Prosperity Bancshares (PB) 8-K/A Financial Statements and Exhibits

Exhibit 99.2

PROSPERITY BANCSHARES, INC.

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma consolidated combined financial statements of Prosperity Bancshares, Inc. (“Prosperity”) as of September 30, 2006 and for the nine months ended September 30, 2006 and the year ended December 31, 2005 are presented to show the impact on Prosperity’s historical financial position and results of operations:

• the completion by Prosperity of the SNB Bancshares, Inc. acquisition, which was consummated on April 1, 2006;

• the completion by Prosperity of the Texas United Bancshares, Inc. (“Texas United”) acquisition and the issuance of shares of Prosperity common stock to the shareholders of Texas United in connection with the acquisition, which was consummated on January 31, 2007;

• with respect to the year ended December 31, 2005 only, the completion by Prosperity of the First Capital Bankers, Inc. acquisition, which was consummated on March 1, 2005;

• with respect to the year ended December 31, 2005 only, the completion by Prosperity of the Grapeland Bancshares, Inc. acquisition, which was consummated on December 1, 2005; and

• with respect to the year ended December 31, 2005 only, the completion by Texas United of the Gateway Holding Company acquisition, which was consummated on December 1, 2005.

The unaudited Pro Forma Consolidated Combined Balance Sheet reflects the historical position of Prosperity and Texas United at September 30, 2006, with pro forma adjustments based on the assumption that the acquisition was completed on September 30, 2006. The pro forma adjustments are based on the purchase method of accounting. The unaudited Pro Forma Consolidated Combined Statements of Income assume that the acquisition was consummated on January 1, 2005. The adjustments are based on information available and certain assumptions that Prosperity believes are reasonable.

The unaudited Pro Forma Consolidated Combined Statement of Income for the nine months ended September 30, 2006 assumes that the SNB Bancshares acquisition was consummated on January 1, 2006. The unaudited Pro Forma Consolidated Combined Statement of Income for the year ended December 31, 2005 assumes that each of the SNB Bancshares acquisition, the Grapeland Bancshares acquisition and the First Capital acquisition by Prosperity was consummated on January 1, 2005 and that the Gateway Holding Company acquisition by Texas United was consummated on January 1, 2005.

The following information should be read in conjunction with and is qualified in its entirety by Prosperity’s consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2005 and unaudited consolidated financial statements and accompanying notes included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and by Texas United’s consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2005 and unaudited consolidated financial statements and accompanying notes included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.

The unaudited pro forma consolidated combined financial statements are intended for informational purposes and are not necessarily indicative of the future financial position or future operating results of the combined company or of the financial position or operating results of the combined company that would have actually occurred had the Texas United acquisition or the other acquisitions been in effect as of the date or for the periods presented.

UNAUDITED PRO FORMA CONSOLIDATED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2006

	Prosperity Historical			Texas United Historical			Pro Forma Adjustments				Pro Forma Combined
	(In thousands, except per share data)
Assets
Cash and due from banks	$	85,106		$	57,030		$	(30,475	)	(a)	$	111,661
Federal funds sold		31,074			45,710			—				76,784
Total cash and cash equivalents		116,180			102,740			(30,475	)			188,445
Interest-bearing deposits in financial institutions		397			—							397
Available for sale securities, at fair value		377,384			252,118							629,502
Held to maturity securities, at cost		1,189,094			25,580			(120	)	(b)		1,214,554
Total loans		2,214,401			1,269,244					(c)		3,483,645
Less allowance for credit losses		(24,093	)		(10,600	)						(34,693	)
Loans, net		2,190,308			1,258,644							3,448,952
Bank premises and equipment, net		63,118			63,299							126,417
Accrued interest receivable		20,091			10,228							30,319
Goodwill		425,073			86,468			188,936		(d)		700,477
Core deposit intangibles		24,285			12,042			30,995		(e)		67,322
Other intangibles		—			5,647							5,647
Other real estate owned		59			1,867							1,926
Other assets		49,727			36,289							86,016
Total assets	$	4,455,716		$	1,854,922		$	189,336			$	6,499,974
Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing	$	809,836		$	395,072		$				$	1,204,908
Interest-bearing		2,783,309			955,118							3,738,427
Total deposits		3,593,145			1,350,190							4,943,335
Other liabilities		31,956			42,284							74,240
Other borrowings		79,943			237,758			(9,000	)	(f)		308,701
Junior subordinated debentures		100,519			49,996			(7,210	)	(g)		143,305
Total liabilities		3,805,563			1,680,228			(16,210	)			5,469,581
Shareholders’ equity:
Common stock		32,824			10,690			(10,690	)	(h)		43,537
								10,713		(i)
Capital surplus		425,300			129,676			(129,676	)	(h)		794,827
								369,527		(i)
Retained earnings		196,668			38,986			(38,986	)	(h)		196,668
Accumulated other comprehensive income, net of unrealized gains (losses) on available for sale securities		(4,032	)		(4,541	)		4,541		(j)		(4,032	)
Less treasury stock, at cost		(607	)		(117	)		117		(h)		(607	)
Total shareholders’ equity		650,153			174,694			205,546				1,030,393
Total liabilities and shareholders’ equity	$	4,455,716		$	1,854,922		$	189,336			$	6,499,974

-2-

(a) This adjustment represents the cash payments expected to be made for the following items required by the merger agreement (in thousands):

Payoff of Texas United line of credit with a commercial bank	$	9,000
Payments to certain officers and directors of Texas United (including income tax not deductible by Texas United)		14,247
Redemption of junior subordinated debentures issued to GNB Capital Trust I		7,210
Cash paid to Texas United option holders that elect to receive a cash payment in exchange for their options		18
Total cash payment	$	30,475

(b) This adjustment represents the write-down of Texas United’s held to maturity securities to market value as part of the purchase accounting transactions.

(c) Loans and deposits are currently being evaluated for any fair value adjustments that may be required, therefore no pro forma adjustments have been made at this time.

(d) This adjustment represents the amount of goodwill expected to be recorded in the acquisition of Texas United, less amounts allocated to the estimated identifiable intangible assets, payments to certain officers and directors of Texas United and the write-down of held to maturity securities to market value, calculated as follows (in thousands):

Purchase price for Texas United (based on the closing price of Prosperity common stock of $35.00 as of January 31, 2007):

Total purchase price	$	380,240
Less: Texas United equity at book value		(174,694	)
Add: Allocated to write-down of held to maturity securities		120
Payments to certain officers and directors of Texas United		14,265
Allocated to core deposits intangibles		(30,995	)
Total goodwill adjustment	$	188,936

(e) This adjustment represents the recognition of core deposit intangibles expected to be acquired in the Texas United acquisition.

(f) This adjustment represents the payoff of Texas United’s line of credit with a commercial bank that is secured with stock of State Bank as required by the merger agreement.

(g) This adjustment represents the redemption of the junior subordinated debentures issued to GNB Capital Trust I as required by the merger agreement.

(h) This adjustment represents the elimination of equity of Texas United as a part of the purchase accounting transactions.

(i) This adjustment represents (i) the issuance of 10.713 million shares of Prosperity common stock to shareholders of Texas United, based on (a) 10.684 million shares of Texas United common stock outstanding as of September 30, 2006, (b) the issuance of $1.0 million in shares of restricted Prosperity common stock (28,802 shares at $35.00 per share) as set forth in the employment agreements to be entered into pursuant to the merger agreement, (c) the closing price of Prosperity common stock on January 31, 2007 of $35.00 per share and (ii) the issuance of options to acquire 179,956 shares of Prosperity common stock, with an aggregate value of $6.3 million based on the closing price of Prosperity common stock on January 31, 2007 of $35.00.

(j) This adjustment represents the elimination of Texas United unrealized loss on available for sale securities.

-3-

UNAUDITED PRO FORMA CONSOLIDATED

COMBINED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006

	Prosperity Historical		SNB Bancshares Historical			Pro Forma Adjustments			Adjusted Prosperity Subtotal			Texas United Historical			Pro Forma Adjustments			Pro Forma Combined
	(In thousands, except per share data)
Interest income:
Loans, including fees	$	113,685	$	11,391		$			$	125,076		$	76,693		$			$	201,769
Securities		54,598		3,055						57,653			8,889						66,542
Federal funds sold and other interest income		563		160						723			937						1,660
Total interest income		168,846		14,606						183,452			86,519						269,971
Interest expense:
Deposits		57,487		5,783						63,270			19,474						82,744
Federal funds purchased and other borrowings		4,123		170						4,293			9,053			(359	)(d)		12,987
Junior subordinated debentures		5,497		589						6,086			2,679			(575	)(e)		8,190
Total interest expense		67,107		6,542						73,649			31,206			(934	)		103,921
Net interest income		101,739		8,064						109,803			55,313			934			166,050
Provision for credit losses		360								360			2,266						2,626
Net interest income after provision for credit losses		101,379		8,064						109,443			53,047			934			163,424
Noninterest income:
Customer service fees		20,610		291						20,901			8,708						29,609
Other		5,131		183						5,314			10,503						15,817
Gain on sale of loans		—		445						445			—						445
Gain (loss) on sale of securities		—		(16	)					(16	)		(132	)					(148	)
Total noninterest income		25,741		903						26,644			19,079						45,723
Noninterest expense:
Salaries and employee benefits		31,195		9,075			(5,904	)(a)		34,366			31,601			(6,569	)(f)		59,689
																291	(g)
Net occupancy expense		5,814		889			(294	)(a)		6,409			8,126			(596	)(f)		13,939
Data processing		2,728		702			(309	)(a)		3,121			1,160			(893	)(f)		3,388
Core deposit intangibles amortization		3,616		—			229	(b)		3,845			1,104			4,125	(h)		9,074
Other		15,124		4,403			(2,978	)(a)		16,549			13,531			(2,987	)(f)		27,093
Total noninterest expense		58,477		15,069			(9,256	)		64,290			55,522			(6,629	)		113,183
Income (loss) before federal income taxes		68,643		(6,102	)		9,256			71,797			16,604			7,563			95,964
Provision for federal income taxes		23,520		(2,143	)		3,152	(c)		24,529			5,180			2,540	(i)		32,249
Net income (loss)	$	45,123	$	(3,959	)	$	6,104		$	47,268		$	11,424		$	5,023		$	63,715
Basic earnings (loss) per share:
Earnings (loss) per share	$	1.45	$	(0.32	)				$	1.45		$	1.12					$	1.47
Weighted average shares outstanding		31,053		12,436						32,536			10,230						43,249
Diluted earnings (loss) per share:
Earnings (loss) per share	$	1.43	$	(0.29	)				$	1.44		$	1.10					$	$1.46
Weighted average shares outstanding		31,452		13,687						32,935			10,369						43,648

-4-

(a) This adjustment represents the reversal of direct acquisition entries booked by SNB Bancshares in connection with the acquisition of SNB Bancshares by Prosperity.

(b) This adjustment represents three months of amortization on core deposit intangibles of $5.7 million acquired in the acquisition of SNB Bancshares, which is being amortized on an accelerated basis over eight years.

(c) This adjustment represents the net federal income tax effect of the pro forma adjustments using an effective tax rate of 34.05%. Prosperity’s statutory tax rate for this period was 35%. Management of Prosperity believes that the effective tax rate more accurately reflects the tax that will be incurred by the combined companies.

(d) This adjustment represents the interest savings from the repayment of Texas United’s line of credit with a commercial bank that is secured with stock of State Bank as required by the merger agreement.

(e) This adjustment represents the recapture of nine months of interest expense that has been paid on the junior subordinated debentures of Texas United issued to GNB Capital Trust I, which debentures will be redeemed as required by the merger agreement.

(f) This adjustment represents the anticipated operational cost savings in connection with the acquisition of Texas United for the combined company over a nine month period. Prosperity anticipates that these savings will occur through the combination of back office operations and elimination of duplicate general, administrative and salary and benefits expense.

(g) This adjustment represents nine months of expense related to the issuance of $1.0 million in shares of restricted Prosperity common stock (28,802 shares at $35.00 per share price of Prosperity common stock) to certain officers of Texas United as provided by employment agreements with such officers, which employment agreements are required by the merger agreement.

(h) This adjustment represents nine months of amortization on core deposit intangibles of $31.0 million acquired in the acquisition of Texas United, which will be amortized on an accelerated basis over ten years.

(i) This adjustment represents the net federal income tax effect of the pro forma adjustments using an effective tax rate of 33.60%. Prosperity’s statutory tax rate for this period was 35%. Management of Prosperity believes that the effective tax rate more accurately reflects the tax that will be incurred by the combined companies.

-5-

UNAUDITED PRO FORMA CONSOLIDATED

COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2005

	Prosperity Historical			First Capital Bankers Historical			Grapeland Bancshares Historical			SNB Bancshares Historical				Pro Forma Adjustments			Adjusted Prosperity Subtotal			Adjusted Texas United Subtotal*			Pro Forma Adjustments			Pro Forma Combined
	(In thousands, except per share data)
Interest income:
Loans, including fees	$	99,958		$	5,192		$	2,698		$	44,134			$			$	151,982		$	73,665		$			$	225,647
Securities		60,866			932			469			15,784				(460	)(a)		77,591			12,305						89,896
Federal funds sold and other interest income		1,299			—			109			224							1,632			614						2,246
													��
Total interest income		162,123			6,124			3,276			60,142				(460	)		231,205			86,584						317,789
Interest expense:
Deposits		43,643			1,406			767			18,753							64,569			16,042						80,611
Federal funds purchased and other borrowings		2,688			215			876			5,911				(705	)(b)		8,985			7,310			(142	)(g)		16,153
Junior subordinated debentures		4,895			706			—			2,706							8,307			2,706			(742	)(h)		10,271
Total interest expense		51,226			2,327			1,643			27,370				(705	)		81,861			26,058			(884	)		107,035
Net interest income		110,897			3,797			1,633			32,772				245			149,344			60,526			884			210,754
Provision for credit losses		480			1,075			269			10,351				(1,285	)(c)		10,890			4,213						15,103
Net interest income after provision for credit losses		110,417			2,722			1,364			22,421				1,530			138,454			56,313			884			195,651
Noninterest income:
Customer service fees		24,985			992			300			889							27,166			10,437						37,603
Other		5,115			451			91			769							6,426			6,637						13,063
Impairment write-down of securities		—			—			—			(13,777	)			—			(13,777	)		—			—			(13,777	)
Gain on sale of loans		—			—			—			—							—			9,543						9,543
Gain (loss) on sale of securities		(79	)		—			(456	)		128							(407	)		(230	)					(637	)
Total noninterest income		30,021			1,443			(65	)		(11,991	)						19,408			26,387						45,795
Noninterest expense:
Salaries and employee benefits		36,672			3,419			841			11,850				(5,447	)(c)		47,335			38,125			(7,032	)(i)		78,817
																								389	(j)
Net occupancy expense		6,663			1,596			236			2,132				(2,142	)(c)		8,485			8,969			(550	)(i)		16,904
Data processing		2,837			4,756			143			1,739				(5,130	)(c)		4,345			1,512			(883	)(i)		4,974
Core deposit intangibles amortization		3,912			—			—			—				1,446	(d)		5,358			1,180			5,500	(k)		12,038
Other		18,873			3,806			936			5,787				(5,799	)(c)		23,603			16,114			(4,429	)(i)		35,288
Total noninterest expense		68,957			13,577			2,156			21,508				(17,072	)		89,126			65,900			(7,005	)		148,021
Income (loss) before federal income taxes		71,481			(9,412	)		(857	)		(11,078	)			18,602			68,736			16,800			7,889			93,425
Provision (benefit) for federal income taxes		23,621			(2,533	)		—			(3,766	)			6,427	(e)		23,749			5,630			2,710	(l)		32,089
Net income (loss)	$	47,860		$	(6,879	)	$	(857	)	$	(7,312	)		$	12,175		$	44,987		$	11,170		$	5,179		$	61,336
Basic earnings (loss) per share:
Earnings (loss) per share	$	1.79		$	(2.46	)	$	(0.03	)	$	(0.59	)					$	1.40	(f)	$	1.18					$	1.47	(m)
Weighted average shares outstanding		26,706			2,795			30,000			12,435							32,203			9,461						41,693
Diluted earnings (loss) per share:
Earnings (loss) per share	$	1.77		$	(2.42	)	$	(0.03	)	$	(0.59	)					$	1.38	(f)	$	1.15					$	1.45	(m)
Weighted average shares outstanding		27,024			2,837			30,000			12,435							32,600			9,715						42,344

-6-

 * The information in this column is taken from the Pro Forma Combined column on the Unaudited Pro Forma Consolidated Combined Statement of Earnings of Texas United for the year ended December 31, 2005 following this statement of income.

(a) This adjustment represents the lost earnings associated with the sale of Grapeland Bancshares’ securities portfolio to fund the payoff of its long-term debt.

(b) This adjustment represents the interest expense savings as a result of the payoff of Grapeland Bancshares’ long-term debt.

(c) This adjustment represents the reversal of direct acquisition entries booked by First Capital and Grapeland Bancshares in connection with the merger and the anticipated operational savings in connection with the acquisition of First Capital, Grapeland Bancshares and SNB Bancshares for the combined company over a twelve month period. Prosperity anticipates that these savings will occur through the combination of back office operations and elimination of duplicate general, administrative and salary and benefits expense.

(d) This adjustment represents eleven months of amortization on core deposit intangibles of $1.2 million acquired in the acquisition of Grapeland Bancshares, two months of amortization on core deposit intangibles of $13.4 million acquired in the acquisition of First Capital and twelve months of amortization on core deposit intangibles of $5.7 million acquired in the acquisition of SNB Bancshares, all of which are being amortized on an accelerated basis over eight years.

(e) This adjustment represents the net federal income tax effect of the pro forma adjustments with respect to the First Capital, Grapeland Bancshares and SNB Bancshares acquisitions using an effective tax rate of 34.55%. Prosperity’s statutory tax rate for this period was 35%. Management of Prosperity believes that the effective tax rate more accurately reflects the tax that will be incurred by the combined companies.

(f) Basic and diluted earnings per share of Prosperity, before giving effect to the proposed acquisition of Texas United, excluding the one time impairment write-down loss on SNB Bancshares securities of $13.8 million and the one time additional provision for loan losses of $7.9 million related to the sale of SNB Bancshares loans prior to acquisition would have been $1.84 and $1.82, respectively.

(g) This adjustment represents the interest savings from the repayment of Texas United’s line of credit with a commercial bank that is secured with stock of State Bank as required by the merger agreement.

(h) This adjustment represents the recapture of twelve months of interest expense that has been paid on the junior subordinated debentures of Texas United issued to GNB Capital Trust I, which debentures will be redeemed as required by the merger agreement.

(i) This adjustment represents the anticipated operational cost savings in connection with the acquisition of Texas United for the combined company over a twelve month period. Prosperity anticipates that these savings will occur through the combination of back office operations and elimination of duplicate general, administrative and salary and benefits expense.

(j) This adjustment represents twelve months of expense related to the issuance of $1.0 million in shares of restricted Prosperity common stock (28,802 shares at a $35.00 per share price of Prosperity common stock) to certain officers of Texas United as provided by employment agreements with such officers, which employment agreements are required by the merger agreement.

(k) This adjustment represents twelve months of amortization on core deposit intangibles of $31.0 million acquired in the acquisition of Texas United, which will be amortized on an accelerated basis over ten years.

(l) This adjustment represents the net federal income tax effect of the pro forma adjustments with respect to the Texas United acquisition using an effective tax rate of 34.35%. Prosperity’s statutory tax rate for this period was 35%. Management of Prosperity believes the effective tax rate more accurately reflects the tax that will be incurred by the combined companies.

(m) Basic and diluted earnings per share of Prosperity, after giving effect to the proposed acquisition of Texas United, excluding the one time impairment write-down loss on SNB Bancshares securities of $13.8 million and the one time additional provision for loan losses of $7.9 million related to the sale of SNB Bancshares loans prior to acquisition would have been $1.81 and $1.78, respectively.

-7-

Basic and diluted earnings per share excluding the impairment write-down loss and one time additional provision for loan losses in footnotes (f) and (m) are considered non-GAAP financial measures as defined in the rules and regulations of the Securities and Exchange Commission. Management of Prosperity believes that this presentation of basic and diluted earnings per share excluding such impairment write-down loss and one time additional provision for loan losses should clarify investors’ understanding of SNB Bancshares’ earnings performance prior to completion of the SNB Bancshares acquisition and the anticipated earnings performance of the combined company following completion of the SNB Bancshares acquisition. The reconciliation of Prosperity’s earnings per share calculated on a GAAP basis to the non-GAAP earnings per share is set forth below (in thousands, except per share data):

Net income (GAAP)	$	61,336
Add:  One time impairment write-down loss on SNB Bancshares securities		13,777
One time additional provision for loan losses on sale of SNB Bancshares loans		7,900
Tax effect of one time additions		(7,489	)
Net income (non-GAAP)	$	75,524
Weighted average shares outstanding (basic)		41,693
Weighted average shares outstanding (diluted)		42,344
Non-GAAP earnings per share (basic)	$	1.81
Non-GAAP earnings per share (diluted)		1.78

-8-

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL INFORMATION

OF TEXAS UNITED

The following unaudited pro forma consolidated combined financial information of Texas United for the year ended December 31, 2005 is presented to show the impact on Texas United’s historical financial position and results of operations of the completion of the Gateway Holding Company acquisition, which was consummated on December 1, 2005.

The unaudited Pro Forma Consolidated Combined Statement of Earnings of Texas United for the year ended December 31, 2005 assumes that the acquisition of Gateway Holding Company by Texas United was consummated on January 1, 2005. The following information should be read in conjunction with and is qualified in its entirety by Texas United’s consolidated financial statements and accompanying notes which are incorporated by reference into this joint proxy statement/prospectus.

The unaudited pro forma consolidated combined financial information is intended for informational purposes and is not necessarily indicative of the future financial position or future operating results of the combined company or of the financial position or operating results of the combined company that would have actually occurred had the acquisition been in effect as of the date or for the period presented.

-9-

UNAUDITED PRO FORMA CONSOLIDATED

COMBINED STATEMENT OF EARNINGS OF TEXAS UNITED

FOR THE YEAR ENDED DECEMBER 31, 2005

	Texas United Historical			Gateway Historical			Pro Forma Adjustments			Pro Forma Combined
	(In thousands, except per share data)
Interest income:
Loans, including fees	$	64,593		$	8,720		$	352	(a)	$	73,665
Securities		10,908			1,397						12,305
Federal funds sold and other interest income		234			380						614
Total interest income		75,735			10,497			352			86,584
Interest expense:
Deposits		14,024			2,018						16,042
Federal funds sold and purchased and other borrowings		7,024			286						7,310
Junior subordinated debentures		1,721			234			751	(b)		2,706
Total interest expense		22,769			2,538			751			26,058
Net interest income, before provision for credit losses		52,966			7,959			(399	)		60,526
Provision for credit losses		3,838			375						4,213
Net interest income after provision for credit losses		49,128			7,584			(399	)		56,313
Noninterest income:
Customer service fees		9,185			1,252						10,437
Other		15,646			534						16,180
Gain (loss) on sale of securities		(169	)		(672	)		611	(c)		(230	)
Total noninterest income		24,662			1,114			611			26,387
Noninterest expense:
Salaries and employee benefits		33,855			5,470			(1,200	)(d)		38,125
Net occupancy expense		7,809			1,183			(23	)(e)		8,969
Data processing		1,026			486						1,512
Core deposit intangibles amortization		779			8			393	(f)		1,180
Other		14,171			1,940			3	(g)		16,114
Total noninterest expense		57,640			9,087			(827	)		65,900
Income (loss) before federal income taxes		16,150			(389	)		1,039			16,800
Provision for federal income taxes		5,414			(132	)		348	(h)		5,630
Net income (loss)	$	10,736		$	(257	)	$	691		$	11,170
Basic earnings (loss) per share:
Earnings (loss) per share	$	1.17		$	(0.17	)				$	1.18
Weighted average shares outstanding		9,165			1,531						9,461
Diluted earnings (loss) per share:
Earnings (loss) per share	$	1.14		$	(0.17	)				$	1.15
Weighted average shares outstanding		9,419			1,531						9,715

(a) This adjustment represents the interest income that would have been realized for the year related to the fair value appreciation on the loan portfolio acquired from Gateway.

(b) This adjustment represents interest expense associated with the issuance of approximately $16.0 million in junior subordinated debentures to fund the cash portion of the merger consideration.

-10-

(c) This adjustment represents the reversal of losses incurred on the sales of investment securities related to the repositioning of Gateway’s investment securities portfolio in connection with the Gateway acquisition.

(d) This adjustment represents the reversal of salaries and benefits expense paid to an executive in connection with the Gateway acquisition.

(e) This adjustment represents a net reduction in depreciation/occupancy expense as a result of purchase accounting adjustments.

(f) This adjustment represents eleven months of amortization on core deposit intangibles of $4.8 million acquired in the acquisition of Gateway, which is being amortized over eight years.

(g) This adjustment represents noninterest expense that would have been realized for the year related to the fair value write-down of certain certificates of deposit acquired from Gateway.

(h) This adjustment represents the net federal income tax effect of the pro forma adjustments using an effective tax rate of 33.52%. Texas United’s statutory tax rate for this period was 35%. Management of Texas United believes that the effective tax rate more accurately reflects the tax that will be incurred by the combined companies.

-11-