Prosperity Bancshares (PB) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $135.2 million, up 21.1% year-over-year; diluted EPS was $1.42, also up 21.1%.

• Announced a definitive agreement to merge with American Bank Holding Corporation, expanding presence in South and Central Texas, including San Antonio and Corpus Christi.

• Total assets were $38.4 billion and deposits were $27.5 billion as of June 30, 2025.

• Maintains strong presence in Texas and Oklahoma, ranked #2 in deposit market share in Texas.

• Focus remains on organic growth, disciplined deposit pricing, and maintaining strong asset quality while pursuing strategic M&A opportunities.

Financial highlights

• Net interest income for Q2 2025 was $267.7 million, up 3.5% year-over-year; net interest margin rose to 3.18%, up 24 basis points.

• Noninterest income for Q2 2025 was $43.0 million, down 6.6% year-over-year, mainly due to lower securities gains.

• Noninterest expense decreased 9.3% year-over-year to $138.6 million, reflecting lower regulatory and merger-related costs.

• Declared a $0.58 cash dividend for Q3 2025.

• 10-year CAGR: loans 9.1%, deposits 4.8%, assets 6.3%.

Outlook and guidance

• Management expects positive tailwinds over the next 12–24 months, supported by improved net interest margin and loan growth.

• The merger with American Bank is expected to close in Q4 2025 or Q1 2026, subject to regulatory and shareholder approvals.

• Expect low single-digit loan growth for the remainder of 2025, with stabilized core deposits.

• Net interest margin projected to expand, with models showing 3.35% in six months and 3.48% in twelve months if rates remain unchanged.

• Non-interest expense for Q3 2025 expected to be $141–$144 million.