Prosperity Bancshares (PB) 8-K Regulation FD Disclosure

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 $6.5 billion Texas based Financial Holding Company

•

3

rd

largest Texas based commercial bank by deposit size

•

Strong balance sheet growth –

10 year CAGR of 49% loans, 35%

deposits, and 38% assets

•

Strong earnings growth –

10 year CAGR of 11% for EPS (diluted) and

34% for net income

•

Shareholder driven with a approximately 13% insider ownership

•

Excellent asset quality –

Net Charge Offs / Average Loans of 0.05% for

three months ending March 31, 2008

•

Excellent cost control –

under 50% efficiency ratio

•

Since 2000, we have successfully integrated 19 accretive transactions.

a Track Record of Success

4

Banking Center Network

Banking Center Network

Franchise –

$ 5.0 billion in Deposits

$ 3.2 billion in Loans

130

Full Service Locations

23

in Central Texas

26

in Dallas/Fort Worth area

2

in East Texas

46

in Houston CMSA

33

in South 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

2007

1Q08

$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 3/31/08

Loans = $3.2 billion

Deposits = $5.0 billion

Assets = $6.5 billion

6

EPS Growth Diluted

EPS Growth Diluted

Net income 5 and 10 year

CAGR = 34% and 38% respectively

EPS 10 year

CAGR = 9%

$0.52

$1.22

$1.36

$1.59

$1.77

$1.94

$2.09

$0.52

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

2002

2003

2004

2005

2006

2007

1Q 2007

1Q 2008

7

Net Interest Income and Margin

(fte)

Net Interest Income and Margin

(fte)

4.03%

4.12%

3.77%

3.82%

3.81%

3.79%

3.93%

4.09%

4.07%

$0

$10

$20

$30

$40

$50

$60

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

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

2006

-

3.80%

and

for

2007

–

4.06%

8

Efficiency Ratio

45.06%

45.45%

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

2007

1Q2008

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.

2 acquisitions

$1.9 billion

assets

acquired

9

Deposit Composition

Deposit Composition

Non-interest

bearing DDA

24.3%

MMA &

Savings

25.9%

Interest

Bearing DDA

15.5%

CDs & IRAs

<$100,000

16.6%

CDs & IRAs

>$100,000

17.7%

$ in thousands

1Q08 Cost of Deposits-

2.35%

March 31, 2008

Amount

Non-interest bearing DDA

$

1,202,622

24.3

%

Interst Bearing DDA

769,440

15.5

MMA & Savings

1,282,377

25.9

CD's & IRA's<100m

819,671

16.6

CD's & IRA's>100m

874,608

17.7

Total Deposits

$

4,948,718

100.0

%

% of total

10

Loan Growth

Loan Growth

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

$2,800

$3,200

$3,600

2002

2003

2004

2005

2006

2007

1Q07

1Q08

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 63% at 12/31/07

11

Loan Portfolio

Loan Portfolio

Home Equity

3.0%

Agriculture

3.8%

Consumer

3.9%

1-4 Family

Residential

17.3%

Commercial

14.3%

Construction

21.0%

Commercial

R.E.

36.7%

$ in thousands

Loans/Deposits: 63.9%

March 31, 2008

Amount

Commercial R.E.

$

1,161,668

36.7

%

Commercial

452,635

14.3

Construction

664,679

21.0

1-4 Family Residential

546,765

17.3

Consumer

121,975

3.9

Agriculture

119,346

3.8

Home Equity

94,559

3.0

Gross Loans

$

3,161,627

100.0

%

% of total

12

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%

$

453.6

14.5%

37.0%

Construction

$

52.4

7.7%

$

36.5

4.7%

$

109.6

10.6%

$

206.7

13.4%

$

433.2

19.9%

$

683.2

21.7%

67.1%

1-4 Family Residential

$

206.6

30.4%

$

237.1

30.8%

$

260.5

25.2%

$

313.2

20.3%

$

377.0

17.3%

$

526.3

16.7%

20.6%

Home Equity

$

23.2

3.4%

$

27.9

3.6%

$

34.5

3.3%

$

58.7

3.8%

$

63.4

2.9%

$

93.9

3.0%

32.3%

Commercial Real Estate

$

202.5

29.8%

$

283.8

36.9%

$

389.6

37.7%

$

619.3

40.3%

$

881.1

40.5%

$

1,148.7

36.6%

41.5%

Agriculture

$

36.6

5.4%

$

35.9

4.7%

$

44.1

4.2%

$

56.3

3.6%

$

57.4

2.6%

$

114.0

3.6%

25.5%

Consumer

$

64.5

9.5%

$

54.8

7.1%

$

52.9

5.1%

$

65.1

4.2%

$

66.7

3.1%

$

123.2

3.9%

13.8%

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%

$

3,142.9

100.0%

35.8%

12/31/2002

12/31/2007

12/31/2006

12/31/2003

12/31/2004

12/31/2005

13

Asset Quality –

NPA*/Loans + OREO

*

Includes loans past due 90 days and still accruing

Asset Quality –

NPA*/Loans + OREO

*

Includes loans past due 90 days and still accruing

0.13%

0.55%

0.49%

0.05%

0.09%

0.17%

0.13%

0.38%

0.00%

1.18%

0.83%

1.02%

0.97%

0.83%

0.65%

1.00%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2001

2002

2003

2004

2005

2006*

2007

1Q07

1Q08

PRSP NPA*/Loans + OREO

Peer NPA*/Loans + OREO

Source: SNL Financial

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

* SNBI, SBIT, TRBS & TXUI have been acquired and were excluded from 2006 & 2007

14

Asset Quality -

NCO/Average Loans

Asset Quality -

NCO/Average Loans

0.23%

0.05%

0.54%

0.15%

0.10%

0.04%

0.03%

0.06%

0.08%

0.06%

0.02%

0.19%

0.20%

0.19%

0.30%

0.32%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

2001

2002

2003

2004

2005

2006*

2007*

1Q07

1Q08

PRSP NCO / Loans

Peer NCO / Loans

Source: SNL Financial

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

* SNBI, SBIT, TRBS & TXUI have been acquired and were excluded from 2006 & 2007

15

0

100

200

300

400

500

600

700

800

Prosperity Bancshares Inc.  (+458.0%)

Russell 3000  (+41.0%)

NASDAQ Bank Index  (+48.4%)

Total Return Performance

Total Return Performance

$100,000 invested in PRSP at

IPO on 11/12/1998 was worth

$558,000 on 12/31/2007

Source: FactSet Research Systems

16

Merger & Acquisition History*

Merger & Acquisition History*

$0

$5

$10

$15

$20

$25

$30

$35

$40

Nov-

98

May-

99

Nov-

99

May-

00

Nov-

00

May-

01

Nov-

01

May-

02

Nov-

02

May-

03

Nov-

03

May-

04

Nov-

04

May-

05

Nov-

05

May-

06

Nov-

06

May-

07

Nov-

07

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.

05/01/07

The Bank of Navasota

Deal Value:  $383.2

Location:      Navasota

17

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

1Q08 Presentation

19

Supplemental

Data

20

Financial Highlights

Financial Highlights

As Originally Reported

(Dollars in thousands, except EPS)

5.87%

14.10%

13.12%

8.09%

$7.42

$25.54

32.34%

8.72%

1.49%

$2.09

$90,635

$199,675

$52,923

$4,966,407

$3,142,971

$6,372,343

2007

5.94%

14.04%

13.09%

7.84%

$7.58

$25.93

27.28%

8.02%

1.43%

$0.52

$22,938

$51,995

$12,679

$4,928,240

$3,247,708

$6,464,733

1Q08

4.97%

13.13%

12.08%

8.31%

$6.29

$24.37

31.24%

8.71%

1.40%

$0.52

$20,229

$46,088

$11,671

$4,48,718

$3,161,627

$6,326,699

1Q07

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

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

Tier I Risk Capital

Total Risk Capital

Net-

Int

Income

Book value per share

Tangible Ratio

Leverage Ratio

Non-Int

Income

Tangible book value

per share

ROAE –

tangible

ROAE

ROAA

EPS (diluted)

Net Income

Deposits

Loans

Assets

(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

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

10/22/2007

Banco Popular North America

6

Bank

TX

140,000

NA

10.1

Yes

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

At Announcement

Date of

Announcement

Seller

City

State

Type

Consideration

Accounting

Method

PRSP

Assets

($000)

Sellers'

Assets

($000)

Sellers'

Assets

Contribution

(%)

Deal

Value

($000)

2/7/2008

1st Choice Bancorp, Inc.

Houston

TX

Bank

Mixed

Purchase

6,372,343

313,900

4.69

66.2

05/01/07

The Bank of Navasota

Navasota

TX

Bank

Common Stock

Purchase

6,247,926

72,300

1.14

17.1

07/19/06

Texas United Bancshares, Inc.

La Grange

TX

Bank

Common Stock

Purchase

4,547,220

1,818,000

27.82

357.1

11/16/05

SNB Bancshares, Inc.

Houston

TX

Bank

Mixed

Purchase

3,493,972

1,121,747

24.30

242.7

09/12/05

Grapeland Bancshares, Inc.

Grapeland

TX

Bank

Common Stock

Purchase

3,479,747

73,000

2.15

7.3

10/26/04

FirstCapital Bankers, Inc.

Corpus Christi

TX

Thrift

Common Stock

Purchase

2,709,169

773,566

22.21

135.7

05/12/04

Village Bank and Trust

Austin

TX

Thrift

Cash

Purchase

2,449,553

110,400

4.31

20.2

04/26/04

Liberty Bank

Austin

TX

Thrift

Mixed

Purchase

2,449,553

186,000

7.06

42

10/06/03

First State Bank of North Texas

Dallas

TX

Bank

Mixed

Purchase

2,078,532

93,900

4.32

21.3

07/21/03

Mainbancorp

Dallas

TX

Bank

Mixed

Purchase

1,983,277

195,700

8.98

39.7

03/05/03

BankDallas SSB

Dallas

TX

Thrift

Cash

Purchase

1,822,256

40,716

2.19

7

02/03/03

Abrams Centre Bancshares, Inc.

Dallas

TX

Bank

Cash

Purchase

1,822,256

95,388

4.97

16.3

08/15/02

First National Bank of Bay City

Bay City

TX

Bank

Cash

Purchase

1,360,356

28,174

2.03

5

07/15/02

Southwest Bank Holding Company

Dallas

TX

Bank

Cash

Purchase

1,289,637

127,055

8.97

21

05/02/02

Paradigm Bancorporation, Incorporated

Houston

TX

Bank

Common Stock

Purchase

1,289,637

259,262

16.74

41.6

04/26/02

First State Bank

Needville

TX

Bank

Cash

Purchase

1,289,637

17,539

1.36

3.7

02/22/02

Texas Guaranty Bank, N.A.

Houston

TX

Bank

Cash

Purchase

1,262,152

75,019

5.61

11.8

11/08/00

Commercial Bancshares, Inc.

Houston

TX

Bank

Common Stock

Pooling

693,079

401,271

36.67

53.3

06/21/99

South Texas Bancshares, Inc.

Beeville

TX

Bank

Cash

Purchase

461,903

142,091

23.53

23.4

6/5/1998

Union State Bank

East Bernard

TX

Bank

Cash

Purchase

339,287

79,174

18.92

17.6

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

1

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Quarter Earnings