Prosperity Bancshares (PB) completes cash-and-stock Stellar Bancorp deal
Rhea-AI Filing Summary
Prosperity Bancshares, Inc. completed its previously announced acquisition of Stellar Bancorp, Inc. on July 1, 2026. Each Stellar share was converted into 0.3803 Prosperity common shares plus $11.36 in cash, with cash paid in lieu of fractional shares.
Total consideration for the transaction was approximately $590 million in cash and 19 million Prosperity shares, and Prosperity assumed about $2.17 billion in Federal Home Loan Bank of Dallas obligations issued to Stellar Bank. Stellar’s bank subsidiary was merged into Prosperity Bank, and Stellar’s leadership received key roles and board seats in the combined organization.
Positive
- None.
Negative
- None.
Insights
Prosperity closes a sizable cash-and-stock bank acquisition and adds Stellar leadership.
Prosperity Bancshares has closed its merger with Stellar Bancorp, paying approximately $590 million in cash and issuing 19 million shares. Each Stellar share receives 0.3803 Prosperity shares plus $11.36 cash, combining two Texas-focused franchises under Prosperity Bank.
Prosperity also assumed roughly $2.17 billion of Federal Home Loan Bank of Dallas obligations, adding to wholesale funding that must be managed alongside the enlarged balance sheet. The deal expands branch presence across major Texas markets while integrating Stellar’s operations on a timeline that extends to March 2027.
Leadership continuity is supported by bringing former Stellar executives into senior roles and board positions, including a three-year Vice Chairman role for Robert R. Franklin, Jr. Future company filings may show how the integration of Stellar affects asset growth, funding costs, and profitability over time.
8-K Event Classification
Key Figures
Key Terms
Exchange Ratio financial
restricted stock financial
Federal Home Loan Bank of Dallas financial
forward-looking statements regulatory
Private Securities Litigation Reform Act of 1995 regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
Effective July 1, 2026 (the “Closing Date”), Prosperity Bancshares, Inc. (“Prosperity” or the “Company”) completed its previously announced acquisition of Stellar Bancorp, Inc., a Texas corporation (“Stellar”), pursuant to the Agreement and Plan of Merger, dated as of January 27, 2026 (the “Merger Agreement”), by and between Prosperity and Stellar.
Pursuant to the Merger Agreement, Stellar merged with and into Prosperity (the “Merger”), with Prosperity continuing as the surviving corporation in the Merger. Immediately following the Merger, Stellar Bank, a Texas banking association and wholly owned subsidiary of Stellar, merged with and into Prosperity Bank, a Texas banking association and wholly owned subsidiary of Prosperity (the “Bank Merger” and together with the Merger, the “Transactions”), with Prosperity Bank continuing as the surviving bank in the Bank Merger.
Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of Stellar (“Stellar Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares held by Prosperity or Stellar, was converted into the right to receive (i) 0.3803 shares of common stock (the “Exchange Ratio”), par value $1.00 per share, of Prosperity (“Prosperity Common Stock”), (ii) an amount in cash equal to $11.36 (the “Per Share Cash Consideration”) ((i) and (ii) together, the “Per Share Merger Consideration”) and (iii) cash in lieu of fractional shares.
Pursuant to the Merger Agreement, at the Effective Time:
| • | Stellar Stock Options. Each Stellar stock option with a per-share exercise price that was less than the Per Share Merger Consideration Value was cancelled and the holder of such cancelled stock option received (without interest) an amount in cash equal to the product of (A) the excess of the Per Share Merger Consideration Value over the stock option’s per-share exercise price, multiplied by (B) the number of shares of Stellar Common Stock subject to such stock option immediately prior to the Effective Time. Any Stellar stock option with a per-share exercise price that was equal to or greater than the Per Share Merger Consideration Value was cancelled for no consideration in respect thereof. “Per Share Merger Consideration Value” means the sum of (1) the Per Share Cash Consideration plus (2) the product of (x) the Exchange Ratio multiplied by (y) $71.44, which equaled the average closing sale price of Prosperity Common Stock for the 10 consecutive full trading days ending on and including the fifth trading day immediately preceding the Closing Date. |
| • | Stellar Restricted Stock Awards. Each outstanding restricted stock award in respect of Stellar Common Stock subject solely to service-based vesting, repurchase or other lapse restriction fully vested and was converted into the right to receive (without interest) the Per Share Merger Consideration. |
| • | Stellar Performance Unit Awards. Each outstanding restricted unit award in respect of Stellar Common Stock subject to performance-based vesting (each, a “performance unit award”) fully vested and was converted into the right to receive (without interest) a cash payment equal to the product of (a) the Per Share Merger Consideration Value multiplied by (b) the number of shares of Stellar Common Stock subject to such performance unit award, with applicable performance deemed achieved at 100% of the target level (or, in the case of the performance unit awards granted in 2024, 200% of the target level). |
The foregoing description of the Transactions and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 and incorporated herein by reference.
The total aggregate consideration payable in the Transaction was approximately $590 million in cash and 19 million shares of Prosperity Common Stock. The issuance of shares of Prosperity Common Stock in connection with the Transaction was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-4, as amended (File No. 333-294882), filed by Prosperity with the Securities and Exchange Commission (the “Commission”), which was declared effective on April 21, 2026 (the “Registration Statement”). The proxy statement/prospectus included in the Registration Statement contains additional information about the Merger Agreement and the transactions contemplated thereby.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
In connection with the Transactions, on the Closing Date, Prosperity assumed Stellar’s obligations with respect to approximately $2.17 billion in obligations issued by the Federal Home Loan Bank of Dallas to Stellar Bank.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Directors to the Boards of Directors of Prosperity
In accordance with the terms of the Merger Agreement, as of the Effective Time, the size of the board of directors of the Company (the “Board”) was increased to consist of a total of 16 directors, including the 14 directors of the Company as of immediately prior to the Effective Time and two former directors of Stellar. The two former directors of Stellar appointed by the Board, in each case effective as of the Effective Time, were Robert R. Franklin, Jr. and Joseph B. Swinbank. Mr. Franklin was appointed to serve as a Class I director and Mr. Swinbank was appointed to serve as a Class III director, each with a term expiring at the Company’s next annual meeting of shareholders.
Appointment of Vice Chairman to Prosperity and Prosperity Bank
Effective as of the Effective Time, Mr. Franklin was appointed to the position of Vice Chairman of Prosperity and Prosperity Bank. Mr. Franklin, 71, served as Executive Chairman and director of Stellar Bank and Chief Executive Officer and director of Stellar from 2022 until the Effective Time. Mr. Franklin also served as Chairman, President and Chief Executive Officer of CBTX, Inc. from 2013 until 2022. Mr. Franklin graduated from the University of Texas at Austin in 1977 with a B.B.A. in Finance.
On June 9, 2026, Prosperity entered into an Amended and Restated Employment Agreement with Mr. Franklin (the “Franklin Agreement”). Pursuant to the Franklin Agreement, Mr. Franklin will serve on the Board of Prosperity and as Vice Chairman of Prosperity Bank for a three-year term commencing at the Effective Time (the “Term”). During the Term, Mr. Franklin will receive an annual base salary of $1,120,187 and will be eligible to receive an annual bonus with a target opportunity equal to 175% of his base salary. Mr. Franklin will also be eligible to participate in Prosperity equity and/or other long-term compensation plans.
Shortly following the Effective Time, Prosperity will grant to Mr. Franklin an award of restricted stock consisting of 25,000 shares of Prosperity common stock (the “RSA Award”). The RSA Award will vest on third anniversary of the date of grant, subject to Mr. Franklin’s continued employment through such date, except as otherwise described below. In addition, Mr. Franklin will receive a signing bonus of $3,000,000, less applicable withholdings, payable on Prosperity Bank’s first regular payroll date following the Effective Time.
In the event of Mr. Franklin’s termination of employment without cause (other than due to death or disability) during the Term, and subject to his execution and non-revocation of a general release of claims and continued compliance with certain restrictive covenants, including confidentiality, noncompetition and nonsolicitation covenants, Mr. Franklin will be entitled to receive (i) a lump sum cash payment equal to his base salary for the remainder of the Term and (ii) immediate full vesting of the RSA Award. In addition, the RSA Award will fully vest upon Mr. Franklin’s earlier death.
The foregoing description of the Franklin Agreement is qualified in its entirety by reference to the Franklin Agreement, which is included as Exhibit 10.1 hereto and is incorporated herein by reference.
Other than as described in this Item 5.02, there are no other arrangements or understandings between Mr. Franklin or Mr. Swinbank, on the one hand, and the Company, on the other hand, or any other person pursuant to which Mr. Franklin or Mr. Swinbank was appointed as a director of the Company or related party transactions between Mr.
3
Franklin or Mr. Swinbank, on the one hand, and the Company, on the other hand, that are required to be disclosed under Item 404(a) of Regulation S-K. Non-employee members of the Board will be compensated for such service as described in the proxy statement filed by Prosperity in connection with its 2026 annual meeting of shareholders on March 16, 2026 and in any information that Prosperity files with the Commission that updates or supersedes that information.
| Item 8.01 | Other Events. |
On July 1, 2026, Prosperity issued a press release announcing the completion of the Transactions, a copy of which is filed as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial statements of businesses acquired.
The financial information required by this Item 9.01(a) of Form 8-K will be filed by an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K was required to be filed.
(b) Pro forma financial information.
The pro forma financial information required by this Item 9.01(b) of Form 8-K will be filed by an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K was required to be filed.
(d) Exhibits.
| Exhibit No. |
Description | |
| 2.1 | Agreement and Plan of Merger, dated as of January 27, 2026, by and between Prosperity Bancshares, Inc. and Stellar Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 29, 2026) | |
| 10.1 | Amended and Restated Employment Agreement, dated as of June 9, 2026, by and among Prosperity Bank, Stellar Bank and Robert Franklin, Jr. | |
| 99.1 | Press Release, dated July 1, 2026 | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL document) | |
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PROSPERITY BANCSHARES, INC. | ||
| By: | /s/ Charlotte M. Rasche | |
| Charlotte M. Rasche | ||
| Executive Vice President and General Counsel | ||
Dated: July 1, 2026
5
Exhibit 99.1
|
PRESS RELEASE |
For more information contact: | |
| Prosperity Bancshares, Inc.® | Cullen Zalman | |
| Prosperity Bank Plaza | Executive Vice President – Banking and Corporate Activities | |
| 4295 San Felipe | 281.269.7199 | |
| Houston, Texas 77027 | cullen.zalman@prosperitybankusa.com | |
PROSPERITY BANCSHARES, INC.®
COMPLETES MERGER WITH
STELLAR BANCORP, INC.
FOR IMMEDIATE RELEASE
HOUSTON, July 1, 2026. Prosperity Bancshares, Inc.® (“Prosperity”) (NYSE: PB), the parent company of Prosperity Bank®, today announced the completion of the merger of Stellar Bancorp, Inc. (“Stellar”) with and into Prosperity and the merger of Stellar’s wholly owned subsidiary, Stellar Bank, headquartered in Houston, Texas, with and into Prosperity Bank, all effective on July 1, 2026.
Under the terms and subject to the conditions of the merger agreement between Prosperity and Stellar, Prosperity issued 0.3803 shares of Prosperity common stock and paid $11.36 in cash for each outstanding share of Stellar common stock.
Robert R. Franklin, Jr., Stellar’s Chief Executive Officer and Stellar Bank’s Executive Chairman, joined Prosperity and Prosperity Bank as Vice Chairman, and Ramon Vitulli, Stellar’s President and Stellar Bank’s Chief Executive Officer, joined Prosperity Bank as Houston Area Chairman. Additional members of Stellar Bank management will maintain leadership roles in the combined organization.
In addition, Mr. Franklin and Joe B. Swinbank, a director of Stellar, have joined the Board of Directors of Prosperity, and Mr. Vitulli and Pat Parsons, a director of Stellar Bank, have joined the Board of Directors of Prosperity Bank.
Stellar operates fifty-two (52) banking offices including its main office in Houston and banking offices in the Houston, Beaumont and East Texas areas and in Dallas, Texas. Stellar banking locations will continue to operate under the Stellar Bank name until the operational integration, which is scheduled for March 2027. At that time, Stellar customers may begin using any of Prosperity Bank’s full service banking centers.
Page 1
About Prosperity Bancshares, Inc. ®
As of March 31, 2026, Prosperity Bancshares, Inc.® is a $43.619 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.
As of June 30, 2026, Prosperity operates 311 full-service banking locations: 62 in the Houston area, including The Woodlands; 36 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 21 in the East Texas area; 28 in the Central Texas area including Austin and San Antonio; 45 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; 8 in the Tulsa, Oklahoma area; and 18 in the Central, South Texas and San Antonio areas currently doing business as American Bank; and 11 in the San Antonio area doing business as Texas Partners Bank.
Cautionary Notes on Forward-Looking Statements
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may,” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity’s possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity’s future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity’s loan portfolio and allowance for loan losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity’s future operations, future or proposed acquisitions, including the integration of Stellar, the future or expected effect of acquisitions on Prosperity’s operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of transactions, and statements about the assumptions underlying any such statement. These forward-looking statements are not guarantees of future performance and are based on expectations and assumptions Prosperity currently believes to be valid. Because forward-looking statements relate to future results and occurrences, many of which are outside of Prosperity’s
Page 2
control, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. These risks and uncertainties include, but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks, including Stellar; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, including Stellar, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of Stellar or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity’s securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and weather. Prosperity disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. These and various other factors are discussed in Prosperity’s Annual Report on Form 10-K for the year ended December 31, 2025, and other reports and statements Prosperity has filed with the Securities and Exchange Commission (“SEC”). Copies of the SEC filings for Prosperity may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.
Page 3