Announcement • Jul 01

Prosperity Bancshares, Inc. (NYSE:PB) completed the acquisition of Stellar Bancorp, Inc. (NYSE:STEL).

Prosperity Bancshares, Inc. (NYSE:PB) entered into a definitive merger agreement to acquire Stellar Bancorp, Inc. (NYSE:STEL) for approximately $2 billion on January 27, 2026. As a part of consideration, Prosperity will issue 0.3803 shares and $11.36 in cash for each outstanding share of Stellar common stock. The purchase price is a mix of 70% stock and 30% cash. Prosperity Bancshares, Inc will hold 84% and Stellar Bancorp, Inc will hold 16%. Immediately following the Merger, Stellar’s wholly owned banking subsidiary, Stellar Bank, will merge with and into Prosperity’s wholly owned banking subsidiary, Prosperity Bank. In case of termination $78 million will be payable by Stellar Bancorp, Inc. In the merger, Stellar will merge with and into Prosperity, with Prosperity continuing as the surviving corporation. After completion of the merger, Stellar will cease to exist and Prosperity will remain a publicly traded company. In addition, immediately following the completion of the merger, Stellar Bank, a Texas banking association and a wholly owned subsidiary of Stellar, will merge (the “bank merger”) with and into Prosperity Bank, a Texas banking association and a wholly owned subsidiary of Prosperity, with Prosperity Bank as the surviving bank. Following the merger, shares of Prosperity common stock will continue to be traded on the NYSE under the trading symbol “PB.” Robert R. Franklin, Jr., Stellar's Chief Executive Officer and Stellar Bank's Executive Chairman will join Prosperity Bank as Vice Chairman and Ramon Vitulli, Stellar's President and Stellar Bank's Chief Executive Officer, will join Prosperity Bank as Houston Area Chairman. In addition, upon completion of the merger, Franklin and one additional member of the Stellar Board of Directors will join the Board of Directors of Prosperity, and Vitulli and Pat Parsons, a director of Stellar Bank, will join the Board of Directors of Prosperity Bank. The merger has been unanimously approved by the Boards of Directors of both companies and is expected to close during the second quarter of 2026, subject to the receipt of required regulatory approvals, approval by Stellar's shareholders, listing approval, effectiveness of registration statement, HSR act approval and the satisfaction of other customary closing conditions. Transaction is expected to be 9.2% EPS accretive and 7.8% TBV dilutive. Prosperity filed with the Securities and Exchange Commission (the “SEC”) on April 3, 2026, a registration statement on Form S-4, File No. 333-294882, as amended on April 17, 2026, and which was declared effective by the SEC on April 21, 2026. As of April 22, 2026, Prosperity has received all necessary regulatory approvals for the acquisition of Stellar and Stellar Bank, and the transaction is expected to be completed on or about July 1, 2026, subject to approval by Stellar shareholders and the satisfaction or waiver of other customary closing conditions set for in the Merger Agreement. As of May 27, 2026, shareholders of Stellar Bancorp, Inc. approved the merger transaction. Keefe, Bruyette & Woods, Inc. acted as financial advisor and fairness opinion provider to Stellar Bancorp, Inc will receive a fee of 1.2% of merger consideration, $2 million of which is payable towards opinion rendered. Mike Keeley, Blake Redwine, Evan Hardee, Alex Clark, Todd Schroeder of Norton Rose Fulbright US LLP acted as legal advisor for Stellar Bancorp, Inc. Matthew T. Carpenter and Edward D. Herlihy of Wachtell, Lipton, Rosen & Katz LLP acted as legal advisor for Prosperity Bancshares, Inc. Georgeson LLC acted as proxy solicitor to Stellar Bancorp, Inc and will receive a fee of $0.021 million. Computershare Trust Company, Inc acted as transfer agent to Prosperity Bancshares, Inc. Prosperity Bancshares, Inc. (NYSE:PB) completed the acquisition of Stellar Bancorp, Inc. (NYSE:STEL) on July 1, 2026. On June 30, 2026, Stellar notified the New York Stock Exchange of the consummation of the Merger and requested that the NYSE (i) suspend trading of Stellar Common Stock prior to the opening of trading on July 1, 2026, (ii) withdraw Stellar Common Stock from listing on the NYSE prior to the opening of trading on July 1, 2026, and (iii) file with the Securities and Exchange Commission notifications of delisting of Stellar Common Stock on Form 25 and deregistration under Section 12(b) of the Securities Exchange Act of 1934, as amended. As a result, Stellar Common Stock will no longer be listed on the NYSE.

Stellar Bancorp, Inc. Stock Price

STEL Share Price Performance

STEL Community Narratives

Digital Disruption And Rising Costs Will Erode Banking Margins

Competitive Loan Growth And Funding Pressures Will Constrain Long Term Performance

Relationship Banking And Low Cost Deposits Will Drive A Stronger Long Term Franchise

Digital Disruption And Rising Costs Will Erode Banking Margins

Relationship Banking And Low Cost Deposits Will Drive A Stronger Long Term Franchise

Competitive Loan Growth And Funding Pressures Will Constrain Long Term Performance

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STEL: Fair Outlook Will Balance Merger Vote And Future P E Assumptions

Relationship Banking And Low Cost Deposits Will Drive A Stronger Long Term Franchise

Competitive Loan Growth And Funding Pressures Will Constrain Long Term Performance

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Prosperity Bancshares, Inc. (NYSE:PB) completed the acquisition of Stellar Bancorp, Inc. (NYSE:STEL).

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