Prosperity Bancshares Signs Definitive Merger Agreement to Acquire Stellar Bancorp
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: Newsfilter
- Merger Agreement Signed: Prosperity Bancshares has signed a definitive merger agreement with Stellar Bancorp, expected to close on February 1, 2026, which will elevate Prosperity's deposit ranking in Texas from 9th to 5th, significantly enhancing its competitive position in the market.
- Financial Performance Growth: The net income for Q4 2025 was $139.9 million, a 7.6% increase from the same period in 2024, with earnings per share at $1.49, reflecting ongoing improvements in interest income and operational efficiency, which are expected to further drive shareholder value.
- Significant Deposit Increase: Deposits rose by $700.4 million in Q4 2025, an annualized growth rate of 10.1%, indicating the company's success in attracting customer deposits, thereby strengthening its capital base and future growth potential.
- Stock Repurchase Program: Prosperity repurchased approximately 2.04 million shares of common stock for $137.2 million in 2025 and approved a stock repurchase program for 2026 covering up to 5% of outstanding shares, demonstrating confidence in its stock value.
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Analyst Views on PB
Wall Street analysts forecast PB stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PB is 80.50 USD with a low forecast of 75.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 68.430
Low
75.00
Averages
80.50
High
85.00
Current: 68.430
Low
75.00
Averages
80.50
High
85.00
About PB
Prosperity Bancshares, Inc. is a regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. It offers certificates of deposit, interest checking accounts, money market accounts and savings accounts. It also offers agricultural loans, home equity loans, debit and credit cards, digital banking solutions, trust and wealth management, retail brokerage services, mortgage services, and treasury management. It operates around 283 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 44 in the West Texas area including Lubbock, Midland-Odessa, Abilene; Amarillo and Wichita Falls; 15 in the Bryan/College Station area, six in the Central Oklahoma area, and eight in the Tulsa, Oklahoma area.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Prosperity Bancshares Reports Strong 2025 Earnings and M&A Activity
- Net Income Growth: Prosperity Bancshares reported a net income of $543 million for 2025, a 13.1% increase from $480 million in 2024, with diluted EPS rising to $5.72, indicating significant improvement in profitability.
- Margin Expansion: The bank's net interest margin reached 3.30% in Q4, up from 3.05% in the same quarter of 2024, reflecting ongoing improvements in interest income that are expected to enhance future profitability.
- M&A Activity: Prosperity has completed its merger with American Bank and anticipates finalizing the merger with Southwest Bancshares on February 1, 2026, while the acquisition of Stellar Bancorp will elevate its Houston deposit rank from 9th to 5th, strengthening its competitive position.
- Asset Quality Concerns: Although nonperforming assets rose to $150 million from $119 million in the previous quarter, net charge-offs remained low at $5.9 million, demonstrating the company's effectiveness in managing credit risk.
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