Prosperity Bancshares (PB)
NYSE:PB
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Prosperity Bancshares
(NYSE:PB)
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Rating:74Outperform
Price Target:
$81.00
â–²(18.16% Upside)
Action:UpgradedDate:02/27/26
Overall score reflects solid financial fundamentals and improved leverage, supported by constructive earnings-call signals (improving NIM, deposit growth, and M&A-driven upside). Valuation is favorable with a moderate P/E and a ~3.27% dividend yield. The main offsets are volatile cash-flow conversion, mixed near-term technical momentum, and credit/integration risks highlighted in the latest call.
Positive Factors
Improved capital and leverage
Debt-to-equity has trended down materially (≈0.62→0.28 over several years), strengthening the bank’s capital posture. That durable improvement reduces balance-sheet risk, preserves regulatory flexibility, and supports sustainable capital return and M&A funding without undue strain on reserves.
Negative Factors
Rising nonperforming assets
NPAs increased notably from the prior quarter and reflect specific stressed credits (two middle‑market loans and an acquired RE loan). Persistently higher NPAs would pressure provisioning, compress returns, and could constrain capital deployment if additional deterioration emerges.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved capital and leverage
Debt-to-equity has trended down materially (≈0.62→0.28 over several years), strengthening the bank’s capital posture. That durable improvement reduces balance-sheet risk, preserves regulatory flexibility, and supports sustainable capital return and M&A funding without undue strain on reserves.
Read all positive factors
Prosperity Bancshares (PB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.96B
Dividend Yield3.31%
Average Volume (3M)908.67K
Price to Earnings (P/E)12.0
Beta (1Y)0.64
Revenue Growth0.55%
EPS Growth19.13%
CountryUS
Employees3,898
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.49
Shares Outstanding101,489,020
10 Day Avg. Volume1,120,214
30 Day Avg. Volume908,671
Financial Highlights & Ratios
PEG Ratio0.91
Price to Book (P/B)0.86
Price to Sales (P/S)3.76
P/FCF Ratio12.64
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue5.13
Enterprise Value/Gross Profit7.18
Enterprise Value/Ebitda10.37
Forecast
1Y Price Target
$77.11Price Target Upside12.49% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)5.73
Revenue Forecast (FY)$1.74B
Prosperity Bancshares Business Overview & Revenue Model
Company Description
Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time ac...
How the Company Makes Money
Prosperity Bancshares generates revenue primarily through interest income from loans and interest-earning assets, which is the largest component of its revenue model. The bank provides various types of loans, including commercial, real estate, and...
Prosperity Bancshares Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized solid core financial performance (double-digit annual EPS and net income growth), improving NIM, deposit growth, disciplined capital deployment (buybacks/dividends) and a string of strategic, accretive M&A that materially expands the Texas franchise. Offsetting items include a modest but notable rise in nonperforming assets driven by a few credits, a quarter-over-quarter decline in loan balances and production, and near-term merger-related expense headwinds and integration risk. On balance, positive operational and strategic momentum and sizable franchise/earnings upside from acquisitions outweigh the manageable credit and integration challenges.Positive Updates
Strong Yearly and Quarterly Earnings Growth
Net income for year ended 12/31/2025 was $543.0M vs $480.0M in 2024, up $63.0M or 13.2%. Diluted EPS was $5.72 vs $5.05 in 2024, up 13.3%. Quarterly net income was $139.9M vs $130.0M a year ago, up $9.8M or 7.6%.
Negative Updates
Increase in Nonperforming Assets
Nonperforming assets rose to $150.8M at 12/31/2025 (up $31.3M q/q from $119.6M). NPAs represented ~69 bps of loans & ORE (or 46 bps of quarterly average interest-earning assets) vs prior-quarter metrics of 54 bps (loans & ORE) / 36 bps (IEAs). Management attributes the rise to two middle‑market loans and one acquired real-estate loan.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Yearly and Quarterly Earnings Growth
Net income for year ended 12/31/2025 was $543.0M vs $480.0M in 2024, up $63.0M or 13.2%. Diluted EPS was $5.72 vs $5.05 in 2024, up 13.3%. Quarterly net income was $139.9M vs $130.0M a year ago, up $9.8M or 7.6%.
Read all positive updates
Company Guidance
Guidance from the call included near-term and forward-year targets and a number of key metrics: Q1 2026 fair-value loan income is expected to be $3.0–$4.0 million and noninterest expense is guided to $172–$176 million (which includes $30–$33 million of one‑time merger charges); management expects 2026 standalone net interest margin around 3.50% (pro forma with Stellar nearer ~4.22%), Q4/2025 tax‑equivalent NIM was 3.30%, net interest income before provision was $275 million, noninterest income $42.8 million and noninterest expense $138.7 million with an efficiency ratio ~43.6–43.7%; balance sheet and credit metrics at 12/31/25 included loans of $21.805 billion (loans excl. warehouse purchases $20.5B), deposits $28.4 billion, nonperforming assets $150.8 million (69 bps of loans & ORE), allowance for credit losses on loans $333 million ($371M including off‑balance sheet), ACL/NPAs 2.21x, and Q4 net charge‑offs $5.884 million; the bond portfolio has a modified duration of 3.7 with projected annual cash flows of ~$1.9 billion; capital deployment/return metrics noted $157M of 2025 buybacks (2.34M shares at $67.04 avg), an additional buyback authorization (≈5%) available, a $2.40 annual dividend, and management’s longer‑term outlook included projected 2027 EPS of $7.34 (roughly $880 million net income) and realization of announced cost saves after systems conversions.Prosperity Bancshares Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
77
Positive
Cash Flow
69
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.74B | 1.74B | 1.56B | 1.20B | 1.15B |
| Gross Profit | 1.25B | 1.14B | 1.05B | 1.11B | 1.10B |
| EBITDA | 849.15M | 647.39M | 565.42M | 694.47M | 689.30M |
| Net Income | 542.84M | 479.39M | 419.32M | 524.52M | 519.30M |
Balance Sheet | |||||
| Total Assets | 38.46B | 39.57B | 38.55B | 37.69B | 37.83B |
| Cash, Cash Equivalents and Short-Term Investments | 10.69B | 12.95B | 896.74M | 880.33M | 3.06B |
| Total Debt | 2.15B | 3.42B | 4.03B | 4.13B | 448.10M |
| Total Liabilities | 30.85B | 32.13B | 31.47B | 30.99B | 31.41B |
| Stockholders Equity | 7.62B | 7.44B | 7.08B | 6.70B | 6.43B |
Cash Flow | |||||
| Free Cash Flow | 516.98M | 451.55M | 612.20M | 464.11M | 675.71M |
| Operating Cash Flow | 549.51M | 472.69M | 646.36M | 506.53M | 694.73M |
| Investing Cash Flow | 773.91M | 1.98B | 1.09B | -1.96B | -2.72B |
| Financing Cash Flow | -1.55B | -940.22M | -1.71B | -666.75M | 3.23B |
Prosperity Bancshares Technical Analysis
Positive
68.55
Price Trends
68.82
Negative
69.15
Negative
67.66
Positive
Market Momentum
-0.24
Negative
58.18
Neutral
69.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PB, the sentiment is Positive. The current price of 68.55 is above the 20-day moving average (MA) of 65.87, below the 50-day MA of 68.82, and above the 200-day MA of 67.66, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 58.18 is Neutral, neither overbought nor oversold. The STOCH value of 69.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PB.
Prosperity Bancshares Risk Analysis
Prosperity Bancshares disclosed 46 risk factors in its most recent earnings report. Prosperity Bancshares reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Prosperity Bancshares Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.39B | 7.10 | 11.93% | 3.68% | 2.79% | 2.11% | |
74 Outperform | $6.96B | 12.03 | 7.14% | 3.31% | 0.55% | 19.13% | |
74 Outperform | $5.69B | 11.51 | 11.43% | 2.85% | 1.43% | 19.58% | |
71 Outperform | $8.15B | 10.18 | 9.79% | 1.93% | -2.81% | 14.96% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
PB
Prosperity Bancshares
68.55
3.43
5.27%
OZK
Bank OZK
47.49
8.56
21.99%
BOKF
Bok Financial
134.21
43.55
48.04%
HOMB
Home Bancshares
28.15
2.21
8.51%
Prosperity Bancshares Corporate Events
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Prosperity Bancshares completes Texas Partners Bank acquisition
Positive
Feb 2, 2026
On February 2, 2026, Prosperity Bancshares announced it had completed the acquisition of Southwest Bancshares, Inc. and the merger of Southwest’s subsidiary, Texas Partners Bank, into Prosperity Bank, effective February 1, 2026. Under the me...
Business Operations and StrategyM&A Transactions
Prosperity Bancshares Announces Merger Agreement With Stellar Bancorp
Positive
Jan 29, 2026
On January 27, 2026, Prosperity Bancshares, Inc. entered into a definitive Agreement and Plan of Merger to acquire Stellar Bancorp, Inc., under which Stellar will merge into Prosperity, followed by the merger of Stellar Bank into Prosperity Bank, ...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Prosperity Bancshares to Acquire Stellar Bancorp in Merger
Positive
Jan 28, 2026
On January 28, 2026, Prosperity Bancshares and Stellar Bancorp announced a definitive agreement under which Prosperity will acquire Stellar and its subsidiary Stellar Bank in a stock-and-cash transaction valued at approximately $2.002 billion, bas...
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Prosperity Bancshares Completes Acquisition of American Bank
Positive
Jan 2, 2026
On January 2, 2026, Prosperity Bancshares announced that it had completed the acquisition of American Bank Holding Corporation, with the legal mergers of both the holding company and its subsidiary American Bank, N.A. into Prosperity and Prosperit...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.