Prosperity Bancshares Reports Solid Earnings Growth for Q3 2025

Prosperity Bancshares Reports Strong Earnings for Q3 2025

On October 29, 2025, Prosperity Bancshares, Inc. (NYSE: PB) unveiled its third-quarter earnings, showcasing impressive growth and a consistent upward trajectory. The company reported a net income of $137.6 million for the quarter ending September 30, 2025, up from $127.3 million during the same time last year. This achievement translates to a diluted earnings per share of $1.45, illustrating an increase of 8.2% year-over-year.

In addition to these robust earnings, the board of directors authorized a 3.45% dividend hike to $0.60 per share for the upcoming fourth quarter. This decision marks the 22nd consecutive annual dividend increase, reflecting a remarkable compound annual growth rate of 10.7% since 2003. The enhancement in dividends reiterates the board's ongoing confidence in the company's growth trajectory and market position.

According to David Zalman, the Senior Chairman and CEO of Prosperity, the company's success in the third quarter was driven by a 29 basis point improvement in the net interest margin, which escalated from 2.95% in Q3 2024 to 3.24% in Q3 2025. This growth is supported by increased customer deposits, which rose by $308.7 million, marking a 4.5% annualized increase during the same period.

During the first nine months of the year, Prosperity's total net income reached $402.9 million, a significant increase of 15.4%. This growth can be attributed to an upsurge in net interest income, which totaled $806.5 million—up 6.3% compared to $758.7 million for the same period in 2024.

Zalman expressed enthusiasm about their latest strategic moves, including signing a definitive merger agreement with Southwest Bancshares, Inc. This merger is expected to significantly boost Prosperity's presence in the San Antonio metro area by adding four additional branches and enhancing deposit market share. The deal will also strengthen operations across Central Texas, particularly in the Texas Hill Country region.

Additionally, the announcement regarding the pending acquisition of American Bank Holding Corporation is anticipated to further enhance the company’s footprint in Corpus Christi and surrounding areas, solidifying its operational capabilities across South and Central Texas.

For the remainder of the year, the Texas economy remains in a strong position, ranking as the eighth largest in the world with a GDP of approximately $2.77 trillion in 2024. Despite a few signs of moderation in the broader economy, Zalman believes Texas maintains a beneficial business climate, characterized by its pro-business policies and the absence of state income tax. This favorable environment attracts major corporations relocating to Texas, further solidifying its economic appeal.

The bank's capital health features a robust allowance for credit losses set at $377.3 million, equating to a ratio of 1.64% of total loans, excluding the Warehouse Purchase Program. Furthermore, nonperforming assets remained low at 0.36% of average interest-earning assets—an encouraging sign of credit quality stability.

In conclusion, the quarterly results demonstrate Prosperity's strong operational performance and commitment to shareholder value through increasing dividends and strategic expansions. Looking forward, the company appears poised for continued growth amidst favorable economic conditions in Texas and strategic mergers that will lead to a broader market presence.

Prosperity Bancshares shows no signs of slowing down, putting itself in a solid position for future opportunities. Investors and stakeholders can anticipate further updates following the upcoming conference call scheduled for October 29 at 11:30 a.m. ET, where management will discuss results in depth and provide insights into long-term strategies.