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# Prosperity Bancshares Sees Double-Digit 2027 EPS Growth On Flat To Slightly Higher Loans
- URL: https://www.bullished.co/prosperity-bancshares-sees-double-digit-2027-eps-growth-on-flat-to-slightly-higher-loans-dc8389e3/
- Published: 2026-10-28T17:05:57.000Z
- Updated: 2026-10-28T17:05:57.000Z
- Description: Executives point to margin expansion and $65 million to $70 million in pre-tax cost savings, not loan growth, as the earnings engine.
- Author: Matteo Parrino
- Tags: Earnings, PB, Industry: Financials

Prosperity Bancshares expects earnings per share to grow at a double-digit rate in 2027 even if loans stay flat to slightly higher, President and Chief Operating Officer Kevin Hanigan told analysts on the bank's [third-quarter earnings call](https://markets.ft.com/data/announce/detail?dockey=600-202610280630PR%5FNEWS%5FUSPRX%5F%5F%5F%5FDA81151-1&ref=bullished.co) on Wednesday. Prosperity, a Texas and Oklahoma bank holding company, said the lift would come from wider margins and cost cuts rather than lending.

## Earnings growth without loan growth

Hanigan said flat loans would still deliver double-digit EPS growth in 2027, and he put it at "a load of mid-teen double-digit" growth. He then pointed to 2028, when management sees loan growth of 3% to 5% and another year of double-digit EPS growth.

The loan stall, he said, is a matter of history: loans at acquired institutions tend to shrink for six months to a year after a deal. Against that, monthly loan production is climbing. Chairman H. E. Tim Timanus Jr. said average monthly new production was $635 million in the third quarter, up from $454 million in the second.

Third-quarter earnings, excluding one-time merger expenses, were $200 million, or [$1.67 per diluted share](https://markets.ft.com/data/announce/detail?dockey=600-202610280630PR%5FNEWS%5FUSPRX%5F%5F%5F%5FDA81151-1&ref=bullished.co), CEO David Zalman said. Hanigan called the $1.67 to $1.69 range the new run rate with Stellar Bank on board.

Prosperity's board raised the fourth-quarter dividend to 64 cents a share from 60 cents, an increase of 6.7%.

## Margin and the cost-savings math

Chief Financial Officer Asylbek Osmonov said the net interest margin was 3.73% in the third quarter, up from 3.47% in the second quarter and 3.24% a year earlier. Guidance for 2027 is 3.80% to 3.85%.

Asked by an analyst at TD Cowen why that is not higher given rising rates, Osmonov said the model assumes flat rates and management is being conservative. Zalman said the company tries to "under-promise and over-perform."

Osmonov said another $65 million to $70 million of pre-tax savings is coming versus third-quarter expenses, aiming at a clean run rate of $220 million to $225 million a quarter once integrations settle. Fourth-quarter noninterest expense is guided to $235 million to $238 million, excluding remaining one-time merger costs. Third-quarter expense excluding merger costs was $238.9 million.

## Buybacks over deals, and a long-term pitch

Prosperity now has $54.1 billion in assets, up 41% from a year earlier, after three mergers. It finished integrating American Bank in September and plans to complete Texas Partners Bank in November and Stellar Bank in March 2027.

Zalman said buybacks are far likelier than acquisitions in the near term, with the stock trading below 10 times earnings. He also said the loan-to-deposit ratio is 77% against a policy ceiling of about 85%.

Answering a Piper Sandler analyst, Zalman rejected chasing double-digit loan growth. "If you're a long-term investor, you're going to love our model," he said. "If you're a short-term investor, you probably wouldn't."

The Stellar Bank system conversion, scheduled for March 2027, is the next milestone behind the cost savings.

### Sources

- [Prosperity Bancshares (PB) Reports Q3 Earnings: What Key Metrics Have to Say](https://finance.yahoo.com/markets/stocks/articles/prosperity-bancshares-pb-reports-q3-123005535.html?ref=bullished.co) — Yahoo Finance
- [Prosperity Bancshares (PB) Q3 Earnings Beat Estimates](https://finance.yahoo.com/markets/stocks/articles/prosperity-bancshares-pb-q3-earnings-105004774.html?ref=bullished.co) — Yahoo Finance
- [PROSPERITY BANCSHARES, INC.® REPORTS THIRD QUARTER 2026 EARNINGS – Company Announcement - FT.com](https://markets.ft.com/data/announce/detail?dockey=600-202610280630PR%5FNEWS%5FUSPRX%5F%5F%5F%5FDA81151-1&ref=bullished.co) — Financial Times
- [Prosperity Bancshares GAAP EPS of $1.67 beats by $0.30, revenue of $475.7M misses by](https://seekingalpha.com/news/4658727-prosperity-bancshares-gaap-eps-of-167-beats-by-030-revenue-of-4757m-misses-by-2078m?ref=bullished.co) — seekingalpha.com