Prosperity Bancshares Inc PB
New risk paragraphs, branching off last year
Each branch is a paragraph in Risk Factors with nothing like it in the 10-K filed Feb 27, 2025. A box jumps to the paragraph as filed, below.
Paragraphs with nothing like them in last year's 10-K
4 paragraphs in Risk Factors of the 10-K filed Feb 26, 2026 with nothing like them in the 10-K filed Feb 27, 2025. Quoted exactly. Paragraphs that were only edited are under 10-K change.
The Company’s success depends primarily on the general economic conditions of the primary markets in Texas and Oklahoma in which it operates and where its loans are concentrated. The local economic conditions in Texas and Oklahoma have a significant impact on the Company’s commercial, real estate and construction, land development and other land loans; the ability of its borrowers
The Company is subject to risks related to the pending acquisition of Stellar and the recent acquisitions of American and Southwest.
The Company recently completed the acquisitions of American and Southwest and the acquisition of Stellar is pending. The completed and pending acquisitions involve strategic and operational risks and uncertainties, including the risk that the Stellar acquisition will not close; the diversion of management's time on issues related to the acquisitions and integration rather than ongoing business concerns; unexpected transaction costs, including the costs of integrating operations; the risk that the businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies; the risk of deposit and customer attrition; regulatory enforcement and litigation risk; unexpected operating and other costs; the risk of customer and employee loss and business disruptions and increased
The Dodd-Frank Act, enacted in July 2010, instituted major changes to the banking and financial institutions regulatory regimes in light of the performance of and government intervention in the financial services sector during the several years prior to the
Paragraphs in the 10-Q filed Nov 9, 2026 that were not in the one before
New in the latest 10-Q
20 paragraphs in the 10-Q filed Nov 9, 2026 with nothing like them in the 10-Q filed Aug 6, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
Financial statements and notes
credit loss expense. Accordingly, the initial estimate of expected credit losses recognized in the allowance for credit losses on loans will include both PCD loans and PSLs.
Read in the 10-Q
9. BORROWINGS AND SUBORDINATED DEBT The following table presents the Company’s borrowings and subordinated debt as of the dates indicated: September 30, 2026 December 31, 2025 ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── (Dollars in thousands) FHLB advances $ 2,400,000 $ 1,950,000 Securities sold under repurchase agreements 204,761 201,216 Subordinated notes (1) 61,000 - Junior subordinated debentures 11,341 - Total $ 2,677,102 $ 2,151,216 (1) Includes a $9.0 million elimination related to the Company’s portion of investment in American and Southwest subordinated notes which were acquired in the Stellar Merger.
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The initial and subsequent changes in the fair value of IRLCs and the forward sales of mortgage-backed securities are recorded in mortgage income. These gains and losses were not attributable to instrument-specific credit risk. For interest rate swaps and caps, because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts substantially offset each other and do not have a material impact on its results of operations. Income (loss) for the three and nine months ended September 30, 2026, and 2025 was as follows: Three Months Ended September 30, Nine Months Ended September 30, Derivatives not designated as hedging instruments 2026 2025 2026 2025 ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── (Dollars in thousands) Interest rate lock commitments $ (114) $ (110) $ (118) $ 55 Forward mortgage-backed securities trades 348 (26) 485 (233)
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Acquisitions are an integral part of the Company’s growth strategy. All acquisitions were accounted for using the acquisition method of accounting. Accordingly, the assets and liabilities of the acquired entities were recorded at their fair values at the acquisition date. The excess of the purchase price over the estimated fair value of the net assets for tax-free acquisitions was recorded as goodwill, none of which is deductible for tax purposes. The excess of the purchase price over the estimated fair value of the net assets for taxable acquisitions was also recorded as goodwill, and is deductible for tax purposes. The identified core deposit intangibles for each acquisition are being amortized using a non-pro rata basis over an estimated life of 10 to 15 years. The results of operations for each acquisition have been included in the Company’s consolidated financial results beginning on the respective acquisition date.
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The measurement period for the Company to determine the fair values of acquired identifiable assets and assumed liabilities will end at the earlier of (1) twelve months from the date of the acquisition or (2) as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable.
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Show the other 15
the subsequent fair value adjustments that have not yet been finalized. Additionally, the Company recognized $33.8 million of core deposit intangibles as of September 30, 2026. Acquisition of Stellar Bancorp, Inc. On July 1, 2026, the Company completed the Stellar Merger. Stellar Bank operated 52 banking offices including its main office in Houston and banking offices in the Houston, Beaumont and East Texas areas and in Dallas, Texas. Pursuant to the terms of the definitive agreement, Bancshares issued 19,371,499 shares of its common stock and paid approximately $578.7 million in cash for all outstanding shares of Stellar common stock. The acquisition of Stellar constituted a business combination in accordance with FASB ASC Topic 805, Business Combinations. The assets acquired and liabilities assumed were recorded on the consolidated balance sheet at estimated fair value on the acquisition date. The determination of fair value requires management to make estimates related to discount rates, expected future cash flows, market conditions and other future events that are highly subjective in nature and subject to change. The purchase consideration allocation is considered preliminary as certain estimates related to the assets acquired and liabilities assumed are subject to continuing refinement. Valuations subject to refinement during the measurement period include, but are not limited to, loans, certain other assets, and the core deposit intangible asset. As of September 30, 2026, the following table provides the allocation of the purchase consideration to the assets acquired and liabilities assumed on the acquisition date (dollars in thousands). Fair value of purchase consideration Common stock issued (19,371,499 shares) $1,414,701 Cash 578,697 Total consideration $1,993,398 Fair value of assets acquired Cash and due from banks $681,652 Available for sale securities, at fair value 1,320,682 Loans held for investment, net 7,265,750 Bank premises and equipment, net 84,198 Other real estate owned 12,550 Core deposit intangibles 183,992 Federal Home Loan Bank and Federal Reserve Bank stock 98,939 Bank owned life insurance and other assets 237,559 Total assets acquired 9,885,322 Fair value of liabilities assumed Deposits 8,721,475 Other liabilities 57,310 Junior subordinated debentures 11,341 Total liabilities assumed 8,790,126 Fair value of net assets acquired $1,095,196 Goodwill resulting from acquisition $898,202 As of September 30, 2026, the Company recognized goodwill of $898.2 million which does not include all the subsequent fair value adjustments that have not yet been finalized. Goodwill represents the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair value of liabilities assumed. The goodwill is not deductible for tax purposes. Additionally, as of September 30, 2026, total core deposit intangibles related to the Stellar Merger were $184.0 million.
Read in the 10-Q
The Company incurred $67.2 million and $67.6 million of pre-tax merger related expenses during the three and nine months ended September 30, 2026, respectively, related to the Stellar Merger. The Company did not incur merger-related expenses during 2025 related to the Stellar Merger. The merger related expenses are reflected on the Company’s income statement for the applicable periods under “Merger related expenses” and consist of salaries and benefits, data processing and professional and legal fees.
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The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above.
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Cash and due from banks - The carrying amount of these items is a reasonable estimate of their fair value based on the short-term nature of these assets.
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Available for sale securities, at fair value - Fair values for securities were based on quoted market prices or recent transactions, where available.
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Loans held for investment, net - Fair values for loans held for investment were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans and leases were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans were based on current market rates for new originations of comparable loans and include adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance on the date of acquisition using the same methodology as other loans held-for-investment. In addition, the Company adopted ASU 2025-08 in the first quarter of 2026. Accordingly, the initial estimate of expected credit losses recognized in the allowance included both PCD and non-PCD loans which were deemed PSLs.
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Unpaid Principal Balance Premium / (Discount) Loans Allowance for Loan Losses Net Loans
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Bank premises and equipment, net - The fair values of premises are based on a market approach by obtaining third-party appraisals and broker opinions of value for land, office and branch space.
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Core deposit intangible - The core deposit intangible represents the low cost of funding acquired core deposits provide relative to the Company’s marginal cost of funds. The fair value was estimated based on a cost savings methodology that gave consideration to expected customer attrition rates, net maintenance cost of the deposit base, interest costs associated with customer deposits, and the alternative cost of funds. The estimated fair value was grossed-up for the expected tax amortization benefit. The intangible asset is being amortized over 10 years using an accelerated method, based upon the period over which estimated economic benefits are estimated to be received.
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Deposits - The fair values used for demand, savings and money market deposits are equal to the amount payable on demand at the acquisition date. The fair value of time deposits is estimated by discounting the estimated future cash flows using current rates offered for deposits with similar remaining maturities.
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Junior subordinated debentures - The fair value of junior subordinated debentures is estimated by discounting the estimated future cash flows by using comparable corporate bond indices and swap rates from the financial services sector and factoring in the applicable credit spreads and optional early redemption provisions.
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Operations of Stellar have been included in the consolidated financial statements since July 1, 2026. The amount of revenue (net interest income plus non-interest income) derived from Stellar since the acquisition date included in the consolidated income statement for the three and nine months ended September 30, 2026 was approximately $88.5 million.
Read in the 10-Q
The following unaudited pro forma information presents the results of operations for the three and nine months ended September 30, 2026 and 2025 as if the Stellar Merger had occurred on January 1, 2025. The pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the merged companies that would have been achieved had the Stellar Merger occurred on January 1, 2025, nor are they intended to represent or be indicative of future results of operations. The pro forma results do not include expected operating cost savings as a result of the acquisition. These pro forma results require significant estimates and judgments particularly as they relate to valuation and accretion of income associated with acquired loans. The pro forma combined results for the three and nine months ended September 30, 2026 include merger related expenses for the Stellar Merger of $67.2 million and $67.6 million, respectively. Pro forma adjustments principally included reversing interest income as previously recorded by Stellar and recording interest income based on impact of estimated fair values of the acquired interest-earning assets and assumed interest-bearing liabilities and reversing core deposit intangible amortization as previously recorded by Stellar and recording amortization expense as it relates to the core deposit intangible recognized from the Stellar Merger. Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── (Dollars in thousands) Net interest income $ 433,986 $ 377,591 $ 1,290,760 $ 1,122,350 Net income 134,725 165,139 469,566 494,199
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Includes a $9.0 million elimination related to the Company’s portion of investment in American and Southwest subordinated notes which were acquired in the Stellar Merger.
Read in the 10-Q
be subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers.
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The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Nov 9, 2026 against Item 1A of the 10-K filed Feb 26, 2026.
A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed.
Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed,
Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal
(cut words struck through, new words highlighted).
Text on the page, not a score; each links to the filing at sec.gov.
What the 10-Q itself says about its risk factors:There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Read in the 10-Q
1 paragraph in the 10-Q's Item 1A, and none of them adds, rewords or quietly edits a paragraph of the 10-K's.
Phrases used for the first time
Two-word phrases in Risk Factors of the 10-K filed Feb 26, 2026 that are in none of the 1 earlier 10-Ks stored, back to Feb 27, 2025
Where each one is used
- security incidents: The Company relies heavily on communications and information systems to conduct its business and store sensitive data, including those maintained with the Company’s service providers and vendors. Any failure, interruption or compromise in security of these systems, whether caused by physical damage, internal or...
- pending acquisition: The Company is subject to risks related to the pending acquisition of Stellar and the recent acquisitions of American and Southwest.
Used at least twice, small words left out. Counted, not picked: a phrase can be new because the company renamed something.
Sources
Item 1A of each 10-K and 10-Q on EDGAR, quoted exactly. Each paragraph links to the filing at sec.gov.
Also
10-K change: what was reworded or cut, section by section.
Work with it
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