Core Viewpoint - Prosperity Bancshares reported strong fourth-quarter earnings, surpassing estimates, driven by increased net interest income (NII) and non-interest income, despite a decline in loan balances [2][4]. Financial Performance - Q4 2025 adjusted earnings were $1.46, exceeding the Zacks Consensus Estimate of $1.45, marking a 6.6% year-over-year growth [2]. - Total revenues for Q4 were $317.7 million, up from $307.6 million a year earlier, slightly above the Zacks Consensus Estimate of $317.3 million [5]. - For the full year 2025, total revenues reached $1.25 billion, reflecting a 4.8% increase year over year [5]. Income and Expenses - NII increased by 4.5% year over year to $275 million, with net interest margin (NIM) expanding by 25 basis points to 3.30% [6]. - Non-interest income rose to $42.8 million, a 7.4% increase, driven by higher fee-based revenues [7]. - Non-interest expenses decreased by 2% year over year to $138.7 million, contributing to an improved efficiency ratio of 43.66% [8]. Balance Sheet and Capital Position - As of December 31, 2025, total assets were $38.46 billion, with total loans at $21.81 billion (down 1%) and deposits increasing by 2.5% to $28.48 billion [9]. - The common equity tier 1 ratio improved to 17.55%, and the total risk-based capital ratio rose to 18.80% [10]. Credit Quality - Non-performing assets increased to $150.8 million from $81.5 million a year ago, while net charge-offs rose to $5.9 million [12]. Shareholder Returns - The company repurchased 2.04 million shares at an average price of $67.10 during the reported quarter [13]. Future Outlook - NIM is expected to be at least 3.50% for 2026, with management anticipating non-interest expenses to be between $172-$176 million for Q1 2026 [14][15]. - Estimates for the stock have been trending downward, with a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [18]. Industry Comparison - Prosperity Bancshares is part of the Zacks Banks - Southwest industry, with Texas Capital (TCBI) reporting a year-over-year revenue increase of 15.4% in its latest quarter [19].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35388 PROSPERITY BANCSHARES, INC.® (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporati ...

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence in investing [1] Zacks Style Scores - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score assesses a company's financial strength and future outlook based on projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for stocks with strong value, growth forecasts, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that uses earnings estimate revisions to assist in building a successful portfolio [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.83% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have A or B Scores to ensure potential upside [10] Company Spotlight: Prosperity Bancshares - Prosperity Bancshares, based in Houston, TX, operates through its bank subsidiary and is currently rated 3 (Hold) with a VGM Score of B [12] - The company has a Momentum Style Score of A, with shares increasing by 4% over the past four weeks, and an upward revision in earnings estimates for fiscal 2026 [13]

Core Insights - Prosperity Bancshares, Inc. (PB) reported fourth-quarter 2025 earnings of $1.49, exceeding the Zacks Consensus Estimate of $1.45, with an 8.8% year-over-year growth [1] - The company announced a $2 billion stock-and-cash acquisition of Stellar Bancorp, Inc. (STEL), which led to a 7.9% decline in PB's shares following the announcement [1][9] Financial Performance - Net income available to common shareholders was $139.9 million, reflecting a 7.6% increase from the previous year, surpassing the estimate of $134.9 million [2] - For 2025, earnings per share reached $5.72, beating the Zacks Consensus Estimate of $5.68, and net income was $542.8 million, up 13.2% year over year [3] - Quarterly total revenues were $317.7 million, up from $307.6 million a year earlier, slightly above the Zacks Consensus Estimate of $317.3 million [4] Income and Expenses - Net interest income (NII) rose 4.5% year over year to $275 million, with a net interest margin (NIM) of 3.30%, an increase of 25 basis points [5] - Non-interest income totaled $42.8 million, up 7.4%, driven by increases in fee-based revenues [6] - Non-interest expenses decreased by 2% year over year to $138.7 million, attributed to lower salaries, regulatory assessments, and other costs [7] Balance Sheet and Capital Position - As of December 31, 2025, total assets were $38.46 billion, total loans were $21.81 billion (down 1%), and deposits increased by 2.5% to $28.48 billion [8] - The common equity tier 1 ratio improved to 17.55% from 16.42% year over year [8] - The total risk-based capital ratio rose to 18.80% from 17.67%, and the equity-to-assets ratio strengthened to 19.8% from 18.8% [10] Credit Quality - Non-performing assets increased to $150.8 million from $81.5 million a year ago, while net charge-offs rose to $5.9 million from $2.6 million [11] - The company reported no provision for credit losses during the quarter, consistent with the previous year [11] Acquisition Details - Prosperity Bancshares agreed to acquire Stellar Bancorp for $2 billion, with the deal expected to close in Q2 2026, subject to regulatory and shareholder approvals [13] - The acquisition will involve issuing 0.3803 shares of PB's common stock and $11.36 in cash for each share of Stellar common stock [14] - Upon completion, the merged entity will be the second-largest bank based on deposits in Texas, with approximately $54 billion in assets [15] Strategic Outlook - The acquisition is projected to generate significant financial benefits, including cost savings of 35% of STEL's non-interest expenses, with an expected 9.2% accretion to 2027 earnings [16] - Prosperity Bancshares continues to demonstrate strong capital management and strategic expansion initiatives, although challenges remain with lower loan balances and asset quality [17]

Financial Data and Key Metrics Changes - For the year ended December 31, 2025, net income was $543 million, an increase of $63 million or 13.2% compared to $480 million for the same period in 2024 [6] - Net income per diluted common share was $5.72 for the year ending December 31, 2025, compared to $5.05 for the same period in 2024, an increase of 13.3% [6] - For the three months ending December 31, 2025, net income was $139.9 million, an increase of $9.8 million or 7.6% compared to $130 million for the same period in 2024 [7] - The annualized return on average assets was 1.49% and on average tangible common equity was 13.61% for the three months ending December 31, 2025 [7] - The efficiency ratio was 43.6% for the three months ending December 31, 2025 [7] Business Line Data and Key Metrics Changes - Net interest income before provision for credit losses for the three months ended December 31, 2025, was $275 million, an increase of $7.2 million compared to $267.8 million for the same period in 2024 [15] - The net interest margin on a tax-equivalent basis was 3.30% for the three months ended December 31, 2025, an increase of 25 basis points compared to 3.05% for the same period in 2024 [16] - Non-interest income was $42.8 million for the three months ended December 31, 2025, compared to $39.8 million for the same period in 2024 [17] - Non-interest expense was $138.7 million for the three months ended December 31, 2025, compared to $141.5 million for the same period in 2024 [18] Market Data and Key Metrics Changes - Deposits were $28.4 billion at December 31, 2025, an increase of $700 million from $27.7 billion at September 30, 2025 [9] - Nonperforming assets totaled $150 million, or 46 basis points of quarterly average interest-earning assets at December 31, 2025, compared to $119 million, or 36 basis points at September 30, 2025 [10] Company Strategy and Development Direction - The company is focused on delivering shareholder value through low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A [14] - The acquisition of Stellar Bancorp is seen as a significant milestone, enhancing the company's Texas footprint and making it the largest Texas-based bank in the market [14] - The company plans to prioritize the integration of the three banks it is acquiring, focusing on customer and associate care [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum heading into 2026, with expectations for improved net interest margins and overall performance [32][34] - The company anticipates realizing cost savings related to the acquisitions after system conversions scheduled for later in the year [19] - Management highlighted strong tailwinds for growth in 2026 and beyond, with expectations for a minimum net interest margin of 3.5% [86] Other Important Information - The company completed a merger with American Bank on January 1, 2026, and expects to finalize the merger with Southwest Bancshares on February 1, 2026 [11][12] - The allowance for credit losses on loans was $333 million, with a strong coverage ratio of 2.21 times non-performing assets [10] Q&A Session Summary Question: Can you explain the difference in earnings estimates for Stellar compared to consensus? - Management indicated that Stellar's fourth quarter earnings influenced the estimates, and they are confident in the earnings level coming from Stellar [28][29] Question: Why is this acquisition different from past ones? - Management emphasized the long-standing relationship with Stellar and the similarities in operational discipline, which reduce risks associated with the acquisition [36][37] Question: Can you discuss the price of the acquisition and the expected synergies? - Management acknowledged the premium price for a quality bank and highlighted the expected earnings growth and synergies from the merger [40][45] Question: What are the capital deployment plans moving forward? - Management indicated a focus on integration but also mentioned the potential for opportunistic buybacks and dividend increases [48][50] Question: How will the company manage multiple bank integrations simultaneously? - Management stated that designated teams will handle integrations, allowing core operations to continue without distraction [53][56] Question: Can you provide details on the increase in nonperforming assets? - Management confirmed that a specific $35 million Shared National Credit was part of the increase and noted ongoing resolution discussions [108][109]

Financial Data and Key Metrics Changes - For the year ended December 31, 2025, net income was $543 million, an increase of $63 million or 13.2% compared to $480 million for the same period in 2024 [6] - Net income per diluted common share was $5.72 for the year ending December 31, 2025, compared to $5.05 for the same period in 2024, an increase of 13.3% [6] - The net income for the three months ending December 31, 2025, was $139.9 million, compared to $130 million for the same period in 2024, an increase of $9.8 million or 7.6% [7] - The annualized return on average assets was 1.49% and on average tangible common equity was 13.61% for the three months ending December 31, 2025 [7] - The efficiency ratio was 43.6% for the three months ending December 31, 2025 [7] Business Line Data and Key Metrics Changes - Net interest income before provision for credit losses for the three months ended December 31, 2025, was $275 million, an increase of $7.2 million compared to $267.8 million for the same period in 2024 [15] - The net interest margin on a tax-equivalent basis was 3.30% for the three months ended December 31, 2025, an increase of 25 basis points compared to 3.05% for the same period in 2024 [16] - Non-interest income was $42.8 million for the three months ended December 31, 2025, compared to $39.8 million for the same period in 2024 [17] - Non-interest expense was $138.7 million for the three months ended December 31, 2025, compared to $141.5 million for the same period in 2024 [18] Market Data and Key Metrics Changes - Deposits were $28.4 billion at December 31, 2025, an increase of $700 million from $27.7 billion at September 30, 2025 [9] - Nonperforming assets totaled $150 million, or 46 basis points of quarterly average interest-earning assets at December 31, 2025, compared to $119 million, or 36 basis points at September 30, 2025 [10] Company Strategy and Development Direction - The company completed a merger with American Bank on January 1, 2026, and expects to finalize the merger with Southwest Bancshares on February 1, 2026 [11][12] - The acquisition of Stellar Bancorp is seen as a significant milestone, enhancing the company's Texas footprint and deposit rank [14] - The company aims to deliver shareholder value through low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum from the second half of 2025 into 2026, with expectations for improved net interest margins and earnings [32][34] - The company anticipates a minimum net interest margin of 3.5% for 2026, with potential upside from the acquisition of Stellar Bank [79][80] - Management highlighted a strong capital position and plans for capital deployment, including potential stock buybacks and dividend increases [48][49] Other Important Information - The company repurchased approximately $157 million, or 2.34 million shares of its common stock at an average weighted price of $67.04 under its 2025 stock repurchase program [8] - The allowance for credit losses on loans was $333 million, with a strong coverage ratio of 2.21 times non-performing assets [10] Q&A Session Summary Question: Can you discuss the Stellar acquisition and the difference in earnings estimates? - Management noted that the earnings estimates are influenced by Stellar's recent performance and expressed confidence in the projected earnings from the acquisition [28][32] Question: Why is this acquisition different from past ones? - Management emphasized the familiarity and alignment between the two banks, which reduces risk and enhances growth potential [35][37] Question: Can you elaborate on the capital deployment strategy post-acquisition? - Management indicated a focus on integration of the three banks and potential for opportunistic buybacks, with a strong capital position allowing for flexibility [48][50] Question: How will you manage multiple bank integrations simultaneously? - Management assured that designated teams are in place for integration, allowing core operations to continue without distraction [53][56] Question: What is the outlook for nonperforming assets and credit quality? - Management acknowledged an increase in nonperforming assets but expressed confidence in the overall credit quality of the portfolio [108][109]

Financial Data and Key Metrics Changes - For the year ended December 31, 2025, net income was $543 million, an increase of $63 million or 13.2% compared to $480 million for the same period in 2024 [5] - Net income per diluted common share was $5.72 for the year ending December 31, 2025, compared to $5.05 for the same period in 2024, an increase of 13.3% [5] - The net income for the three months ending December 31, 2025, was $139.9 million, an increase of $9.8 million or 7.6% compared to $130 million for the same period in 2024 [6] - The annualized return on average assets was 1.49% and on average tangible common equity was 13.61% for the three months ending December 31, 2025 [6] - The efficiency ratio was 43.6% for the three months ending December 31, 2025 [6] Business Line Data and Key Metrics Changes - Net interest income before provision for credit losses for the three months ended December 31, 2025, was $275 million, an increase of $7.2 million compared to $267.8 million for the same period in 2024 [13] - Non-interest income was $42.8 million for the three months ended December 31, 2025, compared to $39.8 million for the same period in 2024 [16] - Non-interest expense was $138.7 million for the three months ended December 31, 2025, compared to $141.5 million for the same period in 2024 [17] Market Data and Key Metrics Changes - Deposits were $28.4 billion at December 31, 2025, an increase of $700 million from $27.7 billion at September 30, 2025 [8] - Nonperforming assets totaled $150 million, or 46 basis points of quarterly average interest-earning assets at December 31, 2025, compared to $119 million, or 36 basis points at September 30, 2025 [9] Company Strategy and Development Direction - The company completed a merger with American Bank on January 1, 2026, and expects to finalize the merger with Southwest Bancshares on February 1, 2026 [10][11] - The acquisition of Stellar Bancorp is seen as a significant milestone, enhancing the company's Texas footprint and making it the largest Texas-based bank in the market [12] - The company aims to deliver shareholder value through low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain and grow earnings, citing strong demand for loans and a disciplined approach to credit quality [8][12] - The company anticipates improvements in net interest margin due to the integration of acquired banks and favorable market conditions [78][86] - Management highlighted the importance of focusing on customer care and successful integration of the three banks acquired [35] Other Important Information - The company repurchased approximately $157 million, or 2.34 million shares of its common stock at an average weighted price of $67.04 under its 2025 stock repurchase program [7] - The allowance for credit losses on loans was $333 million, with a strong coverage ratio of 2.21 times non-performing assets [9] Q&A Session Summary Question: What is driving the difference in earnings estimates for Stellar compared to consensus? - Management indicated that Stellar's fourth quarter earnings would influence the estimates, and a representative from Stellar provided insights on their growth momentum and earnings potential [27][31] Question: Why is this acquisition different from past ones? - Management emphasized the familiarity and alignment between the two banks, suggesting that the integration would be smoother and more efficient than previous acquisitions [33][35] Question: Can you elaborate on the price of the acquisition and the expected synergies? - Management acknowledged the premium paid for Stellar but justified it by highlighting the expected earnings growth and enhanced franchise value from the merger [39][42] Question: What are the capital deployment plans moving forward? - Management indicated a focus on integration for the coming months, with potential for opportunistic buybacks and dividend increases based on strong cash flow projections [45][48] Question: How will the company manage multiple bank integrations simultaneously? - Management assured that designated teams are in place for integration, allowing core operations to continue without distraction [51][53] Question: Can you discuss the increase in nonperforming assets? - Management provided details on specific loans contributing to the increase and expressed confidence in the overall credit quality of the portfolio [108][110]

It's TIME. Let's GO. Join the traders at BAD BEAT Investing! For a limited time ONLY, you can join BAD BEAT for a one month TRIAL at a big discount. Why join? We are available all day during market hours to answer questions, and help you learn and grow. Best position yourself to catch rapid-return trades, while finding deep value for the long-term.We resume our regional bank coverage with the just-reported earnings out of Prosperity Bancshares, Inc. ( PB ). This bank has been growing organically and has bee ...

Bank stocks have done very well these past few months. Funds that track the space have outperformed the S&P 500 by a double-digit margin since November, as investors seem to have moved on from last quarter's credit jitters , focusing insteadI like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investor', and predominantly ...

Key insight: The merged bank will hold the number-one deposit share in Beaumont, home to a bustling port and some of the nation's largest oil refineries.Expert quote: "By joining forces, we are creating one of the strongest Texas banking franchises, supported by an exceptional deposit base and a shared commitment to relationship-driven community banking." — Stellar Bancorp Chairman and CEO Robert FranklinSupporting data: Prosperity has completed 31 M&A deals since 2000.UPDATE: This story includes additional ...