Prosperity Bancshares Inc. reported third‑quarter 2025 results showing net income of $137.6 million, up 8.2% from $127.3 million in the same quarter a year earlier, and earnings per share of $1.45, compared with $1.34 in Q3 2024.
Revenue rose 3.9% year‑over‑year to $314.7 million, driven by growth in the bank’s loan and deposit portfolios. Deposits increased by $308.7 million during the quarter, while loans excluding warehouse purchase program loans fell by $160 million from Q2 2025 to Q3 2025, reflecting a competitive lending environment and a shift away from low‑down‑payment programs.
The net interest margin on a tax‑equivalent basis expanded to 3.24% in Q3 2025 from 2.95% in Q3 2024, supported by higher average loan balances and favorable repricing of balance‑sheet assets. Management noted that the margin outlook remains positive over the next 24 to 36 months, even with interest‑rate fluctuations.
Nonperforming assets increased to $119 million, or 36 basis points of quarterly average earning assets, up from $110 million (33 basis points) in Q2 2025. Approximately $57 million of these NPAs are tied to single‑family loans originated under prior low‑down‑payment programs that have since been discontinued. Net charge‑offs rose to $6.5 million in Q3 2025 from $3.0 million in Q2 2025.
The board approved a fourth‑quarter 2025 dividend of $0.60 per share, marking the 22nd consecutive annual increase and a compound annual growth rate of 10.7% from 2003 to 2025. The company also authorized opportunistic share repurchases and indicated an intent to resume aggressive buybacks.
Prosperity Bancshares is pursuing strategic growth through mergers, having signed a definitive agreement with Southwest Bancshares Inc. and a pending merger with American Bank Holding Corporation, valued at approximately $321.5 million based on the July 16, 2025 closing price. These deals are expected to expand operations in Texas, particularly in San Antonio, Central Texas, and Corpus Christi.
Management projected that Q4 loan balances would be roughly flat, with low‑single‑digit organic loan growth expected for 2026, while continuing to monitor asset quality and margin expansion.
The results reaffirm Prosperity Bancshares’ trajectory of solid profitability and provide investors with the latest data on the bank’s financial health and growth prospects.
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