Prosperity Bancshares (PB) Q4 2025 earnings summary

Executive summary

• Reported full-year 2025 net income of $543 million, up 13.2% year-over-year, and Q4 2025 net income of $139.9 million, with diluted EPS of $5.72 for the year and $1.49 for Q4, both up over 13% and 8.8% respectively.

• Completed the acquisition of American Bank and announced definitive agreements to acquire Stellar Bancorp and Southwest Bancshares, enhancing Texas market presence.

• Received all regulatory and shareholder approvals for the Southwest Bancshares merger, effective February 1, 2026.

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

• Assets reached $38.5 billion, loans $21.8 billion, and deposits $28.5 billion as of December 31, 2025.

Financial highlights

• Net interest income for Q4 2025 was $275 million, up $7.2 million year-over-year; net interest margin improved 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, aided by reversal of the 2024 FDIC special assessment.

• Deposits increased by $700.4 million in Q4 2025, representing a 10.1% annualized growth rate.

• Efficiency ratio improved to 42.6%–43.7% in Q4 2025 from 46.1% in Q4 2024.

Outlook and guidance

• Expect noninterest expense of $172–$176 million in Q1 2026, including merger-related charges of $30–$33 million.

• Projected net interest margin for 2026 standalone at 3.5%, with combined margin (including Stellar) expected to be higher.

• Anticipate low single-digit loan growth in 2026, with acquired portfolios expected to maintain or exceed this pace.

• Most cost savings from recent acquisitions expected after system conversions later in 2026.

• Approved a 2026 stock repurchase program covering up to 5% of outstanding common stock.