Prosperity Bancshares : ® Reports First Quarter 2020 Earnings

PRESS RELEASE	For more information contact:
Prosperity Bancshares, Inc.®	Cullen Zalman
Prosperity Bank Plaza	Vice President - Banking and Corporate Activities
4295 San Felipe	281.269.7199
Houston, Texas 77027	[e-mail]

FOR IMMEDIATE RELEASE

PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER

2020 EARNINGS

• First quarter earnings per share (diluted) of $1.39, an increase of 17.8% compared to the first quarter 2019
• First quarter net income of $130.848 million
• Loans increased $281.849 million or 1.50% during the first quarter 2020
• Allowance for credit losses on loans and on off-balance sheet credit exposure was $357.206 million
• Allowance for credit losses to total loans, excluding warehouse purchase program loans, of 1.88%
• Nonperforming assets remain low at 0.25% of first quarter average interest-earning assets
• Return (annualized) on first quarter average assets of 1.67%
• Returns (annualized) on first quarter averages common equity of 8.86% and average tangible common equity of 20.16%(1)
• Repurchased 2.092 million shares during the first quarter of 2020

HOUSTON, April 29, 2020. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, "Prosperity"), reported net income for the quarter ended March 31, 2020 of $130.848 million compared with $82.402 million for the same period in 2019. Net income per diluted common share was $1.39 compared with $1.18 for the same period in 2019. Additionally, loans increased 1.5% during the first quarter 2020 and nonperforming assets remain low at 0.25% of first quarter average interest-earning assets. On November 1, 2019, LegacyTexas Financial Group, Inc. ("LegacyTexas"), merged with Prosperity Bancshares and LegacyTexas Bank merged with Prosperity Bank (collectively, the "Merger").

"I am proud to announce that Prosperity posted diluted earnings per share of $1.39 for the first quarter of 2020, a 17.8% increase compared with the same period in 2019. Our merger with LegacyTexas was completed on November 1, 2019 and our management teams continue to find commonalties and strengths that we expect will benefit our company, shareholders and associates going forward. Our planned operational integration remains on schedule for June of this year," said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

"In our efforts to continue enhance shareholder value, during the first quarter 2020 Prosperity repurchased 2.092 million shares of its common stock at a weighted average price of $52.59 per share," continued Zalman.

"Also, during the first quarter of 2020, Prosperity increased its allowance for credit losses on loans to $327.206 million from $87.469 million for the fourth quarter of 2019 after adopting accounting standard ASU 2016-13, also known as CECL. The amount of the allowance is based on our CECL methodology. We believe that these additional reserves should help insulate the company during these challenging and unprecedented times. Our allowance for credit losses to total loans, excluding warehouse purchase program loans, now stands at 1.88% compared to 0.51% at December 31, 2019," added Zalman.

______________

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

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"While today's challenges are certainly extraordinary, Prosperity has a deep management team with experience navigating and adapting to difficult times. We entered this economic downturn from a position of strength, with sound credit quality, robust capital and liquidity and solid operating fundamentals. We believe that our team will see us through and we remain confident in our long-term future," stated Zalman.

"I would like to thank every associate at Prosperity. Throughout the past several months, while dealing with various personal challenges related to the pandemic, our retail team operated at full capacity, enabling us to keep our locations open and serve our customers' daily needs. Additionally, our operational staff and lending team were crucial in accepting, processing and submitting thousands of SBA PPP applications and closing the loans, working around the clock to assist our customers," concluded Zalman.

Results of Operations for the Three Months Ended March 31, 2020

Net income was $130.848 million(2) for the three months ended March 31, 2020 compared with $82.402 million(3) for the same period in 2019. Net income per diluted common share was $1.39 for the three months ended March 31, 2020 compared with $1.18 for the same period in 2019. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2020 were 1.67%, 8.86% and 20.16%(1), respectively. Prosperity's efficiency ratio (excluding net gains on the sale of assets and taxes) was 42.90%(1) for the three months ended March 31, 2020. Excluding merger related expenses of

$544 thousand, net of tax, the efficiency ratio was 42.71%(1) for the three months ended March 31, 2020.

Net interest income before provision for credit losses for the three months ended March 31, 2020 was $256.031 million compared with $154.911 million for the same period in 2019, an increase of $101.120 million or 65.3%. The increase was primarily due to the Merger and the increase in loan discount accretion of $26.689 million. On a linked quarter basis, net interest income before provision for credit losses was $256.031 million compared with $232.030 million for the three months ended December 31, 2019. The increase was primarily due to the increase in loan discount accretion of $4.740 million and three months of combined bank earnings in the first quarter of 2020 compared with only two months in the fourth quarter 2019.

The net interest margin on a tax equivalent basis was 3.81% for the three months ended March 31, 2020 compared with 3.20% for the same period in 2019. The change was primarily due to increased interest-earning assets and the $26.689 million increase in loan discount accretion. On a linked quarter basis, the net interest margin on a tax equivalent basis was 3.81% for the three months ended March 31, 2020 compared with 3.66% for the three months ended December 31, 2019. The change was primarily due to increased interest-earning assets and the $4.740 million increase in loan discount accretion.

Noninterest income was $34.388 million for the three months ended March 31, 2020 compared with $28.144 million for the same period in 2019, an increase of $6.244 million or 22.2%. This increase was primarily due to an increase in nonsufficient funds fees, credit card, debit card and ATM card fees, mortgage income, service fees and other noninterest income primarily due to the Merger. On a linked quarter basis, noninterest income decreased $1.118 million or 3.1% to $34.388 million compared with $35.506 million for the three months ended December 31, 2019, primarily due to the decrease in other noninterest income and mortgage income, partially offset by lower net loss on write-down of assets.

Noninterest expense was $124.741 million for the three months ended March 31, 2020 compared with $78.571 million for the same period in 2019, an increase of $46.170 million or 58.8%, primarily due to the Merger. On a linked quarter basis, noninterest expense decreased $31.710 million or 20.3% to $124.741 million compared with $156.451 million for the three months ended December 31, 2019. The decrease was primarily due to the decrease of merger related expenses partially offset by increases in salaries and benefits, credit and debit card, data processing and software amortization, and net occupancy and equipment due to three months of combined bank noninterest expenses in the first quarter 2020 compared with two months in fourth quarter 2019.

Balance Sheet Information

At March 31, 2020, Prosperity had $31.743 billion in total assets, an increase of $9.389 billion or 42.0%, compared with $22.354 billion at March 31, 2019.

Loans at March 31, 2020 were $19.127 billion, an increase of $8.713 billion or 83.7%, compared with $10.414 billion at March 31, 2019. Linked quarter loans increased $281.849 million or 1.5% from $18.845 billion at December 31, 2019.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At March 31, 2020, oil and gas loans totaled $718.654 million (net of discount) or 3.8% of total loans, of which $435.041 million were production

______________

1. Includes purchase accounting adjustments of $24.134 million, net of tax, primarily comprised of loan discount accretion of $28.482 million, and merger related expenses of $544 thousand for the three months ended March 31, 2020.
2. Includes purchase accounting adjustments of $1.238 million, net of tax, primarily comprised of loan discount accretion of $1.793 million for the three months ended March 31, 2019.

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loans and $283.613 million were servicing loans, compared with total oil and gas loans of $380.835 million (net of discount) or 3.7% of total loans at March 31, 2019, of which $115.571 million were production loans and $265.264 million were servicing loans. In addition, as of March 31, 2020, Prosperity had total unfunded commitments to oil and gas companies of $389.515 million compared with total unfunded commitments to oil and gas companies of $231.474 million as of March 31, 2019. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Additionally, Prosperity extends credit to hotels and restaurants. At March 31, 2020, loans to hotels totaled $374.105 million or 2.0% of total loans and loans to restaurants totaled $204.600 million or 1.1% of total loans.

Deposits at March 31, 2020 were $23.826 billion, an increase of $6.628 billion or 38.5%, compared with $17.198 billion at March 31, 2019. Linked quarter deposits decreased $373.375 million or 1.5% from $24.200 billion at December 31, 2019.

The table below provides detail on the impact of loans acquired and deposits assumed in the Merger:

Balance Sheet Data (at period end) (In thousands)

	Mar 31, 2020			Dec 31, 2019			Sep 30, 2019			Jun 30, 2019			Mar 31, 2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Loans acquired (including new production since
acquisition date):
LegacyTexas:
Loans held for sale	$	54,229			$	66,745			$	-			$	-			$	-
Loans held for investment		6,713,337				6,636,855				-				-				-
Loans held for investment - Warehouse
Purchase Program		1,713,762				1,552,762				-				-				-
All other loans		10,645,867				10,588,984				10,673,345				10,587,375				10,414,022
Total loans	$	19,127,195			$	18,845,346			$	10,673,345			$	10,587,375			$	10,414,022
Deposits assumed (including new deposits since
acquisition date):
LegacyTexas	$	5,605,986			$	6,141,546			$	-			$	-			$	-
All other deposits		18,220,371				18,058,186				16,929,920				16,887,629				17,197,770
Total deposits	$	23,826,357			$	24,199,732			$	16,929,920			$	16,887,629			$	17,197,770

Excluding loans acquired in the Merger and new production by the acquired lending operations since November 1, 2019, loans at March 31, 2020 grew $231.845 million or 2.2% compared with March 31, 2019 and grew $56.883 million or 0.5% compared with December 31, 2019.

Excluding deposits assumed in the Merger and new deposits generated at the acquired banking centers since November 1, 2019, deposits at March 31, 2020 grew $1.023 billion or 6.0% compared with March 31, 2019 and grew $162.185 million or 0.9% compared with December 31, 2019.

Asset Quality

Nonperforming assets totaled $67.179 million or 0.25% of quarterly average interest-earning assets at March 31, 2020, compared with $40.883 million or 0.21% of quarterly average interest-earning assets at March 31, 2019, and $62.943 million or 0.25% of quarterly average interest-earning assets at December 31, 2019.

The allowance for credit losses on loans was $327.206 million or 1.71% of total loans at March 31, 2020 compared to $87.469 million or 0.46% of total loans at December 31, 2019 and $86.091 million or 0.83% of total loans at March 31, 2019. On January 1, 2020, Prosperity adopted the measurement of current expected credit losses ("CECL"). Upon adoption of CECL, Prosperity recognized an increase in allowance for credit losses on loans of $108.698 million, of which $102.545 million was related to LegacyTexas and an increase in allowance for credit losses on off-balance sheet credit exposures of $24.443 million, of which $6.314 million was related to LegacyTexas, with a corresponding decrease in retained earnings (pre-tax). Additionally, Prosperity recognized an increase in the allowance for credit losses on loans of $131.841 million, of which $130.278 million was related to LegacyTexas, due to the reclass of purchased credit deteriorated ("PCD") discounts as a result of adopting CECL.

Prosperity had a $13.150 million provision for credit losses reflecting forecasted credit deterioration due to the COVID-19 pandemic for the first quarter of 2020. Countering this provision, during the first quarter of 2020, several purchase credit deteriorated ("PCD") loans were repaid in full, which cleared $8.576 million in specific reserves. Additionally, balance changes and historical loss rate improvements released $5.471 million in general reserves. Combined, these events fully offset the provision. Accordingly, there was

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no provision for credit losses for the three months ended March 31, 2020 compared with $700 thousand for the three months ended March 31, 2019 and $1.700 million for the three months ended December 31, 2019.

Net charge-offs were $801 thousand for the three months ended March 31, 2020 compared with net charge-offs of $1.049 million for the three months ended March 31, 2019 and net charge-offs of $1.291 million for the three months ended December 31, 2019.

Dividend

Prosperity Bancshares declared a second quarter cash dividend of $0.46 per share to be paid on July 1, 2020 to all shareholders of record as of June 15, 2020.

Stock Repurchase Program

On January 29, 2020, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately

4.740 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 28, 2021, at the discretion of management. Prosperity Bancshares repurchased 2.092 million shares of its common stock at an average weighted price of $52.59 per share during the three months ended March 31, 2020.

COVID-19 Pandemic

In December 2019, a novel strain of coronavirus disease ("COVID-19") was first reported in Wuhan, Hubei Province, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, the U.S. President announced a national emergency relating to the pandemic. On March 13, the Texas governor signed a proclamation certifying that COVID-19 poses an imminent threat of disaster in the state and declaring a state of disaster for all counties in Texas. Prosperity Bank (the "Bank") is considered an essential business and is closely monitoring the latest developments regarding COVID-19. The health and safety of our associates, customers, and communities are of utmost importance, and the Bank remains committed to providing uninterrupted service. Additionally, the Bank has continuity plans in place to ensure critical operations are able to continue without disruption. The COVID-19 pandemic has resulted in significant economic uncertainties that could negatively impact Prosperity's operating income, financial condition and cash flows.

Merger with LegacyTexas Financial Group, Inc.

On November 1, 2019, Prosperity completed the merger with LegacyTexas and its wholly-owned subsidiary LegacyTexas Bank headquartered in Plano, Texas. LegacyTexas Bank operated 42 locations in 19 North Texas cities in and around the Dallas-Fort Worth area.

Pursuant to the terms of the merger agreement, Prosperity issued 26,228,148 shares of Prosperity common stock with a closing price of $69.02 per share plus $318.018 million in cash, made up of $308.585 million in cash and $9.433 million in cash for taxes withheld, for all outstanding shares of LegacyTexas. This resulted in goodwill of $1.322 billion as of March 31, 2020, which was subject to subsequent fair value adjustments.

Conference Call

Prosperity's management team will host a conference call on Wednesday, April 29, 2020 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2020 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The elite entry number is 3056906.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity's home page by selecting "Presentations & Calls" from the drop-down menu on the Investor Relations tab and following the instructions.

Non-GAAP Financial Measures

Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews tangible book value per share, return on average tangible common equity, tangible equity to tangible assets ratio and the efficiency ratio, excluding net gains and losses on the sale of assets and securities. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and that their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity's business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Please refer to the "Notes to Selected Financial Data" at

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the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Prosperity Bancshares, Inc. ®

As of March 31, 2020, Prosperity Bancshares, Inc.® is a $31.7 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and cash management.

As of March 31, 2020, Prosperity operated 285 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 33 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area and 42 in the Dallas/Fort Worth area currently doing business as LegacyTexas Bank.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on the Bank's operating income, financial condition and cash flows. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks, including LegacyTexas; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, including the LegacyTexas transaction, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; the effect, impact potential duration or other implications of the COVID-19 pandemic; and weather. These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2019 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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Bryan/College Station Area	Fort Worth	Canton	East Bernard	86th Street
Bryan	Haltom City	Carthage	El Campo	98th Street
Bryan-29th Street	Keller	Corsicana	Dayton	Avenue Q
Bryan-East	Roanoke	Crockett	Galveston	North University
Bryan-North	Stockyards	Eustace	Groves	Texas Tech Student Union
Caldwell		Gilmer	Hempstead
College Station	Other Dallas/Fort Worth Area	Grapeland	Hitchcock	Midland
Crescent Point	Locations	Gun Barrel City	Liberty	Wadley
Hearne	Arlington	Jacksonville	Magnolia	Wall Street
Huntsville	Azle	Kerens	Magnolia Parkway
Madisonville	Ennis	Longview	Mont Belvieu	Odessa
Navasota	Gainesville	Mount Vernon	Nederland	Grandview
New Waverly	Glen Rose	Palestine	Needville	Grant
Rock Prairie	Granbury	Rusk	Rosenberg	Kermit Highway
Southwest Parkway	Mesquite	Seven Points	Shadow Creek	Parkway
Tower Point	Muenster	Teague	Spring
Wellborn Road	Sanger	Tyler-Beckham	Tomball	Other West Texas Area
	Waxahachie	Tyler-South Broadway	Waller	Locations
Central Texas Area	Weatherford	Tyler-University	West Columbia	Big Spring
Austin		Winnsboro	Wharton	Brownfield
Allandale	LegacyTexas Dallas/Fort Worth Area		Winnie	Brownwood
Cedar Park	LegacyTexas Dallas	Houston Area	Wirt	Cisco
Congress	14th Street	Houston		Comanche
Lakeway	Addison	Aldine	South Texas Area -	Early
Liberty Hill	Allen	Alief	Corpus Christi	Floydada
Northland	Carrollton	Bellaire	Calallen	Gorman
Oak Hill	Coppell	Beltway	Carmel	Levelland
Research Blvd	Downtown Grapevine	Clear Lake	Northwest	Littlefield
Westlake	East Plano	Copperfield	Saratoga	Merkel
	El Dorado	Cypress	Timbergate	Plainview
Other Central Texas Area	Frisco	Downtown	Water Street	San Angelo
Locations	Frisco-South	Eastex		Slaton
Bastrop	Frisco-West	Fairfield	Victoria	Snyder
Canyon Lake	Garland	First Colony	Victoria Main
Dime Box	Grapevine	Fry Road	Victoria-Navarro	Oklahoma
Dripping Springs	Grapevine Drive-thru	Gessner	Victoria-North	Central Oklahoma Area
Elgin	Lake Highlands	Gladebrook	Victoria Salem	Oklahoma City
Flatonia	LegacyTexas	Grand Parkway		23rd Street
Georgetown	McKinney	Heights	Other South Texas Area	Expressway
Gruene	McKinney-380	Highway 6 West	Locations	I-240
Kingsland	North Carrolton	Little York	Alice	Memorial
La Grange	North East Tarrant County	Medical Center	Aransas Pass
Lexington	Oak Cliff	Memorial Drive	Beeville	Other Central Oklahoma Area
New Braunfels	Park Cities	Northside	Colony Creek	Locations
Pleasanton	Plano-West	Pasadena	Cuero	Edmond
Round Rock	Preston Forest	Pecan Grove	Edna	Norman
San Antonio	Preston Road	Pin Oak	Goliad
Schulenburg	Preston Royal	River Oaks	Gonzales	Tulsa Area
Seguin	Richardson	Sugar Land	Hallettsville	Tulsa
Smithville	Richardson-West	SW Medical Center	Kingsville	Garnett
Thorndale	Rosewood Court	Tanglewood	Mathis	Harvard
Weimar	Tollroad	The Plaza	Padre Island	Memorial
	Trinity Mills	Uptown	Palacios	Sheridan
Dallas/Fort Worth Area	West 15th	Waugh Drive	Port Lavaca	S. Harvard
Dallas	West Allen	Westheimer	Portland	Utica Tower
Abrams Centre	Wylie	West University	Rockport	Yale
Balch Springs		Woodcreek	Sinton
Camp Wisdom	LegacyTexas Fort Worth		Taft	Other Tulsa Area Locations
Cedar Hill	Hulen	Katy	Yoakum	Owasso
Frisco	Museum Place	Cinco Ranch	Yorktown
Frisco-West	Renaissance Square	Katy-Spring Green
Kiest			West Texas Area
McKinney	LegacyTexas Other Dallas/Fort Worth	The Woodlands	Abilene
McKinney-Stonebridge	Area Locations	The Woodlands-College Park	Antilley Road
Midway	Flower Mound	The Woodlands-I-45	Barrow Street
Plano	Grand Prairie	The Woodlands-Research Forest	Cypress Street
Preston Forest	Jacksboro		Judge Ely
Preston Road	Runaway Bay	Other Houston Area	Mockingbird
Red Oak	Weatherford	Locations
Sachse		Angleton	Lubbock
The Colony	East Texas Area	Bay City	4th Street
Turtle Creek	Athens	Beaumont	66th Street
Westmoreland	Blooming Grove	Cleveland	82nd Street

- - -

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Balance Sheet Data (at period end)

Loans held for sale

Loans held for investment

Loans held for investment - Warehouse Purchase Program

Total loans

Investment securities(A)

Federal funds sold

Allowance for credit losses(B)

Cash and due from banks

Goodwill

Core deposit intangibles, net

Other real estate owned

Fixed assets, net

Other assets

Total assets

Noninterest-bearing deposits

Interest-bearing deposits

Total deposits

Other borrowings

Securities sold under repurchase agreements Subordinated notes

Allowance for credit losses on off-balance sheet credit exposures(B)

Other liabilities

Total liabilities

Shareholders' equity(C)

Total liabilities and equity

	Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019	Mar 31, 2019
$	65,035	$	80,959	$	20,284	$	20,315	$	24,398
	17,348,398		17,211,625		10,653,061		10,567,060		10,389,624

	1,713,762		1,552,762		-		-		-
	19,127,195		18,845,346		10,673,345		10,587,375		10,414,022
	8,295,495		8,570,056		8,495,206		8,951,940		9,137,645
	676		519		521		555		566
	(327,206)		(87,469)		(87,061)		(87,006)		(86,091)
	381,458		573,589		420,359		302,069		291,498
	3,223,144		3,223,671		1,900,845		1,900,845		1,900,845
	83,041		86,404		29,051		30,299		31,564
	5,452		6,936		815		2,005		2,096
	327,293		326,832		263,703		262,479		257,595
	626,951		639,824		396,033		424,660		404,501
$	31,743,499	$	32,185,708	$	22,092,817	$	22,375,221	$	22,354,241
$	7,461,323	$	7,763,894	$	5,784,002	$	5,691,236	$	5,673,707
	16,365,034		16,435,838		11,145,918		11,196,393		11,524,063
	23,826,357		24,199,732		16,929,920		16,887,629		17,197,770
	1,338,429		1,303,730		600,795		940,874		680,952
	344,695		377,294		311,404		313,825		254,573
	125,585		125,804		-		-		-
	29,947		5,599		-		-		-
	222,912		202,714		123,892		104,998		111,156
	25,887,925		26,214,873		17,966,011		18,247,326		18,244,451
	5,855,574		5,970,835		4,126,806		4,127,895		4,109,790
$	31,743,499	$	32,185,708	$	22,092,817	$	22,375,221	$	22,354,241

1. Includes $(3,421), $763, $49, $1,611, and $895 in unrealized (losses) gains on available for sale securities for the quarterly periods ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.
2. ASU 2016-13 became effective for Prosperity on January 1, 2020.
3. Includes $(2,703), $602, $38, $1,273, and $706 in after-tax unrealized (losses) gains on available for sale securities for the quarterly periods ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.

Page 7 of 17

	Prosperity Bancshares, Inc.®
	Financial Highlights (Unaudited)
		(In thousands)
					Three Months Ended
	Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019	Mar 31, 2019
Income Statement Data
Interest income:
Loans	$	247,243	$	222,910	$	134,943	$	133,525	$	130,065
Securities(D)		48,282		49,348		50,872		53,944		55,648
Federal funds sold and other earning assets		713		600		363		318		402
Total interest income		296,238		272,858		186,178		187,787		186,115
Interest expense:
Deposits		35,018		32,759		26,939		26,562		25,128
Other borrowings		2,932		6,115		4,335		5,556		5,317
Securities sold under repurchase agreements		757		879		914		831		759
Subordinated notes and trust preferred		1,500		1,075		-		-		-
Total interest expense		40,207		40,828		32,188		32,948		31,205
Net interest income		256,031		232,030		153,990		154,838		154,911
Provision for credit losses		-		1,700		1,100		800		700
Net interest income after provision for credit losses		256,031		230,330		152,890		154,038		154,211

Noninterest income:
Nonsufficient funds (NSF) fees		9,443			9,990			8,835				7,973			7,816
Credit card, debit card and ATM card income		7,474			7,728			6,688				6,480			5,971
Service charges on deposit accounts		6,104			5,597			5,020				4,989			4,998
Trust income		2,662			2,582			2,492				2,558			2,595
Mortgage income		2,010			2,455			839				990			722
Brokerage income		650			625			522				541			673
Bank owned life insurance income		1,545			1,502			1,314				1,321			1,289
Net (loss) gain on sale or write-down of assets		(385)			(1,870)			(3)			2			58
Other noninterest income		4,885			6,897			4,966				5,104			4,022
Total noninterest income		34,388			35,506			30,673				29,958			28,144
Noninterest expense:
Salaries and benefits		77,282			69,356			52,978				52,941			51,073
Net occupancy and equipment		8,980			7,420			5,607				5,492			5,466
Credit and debit card, data processing and software
amortization		11,421			9,158			4,989				4,904			4,573
Regulatory assessments and FDIC insurance		2,078			2,095			1,814				2,325			2,374
Core deposit intangibles amortization		3,363			2,705			1,248				1,265			1,319
Depreciation		4,768			4,212			3,286				3,111			3,104
Communications		3,195			3,012			2,214				2,183			2,270
Other real estate expense		46			57			68				120			83
Net (gain) loss on sale or write-down of other real estate		(130)			(49)			(115)				(54)			(177)
Merger related expenses		544			46,402			-				-			-
Other noninterest expense		13,194			12,083			8,610				8,534			8,486
Total noninterest expense		124,741			156,451			80,699				80,821			78,571
Income before income taxes		165,678			109,385			102,864				103,175			103,784
Provision for income taxes		34,830			23,251			21,106				20,917			21,382
Net income available to common shareholders	$	130,848		$	86,134		$	81,758			$	82,258		$	82,402

1. Interest income on securities was reduced by net premium amortization of $8,005, $8,556, $8,027, $7,607 and $6,589 for the three-month periods ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.

Page 8 of 17

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

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

Profitability

Net income (E) (F)

Basic earnings per share

Diluted earnings per share

Return on average assets (G) (K)

Return on average common equity (G) (K)

Return on average tangible common equity (G) (H) (K)

Tax equivalent net interest margin (E) (F) (I)

Efficiency ratio (H) (J) (L)

Liquidity and Capital Ratios

Equity to assets

Common equity tier 1 capital

Tier 1 risk-based capital

Total risk-based capital

Tier 1 leverage capital

Period end tangible equity to period end tangible assets (H)

Other Data

Weighted-average shares used in computing earnings per common share

Basic

Diluted

Period end shares outstanding

Cash dividends paid per common share

Book value per common share

Tangible book value per common share (H)

Common Stock Market Price

High

Low

Period end closing price

Employees - FTE

Number of banking centers

Three Months Ended

Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
$	130,848	$	86,134	$	81,758	$	82,258	$	82,402
$	1.39	$	1.01	$	1.19	$	1.18	$	1.18
$	1.39	$	1.01	$	1.19	$	1.18	$	1.18
	1.67 %		1.19 %		1.47 %		1.46 %		1.46 %
	8.86 %		6.33 %		7.89 %		7.92 %		8.05 %
	20.16 %		12.50 %		14.77 %		14.82 %		15.24 %
	3.81 %		3.66 %		3.16 %		3.16 %		3.20 %
	42.90 %		58.07 %		43.70 %		43.74 %		42.94 %
	18.45 %		18.55 %		18.68 %		18.45 %		18.38 %
	12.27 %		12.30 %		16.68 %		16.59 %		16.76 %
	12.27 %		12.30 %		16.68 %		16.59 %		16.76 %
	12.81 %		12.70 %		17.34 %		17.25 %		17.42 %
	9.49 %		10.42 %		10.86 %		10.67 %		10.59 %
	8.96 %		9.21 %		10.90 %		10.75 %		10.66 %
	94,371		85,573		68,738		69,806		69,847
	94,371		85,573		68,738		69,806		69,847
	92,652		94,746		68,397		69,261		69,846
$	0.46	$	0.46	$	0.41	$	0.41	$	0.41
$	63.20	$	63.02	$	60.34	$	59.60	$	58.84
$	27.52	$	28.08	$	32.12	$	31.72	$	31.17
$	75.22	$	74.35	$	71.86	$	74.50	$	75.36
$	42.02	$	66.60	$	62.17	$	61.85	$	61.65
$	48.25	$	71.89	$	70.63	$	66.05	$	69.06
	3,782		3,901		3,044		3,046		3,065
	285		285		243		243		242

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

				Three Months Ended
	Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019		Mar 31, 2019
Loan discount accretion
ASC 310-20	$22,463	$17,834	$1,006	$880	$1,474
ASC 310-30	$6,019	$5,908	$277	$347	$319
Securities net amortization	$194	$201	$157	$255	$234
Time deposits amortization	$2,270	$1,709		-		-		-

1. Using effective tax rate of 21.0%, 21.3%, 20.5%, 20.3% and 20.6% for the three-month periods ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.
2. Interim periods annualized.
3. Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
4. Net interest margin for all periods presented is based on average balances on an actual 365 day or 366 days basis.
5. Calculated by dividing total noninterest expense, excluding credit loss provisions and one-time merger and acquisition expenses, by net interest income plus noninterest income, excluding net gains and losses on the sale of assets and securities. Additionally, taxes are not part of this calculation.
6. Excluding merger related expenses, net of tax, annualized returns on average assets, average common equity and average tangible common equity were 1.67%(H), 8.89%(H) and 20.23%(H) for the three months ended March 31, 2020.
7. Excluding merger related expenses, net of tax, the efficiency ratio was 42.71%(H) for the three months ended March 31, 2020.

Page 9 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Interest-earning assets:

Loans held for sale

Loans held for investment

Loans held for investment - Warehouse Purchase Program

Total Loans

Investment securities

Federal funds sold and other earning assets Total interest-earning assets

Allowance for credit losses(B)

Noninterest-earning assets

Total assets

				Three Months Ended
	Mar 31, 2020				Dec 31, 2019				Mar 31, 2019
	Interest				Interest				Interest
	Earned/	Average			Earned/	Average			Earned/	Average
Average	Interest	Yield/		Average	Interest	Yield/		Average	Interest	Yield/
Balance	Paid	Rate	(M)	Balance	Paid	Rate	(M)	Balance	Paid	Rate	(M)

$	66,917	$	632	3.80%	$	57,171	$	570	3.96%	$	24,993	$	305	4.95%
	17,263,098		236,517	5.51%		15,261,163		212,466	5.52%		10,367,242		129,760	5.08%
	1,120,324		10,094	3.62%		996,903		9,874	3.93%		-		-	-
	18,450,339		247,243	5.39%		16,315,237		222,910	5.42%		10,392,235		130,065	5.08%
	8,434,196		48,282	2.30%	(N)	8,598,736		49,348	2.28%	(N)	9,299,963		55,648	2.43%	(N)
	223,631		713	1.28%		305,596		600	0.78%		71,842		402	2.27%
	27,108,166		296,238	4.40%		25,219,569		272,858	4.29%		19,764,040		186,115	3.82%

		(328,005	)								(86,795	)						(86,507	)
		4,577,251									3,930,651							2,864,039
	$	31,357,412								$	29,063,425						$	22,541,572

Interest-bearing liabilities: Interest-bearing demand deposits Savings and money market deposits Certificates and other time deposits Other borrowings

Securities sold under repurchase agreements Subordinated notes and trust preferred

Total interest-bearing liabilities

Noninterest-bearing liabilities: Noninterest-bearing demand deposits Allowance for credit losses on off-balance

sheet credit exposures(B) Other liabilities

Total liabilities

Shareholders' equity

Total liabilities and shareholders' equity

$	4,990,376	$	7,096	0.57%		$	4,233,880	$	5,755	0.54%		$	4,148,377	$	6,812	0.67%
	7,965,440		14,122	0.71%			7,109,754		14,187	0.79%			5,472,789		11,184	0.83%
	3,404,748		13,800	1.63%			3,044,843		12,817	1.67%			2,062,753		7,132	1.40%
	832,961		2,932	1.42%			1,403,686		6,115	1.73%			844,873		5,317	2.55%
	366,615		757	0.83%			351,580		879	0.99%			272,630		759	1.13%
	125,694		1,500	4.80%			87,963		1,075	4.85%			-		-	-
	17,685,834		40,207	0.91%	(O)		16,231,706		40,828	1.00%	(O)		12,801,422		31,204	0.99%	(O)
	7,491,798						7,066,878						5,557,821

		13,009										5,599										-
		262,523										315,256										86,868
		25,453,164										23,619,439										18,446,111
		5,904,248										5,443,986										4,095,461
	$	31,357,412									$	29,063,425									$	22,541,572

Net interest income and margin

Non-GAAP to GAAP reconciliation: Tax equivalent adjustment

Net interest income and margin (tax equivalent basis)

$ 256,031 3.80% $ 232,0303.65% $ 154,9113.18%

723		668		863
$ 256,754	3.81%	$ 232,698	3.66%	$ 155,774	3.20%

1. Annualized and based on an actual 365 day or 366 day basis.
2. Yield on securities was impacted by net premium amortization of $8,005, $8,556 and $6,589 for the three-month periods ended March 31, 2020, December 31, 2019 and March 31, 2020, respectively.
3. Total cost of funds, including noninterest bearing deposits, was 0.64%, 0.70% and 0.69% for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

Page 10 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD TREND (P)

Interest-Earning Assets:

Loans held for sale

Loans held for investment

Loans held for investment - Warehouse Purchase Program

Total loans

Investment securities (Q)

Federal funds sold and other earning assets Total interest-earning assets

Interest-Bearing Liabilities:

Interest-bearing demand deposits

Savings and money market deposits

Certificates and other time deposits

Other borrowings

Securities sold under repurchase agreements Subordinated notes and trust preferred

Total interest-bearing liabilities

Net Interest Margin

Net Interest Margin (tax equivalent)

Three Months Ended

Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
3.80%	3.96%	5.01%	5.12%	4.95%
5.51%	5.52%	5.05%	5.08%	5.09%
3.62%	3.93%	-	-	-
5.39%	5.42%	5.05%	5.09%	5.08%
2.30%	2.28%	2.30%	2.36%	2.43%
1.28%	0.78%	1.93%	1.98%	2.27%
4.40%	4.29%	3.80%	3.81%	3.82%
0.57%	0.54%	0.62%	0.63%	0.67%
0.71%	0.79%	0.90%	0.90%	0.83%
1.63%	1.67%	1.67%	1.57%	1.40%
1.42%	1.73%	2.29%	2.52%	2.55%
0.83%	0.99%	1.15%	1.15%	1.13%
4.80%	4.85%	-	-	-
0.91%	1.00%	1.04%	1.05%	0.99%
3.80%	3.65%	3.14%	3.14%	3.18%
3.81%	3.66%	3.16%	3.16%	3.20%

1. Annualized and based on average balances on an actual 365 day or 366 day basis.
2. Yield on securities was impacted by net premium amortization of $8,005, $8,556, $8,027, $7,607 and $6,589 for the three-month periods ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.

Page 11 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Balance Sheet Averages

Loans held for sale

Loans held for investment

Loans held for investment - Warehouse Purchase Program

Total Loans

Investment securities

Federal funds sold and other earning assets Total interest-earning assets

Allowance for credit losses(B)

Cash and due from banks

Goodwill

Core deposit intangibles, net

Other real estate

Fixed assets, net

Other assets

Total assets

Noninterest-bearing deposits

Interest-bearing demand deposits

Savings and money market deposits

Certificates and other time deposits

Total deposits

Other borrowings

Securities sold under repurchase agreements Subordinated notes and trust preferred Allowance for credit losses on off-balance sheet

credit exposures(B) Other liabilities Shareholders' equity

Total liabilities and equity

Three Months Ended

	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
	$	66,917		$	57,171		$	21,077		$	24,787		$	24,993
		17,263,098			15,261,163			10,589,272			10,495,638			10,367,242
		1,120,324			996,903			-			-			-
		18,450,339			16,315,237			10,610,349			10,520,425			10,392,235
		8,434,196			8,598,736			8,758,056			9,185,877			9,299,963
		223,631			305,596			74,751			64,335			71,842
		27,108,166			25,219,569			19,443,156			19,770,637			19,764,040
		(328,005	)		(86,795	)		(86,996	)		(86,158	)		(86,507	)
		321,832			275,072			230,986			227,653			266,316
		3,223,633			2,658,133			1,900,845			1,900,845			1,900,845
		84,865			28,912			29,682			30,933			32,243
		5,837			4,864			997			2,053			2,100
		325,337			308,692			263,495			260,054			257,811
		615,747			654,978			423,931			420,940			404,724
	$	31,357,412		$	29,063,425		$	22,206,096		$	22,526,957		$	22,541,572

$	7,491,798	$	7,066,878	$	5,701,419	$	5,674,615	$	5,557,821
	4,990,376		4,233,880		3,575,249		3,714,968		4,148,377
	7,965,440		7,109,754		5,524,277		5,647,494		5,472,789
	3,404,748		3,044,843		2,083,803		2,057,033		2,062,753
	23,852,362		21,455,355		16,884,748		17,094,110		17,241,740
	832,961		1,403,686		749,814		883,557		844,873
	366,615		351,580		315,277		288,666		272,630
	125,694		87,963		-		-		-

		13,009			5,673			-			-			-
		262,523			320,855			111,526			108,246			86,868
		5,904,248			5,443,986			4,144,731			4,152,378			4,095,461
	$	31,357,412		$	29,063,425		$	22,206,096		$	22,526,957		$	22,541,572

Page 12 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Period End Balances
Loan Portfolio

Commercial and industrial		$	2,500,110			13.1	%		$	2,507,318			13.3	%		$	1,120,913			10.5	%		$	1,158,657			10.9	%		$	1,117,753			10.7	%
Warehouse purchase program			1,713,762			9.0	%			1,552,762			8.2	%			-			-				-			-				-			-
Construction, land development and
other land loans			2,051,021			10.7%			2,064,167			11.0%			1,764,648			16.5%			1,739,308			16.4%			1,709,283			16.4%
1-4 family residential			3,993,138			20.9	%			3,880,382			20.6	%			2,472,907			23.2	%			2,456,506			23.2	%			2,444,434			23.5	%
Home equity			516,003			2.6	%			507,029			2.6	%			250,775			2.3	%			256,772			2.4	%			262,276			2.5	%
Commercial real estate (includes
multi-family residential)			6,576,213			34.4%			6,556,285			34.9%			3,652,176			34.3%			3,551,668			33.6%			3,496,688			33.6%
Agriculture (includes farmland)			635,295			3.3	%			680,855			3.6	%			729,585			6.8	%			736,470			7.0	%			708,348			6.8	%
Consumer and other			423,000			2.2	%			398,271			2.1	%			342,839			3.2	%			321,023			3.0	%			294,405			2.8	%
Energy			718,653			3.8	%			698,277			3.7	%			339,502			3.2	%			366,971			3.5	%			380,835			3.7	%
Total loans		$	19,127,195						$	18,845,346						$	10,673,345						$	10,587,375						$	10,414,022

Deposit Types

Noninterest-bearing DDA

Interest-bearing DDA

Money market

Savings

Certificates and other time deposits Total deposits

Loan to Deposit Ratio

	$	7,461,323			31.3	%		$	7,763,894		32.1	%		$	5,784,002		34.2	%		$	5,691,236		33.7	%		$	5,673,707		33.0	%
		4,980,090			20.9	%			5,100,938		21.1	%			3,564,419		21.0	%			3,530,581		20.9	%			3,875,109		22.5	%
		5,341,525			22.4	%			5,099,024		21.1	%			3,457,728		20.4	%			3,438,164		20.3	%			3,302,445		19.2	%
		2,716,247			11.4	%			2,756,297		11.3	%			2,027,621		12.0	%			2,158,159		12.8	%			2,293,134		13.3	%
		3,327,172			14.0	%			3,479,579		14.4	%			2,096,150		12.4	%			2,069,489		12.3	%			2,053,375		12.0	%
	$	23,826,357						$	24,199,732					$	16,929,920					$	16,887,629					$	17,197,770

80.3 %

77.9 %

63.0 %

62.7 %

60.6 %

Page 13 of 17

Construction Loans

Single family residential construction Land development

Raw land

Residential lots

Commercial lots

Commercial construction and other Net unaccreted discount

Total construction loans

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

	Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019		Mar 31, 2019
$	655,191	31.9 %	$	614,647	29.7 %	$	462,714	26.2 %	$	446,868	25.7 %	$	454,041	26.5 %
	110,853		5.4 %		88,529		4.3 %		80,711		4.6 %		87,825		5.0 %		84,562		4.9 %
	265,943		12.9 %		233,559		11.3 %		171,609		9.7 %		168,531		9.7 %		156,674		9.2 %
	136,861		6.7 %		138,961		6.7 %		123,265		7.0 %		121,586		7.0 %		119,301		7.0 %
	106,036		5.2 %		101,960		4.9 %		102,084		5.8 %		105,633		6.1 %		92,683		5.4 %
	778,731		37.9 %		890,597		43.1 %		825,001		46.7 %		809,680		46.5 %		802,996		47.0 %
	(2,594 )			(4,086 )			(736 )			(815 )			(974 )
$	2,051,021			$	2,064,167			$	1,764,648			$	1,739,308			$	1,709,283

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of March 31, 2020

			Houston			Dallas					Austin			OK City			Tulsa			Other (R)			Total
Collateral Type
Shopping center/retail	$	370,875		$	295,704			$	49,914		$	16,013		$	32,207		$	288,543		$	1,053,256
Commercial and industrial buildings		149,079			79,447					13,566			12,009			19,574			175,596			449,271
Office buildings		194,554			695,103					26,001			43,739			5,526			89,462			1,054,385
Medical buildings		38,769			50,872					12,832			24,711			25,620			51,514			204,318
Apartment buildings		358,231			726,145					33,207			16,028			43,127			235,595			1,412,333
Hotel		60,893			73,386					33,108			30,038				-			135,078			332,503
Other		52,565			32,165					15,770			10,376			4,444			84,748			200,068
Total	$	1,224,966		$	1,952,822			$	184,398		$	152,914		$	130,498		$	1,060,536		$	4,706,134	(S)
Acquired Loans
			Non-PCD Loans						PCD Loans								Total Acquired Loans

Loan marks:

Acquired banks (T)

LegacyTexas merger(U)

Total

				Balance	Balance
Balance at	Balance at	Balance at	Balance at	at	at	Balance at	Balance at	Balance at
Acquisition	Dec 31,	Mar 31,	Acquisition	Dec 31,	Mar 31,	Acquisition	Dec 31,	Mar 31,
Date	2019	2020	Date	2019	2020	Date	2019	2020

$	229,080	$	10,115	$	9,238	$	142,128	$	1,562	$	-		$	371,208	$	11,677	$	9,238
	116,519		100,015		78,375		177,924		165,758		29,460			294,443		265,773		107,835
	345,599		110,130		87,613		320,052		167,320		29,460	(W)		665,651		277,450		117,073

Acquired portfolio loan balances:

Acquired banks (T)

LegacyTexas merger(U)

Total

Acquired portfolio loan balances less loan marks

5,690,998	379,729	350,738		275,221	7,889	7,548	5,966,219		387,618	358,286
6,595,161	5,722,811	5,393,630		414,352	402,896	347,612	7,009,513		6,125,707	5,741,242
12,286,159	6,102,540	5,744,368		689,573	410,785	355,160	12,975,732	(V)	6,513,325	6,099,528
$ 11,940,560	$ 5,992,410	$ 5,656,755	$	369,521	$ 243,465	$ 325,700	$ 12,310,081		$ 6,235,875	$ 5,982,455

1. Includes other MSA and non-MSA regions.
2. Represents a portion of total commercial real estate loans of $6.576 billion as of March 31, 2020.
3. Includes Bank of Texas, Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company and Tradition Bank.
4. LegacyTexas merger was completed on November 1, 2019. During the fourth quarter of 2019, LegacyTexas added $7.010 billion in loans with related purchase accounting adjustments of $294.443 million at acquisition date.
5. Actual principal balances acquired.
6. ASU 2016-13 became effective for Prosperity on January 1, 2020.

Page 14 of 17

Prosperity Bancshares, Inc.®
Financial Highlights (Unaudited)
	(Dollars in thousands)
				Three Months Ended
	Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019	Mar 31, 2019
Asset Quality
Nonaccrual loans	$	58,194	$	55,243	$	49,973	$	37,289	$	37,491
Accruing loans 90 or more days past due		3,255		441		341		1,594		647
Total nonperforming loans		61,449		55,684		50,314		38,883		38,138
Repossessed assets		278		324		28		670		649
Other real estate		5,452		6,935		815		2,005		2,096
Total nonperforming assets	$	67,179	$	62,943	$	51,157	$	41,558	$	40,883
Nonperforming assets:
Commercial and industrial (includes energy)	$	15,987	$	17,086	$	15,974	$	17,592	$	17,119
Construction, land development and other land loans		1,125		1,177		874		2,296		1,488
1-4 family residential (includes home equity)		28,996		26,453		19,600		16,641		17,508
Commercial real estate (includes multi-family residential)		20,155		18,031		14,384		4,352		4,166
Agriculture (includes farmland)		896		101		285		616		542
Consumer and other		20		95		40		61		60
Total	$	67,179	$	62,943	$	51,157	$	41,558	$	40,883
Number of loans/properties		198		236		89		92		84
Allowance for credit losses at end of period(X)	$	327,206	$	87,469	$	87,061	$	87,006	$	86,091
Net charge-offs (recoveries):
Commercial and industrial (includes energy)	$	(28)	$	76	$	(83)	$	(828)	$	1,719
Construction, land development and other land loans		(12)		(6)		(6)		7		-
1-4 family residential (includes home equity)		5		20		(9)		11		(3)
Commercial real estate (includes multi-family residential)		(81)		254		(1)		(1)		(1)
Agriculture (includes farmland)		(1)		(18)		278		46		(1,278)
Consumer and other		918		965		867		650		612
Total	$	801	$	1,291	$	1,046	$	(115)	$	1,049
Asset Quality Ratios
Nonperforming assets to average interest-earning assets		0.25 %		0.25 %		0.26 %		0.21 %		0.21 %
Nonperforming assets to loans and other real estate		0.35 %		0.33 %		0.48 %		0.39 %		0.39 %
Net charge-offs to average loans (annualized)		0.02 %		0.03 %		0.04 %		-		0.04 %
Allowance for credit losses to total loans(X)		1.71 %		0.46 %		0.82 %		0.82 %		0.83 %
Allowance for credit losses to total loans, excluding Warehouse
Purchase Program loans(X)		1.88%		0.51%		0.82%		0.82%		0.83%

(X) ASU 2016-13 became effective for Prosperity on January 1, 2020.

Page 15 of 17

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

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

NOTES TO SELECTED FINANCIAL DATA

Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews diluted earnings per share excluding merger related expenses, tangible book value per share, return on average tangible common equity, the tangible equity to tangible assets ratio and the efficiency ratio, excluding net gains and losses on the sale of assets and securities, for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding acquired loans accounted for under ASC Topics 310-20 and 310-30 and Warehouse Purchase Program loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

Reconciliation of diluted earnings per share to diluted earnings per share, excluding merger related expenses:

Net income

Add: merger related expenses, net of tax(Y)

Net income, excluding merger related expenses, net of tax(Y)

Weighted average diluted shares outstanding

Merger related expenses per diluted share, net of tax(Y)

Diluted earnings per share, excluding merger related expenses, net of tax(Y)

Three Months Ended

Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019	Mar 31, 2019
$	130,848	$	86,134	$	81,758	$	82,258	$	82,402
	430		36,658		-		-		-
$	131,278	$	122,792	$	81,758	$	82,258	$	82,402
	94,371		85,573		68,738		69,806		69,847
$	-	$	0.43	$	-	$	-	$	-
$	1.39	$	1.44	$	1.19	$	1.18	$	1.18

Reconciliation of return on average assets to return on average assets excluding merger related expenses, net of tax:

Net income, excluding merger related expenses, net of tax(Y) Average total assets

Return on average assets excluding merger related expenses, net of

tax (G) (Y)

$	131,278	$
$	31,357,412	$
	1.67 %

122,792	$	81,758	$	82,258	$	82,402
29,063,425	$	22,206,096	$	22,526,957	$	22,541,572
1.69 %		1.47 %		1.46 %		1.46 %

Reconciliation of return on average common equity to return on average common equity excluding merger related expenses, net of tax:

Net income, excluding merger related expenses, net of tax(Y) Average shareholders' equity

Return on average common equity excluding merger related expenses, net of tax (G) (Y)

$	131,278	$
$	5,904,248	$
	8.89 %

122,792	$	81,758	$
5,443,986	$	4,144,731	$
9.02 %		7.89 %

82,258	$	82,402
4,152,378	$	4,095,461
7.92 %		8.05 %

Reconciliation of return on average common equity to return on average tangible common equity:

Net income

Average shareholders' equity

Less: Average goodwill and other intangible assets

Average tangible shareholders' equity

Return on average tangible common equity (G)

Reconciliation of return on average common equity to return on average tangible common equity excluding merger related expenses, net of tax:

Net income excluding merger related expenses, net of tax(Y) Average shareholders' equity

Less: Average goodwill and other intangible assets

Average tangible shareholders' equity

Return on average tangible common equity excluding merger related expenses, net of tax (F) (Y)

$	130,848	$	86,134	$	81,758	$	82,258	$	82,402
$	5,904,248	$	5,443,986	$	4,144,731	$	4,152,378	$	4,095,461
	(3,308,498 )		(2,687,045 )		(1,930,527 )		(1,931,778 )		(1,933,088 )
$	2,595,750	$	2,756,941	$	2,214,204	$	2,220,600	$	2,162,373
	20.16 %		12.50 %		14.77 %		14.82 %		15.24 %

$	131,278	$	122,792	$	81,758	$	82,258	$	82,402
$	5,904,248	$	5,443,986	$	4,144,731	$	4,152,378	$	4,095,461
	(3,308,498 )		(2,687,045 )		(1,930,527 )		(1,931,778 )		(1,933,088 )
$	2,595,750	$	2,756,941	$	2,214,204	$	2,220,600	$	2,162,373

20.23

%

17.82

%

14.77

%

14.82

%

15.24

%

(Y) Calculated assuming a federal tax rate of 21.0%.

Page 16 of 17

Three Months Ended

Reconciliation of book value per share to tangible book value per share:

Shareholders' equity

Less: Goodwill and other intangible assets

Tangible shareholders' equity

Period end shares outstanding

Tangible book value per share:

Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:

Tangible shareholders' equity

Total assets

Less: Goodwill and other intangible assets

Tangible assets

Period end tangible equity to period end tangible assets ratio:

Reconciliation of allowance for credit losses to total loans to allowance for credit losses to total loans, excluding Warehouse Purchase Program loans:

Allowance for credit losses (X)

Total loans

Less: Warehouse Purchase Program loans

Total loans less Warehouse Purchase Program loans

Allowance for credit losses to total loans, excluding Warehouse Purchase Program loans

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets and securities:

Noninterest expense

Net interest income

Noninterest income

Less: net (loss) gain on sale of assets

Noninterest income excluding net gains and losses on the sale of assets and securities

Total income excluding net gains and losses on the sale of assets and securities

Efficiency ratio, excluding net gains and losses on the sale of assets and securities

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets and securities and merger related expenses:

Noninterest expense

Less: merger related expenses

Noninterest expense excluding merger related expenses

Net interest income

Noninterest income

Less: net (loss) gain on sale of assets

Noninterest income excluding net gains and losses on the sale of assets and securities

Total income excluding net gains and losses on the sale of assets and securities

Efficiency ratio, excluding net gains and losses on the sale of assets and securities and merger related expenses

Mar 31, 2020		Dec 31, 2019		Sep 30, 2019		Jun 30, 2019	Mar 31, 2019
$	5,855,574	$	5,970,835	$	4,126,806	$	4,127,895	$	4,109,790
	(3,306,185 )		(3,310,075 )		(1,929,896 )		(1,931,144 )		(1,932,409 )
$	2,549,389	$	2,660,760	$	2,196,910	$	2,196,751	$	2,177,381
	92,652		94,746		68,397		69,261		69,846
$	27.52	$	28.08	$	32.12	$	31.72	$	31.17
$	2,549,389	$	2,660,760	$	2,196,910	$	2,196,751	$	2,177,381
$	31,743,499	$	32,185,708	$	22,092,817	$	22,375,221	$	22,354,241
	(3,306,185 )		(3,310,075 )		(1,929,896 )		(1,931,144 )		(1,932,409 )
$	28,437,314	$	28,875,633	$	20,162,921	$	20,444,077	$	20,421,832
	8.96 %		9.21 %		10.90 %		10.75 %		10.66 %
$	327,206	$	87,469	$	87,061	$	87,006	$	86,091
$	19,127,195	$	18,845,346	$	10,673,345	$	10,587,375	$	10,414,022
	1,713,762		1,552,762		-		-		-
$	17,413,433	$	17,292,584	$	10,673,345	$	10,587,375	$	10,414,022
	1.88 %		0.51 %		0.82 %		0.82 %		0.83 %
$	124,741	$	156,451	$	80,699	$	80,821	$	78,571
$	256,031	$	232,030	$	153,990	$	154,838	$	154,911
	34,388		35,506		30,673		29,958		28,144
	(385 )		(1,870 )		(3 )		2		58
	34,773		37,376		30,676		29,956		28,086
$	290,804	$	269,406	$	184,666	$	184,794	$	182,997
	42.90 %		58.07 %		43.70 %		43.74 %		42.94 %
$	124,741	$	156,451	$	80,699	$	80,821	$	78,571
	544		46,402		-		-		-
$	124,197	$	110,049	$	80,699	$	80,821	$	78,571
$	256,031	$	232,030	$	153,990	$	154,838	$	154,911
	34,388		35,506		30,673		29,958		28,144
	(385 )		(1,870 )		(3 )		2		58
	34,773		37,376		30,676		29,956		28,086
$	290,804	$	269,406	$	184,666	$	184,794	$	182,997
	42.71 %		40.85 %		43.70 %		43.74 %		42.94 %

Page 17 of 17