In a significant development within the financial sector, Prosperity Bancshares, Inc. and Stellar Bancorp, Inc. have revealed plans for a strategic merger. This agreement, which has garnered the unanimous endorsement of both companies' Boards of Directors, is poised to reshape the banking landscape in Texas by creating an institution with substantial market presence.
Under the terms of this unification, Prosperity will acquire Stellar Bancorp in a deal valued at approximately $2.002 billion. Shareholders of Stellar will receive 0.3803 shares of Prosperity's common stock plus $11.36 in cash for each of their Stellar shares. This transaction, anticipated to conclude in the second quarter of 2026, pending standard regulatory reviews and closing conditions, will result in a banking entity that boasts over 330 banking centers and will be the second-largest bank in Texas based on deposits.
Alongside the merger announcement, both companies also released their latest financial results. Prosperity Bancshares reported a quarterly earnings per share of $1.46, slightly exceeding analyst predictions, while its revenue of $317.7 million was just below the consensus. Stellar Bancorp, on the other hand, met its earnings consensus with 51 cents per share and surpassed revenue expectations, reaching $108.9 million. These financial disclosures highlight the solid foundations upon which this new combined entity will be built, with Stellar Bancorp holding $419.5 million in cash and equivalents, and Prosperity Bancshares reporting $1.75 billion in cash and bank deposits as of December 31. The market reacted to the news with Stellar Bancorp's shares climbing over 11%, while Prosperity Bancshares experienced a dip of more than 9%.
This merger represents a bold step towards consolidation and growth in the banking industry. By combining forces, Prosperity Bancshares and Stellar Bancorp are not only increasing their scale and operational efficiency but also enhancing their capacity to invest in future opportunities and deliver improved services to a broader customer base. This move is a testament to forward-thinking leadership, aiming to strengthen financial stability and foster economic prosperity within the communities they serve.