Prosperity Bancshares (PB) Q4 2025 earnings summary

Executive summary

• Q4 2025 net income was $139.9 million, up 7.6–8.8% year-over-year, with full-year net income of $543 million, up 13.2% year-over-year; diluted EPS for 2025 was $5.72, up 13.3% from 2024.

• Assets reached $38.5 billion, loans $21.8 billion, and deposits $28.5 billion at year-end 2025.

• Completed the American Bank merger and announced the acquisition of Stellar Bancorp, with the Southwest Bancshares deal expected to close in early 2026.

• Approved a stock repurchase program covering up to 5% of outstanding shares and declared a $0.60 cash dividend for Q1 2026.

• Combined Houston deposit rank will rise to #5, making the company the largest Texas-based bank in the market.

Financial highlights

• Net interest income for Q4 2025 was $275 million, up $7.2 million year-over-year; net interest margin rose to 3.30% from 3.05% in Q4 2024.

• Noninterest income for Q4 2025 was $42.8 million, up from $39.8 million in Q4 2024.

• Noninterest expense for Q4 2025 was $138.7 million, down from $141.5 million in Q4 2024, mainly due to reversal of the 2024 FDIC special assessment.

• Deposits grew to $28.5 billion at year-end, up $700.4 million in Q4 2025, representing a 10.1% annualized growth rate.

• Total assets at year-end 2025 were $38.5 billion, down from $39.6 billion at year-end 2024, mainly due to a $1.25 billion reduction in borrowings.

Outlook and guidance

• Expect noninterest expense of $172–$176 million in Q1 2026, including three months of American Bank and two months of Texas Partners Bank expenses.

• One-time merger-related charges of $30–$33 million anticipated in Q1 2026.

• Projected 2026 standalone net interest margin of 3.5%, with combined margin expected to rise further after Stellar acquisition.

• Confident in achieving $7.34 EPS in 2027 post-integration, with strong cost save assumptions.

• Expectation to close the Southwest Bancshares acquisition on February 1, 2026, after receiving all regulatory and shareholder approvals.