Stellar Bancorp (STEL) Proxy filing summary

Executive summary

• A merger is proposed between Stellar Bancorp, Inc. and Prosperity Bancshares, Inc., with Prosperity as the surviving entity; Stellar Bank will also merge into Prosperity Bank immediately after the parent merger.

• Stellar shareholders will receive $11.36 in cash and 0.3803 shares of Prosperity common stock per Stellar share, with cash in lieu of fractional shares; the total implied value per Stellar share is approximately $37.65 based on recent market prices.

• The aggregate merger consideration is estimated at $2.0 billion, with former Stellar shareholders owning about 16.1% of the combined company post-merger.

• The merger is expected to close in the second quarter of 2026, subject to regulatory and shareholder approvals.

• The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code.

Voting matters and shareholder proposals

• Stellar shareholders will vote on three proposals: approval of the merger agreement, a non-binding advisory vote on merger-related executive compensation, and a proposal to adjourn or postpone the meeting if necessary.

• Approval of the merger requires at least two-thirds of outstanding Stellar shares; the compensation and adjournment proposals require a majority of votes cast.

• Directors of Stellar, holding about 8.7% of shares, have entered into voting agreements to support the merger.

• Dissenters' rights are available under Texas law for shareholders who oppose the merger and follow required procedures.

Board of directors and corporate governance

• The merger agreement provides for two current Stellar directors to join the Prosperity Board and two to join the Prosperity Bank board post-merger.

• Governance documents of Prosperity will govern the combined company after the merger.