Federal Reserve Approves Prosperity Bancshares Merger

Washington, D.C., January 9, 2026 – The Federal Reserve Board has approved the merger of Prosperity Bancshares, Inc. (Houston, Texas) with Southwest Bancshares, Inc. (San Antonio, Texas), allowing Prosperity to indirectly acquire Texas Partners Bank, Southwest’s state nonmember bank subsidiary. Following the merger, Texas Partners will merge into Prosperity Bank, Prosperity’s state nonmember bank subsidiary.

The Board’s decision follows a review of financial, managerial, competitive, and community impact considerations under Section 3 of the Bank Holding Company Act.

Key Details of the Merger:

Pro forma assets: Prosperity would have approximately $43.4 billion in consolidated assets and control $32.5 billion in deposits, representing less than 1% of U.S. insured deposits.
Texas market: Prosperity Bank would become the 8th largest bank in Texas, controlling about 2.1% of deposits.
Market competition: The merger is not expected to substantially lessen competition in the Austin, San Antonio, and Fredericksburg markets. The Department of Justice reviewed the merger and found no significant adverse competitive effects.

Community and Consumer Considerations:

Both Prosperity Bank and Texas Partners have “Satisfactory” CRA ratings, with Prosperity Bank demonstrating leadership in community development lending and investments.
Prosperity Bank has undertaken initiatives to expand minority and low-income lending, financial literacy programs, and community outreach.
Potential branch consolidations will not affect low-income census tracts, and Prosperity plans to expand services and digital capabilities for Texas Partners’ customers.

Financial Stability:

The merger is not expected to pose systemic risks to the U.S. financial system, as the combined organization will remain well-capitalized, with straightforward operations and limited cross-border or complex interconnections.

Public Comments:

The Board received two adverse comments raising fair lending concerns, which were addressed. Examiners found no evidence of discriminatory practices at Prosperity Bank or Texas Partners.

Conditions:

Approval is contingent upon Prosperity complying with all conditions imposed by the Board and obtaining all other required regulatory approvals.
The merger may not be consummated until at least 15 calendar days after the order and must be completed within three months unless extended for good cause.

Board Action:
The order was issued by the Board of Governors, effective January 8, 2026, with voting in favor by Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Bowman, and Governors Waller, Cook, Barr, and Miran.