Business Context and Reporting Period
Company: Prosperity Bancshares, Inc. (Prosperity)
Filing Type: Form 8-K (Current Report)
Date of Report: July 1, 2026
Event: Completion of the acquisition of Stellar Bancorp, Inc. (Stellar) and the subsequent merger of Stellar Bank into Prosperity Bank.
Key Financial Metrics and Transaction Details
- Total Consideration: Approximately $590 million in cash and 19 million shares of Prosperity Common Stock.
- Exchange Ratio: 0.3803 shares of Prosperity Common Stock per share of Stellar Common Stock.
- Cash Consideration: $11.36 per share of Stellar Common Stock.
- Debt Assumption: Prosperity assumed approximately $2.17 billion in obligations issued by the Federal Home Loan Bank of Dallas to Stellar Bank.
- Executive Compensation (Robert R. Franklin, Jr.):
- Annual Base Salary: $1,120,187.
- Target Annual Bonus: 175% of base salary.
- Signing Bonus: $3,000,000.
- Restricted Stock Award: 25,000 shares of Prosperity Common Stock.
Material Changes
The primary material change is the consolidation of Stellar Bancorp, Inc. into Prosperity Bancshares, Inc. Effective July 1, 2026:
- Stellar merged with and into Prosperity, with Prosperity as the surviving corporation.
- Stellar Bank merged with and into Prosperity Bank, with Prosperity Bank as the surviving bank.
- Stellar stock options and restricted stock awards were converted into cash or Prosperity stock based on the Merger Consideration Value.
- The Board of Directors expanded from 14 to 16 members, adding two former Stellar directors.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the successful closing of the previously announced merger. No specific forward-looking financial guidance or revenue projections are included in this 8-K.
Risks and Contingencies:
- Financial Statement Timing: Required financial statements of the acquired business and pro forma financial information are not included in this filing. They will be filed via amendment within 71 calendar days of the report date.
- Executive Retention: The employment agreement for the new Vice Chairman includes significant severance provisions, including lump-sum payments and immediate vesting of equity in the event of termination without cause.
Investor Verification Checklist
- Verify the final pro forma financial impact of the $2.17 billion debt assumption and $590 million cash outlay once the amendment is filed (within 71 days).
- Review the full text of the Merger Agreement (Exhibit 2.1) for details on contingent liabilities or earn-outs not summarized here.
- Monitor the integration progress of Stellar Bank into Prosperity Bank, specifically regarding branch consolidation and system migrations.
- Confirm the dilution impact of the 19 million new shares issued to Stellar shareholders on existing Prosperity shareholders.