Prosperity Bancshares, Inc. · NYSE:PB

Prosperity Bancshares — Merger or Acquisition (June 2019)

13 slides from Prosperity Bancshares's merger presentation, Jun 17, 2019

  1. Slide 1: Partnering to Create a Premier Franchise

    Preliminary working draft June 17, 2019 PARTNERING TO CREATE A PREMIER FRANCHISE 1 June │ 2019

  2. Slide 2: Important Information

    Important Information Cautionary Notes on Forward-Looking Statements This communication contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securit

  3. Slide 3: Merger Creates Significant Strategic and Financial Value

    Merger Creates Significant Strategic and Financial Value • Creates second largest Texas-headquartered bank by deposits, with $22.4 billion of deposits in Texas(1) Further Strengthens • Pro forma assets of $31.7 billion(2) Franchise Value • Pro forma ROAA in the top quartile among U.S. banks $20 - $5

  4. Slide 4: Stronger Combined Franchise

    Stronger Combined Franchise Increases Scale Maintains Fortress Enhances Diversifies and Capacity(1) Balance Sheet Footprint Loan Portfolio(1) Largest Texas- Loans / Commercial Real $31.7B Total Assets 71% Deposits(2) 2nd Headquartered 36% Estate Bank by Deposits(5) Largest Texas- Core Headquartered

  5. Slide 5: Summary of Transaction

    Summary of Transaction • 0.5280 shares of Prosperity and $6.28 cash for each LegacyTexas share Consideration • Results in ~85% stock / ~15% cash • $41.78 per share Transaction Value(1) • ~$2.1 billion in aggregate consideration • 9.3% premium to LegacyTexas’ closing price(2) Implied Transaction • 12

  6. Slide 6: Overview of the LegacyTexas Franchise

    Overview of the LegacyTexas Franchise LegacyTexas Branch Network Financial Highlights as of or for the Quarter ended, ($millions) 3/31/2019 Balance Sheet Frisco Assets $9,346 McKinney Gross Loans (HFI) 8,052 Plano Deposits 7,077 Shareholders' Equity 1,121 Loans / Deposits (1) 98% Dallas Profitabilit

  7. Slide 7: Creating One of the Largest Texas-Headquartered Banks

    Creating One of the Largest Texas-Headquartered Banks Pro Forma Branch Footprint Pro Forma Deposit Market Share Summary - Texas Market No. of Deposits Share Rank Institution (State) Branches ($ millions) (%) Tulsa 1 JPMorgan Chase & Co. (NY) 559 $ 180,253 23.8% 2 Bank of America Corporation (NC) 364

  8. Slide 8: Expands Presence in Strategically Key Markets

    Expands Presence in Strategically Key Markets Dallas / Fort Worth Market Highlights Collin County is a Solid Foundation for the Future • Significant population growth supported by employment opportunities • With its close proximity to Dallas, Collin County is now leading North • The Dallas / Fort Wo

  9. Slide 9: Attractive Loan and Deposit Mix

    Attractive Loan and Deposit Mix Loans: Consumer and other Agriculture Consumer and other Mortgage Warehouse Consumer and other Agriculture 3% 1% Mortgage Warehouse 4% 2% 13% 7% 6% CRE CRE 34% C&D CRE 36% C&D 3% C&D 39% 16% 11% $10.4B $8.1B $18.5B Yield: 5.08% Yield: 5.38% Yield: 5.21% C&I C&I C&I 26

  10. Slide 10: Key Merger Assumptions

    Key Merger Assumptions Standalone • Prosperity 2020 consensus estimate of $5.05 per share(1) Earnings per Share • LegacyTexas 2020 consensus estimate of $3.44 per share(1) • Cost savings of 25% of LegacyTexas’ non-interest expense base (with 50% phase-in during 2020 and 100% thereafter) Synergies •

  11. Slide 11: Transaction Multiples and Financial Impact

    Transaction Multiples and Financial Impact Illustrative Stock Consideration ~85% 100% Market Premium(1) 9.3% Price/Tangible Book Value(2) 2.16x Price/2020E Earnings 12.1x 2020 EPS Accretion (50% Phased-in Synergies) 6.6% 2.9% 2020 EPS Accretion (100% Phased-in Synergies) 10.3% 6.5% TBVPS Dilution at

  12. Slide 12: Prosperity Bancshares, Inc. Total Shareholder Return

    Prosperity Bancshares, Inc. Total Shareholder Return Total shareholder return driven by our organic growth and successful M&A strategy. Prosperity has completed 27 M&A transactions since 2000. 1 Commercial Bancshares, Inc. 11 Liberty Bank 21 The Bank Arlington 2 Texas Guaranty Bank, N.A. 12 Village

  13. Slide 13: Transaction Rationale

    Transaction Rationale Adds Scale in the Dallas / Fort Worth Market Creates a Leading Bank, with Profitability in the Top Quartile of U.S. Regional Banks Complementary Business Models Deepens Management Bench and Talent Throughout the Company Efficient Use of Excess Capital While Remaining Well-

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