Prosperity Bancshares Reports $130.2 Million Net Income for Q1 2025

Prosperity Bancshares, Inc. reported a net income of $130.2 million for the first quarter of 2025, translating to earnings of $1.37 per diluted share, compared to $110.4 million or $1.18 per diluted share in the same period of 2024. This increase in profitability was primarily driven by a rise in net interest income, which reached $265.4 million, an 11.4% increase from $238.2 million year-over-year. The company's net interest margin improved to 3.14%, up from 2.79% in the prior year, reflecting higher average balances and rates on loans, despite a decrease in average balances on investment securities.

Total assets for Prosperity Bancshares decreased to $38.76 billion as of March 31, 2025, down from $39.57 billion at the end of 2024. The decline was attributed to a reduction in total loans, which fell to $21.98 billion from $22.15 billion, and total deposits, which decreased to $28.03 billion from $28.38 billion. The company’s total shareholders’ equity, however, increased to $7.52 billion, up from $7.44 billion, primarily due to retained earnings from the current quarter's net income.

In terms of operational developments, Prosperity Bancshares completed the merger with Lone Star State Bancshares, Inc. on April 1, 2024, which contributed to the increase in net interest income. The merger added five full-service banking locations in West Texas, enhancing the company's geographic footprint. As of March 31, 2025, the company operated 284 banking locations across Texas and Oklahoma, with a focus on maintaining efficient operations and pursuing further growth opportunities.

The company’s allowance for credit losses on loans stood at $349.1 million, representing 1.59% of total loans, a slight decrease from $351.8 million or 1.59% at the end of 2024. Net charge-offs for the quarter were $2.7 million, compared to $2.1 million in the same period last year. The nonperforming assets remained stable at $81.4 million, accounting for 0.37% of total loans and other real estate, indicating consistent asset quality management.

Looking ahead, Prosperity Bancshares aims to continue its growth strategy through internal expansion and potential acquisitions while managing market risks, particularly interest rate fluctuations. The company remains committed to maintaining strong capital ratios, with its Common Equity Tier 1 capital ratio at 16.92%, significantly above the regulatory minimum, positioning it well for future opportunities and challenges in the banking sector.