Prosperity Bancshares to acquire Southwest Bancshares

Prosperity Bancshares (PB) and Southwest Bancshares jointly announced the signing of a definitive merger agreement whereby Prosperity will acquire Southwest and Texas Partners. Texas Partners operates 11 banking offices in Central Texas including its main office in San Antonio, and banking offices in the San Antonio area, Austin and the Hill Country. As of June 30, Southwest, on a consolidated basis, reported total assets of $2.4B, total loans of $1.9B and total deposits of $2.1B. Under the terms and subject to the conditions of the definitive agreement, Prosperity will issue 4,062,520 shares of Prosperity common stock for all outstanding shares of Southwest common stock and restricted stock awards, subject to certain potential adjustments. Southwest warrants and in-the-money Southwest stock options that are outstanding at the closing will be converted into cash payments based on the value of the merger consideration, as calculated pursuant to the terms of the merger agreement. Based on Prosperity’s closing price of $65.97 on September 29, the total consideration was valued at approximately $268.9M. Brent Given, Texas Partners interim chairman, president and CEO, will join Prosperity Bank as San Antonio Area chairman, and Tom Moreno, Texas Partners COO, will have a senior management position in Prosperity Bank’s operations. Additional members of Texas Partners management will maintain leadership roles in the combined organization. In addition, upon completion of the merger, Gene Dawson, Jr., interim chairman, president and CEO of Southwest, 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 first quarter of 2026. The transaction is subject to certain conditions, including approval by Southwest’s shareholders and customary regulatory approvals.