Cullen Zalman Executive Vice President – Banking and Corporate Activities, Prosperity Bank

Invest: spoke with Cullen Zalman, executive vice president of banking and corporate activities for Prosperity Bank, about scale, service, and technology investments becoming essential for banks that want to stay competitive, especially in fast-growing markets like Houston. “We want a fair deal for our customers, a fair deal for the communities we are in, and a fair deal for us,” Zalman said, outlining a strategy built around acquisitions, local decision-making, and relationship-driven banking supported by modern digital capabilities.

What economic or market shifts have had the biggest impact on Prosperity Bank’s commercial banking business in Texas?

We’ve been extremely busy over the last 12 months with several mergers and acquisitions. We recently announced and closed the acquisition of American Bank out of Corpus Christi and Texas Partners Bank in San Antonio. We also announced the acquisition of Stellar Bank in Houston, which has not closed yet, but it will allow us to be Houston’s community bank, with the size and scale to support customers from consumer and retail banking through small business and the middle market.

We judge ourselves on our market share, and bringing these organizations together strengthens our ability to compete in a market where more banks are coming into Texas and Houston from outside the state. There’s nothing against out-of-state banks, but Houston has not historically had a homegrown community bank with meaningful scale that can serve the full range of customer needs.

What is the strategic goal behind this expansion, and what makes Prosperity’s community bank model work at scale?

A lot of the institutions we’ve acquired over the years are long-standing organizations with historic roots in Texas. Prosperity was started in the mid-1980s, but some of the institutions we’ve acquired have 50- and 100-year histories. The goal is to build something that is a Texas champion — and we’re in Oklahoma as well — a regional champion that can serve as Texas’ and Oklahoma’s bank, without customers having to go outside the state for capital, financing, and related needs.

We focus on serving the whole life cycle. That starts with basic consumer needs, then grows into home loans and other personal lending, and extends into small business financing and middle market relationships. The goal is to be a full-service bank, with the capacity to support customers as their needs evolve.

As you integrate acquisitions, how do you maintain relationships while still achieving operational efficiencies?

A bank is nothing without the people inside it. What makes a bank is the customer service it provides, so when we do these deals, we do our best to retain the customer-facing teams. We don’t want customers joining through an acquisition to have to deal with someone new. We want them to keep their banker, and we want that banker to be comfortable in the Prosperity system.

Where we traditionally realize cost savings is through redundant systems and vendors — things like core system providers, accounting software, and human resources platforms. You don’t need two of everything. Scale matters because the regulatory burden increases as an institution grows, and expectations rise along with it. Technology is also expensive, and banks are competing not only with other banks but with every digital experience customers have. People expect banking apps to feel as seamless as anything else they use every day, so scale helps you invest in the technology required to maintain strong service.

Which industries are creating the most opportunity in Texas and Houston, and what is business sentiment like?

Texas has recently been somewhat insulated when the broader economy gets tough, and population growth plays a big role. We’re in a pro-business state that encourages companies to relocate and for people to move here, including because there is no state income tax. Businesses that relocate create jobs, and that drives additional activity across the economy, everything from new small businesses supporting those companies to housing demand and homebuilding that comes with population inflows.

In general, the businesses moving here create a broad lift because growth compounds. When people move to Texas for jobs, it drives additional needs and opportunities across multiple sectors and supply chains.

What are commercial clients asking for most today, and how have higher interest rates changed borrowing and liquidity management?

We do a lot in construction and commercial real estate. When rates began rising, we saw customers finish projects already underway, but many planned projects were put on hold until borrowers could revisit underwriting and deal structure. Higher rates have required customers to put more money down initially to make the math work.

We have strong clients who have adapted, and we’re now seeing projects restart. In terms of liquidity, average line utilization declined significantly during the period of uncertainty. Borrowers were more cautious and used less of their available credit. We’re starting to see utilization tick back up. We’re not back to prior highs, but it’s a signal that commercial clients are expanding and putting capital to work instead of just treading water.

How are you approaching talent retention and leadership continuity as you expand?

Internally, we sometimes describe ourselves as a bank of immigrants because so many people come from other banks at some point. The key for us is keeping leadership in place and empowering local teams. With the Stellar acquisition, for example, its CEO, Ray Vitulli, will continue as a leader in the Texas market as a co-area chairman, and Robert Franklin will remain in executive leadership as Vice Chairman.

We divide the bank into nine or 10 areas, including Houston, Dallas, Austin, and, soon, San Antonio, along with Oklahoma and multiple regions of Texas, and each has an area chairman and an area president. While some decision-making is centralized, many local decisions are made by local teams so we can keep a community bank feel. Customers know who is making decisions, who to call, and who is accountable. Area leaders are responsible for hiring in their markets and for growing loans and deposits, which keeps decision-making close to the communities we serve.

How are you balancing digital expectations with relationship-based service as client needs evolve?

We recently completed an internal conversion that positions us to grow into a much larger bank. A major improvement is that everything is now cloud-based in real time. For customers, that means balances and transaction activity post in a way that better matches how people expect modern banking to work.

We also believe products and services need to be available through multiple channels — on the app, online, and in the branch. The branch should function more like a place you go when you need a real person, when you have a problem to solve, or when you want to open an account and ask questions. After that, many customers want to do everything digitally.

Branches can also serve as community centers, especially in smaller communities. In a large market like Houston, that looks different sometimes, but in smaller towns, the local branch can be an important hub. The foundation is still relationship-based service, supported by technology that allows customers to do anything online if they choose.

How are you using AI today, and where do you see it creating the biggest efficiencies?

We’re in the early stages. We don’t have the research and development budgets of the largest banks, so we will rely heavily on our technology providers to do the R&D, and we’ll purchase services from them as those capabilities mature. We have started introducing tools like Copilot internally to help people find answers and move faster.

I see meaningful opportunities in some back-office operations and compliance work, particularly areas like Bank Secrecy Act (BSA) processes and related reporting. The thresholds for certain transaction reporting haven’t increased since the rules were written, so inflation and higher transaction volumes have created more work. AI and automation can create efficiencies so we don’t have to add as many people over time while keeping productivity high.

Banking, however, is still a personal business and a customer service business. Lending is a commodity to some extent. What differentiates a bank is having experienced bankers who can advise customers, especially newer business owners, on what they will need to complete a project, what risks to consider, and what tends to make deals succeed or fail. I believe that personal touch will remain important.

How are you tackling fraud, cybersecurity, and customer protection as threats evolve?

We invest heavily in it and dedicate significant resources to it because fraud is a huge issue. We also focus on customer education because, in my opinion, much fraud happens when someone makes a mistake and gets tricked into giving up passwords or credentials. A lot of these attacks target customers rather than employees.

We work to keep our technology current and introduce protections such as multi-factor authentication. In treasury management, we provide tools that allow customers to transact, manage payroll, and run operations while putting safeguards around those activities. We also use monitoring to flag suspicious activity, contact customers quickly, confirm authenticity, and introduce timing controls that can help stop a fraudulent transaction in progress. We can’t catch everything, but we focus on layered protection and fast response.

What initiatives are in place to support the communities you serve across Texas and Oklahoma?

We ask our people to be involved in their communities and to give back. Many serve on boards, city councils, and volunteer in schools and local organizations. We support local needs, including high school programs and community events, and we see that as a meaningful way to invest rather than spending on large advertising campaigns or flashy buildings.

Each region also has a primary charitable focus. In Houston, our main charitable partner is the Easter Seals Foundation, which supports individuals with disabilities and also veterans by helping connect them with resources and support. Beyond those main charities, we also support local giving through banking center budgets so branches can respond when small communities need sponsorships or support.

In 2024, we donated $3.8 million across the year to more than 3,600 charitable organizations. We also recorded more than 10,000 hours of volunteer service in collaboration with 624 community-based organizations, and I believe we have done similar numbers in 2025 as well as in years past. The goal is to stay close to the communities we serve and put resources where they matter locally.

What is your outlook for Texas over the next two to three years, and what are Prosperity’s priorities?

I think Texas will continue to be a prosperous place to be and a great place to do business. There is space here for economic growth, and population growth, including from other states, is a major driver. As long as Texas maintains a pro-business regulatory environment, I believe the state is poised to keep capitalizing on that momentum.

Texas also has breadth across industries, from healthcare and technology to oil and gas, and financial services continues to expand as well. For Prosperity, the priority is to keep building over the next three, five, and 10 years and continue developing into the Texas champion bank — a full-service bank that can support customers wherever they are in the consumer or commercial life cycle and can continue giving back to the communities we’re in.

Internally, we focus on delivering strong service and keeping relationships at the center of what we do — greeting people with a smile, knowing customers by name, trying to say yes instead of no, and thanking customers for doing business with us.