Prosperity Bancshares (PB) 8-K This presentation may contain forward-looking statements within the meaning of the securities

Exhibit 99.1

2

“Safe Harbor”

Statement

“Safe Harbor”

Statement

under the Private Securities Litigation Reform Act of 1995

This presentation may contain forward-looking statements within the meaning of the securities

laws

that

are

based

on

current

expectations,

assumptions’

estimates

and

projections

about

Prosperity Bancshares®, and its subsidiaries. These forward-looking statements are not

guarantees of future performance and are subject to risks and uncertainties, many of which are

outside of Prosperity’s control, that may cause actual results to differ materially from those

expressed or implied by the forward-looking statements. These risks and uncertainties include

but are not limited to whether Prosperity can: successfully identify acquisition targets and

integrate the businesses of acquired companies and banks; continue to sustain its current

internal growth rate or total growth rate; provide products and services that appeal to its

customers; continue to have access to debt and equity capital markets; and achieve its sales

objectives. Other risks include the possibility that credit quality could deteriorate; actions of

competitors; changes in laws and regulations (including changes in governmental interpretations

of regulations and changes in accounting standards); customer and consumer demand, including

customer and consumer response to marketing; effectiveness of spending, investments or

programs; fluctuations in the cost and availability of supply chain resources; economic

conditions, including currency rate fluctuations and interest rate fluctuations; weather; and the

stock price volatility associated with “small-cap”

companies. These and various other factors are

discussed in our most recent Annual Report on Form 10-K and other reports and statements we

have

filed

with

the

SEC.

Copies

of

the

SEC

filings

for

Prosperity

Bancshares’s®

may

be

downloaded from the Internet at no charge from www.prosperitybanktx.com.

3

Prosperity is . . . .

Prosperity is . . . .

•

A $6.2 billion Texas based Financial Holding Company

•

3

largest Texas based commercial bank by deposit size

•

Strong

balance

sheet

growth

–

10 year CAGR of 34% loans, 30%

deposits, and 32% assets

•

Strong

earnings

growth

–

10 year CAGR of 18% for EPS (diluted) and

37% for net income

•

Shareholder driven with a approximately 13% insider ownership

•

Excellent

asset

quality

–

Net Charge Offs / Average Loans of 0.02% for

three months ending June 30, 2007

•

Excellent

cost

control

–

under 50% efficiency ratio

•

Since 2002, we have successfully integrated 15 accretive transactions.

a Track Record of Success

rd

4

Banking Center Network

Banking Center Network

# of

Branches

Prosperity Bancshares Inc.

88

Texas United Bancshares, Inc.

State Bank

25

GNB Financial NA

7

Gateway National Bank

6

Northwest Bank

5

Total Texas United Branches

43

Franchise –

$ 4.8 billion in Deposits

$ 3.2 billion in Loans

124

Full Service Locations

9

in Austin area

5

in Bryan/College Station

11

in Corpus Christi area

27

in Dallas/Fort Worth area

2

in East Texas

40

in Houston CMSA

30

in South and South

Central Texas

5

Balance Sheet Summary

Balance Sheet Summary

$0

$600

$1,200

$1,800

$2,400

$3,000

$3,600

$4,200

$4,800

$5,400

$6,000

$6,600

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2Q 07

$0

$200

$400

$600

$800

$1,000

$1,200

Loans

Deposits

Assets

Equity

As Originally Reported

$ in millions

Equity in millions

Total footings as of 6/30/07

Loans = $3.2 billion

Deposits = $4.8 billion

Assets = $6.2 billion

6

EPS Growth Diluted

EPS Growth Diluted

$0.52

$0.79

$1.22

$1.36

$1.59

$1.77

$1.94

$0.48

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

2001

2002

2003

2004

2005

2006

2Q 2006

2Q 2007

Net income 5 and 10 year

CAGR = 37% and 37% respectively

EPS 10 year

CAGR = 18%

7

Net Interest Income and Margin

(fte)

Net Interest Income and Margin

(fte)

4.09%

3.93%

3.77%

3.81%

3.82%

3.81%

3.82%

3.77%

3.79%

$0

$10

$20

$30

$40

$50

$60

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3.60%

3.70%

3.80%

3.90%

4.00%

4.10%

4.20%

Net Interest

Income

Net Interest

Margin

$ in millions

Net

Interest

Margin

for

2005-

3.81%

and for 2006 -

3.80%

8

Loan Growth

Loan Growth

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

$2,800

$3,200

$3,600

2001

2002

2003

2004

2005

2006

2Q06

2Q07

30.00%

35.00%

40.00%

45.00%

50.00%

55.00%

60.00%

65.00%

70.00%

Loans

Loan / Deposit

Ratio

$ in millions

Loan/deposit ratio increased from 37% at 12/31/03 to 67% at 6/30/07

Organic Loan Growth has averaged

7.1% for the last two years

9

Efficiency Ratio

46.19%

45.29%

48.99%

49.45%

51.82%

50.39%

40.00%

42.50%

45.00%

47.50%

50.00%

52.50%

55.00%

2002

2003

2004

2005

2006

2Q07

5 acquisitions

$507 million

assets acquired

4 acquisitions

$426 million

assets acquired

2 acquisitions

$846 million

assets acquired

2 acquisitions

$296 million

assets acquired

1 acquisition

$1.1 billion

assets acquired

Calculated by dividing total non-interest expense (excluding credit loss provisions) by net interest income plus non-interest income (excluding gains and losses on the sale of

securities, and assets)  Additionally, taxes are not part of this calculation.

1 acquisition

$1.8 billion

assets acquired

10

Loan Portfolio

Loan Portfolio

Home Equity

3.0%

Agriculture

3.7%

Consumer

4.0%

1-4 Family

Residential

16.5%

Commercial

14.9%

Construction

22.5%

Commercial

R.E.

35.5%

$ in thousands

Loans/Deposits: 66.6%

June 30, 2007

Amount

Commercial R.E.

$

1,127,304

35.4

%

Commercial

473,526

14.9

Construction

715,385

22.5

1-4 Family Residential

527,233

16.5

Consumer

125,725

4.0

Agriculture

117,043

3.7

Home Equity

94,960

3.0

Gross Loans

$

3,181,176

100.0

%

% of total

11

Historical Loan Composition

Historical Loan Composition

$ in millions

CAGR

Loan Composition

Commercial

$

93.8

13.8%

$

94.0

12.2%

$

144.4

13.9%

$

222.8

14.4%

$

297.7

13.7%

$

473.5

14.9%

33.5%

Construction

$

52.4

7.7%

$

36.5

4.7%

$

109.6

10.6%

$

206.7

13.4%

$

433.2

19.9%

$

715.4

22.5%

69.6%

1-4 Family Residential

$

206.6

30.4%

$

237.1

30.8%

$

260.5

25.2%

$

313.2

20.3%

$

377.0

17.3%

$

527.2

16.5%

16.2%

Home Equity

$

23.2

3.4%

$

27.9

3.6%

$

34.5

3.3%

$

58.7

3.8%

$

63.4

2.9%

$

95.0

3.0%

28.6%

Commercial Real Estate

$

202.5

29.8%

$

283.8

36.9%

$

389.6

37.7%

$

619.3

40.3%

$

881.1

40.5%

$

1,127.3

35.4%

44.4%

Agriculture

$

36.6

5.4%

$

35.9

4.7%

$

44.1

4.2%

$

56.3

3.6%

$

57.4

2.6%

$

117.0

3.7%

11.9%

Consumer

$

64.5

9.5%

$

54.8

7.1%

$

52.9

5.1%

$

65.1

4.2%

$

66.7

3.1%

$

125.7

4.0%

0.8%

Total Loans

$

679.6

100.0%

$

770.0

100.0%

$

1,035.6

100.0%

$

1,542.1

100.0%

$

2,176.5

100.0%

$

3,181.1

100.0%

33.8%

6/30/2007

12/31/2006

12/31/2003

12/31/2002

12/31/2004

12/31/2005

12

Asset Quality –

NPA/Loans + OREO

Asset Quality –

NPA/Loans + OREO

1.06%

0.77%

0.55%

0.02%

0.04%

0.06%

0.04%

0.37%

0.00%

0.72%

0.92%

0.81%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2001

2002

2003

2004

2005

2006*

2Q06

2Q07

PRSP NPA / Loans

PRSP NPA/ Loan II

Peer NPA / Loans

Texas Peer Group Includes: CFR, FFIN, FBTX, IBOC, MCBI, SBSI, SNBI, SBIB, SBIT, TCBI, TRBS & TXUI

* -

SNBI, SBIT, TRBS & TXUI have been acquired and were excluded from 2006

Source: SNL Financial

13

Asset Quality -

NCO/Average Loans

Asset Quality -

NCO/Average Loans

0.08%

0.23%

0.54%

0.04%

0.03%

0.06%

0.06%

0.15%

0.20%

0.19%

0.29%

0.32%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

2001

2002

2003

2004

2005

2006*

2Q06

2Q07

PRSP NCO / Loans

PRSP NCO / Loans II

Peer NCO / Loans

Source: SNL Financial

Texas Peer Group Includes: CFR, FFIN, FBTX, IBOC, MCBI, SBSI, SNBI, SBIB, SBIT, TCBI, TRBS & TXUI

*-

SNBI, SBIT, TRBS & TXUI have been acquired and were excluded from 2006

14

Bond Portfolio

Bond Portfolio

June 30, 2007

Total Carrying Value of Investment

Securities $1,818,723

MBS

$1,015,636

55.69%

Preferred

$24,000

1.32%

Municipals

$95,421

5.23%

US Agencies &

Treasury

$429,558

23.55%

Corporate &

Other

$11,387

0.62%

CMOs

$247,832

13.59%

Portfolio Allocation

HTM

$1,419,214

78.0%

AFS

$   404,620(+)         22.0%

Subtotal

$1,823,834

100.0%

Less

$       5,111(-)          Unrealized Loss (AFS)

Total

$1,818,723

100.0%

$ in millions

•

Approx. annual cash

flow $500

million

•

Effective duration

2.9 years

15

Deposit Composition

Deposit Composition

Non-interest

bearing DDA

24.8%

MMA &

Savings

25.6%

Interest

Bearing DDA

16.8%

CDs & IRAs

<$100,000

16.5%

CDs & IRAs

>$100,000

16.3%

$ in thousands

2Q07 Cost of Deposits-

2.60%

June 30, 2007

Amount

Non-interest bearing DDA

$

1,184,172

24.8

%

Interest Bearing DDA

804,961

16.8

MMA & Savings

1,219,770

25.6

CD's & IRA's<100m

786,578

16.5

CD's & IRA's>100m

780,901

16.3

Total Deposits

$

4,776,382

100.0

%

% of total

16

0

100

200

300

400

500

600

700

Prosperity Bancshares Inc.  (+548.2%)

Russell 3000  (+54.8%)

NASDAQ Bank Index  (+90.5%)

Total Return Performance

Total Return Performance

$100,000 invested in PRSP at

IPO on 11/12/1998 was worth

$648,167 on 12/31/2006

Source: FactSet Research Systems

17

Merger & Acquisition History*

Merger & Acquisition History*

06/21/99

South Texas Bancshares, Inc.

Deal Value:                   $23.4

Location:                   Beeville

11/08/00

Heritage Bank

Deal Value: $53.3

Location: Houston

02/22/02

Texas Guaranty Bank

Deal Value:       $11.8

Location:      Houston

04/26/02

First State Bank

Deal Value: $3.7

Location: Needville

05/02/02

Paradigm Bank

Deal Value:   $41.6

Location: Houston

08/15/02

First National Bank

Deal Value:     $5.0

Location:  Bay City

03/05/03

BankDallas

Deal Value: $7.0

Location:  Dallas

10/26/04

FirstCapital Bank

Deal Value: $135.7

Location:  Corpus Christi

06/15/00

Compass Bank –

5 Branches

Location:        Houston area

07/15/02

Bank of the Southwest

Deal Value:        $21.0

Location:           Dallas

02/03/03

Abrams Centre Bank

Deal Value:     $16.3

Location:        Dallas

07/21/03

Mainbank

Deal Value: $39.7

Location:   Dallas

10/06/03

First State Bank

Deal Value:  $21.3

Location:      Dallas

4/26/04

First State Bank

Deal Value:  $7.3

Location:      Grapeland

05/12/04

Village Bank

Deal Value:  $20.2

Location:      Austin

09/12/05

Liberty Bank

Deal Value:  $42.0

Location:      Austin

11/16/05

Southern National Bank

Deal Value:  $242.7

Location:      Houston

07/19/06

Texas United Bancshares

Deal Value:  $383.2

Location:      Texas

*-

Merger and Acquisition dates are the dates the transaction was announced to the public.

$0

$5

$10

$15

$20

$25

$30

$35

$40

Nov-98May-99

Nov-99May-00

Nov-00May-01

Nov-01May-02

Nov-02May-03

Nov-03May-04

Nov-04May-05

Nov-05May-06

Nov-06May-07

18

Contact Information

Contact Information

979.543.2200

david.hollaway@prosperitybanktx.com

Chief Financial Officer

David Hollaway

281.269.7199

dan.rollins@prosperitybanktx.com

www.prosperitybanktx.com

President & Chief Operating Officer

281.269-7222  Fax

Dan Rollins

281.269.7199  Telephone

979.543.2200

david.zalman@prosperitybanktx.com

Houston, Texas  77027

Chairman & Chief Executive Officer

4295 San Felipe

David Zalman

Prosperity Bank Plaza

Investor Contacts

Corporate Headquarters

19

Supplemental

Data

20

Financial Highlights

Financial Highlights

As Originally Reported

(Dollars in thousands, except EPS)

5.24%

14.58%

13.55%

7.76%

$6.62

$20.26

31.53%

10.24%

1.44%

$1.94

$61,725

$138,145

$33,982

$3,725,678

$2,176,507

$4,586,769

2006

4.38%

14.67%

13.56%

6.30%

$4.96

$12.32

33.41%

14.27%

1.36%

$1.59

$34,707

$81,967

$23,071

$2,317,076

$1,035,513

$2,697,228

2004

5.46%

16.37%

15.34%

7.83%

$6.48

$16.69

29.88%

11.56%

1.42%

$1.77

$47,860

$110,897

$30,021

$2,920,318

$1,542,125

$3,585,982

2005

4.17%

16.90%

15.82%

7.10%

$4.53

$10.49

29.94%

15.60%

1.32%

$1.36

$26,548

$64,499

$16,966

$2,083,748

$770,053

$2,400,487

2003

12.36%

12.47%

Tier I Risk Capital

14.18%

13.53%

Total Risk Capital

$51,344

$36,582

Net-

Int

Income

4.56%

6.98%

$5.69

$19.39

30.72%

10.43%

1.41%

$0.48

$15,895

$9,156

$3,640,000

$2,204,792

$4,531,951

2Q 06

$24.69

Book value per share

5.48%

Tangible Ratio

7.57%

Leverage Ratio

$13,845

Non-Int

Income

$6.75

Tangible book value

per share

32.04%

ROAE –

tangible

8.54%

ROAE

1.47%

ROAA

$0.52

EPS (diluted)

$22,993

Net Income

$4,776,382

Deposits

$3,181,176

Loans

$6,184,914

Assets

2Q 07

(1) Due to the adoption of SFAS 150 on January 1, 2004, the Company now includes the dividend payments on junior subordinated debentures

as part of interest expense rather than non-interest expense.  Prior period data has been restated to reflect the adoption of SFAS 150.

21

PRSP Acquisitions

PRSP Acquisitions

At Announcement

Seller

City

State

Type

Consideration

Accounting

Method

PRSP

Assets

($000)

Sellers'

Assets

($000)

Sellers'

Assets

Contribution

(%)

Deal

Value

($000)

Texas United Bancshares, Inc.

La Grange

TX

Bank

Common Stock

Purchase

4,547,220

1,818,000

27.82

357.1

SNB Bancshares, Inc.

Houston

TX

Bank

Mixed

Purchase

3,493,972

1,121,747

24.30

242.7

Grapeland Bancshares, Inc.

Grapeland

TX

Bank

Common Stock

Purchase

3,479,747

73,000

2.15

7.3

FirstCapital Bankers, Inc.

Corpus Christi

TX

Thrift

Common Stock

Purchase

2,709,169

773,566

22.21

135.7

Village Bank and Trust

Austin

TX

Thrift

Cash

Purchase

2,449,553

110,400

4.31

20.2

Liberty Bank

Austin

TX

Thrift

Mixed

Purchase

2,449,553

186,000

7.06

42

First State Bank of North Texas

Dallas

TX

Bank

Mixed

Purchase

2,078,532

93,900

4.32

21.3

Mainbancorp

Dallas

TX

Bank

Mixed

Purchase

1,983,277

195,700

8.98

39.7

BankDallas SSB

Dallas

TX

Thrift

Cash

Purchase

1,822,256

40,716

2.19

7

Abrams Centre Bancshares, Inc.

Dallas

TX

Bank

Cash

Purchase

1,822,256

95,388

4.97

16.3

First National Bank of Bay City

Bay City

TX

Bank

Cash

Purchase

1,360,356

28,174

2.03

5

Southwest Bank Holding Company

Dallas

TX

Bank

Cash

Purchase

1,289,637

127,055

8.97

21

Paradigm Bancorporation, Incorporated

Houston

TX

Bank

Common Stock

Purchase

1,289,637

259,262

16.74

41.6

First State Bank

Needville

TX

Bank

Cash

Purchase

1,289,637

17,539

1.36

3.7

Texas Guaranty Bank, N.A.

Houston

TX

Bank

Cash

Purchase

1,262,152

75,019

5.61

11.8

Commercial Bancshares, Inc.

Houston

TX

Bank

Common Stock

Pooling

693,079

401,271

36.67

53.3

South Texas Bancshares, Inc.

Beeville

TX

Bank

Cash

Purchase

461,903

142,091

23.53

23.4

Union State Bank

East Bernard

TX

Bank

Cash

Purchase

339,287

79,174

18.92

17.6

Branch Acquisitions

Date of

Announcement

Seller

# of

Branches

Branch

Type

Branch

Locale

State

Amount of

Deposits

Transferred

($000)

Deposit

Premium

($000)

Premium/

Deposits (%)

Assets

Transferred:

Loan? Yor N

6/15/2000

Compass Bancshares, Inc.

5

Bank

TX

87,000

NA

NA

Yes

2/27/1998

Grimes County Capital Corporation

1

Bank

TX

5,900

250

4.24

No

3/30/1997

Wells Fargo & Company

1

Bank

TX

NA

NA

NA

No

3/11/1996

Victoria Bankshares, Inc.

1

Bank

TX

46,000

NA

NA

Yes

22

Projected Population Change

2005-2010 (%)

10.86%

10.58%

6.26%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

PRSP Pro Forma

Texas Average

National Average

Growth Rates are deposits rated by County

Source: SNL Financial

* Pro Forma includes the acquisition of TXUI

*

23

The Greater Houston Market

The Greater Houston Market

•

A metropolitan region of 5.4 million that is projected to grow 15.0% from 2005 to 2010

•

Houston is the 4th largest city in the US

•

Harris County is Texas’

largest deposit market with $85.8 billion in total deposits

•

Home to 24 FORTUNE 500 companies

•

Port of Houston contributes $7.7 Billion to the local economy and provides 200,000

direct and related jobs

•

Home of NASA’s Johnson Space Center

•

Largest medical center in the world; 65,300 employees and an $13.5 billion impact on

the Houston economy

•

Energy Capitol of the World

•

Sugar Land (Southwestern region of the Houston MSA) ranked #3 on

Money’s Best

Places to Live

Source: SNL Financial and Greater Houston Partnership

24

Fort Bend County

Fort Bend County

Sources: ESRI, ACCRA The Council for Community and Economic Research and the Greater Fort Bend Economic Development Council

•

Fast-growing county with an attractive customer base

–

26.6% historical population growth for 2000 –

2005

Versus 10.8% for Texas and 6.2% for the U.S.

–

27.6% projected population growth for 2005 –

2010

Versus 10.6% for Texas and 6.3% for the U.S.

•

Ranks second in the nation for median household income (adjusted

for

cost of living)

•

Median household income of approximately $76,300 well above the

median for the state of Texas of approximately $47,800

•

Leads the nation in its rate of homeownership (81%) and employment

growth

25

The Dallas/Fort Worth Market

The Dallas/Fort Worth Market

•

Fort Worth is Texas’

third largest deposit market

•

A metropolitan region of 5.9 million that is projected to grow 13.9% from 2005

to 2010

–

Tarrant County will lead the region’s population growth, adding up to 800,000 people

by 2030

•

New residents and businesses are attracted by favorable cost of living, quality

of life and major development projects

•

DFW airport is the busiest airport in the world and the nation’s largest inland

port

•

Service related businesses and the health care and energy industries are

significant growth sectors

•

The DFW Metroplex has the second largest high-tech sector in the nation

Source: SNL Financial and North Central Texas Council of Governments

26

Other Significant Markets

Other Significant Markets

The Victoria Market

•

Known as the South Texas Crossroads,

Victoria is located at the intersection of

three major US highways: 77, 87 and 59

(the future I-69)

•

A cultural, historic and economic hub

with a population of approximately

90,000

•

Located just 1.5-2 hours from four major

metropolitan communities: Austin,

Houston, San Antonio and Corpus

Christi

Source: SNL Financial, Greater Victoria Chamber of Commerce, Victoria

Economic Development Corporation and Corpus Christi Regional Economic

Development Corporation

The Corpus Christi Market

•

8th Largest City in Texas

•

7th Largest Port in the US; Employs

40,000 Texans and provides $2.2 billion

in income

•

Major industries include: Petrochemical,

Military, Tourism

•

Corpus Christi has been rated:

–

#31 for Best Performing Economy in the

United States

–

Top 20 Best Places To Do Business

–

8th most favorable city to live in based

on wages, cost-of-living and employment

–

4th in nation for new investments

•

Vast sea channels link the Port of

Corpus Christi to the globe

27

Other Significant Markets

Other Significant Markets

The Bryan / College Station Market

•

Current population of more than 200,000

that is projected to grow 9.6% from 2005

to 2010

•

Home to the fourth largest University in

the country (Texas A&M University)

•

College Station has been rated:

–

In the Top 60 of America's Smaller Cities

–

14th in the Nation for Relocation

–

First MSA and First in the US for the

Better Living Index

–

12th in the Smaller City Category, Top 25

Cities for doing business in America

–

11th on Money’s 2006 Most Educated

Source: SNL Financial, City of College Station, Austin Chamber of Commerce

and The Texas Economic Development

The Austin / Round Rock Market

•

A metropolitan region of 1.4 million that

is projected to grow 16.2% from 2005 to

2010

•

Median household income of $59,000

that is projected to grow 17.8% from

2005 to 2010

•

Austin ranked #2 on Money’s Best

Places to Live (Best Big Cities for 2006)

•

Austin has been called “Best Place for

Business and Careers”, “Live Music

Capital of the World”

and the “Best City

for Relocating Families”

•

The region is among the top targets for

venture capital investment in the United

States

2Q07 Presentation –

KWB Conference

July 31-

August 1, 2007