Prosperity Bancshares, Inc.

Second-quarter 2026 adjusted net income was $162 million, or $1.62 per diluted share, compared with $135 million, or $1.42 per diluted share, in the same period of 2025. That implies year-over-year increases of 20.4% in net income and 14.1% in diluted EPS. Net interest income before provision for credit losses was $330.6 million, up from $207.7 million a year ago, and tax-equivalent NIM was 3.47% versus 3.18% in Q2 2025 and 3.51% in Q1 2026. Loans were $25 billion at June 30, 2026, up $2.8 billion or 12.8% year over year, and deposits were $32.6 billion, up $5.1 billion or 18.7% year over year. Noninterest income was $60.7 million, noninterest expense was $176.2 million, NPAs were $130 million, and the ACL on loans and off-balance-sheet credit exposure was $420 million. For Q3 2026, management guided to noninterest expense of $244 million to $250 million and fair value loan income of $6 million to $8 million; it also said NIM guidance remains roughly 3.70% exiting 2026 and 3.80%-3.85% in 2027.

David Zalman’s tone was upbeat and confident, especially about the Stellar merger closing on July 1 and the broader franchise expansion. He emphasized that the company is focused on integrating American Bank, Texas Partners Bank, and Stellar Bank, while still pursuing organic growth and future M&A. He repeatedly framed the bank as more focused on profitability than on forcing loan growth, arguing that current pricing in parts of the market does not justify taking on risk for thin spreads.

Asylbek Osmonov highlighted stronger core revenue and improving profitability metrics, with net interest income before provision at $330.6 million and NIM at 3.47%. He said noninterest income was $60.7 million, including an $8.2 million Visa-related gain, while noninterest expense was $176.2 million; for Q3, he expects expenses of $244 million to $250 million, excluding one-time Stellar merger costs. He also noted fair value loan income of $4 million in Q2, expects $6 million to $8 million in Q3, and described Stellar as contributing $42.1 million of pretax pre-provision core income before one-time items.

Analysts focused on whether management still sees the path to 3.70% NIM exiting 2026 and 3.80%-plus in 2027, and management said the guidance is still intact, though a higher money-market rate could temper margin a bit. They also pressed on loan growth, with management saying companywide growth should be relatively flat for the rest of the year, aside from Stellar’s pipeline and construction loans that may not fund until 2027. Other questions centered on deposit growth, securities deployment, returns on tangible capital, and buybacks; management said buybacks were muted in Q2 because of blackout periods and that it would repurchase shares when opportunities arise.