10-Q

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 March 31, 2024

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 May 6, 2024, there were 95,937,934 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 March 31, 2024 (unaudited) and December 31, 2023	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 (unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	54
Item 4.	Controls and Procedures	54
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signatures		57

2

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2024			2023
	(unaudited)
	(Dollars in thousands, except par value)
ASSETS
Cash and due from banks	$	1,086,444		$	458,153
Federal funds sold		250			260
Total cash and cash equivalents		1,086,694			458,413
Available for sale securities, at fair value		315,300			438,588
Held to maturity securities, at cost (fair value of $10,478,359 and $10,984,598, respectively)		11,985,838			12,365,308
Total securities		12,301,138			12,803,896
Loans held for sale		6,380			5,734
Loans held for investment		20,393,943			20,352,559
Loans held for investment - Warehouse Purchase Program		864,924			822,245
Total loans		21,265,247			21,180,538
Less: allowance for credit losses on loans		(330,219	)		(332,362	)
Loans, net		20,935,028			20,848,176
Accrued interest receivable		97,671			96,327
Goodwill		3,396,402			3,396,086
Core deposit intangibles, net		60,757			63,994
Bank premises and equipment, net		372,333			369,992
Other real estate owned		2,204			1,708
Bank owned life insurance (BOLI)		380,615			379,447
Federal Home Loan Bank of Dallas stock		8,750			8,750
Other assets		114,928			121,088
TOTAL ASSETS	$	38,756,520		$	38,547,877
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	9,526,535		$	9,776,572
Interest-bearing		17,648,983			17,403,237
Total deposits		27,175,518			27,179,809
Other borrowings		3,900,000			3,725,000
Securities sold under repurchase agreements		261,671			309,277
Accrued interest payable		75,871			34,819
Allowance for credit losses on off-balance sheet credit exposures		36,503			36,503
Other liabilities		202,413			183,139
Total liabilities		31,651,976			31,468,547
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; 93,525,291 issued and outstanding at March 31, 2024; 93,722,383 shares issued and outstanding at December 31, 2023		93,525			93,723
Capital surplus		3,672,090			3,703,795
Retained earnings		3,341,262			3,283,210
Accumulated other comprehensive loss —net unrealized loss on available for sale securities, net of tax benefit of $(620) and $(372), respectively		(2,333	)		(1,398	)
Total shareholders’ equity		7,104,544			7,079,330
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	38,756,520		$	38,547,877

See notes to consolidated financial statements.

3

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended
	March 31,
	2024			2023
	(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees	$	306,228		$	247,118
Securities		66,421			73,185
Federal funds sold and other earning assets		9,265			7,006
Total interest income		381,914			327,309
INTEREST EXPENSE:
Deposits		92,692			47,343
Other borrowings		48,946			34,396
Securities sold under repurchase agreements		2,032			2,103
Total interest expense		143,670			83,842
NET INTEREST INCOME		238,244			243,467
PROVISION FOR CREDIT LOSSES		—			—
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		238,244			243,467
NONINTEREST INCOME:
Nonsufficient funds (NSF) fees		8,288			8,095
Credit card, debit card and ATM card income		8,861			8,666
Service charges on deposit accounts		6,406			5,926
Trust income		4,156			3,225
Mortgage income		610			238
Brokerage income		1,235			1,149
Net (loss) gain on sale or write-down of assets		(35	)		121
Net gain on sale of securities		298			—
Other		9,051			10,846
Total noninterest income		38,870			38,266
NONINTEREST EXPENSE:
Salaries and employee benefits		85,771			77,798
Net occupancy and equipment		8,623			8,025
Credit and debit card, data processing and software amortization		10,975			9,566
Regulatory assessments and FDIC insurance		5,538			4,973
Core deposit intangibles amortization		3,237			2,374
Depreciation		4,686			4,433
Communications		3,402			3,462
Net other real estate income		49			45
Merger related expenses		—			860
Other		13,567			11,464
Total noninterest expense		135,848			123,000
INCOME BEFORE INCOME TAXES		141,266			158,733
PROVISION FOR INCOME TAXES		30,840			34,039
NET INCOME	$	110,426		$	124,694
EARNINGS PER SHARE:
Basic	$	1.18		$	1.37
Diluted	$	1.18		$	1.37

See notes to consolidated financial statements.

4

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended
	March 31,
	2024			2023
	(Dollars in thousands)
Net income	$	110,426		$	124,694
Other comprehensive income, before tax:
Securities available for sale:
Change in unrealized loss during the period		(1,184	)		(4	)
Total other comprehensive loss		(1,184	)		(4	)
Deferred tax benefit related to other comprehensive income		249			1
Other comprehensive loss, net of tax		(935	)		(3	)
Comprehensive income	$	109,491		$	124,691

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)
BALANCE AT DECEMBER 31, 2022		91,313,615		$	91,314		$	3,541,924		$	3,069,609		$	(3,473	)	$	6,699,374
Net income											124,694						124,694
Other comprehensive loss														(3	)		(3	)
Common stock issued in connection with the issuance of restricted stock awards, net		(9,250	)		(9	)		9									—
Common stock repurchase		(611,263	)		(611	)		(37,429	)								(38,040	)
Stock based compensation expense								3,166									3,166
Cash dividends declared, $0.55 per share											(50,074	)					(50,074	)
BALANCE AT MARCH 31, 2023		90,693,102		$	90,694		$	3,507,670		$	3,144,229		$	(3,476	)	$	6,739,117
BALANCE AT DECEMBER 31, 2023		93,722,383		$	93,723		$	3,703,795		$	3,283,210		$	(1,398	)	$	7,079,330
Net income											110,426						110,426
Other comprehensive loss														(935	)		(935	)
Common stock issued in connection with the issuance of restricted stock awards, net		370,600			370			(370	)								—
Common stock repurchase		(567,692	)		(568	)		(34,714	)								(35,282	)
Stock based compensation expense								3,379									3,379
Cash dividends declared, $0.56 per share											(52,374	)					(52,374	)
BALANCE AT MARCH 31, 2024		93,525,291		$	93,525		$	3,672,090		$	3,341,262		$	(2,333	)	$	7,104,544

See notes to consolidated financial statements.

6

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
	March 31,
	2024			2023
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	110,426		$	124,694
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and core deposit intangibles amortization		7,923			6,807
Provision for credit losses		—			—
Net amortization of premium on investments		5,822			7,384
Net gain on sale of investment securities		(298	)		—
Net gain on sale of other real estate and repossessed assets		(137	)		(13	)
Net loss (gain) on sale or write down of premises and equipment		35			(121	)
Net accretion of discount on loans		(1,860	)		(872	)
Net amortization of premium on deposits		(97	)		(53	)
Net gain on sale of loans		(612	)		(239	)
Proceeds from sale of loans held for sale		24,475			8,470
Originations of loans held for sale		(24,509	)		(9,280	)
Stock based compensation expense		3,379			3,166
Decrease (increase) in accrued interest receivable and other assets		2,811			(66,156	)
Increase in accrued interest payable and other liabilities		60,042			105,986
Net cash provided by operating activities		187,400			179,773
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal paydowns of held to maturity securities		391,803			412,524
Purchase of held to maturity securities		(18,947	)		(3,028	)
Proceeds from maturities, sales and principal paydowns of available for sale securities		5,631,402			2,515,280
Purchase of available for sale securities		(5,508,208	)		(2,527,704	)
Originations of Warehouse Purchase Program loans		(3,021,378	)		(2,468,101	)
Proceeds from pay-offs of Warehouse Purchase Program loans		2,978,699			2,409,606
Net increase in loans held for investment		(42,737	)		(434,029	)
Purchase of bank premises and equipment		(7,184	)		(10,224	)
Proceeds from sale of bank premises, equipment and other real estate		838			741
Proceeds from insurance claims		1,049			2,811
Net cash provided by (used in) investing activities		405,337			(102,124	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing deposits		(250,037	)		(807,100	)
Net increase (decrease) in interest-bearing deposits		245,843			(722,142	)
Net proceeds from other short-term borrowings		175,000			1,515,000
Net (decrease) increase in securities sold under repurchase agreements		(47,606	)		6,127
Repurchase of common stock		(35,282	)		(38,040	)
Payments of cash dividends		(52,374	)		(50,074	)
Net cash provided by (used in) financing activities		35,544			(96,229	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		628,281			(18,580	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		458,413			424,133
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,086,694		$	405,553
NONCASH ACTIVITIES:
Acquisition of real estate through foreclosure of collateral	$	969		$	468
SUPPLEMENTAL INFORMATION:
Income taxes paid	$	487		$	327
Interest paid		102,618			79,968

See notes to consolidated financial statements

7

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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, 2023. Operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other period.

2. INCOME PER COMMON SHARE

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

	Three Months Ended March 31,
	2024				2023
	Amount		Per Share Amount		Amount		Per Share Amount
	(Amounts in thousands, except per share data)
Net income	$	110,426			$	124,694
Basic:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37
Diluted:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37

There were no stock options outstanding at March 31, 2024 or exercisable during the three months ended March 31, 2024 or 2023 that would have had an anti-dilutive effect on the above computation.

3. NEW ACCOUNTING STANDARDS

Accounting Standards Updates (“ASU”)

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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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. The Company does not expect ASU 2024-01 to have a significant impact on its financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income. ASU 2023-09 focuses on the rate reconciliation and income taxes paid and 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,

8

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The Company does not expect ASU 2023-09 to have an 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 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. Early adoption is permitted. The Company does not expect ASU 2023-07 to have a significant impact on its 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 Accounting Standards Codification 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. The Company does not expect ASU 2023-06 to have a significant impact on its financial statements.

ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in ASU 2022-02 eliminated the accounting guidance for troubled debt restructurings and enhanced disclosures for certain loan refinancing and restructurings to borrowers experiencing financial difficulty. This guidance was applied on a prospective basis. Additionally, ASU 2022-02 requires entities to disclose current-period gross charge-offs by year of origination. ASU 2022-02 became effective for the Company on January 1, 2023 and did not have a significant impact on the Company’s financial statements.

4. SECURITIES

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

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	1,830	$	(335	)	$	15,845
Collateralized mortgage obligations		198,180		—		(3,374	)		194,806
Mortgage-backed securities		105,723		58		(1,132	)		104,649
Total	$	318,253	$	1,888	$	(4,841	)	$	315,300
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,691	$	—	$	(107	)	$	7,584
States and political subdivisions		111,699		764		(2,581	)		109,882
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		256,216		—		(25,076	)		231,140
Mortgage-backed securities		11,598,232		388		(1,477,027	)		10,121,593
Total	$	11,985,838	$	1,152	$	(1,508,631	)	$	10,478,359

9

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	20,698	$	1,827	$	(738	)	$	21,787
Collateralized mortgage obligations		321,881		967		(2,804	)		320,044
Mortgage-backed securities		97,779		96		(1,118	)		96,757
Total	$	440,358	$	2,890	$	(4,660	)	$	438,588
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,631	$	—	$	(52	)	$	7,579
States and political subdivisions		116,497		1,864		(2,306	)		116,055
Corporate debt securities		12,000		—		(4,200	)		7,800
Collateralized mortgage obligations		263,250		—		(20,864	)		242,386
Mortgage-backed securities		11,965,930		2,131		(1,357,283	)		10,610,778
Total	$	12,365,308	$	3,995	$	(1,384,705	)	$	10,984,598

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 326,“Financial Instruments – Credit Losses.”

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.

As of March 31, 2024, 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 March 31, 2024, 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 March 31, 2024, the Company’s municipal securities represent 0.9% of the securities portfolio. Management has the ability and intent to hold the securities classified as held to maturity until they mature,

10

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

at which time the Company will receive full value for the securities. Accordingly, as of March 31, 2024, 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:

	March 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	$	5,265	$	(335	)	$	—	$	—		$	5,265	$	(335	)
Collateralized mortgage obligations		58,266		(874	)		136,540		(2,500	)		194,806		(3,374	)
Mortgage-backed securities		10,043		(60	)		91,458		(1,072	)		101,501		(1,132	)
Total	$	73,574	$	(1,269	)	$	227,998	$	(3,572	)	$	301,572	$	(4,841	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,583	$	(107	)	$	—	$	—		$	7,583	$	(107	)
States and political subdivisions		14,877		(68	)		54,906		(2,513	)		69,783		(2,581	)
Corporate debt securities		—		—			8,160		(3,840	)		8,160		(3,840	)
Collateralized mortgage obligations		47,876		(1,261	)		183,228		(23,815	)		231,104		(25,076	)
Mortgage-backed securities		147,256		(1,836	)		9,900,482		(1,475,191	)		10,047,738		(1,477,027	)
Total	$	217,592	$	(3,272	)	$	10,146,776	$	(1,505,359	)	$	10,364,368	$	(1,508,631	)

	December 31, 2023
	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	$	7,300	$	(738	)	$	—	$	—		$	7,300	$	(738	)
Collateralized mortgage obligations		54,611		(729	)		114,758		(2,075	)		169,369		(2,804	)
Mortgage-backed securities		1,154		(13	)		92,211		(1,105	)		93,365		(1,118	)
Total	$	63,065	$	(1,480	)	$	206,969	$	(3,180	)	$	270,034	$	(4,660	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,580	$	(52	)	$	—	$	—		$	7,580	$	(52	)
States and political subdivisions		23,085		(79	)		41,039		(2,227	)		64,124		(2,306	)
Corporate debt securities		—		—			7,800		(4,200	)		7,800		(4,200	)
Collateralized mortgage obligations		50,147		(470	)		192,205		(20,394	)		242,352		(20,864	)
Mortgage-backed securities		52,853		(807	)		10,354,514		(1,356,476	)		10,407,367		(1,357,283	)
Total	$	133,665	$	(1,408	)	$	10,595,558	$	(1,383,297	)	$	10,729,223	$	(1,384,705	)

At March 31, 2024 and December 31, 2023, there were 1,028 securities and 941 securities, respectively, in an unrealized loss position for 12 months or more.

11

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

The table below summarizes the amortized cost and fair value of investment securities at March 31, 2024, 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	$	27,214	$	27,560	$	—	$	—
Due after one year through five years		45,853		45,608		—		—
Due after five years through ten years		46,427		41,573		14,350		15,845
Due after ten years		11,896		10,885		—		—
Subtotal		131,390		125,626		14,350		15,845
Mortgage-backed securities and collateralized mortgage obligations		11,854,448		10,352,733		303,903		299,455
Total	$	11,985,838	$	10,478,359	$	318,253	$	315,300

The Company recorded a $298 thousand net gain on the sale of securities for the three months ended March 31, 2024 and no gain or loss on the sale of securities for the three months ended March 31, 2023. As of March 31, 2024, the Company did not own any non-agency collateralized mortgage obligations.

At March 31, 2024 and December 31, 2023, 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 $10.99 billion and $11.34 billion and a fair value of $9.60 billion and $10.09 billion at March 31, 2024 and December 31, 2023, respectively, were pledged to collateralize public deposits and for other purposes required or permitted by law.

5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

	March 31, 2024		December 31, 2023
	(Dollars in thousands)
Residential mortgage loans held for sale	$	6,380	$	5,734
Commercial and industrial		2,470,848		2,305,040
Real estate:
Construction, land development and other land loans		2,876,588		3,076,591
1-4 family residential (includes home equity)		8,275,040		8,162,344
Commercial real estate (includes multi-family residential)		5,631,460		5,662,948
Farmland		590,896		598,898
Agriculture		222,196		217,145
Consumer and other		326,915		329,593
Total loans held for investment, excluding Warehouse Purchase Program		20,393,943		20,352,559
Warehouse Purchase Program		864,924		822,245
Total loans, including Warehouse Purchase Program	$	21,265,247	$	21,180,538

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 82.3% and 83.0% of the Company’s total loan portfolio, excluding Warehouse Purchase Program loans, at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, excluding Warehouse Purchase Program loans, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

12

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

Related Party Loans. As of March 31, 2024 and December 31, 2023, loans outstanding to directors, officers and their affiliates totaled $290 thousand and $292 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 three months ended March 31, 2024			As of and for the year ended December 31, 2023
	(Dollars in thousands)
Beginning balance on January 1	$	292		$	547
New loans		1			64
Repayments		(3	)		(319	)
Ending balance	$	290		$	292

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.

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

	March 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	$	17,078	$	—	$	17,078	$	14,749	$	2,844,761	$	2,876,588
Warehouse Purchase Program loans		—		—		—		—		864,924		864,924
Agriculture and agriculture real estate (includes farmland)		3,672		428		4,100		3,286		805,706		813,092
1-4 family (includes home equity) (1)		37,462		—		37,462		29,464		8,214,494		8,281,420
Commercial real estate (includes multi-family residential)		13,036		2,417		15,453		21,303		5,594,704		5,631,460
Commercial and industrial		20,715		190		20,905		9,542		2,440,401		2,470,848
Consumer and other		432		—		432		131		326,352		326,915
Total	$	92,395	$	3,035	$	95,430	$	78,475	$	21,091,342	$	21,265,247

13

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

	December 31, 2023
	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	$	21,627	$	1,635	$	23,262	$	14,770	$	3,038,559	$	3,076,591
Warehouse Purchase Program loans		—		—		—		—		822,245		822,245
Agriculture and agriculture real estate (includes farmland)		8,572		—		8,572		1,460		806,011		816,043
1-4 family (includes home equity) (1)		38,350		130		38,480		25,694		8,103,904		8,168,078
Commercial real estate (includes multi-family residential)		23,511		—		23,511		18,662		5,620,775		5,662,948
Commercial and industrial		14,782		430		15,212		8,066		2,281,762		2,305,040
Consumer and other		503		—		503		36		329,054		329,593
Total	$	107,345	$	2,195	$	109,540	$	68,688	$	21,002,310	$	21,180,538

(1)Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

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

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Nonaccrual loans (1) (2)	$	78,475		$	68,688
Accruing loans 90 or more days past due		3,035			2,195
Total nonperforming loans		81,510			70,883
Repossessed assets		97			76
Other real estate		2,204			1,708
Total nonperforming assets	$	83,811		$	72,667
Nonperforming assets to total loans and other real estate		0.39	%		0.34	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.41	%		0.36	%
Nonaccrual loans to total loans		0.37	%		0.32	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.38	%		0.34	%

(1)ASU 2022-02 became effective for the Company on January 1, 2023.

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

The Company had $83.8 million in nonperforming assets at March 31, 2024 compared with $72.7 million at December 31, 2023. Nonperforming assets were 0.39% of total loans and other real estate at March 31, 2024 and 0.34% of total loans and other real estate at December 31, 2023. The Company had $78.5 million in nonaccrual loans at March 31, 2024 compared with $68.7 million at December 31, 2023.

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,

14

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

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.

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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
PCD loans:
Outstanding balance	$	495,074		$	533,653
Discount		(7,361	)		(7,914	)
Recorded investment	$	487,713		$	525,739

Changes in the accretable yield for acquired PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	7,914		$	3,361
Accretion charge-offs		(5	)		—
Accretion		(548	)		(339	)
Balance at March 31,	$	7,361		$	3,022

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 March 31, 2024, 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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Non-PCD loans:
Outstanding balance	$	1,676,563		$	1,823,809
Discount		(18,681	)		(19,992	)
Recorded investment	$	1,657,882		$	1,803,817

Changes in the discount accretion for Non-PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	19,992		$	2,233
Accretion recoveries		1			—
Accretion		(1,312	)		(532	)
Balance at March 31,	$	18,681		$	1,701

15

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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.

16

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

The following tables present loans by risk grade, by category of loan and year of origination/renewal at March 31, 2024.

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Construction, Land Development and Other Land Loans
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		1,106		166		—		—		14		—		—		1,286
Grade 3		103,359		745,828		696,969		364,477		215,354		57,308		119,072		—		2,302,367
Grade 4		3,478		83,562		146,216		42,544		5,572		26,944		30,782		—		339,098
Grade 5		—		—		1,357		—		23,373		15,796		769		—		41,295
Grade 6		—		570		—		7,698		184		561		—		—		9,013
Grade 7		—		183		2,647		343		—		242		248		—		3,663
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,218		29,616		98,450		15,171		7,649		7,371		20,391		—		179,866
Total	$	108,055	$	860,865	$	945,805	$	430,233	$	252,132	$	108,236	$	171,262	$	—	$	2,876,588
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agriculture and Agriculture Real Estate (includes Farmland)
Grade 1	$	720	$	1,179	$	1,231	$	172	$	252	$	369	$	8,590	$	—	$	12,513
Grade 2		—		13		60		101		—		722		46		—		942
Grade 3		20,051		126,212		168,180		76,630		47,924		118,858		102,641		94		660,590
Grade 4		3,436		21,435		19,644		25,993		4,122		9,589		21,807		—		106,026
Grade 5		725		57		799		885		—		1,143		—		—		3,609
Grade 6		—		—		—		78		—		1,195		—		—		1,273
Grade 7		—		—		1,469		558		339		29		—		—		2,395
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		1,986		2,532		1,345		14,558		2,630		2,693		—		25,744
Total	$	24,932	$	150,882	$	193,915	$	105,762	$	67,195	$	134,535	$	135,777	$	94	$	813,092
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	121	$	—	$	—	$	121
1-4 Family (includes Home Equity) (1)
Grade 1	$	—	$	74	$	153	$	—	$	109	$	—	$	—	$	—	$	336
Grade 2		—		526		1,243		153		236		2,602		—		—		4,760
Grade 3		109,256		1,172,870		2,253,123		2,140,728		1,021,887		1,310,779		91,597		2,757		8,102,997
Grade 4		1,178		15,265		15,813		25,722		5,681		64,138		2,871		204		130,872
Grade 5		—		—		1,206		—		119		2,517		—		—		3,842
Grade 6		—		—		357		41		19		1,840		—		—		2,257
Grade 7		—		1,744		7,554		5,304		4,433		9,293		95		—		28,423
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		625		4,243		475		469		2,121		—		—		7,933
Total	$	110,434	$	1,191,104	$	2,283,692	$	2,172,423	$	1,032,953	$	1,393,290	$	94,563	$	2,961	$	8,281,420
Current-period gross write-offs	$	—	$	—	$	389	$	—	$	33	$	39	$	—	$	—	$	461

17

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Commercial Real Estate (includes Multi-Family Residential)
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		1,128		—		459		2,232		—		—		3,819
Grade 3		50,492		403,245		908,841		680,193		405,589		1,246,771		77,627		4,591		3,777,349
Grade 4		2,667		43,104		262,140		172,287		217,796		716,336		15,857		—		1,430,187
Grade 5		—		192		2,538		4,771		—		89,422		2,355		—		99,278
Grade 6		—		—		—		356		11,451		76,088		—		—		87,895
Grade 7		—		1,693		827		2,464		—		806		—		—		5,790
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		540		13,613		53,166		49,281		38,547		71,666		329		—		227,142
Total	$	53,699	$	461,847	$	1,228,640	$	909,352	$	673,842	$	2,203,321	$	96,168	$	4,591	$	5,631,460
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and Industrial
Grade 1	$	6,392	$	15,267	$	9,372	$	6,418	$	2,811	$	6,188	$	41,360	$	176	$	87,984
Grade 2		—		695		7,799		219		195		3,651		2,295		—		14,854
Grade 3		211,874		206,299		222,945		147,665		49,661		187,230		910,134		30,276		1,966,084
Grade 4		20,633		44,614		30,936		14,641		11,286		110,319		65,063		2,222		299,714
Grade 5		—		17		21,827		6,057		1,666		788		8,200		100		38,655
Grade 6		413		311		3,898		615		354		962		2,390		—		8,943
Grade 7		—		3,900		420		195		1,268		1,416		457		—		7,656
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		3,689		14,070		3,637		661		2,439		22,462		—		46,958
Total	$	239,312	$	274,792	$	311,267	$	179,447	$	67,902	$	312,993	$	1,052,361	$	32,774	$	2,470,848
Current-period gross write-offs	$	—	$	53	$	349	$	39	$	—	$	24	$	895	$	—	$	1,360
Consumer and Other
Grade 1	$	4,614	$	12,520	$	5,465	$	2,813	$	1,681	$	5,914	$	2,588	$	—	$	35,595
Grade 2		6,132		12,406		14,181		—		—		1,839		1,507		—		36,065
Grade 3		24,054		40,317		38,129		24,769		11,901		17,352		75,004		11		231,537
Grade 4		—		1,748		257		1,105		15,259		2,255		2,865		—		23,489
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		31		5		—		—		—		—		36
Grade 7		—		—		—		—		122		1		—		—		123
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		34		7		15		14		—		70
Total	$	34,800	$	66,991	$	58,063	$	28,726	$	28,970	$	27,376	$	81,978	$	11	$	326,915
Current-period gross write-offs	$	1,470	$	20	$	17	$	24	$	—	$	70	$	58	$	—	$	1,659

18

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Warehouse Purchase Program
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		—		—		—		—		—		—		—
Grade 3		864,924		—		—		—		—		—		—		—		864,924
Grade 4		—		—		—		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		—		—		—		—		—		—		—
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		—		—		—		—		—
Total	$	864,924	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	864,924
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Grade 1	$	11,726	$	29,040	$	16,221	$	9,403	$	4,853	$	12,471	$	52,538	$	176	$	136,428
Grade 2		6,132		14,746		24,577		473		890		11,060		3,848		—		61,726
Grade 3		1,384,010		2,694,771		4,288,187		3,434,462		1,752,316		2,938,298		1,376,075		37,729		17,905,848
Grade 4		31,392		209,728		475,006		282,292		259,716		929,581		139,245		2,426		2,329,386
Grade 5		725		266		27,727		11,713		25,158		109,666		11,324		100		186,679
Grade 6		413		881		4,286		8,793		12,008		80,646		2,390		—		109,417
Grade 7		—		7,520		12,917		8,864		6,162		11,787		800		—		48,050
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,758		49,529		172,461		69,943		61,891		86,242		45,889		—		487,713
Total	$	1,436,156	$	3,006,481	$	5,021,382	$	3,825,943	$	2,122,994	$	4,179,751	$	1,632,109	$	40,431	$	21,265,247
Current-period gross write-offs	$	1,470	$	73	$	755	$	63	$	33	$	254	$	953	$	—	$	3,601

(1)Includes $6.4 million of residential mortgage loans held for sale at March 31, 2024.

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 as of March 31, 2024 for estimated losses in the Company’s loan portfolio. 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.

19

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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 ASC Topic 326-20, “Financial Instruments – Credit Losses.” 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 ASC Topic 326, “Financial Instruments – Credit Losses.” 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 absorb losses in other categories.

20

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

The following table details activity in the allowance for credit losses on loans by category of loan for the three months ended March 31, 2024 and 2023.

	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 December 31, 2023	$	87,775		$	11,380		$	77,652		$	88,664		$	59,832		$	7,059		$	332,362
Provision for credit losses on loans		(5,619	)		1,270			2,469			(1,468	)		2,067			1,281			—
Charge-offs		—			(121	)		(461	)		—			(1,360	)		(1,659	)		(3,601	)
Recoveries		2			98			4			17			1,077			260			1,458
Net (charge-offs) recoveries		2			(23	)		(457	)		17			(283	)		(1,399	)		(2,143	)
Balance March 31, 2024	$	82,158		$	12,627		$	79,664		$	87,213		$	61,616		$	6,941		$	330,219
Allowance for credit losses on loans:
Three Months Ended
Balance December 31, 2022	$	78,853		$	7,699		$	60,795		$	66,272		$	62,319		$	5,638		$	281,576
Provision for credit losses		1,695			356			1,603			1,699			(6,495	)		1,142			—
Charge-offs		—			—			(65	)		—			(901	)		(1,225	)		(2,191	)
Recoveries		13			6			205			1			2,373			208			2,806
Net (charge-offs) recoveries		13			6			140			1			1,472			(1,017	)		615
Balance March 31, 2023	$	80,561		$	8,061		$	62,538		$	67,972		$	57,296		$	5,763		$	282,191

The allowance for credit losses on loans as of March 31, 2024 totaled $330.2 million or 1.55% of total loans, including acquired loans with discounts, a decrease of $2.1 million or 0.6% compared to the allowance for credit losses on loans totaling $332.4 million or 1.57% of total loans, including acquired loans with discounts, as of December 31, 2023. There was no provision for credit losses for the three months ended March 31, 2024 and 2023.

Net charge-offs were $2.1 million for the three months ended March 31, 2024 compared to net recoveries of $615 thousand for the three months ended March 31, 2023. Net charge-offs for the three months ended March 31, 2024 included $991 thousand related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Further, an additional $4.1 million of specific reserves on resolved PCD loans without any related charge-offs was 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 March 31, 2024 and December 31, 2023, the Company had $36.5 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 March 31, 2024, the Company had $2.26 billion in commitments expected to fund.

21

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

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 ASC Topic 326, “Financial Instruments—Credit Losses”, 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 who are 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 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.

The following table displays the amortized cost of loans that were both experiencing financial difficulty and modified during the three months ended March 31, 2024 and 2023, presented by category of loan and type of modification.

	Term Extension		Percentage of Total Loans Held for Investment
	(Dollars in thousands)
Three Months Ended March 31, 2024
Commercial and industrial	$	413		—
Agriculture		11,000		0.05	%
Total	$	11,413		0.05	%
Three Months Ended March 31, 2023
Construction, land development and other land loans	$	4,233		0.02	%
Total	$	4,233		0.02	%

The following table describes the modifications made to the loans presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023.

Term Extension
Loan Type	Three Months Ended March 31, 2024
Commercial and industrial	Modified to a 7 year term
Agriculture	Modified to a 2 year term
Loan Type	Three Months Ended March 31, 2023
Construction, land development and other land loans	Less than 12-month extension

The Company did not have any modified loans that defaulted during the three months ended March 31, 2024 that were modified during the prior trailing twelve months. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

22

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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. 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.

23

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

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

	As of March 31, 2024
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	15,845	$	—	$	15,845
Collateralized mortgage obligations		—		194,806		—		194,806
Mortgage-backed securities		—		104,649		—		104,649
Total	$	—	$	315,300	$	—	$	315,300
Derivative financial instruments:
Interest rate lock commitments	$	—	$	256	$	—	$	256
Forward mortgage-backed securities trades		—		8		—		8
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		4,309		—		4,309
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		74		—		74
Loan customer counterparty		—		4,330		—		4,330
Financial institution counterparty		—		—		—		—

	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	21,787	$	—	$	21,787
Collateralized mortgage obligations		—		320,044		—		320,044
Mortgage-backed securities		—		96,757		—		96,757
Total available for sale securities	$	—	$	438,588	$	—	$	438,588
Derivative financial instruments:
Interest rate lock commitments	$	—	$	218	$	—	$	218
Forward mortgage-backed securities trades		—		1		—		1
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		3,876		—		3,876
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		161		—		161
Loan customer counterparty		—		3,899		—		3,899
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 months ended March 31, 2024, the Company had additions to other real estate owned of $969 thousand of which $845 thousand was outstanding as of March 31, 2024. For the three months ended March 31, 2024, the Company had additions to impaired loans of $13.4 million, of which $13.4 million was outstanding as of March 31, 2024. The remaining financial assets and liabilities measured at fair value on a non-recurring basis that were recorded in 2024 and remained outstanding at March 31, 2024 were not significant.

24

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

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

	As of March 31, 2024
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	1,086,444	$	1,086,444	$	—	$	—	$	1,086,444
Federal funds sold		250		250		—		—		250
Held to maturity securities		11,985,838		—		10,478,359		—		10,478,359
Loans held for sale		6,380		—		6,380		—		6,380
Loans held for investment, net of allowance		20,063,724		—		—		18,465,513		18,465,513
Loans held for investment - Warehouse Purchase Program		864,924		—		864,924		—		864,924
Other real estate owned		2,204		—		2,204		—		2,204
Liabilities
Deposits:
Noninterest-bearing	$	9,526,535	$	—	$	9,526,535	$	—	$	9,526,535
Interest-bearing		17,648,983		—		17,611,669		—		17,611,669
Other borrowings		3,900,000		—		3,876,545		—		3,876,545
Securities sold under repurchase agreements		261,671		—		261,621		—		261,621

	As of December 31, 2023
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	458,153	$	458,153	$	—	$	—	$	458,153
Federal funds sold		260		260		—		—		260
Held to maturity securities		12,365,308		—		10,984,598		—		10,984,598
Loans held for sale		5,734		—		5,734		—		5,734
Loans held for investment, net of allowance		20,020,197		—		—		18,321,054		18,321,054
Loans held for investment - Warehouse Purchase Program		822,245		—		822,245		—		822,245
Other real estate owned		1,708		—		1,708		—		1,708
Liabilities
Deposits:
Noninterest-bearing	$	9,776,572	$	—	$	9,776,572	$	—	$	9,776,572
Interest-bearing		17,403,237		—		17,371,523		—		17,371,523
Other borrowings		3,725,000		—		3,725,000		—		3,725,000
Securities sold under repurchase agreements		309,277		—		309,245		—		309,245

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

25

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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 March 31, 2024. 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 three months ended March 31, 2024 and the year ended December 31, 2023 were as follows:

	Goodwill		Core Deposit Intangibles
	(Dollars in thousands)
Balance as of December 31, 2022	$	3,231,636	$	51,348
Less:
Amortization		—		(12,676	)
Add:
First Bancshares Merger		164,450		25,322
Balance as of December 31, 2023		3,396,086		63,994
Less:
Amortization		—		(3,237	)
Add:
First Bancshares Merger		316		—
Balance as of March 31, 2024	$	3,396,402	$	60,757

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 March 31, 2024, 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.

26

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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 $3.2 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively. The estimated aggregate future amortization expense for core deposit intangibles remaining as of March 31, 2024 is as follows (dollars in thousands):

Remaining 2024	$	9,576
2025		11,409
2026		10,376
2027		9,288
2028		8,288
Thereafter		11,820
Total	$	60,757

8. STOCK–BASED COMPENSATION

At March 31, 2024, 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 March 31, 2024, 406,757 shares of restricted common stock have vested and 540,297 shares of unvested restricted stock have been issued under the 2020 Plan.

As of March 31, 2024, the Company had no stock options outstanding. Stock-based compensation expense related to restricted stock was $3.4 million and $3.2 million during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $28.0 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 1.95 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 March 31, 2024 are summarized below. The Company’s future cash payments associated with its contractual obligations pursuant to the Federal Reserve’s Bank Term Funding Program (“BTFP”) as of March 31, 2024 are summarized below. The future interest payments were calculated using the current rate in effect at March 31, 2024. Payments under the BTFP include interest of $186.1 million that will be due over the future periods. These payments do not include prepayment options that may be available to the Company.

	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)
Bank Term Funding Program	$	4,086,149	$	—	$	—	$	—	$	4,086,149

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PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(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 $869 thousand and $806 thousand for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, operating lease ROU assets and lease liabilities were approximately $36.8 million. ROU assets and lease liabilities were classified as other assets and other liabilities, respectively.

As of March 31, 2024, the weighted average of remaining lease terms of the Company’s operating leases was 5.7 years. The weighted average discount rate used to determine the lease liabilities as of March 31, 2024 for the Company’s operating leases was 2.9%. Cash paid for the Company’s operating leases was $2.9 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company obtained $2.1 million in ROU assets in exchange for lease liabilities for one operating lease.

The Company’s future undiscounted cash payments associated with its operating leases as of March 31, 2024 are summarized below (dollars in thousands).

Remaining 2024	$	7,877
2025		10,005
2026		8,865
2027		5,849
2028		2,873
2029		1,541
Thereafter		8,327
Total undiscounted lease payments	$	45,337

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 March 31, 2024 are summarized below. Since commitments associated with letters of credit, unused capacity of 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	$	62,745	$	18,559	$	2,445	$	26	$	83,775
Unused capacity on Warehouse Purchase Program loans		1,058,576		—		—		—		1,058,576
Commitments to extend credit		1,489,941		1,020,761		296,869		1,623,299		4,430,870
Total	$	2,611,262	$	1,039,320	$	299,314	$	1,623,325	$	5,573,221

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PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

The Company records an allowance for credit losses on off-balance sheet credit exposure that is adjusted through a charge to provision for credit losses on the Company’s consolidated statement of income. At March 31, 2024 and December 31, 2023, this allowance, reported as a separate line item on the Company’s consolidated balance sheet, totaled $36.5 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,
	2024								2023
	Before Tax Amount			Tax Effect		Net of Tax Amount			Before Tax Amount			Tax Effect		Net of Tax Amount
	(Dollars in thousands)
Other comprehensive loss:
Securities available for sale:
Change in unrealized loss during period	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)
Total securities available for sale		(1,184	)		249		(935	)		(4	)		1		(3	)
Total other comprehensive loss	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)

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, 2023	$	(1,398	)	$	(1,398	)
Other comprehensive loss		(935	)		(935	)
Balance at March 31, 2024	$	(2,333	)	$	(2,333	)
Balance at December 31, 2022	$	(3,473	)	$	(3,473	)
Other comprehensive loss		(3	)		(3	)
Balance at March 31, 2023	$	(3,476	)	$	(3,476	)

11. DERIVATIVE FINANCIAL INSTRUMENTS

The following table provides the outstanding notional balances and fair values of outstanding derivative positions at March 31, 2024 and December 31, 2023.

	March 31, 2024						December 31, 2023
	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	$	15,693	$	256	$	—	$	7,113	$	218	$	—
Forward mortgage-backed securities trades		20,500		8		74		14,250		1		161
Commercial loan interest rate swaps and caps:
Loan customer counterparty		67,207		—		4,330		67,408		—		3,899
Financial institution counterparty		67,207		4,309		—		67,408		3,876		—

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.

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PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

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 March 31, 2024 and December 31, 2023 are presented in the following table.

	Weighted-Average Interest Rate
	March 31, 2024						December 31, 2023
	Received			Paid			Received			Paid
Loan customer counterparty		3.07	%		6.78	%		3.07	%		6.81	%

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 $4.3 million at March 31, 2024 and $3.9 million at December 31, 2023. 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 $280 thousand at March 31, 2024. 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 zero at March 31, 2024 and December 31, 2023.

The initial and subsequent changes in the fair value of IRLCs and the forward sales of mortgage-backed securities are recorded in net gain on sale of mortgage loans. 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 months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2024		2023
	(Dollars in thousands)
Interest rate lock commitments	$	38	$	30
Forward mortgage-backed securities trades		196		(50	)

30

PROSPERITY BANCSHARES, INC.® AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

(UNAUDITED)

12. ACQUISITIONS

Merger of First Bancshares of Texas, Inc. — Effective May 1, 2023, the Company completed the Merger of First Bancshares of Texas, Inc. (“First Bancshares”) into Bancshares and the subsequent merger of its wholly owned subsidiary, FirstCapital Bank of Texas, N.A. (“FirstCapital Bank”), into the Bank. FirstCapital Bank operated 16 full-service banking offices in six different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas. As of March 31, 2023, First Bancshares, on a consolidated basis, reported total assets of $2.14 billion, total loans of $1.65 billion and total deposits of $1.71 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 3,583,370 shares of its common stock plus approximately $91.5 million in cash for all outstanding shares of First Bancshares. As of March 31, 2024, the Company recognized goodwill of $164.8 million, which does not include all the subsequent fair value adjustments that have not yet been finalized. 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. During the second quarter of 2023, the Company completed the operational conversion of FirstCapital Bank.

13. SUBSEQUENT EVENT

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. Lone Star operated five banking centers 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.

Under 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 in the second quarter of 2024.

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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 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;

32

•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;

•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;

•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, 2023, 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, 2023.

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 March 31, 2024, 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; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 44 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 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

33

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.

Total assets were $38.76 billion at March 31, 2024 compared with $38.55 billion at December 31, 2023, an increase of $208.6 million or 0.5%. Total loans were $21.27 billion at March 31, 2024 compared with $21.18 billion at December 31, 2023, an increase of $84.7 million or 0.4%. Total deposits were $27.18 billion at March 31, 2024 compared with $27.18 billion at December 31, 2023 with a decrease of $4.3 million. Total shareholders’ equity was $7.10 billion at March 31, 2024 compared with $7.08 billion at December 31, 2023, an increase of $25.2 million or 0.4%.

RECENT ACQUISITION

Merger of First Bancshares of Texas, Inc. — Effective May 1, 2023, the Company completed the merger of First Bancshares of Texas, Inc. (“First Bancshares”) into the Bancshares and the subsequent merger of its wholly owned subsidiary, FirstCapital Bank of Texas, N.A. (“FirstCapital Bank”), into the Bank (collectively, the “FB Merger”). FirstCapital Bank operated 16 full-service banking offices in six different markets in West, North and Central Texas areas, including its main office in Midland, Texas, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas. As of March 31, 2023, First Bancshares, on a consolidated basis, reported total assets of $2.14 billion, total loans of $1.65 billion and total deposits of $1.71 billion.

Pursuant to the terms of the definitive agreement, the Bancshares issued 3,583,370 shares of its common stock and approximately $91.5 million in cash for all outstanding shares of First Bancshares capital stock. As of March 31, 2024, the Company recognized goodwill of $164.8 million, which does not include all the subsequent fair value adjustments that have not yet been finalized. During the second quarter of 2023, the Company completed the operational conversion of FirstCapital Bank.

SUBSEQUENT EVENT

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 the Bancshares and the subsequent merger of its wholly owned subsidiary, Lone Star State Bank of West Texas (“Lone Star Bank”), into the Bank. Lone Star operated five banking centers 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.

Under 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 in the second quarter of 2024.

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

34

statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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 326, “Measurement of Credit Losses on Financial Instruments” which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) 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. 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 for estimated 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. Pursuant to the Company's adoption of ASU 2022-02 effective January 1, 2023, the Company prospectively discontinued troubled debt restructurings accounting and no longer measures the economic concession for loan modifications occurring on or after the adoption date. In addition, modifications to loans previously designated as troubled debt restructurings that occur on or after January 1, 2023, are accounted for under ASU 2022-02 and result in the elimination of any prior economic concession recorded in the allowance related to such loans. For further discussion of the methodology used in the determination of the allowance for credit losses on loans, see “Accounting for Acquired 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.

35

RESULTS OF OPERATIONS

Net income available to common shareholders was $110.4 million for the quarter ended March 31, 2024 compared with $124.7 million for the same period in 2023. The change was primarily due to a decrease in net interest income and an increase in noninterest expense primarily due to an increase in salaries and benefits and expenses due to the FB Merger. Net income per diluted common share was $1.18 for the quarter ended March 31, 2024 compared with $1.37 for the same period in 2023. The Company posted annualized returns on average common equity of 6.20% and 7.38%, annualized returns on average assets of 1.13% and 1.31% and efficiency ratios of 49.07% and 43.68% for the quarters ended March 31, 2024 and 2023, respectively. The efficiency ratio is calculated by dividing total noninterest expense (excluding net gains and losses on the sale or write down 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 or write-down of assets and securities are not included. Additionally, taxes are not part of this calculation.

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 March 31, 2024

Net interest income before the provision for credit losses was $238.2 million for the quarter ended March 31, 2024, a decrease of $5.2 million or 2.1%, compared with $243.5 million for the same period in 2023. The change was primarily due to an increase in the average balances on other borrowings, an increase in the average rates on interest-bearing deposits and a decrease in the average balance on investment securities, partially offset by an increase in the average balances and average rates on loans.

Interest income on loans was $306.2 million for the quarter ended March 31, 2024, an increase of $59.1 million or 23.9%, compared with $247.1 million for the same period in 2023. The increase was due to an increase in both the average balances and average rates on loans.

Interest income on securities was $66.4 million for the quarter ended March 31, 2024, a decrease of $6.8 million or 9.2%, compared with $73.2 million for the same period in 2023, primarily due to a decrease in the average balances on investment securities.

Average interest-bearing liabilities were $22.10 billion for the quarter ended March 31, 2024, an increase of $1.28 billion or 6.1%, compared with $20.82 billion for the same period in 2023, primarily due to an increase in other borrowings and an increase in average rates on interest-bearing deposits. The average rate on interest-bearing liabilities was 2.62% for the quarter ended March 31, 2024, an increase of 99 basis points, compared with 1.63% for the same period in 2023.

The net interest margin on a tax-equivalent basis was 2.79% for the quarter ended March 31, 2024, a decrease of 14 basis points compared with 2.93% for the same period in 2023. The change was primarily due to an increase in the average balances on other borrowings, an increase in the average rates on interest-bearing deposits and a decrease in the average balance on investment securities, partially offset by an increase in the average balances and average rates on loans.

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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 March 31,
	2024								2023
	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	$	5,467		$	92		6.77	%	$	2,343		$	38		6.58	%
Loans held for investment		20,415,316			292,673		5.77	%		18,317,712			236,606		5.24	%
Loans held for investment - Warehouse Purchase Program		720,650			13,463		7.51	%		617,822			10,474		6.88	%
Total loans		21,141,433			306,228		5.83	%		18,937,877			247,118		5.29	%
Investment securities		12,693,268			66,421		2.10	%		14,332,509			73,185		2.07	%
Federal funds sold and other earning assets		672,840			9,265		5.54	%		600,048			7,006		4.74	%
Total interest-earning assets		34,507,541			381,914		4.45	%		33,870,434			327,309		3.92	%
Allowance for credit losses on loans		(331,708	)							(282,316	)
Noninterest-earning assets		4,759,697								4,589,735
Total assets	$	38,935,530							$	38,177,853
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	5,143,585		$	8,423		0.66	%	$	5,877,641		$	3,792		0.26	%
Savings and money market deposits		8,889,077			47,152		2.13	%		9,579,679			35,521		1.50	%
Certificates and other time deposits		3,683,815			37,117		4.05	%		2,045,580			8,030		1.59	%
Other borrowings		4,083,132			48,946		4.82	%		2,887,011			34,396		4.83	%
Securities sold under repurchase agreements		296,437			2,032		2.76	%		427,887			2,103		1.99	%
Total interest-bearing liabilities		22,096,046			143,670		2.62	%		20,817,798			83,842		1.63	%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits		9,443,249								10,389,980
Allowance for credit losses on off-balance sheet credit exposures		36,503								29,947
Other liabilities		238,480								180,685
Total liabilities		31,814,278								31,418,410
Shareholders' equity		7,121,252								6,759,443
Total liabilities and shareholders' equity	$	38,935,530							$	38,177,853
Net interest rate spread							1.83	%							2.29	%
Net interest income and margin (2) (3)				$	238,244		2.78	%				$	243,467		2.92	%
Net interest income and margin (tax equivalent) (4)				$	239,052		2.79	%				$	244,300		2.93	%

(1)Annualized and based on average balances on an actual 366-day or 365-day basis for the three months ended March 31, 2024 and 2023.

(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 March 31,
	2024 vs. 2023
	Increase
	(Decrease)
	Due to Change in
	Volume			Rate			Total
	(Dollars in thousands)
Interest-Earning Assets:
Loans held for sale	$	51		$	3		$	54
Loans held for investment (1)		27,321			28,746			56,067
Loans held for investment - Warehouse Purchase Program		1,758			1,231			2,989
Investment securities (1)		(8,440	)		1,676			(6,764	)
Federal funds sold and other earning assets		857			1,402			2,259
Total increase in interest income		21,547			33,058			54,605
Interest-Bearing Liabilities:
Interest-bearing demand deposits		(478	)		5,109			4,631
Savings and money market deposits		(2,582	)		14,213			11,631
Certificates and other time deposits (1)		6,485			22,602			29,087
Other borrowings		14,370			180			14,550
Securities sold under repurchase agreements		(651	)		580			(71	)
Total increase in interest expense		17,144			42,684			59,828
Increase (decrease) in net interest income	$	4,403		$	(9,626	)	$	(5,223	)

(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 months ended March 31, 2024 and 2023.

Net charge-offs were $2.1 million for the quarter ended March 31, 2024 compared with net recoveries of $615 thousand for the quarter ended March 31, 2023. Net charge-offs for the three months ended March 31, 2024 included $991 thousand related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Further, an additional $4.1 million of specific reserves on resolved PCD loans without any related charge-offs 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.

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Noninterest income totaled $38.9 million for the three months ended March 31, 2024 compared with $38.3 million for the same period in 2023, an increase of $604 thousand or 1.6%.

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

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Nonsufficient funds fees	$	8,288		$	8,095
Credit card, debit card and ATM card income		8,861			8,666
Service charges on deposit accounts		6,406			5,926
Trust income		4,156			3,225
Mortgage income		610			238
Brokerage income		1,235			1,149
Bank owned life insurance income		2,047			1,354
Net (loss) gain on sale or write-down of assets		(35	)		121
Net gain on sale of securities		298			—
Other		7,004			9,492
Total noninterest income	$	38,870		$	38,266

Noninterest Expense

Noninterest expense totaled $135.8 million for the quarter ended March 31, 2024 compared with $123.0 million for the quarter ended March 31, 2023, an increase of $12.8 million or 10.4%. The change was primarily due to increases in salaries and benefits, other noninterest expense and in credit and debit card, data processing and software amortization expense primarily due to three months of operations related to the FB Merger in the first quarter 2024 compared to none in the first quarter 2023.

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

	Three Months Ended March 31,
	2024		2023
	(Dollars in thousands)
Salaries and employee benefits (1)	$	85,771	$	77,798
Non-staff expenses:
Net occupancy and equipment		8,623		8,025
Credit and debit card, data processing and software amortization		10,975		9,566
Regulatory assessments and FDIC insurance		5,538		4,973
Core deposit intangibles amortization		3,237		2,374
Depreciation		4,686		4,433
Communications (2)		3,402		3,462
Net other real estate income (3)		49		45
Merger related expenses		—		860
Other		13,567		11,464
Total noninterest expense	$	135,848	$	123,000

(1)Includes stock-based compensation expense of $3.4 million and $3.2 million for the three months ended March 31, 2024 and 2023, 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 other nondeductible expenses. Income tax expense totaled $30.8 million for the three months ended March 31, 2024 compared with $34.0 million for the same period in 2023, a decrease of $3.2 million or 9.4%. The Company’s effective tax rate for the three months ended March 31, 2024 and 2023 was 21.8% and 21.4%, respectively.

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FINANCIAL CONDITION

Loan Portfolio

The Company separates its loan portfolio into two general categories of loans: (1) “originated loans,” which are loans originated by Prosperity Bank 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.

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.

	March 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	$	6,380	$	—	$	—	$	—	$	6,380
Commercial and industrial		1,746,604		516,720		160,566		46,958		2,470,848
Warehouse purchase program		864,924		—		—		—		864,924
Real estate:
Construction, land development and other land loans		2,568,008		123,678		5,036		179,866		2,876,588
1-4 family residential (includes home equity)		7,355,509		210,021		701,577		7,933		8,275,040
Commercial real estate (includes multi-family residential)		4,286,824		359,308		758,186		227,142		5,631,460
Farmland		544,039		9,440		16,841		20,576		590,896
Agriculture		162,249		50,743		4,036		5,168		222,196
Consumer and other		270,457		44,748		11,640		70		326,915
Total loans held for investment		17,798,614		1,314,658		1,657,882		487,713		21,258,867
Total	$	17,804,994	$	1,314,658	$	1,657,882	$	487,713	$	21,265,247

	December 31, 2023
			Acquired Loans
	Originated Loans		Re-Underwritten Acquired Loans		Non-PCD Loans		PCD Loans		Total Loans
	(Dollars in thousands)
Residential mortgage loans held for sale	$	5,734	$	—	$	—	$	—	$	5,734
Commercial and industrial		1,499,739		540,360		195,509		69,432		2,305,040
Warehouse purchase program		822,245		—		—		—		822,245
Real estate:
Construction, land development and other land loans		2,739,059		126,694		5,412		205,426		3,076,591
1-4 family residential (includes home equity)		7,211,453		214,809		730,189		5,893		8,162,344
Commercial real estate (includes multi-family residential)		4,262,288		338,200		834,922		227,538		5,662,948
Farmland		560,440		8,516		18,706		11,236		598,898
Agriculture		160,381		45,142		5,491		6,131		217,145
Consumer and other		271,000		44,922		13,588		83		329,593
Total loans held for investment		17,526,605		1,318,643		1,803,817		525,739		21,174,804
Total	$	17,532,339	$	1,318,643	$	1,803,817	$	525,739	$	21,180,538

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At March 31, 2024, total loans were $21.27 billion, an increase of $84.7 million or 0.4%, compared with $21.18 billion at December 31, 2023. Loans at March 31, 2024 included $6.4 million of loans held for sale and $864.9 million of Warehouse Purchase Program loans compared with $5.7 million of loans held for sale and $822.2 million of Warehouse Purchase Program loans at December 31, 2023. At March 31, 2024 and December 31, 2023, loans represented 54.9% of total assets.

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 or 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

41

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.

(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 $11.1 million to $83.8 million at March 31, 2024 compared with $72.7 million at December 31, 2023, with the majority of the balance for each period attributable to acquired loans.

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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:

	March 31, 2024
				Acquired Loans
	Originated Loans			Re-Underwritten Acquired Loans			Non-PCD Loans			PCD Loans			Total
	(Dollars in thousands)
Nonaccrual loans (1)(2)	$	36,147		$	3,674		$	8,229		$	30,425		$	78,475
Accruing loans 90 or more days past due		428			2,607			—			—			3,035
Total nonperforming loans		36,575			6,281			8,229			30,425			81,510
Repossessed assets		37			—			15			45			97
Other real estate		1,644			—			37			523			2,204
Total nonperforming assets	$	38,256		$	6,281		$	8,281		$	30,993		$	83,811
Nonperforming assets to total loans and other real estate		0.21	%		0.48	%		0.50	%		6.35	%		0.39	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.23	%		0.48	%		0.50	%		6.35	%		0.41	%
Nonaccrual loans to total loans		0.20	%		0.28	%		0.50	%		6.24	%		0.37	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.21	%		0.28	%		0.50	%		6.24	%		0.38	%

	December 31, 2023
				Acquired Loans
	Originated Loans			Re-Underwritten Acquired Loans			Non-PCD Loans			PCD Loans			Total
	(Dollars in thousands)
Nonaccrual loans (1)(2)	$	29,160		$	2,612		$	8,594		$	28,322		$	68,688
Accruing loans 90 or more days past due		—			552			8			1,635			2,195
Total nonperforming loans		29,160			3,164			8,602			29,957			70,883
Repossessed assets		76			—			—			—			76
Other real estate		1,323			—			—			385			1,708
Total nonperforming assets	$	30,559		$	3,164		$	8,602		$	30,342		$	72,667
Nonperforming assets to total loans and other real estate		0.17	%		0.24	%		0.48	%		5.77	%		0.34	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.18	%		0.24	%		0.48	%		5.77	%		0.36	%
Nonaccrual loans to total loans		0.17	%		0.20	%		0.48	%		5.39	%		0.32	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.17	%		0.20	%		0.48	%		5.39	%		0.34	%

(1)ASU 2022-02 became effective for the Company on January 1, 2023.

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

Nonperforming assets were 0.39% of total loans and other real estate at March 31, 2024 and 0.34% of total loans and other real estate at December 31, 2023. The allowance for credit losses on loans as a percentage of total nonperforming loans was 405.1% at March 31, 2024 and 468.89% at December 31, 2023.

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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 as of March 31, 2024 for estimated losses in the Company’s loan portfolio. 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 absorb 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 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.

44

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 is made. 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. See “Critical Accounting Estimates” above for more information.

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.

45

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 Three Months Ended March 31, 2024
	Originated Loans			Acquired Loans			Total
	(Dollars in thousands)
Average loans outstanding	$	17,587,207		$	3,554,226		$	21,141,433
Gross loans outstanding at end of period	$	17,804,994		$	3,460,253		$	21,265,247
Allowance for credit losses on loans at beginning of period	$	222,413		$	109,949		$	332,362
Provision for credit losses		5,484			(5,484	)		—
Charge-offs:
Commercial and industrial		(214	)		(1,146	)		(1,360	)
Real estate and agriculture		(201	)		(381	)		(582	)
Consumer and other		(1,528	)		(131	)		(1,659	)
Recoveries:
Commercial and industrial		164			913			1,077
Real estate and agriculture		2			119			121
Consumer and other		215			45			260
Net (charge-offs) recoveries(1)		(1,562	)		(581	)		(2,143	)
Allowance for credit losses on loans at end of period	$	226,335		$	103,884		$	330,219
Ratio of allowance to end of period loans		1.27	%		3.00	%		1.55	%
Ratio of allowance to end of period loans, excluding Warehouse Purchase Program		1.34	%		3.00	%		1.62	%
Ratio of net charge-offs (recoveries) to average loans (annualized)		0.04	%		0.07	%		0.04	%
Ratio of allowance to end of period nonperforming loans		618.8	%		231.2	%		405.1	%
Ratio of allowance to end of period nonaccrual loans		626.2	%		245.4	%		420.8	%

	As of and for the Three Months Ended March 31, 2023
	Originated Loans			Acquired Loans			Total
	(Dollars in thousands)
Average loans outstanding	$	16,097,319		$	2,840,558		$	18,937,877
Gross loans outstanding at end of period	$	16,596,141		$	2,738,218		$	19,334,359
Allowance for credit losses on loans at beginning of period	$	209,467		$	72,109		$	281,576
Provision for credit losses		6,737			(6,737	)		—
Charge-offs:
Commercial and industrial		(394	)		(507	)		(901	)
Real estate and agriculture		(65	)		—			(65	)
Consumer and other		(1,192	)		(33	)		(1,225	)
Recoveries:
Commercial and industrial		1,177			1,196			2,373
Real estate and agriculture		31			194			225
Consumer and other		204			4			208
Net (charge-offs) recoveries(1)		(239	)		854			615
Allowance for credit losses on loans at end of period	$	215,965		$	66,226		$	282,191
Ratio of allowance to end of period loans		1.30	%		2.42	%		1.46	%
Ratio of allowance to end of period loans, excluding Warehouse Purchase Program		1.37	%		2.42	%		1.52	%
Ratio of net charge-offs (recoveries) to average loans (annualized)		0.01	%		(0.12	%)		(0.01	%)
Ratio of allowance to end of period nonperforming loans		1,598.3	%		737.2	%		1,254.4	%
Ratio of allowance to end of period nonaccrual loans		1,598.3	%		737.2	%		1,254.4	%

(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 $1.9 million during the three months ended March 31, 2024. Partially offsetting these charge-offs were recoveries on originated loans of $381 thousand. Gross charge-offs on acquired loans were $1.7 million during the three months ended March 31, 2024. Offsetting these charge-offs were recoveries on acquired loans of $1.1 million. Total charge-offs for the three months ended March 31, 2024 were $3.6 million, partially offset by total recoveries of $1.5 million.

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

	Three Months Ended March 31,
	2024						2023
	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	$	(283	)		0.01	%	$	1,472			(0.03	%)
Real estate:
Construction, land development and other land loans		2			0.00	%		13			0.00	%
1-4 family residential (including home equity)		(457	)		0.01	%		140			0.00	%
Commercial real estate (including multi-family residential)		17			0.00	%		1			0.00	%
Agriculture (includes farmland)		(23	)		0.00	%		6			0.00	%
Consumer and other		(1,399	)		0.03	%		(1,017	)		0.02	%
Total net (charge-offs) recoveries	$	(2,143	)		0.04	%	$	615			(0.01	%)

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 absorb losses from any loan category, regardless of whether allocated to an originated loan or an acquired loan.

	March 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	$	33,693	$	17,626	$	4,612	$	5,685	$	61,616		12.1	%
Real estate		179,599		9,780		15,279		44,377		249,035		82.3	%
Agriculture and agriculture real estate		7,794		1,151		365		3,317		12,627		4.0	%
Consumer and other		5,249		1,484		189		19		6,941		1.6	%
Total allowance for credit losses on loans	$	226,335	$	30,041	$	20,445	$	53,398	$	330,219		100.0	%

	December 31, 2023
			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	$	27,948	$	18,211	$	5,340	$	8,333	$	59,832		11.3	%
Real estate		181,358		9,239		16,511		46,983		254,091		83.1	%
Agriculture and agriculture real estate		7,750		1,037		256		2,337		11,380		4.0	%
Consumer and other		5,357		1,465		217		20		7,059		1.6	%
Total allowance for credit losses on loans	$	222,413	$	29,952	$	22,324	$	57,673	$	332,362		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 $330.2 million at March 31, 2024 compared to $332.4 million at December 31, 2023, a decrease of $2.1 million or 0.6%. The allowance for credit losses on loans totaled 1.55% of total loans at March 31, 2024 and 1.57% of total loans at December 31, 2023.

At March 31, 2024, $226.3 million of the allowance for credit losses on loans was attributable to originated loans, an increase of $3.9 million or 1.8% compared with $222.4 million of the allowance at December 31, 2023. At March 31, 2024, $30.0 million of the allowance for credit losses on loans was attributable to re-underwritten acquired loans compared with $30.0 million of the allowance at December 31, 2023, an increase of $89 thousand or 0.3%. At March 31, 2024, $20.4 million of the allowance for credit losses on loans was attributable to Non-PCD loans compared with $22.3 million of the allowance at December 31, 2023, a decrease of $1.9 million or 8.4%. At March 31, 2024, $53.4 million of the allowance for credit losses on loans was attributable to PCD loans compared with $57.7 million of the allowance at December 31, 2023, a decrease of $4.3 million or 7.4%.

At March 31, 2024, the Company had $26.0 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 March 31, 2024 is adequate to absorb expected lifetime 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 March 31, 2024.

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 March 31, 2024 and December 31, 2023, the Company had $36.5 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.

Securities

The carrying cost of securities totaled $12.30 billion at March 31, 2024 compared with $12.80 billion at December 31, 2023, a decrease of $502.8 million or 3.9%. At March 31, 2024, securities represented 31.7% of total assets compared with 33.2% of total assets at December 31, 2023.

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

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	1,830	$	(335	)	$	15,845
Collateralized mortgage obligations		198,180		—		(3,374	)		194,806
Mortgage-backed securities		105,723		58		(1,132	)		104,649
Total	$	318,253	$	1,888	$	(4,841	)	$	315,300
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,691	$	—	$	(107	)	$	7,584
States and political subdivisions		111,699		764		(2,581	)		109,882
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		256,216		—		(25,076	)		231,140
Mortgage-backed securities		11,598,232		388		(1,477,027	)		10,121,593
Total	$	11,985,838	$	1,152	$	(1,508,631	)	$	10,478,359

48

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	20,698	$	1,827	$	(738	)	$	21,787
Collateralized mortgage obligations		321,881		967		(2,804	)		320,044
Mortgage-backed securities		97,779		96		(1,118	)		96,757
Total	$	440,358	$	2,890	$	(4,660	)	$	438,588
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,631	$	—	$	(52	)	$	7,579
States and political subdivisions		116,497		1,864		(2,306	)		116,055
Corporate debt securities		12,000		—		(4,200	)		7,800
Collateralized mortgage obligations		263,250		—		(20,864	)		242,386
Mortgage-backed securities		11,965,930		2,131		(1,357,283	)		10,610,778
Total	$	12,365,308	$	3,995	$	(1,384,705	)	$	10,984,598

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 326, “Financial Instruments – Credit Losses.”

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.

As of March 31, 2024, 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 March 31, 2024, 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 March 31, 2024 the Company’s municipal securities represent 0.9% 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 March 31, 2024, management believes that there is no potential for material credit losses on held to maturity securities.

49

Deposits

Total deposits were $27.18 billion at March 31, 2024 compared with $27.18 billion at December 31, 2023 with a decrease of $4.3 million. At March 31, 2024, noninterest-bearing deposits totaled $9.53 billion, a decrease of $250.0 million or 2.6% compared with $9.78 billion at December 31, 2023. Interest-bearing deposits totaled $17.65 billion at March 31, 2024 compared with $17.40 billion at December 31, 2023, an increase of $245.7 million or 1.4%.

Average deposits for the three months ended March 31, 2024 were $27.16 billion, a decrease of $733.2 million or 2.6%, compared with $27.89 billion for the three months ended March 31, 2023. The ratio of average interest-bearing deposits to total average deposits was 65.2% and 62.8% during the first three months of 2024 and 2023, respectively.

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

	Three Months Ended March 31,
	2024					2023
	Average Balance		Average Rate (1)			Average Balance		Average Rate (1)
	(Dollars in thousands)
Interest-bearing demand deposits	$	5,143,585		0.66	%	$	5,877,641		0.26	%
Regular savings		2,829,146		0.71	%		3,396,252		0.70	%
Money market savings		6,059,931		2.80	%		6,183,427		1.95	%
Certificates, IRAs and other time deposits		3,683,815		4.05	%		2,045,580		1.59	%
Total interest-bearing deposits		17,716,477		2.10	%		17,502,900		1.10	%
Noninterest-bearing demand deposits		9,443,249					10,389,980
Total deposits	$	27,159,726		1.37	%	$	27,892,880		0.69	%

(1)Annualized and based on average balances on an actual 366-day and 365-day basis for the three months ended March 31, 2024 and 2023.

Other Borrowings

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

	March 31, 2024		December 31, 2023
	(Dollars in thousands)
Bank Term Funding Program	$	3,900,000	$	3,725,000
Securities sold under repurchase agreements		261,671		309,277
Total	$	4,161,671	$	4,034,277

Bank Term Funding Program— During the second quarter of 2023, the Bank began participating in the Federal Reserve’s Bank Term Funding Program (“BTFP”), which ceased extending new loans as of March 11, 2024. Under the BTFP program, eligible depository institutions could obtain loans of up to one year in length by pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets are valued at par. At March 31, 2024, the Bank had secured borrowing capacity of $5.53 billion collateralized by the par value of pledged securities totaling $5.53 billion. At March 31, 2024, the balance outstanding was $3.90 billion consisting of a one-term advance maturing in January 2025 with an interest rate of 4.76%.

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 March 31, 2024, the Company had total borrowing capacity of $11.00 billion under this line. At March 31, 2024, the Company had no FHLB advances or long-term notes payable balance outstanding.

Securities sold under repurchase agreements— At March 31, 2024, the Company had $261.7 million in securities sold under repurchase agreements with banking customers compared with $309.3 million at December 31, 2023, a decrease of $47.6 million or 15.4%. Repurchase agreements are generally settled on the following business day; however, approximately $3.0 million of the repurchase agreements outstanding at March 31, 2024 have maturity dates ranging from 12 to 24 months. All securities sold under repurchase agreements are collateralized by certain pledged securities.

50

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 March 31, 2024, the Company had outstanding $4.43 billion in commitments to extend credit, $83.8 million in commitments associated with outstanding standby letters of credit and $1.06 billion 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 March 31, 2024, the Company had cash and cash equivalents of $1.09 billion compared with $458.4 million at December 31, 2023, an increase of $628.3 million or 137.1%. The increase was primarily due to net proceeds from principal paydowns and sales of investment securities of $496.1 million, net cash provided by operating activities of $187.4 million and proceeds from short-term borrowings of $175.0 million, partially offset by a net increase in loans of $85.4 million, payment of cash dividends of $52.4 million, repurchase of common stock of $35.3 million and a decrease in securities sold under repurchase agreements of $47.6 million.

Share Repurchases

On January 16, 2024, the Company announced a stock repurchase program under which the Company could repurchase up to 5%, or approximately 4.7 million shares, of its outstanding common stock over a one-year period expiring on January 16, 2025, 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 suspend, modify or terminate the program at any time and for any reason without prior notice. Under its 2024 stock repurchase program, Bancshares repurchased 567,692 shares of its common stock at an average weighted price of $62.12 per share during the three months ended March 31, 2024.

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 March 31, 2024 are summarized below.

Borrowings

The Company’s future cash payments associated with the Federal Reserve's BTFP as of March 31, 2024 are summarized below. The future interest payments were calculated using the current rate in effect at March 31, 2024. Payments under the BTFP include interest of $186.1 million that will be due over the future periods. These payments do not include prepayment options that may be available to the Company.

	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)
Bank Term Funding Program	$	4,086,149	$	—	$	—	$	—	$	4,086,149

51

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 $869 thousand and $806 thousand for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, operating lease ROU assets and lease liabilities were approximately $36.8 million. ROU assets and lease liabilities were classified as other assets and other liabilities, respectively.

As of March 31, 2024, the weighted average of remaining lease terms of the Company’s operating leases was 5.7 years. The weighted average discount rate used to determine the lease liabilities as of March 31, 2024 for the Company’s operating leases was 2.9%. Cash paid for the Company’s operating leases was $2.9 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company obtained $2.1 million in ROU assets in exchange for lease liabilities for one operating lease.

The Company’s future undiscounted cash payments associated with its operating leases as of March 31, 2024 are summarized below (dollars in thousands).

Remaining 2024	$	7,877
2025		10,005
2026		8,865
2027		5,849
2028		2,873
2029		1,541
Thereafter		8,327
Total undiscounted lease payments	$	45,337

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 of Warehouse Purchase Program loans and commitments to extend credit expiring by period as of March 31, 2024 are summarized below. Since commitments associated with letters of credit, unused capacity of 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	$	62,745	$	18,559	$	2,445	$	26	$	83,775
Unused capacity on Warehouse Purchase Program loans		1,058,576		—		—		—		1,058,576
Commitments to extend credit		1,489,941		1,020,761		296,869		1,623,299		4,430,870
Total	$	2,611,262	$	1,039,320	$	299,314	$	1,623,325	$	5,573,221

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 a charge to provision for credit losses on the Company’s consolidated statement of income. At March 31, 2024 and December 31, 2023, this allowance, reported as a separate line item on the Company’s consolidated balance sheet, totaled $36.5 million.

52

Capital Resources

Total shareholders’ equity was $7.10 billion at March 31, 2024 compared with $7.08 billion at December 31, 2023, an increase of $25.2 million or 0.4%. The increase was primarily due to net income of $110.4 million, partially offset by dividend payments of $52.4 million and common stock repurchases of $35.3 million.

The Basel III Capital Rules adopted by the federal regulatory authorities in 2013 substantially revised the risk-based capital requirements applicable to the Company and the Bank. The Basel III Capital Rules became effective for the Company on January 1, 2015, subject to a phase-in period for certain provisions. The Basel III Capital Rules require a capital conservation buffer with respect to each of the Common Equity Tier 1, Tier 1 risk-based and total risk-based capital ratios, which provides for capital levels that exceed the minimum risk-based capital adequacy requirements. The capital conservation buffer of 2.5% was fully phased-in on January 1, 2019. 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.

In response to the COVID-19 pandemic, in March 2020 the joint federal bank regulatory agencies issued an interim final rule that allowed banking organizations that implemented CECL in 2020 to mitigate the effects of the CECL accounting standard in their regulatory capital for two years. This two-year delay is in addition to the three-year transition period that the agencies had already made available. The Company adopted the option provided by the interim final rule, which delayed the effects of CECL on its regulatory capital through 2021, after which the effects will be phased in over a three-year period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period include both the initial impact of the Company’s adoption of CECL on January 1, 2020 and 25% of subsequent changes in the Company’s allowance for credit losses during each quarter of the two-year period ending December 31, 2021. The cumulative amount of the transition adjustments is being phased in over the three-year transition period that began on January 1, 2022, with 75% recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024.

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 March 31, 2024, the Bank’s capital ratios were above the levels required for the Bank to be designated as “well capitalized.”

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 March 31, 2024:

	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 March 31, 2024
The Company
CET1 capital (to risk-weighted assets)		4.50	%			7.00	%	N/A				15.75	%
Tier 1 capital (to risk-weighted assets)		6.00	%			8.50	%	N/A				15.75	%
Total capital (to risk-weighted assets)		8.00	%			10.50	%	N/A				17.00	%
Tier 1 capital (to average assets) (leverage)		4.00	%	(1)		4.00	%	N/A				10.37	%
The Bank
CET1 capital (to risk-weighted assets)		4.50	%			7.00	%		6.50	%		15.69	%
Tier 1 capital (to risk-weighted assets)		6.00	%			8.50	%		8.00	%		15.69	%
Total capital (to risk-weighted assets)		8.00	%			10.50	%		10.00	%		16.94	%
Tier 1 capital (to average assets) (leverage)		4.00	%	(2)		4.00	%		5.00	%		10.33	%

(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.

53

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 Liquidity” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 28, 2024 (the “2023 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 2023 Form 10-K and presented as of December 31, 2023.

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 March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

54

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, 2023.

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

a. None.

b. None.

c. The following table details the Company’s repurchases of shares of its common stock during the three months ended March 31, 2024:

Period	Total Number of Shares Purchased		Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Program		Maximum Number of Shares That May Yet Be Purchased Under the Plan at the End of the Period (1)
January 1 - January 31, 2024		—	$	—		—		4,704,762
February 1 - February 29, 2024		567,692		62.12		567,692		4,137,070
March 1 - March 31, 2024		—		—		—		4,137,070
Total		567,692	$	62.12		567,692

(1)On January 16, 2024, Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.7 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 16, 2025, at the discretion of management. Under the stock repurchase program, Bancshares could repurchase shares from time to time at prevailing market prices, through open-market purchases or privately negotiated transactions, depending upon market conditions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—Share Repurchases” for additional information.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

c. During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “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 the Company’s common stock.

55

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 the Company’s 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 March 31, 2024 (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.

56

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: 05/8/2024	/S/ DAVID ZALMAN
	David Zalman
	Senior Chairman and Chief Executive Officer
Date: 05/8/2024	/S/ ASYLBEK OSMONOV
	Asylbek Osmonov
	Chief Financial Officer

57

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, David Zalman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Prosperity Bancshares, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2024

/s/ David Zalman

David Zalman

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Asylbek Osmonov, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Prosperity Bancshares, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2024

/s/ Asylbek Osmonov

Asylbek Osmonov

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Prosperity Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Zalman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and operating results of the Company.

/s/ David Zalman

David Zalman

Chief Executive Officer

May 8, 2024

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Prosperity Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Asylbek Osmonov, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and operating results of the Company.

/s/ Asylbek Osmonov

Asylbek Osmonov

Chief Financial Officer

May 8, 2024

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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 06, 2024
Cover [Abstract]
Entity Registrant Name	PROSPERITY BANCSHARES, INC.
Entity Central Index Key	0001068851
Trading Symbol	PB
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding (in shares)		95,937,934
Entity Current Reporting Status	Yes
Entity File Number	001-35388
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	74-2331986
Entity Address, Address Line One	Prosperity Bank Plaza
Entity Address, Address Line Two	4295 San Felipe
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77027
City Area Code	281
Local Phone Number	269-7199
Entity Shell Company	false
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common stock, par value $1.00 per share
Security Exchange Name	NYSE
Document Quarterly Report	true
Document Transition Report	false

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
ASSETS
Cash and due from banks	$ 1,086,444	$ 458,153
Federal funds sold	250	260
Total cash and cash equivalents	1,086,694	458,413
Available for sale securities, at fair value	315,300	438,588
Held to maturity securities, at cost (fair value of $10,478,359 and $10,984,598, respectively)	11,985,838	12,365,308
Total securities	12,301,138	12,803,896
Loans held for sale	6,380	5,734
Loans held for investment	20,393,943	20,352,559
Loans held for investment - Warehouse Purchase Program	864,924	822,245
Total loans	21,265,247	21,180,538
Less: allowance for credit losses on loans	(330,219)	(332,362)
Loans, net	20,935,028	20,848,176
Accrued interest receivable	97,671	96,327
Goodwill	3,396,402	3,396,086
Core deposit intangibles, net	60,757	63,994
Bank premises and equipment, net	372,333	369,992
Other real estate owned	2,204	1,708
Bank owned life insurance (BOLI)	380,615	379,447
Federal Home Loan Bank of Dallas stock	8,750	8,750
Other assets	114,928	121,088
TOTAL ASSETS	38,756,520	38,547,877
Deposits:
Noninterest-bearing	9,526,535	9,776,572
Interest-bearing	17,648,983	17,403,237
Total deposits	27,175,518	27,179,809
Other borrowings	3,900,000	3,725,000
Securities sold under repurchase agreements	261,671	309,277
Accrued interest payable	75,871	34,819
Allowance for credit losses on off-balance sheet credit exposures	36,503	36,503
Other liabilities	202,413	183,139
Total liabilities	31,651,976	31,468,547
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; 93,525,291 issued and outstanding at March 31, 2024; 93,722,383 shares issued and outstanding at December 31, 2023	93,525	93,723
Capital surplus	3,672,090	3,703,795
Retained earnings	3,341,262	3,283,210
Accumulated other comprehensive loss - net unrealized loss on available for sale securities, net of tax benefit of $(620) and $(372), respectively	(2,333)	(1,398)
Total shareholders’ equity	7,104,544	7,079,330
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 38,756,520	$ 38,547,877

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Held to maturity securities, fair value	$ 10,478,359	$ 10,984,598
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)		200,000,000
Common stock, shares issued (in shares)	93,525,291	93,722,383
Common stock, shares outstanding (in shares)	93,525,291	93,722,383
Accumulated other comprehensive loss net unrealized loss on available for sale securities, tax benefit	$ (620)	$ (372)

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Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
INTEREST INCOME:
Loans, including fees	$ 306,228,000	$ 247,118,000
Securities	66,421,000	73,185,000
Federal funds sold and other earning assets	9,265,000	7,006,000
Total interest income	381,914,000	327,309,000
INTEREST EXPENSE:
Deposits	92,692,000	47,343,000
Other borrowings	48,946,000	34,396,000
Securities sold under repurchase agreements	2,032,000	2,103,000
Total interest expense	143,670,000	83,842,000
NET INTEREST INCOME	238,244,000	243,467,000
PROVISION FOR CREDIT LOSSES	0	0
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	238,244,000	243,467,000
NONINTEREST INCOME:
Nonsufficient funds (NSF) fees	8,288,000	8,095,000
Credit card, debit card and ATM card income	8,861,000	8,666,000
Service charges on deposit accounts	6,406,000	5,926,000
Trust income	4,156,000	3,225,000
Mortgage income	610,000	238,000
Brokerage income	1,235,000	1,149,000
Net (loss) gain on sale or write-down of assets	(35,000)	121,000
Net gain on sale of securities	298,000	0
Other	9,051,000	10,846,000
Total noninterest income	38,870,000	38,266,000
NONINTEREST EXPENSE:
Salaries and employee benefits	85,771,000	77,798,000
Net occupancy and equipment	8,623,000	8,025,000
Credit and debit card, data processing and software amortization	10,975,000	9,566,000
Regulatory assessments and FDIC insurance	5,538,000	4,973,000
Core deposit intangibles amortization	3,237,000	2,374,000
Depreciation	4,686,000	4,433,000
Communications	3,402,000	3,462,000
Net other real estate income	49,000	45,000
Merger related expenses	0	860,000
Other	13,567,000	11,464,000
Total noninterest expense	135,848,000	123,000,000
INCOME BEFORE INCOME TAXES	141,266,000	158,733,000
PROVISION FOR INCOME TAXES	30,840,000	34,039,000
NET INCOME	$ 110,426,000	$ 124,694,000
EARNINGS PER SHARE:
Basic	$ 1.18	$ 1.37
Diluted	$ 1.18	$ 1.37

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 110,426	$ 124,694
Securities available for sale:
Change in unrealized loss during the period	(1,184)	(4)
Total other comprehensive loss	(1,184)	(4)
Deferred tax benefit related to other comprehensive income	249	1
Other comprehensive loss, net of tax	(935)	(3)
Comprehensive income	$ 109,491	$ 124,691

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
BALANCE at Dec. 31, 2022	$ 6,699,374	$ 91,314	$ 3,541,924	$ 3,069,609	$ (3,473)
BALANCE (in shares) at Dec. 31, 2022		91,313,615
Net income	124,694			124,694
Other comprehensive loss	(3)				(3)
Common stock issued in connection with the granting of restricted stock awards, net		$ (9)	9
Common stock issued in connection with the granting of restricted stock awards, net (in shares)		(9,250)
Common stock repurchase	(38,040)	$ (611)	(37,429)
Common stock repurchase (in shares)		(611,263)
Stock based compensation expense	3,166		3,166
Cash dividends declared	(50,074)			(50,074)
BALANCE at Mar. 31, 2023	6,739,117	$ 90,694	3,507,670	3,144,229	(3,476)
BALANCE (in shares) at Mar. 31, 2023		90,693,102
BALANCE at Dec. 31, 2023	7,079,330	$ 93,723	3,703,795	3,283,210	(1,398)
BALANCE (in shares) at Dec. 31, 2023		93,722,383
Net income	110,426			110,426
Other comprehensive loss	(935)				(935)
Common stock issued in connection with the granting of restricted stock awards, net		$ 370	(370)
Common stock issued in connection with the granting of restricted stock awards, net (in shares)		370,600
Common stock repurchase	(35,282)	$ (568)	(34,714)
Common stock repurchase (in shares)		(567,692)
Stock based compensation expense	3,379		3,379
Cash dividends declared	(52,374)			(52,374)
BALANCE at Mar. 31, 2024	$ 7,104,544	$ 93,525	$ 3,672,090	$ 3,341,262	$ (2,333)
BALANCE (in shares) at Mar. 31, 2024		93,525,291

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Retained Earnings [Member]
Cash dividend declared, per share (in dollars per share)	$ 0.56	$ 0.55

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 110,426,000	$ 124,694,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and core deposit intangibles amortization	7,923,000	6,807,000
Provision for credit losses	0	0
Net amortization of premium on investments	5,822,000	7,384,000
Net gain on sale of investment securities	(298,000)
Net gain on sale of other real estate and repossessed assets	(137,000)	(13,000)
Net loss (gain) on sale or write down of premises and equipment	35,000	(121,000)
Net accretion of discount on loans	(1,860,000)	(872,000)
Net amortization of premium on deposits	(97,000)	(53,000)
Net gain on sale of loans	(612,000)	(239,000)
Proceeds from sale of loans held for sale	24,475,000	8,470,000
Originations of loans held for sale	(24,509,000)	(9,280,000)
Stock based compensation expense	3,379,000	3,166,000
Decrease (increase) in accrued interest receivable and other assets	2,811,000	(66,156,000)
Increase in accrued interest payable and other liabilities	60,042,000	105,986,000
Net cash provided by operating activities	187,400,000	179,773,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal paydowns of held to maturity securities	391,803,000	412,524,000
Purchase of held to maturity securities	(18,947,000)	(3,028,000)
Proceeds from maturities, sales and principal paydowns of available for sale securities	5,631,402,000	2,515,280,000
Purchase of available for sale securities	(5,508,208,000)	(2,527,704,000)
Originations of Warehouse Purchase Program loans	(3,021,378,000)	(2,468,101,000)
Proceeds from pay-offs of Warehouse Purchase Program loans	2,978,699,000	2,409,606,000
Net increase in loans held for investment	(42,737,000)	(434,029,000)
Purchase of bank premises and equipment	(7,184,000)	(10,224,000)
Proceeds from sale of bank premises, equipment and other real estate	838,000	741,000
Proceeds from insurance claims	1,049,000	2,811,000
Net cash provided by (used in) investing activities	405,337,000	(102,124,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing deposits	(250,037,000)	(807,100,000)
Net increase (decrease) in interest-bearing deposits	245,843,000	(722,142,000)
Net proceeds from other short-term borrowings	175,000,000	1,515,000,000
Net (decrease) increase in securities sold under repurchase agreements	(47,606,000)	6,127,000
Repurchase of common stock	(35,282,000)	(38,040,000)
Payments of cash dividends	(52,374,000)	(50,074,000)
Net cash provided by (used in) financing activities	35,544,000	(96,229,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	628,281,000	(18,580,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	458,413,000	424,133,000
CASH AND CASH EQUIVALENTS, END OF PERIOD	1,086,694,000	405,553,000
NONCASH ACTIVITIES:
Acquisition of real estate through foreclosure of collateral	969,000	468,000
SUPPLEMENTAL INFORMATION:
Income taxes paid	487,000	327,000
Interest paid	$ 102,618,000	$ 79,968,000

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 110,426	$ 124,694

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Title	director or officer
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

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, 2023. Operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any other period.

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Income Per Common Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Income Per Common Share

2. INCOME PER COMMON SHARE

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

	Three Months Ended March 31,
	2024				2023
	Amount		Per Share Amount		Amount		Per Share Amount
	(Amounts in thousands, except per share data)
Net income	$	110,426			$	124,694
Basic:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37
Diluted:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37

There were no stock options outstanding at March 31, 2024 or exercisable during the three months ended March 31, 2024 or 2023 that would have had an anti-dilutive effect on the above computation.

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New Accounting Standards

3 Months Ended

Mar. 31, 2024

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Standards

3. NEW ACCOUNTING STANDARDS

Accounting Standards Updates (“ASU”)

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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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. The Company does not expect ASU 2024-01 to have a significant impact on its financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income. ASU 2023-09 focuses on the rate reconciliation and income taxes paid and 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 ASU 2023-09 to have an 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 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. Early adoption is permitted. The Company does not expect ASU 2023-07 to have a significant impact on its 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 Accounting Standards Codification 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. The Company does not expect ASU 2023-06 to have a significant impact on its financial statements.

ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in ASU 2022-02 eliminated the accounting guidance for troubled debt restructurings and enhanced disclosures for certain loan refinancing and restructurings to borrowers experiencing financial difficulty. This guidance was applied on a prospective basis. Additionally, ASU 2022-02 requires entities to disclose current-period gross charge-offs by year of origination. ASU 2022-02 became effective for the Company on January 1, 2023 and did not have a significant impact on the Company’s financial statements.

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Securities

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Securities

4. SECURITIES

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

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	1,830	$	(335	)	$	15,845
Collateralized mortgage obligations		198,180		—		(3,374	)		194,806
Mortgage-backed securities		105,723		58		(1,132	)		104,649
Total	$	318,253	$	1,888	$	(4,841	)	$	315,300
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,691	$	—	$	(107	)	$	7,584
States and political subdivisions		111,699		764		(2,581	)		109,882
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		256,216		—		(25,076	)		231,140
Mortgage-backed securities		11,598,232		388		(1,477,027	)		10,121,593
Total	$	11,985,838	$	1,152	$	(1,508,631	)	$	10,478,359

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	20,698	$	1,827	$	(738	)	$	21,787
Collateralized mortgage obligations		321,881		967		(2,804	)		320,044
Mortgage-backed securities		97,779		96		(1,118	)		96,757
Total	$	440,358	$	2,890	$	(4,660	)	$	438,588
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,631	$	—	$	(52	)	$	7,579
States and political subdivisions		116,497		1,864		(2,306	)		116,055
Corporate debt securities		12,000		—		(4,200	)		7,800
Collateralized mortgage obligations		263,250		—		(20,864	)		242,386
Mortgage-backed securities		11,965,930		2,131		(1,357,283	)		10,610,778
Total	$	12,365,308	$	3,995	$	(1,384,705	)	$	10,984,598

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 326,“Financial Instruments – Credit Losses.”

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.

As of March 31, 2024, 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 March 31, 2024, 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 March 31, 2024, the Company’s municipal securities represent 0.9% 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 March 31, 2024, 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:

	March 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	$	5,265	$	(335	)	$	—	$	—		$	5,265	$	(335	)
Collateralized mortgage obligations		58,266		(874	)		136,540		(2,500	)		194,806		(3,374	)
Mortgage-backed securities		10,043		(60	)		91,458		(1,072	)		101,501		(1,132	)
Total	$	73,574	$	(1,269	)	$	227,998	$	(3,572	)	$	301,572	$	(4,841	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,583	$	(107	)	$	—	$	—		$	7,583	$	(107	)
States and political subdivisions		14,877		(68	)		54,906		(2,513	)		69,783		(2,581	)
Corporate debt securities		—		—			8,160		(3,840	)		8,160		(3,840	)
Collateralized mortgage obligations		47,876		(1,261	)		183,228		(23,815	)		231,104		(25,076	)
Mortgage-backed securities		147,256		(1,836	)		9,900,482		(1,475,191	)		10,047,738		(1,477,027	)
Total	$	217,592	$	(3,272	)	$	10,146,776	$	(1,505,359	)	$	10,364,368	$	(1,508,631	)

	December 31, 2023
	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	$	7,300	$	(738	)	$	—	$	—		$	7,300	$	(738	)
Collateralized mortgage obligations		54,611		(729	)		114,758		(2,075	)		169,369		(2,804	)
Mortgage-backed securities		1,154		(13	)		92,211		(1,105	)		93,365		(1,118	)
Total	$	63,065	$	(1,480	)	$	206,969	$	(3,180	)	$	270,034	$	(4,660	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,580	$	(52	)	$	—	$	—		$	7,580	$	(52	)
States and political subdivisions		23,085		(79	)		41,039		(2,227	)		64,124		(2,306	)
Corporate debt securities		—		—			7,800		(4,200	)		7,800		(4,200	)
Collateralized mortgage obligations		50,147		(470	)		192,205		(20,394	)		242,352		(20,864	)
Mortgage-backed securities		52,853		(807	)		10,354,514		(1,356,476	)		10,407,367		(1,357,283	)
Total	$	133,665	$	(1,408	)	$	10,595,558	$	(1,383,297	)	$	10,729,223	$	(1,384,705	)

At March 31, 2024 and December 31, 2023, there were 1,028 securities and 941 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 March 31, 2024, 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	$	27,214	$	27,560	$	—	$	—
Due after one year through five years		45,853		45,608		—		—
Due after five years through ten years		46,427		41,573		14,350		15,845
Due after ten years		11,896		10,885		—		—
Subtotal		131,390		125,626		14,350		15,845
Mortgage-backed securities and collateralized mortgage obligations		11,854,448		10,352,733		303,903		299,455
Total	$	11,985,838	$	10,478,359	$	318,253	$	315,300

The Company recorded a $298 thousand net gain on the sale of securities for the three months ended March 31, 2024 and no gain or loss on the sale of securities for the three months ended March 31, 2023. As of March 31, 2024, the Company did not own any non-agency collateralized mortgage obligations.

At March 31, 2024 and December 31, 2023, 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 $10.99 billion and $11.34 billion and a fair value of $9.60 billion and $10.09 billion at March 31, 2024 and December 31, 2023, respectively, were pledged to collateralize public deposits and for other purposes required or permitted by law.

XML

Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

Loans and Allowance for Credit Losses

5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

	March 31, 2024		December 31, 2023
	(Dollars in thousands)
Residential mortgage loans held for sale	$	6,380	$	5,734
Commercial and industrial		2,470,848		2,305,040
Real estate:
Construction, land development and other land loans		2,876,588		3,076,591
1-4 family residential (includes home equity)		8,275,040		8,162,344
Commercial real estate (includes multi-family residential)		5,631,460		5,662,948
Farmland		590,896		598,898
Agriculture		222,196		217,145
Consumer and other		326,915		329,593
Total loans held for investment, excluding Warehouse Purchase Program		20,393,943		20,352,559
Warehouse Purchase Program		864,924		822,245
Total loans, including Warehouse Purchase Program	$	21,265,247	$	21,180,538

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 82.3% and 83.0% of the Company’s total loan portfolio, excluding Warehouse Purchase Program loans, at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, loans outstanding to directors, officers and their affiliates totaled $290 thousand and $292 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 three months ended March 31, 2024			As of and for the year ended December 31, 2023
	(Dollars in thousands)
Beginning balance on January 1	$	292		$	547
New loans		1			64
Repayments		(3	)		(319	)
Ending balance	$	290		$	292

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.

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

	March 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	$	17,078	$	—	$	17,078	$	14,749	$	2,844,761	$	2,876,588
Warehouse Purchase Program loans		—		—		—		—		864,924		864,924
Agriculture and agriculture real estate (includes farmland)		3,672		428		4,100		3,286		805,706		813,092
1-4 family (includes home equity) (1)		37,462		—		37,462		29,464		8,214,494		8,281,420
Commercial real estate (includes multi-family residential)		13,036		2,417		15,453		21,303		5,594,704		5,631,460
Commercial and industrial		20,715		190		20,905		9,542		2,440,401		2,470,848
Consumer and other		432		—		432		131		326,352		326,915
Total	$	92,395	$	3,035	$	95,430	$	78,475	$	21,091,342	$	21,265,247

	December 31, 2023
	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	$	21,627	$	1,635	$	23,262	$	14,770	$	3,038,559	$	3,076,591
Warehouse Purchase Program loans		—		—		—		—		822,245		822,245
Agriculture and agriculture real estate (includes farmland)		8,572		—		8,572		1,460		806,011		816,043
1-4 family (includes home equity) (1)		38,350		130		38,480		25,694		8,103,904		8,168,078
Commercial real estate (includes multi-family residential)		23,511		—		23,511		18,662		5,620,775		5,662,948
Commercial and industrial		14,782		430		15,212		8,066		2,281,762		2,305,040
Consumer and other		503		—		503		36		329,054		329,593
Total	$	107,345	$	2,195	$	109,540	$	68,688	$	21,002,310	$	21,180,538

(1)Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

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

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Nonaccrual loans (1) (2)	$	78,475		$	68,688
Accruing loans 90 or more days past due		3,035			2,195
Total nonperforming loans		81,510			70,883
Repossessed assets		97			76
Other real estate		2,204			1,708
Total nonperforming assets	$	83,811		$	72,667
Nonperforming assets to total loans and other real estate		0.39	%		0.34	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.41	%		0.36	%
Nonaccrual loans to total loans		0.37	%		0.32	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.38	%		0.34	%

(1)ASU 2022-02 became effective for the Company on January 1, 2023.

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

The Company had $83.8 million in nonperforming assets at March 31, 2024 compared with $72.7 million at December 31, 2023. Nonperforming assets were 0.39% of total loans and other real estate at March 31, 2024 and 0.34% of total loans and other real estate at December 31, 2023. The Company had $78.5 million in nonaccrual loans at March 31, 2024 compared with $68.7 million at December 31, 2023.

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.

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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
PCD loans:
Outstanding balance	$	495,074		$	533,653
Discount		(7,361	)		(7,914	)
Recorded investment	$	487,713		$	525,739

Changes in the accretable yield for acquired PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	7,914		$	3,361
Accretion charge-offs		(5	)		—
Accretion		(548	)		(339	)
Balance at March 31,	$	7,361		$	3,022

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 March 31, 2024, 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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Non-PCD loans:
Outstanding balance	$	1,676,563		$	1,823,809
Discount		(18,681	)		(19,992	)
Recorded investment	$	1,657,882		$	1,803,817

Changes in the discount accretion for Non-PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	19,992		$	2,233
Accretion recoveries		1			—
Accretion		(1,312	)		(532	)
Balance at March 31,	$	18,681		$	1,701

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.

The following tables present loans by risk grade, by category of loan and year of origination/renewal at March 31, 2024.

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Construction, Land Development and Other Land Loans
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		1,106		166		—		—		14		—		—		1,286
Grade 3		103,359		745,828		696,969		364,477		215,354		57,308		119,072		—		2,302,367
Grade 4		3,478		83,562		146,216		42,544		5,572		26,944		30,782		—		339,098
Grade 5		—		—		1,357		—		23,373		15,796		769		—		41,295
Grade 6		—		570		—		7,698		184		561		—		—		9,013
Grade 7		—		183		2,647		343		—		242		248		—		3,663
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,218		29,616		98,450		15,171		7,649		7,371		20,391		—		179,866
Total	$	108,055	$	860,865	$	945,805	$	430,233	$	252,132	$	108,236	$	171,262	$	—	$	2,876,588
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agriculture and Agriculture Real Estate (includes Farmland)
Grade 1	$	720	$	1,179	$	1,231	$	172	$	252	$	369	$	8,590	$	—	$	12,513
Grade 2		—		13		60		101		—		722		46		—		942
Grade 3		20,051		126,212		168,180		76,630		47,924		118,858		102,641		94		660,590
Grade 4		3,436		21,435		19,644		25,993		4,122		9,589		21,807		—		106,026
Grade 5		725		57		799		885		—		1,143		—		—		3,609
Grade 6		—		—		—		78		—		1,195		—		—		1,273
Grade 7		—		—		1,469		558		339		29		—		—		2,395
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		1,986		2,532		1,345		14,558		2,630		2,693		—		25,744
Total	$	24,932	$	150,882	$	193,915	$	105,762	$	67,195	$	134,535	$	135,777	$	94	$	813,092
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	121	$	—	$	—	$	121
1-4 Family (includes Home Equity) (1)
Grade 1	$	—	$	74	$	153	$	—	$	109	$	—	$	—	$	—	$	336
Grade 2		—		526		1,243		153		236		2,602		—		—		4,760
Grade 3		109,256		1,172,870		2,253,123		2,140,728		1,021,887		1,310,779		91,597		2,757		8,102,997
Grade 4		1,178		15,265		15,813		25,722		5,681		64,138		2,871		204		130,872
Grade 5		—		—		1,206		—		119		2,517		—		—		3,842
Grade 6		—		—		357		41		19		1,840		—		—		2,257
Grade 7		—		1,744		7,554		5,304		4,433		9,293		95		—		28,423
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		625		4,243		475		469		2,121		—		—		7,933
Total	$	110,434	$	1,191,104	$	2,283,692	$	2,172,423	$	1,032,953	$	1,393,290	$	94,563	$	2,961	$	8,281,420
Current-period gross write-offs	$	—	$	—	$	389	$	—	$	33	$	39	$	—	$	—	$	461

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Commercial Real Estate (includes Multi-Family Residential)
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		1,128		—		459		2,232		—		—		3,819
Grade 3		50,492		403,245		908,841		680,193		405,589		1,246,771		77,627		4,591		3,777,349
Grade 4		2,667		43,104		262,140		172,287		217,796		716,336		15,857		—		1,430,187
Grade 5		—		192		2,538		4,771		—		89,422		2,355		—		99,278
Grade 6		—		—		—		356		11,451		76,088		—		—		87,895
Grade 7		—		1,693		827		2,464		—		806		—		—		5,790
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		540		13,613		53,166		49,281		38,547		71,666		329		—		227,142
Total	$	53,699	$	461,847	$	1,228,640	$	909,352	$	673,842	$	2,203,321	$	96,168	$	4,591	$	5,631,460
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and Industrial
Grade 1	$	6,392	$	15,267	$	9,372	$	6,418	$	2,811	$	6,188	$	41,360	$	176	$	87,984
Grade 2		—		695		7,799		219		195		3,651		2,295		—		14,854
Grade 3		211,874		206,299		222,945		147,665		49,661		187,230		910,134		30,276		1,966,084
Grade 4		20,633		44,614		30,936		14,641		11,286		110,319		65,063		2,222		299,714
Grade 5		—		17		21,827		6,057		1,666		788		8,200		100		38,655
Grade 6		413		311		3,898		615		354		962		2,390		—		8,943
Grade 7		—		3,900		420		195		1,268		1,416		457		—		7,656
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		3,689		14,070		3,637		661		2,439		22,462		—		46,958
Total	$	239,312	$	274,792	$	311,267	$	179,447	$	67,902	$	312,993	$	1,052,361	$	32,774	$	2,470,848
Current-period gross write-offs	$	—	$	53	$	349	$	39	$	—	$	24	$	895	$	—	$	1,360
Consumer and Other
Grade 1	$	4,614	$	12,520	$	5,465	$	2,813	$	1,681	$	5,914	$	2,588	$	—	$	35,595
Grade 2		6,132		12,406		14,181		—		—		1,839		1,507		—		36,065
Grade 3		24,054		40,317		38,129		24,769		11,901		17,352		75,004		11		231,537
Grade 4		—		1,748		257		1,105		15,259		2,255		2,865		—		23,489
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		31		5		—		—		—		—		36
Grade 7		—		—		—		—		122		1		—		—		123
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		34		7		15		14		—		70
Total	$	34,800	$	66,991	$	58,063	$	28,726	$	28,970	$	27,376	$	81,978	$	11	$	326,915
Current-period gross write-offs	$	1,470	$	20	$	17	$	24	$	—	$	70	$	58	$	—	$	1,659

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Warehouse Purchase Program
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		—		—		—		—		—		—		—
Grade 3		864,924		—		—		—		—		—		—		—		864,924
Grade 4		—		—		—		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		—		—		—		—		—		—		—
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		—		—		—		—		—
Total	$	864,924	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	864,924
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Grade 1	$	11,726	$	29,040	$	16,221	$	9,403	$	4,853	$	12,471	$	52,538	$	176	$	136,428
Grade 2		6,132		14,746		24,577		473		890		11,060		3,848		—		61,726
Grade 3		1,384,010		2,694,771		4,288,187		3,434,462		1,752,316		2,938,298		1,376,075		37,729		17,905,848
Grade 4		31,392		209,728		475,006		282,292		259,716		929,581		139,245		2,426		2,329,386
Grade 5		725		266		27,727		11,713		25,158		109,666		11,324		100		186,679
Grade 6		413		881		4,286		8,793		12,008		80,646		2,390		—		109,417
Grade 7		—		7,520		12,917		8,864		6,162		11,787		800		—		48,050
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,758		49,529		172,461		69,943		61,891		86,242		45,889		—		487,713
Total	$	1,436,156	$	3,006,481	$	5,021,382	$	3,825,943	$	2,122,994	$	4,179,751	$	1,632,109	$	40,431	$	21,265,247
Current-period gross write-offs	$	1,470	$	73	$	755	$	63	$	33	$	254	$	953	$	—	$	3,601

(1)Includes $6.4 million of residential mortgage loans held for sale at March 31, 2024.

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 as of March 31, 2024 for estimated losses in the Company’s loan portfolio. 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.

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 ASC Topic 326-20, “Financial Instruments – Credit Losses.” 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 ASC Topic 326, “Financial Instruments – Credit Losses.” 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 absorb losses in other categories.

The following table details activity in the allowance for credit losses on loans by category of loan for the three months ended March 31, 2024 and 2023.

	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 December 31, 2023	$	87,775		$	11,380		$	77,652		$	88,664		$	59,832		$	7,059		$	332,362
Provision for credit losses on loans		(5,619	)		1,270			2,469			(1,468	)		2,067			1,281			—
Charge-offs		—			(121	)		(461	)		—			(1,360	)		(1,659	)		(3,601	)
Recoveries		2			98			4			17			1,077			260			1,458
Net (charge-offs) recoveries		2			(23	)		(457	)		17			(283	)		(1,399	)		(2,143	)
Balance March 31, 2024	$	82,158		$	12,627		$	79,664		$	87,213		$	61,616		$	6,941		$	330,219
Allowance for credit losses on loans:
Three Months Ended
Balance December 31, 2022	$	78,853		$	7,699		$	60,795		$	66,272		$	62,319		$	5,638		$	281,576
Provision for credit losses		1,695			356			1,603			1,699			(6,495	)		1,142			—
Charge-offs		—			—			(65	)		—			(901	)		(1,225	)		(2,191	)
Recoveries		13			6			205			1			2,373			208			2,806
Net (charge-offs) recoveries		13			6			140			1			1,472			(1,017	)		615
Balance March 31, 2023	$	80,561		$	8,061		$	62,538		$	67,972		$	57,296		$	5,763		$	282,191

The allowance for credit losses on loans as of March 31, 2024 totaled $330.2 million or 1.55% of total loans, including acquired loans with discounts, a decrease of $2.1 million or 0.6% compared to the allowance for credit losses on loans totaling $332.4 million or 1.57% of total loans, including acquired loans with discounts, as of December 31, 2023. There was no provision for credit losses for the three months ended March 31, 2024 and 2023.

Net charge-offs were $2.1 million for the three months ended March 31, 2024 compared to net recoveries of $615 thousand for the three months ended March 31, 2023. Net charge-offs for the three months ended March 31, 2024 included $991 thousand related to resolved PCD loans, which had specific reserves that were allocated to the charge-offs. Further, an additional $4.1 million of specific reserves on resolved PCD loans without any related charge-offs was 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 March 31, 2024 and December 31, 2023, the Company had $36.5 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 March 31, 2024, the Company had $2.26 billion in commitments expected to fund.

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 ASC Topic 326, “Financial Instruments—Credit Losses”, 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 who are 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 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.

The following table displays the amortized cost of loans that were both experiencing financial difficulty and modified during the three months ended March 31, 2024 and 2023, presented by category of loan and type of modification.

	Term Extension		Percentage of Total Loans Held for Investment
	(Dollars in thousands)
Three Months Ended March 31, 2024
Commercial and industrial	$	413		—
Agriculture		11,000		0.05	%
Total	$	11,413		0.05	%
Three Months Ended March 31, 2023
Construction, land development and other land loans	$	4,233		0.02	%
Total	$	4,233		0.02	%

The following table describes the modifications made to the loans presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023.

Term Extension
Loan Type	Three Months Ended March 31, 2024
Commercial and industrial	Modified to a 7 year term
Agriculture	Modified to a 2 year term
Loan Type	Three Months Ended March 31, 2023
Construction, land development and other land loans	Less than 12-month extension

The Company did not have any modified loans that defaulted during the three months ended March 31, 2024 that were modified during the prior trailing twelve months. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.

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Fair Value

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value

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. 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.

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

	As of March 31, 2024
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	15,845	$	—	$	15,845
Collateralized mortgage obligations		—		194,806		—		194,806
Mortgage-backed securities		—		104,649		—		104,649
Total	$	—	$	315,300	$	—	$	315,300
Derivative financial instruments:
Interest rate lock commitments	$	—	$	256	$	—	$	256
Forward mortgage-backed securities trades		—		8		—		8
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		4,309		—		4,309
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		74		—		74
Loan customer counterparty		—		4,330		—		4,330
Financial institution counterparty		—		—		—		—

	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	21,787	$	—	$	21,787
Collateralized mortgage obligations		—		320,044		—		320,044
Mortgage-backed securities		—		96,757		—		96,757
Total available for sale securities	$	—	$	438,588	$	—	$	438,588
Derivative financial instruments:
Interest rate lock commitments	$	—	$	218	$	—	$	218
Forward mortgage-backed securities trades		—		1		—		1
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		3,876		—		3,876
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		161		—		161
Loan customer counterparty		—		3,899		—		3,899
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 months ended March 31, 2024, the Company had additions to other real estate owned of $969 thousand of which $845 thousand was outstanding as of March 31, 2024. For the three months ended March 31, 2024, the Company had additions to impaired loans of $13.4 million, of which $13.4 million was outstanding as of March 31, 2024. The remaining financial assets and liabilities measured at fair value on a non-recurring basis that were recorded in 2024 and remained outstanding at March 31, 2024 were not significant.

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

	As of March 31, 2024
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	1,086,444	$	1,086,444	$	—	$	—	$	1,086,444
Federal funds sold		250		250		—		—		250
Held to maturity securities		11,985,838		—		10,478,359		—		10,478,359
Loans held for sale		6,380		—		6,380		—		6,380
Loans held for investment, net of allowance		20,063,724		—		—		18,465,513		18,465,513
Loans held for investment - Warehouse Purchase Program		864,924		—		864,924		—		864,924
Other real estate owned		2,204		—		2,204		—		2,204
Liabilities
Deposits:
Noninterest-bearing	$	9,526,535	$	—	$	9,526,535	$	—	$	9,526,535
Interest-bearing		17,648,983		—		17,611,669		—		17,611,669
Other borrowings		3,900,000		—		3,876,545		—		3,876,545
Securities sold under repurchase agreements		261,671		—		261,621		—		261,621

	As of December 31, 2023
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	458,153	$	458,153	$	—	$	—	$	458,153
Federal funds sold		260		260		—		—		260
Held to maturity securities		12,365,308		—		10,984,598		—		10,984,598
Loans held for sale		5,734		—		5,734		—		5,734
Loans held for investment, net of allowance		20,020,197		—		—		18,321,054		18,321,054
Loans held for investment - Warehouse Purchase Program		822,245		—		822,245		—		822,245
Other real estate owned		1,708		—		1,708		—		1,708
Liabilities
Deposits:
Noninterest-bearing	$	9,776,572	$	—	$	9,776,572	$	—	$	9,776,572
Interest-bearing		17,403,237		—		17,371,523		—		17,371,523
Other borrowings		3,725,000		—		3,725,000		—		3,725,000
Securities sold under repurchase agreements		309,277		—		309,245		—		309,245

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

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 March 31, 2024. 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.

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Goodwill and Core Deposit Intangibles

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Core Deposit Intangibles

7. GOODWILL AND CORE DEPOSIT INTANGIBLES

Changes in the carrying amount of the Company’s goodwill and core deposit intangibles for the three months ended March 31, 2024 and the year ended December 31, 2023 were as follows:

	Goodwill		Core Deposit Intangibles
	(Dollars in thousands)
Balance as of December 31, 2022	$	3,231,636	$	51,348
Less:
Amortization		—		(12,676	)
Add:
First Bancshares Merger		164,450		25,322
Balance as of December 31, 2023		3,396,086		63,994
Less:
Amortization		—		(3,237	)
Add:
First Bancshares Merger		316		—
Balance as of March 31, 2024	$	3,396,402	$	60,757

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 March 31, 2024, 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.

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 $3.2 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively. The estimated aggregate future amortization expense for core deposit intangibles remaining as of March 31, 2024 is as follows (dollars in thousands):

Remaining 2024	$	9,576
2025		11,409
2026		10,376
2027		9,288
2028		8,288
Thereafter		11,820
Total	$	60,757

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

8. STOCK–BASED COMPENSATION

At March 31, 2024, 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 March 31, 2024, 406,757 shares of restricted common stock have vested and 540,297 shares of unvested restricted stock have been issued under the 2020 Plan.

As of March 31, 2024, the Company had no stock options outstanding. Stock-based compensation expense related to restricted stock was $3.4 million and $3.2 million during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $28.0 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 1.95 years.

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Contractual Obligations and Off-Balance Sheet Items

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Contractual Obligations and Off-Balance Sheet Items

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 March 31, 2024 are summarized below. The Company’s future cash payments associated with its contractual obligations pursuant to the Federal Reserve’s Bank Term Funding Program (“BTFP”) as of March 31, 2024 are summarized below. The future interest payments were calculated using the current rate in effect at March 31, 2024. Payments under the BTFP include interest of $186.1 million that will be due over the future periods. These payments do not include prepayment options that may be available to the Company.

	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)
Bank Term Funding Program	$	4,086,149	$	—	$	—	$	—	$	4,086,149

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 $869 thousand and $806 thousand for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, operating lease ROU assets and lease liabilities were approximately $36.8 million. ROU assets and lease liabilities were classified as other assets and other liabilities, respectively.

As of March 31, 2024, the weighted average of remaining lease terms of the Company’s operating leases was 5.7 years. The weighted average discount rate used to determine the lease liabilities as of March 31, 2024 for the Company’s operating leases was 2.9%. Cash paid for the Company’s operating leases was $2.9 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company obtained $2.1 million in ROU assets in exchange for lease liabilities for one operating lease.

The Company’s future undiscounted cash payments associated with its operating leases as of March 31, 2024 are summarized below (dollars in thousands).

Remaining 2024	$	7,877
2025		10,005
2026		8,865
2027		5,849
2028		2,873
2029		1,541
Thereafter		8,327
Total undiscounted lease payments	$	45,337

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 March 31, 2024 are summarized below. Since commitments associated with letters of credit, unused capacity of 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	$	62,745	$	18,559	$	2,445	$	26	$	83,775
Unused capacity on Warehouse Purchase Program loans		1,058,576		—		—		—		1,058,576
Commitments to extend credit		1,489,941		1,020,761		296,869		1,623,299		4,430,870
Total	$	2,611,262	$	1,039,320	$	299,314	$	1,623,325	$	5,573,221

The Company records an allowance for credit losses on off-balance sheet credit exposure that is adjusted through a charge to provision for credit losses on the Company’s consolidated statement of income. At March 31, 2024 and December 31, 2023, this allowance, reported as a separate line item on the Company’s consolidated balance sheet, totaled $36.5 million.

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Other Comprehensive (Loss) Income

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Other Comprehensive (Loss) Income

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,
	2024								2023
	Before Tax Amount			Tax Effect		Net of Tax Amount			Before Tax Amount			Tax Effect		Net of Tax Amount
	(Dollars in thousands)
Other comprehensive loss:
Securities available for sale:
Change in unrealized loss during period	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)
Total securities available for sale		(1,184	)		249		(935	)		(4	)		1		(3	)
Total other comprehensive loss	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)

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, 2023	$	(1,398	)	$	(1,398	)
Other comprehensive loss		(935	)		(935	)
Balance at March 31, 2024	$	(2,333	)	$	(2,333	)
Balance at December 31, 2022	$	(3,473	)	$	(3,473	)
Other comprehensive loss		(3	)		(3	)
Balance at March 31, 2023	$	(3,476	)	$	(3,476	)

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

11. DERIVATIVE FINANCIAL INSTRUMENTS

The following table provides the outstanding notional balances and fair values of outstanding derivative positions at March 31, 2024 and December 31, 2023.

	March 31, 2024						December 31, 2023
	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	$	15,693	$	256	$	—	$	7,113	$	218	$	—
Forward mortgage-backed securities trades		20,500		8		74		14,250		1		161
Commercial loan interest rate swaps and caps:
Loan customer counterparty		67,207		—		4,330		67,408		—		3,899
Financial institution counterparty		67,207		4,309		—		67,408		3,876		—

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 March 31, 2024 and December 31, 2023 are presented in the following table.

	Weighted-Average Interest Rate
	March 31, 2024						December 31, 2023
	Received			Paid			Received			Paid
Loan customer counterparty		3.07	%		6.78	%		3.07	%		6.81	%

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 $4.3 million at March 31, 2024 and $3.9 million at December 31, 2023. 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 $280 thousand at March 31, 2024. 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 zero at March 31, 2024 and December 31, 2023.

The initial and subsequent changes in the fair value of IRLCs and the forward sales of mortgage-backed securities are recorded in net gain on sale of mortgage loans. 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 months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2024		2023
	(Dollars in thousands)
Interest rate lock commitments	$	38	$	30
Forward mortgage-backed securities trades		196		(50	)

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Acquisitions

3 Months Ended

Mar. 31, 2024

Business Combinations [Abstract]

Acquisitions

12. ACQUISITIONS

Merger of First Bancshares of Texas, Inc. — Effective May 1, 2023, the Company completed the Merger of First Bancshares of Texas, Inc. (“First Bancshares”) into Bancshares and the subsequent merger of its wholly owned subsidiary, FirstCapital Bank of Texas, N.A. (“FirstCapital Bank”), into the Bank. FirstCapital Bank operated 16 full-service banking offices in six different markets in West, North and Central Texas areas, including its main office in Midland, and banking offices in Midland, Lubbock, Amarillo, Wichita Falls, Burkburnett, Byers, Henrietta, Dallas, Horseshoe Bay, Marble Falls and Fredericksburg, Texas. As of March 31, 2023, First Bancshares, on a consolidated basis, reported total assets of $2.14 billion, total loans of $1.65 billion and total deposits of $1.71 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 3,583,370 shares of its common stock plus approximately $91.5 million in cash for all outstanding shares of First Bancshares. As of March 31, 2024, the Company recognized goodwill of $164.8 million, which does not include all the subsequent fair value adjustments that have not yet been finalized. 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. During the second quarter of 2023, the Company completed the operational conversion of FirstCapital Bank.

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Subsequent Event

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Event

13. SUBSEQUENT EVENT

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. Lone Star operated five banking centers 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.

Under 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 in the second quarter of 2024.

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New Accounting Standards (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Standards Update and Change in Accounting Principle [Abstract]

Accounting Standards Updates (''ASU'')

Accounting Standards Updates (“ASU”)

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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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. The Company does not expect ASU 2024-01 to have a significant impact on its financial statements.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income. ASU 2023-09 focuses on the rate reconciliation and income taxes paid and 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 ASU 2023-09 to have an 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 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. Early adoption is permitted. The Company does not expect ASU 2023-07 to have a significant impact on its 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 Accounting Standards Codification 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. The Company does not expect ASU 2023-06 to have a significant impact on its financial statements.

ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in ASU 2022-02 eliminated the accounting guidance for troubled debt restructurings and enhanced disclosures for certain loan refinancing and restructurings to borrowers experiencing financial difficulty. This guidance was applied on a prospective basis. Additionally, ASU 2022-02 requires entities to disclose current-period gross charge-offs by year of origination. ASU 2022-02 became effective for the Company on January 1, 2023 and did not have a significant impact on the Company’s financial statements.

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Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

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

	Three Months Ended March 31,
	2024				2023
	Amount		Per Share Amount		Amount		Per Share Amount
	(Amounts in thousands, except per share data)
Net income	$	110,426			$	124,694
Basic:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37
Diluted:
Weighted average shares outstanding		93,706	$	1.18		91,207	$	1.37

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Securities (Tables)

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost and Fair Value of Investment Securities

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

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	14,350	$	1,830	$	(335	)	$	15,845
Collateralized mortgage obligations		198,180		—		(3,374	)		194,806
Mortgage-backed securities		105,723		58		(1,132	)		104,649
Total	$	318,253	$	1,888	$	(4,841	)	$	315,300
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,691	$	—	$	(107	)	$	7,584
States and political subdivisions		111,699		764		(2,581	)		109,882
Corporate debt securities		12,000		—		(3,840	)		8,160
Collateralized mortgage obligations		256,216		—		(25,076	)		231,140
Mortgage-backed securities		11,598,232		388		(1,477,027	)		10,121,593
Total	$	11,985,838	$	1,152	$	(1,508,631	)	$	10,478,359

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
Corporate debt securities	$	20,698	$	1,827	$	(738	)	$	21,787
Collateralized mortgage obligations		321,881		967		(2,804	)		320,044
Mortgage-backed securities		97,779		96		(1,118	)		96,757
Total	$	440,358	$	2,890	$	(4,660	)	$	438,588
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,631	$	—	$	(52	)	$	7,579
States and political subdivisions		116,497		1,864		(2,306	)		116,055
Corporate debt securities		12,000		—		(4,200	)		7,800
Collateralized mortgage obligations		263,250		—		(20,864	)		242,386
Mortgage-backed securities		11,965,930		2,131		(1,357,283	)		10,610,778
Total	$	12,365,308	$	3,995	$	(1,384,705	)	$	10,984,598

Securities in Continuous Loss Position

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

	March 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	$	5,265	$	(335	)	$	—	$	—		$	5,265	$	(335	)
Collateralized mortgage obligations		58,266		(874	)		136,540		(2,500	)		194,806		(3,374	)
Mortgage-backed securities		10,043		(60	)		91,458		(1,072	)		101,501		(1,132	)
Total	$	73,574	$	(1,269	)	$	227,998	$	(3,572	)	$	301,572	$	(4,841	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,583	$	(107	)	$	—	$	—		$	7,583	$	(107	)
States and political subdivisions		14,877		(68	)		54,906		(2,513	)		69,783		(2,581	)
Corporate debt securities		—		—			8,160		(3,840	)		8,160		(3,840	)
Collateralized mortgage obligations		47,876		(1,261	)		183,228		(23,815	)		231,104		(25,076	)
Mortgage-backed securities		147,256		(1,836	)		9,900,482		(1,475,191	)		10,047,738		(1,477,027	)
Total	$	217,592	$	(3,272	)	$	10,146,776	$	(1,505,359	)	$	10,364,368	$	(1,508,631	)

	December 31, 2023
	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	$	7,300	$	(738	)	$	—	$	—		$	7,300	$	(738	)
Collateralized mortgage obligations		54,611		(729	)		114,758		(2,075	)		169,369		(2,804	)
Mortgage-backed securities		1,154		(13	)		92,211		(1,105	)		93,365		(1,118	)
Total	$	63,065	$	(1,480	)	$	206,969	$	(3,180	)	$	270,034	$	(4,660	)
Held to Maturity
U.S. Treasury securities and obligations of U.S. Government agencies	$	7,580	$	(52	)	$	—	$	—		$	7,580	$	(52	)
States and political subdivisions		23,085		(79	)		41,039		(2,227	)		64,124		(2,306	)
Corporate debt securities		—		—			7,800		(4,200	)		7,800		(4,200	)
Collateralized mortgage obligations		50,147		(470	)		192,205		(20,394	)		242,352		(20,864	)
Mortgage-backed securities		52,853		(807	)		10,354,514		(1,356,476	)		10,407,367		(1,357,283	)
Total	$	133,665	$	(1,408	)	$	10,595,558	$	(1,383,297	)	$	10,729,223	$	(1,384,705	)

Investment Securities by Contractual Maturity

The table below summarizes the amortized cost and fair value of investment securities at March 31, 2024, 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	$	27,214	$	27,560	$	—	$	—
Due after one year through five years		45,853		45,608		—		—
Due after five years through ten years		46,427		41,573		14,350		15,845
Due after ten years		11,896		10,885		—		—
Subtotal		131,390		125,626		14,350		15,845
Mortgage-backed securities and collateralized mortgage obligations		11,854,448		10,352,733		303,903		299,455
Total	$	11,985,838	$	10,478,359	$	318,253	$	315,300

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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

Types of Loans in Loan Portfolio

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

	March 31, 2024		December 31, 2023
	(Dollars in thousands)
Residential mortgage loans held for sale	$	6,380	$	5,734
Commercial and industrial		2,470,848		2,305,040
Real estate:
Construction, land development and other land loans		2,876,588		3,076,591
1-4 family residential (includes home equity)		8,275,040		8,162,344
Commercial real estate (includes multi-family residential)		5,631,460		5,662,948
Farmland		590,896		598,898
Agriculture		222,196		217,145
Consumer and other		326,915		329,593
Total loans held for investment, excluding Warehouse Purchase Program		20,393,943		20,352,559
Warehouse Purchase Program		864,924		822,245
Total loans, including Warehouse Purchase Program	$	21,265,247	$	21,180,538

Related Party Loans

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

	As of and for the three months ended March 31, 2024			As of and for the year ended December 31, 2023
	(Dollars in thousands)
Beginning balance on January 1	$	292		$	547
New loans		1			64
Repayments		(3	)		(319	)
Ending balance	$	290		$	292

Aging Analysis of Past Due Loans

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

	March 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	$	17,078	$	—	$	17,078	$	14,749	$	2,844,761	$	2,876,588
Warehouse Purchase Program loans		—		—		—		—		864,924		864,924
Agriculture and agriculture real estate (includes farmland)		3,672		428		4,100		3,286		805,706		813,092
1-4 family (includes home equity) (1)		37,462		—		37,462		29,464		8,214,494		8,281,420
Commercial real estate (includes multi-family residential)		13,036		2,417		15,453		21,303		5,594,704		5,631,460
Commercial and industrial		20,715		190		20,905		9,542		2,440,401		2,470,848
Consumer and other		432		—		432		131		326,352		326,915
Total	$	92,395	$	3,035	$	95,430	$	78,475	$	21,091,342	$	21,265,247

	December 31, 2023
	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	$	21,627	$	1,635	$	23,262	$	14,770	$	3,038,559	$	3,076,591
Warehouse Purchase Program loans		—		—		—		—		822,245		822,245
Agriculture and agriculture real estate (includes farmland)		8,572		—		8,572		1,460		806,011		816,043
1-4 family (includes home equity) (1)		38,350		130		38,480		25,694		8,103,904		8,168,078
Commercial real estate (includes multi-family residential)		23,511		—		23,511		18,662		5,620,775		5,662,948
Commercial and industrial		14,782		430		15,212		8,066		2,281,762		2,305,040
Consumer and other		503		—		503		36		329,054		329,593
Total	$	107,345	$	2,195	$	109,540	$	68,688	$	21,002,310	$	21,180,538

(1)Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

Non-performing Assets

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

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Nonaccrual loans (1) (2)	$	78,475		$	68,688
Accruing loans 90 or more days past due		3,035			2,195
Total nonperforming loans		81,510			70,883
Repossessed assets		97			76
Other real estate		2,204			1,708
Total nonperforming assets	$	83,811		$	72,667
Nonperforming assets to total loans and other real estate		0.39	%		0.34	%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.41	%		0.36	%
Nonaccrual loans to total loans		0.37	%		0.32	%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.38	%		0.34	%

(1)ASU 2022-02 became effective for the Company on January 1, 2023.

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

Recorded Investment and Outstanding Balance for Purchased Credit Deteriorated Loans and Non Purchased Credit Deteriorated 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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
PCD loans:
Outstanding balance	$	495,074		$	533,653
Discount		(7,361	)		(7,914	)
Recorded investment	$	487,713		$	525,739

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 March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	(Dollars in thousands)
Non-PCD loans:
Outstanding balance	$	1,676,563		$	1,823,809
Discount		(18,681	)		(19,992	)
Recorded investment	$	1,657,882		$	1,803,817

Summary of Changes in Accretable Yields of Acquired Loans

Changes in the accretable yield for acquired PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	7,914		$	3,361
Accretion charge-offs		(5	)		—
Accretion		(548	)		(339	)
Balance at March 31,	$	7,361		$	3,022

Changes in the discount accretion for Non-PCD loans for the three months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024			2023
	(Dollars in thousands)
Balance at beginning of period	$	19,992		$	2,233
Accretion recoveries		1			—
Accretion		(1,312	)		(532	)
Balance at March 31,	$	18,681		$	1,701

Risk Grade by Category of Loan and Year of Origination/Renewal

The following tables present loans by risk grade, by category of loan and year of origination/renewal at March 31, 2024.

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Construction, Land Development and Other Land Loans
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		1,106		166		—		—		14		—		—		1,286
Grade 3		103,359		745,828		696,969		364,477		215,354		57,308		119,072		—		2,302,367
Grade 4		3,478		83,562		146,216		42,544		5,572		26,944		30,782		—		339,098
Grade 5		—		—		1,357		—		23,373		15,796		769		—		41,295
Grade 6		—		570		—		7,698		184		561		—		—		9,013
Grade 7		—		183		2,647		343		—		242		248		—		3,663
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,218		29,616		98,450		15,171		7,649		7,371		20,391		—		179,866
Total	$	108,055	$	860,865	$	945,805	$	430,233	$	252,132	$	108,236	$	171,262	$	—	$	2,876,588
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agriculture and Agriculture Real Estate (includes Farmland)
Grade 1	$	720	$	1,179	$	1,231	$	172	$	252	$	369	$	8,590	$	—	$	12,513
Grade 2		—		13		60		101		—		722		46		—		942
Grade 3		20,051		126,212		168,180		76,630		47,924		118,858		102,641		94		660,590
Grade 4		3,436		21,435		19,644		25,993		4,122		9,589		21,807		—		106,026
Grade 5		725		57		799		885		—		1,143		—		—		3,609
Grade 6		—		—		—		78		—		1,195		—		—		1,273
Grade 7		—		—		1,469		558		339		29		—		—		2,395
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		1,986		2,532		1,345		14,558		2,630		2,693		—		25,744
Total	$	24,932	$	150,882	$	193,915	$	105,762	$	67,195	$	134,535	$	135,777	$	94	$	813,092
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	121	$	—	$	—	$	121
1-4 Family (includes Home Equity) (1)
Grade 1	$	—	$	74	$	153	$	—	$	109	$	—	$	—	$	—	$	336
Grade 2		—		526		1,243		153		236		2,602		—		—		4,760
Grade 3		109,256		1,172,870		2,253,123		2,140,728		1,021,887		1,310,779		91,597		2,757		8,102,997
Grade 4		1,178		15,265		15,813		25,722		5,681		64,138		2,871		204		130,872
Grade 5		—		—		1,206		—		119		2,517		—		—		3,842
Grade 6		—		—		357		41		19		1,840		—		—		2,257
Grade 7		—		1,744		7,554		5,304		4,433		9,293		95		—		28,423
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		625		4,243		475		469		2,121		—		—		7,933
Total	$	110,434	$	1,191,104	$	2,283,692	$	2,172,423	$	1,032,953	$	1,393,290	$	94,563	$	2,961	$	8,281,420
Current-period gross write-offs	$	—	$	—	$	389	$	—	$	33	$	39	$	—	$	—	$	461

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Commercial Real Estate (includes Multi-Family Residential)
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		1,128		—		459		2,232		—		—		3,819
Grade 3		50,492		403,245		908,841		680,193		405,589		1,246,771		77,627		4,591		3,777,349
Grade 4		2,667		43,104		262,140		172,287		217,796		716,336		15,857		—		1,430,187
Grade 5		—		192		2,538		4,771		—		89,422		2,355		—		99,278
Grade 6		—		—		—		356		11,451		76,088		—		—		87,895
Grade 7		—		1,693		827		2,464		—		806		—		—		5,790
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		540		13,613		53,166		49,281		38,547		71,666		329		—		227,142
Total	$	53,699	$	461,847	$	1,228,640	$	909,352	$	673,842	$	2,203,321	$	96,168	$	4,591	$	5,631,460
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and Industrial
Grade 1	$	6,392	$	15,267	$	9,372	$	6,418	$	2,811	$	6,188	$	41,360	$	176	$	87,984
Grade 2		—		695		7,799		219		195		3,651		2,295		—		14,854
Grade 3		211,874		206,299		222,945		147,665		49,661		187,230		910,134		30,276		1,966,084
Grade 4		20,633		44,614		30,936		14,641		11,286		110,319		65,063		2,222		299,714
Grade 5		—		17		21,827		6,057		1,666		788		8,200		100		38,655
Grade 6		413		311		3,898		615		354		962		2,390		—		8,943
Grade 7		—		3,900		420		195		1,268		1,416		457		—		7,656
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		3,689		14,070		3,637		661		2,439		22,462		—		46,958
Total	$	239,312	$	274,792	$	311,267	$	179,447	$	67,902	$	312,993	$	1,052,361	$	32,774	$	2,470,848
Current-period gross write-offs	$	—	$	53	$	349	$	39	$	—	$	24	$	895	$	—	$	1,360
Consumer and Other
Grade 1	$	4,614	$	12,520	$	5,465	$	2,813	$	1,681	$	5,914	$	2,588	$	—	$	35,595
Grade 2		6,132		12,406		14,181		—		—		1,839		1,507		—		36,065
Grade 3		24,054		40,317		38,129		24,769		11,901		17,352		75,004		11		231,537
Grade 4		—		1,748		257		1,105		15,259		2,255		2,865		—		23,489
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		31		5		—		—		—		—		36
Grade 7		—		—		—		—		122		1		—		—		123
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		34		7		15		14		—		70
Total	$	34,800	$	66,991	$	58,063	$	28,726	$	28,970	$	27,376	$	81,978	$	11	$	326,915
Current-period gross write-offs	$	1,470	$	20	$	17	$	24	$	—	$	70	$	58	$	—	$	1,659

	Term Loans
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)
Warehouse Purchase Program
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		—		—		—		—		—		—		—
Grade 3		864,924		—		—		—		—		—		—		—		864,924
Grade 4		—		—		—		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		—		—		—		—		—		—		—
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		—		—		—		—		—
Total	$	864,924	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	864,924
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Grade 1	$	11,726	$	29,040	$	16,221	$	9,403	$	4,853	$	12,471	$	52,538	$	176	$	136,428
Grade 2		6,132		14,746		24,577		473		890		11,060		3,848		—		61,726
Grade 3		1,384,010		2,694,771		4,288,187		3,434,462		1,752,316		2,938,298		1,376,075		37,729		17,905,848
Grade 4		31,392		209,728		475,006		282,292		259,716		929,581		139,245		2,426		2,329,386
Grade 5		725		266		27,727		11,713		25,158		109,666		11,324		100		186,679
Grade 6		413		881		4,286		8,793		12,008		80,646		2,390		—		109,417
Grade 7		—		7,520		12,917		8,864		6,162		11,787		800		—		48,050
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		1,758		49,529		172,461		69,943		61,891		86,242		45,889		—		487,713
Total	$	1,436,156	$	3,006,481	$	5,021,382	$	3,825,943	$	2,122,994	$	4,179,751	$	1,632,109	$	40,431	$	21,265,247
Current-period gross write-offs	$	1,470	$	73	$	755	$	63	$	33	$	254	$	953	$	—	$	3,601

(1)Includes $6.4 million of residential mortgage loans held for sale at March 31, 2024.

Allowance for Credit Losses on Loans by Category of Loan

The following table details activity in the allowance for credit losses on loans by category of loan for the three months ended March 31, 2024 and 2023.

	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 December 31, 2023	$	87,775		$	11,380		$	77,652		$	88,664		$	59,832		$	7,059		$	332,362
Provision for credit losses on loans		(5,619	)		1,270			2,469			(1,468	)		2,067			1,281			—
Charge-offs		—			(121	)		(461	)		—			(1,360	)		(1,659	)		(3,601	)
Recoveries		2			98			4			17			1,077			260			1,458
Net (charge-offs) recoveries		2			(23	)		(457	)		17			(283	)		(1,399	)		(2,143	)
Balance March 31, 2024	$	82,158		$	12,627		$	79,664		$	87,213		$	61,616		$	6,941		$	330,219
Allowance for credit losses on loans:
Three Months Ended
Balance December 31, 2022	$	78,853		$	7,699		$	60,795		$	66,272		$	62,319		$	5,638		$	281,576
Provision for credit losses		1,695			356			1,603			1,699			(6,495	)		1,142			—
Charge-offs		—			—			(65	)		—			(901	)		(1,225	)		(2,191	)
Recoveries		13			6			205			1			2,373			208			2,806
Net (charge-offs) recoveries		13			6			140			1			1,472			(1,017	)		615
Balance March 31, 2023	$	80,561		$	8,061		$	62,538		$	67,972		$	57,296		$	5,763		$	282,191

Schedule of Amortized Cost of Loans Experiencing Financial Difficulty and Modified

The following table displays the amortized cost of loans that were both experiencing financial difficulty and modified during the three months ended March 31, 2024 and 2023, presented by category of loan and type of modification.

	Term Extension		Percentage of Total Loans Held for Investment
	(Dollars in thousands)
Three Months Ended March 31, 2024
Commercial and industrial	$	413		—
Agriculture		11,000		0.05	%
Total	$	11,413		0.05	%
Three Months Ended March 31, 2023
Construction, land development and other land loans	$	4,233		0.02	%
Total	$	4,233		0.02	%

Schedule of Loan Modifications

The following table describes the modifications made to the loans presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023.

Term Extension
Loan Type	Three Months Ended March 31, 2024
Commercial and industrial	Modified to a 7 year term
Agriculture	Modified to a 2 year term
Loan Type	Three Months Ended March 31, 2023
Construction, land development and other land loans	Less than 12-month extension

XML

Fair Value (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Assets and Liabilities Measured on Recurring Basis

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

	As of March 31, 2024
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	15,845	$	—	$	15,845
Collateralized mortgage obligations		—		194,806		—		194,806
Mortgage-backed securities		—		104,649		—		104,649
Total	$	—	$	315,300	$	—	$	315,300
Derivative financial instruments:
Interest rate lock commitments	$	—	$	256	$	—	$	256
Forward mortgage-backed securities trades		—		8		—		8
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		4,309		—		4,309
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		74		—		74
Loan customer counterparty		—		4,330		—		4,330
Financial institution counterparty		—		—		—		—

	As of December 31, 2023
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets:
Available for sale securities:
Corporate debt securities	$	—	$	21,787	$	—	$	21,787
Collateralized mortgage obligations		—		320,044		—		320,044
Mortgage-backed securities		—		96,757		—		96,757
Total available for sale securities	$	—	$	438,588	$	—	$	438,588
Derivative financial instruments:
Interest rate lock commitments	$	—	$	218	$	—	$	218
Forward mortgage-backed securities trades		—		1		—		1
Loan customer counterparty		—		—		—		—
Financial institution counterparty		—		3,876		—		3,876
Liabilities:
Derivative financial instruments:
Interest rate lock commitments	$	—	$	—	$	—	$	—
Forward mortgage-backed securities trades		—		161		—		161
Loan customer counterparty		—		3,899		—		3,899
Financial institution counterparty		—		—		—		—

Summary of Carrying and Fair Value Information of Financial Instruments

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

	As of March 31, 2024
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	1,086,444	$	1,086,444	$	—	$	—	$	1,086,444
Federal funds sold		250		250		—		—		250
Held to maturity securities		11,985,838		—		10,478,359		—		10,478,359
Loans held for sale		6,380		—		6,380		—		6,380
Loans held for investment, net of allowance		20,063,724		—		—		18,465,513		18,465,513
Loans held for investment - Warehouse Purchase Program		864,924		—		864,924		—		864,924
Other real estate owned		2,204		—		2,204		—		2,204
Liabilities
Deposits:
Noninterest-bearing	$	9,526,535	$	—	$	9,526,535	$	—	$	9,526,535
Interest-bearing		17,648,983		—		17,611,669		—		17,611,669
Other borrowings		3,900,000		—		3,876,545		—		3,876,545
Securities sold under repurchase agreements		261,671		—		261,621		—		261,621

	As of December 31, 2023
	Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Assets
Cash and due from banks	$	458,153	$	458,153	$	—	$	—	$	458,153
Federal funds sold		260		260		—		—		260
Held to maturity securities		12,365,308		—		10,984,598		—		10,984,598
Loans held for sale		5,734		—		5,734		—		5,734
Loans held for investment, net of allowance		20,020,197		—		—		18,321,054		18,321,054
Loans held for investment - Warehouse Purchase Program		822,245		—		822,245		—		822,245
Other real estate owned		1,708		—		1,708		—		1,708
Liabilities
Deposits:
Noninterest-bearing	$	9,776,572	$	—	$	9,776,572	$	—	$	9,776,572
Interest-bearing		17,403,237		—		17,371,523		—		17,371,523
Other borrowings		3,725,000		—		3,725,000		—		3,725,000
Securities sold under repurchase agreements		309,277		—		309,245		—		309,245

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Goodwill and Core Deposit Intangibles (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Core Deposit Intangibles

Changes in the carrying amount of the Company’s goodwill and core deposit intangibles for the three months ended March 31, 2024 and the year ended December 31, 2023 were as follows:

	Goodwill		Core Deposit Intangibles
	(Dollars in thousands)
Balance as of December 31, 2022	$	3,231,636	$	51,348
Less:
Amortization		—		(12,676	)
Add:
First Bancshares Merger		164,450		25,322
Balance as of December 31, 2023		3,396,086		63,994
Less:
Amortization		—		(3,237	)
Add:
First Bancshares Merger		316		—
Balance as of March 31, 2024	$	3,396,402	$	60,757

Estimated Aggregate Future Amortization Expense for Core Deposit Intangibles

The estimated aggregate future amortization expense for core deposit intangibles remaining as of March 31, 2024 is as follows (dollars in thousands):

Remaining 2024	$	9,576
2025		11,409
2026		10,376
2027		9,288
2028		8,288
Thereafter		11,820
Total	$	60,757

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Contractual Obligations and Off-Balance Sheet Items (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Summary of Future Cash Payments Associated with Contractual Obligations Pursuant to Subordinated Debentures, Federal Reserve's Bank Term Funding Program and Federal Home Loan Bank Advances

The Company’s future cash payments associated with its contractual obligations pursuant to the Federal Reserve’s Bank Term Funding Program (“BTFP”) as of March 31, 2024 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)
Bank Term Funding Program	$	4,086,149	$	—	$	—	$	—	$	4,086,149

Future Undiscounted Cash Payments Associated with its Operating Leases

The Company’s future undiscounted cash payments associated with its operating leases as of March 31, 2024 are summarized below (dollars in thousands).

Remaining 2024	$	7,877
2025		10,005
2026		8,865
2027		5,849
2028		2,873
2029		1,541
Thereafter		8,327
Total undiscounted lease payments	$	45,337

Summary of Commitments Associated with Outstanding Standby Letters of Credit, Unused Capacity on Warehouse Purchase Program Loans and Commitments to Extend Credit

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 March 31, 2024 are summarized below. Since commitments associated with letters of credit, unused capacity of 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	$	62,745	$	18,559	$	2,445	$	26	$	83,775
Unused capacity on Warehouse Purchase Program loans		1,058,576		—		—		—		1,058,576
Commitments to extend credit		1,489,941		1,020,761		296,869		1,623,299		4,430,870
Total	$	2,611,262	$	1,039,320	$	299,314	$	1,623,325	$	5,573,221

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Other Comprehensive (Loss) Income (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income

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

	Three Months Ended March 31,
	2024								2023
	Before Tax Amount			Tax Effect		Net of Tax Amount			Before Tax Amount			Tax Effect		Net of Tax Amount
	(Dollars in thousands)
Other comprehensive loss:
Securities available for sale:
Change in unrealized loss during period	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)
Total securities available for sale		(1,184	)		249		(935	)		(4	)		1		(3	)
Total other comprehensive loss	$	(1,184	)	$	249	$	(935	)	$	(4	)	$	1	$	(3	)

Activity in Accumulated Other Comprehensive Loss Associated with Securities Available for Sale, Net of Tax

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, 2023	$	(1,398	)	$	(1,398	)
Other comprehensive loss		(935	)		(935	)
Balance at March 31, 2024	$	(2,333	)	$	(2,333	)
Balance at December 31, 2022	$	(3,473	)	$	(3,473	)
Other comprehensive loss		(3	)		(3	)
Balance at March 31, 2023	$	(3,476	)	$	(3,476	)

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Balances and Fair Value of Derivative Positions

The following table provides the outstanding notional balances and fair values of outstanding derivative positions at March 31, 2024 and December 31, 2023.

	March 31, 2024						December 31, 2023
	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	$	15,693	$	256	$	—	$	7,113	$	218	$	—
Forward mortgage-backed securities trades		20,500		8		74		14,250		1		161
Commercial loan interest rate swaps and caps:
Loan customer counterparty		67,207		—		4,330		67,408		—		3,899
Financial institution counterparty		67,207		4,309		—		67,408		3,876		—

Schedule of Weighted Average Received and Paid Interest Rates for Interest Rate Swaps Outstanding

The commercial loan customer counterparty weighted average received and paid interest rates for interest rate swaps outstanding at March 31, 2024 and December 31, 2023 are presented in the following table.

	Weighted-Average Interest Rate
	March 31, 2024						December 31, 2023
	Received			Paid			Received			Paid
Loan customer counterparty		3.07	%		6.78	%		3.07	%		6.81	%

Schedule of Income (Loss) from Derivatives Not Designated as Hedging Instruments

Income (loss) for the three months ended March 31, 2024 and 2023 was as follows:

	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2024		2023
	(Dollars in thousands)
Interest rate lock commitments	$	38	$	30
Forward mortgage-backed securities trades		196		(50	)

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Income Per Common Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Net income	$ 110,426	$ 124,694
Basic, Weighted average shares outstanding (in shares)	93,706	91,207
Basic	$ 1.18	$ 1.37
Diluted, Weighted average shares outstanding (in shares)	93,706	91,207
Diluted	$ 1.18	$ 1.37

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Income Per Common Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Number of options outstanding	0
Antidilutive Securities excluded from computation of earnings per share, amount	0	0

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New Accounting Standards - Additional Information (Details)	Mar. 31, 2024
Accounting Standards Update and Change in Accounting Principle [Abstract]
Minimum percentage of income tax payment net of refunds received	5.00%

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Securities - Schedule of Amortized Cost and Fair Value of Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Available for Sale, Amortized Cost	$ 318,253	$ 440,358
Available for Sale, Gross Unrealized Gains	1,888	2,890
Available for Sale, Gross Unrealized Losses	(4,841)	(4,660)
Available for Sale	315,300	438,588
Held to Maturity, Amortized Cost	11,985,838	12,365,308
Held to Maturity, Gross Unrealized Gains	1,152	3,995
Held to Maturity, Gross Unrealized Losses	(1,508,631)	(1,384,705)
Held to Maturity	10,478,359	10,984,598	$ 10,984,598
Corporate Debt Securities [Member]
Marketable Securities [Line Items]
Available for Sale, Amortized Cost	14,350	20,698
Available for Sale, Gross Unrealized Gains	1,830	1,827
Available for Sale, Gross Unrealized Losses	(335)	(738)
Available for Sale	15,845	21,787
Held to Maturity, Amortized Cost	12,000	12,000
Held to Maturity, Gross Unrealized Losses	(3,840)	(4,200)
Held to Maturity	8,160	7,800
Collateralized Mortgage Obligations [Member]
Marketable Securities [Line Items]
Available for Sale, Amortized Cost	198,180	321,881
Available for Sale, Gross Unrealized Gains		967
Available for Sale, Gross Unrealized Losses	(3,374)	(2,804)
Available for Sale	194,806	320,044
Held to Maturity, Amortized Cost	256,216	263,250
Held to Maturity, Gross Unrealized Losses	(25,076)	(20,864)
Held to Maturity	231,140	242,386
Mortgage-backed Securities [Member]
Marketable Securities [Line Items]
Available for Sale, Amortized Cost	105,723	97,779
Available for Sale, Gross Unrealized Gains	58	96
Available for Sale, Gross Unrealized Losses	(1,132)	(1,118)
Available for Sale	104,649	96,757
Held to Maturity, Amortized Cost	11,598,232	11,965,930
Held to Maturity, Gross Unrealized Gains	388	2,131
Held to Maturity, Gross Unrealized Losses	(1,477,027)	(1,357,283)
Held to Maturity	10,121,593	10,610,778
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Marketable Securities [Line Items]
Held to Maturity, Amortized Cost	7,691	7,631
Held to Maturity, Gross Unrealized Losses	(107)	(52)
Held to Maturity	7,584	7,579
States and Political Subdivisions [Member]
Marketable Securities [Line Items]
Held to Maturity, Amortized Cost	111,699	116,497
Held to Maturity, Gross Unrealized Gains	764	1,864
Held to Maturity, Gross Unrealized Losses	(2,581)	(2,306)
Held to Maturity	$ 109,882	$ 116,055

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Securities - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($) Segment Security	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) Security
Schedule Of Held To Maturity Securities [Line Items]
Number of Investment Securities Segments | Segment	2
Credit losses	$ 0
Municipal securities percentage of securities portfolio	0.90%
Securities in Unrealized Loss Positions Qualitative Disclosure Number of Positions Greater Than or Equal to One Year | Security	1,028		941
Gain (loss) on sale of securities	$ 298,000	$ 0
Available for Sale Securities, Amortized Cost Basis	318,253,000		$ 440,358,000
Debt Securities, Available-for-Sale	315,300,000		438,588,000
Collateralized Securities [Member]
Schedule Of Held To Maturity Securities [Line Items]
Available for Sale Securities, Amortized Cost Basis	10,990,000,000		11,340,000,000
Debt Securities, Available-for-Sale	$ 9,600,000,000		$ 10,090,000,000.00
Securities Concentration Risk [Member] | Stockholders' Equity, Total [Member] | Other Than U.S. Government and Agencies [Member]
Schedule Of Held To Maturity Securities [Line Items]
Concentration Risk, Percentage	10.00%		10.00%

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Securities - Securities in Continuous Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Schedule Of Available For Sale Securities [Line Items]
Available for Sale, Estimated Fair Value, Less than 12 Months	$ 73,574	$ 63,065
Available for Sale, Unrealized Losses, Less than 12 Months	(1,269)	(1,480)
Available for Sale, Estimated Fair Value, 12 Months or More	227,998	206,969
Available for Sale, Unrealized Losses, 12 Months or More	(3,572)	(3,180)
Available for Sale, Estimated Fair Value, Total	301,572	270,034
Available for Sale, Unrealized Losses, Total	(4,841)	(4,660)
Held to Maturity, Estimated Fair Value, Less than 12 Months	217,592	133,665
Held to Maturity, Unrealized Losses, Less than 12 Months	(3,272)	(1,408)
Held to Maturity, Estimated Fair Value, 12 Months or More	10,146,776	10,595,558
Held to Maturity, Unrealized Losses, 12 Months or More	(1,505,359)	(1,383,297)
Held to Maturity, Estimated Fair Value, Total	10,364,368	10,729,223
Held to Maturity, Unrealized Losses, Total	(1,508,631)	(1,384,705)
Corporate Debt Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Available for Sale, Estimated Fair Value, Less than 12 Months	5,265	7,300
Available for Sale, Unrealized Losses, Less than 12 Months	(335)	(738)
Available for Sale, Estimated Fair Value, Total	5,265	7,300
Available for Sale, Unrealized Losses, Total	(335)	(738)
Held to Maturity, Estimated Fair Value, 12 Months or More	8,160	7,800
Held to Maturity, Unrealized Losses, 12 Months or More	(3,840)	(4,200)
Held to Maturity, Estimated Fair Value, Total	8,160	7,800
Held to Maturity, Unrealized Losses, Total	(3,840)	(4,200)
Collateralized Mortgage Obligations [Member]
Schedule Of Available For Sale Securities [Line Items]
Available for Sale, Estimated Fair Value, Less than 12 Months	58,266	54,611
Available for Sale, Unrealized Losses, Less than 12 Months	(874)	(729)
Available for Sale, Estimated Fair Value, 12 Months or More	136,540	114,758
Available for Sale, Unrealized Losses, 12 Months or More	(2,500)	(2,075)
Available for Sale, Estimated Fair Value, Total	194,806	169,369
Available for Sale, Unrealized Losses, Total	(3,374)	(2,804)
Held to Maturity, Estimated Fair Value, Less than 12 Months	47,876	50,147
Held to Maturity, Unrealized Losses, Less than 12 Months	(1,261)	(470)
Held to Maturity, Estimated Fair Value, 12 Months or More	183,228	192,205
Held to Maturity, Unrealized Losses, 12 Months or More	(23,815)	(20,394)
Held to Maturity, Estimated Fair Value, Total	231,104	242,352
Held to Maturity, Unrealized Losses, Total	(25,076)	(20,864)
Mortgage-backed Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Available for Sale, Estimated Fair Value, Less than 12 Months	10,043	1,154
Available for Sale, Unrealized Losses, Less than 12 Months	(60)	(13)
Available for Sale, Estimated Fair Value, 12 Months or More	91,458	92,211
Available for Sale, Unrealized Losses, 12 Months or More	(1,072)	(1,105)
Available for Sale, Estimated Fair Value, Total	101,501	93,365
Available for Sale, Unrealized Losses, Total	(1,132)	(1,118)
Held to Maturity, Estimated Fair Value, Less than 12 Months	147,256	52,853
Held to Maturity, Unrealized Losses, Less than 12 Months	(1,836)	(807)
Held to Maturity, Estimated Fair Value, 12 Months or More	9,900,482	10,354,514
Held to Maturity, Unrealized Losses, 12 Months or More	(1,475,191)	(1,356,476)
Held to Maturity, Estimated Fair Value, Total	10,047,738	10,407,367
Held to Maturity, Unrealized Losses, Total	(1,477,027)	(1,357,283)
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Schedule Of Available For Sale Securities [Line Items]
Held to Maturity, Estimated Fair Value, Less than 12 Months	7,583	7,580
Held to Maturity, Unrealized Losses, Less than 12 Months	(107)	(52)
Held to Maturity, Estimated Fair Value, Total	7,583	7,580
Held to Maturity, Unrealized Losses, Total	(107)	(52)
States and Political Subdivisions [Member]
Schedule Of Available For Sale Securities [Line Items]
Held to Maturity, Estimated Fair Value, Less than 12 Months	14,877	23,085
Held to Maturity, Unrealized Losses, Less than 12 Months	(68)	(79)
Held to Maturity, Estimated Fair Value, 12 Months or More	54,906	41,039
Held to Maturity, Unrealized Losses, 12 Months or More	(2,513)	(2,227)
Held to Maturity, Estimated Fair Value, Total	69,783	64,124
Held to Maturity, Unrealized Losses, Total	$ (2,581)	$ (2,306)

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Securities - Investment Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Held to Maturity, amortized cost, due in one year or less	$ 27,214
Held to Maturity, amortized cost, due after one year through five years	45,853
Held to Maturity, amortized cost, due after five years through ten years	46,427
Held to Maturity, amortized cost, due after ten years	11,896
Held to Maturity, amortized cost, subtotal	131,390
Held to Maturity, amortized cost, mortgage-backed securities and collateralized mortgage obligations	11,854,448
Held to Maturity, Amortized Cost	11,985,838	$ 12,365,308
Held to Maturity, fair value, due in one year or less	27,560
Held to Maturity, fair value, due after one year through five years	45,608
Held to Maturity, fair value, due after five years through ten years	41,573
Held to Maturity, fair value, due after ten years	10,885
Held to Maturity, fair value, subtotal	125,626
Held to Maturity, fair value, mortgage-backed securities and collateralized mortgage obligations	10,352,733
Held to Maturity, fair value, total	10,478,359	10,984,598	$ 10,984,598
Available for Sale, amortized cost, due after five years through ten years	14,350
Available for Sale, amortized cost, subtotal	14,350
Available for Sale, amortized cost, mortgage-backed securities and collateralized mortgage obligations	303,903
Available for Sale, Amortized Cost	318,253	440,358
Available for Sale, fair value, due after five years through ten years	15,845
Available for Sale, fair value, subtotal	15,845
Available for Sale, fair value, mortgage-backed securities and collateralized mortgage obligations	299,455
Available for Sale securities, at fair value	$ 315,300	$ 438,588

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Loans and Allowance for Credit Losses - Types of Loans in Loan Portfolio (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale		$ 6,380	$ 5,734
Loans held for investment		20,393,943	20,352,559
Total loans, including Warehouse Purchase Program		21,265,247	21,180,538
Residential Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale		6,380	5,734
Warehouse Purchase Program [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		864,924	822,245
Total loans, including Warehouse Purchase Program		864,924	822,245
Commercial and Industrial [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		2,470,848	2,305,040
Total loans, including Warehouse Purchase Program		2,470,848	2,305,040
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		2,876,588	3,076,591
Total loans, including Warehouse Purchase Program		2,876,588	3,076,591
Real Estate [Member] | 1-4 Family [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		8,275,040	8,162,344
Total loans, including Warehouse Purchase Program	[1]	8,281,420	8,168,078
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		5,631,460	5,662,948
Total loans, including Warehouse Purchase Program		5,631,460	5,662,948
Real Estate [Member] | Farmland [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		590,896	598,898
Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		222,196	217,145
Consumer and Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		326,915	329,593
Total loans, including Warehouse Purchase Program		$ 326,915	$ 329,593

[1] Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

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Loans and Allowance for Credit Losses - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Accounts Notes And Loans Receivable [Line Items]
Percentage of Loans Related to Single Industry on Loans	10.00%		10.00%
Percentage of real estate loans aggregating to company loan portfolio, excluding Warehouse Purchase Program loans	82.30%		83.00%
Loans and Leases Receivable, Related Parties	$ 290,000		$ 292,000	$ 547,000
Loans held for investment	$ 20,393,943,000		$ 20,352,559,000
Financing Receivable Ratio of Nonperforming Loans to All Loans and Other Real Estate	0.39%		0.34%
Loans and leases receivable, nonaccrual loans	$ 78,500,000		$ 68,700,000
Financing Receivable, Allowance for Credit Losses on Loans	$ 330,200,000		$ 332,400,000
Allowance for Credit Losses as Percentage of Loans	1.55%		1.57%
Provision for credit losses	$ 0	$ 0
Decrease in allowance for credit losses for loans	$ (2,100,000)
Decrease in allowance for credit losses for loans, percentage	(0.60%)
Net (charge-offs) recoveries	$ (2,143,000)	$ 615,000
General reserve	4,100,000
Allowance for credit losses on off-balance sheet credit exposures	36,503,000		$ 36,503,000
Commitments expected to fund	2,260,000,000
Nonaccrual loans	78,475,000		68,688,000
PCD Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Net (charge-offs) recoveries	(991,000)
Nonperforming Financial Instruments [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment	$ 83,800,000		$ 72,700,000

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Loans and Allowance for Credit Losses - Related Party Loans (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Receivables [Abstract]
Beginning balance on January 1	$ 292	$ 547
New loans	1	64
Repayments	(3)	(319)
Ending balance	$ 290	$ 292

XML

Loans and Allowance for Credit Losses - Aging Analysis of Past Due Loans (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		$ 21,091,342	$ 21,002,310
Nonaccrual loans		78,475	68,688
Total loans		21,265,247	21,180,538
Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		92,395	107,345
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		3,035	2,195
Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		95,430	109,540
Warehouse Purchase Program Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		864,924	822,245
Total loans		864,924	822,245
Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		805,706	806,011
Nonaccrual loans		3,286	1,460
Total loans		813,092	816,043
Agriculture [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		3,672	8,572
Agriculture [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		428
Agriculture [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		4,100	8,572
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		2,844,761	3,038,559
Nonaccrual loans		14,749	14,770
Total loans		2,876,588	3,076,591
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		17,078	21,627
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing			1,635
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		17,078	23,262
Real Estate [Member] | Agriculture [Member]
Accounts Notes And Loans Receivable [Line Items]
Total loans		813,092
Real Estate [Member] | 1-4 Family Residential (Includes Home Equity) [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing	[1]	8,214,494	8,103,904
Nonaccrual loans	[1]	29,464	25,694
Total loans	[1]	8,281,420	8,168,078
Real Estate [Member] | 1-4 Family Residential (Includes Home Equity) [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing	[1]	37,462	38,350
Real Estate [Member] | 1-4 Family Residential (Includes Home Equity) [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing	[1]		130
Real Estate [Member] | 1-4 Family Residential (Includes Home Equity) [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing	[1]	37,462	38,480
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		5,594,704	5,620,775
Nonaccrual loans		21,303	18,662
Total loans		5,631,460	5,662,948
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		13,036	23,511
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		2,417
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		15,453	23,511
Commercial and Industrial [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		2,440,401	2,281,762
Nonaccrual loans		9,542	8,066
Total loans		2,470,848	2,305,040
Commercial and Industrial [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		20,715	14,782
Commercial and Industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		190	430
Commercial and Industrial [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		20,905	15,212
Consumer and Other [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		326,352	329,054
Nonaccrual loans		131	36
Total loans		326,915	329,593
Consumer and Other [Member] | Financing Receivables, 30 to 89 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		432	503
Consumer and Other [Member] | Financing Receivables Past Due Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans past due and still accruing		$ 432	$ 503

[1] Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

XML

Loans and Allowance for Credit Losses - Aging Analysis of Past Due Loans (Parenthetical) (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale	$ 6,380	$ 5,734
Residential Mortgage Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for sale	$ 6,380	$ 5,734

XML

Loans and Allowance for Credit Losses - Nonperforming Assets (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		$ 20,393,943	$ 20,352,559
Other real estate owned		$ 2,204	$ 1,708
Nonperforming assets to total loans and other real estate		0.39%	0.34%
Nonperforming assets to total loans, excluding Warehouse Purchase Program loans, and other real estate		0.41%	0.36%
Nonaccrual loans to total loans		0.37%	0.32%
Nonaccrual loans to total loans, excluding Warehouse Purchase Program loans		0.38%	0.34%
Nonperforming Financial Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		$ 81,510	$ 70,883
Repossessed assets		97	76
Other real estate owned		2,204	1,708
Total nonperforming assets		83,811	72,667
Nonperforming Financial Loans [Member] | Finance Receivable Nonaccrual Status [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment	[1],[2]	78,475	68,688
Nonperforming Financial Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		$ 3,035	$ 2,195

[1] ASU 2022-02 became effective for the Company on January 1, 2023.

[2] There were no nonperforming Warehouse Purchase Program loans or Warehouse Purchase Program lines of credit for the periods presented.

XML

Loans and Allowance for Credit Losses - Nonperforming Assets (Parenthetical) (Details) - USD ($)		Mar. 31, 2024	Dec. 31, 2023
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		$ 20,393,943,000	$ 20,352,559,000
Nonperforming Financial Loans [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		81,510,000	70,883,000
Nonperforming Financial Loans [Member] | Finance Receivable Nonaccrual Status [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment	[1],[2]	78,475,000	68,688,000
Troubled Debt Restructuring [Member] | Nonperforming Financial Loans [Member] | Finance Receivable Nonaccrual Status [Member] | Warehouse Purchase Program [Member]
Accounts Notes And Loans Receivable [Line Items]
Loans held for investment		$ 0	$ 0

[1] ASU 2022-02 became effective for the Company on January 1, 2023.

[2] There were no nonperforming Warehouse Purchase Program loans or Warehouse Purchase Program lines of credit for the periods presented.

XML

Loans and Allowance for Credit Losses - Recorded Investment and Outstanding Balance for Purchased Credit Deteriorated Loans and Non Purchased Credit Deteriorated Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
PCD Loans [Member]
Purchased And Non Purchased Credit Impaired Loans [Line Items]
Outstanding balance	$ 495,074	$ 533,653
Discount	(7,361)	(7,914)
Recorded investment	487,713	525,739
Non-PCD Loans [Member]
Purchased And Non Purchased Credit Impaired Loans [Line Items]
Outstanding balance	1,676,563	1,823,809
Discount	(18,681)	(19,992)
Recorded investment	$ 1,657,882	$ 1,803,817

XML

Loans and Allowance for Credit Losses - Summary of Changes in Accretable Yields of Acquired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
PCD Loans [Member]
Changes In Accretable Yield for PCI And Non PCI Loans [Line Items]
Balance at beginning of period	$ 7,914	$ 3,361
Accretion recoveries (charge-offs)	(5)
Accretion	(548)	(339)
Balance at March 31,	7,361	3,022
Non-PCD Loans [Member]
Changes In Accretable Yield for PCI And Non PCI Loans [Line Items]
Balance at beginning of period	19,992	2,233
Accretion recoveries (charge-offs)	1
Accretion	(1,312)	(532)
Balance at March 31,	$ 18,681	$ 1,701

XML

Loans and Allowance for Credit Losses - Risk Grade by Category of Loan and Year of Origination/Renewal (Details) - USD ($) $ in Thousands		Mar. 31, 2024	Dec. 31, 2023
Financing Receivable Impaired [Line Items]
2024		$ 1,436,156
2023		5,021,382
2022		2,122,994
2021		3,825,943
2020		3,006,481
Prior		4,179,751
Revolving Loans		1,632,109
Revolving Loans Converted to Term Loans		40,431
Total loans		21,265,247	$ 21,180,538
Current-period gross write-offs, 2024		1,470
Current-period gross write-offs, 2023		755
Current-period gross write-offs, 2022		33
Current-period gross write-offs, 2021		63
Current-period gross write-offs, 2020		73
Current-period gross write-offs, Prior		254
Current-period gross write-offs, Revolving Loans		953
Current-period gross write-offs, Total		3,601
PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2024		1,758
2023		172,461
2022		61,891
2021		69,943
2020		49,529
Prior		86,242
Revolving Loans		45,889
Total loans		487,713
Agriculture [Member]
Financing Receivable Impaired [Line Items]
Total loans		813,092	816,043
Warehouse Purchase Program [Member]
Financing Receivable Impaired [Line Items]
2024		864,924
Total loans		864,924	822,245
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2024		108,055
2023		860,865
2022		945,805
2021		430,233
2020		252,132
Prior		108,236
Revolving Loans		171,262
Total loans		2,876,588	3,076,591
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2024		1,218
2023		29,616
2022		98,450
2021		15,171
2020		7,649
Prior		7,371
Revolving Loans		20,391
Total loans		179,866
Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2024		24,932
2023		150,882
2022		193,915
2021		105,762
2020		67,195
Prior		134,535
Revolving Loans		135,777
Revolving Loans Converted to Term Loans		94
Total loans		813,092
Current-period gross write-offs, Prior		121
Current-period gross write-offs, Total		121
Real Estate [Member] | Agriculture [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2023		1,986
2022		2,532
2021		1,345
2020		14,558
Prior		2,630
Revolving Loans		2,693
Total loans		25,744
Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2024		110,434
2023		1,191,104
2022		2,283,692
2021		2,172,423
2020		1,032,953
Prior		1,393,290
Revolving Loans		94,563
Revolving Loans Converted to Term Loans		2,961
Total loans	[1]	8,281,420	8,168,078
Current-period gross write-offs, 2022		389
Current-period gross write-offs, 2020		33
Current-period gross write-offs, Prior		39
Current-period gross write-offs, Total		461
Real Estate [Member] | 1-4 Family [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2023		625
2022		4,243
2021		475
2020		469
Prior		2,121
Total loans		7,933
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2024		53,699
2023		461,847
2022		1,228,640
2021		909,352
2020		673,842
Prior		2,203,321
Revolving Loans		96,168
Revolving Loans Converted to Term Loans		4,591
Total loans		5,631,460	5,662,948
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2024		540
2023		13,613
2022		53,166
2021		49,281
2020		38,547
Prior		71,666
Revolving Loans		329
Total loans		227,142
Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2024		239,312
2023		274,792
2022		311,267
2021		179,447
2020		67,902
Prior		312,993
Revolving Loans		1,052,361
Revolving Loans Converted to Term Loans		32,774
Total loans		2,470,848	2,305,040
Current-period gross write-offs, 2023		53
Current-period gross write-offs, 2022		349
Current-period gross write-offs, 2021		39
Current-period gross write-offs, Prior		24
Current-period gross write-offs, Revolving Loans		895
Current-period gross write-offs, Total		1,360
Commercial and Industrial [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2023		3,689
2022		14,070
2021		3,637
2020		661
Prior		2,439
Revolving Loans		22,462
Total loans		46,958
Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2024		34,800
2023		66,991
2022		58,063
2021		28,726
2020		28,970
Prior		27,376
Revolving Loans		81,978
Revolving Loans Converted to Term Loans		11
Total loans		326,915	$ 329,593
Current-period gross write-offs, 2024		1,470
Current-period gross write-offs, 2023		20
Current-period gross write-offs, 2022		17
Current-period gross write-offs, 2021		24
Current-period gross write-offs, 2020		0
Current-period gross write-offs, Prior		70
Current-period gross write-offs, Revolving Loans		58
Current-period gross write-offs, Total		1,659
Consumer and Other [Member] | PCD Loans [Member]
Financing Receivable Impaired [Line Items]
2021		34
2020		7
Prior		15
Revolving Loans		14
Total loans		70
Grade 1 [Member]
Financing Receivable Impaired [Line Items]
2024		11,726
2023		16,221
2022		4,853
2021		9,403
2020		29,040
Prior		12,471
Revolving Loans		52,538
Revolving Loans Converted to Term Loans		176
Total loans		136,428
Grade 1 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2024		720
2023		1,179
2022		1,231
2021		172
2020		252
Prior		369
Revolving Loans		8,590
Total loans		12,513
Grade 1 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2023		74
2022		153
2020		109
Total loans		336
Grade 1 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2024		6,392
2023		15,267
2022		9,372
2021		6,418
2020		2,811
Prior		6,188
Revolving Loans		41,360
Revolving Loans Converted to Term Loans		176
Total loans		87,984
Grade 1 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2024		4,614
2023		12,520
2022		5,465
2021		2,813
2020		1,681
Prior		5,914
Revolving Loans		2,588
Total loans		35,595
Grade 2 [Member]
Financing Receivable Impaired [Line Items]
2024		6,132
2023		24,577
2022		890
2021		473
2020		14,746
Prior		11,060
Revolving Loans		3,848
Total loans		61,726
Grade 2 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2023		1,106
2022		166
Prior		14
Total loans		1,286
Grade 2 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2023		13
2022		60
2021		101
Prior		722
Revolving Loans		46
Total loans		942
Grade 2 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2023		526
2022		1,243
2021		153
2020		236
Prior		2,602
Total loans		4,760
Grade 2 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2022		1,128
2020		459
Prior		2,232
Total loans		3,819
Grade 2 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2023		695
2022		7,799
2021		219
2020		195
Prior		3,651
Revolving Loans		2,295
Total loans		14,854
Grade 2 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2024		6,132
2023		12,406
2022		14,181
Prior		1,839
Revolving Loans		1,507
Total loans		36,065
Grade 3 [Member]
Financing Receivable Impaired [Line Items]
2024		1,384,010
2023		4,288,187
2022		1,752,316
2021		3,434,462
2020		2,694,771
Prior		2,938,298
Revolving Loans		1,376,075
Revolving Loans Converted to Term Loans		37,729
Total loans		17,905,848
Grade 3 [Member] | Warehouse Purchase Program [Member]
Financing Receivable Impaired [Line Items]
2024		864,924
Total loans		864,924
Grade 3 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2024		103,359
2023		745,828
2022		696,969
2021		364,477
2020		215,354
Prior		57,308
Revolving Loans		119,072
Total loans		2,302,367
Grade 3 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2024		20,051
2023		126,212
2022		168,180
2021		76,630
2020		47,924
Prior		118,858
Revolving Loans		102,641
Revolving Loans Converted to Term Loans		94
Total loans		660,590
Grade 3 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2024		109,256
2023		1,172,870
2022		2,253,123
2021		2,140,728
2020		1,021,887
Prior		1,310,779
Revolving Loans		91,597
Revolving Loans Converted to Term Loans		2,757
Total loans		8,102,997
Grade 3 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2024		50,492
2023		403,245
2022		908,841
2021		680,193
2020		405,589
Prior		1,246,771
Revolving Loans		77,627
Revolving Loans Converted to Term Loans		4,591
Total loans		3,777,349
Grade 3 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2024		211,874
2023		206,299
2022		222,945
2021		147,665
2020		49,661
Prior		187,230
Revolving Loans		910,134
Revolving Loans Converted to Term Loans		30,276
Total loans		1,966,084
Grade 3 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2024		24,054
2023		40,317
2022		38,129
2021		24,769
2020		11,901
Prior		17,352
Revolving Loans		75,004
Revolving Loans Converted to Term Loans		11
Total loans		231,537
Grade 4 [Member]
Financing Receivable Impaired [Line Items]
2024		31,392
2023		475,006
2022		259,716
2021		282,292
2020		209,728
Prior		929,581
Revolving Loans		139,245
Revolving Loans Converted to Term Loans		2,426
Total loans		2,329,386
Grade 4 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2024		3,478
2023		83,562
2022		146,216
2021		42,544
2020		5,572
Prior		26,944
Revolving Loans		30,782
Total loans		339,098
Grade 4 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2024		3,436
2023		21,435
2022		19,644
2021		25,993
2020		4,122
Prior		9,589
Revolving Loans		21,807
Total loans		106,026
Grade 4 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2024		1,178
2023		15,265
2022		15,813
2021		25,722
2020		5,681
Prior		64,138
Revolving Loans		2,871
Revolving Loans Converted to Term Loans		204
Total loans		130,872
Grade 4 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2024		2,667
2023		43,104
2022		262,140
2021		172,287
2020		217,796
Prior		716,336
Revolving Loans		15,857
Total loans		1,430,187
Grade 4 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2024		20,633
2023		44,614
2022		30,936
2021		14,641
2020		11,286
Prior		110,319
Revolving Loans		65,063
Revolving Loans Converted to Term Loans		2,222
Total loans		299,714
Grade 4 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2023		1,748
2022		257
2021		1,105
2020		15,259
Prior		2,255
Revolving Loans		2,865
Total loans		23,489
Grade 5 [Member]
Financing Receivable Impaired [Line Items]
2024		725
2023		27,727
2022		25,158
2021		11,713
2020		266
Prior		109,666
Revolving Loans		11,324
Revolving Loans Converted to Term Loans		100
Total loans		186,679
Grade 5 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2022		1,357
2020		23,373
Prior		15,796
Revolving Loans		769
Total loans		41,295
Grade 5 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2024		725
2023		57
2022		799
2021		885
Prior		1,143
Total loans		3,609
Grade 5 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2022		1,206
2020		119
Prior		2,517
Total loans		3,842
Grade 5 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2023		192
2022		2,538
2021		4,771
Prior		89,422
Revolving Loans		2,355
Total loans		99,278
Grade 5 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2023		17
2022		21,827
2021		6,057
2020		1,666
Prior		788
Revolving Loans		8,200
Revolving Loans Converted to Term Loans		100
Total loans		38,655
Grade 6 [Member]
Financing Receivable Impaired [Line Items]
2024		413
2023		4,286
2022		12,008
2021		8,793
2020		881
Prior		80,646
Revolving Loans		2,390
Total loans		109,417
Grade 6 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2023		570
2021		7,698
2020		184
Prior		561
Total loans		9,013
Grade 6 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2021		78
Prior		1,195
Total loans		1,273
Grade 6 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2022		357
2021		41
2020		19
Prior		1,840
Total loans		2,257
Grade 6 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2021		356
2020		11,451
Prior		76,088
Total loans		87,895
Grade 6 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2024		413
2023		311
2022		3,898
2021		615
2020		354
Prior		962
Revolving Loans		2,390
Total loans		8,943
Grade 6 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2022		31
2021		5
Total loans		36
Grade 7 [Member]
Financing Receivable Impaired [Line Items]
2023		12,917
2022		6,162
2021		8,864
2020		7,520
Prior		11,787
Revolving Loans		800
Total loans		48,050
Grade 7 [Member] | Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Impaired [Line Items]
2023		183
2022		2,647
2021		343
Prior		242
Revolving Loans		248
Total loans		3,663
Grade 7 [Member] | Real Estate [Member] | Agriculture [Member]
Financing Receivable Impaired [Line Items]
2022		1,469
2021		558
2020		339
Prior		29
Total loans		2,395
Grade 7 [Member] | Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Impaired [Line Items]
2023		1,744
2022		7,554
2021		5,304
2020		4,433
Prior		9,293
Revolving Loans		95
Total loans		28,423
Grade 7 [Member] | Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Impaired [Line Items]
2023		1,693
2022		827
2021		2,464
Prior		806
Total loans		5,790
Grade 7 [Member] | Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
2023		3,900
2022		420
2021		195
2020		1,268
Prior		1,416
Revolving Loans		457
Total loans		7,656
Grade 7 [Member] | Consumer and Other [Member]
Financing Receivable Impaired [Line Items]
2020		122
Prior		1
Total loans		$ 123

[1] Includes $6.4 million and $5.7 million of residential mortgage loans held for sale at March 31, 2024 and December 31, 2023, respectively.

XML

Loans and Allowance for Credit Losses - Risk Grade by Category of Loan and Year of Origination/Renewal (Parenthetical) (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financing Receivable Impaired [Line Items]
Loans held for sale	$ 6,380	$ 5,734
Residential Mortgage Loans [Member]
Financing Receivable Impaired [Line Items]
Loans held for sale	$ 6,380	$ 5,734

XML

Loans and Allowance for Credit Losses - Allowance for Credit Losses on Loans by Category of Loan (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	$ 332,362	$ 281,576
Charge-offs	(3,601)	(2,191)
Recoveries	1,458	2,806
Net (charge-offs) recoveries	(2,143)	615
Allowance for credit losses on loans, ending balance	330,219	282,191
Agriculture [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	11,380	7,699
Provision for credit losses	1,270	356
Charge-offs	(121)
Recoveries		6
Net (charge-offs) recoveries		6
Allowance for credit losses on loans, ending balance	12,627	8,061
Real Estate [Member] | Construction, Land Development and Other Land Loans [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	87,775	78,853
Provision for credit losses	(5,619)	1,695
Recoveries	2	13
Net (charge-offs) recoveries	2	13
Allowance for credit losses on loans, ending balance	82,158	80,561
Real Estate [Member] | Agriculture [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Recoveries	98
Net (charge-offs) recoveries	(23)
Real Estate [Member] | 1-4 Family [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	77,652	60,795
Provision for credit losses	2,469	1,603
Charge-offs	(461)	(65)
Recoveries	4	205
Net (charge-offs) recoveries	(457)	140
Allowance for credit losses on loans, ending balance	79,664	62,538
Real Estate [Member] | Commercial Real Estate (Includes Multi-Family Residential) [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	88,664	66,272
Provision for credit losses	(1,468)	1,699
Charge-offs	0	0
Recoveries		1
Net (charge-offs) recoveries	17	1
Allowance for credit losses on loans, ending balance	87,213	67,972
Commercial and Industrial [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	59,832	62,319
Provision for credit losses	2,067	(6,495)
Charge-offs	(1,360)	(901)
Recoveries	1,077	2,373
Net (charge-offs) recoveries	(283)	1,472
Allowance for credit losses on loans, ending balance	61,616	57,296
Consumer and Other [Member]
Financing Receivable Allowance For Credit Losses [Line Items]
Allowance for credit losses on loans, beginning balance	7,059	5,638
Provision for credit losses	1,281	1,142
Charge-offs	(1,659)	(1,225)
Recoveries	260	208
Net (charge-offs) recoveries	(1,399)	(1,017)
Allowance for credit losses on loans, ending balance	$ 6,941	$ 5,763

XML

Loans and Allowance for Credit Losses - Schedule of Amortized Cost of Loans Experiencing Financial Difficulty and Modified (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total loans held for investment	0.05%	0.02%
Term Extension [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortized Cost	$ 11,413	$ 4,233
Commercial and Industrial [Member] | Term Extension [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortized Cost	$ 413
Construction, Land Development and Other Land Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total loans held for investment		0.02%
Construction, Land Development and Other Land Loans [Member] | Term Extension [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortized Cost		$ 4,233
Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of total loans held for investment	0.05%
Agriculture [Member] | Term Extension [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortized Cost	$ 11,000

XML

Loans and Allowance for Credit Losses - Schedule of Loan Modifications (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial Effect on Term Extension	Modified to a 7 year term
Construction, Land Development and Other Land Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial Effect on Term Extension		Less than 12-month extension
Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial Effect on Term Extension	Modified to a 2 year term

XML

Fair Value - Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Available for sale securities:
Available for sale securities, at fair value	$ 315,300	$ 438,588
Corporate Debt Securities [Member]
Available for sale securities:
Available for sale securities, at fair value	15,845	21,787
Fair Value, Measurements, Recurring [Member]
Available for sale securities:
Available for sale securities, at fair value	315,300	438,588
Fair Value, Measurements, Recurring [Member] | Loan Customer Counterparty [Member]
Derivative financial instruments:
Derivative financial instruments, liabilities at fair value	4,330	3,899
Fair Value, Measurements, Recurring [Member] | Financial Institution Counterparty [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	4,309	3,876
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member]
Available for sale securities:
Available for sale securities, at fair value	15,845	21,787
Fair Value, Measurements, Recurring [Member] | Interest Rate Lock Commitments [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	256	218
Fair Value, Measurements, Recurring [Member] | Forward Mortgage-Backed Securities Trades [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	74	161
Derivative financial instruments:
Derivative financial instruments, liabilities at fair value	8	1
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Available for sale securities:
Available for sale securities, at fair value	315,300	438,588
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Loan Customer Counterparty [Member]
Derivative financial instruments:
Derivative financial instruments, liabilities at fair value	4,330	3,899
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Financial Institution Counterparty [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	4,309	3,876
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate Debt Securities [Member]
Available for sale securities:
Available for sale securities, at fair value	15,845	21,787
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Interest Rate Lock Commitments [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	256	218
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Forward Mortgage-Backed Securities Trades [Member]
Derivative financial instruments:
Derivative financial instruments, assets at fair value	74	161
Derivative financial instruments:
Derivative financial instruments, liabilities at fair value	8	1
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member]
Available for sale securities:
Available for sale securities, at fair value	194,806	320,044
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 2 [Member]
Available for sale securities:
Available for sale securities, at fair value	194,806	320,044
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities [Member]
Available for sale securities:
Available for sale securities, at fair value	104,649	96,757
Fair Value, Measurements, Recurring [Member] | Mortgage-backed Securities [Member] | Level 2 [Member]
Available for sale securities:
Available for sale securities, at fair value	$ 104,649	$ 96,757

XML

Fair Value - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Other real estate, additions	$ 969
Real estate owned outstanding	845
Additions to impaired loans	$ 13,400
Impaired loans outstanding		$ 13,400

XML

Fair Value - Summary of Carrying and Fair Value Information of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 1,086,444	$ 458,153
Federal funds sold	250	260
Held to maturity securities	10,478,359	10,984,598	$ 10,984,598
Loans held for sale	6,380	5,734
Loans held for investment	20,393,943	20,352,559
Other real estate owned	2,204	1,708
Liabilities
Noninterest-bearing	9,526,535	9,776,572
Interest-bearing	17,648,983	17,403,237
Other borrowings	3,900,000	3,725,000
Securities sold under repurchase agreements	261,671	309,277
Carrying Amount [Member]
Assets
Cash and due from banks	1,086,444	458,153
Federal funds sold	250	260
Held to maturity securities	11,985,838	12,365,308
Loans held for sale	6,380	5,734
Loans held for investment, net of allowance	20,063,724	20,020,197
Loans held for investment	864,924	822,245
Other real estate owned	2,204	1,708
Liabilities
Noninterest-bearing	9,526,535	9,776,572
Interest-bearing	17,648,983	17,403,237
Other borrowings	3,900,000	3,725,000
Securities sold under repurchase agreements	261,671	309,277
Estimated Fair Value [Member]
Assets
Cash and due from banks	1,086,444	458,153
Federal funds sold	250	260
Held to maturity securities	10,478,359	10,984,598
Loans held for sale	6,380	5,734
Loans held for investment, net of allowance	18,465,513	18,321,054
Loans held for investment	864,924	822,245
Other real estate owned	2,204	1,708
Liabilities
Noninterest-bearing	9,526,535	9,776,572
Interest-bearing	17,611,669	17,371,523
Other borrowings	3,876,545	3,725,000
Securities sold under repurchase agreements	261,621	309,245
Estimated Fair Value [Member] | Level 1 [Member]
Assets
Cash and due from banks	1,086,444	458,153
Federal funds sold	250	260
Estimated Fair Value [Member] | Level 2 [Member]
Assets
Held to maturity securities	10,478,359	10,984,598
Loans held for sale	6,380	5,734
Loans held for investment	864,924	822,245
Other real estate owned	2,204	1,708
Liabilities
Noninterest-bearing	9,526,535	9,776,572
Interest-bearing	17,611,669	17,371,523
Other borrowings	3,876,545	3,725,000
Securities sold under repurchase agreements	261,621	309,245
Estimated Fair Value [Member] | Level 3 [Member]
Assets
Loans held for investment, net of allowance	$ 18,465,513	$ 18,321,054

XML

Goodwill and Core Deposit Intangibles - Goodwill and Core Deposit Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Beginning balance	$ 3,396,086	$ 3,231,636	$ 3,231,636
Goodwill, First Bancshares Merger	316		164,450
Goodwill, Ending balance	3,396,402		3,396,086
Core Deposit Intangibles, Beginning balance	63,994	51,348	51,348
Core Deposit Intangibles, Amortization	(3,237)	$ (2,374)	(12,676)
Core Deposit Intangibles, First Bancshares Merger			25,322
Core Deposit Intangibles, Ending balance	$ 60,757		$ 63,994

XML

Goodwill and Core Deposit Intangibles - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Schedule Of Intangible Assets And Goodwill [Line Items]
Impairment recorded on goodwill and core deposit intangibles	$ 0
Amortization expense related to intangible assets	$ 3,237,000	$ 2,374,000	$ 12,676,000
Minimum [Member]
Schedule Of Intangible Assets And Goodwill [Line Items]
Finite-lived intangible assets, useful life	10 years
Maximum [Member]
Schedule Of Intangible Assets And Goodwill [Line Items]
Finite-lived intangible assets, useful life	15 years

XML

Goodwill and Core Deposit Intangibles - Estimated Aggregate Future Amortization Expense for Core Deposit Intangibles (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining 2024	$ 9,576
2025	11,409
2026	10,376
2027	9,288
2028	8,288
Thereafter	11,820
Total	$ 60,757	$ 63,994	$ 51,348

XML

Stock-Based Compensation - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($) Plan shares	Mar. 31, 2023 USD ($)	Mar. 03, 2020 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of stock-based employee compensation plans | Plan	1
Total unrecognized compensation expense related to stock-based compensation arrangements | $	$ 28.0
Weighted-average period of cost expected to be recognized	1 year 11 months 12 days
Number of shares outstanding	0
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense | $	$ 3.4	$ 3.2
2020 Stock Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common shares authorized for issuance			2,500,000
2020 Stock Incentive Plan [Member] | Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares vested	406,757
2020 Stock Incentive Plan [Member] | Unvested Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share issued	540,297

XML

Contractual Obligations and Off-Balance Sheet Items - Summary of Future Cash Payments Associated with Contractual Obligations Pursuant to Subordinated Debentures, Federal Reserve's Bank Term Funding Program and Federal Home Loan Bank Advances (Details) - Guarantee Obligations [Member] $ in Thousands	Mar. 31, 2024 USD ($)
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	$ 2,611,262
More than 1 year but less than 3 years	1,039,320
3 years or more but less than 5 years	299,314
5 years or more	1,623,325
Total	5,573,221
Payment Guarantee [Member] | Bank Term Funding Program [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	4,086,149
Total	$ 4,086,149

XML

Contractual Obligations and Off-Balance Sheet Items - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) SubleaseArrangement	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Contractual Obligations And Off Balance Sheet Items [Line Items]
Operating lease right of use asset	$ 36,800
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other assets
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities
Number of sublease arrangement | SubleaseArrangement	1
Sublease income	$ 869	$ 806
Operating lease, weighted average remaining lease term	5 years 8 months 12 days
Operating lease, weighted average discount rate, percent	2.90%
Operating lease, payments	$ 2,900	$ 2,800
Right-of-Use asset obtained in exchange for operating lease liability	2,100
Allowance for credit losses on off-balance sheet credit exposures	36,503		$ 36,503
Bank Term Funding Program [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
Interest payable	$ 186,100
Minimum [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
Lessee operating lease remaining lease term	1 year
Maximum [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
Lessee operating lease remaining lease term	15 years

XML

Contractual Obligations and Off-Balance Sheet Items - Future Undiscounted Cash Payments Associated with its Operating Leases (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Leases [Abstract]
Remaining 2024	$ 7,877
2025	10,005
2026	8,865
2027	5,849
2028	2,873
2029	1,541
Thereafter	8,327
Total undiscounted lease payments	$ 45,337

XML

Contractual Obligations and Off-Balance Sheet Items - Summary of Commitments Associated with Outstanding Standby Letters of Credit and Commitments to Extend Credit (Details) - Guarantee Obligations [Member] $ in Thousands	Mar. 31, 2024 USD ($)
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	$ 2,611,262
More than 1 year but less than 3 years	1,039,320
3 years or more but less than 5 years	299,314
5 years or more	1,623,325
Total	5,573,221
Standby Letters of Credit [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	62,745
More than 1 year but less than 3 years	18,559
3 years or more but less than 5 years	2,445
5 years or more	26
Total	83,775
Unused capacity on Warehouse Purchase Program loans [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	1,058,576
Total	1,058,576
Commitments to Extend Credit [Member]
Contractual Obligations And Off Balance Sheet Items [Line Items]
1 year or less	1,489,941
More than 1 year but less than 3 years	1,020,761
3 years or more but less than 5 years	296,869
5 years or more	1,623,299
Total	$ 4,430,870

XML

Other Comprehensive (Loss) Income - Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity [Abstract]
Change in unrealized loss during period, before tax amount	$ (1,184)	$ (4)
Change in unrealized loss during period, tax effect	249	1
Change in unrealized loss during period, net of tax amount	(935)	(3)
Total securities available for sale, before tax amount	(1,184)	(4)
Total securities available for sale, tax effect	249	1
Total securities available for sale, net of tax amount	(935)	(3)
Total other comprehensive loss, before tax amount	(1,184)	(4)
Total other comprehensive loss, tax effect	249	1
Other comprehensive loss, net of tax	$ (935)	$ (3)

XML

Other Comprehensive (Loss) Income - Activity in Accumulated Other Comprehensive Loss Associated with Securities Available for Sale, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Beginning balance, accumulated other comprehensive income	$ (1,398)	$ (3,473)
Other comprehensive income (loss)	(935)	(3)
Ending balance, accumulated other comprehensive income	(2,333)	(3,476)
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Beginning balance, accumulated other comprehensive income	(1,398)	(3,473)
Other comprehensive income (loss)	(935)	(3)
Ending balance, accumulated other comprehensive income	$ (2,333)	$ (3,476)

XML

Derivative Financial Instruments - Schedule of Notional Balances and Fair Value of Derivative Positions (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Interest Rate Lock Commitments [Member]
Derivatives Fair Value [Line Items]
Outstanding Notional Balance	$ 15,693	$ 7,113
Derivative financial instruments, assets at fair value	256	218
Forward Mortgage-Backed Securities Trades [Member]
Derivatives Fair Value [Line Items]
Outstanding Notional Balance	20,500	14,250
Derivative financial instruments, assets at fair value	8	1
Derivative financial instruments, liabilities at fair value	74	161
Commercial Loan Interest Rate Swaps and Caps [Member] | Loan Customer Counterparty [Member]
Derivatives Fair Value [Line Items]
Outstanding Notional Balance	67,207	67,408
Derivative financial instruments, liabilities at fair value	4,330	3,899
Commercial Loan Interest Rate Swaps and Caps [Member] | Financial Institution Counterparty [Member]
Derivatives Fair Value [Line Items]
Outstanding Notional Balance	67,207	67,408
Derivative financial instruments, assets at fair value	$ 4,309	$ 3,876

XML

Derivative Financial Instruments - Schedule of Weighted Average Received and Paid Interest Rates for Interest Rate Swaps Outstanding (Details) - Commercial Loan Interest Rate Swaps and Caps [Member] - Loan Customer Counterparty [Member]	Mar. 31, 2024	Dec. 31, 2023
Derivative [Line Items]
Weighted-Average Interest Rate Received	3.07	3.07
Weighted-Average Interest Rate Paid	6.78	6.81

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Derivative Financial Instruments - Additional Information (Details) - Interest Rate Swap [Member] - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Derivative [Line Items]
Credit exposure	$ 4,300,000	$ 3,900,000
Cash collateral pledged	0	$ 0
Financial Institution Counterparty [Member]
Derivative [Line Items]
Credit exposure	$ 280,000

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Derivative Financial Instruments - Schedule of Income (Loss) from Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Interest Rate Lock Commitments [Member]
Derivative Instruments Gain Loss [Line Items]
Derivatives not designated as hedging instruments	$ 38	$ 30
Forward Mortgage-Backed Securities Trades [Member]
Derivative Instruments Gain Loss [Line Items]
Derivatives not designated as hedging instruments	$ 196	$ (50)

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Acquisitions - Additional Information (Details) $ in Thousands		3 Months Ended
	May 31, 2023 Office	Mar. 31, 2024 USD ($) shares	Dec. 31, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Goodwill		$ 3,396,402	$ 3,396,086		$ 3,231,636
Total assets		38,756,520	38,547,877
Loans		20,935,028	20,848,176
Total deposits		$ 27,175,518	$ 27,179,809
First Bancshares of Texas, Inc. [Member]
Business Acquisition [Line Items]
Business acquisition, equity interest issued or issuable, number of shares | shares		3,583,370
Payments to acquire businesses in cash		$ 91,500
Goodwill		164,800
Total assets				$ 2,140,000
Loans				1,650,000
Total deposits				$ 1,710,000
First Bancshares of Texas, Inc. [Member] | West, North and Central Texas [Member]
Business Acquisition [Line Items]
Number of full-service banking offices | Office	16
Lone Star State Bancshares Inc [Member]
Business Acquisition [Line Items]
Total assets		1,380,000
Loans		1,080,000
Total deposits		$ 1,240,000

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Subsequent Event - Additional Information (Details) $ in Thousands		3 Months Ended
	Apr. 01, 2024 Office	Jun. 30, 2024 USD ($) shares	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)
Subsequent Event [Line Items]
Assets			$ 38,756,520	$ 38,547,877
Loans			20,935,028	20,848,176
Total deposits			27,175,518	$ 27,179,809
Lone Star State Bancshares Inc [Member]
Subsequent Event [Line Items]
Assets			1,380,000
Loans			1,080,000
Total deposits			$ 1,240,000
Lone Star State Bancshares Inc [Member] | West Texas [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of banking offices | Office	5
Lone Star State Bancshares Inc [Member] | Forecast [Member]
Subsequent Event [Line Items]
Business acquisition, equity interest issued or issuable, number of shares | shares		2,376,182
Payments to acquire businesses in cash		$ 64,100