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PB Q1 earnings beat estimates, driven by higher NII, fee income and no credit loss provisions.
Prosperity Bancshares saw revenues jump 19.9% y/y, aided by loan and deposit growth plus acquisitions.
PB faced rising expenses from merger costs, while capital ratios and profitability metrics declined.
Prosperity Bancshares, Inc.’s (PB - Free Report) first-quarter 2026 adjusted earnings of $1.50 per share surpassed the Zacks Consensus Estimate of $1.41. The bottom line compared favorably with earnings of $1.37 in the prior-year quarter.
In the reported quarter, Prosperity Bancshares completed the acquisitions of American Bank Holding and Southwest Bancshares. Also, it announced a deal to acquire Stellar Bancorp and its subsidiary for $2 billion.
Results benefited from an increase in net interest income (NII) and non-interest income, alongside nil provisions. Higher loans and deposit balances were other positives. However, an increase in expenses due to the merger-related charges hurt the results to some extent.
Results in the reported quarter excluded merger-related expenses of $42.5 million. Including those, net income available to common shareholders was $116.3 million or $1.16 per share compared with $130.2 million or $1.37 per share in the year-ago quarter. Our estimate for net income was $115.1 million.
PB’s Revenues Improve, Expenses Rise
Total revenues were $367.6 million, up 19.9% year over year. The top line surpassed the Zacks Consensus Estimate of $352.9 million.
NII rose 21% year over year to $321.2 million. Also, the net interest margin (NIM), on a tax-equivalent basis, expanded 37 basis points to 3.51%. Our estimates for NII and NIM were pegged at $295.6 million and 3.36%, respectively.
Non-interest income totaled $46.5 million, up 12.5% year over year. The rise was driven by an increase in all fee-based revenue components, except for other non-interest income. Our estimate for the metric was pegged at $54.4 million.
Non-interest expenses were $217.3 million, up 54.9% year over year. The rise was primarily due to merger-related expenses incurred in the reported quarter. Our estimate for non-interest expenses was $202.7 million.
The efficiency ratio improved to 59.16% from 45.71% in the prior-year quarter.
PB’s Balance Sheet Strong, Capital & Profitability Ratios Weaken
As of March 31, 2026, total assets were $43.6 billion, up 13.4% from the previous quarter. Total loans were $25.3 billion, up 16% sequentially. Deposits increased 14.6% sequentially to $32.6 billion. Our estimates for total loans and total deposits were $25.3 billion and $32.8 billion, respectively.
As of March 31, 2026, the common equity tier 1 ratio was 15.44%, down from 16.92% in the year-ago quarter. The total risk-based capital ratio declined to 16.69% from 18.17% in the prior-year quarter. The equity-to-assets ratio was 18.82%, down from 19.39% as of March 31, 2025.
At the end of the first quarter, return on average assets was 1.10%, down from 1.34% in the prior-year quarter. The return on average common equity was 5.70%, down from 6.94% in the prior-year quarter.
PB’s Credit Quality: A Mixed Bag
As of March 31, 2026, non-performing assets were $122.1 million, up 50% from the year-ago period. Net charge-offs were $41.3 million, up significantly from $2.7 million in the same quarter of 2025.
The company reported no provision for credit losses during the reported quarter, consistent with the year-ago period. The ratio of allowance for credit losses on loans was $1.52% of the total loans, down from 1.59% a year earlier.
Prosperity Bancshares’s Share Repurchase Update
In the reported quarter, the company repurchased 0.837 million shares at an average price of $68.15 under its ongoing 2026 stock buyback program.
Our Take on PB
Prosperity Bancshares’ inorganic expansion initiatives (including the pending Stellar Bancorp deal) will likely keep aiding robust top-line growth in the near term. The company’s favorable deposit mix and efforts to improve fee income are other positives. However, rising expenses might hurt the bottom line to some extent.
Prosperity Bancshares, Inc. Price, Consensus and EPS Surprise
BOK Financial Corporation's (BOKF - Free Report) first-quarter 2026 earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.30. The bottom line jumped 38.7% from the prior-year quarter.
BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans was another positive. However, the rise in operating expenses was the undermining factor.
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2026 earnings of 70 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line compared favorably with 59 cents in the prior-year quarter.
ASB’s results reflected higher NII and non-interest income. A rise in loans and deposit balances, and lower provisions acted as tailwinds. However, higher expenses were an undermining factor.
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PB Q1 Earnings Beat Estimates, Revenues & Expenses Rise Y/Y
Key Takeaways
Prosperity Bancshares, Inc.’s (PB - Free Report) first-quarter 2026 adjusted earnings of $1.50 per share surpassed the Zacks Consensus Estimate of $1.41. The bottom line compared favorably with earnings of $1.37 in the prior-year quarter.
In the reported quarter, Prosperity Bancshares completed the acquisitions of American Bank Holding and Southwest Bancshares. Also, it announced a deal to acquire Stellar Bancorp and its subsidiary for $2 billion.
Results benefited from an increase in net interest income (NII) and non-interest income, alongside nil provisions. Higher loans and deposit balances were other positives. However, an increase in expenses due to the merger-related charges hurt the results to some extent.
Results in the reported quarter excluded merger-related expenses of $42.5 million. Including those, net income available to common shareholders was $116.3 million or $1.16 per share compared with $130.2 million or $1.37 per share in the year-ago quarter. Our estimate for net income was $115.1 million.
PB’s Revenues Improve, Expenses Rise
Total revenues were $367.6 million, up 19.9% year over year. The top line surpassed the Zacks Consensus Estimate of $352.9 million.
NII rose 21% year over year to $321.2 million. Also, the net interest margin (NIM), on a tax-equivalent basis, expanded 37 basis points to 3.51%. Our estimates for NII and NIM were pegged at $295.6 million and 3.36%, respectively.
Non-interest income totaled $46.5 million, up 12.5% year over year. The rise was driven by an increase in all fee-based revenue components, except for other non-interest income. Our estimate for the metric was pegged at $54.4 million.
Non-interest expenses were $217.3 million, up 54.9% year over year. The rise was primarily due to merger-related expenses incurred in the reported quarter. Our estimate for non-interest expenses was $202.7 million.
The efficiency ratio improved to 59.16% from 45.71% in the prior-year quarter.
PB’s Balance Sheet Strong, Capital & Profitability Ratios Weaken
As of March 31, 2026, total assets were $43.6 billion, up 13.4% from the previous quarter. Total loans were $25.3 billion, up 16% sequentially. Deposits increased 14.6% sequentially to $32.6 billion. Our estimates for total loans and total deposits were $25.3 billion and $32.8 billion, respectively.
As of March 31, 2026, the common equity tier 1 ratio was 15.44%, down from 16.92% in the year-ago quarter. The total risk-based capital ratio declined to 16.69% from 18.17% in the prior-year quarter. The equity-to-assets ratio was 18.82%, down from 19.39% as of March 31, 2025.
At the end of the first quarter, return on average assets was 1.10%, down from 1.34% in the prior-year quarter. The return on average common equity was 5.70%, down from 6.94% in the prior-year quarter.
PB’s Credit Quality: A Mixed Bag
As of March 31, 2026, non-performing assets were $122.1 million, up 50% from the year-ago period. Net charge-offs were $41.3 million, up significantly from $2.7 million in the same quarter of 2025.
The company reported no provision for credit losses during the reported quarter, consistent with the year-ago period. The ratio of allowance for credit losses on loans was $1.52% of the total loans, down from 1.59% a year earlier.
Prosperity Bancshares’s Share Repurchase Update
In the reported quarter, the company repurchased 0.837 million shares at an average price of $68.15 under its ongoing 2026 stock buyback program.
Our Take on PB
Prosperity Bancshares’ inorganic expansion initiatives (including the pending Stellar Bancorp deal) will likely keep aiding robust top-line growth in the near term. The company’s favorable deposit mix and efforts to improve fee income are other positives. However, rising expenses might hurt the bottom line to some extent.
Prosperity Bancshares, Inc. Price, Consensus and EPS Surprise
Prosperity Bancshares, Inc. price-consensus-eps-surprise-chart | Prosperity Bancshares, Inc. Quote
Currently, Prosperity Bancshares carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of PB’s Peer Banks
BOK Financial Corporation's (BOKF - Free Report) first-quarter 2026 earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.30. The bottom line jumped 38.7% from the prior-year quarter.
BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans was another positive. However, the rise in operating expenses was the undermining factor.
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2026 earnings of 70 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line compared favorably with 59 cents in the prior-year quarter.
ASB’s results reflected higher NII and non-interest income. A rise in loans and deposit balances, and lower provisions acted as tailwinds. However, higher expenses were an undermining factor.