a tax benefit for NOL related to the CARES Act.

(G) Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(H) Net interest margin for all periods presented is based on average balances on an actual 365-day or 366-day basis.

(I) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation.

(J) For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related expenses net of tax, and NOL tax benefit, refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K) For calculations of the efficiency ratio excluding merger related expenses net of tax, refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

YIELD ANALYSIS	Three Months Ended
	Dec 31, 2021								Sep 30, 2021								Dec 31, 2020
	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		^(L)	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		^(L)	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate	^(L)
Interest-earning assets:
Loans held for sale	$	8,794		$	71	3.20%			$	11,714		$	91	3.08%			$	42,856		$	348	3.23%
Loans held for investment		16,830,163			192,200	4.53%				17,102,998			199,019	4.62%				17,700,756			220,357	4.95%
Loans held for investment - Warehouse Purchase Program		1,772,971			13,938	3.12%				1,836,252			14,711	3.18%				2,603,455			20,920	3.20%
Total Loans		18,611,928			206,209	4.40%				18,950,964			213,821	4.48%				20,347,067			241,625	4.72%
Investment securities		12,751,857			46,857	1.46%		^(M)		12,184,964			46,217	1.50%		^(M)		8,001,679			36,721	1.83%	^(M)
Federal funds sold and other earning assets		1,393,859			563	0.16%				734,787			302	0.16%				1,094,487			301	0.11%
Total interest-earning assets		32,757,644			253,629	3.07%				31,870,715			260,340	3.24%				29,443,233			278,647	3.76%
Allowance for credit losses on loans		(287,191	)							(301,011	)							(322,138	)
Noninterest-earning assets		4,476,582								4,728,965								4,569,811
Total assets	$	36,947,035							$	36,298,669							$	33,690,906

Interest-bearing liabilities:
Interest-bearing demand deposits	$	6,196,283		$	2,187	0.14%			$	6,089,678		$	3,614	0.24%			$	5,545,298		$	5,301	0.38%
Savings and money market deposits		10,286,650			3,817	0.15%				9,944,664			4,522	0.18%				9,170,179			6,985	0.30%
Certificates and other time deposits		2,766,123			2,681	0.38%				2,897,123			3,442	0.47%				3,047,475			7,471	0.98%
Other borrowings		—			—		—			—			—		—			2,435			33	5.39%
Securities sold under repurchase agreements		432,981			184	0.17%				448,338			195	0.17%				376,779			224	0.24%
Subordinated notes		—			—		—			—			—		—			81,570			999	4.87%
Total interest-bearing liabilities		19,682,037			8,869	0.18%		^(N)		19,379,803			11,773	0.24%		^(N)		18,223,736			21,013	0.46%	^(N)

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		10,587,441								10,286,062								9,103,742
Allowance for credit losses on off-balance sheet credit exposures		29,947								29,947								29,947
Other liabilities		234,746								229,502								224,907
Total liabilities		30,534,171								29,925,314								27,582,332
Shareholders' equity		6,412,864								6,373,355								6,108,574
Total liabilities and shareholders' equity	$	36,947,035							$	36,298,669							$	33,690,906

Net interest income and margin				$	244,760	2.96%						$	248,567	3.09%						$	257,634	3.48%
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment					457								551								664
Net interest income and margin (tax equivalent basis)				$	245,217	2.97%						$	249,118	3.10%						$	258,298	3.49%

(M) Yield on securities was impacted by net premium amortization of $16,006, $15,141, and $11,509 for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 0.12%, 0.16%, and 0.31% for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

YIELD ANALYSIS	Year-to-Date
	Dec 31, 2021								Dec 31, 2020
	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		^(O)	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate	^(O)
Interest-earning assets:
Loans held for sale	$	16,807		$	510	3.03%			$	55,883		$	1,923	3.44%
Loans held for investment		17,128,069			806,012	4.71%				17,842,438			910,532	5.10%
Loans held for investment - Warehouse Purchase Program		1,988,724			63,386	3.19%				1,964,206			63,440	3.23%
Total loans		19,133,600			869,908	4.55%				19,862,527			975,895	4.91%
Investment securities		11,328,903			175,459	1.55%		^(P)		8,022,205			166,812	2.08%	^(P)
Federal funds sold and other earning assets		1,212,698			1,556	0.13%				529,075			1,203	0.23%
Total interest-earning assets		31,675,201			1,046,923	3.31%				28,413,807			1,143,910	4.03%
Allowance for credit losses on loans		(302,381	)							(324,308	)
Noninterest-earning assets		4,602,458								4,555,851
Total assets	$	35,975,278							$	32,645,350

Interest-bearing liabilities:
Interest-bearing demand deposits	$	6,169,864		$	17,215	0.28%			$	5,177,736		$	22,046	0.43%
Savings and money market deposits		9,883,549			19,582	0.20%				8,654,874			37,685	0.44%
Certificates and other time deposits		2,917,976			16,116	0.55%				3,194,274			42,771	1.34%
Other borrowings		—			—		—			329,276			3,550	1.08%
Securities sold under repurchase agreements		410,747			702	0.17%				371,872			1,627	0.44%
Subordinated notes		—			—		—			114,499			5,498	4.80%
Total interest-bearing liabilities		19,382,136			53,615	0.28%		^(Q)		17,842,531			113,177	0.63%	^(Q)

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		10,036,519								8,558,385
Allowance for credit losses on off-balance sheet credit exposures		29,947								25,735
Other liabilities		204,522								244,047
Total liabilities		29,653,124								26,670,698
Shareholders' equity		6,322,154								5,974,652
Total liabilities and shareholders' equity		35,975,278							$	32,645,350

Net interest income and margin				$	993,308	3.14%						$	1,030,733	3.63%
Non-GAAP to GAAP reconciliation:
Tax equivalent adjustment					2,229								2,735
Net interest income and margin (tax equivalent basis)				$	995,537	3.14%						$	1,033,468	3.64%

(P) Yield on securities was impacted by net premium amortization of $58,427 and $38,827 for the years ended December 31, 2021 and 2020, respectively.

(Q) Total cost of funds, including noninterest bearing deposits, was 0.18% and 0.43% for the years ended December 31, 2021 and 2020, respectively.

	Three Months Ended
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
YIELD TREND ^(R)

Interest-Earning Assets:
Loans held for sale		3.20	%		3.08	%		3.19	%		2.90	%		3.23	%
Loans held for investment		4.53	%		4.62	%		4.65	%		5.02	%		4.95	%
Loans held for investment - Warehouse Purchase Program		3.12	%		3.18	%		3.21	%		3.23	%		3.20	%
Total loans		4.40	%		4.48	%		4.50	%		4.80	%		4.72	%
Investment securities ^(S)		1.46	%		1.50	%		1.57	%		1.71	%		1.83	%
Federal funds sold and other earning assets		0.16	%		0.16	%		0.11	%		0.09	%		0.11	%
Total interest-earning assets		3.07	%		3.24	%		3.30	%		3.64	%		3.76	%

Interest-Bearing Liabilities:
Interest-bearing demand deposits		0.14	%		0.24	%		0.35	%		0.39	%		0.38	%
Savings and money market deposits		0.15	%		0.18	%		0.22	%		0.25	%		0.30	%
Certificates and other time deposits		0.38	%		0.47	%		0.58	%		0.76	%		0.98	%
Other borrowings		—			—			—			—			5.39	%
Securities sold under repurchase agreements		0.17	%		0.17	%		0.17	%		0.17	%		0.24	%
Subordinated notes		—			—			—			—			4.87	%
Total interest-bearing liabilities		0.18	%		0.24	%		0.32	%		0.38	%		0.46	%

Net Interest Margin		2.96	%		3.09	%		3.10	%		3.40	%		3.48	%
Net Interest Margin (tax equivalent)		2.97	%		3.10	%		3.11	%		3.41	%		3.49	%

(R) Annualized and based on average balances on an actual 365-day or 366-day basis.

(S) Yield on securities was impacted by net premium amortization of $16,006, $15,141, $14,436, $12,844 and $11,509 for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

	Three Months Ended
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Balance Sheet Averages
Loans held for sale	$	8,794		$	11,714		$	13,716		$	33,327		$	42,856
Loans held for investment		16,830,163			17,102,998			17,305,259			17,279,066			17,700,756
Loans held for investment - Warehouse Purchase Program		1,772,971			1,836,252			1,984,305			2,369,601			2,603,455
Total Loans		18,611,928			18,950,964			19,303,280			19,681,994			20,347,067

Investment securities		12,751,857			12,184,964			11,180,948			9,148,841			8,001,679
Federal funds sold and other earning assets		1,393,859			734,787			1,221,993			1,506,645			1,094,487
Total interest-earning assets		32,757,644			31,870,715			31,706,221			30,337,480			29,443,233
Allowance for credit losses on loans		(287,191	)		(301,011	)		(306,059	)		(315,590	)		(322,138	)
Cash and due from banks		329,406			570,765			521,737			308,787			289,579
Goodwill		3,231,637			3,231,637			3,231,637			3,233,231			3,231,850
Core deposit intangibles, net		63,091			65,955			68,830			71,763			74,919
Other real estate		321			279			3,001			6,385			14,573
Fixed assets, net		321,524			323,584			326,570			326,004			325,485
Other assets		530,603			536,745			544,085			576,300			633,405
Total assets	$	36,947,035		$	36,298,669		$	36,096,022		$	34,544,360		$	33,690,906

Noninterest-bearing deposits	$	10,587,441		$	10,286,062		$	10,062,085		$	9,206,791		$	9,103,742
Interest-bearing demand deposits		6,196,283			6,089,678			6,281,068			6,112,469			5,545,298
Savings and money market deposits		10,286,650			9,944,664			9,872,624			9,420,064			9,170,179
Certificates and other time deposits		2,766,123			2,897,123			2,980,186			3,031,621			3,047,475
Total deposits		29,836,497			29,217,527			29,195,963			27,770,945			26,866,694
Other borrowings		—			—			—			—			2,435
Securities sold under repurchase agreements		432,981			448,338			383,975			376,662			376,779
Subordinated notes		—			—			—			—			81,570
Allowance for credit losses on off-balance sheet credit exposures		29,947			29,947			29,947			29,947			29,947
Other liabilities		234,746			229,502			198,748			169,138			224,907
Shareholders' equity		6,412,864			6,373,355			6,287,389			6,197,668			6,108,574
Total liabilities and equity	$	36,947,035		$	36,298,669		$	36,096,022		$	34,544,360		$	33,690,906

	Dec 31, 2021					Sep 30, 2021					Jun 30, 2021					Mar 31, 2021					Dec 31, 2020
Period End Balances

Loan Portfolio
Commercial and industrial	$	2,050,631		11.0	%	$	1,841,899		9.7	%	$	2,021,951		10.5	%	$	2,104,116		10.7	%	$	2,210,003		10.9	%
Warehouse purchase program		1,775,699		9.5	%		1,998,049		10.6	%		2,095,559		10.9	%		2,272,389		11.6	%		2,842,379		14.0	%
Construction, land development and other land loans		2,299,715		12.4	%		2,269,417		12.0	%		2,147,474		11.2	%		2,031,355		10.4	%		1,956,960		9.7	%
1-4 family residential		4,860,419		26.1	%		4,709,468		24.8	%		4,531,589		23.5	%		4,310,437		21.9	%		4,253,331		21.0	%
Home equity		808,289		4.4	%		746,426		3.9	%		637,431		3.3	%		554,278		2.8	%		504,207		2.5	%
Commercial real estate (includes multi-family residential)		5,251,368		28.2	%		5,550,841		29.3	%		5,681,184		29.5	%		5,858,475		29.8	%		6,078,764		30.0	%
Agriculture (includes farmland)		620,338		3.3	%		631,497		3.3	%		590,135		3.1	%		571,783		2.9	%		581,352		2.9	%
Consumer and other		288,496		1.6	%		274,980		1.5	%		264,652		1.4	%		293,023		1.5	%		344,028		1.7	%
Energy		491,305		2.6	%		569,314		3.0	%		501,821		2.6	%		503,947		2.6	%		512,735		2.5	%
Paycheck Protection Program		169,884		0.9	%		365,841		1.9	%		779,989		4.0	%		1,139,083		5.8	%		963,185		4.8	%
Total loans	$	18,616,144				$	18,957,732				$	19,251,785				$	19,638,886				$	20,246,944

Deposit Types
Noninterest-bearing DDA	$	10,750,034		34.9	%	$	10,326,489		35.0	%	$	10,099,149		34.7	%	$	9,820,445		34.1	%	$	9,151,233		33.4	%
Interest-bearing DDA		6,741,092		21.9	%		6,088,923		20.7	%		6,185,115		21.2	%		6,158,641		21.4	%		5,899,051		21.6	%
Money market		7,178,904		23.3	%		6,864,664		23.3	%		6,706,252		23.0	%		6,714,889		23.4	%		6,381,014		23.3	%
Savings		3,401,727		11.1	%		3,293,850		11.2	%		3,160,606		10.9	%		3,083,447		10.7	%		2,863,086		10.5	%
Certificates and other time deposits		2,700,005		8.8	%		2,877,726		9.8	%		2,959,119		10.2	%		2,985,683		10.4	%		3,066,108		11.2	%
Total deposits	$	30,771,762				$	29,451,652				$	29,110,241				$	28,763,105				$	27,360,492

Loan to Deposit Ratio		60.5	%				64.4	%				66.1	%				68.3	%				74.0	%

	Dec 31, 2021					Sep 30, 2021					Jun 30, 2021					Mar 31, 2021					Dec 31, 2020

Single family residential construction	$	728,393		31.7	%	$	659,248		29.0	%	$	624,954		29.1	%	$	590,223		29.1	%	$	579,761		29.6	%
Land development		99,099		4.3	%		92,623		4.1	%		97,709		4.6	%		97,267		4.8	%		103,307		5.3	%
Raw land		322,673		14.0	%		315,803		13.9	%		245,484		11.4	%		243,394		12.0	%		247,628		12.7	%
Residential lots		206,978		9.0	%		195,201		8.6	%		165,645		7.7	%		176,884		8.6	%		158,441		8.1	%
Commercial lots		184,901		8.0	%		169,189		7.5	%		153,714		7.2	%		137,512		6.8	%		114,427		5.8	%
Commercial construction and other		757,687		33.0	%		837,436		36.9	%		860,069		40.0	%		786,192		38.7	%		753,587		38.5	%
Net unaccreted discount		(16	)				(83	)				(101	)				(117	)				(191	)
Total construction loans	$	2,299,715				$	2,269,417				$	2,147,474				$	2,031,355				$	1,956,960

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of December 31, 2021

	Houston		Dallas		Austin		OK City		Tulsa		Other ^(T)		Total
Collateral Type
Shopping center/retail	$	338,333	$	295,795	$	43,084	$	17,404	$	28,424	$	285,351	$	1,008,391
Commercial and industrial buildings		156,430		75,850		17,850		22,957		17,848		158,717		449,652
Office buildings		110,424		423,035		23,515		70,651		4,761		77,452		709,838
Medical buildings		96,724		21,552		2,594		22,871		43,311		65,361		252,413
Apartment buildings		120,376		199,421		12,842		15,669		34,737		139,622		522,667
Hotel		86,187		68,438		41,308		28,958		—		140,210		365,101
Other		74,949		68,338		28,468		7,932		3,735		72,608		256,030
Total	$	983,423	$	1,152,429	$	169,661	$	186,442	$	132,816	$	939,321	$	3,564,092	^(U)

	Non-PCD Loans						PCD Loans						Total Acquired Loans
	Balance at Acquisition Date		Balance at Sep 30, 2021		Balance at Dec 31, 2021		Balance at Acquisition Date		Balance at Sep 30, 2021		Balance at Dec 31, 2021		Balance at Acquisition Date			Balance at Sep 30, 2021		Balance at Dec 31, 2021
Loan marks:
Acquired banks ^(V)	$	345,599	$	12,774	$	8,143	$	320,052	$	5,569	$	4,838	$	665,651		$	18,343	$	12,981

Acquired portfolio loan balances:
Acquired banks ^(V)		12,286,159		2,585,926		2,094,039		689,573		89,833		83,909		12,975,732	^(W)		2,675,759		2,177,948

Acquired portfolio loan balances less loan marks	$	11,940,560	$	2,573,152	$	2,085,896	$	369,521	$	84,264	$	79,071	$	12,310,081		$	2,657,416	$	2,164,967

(U) Represents a portion of total commercial real estate loans of $5.251 billion as of December 31, 2021.

(V) Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank and LegacyTexas Bank.

	Three Months Ended															Year-to-Date
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
Asset Quality
Nonaccrual loans	$	26,269		$	35,035		$	32,880		$	43,025		$	47,185		$	26,269		$	47,185
Accruing loans 90 or more days past due		887			1,038			330			313			1,699			887			1,699
Total nonperforming loans		27,156			36,073			33,210			43,338			48,884			27,156			48,884
Repossessed assets		310			326			310			362			93			310			93
Other real estate		622			150			144			462			10,593			622			10,593
Total nonperforming assets	$	28,088		$	36,549		$	33,664		$	44,162		$	59,570		$	28,088		$	59,570

Nonperforming assets:
Commercial and industrial (includes energy)	$	6,150		$	8,199		$	8,613		$	11,290		$	16,176		$	6,150		$	16,176
Construction, land development and other land loans		1,841			803			1,423			1,692			1,566			1,841			1,566
1-4 family residential (includes home equity)		11,990			11,117			11,681			11,920			25,830			11,990			25,830
Commercial real estate (includes multi-family residential)		7,276			15,691			11,266			16,896			12,315			7,276			12,315
Agriculture (includes farmland)		816			643			661			803			2,075			816			2,075
Consumer and other		15			96			20			1,561			1,608			15			1,608
Total	$	28,088		$	36,549		$	33,664		$	44,162		$	59,570		$	28,088		$	59,570
Number of loans/properties		157			155			152			167			208			157			208
Allowance for credit losses on loans	$	286,380		$	287,187		$	302,884		$	307,210		$	316,068		$	286,380		$	316,068

Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	177		$	3,763		$	3,529		$	1,584		$	4,085		$	9,053		$	24,607
Construction, land development and other land loans		(162	)		(4	)		(105	)		(5	)		(110	)		(276	)		350
1-4 family residential (includes home equity)		(72	)		66			(6	)		47			1,982			35			2,290
Commercial real estate (includes multi-family residential)		(10	)		11,180			517			6,589			626			18,276			1,221
Agriculture (includes farmland)		(102	)		(63	)		(9	)		33			(4	)		(141	)		(25	)
Consumer and other		976			755			400			610			988			2,741			3,496
Total	$	807		$	15,697		$	4,326		$	8,858		$	7,567		$	29,688		$	31,939

Asset Quality Ratios
Nonperforming assets to average interest-earning assets		0.09	%		0.11	%		0.11	%		0.15	%		0.20	%		0.09	%		0.21	%
Nonperforming assets to loans and other real estate		0.15	%		0.19	%		0.17	%		0.22	%		0.29	%		0.15	%		0.29	%
Net charge-offs to average loans (annualized)		0.02	%		0.33	%		0.09	%		0.18	%		0.15	%		0.16	%		0.16	%
Allowance for credit losses on loans to total loans		1.54	%		1.51	%		1.57	%		1.56	%		1.56	%		1.54	%		1.56	%
Allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program loans and Paycheck Protection Program loans ^(G)		1.72	%		1.73	%		1.85	%		1.89	%		1.92	%		1.72	%		1.92	%

Prosperity’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews diluted earnings per share excluding merger related expenses net of tax, and NOL tax benefit; return on average assets excluding merger related expenses net of tax, and NOL tax benefit; return on average common equity excluding merger related expenses net of tax, and NOL tax benefit; return on average tangible common equity; return on average tangible common equity excluding merger related expenses net of tax, and NOL tax benefit; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and PPP loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities and merger related expenses, for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses on loans to total loans (excluding Warehouse Purchase Program loans and PPP loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

	Three Months Ended															Year-to-Date
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020
Reconciliation of diluted earnings per share to diluted earnings per share, excluding merger related expenses net of tax, and NOL tax benefit:
Net income	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	528,904
Add: merger related expenses net of tax^(X)		—			—			—			—			—			—			6,334
Less: NOL tax benefit ^(Y)		—			—			—			—			—			—			(20,145	)
Net income, excluding merger related expenses net of tax, and NOL tax benefit ^{(X) (Y)}	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	515,093

Weighted average diluted shares outstanding		92,162			92,683			92,935			92,854			92,559			92,657			93,058
Merger related expenses per diluted share, net of tax^(X)	$	—		$	—		$	—		$	—		$	—		$	—		$	0.07
NOL tax benefit per diluted share ^(X)	$	—		$	—		$	—		$	—		$	—		$	—		$	(0.22	)
Diluted earnings per share, excluding merger related expenses net of tax, and NOL tax benefit ^{(X) (Y)}	$	1.38		$	1.39		$	1.41		$	1.44		$	1.48		$	5.60		$	5.54

Reconciliation of return on average assets to return on average assets excluding merger related expenses net of tax, and NOL tax benefit:
Net income, excluding merger related expenses net of tax, and NOL tax benefit ^{(X) (Y)}	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	515,093
Average total assets	$	36,947,035		$	36,298,669		$	36,096,022		$	34,544,360		$	33,690,906		$	35,975,278		$	32,645,350
Return on average assets excluding merger related expenses net of tax, and NOL tax benefit^{(F) (X) (Y)}		1.37	%		1.42	%		1.45	%		1.54	%		1.63	%		1.44	%		1.58	%

Reconciliation of return on average common equity to return on average common equity excluding merger related expenses net of tax, and NOL tax benefit:
Net income, excluding merger related expenses net of tax, and NOL tax benefit ^{(X) (Y)}	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	515,903
Average shareholders' equity	$	6,412,864		$	6,373,355		$	6,287,389		$	6,197,668		$	6,108,574		$	6,322,154		$	5,974,652
Return on average common equity excluding merger related expenses net of tax, and NOL tax benefit ^{(F) (X) (Y)}		7.91	%		8.07	%		8.31	%		8.60	%		8.98	%		8.21	%		8.62	%

Reconciliation of return on average common equity to return on average tangible common equity:
Net income	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	528,904
Average shareholders' equity	$	6,412,864		$	6,373,355		$	6,287,389		$	6,197,668		$	6,108,574		$	6,322,154		$	5,974,652
Less: Average goodwill and other intangible assets		(3,294,728	)		(3,297,592	)		(3,300,467	)		(3,304,994	)		(3,306,769	)		(3,299,412	)		(3,307,639	)
Average tangible shareholders’ equity	$	3,118,136		$	3,075,763		$	2,986,922		$	2,892,674		$	2,801,805		$	3,022,742		$	2,667,013
Return on average tangible common equity ^(F)		16.26	%		16.72	%		17.49	%		18.43	%		19.57	%		17.18	%		19.83	%

(Y) Net income for the second quarter of 2020 includes a tax benefit for NOL related to the CARES Act.

	Three Months Ended															Year-to-Date
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020

Reconciliation of return on average common equity to return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit:
Net income, excluding merger related expenses net of tax, and NOL tax benefit^{(X) (Y)}	$	126,787		$	128,590		$	130,611		$	133,309		$	137,091		$	519,297		$	515,093
Average shareholders' equity	$	6,412,864		$	6,373,355		$	6,287,389		$	6,197,668		$	6,108,574		$	6,322,154		$	5,974,652
Less: Average goodwill and other intangible assets		(3,294,728	)		(3,297,592	)		(3,300,467	)		(3,304,994	)		(3,306,769	)		(3,299,412	)		(3,307,639	)
Average tangible shareholders’ equity	$	3,118,136		$	3,075,763		$	2,986,922		$	2,892,674		$	2,801,805		$	3,022,742		$	2,667,013
Return on average tangible common equity excluding merger related expenses net of tax, and NOL tax benefit ^{(F) (X) (Y)}		16.26	%		16.72	%		17.49	%		18.43	%		19.57	%		17.18	%		19.31	%


Reconciliation of book value per share to tangible book value per share:
Shareholders’ equity	$	6,427,236		$	6,345,441		$	6,310,337		$	6,221,846		$	6,130,669		$	6,427,236		$	6,130,669
Less: Goodwill and other intangible assets		(3,293,320	)		(3,296,175	)		(3,299,053	)		(3,301,940	)		(3,304,871	)		(3,293,320	)		(3,304,871	)
Tangible shareholders’ equity	$	3,133,916		$	3,049,266		$	3,011,284		$	2,919,906		$	2,825,798		$	3,133,916		$	2,825,798

Period end shares outstanding		92,170			92,160			92,935			92,929			92,571			92,170			92,571
Tangible book value per share	$	34.00		$	33.09		$	32.40		$	31.42		$	30.53		$	34.00			30.53

Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:
Tangible shareholders’ equity	$	3,133,916		$	3,049,266		$	3,011,284		$	2,919,906		$	2,825,798		$	3,133,916		$	2,825,798
Total assets	$	37,833,970		$	36,512,119		$	36,099,924		$	35,558,418		$	34,059,275		$	37,833,970		$	34,059,275
Less: Goodwill and other intangible assets		(3,293,320	)		(3,296,175	)		(3,299,053	)		(3,301,940	)		(3,304,871	)		(3,293,320	)		(3,304,871	)
Tangible assets	$	34,540,650		$	33,215,944		$	32,800,871		$	32,256,478		$	30,754,404		$	34,540,650		$	30,754,404
Period end tangible equity to period end tangible assets ratio		9.07	%		9.18	%		9.18	%		9.05	%		9.19	%		9.07	%		9.19	%

Reconciliation of allowance for credit losses on loans to total loans to allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and Paycheck Protection Program loans:
Allowance for credit losses on loans	$	286,380		$	287,187		$	302,884		$	307,210		$	316,068		$	286,380		$	316,068
Total loans	$	18,616,144		$	18,957,732		$	19,251,785		$	19,638,886		$	20,246,944		$	18,616,144		$	20,246,944
Less: Warehouse Purchase Program loans		(1,775,699	)		(1,998,049	)		(2,095,559	)		(2,272,389	)		(2,842,379	)		(1,775,699	)		(2,842,379	)
Less: Paycheck Protection Program loans		(169,884	)		(365,841	)		(779,989	)		(1,139,083	)		(963,185	)		(169,884	)		(963,185	)
Total loans less Warehouse Purchase Program and Paycheck Protection Program loans	$	16,670,561		$	16,593,842		$	16,376,237		$	16,227,414		$	16,441,380		$	16,670,561		$	16,441,380
Allowance for credit losses on loans to total loans excluding Warehouse Purchase Program and Paycheck Protection Program loans		1.72	%		1.73	%		1.85	%		1.89	%		1.92	%		1.72	%		1.92	%

Reconciliation of efficiency ratio to efficiency ratio excluding net gains and losses on the sale of assets and taxes:
Noninterest expense	$	119,538		$	119,815		$	115,191		$	119,076		$	120,205		$	473,620		$	497,233

Net interest income	$	244,760		$	248,567		$	245,399		$	254,582		$	257,634		$	993,308		$	1,030,733
Noninterest income		35,757			34,645			35,556			34,008			36,547			139,966			131,534
Less: net gain (loss) on sale or write down of assets		1,165			255			(244	)		(79	)		(675	)		1,097			(5,533	)
Noninterest income excluding net gains and losses on the sale or write down of assets and securities		34,592			34,390			35,800			34,087			37,222			138,869			137,067
Total income excluding net gains and losses on the sale or write down of assets and taxes	$	279,352		$	282,957		$	281,199		$	288,669		$	294,856		$	1,132,177		$	1,167,800
Efficiency ratio, excluding net gains and losses on the sale or write down of assets and taxes		42.79	%		42.34	%		40.96	%		41.25	%		40.77	%		41.83	%		42.58	%

	Three Months Ended															Year-to-Date
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Dec 31, 2021			Dec 31, 2020

Reconciliation of efficiency ratio to efficiency ratio excluding net gains and losses on the sale of assets, taxes and merger related expenses:
Noninterest expense	$	119,538		$	119,815		$	115,191		$	119,076		$	120,205		$	473,620		$	497,233
Less: merger related expenses		—			—			—			—			—			—			8,018
Noninterest expense excluding merger related expenses	$	119,538		$	119,815		$	115,191		$	119,076		$	120,205		$	473,620		$	489,215

Net interest income	$	244,760		$	248,567		$	245,399		$	254,582		$	257,634		$	993,308		$	1,030,733
Noninterest income		35,757			34,645			35,556			34,008			36,547			139,966			131,534
Less: net gain (loss) on sale or write down of assets		1,165			255			(244	)		(79	)		(675	)		1,097			(5,533	)
Noninterest income excluding net gains and losses on the sale or write down of assets and taxes		34,592			34,390			35,800			34,087			37,222			138,869			137,067
Total income excluding net gains and losses on the sale or write down of assets and taxes	$	279,352		$	282,957		$	281,199		$	288,669		$	294,856		$	1,132,177		$	1,167,800
Efficiency ratio excluding net gains and losses on the sale or write down of assets, taxes and merger related expenses		42.79	%		42.34	%		40.96	%		41.25	%		40.77	%		41.83	%		41.89	%

PRESS RELEASE	For more information contact:

Prosperity Bancshares, Inc.^®	Cullen Zalman
Prosperity Bank Plaza	Senior Vice President – Banking and Corporate Activities
4295 San Felipe	281.269.7199
Houston, Texas 77027	cullen.zalman@prosperitybankusa.com

	Three Months Ended					Year-to-Date
	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Dec 31, 2021	Dec 31, 2020
Loan discount accretion
ASC 310-20	$4,635	$3,761	$9,731	$13,313	$13,514	$31,440	$70,705
ASC 310-30	$731	$1,618	$2,462	$3,027	$2,545	$7,838	$20,636
Securities net amortization	$139	$136	$171	$111	$66	$557	$579
Time deposits amortization	$127	$201	$327	$507	$790	$1,162	$6,093