Prosperity Bancshares (PB) AI Stock Analysis

• Market Cap: $6.56B
• Dividend Yield: 3.31%
• Average Volume (3M): 908.67K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.62
• Revenue Growth: 0.55%
• EPS Growth: 19.13%
• Country: US
• Employees: 3,898
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.49
• Shares Outstanding: 94,991,830
• 10 Day Avg. Volume: 1,120,214
• 30 Day Avg. Volume: 908,671
• PEG Ratio: 1.25
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 4.11
• P/FCF Ratio: 15.85
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 4.91
• Enterprise Value/Gross Profit: 7.03
• Enterprise Value/Ebitda: 10.07
• 1Y Price Target: $76.88
• Price Target Upside: 10.29% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $75.00 ▲(7.59% Upside)

The score is driven mainly by solid underlying financial profitability and a stable balance sheet, supported by attractive valuation (low P/E and a 3.39% dividend). Offsetting these positives are weaker near-term technical momentum and earnings-call risks tied to rising NPAs, slowing loan growth, and integration/one-time expense headwinds from multiple concurrent deals.

Positive Factors

High profitability and margins

Prosperity’s TTM net margin and strong EBIT/EBITDA margins reflect durable operating efficiency and disciplined cost control. High margins enable robust earnings-to-cash conversion, support sustained dividends and buybacks, and provide a structural buffer against cyclical credit or funding pressures.

Improving net interest margin trajectory

Management’s NIM improvement and pro forma uplift with Stellar indicate a structural increase in core net interest income. Sustained NIM expansion driven by balance-sheet mix, deposit growth and accretive acquisitions should materially lift long-term profitability and recurring cash generation.

Strategic M&A expands Texas franchise and scale

The American acquisition and Stellar transaction materially increase deposit scale and market share in Houston and Texas. Greater scale enhances cross-sell, fee income potential and funding stability, while expected cost synergies and franchise depth strengthen the bank’s long-term competitive position regionally.

Negative Factors

Rising nonperforming assets and credit concentration

NPAs increased materially and are tied to several large credits including middle‑market and acquired real‑estate loans. Such concentrated problem credits can require heightened provisions, impair earnings and capital deployment, and signal potential underwriting stress over multiple quarters until resolved.

Slowing loan growth and lower new production

Quarterly declines in loan balances and a drop in average monthly loan production indicate weakening organic asset growth. Persistent loan growth headwinds limit sustainable net interest income expansion, reduce operating leverage on fixed expenses, and increase reliance on acquisitions to drive earnings.

Integration and execution risk from multiple deals

Simultaneous systems conversions and branch consolidations elevate execution and retention risks across personnel, customers and deposits. Integration complexity can delay expected cost saves, increase short-term expenses, and create multi-quarter uncertainty around realized synergies and revenue retention.

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 accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. As of December 31, 2021, the company operated 273 full-service banking locations comprising 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 63 in the Dallas/Fort Worth, Texas area; 22 in the East Texas area; 29 in the Central Texas area, including Austin and San Antonio; 34 in the West Texas area, including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area doing business as LegacyTexas Bank. Prosperity Bancshares, Inc. was founded in 1983 and is based in Houston, Texas.

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 consumer loans, earning interest from borrowers over the life of these loans. Additionally, the company earns non-interest income through service charges on deposit accounts, fees from wealth management services, and transaction fees from its treasury management services. Significant partnerships with local businesses and a focus on community banking also contribute to its growth and earnings, enhancing customer loyalty and expanding its deposit base.

Prosperity Bancshares Financial Statement Overview

Summary

Strong profitability (TTM net margin 31.45%; EBIT/EBITDA margins 40.16%/50.32%) and moderate leverage (debt-to-equity 0.32) support the score, but it is held back by declining TTM revenue growth (-1.16%) and weakening cash flow trends (TTM free cash flow growth -19.2% and low operating cash flow to net income).

Income Statement

Prosperity Bancshares shows a strong net profit margin of 31.45% in TTM, indicating robust profitability. However, the revenue growth rate has declined by 1.16% in the TTM period, which is a concern. The EBIT and EBITDA margins are healthy at 40.16% and 50.32% respectively, reflecting efficient operations. The gross profit margin has decreased over time, suggesting increased cost pressures.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.32 in TTM, indicating a balanced approach to leveraging. Return on equity is reasonable at 7.06%, but there is room for improvement. The equity ratio stands at 20.00%, showing a stable capital structure, though slightly lower than previous years.

Cash Flow

Free cash flow growth has declined by 19.2% in TTM, which is concerning. However, the free cash flow to net income ratio remains strong at 98.18%, indicating efficient cash generation relative to net income. The operating cash flow to net income ratio is low, suggesting potential liquidity management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.72B	1.74B	1.56B	1.20B	1.15B	1.24B
Gross Profit	1.20B	1.14B	1.05B	1.11B	1.10B	1.10B
EBITDA	839.96M	647.39M	565.42M	694.47M	689.30M	676.43M
Net Income	533.01M	479.39M	419.32M	524.52M	519.30M	528.90M
Balance Sheet
Total Assets	38.33B	39.57B	38.55B	37.69B	37.83B	34.06B
Cash, Cash Equivalents and Short-Term Investments	2.10B	12.95B	896.74M	880.33M	3.06B	1.99B
Total Debt	2.59B	3.42B	4.03B	4.13B	448.10M	389.58M
Total Liabilities	30.67B	32.13B	31.47B	30.99B	31.41B	27.93B
Stockholders Equity	7.66B	7.44B	7.08B	6.70B	6.43B	6.13B
Cash Flow
Free Cash Flow	260.50M	451.55M	612.20M	464.11M	675.71M	560.18M
Operating Cash Flow	265.33M	472.69M	646.36M	506.53M	694.73M	582.32M
Investing Cash Flow	1.38B	1.98B	1.09B	-1.96B	-2.72B	-1.27B
Financing Cash Flow	-2.09B	-940.22M	-1.71B	-666.75M	3.23B	1.46B

Prosperity Bancshares Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 69.71
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PB, the sentiment is Neutral. The current price of 69.71 is below the 20-day moving average (MA) of 71.45, below the 50-day MA of 70.50, and above the 200-day MA of 67.89, indicating a neutral trend. The MACD of -0.22 indicates Positive momentum. The RSI at 46.06 is Neutral, neither overbought nor oversold. The STOCH value of 35.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PB.

Prosperity Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BOKF	72 Outperform	$8.22B	14.08	9.13%	1.93%	-2.81%	14.96%
CADE	71 Outperform	$7.69B	14.87	9.22%	2.52%	14.58%	-19.97%
HOMB	71 Outperform	$5.67B	12.01	11.20%	2.85%	1.43%	19.58%
OZK	70 Outperform	$5.39B	7.70	12.09%	3.68%	2.79%	2.11%
PB	68 Neutral	$6.56B	12.07	7.09%	3.31%	0.55%	19.13%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Prosperity Bancshares Corporate Events

Prosperity Bancshares completes Texas Partners Bank acquisition

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 merger agreement, Prosperity issued 4,095,397 shares of its common stock to former Southwest shareholders and award holders, cementing its expansion in Central Texas. The deal brings Texas Partners’ 11 banking offices in San Antonio, Austin and the Hill Country under Prosperity’s umbrella, with those locations retaining the Texas Partners Bank name until operational integration scheduled for November 2026, when customers are expected to gain access to all Prosperity Bank branches. Leadership continuity is being preserved, with Texas Partners executives, including Interim CEO Brent Given and COO Tom Moreno, taking senior roles at Prosperity Bank and Southwest’s interim CEO Gene Dawson, Jr. joining the Prosperity Bank board, signaling a strategic push to deepen Prosperity’s footprint and relationships in the fast-growing San Antonio and Central Texas markets.

The most recent analyst rating on (PB) stock is a Sell with a $68.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.

Prosperity Bancshares Announces Merger Agreement With Stellar Bancorp

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, with Prosperity and Prosperity Bank remaining as the surviving entities. Under the terms of the all-stock-and-cash transaction, each outstanding share of Stellar common stock will be converted at closing into 0.3803 shares of Prosperity common stock plus $11.36 in cash, with associated treatment for Stellar stock options, restricted stock and performance unit awards, and the combined company’s governance will expand to include two Stellar-appointed directors on both the Prosperity Bancshares and Prosperity Bank boards. The deal, unanimously approved by both companies’ boards and supported by voting agreements from Stellar directors holding about 8.8% of Stellar’s shares, is subject to customary shareholder, regulatory and listing approvals, tax opinions and closing conditions, includes a $78 million termination fee payable by Stellar under specified circumstances, and is reinforced by post-closing director support agreements that restrict certain competitive and solicitation activities for two years, underscoring Prosperity’s strategic move to consolidate its regional banking footprint and integrate Stellar’s operations and customer base.

The most recent analyst rating on (PB) stock is a Hold with a $74.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.

Prosperity Bancshares to Acquire Stellar Bancorp in Merger

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, based on Prosperity’s January 27, 2026 closing share price. Stellar, which operates 52 banking offices in the greater Houston, Beaumont and Dallas markets and reported $10.807 billion in assets at year-end 2025, will be merged into Prosperity, followed by the combination of Stellar Bank into Prosperity Bank, with key Stellar executives, including CEO Robert R. Franklin Jr. and President Ramon Vitulli, assuming senior leadership and board roles in the combined organization. The deal, unanimously approved by both boards and expected to close in the second quarter of 2026 subject to regulatory and shareholder approvals, will significantly expand Prosperity’s presence in Houston and other Texas markets and create the second-largest Texas-headquartered bank by deposits, enhancing its scale, franchise strength and competitive positioning in a fast-growing regional economy while preserving a community banking focus for customers and local stakeholders.

The most recent analyst rating on (PB) stock is a Buy with a $81.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.

Prosperity Bancshares Completes Acquisition of American Bank

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 Prosperity Bank taking effect on January 1, 2026. Prosperity issued 4,439,981 shares of its common stock to former American shareholders and award holders, added key American Bank executives to senior leadership roles and its bank board, and retained American Bank’s management in leadership positions, while American’s 18 banking offices and two loan production offices in South and Central Texas will continue to operate under the American Bank name until operational integration slated for September 2026, bolstering Prosperity’s presence in markets including Corpus Christi, San Antonio, Austin and Houston and deepening its South Texas franchise.

The most recent analyst rating on (PB) stock is a Hold with a $83.00 price target. To see the full list of analyst forecasts on Prosperity Bancshares stock, see the PB Stock Forecast page.