PROSPERITY BANCSHARES, INC.® REPORTS FIRST QUARTER 2026 EARNINGS

Results of Operations for the Three Months Ended March 31, 2026

For the three months ended March 31, 2026, net income was $116.3 million⁽²⁾ or  $1.16 per diluted common share compared with $130.2 million⁽³⁾ or  $1.37 per diluted common share for the same period in 2025. On a linked quarter basis, net income was $116.3 million⁽²⁾ or  $1.16 per diluted common share for the three months ended March 31, 2026, compared with $139.9 million⁽⁴⁾ or $1.49 per diluted common share for the three months ended December 31, 2025. Net income and net income per diluted common share for the first quarter of 2026 were impacted by the Mergers and merger related expenses of $42.5 million. Excluding these charges, net income was $149.9⁽¹⁾ million and earnings per diluted common share was $1.50⁽¹⁾ for the three months ended March 31, 2026. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2026 were 1.10%, 5.70% and 10.59%⁽¹⁾, respectively. Excluding merger related expenses, net of tax, annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2026, were 1.42%⁽¹⁾, 7.35%⁽¹⁾ and 13.65%⁽¹⁾, respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale, write-down or write-up of assets and securities) was 59.16%⁽¹⁾ for the three months ended March 31, 2026, and excluding merger related expenses, the efficiency ratio was 47.58%⁽¹⁾.

Net interest income before provision for credit losses was $321.2 million for the three months ended March 31, 2026, compared with $265.4 million for the same period in 2025, an increase of $55.8 million or 21.0%. The net interest margin on a tax equivalent basis was 3.51% for the three months ended March 31, 2026, compared with 3.14% for the same period in 2025. Net interest income before provision for credit losses increased $46.2 million or 16.8% to $321.2 million for the three months ended March 31, 2026, compared with $275.0 million for the three months ended December 31, 2025. The net interest margin on a tax equivalent basis was 3.51% for the three months ended March 31, 2026, compared with 3.30% for the three months ended December 31, 2025. The change for both periods were primarily due to the repricing of assets and the impact of the Mergers.

Noninterest income was $46.5 million for the three months ended March 31, 2026, compared with $41.3 million for the same period in 2025, an increase of $5.2 million or 12.5%.  Noninterest income was $46.5 million for the three months ended March 31, 2026, compared with $42.8 million for the three months ended December 31, 2025, an increase of $3.7 million or 8.6%. The change for both periods was primarily due to the Mergers.

Noninterest expense was $217.3 million for the three months ended March 31, 2026, compared with $140.3 million for the same period in 2025, an increase of $77.0 million. Noninterest expense was $217.3 million for the three months ended March 31, 2026, compared with $138.7 million for the three months ended December 31, 2025, an increase of $78.6 million. The change for both periods was primarily due to an increase in merger related expenses of $42.5 million, an increase in salaries and benefits and an increase in additional expenses related to three months of American operations and two months of Southwest operations.

Balance Sheet Information

Prosperity had $43.619 billion in total assets at March 31, 2026, an increase of $4.855 billion or 12.5%, compared with $38.765 billion at March 31, 2025. Linked quarter total assets increased by $5.156 billion or 13.4% compared with $38.463 billion at December 31, 2025. Total assets increased primarily due to the Mergers.

Loans were $25.288 billion at March 31, 2026, an increase of $3.310 billion or 15.1% from $21.978 billion at March 31, 2025. Linked quarter loans increased $3.483 billion or 16.0% from $21.805 billion at December 31, 2025. Loans increased primarily due to the Mergers. Loans, excluding Warehouse Purchase Program loans, were $23.855 billion at March 31, 2026, compared with $20.920 billion at March 31, 2025, an increase of $2.935 billion or 14.0%, and compared with $20.501 billion at December 31, 2025, an increase of $3.354 billion or 16.4%.

Deposits were $32.633 billion at March 31, 2026, an increase of $4.606 billion or 16.4%, from $28.027 billion at March 31, 2025. Linked quarter deposits increased $4.150 billion or 14.6% from $28.482 billion at December 31, 2025. Deposits increased primarily due to the Mergers.

Asset Quality

Nonperforming assets totaled $122.1 million or 0.33% of quarterly average interest-earning assets at March 31, 2026, compared with  $81.4 million or 0.24% of quarterly average interest-earning assets at March 31, 2025 and $150.8 million or 0.46% of quarterly average interest-earning assets at December 31, 2025.

The allowance for credit losses on loans and off-balance sheet credit exposures was $421.5 million at March 31, 2026, compared with $386.7 million at March 31, 2025 and $371.4 million at December 31, 2025. There was no provision for credit losses for the three months ended March 31, 2026,  March 31, 2025 and December 31, 2025.

The allowance for credit losses on loans was $383.8 million or 1.52% of total loans at March 31, 2026, compared with $349.1 million or 1.59% of total loans at March 31, 2025 and $333.7 million or 1.53% of total loans at December 31, 2025. The allowance for credit losses on loans increased during the first quarter of 2026 due to the Mergers, of which $47.5 million was attributable to the American Merger and $43.9 million was attributable to the Southwest Merger. Excluding Warehouse Purchase Program loans, the allowance for credit losses on loans to total loans was 1.61%⁽¹⁾ at March 31, 2026, compared with 1.67%⁽¹⁾ at March 31, 2025 and 1.63%⁽¹⁾ at December 31, 2025.

Net charge-offs were $41.3 million for the three months ended March 31, 2026, compared with net charge-offs of $2.7 million for the three months ended March 31, 2025 and net charge-offs of $5.9 million for the three months ended December 31, 2025. Net charge-offs for the first quarter 2026 included a $33.8 million increase in net charge-offs for commercial and industrial loans. Net charge-offs for the first quarter of 2026 included $2.0 million related to resolved purchased credit deteriorated ("PCD") loans, which had specific reserves that were allocated to the charge-offs. Additionally, reserves on PCD loans increased by $49.0 million due to Day One accounting for PCD loans at the time of the Mergers. Further, $2.0 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Dividend

Prosperity Bancshares declared a second quarter 2026 cash dividend of $0.60 per share to be paid on July 1, 2026, to all shareholders of record as of June 15, 2026.

Stock Repurchase Program

On January 26, 2026, Prosperity Bancshares announced a stock repurchase program under which up to 5%, or approximately 4.87 million shares, of its outstanding common stock may be acquired over a one-year period expiring on January 26, 2027, at the discretion of management. Under its 2026 stock repurchase program, Prosperity Bancshares repurchased approximately 837,000 shares of its common stock at an average weighted price of $68.15 per share for a total of $57.1 million during the three months ended March 31, 2026.

Pending Acquisition of Stellar Bancorp, Inc.

On January 28, 2026, Prosperity Bancshares and Stellar Bancorp, Inc. ("Stellar") jointly announced the signing of an Agreement and Plan of Merger (the "Merger Agreement"), which provides that Stellar, the parent company of Stellar Bank ("Stellar Bank"), will merge with and into Prosperity Bancshares, and Stellar Bank will merge with and into Prosperity Bank. Stellar Bank operates 52 banking offices in greater Houston and Beaumont, Texas and surrounding areas.

Under the terms and subject to the conditions of the Merger Agreement, Prosperity Bancshares will issue 0.3803 shares of its common stock and $11.36 in cash for each outstanding share of Stellar common stock. Based on Prosperity Bancshares' closing price of $72.90 on January 27, 2026, the total consideration was valued at approximately $2.002 billion. Prosperity has received all necessary regulatory approvals for the acquisition of Stellar and Stellar Bank, and the transaction is expected to be completed on or about July 1, 2026, subject to approval by Stellar shareholders and the satisfaction or waiver of other customary closing conditions set for in the Merger Agreement.

Acquisition of Southwest Bancshares, Inc.

On February 1, 2026, Prosperity completed the acquisition of Southwest and its wholly owned subsidiary Texas Partners, headquartered in San Antonio, Texas. Texas Partners operated 11 banking offices in Central Texas including its main office in San Antonio, and banking offices in the San Antonio area, Austin and the Hill Country. 

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,094,974 shares of its common stock for all outstanding shares of Southwest common stock in the first quarter of 2026. This resulted in goodwill of $134.1 million as of March 31, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $33.8 million of core deposit intangibles as of March 31, 2026.

Acquisition of American Bank Holding Corporation

On January 1, 2026, Prosperity completed the acquisition of American and its wholly owned subsidiary American Bank, headquartered in Corpus Christi, Texas. American Bank operated 18 banking offices and two loan production offices in South and Central Texas including its main office in Corpus Christi, and banking offices in San Antonio, Austin, Victoria and the greater Corpus Christi area including Port Aransas and Rockport and a loan production office in Houston, Texas. 

Pursuant to the terms of the definitive agreement, Prosperity Bancshares issued 4,439,938 shares of its common stock for all outstanding shares of American common stock in the first quarter of 2026. This resulted in goodwill of $185.0 million as of March 31, 2026, which does not include all the subsequent fair value adjustments that have not yet been finalized. Additionally, Prosperity recognized $31.1 million of core deposit intangibles as of March 31, 2026. 

Conference Call

Prosperity's management team will host a conference call on Wednesday, April 29, 2026, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's first quarter 2026 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 7638209.

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

Non-GAAP Financial Measures

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

Prosperity Bancshares, Inc. ®

As of March 31, 2026, Prosperity Bancshares, Inc.^® is a $43.619 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

Prosperity currently operates 312 full-service banking locations: 62 in the Houston area, including The Woodlands; 36 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 22 in the East Texas area; 28 in the Central Texas area including Austin and San Antonio; 45 in the West Texas area including Lubbock, Midland-Odessa, Abilene; Amarillo and Wichita Falls; 15 in the Bryan/College Station area, 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area; 18 in the Central, South Texas and San Antonio areas doing business as American Bank and 11 in the San Antonio area doing business as Texas Partners Bank.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains, and the remarks by Prosperity's management on the conference call may contain, statements regarding the proposed transaction between Prosperity Bancshares, Inc. ("Prosperity") and Stellar Bancorp, Inc. ("Stellar"); future financial and operating results; benefits and synergies of the proposed transaction; future opportunities for Prosperity; the issuance of common stock of Prosperity contemplated by the Agreement and Plan of Merger by and between Prosperity and Stellar (the "Merger Agreement"); the expected timing of the closing of the proposed transaction contemplated by the Merger Agreement; the ability of the parties to complete the proposed transaction considering the various closing conditions and any other statements about future expectations that constitute forward-looking statements within the meaning of the federal securities laws, including the meaning of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "believe," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates, and projections about Prosperity, Stellar and their respective subsidiaries or related to the proposed transaction between Prosperity and Stellar and are subject to significant risks and uncertainties that could cause actual results to differ materially from the results expressed in such statements.

These forward-looking statements may include information about Prosperity's and Stellar'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 and Stellar's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's and Stellar'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 and Stellar's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's and Stellar'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.

These forward-looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of the control of Prosperity and Stellar, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to, whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; 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); 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; changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs; and the effect, impact, potential duration or other implications of weather and climate-related events. Many possible events or factors could adversely affect the future financial results and performance of Prosperity, Stellar or the combined company and could cause those results or performance to differ materially from those expressed in or implied by the forward-looking statements. Such risks and uncertainties include, among others: (1) the risk that the cost savings and synergies from the proposed transaction may not be fully realized or may take longer than anticipated to be realized, (2) disruption to Prosperity's and Stellar's businesses as a result of the announcements and pendency of the proposed transaction, (3) the risk that the integration of Stellar's businesses and operations into Prosperity will be materially delayed or will be more costly or difficult than expected, or that Prosperity is otherwise unable to successfully integrate Stellar's business into its own, including as a result of unexpected factors or events, (4) the failure to obtain the necessary approval by the shareholders of Stellar, (5) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the proposed transaction, (6) the failure of the closing conditions in the Merger Agreement to be satisfied, or any unexpected delay in closing the proposed transaction or the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (7) the dilution caused by the issuances of additional shares of Prosperity's common stock in the proposed transaction, (8) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (9) the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against Prosperity before or after the proposed transaction, or against Stellar, (10) diversion of management's attention from ongoing business operations and (11) general competitive, economic, political and market conditions and other factors that may affect future results of Prosperity and Stellar. Prosperity and Stellar disclaim any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other risks, uncertainties, assumptions, and factors are discussed in the respective Annual Reports on Form 10-K for the year ended December 31, 2025, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, filed by Prosperity or Stellar and in other filings made by Prosperity and Stellar with the Securities and Exchange Commission (the "SEC") from time to time.

Additional Information about the Transaction and Where to Find It

In connection with the proposed transaction, Prosperity has filed with the SEC a registration statement (the "Registration Statement") on Form S-4 (File No. 333-294882) to register the shares of Prosperity common stock to be issued to the shareholders of Stellar in connection with the proposed transaction. The Registration Statement includes a prospectus of Prosperity and a proxy statement of Stellar (the "proxy statement/prospectus"), which has been sent to the shareholders of Stellar in connection with the proposed transaction. The Registration Statement was declared effective on April 21, 2026, at which time Prosperity filed a final prospectus and Stellar filed a definitive proxy statement. The mailing of the proxy statement/prospectus to Stellar shareholders commenced on April 23, 2026. This communication is not a substitute for the Registration Statement, the proxy statement/prospectus or any other document that may be filed by Prosperity or Stellar with the SEC.  INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY/STATEMENT PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders may obtain the Registration Statement and the proxy statement/prospectus and other documents that are filed with the SEC by Prosperity or Stellar, as applicable, free of charge from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank.

Participants in the Solicitation

Prosperity, Stellar and certain of their directors and executive officers and other employees may be deemed to be participants in the solicitation of proxies from Stellar's shareholders in connection with the proposed transaction. Information about the directors and executive officers of Prosperity and their ownership of Prosperity common stock is contained in the definitive proxy statement for Prosperity's 2026 annual meeting of shareholders (the "Prosperity Annual Meeting Proxy Statement"), which was filed with the SEC on March 16, 2026, including under the headings "Item 1. Election of Directors," "Corporate Governance," "Executive Compensation and Other Matters," "Item 3. Advisory Vote on Executive Compensation," and "Beneficial Ownership of Common Stock by Management of the Company and Principal Shareholders." Information about the directors and executive officers of Stellar and their ownership of Stellar common stock is contained in Amendment No. 1 to the Annual Report on Form 10-K for the year ended December 31, 2025 of Stellar (the "Stellar 10-K/A"), which was filed with the SEC on April 17, 2026.  Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of Stellar in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, is included in the proxy statement/prospectus relating to the proposed transaction filed with the SEC.  To the extent holdings of securities by potential participants (or the identity of such participants) have changed since the information printed in the Prosperity Annual Meeting Proxy Statement or the Stellar 10-K/A, such information has been or will be reflected on Statements of Change in Ownership on Forms 3 and 4 filed with the SEC, as applicable.  Free copies of the proxy statement/prospectus relating to the proposed transaction and free copies of the other SEC filings to which reference is made in this paragraph may be obtained from the SEC's website at https://www.sec.gov or through the investor relations section of Prosperity's website at https://www.prosperitybankusa.com/investor-relations/ or Stellar's website at https://ir.stellar.bank.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, and otherwise in accordance with applicable law.