Prosperity Bancshares (NYSE:PB) reported a double-digit surge in annual profits Wednesday, paired with a massive acquisition that fundamentally alters the competitive landscape of Texas banking.
The Houston-based lender posted full-year 2025 net income of $542.8 million, a 13.2% increase over the prior year, while fourth-quarter earnings of $1.49 per share topped analyst expectations.
The financial results served as a backdrop for the announcement of a definitive merger agreement with Stellar Bancorp, in a deal valued at approximately $2.02 billion.
The stock-and-cash transaction will add Stellar's $10.8 billion in assets to Prosperity’s portfolio, catapulting the combined entity to the position of the second-largest Texas-based bank by deposits.
Operational metrics for the year underscored a high-performing "fortress" balance sheet.
Net interest margin expanded by 25 basis points to 3.30%, fueled by higher yields on loans and a disciplined approach to deposit pricing.
Despite industry-wide pressures on liquidity, Prosperity saw deposits grow by $700.4 million in the fourth quarter alone—a 10.1% annualized growth rate.
The bank also confirmed it officially completed its merger with American Bank on January 1, 2026, adding 18 banking offices across South and Central Texas.