Stellar Bancorp, Inc. 8-K

What Happened
Stellar Bancorp, Inc. announced that it merged with and into Prosperity Bancshares, Inc., with Prosperity as the surviving corporation, effective July 1, 2026. Immediately following that merger, Stellar Bank merged into Prosperity Bank. The merger was completed pursuant to the Agreement and Plan of Merger dated January 27, 2026. At the effective time each outstanding share of Stellar common stock (except certain excluded shares) was converted into a per-share merger consideration consisting of 0.3803 shares of Prosperity common stock plus $11.36 in cash (plus cash in lieu of fractional shares).

Key Details

• Exchange ratio: 0.3803 shares of Prosperity common stock per share of Stellar common stock.
• Cash component: $11.36 per Stellar share.
• Implied Per Share Merger Consideration Value = $11.36 + (0.3803 × $71.44) ≈ $38.53 per Stellar share (using the stated $71.44 10-day average for Prosperity).
• Equity awards: Stellar stock options with a per-share exercise price below the Per Share Merger Consideration Value were cancelled for a cash payment equal to (Merger Consideration Value − option strike) × number of shares; options with strike ≥ Merger Consideration Value were cancelled for no consideration. Service-based restricted stock vested and converted into the Per Share Merger Consideration. Performance units vested and were paid in cash using performance deemed achieved at 100% of target (200% for 2024 awards).
• Delisting/deregistration: Stellar requested suspension and withdrawal from NYSE trading prior to market open on July 1, 2026; Prosperity will seek deregistration under Sections 12(b) and 12(g) and suspension of reporting under Sections 13 and 15(d) as promptly as practicable.
• Corporate and governance changes: Stellar’s directors and executive officers ceased serving at the Effective Time; two former Stellar directors (Robert R. Franklin, Jr. and Joseph B. Swinbank) were appointed to Prosperity’s board. Stellar’s charter and bylaws ceased by operation of law; Prosperity’s governing documents now apply to the surviving company.
• Balance sheet repositioning: Through June 30, 2026, Stellar sold about $466.4 million of securities from its investment portfolio ahead of closing.

Why It Matters
For Stellar shareholders, the transaction replaces ownership in Stellar with a fixed cash component plus Prosperity stock (0.3803 shares + $11.36 per Stellar share), and Stellar common shares will no longer trade on the NYSE. Holders of Stellar options, restricted stock and performance units receive cash or conversion according to the agreement terms, meaning many equity holders will be cashed out or rolled into Prosperity stock value. The delisting and deregistration filings mean former Stellar reporting obligations will be suspended once the required SEC filings are made. The sale of roughly $466M in securities indicates Stellar repositioned its balance sheet ahead of the closing, which may affect the mix of assets absorbed by Prosperity.