Prosperity Bancshares (PB) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

PRESS RELEASE	For more information contact:
Prosperity Bancshares, Inc.®	Dan Rollins
Prosperity Bank Plaza	President and Chief Operating Officer
4295 San Felipe	281.269.7199
Houston, Texas 77027	dan.rollins@prosperitybanktx.com

FOR IMMEDIATE RELEASE

PROSPERITY BANCSHARES, INC.^®

FIRST QUARTER EARNINGS UP 13.4%

• 1Q 2008 Earnings Per Share of $0.52 (diluted)

• 1Q 2008 Organic Loan Growth of 8.4% annualized

HOUSTON, April 18, 2008. Prosperity Bancshares, Inc.^® NASDAQ: (PRSP), the parent company of Prosperity Bank^®, reported earnings for the quarter ended March 31, 2008. Net income for the quarter was $22.938 million or $0.52 per diluted common share, an increase in net income of $2.709 million or 13.4%, compared with $20.229 million or $0.50 per diluted common share for the same period in the prior year.

Prosperity completed its acquisition of the Houston branches of Banco Popular North America on January 10, 2008, The Bank of Navasota, N.A. on September 1, 2007 and Texas United Bancshares, Inc. on January 31, 2007. The results of operations for these acquisitions have been included in Prosperity’s consolidated financial statements since their respective purchase dates. During the first quarter, Prosperity announced the proposed acquisition of 1^st Choice Bank, which has two locations in Houston.

“I am pleased to report another sound quarter of performance by our team,” said David Zalman, Prosperity’s Chairman and Chief Executive Officer. “Our strong asset quality along with our style of community banking should continue to help us build value for our shareholders.”

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Results of operations for the three months ended March 31, 2008

For the three months ended March 31, 2008, net income was $22.938 million compared with $20.229 million for the same period in 2007. Net income per diluted common share was $0.52 for the three months ended March 31, 2008 compared with $0.50 for the same period in 2007. Returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2008 were 1.43%, 8.02% and 27.28%, respectively. Prosperity’s efficiency ratio was 45.06% for the three months ended March 31, 2008.

Net interest income before provision for credit losses for the quarter ended March 31, 2008 increased 12.8% to $51.995 million compared with $46.088 million during the same period in 2007. The increase was attributable primarily to an 8.9% increase in average earning assets.

Non-interest income increased 8.6% to $12.679 million for the three months ended March 31, 2008 compared with $11.671 million for the same period in 2007. The increase was attributable primarily to deposit service charges on the increased number of deposit accounts as a result of the additional banking centers acquired in January 2007, September 2007 and January 2008. Linked quarter non-interest income decreased $569,000.

Non-interest expense increased $1.849 million or 6.8% to $29.120 million for the first quarter of 2008 compared with $27.271 million for the first quarter of 2007. The increase was attributable primarily to the increased operating costs associated with the additional banking centers acquired as a part of the acquisitions completed in January 2007, September 2007 and January 2008. Linked quarter non-interest expense decreased $10.293 million or 26.1%, which was primarily due to a $9.975 million pre-tax impairment write-down on securities in the fourth quarter of 2007.

Balance Sheet Data (at period end)	Mar 31, 2008		Dec 31, 2007		Mar 31, 2007
(In Thousands)	(Unaudited)		(Unaudited)		(Unaudited)
Loans:
Acquired with Texas United Bancshares	$	934,959	$	959,949	$	1,091,475
Acquired with The Bank of Navasota		24,339		27,641		0
Acquired with Banco Popular Houston Branches		1,629		0		0
All other		2,200,700		2,155,381		2,156,233
Total Loans	$	3,161,627	$	3,142,971	$	3,247,708
Deposits:
Assumed with Texas United Bancshares	$	1,137,085	$	1,154,486	$	1,284,945
Assumed with The Bank of Navasota		59,212		61,447		0
Assumed with Banco Popular Houston Branches		117,873		0		0
All other		3,634,548		3,750,474		3,643,295
Total Deposits	$	4,948,718	$	4,966,407	$	4,928,240

Loans at March 31, 2008 were $3.162 billion, a decrease of $86.1 million, or 2.7%, compared with $3.248 billion at March 31, 2007. Linked quarter loan growth increased 0.6% or $18.656 million, with loans increasing from $3.143 billion at December 31, 2007 to $3.162 billion at March 31, 2008. As reflected in the table above, linked quarter loan growth for the first quarter of 2008 was impacted

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by the loans acquired as a part of the acquisitions of Texas United, Navasota and the Banco Popular Houston branches. Excluding the loans acquired as a part of those acquisitions, linked quarter loans increased 2.1%, or 8.4% on an annualized basis.

Deposits at March 31, 2008 were $4.949 billion, an increase of $20.5 million or 0.4%, compared with $4.928 billion at March 31, 2007. Linked quarter deposits decreased 0.4% from $4.966 billion at December 31, 2007. As reflected in the table above, linked quarter deposits for the first quarter of 2008 were impacted by the deposits assumed as a part of the acquisitions of Texas United, Navasota and the Banco Popular Houston branches. Excluding deposits assumed as a part of those acquisitions, linked quarter deposit decreased 3.1%.

Average loans increased 9.3% or $267.145 million to $3.143 billion for the quarter ended March 31, 2008 compared with $2.876 billion for the same period of 2007. Linked quarter average loans increased $6.659 million from $3.137 billion. Average deposits increased 8.9% to $4.938 billion for the quarter ended March 31, 2008 compared with $4.536 billion for the same period of 2007. Linked quarter average deposits increased $152.815 million from $4.785 billion.

The provision for credit losses was $1.167 million for the three months ended March 31, 2008, $245,000 for the three months ended March 31, 2007 and $120,000 for the three months ended December 31, 2007. In making its evaluation of the adequacy of the allowance for credit losses, management considers factors such as historical loan loss experience, industry diversification of the Company’s commercial loan portfolio, the amount of nonperforming assets and related collateral, the volume, growth and composition of the Company’s loan portfolio, current economic changes that may affect the borrower’s ability to pay and the value of collateral, the evaluation of the Company’s loan portfolio through its internal loan review process and other relevant factors.

Non-performing assets totaled $17.554 million or 0.33% of average earning assets at March 31, 2008 compared with $4.314 million or 0.09% of average earning assets at March 31, 2007 and $15.390 million or 0.30% of average earnings assets at December 31, 2007. At March 31, 2008, the allowance for credit losses was 1.01% of total loans, compared with 1.12% at March 31, 2007.

Conference Call

Prosperity’s management team will host a conference call on Friday, April 18, 2008 at 10:30 a.m. Eastern Daylight Savings Time (9:30 a.m. Central Daylight Savings Time) to discuss Prosperity’s first quarter earnings. Individuals and investment professionals may participate in the call by dialing 1-800-894-5910, the reference code is PBTX.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity’s website atwww.prosperitybanktx.com. The webcast may be accessed directly from Prosperity’s Investor Relations page by clicking on the “1^st Quarter Results and Webcast” link.

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Pending Acquisition of 1^st Choice Bancorp, Inc.

On February 7, 2008, Prosperity announced that it had entered into a definitive agreement to acquire 1^st Choice Bancorp, Inc. and its wholly-owned subsidiary, 1^st Choice Bank. 1^st Choice Bancorp, Inc. operates two (2) banking offices in Houston, Texas, with one location in South Houston and another in the Heights area, which will be consolidated with Prosperity’s Heights location and remain in 1^st Choice’s Heights banking office. As of March 31, 2008, 1^st Choice Bancorp reported total assets of approximately $313.9 million, loans of approximately $198.9 million, deposits of approximately $285.1 million and stockholders’ equity of approximately $27.5 million.

Acquisition of Banco Popular’s Houston Branches

On January 10, 2008, Prosperity Bank^® completed its previously announced acquisition of six (6) Houston retail bank branches from Banco Popular North America. The branches had an aggregate of approximately $125 million in combined deposits. All six (6) locations are now operating as full service banking centers of Prosperity Bank^®.

Acquisition of The Bank of Navasota, N.A.

On September 1, 2007, Prosperity completed its previously announced acquisition of The Bank of Navasota, N.A. Navasota is located between Hempstead and College Station and bridges the gap between Prosperity’s banking centers in northwest Houston, including Hempstead, and its five locations in Bryan-College Station. The Bank of Navasota operated one (1) banking office in Navasota, Grimes County, Texas, which became a full service banking center of Prosperity Bank. As of August 31, 2007, The Bank of Navasota reported total assets of approximately $73.4 million, loans of approximately $33.0 million, deposits of approximately $63.8 million and shareholders’ equity of approximately $9.1 million.

In connection with the acquisition, Prosperity issued 251,454 shares of its common stock and paid approximately $8.625 million in cash for all outstanding shares of The Bank of Navasota.

Prosperity Bancshares, Inc.^®

Prosperity Bancshares, Inc.^®, a $6.5 billion Houston, Texas based regional financial holding company is the parent company of Prosperity Bank^®. Operating under a community banking philosophy, Prosperity seeks to develop broad customer relationships based on service and convenience. Prosperity offers a variety of traditional loan and deposit products to its customers, which consist primarily of small and medium sized businesses and consumers. In addition to established banking products, Prosperity offers a complete line of services including: Internet Banking services atwww.prosperitybanktx.com, Retail Brokerage Services, MasterMoney Debit Cards, and 24 hour voice response banking. Prosperity currently operates one hundred thirty (130) full service banking locations and one (1) loan production office; forty-six (46) in the Houston CMSA; thirty-three (33) in the South Texas area including Corpus Christi and Victoria; twenty-six (26) in the Dallas/Fort Worth metroplex; two (2) in the East Texas area; twenty-three (23) in the Central Texas area including Austin and Bryan/College Station and one (1) loan production office in San Antonio.

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Prosperity Bank^®operates the following full service banking centers:

Central Texas	Cedar Hill	Cypress	South Texas Area -
Area -	Central Expressway	Downtown
	Frisco	Fairfield	Corpus Christi -
Austin -	Frisco - West	Gessner	Airline
Allandale	Kiest	Gladebrook	Carmel
Cedar Park	Preston Road	Harrisburg	Everhart
Congress	Red Oak	Heights	Northwest
183	The Colony	Highway 6 West	Saratoga
Lakeway	Turtle Creek	Hillcroft	Woodlawn
Liberty Hill	Westmoreland	Holcombe	Water Street
Oak Hill		Little York
Research Blvd	Fort Worth -	Long Point	Other South Texas
Round Rock	Haltom City	Medical Center	Locations -
	Keller	Memorial Drive	Alice
Bryan/College	Roanoke	Pecan Grove	Aransas Pass
Station -	Stockyards	River Oaks	Bay City
Bryan		Sugar Land	Beeville
Bryan- East	Other Dallas/Fort	SW Medical Center	Cuero
Bryan- North	Worth Locations -	Tanglewood	East Bernard
College Station	Azle	Uptown	Edna
Wellborn Road	Blooming Grove	Waugh Drive	El Campo
Navasota	Corsicana	Westheimer	Goliad
	Ennis	Woodcreek	Gonzales
Other Central	Gainesville		Hallettsville
Texas Locations -	Mesquite	Other Houston	Kingsville
Caldwell	Muenster	Area	Mathis
Dime Box	Sanger	Locations -	Palacios
Flatonia	Waxahachie	Angleton	Pleasanton
La Grange		Cinco Ranch	Port Aransas
Lexington	East Texas Area -	Cleveland	Port Lavaca
New Braunfels	Crockett	Dayton	Portland
Schulenburg	Grapeland	Galveston	Rockport
Weimar		Hempstead	Seguin
		Hitchcock	Sinton
		Katy	Victoria
	Houston Area -	Liberty	Victoria - North
Dallas/Fort Worth		Magnolia	Wharton
Area -	Houston -	Mont Belvieu	Yoakum
	Aldine	Needville	Yorktown
Dallas -	Bellaire	Sweeny
Abrams Centre	CityWest	Tomball
Balch Springs	Clear Lake	Waller
Camp Wisdom	Copperfield	West Columbia
		Winnie
		Wirt

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In connection with the proposed acquisition of 1^st Choice Bancorp, Inc., Prosperity has filed with the Securities and Exchange Commission a registration statement on Form S-4 to register the shares of Prosperity’s common stock to be issued to the shareholders of 1^st Choice Bancorp. The registration statement includes a proxy statement/prospectus which will be sent to the shareholders of 1st Choice Bancorp seeking their approval of the proposed transaction.

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, 1^ST CHOICE BANCORP AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of these documents through the website maintained by the Securities and Exchange Commission at http://www.sec.gov. Documents filed with the SEC by Prosperity will be available free of charge by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations. Prosperity’s telephone number is (281) 269-7199.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by our management on the conference call 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, but are not limited to: 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); a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity’s securities portfolio; 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 fromwww.prosperitybanktx.com.

- - -

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Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars and share amounts in thousands, except per share data)

	Three Months Ended
	Mar 31, 2008		Dec 31, 2007			Sept 30, 2007		June 30, 2007
Selected Earnings and Per Share Data	(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
Total interest income	$	84,465	$	85,441		$	88,004	$	87,300
Total interest expense		32,470		33,807			36,635		35,956
Net interest income		51,995		51,634			51,369		51,344
Provision for credit losses		1,167		120			75		320
Net interest income after provision for credit losses		50,828		51,514			51,294		51,024
Total non-interest income		12,679		13,248			14,159		13,845
Total non-interest expense		29,120		39,413			30,087		30,072
Net income before taxes		34,387		25,349			35,366		34,797
Federal income taxes		11,449		8,268			11,518		11,804
Net income	$	22,938	$	17,081	(A)	$	23,848	$	22,993
Basic earnings per share(B)	$	0.52	$	0.39	(A)	$	0.54	$	0.53
Diluted earnings per share(B)	$	0.52	$	0.38	(A)	$	0.54	$	0.52
Period end shares outstanding		44,279		44,151			44,110		43,811
Weighted average shares outstanding (basic)		44,188		44,133			43,910		43,796
Weighted average shares outstanding (diluted)		44,328		44,420			44,254		44,216

^(A) Earnings for the three months ended December 31, 2007 includes a $10.0 million pre-tax, or $6.5 million after-tax, impairment charge on write-down of securities, which resulted in a $0.14 decrease in basic earnings per share to $0.39 per share and a $0.15 decrease in diluted earnings per share to $0.38 per share.

^(B) Earnings per share in each quarter is computed individually using the weighted average number of shares outstanding during that quarter while earnings per share for the full fiscal year period is computed using the weighted average number of shares outstanding during the year. Thus, the sum for the quarters does not necessarily equal the full fiscal year period earnings per share.

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Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars in thousands)

	Three Months Ended
	Mar 31, 2008			Mar 31, 2007			Dec 31, 2007			Dec 31, 2006
Balance Sheet Averages	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Total loans	$	3,143,174		$	2,876,029		$	3,136,515		$	2,203,459
Investment securities		1,977,510			1,873,905			1,801,443			1,576,469
Federal funds sold and other temporary investments		131,601			71,451			111,059			83,966
Total earning assets		5,252,285			4,821,385			5,049,017			3,863,894
Allowance for credit losses		(31,948	)		(32,131	)		(34,595	)		(24,034	)
Cash and due from banks		145,693			131,998			141,696			90,942
Goodwill		762,406			646,820			746,427			425,072
Core Deposit Intangibles (CDI)		44,790			22,906			47,372			23,652
Other real estate		11,422			752			5,622			125
Fixed assets, net		123,534			99,147			120,720			63,618
Other assets		110,969			105,335			106,099			64,019
Total assets	$	6,419,151		$	5,796,212		$	6,182,358		$	4,507,288
Non-interest bearing deposits	$	1,155,210		$	1,035,294		$	1,182,179		$	822,458
Interest bearing deposits		3,782,709			3,500,810			3,602,925			2,813,906
Total deposits		4,937,919			4,536,104			4,785,104			3,636,364
Securities sold under repurchase agreements		66,074			59,236			66,538			47,361
Federal funds purchased and other borrowings		96,978			110,703			41,106			31,044
Junior subordinated debentures		112,885			130,413			112,885			100,519
Other liabilities		61,745			31,050			54,839			33,420
Shareholders’ equity(C)		1,143,550			928,706			1,121,886			658,580
Total liabilities and equity	$	6,419,151		$	5,796,212		$	6,182,358		$	4,507,288

^(C) Includes ($1,330), ($2,573), ($2,287) and ($3,545) in after tax unrealized (losses) on available for sale securities for the three month periods ending March 31, 2008, March 31, 2007, December 31, 2007 and December 31, 2006, respectively.

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Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars in thousands)

	Three Months Ended
	Mar 31, 2008		Mar 31, 2007		Dec 31, 2007			Dec 31, 2006
Income Statement Data	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
Interest on loans	$	58,520	$	57,260	$	61,682		$	43,741
Interest on securities		24,783		21,708		22,446			18,034
Interest on federal funds sold and other earning assets		1,162		895		1,313			1,118
Total interest income		84,465		79,863		85,441			62,893
Interest expense - deposits		28,945		29,113		30,354			23,455
Interest expense - debentures		2,019		2,598		2,206			2,095
Interest expense - other		1,506		2,064		1,247			937
Total interest expense		32,470		33,775		33,807			26,487
Net interest income(D)		51,995		46,088		51,634			36,406
Provision for credit losses		1,167		245		120			144
Net interest income after provision for credit losses		50,828		45,843		51,514			36,262
Service charges on deposit accounts		10,506		8,510		11,029			6,769
Net gain on sale of assets		43		14		85			44
Brokered mortgage income		109		132		105			178
Gain on sale of held for sale loans		73		604		132			0
Gain on sale of securities		0		0		28			0
Other non-interest income		1,948		2,411		1,869			1,250
Total non-interest income		12,679		11,671		13,248			8,241
Salaries and benefits(E)		16,130		15,302		15,747			10,103
CDI amortization		2,492		2,145		2,620			1,253
Net occupancy and equipment		2,810		2,458		2,775			2,070
Depreciation		1,937		1,876		1,955			1,281
Impairment write-down loss on securities		0		0		9,975			0
Data processing and software amortization		1,291		985		1,123			884
Other non-interest expense		4,460		4,505		5,218			3,601
Total non-interest expense		29,120		27,271		39,413			19,192
Net income before taxes		34,387		30,243		25,349			25,311
Federal income taxes		11,449		10,014		8,268			8,709
Net income available to common shareholders	$	22,938	$	20,229	$	17,081	(F)	$	16,602

^(D) Net interest income on a tax equivalent basis would be $52,832, $46,764, $52,467 and $36,891, for the three months ended March 31, 2008, March 31, 2007, December 31, 2007 and December 31, 2006, respectively.

^(E) Salaries and benefits includes stock-based compensation expense of $248, $433, $477 and $244 for the three months ended March 31, 2008, March 31, 2007, December 31, 2007 and December 31, 2006, respectively.

^(F) Earnings for the three months ended December 31, 2007 includes a $6.5 million after-tax impairment charge on write-down of securities.

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Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars and share amounts in thousands, except per share data)

	Three Months Ended
	Mar 31, 2008		Mar 31, 2007		Dec 31, 2007			Dec 31, 2006
Common Share and Other Data	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
Employees - FTE		1,374		1,432		1,359			908
Book value per share	$	25.93	$	24.37	$	25.54		$	20.26
Tangible book value per share	$	7.58	$	6.29	$	7.42		$	6.62
Period end shares outstanding		44,279		43,766		44,151			32,793
Weighted average shares outstanding (basic)		44,188		39,813		44,133			32,791
Weighted average shares outstanding (diluted)		44,328		40,283		44,420			33,199
Non-accrual loans	$	1,332	$	1,307	$	1,035		$	181
Accruing loans 90 or more days past due		4,484		831		4,092			767
Restructured loans		0		0		0			0
Total non-performing loans		5,816		2,138		5,127			948
Repossessed assets		126		37		56			32
Other real estate		11,612		2,139		10,207			140
Total non-performing assets	$	17,554	$	4,314	$	15,390		$	1,120
Allowance for credit losses at end of period	$	32,067	$	36,341	$	32,543		$	23,990
Net charge-offs	$	1,643	$	635	$	3,113		$	247
Basic earnings per share	$	0.52	$	0.51	$	0.39	(G)	$	0.51
Diluted earnings per share	$	0.52	$	0.50	$	0.38	(G)	$	0.50

^(G) Earnings for the three months ended December 31, 2007 includes a $10.0 million pre-tax, or $6.5 million after-tax, impairment charge on write-down of securities, which resulted in a $0.14 decrease in basic earnings per share to $0.39 per share and a $0.15 decrease in diluted earnings per share to $0.38 per share.

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Prosperity Bancshares, Inc.^®

Financial Highlights

	Three Months Ended
	Mar 31, 2008			Mar 31, 2007			Dec 31, 2007			Dec 31, 2006
Performance Ratios	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Return on average assets (annualized)		1.43	%		1.40	%		1.11	%(H)		1.47	%
Return on average common equity (annualized)		8.02	%		8.71	%		6.09	%(H)		10.08	%
Return on average tangible common equity		27.28	%		31.24	%		20.83	%(H)		31.64	%
Net interest margin(I) (tax equivalent)		4.03	%		3.93	%		4.12	%		3.79	%
Efficiency ratio(J)		45.06	%		47.23	%		45.45	%		43.03	%
Asset Quality Ratios
Non-performing assets to average earning assets		0.33	%		0.09	%		0.30	%		0.03	%
Non-performing assets to and other real estate		0.55	%		0.13	%		0.49	%		0.05	%
Net charge-offs to average loans		0.05	%		0.02	%		0.10	%		0.01	%
Allowance for credit losses to total loans		1.01	%		1.12	%		1.04	%		1.10	%
Common Stock Market
High	$	31.46		$	37.11		$	35.07		$	35.38
Low	$	21.96		$	32.18		$	28.18		$	32.54
Period end market price	$	28.66		$	34.74		$	29.39		$	34.51

^(H)Earnings for the three months ended December 31, 2007 includes a $6.5 million after-tax impairment charge on write-down of securities, which resulted in a 41 basis point decrease on return on average assets to 1.11%, a 231 basis point decrease on return on average equity to 6.09% and a 790 basis point decrease on return on average tangible common equity to 20.83%.

^(I) Net interest margin for all periods presented is calculated on an actual/365 day basis.

^(J) Calculated by dividing total non-interest expense (excluding credit loss provisions) by net interest income plus non-interest income (excluding net gains and losses on the sale of securities and assets). Additionally, taxes are not part of this calculation.

Page 11 of 18

Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars in thousands)

	March 31, 2008					March 31, 2007					December 31, 2007					December 31, 2006
Balance Sheet Data (at period end)	(Unaudited)					(Unaudited)					(Unaudited)					(Unaudited)
Loan Portfolio
Commercial	$	452,635		14.3	%	$	474,127		14.6	%	$	453,644		14.5	%	$	297,677		13.7	%
Construction		664,679		21.0	%		752,790		23.2	%		683,171		21.7	%		433,178		19.9	%
1-4 family residential		546,765		17.3	%		519,532		16.0	%		526,338		16.7	%		376,996		17.3	%
Home equity		94,559		3.0	%		93,348		2.9	%		93,877		3.0	%		63,427		2.9	%
Commercial real estate		1,161,668		36.7	%		1,166,638		35.9	%		1,148,709		36.6	%		881,125		40.5	%
Agriculture		119,346		3.8	%		109,521		3.4	%		114,019		3.6	%		57,429		2.6	%
Consumer		121,975		3.9	%		131,752		4.0	%		123,213		3.9	%		66,675		3.1	%
Total Loans	$	3,161,627				$	3,247,708				$	3,142,971				$	2,176,507
Deposit Types
Non-interest bearing DDA	$	1,202,622		24.3	%	$	1,188,741		24.1	%	$	1,168,069		23.5	%	$	835,876		22.4	%
Interest bearing DDA		769,440		15.5	%		868,481		17.6	%		1,004,761		20.2	%		736,962		19.8	%
Money Market		1,042,744		21.1	%		1,037,960		21.1	%		970,112		19.5	%		825,510		22.2	%
Savings		239,633		4.8	%		233,505		4.7	%		223,161		4.5	%		168,677		4.5	%
Time < $100		819,671		16.6	%		806,295		16.4	%		791,818		16.0	%		584,360		15.7	%
Time > $100		874,608		17.7	%		793,258		16.1	%		808,486		16.3	%		574,293		15.4	%
Total Deposits	$	4,948,718				$	4,928,240				$	4,966,407				$	3,725,678
Loan to Deposit Ratio		63.9	%				65.9	%				63.3	%				58.4	%

Page 12 of 18

Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars in thousands)

	Mar 31, 2008			Dec 31, 2007			Sept 30, 2007			June 30, 2007			Mar 31, 2007
Balance Sheet Data (at period end)	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Total loans	$	3,161,627		$	3,142,971		$	3,127,555		$	3,181,176		$	3,247,708
Investment securities(K)		2,086,382			1,857,606			1,804,326			1,818,723			1,886,294
Federal funds sold and other temporary investments		32,268			193,043			101,173			32,243			66,457
Total earning assets		5,280,277			5,193,620			5,033,054			5,032,142			5,200,459
Allowance for credit losses		(32,067	)		(32,543	)		(35,536	)		(36,129	)		(36,341	)
Cash and due from banks		159,754			178,247			141,662			153,854			135,497
Goodwill		769,013			753,909			745,650			736,624			739,328
Core deposit intangibles		43,577			46,069			48,689			49,317			51,883
Other real estate		11,612			10,207			1,460			3,637			2,138
Fixed assets, net		123,806			120,044			120,794			120,810			118,287
Other assets		108,761			102,790			114,751			124,659			115,448
Total assets	$	6,464,733		$	6,372,343		$	6,170,524		$	6,184,914		$	6,326,699
Demand deposits	$	1,202,622		$	1,168,069		$	1,165,089		$	1,184,172		$	1,188,741
Interest bearing deposits		3,746,096			3,798,338			3,618,925			3,592,210			3,739,499
Total deposits		4,948,718			4,966,407			4,784,014			4,776,382			4,928,240
Securities sold under repurchase agreements		70,942			84,581			79,484			86,035			73,916
Federal funds purchased and other borrowings		125,360			31,466			31,988			59,499			65,621
Junior subordinated debentures		112,885			112,885			112,885			120,617			145,360
Other liabilities		58,761			49,573			50,908			60,805			46,993
Total liabilities		5,316,666			5,244,912			5,059,279			5,103,338			5,260,130
Shareholders’ equity(L)		1,148,067			1,127,431			1,111,245			1,081,576			1,066,569
Total liabilities and equity	$	6,464,733		$	6,372,343		$	6,170,524		$	6,184,914		$	6,326,699

^(K) Includes $3,903, ($7,795), ($2,924), ($5,111) and ($2,435) in unrealized gains (losses) on available for sale securities for the quarterly periods ending March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively.

^(L) Includes $2,537, ($5,067), ($1,901), ($3,322) and ($1,583) in after tax unrealized gains (losses) on available for sale securities for the quarterly periods ending March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007, respectively.

Page 13 of 18

Prosperity Bancshares, Inc.^®

Financial Highlights

(Dollars in thousands)

	Three Months Ended
	Mar 31, 2008		Dec 31, 2007			Sept 30, 2007		Jun 30, 2007		Mar 31, 2007
Income Statement Data	(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)
Interest on loans	$	58,520	$	61,682		$	64,036	$	64,622	$	57,260
Interest on securities		24,783		22,446			23,316		21,996		21,708
Interest on federal funds sold and other earning assets		1,162		1,313			652		682		895
Total interest income		84,465		85,441			88,004		87,300		79,863
Interest expense- deposits		28,945		30,354			31,794		31,421		29,113
Interest expense- debentures		2,019		2,206			2,358		2,896		2,598
Interest expense- other		1,506		1,247			2,483		1,639		2,064
Total interest expense		32,470		33,807			36,635		35,956		33,775
Net interest income		51,995		51,634			51,369		51,344		46,088
Provision for credit losses		1,167		120			75		320		245
Net interest income after provision for credit losses		50,828		51,514			51,294		51,024		45,843
Service charges on deposits accounts		10,506		11,029			10,785		10,613		8,510
Net gain on sale of assets		43		85			640		82		14
Brokered mortgage income		109		105			188		254		132
Gain on sale of held for sale loans		73		132			269		310		604
Gain on sale of securities		0		28			58		0		0
Other non-interest income		1,948		1,869			2,219		2,586		2,411
Total non-interest income		12,679		13,248			14,159		13,845		11,671
Salaries and benefits		16,130		15,747			16,365		16,496		15,302
CDI amortization		2,492		2,620			2,586		2,566		2,145
Net occupancy and equipment		2,810		2,775			2,665		2,636		2,458
Depreciation		1,937		1,955			1,895		1,885		1,876
Impairment write-down loss on securities		0		9,975			0		0		0
Data processing and software amortization		1,291		1,123			1,290		1,172		985
Other non-interest expense		4,460		5,218			5,286		5,317		4,505
Total non-interest expense		29,120		39,413			30,087		30,072		27,271
Net income before taxes		34,387		25,349			35,366		34,797		30,243
Federal income taxes		11,449		8,268			11,518		11,804		10,014
Net income available to common shareholders	$	22,938	$	17,081	(M)	$	23,848	$	22,993	$	20,229

^(M)Earnings for the three months ended December 31, 2007 includes a $10.0 million pre-tax, or $6.5 million after-tax, impairment charge on write-down of securities.

Page 14 of 18

Prosperity Bancshares, Inc.^®

Financial Highlights

	Three Months Ended
	Mar 31, 2008		Dec 31, 2007		Sep 30, 2007		Jun 30, 2007		Mar 31, 2007
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Comparative Quarterly Asset Quality, Performance & Capital Ratios
Return on average assets (annualized)	1.43	%	1.11	%(N)	1.53	%	1.47	%	1.40	%
Return on average common equity (annualized)	8.02	%	6.09	%(N)	8.67	%	8.54	%	8.71	%
Return on average tangible equity (annualized)	27.28	%	20.83	%(N)	30.53	%	32.04	%	31.24	%
Net interest margin (tax equivalent) (annualized)	4.03	%	4.12	%	4.07	%	4.09	%	3.93	%
Employees—FTE	1,374		1,359		1,369		1,408		1,432
Efficiency ratio	45.06	%	45.45	%	46.41	%	46.19	%	47.23	%
Non-performing assets to average earning assets	0.33	%	0.30	%	0.19	%	0.22	%	0.09	%
Non-performing assets to loans and other real estate	0.55	%	0.49	%	0.30	%	0.35	%	0.13	%
Net charge-offs to average loans	0.05	%	0.10	%	0.04	%	0.02	%	0.02	%
Allowance for credit losses to total loans	1.01	%	1.04	%	1.14	%	1.14	%	1.12	%
Tier 1 risk-based capital	13.16	%	13.13	%	13.03	%	12.36	%	12.08	%
Total risk-based capital	14.11	%	14.11	%	14.11	%	14.18	%	13.13	%
Tier 1 leverage capital	7.91	%	8.09	%	7.83	%	7.57	%	8.31	%
Tangible equity to tangible	5.94	%	5.88	%	5.89	%	5.48	%	4.97	%
Equity to assets	17.76	%	17.69	%	18.01	%	17.49	%	16.86	%

^(N) Earnings for the three months ended December 31, 2007 includes a $6.5 million after-tax impairment charge on write-down of securities, which resulted in a 41 basis point decrease on return on average assets to 1.11%, a 231 basis point decrease on return on average equity to 6.09% and a 790 basis point decrease on return on average tangible common equity to 20.83%.

Page 15 of 18

Prosperity Bancshares, Inc.^®

Supplemental Financial Data (Unaudited)

(Dollars in thousands)

	Three Months Ended Mar 31, 2008
YIELD ANALYSIS	Average Balance			Interest Earned / Interest Paid		Average Yield/ Rate
Interest Earning Assets:
Loans	$	3,143,174		$	58,520	7.47	%
Investment securities		1,977,510			24,783	5.01	%
Federal funds sold and other temporary investments		131,601			1,162	3.54	%
Total interest earning assets		5,252,285		$	84,465	6.45	%
Allowance for credit losses		(31,948	)
Non-interest earning assets		1,198,814
Total assets debentures	$	6,419,151
Interest Bearing Liabilities:
Interest bearing demand deposits	$	869,728		$	3,121	1.44	%
Savings and money market deposits		1,252,346			7,414	2.37	%
Certificates and other time deposits		1,660,635			18,410	4.45	%
Securities sold under repurchase agreements		66,074			604	3.67	%
Federal funds purchased and other borrowings		96,978			902	3.73	%
Junior subordinated debentures		112,885			2,019	7.17	%
Total interest bearing liabilities		4,058,646		$	32,470	3.21	%
Non-interest bearing liabilities:
Non-interest bearing demand deposits		1,155,210
Other liabilities		61,745
Total liabilities		5,275,601
Shareholders’ equity		1,143,550
Total liabilities and shareholders’ equity	$	6,419,151
Net Interest Income & Margin				$	51,995	3.97	%
Net Interest Income & Margin (tax equivalent)				$	52,832	4.03	%

Page 16 of 18

Prosperity Bancshares, Inc.^®

Supplemental Financial Data (Unaudited)

(Dollars in thousands)

	Three Months Ended Mar 31, 2007
YIELD ANALYSIS	Average Balance			Interest Earned / Interest Paid		Average Yield/Rate
Interest Earning Assets:
Loans	$	2,876,029		$	57,260	8.07	%
Investment securities		1,873,905			21,708	4.63	%
Federal funds sold and other temporary investments		71,451			895	5.08	%
Total interest earning assets		4,821,385		$	79,863	6.72	%
Allowance for credit losses		(32,131	)
Non-interest earning assets		1,006,958
Total assets repurchase agreements	$	5,796,212
Interest Bearing Liabilities:
Interest bearing demand deposits	$	860,328		$	4,730	2.23	%
Savings and money market deposits		1,178,241			8,267	2.85	%
Certificates and other time deposits		1,462,241			16,116	4.47	%
Securities sold under repurchase agreements		59,236			602	4.12	%
Federal funds purchased and other borrowings		110,703			1,462	5.36	%
Junior subordinated debentures		130,413			2,598	8.08	%
Total interest bearing liabilities		3,801,162		$	33,775	3.60	%
Non-interest bearing liabilities:
Non-interest bearing demand deposits		1,035,294
Other liabilities		31,050
Total liabilities		4,867,506
Shareholders’ equity		928,706
Total liabilities and shareholders’ equity	$	5,796,212
Net Interest Income & Margin				$	46,088	3.88	%
Net Interest Income & Margin (tax equivalent)				$	46,764	3.93	%

Page 17 of 18

Prosperity Bancshares, Inc.^®

Supplemental Financial Data (Unaudited)

(Dollars in thousands)

	Three Months Ended Dec 31, 2007
YIELD ANALYSIS	Average Balance			Interest Earned / Interest Paid		Average Yield/Rate
Interest Earning Assets:
Loans	$	3,136,515		$	61,682	7.80	%
Investment securities		1,801,443			22,446	4.98	%
Federal funds sold and other temporary investments		111,059			1,313	4.69	%
Total interest earning assets		5,049,017		$	85,441	6.71	%
Allowance for credit losses		(34,595	)
Non-interest earning assets		1,167,936
Total assets	$	6,182,358
Interest Bearing Liabilities:
Interest bearing demand deposits	$	826,751		$	3,510	1.68	%
Savings and money market deposits		1,189,161			8,289	2.77	%
Certificates and other time deposits		1,587,013			18,555	4.64	%
Securities sold under repurchase agreements		66,538			707	4.22	%
Federal funds purchased and other borrowings		41,106			540	5.21	%
Junior subordinated debentures		112,885			2,206	7.75	%
Total interest bearing liabilities		3,823,454		$	33,807	3.51	%
Non-interest bearing liabilities:
Non-interest bearing demand deposits		1,182,179
Other liabilities		54,839
Total liabilities		5,060,472
Shareholders’ equity		1,121,886
Total liabilities and shareholders’ equity	$	6,182,358
Net Interest Income & Margin				$	51,634	4.06	%
Net Interest Income & Margin (tax equivalent)				$	52,467	4.12	%

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Page 18 of 18