Prosperity Bancshares Inc

Hilltop Holdings reported a 5.6% year-over-year increase in net interest income to $227.9 million for the first half of 2026, driven by strength in its banking segment and lower funding costs. In the second quarter alone, NII rose 4.7% year over year and 3.4% sequentially to $115.9 million, with the consolidated net interest margin expanding to 3.21% from 3.13% in the prior quarter. Net loans held for investment grew to $8.6 billion as of June 30, up 8% year over year and 3% sequentially, prompting management to raise its 2026 average loan growth expectation to 5-7% from 4-6%. However, management expects NIM to remain around current levels or decline modestly in the second half, with NII likely staying relatively stable, suggesting the pace of growth may moderate. Among peers, Cullen/Frost Bankers saw NII rise 4.8% to $886.3 million in the first half, while Prosperity Bancshares recorded a 22.2% increase to $651.7 million, aided by acquisitions and margin expansion.

Prosperity Bancshares reported higher second-quarter and year-to-date earnings in late July 2026, alongside continued modest net charge-offs. The company completed a US$70.75 million share repurchase program and affirmed a US$0.60 quarterly dividend payable on October 1, 2026. Management also confirmed it is actively seeking further acquisitions, reinforcing the bank's acquisition-driven growth strategy while highlighting integration risks from three banks currently being absorbed.

Shares of several regional banks climbed after softer-than-expected inflation data cooled expectations for further Federal Reserve interest rate hikes. A June CPI of 3.5% and lower-than-expected producer prices bolstered investor confidence that inflationary pressures may be easing, reducing the likelihood of aggressive monetary tightening. Strong second-quarter earnings from major financial institutions also supported the sector, showing stabilized net interest income and contained credit-loss provisions. The State Street S&P Regional Banking ETF, which tracks the broader regional banking sector, has been trading near its 2026 highs. Among individual movers, Prosperity Bancshares rose 2.7%, Peoples Bancorp gained 3.3%, National Bank Holdings advanced 3.1%, Live Oak Bancshares jumped 3.3%, and Glacier Bancorp added 2.8%.

Prosperity Bancshares has completed its merger with Stellar Bancorp, effective July 1, 2026. Under the terms, Prosperity issued 0.3803 shares of its common stock and paid $11.36 in cash for each outstanding share of Stellar common stock. Stellar’s CEO Robert R. Franklin, Jr. joins Prosperity as Vice Chairman, while Stellar’s President Ramon Vitulli becomes Houston Area Chairman of Prosperity Bank. Stellar operates 52 banking offices in Texas, which will continue under the Stellar Bank name until operational integration scheduled for March 2027. As of June 30, 2026, Prosperity operates 311 full-service banking locations across Texas and Oklahoma.