📜 What This Document Is

This is a registration statement (Form S-4) and proxy statement/prospectus filed with the SEC. It's the official document explaining the proposed merger between Stellar Bancorp (STEL) and Prosperity Bancshares (PB). Stellar shareholders need this to vote on the deal. Think of it as the merger's instruction manual and voting ballot combined.

🏢 The Companies Involved

Prosperity Bancshares (PB): The surviving company. A large Texas-based bank holding company with $38.46 billion in assets, $28.48 billion in deposits, and 312 banking locations across Texas and Oklahoma as of early 2026. They recently acquired American Bank and Southwest Bancshares. Trades on NYSE under "PB".
Stellar Bancorp (STEL): The company being acquired. A smaller Texas bank holding company with $10.81 billion in assets, $9.02 billion in deposits, and 52 banking centers (mostly Houston/Beaumont). Trades on NYSE under "STEL". 👉 In simple terms: Prosperity (the bigger bank) is buying Stellar (the smaller bank) to create an even larger banking presence in Texas.

💰 The Deal: What Stellar Shareholders Get

For each share of Stellar common stock (STEL) you own, you will receive:

$11.36 in CASH
0.3803 shares of Prosperity common stock (PB)

👉 Why it matters: This is a "mixed" deal – part cash, part stock. The total value depends on Prosperity's stock price when the deal closes.

Example Value (Jan 27, 2026): Based on PB's closing price of $72.90 that day, each STEL share was worth about $39.08 ($11.36 cash + $27.72 in PB stock).
Aggregate Deal Value: Approximately $2.0 Billion based on the Jan 27th price.
No Fractional Shares: You'll get cash instead of a tiny piece of a PB share.

🗳️ The Special Meeting & Your Vote

What: Stellar is holding a special shareholder meeting to vote on the merger.
Your Vote is CRITICAL: The merger needs approval from holders of at least two-thirds (66.7%) of Stellar's outstanding shares.
Recommendation: The Stellar Board of Directors unanimously recommends voting "FOR" the merger.
If you don't vote: It counts the same as voting "AGAINST" the merger.
Record Date: You must be a Stellar shareholder on the date set by the board (TBD in doc) to vote.
Dissenters' Rights: If you oppose the merger, you have the right under Texas law to demand cash payment for the "fair value" of your shares (determined by a court), but you must follow strict procedures.

⚖️ Key Conditions & Timing

Expected Closing: Second Quarter (Q2) 2026.
Must Happen First:
1. Shareholder Approval: Stellar shareholders must vote "FOR" the merger (needs 2/3 vote).
2. Regulatory Approvals: Needs clearance from the Federal Reserve (waiver obtained), FDIC, and Texas Dept. of Banking (still pending).
Other Conditions: Standard stuff like no legal blocks, Prosperity stock being listed on NYSE, and accurate information from both companies.

💸 What Happens to Stellar Executives & Equity Awards

Executive Interests: Stellar execs have deals (like jobs at Prosperity, severance rights) that differ from regular shareholders. The Board considered this.
Stock Options: "In-the-money" options (strike price < merger value) become a cash payout. "Underwater" options (strike price > merger value) get canceled worthlessly.
Restricted Stock & Performance Awards: These will vest and convert into the merger consideration (cash + PB stock).

📊 Financial & Tax Impact

Prosperity Post-Deal: Existing PB shares remain outstanding. Former STEL shareholders will own about [X]% of the combined company (exact % TBD), current PB shareholders will own about [Y]%.
Taxes: The deal is designed to be a tax-free reorganization for U.S. federal income tax purposes for the stock part. You'll generally only owe tax on the gain realized, limited to the amount of cash you receive (excluding cash for fractional shares). Consult your own tax advisor!
Dividends: PB pays regular dividends. Both companies will coordinate to ensure Stellar shareholders don't miss or double up on dividends related to the merger timing.

⚠️ Key Risks & What Could Go Wrong

Deal Not Approved: If Stellar shareholders don't vote "FOR" it, the merger dies.
Regulators Say No: If key regulators block the deal.
Stock Price Fluctuation: The value of the PB stock portion will change between now and closing.
Termination Fee: If the deal falls apart under certain circumstances (like Stellar getting a better offer), Stellar might owe Prosperity a $78 Million fee.
Integration Challenges: Combining two banks is complex and carries operational risk.

📞 Contact Information

Prosperity Investor Relations:
Prosperity Bank Plaza, 4295 San Felipe, Houston, TX 77027
(281) 269-7199
Stellar Shareholder Inquiries / Proxy Solicitor (Georgeson LLC):
Toll-Free: (877) 811-4522 | Non-Toll-Free: (267) 281-9853
Or contact Stellar directly: Stellar Bancorp, Inc.
Attn: Investor Relations
9 Greenway Plaza, Suite 110, Houston, TX 77476
[email protected] | (713) 210-7600

🧠 The Analogy

Imagine two neighboring restaurants merging. Stellar (the smaller cafe) is closing its doors. Its customers (shareholders) get a cash payout ($11.36) and a gift card (0.3803 shares) for the larger Prosperity restaurant chain. They become partial owners of the bigger combined business. They must all vote yes for the plan to happen.

🧩 Final Takeaway

Stellar Bancorp is being acquired by Prosperity Bancshares. If you own Stellar (STEL) stock, you MUST vote. Each share gets $11.36 cash + 0.3803 shares of Prosperity (PB) stock. The Stellar Board strongly recommends voting "FOR". The deal needs a 2/3 shareholder vote and regulatory approval to close around Q2 2026.

PROSPERITY BANCSHARES INC — S-4 Filing