Jan 28 (Reuters) – Prosperity Bancshares will buy rival Stellar Bancorp in a $2 billion cash-and-stock deal, the banks said on Wednesday, creating a mega Texas-focused lender and highlighting rapid consolidation among U.S. regional lenders.
Dealmaking activity between U.S. banks in 2025 hit the highest levels in four years as boardrooms looked to strengthen balance sheets and also take advantage of easier regulations.
Prosperity has offered 0.3803 of its shares and $11.36 in cash for each Stellar share held. The deal values Stellar at $39.08 per share, implying a 19.8% premium to the stock’s last close.
Shares of Stellar jumped 11.8% in premarket trading, while Prosperity slipped 6%.
The deal beefs up Prosperity’s presence in greater Houston, Beaumont and Dallas and creates the second largest Texas-headquartered bank by deposits with over 330 banking centers, the companies said.
“This is a rare opportunity to significantly enhance our presence in the Houston area, a market with a diverse economy that is continually attracting investment and has a growing population,” Prosperity CEO David Zalman said.
Prosperity, which had $38.5 billion in assets as of December 31, in recent months had struck deals to buy smaller Texas rivals American Bank and Southwest Bancshares.
Stellar had $10.8 billion in assets as of the end of 2025. Its CEO Robert Franklin will join Prosperity as vice chairman.
The transaction is expected to close in the second quarter.
Keefe, Bruyette & Woods advised Stellar on the deal.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila)
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