Houston-based Prosperity Bancshares will acquire Stellar Bank, also based in the city, in a deal worth roughly $2 billion, the banks announced Wednesday.
The transaction, expected to close in the second quarter of 2026, is Prosperity’s third announced acquisition since July – and by far the largest.
The Houston bank said in July it would buy fellow Texas lender American Bank for $321.5 million; that deal closed Jan. 1 with conversion expected by September. Prosperity then announced last October that it would acquire San Antonio-based Southwest Bancshares for $268.9 million. That deal is expected to close Feb. 1 after gaining Southwest shareholder approval last week.
Buying Stellar would give Prosperity 52 added locations in greater Houston, Beaumont and the Dallas-Fort Worth area, the banks said Wednesday. It would also push Prosperity to the brink of $50 billion in assets. Stellar counted $10.8 billion in assets as of Dec. 31, along with $9 billion in deposits and $7.3 billion in loans. Prosperity touts $38.5 billion in assets.
The combination would create the second-largest Texas-headquartered bank by deposits, with more than 330 locations, Prosperity CEO David Zalman said Wednesday.
“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,” Zalman said in a statement. “Together, our increased scale better positions us to invest in future opportunities and serve our customers.”
Under the deal, Stellar investors will receive $11.36 in cash and 0.3803 shares of Prosperity for each Stellar share they own. The deal’s $2 billion value stems from Prosperity's closing stock price of $72.90 per share as of Tuesday.
Bob Franklin, executive chair of Stellar Bank and CEO of the lender’s holding company, will join the board of Prosperity’s holding company and become a vice chairman at the bank.
"By joining forces, we are creating one of the strongest Texas banking franchises, supported by an exceptional deposit base and a shared commitment to relationship‑driven community banking,” Franklin said in a statement Wednesday. “This combination enhances our ability to serve customers with greater scale, expanded capabilities, and the financial strength needed to meet the evolving needs of a growing Texas economy."
Ramon Vitulli, Stellar Bank’s CEO, will become Prosperity Bank’s Houston area chairman. Other members of Stellar Bank’s management team will continue in their leadership roles, Prosperity said.
“Together with Prosperity, we look forward to building an even more competitive and resilient financial institution for the future," Franklin added.
The Prosperity-Stellar deal marks 2026’s first multibillion-dollar combination in the banking sphere and cements Texas’ status as a hot spot for mergers and acquisitions. A November analysis by S&P Global cited Texas as the most targeted state for M&A in banking, with 20 institutions in potential buyers’ cross-hairs.
More than 300 banks are headquartered in the Lone Star State. Two of last year’s four richest deals were takeovers of Texas-based lenders: Fifth Third’s $10.9 billion purchase of Dallas-based Comerica and Huntington’s $7.4 billion acquisition of Houston-based Cadence.
