Prosperity Bancshares Expands With Stellar

Prosperity Bancshares just went full Texas Two-Step on consolidation, agreeing to buy Stellar Bancorp in a cash-and-stock deal valued at about $2 billion. Under the terms, Stellar shareholders get $11.36 in cash plus 0.3803 shares of Prosperity for each Stellar share — an implied $39.08 per share, or about a 19.8% premium to Stellar’s prior close. This is based on Prosperity’s $72.90 close on Jan. 27, 2026.

This deal could be seen as Prosperity putting a bigger hat on a market it already likes. The acquisition is set to expand its footprint across greater Houston, Beaumont, and Dallas, and would create the second-largest Texas-headquartered bank by deposits - with over 330 banking centers once combined. Prosperity CEO David Zalman called it a “rare opportunity” to enhance its Houston presence, pointing to the region’s investment and population growth.

Stellar brings real, measurable heft to their corner, operating 52 banking offices. As of Dec. 31, 2025, Stellar reported $10.807B in assets, $7.301B in loans, and $9.021B in deposits. Leadership continuity is part of the pitch too — Robert R. Franklin, Jr. is slated to join Prosperity Bank as Vice Chairman, and Ramon Vitulli as Houston Area Chairman.

The market’s first reaction was the typical M&A swing — Stellar popped while Prosperity dropped — and analysts noted Prosperity is paying up, even as the combination unites two strong deposit franchises. The transaction is expected to close in Q2 2026, subject to approvals, including a Stellar shareholder vote. For now, the paperwork rodeo is next, but Prosperity’s bet is that “more Texas deposits” is a thesis investors can understand without needing a decoder ring.

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