Prosperity Bancshares Inc 2026 Q2 Earnings Call

Review the key takeaways and the transcript of this earnings call.

PeriodQ2 2026

Key takeaways

Prosperity Bancshares completed mergers with American Bank Holding Corporation on January 1, 2026, and Southwest Bancshares Inc. on February 1, 2026, and announced a merger with Stellar Bancorp expected to complete on July 1, 2026.
Net income for the quarter ending March 31, 2026, was $116 million, down from $130 million in the same period in 2025; net income per diluted common share was $1.16 compared to $1.37 in 2025.
Including $42.5 million merger-related expenses, net income was $149.9 million and net income per diluted common share was $1.50, a 9.5% increase over the prior year.
Loans increased 15.1% year over year to $25.2 billion, primarily due to mergers; excluding mergers and net charge-offs, total loans decreased 1.2%.
Deposits grew 16.4% year over year to $32.6 billion, driven mainly by mergers; core deposits increased 1.2%.
Net interest margin on a tax-equivalent basis was 3.51% for Q1 2026, up from 3.3% in Q4 2025.
Non-performing assets decreased to $122 million or 33 basis points of average interest-earning assets as of March 31, 2026, from $150 million or 46 basis points at December 31, 2025.
Allowance for credit losses increased to $421 million, with $90 million attributable to mergers.
Net charge-offs were $41 million, the largest in the bank's history, primarily due to two unique credits.
Non-interest expense rose to $217.3 million in Q1 2026, mainly due to merger expenses and acquisitions.
Prosperity completed a core system conversion in February 2026.
The company repurchased approximately 837,000 shares at an average price of $68.15, totaling $57 million during Q1 2026.

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