SEC Form S-4 filed by Prosperity Bancshares Inc.

As filed with the Securities and Exchange Commission on September 17, 2025

Registration No. 333-   

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

 

 

PROSPERITY BANCSHARES, INC.

(Exact Name of Registrant as specified in its charter)

 

 

 

Texas		6022		74-2331986
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

4295 San Felipe

Houston, Texas 77027

(281) 269-7199

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

David Zalman

Senior Chairman and Chief Executive Officer

Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

Houston, Texas 77027

(281) 269-7199

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Charlotte M. Rasche Executive Vice President and General Counsel Prosperity Bancshares, Inc. 80 Sugar Creek Center Blvd. Sugar Land, Texas 77478 (281) 269-7199		Edward D. Herlihy, Esq. Matthew T. Carpenter, Esq. Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212) 403-1000

 

Stephen C. Raffaele President American Bank Holding Corporation 800 N. Shoreline Boulevard, Suite 200S Corpus Christi, Texas 78401 (512) 306-5550		Bryn A. Sappington, Esq. Blake Redwine, Esq. Evan Hardee, Esq. Norton Rose Fulbright US LLP 2200 Ross Avenue, Suite 3600 Dallas, Texas 75201 (214) 855-8000

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement is declared effective and upon completion of the merger described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a) MAY DETERMINE.

 

 

vote in connection with the ABHC merger proposal and the ABHC adjournment proposal. This document is also a prospectus that is being delivered to holders of ABHC common stock because, in connection with the merger, Prosperity is offering shares of Prosperity common stock to holders of ABHC common stock.

The ABHC special meeting will be held in person on [   ], 2025, at [   ], Central Time, at the Omni Corpus Christi Hotel, 900 North Shoreline Boulevard, Corpus Christi, Texas 78401.

ABHC shareholders, your vote is very important.

To ensure your representation at the ABHC special meeting, please complete, sign, date and return the enclosed proxy. Sending in your proxy will not prevent you from voting your shares in person at the ABHC special meeting, since you may revoke your proxy at any time before it is voted.

The ABHC board of directors unanimously approved the merger agreement and the transactions contemplated thereby, including the merger, and recommends that ABHC shareholders vote “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal.

 

 

This document contains a more complete description of the ABHC special meeting, the merger, the documents related to the merger and other related matters. Please carefully read the entire proxy statement/prospectus, including the “Risk Factors” section, beginning on page 20, for a discussion of the proposed merger and the risks relating to the proposed merger. You may also obtain information about Prosperity from documents that Prosperity has filed with the Securities and Exchange Commission. The ABHC board of directors enthusiastically supports the merger and recommends that you vote in favor of the approval of the merger agreement and the transactions contemplated thereby.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger, including the issuance of the securities to be issued under this proxy statement/prospectus, or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. The securities that Prosperity is offering through this document are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of Prosperity or ABHC, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This proxy statement/prospectus is dated [   ], 2025, and it is first being mailed or otherwise delivered to the shareholders of ABHC on or about [   ], 2025.

ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about Prosperity from documents filed with the SEC that have not been included in or delivered with this document. This information is described on page 115 under “Where You Can Find More Information.” You can obtain free copies of this information by writing or calling:

Prosperity Bancshares, Inc.

Attention: Investor Relations

Prosperity Bank Plaza

4295 San Felipe

Houston, Texas 77027

(281) 269-7199

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them by [   ], in order to receive them before the ABHC special meeting.

No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated [   ], 2025, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to holders of ABHC common stock nor the issuance by Prosperity of shares of Prosperity common stock in connection with the merger will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in, or incorporated by reference into, this document regarding ABHC has been provided by ABHC and information contained in, or incorporated by reference into, this document regarding Prosperity has been provided by Prosperity.

See the section entitled “Where You Can Find More Information” beginning on page 115 of this proxy statement/prospectus for further information.

 

American Bank Holding Corporation

800 N. Shoreline Boulevard, Suite 200S

Corpus Christi, Texas 78401

(800) 257-8316

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

A special meeting of shareholders of American Bank Holding Corporation (“ABHC”) will be held in person on [   ], 2025 at [   ], Central Time, at the Omni Corpus Christi Hotel, 900 North Shoreline Boulevard, Corpus Christi, Texas 78401 (the “ABHC special meeting”), for the following purposes:

 

1.

To consider and vote on the proposal to approve the Agreement and Plan of Merger, dated as of July 17, 2025 (as amended from time to time, the “merger agreement”), a copy of which is attached as Annex A to the accompanying proxy statement/prospectus of which this notice is a part, by and between Prosperity Bancshares, Inc. (“Prosperity”) and ABHC, and the transactions contemplated thereby, including the merger of ABHC with and into Prosperity (the “merger”) (the “ABHC merger proposal”); and

 

2.

To consider and vote on any proposal to adjourn or postpone the ABHC special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal (the “ABHC adjournment proposal”).

Approval of the ABHC merger proposal is required to complete the transactions contemplated by the merger agreement.

Only ABHC shareholders of record at the close of business on [   ], 2025 will be entitled to notice of, to attend and to vote at the ABHC special meeting.

ABHC will transact no other business at ABHC special meeting, except for business properly brought before the ABHC special meeting or any adjournment or postponement thereof by or at the direction of the ABHC board of directors.

Shareholders of ABHC have the right to dissent from the merger and obtain payment in cash of the appraised fair value of their shares of ABHC common stock under applicable provisions of the Texas Business Organizations Code. In order for such a shareholder of ABHC to perfect his, her or its right to dissent, the shareholder must file a written objection to the merger with ABHC prior to the ABHC special meeting, vote against the merger agreement and file a written demand with Prosperity within 20 days after completion of the merger for payment of the fair value of the shareholder’s shares of ABHC common stock. A copy of the applicable statutory provisions of the Texas Business Organizations Code is included as Annex E to the accompanying proxy statement/prospectus and a summary of these provisions can be found under the caption “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 68.

The board of directors of ABHC has unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger, and unanimously recommends that you vote “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal.

Your Vote is Very Important

A proxy card is enclosed. Whether or not you plan to attend the special meeting, please complete, sign and date the proxy card and promptly mail it in the enclosed envelope. You may revoke your proxy card in the manner described in the proxy statement/prospectus at any time before it is exercised. If you attend the special meeting, you may change your vote if you wish, even if you have previously returned your proxy card.

The proxy statement/prospectus of which this notice is a part provides a detailed description of the merger agreement, the transactions contemplated thereby, including the merger, and the other matters to be considered at the ABHC special meeting. A summary of the merger agreement is included in the proxy statement/prospectus in the sections entitled “The Merger” and “The Merger Agreement,” and a copy of the merger agreement is attached as Annex A to the proxy statement/prospectus, each of which are incorporated by reference into this notice to the same extent as if fully set forth herein. We encourage you to carefully read this proxy statement/prospectus (including the annexes thereto) and any other documents incorporated by reference herein in their entirety.

IF YOU HAVE QUESTIONS ABOUT THE MERGER, THE ABHC MERGER PROPOSAL OR THE ABHC ADJOURNMENT PROPOSAL, OR VOTING YOUR SHARES, PLEASE CONTACT:

Ben B. Wallace

Vice Chairman and Executive Vice President of ABHC

American Bank Holding Corporation

800 N. Shoreline Boulevard, Suite 200S

Corpus Christi, Texas 78401

(361) 653-5070

Email: [email protected]

 

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS			1
SUMMARY			10
The Parties to the Merger			10
The Merger and the Merger Agreement			11
Merger Consideration			11
Treatment of ABHC Restricted Stock Awards			13
Material U.S. Federal Income Tax Consequences of the Merger			13
ABHC’s Reasons for the Merger; Recommendation of the ABHC Board of Directors			13
Opinion of ABHC’s Financial Advisor			14
Appraisal or Dissenters’ Rights in the Merger			14
Interests of ABHC’s Directors and Executive Officers in the Merger			15
Regulatory Approvals			15
Expected Timing of the Merger			15
Conditions to Completion of the Merger			16
Termination of the Merger Agreement			17
Termination Fee			18
Accounting Treatment			18
The Rights of Holders of ABHC Common Stock Will Change as a Result of the Merger			18
Listing of Prosperity Common Stock			18
The ABHC Special Meeting			18
Risk Factors			19
RISK FACTORS			20
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			26
COMPARATIVE STOCK PRICES AND DIVIDENDS			30
Prosperity			30
ABHC			31
THE ABHC SPECIAL MEETING			33
ABHC PROPOSALS			37
INFORMATION ABOUT PROSPERITY			39
INFORMATION ABOUT ABHC			40
THE MERGER			42
Terms of the Merger			42
Background of the Merger			43
ABHC’s Reasons for the Merger; Recommendation of the ABHC Board of Directors			50
Opinion of ABHC’s Financial Advisor			52
Certain Unaudited Prospective Financial Information			62
Interests of ABHC’s Directors and Executive Officers in the Merger			64
Governance of Prosperity After the Merger			65
Accounting Treatment			65
Regulatory Approvals			66
Stock Exchange Listings			68
Appraisal or Dissenters’ Rights in the Merger			68

 

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THE MERGER AGREEMENT			71
Explanatory Note Regarding the Merger Agreement			71
Structure of the Merger			71
Merger Consideration			72
Fractional Shares			73
Governing Documents			74
Treatment of ABHC Restricted Stock Awards			74
Closing and Effective Time of the Merger			74
Conversion of Shares; Exchange of ABHC Stock Certificates			74
Representations and Warranties			75
Covenants and Agreements			77
Shareholder Meeting and Recommendation of the ABHC Board of Directors			83
Agreement Not to Solicit Other Offers			84
Conditions to Completion of the Merger			86
Termination of the Merger Agreement			87
Effect of Termination			88
Termination Fee			88
Fees and Expenses			88
Amendment, Waiver and Extension of the Merger Agreement			89
Voting Agreements			89
Director Support Agreements			90
Governing Law			90
Specific Performance			90
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			91
Tax Consequences of the Merger Generally			92
Information Reporting and Backup Withholding			94
SECURITY OWNERSHIP OF ABHC DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS OF ABHC			95
DESCRIPTION OF PROSPERITY CAPITAL STOCK			96
COMPARISON OF SHAREHOLDERS’ RIGHTS			99
TEXAS ANTI-TAKEOVER STATUTES			111
LEGAL MATTERS			113
EXPERTS			114
WHERE YOU CAN FIND MORE INFORMATION			115
Annex A – Agreement and Plan of Merger			A-1
Annex B – Form of Voting Agreement			B-1
Annex C – Form of Director Support Agreement			C-1
Annex D – Fairness Opinion of Stephens Inc.			D-1
Annex E – Provisions of the Texas Business Organizations Code Relating to Dissenters’ Rights			E-1

 

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QUESTIONS AND ANSWERS

The following are some questions that you may have about the merger and the ABHC special meeting, and brief answers to those questions. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the ABHC special meeting. Additional important information is also contained in the documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 115.

In this proxy statement/prospectus, unless the context otherwise requires:

 

•

“ABHC” refers to American Bank Holding Corporation;

 

•

“ABHC common stock” refers to the common stock, par value $1.25 per share, of ABHC;

 

•

“Prosperity” refers to Prosperity Bancshares, Inc.; and

 

•

“Prosperity common stock” refers to the common stock, par value $1.00 per share, of Prosperity.

 

Q:	Why am I receiving this proxy statement/prospectus?

 

A:

You are receiving this proxy statement/prospectus because Prosperity and ABHC have entered into an Agreement and Plan of Merger, dated as of July 17, 2025 (as amended from time to time, the “merger agreement”). A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus and is incorporated by reference herein. The merger agreement (a) provides that ABHC will merge with and into Prosperity (the “merger”), with Prosperity as the surviving corporation (the “surviving corporation,” or “Prosperity,” as the case may be) and (b) contemplates that immediately following the completion of the merger, American Bank, National Association (“American Bank”), a national banking association and a wholly-owned subsidiary of ABHC, will merge with and into Prosperity Bank, a Texas banking association and a wholly-owned subsidiary of Prosperity, with Prosperity Bank as the surviving bank (the “surviving bank”) (the “bank merger”).

To complete the merger, among other things, holders of ABHC common stock must approve the merger agreement and the transactions contemplated thereby, including the merger (the “ABHC merger proposal”).

ABHC is holding a special meeting of holders of ABHC common stock (the “ABHC special meeting”) to obtain approval of the ABHC merger proposal. Holders of ABHC common stock will also be asked to approve the proposal to adjourn or postpone the ABHC special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal (the “ABHC adjournment proposal”).

This document is also a prospectus that is being delivered to holders of ABHC common stock because, in connection with the merger, Prosperity is offering shares of Prosperity common stock to holders of ABHC common stock.

This proxy statement/prospectus contains important information about the merger agreement, the merger and the proposals being voted on at the ABHC special meeting. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of common stock voted by proxy without attending the meeting. Your vote is important and we encourage you to submit your proxy as soon as possible.

 

Q:	What will happen in the merger?

 

A:

In the merger, ABHC will merge with and into Prosperity, with Prosperity continuing as the surviving corporation. After completion of the merger, ABHC will cease to exist and Prosperity will remain a publicly traded company. See the information provided in the section entitled “The Merger Agreement—Structure of the Merger” beginning on page 71 and the merger agreement for more information about the merger.

 

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Q:	When and where will the ABHC special meeting take place?

 

A:

The ABHC special meeting will be held in person on [   ], 2025 at [   ], Central Time, at the Omni Corpus Christi Hotel, 900 North Shoreline Boulevard, Corpus Christi, Texas 78401. If you hold your shares of ABHC common stock in your name as a shareholder of record, you may attend the ABHC special meeting and cast your vote in person at the ABHC special meeting at any time before the closing of the polls at the ABHC special meeting.

 

Q:	What matters will be considered at the ABHC special meeting?

 

A:	At the ABHC special meeting, holders of ABHC common stock will be asked to consider and vote on the following proposals:

 

•

ABHC Proposal 1: The ABHC merger proposal. Approval of the merger agreement and the transactions contemplated thereby, including the merger; and

 

•

ABHC Proposal 2: The ABHC adjournment proposal. Approval of the adjournment or postponement of the ABHC special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal.

In order to complete the merger, among other things, holders of ABHC common stock must approve the ABHC merger proposal. Approval of the ABHC adjournment proposal is not a condition to the obligations of Prosperity or ABHC to complete the merger.

 

Q:	What will holders of ABHC common stock receive in the merger?

 

A:

Under the terms and subject to the conditions set forth in the merger agreement, all outstanding shares of ABHC common stock issued and outstanding immediately prior to the effective time of the merger (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards but excluding dissenting shares, treasury shares and shares held by ABHC or Prosperity (other than treasury shares and shares held by ABHC or Prosperity (a) held in any ABHC benefit plans or related trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity and (b) held, directly or indirectly, in respect of debts previously contracted)) will be converted into the right to receive, without interest, an aggregate of 4,439,981 shares of Prosperity common stock (the “aggregate stock consideration”), as such number of shares of Prosperity common stock may be reduced pursuant to the terms of the merger agreement.

The aggregate stock consideration will be reduced, if the ABHC equity capital, as calculated pursuant to the terms of the merger agreement, is less than $173,000,000 on the closing date, by a number of shares equal to the absolute value of the difference between $173,000,000 and the ABHC equity capital on the closing date, divided by $70.73 (the aggregate stock consideration, as so adjusted, the “adjusted aggregate stock consideration”). For the purposes of the merger agreement, the ABHC equity capital is equal to the sum of the capital stock, capital surplus and retained earnings of ABHC, minus goodwill and other intangibles, and excluding unrealized securities gains or losses, on a consolidated basis, as determined pursuant to generally accepted accounting principles in the United States (“GAAP”) and other terms set forth in the merger agreement (the “ABHC equity capital”). The merger agreement provides that ABHC must, for the purposes of calculating the ABHC equity capital, deduct for certain extraordinary items related to the merger agreement and the transactions contemplated thereby, including, without duplication: (i) the amount of expenses incurred by ABHC and its subsidiaries related to the merger, the merger agreement and the actions and transactions contemplated thereby, including any fees and commissions payable to any broker, finder, financial advisor or investment banking firm in connection with the merger agreement or the transactions contemplated thereby and any legal and accounting fees and other expenses incurred in connection with the negotiation, execution or performance of the merger agreement or the consummation of the transactions

 

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contemplated thereby, (ii) any amount needed to bring ABHC’s total loan loss reserve to an amount equal to the greater of (x) 1.05% of the total loans of ABHC and its subsidiaries as of the closing date, determined in accordance with GAAP and the accounting principles, practices, procedures, methodologies and policies employed in preparing the audited consolidated balance sheet of ABHC and its subsidiaries as of December 31, 2024 or (y) $18,400,000, (iii) the amount of any fees, costs, expenses and accruals related to threatened or outstanding litigation relating to ABHC and its subsidiaries, (iv) the premium or additional cost required to provide for the continuation of certain of ABHC’s insurance policies pursuant to the merger agreement, (v) the amount of any payments to be made pursuant to any existing employment, change in control, salary continuation, deferred compensation or other similar agreements or arrangements or severance, noncompetition, retention or bonus arrangements between ABHC or American Bank and any other person (but not including stay-pay arrangements agreed to between Prosperity Bank and American Bank), (vi) the amount of any amounts that may be owed by Prosperity or Prosperity Bank after the effective time under any of the agreements or arrangements in the foregoing clause (v), (vii) the accrual of any future benefit payments due under any salary continuation, deferred compensation or other similar agreements through the date of the final payment, which amount must be confirmed by a third-party consultant mutually acceptable to ABHC and Prosperity, (viii) the amount of any cost to fully fund, terminate and liquidate any ABHC benefit plan and to pay all related expenses and fees, including expenses and fees associated with any governmental filings in connection with such termination, to the extent such termination is required by the terms of the merger agreement or requested by Prosperity under the terms of the merger agreement, (ix) the nondeductible amount of any payments subject to Section 280G of the Internal Revenue Code (the “Code”) and (x) such other amounts as are agreed upon by ABHC and Prosperity.

As a result, holders of ABHC common stock will receive the number of shares of Prosperity common stock equal to the adjusted aggregate stock consideration divided by the aggregate number of shares of ABHC common stock issued and outstanding (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards) immediately prior to the effective time, for each share of ABHC common stock held by such holder immediately prior to the effective time of the merger (the “merger consideration”).

For illustration purposes only, if the merger occurs and assuming (i) there are [   ] shares of ABHC common stock issued and outstanding at the closing of the merger (including [   ] shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards), (ii) the ABHC equity capital on the closing date, as calculated pursuant to the terms of the merger agreement, is equal to or greater than $173,000,000, and (iii) the price per share of Prosperity common stock received in the merger is equal to $[   ], which was the closing price per share of Prosperity common stock on [   ], 2025, then holders of ABHC common stock will receive [   ] shares of Prosperity common stock with a value of $[   ] (before adjusting for fractional shares) for each share of ABHC common stock.

 

Q:	Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?

 

A:

Yes. Any change in the market price of Prosperity common stock prior to the completion of the merger will affect the value of the merger consideration that holders of ABHC common stock will receive upon completion of the merger. Additionally, the aggregate stock consideration may be adjusted downwards subject to the amount of ABHC equity capital on the closing date, and the merger consideration issued and paid per share in the merger may increase or decrease if the number of shares of ABHC common stock outstanding changes after the date hereof. Neither Prosperity nor ABHC is permitted to terminate the merger agreement as a result, in and of itself, of any increase or decrease in the market price of Prosperity common stock.

 

Q:	How will the merger affect ABHC restricted stock awards?

 

A:	At the effective time, each award in respect of a share of ABHC common stock subject to vesting, repurchase or other lapse restriction that is outstanding immediately prior to the effective time (each, an

 

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“ABHC restricted stock award”) will fully vest and be cancelled and converted into the right to receive (without interest) the merger consideration in respect of each share of ABHC common stock subject to such ABHC restricted stock award immediately prior to the effective time, which will be delivered as soon as reasonably practicable following the closing date and in no event later than ten (10) business days following the closing date. Each holder of an ABHC restricted stock award converted into the right to receive the merger consideration that would have otherwise been entitled to receive a fraction of a share of Prosperity common stock (after aggregating all shares to be delivered in respect of all ABHC restricted stock awards held by such holder) will instead receive a cash payment (rounded to the nearest cent) in an amount equal to such fractional share of Prosperity common stock (rounded to the nearest thousandth when expressed in decimal form) multiplied by the Prosperity share closing price (as defined below).

 

Q:	How does the ABHC board of directors recommend that I vote at the ABHC special meeting?

 

A:	The ABHC board of directors unanimously recommends that you vote “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal.

In considering the recommendations of the ABHC board of directors, holders of ABHC common stock should be aware that ABHC directors and executive officers may have interests in the merger that are or may be different from, or in addition to, the interests of holders of ABHC common stock generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of ABHC’s Directors and Executive Officers in the Merger” beginning on page 64.

 

Q:	Who is entitled to vote at the ABHC special meeting?

 

A:

The ABHC board of directors has fixed the close of business on [  ], 2025 as the record date (the “ABHC record date”) for determination of the holders of ABHC common stock entitled to notice of and to vote at the ABHC special meeting. Only ABHC shareholders at the close of business on the ABHC record date will be entitled to vote at the ABHC special meeting.

Each holder of ABHC common stock is entitled to cast one (1) vote on each matter properly brought before the ABHC special meeting for each share of ABHC common stock that such holder owned of record as of the ABHC record date. As of the ABHC record date, there were [  ] shares of ABHC common stock outstanding and entitled to be voted at the ABHC special meeting. Attendance at the ABHC special meeting in person is not required to vote. See below and the section entitled “The ABHC Special Meeting—Voting and Revocation of Proxies” beginning on page 35 for instructions on how to vote your shares without attending the ABHC special meeting.

 

Q:	What constitutes a quorum for the ABHC special meeting?

 

A:

The presence, in person or represented by proxy, of ABHC shareholders who hold shares representing a majority of the shares of ABHC common stock issued and outstanding and entitled to vote at the ABHC special meeting, constitutes a quorum. If you fail to submit a proxy or to vote at the ABHC special meeting, or fail to instruct your bank, broker, trustee or other nominee how to vote, your shares of ABHC common stock will not be counted toward a quorum.

 

Q:	If my shares of common stock are held in “street name” by my bank, broker, trustee or other nominee, will my bank, broker, trustee or other nominee vote my shares for me?

 

A:

No. If your shares are held in “street name” by a bank, broker, trustee or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. You may not vote shares held in “street name” by returning the proxy directly to ABHC or by voting at the ABHC special meeting, unless you provide a “legal proxy,” which you must obtain from your bank, broker, trustee or other nominee.

 

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Brokers, banks, trustees or other nominees who hold shares of ABHC common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers, banks, trustees or other nominees are not allowed to exercise voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. ABHC expects that all proposals to be voted on at the ABHC special meeting will be “non-routine” matters on which brokers, banks, trustees or other nominees do not have discretionary voting power to vote.

If you are an ABHC shareholder and you do not instruct your bank, broker or other nominee on how to vote your shares:

 

•

your bank, broker or other nominee may not vote your shares on the ABHC merger proposal, which broker non-votes will have the same effect as a vote “AGAINST” such proposal (assuming a quorum is present); and

 

•

your bank, broker or other nominee may not vote your shares on the ABHC adjournment proposal, which broker non-votes will have no effect on such proposal (whether or not a quorum is present).

 

Q:	What vote is required for the approval of each proposal at the ABHC special meeting?

 

A:	ABHC Proposal 1: ABHC merger proposal. Approval of the ABHC merger proposal requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of ABHC common stock entitled to vote on the ABHC merger proposal.

ABHC Proposal 2: ABHC adjournment proposal. Assuming a quorum is present, approval of the ABHC adjournment proposal requires the affirmative vote of the holders of a majority of the shares of ABHC common stock present in person or represented by proxy at the ABHC special meeting and entitled to vote on the ABHC adjournment proposal.

 

Q:	How do I submit a proxy or vote my shares at the ABHC special meeting?

 

A:

If you hold your shares of ABHC common stock in your name as a shareholder of record, you may vote your shares by mail by completing, signing, dating and returning the proxy in the enclosed envelope, which requires no additional postage if mailed in the United States, which must be received no later than the close of business on [  ], 2025 in order for your vote to be counted at the ABHC special meeting. If you sign and return your proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal.

If your shares are held in “street name” by a bank, broker, trustee or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. You may not vote shares held in “street name” by returning the proxy directly to ABHC or by voting at the ABHC special meeting, unless you provide a “legal proxy,” which you must obtain from your bank, broker, trustee or other nominee.

If you hold your shares in more than one account, please be sure to submit a proxy with respect to each proxy card you receive.

If you hold your shares of ABHC common stock in your name as a shareholder of record, you may attend the ABHC special meeting and cast your vote in person at the ABHC special meeting at any time before the closing of the polls at the ABHC special meeting.

The ABHC special meeting will begin promptly at [  ] a.m., Central Time, on [  ], 2025. The ABHC special meeting will be held in person at the Omni Corpus Christi Hotel, 900 North Shoreline Boulevard, Corpus Christi, Texas 78401.

Even if you plan to attend the ABHC special meeting, ABHC recommends that you vote your shares in advance as described above so that your vote will be counted if you later decide not to or become unable to attend the ABHC special meeting.

 

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Additional information on voting procedures can be found under the section entitled “The ABHC Special Meeting” on page 33.

 

Q:	What do I need to do now prior to the ABHC special meeting?

 

A:	After carefully reading and considering the information contained in this proxy statement/prospectus in its entirety, including its annexes and the information incorporated by reference herein, please vote as soon as possible even if you plan on attending the ABHC special meeting.

If you are a record holder of shares of ABHC common stock, please respond by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope as soon as possible by [  ], 2025 so that your shares may be presented at the ABHC special meeting. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker, trustee or other nominee.

 

Q:	Why is my vote important?

 

A:

If you do note vote, it will be more difficult for ABHC to obtain the necessary quorum to hold the ABHC special meeting. In addition, your failure to submit a proxy or vote at the ABHC special meeting, or failure to instruct your bank, broker, trustee or other nominee how to vote, will have the same effect as a vote “AGAINST” the ABHC merger proposal and an abstention will have the same effect as a vote “AGAINST” the ABHC merger proposal.

Assuming a quorum is present, approval of the ABHC merger proposal requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of ABHC common stock entitled to vote on the proposal and approval of the ABHC adjournment proposal requires the affirmative vote of the holders of a majority of the shares of ABHC common stock present in person or represented by proxy at the ABHC special meeting and entitled to vote on the proposal.

The ABHC board of directors unanimously recommends that you vote “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal.

 

Q:	Can I revoke my proxy or change my vote?

 

A:	Yes. You can change your vote at any time before your proxy is voted at the ABHC special meeting. You can do this by:

 

•

delivering a written notice of revocation to Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at American Bank Holding Corporation, 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401, which must be received by [  ] p.m., Central Time, on [  ], 2025;

 

•

executing a proxy bearing a later date and delivering that proxy to Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at American Bank Holding Corporation, 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401, which must be received by [  ] p.m., Central Time, on [  ], 2025; or

 

•

attending the ABHC special meeting and voting in person.

If your shares are held by a broker, bank, trustee or other nominee, you should contact your broker, bank, trustee or other nominee to change your vote.

 

Q:	Will ABHC be required to submit the ABHC merger proposal to its shareholders even if the ABHC board of directors has withdrawn, modified or qualified its recommendation?

 

A:	Yes. Unless the merger agreement is terminated before the ABHC special meeting in accordance with its terms, the ABHC special meeting will be convened and ABHC is required to submit the ABHC merger

 

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proposal to its shareholders at the ABHC special meeting even if the ABHC board of directors has withdrawn or modified the ABHC board recommendation (as defined in the section entitled “The Merger Agreement—Shareholder Meeting and Recommendation of the ABHC Board of Directors”).

 

Q:	Are there any ABHC shareholders already committed to voting in favor of the ABHC merger proposal?

 

A:

Yes. Directors of ABHC and American Bank who are also shareholders of ABHC, and certain other shareholders of ABHC, have entered into a voting agreement with Prosperity pursuant to which, among other things, they have agreed to vote in favor of the approval and adoption of the merger agreement, subject to the terms of the voting agreement. As of the record date for the ABHC special meeting, these shareholders collectively and beneficially owned approximately [ ]% of the outstanding shares of ABHC common stock. For information regarding the voting agreement and certain holders of shares of ABHC common stock, see “Security Ownership of ABHC Directors, Executive Officers and Certain Beneficial Owners of ABHC” on page 95.

 

Q:	Are holders of ABHC common stock entitled to appraisal or dissenters’ rights?

 

A:	ABHC shareholders who vote against the ABHC merger proposal, and follow certain procedural steps, will be entitled to dissenters’ rights under the provisions of Chapter 10, Subchapter H of the Texas Business Organizations Code (the “TBOC”).

For more information, see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 68. In addition, a copy of Chapter 10, Subchapter H of the TBOC is attached as Annex E to this proxy statement/prospectus.

 

Q:	Are there any risks that I should consider in deciding whether to vote for the approval of the ABHC merger proposal or the ABHC adjournment proposal?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 20. You also should read and carefully consider the risk factors of Prosperity contained in the documents that are incorporated by reference into this proxy statement/prospectus.

 

Q:	Does Prosperity pay regular dividends on its shares of common stock?

 

A:

Yes, Prosperity pays quarterly cash dividends on its shares of Prosperity common stock. Prosperity declared quarterly cash dividends on its common stock in 2025, 2024 and 2023. As approved by Prosperity’s board of directors, Prosperity declared and paid a $0.55 per share dividend for the first three fiscal quarters of 2023 and declared and paid a $0.56 per share dividend for the fourth fiscal quarter of 2023. Prosperity declared and paid $0.56 per share dividend for the first three fiscal quarters of 2024 and declared and paid a $0.58 per share dividend for the fourth fiscal quarter of 2024. Prosperity declared and paid a $0.58 per share dividend to holders of Prosperity common stock for the first two fiscal quarters of 2025. On July 23, 2025, Prosperity announced it had declared a $0.58 per share dividend for the third fiscal quarter of 2025, payable on October 1, 2025, to shareholders of record as of September 15, 2025. The amount of quarterly cash dividends paid on shares of Prosperity common stock is subject to change based on the quarterly dividend amounts approved by the board of directors of Prosperity.

 

Q:	What are the material U.S. federal income tax consequences of the merger to U.S. holders of ABHC common stock?

 

A:	The merger is intended to qualify as a “reorganization” (within the meaning of Section 368(a) of the Code) for U.S. federal income tax purposes, and it is a condition to Prosperity’s and ABHC’s respective obligations to

 

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complete the merger that Prosperity and ABHC each receive a legal opinion to the effect that the merger will so qualify. Accordingly, U.S. holders of ABHC common stock generally will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of their ABHC common stock for Prosperity common stock in the merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of Prosperity common stock. You should be aware that the tax consequences to you of the merger may depend upon your own situation. In addition, you may be subject to state, local or non-U.S. tax laws that are not discussed in this proxy statement/prospectus. You should therefore consult with your own tax advisor for a full understanding of the tax consequences to you of the merger. For a more complete discussion of the material U.S. federal income tax consequences of the merger, see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 91.

 

Q:	When is the merger expected to be completed?

 

A:

Prosperity and ABHC expect to complete the merger in the fourth quarter of 2025 or the first quarter of 2026. However, neither Prosperity nor ABHC can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. Before we can complete the merger, ABHC must first obtain the approval of holders of ABHC common stock for the merger, and Prosperity and ABHC must obtain necessary regulatory approvals and satisfy certain other conditions to completion of the merger.

 

Q:	What are the conditions to completion of the merger?

 

A:

The obligations of Prosperity and ABHC to complete the merger are subject to the satisfaction or waiver of certain closing conditions contained in the merger agreement, including the receipt of required regulatory approvals and the expiration of statutory waiting periods without the imposition of any materially burdensome regulatory condition (as defined in “The Merger—Regulatory Approvals”), receipt of tax opinions, approval by holders of ABHC common stock of the ABHC merger proposal and other customary conditions. For more information, see the section entitled “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 86.

 

Q:	What happens if the merger is not completed?

 

A:

If the merger is not completed, holders of ABHC common stock will not receive any consideration for their shares of ABHC common stock in connection with the merger. Instead, ABHC will remain an independent company and Prosperity will not complete the issuance of shares of Prosperity common stock pursuant to the merger agreement. In addition, if the merger agreement is terminated in certain circumstances, a termination fee of $12,850,000 may be payable by ABHC to Prosperity. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 88 for a more detailed discussion of the circumstances under which a termination fee will be required to be paid.

 

Q:	Should I send in my ABHC stock certificates now?

 

A:

No. Please do not send in your stock certificates with your proxy. After the merger is completed, an exchange agent designated by Prosperity and reasonably acceptable to ABHC (the “exchange agent”) will send you instructions for exchanging ABHC stock certificates for the consideration to be received in the merger. See the section entitled “The Merger Agreement—Conversion of Shares; Exchange of ABHC Stock Certificates” beginning on page 74.

 

Q:	What should I do if I receive more than one set of voting materials for the same special meeting?

 

A:	If you hold shares of ABHC common stock in “street name” and also directly in your name as a holder of record or otherwise or if you hold shares of ABHC common stock in more than one brokerage account, you may receive more than one set of voting material relating to the ABHC special meeting.

 

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Record holders. For shares held directly, please complete, sign, date and return each proxy card or otherwise following the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares of ABHC common stock are voted.

Shares in “street name.” For shares held in “street name” through a bank, broker, trustee or other nominee, you should follow the procedures provided by your bank, broker, trustee or other nominee to vote your shares.

 

Q:	Who can help answer my questions?

 

A:	If you need assistance in completing your proxy, have questions regarding the ABHC special meeting, or would like additional copies of this proxy statement/prospectus, please contact Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at (361) 653-5070 or [email protected].

 

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RISK FACTORS

An investment by ABHC’s shareholders in Prosperity common stock as a result of the exchange of shares of Prosperity common stock for shares of ABHC common stock in the merger involves certain risks. Certain material risks and uncertainties connected with the merger agreement and transactions contemplated thereby, including the merger and bank merger, and ownership of Prosperity common stock are discussed below. In addition, Prosperity discusses certain other material risks connected with the ownership of Prosperity common stock and with Prosperity’s business under the caption entitled “Risk Factors” appearing in its Annual Report on Form 10-K most recently filed with the SEC and may include additional or updated disclosures of such material risks in its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that Prosperity has filed with the SEC or may file with the SEC after the date of this proxy statement/prospectus, each of which reports is or will be incorporated by reference in this proxy statement/prospectus.

Holders of ABHC common stock should carefully read and consider all of these risks and all other information contained in this proxy statement/prospectus, including the discussions of risk factors included in the documents incorporated by reference in this proxy statement/prospectus, in deciding whether to vote for approval of the various proposals for which they may be entitled to vote at the ABHC special meeting described herein. The risks described in this proxy statement/prospectus and in those documents incorporated by reference may adversely affect the value of Prosperity common stock that you, as an existing holder of ABHC common stock, will hold upon consummation of the merger, and could result in a significant decline in the value of Prosperity common stock and cause the holders of ABHC common stock to lose all or part of the value of their investments in Prosperity common stock.

Because the market price of Prosperity common stock may fluctuate, holders of ABHC common stock cannot be certain of the market value of the merger consideration they will receive.

The merger consideration payable to the shareholders of ABHC will be in the form of Prosperity common stock. The market value of Prosperity common stock will vary from the closing price of Prosperity common stock on the date that parties announced the merger, on the date that this proxy statement/prospectus is mailed to the shareholders of ABHC, and on the date of the special meeting, and any change in the market price of Prosperity common stock prior to the completion of the merger will affect the value of the merger consideration that will be received by the shareholders of ABHC. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Prosperity’s business, operations and prospects and regulatory considerations, many of which factors are beyond Prosperity’s or ABHC’s control. Therefore, at the time of the ABHC special meeting, holders of ABHC common stock will not know the market value of the consideration to be received by holders of ABHC common stock at the effective time. Shareholders of ABHC should obtain current market quotations for shares of Prosperity common stock before voting their shares at the ABHC special meeting.

The equity capital of ABHC as at closing date of the merger could be less than $173,000,000, which would result in the reduction of the amount of the merger consideration that ABHC shareholders would be entitled to receive in the merger.

The amount of merger consideration that ABHC shareholders would be entitled to receive in the merger will be reduced if the ABHC equity capital is less than $173,000,000 as at the closing date, calculated in the manner and under the circumstances set forth in the merger agreement. Accordingly, at the time ABHC shareholders vote with respect to the merger agreement, they will not know the exact value of the merger consideration they will be entitled to receive in the merger.

 

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The market price of Prosperity common stock after the merger may be affected by factors different from those currently affecting the independent businesses of Prosperity and ABHC.

Upon completion of the merger, holders of ABHC common stock will become holders of Prosperity common stock. Prosperity’s business differs in important respects from that of ABHC, and, accordingly, the results of operations of Prosperity and the market price of Prosperity common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of each of Prosperity and ABHC. For a discussion of the businesses of Prosperity and ABHC and of some important factors to consider in connection with those businesses, see the documents incorporated by reference in this proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 115.

ABHC and Prosperity are expected to incur substantial costs related to the merger and integration. If the merger is not completed, ABHC and Prosperity will have incurred substantial expenses without realizing the expected benefits of the merger.

Each of ABHC and Prosperity has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, filing fees and other regulatory fees, printing costs and other related costs. Some of these costs are payable by either ABHC or Prosperity regardless of whether or not the merger is completed. If the merger is not completed, ABHC and Prosperity would have to recognize these expenses without realizing the expected benefits of the merger.

Combining Prosperity and ABHC may be more difficult, costly or time consuming than expected and Prosperity and ABHC may fail to realize the anticipated benefits of the merger.

The success of the merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of Prosperity and ABHC. To realize the anticipated benefits and cost savings from the merger, Prosperity and ABHC must successfully integrate and combine their businesses in a manner that permits those cost savings to be realized. If Prosperity and ABHC are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected. In addition, the actual cost savings and anticipated benefits of the merger could be less than anticipated, and integration may result in additional unforeseen expenses.

Prosperity and ABHC have operated and, until the completion of the merger, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of Prosperity and ABHC during this transition period and for an undetermined period after completion of the merger on Prosperity.

Prosperity may be unable to retain ABHC personnel successfully while the merger is pending or after the merger is completed.

The success of the merger and the bank merger will depend in part on Prosperity’s ability to retain the talents and dedication of key employees currently employed by ABHC. It is possible that these employees may decide not to remain with ABHC while the merger is pending or with Prosperity after the merger is completed. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, Prosperity’s business activities may be adversely affected and management’s attention may

 

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be diverted from successfully integrating ABHC to hiring suitable replacements, all of which may cause Prosperity’s business to suffer. In addition, Prosperity may not be able to locate suitable replacements for any key employees who leave Prosperity, or to offer employment to potential replacements on reasonable terms.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on Prosperity following the merger.

Before the merger and the bank merger may be completed, various approvals, consents and non-objections must be obtained from the Federal Reserve Board, the FDIC and the Texas Department of Banking. In determining whether to grant these approvals, the regulators consider a variety of factors, including the regulatory standing of each party and the factors described under “The Merger—Regulatory Approvals” beginning on page 66. These approvals could be delayed or not obtained at all, including due to any or all of the following: an adverse development in either party’s regulatory standing, or any other factors considered by regulators in granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, require branch divestitures, or place restrictions on the conduct of Prosperity’s business or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions or that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of Prosperity following the merger or will otherwise reduce the anticipated benefits of the merger. In addition, there can be no assurance that any such conditions, limitations, obligations or restrictions will not result in the delay or abandonment of the merger. Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any governmental entity of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.

Despite the parties’ commitments to use their reasonable best efforts to promptly prepare and file all necessary documentation in connection with regulatory approvals and cooperate with each other to respond to any request for information and resolve any objection that may be asserted by any governmental entity with respect to the merger agreement, neither Prosperity, ABHC, nor their respective subsidiaries is required under the terms of the merger agreement to take any action, or commit to take any action, or agree to any condition or restriction in connection with obtaining these approvals, that would, individually or in the aggregate, reasonably be likely to have a material adverse effect on the surviving corporation and its subsidiaries, taken as a whole and considered on a scale relative to ABHC and its subsidiaries, after giving effect to the merger. See the section entitled “The Merger—Regulatory Approvals” beginning on page 66.

Certain of ABHC’s directors and executive officers may have interests in the merger that may differ from, or be in addition to, the interests of holders of ABHC common stock generally.

Holders of ABHC common stock should be aware that some of ABHC’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of ABHC shareholders generally. Such interests include payments in connection with existing change in control agreements with certain executive officers of ABHC and American Bank, American Bank and Prosperity Bank entering into new employment agreements with certain executive officers of ABHC and American Bank, the acceleration and settlement of certain outstanding equity awards, and the right to indemnification and insurance coverage following the consummation of the merger. The ABHC board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger and merger agreement, and in recommending that shareholders approve the ABHC merger proposal. For a more complete description of these interests, please see the section entitled “The Merger—Interests of ABHC’s Directors and Executive Officers in the Merger” beginning on page 64.

 

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Termination of the merger agreement could negatively affect ABHC or Prosperity.

If the merger is not completed for any reason, including as a result of ABHC shareholders failing to approve the ABHC merger proposal, there may be various adverse consequences. For example, Prosperity or ABHC’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of Prosperity common stock could decline to the extent that the current market prices reflect a market assumption that the merger will be completed. If the merger agreement is terminated under certain circumstances, ABHC may be required to pay a termination fee of $12,850,000 to Prosperity. See the section entitled “The Merger Agreement—Termination Fee” on page 88 for a complete discussion of the circumstances under which any such termination fee will be required to be paid.

ABHC will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on ABHC. These uncertainties may impair ABHC’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with ABHC to seek to change existing business relationships with ABHC. In addition, subject to certain exceptions, ABHC has agreed to operate its business in the ordinary course prior to closing, and not to take certain actions which could cause ABHC to be unable to pursue other beneficial opportunities that may arise prior to the completion of the merger. See the section entitled “The Merger Agreement—Covenants and Agreements” beginning on page 77 for a description of the restrictive covenants applicable to Prosperity and ABHC.

The shares of Prosperity common stock to be received by holders of ABHC common stock as a result of the merger will have different rights from the shares of ABHC common stock.

In the merger, holders of ABHC common stock will become holders of Prosperity common stock and while their rights as shareholders will continue to be governed by Texas law, their rights as shareholders of Prosperity will be governed by the governing documents of Prosperity. The rights associated with Prosperity common stock are different from the rights associated with ABHC common stock. See the section entitled “Comparison of Shareholders’ Rights” beginning on page 99 for a discussion of the different rights associated with Prosperity common stock.

Holders of ABHC common stock will have a reduced ownership and voting interest in Prosperity after the merger and will exercise less influence over management.

Holders of ABHC common stock currently have the right to vote in the election of the board of directors and on other matters affecting ABHC. When the merger is completed, holders of ABHC common stock will become holders of Prosperity common stock, with a percentage ownership of Prosperity that is smaller than the holder’s percentage ownership of ABHC. Based on the number of shares of Prosperity and ABHC common stock outstanding as of the close of business on the record date, and based on the number of shares of Prosperity common stock expected to be issued in the merger (assuming the ABHC equity capital on the closing date, as calculated pursuant to the terms of the merger agreement, is equal to or greater than $173,000,000), the former holders of ABHC common stock, as a group, are estimated to own approximately [    ] percent ([    ]%) of the fully diluted shares of Prosperity immediately after the merger and current holders of Prosperity common stock as a group are estimated to own approximately [    ] ([    ])% of the fully diluted shares of Prosperity immediately after the merger. Because of this, holders of ABHC common stock will have less influence on the management and policies of Prosperity than they now have on the management and policies of ABHC.

Holders of ABHC common stock have appraisal rights and dissenters’ rights in the merger.

Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation

 

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pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction. If the merger agreement is adopted by ABHC shareholders, ABHC shareholders who vote against the approval of the merger agreement and who properly demand payment of the fair value of their shares of ABHC common stock under the applicable provisions of the TBOC will be entitled to appraisal rights in connection with the merger under the applicable provisions of the TBOC. In addition, Prosperity’s obligation to consummate the merger is subject to the condition that holders of no more than five percent (5%) of the issued and outstanding shares of ABHC common stock demand or be entitled to receive payment of the fair value of their shares as dissenting shareholders under the applicable provisions of the TBOC. Neither ABHC nor Prosperity can predict the number of ABHC shareholders who will seek payment of fair cash value of their shares. See the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning of page 68.

The merger agreement limits ABHC’s ability to pursue alternatives to the merger and may discourage other companies from trying to acquire ABHC.

The merger agreement contains “no shop” covenants that restrict ABHC’s ability to, directly or indirectly, initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to, engage or participate in any negotiations with any person concerning, provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to, any acquisition proposal, subject to certain exceptions, or, during the term of the merger agreement, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other agreement relating to any acquisition proposal (whether written or oral, binding or nonbinding).

The merger agreement further provides that, during the twelve (12)-month period following the termination of the merger agreement under specified circumstances, including the entry into a definitive agreement or consummation of a transaction with respect to an alternative acquisition proposal, ABHC may be required to pay to Prosperity a cash termination fee equal to $12,850,000. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 88.

These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of ABHC from considering or proposing that acquisition.

The merger agreement subjects ABHC to certain restrictions on its business activities prior to the effective time.

The merger agreement subjects ABHC to certain restrictions on its business activities prior to the effective time. Subject to certain specified exceptions, the merger agreement obligates ABHC to, and to cause each of its subsidiaries to, (a) conduct its business in the ordinary course in all material respects, (b) use reasonable best efforts to maintain and preserve intact its business organization and relationships with employees, officers, directors, customers, depositors, suppliers, correspondent banks, governmental entities with jurisdiction over its operations and other third parties having material business relationships with ABHC or any of its subsidiaries and (c) take no action that would be reasonably likely to adversely affect or materially delay the receipt of any necessary approvals of any regulatory agency or other governmental entity required for the transactions contemplated by the merger agreement or the ability of ABHC to perform its covenants and agreements under the merger agreement or to consummate the transactions contemplated by the merger agreement on a timely basis. These restrictions could prevent ABHC from pursuing certain business opportunities that arise prior to the effective time. See the section entitled “The Merger Agreement—Covenants and Agreements—Conduct of Business Prior to the Completion of the Merger” beginning on page 77.

 

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The opinion of ABHC’s financial advisor delivered to the ABHC board of directors prior to the signing of the merger agreement will not reflect changes in circumstances occurring after the date of such opinion.

The opinion of ABHC’s financial advisor was delivered on, and dated, July 17, 2025. Changes in the operations and prospects of Prosperity and ABHC, general market and economic conditions and other factors which may be beyond the control of Prosperity and ABHC may have altered the value of Prosperity or ABHC or the prices of shares of Prosperity common stock as of the date of this proxy statement/prospectus, or may alter such values and prices by the time the merger is completed. The opinion does not speak as of the time the merger will be completed or as of any date other than the date of the opinion. See the section entitled “The Merger—Opinion of ABHC’s Financial Advisor” beginning on page 52.

Risks Relating to Prosperity’s Business

You should read and consider risk factors specific to Prosperity’s business that will also affect Prosperity after the merger. These risks are described in the sections entitled “Risk Factors” in Prosperity’s Annual Report on Form 10-K most recently filed with the SEC and in other documents incorporated by reference into this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 115 of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains statements regarding the merger between Prosperity and ABHC; future financial and operating results; benefits and synergies of the transaction; future opportunities for the surviving corporation; the issuance of common stock of Prosperity contemplated by the merger agreement; the expected timing of the closing of the merger; the ability of the parties to complete the merger considering the various closing conditions and any other statements about future expectations that constitute forward-looking statements within the meaning of the federal securities laws, including the meaning of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, oral or written forward-looking statements may also be included in other information released to the public. Such forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may,” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates, and projections about Prosperity and ABHC or related to the merger and are subject to significant risks and uncertainties that could cause actual results to differ materially from the results expressed in such statements.

These forward-looking statements may include information about the surviving corporation’s possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for credit losses, provision for taxes, effective tax rate, earnings per share and cash flows and the surviving corporation’s future capital expenditures and dividends, future financial condition and changes therein, including changes in the surviving corporation’s loan portfolio and allowance for credit losses, changes in deposits, borrowings and the investment securities portfolio, future capital structure or changes therein, as well as the plans and objectives of management for the surviving corporation’s future operations, future or proposed acquisitions, the future or expected effect of acquisitions on the surviving corporation’s operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors, in addition to the factors relating to the merger discussed under the caption entitled “Risk Factors” beginning on page 20 and the factors previously disclosed in Prosperity’s reports filed with the SEC and incorporated by reference into this proxy statement/prospectus, which could cause actual results to differ materially from those contained or implied in the forward-looking statements or historical performance:

 

•

the risk that the cost savings and synergies from the merger may not be fully realized or may take longer than anticipated to be realized;

 

•

disruption to Prosperity’s business and to ABHC’s business as a result of the announcement and pendency of the merger;

 

•

the risk that the integration of ABHC’s business and operations into Prosperity, will be materially delayed or will be more costly or difficult than expected, or that Prosperity is otherwise unable to successfully integrate ABHC’s business into its own, including as a result of unexpected factors or events;

 

•

the failure to obtain the necessary approval by the shareholders of ABHC;

 

•

the ability of each of Prosperity and ABHC to obtain required governmental approvals of the merger on the timeline expected, or at all, and the risk that such approvals may result in the imposition of

 

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conditions that could adversely affect Prosperity after the closing of the merger or adversely affect the expected benefits of the merger;

 

•

reputational risk and the reaction of each company’s customers, suppliers, employees or other business partners to the merger;

 

•

the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger or the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;

 

•

the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the merger, and Prosperity’s ability to complete the acquisition and integration of ABHC successfully;

 

•

the dilution caused by the issuance of additional shares of Prosperity’s common stock in the merger;

 

•

Prosperity’s revenues after the merger may be less than expected;

 

•

the outcome of any legal or regulatory proceedings that may be currently pending or later instituted against Prosperity before or after the merger, or against ABHC;

 

•

diversion of management’s attention from ongoing business operations;

 

•

general competitive, economic, political and market conditions and other factors that may affect future results of Prosperity and ABHC;

 

•

changes in economic and market conditions that affect the amount and value of the assets of Prosperity Bank and American Bank;

 

•

inaccuracy of the assumptions and estimates that the managements of Prosperity or ABHC make in establishing reserves for probable loan losses and other estimates;

 

•

lack of liquidity, including as a result of a reduction in the amount of sources of liquidity, that Prosperity or ABHC currently have;

 

•

material increases or decreases in the amount of deposits held by Prosperity Bank or American Bank and the cost of those deposits;

 

•

access to the debt and equity markets and the overall cost of funding operations;

 

•

changes in market interest rates that affect the pricing of the loans and deposits of each of Prosperity Bank and American Bank, and the net interest income of each of Prosperity Bank and American Bank;

 

•

fluctuations in the market value and liquidity of the securities Prosperity and ABHC hold for sale, including as a result of changes in market interest rates;

 

•

effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

 

•

the occurrence of market conditions adversely affecting the financial industry generally;

 

•

the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by Prosperity’s regulators, such as the Dodd-Frank Act, and changes in federal government policies;

 

•

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the SEC and the Public Company Accounting Oversight Board, as the case may be;

 

•

governmental monetary and fiscal policies, including the policies of the Federal Reserve;

 

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•

changes in the scope and cost of FDIC insurance and other coverage;

 

•

changes in inflation;

 

•

an increase in the rate of personal or commercial customers’ bankruptcies;

 

•

technology-related changes may be harder to make or may be more expensive than expected;

 

•

attacks on the security of, and breaches of, Prosperity’s or ABHC’s digital information systems, the costs Prosperity or ABHC incurs to provide security against such attacks and any costs and liability Prosperity or ABHC may incur in connection with any breach of those systems;

 

•

the potential impact of technology and “FinTech” entities and digital currencies on the banking industry generally;

 

•

the impacts related to or resulting from bank failures and other volatility, including potential increased regulatory requirements and costs, such as FDIC special assessments, long-term debt requirements and heightened capital requirements, and potential impacts to macroeconomic conditions, which could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital;

 

•

the effects of social media on market perceptions of Prosperity or ABHC and banks generally;

 

•

volatility and disruptions in global capital, foreign exchange and credit markets;

 

•

the ability of the surviving corporation to successfully identify acquisition targets and integrate the businesses of acquired companies and banks;

 

•

the possibility that the surviving corporation will be unable to sustain its current internal growth rate and total growth rate, or achieve its sales objectives;

 

•

the possibility that credit quality could deteriorate;

 

•

the potential changes in customer and consumer demand, including customer and consumer response to marketing;

 

•

the possibility that effectiveness of spending, investments or programs will decline;

 

•

fluctuations in the cost and availability of supply chain resources;

 

•

changes in economic conditions, including currency rate, interest rate and commodity price fluctuations;

 

•

changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs;

 

•

the effect, impact, potential duration or other implications of weather and climate-related events; and

 

•

other factors that may affect the future results of Prosperity and ABHC.

Additional factors that could cause results to differ materially from those described above can be found in Prosperity’s filings with the SEC that are incorporated by reference into this proxy statement/prospectus, as described in the section entitled “Where You Can Find More Information.”

All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth above. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy statement/prospectus or the dates of the documents incorporated by reference in this proxy statement/prospectus and are based on information available at that time. Neither Prosperity nor ABHC assume any obligation to update forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in circumstances or other factors affecting forward-looking statements that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. If Prosperity or ABHC update one or more forward-looking

 

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statements, no inference should be drawn that Prosperity or ABHC will make additional updates with respect to those or other forward-looking statements. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that Prosperity has filed with the SEC as described under “Where You Can Find More Information” beginning on page 115.

Prosperity and ABHC expressly qualify in their entirety all forward-looking statements attributable to either of them or any person acting on their behalf by the cautionary statements contained or referred to in this proxy statement/prospectus.

 

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COMPARATIVE STOCK PRICES AND DIVIDENDS

Prosperity

The following table shows (1) the market value of Prosperity common stock at the close of business on July 17, 2025, the last trading day prior to the announcement of the merger, and as of the most recent practicable date preceding the date of this proxy statement/prospectus, and (2) the equivalent pro forma value of a share of ABHC common stock at such date based on the value of the merger consideration. The equivalent prices per ABHC share are hypothetical implied values of the merger consideration, assuming the ABHC equity capital on the closing date, as calculated pursuant to the terms of the merger agreement, is equal to or greater than $173,000,000.

For illustration purposes only, if the merger occurs and assuming (i) there are [   ] shares of ABHC common stock issued and outstanding at the closing of the merger (including [   ] shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards), (ii) the ABHC equity capital on the closing date, as calculated pursuant to the terms of the merger agreement, is equal to or greater than $173,000,000, and (iii) the price per share of Prosperity common stock received in the merger is equal to $[   ], which was the closing price per share of Prosperity common stock on [   ], 2025, then holders of ABHC common stock will receive [   ] shares of Prosperity common stock with a value of $[   ] (before adjusting for fractional shares) for each share of ABHC common stock.

Because of the possibility of the ABHC equity capital adjustment as discussed in this proxy statement/prospectus, you will not know the exact amount of merger consideration you will receive in connection with the merger when you vote on the ABHC merger proposal.

 

		Prosperity Common Stock(1)				Equivalent Pro Forma Value Per Share of ABHC Common Stock(2)
July 17, 2025		$	73.78			$	329.07
[   ], 2025		$	[	]		$	[	]

(1)	Represents the closing price of Prosperity common stock on the NYSE.

(2)	Calculated by multiplying the price of Prosperity common stock on the NYSE as of the specified date by the aggregate merger consideration divided by 995,467 shares of ABHC common stock.

As approved by Prosperity’s board of directors, Prosperity declared and paid a $0.52 per share dividend for the first three fiscal quarters of 2022 and declared and paid a $0.55 per share dividend for the fourth fiscal quarter of 2022. Prosperity declared and paid a $0.55 per share dividend for the first three fiscal quarters of 2023 and declared and paid a $0.56 per share dividend for the fourth fiscal quarter of 2023. Prosperity declared and paid $0.56 per share dividend for the first three fiscal quarters of 2024 and declared and paid a $0.58 per share dividend for the fourth fiscal quarter of 2024. Prosperity declared and paid a $0.58 per share dividend to holders of Prosperity common stock for the first two fiscal quarters of 2025. On July 23, 2025, Prosperity announced it had declared a $0.58 per share dividend for the third fiscal quarter of 2025, payable on October 1, 2025, to shareholders of record as of September 15, 2025.

Prosperity intends to continue to pay regular quarterly cash dividends on its common stock in the fourth fiscal quarter of 2025 and following the merger, when, as and if declared by Prosperity’s board of directors out of funds legally available for that purpose and subject to regulatory restrictions. Except as described herein, no dividends payable in the future have been declared by Prosperity’s board of directors.

Prosperity’s dividend policy may change with respect to the payment of dividends as a return on investment, and Prosperity’s board of directors may change or eliminate the payment of future dividends at its discretion, without notice to Prosperity’s shareholders. There can be no assurance that Prosperity will continue to pay

 

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dividends in the future. Future dividends on Prosperity’s common stock will depend upon its earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate, its ability to service any equity or debt obligations senior to the common stock and other factors deemed relevant by the board of directors of Prosperity.

ABHC

There is no established public trading market for the shares of ABHC common stock, and no market for ABHC common stock is expected to develop if the merger does not occur. No registered broker/dealer makes a market in the ABHC common stock, and no shares of such stock are listed for trading or quoted on any stock exchange or automated quotation system. Transfers of ABHC common stock are also subject to certain restrictions as a result of the ABHC shareholders agreement, which is designed to preserve ABHC’s eligibility as a Subchapter S corporation. ABHC serves as its own transfer agent and registrar. As of the ABHC record date, there were approximately [   ] holders of record of ABHC common stock.

The following table shows, for the periods indicated, the high and low sales prices per share for ABHC common stock, to the extent management of ABHC is aware of such sales, as well as per share dividends paid by ABHC on its common stock. Shares of ABHC common stock are traded by individuals on a personal basis, are infrequent in nature, and ABHC may not become aware of all trades in its common stock or the prices at which such trades are completed. The prices shown on the table below are the result of limited transactions and may not have been representative of the actual fair market value of ABHC common stock at the time of the respective transactions.

ABHC pays regular quarterly dividends on its common stock based on its earnings as described in the table below. In addition, since its election to be treated as a Subchapter S corporation for federal income tax purposes, ABHC has paid a quarterly dividend for the purposes of enabling shareholders to pay their estimated federal income tax obligations on ABHC’s taxable income as a Subchapter S corporation. However, ABHC is not legally required to pay such dividends.

 

		Low				High				Earnings Dividend				Tax Dividend
2022
First Quarter		$	238.00			$	240.00			$	1.73			$	0.81
Second Quarter		$	240.00			$	240.00			$	1.73			$	1.32
Third Quarter		$	240.00			$	240.00			$	1.74			$	2.41
Fourth Quarter		$	240.00			$	240.00			$	1.74			$	5.75
2023
First Quarter		$	240.00			$	240.00			$	1.73			$	0.98
Second Quarter		$	240.00			$	240.00			$	1.73			$	2.35
Third Quarter			—				—			$	1.73			$	2.22
Fourth Quarter			—				—			$	1.73			$	3.94	(1)
2024
First Quarter			—				—			$	1.73			$	1.79
Second Quarter		$	244.00			$	244.00			$	1.73			$	1.24
Third Quarter			—				—			$	1.73			$	1.00
Fourth Quarter			—				—			$	1.73			$	2.84
2025
First Quarter			—				—			$	1.73			$	2.19
Second Quarter		$	250.00			$	250.00			$	1.73			$	0.92
Third Quarter (through [   ], 2025)			—				—				—				—

 

(1)	Consists of tax dividends of $2.09 per share and $1.85 per share paid with respect to the fourth quarter of 2023.

 

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ABHC’s shareholders are entitled to receive dividends out of legally available funds when, as and if declared by the ABHC board of directors, in its sole discretion. As a Texas corporation, ABHC is subject to certain restrictions on dividends under the TBOC. Generally, a Texas corporation may pay dividends to its shareholders out of its surplus (the excess of its assets over its liabilities and stated capital) unless the corporation is insolvent or the payment of the dividend would render the corporation insolvent. Federal and state banking laws and regulations and state corporate laws restrict the amount of dividends we may declare and pay and that American Bank may declare and pay to ABHC.

 

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THE ABHC SPECIAL MEETING

This section contains information for ABHC shareholders about the ABHC special meeting. ABHC is mailing or otherwise delivering this proxy statement/prospectus to you, as an ABHC shareholder, on or about [   ], 2025. This proxy statement/prospectus is also being delivered to ABHC shareholders as Prosperity’s prospectus for its offering of Prosperity common stock in connection with the merger. This proxy statement/prospectus is accompanied by a notice of the ABHC special meeting and a proxy that the ABHC board of directors is soliciting for use by ABHC shareholders at the ABHC special meeting and at any adjournments or postponements of the ABHC special meeting. References to “you” and “your” in this section are to ABHC shareholders.

Date, Time and Place

The ABHC special meeting will be held in person on [   ], 2025 at [   ], Central Time, at the Omni Corpus Christi Hotel, 900 North Shoreline Boulevard, Corpus Christi, Texas 78401. If you hold your shares of ABHC common stock in your name as a shareholder of record, you may attend the ABHC special meeting and cast your vote in person at the ABHC special meeting at any time before the closing of the polls at the ABHC special meeting.

Matters to Be Considered

At the ABHC special meeting, you will be asked to consider and vote upon the following proposals:

 

•

ABHC merger proposal: to approve the merger agreement and the transactions contemplated thereby, including the merger; and

 

•

ABHC adjournment proposal: to adjourn or postpone the ABHC special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal.

Recommendation of the ABHC Board of Directors

The ABHC board of directors has unanimously approved the merger agreement and determined that the merger and the bank merger are advisable and in the best interests of ABHC and its shareholders.

Accordingly, the ABHC board of directors recommends that ABHC shareholders vote as follows:

“FOR” the ABHC merger proposal; and

“FOR” the ABHC adjournment proposal.

Holders of ABHC common stock should carefully read this proxy statement/prospectus, including any documents incorporated by reference, and the annexes in their entirety for more detailed information concerning the merger and the transactions contemplated by the merger agreement.

Completion of the merger is conditioned upon the approval of the ABHC merger proposal, but is not conditioned upon the approval of the ABHC adjournment proposal.

Record Date; Shareholders Entitled to Vote

The record date for the ABHC special meeting is [   ], 2025. Only record holders of shares of ABHC common stock at the close of business on the record date are entitled to notice of, to attend and to vote at, the ABHC special meeting or any adjournment or postponement thereof. At the close of business on the record date, the only outstanding voting securities of ABHC were shares of common stock, and [   ] shares of ABHC

 

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common stock were issued and outstanding (including [   ] shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards).

Each share of ABHC common stock outstanding on the record date is entitled to one vote on each proposal.

Voting by ABHC’s Directors and Executive Officers

At the close of business on the record date for the ABHC special meeting, ABHC directors and executive officers and their affiliates were entitled to vote approximately [   ] shares of ABHC common stock, or approximately [   ]% of the shares of ABHC common stock outstanding on that date.

ABHC currently expects that the shares of ABHC common stock beneficially owned by its directors and executive officers will be voted in favor of the ABHC merger proposal and the ABHC adjournment proposal. In connection with the merger agreement, each of the directors, certain executive officers and certain shareholders of ABHC, in their capacities as shareholders, have separately entered into voting agreements pursuant to which they agreed to vote their beneficially owned shares of ABHC common stock in favor of the ABHC merger proposal and certain related matters and against alternative transactions. For further information, see the section entitled “The Merger Agreement—Voting Agreements” beginning on page 89.

Quorum and Adjournment

No business may be transacted at the ABHC special meeting unless a quorum is present. ABHC shareholders who hold shares representing at least a majority of the shares of ABHC common stock issued and outstanding and entitled to vote at the ABHC special meeting must be present in person or represented by proxy to constitute a quorum.

If a quorum is not present, the shareholders entitled to vote, present in person or represented by proxy, shall have power to adjourn the ABHC special meeting from time to time by a vote of the holders of the majority of the shares who are present or represented by proxy at the meeting, without notice other than announcement at the ABHC special meeting, until a quorum shall be present or represented. When any adjourned ABHC special meeting is reconvened and a quorum shall be present and represented, any business may be transacted which might have been transacted at the ABHC special meeting as originally notified. Once a quorum is constituted, the shareholders present or represented by proxy at the ABHC special meeting may continue to transact business until adjournment, notwithstanding the subsequent withdrawal therefrom of such number of shareholders as to leave less than a quorum. Unless the merger agreement has been terminated in accordance with its terms, the ABHC special meeting shall be convened and the merger agreement and the merger will be submitted to the shareholders of ABHC at the ABHC special meeting, for the purpose of voting on the ABHC merger proposal and the ABHC adjournment proposal. ABHC shall only be required to adjourn or postpone the ABHC special meeting two (2) times pursuant to the merger agreement.

All shares of ABHC common stock represented at the ABHC special meeting, including shares of ABHC common stock that are represented but that vote to abstain and broker non-votes, will be treated as present for purposes of determining the presence or absence of a quorum.

Participation in the ABHC special meeting in accordance with the instructions given above will constitute the presence in person at the ABHC special meeting, except where such shareholder participates in the meeting for the express purpose of objecting to the transaction of business on the ground that the meeting is not lawfully called or convened.

 

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Vote Required; Treatment of Abstentions; Broker Non-Votes and Failure to Vote

The required votes to approve the ABHC proposals are as follows:

Approval of the ABHC merger proposal requires the affirmative vote of holders of at least two-thirds of the outstanding shares of ABHC common stock entitled to vote on the ABHC merger proposal. If you are an ABHC shareholder and mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the ABHC special meeting on the ABHC merger proposal, or if you fail to instruct your bank, broker or other nominee how to vote with respect to the ABHC merger proposal, it will have the same effect as a vote “AGAINST” the proposal.

Assuming a quorum is present, approval of the ABHC adjournment proposal requires the affirmative vote of the holders of a majority of the shares of ABHC common stock present in person or represented by proxy at the ABHC special meeting and entitled to vote. If you are an ABHC shareholder who is present in person or represented by proxy at the ABHC special meeting and you mark “ABSTAIN” on your proxy, fail to vote on the ABHC adjournment proposal or fail to instruct your bank, broker or other nominee how to vote with respect to the ABHC adjournment proposal, it will have the same effect as a vote “AGAINST” the proposal. If you are not present in person or represented by proxy at the ABHC special meeting, it will have no effect on the ABHC adjournment proposal.

Voting and Revocation of Proxies

Proxies, in the form enclosed, which are properly executed and returned and not subsequently revoked, will be voted in accordance with the instructions indicated on the proxies. Any properly executed proxy on which voting instructions are not specified will be voted “FOR” the ABHC merger proposal and “FOR” the ABHC adjournment proposal. The proxy also grants authority to the persons designated in such proxy to vote in accordance with their own judgment if an unscheduled matter is properly brought before the ABHC special meeting.

If you hold your shares of ABHC common stock in your name as a shareholder of record, you may attend the ABHC special meeting and cast your vote in person at the ABHC special meeting at any time before the closing of the polls at the ABHC special meeting.

A holder of ABHC common stock may revoke a previously delivered proxy before it is voted at the special meeting by:

 

•

delivering a written notice of revocation to Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at American Bank Holding Corporation, 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401, which must be received by [   ] p.m., Central Time, on [   ], 2025;

 

•

executing a proxy bearing a later date and delivering that proxy to Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at American Bank Holding Corporation, 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401, which must be received by [   ] p.m., Central Time, on [   ], 2025; or

 

•

attending the ABHC special meeting and voting in person.

All written notices of revocation and other communications with respect to revocation or proxies must be sent to: American Bank Holding Corporation, 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401, Attention: Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC. If you hold your shares in street name with a bank or broker, you must contact such bank or broker for instructions as to how to revoke your proxy.

 

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Dissenter’s Rights

ABHC shareholders are entitled to dissenters’ rights with respect to the ABHC merger proposal. These dissenters’ rights are conditioned on strict compliance with requirements of the applicable provisions of the Texas Business Organizations Code. Please see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger,” and the full text of the applicable provisions of the Texas Business Organizations Code, which are reproduced in full in Annex E to this proxy statement/prospectus.

Solicitation of Proxies

The ABHC board of directors is soliciting proxies for the ABHC special meeting from holders of shares of ABHC common stock entitled to vote at such special meeting. ABHC is responsible for its expenses incurred in preparing, assembling, printing, and mailing this proxy statement/prospectus. Proxies will be solicited through the mail. Additionally, directors and officers of ABHC intend to solicit proxies personally or by telephone or other means of communication. The directors and officers of ABHC will not be additionally compensated for any such solicitation. ABHC will reimburse banks, brokers and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding the proxy materials to beneficial owners.

Other Matters to Come Before the ABHC Special Meeting

ABHC management knows of no other business to be presented at the ABHC special meeting, but if any other matters are properly presented to the meeting or any adjournments thereof, the persons named in the proxies will vote upon them in accordance with the ABHC board of directors’ recommendations.

Assistance

If you need assistance in completing your proxy, have questions regarding the ABHC special meeting, or would like additional copies of this proxy statement/prospectus, please contact Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC, at (361) 653-5070 or [email protected].

 

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ABHC PROPOSALS

Proposal 1: ABHC Merger Proposal

ABHC is asking holders of ABHC common stock to approve the merger agreement and the transactions contemplated thereby, including the merger. Holders of ABHC common stock should read this proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A.

After careful consideration, the ABHC board of directors unanimously (i) determined that the merger and the bank merger are advisable and in the best interests of ABHC and its shareholders, (ii) adopted and approved the merger agreement and the transactions contemplated thereby, (iii) authorized the execution of the merger agreement, (iv) directed that the merger agreement be submitted to the holders of ABHC common stock for approval and (v) recommended approval of the merger agreement and the transactions contemplated thereby by the holders of ABHC common stock. See the section entitled “The Merger—ABHC’s Reasons for the Merger; Recommendation of the ABHC Board of Directors” for a more detailed discussion of the recommendation of the ABHC board of directors.

Approval of the ABHC merger proposal is a condition to the completion of the merger. If the ABHC merger proposal is not approved, the merger will not occur. For a detailed discussion of the terms and conditions of the merger, see the section entitled “The Merger—Terms of the Merger.”

Vote Required for Approval

Approval of the ABHC merger proposal requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of ABHC common stock entitled to vote on the proposal. If you are an ABHC shareholder and mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the ABHC special meeting on the ABHC merger proposal, or if you fail to instruct your bank, broker or other nominee how to vote with respect to the ABHC merger proposal, it will have the same effect as a vote “AGAINST” the proposal.

Recommendation of the ABHC Board of Directors

THE ABHC BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ABHC MERGER PROPOSAL.

Proposal 2: ABHC Adjournment Proposal

The ABHC special meeting may be adjourned or postponed, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal.

If, at the ABHC special meeting, the number of shares of ABHC common stock present or represented by proxy and voting in favor of the ABHC merger proposal is insufficient to approve the ABHC merger proposal, ABHC intends to move to adjourn the ABHC special meeting to enable the ABHC board of directors to solicit additional proxies for approval of the ABHC merger proposal. In that event, ABHC will ask holders of ABHC common stock to vote on the ABHC adjournment proposal, but not the ABHC merger proposal.

In this proposal, ABHC is asking holders of ABHC common stock to authorize the holder of any proxy solicited by the ABHC board of directors, on a discretionary basis, to vote in favor of adjourning or postponing the ABHC special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of such adjournment or postponement to approve the ABHC merger proposal, including the

 

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solicitation of proxies from holders of ABHC common stock who have previously voted. Under the ABHC bylaws, if a quorum is not present at the ABHC special meeting, the ABHC shareholders entitled to vote, present in person or represented by proxy, shall have the power to adjourn the ABHC special meeting by a vote of the holders of the majority of the shares who are present or represented by proxy at the meeting, without notice other than announcement at the ABHC special meeting, until a quorum shall be present or represented. The approval of the ABHC adjournment proposal by holders of ABHC common stock is not a condition to the completion of the merger.

Vote Required for Approval

The vote on the ABHC adjournment proposal is a vote separate and apart from the vote on the ABHC merger proposal. Accordingly, if you are a holder of ABHC common stock, you may vote to approve the ABHC merger proposal and vote not to approve the ABHC adjournment proposal, and vice versa. The approval of the ABHC adjournment proposal by holders of ABHC common stock is not a condition to the completion of the merger.

Assuming a quorum is present, approval of the ABHC adjournment proposal requires the affirmative vote of the holders of a majority of the shares of ABHC common stock present in person or represented by proxy at the ABHC special meeting and entitled to vote. If you are an ABHC shareholder who is present in person or represented by proxy at the ABHC special meeting and you mark “ABSTAIN” on your proxy, fail to vote on the ABHC adjournment proposal or fail to instruct your bank, broker or other nominee how to vote with respect to the ABHC adjournment proposal, it will have the same effect as a vote “AGAINST” the proposal. If you are not present in person or represented by proxy at the ABHC special meeting, it will have no effect on the ABHC adjournment proposal.

Recommendation of the ABHC Board of Directors

THE ABHC BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ABHC ADJOURNMENT PROPOSAL.

 

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INFORMATION ABOUT PROSPERITY

Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

Houston, Texas 77027

(281) 269-7199

Prosperity Bancshares, Inc. was formed in 1983 as a vehicle to acquire the former Allied Bank in Edna, Texas, which was chartered in 1949 as The First National Bank of Edna and is now known as Prosperity Bank. Prosperity is a Texas corporation and a registered financial holding company that derives substantially all of its revenues and income from the operation of its bank subsidiary, Prosperity Bank. Prosperity Bank provides a wide array of financial products and services to businesses and consumers throughout Texas and Oklahoma. As of June 30, 2025, Prosperity Bank operated 283 full service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 61 in the Dallas/Fort Worth area; 22 in the East Texas area; 31 in the Central Texas area including Austin and San Antonio; 45 in the West Texas area including Lubbock, Midland-Odessa, Abilene, Amarillo and Wichita Falls; 15 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

Prosperity’s common stock is traded on the NYSE under the symbol “PB.”

Prosperity’s principal executive office is located at Prosperity Bank Plaza, 4295 San Felipe in Houston, Texas and its telephone number at that location is (281) 269-7199. Prosperity’s website is https://www.prosperitybankusa.com/. The information on Prosperity’s website is not part of this proxy statement/prospectus, and the references to the Prosperity website address do not constitute incorporation by reference of any information on that website into this proxy statement/prospectus.

Additional information about Prosperity and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 115.

 

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INFORMATION ABOUT ABHC

American Bank Holding Corporation

800 N. Shoreline Boulevard, Suite 200S

Corpus Christi, Texas 78401

(800) 257-8316

General

ABHC is a Texas corporation and a registered financial holding company. ABHC was incorporated in 1994 for the purpose of serving as a bank holding company for American Bank. ABHC does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for its wholly owned banking subsidiary, American Bank. Its primary activities are to provide assistance in the management and coordination of American Bank’s financial resources. ABHC has no significant assets other than all of the outstanding common stock of American Bank. ABHC derives its revenues primarily from the operations of American Bank in the form of dividends received from American Bank. As a bank holding company, ABHC is subject to the supervision and regulation of the Federal Reserve Board.

American Bank is a national banking association that was chartered in 1970 and is subject to the supervision and regulation of the Office of the Comptroller of the Currency. American Bank is a full-service commercial bank, providing financial services to customers primarily located in the Texas market areas of Austin, Corpus Christi, San Antonio and Victoria.

As of June 30, 2025, ABHC had, on a consolidated basis, total assets of $2.6 billion, total loans of $1.8 billion, and total deposits of $2.3 billion.

Products and Services

American Bank operates 18 banking offices and two loan production offices, including its main office in Corpus Christi and a loan production office in Houston. Services include commercial banking, with Centers of Excellence specializing in commercial real estate, medical, energy, SBA and technology lending; a full range of personal and business banking services, including business and personal deposit accounts and loans; wealth management services including private banking, investment management, and trust; a full suite of technology-enabled treasury management services; home mortgage and construction-related loans; and a full range of electronic banking services.

Employees

As of June 30, 2025, American Bank had 365 full-time (or full-time equivalent) employees, none of whom is covered by a collective bargaining agreement.

Properties

The principal executive office of ABHC and American Bank is located at 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401. American Bank also operates five additional branch offices in Corpus Christi, Texas, four branch offices in San Antonio, Texas, a branch office in each of Converse, Austin, Goliad, New Braunfels, Port Aransas, Rockport, Universal City, and Victoria, Texas, and a loan production office in each of Corpus Christi and Houston, Texas.

Legal Proceedings

There are no threatened or pending legal proceedings against ABHC or American Bank which, if determined adversely, would, in the opinion of management, have a material adverse effect on ABHC’s business, financial condition, results of operations, cash flows or prospects.

 

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Competition

American Bank operates 18 banking offices and two loan production offices in five markets as defined by the Federal Reserve: Austin, Texas; Corpus Christi, Texas; Houston, Texas; San Antonio, Texas; and Victoria, Texas, each of which is a highly competitive and fragmented market.

ABHC experiences competition in its markets from many other financial institutions, including when attracting and retaining savings deposits and in lending funds. The primary factors ABHC encounters in competing for savings deposits are convenient office locations and rates offered. Direct competition for savings deposits comes from other commercial bank and thrift institutions, credit unions, money market mutual funds and issuers of corporate and government securities which may offer more attractive rates than insured depository institutions are willing to pay. The primary factors ABHC encounters in competing for loans include, among others, interest rate and loan origination fees and the range of services offered. Competition for origination of real estate loans comes from other commercial banks, thrift institutions, mortgage bankers, mortgage brokers and insurance companies. Banks and other financial institutions with which ABHC competes may have capital resources and loan limits substantially higher than those maintained by ABHC.

Corporate Information

ABHC’s principal executive office is located at 800 N. Shoreline Boulevard, Suite 200S, Corpus Christi, Texas 78401. American Bank’s website is https://www.americanbank.com/. The information on American Bank’s website is not part of this proxy statement/prospectus, and the references to the American Bank website address do not constitute incorporation by reference of any information on that website into this proxy statement/prospectus.

 

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THE MERGER

This section of the proxy statement/prospectus describes material aspects of the merger. This summary may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus and the other documents we refer you to for a more complete understanding of the merger. In addition, we incorporate important business and financial information about Prosperity into this proxy statement/prospectus by reference. You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 115.

Terms of the Merger

Each of Prosperity’s and ABHC’s respective board of directors has approved the merger agreement. The merger agreement provides that ABHC will merge with and into Prosperity, with Prosperity as the surviving corporation. Following the completion of the merger, American Bank, a national banking association and a wholly owned bank subsidiary of ABHC, will merge with and into Prosperity Bank, a Texas banking association and a wholly owned bank subsidiary of Prosperity, with Prosperity Bank as the surviving bank.

Under the terms and subject to the conditions set forth in the merger agreement, all outstanding shares of ABHC common stock issued and outstanding immediately prior to the effective time of the merger (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards but excluding dissenting shares, treasury shares and shares held by ABHC or Prosperity (other than treasury shares and shares held by ABHC or Prosperity (a) held in any ABHC benefit plans or related trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity and (b) held, directly or indirectly, in respect of debts previously contracted)) will be converted into the right to receive, without interest, an aggregate of 4,439,981 shares of Prosperity common stock (the “aggregate stock consideration”) as such number of shares of Prosperity common stock may be reduced pursuant to the terms of the merger agreement.

The aggregate stock consideration will be reduced if the ABHC equity capital, as calculated pursuant to the terms of the merger agreement, is less than $173,000,000 on the closing date, by a number of shares equal to the absolute value of the difference between $173,000,000 and the ABHC equity capital on the closing date, divided by $70.73 (the aggregate stock consideration, as so adjusted, the “adjusted aggregate stock consideration”). For the purposes of the merger agreement, the equity capital of ABHC is equal to the sum of the capital stock, capital surplus and retained earnings of ABHC, minus goodwill and other intangibles, and excluding unrealized securities gains or losses, on a consolidated basis, as determined pursuant to generally accepted accounting principles in the United States (“GAAP”) and other terms set forth in the merger agreement (the “ABHC equity capital”). The merger agreement provides that ABHC must, for the purposes of calculating the ABHC equity capital, deduct for certain extraordinary items related to the merger agreement and the transactions contemplated thereby, including, without duplication: (i) the amount of expenses incurred by ABHC and its subsidiaries related to the merger, the merger agreement and the actions and transactions contemplated thereby, including any fees and commissions payable to any broker, finder, financial advisor or investment banking firm in connection with the merger agreement or the transactions contemplated thereby and any legal and accounting fees and other expenses incurred in connection with the negotiation, execution or performance of the merger agreement or the consummation of the transactions contemplated thereby, (ii) any amount needed to bring ABHC’s total loan loss reserve to an amount equal to the greater of (x) 1.05% of the total loans of ABHC and its subsidiaries as of the closing date, determined in accordance with GAAP and the accounting principles, practices, procedures, methodologies and policies employed in preparing the audited consolidated balance sheet of ABHC and its subsidiaries as of December 31, 2024 or (y) $18,400,000, (iii) the amount of any fees, costs, expenses and accruals related to threatened or outstanding litigation relating to ABHC and its subsidiaries, (iv) the premium or additional cost required to provide for the continuation of certain of ABHC’s insurance policies pursuant to the merger agreement, (v) the amount of any payments to be made pursuant to any existing employment, change in control, salary continuation, deferred compensation or other similar agreements or arrangements or severance,

 

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noncompetition, retention or bonus arrangements between ABHC or American Bank and any other person (but not including stay-pay arrangements agreed to between Prosperity Bank and American Bank), (vi) the amount of any amounts that may be owed by Prosperity or Prosperity Bank after the effective time under any of the agreements or arrangements in the foregoing clause (v), (vii) the accrual of any future benefit payments due under any salary continuation, deferred compensation or other similar agreements through the date of the final payment, which amount must be confirmed by a third-party consultant mutually acceptable to ABHC and Prosperity, (viii) the amount of any cost to fully fund, terminate and liquidate any ABHC benefit plan and to pay all related expenses and fees, including expenses and fees associated with any governmental filings in connection with such termination, to the extent such termination is required by the terms of the merger agreement or requested by Prosperity under the terms of the merger agreement, (ix) the nondeductible amount of any payments subject to Section 280G of the Code and (x) such other amounts as are agreed upon by ABHC and Prosperity.

As a result, holders of ABHC common stock will receive the number of shares of Prosperity common stock equal to the adjusted aggregate stock consideration divided by the aggregate number of shares of ABHC common stock issued and outstanding (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards) immediately prior to the effective time, for each share of ABHC common stock held by such holder immediately prior to the effective time of the merger (the “merger consideration”).

For illustrative purposes only, if the merger occurs and assuming (i) there are [   ] shares of ABHC common stock issued and outstanding at the closing of the merger (including [   ] shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards), (ii) the ABHC equity capital on the closing date, as calculated pursuant to the terms of the merger agreement, is equal to or greater than $173,000,000, and (iii) the price per share of Prosperity common stock received in the merger is equal to $[   ], which was the closing price per share of Prosperity common stock on [   ], 2025, then holders of ABHC common stock will receive [   ] shares of Prosperity common stock with a value of $[   ] (before adjusting for fractional shares) for each share of ABHC common stock.

Prosperity will not issue any fractional shares of Prosperity common stock in the merger. Holders of ABHC common stock who would otherwise be entitled to a fraction of a share of Prosperity common stock in the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent), without interest, equal to such fractional part of a share of Prosperity common stock (after taking into account all of the shares of ABHC common stock held by such holder immediately prior to the effective time of the merger and rounded to the nearest thousandth when expressed in decimal form) multiplied by the average of the closing sale prices of Prosperity common stock on the New York Stock Exchange as reported by The Wall Street Journal for the ten (10) consecutive full days ending on and including the fifth (5th) trading day immediately preceding the closing date.

Holders of ABHC common stock are being asked to approve the merger and the merger agreement. See the section entitled “The Merger Agreement” beginning on page 71 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

Background of the Merger

As part of the ongoing consideration and evaluation of ABHC’s long-term prospects and strategies, the ABHC board of directors and the senior management of ABHC have regularly reviewed and assessed ABHC’s business strategies and objectives, including assessments of strategic growth opportunities potentially available to ABHC. These strategic discussions have focused on, among other things, prospects and developments in the financial services industry, the regulatory environment, the economy and the financial markets generally, and the implications of such developments for financial institutions generally and ABHC, in particular. These strategic discussions were part of the continuous efforts of ABHC to enhance value for its shareholders and deliver the best possible services to its customers and communities.

 

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These strategic reviews have also included assessments of ongoing consolidation in the financial services industry and the benefits and risks to ABHC and its shareholders of strategic combination transactions compared to the benefits and risks of continued operation as a stand-alone company. Factors assessed in connection with these reviews have included the benefits and risks of organic expansion, competition, potential expense and revenue synergies, regulatory requirements, the interest rate environment, scale and diversification, credit risk, market risk and the impacts of rapidly changing technology and the delivery channels for products and services.

Each of Stephen C. Raffaele, Director and President of ABHC and Director, Chief Executive Officer and President of American Bank, Patricia Hawn Wallace, Chair of the Board of ABHC and Director of American Bank, and Ben B. Wallace, Vice Chairman of the Board and Executive Vice President of ABHC and Chairman of the Board of American Bank, also has engaged from time to time in discussions with management of other companies in the financial services industry, including with respect to potential strategic business combination transaction opportunities that may be available to enhance value for their respective companies and shareholders. Mr. Raffaele, as well as other members of ABHC’s executive committee and board of directors, also occasionally meet with representatives of various investment banking firms experienced in the banking industry to discuss market conditions, industry trends, the performance of ABHC and potential strategic business combination transaction opportunities.

On October 2, 2024, Mr. Raffaele, Mr. Wallace and Mrs. Wallace met with David Zalman, Chief Executive Officer and Senior Chairman of the Board of Prosperity, and two members of his executive team at Mr. Zalman’s home in El Campo, Texas. At this meeting, Mr. Zalman mentioned that Prosperity might be interested in considering an acquisition of ABHC. In an information-only context, the parties discussed what such a transaction might potentially look like, including matters of cultural fit, business model, community banking philosophy, and the treatment of ABHC’s employees in an acquisition scenario. No valuation or follow-up actions were discussed.

On October 31, 2024, Mr. Raffaele met with the Chief Executive Officer and President of another Texas-based bank holding company (“Company A”). The meeting was principally social, though the Chief Executive Officer of Company A did state that Company A might be interested in considering a merger transaction with ABHC. No valuation or follow-up actions were discussed.

In early 2025, as part of its regular discussions of strategic possibilities, the executive committee of American Bank and ABHC began a comprehensive evaluation of long-term strategic alternatives, risks and shareholder objectives given the current operating environment. Parts of this analysis included more specific consideration of (a) the risks and benefits of continuing to operate as a stand-alone institution, including, but not limited to, the risks of continuing to grow organically or through acquisitions, (b) the potential difficulty of raising additional necessary growth capital through private or public offerings of stock, and (c) the continued lack of significant liquidity for ABHC’s shareholders; versus the risks and benefits of finding a merger or acquisition partner who would be willing to appropriately value ABHC stock but who would also offer a good cultural and business model fit so that ABHC’s employees and customers could also benefit from such a transaction. Several financial institutions, including Prosperity, had mentioned to members of ABHC’s executive committee from time to time that they admired ABHC and might be interested in pursuing a strategic transaction with ABHC. In addition, Mr. Raffaele maintained longstanding social and professional relationships with members of the executive and senior management teams of other financial institutions, including Prosperity.

In order to properly consider the full range of long-term strategic alternatives for ABHC and the possible transactions with Prosperity, Company A and other possible strategic counterparties, as well as shareholder objectives and risks regarding the operating environment for financial institutions, the executive committee of the ABHC board of directors met with representatives of Stephens Inc. (“Stephens”), a well-known financial advisor in the financial services industry, on January 29, 2025. At the meeting, Stephens presented material regarding various strategic possibilities for ABHC, including continuing ABHC’s current strategy of operating and growing as a stand-alone financial institution, the options for raising additional capital or going public, and alternatives for a merger, sale or change of control. The executive committee discussed and deliberated these topics with

 

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Stephens, but no decision was made at the meeting regarding any specific strategic transaction. However, the executive committee determined that ABHC should continue to explore the strategic options, including discussions with various potential counterparties, including Company A and Prosperity.

On February 10, 2025, Mr. Raffaele met with the Chief Executive Officer of Company A, at which meeting Company A expressed a strong interest in exploring a potential merger with ABHC, along with some of the general terms and rationale under which such a transaction might take place. No specific valuation or other material terms were discussed.

On February 27, 2025, the executive committee of the ABHC board of directors held a meeting and invited representatives of another investment banking firm to attend. At the meeting, the investment banking firm presented material regarding, and the executive committee discussed and deliberated regarding, various strategic possibilities for ABHC, including continuing ABHC’s current strategy of operating and growing as a stand-alone financial institution, the options for raising additional capital or going public, and alternatives for a merger, sale or change of control. No decision was made at the meeting regarding any specific strategic transaction, though the executive committee determined that ABHC should continue to explore the strategic options, including discussions with various potential counterparties, including Company A and Prosperity.

On March 18, 2025, the executive committee of the ABHC board of directors met to further discuss strategic alternatives, including a potential merger or sale. Representatives of Stephens were present at the meeting and answered questions and presented information regarding the potential strategic alternatives, including a possible change of control, current market conditions for sale transactions, organic growth, potential acquisition targets and potential financing alternatives for acquisition and growth capital. After discussion, the executive committee determined that Stephens should make the same presentation to the full ABHC board of directors.

On March 19, 2025, the full ABHC board of directors met to further discuss the full range of long-term strategic alternatives, including a potential sale. Representatives of Stephens were present at the meeting and answered questions and presented information regarding the potential strategic alternatives, including a possible change of control, current market conditions for sale transactions, organic growth, potential acquisition targets and potential financing alternatives for acquisition and growth capital. At the meeting, the ABHC board of directors authorized Stephens and members of ABHC’s executive committee to continue to meet with potential counterparties to a sale transaction, including Company A and Prosperity. Additionally, the ABHC board of directors authorized ABHC to formally retain Stephens as its exclusive financial advisor regarding potential strategic alternatives, including a sale transaction.

On the afternoon of March 29, 2025, representatives of Stephens presented ABHC with a draft engagement letter which called for the retention of ABHC as American’s exclusive financial advisor regarding potential strategic transactions, including a sale transaction.

On March 31, 2025, ABHC retained Norton Rose Fulbright US LLP (“NRF”) as its legal advisor, to represent ABHC and its affiliated companies, including American Bank, in connection with a potential strategic transaction. Over the course of the next few weeks, Mr. Raffaele and NRF engaged in negotiations with Stephens regarding the terms of the Stephens engagement letter.

On April 9, 2025, ABHC and Stephens executed the Stephens engagement letter.

On April 11, 2025, the executive committee of the ABHC board of directors held a meeting, which was attended by Stephens, to discuss the potential impacts of recent trade policy announcements on potential strategic transactions for ABHC. At that meeting, representatives of Stephens presented materials regarding such impacts, including the potential effects on the value of ABHC and on the share prices of potential acquirors of ABHC. While the general consensus among directors was that the impacts were likely to be negative in the near-term, the

 

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directors concluded that it would be difficult to predict when the negative effects and market uncertainty would abate. Accordingly, the directors determined that it would be better for ABHC, and Stephens on behalf of ABHC, to continue to discuss a potential sale with potential counterparties, including Company A and Prosperity, and to continue the analysis and discussion so that ABHC could avoid any detrimental delay in executing on such a transaction if market conditions improved and market uncertainty abated.

Following this meeting, ABHC employees and representatives of Stephens began to prepare an electronic data room containing materials that potential acquirors could review to conduct due diligence investigations regarding an acquisition of ABHC and American Bank.

On April 15, 2025, the ABHC board of directors held a special meeting to continue discussions regarding a potential merger with or acquisition by a select group of counterparties, including, but not limited to, Company A and Prosperity.

On April 23, 2025, Mr. Raffaele met in San Antonio, Texas with senior members of another Texas-based bank holding company (“Company B”), at which the parties had exploratory discussions regarding a potential business combination transaction between ABHC and Company B.

On April 27, 2025, Mr. Raffaele met with Mr. David Zalman in Austin, Texas. The discussion centered around the degree of potential interest by both parties in an acquisition of ABHC by Prosperity, the rationale and benefits, and the general terms of such a potential transaction.

On April 28, 2025, Stephens sent a draft of a mutual non-disclosure agreement to Prosperity.

On April 28, 2025, Stephens sent a draft of a mutual non-disclosure agreement to Company A.

On April 29, 2025, Prosperity and ABHC executed the mutual non-disclosure agreement.

Also on April 29, 2025, the executive committee of the ABHC board of directors held a meeting to discuss updates regarding the potential transactions with the various counterparties that had been discussed.

On May 1, 2025, Company A and ABHC executed the mutual non-disclosure agreement.

On May 2, 2025, Stephens met with Mr. Cullen Zalman, Prosperity’s Executive Vice President, Banking and Corporate Activities, to have preliminary discussions regarding a potential acquisition of ABHC by Prosperity and to gauge Prosperity’s continued interest in an acquisition of ABHC. While the parties did not discuss valuation, Mr. Cullen Zalman did indicate that Prosperity had long admired ABHC and its banking franchise, that Prosperity continued to be interested in acquiring ABHC and was prepared to act quickly to do so.

On May 5, 2025, Mr. Raffaele met with the Chief Executive Officer of Company A in Austin, Texas. The discussion centered around the degree of potential interest by both parties in a merger transaction and the general terms of such a potential transaction.

On May 9, 2025, Mr. Raffaele, Mr. Wallace, Mrs. Wallace, and Richard F. Scanio, Director of ABHC and Vice Chairman of the Board of American Bank, met with senior members of Company B in Corpus Christi, Texas to continue exploratory discussions regarding a potential business combination transaction between ABHC and Company B.

Over the next few weeks, ABHC and Stephens continued to assemble materials in the electronic data room.

On May 13, 2025, representatives of Stephens met with representatives of Company A to preliminarily discuss a potential acquisition of ABHC by Company A. Although the parties did not discuss any potential valuation of ABHC, Company A’s executives at the meeting indicated that Company A was very interested in pursuing a potential acquisition of ABHC.

 

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On May 15, 2025, Mr. Raffaele met with Mr. David Zalman and Charlotte M. Rasche, Executive Vice President and General Counsel of Prosperity, in Houston, Texas to discuss various deal considerations in connection with a potential acquisition of ABHC by Prosperity. Mr. Raffaele met with Ms. Rasche in Houston, Texas again on May 16, 2025 to continue those discussions.

On May 20, 2025, representatives of Stephens met with members of the executive committee of the ABHC board of directors to provide an update on their contacts with potential acquisition partners. In the presentation, Stephens indicated that there was strong interest from both Company A and Prosperity in an acquisition of ABHC. Additionally, Stephens provided an update on market conditions for bank acquisitions, indicating that there were positive signs of activity that might support a transaction in the near future.

On May 21, 2025, Mr. Raffaele, Mr. Wallace, Mrs. Wallace, and Mr. Scanio met with Mr. David Zalman and Mr. Cullen Zalman at the Wallace home in Corpus Christi, Texas to continue discussions of various deal considerations in connection with a potential sale of ABHC to Prosperity.

On May 22, 2025, Prosperity submitted a non-binding Letter of Intent (the “Prosperity LOI”) to Stephens providing for the acquisition of ABHC by merger with Prosperity in which the consideration was 100% shares of Prosperity common stock.

On May 24, 2025, Company A submitted a non-binding Letter of Intent (the “Company A LOI”) to Stephens providing for the acquisition of ABHC by merger with Company A in which the consideration was 100% shares of Company A stock. The aggregate value of the shares of Company A stock offered in the Company A LOI was less than the value of the shares of Prosperity common stock offered in the Prosperity LOI, based on the share prices of each as of May 24, 2025.

On May 27, 2025, the executive committee of the ABHC board of directors met to discuss both the Prosperity LOI and the Company A LOI. The executive committee authorized Stephens to continue to negotiate with both Prosperity and Company A to increase the value of the merger consideration offered.

Also on May 27, 2025, representatives of Stephens met with representatives of Prosperity to discuss the terms of the Prosperity LOI. Later that same day, Prosperity provided a revised letter of intent (the “Revised Prosperity LOI”), proposing 4,439,981 shares of Prosperity common stock, in the aggregate, in exchange for all outstanding shares of ABHC, subject to downward adjustment if ABHC’s tangible equity capital, excluding unrealized gains and losses in ABHC’s securities portfolio, was less than $173.0 million, which shares of Prosperity stock had an aggregate value of $314.0 million based on the closing price of a share of Prosperity common stock of $70.73 on May 27, 2025.

Also on May 27, 2025, representatives of Stephens contacted representatives of Company A to seek an increase of the merger consideration offered by Company A. Company A stated that they remained interested in acquiring ABHC, but declined to increase the shares of Company A offered as merger consideration.

On May 28, 2025, the executive committee of the ABHC board of directors met to discuss the two offers. Representatives of Stephens and NRF were present at the meeting. At the meeting, the executive committee discussed the details of the Revised Prosperity LOI and the Company A LOI, and deliberated regarding the merits and risks of each. Stephens made a presentation giving a detailed background and evaluation of Prosperity and Company A, as well as an evaluation and comparison of the transactions offered in the Company A LOI and the Revised Prosperity LOI, a preliminary financial analysis and the relative risks and benefits of the two transactions. In particular, members of the executive committee noted that, based on the value of Company A and Prosperity shares as of market close on May 27, 2025:

 

•

Prosperity’s offer implied a value of a share of ABHC common stock at $315.58 (and an aggregate value of ABHC of $314.0 million), which exceeded the value of Company A’s offer; and

 

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•

Based upon ABHC’s most recent quarterly dividend, Prosperity’s offer would result in 14.0% dividend accretion for ABHC shareholders, whereas Company A’s offer would result in a 40.5% decrease in dividends for ABHC shareholders.

After discussion, the executive committee determined that Stephens should make the same presentation to the full ABHC board of directors so that it could have a full and informed discussion of the options available regarding a potential sale of the company.

On May 30, 2025, Mr. Raffaele contacted Mr. Cullen Zalman to continue negotiations of the terms of the Revised Prosperity LOI. Later that day, the executive committee of the ABHC board of directors met to discuss the status of those negotiations and the two offers.

On June 2, 2025, (i) Mr. Raffaele met with Mr. Cullen Zalman and Ms. Rasche in Houston, Texas to continue negotiations of the terms of the Revised Prosperity LOI, and (ii) Mr. Raffaele had discussions with the Chief Executive Officer of Company A to continue negotiations of the terms of the Company A LOI.

Also on June 2, 2025, the full ABHC board of directors met to discuss and consider the two offers. Representatives of Stephens and NRF were present, and Stephens presented the same material it had presented to the ABHC executive committee. As part of the deliberations, members of the ABHC board of directors noted in particular that:

 

•

the value of the consideration offered by Prosperity was higher than the consideration offered by Company A;

 

•

Company A was unwilling to increase the merger consideration it proposed to pay for ABHC;

 

•

Prosperity had a highly-liquid stock compared to the shares of Company A;

 

•

Prosperity had a long history of successfully completing acquisitions and integrating the operations of the acquired company; and

 

•

Prosperity offered to include two persons selected by ABHC on the Prosperity Bank board of directors.

The members of the ABHC board of directors were given an opportunity to each provide their input and thoughts regarding the two offers. After further discussion and deliberation of the relative merits and risks of each offer, the ABHC board of directors authorized ABHC’s executive management team to negotiate a final letter of intent with Prosperity on the terms set forth in the Revised Prosperity LOI.

On June 3, 2025, Mr. Raffaele had contact with Mr. Cullen Zalman to continue negotiations of the terms of the Revised Prosperity LOI.

Over the next few days, Mr. Raffaele, Stephens, NRF and members of Prosperity’s internal legal team discussed the terms of the Revised Prosperity LOI, and made changes to clarify the existing terms. The changes did not represent any changes to the material terms of the offer from Prosperity in the Revised Prosperity LOI. On June 5, 2025, Prosperity circulated a revised letter of intent (the “Final Prosperity LOI”), and both ABHC and Prosperity executed the Final Prosperity LOI.

Over the next several weeks, senior executives of ABHC met on several occasions with employees and executives of Prosperity and its representatives to assist Prosperity in completing its due diligence investigations of ABHC. Meetings included sessions regarding ABHC’s financial statements and financial information, loan portfolio and loan loss reserves, its equipment leasing business, employees and benefits and other customary areas of investigation.

During this time, in June 2025, Prosperity selected Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) to serve as its counsel in connection with the potential transaction with ABHC.

 

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On June 29, 2025, Wachtell Lipton sent an initial draft of the merger agreement to NRF.

Between June 29 and July 17, 2025, representatives of Prosperity and ABHC, with the assistance of representatives of Wachtell Lipton, on behalf of Prosperity, and NRF and Stephens, on behalf of ABHC, negotiated the specific terms of the merger agreement and the related ancillary documents.

On July 15, 2025, the ABHC board of directors held a special meeting to analyze and further consider the negotiated terms of the proposed merger and entry into the merger agreement by ABHC. Representatives of Stephens and NRF also attended this meeting. Stephens reviewed its financial analysis of the proposed merger with the ABHC board of directors. Representatives of NRF provided a summary of the proposed terms of the merger agreement and the ancillary agreements and reviewed the ABHC board of directors’ fiduciary duties in connection with its evaluation of the potential merger. Following these discussions, and after further discussion of the proposed financial terms of the transaction and consideration of the strategic merits and potential risks and uncertainties for ABHC and its shareholders and other constituencies, the ABHC board of directors expressed support for the transaction and directed ABHC executive management and ABHC’s advisors to seek to finalize the terms of the potential transaction.

On July 16, 2025, the American Bank board of directors held a special meeting to analyze and further consider the negotiated terms of the proposed merger and bank merger and entry into the bank merger agreement by American Bank. Members of American Bank’s management and representatives of Stephens and NRF also attended this meeting. Stephens reviewed its financial analysis of the proposed merger with the American Bank board of directors. Representatives of NRF provided a summary of the proposed terms of the merger agreement, the bank merger agreement and the ancillary agreements and reviewed the American Bank board of directors’ fiduciary duties in connection with its evaluation of the potential bank merger. At the conclusion of the meeting, after careful review and discussion by the American Bank board of directors, the American Bank board of directors approved the bank merger agreement and the transactions contemplated thereby and entry into the bank merger agreement by American Bank.

On July 17, 2025, the ABHC board of directors held a special meeting to consider the negotiated terms of the proposed merger between Prosperity and ABHC and the entry into the merger agreement by ABHC. At the meeting, members of ABHC management and representatives of NRF provided an update on the results of the negotiations since the July 15, 2025 board meeting, reviewed the proposed terms of the potential transaction and advised that the negotiations and definitive transaction documents were substantially complete. Stephens reviewed its financial analysis of the proposed merger with the ABHC board of directors. Following discussion among the directors, Stephens rendered to the ABHC board of directors an oral opinion, which was subsequently confirmed by delivery of a written opinion, that, as of such date, the consideration to be received by the common stockholders of ABHC (solely in their capacity as such) in the proposed merger was fair to them from a financial point of view, based upon and subject to the qualifications, assumptions and other matters considered by Stephens in connection with the preparation of its opinion. Representatives of NRF then described the resolutions the directors of ABHC would be asked to consider if they were to approve the proposed merger. At the conclusion of the meeting, after careful review and discussion by the ABHC board of directors, including consideration of the factors described below under “The Merger—ABHC’s Reasons for the Merger; Recommendation of the ABHC Board of Directors,” the ABHC board of directors determined that the merger and the bank merger are advisable and in the best interests of ABHC and its shareholders and approved the merger agreement and the transactions contemplated thereby and entry into the merger agreement by ABHC.

On the evening of July 17, 2025, ABHC and Prosperity executed the merger agreement.

The transaction was announced the morning of July 18, 2025, before the opening of the financial markets in New York, in a press release jointly issued by Prosperity and ABHC.

 

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ABHC’s Reasons for the Merger; Recommendation of the ABHC Board of Directors

The ABHC board of directors believes that the merger is in the best interests of ABHC and its shareholders. Accordingly, the ABHC board of directors has unanimously approved the merger agreement and unanimously recommends that the ABHC shareholders vote “FOR” the ABHC merger proposal.

In reaching its decision to approve and adopt the merger agreement and recommend the approval of the merger to its shareholders, the ABHC board of directors evaluated the merger and the merger agreement, in consultation with ABHC’s executive management, as well as ABHC’s legal and financial advisors, and considered a number of positive factors, including the following, which are not presented in order of priority and are not exhaustive:

 

•

its knowledge of ABHC’s business, operations, regulatory and financial condition, asset quality, earnings, loan portfolio, capital and prospects both as an independent organization and as a part of a combined company with Prosperity;

 

•

the expanded possibilities, including organic growth and future acquisitions, that would be available to the combined company, given its larger size, asset base, capital, market capitalization and footprint in Texas and Oklahoma;

 

•

the results that ABHC could expect to achieve operating independently, and the likely risks and benefits to shareholders of that course of action, as compared with the value of the merger consideration;

 

•

the nature of the merger consideration, which is in the form of stock consideration that offers ABHC shareholders the opportunity to participate as shareholders of Prosperity in the future performance of the combined company and an approximately [   ]% ownership stake in the combined company based on the number of shares (including shares underlying stock-based equity awards) of Prosperity and ABHC outstanding as of [   ], 2025, the last practicable trading day before the date of this proxy statement/prospectus;

 

•

that ABHC shareholders will receive freely-tradable shares of Prosperity common stock, to be listed on NYSE, as merger consideration, so that the merger would provide materially better liquidity for ABHC shareholders versus the extremely limited liquidity options available to ABHC shareholders currently;

 

•

the historical performance of Prosperity common stock;

 

•

Prosperity’s historical cash dividend payments, which are in excess of those historically paid by ABHC;

 

•

the fact that the merger consideration paid in the form of Prosperity common shares is expected to be tax-free to ABHC shareholders for U.S. income tax purposes;

 

•

ABHC’s belief that ABHC and Prosperity share a similar strategic vision and that Prosperity emphasizes many of the same values embraced by ABHC in the conduct of its business, such as a commitment to relationship-based community banking in Texas and Oklahoma, excellent customer service, employee development and opportunities, active participation in the communities served, and delivery of value to shareholders;

 

•

that a merger with Prosperity, a larger bank holding company, could provide opportunity to realize economies of scale, add infrastructure and operational support, and enhance customer products and services, allowing ABHC to remain competitive over the long term;

 

•

that a merger with Prosperity, which has branches in metro areas in Texas and Oklahoma that ABHC does not serve, would provide the benefit of significant diversification outside of ABHC’s current market footprint;

 

•

the effects of the merger on American Bank’s employees, including the prospects for continued employment in a larger organization and various benefits agreed to be provided to American Bank’s employees;

 

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•

the understanding of the ABHC board of directors of the current and prospective environment in which American Bank and Prosperity Bank operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, and the competitive effects of the continuing consolidation in the banking industry;

 

•

the ability of Prosperity to complete the merger from a financial and regulatory perspective;

 

•

an extensive review of strategic options available to ABHC, including continuing as a standalone entity, and consideration and weighing of the potential risks and benefits associated with each;

 

•

that Prosperity agreed to appoint two of ABHC’s current directors, Patricia Hawn Wallace and Stephen C. Raffaele, to the board of directors of Prosperity Bank, thereby providing the ABHC board of directors with meaningful representation on the combined bank board of directors and helping to ensure that the combined company has the opportunity to benefit from the insights and experience of the ABHC board of directors;

 

•

the financial presentation, dated July 17, 2025, of Stephens to the ABHC board of directors and the opinion, dated July 17, 2025, of Stephens to the ABHC board of directors that, as of such date, the consideration to be received by the common stockholders of ABHC (solely in their capacity as such) in the proposed merger was fair to them from a financial point of view, based upon and subject to the qualifications, assumptions and other matters considered by Stephens in connection with the preparation of its opinion, as more fully described below under “The Merger—Opinion of ABHC’s Financial Advisor” beginning on page 52;

 

•

the ABHC board of directors’ review with its legal advisors of the terms of the merger agreement, including the agreement by both parties, subject to the conditions in the merger agreement, to use reasonable best efforts to take all actions necessary or advisable to consummate the merger and obtain required regulatory approvals for the merger;

 

•

the likelihood, based on Prosperity’s recent track record, of receiving the required regulatory approvals and completing the merger in a timely manner;

 

•

that the merger would be subject to the approval of ABHC shareholders, and that shareholders would be free to evaluate the merger and vote for or against the merger agreement proposal at the ABHC special meeting; and

 

•

Prosperity’s consistent historical performance in closing merger transactions and its track record in integrating acquisitions and of realizing the expected financial and other benefits of such acquisitions.

The ABHC board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the merger. The ABHC board of directors concluded that the anticipated benefits of the merger were likely to outweigh these risks substantially. These potential risks included the following (which are presented below in no particular order and are not exhaustive):

 

•

the potential for a decline in the value of Prosperity common stock, whether before or after consummation of the merger, reducing the value of the consideration received by ABHC shareholders;

 

•

the potential risk that the exchange ratio could be reduced in the event that ABHC’s equity capital as of the closing date of the merger is below $173,000,000;

 

•

the lack of control of the ABHC board of directors and ABHC’s shareholders over future operations and strategy of the combined company as compared to remaining independent;

 

•

the significant effort and cost involved in connection with negotiating the merger agreement and consummating the merger (including certain costs and expenses if the merger is not consummated), and the substantial time and effort of management required to consummate the merger and the potential further disruptions to ABHC’s day-to-day operations during the pendency of the mergers, including the

 

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potential risk of diverting management attention and resources from the operation of ABHC’s business and towards the completion of the merger;

 

•

the fact that in order to enter into the merger agreement, ABHC set aside certain strategic business alternatives;

 

•

the restrictions under the terms of the merger agreement on the conduct of ABHC’s business prior to the completion of the merger, which could delay or prevent ABHC from undertaking strategic and other business opportunities that might arise pending completion of the mergers, including in light of the expected time frame for completing the merger;

 

•

the potential for litigation by shareholders in connection with the merger, which, even where lacking in merit, could nonetheless result in distraction and expense;

 

•

the challenges of successfully combining ABHC’s business, operations and workforce with those of Prosperity;

 

•

the interests of certain of ABHC’s directors and executive officers in the merger that are different from, or in addition to, their interests as ABHC shareholders, which are further described in the section of this proxy statement/prospectus entitled “The Merger—Interests of ABHC’s Directors and Executive Officers in the Merger” beginning on page 64;

 

•

that there can be no assurance that all conditions to the parties’ obligations to complete the merger will be satisfied, including the risk that necessary regulatory approvals or ABHC shareholder approval might not be obtained or may be delayed and, as a result, the merger may not be consummated or may be delayed;

 

•

the risk of potential employee attrition and/or adverse effects on business and customer relationships as a result of the pending merger; and

 

•

the risks of the type and nature described under “Risk Factors,” beginning on page 20 and the matters described under “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 26.

The foregoing discussion of the information and factors considered by the ABHC board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by the ABHC board of directors. In reaching its decision to approve the merger agreement, the merger, the bank merger and the other transactions contemplated by the merger agreement, the ABHC board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The ABHC board of directors considered all these factors as a whole and overall considered the factors to be favorable to, and support, its determination to approve the merger agreement.

It should be noted that this explanation of the ABHC board of directors’ reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 26.

Opinion of ABHC’s Financial Advisor

On April 15, 2025, ABHC engaged Stephens to act as financial adviser to ABHC in connection with the proposed merger. As part of its engagement, Stephens was asked to undertake a study of the fairness, from a financial point of view, of the proposed merger to ABHC. ABHC engaged Stephens because, among other factors, Stephens is a nationally recognized investment banking firm with substantial experience in similar transactions. As part of its investment banking business, Stephens is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of Stephens’ engagement, representatives of Stephens participated in a meeting of the ABHC board of directors held on July 17, 2025, in which the ABHC board of directors considered and approved the merger.

 

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At this meeting, Stephens reviewed the financial aspects of the merger and rendered its oral opinion, which was subsequently confirmed by delivery of a written opinion to the ABHC board of directors dated as of July 17, 2025, that, as of such date, the consideration to be received by the common stockholders of ABHC (solely in their capacity as such) in the merger was fair to them from a financial point of view, based upon and subject to the qualifications, assumptions and other matters considered by Stephens in connection with the preparation of its opinion.

The full text of Stephens’ written opinion letter (the “Opinion Letter”) is attached as Annex D to this proxy statement/prospectus. The Opinion Letter outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Stephens in rendering its opinion. The summary of the opinion set forth in this document is qualified in its entirety by reference to the full text of such written Opinion Letter. Shareholders of ABHC are urged to read the entire Opinion Letter carefully in connection with their consideration of the proposed merger. ABHC did not give any instruction to or impose any limitations on Stephens as it related to the issuance of its opinion.

Stephens’ opinion speaks only as of the date of the opinion, and Stephens has undertaken no obligation to update or revise its opinion. The opinion was directed to the ABHC board of directors (solely in its capacity as such) in connection with, and for purposes of, its consideration of the merger. The opinion only addresses whether the consideration to be received by the common stockholders of ABHC (solely in their capacity as such) in the proposed merger was fair to them from a financial point of view as of the date of the opinion. The opinion does not address the underlying business decision of ABHC to engage in the merger or any other term or aspect of the merger agreement or the transactions contemplated thereby. Stephens’ opinion does not constitute a recommendation to the ABHC board of directors or any ABHC shareholders as to how such person should vote or otherwise act with respect to the merger or any other matter. ABHC and Prosperity determined the merger consideration through a negotiation process.

In connection with developing its opinion, Stephens:

 

(i)

reviewed certain publicly available financial statements and reports regarding ABHC and Prosperity;

 

(ii)

reviewed certain audited financial statements regarding ABHC and Prosperity;

 

(iii)

reviewed certain internal financial statements, management reports and other financial and operating data concerning ABHC prepared by management of ABHC;

 

(iv)

reviewed, on a pro forma basis, in reliance upon financial projections and other information and assumptions concerning ABHC and Prosperity provided by management of ABHC and upon consensus research estimates concerning Prosperity, the effect of the proposed merger on the balance sheet, capitalization ratios, earnings and tangible book value both in the aggregate and, where applicable, on a per share basis of Prosperity;

 

(v)

reviewed the reported prices and trading activity for the common stock of Prosperity;

 

(vi)

compared the financial performance of ABHC and Prosperity with that of certain other publicly traded companies and their securities that Stephens deemed relevant to Stephens’ analysis of the proposed merger;

 

(vii)

reviewed the financial terms, to the extent publicly available, of certain merger or acquisition transactions that Stephens deemed relevant to Stephens’ analysis of the proposed merger;

 

(viii)

reviewed the then-most recent draft of the merger agreement and related documents provided to Stephens by ABHC;

 

(ix)

discussed with management of ABHC and management of Prosperity the operations of and future business prospects for ABHC and Prosperity, respectively, and the anticipated financial consequences of the proposed merger to ABHC and Prosperity, respectively;

 

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(x)

assisted in ABHC’s deliberations regarding the material terms of the proposed merger and ABHC’s negotiations with Prosperity; and

 

(xi)

performed such other analyses and provided such other services as Stephens deemed appropriate.

Stephens relied on the accuracy and completeness of the information, financial data and financial forecasts provided to Stephens by ABHC and Prosperity and of the other information reviewed by Stephens in connection with the preparation of Stephens’ opinion, and its opinion was based upon such information. Stephens did not independently verify or undertake any responsibility to independently verify the accuracy or completeness of any of such information, data or forecasts. Management of ABHC assured Stephens that it was not aware of any relevant information that had been omitted or remained undisclosed to Stephens. Stephens did not assume any responsibility for making or undertaking an independent evaluation or appraisal of any of the assets or liabilities of ABHC or of Prosperity, and Stephens was not furnished with any such evaluations or appraisals; nor did Stephens evaluate the solvency or fair value of ABHC or of Prosperity under any laws relating to bankruptcy, insolvency or similar matters. Stephens did not assume any obligation to conduct any physical inspection of the properties, facilities, assets or liabilities (contingent or otherwise) of ABHC or Prosperity. Stephens did not receive or review any individual loan or credit files nor did Stephens make an independent evaluation of the adequacy of the allowance for credit losses of ABHC or Prosperity. Stephens did not make an independent analysis of the effects of potential future changes in the rate of inflation or of prevailing rates of interest or other market developments or disruptions, or of the effects of any global conflicts or hostilities or any other disaster or adversity, on the business or prospects of ABHC or Prosperity. With respect to the financial projections or forecasts prepared by management of ABHC, including the forecasts of potential cost savings and potential synergies, Stephens also assumed that such financial projections or forecasts had been reasonably prepared and reflected the best then currently available estimates and judgments of management of ABHC, as to the future financial performance of ABHC and Prosperity, and provided a reasonable basis for Stephens’ analysis. Stephens recognized that such financial projections or forecasts were based on numerous variables, assumptions and judgments that were inherently uncertain (including, without limitation, factors related to general economic and competitive conditions) and that actual results could vary significantly from such projections or forecasts, and Stephens expressed no opinion as to the reliability of such financial projections, forecasts or estimates or the assumptions upon which they were based.

Stephens does not provide legal, accounting, regulatory, or tax advice or expertise, and Stephens relied solely, and without independent verification, on the assessments of ABHC and its other advisors with respect to such matters. Stephens assumed, with ABHC’s consent, that the proposed merger will not result in any materially adverse legal, regulatory, accounting or tax consequences for ABHC or its shareholders and that any reviews of legal, accounting, regulatory or tax issues conducted as a result of the proposed merger will be resolved favorably to ABHC and its shareholders. Stephens did not express any opinion as to any tax or other consequences that might result from the proposed merger.

Stephens’ opinion was necessarily based upon market, economic and other conditions as they existed and could be evaluated on the date of the opinion and on the information made available to Stephens as of the date of its opinion. Market price data used by Stephens in connection with its opinion was based on reported market closing prices as of July 16, 2025. It should be understood that subsequent developments may affect the opinion and that Stephens did not undertake any obligation to update, revise or reaffirm the opinion or otherwise comment on events occurring after the date of the opinion. Stephens further noted that volatility or disruptions in the credit and financial markets relating to, among other things, potential future changes in the rate of inflation or prevailing rates of interest or other market developments or disruptions, or the effects of any global conflicts or hostilities or any other disaster or adversity, may or may not have an effect on ABHC or Prosperity, and Stephens did not express an opinion as to the effects of such volatility or disruptions on the proposed merger or any party to the proposed merger. Stephens further expressed no opinion as to the prices at which shares of Prosperity’s or ABHC’s common stock may trade at any time subsequent to the announcement of the proposed merger.

 

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In connection with developing its opinion, Stephens assumed that, in all respects material to its analyses:

 

(i)

the proposed merger and any related transactions will be consummated on the terms of the latest draft of the merger agreement provided to Stephens, without material waiver or modification;

 

(ii)

the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct;

 

(iii)

each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents;

 

(iv)

all conditions to the completion of the proposed merger will be satisfied within the time frames contemplated by the merger agreement without any waivers;

 

(v)

that in the course of obtaining the necessary regulatory, lending or other consents or approvals (contractual or otherwise) for the proposed merger and any related transactions, no restrictions, including any divestiture requirements or amendments or modifications, will be imposed that would have a material adverse effect on the contemplated benefits of the proposed merger to the common stockholders of ABHC;

 

(vi)

there has been no material change in the assets, liabilities, financial condition, results of operations, business or prospects of ABHC or Prosperity since the date of the most recent financial statements made available to Stephens, and that no legal, political, economic, regulatory or other development has occurred that will adversely impact ABHC or Prosperity; and

 

(vii)

the proposed merger will be consummated in a manner that complies with applicable law and regulations.

Stephens’ opinion was limited to whether the consideration to be received by the common stockholders of ABHC (solely in their capacity as such) in the proposed merger was fair to them from a financial point of view as of the date of the opinion. Stephens was not asked to, and it did not, offer any opinion as to the terms of the merger agreement or the form of the proposed merger or any aspect of the proposed merger, other than the fairness, from a financial point of view, of the consideration to be received in the proposed merger by the common stockholders of ABHC (solely in their capacity as such). The opinion did not address the merits of the underlying decision by ABHC to engage in the proposed merger, the merits of the proposed merger as compared to other alternatives potentially available to ABHC or the relative effects of any alternative transaction in which ABHC might engage, nor is it intended to be a recommendation to any person or entity as to any specific action that should be taken in connection with the proposed merger, including with respect to how to vote or act with respect to the proposed merger. Moreover, Stephens did not express any opinion as to the fairness of the amount or nature of the compensation to any of ABHC’s officers, directors or employees, or to any group of such officers, directors or employees, whether relative to the compensation to other shareholders of ABHC or otherwise.

The following is a summary of the material financial analyses performed and material factors considered by Stephens in connection with developing its opinion. In performing the financial analyses described below, Stephens relied on the financial and operating data, projections and other financial information and assumptions concerning ABHC provided by management of ABHC, and Stephens reviewed with ABHC’s executive management and board of directors certain assumptions concerning ABHC upon which the analyses were based, as well as other factors. Although this summary does not purport to describe all of the analyses performed or factors considered by Stephens, it does set forth those analyses considered by Stephens to be material in arriving at its opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. The order of the summaries of analyses described does not represent the relative importance or weight given to those analyses by Stephens. It should be noted that in arriving at its opinion, Stephens did not attribute any particular weight to any analysis or factor considered by it, but rather made

 

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qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Stephens believes that its analysis must be considered as a whole and that considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying its opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses summarized below. Accordingly, Stephens’ analyses and the summary of its analyses must be considered as a whole, and selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying Stephens’ analyses and opinion.

Summary of Proposed Merger:

Pursuant to the merger agreement, and subject to the terms, conditions and limitations set forth therein, and for purposes of its opinion, Stephens understood that, subject to potential adjustments as described in the merger agreement, Prosperity is expected to exchange 4,439,981 shares of common stock of Prosperity for all of the outstanding common stock of ABHC. Based upon the unaudited financial information of ABHC as of and for the twelve (12) months ended March 31, 2025, and market data as of July 16, 2025, Stephens calculated the following transaction multiples:

 

Transaction Value / Tangible Book Value(1)			2.26x
Transaction Value / Last Twelve Month (“LTM”) Earnings(2)			17.9x
Transaction Value / 2025 Estimated Earnings(2)(3)			15.4x
Core Deposit Premium(4)			9.1x

 

Source: S&P Capital IQ Pro, FactSet, ABHC documents, regulatory filings

 

(1)	ABHC’s Tangible Common Equity is adjusted upward by $10,667,370 for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

(2)	ABHC’s Net Income assumes a 21% tax effect due to its S-Corp status and excludes one-time items.

(3)	Based on projections provided by ABHC’s management.

(4)	Core Deposits is defined as Total Deposits over $100 thousand; ABHC’s Tangible Common Equity is adjusted for a C-Corp equivalent deferred Tax asset on Unrealized AFS Securities Losses.

Relevant Public Companies Analysis – ABHC:

Stephens compared the financial condition, operating statistics and market valuation of ABHC to certain public companies selected by Stephens and their respective public trading values. Stephens selected the companies outlined below because their relative asset size and financial performance, among other factors, were reasonably similar to ABHC; however, no selected company below was identical or directly comparable to ABHC. A complete analysis involves complex considerations and qualitative judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading values of the relevant public companies. Mathematical analysis (such as determining the median) is not in itself a meaningful method of using relevant public company data.

Stephens selected the following public companies based on the criteria set forth below:

Texas-headquartered banks and thrifts which trade on a major exchange⁽¹⁾ with total assets between $1 billion and $13 billion⁽²⁾⁽³⁾:

 

•

Stellar Bancorp, Inc. (STEL)

 

•

Southside Bancshares, Inc. (SBSI)

 

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•

Third Coast Bancshares, Inc. (TCBX)

 

•

South Plains Financial, Inc. (SPFI)

Notes:

 

(1)	“Major exchange” is defined as the New York Stock Exchange and the Nasdaq Stock Market

(2)	Excludes First Foundation Inc. (FFWM) and Triumph Financial, Inc. (TFIN)

(3)	Excludes targets of announced mergers

To perform this analysis, Stephens reviewed publicly available financial information as of and for the twelve (12) months ended March 31, 2025, or the most recently reported period available, and the market trading multiples of the selected public companies based on July 16, 2025 closing prices. The financial data included in the table presented below may not correspond precisely to the data reported in historical financial statements as a result of the assumptions and methods used by Stephens to compute the financial data presented. The table below contains information reviewed and utilized by Stephens in its analysis:

 

Metric		ABHC				25th Percentile				Median				75th Percentile
Total Assets (in billions)		$	2.5			$	4.8			$	6.6			$	8.9
Tangible Common Equity / Tangible Assets			5.8	%(1)			8.0	%			8.9	%			9.8	%
Leverage Ratio			7.6	%			9.7	%			10.5	%			11.4	%
Total Risk-based Capital Ratio			12.7	%			15.2	%			16.5	%			17.2	%
MRQ Cost of Deposits			1.66	%			2.07	%			2.19	%			2.55	%
Noninterest-bearing Deposits / Total Deposits			27.1	%			18.3	%			23.2	%			28.5	%
Time Deposits / Total Deposits			14.0	%			13.8	%			14.9	%			16.5	%
Nonperforming Assets / Total Assets			0.21	%			0.30	%			0.46	%			0.53	%
Loan Loss Reserves / Loans			1.05	%			1.01	%			1.08	%			1.21	%
MRQ Yield on Loans			6.43	%			6.39	%			6.58	%			6.78	%
MRQ Cost of Funds			1.74	%			2.18	%			2.36	%			2.75	%
MRQ Net Interest Margin			3.65	%			3.52	%			3.75	%			3.85	%
MRQ Core ROAA(2)			0.78	%(3)			1.08	%			1.13	%			1.16	%
Market Capitalization (in millions)			—			$	572			$	761			$	1,087
LTM Average Daily Trading Volume(4) (in millions)			—			$	2.2			$	3.0			$	4.3
Price / Tangible Book Value			2.26x	(1)			1.37x				1.46x				1.53x
Price / LTM Earnings			17.9x	(3)			11.8x				12.3x				12.8x
Price / 2025 Estimated Earnings(5)			15.4x	(3) (6)			11.4x				11.7x				13.0x
Dividend Yield			—				1.2	%			1.7	%			2.6	%

Source: S&P Capital IQ Pro, FactSet, ABHC documents, regulatory filings

 

Note:

Consolidated financial data shown, unless otherwise noted; valuation metrics for ABHC are shown as the implied valuation metrics for the Transactions; Bank-level data shown for ABHC for: MRQ Cost of Deposits, Noninterest-bearing Deposits / Total Deposits, Time Deposits / Total Deposits, Nonperforming Assets / Total Assets, Loan Loss Reserves / Loans, and Yield on Loans; Leverage Ratio and Total Risk-based Capital Ratio for ABHC are estimated; MRQ = Most Recent Quarter; LTM = Last Twelve Months

 

(1)	ABHC’s Tangible Common Equity is adjusted upward by $10,667,370 for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

(2)	MRQ Core ROAA excludes one-time items.

(3)	ABHC’s Net Income assumes a 21% tax effect due to its S-Corp status and excludes one-time items.

(4)	Calculated based on the LTM Average Daily Trading Volume (in shares), multiplied by the most recent available share price.

(5)	Multiples for the Relevant Public Companies are based on research consensus estimates.

(6)	ABHC’s multiple is based on projections provided by ABHC’s management.

 

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Relevant Regional Transactions Analysis – ABHC:

Stephens reviewed certain publicly available transaction multiples and related financial data for transactions with a Texas-headquartered target announced from January 1, 2021 to July 16, 2025, where (i) the deal value was publicly disclosed, (ii) the target’s assets were between $1 billion and $10 billion (excluding any Merger of Equals (as defined by S&P Capital IQ Pro)). The following transactions were selected by Stephens because each target’s relative asset size, financial performance and markets of operation, among other factors, was reasonably similar to ABHC; however, no selected company or transaction below was identical or directly comparable to ABHC or the proposed merger (in each transaction, the acquirer is listed first, the target is listed second and the transaction announcement date is noted parenthetically):

 

•

Investar Holding Corp. / Wichita Falls Bancshares Inc. (07/01/2025)

 

•

Glacier Bancorp Inc. / Guaranty Bancshares Inc. (06/24/2025)

 

•

Prosperity Bancshares Inc. / First Bancshares of Texas Inc. (10/11/2022)

 

•

Prosperity Bancshares Inc. / Lone Star State Bancshares Inc (10/11/2022)

 

•

Origin Bancorp Inc. / BT Holdings Inc. (02/24/2022)

 

•

Simmons First National Corp. / Spirit of Texas Bancshares Inc (11/19/2021)

 

•

Home Bancshares, Inc. / Happy Bancshares Inc. (09/15/2021)

 

•

FirstSun Capital Bancorp / Pioneer Bancshares Inc. (05/11/2021)

Stephens considered these selected transactions to be reasonably similar, but not identical or directly comparable, to the proposed merger. A complete analysis involves complex considerations and qualitative judgments concerning differences in the selected transactions and other factors that could affect the transaction values in those selected transactions as compared with the proposed merger. Mathematical analysis (such as determining the median) is not in itself a meaningful method of using selected transaction data. Stephens compared certain proposed transaction multiples of the proposed merger to the 25th percentile, median and 75th percentile transaction multiples of the selected transactions:

 

Metric		ABHC				25th Percentile				Median				75th Percentile
Deal Value (in millions)		$	321.5			$	224.3			$	325.9			$	502.4
Stock Consideration Percentage			100	%			87	%			100	%			100	%
Price / Tangible Book Value			2.26x	(1)			1.42x				1.60x				1.67x
Price / LTM Earnings			17.9x	(2)			12.4x				14.0x				14.3x
Core Deposit Premium			9.1	%(3)			6.7	%			8.0	%			9.4	%
Target Total Assets (in billions)		$	2.5			$	1.7			$	2.1			$	3.2
Target Tangible Common Equity / Tangible Assets			5.8	%(1)			9.3	%			9.4	%			10.2	%
Target LTM ROAA			0.70	%(2)			0.99	%			1.28	%			1.43	%
Target Nonperforming Assets / Assets			0.2	%			0.2	%			0.4	%			0.5	%

Source: S&P Capital IQ Pro, FactSet, ABHC documents, regulatory filings

 

Note:

For any S-Corps in the analyzed group: (i) Net Income is adjusted for income taxes assuming a 21% tax effect, and (ii) Tangible Common Equity is adjusted for a C-Corp equivalent Deferred Tax Asset on Unrealized AFS Securities Losses; Cadence Bank’s acquisition of Industry Bancshares, Inc. is excluded due to its distressed nature; LTM = Last Twelve Months

 

(1)	ABHC’s Tangible Common Equity is adjusted upward by $10,667,370 for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

(2)	ABHC’s Net Income assumes a 21% tax effect due to its S-Corp status and excludes one-time items.

(3)	Core Deposits is defined as Total Deposits, less Time Deposits over $100 thousand; ABHC’s Tangible Common Equity is adjusted for a C-Corp-equivalent Deferred Tax Asset on Tangible Common Equity is adjusted for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

 

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Relevant Nationwide Transactions Analysis – ABHC:

Stephens reviewed certain publicly available transaction multiples and related financial data for transactions nationwide announced from July 1, 2024 to July 16, 2025, where (i) the deal value was publicly disclosed and (ii) the target’s assets were between $1 billion and $5 billion (excluding any Merger of Equals (as defined by S&P Capital IQ Pro)). The following transactions were selected by Stephens because each target’s relative asset size, financial performance and operations, among other factors, was reasonably similar to ABHC; however, no selected company or transaction below was identical or directly comparable to ABHC or the proposed merger (in each transaction, the acquirer is listed first, the target is listed second and the transaction announcement date is noted parenthetically):

 

•

Investar Holding Corp. / Wichita Falls Bancshares Inc. (07/01/2025)

 

•

Glacier Bancorp Inc. / Guaranty Bancshares Inc. (06/24/2025)

 

•

First Financial Bancorp. / Westfield Bancorp (06/23/2025)

 

•

Commerce Bancshares Inc. / FineMark Holdings Inc. (06/16/2025)

 

•

NB Bancorp / Provident Bancorp Inc (06/05/2025)

 

•

Seacoast Banking Corp. of FL / Villages Bancorp. Inc. (05/29/2025)

 

•

TowneBank / Old Point Financial Corp. (04/03/2025)

 

•

FB Financial Corp. / Southern States Bancshares Inc (03/31/2025)

 

•

MetroCity Bankshares Inc. / First IC Corp. (03/17/2025)

 

•

Old Second Bancorp Inc. / Bancorp Financial Inc. (02/25/2025)

 

•

Glacier Bancorp Inc. / Bank Idaho Holding Company (01/13/2025)

 

•

CNB Financial Corp. / ESSA Bancorp Inc. (01/10/2025)

 

•

Northwest Bancshares, Inc. / Penns Woods Bancorp Inc. (12/17/2024)

 

•

Independent Bank Corp. / Enterprise Bancorp Inc. (12/09/2024)

 

•

EverBank Financial Corp / Sterling Bank & Trust FSB (09/16/2024)

 

•

Camden National Corp. / Northway Financial Inc. (09/10/2024)

 

•

NBT Bancorp Inc. / Evans Bancorp Inc. (09/09/2024)

 

•

ConnectOne Bancorp Inc. / The First of Long Island Corp. (09/05/2024)

 

•

German American Bancorp Inc. / Heartland BancCorp (07/29/2024)

 

•

ChoiceOne Financial Services / Fentura Financial Inc. (07/25/2024)

Stephens considered these selected transactions to be reasonably similar, but not identical or directly comparable, to the proposed merger. A complete analysis involves complex considerations and qualitative judgments concerning differences in the selected transactions and other factors that could affect the transaction values in those selected transactions as compared with the proposed merger. Mathematical analysis (such as determining the median) is not in itself a meaningful method of using selected transaction data. Stephens

 

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compared certain proposed transaction multiples of the proposed merger to the 25th percentile, median and 75th percentile transaction multiples of the selected transactions:

 

Metric		ABHC				25th Percentile				Median				75th Percentile
Deal Value (in millions)		$	321.5			$	205.3			$	248.9			$	355.5
Stock Consideration Percentage			100	%			56	%			98	%			100	%
Price / Tangible Book Value			2.26x	(1)			1.22x				1.40x				1.56x
Price / LTM Earnings			17.9x	(2)			12.5x				14.4x				16.5x
Core Deposit Premium			9.1	%(3)			1.8	%			5.8	%			8.4	%
Target Total Assets (in billions)		$	2.5			$	1.5			$	2.1			$	2.9
Target Tangible Common Equity / Tangible Assets			5.8	%(1)			7.9	%			9.6	%			10.5	%
Target LTM ROAA			0.70	%(2)			0.51	%			0.65	%			1.08	%
Target Nonperforming Assets / Assets			0.2	%			0.1	%			0.1	%			0.5	%

 

Source: S&P Capital IQ Pro, FactSet, ABHC documents, regulatory filings

Note: For any S-Corps in the analyzed group: (i) Net Income is adjusted for income taxes assuming a 21% tax effect, and (ii) Tangible Common Equity is adjusted for a C-Corp equivalent Deferred Tax Asset on Unrealized AFS Securities Losses; Cadence Bank’s acquisition of Industry Bancshares, Inc. is excluded due to its distressed nature; LTM = Last Twelve Months

 

(1)	ABHC’s Tangible Common Equity is adjusted upward by $10,667,370 for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

(2)	ABHC’s Net Income assumes a 21% tax effect due to its S-Corp status and excludes one-time items.

(3)	Core Deposits is defined as Total Deposits, less Time Deposits over $100 thousand; ABHC’s Tangible Common Equity is adjusted for a C-Corp-equivalent Deferred Tax Asset on Tangible Common Equity is adjusted for a C-Corp-equivalent Deferred Tax Asset on Unrealized AFS Securities Losses.

Discounted Cash Flow Analysis – ABHC:

Stephens performed a standalone discounted cash flow analysis of ABHC to estimate a range of implied aggregate intrinsic values for ABHC based upon the discounted net present value of the projected after-tax free cash flows for ABHC for the projected period. In this analysis, Stephens used (i) financial information and data provided by ABHC and (ii) financial forecasts and projections provided by the executive management team of ABHC. See “Certain Unaudited Prospective Financial Information” for additional information regarding the unaudited prospective financial information provided to Stephens by the management of ABHC and approved by ABHC for Stephens’ use and reliance in performing its analysis. Stephens determined ABHC’s projected amount of future cash flow based on (i) expected annual dividend payments (including projected additional dividends for earnings and excess capital, if any, above a tangible common equity to tangible asset ratio of 9% from 2025 to 2029), and (ii) a range of standalone terminal values derived by applying price to earnings multiples ranging from 11.0x to 13.0x to projected 2030 net income. To reconcile net income to future cash flow, Stephens applied adjustments for (a) a pre-tax opportunity cost of cash of 4.25% and (b) a marginal tax rate of 21%. Stephens discounted the resulting projected future cash flows at ABHC’s estimated cost of equity to calculate a net present value range for such projected cash flows.

In selecting terminal price to earnings multiples for ABHC, Stephens considered the range of price to earnings multiples of ABHC and of the comparable public companies of ABHC set forth in the section entitled “Relevant Public Companies Analysis – ABHC.” Exercising its professional judgment, Stephens selected a range of 11.0x to 13.0x as the terminal price to earnings multiples for the discounted cash flow analysis of ABHC. The following table summarizes the range of terminal values of ABHC that Stephens calculated based upon ABHC’s

 

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estimated net income as of the period ending December 31, 2030, and the range of terminal price to earnings multiples of 11.0x to 13.0x:

 

2030 ABHC Pre-tax Net Income (in millions)		$	54.1			$	54.1			$	54.1
2030 ABHC After –tax Net Income (in millions)		$	42.7			$	42.7			$	42.7
Less: Opportunity Cost of Cash		$	1.7			$	1.7			$	1.7
2030 ABHC Adjusted Net Income (in millions)		$	41.0			$	41.0			$	41.0
2030 ABHC Adjusted Net Income (in millions)		$	41.0			$	41.0			$	41.0
Times: Terminal Multiple			11.0x				12.0x				13.0x
Terminal Value (in millions)		$	451.1			$	492.1			$	533.1

Stephens considered discount rates from 11.5% to 13.5% for ABHC. Based on this analysis, Stephens derived a range for the implied aggregate intrinsic value of ABHC from $248,635,275 to $323,610,222.

The discounted cash flow analysis is a widely used valuation methodology, but the results of this methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, capital levels, and discount rates. The analysis did not purport to be indicative of the actual values or expected values of ABHC. The actual results may vary from the projected results, any of these assumptions might not be realized in future operations and the variations may be material.

Miscellaneous: The preparation of a fairness opinion is a complex process and is not susceptible to a partial analysis or summary description. Stephens believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an incomplete view of the process underlying its opinion. In addition, Stephens considered the results of all such analyses and did not assign relative weights to any of the analyses, but rather made qualitative judgments as to significance and relevance of each analysis and factor, so the results from any particular analysis described above should not be taken to be the view of Stephens.

In performing its analyses, Stephens made numerous assumptions with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond the control of ABHC. The analyses performed by Stephens are not necessarily indicative of actual values, trading values or actual future results which might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. The analyses do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty.

Stephens is serving as financial adviser to ABHC in connection with the proposed merger and is entitled to receive from ABHC reimbursement of its expenses and a fee in the amount of 1.4% of the transaction value as defined in the engagement letter between Stephens and ABHC for its services as financial advisor to ABHC, a significant portion of which is contingent upon the consummation of the merger. Stephens also received a fee in the amount of $300,000 from ABHC upon rendering its fairness opinion, which opinion fee will be credited in full against the fee which will become payable to Stephens upon the closing of the merger. ABHC has also agreed to indemnify Stephens against certain claims and liabilities that could arise out of Stephens’ engagement, including certain liabilities that could arise out of Stephens’ providing its opinion.

Stephens issues periodic research reports regarding the business and prospects of Prosperity, and Stephens makes a market in the stock of Prosperity. Stephens has previously received fees for providing investment banking services to ABHC in connection with ABHC’s acquisition of TexStar National Bank in 2022 and ABHC’s issuance of holding company debt in 2022. Stephens expects to pursue future investment banking services assignments with participants in the merger.

In the ordinary course of its business, Stephens and its affiliates and employees at any time may hold long or short positions, and may trade or otherwise effect transactions as principal or for the accounts of customers, in debt, equity or derivative securities of participants in the proposed merger.

 

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Certain Unaudited Prospective Financial Information

Prosperity and ABHC do not as a matter of course make public projections as to future performance, revenues, earnings or other financial results due to, among other reasons, the inherent uncertainty of the underlying assumptions and estimates of any such projections. However, ABHC is including in this proxy statement/prospectus certain unaudited prospective financial information that was made available by ABHC to Stephens for the purpose of Stephens performing its financial analysis in connection with rendering its opinion to the ABHC board of directors, as described above under the section entitled “The Merger—Opinion of ABHC’s Financial Advisor.” This unaudited prospective financial information was prepared solely by ABHC management and was not prepared, provided to, reviewed or approved by Prosperity management or the Prosperity board of directors. By inclusion of this information, the respective managements and boards of directors of Prosperity and ABHC and ABHC’s financial advisor, assume no responsibility for the unaudited prospective financial information. The inclusion of this information should not be regarded as an indication that any of Prosperity, ABHC, Stephens, their respective representatives or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results, or that it should be construed as financial guidance, and it should not be relied on as such.

The information regarding ABHC below was prepared solely by ABHC management for internal use and is subjective in many respects. While presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions made solely by ABHC management with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to ABHC’s business, all of which are difficult to predict and many of which are beyond ABHC’s control. The unaudited prospective financial information of ABHC reflects both assumptions solely by ABHC management as to certain business decisions that are subject to change and, in many respects, subjective judgment solely by ABHC management, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. No assurance can be given that the unaudited prospective financial information and the underlying estimates and assumptions will be realized. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the unaudited prospective financial information to be inaccurate include, but are not limited to, risks and uncertainties relating to ABHC’s business, industry performance, general business and economic conditions, competition, customer requirements and adverse changes in applicable laws, regulations or rules. For other factors that could cause actual results to differ, see the sections entitled “Risk Factors” beginning on page 20 and “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 26.

The unaudited prospective financial information was not prepared by ABHC management with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, the prevailing practices in the banking industry, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the similarly titled GAAP measures in Prosperity’s and ABHC’s respective historical GAAP financial statements. Neither Prosperity’s nor ABHC’s independent public accountants nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. No assurance can be given that, had the unaudited prospective financial information been prepared as of the date of this proxy statement/prospectus, similar estimates and assumptions would be used. Neither Prosperity nor ABHC intends to, and each expressly disclaims any obligation to, make publicly available any update or other revision to the unaudited prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. The unaudited prospective financial information does not

 

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take into account the possible financial and other effects of the merger and does not attempt to predict or suggest future results of the surviving company. The unaudited prospective financial information of ABHC is presented strictly on a stand-alone basis and does not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the potential synergies that may be achieved by the surviving company as a result of the merger, the effect on ABHC of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the unaudited prospective financial information does not take into account the effect on ABHC of any possible failure of the merger to occur.

None of Prosperity, ABHC, Stephens, or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any shareholder of Prosperity or ABHC or other persons regarding ABHC’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the projected results will be achieved. The summary of the unaudited prospective financial information included below is not being included to influence your decision whether to vote for the ABHC merger proposal, but is being provided solely because it was made available to Stephens in connection with the merger.

In light of the foregoing, and considering that the ABHC special meeting will be held many months after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, ABHC shareholders are cautioned not to place unwarranted reliance on such information, and all ABHC shareholders are urged to review the other information contained elsewhere in this proxy statement/prospectus for a description of Prosperity’s and ABHC’s respective businesses, as well as Prosperity’s most recent SEC filings for a description of its reported financial results. See the section entitled “Where You Can Find More Information” beginning on page 115.

In performing its financial analysis with respect to ABHC, Stephens used the following prospective financial information regarding ABHC: (i) estimated pre-tax net income for ABHC of $26,372,000 for the year ending 2025, $36,497,000 for the year ending 2026, $43,322,000 for the year ending 2027, and $49,071,000 for the year ending 2028; (ii) an estimated annual pre-tax Net Income growth rate through the year ending 2030 of 5%; and (iii) an estimated annual balance sheet growth rate through the year ending 2030 of 5%. For the purpose of its analysis, Stephens assumed a 21% tax rate to adjust for ABHC’s S-Corp filing status.

The following table presents certain unaudited prospective financial information regarding ABHC for the years ending 2025 through 2028, which Stephens used in its discounted cash flow analysis in connection with developing its fairness opinion:

 

		As of and for the years ended December 31,
Metric		2025				2026				2027				2028
ABHC Pre-tax Net Income (in millions)		$	26.4			$	36.5			$	43.3			$	49.1
ABHC Estimated After-tax Net Income(1) (in millions)		$	20.8			$	28.8			$	34.2			$	38.8
ABHC Total Assets (in billions)		$	2.6			$	2.7			$	2.8			$	2.9

(1)	Analysis assumes a 21% tax rate

 

Metric		Assumed Long-term Growth Rate for ABHC
Pre-tax Net Income			5.0	%
Total Assets			5.0	%

The foregoing prospective financial information regarding ABHC was provided to Stephens by the executive management team of ABHC and was approved by ABHC for use by Stephens in connection with developing its fairness opinion, as described in this proxy statement/prospectus under the section entitled “The Merger—Opinion of ABHC’s Financial Advisor.”

 

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Interests of ABHC’s Directors and Executive Officers in the Merger

In the merger, the directors and executive officers of ABHC will receive the same consideration for their shares of ABHC common stock as all other ABHC shareholders. In considering the recommendation of the ABHC board of directors that you vote “FOR” the ABHC merger proposal, you should be aware that some of ABHC’s executive officers and directors have interests in the merger, which may be different from, or in addition to, the interests of the ABHC shareholders generally. These interests are described below. The ABHC board of directors was aware of these interests and considered them, among other matters, in reaching its decision to unanimously approve the merger agreement and the transactions contemplated thereby and recommend that ABHC shareholders vote “FOR” the ABHC merger proposal.

Employment Agreements with Prosperity

As a material inducement to Prosperity to enter into the merger agreement, Prosperity Bank entered into employment agreements with Stephen C. Raffaele, Director and President of ABHC and Chief Executive Officer and President of American Bank, and certain other employees of American Bank, which are designed to govern the terms and conditions of each individual’s service relationship with Prosperity Bank following the effective time of the merger. Each agreement is for an initial term of three (3) years, entitles the named individual to receive a base annual salary over the term of the agreement, sets forth the eligibility terms for bonuses and provides for participation in certain employee benefit plans and stock based compensation programs of Prosperity, among other things. Mr. Raffaele’s agreement also provides for a cash signing bonus, payable in a single lump sum. Each agreement also sets forth the conditions under which the agreement may be terminated and contains non-competition and non-solicitation obligations for a specified period of time.

Continuing Service

At the effective time of the merger, Mr. Raffaele and Patricia Hawn Wallace, Chair of ABHC and a Director of American Bank, will join the board of directors of Prosperity Bank. Pursuant to Mr. Raffaele’s employment agreement described above, he will join Prosperity Bank as South Texas and San Antonio Area Chairman. Further, Ben B. Wallace, Vice Chairman and Executive Vice President of ABHC and Chairman of American Bank, will join Prosperity Bank as South Texas Senior Chairman. Additional members of American Bank management will maintain leadership roles in the combined organization.

Acceleration of Equity Awards

At the effective time of the merger, subject to the terms and conditions of the merger agreement, each ABHC restricted stock award will fully vest and be cancelled and converted automatically into the right to receive (without interest) the per share merger consideration in respect of each share of ABHC common stock subject to such ABHC restricted stock award immediately prior to the effective time, which will be delivered as soon as reasonably practicable following the closing date and in no event later than ten (10) business days following the closing date. Each holder of an ABHC restricted stock award converted into the right to receive the per share merger consideration that would have otherwise been entitled to receive a fraction of a share of Prosperity common stock (after aggregating all shares to be delivered in respect of all ABHC restricted stock awards held by such holder) will instead receive a cash payment (rounded to the nearest cent) in an amount equal to such fractional share of Prosperity common stock (rounded to the nearest thousandth when expressed in decimal form) multiplied by the Prosperity share closing price (as defined in “The Merger Agreement—Fractional Shares”). The following table sets forth the shares of ABHC common stock underlying ABHC restricted stock awards held by the ABHC directors and executive officers as of the ABHC record date:

 

Name of Director or Executive Officer		Number of Shares Underlying ABHC Restricted Stock Awards
Stephen C. Raffaele		6,396
Thomas L. Adams		1,935

 

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Change in Control Payments

American Bank is a party to change in control employment agreements with Mr. Raffaele, Thomas L. Adams, Executive Vice President and Chief Financial Officer of American Bank, and certain other employees of American Bank, which provide, among other things, for change in control payments following the completion of the merger. Under the terms of the merger agreement, each of the change in control agreements shall be terminated, American Bank will pay to each such person the change in control payments thereunder (which amounts will be deducted from the ABHC equity capital) and each such person will have executed a termination and release agreement. The aggregate amount of the change in control payments expected to be paid to such persons is approximately $8,000,000.

Indemnification

The merger agreement provides that, for a period of no less than six (6) years from and after the effective time, the surviving corporation will indemnify and hold harmless and will advance expenses as incurred, in each case to the extent (subject to applicable law) such persons are indemnified as of the date of the merger agreement by ABHC pursuant to the ABHC certificate of formation, the ABHC bylaws, the governing or organizational documents of any subsidiary of ABHC and certain other indemnification agreements in existence as of the date of the merger agreement, each present and former director or officer of ABHC and its subsidiaries (in each case, when acting in such capacity) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the effective time, arising out of the fact that such person is or was a director or officer of ABHC or any of its subsidiaries and pertaining to matters existing or occurring at or prior to the effective time, including the transactions contemplated by the merger agreement; provided, that in the case of advancement of expenses the ABHC indemnified party to whom expenses are advanced provides an undertaking (in a reasonable and customary form) to repay such advances if it is ultimately determined that such ABHC indemnified party is not entitled to indemnification.

Governance of Prosperity After the Merger

Articles of Incorporation

At the effective time, the amended and restated articles of incorporation, of Prosperity, as in effect immediately prior to the effective time of the merger, will be the articles of incorporation of Prosperity until thereafter amended in accordance with applicable law.

Bylaws

At the effective time, the amended and restated bylaws of Prosperity, as in effect immediately prior to the effective time of the merger, will be the bylaws of Prosperity until thereafter amended in accordance with applicable law.

Board of Directors and Management of Prosperity Bank After the Merger

At the effective time and until thereafter changed in accordance with law or the certificate of formation or bylaws of Prosperity Bank, the members of the board of directors of Prosperity Bank as of immediately prior to the effective time of the bank merger will be the members of the board of directors of the surviving bank.

Accounting Treatment

Prosperity prepares its financial statements in accordance with GAAP. The merger will be accounted for as an acquisition of ABHC by Prosperity under the acquisition method of accounting in accordance with GAAP. Prosperity will be treated as the acquirer for accounting purposes.

 

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Regulatory Approvals

To complete the merger and bank merger, Prosperity and ABHC need to obtain approvals or consents from, or make filings with, the Federal Reserve Board, the FDIC and the Texas Department of Banking. Subject to the terms of the merger agreement, Prosperity and ABHC have agreed to cooperate with each other and use reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings (and in the case of the applications, notices, petitions and filings required to obtain the requisite regulatory approvals, use their reasonable best efforts to make such filings within forty-five (45) days of the date of the merger agreement), to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement (including the merger and the bank merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such third parties and governmental entities. These approvals are the approval of the merger and bank merger by the Federal Reserve Board, the FDIC or the Texas Department of Banking, as applicable. Nothing in the merger agreement will be deemed to require Prosperity or ABHC or any of their respective subsidiaries, and neither Prosperity nor ABHC nor any of their respective subsidiaries will be permitted (without the written consent of the other party), to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining any permits, consents, approvals and authorizations of governmental entities that would, individually or in the aggregate, reasonably be likely to have a material adverse effect on the surviving corporation and its subsidiaries, taken as a whole, after giving effect to the merger (measured on a scale relative to ABHC and its subsidiaries, taken as a whole) (a “materially burdensome regulatory condition”).

The approval of an application means only that the statutory and regulatory criteria for approval have been satisfied or waived. It does not mean that the approving authority has determined that the consideration to be received by holders of ABHC common stock in the merger is fair. Regulatory approval does not constitute an endorsement or recommendation of the merger.

Prosperity and ABHC believe that the merger does not raise significant regulatory concerns and that they will be able to obtain all requisite regulatory approvals. However, there can be no assurance that all of the regulatory approvals described below will be obtained and, if obtained, there can be no assurances regarding the timing of the approvals, the companies’ ability to obtain the approvals on satisfactory terms or the absence of litigation challenging such approvals. In addition, there can be no assurance that such approvals will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have an adverse effect on the financial condition, results of operations, assets or business of the surviving corporation following completion of the merger. There can likewise be no assurances that U.S. federal or state regulatory or competition authorities will not attempt to challenge the merger or, if such a challenge is made, what the result of such challenge will be.

Federal Reserve Board

The merger is subject to approval by the Federal Reserve Board pursuant to section 3 of the Bank Holding Company Act of 1956, as amended (the “BHC Act”). The Federal Reserve Board takes into consideration a number of factors when acting on applications under section 3 of the BHC Act. These factors include the financial and managerial resources of the companies and banks involved (including consideration of the capital adequacy, liquidity, and earnings performance, as well as the competence, experience and integrity of the officers, directors and principal shareholders, and the records of compliance with applicable laws and regulations) and future prospects of the surviving corporation. The Federal Reserve Board also considers the effectiveness of the applicant in combatting money laundering, the convenience and needs of the communities to be served, as well as the extent to which the proposal would result in greater or more concentrated risks to the stability of the U.S. banking or financial system. The Federal Reserve Board may not approve a proposal that would have significant adverse effects on competition or on the concentration of resources in any banking market.

 

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In considering an application under section 3 of the BHC Act, the Federal Reserve Board also reviews the records of performance of the relevant insured depository institutions under the Community Reinvestment Act (the “CRA”), pursuant to which the Federal Reserve Board must also take into account the record of performance of each of Prosperity and ABHC in meeting the credit needs of the entire community, including low- and moderate-income neighborhoods, served by their depository institution subsidiaries. In their most recent CRA performance evaluation, Prosperity’s wholly owned subsidiary, Prosperity Bank, and ABHC’s wholly owned subsidiary, American Bank, each received an overall regulatory rating of “Satisfactory.”

The Federal Reserve Board may not approve an application that would substantially lessen competition or tend to create a monopoly unless the Federal Reserve Board finds that any anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the proposal in meeting the convenience and needs of the communities to be served. In evaluating the potential competitive effects of a proposed transaction, the Federal Reserve Board consults with the Department of Justice (the “DOJ”), and upon request, the DOJ will prepare a competitive factors report for the Federal Reserve Board’s consideration.

The initial filing of the application to the Federal Reserve Board occurred on August 29, 2025.

Federal Deposit Insurance Corporation

The merger of American Bank with and into Prosperity Bank requires the prior approval of the FDIC under the Bank Merger Act. In evaluating the application, the FDIC will consider: (a) the financial and managerial resources of the banks party to the bank merger and the future prospects of the surviving corporation, (b) the convenience and needs of the community to be served and the record of the banks under the CRA, including their CRA ratings, (c) the banks’ effectiveness in combating money-laundering activities, and (d) the extent to which the proposal would result in greater or more concentrated risks to the stability of the U.S. banking or financial system.

Additionally, the FDIC considers the capital level of the resulting bank, the conformity of the bank merger to applicable law, the purpose of the bank merger, the impact of the bank merger on the safety and soundness of the bank, and the effect on the bank’s shareholders, depositors, other creditors and customers.

The filing of the application to the FDIC occurred on August 29, 2025.

Texas Department of Banking; Additional Regulatory Approvals and Notices

The merger is also subject to the approval of the Texas Department of Banking. The filing of the application to the Texas Department of Banking occurred on August 29, 2025. Notifications and/or applications requesting approval may be submitted to various other federal and state regulatory authorities and self-regulatory organizations.

Public Notice and Comments

The BHC Act, the Bank Merger Act, the Federal Reserve Board, the FDIC and Texas regulations require published notice of, and the opportunity for public comment on, the applications to the Federal Reserve, the FDIC and the Texas Department of Banking. These agencies take into account the views of third-party commenters, particularly on the subject of the merging parties’ CRA performance and record of service to their communities. As part of the review process in merger transactions, the Federal Reserve Board, the FDIC and the Texas Department of Banking frequently receive protests from community groups and others. These agencies are also authorized to hold one or more public hearings or meetings if the agencies determine that such hearings or meetings would be appropriate. The receipt of written comments or any public meeting or hearing could prolong the period during which the applicable application is under review by these agencies.

 

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Department of Justice Review and Waiting Periods

In addition to the Federal Reserve Board, the DOJ conducts a concurrent competitive review of the merger to analyze the merger’s competitive effects and determine whether the merger would result in a violation of the antitrust laws. Transactions approved under section 3 of the BHC Act generally may not be completed until thirty (30) days after the approval of the applicable federal agency is received, during which time the DOJ may challenge the merger on antitrust grounds. With the approval of the applicable federal agency and the concurrence of the DOJ, the waiting period may be reduced to no less than fifteen (15) days. The commencement of an antitrust action would stay the effectiveness of such an approval unless a court specifically ordered otherwise.

In reviewing the merger, the DOJ could analyze the merger’s effect on competition differently than the Federal Reserve Board, and, thus, it is possible that the DOJ could reach a different conclusion than the Federal Reserve Board regarding the merger’s effects on competition. A determination by the DOJ not to object to the merger may not prevent the filing of antitrust actions by private persons or state attorneys general. There can be no assurance if and when DOJ clearance will be obtained, or as to the conditions or limitations that such DOJ approval may contain or impose.

Stock Exchange Listings

Prosperity common stock is listed for trading on the NYSE under the symbol “PB.” Under the terms of the merger agreement, Prosperity will cause the shares of Prosperity common stock to be issued in the merger to be approved for listing on the NYSE, subject to official notice of issuance, prior to the effective time. The merger agreement provides that neither Prosperity nor ABHC will be required to complete the merger if such shares are not authorized for listing on the NYSE, subject to official notice of issuance. Following the merger, shares of Prosperity common stock will continue to be listed on the NYSE.

Appraisal or Dissenters’ Rights in the Merger

General. If you hold one or more shares of ABHC common stock, you are entitled to dissenters’ rights under Texas law and have the right to dissent from the merger and have the appraised fair value of your shares of ABHC common stock paid to you in cash. The appraised fair value may be more or less than the value of the shares of Prosperity common stock (and cash in lieu of fractional shares) being paid in the merger in exchange for shares of ABHC common stock. If you are contemplating exercising your right to dissent, we urge you to read carefully the provisions of Chapter 10, Subchapter H of the TBOC, which are attached to this proxy statement/prospectus as Annex E, and consult with your legal counsel before electing or attempting to exercise these rights. The following discussion describes the steps you must take if you want to exercise your right to dissent. You should read this summary and the full text of the law carefully.

How to Exercise and Perfect Your Right to Dissent. To be eligible to exercise your right to dissent to the merger:

 

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you must, prior to the ABHC special meeting, provide ABHC with a written objection to the merger that states that you will exercise your right to dissent if the merger is completed and that provides an address to which Prosperity may deliver or mail a notice if the merger is completed;

 

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you must vote your shares of ABHC common stock against the merger agreement;

 

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you must, not later than the twentieth (20th) day after Prosperity sends you notice that the merger was completed, provide Prosperity with a written demand for payment of the fair value of your shares of ABHC common stock that states the number and class of shares of ABHC capital stock you own, your estimate of the fair value of such stock and an address to which a notice relating to the dissent and appraisal procedures may be sent; and

 

•

you must, not later than the twentieth (20th) day after the date on which you make written demand for payment of the fair value of your shares of ABHC common stock, submit to Prosperity your certificates

 

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representing ABHC common stock to which the demand relates for purposes of making a notation on the certificates that a demand for the payment of the fair value of your certificates representing ABHC common stock has been made.

If you intend to dissent from the merger, you must send the notice to:

American Bank Holding Corporation

800 N. Shoreline Boulevard, Suite 200S

Corpus Christi, Texas 78401

Attention: President and Secretary

If you fail to vote your shares of ABHC common stock at the special meeting against the approval of the merger agreement, you will lose your right to dissent from the merger. You will instead receive shares of Prosperity common stock as described in the merger agreement. If you comply with the first two items above and the merger is completed, Prosperity will send you a written notice advising you that the merger has been completed. Prosperity must deliver this notice to you within ten (10) days after the merger is completed.

Your Demand for Payment. If you wish to receive the fair value of your shares of ABHC common stock in cash, you must, within twenty (20) days of the date the notice was delivered or mailed to you by Prosperity, send a written demand to Prosperity for payment of the fair value of your shares of ABHC common stock. The fair value of your shares of ABHC common stock will be the value of the shares on the day immediately preceding the merger, excluding any appreciation or depreciation in anticipation of the merger. Your written demand and any notice addressed to Prosperity must be sent to:

Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

Houston, Texas 77027

Attention: President and Secretary

Your written demand must state how many shares of ABHC common stock you own and your estimate of the fair value of your shares of ABHC common stock. If you fail to send this written demand to Prosperity within twenty (20) days of Prosperity’s delivery or mailing of your notice, you will be bound by the merger agreement and you will not be entitled to receive a cash payment representing the fair value of your shares of ABHC common stock. Instead, you will receive shares of Prosperity common stock as described in the merger agreement.

In addition, not later than the twentieth (20th) day after the date on which you make written demand for payment, you must submit to Prosperity your certificates representing ABHC common stock to which the demand relates for purposes of making a notation on the certificates that a demand for the payment of the fair value of your certificates representing ABHC common stock has been made. If you fail to submit your certificates within the required period, it will have the effect of terminating, at the option of Prosperity, your right to dissent and appraisal unless a court, for good cause shown, directs otherwise.

Prosperity’s Actions Upon Receipt of Your Demand for Payment. Within twenty (20) days after Prosperity receives your demand for payment and your estimate of the fair value of your shares of ABHC common stock, Prosperity must send you written notice stating whether or not it accepts your estimate of the fair value of your shares.

If Prosperity accepts your estimate, Prosperity will notify you that it will pay the amount of your estimated fair value within ninety (90) days of the merger being completed. Prosperity will make this payment to you only if you have surrendered the share certificates representing your shares of ABHC common stock, duly endorsed for transfer, to Prosperity.

 

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If Prosperity does not accept your estimate, Prosperity will notify you of this fact and will make an offer of an alternative estimate of the fair value of your shares that it is willing to pay you within one hundred and twenty (120) days of the merger being completed, which you may accept within ninety (90) days or decline.

Payment of the Fair Value of Your Shares of ABHC Common Stock Upon Agreement of an Estimate. If you and Prosperity have reached an agreement on the fair value of your shares of ABHC common stock within ninety (90) days after the merger is completed, Prosperity must pay you the agreed amount within one hundred and twenty (120) days after the merger is completed, provided that you have surrendered the share certificates representing your shares of ABHC common stock, duly endorsed for transfer, to Prosperity.

Commencement of Legal Proceedings if a Demand for Payment Remains Unsettled. If you and Prosperity have not reached an agreement as to the fair market value of your shares of ABHC common stock within ninety (90) days after the merger is completed, you or Prosperity may, within sixty (60) days after the expiration of the ninety (90)-day period, commence proceedings in Harris County, Texas, asking the court to determine the fair value of your shares of ABHC common stock. The court will determine if you have complied with the dissent provisions and if you have become entitled to a valuation of and payment for your shares of ABHC common stock. The court will appoint one or more qualified persons to act as appraisers to determine the fair value of your shares. The appraisers will determine the fair value of your shares and will report this value to the court. The court will consider the report, and both you and Prosperity may address the court about the report. The court will determine the fair value of your shares and direct Prosperity to pay that amount, plus interest, which will begin to accrue ninety-one (91) days after the merger is completed.

Rights as a Shareholder. If you have made a written demand on Prosperity for payment of the fair value of your shares of ABHC common stock, you will not thereafter be entitled to vote or exercise any other rights as a shareholder except the right to receive payment for your shares as described herein and the right to maintain an appropriate action to obtain relief on the ground that the merger would be or was fraudulent. In the absence of fraud in the transaction, your right under the dissent provisions described herein is the exclusive remedy for the recovery of the value of your shares or money damages with respect to the merger.

Withdrawal of Demand. If you have made a written demand on Prosperity for payment of the fair value of your ABHC common stock, you may withdraw such demand at any time before payment for your shares has been made or before a petition has been filed with a court for determination of the fair value of your shares. If you withdraw your demand or are otherwise unsuccessful in asserting your dissenters’ rights, you will be bound by the merger and your status as a shareholder will be restored without prejudice to any corporate proceedings, dividends or distributions which may have occurred during the interim.

 

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THE MERGER AGREEMENT

This section of the proxy statement/prospectus describes the material terms of the merger agreement. The description in this section and elsewhere in this proxy statement/prospectus is subject to, and qualified in its entirety by reference to, the complete text of the merger agreement, which is attached as Annex A to this proxy statement/prospectus and incorporated by reference herein. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We urge you to read the full text of the merger agreement, as it is the legal document governing the merger. This section is not intended to provide you with any factual information about Prosperity or ABHC. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings Prosperity makes with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page 115 of this proxy statement/prospectus.

Explanatory Note Regarding the Merger Agreement

The merger agreement and this summary of terms are included to provide you with information regarding the terms of the merger agreement. Factual disclosures about Prosperity and ABHC contained in this proxy statement/prospectus or in the public reports of Prosperity filed with the SEC may supplement, update or modify the factual disclosures about Prosperity and ABHC contained in the merger agreement. The merger agreement contains representations and warranties by Prosperity, on the one hand, and by ABHC, on the other hand, made solely for the benefit of the other. The representations, warranties and covenants made in the merger agreement by Prosperity and ABHC were qualified and subject to important limitations agreed to by Prosperity and ABHC in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purpose of establishing circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing matters as facts. The representations and warranties also may be subject to a contractual standard of materiality different from that generally applicable to shareholders and reports and documents filed with the SEC, and some were qualified by the matters contained in the confidential disclosure schedules that Prosperity and ABHC each delivered in connection with the merger agreement and certain documents filed with the SEC. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement/prospectus, may have changed since the date of the merger agreement. Accordingly, the representations and warranties in the merger agreement should not be relied on by any persons as characterizations of the actual state of facts about Prosperity and ABHC at the time they were made or otherwise and should be read only in conjunction with the other information provided elsewhere in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 115.

Structure of the Merger

Each of Prosperity’s and ABHC’s respective board of directors unanimously adopted and approved the merger agreement and the transactions contemplated thereby. The merger agreement provides for the merger of ABHC with and into Prosperity, with Prosperity continuing as the surviving corporation in the merger. Immediately following the merger, American Bank, a national banking association and wholly owned bank subsidiary of ABHC, will merge with and into Prosperity Bank, a Texas banking association and wholly owned bank subsidiary of Prosperity, with Prosperity Bank as the surviving entity in the bank merger.

Prosperity may at any time change the method of effecting the merger if and to the extent requested by Prosperity, and ABHC has agreed to enter into such amendments to the merger agreement as Prosperity may reasonably request in order to give effect to such restructuring; provided, however, that no such change or

 

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amendment may (i) alter or change the amount or kind of the merger consideration provided for in the merger agreement, (ii) adversely affect the tax treatment of the merger with respect to ABHC’s shareholders or (iii) be reasonably likely to cause the closing of the merger to be materially delayed or the receipt of the requisite regulatory approvals to be prevented or materially delayed.

Merger Consideration

Under the terms and subject to the conditions set forth in the merger agreement, all outstanding shares of ABHC common stock issued and outstanding immediately prior to the effective time of the merger (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards but excluding dissenting shares, treasury shares and shares held by ABHC or Prosperity (other than treasury shares and shares held by ABHC or Prosperity (a) held in any ABHC benefit plans or related trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity and (b) held, directly or indirectly, in respect of debts previously contracted)) will be converted into the right to receive, without interest, an aggregate of 4,439,981 shares of Prosperity common stock (the “aggregate stock consideration”) as such number of shares of Prosperity common stock may be reduced pursuant to the terms of the merger agreement.

The aggregate stock consideration will be reduced if the ABHC equity capital, as calculated pursuant to the terms of the merger agreement, is less than $173,000,000 on the closing date, by a number of shares equal to the absolute value of the difference between $173,000,000 and the ABHC equity capital on the closing date, divided by $70.73 (the aggregate stock consideration, as so adjusted, “adjusted aggregate stock consideration”). For the purposes of the merger agreement, the equity capital of ABHC is equal to the sum of the capital stock, capital surplus and retained earnings of ABHC, minus goodwill and other intangibles, and excluding unrealized securities gains or losses, on a consolidated basis, as determined pursuant to GAAP and other terms set forth in the merger agreement. The merger agreement provides that ABHC must, for the purposes of calculating the ABHC equity capital, deduct for certain extraordinary items related to the merger agreement and the transactions contemplated thereby, including, without duplication: (i) the amount of expenses incurred by ABHC and its subsidiaries related to the merger, the merger agreement and the actions and transactions contemplated thereby, including any fees and commissions payable to any broker, finder, financial advisor or investment banking firm in connection with the merger agreement or the transactions contemplated thereby and any legal and accounting fees and other expenses incurred in connection with the negotiation, execution or performance of the merger agreement or the consummation of the transactions contemplated thereby, (ii) any amount needed to bring ABHC’s total loan loss reserve to an amount equal to the greater of (x) 1.05% of the total loans of ABHC and its subsidiaries as of the closing date, determined in accordance with GAAP and the accounting principles, practices, procedures, methodologies and policies employed in preparing the audited consolidated balance sheet of ABHC and its subsidiaries as of December 31, 2024 or (y) $18,400,000, (iii) the amount of any fees, costs, expenses and accruals related to threatened or outstanding litigation relating to ABHC and its subsidiaries, (iv) the premium or additional cost required to provide for the continuation of certain of ABHC’s insurance policies pursuant to the merger agreement, (v) the amount of any payments to be made pursuant to any existing employment, change in control, salary continuation, deferred compensation or other similar agreements or arrangements or severance, noncompetition, retention or bonus arrangements between ABHC or American Bank and any other person (but not including stay-pay arrangements agreed to between Prosperity Bank and American Bank), (vi) the amount of any amounts that may be owed by Prosperity or Prosperity Bank after the effective time under any of the agreements or arrangements in the foregoing clause (v), (vii) the accrual of any future benefit payments due under any salary continuation, deferred compensation or other similar agreements through the date of the final payment, which amount must be confirmed by a third-party consultant mutually acceptable to ABHC and Prosperity, (viii) the amount of any cost to fully fund, terminate and liquidate any ABHC benefit plan and to pay all related expenses and fees, including expenses and fees associated with any governmental filings in connection with such termination, to the extent such termination is required by the terms of the merger agreement or requested by Prosperity under the terms of the merger agreement, (ix) the nondeductible amount of any payments subject to Section 280G of the Code and (x) such other amounts as are agreed upon by ABHC and Prosperity.

 

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As a result, holders of ABHC common stock will receive the number of shares of Prosperity common stock equal to the adjusted aggregate stock consideration divided by the aggregate number of shares of ABHC common stock issued and outstanding (including shares of ABHC common stock issued and outstanding pursuant to ABHC restricted stock awards) immediately prior to the effective time, for each share of ABHC common stock held by such holder immediately prior to the effective time of the merger (the “merger consideration”).

All of the shares of ABHC common stock converted into the right to receive the merger consideration will no longer be outstanding and will automatically be cancelled and will cease to exist as of the effective time, and each old certificate (which includes reference to book-entry account statements relating to the ownership of shares of ABHC common stock) previously representing any such shares of ABHC common stock will thereafter represent only the right to receive (i) the merger consideration, (ii) cash in lieu of a fractional share which the shares of ABHC common stock represented by such old certificate have been converted into the right to receive pursuant to the terms of the merger agreement and (iii) any dividends or distributions which the holder thereof has the right to receive pursuant to the terms of the merger agreement, in each case without any interest thereon. Old certificates previously representing shares of ABHC common stock will be exchanged for evidence of shares in book-entry form representing whole shares of Prosperity common stock (together with any dividends or distributions with respect thereto and cash in lieu of fractional shares issued in consideration therefor) upon the surrender of such old certificates pursuant to the terms of the merger agreement, without any interest thereon.

If, prior to the effective time, the outstanding shares of Prosperity common stock or ABHC common stock have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities, in any such case as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, or there is any extraordinary dividend or extraordinary distribution, an appropriate and proportionate adjustment will be made to the merger consideration to give the holders of ABHC common stock the same economic effect as contemplated by the merger agreement prior to such event; provided that this will not permit Prosperity or ABHC to take any action with respect to its securities that is prohibited by the terms of the merger agreement.

At the effective time, all shares of ABHC common stock that are owned by ABHC or Prosperity (in each case other than shares of ABHC common stock (i) held in any ABHC benefit plans or related trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity and (ii) held, directly or indirectly, in respect of debts previously contracted) will be cancelled and will cease to exist, and neither the merger consideration nor any other consideration will be delivered in exchange therefor.

Fractional Shares

No new book-entry certificates or scrip representing fractional shares of Prosperity common stock will be issued upon the surrender for exchange of old certificates or otherwise pursuant to the merger agreement, no dividend or distribution with respect to Prosperity common stock will be payable on or with respect to any fractional share, and such fractional share interests will not entitle the owner thereof to vote or to any other rights of a shareholder of Prosperity. In lieu of the issuance of any such fractional share, Prosperity will pay to each former holder who otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average of the closing sale prices of Prosperity common stock on the NYSE as reported by The Wall Street Journal for the ten (10) consecutive full trading days ending on and including the fifth (5th) trading day immediately preceding the closing date (the “Prosperity share closing price”) by (ii) the fraction of a share (after taking into account all shares of ABHC common stock held by such holder immediately prior to the effective time and rounded to the nearest thousandth when expressed in decimal form) of Prosperity common stock which such holder would otherwise be entitled to receive pursuant to the merger agreement.

 

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Governing Documents

At the effective time, the amended and restated articles of incorporation, of Prosperity, as in effect immediately prior to the effective time, will be the articles of incorporation of Prosperity until thereafter amended in accordance with applicable law, and the amended and restated bylaws of Prosperity, as in effect immediately prior to the effective time, will be the bylaws of Prosperity until thereafter amended in accordance with applicable law. See the section entitled “The Merger—Governance of Prosperity After the Merger” beginning on page 65.

Treatment of ABHC Restricted Stock Awards

At the effective time, each ABHC restricted stock award will fully vest and be cancelled and converted into the right to receive (without interest) the per share merger consideration in respect of each share of ABHC common stock subject to such ABHC restricted stock award immediately prior to the effective time, which will be delivered as soon as reasonably practicable following the closing date and in no event later than ten (10) business days following the closing date. Each holder of an ABHC restricted stock award converted into the right to receive the per share merger consideration that would have otherwise been entitled to receive a fraction of a share of Prosperity common stock (after aggregating all shares to be delivered in respect of all ABHC restricted stock awards held by such holder) will instead receive a cash payment (rounded to the nearest cent) in an amount equal to such fractional share of Prosperity common stock (rounded to the nearest thousandth when expressed in decimal form) multiplied by the Prosperity share closing price (as defined below).

At or prior to the effective time, ABHC, the ABHC board of directors and its compensation committee, as applicable, will adopt any resolutions and take any actions that are necessary for the treatment of the ABHC restricted stock awards under the merger agreement.

Closing and Effective Time of the Merger

On the terms and subject to the conditions set forth in the merger agreement, the closing of the merger will take place at 10:00 a.m., New York City time, at the offices of Wachtell, Lipton, Rosen & Katz, on a date as soon as reasonably practicable after (but no later than thirty (30) business days after) the satisfaction or waiver (subject to applicable law) of all the conditions precedent set forth in the merger agreement (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of such conditions at the closing), unless another date, time or place is agreed to in writing by Prosperity and ABHC; provided that neither party will be required to effect the closing prior to December 1, 2025 (the date on which the closing occurs is referred to as the “closing date”).

On or before the closing date, Prosperity will cause to be filed a certificate of merger with respect to the merger with the Secretary of the State of Texas. The merger will become effective as of the date and time specified in the certificate of merger in accordance with the relevant provisions of the Texas Business Organization Code (the “TBOC”), or at such other date and time as provided by applicable law (such date and time being the “effective time”).

Conversion of Shares; Exchange of ABHC Stock Certificates

Letter of Transmittal

As promptly as practicable after the effective time, but in no event later than ten (10) business days thereafter, Prosperity will use reasonable best efforts to cause the exchange agent to mail to each holder of record of one or more old certificates representing shares of ABHC common stock immediately prior to the effective time that have been converted at the effective time into the right to receive the merger consideration, a letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to the old certificates will pass, only upon proper delivery of the old certificates to the exchange agent) and instructions for use in effecting

 

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the surrender of the old certificates in exchange for certificates representing the number of whole shares of Prosperity common stock and any cash in lieu of fractional shares, which the shares of ABHC common stock represented by such old certificate or old certificates will have been converted into the right to receive pursuant to the merger agreement as well as any dividends or distributions to be paid pursuant to the terms of the merger agreement, and the old certificate or old certificates so surrendered will be cancelled. In the event any old certificate for ABHC common stock has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such old certificate to be lost, stolen or destroyed and, if required by Prosperity or the exchange agent, the posting by such person of a bond in such amount as Prosperity or the exchange agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such old certificate, the exchange agent will issue in exchange for such lost, stolen or destroyed old certificate the shares of Prosperity common stock and any cash in lieu of fractional shares deliverable in respect thereof pursuant to the merger agreement.

After the effective time, there will be no transfers on the stock transfer books of ABHC of the shares of ABHC common stock that were issued and outstanding immediately prior to the effective time. If, after the effective time, old certificates representing such shares are presented for transfer to the exchange agent, they will be cancelled and exchanged for new book-entry certificates representing shares of Prosperity common stock, cash in lieu of fractional shares and dividends or distributions that the holder presenting such old certificates is entitled to, as provided in the merger agreement.

None of Prosperity, ABHC, the exchange agent or any other person will be liable to any former holder of shares of ABHC common stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.

Withholding

Each of Prosperity and the exchange agent will be entitled to deduct and withhold from any cash in lieu of fractional shares of Prosperity common stock, cash dividends or distributions payable pursuant to the merger agreement or any other amount payable pursuant to the merger agreement and such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. tax law. To the extent that amounts are so withheld by Prosperity or the exchange agent, as the case may be, and paid over to the appropriate governmental authority, such withheld amounts will be treated for all purposes of the merger agreement as having been paid to the person in respect of which the deduction and withholding was made by Prosperity or the exchange agent, as the case may be.

Dividends and Distributions

No dividends or other distributions declared with respect to Prosperity common stock will be paid to the holder of any unsurrendered old certificate until the holder thereof surrenders such old certificate in accordance with the merger agreement. After the surrender of an old certificate in accordance with the merger agreement, the record holder thereof will be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to the whole shares of Prosperity common stock which the shares of ABHC common stock represented by such old certificate have been converted into the right to receive under the merger agreement.

Representations and Warranties

The merger agreement contains representations and warranties made by each of Prosperity and ABHC relating to a number of matters, including the following:

 

•

corporate matters, including due organization, qualification and subsidiaries;

 

•

capitalization;

 

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•

authority relative to execution and delivery of the merger agreement and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;

 

•

required governmental and other regulatory and self-regulatory filings and consents and approvals in connection with the merger;

 

•

reports to regulatory agencies;

 

•

financial statements, internal controls and books and records;

 

•

broker’s fees payable in connection with the merger;

 

•

the absence of certain changes or events;

 

•

legal and regulatory proceedings;

 

•

compliance with applicable laws;

 

•

absence of action or circumstance that could reasonably be expected to prevent the merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

•

tax matters; and

 

•

absence of agreements with regulatory agencies.

The merger agreement contains additional representations and warranties by ABHC with respect to:

 

•

the absence of undisclosed liabilities;

 

•

employee benefit matters;

 

•

certain material contracts;

 

•

derivative instruments;

 

•

environmental matters;

 

•

investment securities and commodities;

 

•

real property;

 

•

intellectual property;

 

•

related party transactions;

 

•

takeover restrictions;

 

•

the opinion of ABHC’s financial advisor;

 

•

the accuracy of information relating to ABHC supplied for inclusion in this proxy statement/prospectus and other similar documents;

 

•

loan portfolio matters;

 

•

deposits;

 

•

insurance matters;

 

•

absence of investment adviser subsidiaries; and

 

•

absence of broker-dealer subsidiaries.

The merger agreement contains an additional representation and warranty by Prosperity with respect to Prosperity’s SEC reports.

 

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Certain representations and warranties of Prosperity and ABHC are qualified as to “materiality” or “material adverse effect.” For purposes of the merger agreement, a “material adverse effect,” when used in reference to either Prosperity or ABHC or the surviving corporation, means any effect, change, event, circumstance, condition, occurrence or development that, either individually or in the aggregate, has had or would reasonably be likely to have a material adverse effect on (i) the business, properties, assets, liabilities, results of operations or financial condition of such party and its subsidiaries, taken as a whole or (ii) the ability of such party to timely consummate the transactions contemplated by the merger agreement.

However, a material adverse effect with respect to the business, properties, assets, liabilities, results of operations or financial condition of such party and its subsidiaries, taken as a whole will not be deemed to include the impact of:

 

•

changes, after the date of the merger agreement, in GAAP or applicable regulatory accounting requirements;

 

•

changes, after the date of the merger agreement, in laws, rules or regulations of general applicability to companies in the industries in which such party and its subsidiaries operate, or interpretations thereof by courts or governmental entities;

 

•

changes, after the date of the merger agreement, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally and not specifically relating to such party or its subsidiaries;

 

•

changes, after the date of the merger agreement, resulting from hurricanes, earthquakes, tornados, floods or other natural disasters or from any outbreak of any disease or other public health event;

 

•

public disclosure of the execution of the merger agreement, public disclosure of the transactions contemplated by the merger agreement or actions expressly required by the merger agreement or that are taken with the prior written consent of the other party in contemplation of the transactions contemplated by the merger agreement; or

 

•

a decline in the trading price of a party’s common stock or the failure, in and of itself, to meet earnings projections or internal financial forecasts (it being understood that the underlying causes of such decline or failure may be taken into account in determining whether a material adverse effect has occurred);

except, with respect to the first, second, third and fourth bullets described above, to the extent that the effects of such change are disproportionately adverse to the business, properties, assets, liabilities, results of operations or financial condition of such party and its subsidiaries, taken as a whole, as compared to other banks or savings associations and their holding companies operating principally in the areas in which such party and its subsidiaries are located.

The representations and warranties in the merger agreement do not survive the effective time.

Covenants and Agreements

Conduct of Business Prior to the Completion of the Merger

Prior to the effective time or earlier termination of the merger agreement, except as expressly contemplated or permitted by the merger agreement, required by law or as consented to in writing by Prosperity (such consent not to be unreasonably withheld, conditioned or delayed), and subject to certain specified exceptions, (a) ABHC will, and will cause its subsidiaries to, (i) conduct its business in the ordinary course in all material respects and (ii) use reasonable best efforts to maintain and preserve intact its business organization relationships with employees, officers, directors, customers, depositors, suppliers, correspondent banks, governmental entities with

 

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jurisdiction over its operations and other third parties having material business relationships with ABHC or any of its subsidiaries, and (b) ABHC will, and will cause its subsidiaries to, take no action that would reasonably be likely to adversely affect or materially delay the receipt of any necessary approvals of any regulatory agency or other governmental entity required for the transactions contemplated by the merger agreement or the ability of ABHC to perform its covenants and agreements under the merger agreement or to consummate the transactions contemplated by the merger agreement on a timely basis.

In addition, prior to the effective time or earlier termination of the merger agreement, subject to certain specified exceptions or as consented to in writing by Prosperity (such consent not to be unreasonably withheld, conditioned or delayed), ABHC will not, and will not permit any of its subsidiaries to:

 

•

in each case, other than (i) federal funds borrowings and Federal Home Loan Bank borrowings, in each case with a maturity not in excess of six (6) months, (ii) the creation of deposit liabilities, (iii) issuances of letters of credit, (iv) purchases of federal funds, (v) sales of certificates of deposit and (vi) entry into repurchase agreements, in each case in the ordinary course of business with terms and conditions consistent with past practice, incur any indebtedness for borrowed money, obligations evidenced by notes, debentures or similar instruments, sale and leaseback transactions, capital or finance leases or other similar financing arrangements (other than indebtedness solely between or among ABHC and any of its wholly owned subsidiaries), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person (other than any wholly owned subsidiary of ABHC);

 

•

adjust, split, combine or reclassify any capital stock;

 

•

make, declare, pay or set a record date for any dividend, or any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity or voting securities or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock or other equity or voting securities (except (i) regular quarterly cash dividends by ABHC at a rate not in excess of $1.73 per share of ABHC common stock, (ii) quarterly cash dividends to the extent necessary for the payment of taxes resulting from the ownership of ABHC common stock by the holders of ABHC common stock in amounts computed and paid (consistent with past practice), (iii) the acceptance of shares of ABHC common stock as payment for the vesting or settlement of ABHC restricted stock awards and dividend equivalents thereon, if any (in each case, in accordance with past practice and to the extent required or permitted by the terms of the applicable award agreements) or (iv) dividends paid by any of the subsidiaries of ABHC to ABHC or any of its wholly owned subsidiaries);

 

•

grant any stock options, stock appreciation rights, performance shares, restricted stock units, restricted shares or other equity-based awards or interests, including ABHC restricted stock awards, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock or other equity or voting securities;

 

•

issue, sell or otherwise permit to become outstanding any additional shares of capital stock or other equity or voting securities or securities convertible or exchangeable into, or exercisable for or valued by reference to, any shares of its capital stock or any options, warrants, or other rights of any kind to acquire any shares of capital stock or other equity or voting securities;

 

•

sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or material assets to any individual, corporation or other entity other than a wholly owned subsidiary, or cancel, release or assign any indebtedness to any such person or any claims held by any person, in each case other than in the ordinary course of business;

 

•

except for foreclosure or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith in the ordinary course of business, make any investment or

 

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acquisition, whether by purchase of stock or securities, contributions to capital, property transfers, merger or consolidation or formation of a joint venture or otherwise, in or of any property or assets of any other individual, corporation or other entity, other than a wholly owned subsidiary of ABHC;

 

•

(i) terminate, materially amend, or waive any material provision of, certain material contracts, or make any material change in any instrument or agreement governing the terms of any of its securities, other than normal renewals of contracts in the ordinary course of business without material adverse changes to terms with respect to ABHC or its subsidiaries or (ii) enter into certain material contracts;

 

•

except as required by the terms of any ABHC benefit plan as in effect as of the date of the merger agreement, (i) enter into, adopt or terminate any ABHC benefit plan (including any plans, programs, policies, agreements or arrangements that would be considered an ABHC benefit plan if in effect as of the date of the merger agreement), (ii) amend (whether in writing or through the interpretation of) any ABHC benefit plan (including any plans, programs, policies, agreements or arrangements adopted or entered into that would be considered an ABHC benefit plan if in effect as of the date of the merger agreement), other than de minimis administrative amendments in the ordinary course of business consistent with past practice that do not increase the cost or expense of maintaining, or increase the benefits payable under, such plan, program, policy or arrangements, (iii) increase the compensation payable to any current or former employee, officer, director, independent contractor or consultant, (iv) pay, grant or award, or commit to pay, grant or award, any bonuses or incentive compensation, (v) accelerate the vesting, funding or payment of, or otherwise deviate from the terms provided in the applicable award agreement with respect to the vesting, payment, settlement or exercisability of, any ABHC restricted stock awards or other equity-based awards or other compensation or benefit, (vi) increase the compensation, bonus, severance, termination pay or other benefits payable to any of their respective current, prospective or former employees, officers, directors or independent contractors, (vii) enter into any collective bargaining agreement or similar agreement or arrangement, (viii) fund or provide any funding for any rabbi trust or similar arrangement, (ix) terminate the employment or services of any employee, officer, director or any independent contractor or consultant whose annual base fee or base wage is greater than $125,000, in each case other than for cause or (x) hire or promote any employee, officer, director or any independent contractor or consultant whose annual base fee or base wage is or would be greater than $125,000;

 

•

settle or compromise any claim, suit, action or proceeding other than any settlement involving solely money damages not in excess of $10,000 individually or $100,000 in the aggregate that does not involve or create an adverse precedent and that would not impose any material restriction on the business of ABHC or its subsidiaries or the surviving corporation or its subsidiaries;

 

•

(i) agree or consent to the issuance of any injunction, decree, order or judgment restricting or adversely affecting ABHC’s or its subsidiaries’ respective businesses or operations or (ii) waive or release any material rights or claims other than in the ordinary course of business;

 

•

take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent or impede the merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

•

amend its articles of incorporation, its bylaws or comparable governing documents of its subsidiaries;

 

•

merge or consolidate itself or any of its subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its subsidiaries;

 

•

materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, except as may be required by GAAP;

 

•

implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP;

 

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•

enter into a new line of business or change in any material respect its lending, collateral eligibility, investment, underwriting, risk and asset liability management, interest rate or fee pricing policies and other banking and operating, hedging, securitization and servicing policies (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by such policies or applicable law, regulation or policies imposed by any governmental entity;

 

•

except pursuant to existing commitments entered into prior to the date of the merger agreement and disclosed to Prosperity prior to the date of the merger agreement, make or acquire, renew, modify or extend any loans that, (i) are outside of the ordinary course of business consistent with past practice or inconsistent with, or in excess of the limitations contained in, ABHC’s loan policy or (ii) (x) with respect to loans to existing customers, increase the aggregate outstanding commitments or credit exposure to any such existing customer by more than $2,000,000; or (y) with respect to loans to new customers, result in an aggregate commitment or credit exposure to any such new customer in excess of $2,000,000, in each case of this clause (ii), without first notifying and, if requested by Prosperity within one (1) business day of receipt of such notice, consulting with Prosperity (which notification will be made through certain designated representatives of Prosperity);

 

•

make, or commit to make, any capital expenditures that exceed by more than five percent (5%) ABHC’s capital expenditure budget;

 

•

make, change or revoke any material tax election (including any election in respect of the tax treatment of ABHC as an “S corporation” within the meaning of Sections 1361 and 1362 of the Code (and any analogous provisions of applicable state or local law) or the tax treatment of any subsidiary of ABHC as either a “qualified subchapter S subsidiary” within the meaning of Section 1361(b)(3)(B) of the Code (and any similar provision of applicable state or local law) or as disregarded as an entity separate from its owner in accordance with Treasury Regulations Section 301.7701-3 (and any similar provision of applicable state, local or foreign law), as applicable (collectively, the “ABHC tax treatment”), change an annual tax accounting period, adopt or change any material tax accounting method, file any amended tax return, enter into any closing agreement with respect to taxes, or settle any material tax claim, audit, assessment or dispute or surrender any right to claim a refund of a material amount of taxes, take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to adversely impact the ABHC tax treatment), or permit a shareholder to take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to adversely impact the ABHC tax treatment;

 

•

(i) make any application for the opening or relocation of, or open or relocate, any branch office, loan production office or other significant office or operations facility of ABHC or its subsidiaries, (ii) other than in consultation with Prosperity, make any application for the closing of or close any branch or (iii) other than in consultation with Prosperity, purchase any new real property (other than other real estate owned properties in the ordinary course of business) or enter into, amend or renew any lease with respect to real property;

 

•

foreclose upon or otherwise acquire any commercial real property (i) in excess of $100,000; or (ii) that would reasonably be expected to raise environmental concerns (e.g., gas stations, dry cleaners, etc.), in each case, prior to receipt of a Phase I environmental review thereof;

 

•

cause or allow the loss of insurance coverage, unless replaced with coverage which is substantially similar (in amount, scope and insurer) to that in effect as of the date of merger agreement;

 

•

knowingly take any action that is intended to or would reasonably be likely to adversely affect or materially delay the ability of ABHC or its subsidiaries to obtain any necessary approvals of any governmental entity required for the transactions contemplated by the merger agreement or by the bank merger agreement or the requisite ABHC vote or to perform its covenants and agreements under the merger agreement or the bank merger agreement or to consummate the transactions contemplated thereby; or

 

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•

agree to take, make any commitment to take, or adopt any resolutions of its board of directors or similar governing body in support of, any of the foregoing.

Regulatory Matters

Prosperity and ABHC have agreed to cooperate with each other and use their respective reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings (and in the case of the applications, notices, petitions and filings required to obtain the requisite regulatory approvals, use their reasonable best efforts to make such filings within forty-five (45) days of the date of the merger agreement), to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement (including the merger and the bank merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such third parties and governmental entities. Each of Prosperity and ABHC has agreed to, and to cause their applicable subsidiaries to, cooperate with each other in connection therewith (including the furnishing of any information that may be reasonably requested or required to obtain the requisite regulatory approvals) and will cause their respective subsidiaries to respond and comply as promptly as practicable to any requests by governmental entities for documents and information. Each of Prosperity and ABHC has the right to review in advance, and, to the extent practicable, each will consult the other on, in each case subject to applicable laws relating to the exchange of information, all the information relating to ABHC or Prosperity, as the case may be, and any of their respective subsidiaries, which appears in any filing made with, or written materials submitted to, any governmental entity in connection with the transactions contemplated by the merger agreement. In exercising the foregoing right, each of the parties has agreed to act reasonably and as promptly as practicable. Each of Prosperity and ABHC has agreed to consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and governmental entities necessary or advisable to consummate the transactions contemplated by the merger agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated by the merger agreement. Each party has agreed to consult with the other in advance of any communication, meeting or conference with any governmental entity in connection with the transactions contemplated by the merger agreement and, to the extent permitted by such governmental entity, give the other party and/or its counsel the opportunity to attend and participate in such communications, meetings and conferences.

In furtherance of the foregoing, each of Prosperity and ABHC has agreed to use its reasonable best efforts to (i) avoid the entry of, or to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that would restrain, prevent or delay the closing, and (ii) avoid or eliminate each and every impediment so as to enable the closing to occur as soon as possible, provided, however, that notwithstanding anything in merger agreement to the contrary, Prosperity will not be required to, and ABHC will not (without the written consent of Prosperity), take any action, or commit to take any action, or agree to any condition or restriction, in order to resolve any objections to the transactions contemplated by the merger agreement or in connection with obtaining any permits, consents, approvals and authorizations of governmental entities that would, individually or in the aggregate, reasonably be likely to have a material adverse effect on the surviving corporation and its subsidiaries, taken as a whole, after giving effect to the merger (measured on a scale relative to ABHC and its subsidiaries, taken as a whole) (a “materially burdensome regulatory condition”).

Each of Prosperity and ABHC has agreed to promptly advise the other upon receiving any communication from any governmental entity whose consent or approval is required for consummation of the transactions contemplated by the merger agreement that causes such party to believe that there is a reasonable likelihood that any requisite regulatory approval will not be obtained or that the receipt of any such approval will be materially delayed.

 

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Employee Matters

To the extent requested by Prosperity in writing delivered to ABHC on or prior to the earlier of: (i) at least fifteen (15) business days before the closing date; or (ii) ten (10) business days prior to the commencement of any notice period required to effectuate the termination of an ABHC benefit plan, ABHC and its appropriate subsidiary have agreed to execute and deliver such instruments and take such other actions as Prosperity may reasonably require in order to cause the amendment or termination of any ABHC benefit plan that can be unilaterally amended or terminated by ABHC or its appropriate subsidiary on terms reasonably satisfactory to Prosperity and in accordance with applicable law and effective no later than the closing date, except that the winding up of any such plan may be completed following the closing date.

ABHC has agreed to provide Prosperity an updated ABHC employee census within two (2) business days of Prosperity requesting the same and the day prior to the closing date (all such employees on the ABHC employee census delivered the day prior to the closing date, the “ABHC employees”). All ABHC employees whose employment is not terminated prior to or at the effective time will, at the effective time, be employees of Prosperity or a subsidiary of Prosperity for purposes of the existing employee benefit plans maintained by Prosperity or Prosperity Bank (an “existing benefit plan”). To the extent that an ABHC employee becomes eligible to participate in the existing benefit plan, Prosperity shall cause such existing benefit plan to recognize the prior duration of service of such ABHC employee with ABHC for eligibility, participation and vesting under such existing benefit plan (other than vesting under any equity or incentive compensation arrangement) to the same extent such duration of service was properly recognized immediately prior to the effective time for a comparable purpose under a comparable ABHC benefit plan in which such ABHC employee was eligible to participate immediately prior to the effective time (provided, that such recognition of prior service is permitted by the terms of the applicable existing benefit plan and applicable law, is consented to by third party administrators and insurers, to the extent applicable, and will not operate to duplicate any benefits of an ABHC employee with respect to the same period of service). With respect to any existing benefit plan that is a health, dental, vision plan or other welfare plan in which any ABHC employee is eligible to participate, for the plan year in which such ABHC employee is first eligible to participate, to the extent permitted by the applicable existing benefit plan and applicable law, Prosperity will use commercially reasonable efforts to (i) cause any pre-existing condition limitations or eligibility waiting periods under such existing benefit plan to be waived with respect to such ABHC employee to the extent such limitation was waived or satisfied under the comparable ABHC benefit plan in which such ABHC employee participated immediately prior to the effective time, and (ii) recognize any health, dental or vision deductibles or co-payments paid by such ABHC employee in the year that includes the closing date for purposes of any applicable deductible and annual out-of-pocket expense requirements under any such existing benefit plan. Additionally, Prosperity has agreed to extend coverage to ABHC employees for health care, dependent care and limited purpose health care flexible spending accounts established under Section 125 of the Code to the same extent as available to similarly situated employees of Prosperity or its subsidiaries to the extent permitted by such existing benefit plans and applicable law. ABHC employees will be credited in the plan year in which the effective time occurs with amounts available for reimbursement equal to such amounts as were credited (less amounts disbursed therefrom) under the ABHC’s cafeteria plan to the extent permitted by such existing benefit plans and applicable law. For purposes of determining an ABHC employee’s benefits for the calendar year in which the merger occurs under Prosperity’s vacation program, any vacation taken by an ABHC employee immediately preceding the closing date for the calendar year in which the merger occurs will be deducted from the total Prosperity vacation benefit available to such ABHC employee for such calendar year.

Director and Officer Indemnification and Insurance

The merger agreement provides that at or prior to the effective time, ABHC will purchase past acts and extended reporting period insurance coverage under its (i) current directors and officers insurance policy, (ii) employment practices liability insurance policy and (iii) bankers professional insurance policy (provided, that ABHC may substitute such policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the insured for each of the

 

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foregoing), in each case that (x) provides coverage with respect to claims arising from facts or events which occurred at the effective time or during at least the six (6)-year period immediately preceding the effective time (including the transactions contemplated by the merger agreement) and (y) is in effect for a period of at least six (6) years from and after the effective time (except that ABHC will not expend for such extended insurance coverage an amount in excess of three hundred percent (300%) of the current annual premium paid as of the date hereof by ABHC for such insurance, applied over a six (6)-year term of such extended coverage).

The merger agreement provides that, for a period of no less than six (6) years from and after the effective time, the surviving corporation will indemnify and hold harmless and will advance expenses as incurred, in each case to the extent (subject to applicable law) such persons are indemnified as of the date of the merger agreement by ABHC pursuant to the ABHC certificate of formation, the ABHC bylaws, the governing or organizational documents of any subsidiary of ABHC and certain other indemnification agreements in existence as of the date of the merger agreement, each present and former director or officer of ABHC and its subsidiaries (in each case, when acting in such capacity) (collectively, the “ABHC indemnified parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the effective time, arising out of the fact that such person is or was a director or officer of ABHC or any of its subsidiaries and pertaining to matters existing or occurring at or prior to the effective time, including the transactions contemplated by the merger agreement; provided, that in the case of advancement of expenses the ABHC indemnified party to whom expenses are advanced provides an undertaking (in a reasonable and customary form) to repay such advances if it is ultimately determined that such ABHC indemnified party is not entitled to indemnification.

Certain Additional Covenants

The merger agreement also contains additional covenants, including, among others, covenants relating to the filing of this proxy statement/prospectus, obtaining required consents, the listing of the shares of Prosperity common stock to be issued in the merger, access to information of the other company, ABHC’s allowance for loan losses, advice of changes, takeover restrictions, shareholder litigation relating to the transactions contemplated by the merger agreement, termination of related party agreements, the assumption by Prosperity or Prosperity Bank of ABHC and American Bank indebtedness and public announcements with respect to the transactions contemplated by the merger agreement. Additionally, the merger agreement provides that ABHC must take all actions to cause all agreements between ABHC and its related parties (including the fourth amended and restated agreement of shareholders of ABHC, effective as of November 30, 2016, as amended by the first amendment, effective as of October 25, 2018 and that certain addendum agreement, dated as of September 20, 2022) to be terminated effective at or prior to the closing.

Shareholder Meeting and Recommendation of the ABHC Board of Directors

ABHC has agreed to take, in accordance with applicable law and the ABHC certificate of formation and ABHC bylaws, as amended, all actions necessary to convene a meeting of its shareholders (the “ABHC special meeting”) to be held as soon as reasonably practicable after the registration on Form S-4 of which this proxy statement/prospectus forms a part is declared effective for the purpose of obtaining the requisite ABHC vote required in connection with the merger agreement and the merger. Except in the case of an ABHC adverse recommendation change (as defined below), the ABHC board of directors will use its reasonable best efforts to obtain from the shareholders of ABHC the requisite ABHC vote, including by communicating to its shareholders its recommendation (and including such recommendation in this proxy statement/prospectus) that they approve the merger agreement and the transactions contemplated thereby (the “ABHC board recommendation”). If requested by Prosperity, ABHC will engage a proxy solicitor reasonably acceptable to Prosperity to assist in the solicitation of proxies from ABHC shareholders relating to the requisite ABHC vote. ABHC and its board of directors will not (i) withhold, withdraw, modify or qualify in a manner adverse to Prosperity the ABHC board recommendation, (ii) fail to make the ABHC board recommendation in this proxy statement/prospectus,

 

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(iii) adopt, approve, recommend or endorse an ABHC acquisition proposal or publicly announce an intention to adopt, approve, recommend or endorse an ABHC acquisition proposal, (iv) fail to publicly and without qualification (A) recommend against any ABHC acquisition proposal or (B) reaffirm the ABHC board recommendation, in each case within ten (10) business days (or such fewer number of days as remains prior to the ABHC special meeting) after an ABHC acquisition proposal is made public or any request by Prosperity to do so or (v) publicly propose to do any of the foregoing clauses (i) through (iv) (any of the foregoing, an “ABHC adverse recommendation change”). However, subject to certain termination rights in favor of Prosperity as described in the sections entitled “—Termination of the Merger Agreement” and “—Effect of Termination,” if the ABHC board of directors, after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines in good faith that it would more likely than not result in a violation of its fiduciary duties under applicable law to make or continue to make the ABHC board recommendation, then, prior to the receipt of the requisite ABHC vote, in submitting the merger agreement and the merger to its shareholders, the ABHC board of directors may withhold or withdraw or modify or qualify in a manner adverse to Prosperity the ABHC board recommendation or may submit the merger agreement and the merger to its shareholders without recommendation (although the resolutions approving the merger agreement as of the date thereof may not be rescinded or amended), in which event the ABHC board of directors may communicate the basis for the ABHC adverse recommendation change to its shareholders in the proxy statement/prospectus or an appropriate amendment or supplement thereto; provided that the ABHC board of directors may not take any actions under this sentence unless (i) it gives Prosperity at least three (3) business days’ prior written notice of its intention to take such action and a reasonable description of the event or circumstances giving rise to its determination to take such action (including, in the event such action is taken by the ABHC board of directors in response to an ABHC acquisition proposal, the latest material terms and conditions and the identity of the third party in any such ABHC acquisition proposal, or any amendment or modification thereof, or describe in reasonable detail such other event or circumstances) and (ii) at the end of such notice period, the ABHC board of directors takes into account any amendment or modification to the merger agreement proposed by Prosperity and after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines in good faith that it would nevertheless more likely than not result in a violation of its fiduciary duties under applicable law to continue to make the ABHC board recommendation. Any material amendment to any ABHC acquisition proposal will be deemed to be a new ABHC acquisition proposal for purposes of such notice requirement and will require a new notice period.

ABHC will adjourn or postpone the ABHC special meeting if, as of the time for which such meeting is originally scheduled, there are insufficient shares of ABHC common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if on the date of such meeting, ABHC has not received proxies representing a sufficient number of shares necessary to obtain the requisite ABHC vote. Notwithstanding anything to the contrary in the merger agreement, unless the merger agreement has been terminated in accordance with its terms, the ABHC special meeting will be convened and the merger agreement and the merger will be submitted to the shareholders of ABHC at the ABHC special meeting for the purpose of voting on the approval of the merger and the other matters contemplated thereby, and nothing contained in the merger agreement will be deemed to relieve ABHC of such obligation. ABHC will only be required to adjourn or postpone the ABHC special meeting two (2) times pursuant to the first sentence of this paragraph.

Agreement Not to Solicit Other Offers

ABHC has agreed that it will not, and will cause its subsidiaries, officers and directors, and use its reasonable best efforts to cause its and their respective employees, agents, advisors and representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to, (ii) engage or participate in any negotiations with any person concerning or (iii) provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to, any ABHC acquisition proposal (as defined below), except to notify a person that has made or, to the knowledge of ABHC, is making any inquiries with respect to, or is

 

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considering making an ABHC acquisition proposal of the existence of the foregoing agreement. Unless the merger agreement is terminated in accordance with its terms, ABHC has also agreed that it will not, and will cause its subsidiaries and its and their Representatives not to on its behalf, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other agreement (whether written or oral, binding or nonbinding) (other than a confidentiality agreement referred to and entered into in accordance with the merger agreement relating to an ABHC acquisition proposal). For purposes of the merger agreement, an “ABHC acquisition proposal” means, other than the transactions contemplated by the merger agreement, any offer, inquiry or proposal relating to, or any third-party indication of interest in, (i) any acquisition or purchase, direct or indirect, of twenty percent (20%) or more of the consolidated assets of ABHC and its subsidiaries or twenty percent (20%) or more of any class of equity or voting securities of ABHC or its subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of ABHC, (ii) any tender offer or exchange offer that, if consummated, would result in such third party beneficially owning twenty percent (20%) or more of any class of equity or voting securities of ABHC or its subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of ABHC or (iii) a merger, consolidation, share exchange or other business combination, reorganization recapitalization, liquidation, dissolution or similar transaction involving a party or its subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of ABHC.

However, prior to the receipt of the requisite ABHC vote, in the event ABHC receives an unsolicited bona fide written ABHC acquisition proposal, it may, and may permit its subsidiaries and its and its subsidiaries’ Representatives to, furnish or cause to be furnished confidential or nonpublic information or data and participate in such negotiations or discussions to the extent that its board of directors concludes in good faith (after receiving the advice of its outside counsel, and with respect to financial matters, its financial advisors) that failure to take such actions would be more likely than not to result in a violation of its fiduciary duties under applicable law, provided that, prior to providing any confidential or nonpublic information permitted to be so provided, ABHC has provided such information to Prosperity, and has entered into a confidentiality agreement with such third party on terms no less favorable to it than the confidentiality agreement between Prosperity and ABHC, which confidentiality agreement may not provide such person with any exclusive right to negotiate with ABHC.

ABHC has also agreed to, and to cause its Representatives to, immediately cease and cause to be terminated any activities, discussions or negotiations conducted before the date of the merger agreement with any person other than Prosperity with respect to any ABHC acquisition proposal. Further, ABHC has agreed to, and to cause its subsidiaries to, promptly request (to the extent it has not already done so prior to the date of the merger agreement) any person that has executed a confidentiality or non-disclosure agreement in connection with any actual or potential ABHC acquisition proposal that remains in effect as of the date of the merger agreement to return or destroy all confidential information of ABHC or its subsidiaries in the possession of such person or its Representatives. In addition, ABHC has agreed to promptly (and in any event within twenty-four (24) hours) advise Prosperity following receipt of any ABHC acquisition proposal or any inquiry which could reasonably be expected to lead to an ABHC acquisition proposal, and the substance thereof (including the material terms and conditions of and the identity of the person making such inquiry or ABHC acquisition proposal), to provide Prosperity with an unredacted copy of any such ABHC acquisition proposal and any draft agreements, proposals or other materials received in connection with any such inquiry or ABHC acquisition proposal and to keep Prosperity reasonably apprised of any related developments, discussions and negotiations on a current basis, including by providing to Prosperity within twenty-four (24) hours any amendments to or revisions of the terms of such inquiry or ABHC acquisition proposal. ABHC will use its reasonable best efforts to enforce any existing confidentiality or standstill agreements to which it or any of its subsidiaries is a party in accordance with the terms thereof.

 

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Conditions to Completion of the Merger

Prosperity’s and ABHC’s respective obligations to complete the merger are subject to the satisfaction or waiver, at or prior to the effective time, of the following conditions:

 

•

approval of the merger agreement by the shareholders of ABHC by the requisite ABHC vote;

 

•

the shares of Prosperity common stock issuable pursuant to the merger agreement having been authorized for listing on the NYSE, subject to official notice of issuance;

 

•

the effectiveness under the Securities Act of 1933, as amended, of the registration statement on Form S-4 of which this proxy statement/prospectus forms a part, and the absence of any stop order suspending the effectiveness of the registration statement or proceedings for that purpose initiated or threatened by the SEC and not withdrawn;

 

•

no order, injunction or decree issued by any court or governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger, the bank merger or any of the other transactions contemplated by the merger agreement being in effect, and no law, statute, rule, regulation, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity which prohibits or makes illegal consummation of the merger, the bank merger or any of the other transactions contemplated by the merger agreement;

 

•

all requisite regulatory approvals having been obtained and remaining in full force and effect and all statutory waiting periods in respect thereof having expired;

 

•

the final determination of the amount of the ABHC equity capital as at the closing date in accordance with the terms of the merger agreement;

 

•

the accuracy of the representations and warranties of the other party contained in the merger agreement, generally as of the date on which the merger agreement was entered into and as of the closing date, subject to the materiality standards provided in the merger agreement;

 

•

the performance by the other party in all material respects of the obligations, covenants and agreements required to be performed by it under the merger agreement at or prior to the closing date; and

 

•

receipt by such party of an opinion of legal counsel, in form and substance reasonably satisfactory to such party, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code; in rendering such opinion, counsel may require and rely upon representations contained in certificates of officers of Prosperity and ABHC reasonably satisfactory in form and substance to such counsel.

Prosperity’s obligation to complete the merger is subject to the satisfaction or, where legally permissible, waiver of additional conditions. These additional conditions include, among others:

 

•

receipt of a FIRPTA certificate from ABHC stating that the shares of capital stock of ABHC do not constitute “United States real property interests” under the Code;

 

•

certain directors and officers of ABHC and American Bank having executed a release agreement in a form reasonably acceptable to Prosperity, effective as of the effective time of the merger, releasing ABHC and American Bank from any and all claims by such directors and officers (except as described in such instrument); and that such release agreements remain in full force and effect;

 

•

certain directors and officers of ABHC and American Bank having executed an employment agreement and/or support agreement with Prosperity and/or Prosperity Bank; and that such employment agreements and/or support agreements remain in full force and effect;

 

•

holders of no more than five percent (5%) of the issued and outstanding shares of ABHC common stock have demanded or being entitled to receive payment of the fair value of their shares as dissenting shareholders under the applicable provisions of the TBOC;

 

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•

no requisite regulatory approval having resulted in the imposition of any materially burdensome regulatory condition (as defined in “The Merger—Regulatory Approvals”); and

 

•

receipt of payoff documentation from ABHC relating to certain indebtedness of ABHC, at least two (2) business days prior to the closing.

Neither Prosperity nor ABHC can provide assurance as to when or if all of the conditions to the merger can or will be satisfied or waived by the appropriate party.

Termination of the Merger Agreement

The merger agreement can be terminated at any time prior to completion of the merger, whether before or after the receipt of the requisite ABHC vote, in the following circumstances:

 

•

by mutual consent of Prosperity and ABHC in a written instrument;

 

•

by either Prosperity or ABHC if any governmental entity that must grant a requisite regulatory approval has denied approval of the merger or the bank merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final nonappealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the consummation of the merger or the bank merger, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements set forth in the merger agreement;

 

•

by either Prosperity or ABHC if the merger has not been completed on or before January 14, 2026 (the “initial termination date” or the “termination date”), but if on such date the conditions specified in the merger agreement pertaining to (a) the absence of any order, injunction, decree or other legal restraint or prohibition preventing the consummation of the merger, the bank merger or any of the other transactions contemplated by the merger agreement as it relates to the required regulatory approvals or (b) the consent or approval of certain regulatory authorities have not been satisfied, and all other conditions of the parties have been satisfied or waived (other than those conditions that by their terms are to be fulfilled at the closing, as long as such conditions would be capable of being fulfilled if the closing were to occur on such date), then the “termination date” will be extended to March 16, 2026, provided that the failure of the closing to occur by the termination date is not due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements set forth in the merger agreement;

 

•

by either Prosperity or ABHC (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or if any such representation or warranty ceases to be true) set forth in the merger agreement on the part of ABHC, in the case of a termination by Prosperity, or Prosperity, in the case of a termination by ABHC, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the closing date, the failure of an applicable closing condition of the terminating party and which is not cured by the earlier of the termination date and forty-five (45) days following written notice to the other party, or by its nature or timing cannot be cured during such period;

 

•

by Prosperity, prior to such time as the requisite ABHC vote is obtained, if ABHC or the ABHC board of directors (i) makes an ABHC adverse recommendation change or (ii) materially breaches its obligations related to ABHC shareholder approval or ABHC acquisition proposals; or

 

•

by either Prosperity or ABHC, if the requisite approval of ABHC shareholders of the ABHC merger proposal is not obtained at the ABHC special meeting, or at any adjournment or postponement thereof, in each case at which a vote of the approval of the merger agreement was taken.

 

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Neither Prosperity nor ABHC is permitted to terminate the merger agreement as a result, in and of itself, of any increase or decrease in the market price of Prosperity common stock.

Effect of Termination

If the merger agreement is terminated by either Prosperity or ABHC, as provided under “—Termination of the Merger Agreement” above, the merger agreement will become void and have no effect, and none of Prosperity, ABHC, any of their respective subsidiaries or any of the officers or directors of any of them will have any liability of any nature whatsoever under the merger agreement, or in connection with the transactions contemplated thereby, except that (i) designated provisions of the merger agreement will survive the termination, including those relating to the confidential treatment of information, public announcements, the effect of termination, including the termination fee described below, and certain general provisions, and (ii) notwithstanding anything to the contrary in the merger agreement, neither Prosperity nor ABHC will be relieved or released from any liabilities or damages arising out of its fraud or willful and material breach of any provision of the merger agreement.

Termination Fee

ABHC will pay Prosperity a termination fee equal to $12,850,000 by wire transfer of same-day funds (the “termination fee”) if the merger agreement is terminated in the following circumstances:

 

•

In the event that the merger agreement is terminated by Prosperity pursuant to the second to last bullet set forth under “—Termination of the Merger Agreement” above. In such case, the termination fee must be paid to Prosperity as promptly as reasonably practicable after the date of termination (and in any event, within three (3) business days of the date of termination).

 

•

In the event that, after the date of the merger agreement and prior to the termination of the merger agreement, a bona fide ABHC acquisition proposal has been communicated to or otherwise made known to the ABHC board of directors or ABHC’s senior management or has been made directly to ABHC ’s shareholders generally, or any person has publicly announced (and not withdrawn at least two (2) business days prior to the ABHC special meeting) an ABHC acquisition proposal, and (i) thereafter the merger agreement is terminated by either Prosperity or ABHC pursuant to the third bullet set forth under “—Termination of the Merger Agreement” above without the requisite ABHC shareholder vote having been obtained (and all other closing conditions set forth in the merger agreement and applicable to ABHC were satisfied or were capable of being satisfied prior to such termination) or (ii) thereafter the merger agreement is terminated by Prosperity pursuant to the fourth bullet set forth under “—Termination of the Merger Agreement” above as a result of a willful breach or by ABHC or Prosperity pursuant to the sixth bullet set forth under “—Termination of the Merger Agreement” above, and (iii) prior to the date that is twelve (12) months after the date of such termination, ABHC enters into a definitive agreement or consummates a transaction with respect to an ABHC acquisition proposal (whether or not the same ABHC acquisition proposal as that referred to above), provided that for purposes of the foregoing, all references in the definition of ABHC acquisition proposal to “twenty percent (20%)” will instead refer to “fifty percent (50%).” In such case, the termination fee must be paid to Prosperity on the earlier of the date ABHC enters into such definitive agreement and the date of consummation of such transaction.

Fees and Expenses

Except as otherwise expressly provided in the merger agreement, all fees and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such fees or expenses, whether or not the merger is consummated.

 

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Amendment, Waiver and Extension of the Merger Agreement

Subject to compliance with applicable law, the merger agreement may be amended by the parties at any time before or after the receipt of the requisite ABHC vote, except that after the receipt of the requisite ABHC vote, there may not be, without further approval of the shareholders of ABHC, any amendment of the merger agreement that requires such further approval under applicable law.

At any time prior to the effective time, the parties may, to the extent legally allowed, extend the time for the performance of any of the obligations or other acts of the other party, waive any inaccuracies in the representations and warranties of the other party contained in the merger agreement or in any document delivered by such other party pursuant to the merger agreement, and waive compliance with any of the agreements or satisfaction of any conditions for its benefit contained in the merger agreement; provided, however, that after the receipt of the requisite ABHC vote, there may not be, without further approval of the shareholders of ABHC, any extension or waiver of the merger agreement or any portion thereof that requires further approval under applicable law.

Voting Agreements

Each of the directors of ABHC and American Bank, in each case in their capacities as shareholders, and one non-director shareholder, have individually entered into an ABHC voting agreement, in which they have agreed to vote (or cause to be voted), in person or by proxy, or deliver (or cause to be delivered) a written consent covering, all covered shares as to which they are the record or beneficial owner, subject to certain exceptions, (i) in favor of the adoption and approval of the merger agreement or any other proposal submitted to the ABHC shareholders necessary or advisable for the consummation of the transactions contemplated thereby, including the merger, (ii) in favor of any proposal to adjourn or postpone the ABHC special meeting to a later date if there are not sufficient votes to approve the merger agreement, (iii) against any acquisition proposal or other proposal made in opposition to or that is otherwise in competition or inconsistent with the transactions contemplated by the merger agreement, (iv) against any agreement, amendment of any agreement or organizational document inconsistent with the ABHC voting agreement or merger agreement and (v) against any action, agreement, transaction or proposal that would reasonably be expected to result in a breach of any representation, warranty, covenant, agreement or other obligation of ABHC under the merger agreement or that would reasonably be expected to prevent, impede, delay or adversely affect the consummation of the transactions contemplated by the merger agreement. In addition, the ABHC voting agreements provide that such shareholders will not sell or transfer any of their shares of ABHC common stock of which they are a record or beneficial owner, subject to certain exceptions, until the earlier of the effective time or the date on which the merger agreement is terminated in accordance with its terms.

The ABHC voting agreements will remain in effect until the earlier to occur of the closing of the merger and the date of termination of the merger agreement in accordance with its terms.

As of the ABHC record date, shares constituting approximately [   ]% of the ABHC common stock entitled to vote at the ABHC special meeting are subject to ABHC voting agreements.

The foregoing description of the ABHC voting agreements is subject to, and qualified in its entirety by reference to the ABHC voting agreements, a form of which is attached to this proxy statement/prospectus as Annex B and is incorporated by reference into this proxy statement/prospectus.

For information regarding the voting agreement and certain holders of shares of ABHC common stock, see “Security Ownership of ABHC Directors, Executive Officers and Certain Beneficial Owners of ABHC” on page 95.

 

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Director Support Agreements

The non-employee directors of ABHC and the non-employee directors of American Bank each entered into a director support agreement with Prosperity, Prosperity Bank, ABHC and American Bank in connection with Prosperity’s and ABHC’s entry into the merger agreement (the “ABHC director support agreements”). Pursuant to the ABHC director support agreements, the non-employee directors have agreed, among other things, and subject to certain exceptions, not to disclose or use confidential information of ABHC, American Bank, Prosperity and Prosperity Bank. Additionally, the non-employee directors have agreed, from and after the effective time for a period of two (2) years, not to solicit customers of ABHC, American Bank, Prosperity or Prosperity Bank on behalf of a third party, not to solicit certain ABHC, American Bank, Prosperity or Prosperity Bank employees and not to compete with ABHC, American Bank, Prosperity or Prosperity Bank.

The ABHC director support agreements become effective upon the effective time; provided that if the merger agreement is terminated, the director support agreements will not become effective.

As of the ABHC record date, shares constituting approximately [   ]% of the ABHC common stock entitled to vote at the ABHC special meeting are subject to ABHC director support agreements.

The foregoing description of the ABHC director support agreements is subject to, and qualified in its entirety by reference to the ABHC director support agreements, a form of which is attached to this proxy statement/prospectus as Annex C and is incorporated by reference into this proxy statement/prospectus.

Governing Law

The merger agreement is governed by and will be construed in accordance with the laws of the State of Texas, without regard to any applicable conflicts of law principles.

Specific Performance

Prosperity and ABHC will be entitled to specific performance of the terms of the merger agreement, including an injunction or injunctions to prevent breaches of the merger agreement or to enforce specifically the performance of the terms and provisions thereof (including the parties’ obligation to consummate the merger), in addition to any other remedy to which they are entitled at law or in equity. Each of Prosperity and ABHC waives any defense in any action for specific performance that a remedy at law would be adequate and any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief.

 

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following general discussion sets forth the anticipated material U.S. federal income tax consequences of the merger to U.S. holders (as defined in this section) who exchange their ABHC common stock for Prosperity common stock in the merger. This discussion does not address any tax consequences arising under the laws of any state, local or foreign jurisdiction or under any U.S. federal laws other than those pertaining to the income tax (such as estate or gift tax laws) and, except as expressly addressed below, any U.S. tax reporting requirements. This discussion is based upon the Code, the U.S. Treasury Regulations promulgated thereunder and court and administrative rulings and decisions in effect on the date of this joint proxy statement/prospectus. These laws may change, possibly in a material and adverse manner and/or retroactively, or be subject to differing interpretations, and any such change or differing interpretation could affect the continuing validity and accuracy of this discussion.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of ABHC common stock that is, for U.S. federal income tax purposes:

 

•

an individual citizen or resident of the United States;

 

•

a corporation, or other entity taxable as a corporation, created or organized under the laws of the United States, any state thereof or the District of Columbia;

 

•

a trust if (a) its administration is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) it has a valid election in effect under applicable Treasury Regulations to be treated as a United States person; or

 

•

an estate the income of which is subject to U.S. federal income tax regardless of its source.

If a partnership, including for this purpose any entity or arrangement classified as a partnership for U.S. federal income tax purposes, holds ABHC common stock, the U.S. federal income tax treatment of a partner in such partnership generally will depend on the status of the partners, the status and activities of the partnership and certain determinations made at the partner level. If you are a partner of a partnership holding ABHC common stock, you should consult your tax advisors regarding the specific U.S. federal income tax consequences of the merger in light of your particular circumstances.

This discussion is applicable to you only if you hold your shares of ABHC common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to you in light of your particular circumstances or that may be applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:

 

•

a bank or other financial institution;

 

•

a tax-exempt organization or governmental organization;

 

•

an S corporation, partnership or other pass-through entity (or a shareholder, partner or investor therein);

 

•

an underwriter or insurance company;

 

•

a mutual fund;

 

•

a pension fund, retirement plan, individual retirement account or other tax-deferred account;

 

•

a broker, dealer or trader in securities (including traders in securities that elect to apply a mark-to-market accounting method), currencies or commodities;

 

•

a holder of ABHC common stock subject to the alternative minimum tax provisions of the Code;

 

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•

a holder of ABHC common stock subject to the U.S. anti-inversion rules or the base erosion and anti-abuse tax;

 

•

a holder of ABHC common stock who holds such stock (or who will hold Prosperity common stock after the merger) in connection with a trade or business, permanent establishment or fixed base outside the United States;

 

•

a holder of ABHC common stock required to accelerate the recognition of any item of gross income as a result of such income being recognized on an “applicable financial statement”;

 

•

a holder of ABHC common stock who received ABHC common stock through the exercise of employee stock options or through a tax-qualified retirement plan or otherwise as compensation;

 

•

a holder who exercises dissenters’ rights;

 

•

a person who is not a U.S. holder;

 

•

a real estate investment trust;

 

•

a regulated investment company;

 

•

a person who uses a functional currency other than the U.S. dollar;

 

•

an expatriate or former citizen or long-term resident of the United States;

 

•

a holder who owns (or who has owned or will own, directly, indirectly, or constructively, at any time) 5% or more of the total combined voting power or value of ABHC;

 

•

a holder of options granted under any ABHC benefit plan; or

 

•

a holder of ABHC common stock who holds ABHC common stock as part of a hedge, straddle or a constructive sale or conversion transaction.

If you are a U.S. holder subject to special provisions and/or tax treatment under the Code, including but not limited to those described immediately above, you should consult your own tax advisors regarding the tax consequences relating to the merger in light of your particular circumstances. This discussion is not a complete description of all of the U.S. federal income tax consequences of the merger and, in particular, does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010 or any consequences under the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations issued thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith).

This discussion is not intended to be, and should not be construed as, legal or tax advice and does not purport to be a complete analysis or discussion of all U.S. federal income tax considerations relating to the merger. The tax consequences of the merger are complex and will depend on your specific situation and factors not within Prosperity’s or ABHC’s control. No ruling from the Internal Revenue Services (“IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences applicable to U.S. holders as discussed herein. This discussion is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this discussion. In addition, because the authorities on which this discussion is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this discussion. You should consult your own tax advisor as to the tax consequences of the merger in light of your particular circumstances, including the ability and effect of the alternative minimum tax and any U.S. federal, U.S. state or local, non-U.S. or other tax laws and of changes in such laws.

Tax Consequences of the Merger Generally

U.S. Holders

Prosperity and ABHC intend the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. As described below, it is a condition to each party’s respective obligations to

 

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