REFILE-Prosperity Bancshares posts higher Q4 profit, to buy Stellar Bancorp in $2 bln deal

Overview

• Regional bank's Q4 net income rose 7.6% yr/yr, driven by higher net interest income

• EPS for Q4 increased 8.8% yr/yr

• Company announced merger with Stellar Bancorp, enhancing Texas market position, in deal valued at about $2.002 bln

Outlook

• Company expects Stellar Bancorp acquisition to enhance Texas footprint

• Prosperity Bancshares sees merger with Southwest Bancshares effective February 1, 2026

• Company anticipates increased Houston bank deposit rank post-Stellar acquisition

Result Drivers

• NET INTEREST INCOME - Increase in net interest income contributed to higher Q4 earnings

• DEPOSIT GROWTH - Deposits increased by $700.4 million during Q4 2025

• MERGER ACTIVITY - Completion of American Bank acquisition and pending Stellar Bancorp merger to enhance Texas presence

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Prosperity Bancshares Inc is $77.00, about 5.6% above its January 27 closing price of $72.90

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nPn1gxSbFa

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