Prosperity & Stellar: Seriously?

So, Prosperity Bancshares is buying Stellar Bancorp. Another bank deal. Honestly, it’s like they’re just collecting them now. Like baseball cards, but with more paperwork. Fifty-four billion dollars in assets, they say. Big whoop. It’s just numbers. And mostly other people’s money, let’s be real.

They’re paying two billion dollars for this thing, a mix of cash and stock. Seventy percent stock. Stock! Like that’s a solid commitment. It’s Monopoly money with extra steps. And Stellar shareholders are thrilled, naturally. Up twelve percent. Because getting pieces of paper that might be worth something later is apparently a cause for celebration. It’s… illogical.

Two Stellar board members are getting seats at the Prosperity table. Like that’s going to solve anything. More meetings. More people talking in circles. And they’re keeping the Stellar executives? Oh, great. More layers of management. It’s like they’re deliberately trying to make things slower. I just… I don’t understand the impulse.

They’ll be number one in Beaumont County, apparently. Beaumont County! I didn’t even know Beaumont County existed until five minutes ago. And number five in Houston. So they’re… moderately successful in specific, geographically limited areas. It’s not exactly world domination, is it? They also bring a lot of commercial real estate loans. Which, knowing my luck, will all default the moment this deal closes.

Is This a Good Idea? Honestly?

The banks keep saying they need to grow to compete with the big guys. Grow! As if bigger is always better. It’s just more complicated. More potential for things to go wrong. More customer service representatives who don’t understand my simple request. It’s exhausting.

The deal could work, I guess. They’re projecting over nine percent earnings accretion in 2027. 2027! That’s four years away. I’ll be lucky if I remember what I had for breakfast tomorrow. And they think they can cut thirty-five percent of Stellar’s non-interest expense. That usually means layoffs. And then someone inevitably messes up my account. It’s a vicious cycle.

They’re throwing around numbers like 1.58% return on assets and 17.1% return on equity. It’s all so… precise. Like they actually know what’s going to happen. They’re projecting an efficiency ratio of 44%. Sub-50% is “superb,” they say. I bet they don’t account for the time I spend on hold with customer service. That’s inefficiency.

Here’s the kicker. They paid a premium. 180% of Stellar’s tangible book value. Fine, whatever. It’s a hot market. But the real problem is the dilution. Nearly eight percent. Eight percent! They have to earn that back over four and a half years. Four and a half years! Investors don’t like that, and frankly, neither do I. It feels… irresponsible.

Prosperity’s stock is down eight percent today. Eight percent! See? I’m not the only one who sees this. It’s not that the deal can’t work. It’s that it feels… sloppy. Like they didn’t think it through. They need to integrate Stellar quickly, cut costs, and find revenue synergies. It’s a lot to ask. And I have a feeling they’re going to mess it up. They always do.

2026-01-29 00:03

Is This a Good Idea? Honestly?

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