Updated 3/13/25
Prosperity Bancshares isn’t the type of stock that makes headlines every week—and that’s precisely why some investors love it. Headquartered in Houston, Texas, this regional bank has spent decades building trust in its markets across Texas and Oklahoma. It’s not chasing trends or trying to reinvent the banking wheel. Instead, it sticks to what works: solid lending practices, strong balance sheet management, and a dependable dividend.
In a market that often rewards flash over fundamentals, Prosperity quietly stands out for its consistency. If you’re the kind of investor who cares about sustainable income and long-term financial strength, there’s a good chance this bank has already caught your attention.
Recent Events
2024 ended on a high note for Prosperity. Fourth-quarter earnings jumped over 36% year-over-year, and total revenue climbed 12.5%. These aren’t blockbuster numbers, but they do reflect resilience at a time when many regional banks are still navigating interest rate challenges and margin pressures.
The stock has also been steadily recovering. After hitting a low near $57 last year, shares have worked their way back above $71, showing investors are regaining confidence. With cash reserves just shy of $2 billion and a disciplined approach to lending, PB seems to be playing the long game—something dividend investors can appreciate.
Key Dividend Metrics 🧮💰📈🏦
🧮 Forward Dividend Yield: 3.29%
💰 Forward Annual Dividend: $2.32 per share
📈 Five-Year Average Dividend Yield: 3.08%
🏦 Payout Ratio: 44.75%
🔄 Dividend Growth Track Record: 20+ years
🗓 Next Dividend Payment: April 1, 2025
🚨 Ex-Dividend Date: March 14, 2025
Dividend Overview
What makes Prosperity’s dividend appealing isn’t just the yield—it’s the dependability. At 3.29%, the current yield is above average for the financial sector, and it’s supported by a payout ratio that leaves plenty of breathing room. The bank doesn’t stretch to reward shareholders—it pays from strength.
This isn’t a high-yield, high-risk setup. It’s the kind of dividend that doesn’t keep you up at night. Quarterly payouts come like clockwork, and the company hasn’t blinked through rate cycles or economic slowdowns. For many investors, that quiet consistency is more valuable than headline-grabbing increases.
Dividend Growth and Safety
Prosperity’s dividend story is more about longevity than aggressive hikes. Over the past decade, the bank has steadily raised its dividend in small, measured steps. The increases aren’t dramatic, but they reflect a commitment to sharing profits without compromising financial health.
The most recent earnings report showed full-year EPS at $5.05, more than double the annual dividend payout. That kind of cushion tells you everything you need to know about the sustainability of the dividend. Even if earnings growth slows, PB has plenty of margin to keep those checks coming.
Chart Analysis
General Trend and Structure
The chart for Prosperity Bancshares (PB) shows a full year’s price action leading into March 2025. It highlights a strong markup phase that peaked in late 2024, followed by a steady decline into early 2025. That decline has now pushed the price below its 50-day moving average and is testing the 200-day moving average—a key technical level where buyers often step in.
The most striking part of this chart is the steep rally from mid-June through October, a classic breakout from what appears to be a prior accumulation zone. This was followed by a rounded topping structure that gave way to a soft but persistent markdown over the past couple of months.
Moving Averages and Momentum
Price action is currently below the 50-day moving average, which itself has begun sloping downward—a bearish sign. The 200-day moving average, however, is still rising slowly, suggesting that the longer-term trend hasn’t fully broken down yet. The convergence of price and the 200-day average around the $70 level is an area of interest. It’s a zone where buyers have historically shown up, and where the stock may find temporary footing.
The 50-day moving average crossed above the 200-day average in late summer—a golden cross—and maintained that position until recently. The risk now is of a death cross forming if the short-term weakness continues and the 50-day sinks below the 200-day.
Volume Behavior
Volume patterns reflect this shift in momentum. During the rally in the second half of 2024, we saw solid accumulation volume—many green bars, some with significant size. But since January, red volume days have increased, and overall volume has remained elevated. That increase in selling pressure suggests distribution is in play, not just profit-taking.
There’s a noticeable volume spike in October which likely marks the climax of the prior markup phase. After that, volume becomes more mixed, and the higher red bars in recent weeks show sellers are gaining control.
RSI and Relative Strength
The RSI is currently trending downward, sitting just above oversold territory. That tells us momentum has clearly shifted negative and there’s no bullish divergence yet forming. The RSI was consistently strong during the late 2024 rally, peaking near overbought levels, but has since been declining with lower highs—a classic bearish pattern.
It hasn’t yet hit extreme oversold levels, so there may be room for more downside in the short term. But it’s approaching a point where sentiment could shift quickly if support holds.
Candlestick Behavior and Recent Price Action
The last five candles are worth zooming in on. They’re showing lower highs and lower lows almost across the board. The wicks on the upper ends of several candles suggest attempts to rally are being sold into. Buyers are stepping up during the day, but there’s not enough strength to hold gains into the close.
The most recent candle closed at $70.30, near the low of the day, and slightly below where the 200-day moving average currently sits. That breakdown level is significant. If follow-through selling happens, it could confirm the transition from distribution into a deeper markdown phase.
Short-term momentum is weak. Volume is heavier on red days. The wicks are favoring the downside. Right now, the pressure is clearly on the sellers.
Analyst Ratings
📈 Prosperity Bancshares (PB) has recently attracted attention from analysts with a few changes to its ratings and expectations that give a clearer picture of how Wall Street views the stock right now.
🔄 In January 2025, Bank of America Securities revised its stance on PB, moving the stock from an “Underperform” rating to “Neutral.” This shift likely came in response to improving fundamentals and a more favorable outlook for regional banks. The upgrade implies that the firm no longer sees PB underperforming the market but doesn’t yet view it as a clear outperformer either.
📉 More recently, in March 2025, Morgan Stanley updated its view by trimming its price target from $102.00 to $94.00, while keeping an “Overweight” rating. While the reduced target reflects more cautious expectations, the maintained bullish rating suggests confidence in PB’s ability to navigate near-term pressures and outperform peers in the long run.
💵 As it stands, the consensus analyst price target for Prosperity Bancshares is $83.50. With shares trading around $71, analysts still see meaningful upside from current levels. This average target is based on a mix of bullish and more cautious sentiment, reflecting diverging opinions on regional bank exposure to interest rate changes and competition from digital-first banking platforms.
🔍 Analysts citing reasons for caution tend to focus on margin compression and slower loan growth if rate cuts arrive sooner than expected. On the flip side, those with a more positive view are pointing to Prosperity’s healthy balance sheet, consistent dividend, and disciplined management as reasons it could hold up well, even in a shifting macro environment.
📊 While analyst opinions remain mixed, there’s a shared recognition that PB has strong financials and a solid track record, even if the path forward isn’t entirely clear-cut.
Earning Report Summary
Prosperity Bancshares closed out 2024 on a pretty solid note, showing strength in both earnings and overall financial health. The bank posted $130.1 million in net income for the fourth quarter, a noticeable jump from $95.5 million during the same stretch the year before. That worked out to $1.37 per share, up from $1.02—marking a healthy improvement that didn’t go unnoticed.
One of the highlights was the increase in net interest margin, which landed at 3.05%, up 30 basis points year-over-year. That little boost might not sound huge, but for a bank like Prosperity, it can make a meaningful difference in profitability. It basically means they’re earning more on loans and investments relative to what they’re paying out on deposits—exactly what you want to see in a rising rate environment.
Revenue came in at just over $307 million, beating expectations and showing that this bank isn’t just treading water. Fee-based income also played a role, with non-interest income helping round out the top line. That’s important because it shows Prosperity isn’t overly reliant on interest income alone. They’re doing a solid job building out other revenue streams through services like treasury management and customer fees.
They also made a shareholder-friendly move with a stock buyback announcement. The board approved a plan to repurchase up to 5% of outstanding shares. That’s typically a sign that management feels the stock is undervalued and sees long-term strength in the business.
Operating expenses remained under control, and the bank’s efficiency ratio reflected that. On the credit side, things looked steady too. Non-performing assets stayed low, signaling that the bank is keeping its loan portfolio in check and not taking on unnecessary risk.
All in all, the quarter showed that Prosperity Bancshares is staying disciplined while still growing, even with all the moving parts in today’s economy. There’s nothing flashy in the numbers, but that’s kind of the point—this is a bank that knows how to play the long game.
Financial Health and Stability
A strong dividend is only as good as the balance sheet behind it—and in this case, there’s little to worry about. With nearly $2 billion in cash and a book value per share of $78.07, Prosperity is trading below book value, which doesn’t happen often for a bank with this kind of stability.
Return on Assets is sitting at 1.23%, and Return on Equity at 6.6%. Those are healthy numbers that indicate the bank is managing capital efficiently without taking on unnecessary risk. There’s also no sign of over-leverage, and the loan book remains conservative.
All of this points to a company that takes risk seriously, stays disciplined, and leaves itself room to maneuver in uncertain times.
Valuation and Stock Performance
If you’re looking for value, PB might catch your eye. It trades at a forward P/E of just over 12 and a price-to-book ratio under 1. That combination tells you the market may be underestimating the company’s long-term strength.
On a price-to-sales basis, PB is a bit more expensive, but it makes up for it with strong margins. Operating margin is over 57%, and profit margin tops 40%—clear signs that the company runs lean and doesn’t waste resources.
In terms of stock performance, PB is up around 12% over the past year, outpacing the broader market. It’s not the kind of stock that doubles in a year, but it’s the kind that quietly compounds—especially when you reinvest those dividends.
Risks and Considerations
No stock is without risk, and Prosperity does face a few. Like most regional banks, it’s sensitive to interest rate shifts. If the Federal Reserve cuts rates aggressively, PB’s net interest margin could feel the squeeze. On the other hand, if rates stay higher for longer, loan growth might slow as customers pull back on borrowing.
There’s also the ongoing challenge of technology. While PB has taken steps to modernize its services, it’s competing with both larger banks and agile fintech players. Managing that evolution without disrupting operations or spiking costs will be important in the years ahead.
And while the dividend is stable, it’s not particularly high. Some income-focused investors may prefer higher-yielding sectors, but they’ll also be taking on more volatility in the process.
Final Thoughts
Prosperity Bancshares isn’t here to wow anyone with bold moves or sky-high yields. It’s a steady, well-run regional bank that rewards shareholders quietly and consistently. For dividend investors who care more about sleep-at-night reliability than short-term thrills, that’s a compelling pitch.
You’re not buying PB for a quick flip. You’re buying it because you want to own a piece of a business that takes care of its balance sheet, treats its shareholders with respect, and doesn’t take unnecessary risks.
In a market full of noise, Prosperity keeps things simple. And sometimes, simple is exactly what a long-term investor needs.