Prosperity Bancshares, Inc. reported net income of $141.5 million for the third quarter ended September 30, 2026, compared to $137.6 million in the same period of 2025. Diluted earnings per share (EPS) were $1.18 for the quarter, a decrease from $1.45 in the prior year. The company noted that the current quarter results were impacted by increased merger-related expenses, higher noninterest expenses, and a $5.0 million out-of-state tax settlement, which resulted in an effective tax rate of 24.4%.
Excluding merger expenses, the tax settlement, and a net gain on the exchange of Visa Class B-2 stock, net income was $200.8 million, with diluted EPS of $1.67. The annualized return on average assets was 1.06%. The company’s net interest margin on a tax equivalent basis increased 26 basis points from the second quarter of 2026 to 3.73%.
Prosperity completed the merger of Stellar Bancorp, Inc. into the company on July 1, 2026. The company reported that total assets reached $54.1 billion as of September 30, 2026, an increase of $15.8 billion or 41.1% compared to the prior year. Loans grew to $32.1 billion, a $10.0 billion increase, while deposits increased to $41.2 billion, a $13.4 billion rise. Nonperforming assets remained low at 0.41% of average interest-earning assets.
The Board of Directors approved an increase in the fourth quarter 2026 dividend to $0.64 per share, up from $0.60 per share. This represents a 6.67% increase and marks the 23rd consecutive annual dividend increase for the company. During the third quarter, the company repurchased 457,000 shares of common stock and 1.5 million shares in 2026.
