PROSPERITY BANCSHARES, INC.® ANNOUNCES STOCK REPURCHASE PROGRAM

Rhea-AI Summary

Prosperity Bancshares (NYSE: PB) has announced a significant stock repurchase program authorized by its Board of Directors. The program allows the company to repurchase up to 5% of its outstanding common stock, approximately 4.8 million shares, over a one-year period ending January 21, 2026.

The repurchases can be executed through open market transactions and may include trading plans under Rule 10b5-1. The program's implementation will depend on various factors including price, market conditions, and corporate requirements. The company maintains flexibility to suspend, modify, or terminate the program without prior notice.

Prosperity Bancshares, a $40.115 billion Texas-based financial holding company, operates 285 full-service banking locations across Texas and Oklahoma, providing personal banking services, investments, and financial solutions to consumers and small to medium-sized businesses.

Positive

• Authorization to repurchase 5% of outstanding shares (4.8 million shares)
• Strong financial position with $40.115 billion in assets
• Extensive network of 285 banking locations across Texas and Oklahoma

Negative

• No guarantee on the exact number of shares to be repurchased
• Program can be suspended or terminated at any time

Insights

Financial Analyst

Prosperity Bancshares' newly announced 5% share repurchase program represents approximately $380 million in potential share buybacks based on the current market capitalization of $7.61 billion. This strategic move comes at an interesting time for regional banks, as the sector navigates through a complex interest rate environment.

The program's structure offers notable flexibility - management can execute purchases opportunistically over a full year through January 2026, allowing them to capitalize on market volatility or stock price dislocations. This discretionary approach is particularly valuable given the current banking sector dynamics, where stock valuations have been pressured by interest rate uncertainty and regional banking concerns.

From a capital management perspective, this buyback indicates strong confidence in Prosperity's financial position. With $40.1 billion in assets, the bank maintains substantial scale in its Texas and Oklahoma markets. The repurchase program, while meaningful, appears conservatively sized to maintain robust capital ratios - a important consideration for regional banks under current regulatory scrutiny.

For investors, this program could provide a floor for the stock price while improving key per-share metrics. Assuming full execution, the 5% reduction in share count would mechanically enhance EPS and book value per share, potentially supporting higher valuation multiples. However, the bank's explicit statement about program flexibility and lack of obligation to complete the full amount suggests a prudent approach to capital return that prioritizes balance sheet strength.

HOUSTON, Jan. 21, 2025 /PRNewswire/ -- Prosperity Bancshares, Inc.^® (the "Company") (NYSE: PB), the parent company of Prosperity Bank^®, today announced that its Board of Directors authorized a stock repurchase program under which the Company may repurchase up to 5%, or approximately 4.8 million shares, of its outstanding common stock over a one-year period expiring on January 21, 2026, at the discretion of management.

Repurchases under this program may be made from time to time in open market transactions, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Repurchases under this program also may be made in transactions outside the safe harbor provided by Rule 10b-18 during a pending merger, acquisition or similar transaction.  The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities.  Any repurchased shares will be held by the Company as authorized but unissued shares.

The repurchase program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to the exact number of shares that will be repurchased by the Company.  The Company may suspend, modify or terminate the program at any time and for any reason, without prior notice. 

Prosperity Bancshares, Inc.^®

As of September 30, 2024, Prosperity Bancshares, Inc.^® is a $40.115 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and small to medium sized businesses throughout Texas and Oklahoma.  Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses, and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and cash management.

Prosperity currently operates 285 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 62 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 46 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area, 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

Cautionary Notes on Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as "aim," "anticipate," "estimate," "expect," "goal," "guidance," "intend," "is anticipated," "is expected," "is intended," "objective," "plan," "projected," "projection," "will affect," "will be," "will continue," "will decrease," "will grow," "will impact," "will increase," "will incur," "will reduce," "will remain," "will result," "would be," variations of such words or phrases (including where the word "could," "may," or "would" is used rather than the word "will" in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of any acquisition transaction, and statements about the assumptions underlying any such statement. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors; changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; and weather. These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2023 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission ("SEC"). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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SOURCE Prosperity Bancshares, Inc.

FAQ

How many shares can Prosperity Bancshares (PB) repurchase under the new program?

Prosperity Bancshares can repurchase up to 5% of its outstanding common stock, approximately 4.8 million shares.

What is the duration of PB's 2025 stock repurchase program?

The stock repurchase program runs for one year, expiring on January 21, 2026.

What factors will determine PB's share repurchase timing and volume?

The timing and volume will depend on factors including price, corporate and regulatory requirements, market conditions, and corporate liquidity requirements and priorities.

How many banking locations does Prosperity Bancshares (PB) operate as of 2024?

Prosperity Bancshares operates 285 full-service banking locations across Texas and Oklahoma.

What is Prosperity Bancshares' (PB) total asset value as of September 2024?

Prosperity Bancshares has total assets of $40.115 billion as of September 30, 2024.