For the year ended December 31, 2025, we had net income of $543 million, compared with $480 million for the same period in 2024, an increase of $63 million or 13.2%. Our net income per diluted common share was $5.72 for the year ending December 31, 2025, compared with $5.05 for the same period in 2024, an increase of 13.3%. The net income was $139.9 million for three months, ending December 31, 2025, compared with $130 million for the same period in 2024, an increase of $9.8 million or 7.6%. Our annualized return on average assets and average tangible common equity for the three months ending December 31, 2025, were 1.49% on assets and 13.61% on tangible equity.

As mentioned, since 2024, we expected our net interest margin to increase, and it has. Our overall loans have been impacted by efforts to outsource some less desired loans acquired in previous transactions also. Deposits, as mentioned in our last quarter, we expected deposits to increase due to seasonality, but the increase exceeded our expectations. Deposits were $28.4 billion at December 31, 2025, an increase of $700 million from $27.7 billion at September 30, 2025.

For 27 years, we have remained disciplined and focused on the same strategy, delivering shareholder value by prioritizing low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A. In addition to this first quarter guidance, we will also have about $30 million-$33 million in one-time merger-related charges for those two acquisitions. Our non-performing assets at quarter end, December 31, 2025, totaled $150,842,000, or 69 basis points of loans and other real estate, compared to $119,563,000, or 54 basis points at September 30, 2025. Just curious what's driving that difference and your confidence in that level of earnings coming over from Stellar.

What went well
  • Fourth-quarter net income was $139.9 million, up 7.6% year over year, and full-year 2025 net income reached $543 million, up 13.2% from $480 million, with full-year diluted EPS of $5.72 versus $5.05 (+13.3%).
  • Net interest margin climbed to 3.30% on a tax-equivalent basis, up 25 bps year over year, and the efficiency ratio improved to 43.7% (43.6% excluding gains and losses).
  • Annualized return on average assets was 1.49% and return on average tangible common equity 13.61%, and deposits grew $700 million to $28.4 billion, exceeding seasonal expectations.
  • The company announced the acquisition of Stellar Bancorp, lifting its combined Houston deposit rank from #9 to #5 and making it the largest Texas-based bank in Houston and second-largest by deposits statewide; it also completed the American Bank merger on January 1, 2026 and received approvals for Southwest Bancshares (effective February 1, 2026).
  • Prosperity repurchased approximately $157 million (about 2.34 million shares at a weighted-average price of $67.04) under its 2025 buyback program.
What went wrong
  • Non-performing assets rose to $150 million (69 bps of loans and other real estate) from $119 million, driven by two middle-market lending group loans and one well-collateralized acquired real estate loan.
  • Loans excluding warehouse purchase-program loans declined $249 million to $20.5 billion as management declined to match aggressive out-of-state terms and continued to outsource less-desired acquired loans.
  • Management guided first-quarter 2026 non-interest expense up to $172-$176 million (reflecting the American and Texas Partners acquisitions) plus roughly $30-$33 million of one-time merger-related charges.

More on Prosperity Bancshares Inc

Reported 2026-01-28 · figures from the Prosperity Bancshares Inc Q4 2025 earnings call.

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