Prosperity Bancshares agreed to acquire Stellar Bancorp in a $2 billion cash-and-stock deal announced January 28, 2026, creating Texas’s second-largest bank by deposits. This marks Prosperity’s third Texas acquisition since July, accelerating its Houston dominance.
Deal Structure
Payment Terms: Stellar shareholders receive $11.36 cash plus 0.3803 Prosperity shares per Stellar share, valuing the deal at $39.08 per share based on Prosperity’s $72.90 closing price.
Combined Scale: Post-merger entity hits $54 billion in assets, $38.5 billion from Prosperity plus Stellar’s $10.8 billion assets, $9 billion deposits, and $7.3 billion loans as of Dec 31, 2025.
Timeline: Expected Q2 2026 close, pending regulatory approvals; 70% stock consideration cushions dilution.
Strategic Expansion
Footprint Boost: Adds 52 Stellar branches across Houston, Beaumont, and Dallas-Fort Worth, securing top deposit share in Beaumont and fifth in Houston.
Loan Portfolio: Stellar contributes commercial real estate and industrial loans, complementing Prosperity’s residential mortgage strength.
Leadership Continuity: Stellar’s executive chair Bob Franklin joins Prosperity’s board as vice chairman; key executives retained.
Financial Impact
Earnings Accretion: Projected 9%+ boost to Prosperity’s 2027 earnings with 35% non-interest expense cuts from Stellar operations.
Market Reaction: Stellar shares rose 12%; Prosperity dipped 8% on 8% tangible book value dilution, with 4.5-year recovery timeline.
Regional Powerhouse: Positions combined bank to compete on technology and compliance amid Texas growth.
