#United States #Houston #Prosperity Bancshares #Texas Banking #Stellar Bancorp

Overview of Prosperity Bancshares' Q4 2025 Earnings

Prosperity Bancshares, Inc. recently reported impressive fourth-quarter earnings for 2025, citing a net income of $139.9 million. This amount reflects a robust growth from $130.1 million in the same period last year, highlighting a notable increase in earnings per diluted share from $1.37 to $1.49.

The financial institution also reported substantial annual results, closing 2025 with a total net income of $542.8 million, which translates to a 13.2% growth over the previous year's $479.4 million. The diluted earnings per share reached $5.72, marking a 13.3% increase from the prior year.

Key Financial Metrics

Prosperity Bancshares experienced growth in multiple financial metrics, including:

• - Net Interest Margin: Increased to 3.30% from 3.05% year-over-year.
• - Deposits: Saw an uptick of $700.4 million in the fourth quarter, an increase of 10.1% annualized.
• - Nonperforming Assets: Kept low at 0.46% of average interest-earning assets, ensuring stability in asset quality.
• - Return on Average Assets: Recorded an annualized rate of 1.49% for Q4.

Such figures underscore the bank's operational efficiency and financial health, reassuring stakeholders of its commitment to profitability and strategic growth.

Merger Announcement

On January 28, 2026, Prosperity Bancshares made headlines by signing a definitive merger agreement to acquire Stellar Bancorp, Inc., located in Houston, Texas. This move comes as part of the bank's strategy to enhance its market presence in Texas.

The merger is projected to elevate Prosperity Bancshares' deposit rank in Houston from ninth to fifth, solidifying its status as the largest Texas-based bank in the region and the second-largest in terms of deposits statewide.

CEO David Zalman expressed excitement about the merger, emphasizing Stellar’s strong operational track record and favorable asset mix. This acquisition not only reinforces Prosperity's growth strategy but is also anticipated to create long-term value for shareholders.

Integration Plans and Impact

Post-merger, Prosperity plans to integrate Stellar’s operations smoothly while leveraging its established network of 52 banking offices and strong local reputation. There are also plans to finalize the acquisition of Southwest Bancshares, expected to be effective on February 1, 2026, which was also mentioned in their quarterly report.

Additionally, on January 1, 2026, Prosperity completed the acquisition of American Bank Holding Corporation, enhancing its footprint across Texas and positioning itself to better serve clients in Central and South Texas.

Strategic Vision

Zalman reaffirmed the company's commitment to its disciplined approach, emphasizing growth through judicious mergers and acquisitions, maintaining efficient operations, and prioritizing sound credit quality. With a history dating back to its founding in 1983, Prosperity has consistently focused on delivering value to its shareholders by offering affordable banking solutions and excellent customer service.

In conclusion, Prosperity Bancshares’ solid financial results for Q4 2025, coupled with strategic mergers and acquisitions, position it strongly for future growth in the competitive Texas banking landscape. Stakeholders can look forward to an upward trajectory as the bank leverages its expanded base to provide enhanced services to its clients.