8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 30, 2008

PROSPERITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Texas	0-25051	74-2231986
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4295 San Felipe

Houston, Texas 77027

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (713) 693-9300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On July 30, 2008, management of Prosperity Bancshares, Inc. (the “Company”) presented information regarding the Company’s business and second quarter 2008 operational results to investors at the Keefe, Bruyette & Woods 9th Annual Community Bank Investor Conference. The slide presentation given at this conference is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The foregoing description is qualified by reference to such exhibit.

As provided in General Instruction B.2 to Form 8-K, the information in Item 7.01 and Exhibit 99.1 of this Current Report on Form 8-K is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following is furnished as an exhibit to this Current Report on Form 8-K:

Exhibit Number	Description of Exhibit
99.1 -	Investor presentation given July 30, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PROSPERITY BANCSHARES, INC.
	(Registrant)
Dated: July 30, 2008	By:	/s/ Peter Fisher
		Peter Fisher
		General Counsel

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
99.1 -	Investor presentation given July 30, 2008.

EX-99.1

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 $6.8 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 approximately 11% inside ownership

•

Excellent

asset

quality

–

Net

Charge

Offs

/

Average

Loans

of

0.04%

for

three months ending June 30, 2008

•

Excellent

cost

control

–

under

50%

efficiency

ratio

•

Since 2000, we have successfully integrated 20 accretive transactions.

a Track Record of Success

4

2

nd

Quarter Highlights

2

nd

Quarter Highlights

•

Expanding Net Interest Margin -

Increased to 4.10% in 2

nd

Quarter

•

Non-

Performing Assets to Average Earning Assets

decreased to 0.22% or $11.6 million

•

Strong Earnings of $23.437 million or $0.52 per share

(diluted) or 1.43% Return on Assets in 2

nd

Quarter

•

Stable Texas Economy -

47,700 new jobs in Texas in June

2008

•

Stable Housing Market -

Overall price increase was 1% in

June 2008.

5

Banking Center Network

Banking Center Network

Franchise –

$ 6.8 billion in Assets

$ 5.3 billion in Deposits

$ 3.3 billion in Loans

131

Full Service Locations

% of

Deposits

24

in Central Texas

14 %

26

in Dallas/Fort Worth          17 %

2

in East Texas                        1 %

46

in Houston CMSA               42 %

33

in South Texas                     26 %

The Dallas/ Fort

Worth MSA is the

nation’s 4th largest

regional area with

6.1 million residents

The Houston MSA is

the nation’s 6th

largest regional area

with 5.6 million

residents

Texas has five of the

nation’s top 20 cities

in population:

4  Houston

7  San Antonio

9  Dallas

16  Austin

18  Fort Worth

6

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

San

Antonio

Area

Houston

Area

Dallas/ Fort

Worth Area

Austin Area

Population Growth

Population Growth

Population Change for 2007

Change in Population

65,880

120,544

162,250

53,925

Source: Census Bureau

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

1985

1990

1995

2000

2007

United States

Texas

7

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

$7,200

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2Q08

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Loans

Deposits

Assets

Equity

As Originally Reported

$ in millions

Total footings as

of 6/30/08

Loans = $3.3 bil.

Deposits = $5.3 bil.

Assets = $6.8 bil.

5 year CAGR

Loans = 36%

Deposits = 26%

Assets = 28%

8

EPS Growth Diluted

EPS Growth Diluted

$1.22

$1.36

$1.59

$1.77

$1.94

$0.52

$0.52

$1.94

$2.09*

$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

2Q 2007

2Q 2008

*

EPS

without

the

non-cash

after

tax

impairment

charge

related

to

FNMA/FLHMC

preferred

stock

5 year CAGR without non-cash

impairment would be 11%

9

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

2Q07

2Q08

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

10

Loan Portfolio

Loan Portfolio

Home Equity

2.9%

Agriculture

4.1%

Consumer

3.8%

1-4 Family

Residential

17.2%

Commercial

14.7%

Construction

19.9%

Commercial

R.E.

37.4%

$ in thousands

Loans/ Deposits: 62.6%

June 30, 2008

Amount

Commercial R.E.

$

1,241,873

37.4

%

Commercial

486,817

14.2

Construction

658,669

19.9

1-4 Family Residential

568,376

17.2

Consumer

126,397

4.3

Agriculture

135,422

4.1

Home Equity

95,774

2.9

Gross Loans

$

3,313,328

100.0

%

% of total

Construction Loan Breakout

Approximate $ in million

Single Family:

$225

Land Development:

$130

Raw Land:

$135

Lots:

$100

Commercial/ Other:

$69

11

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

0.49%

0.05%

0.09%

0.17%

0.13%

0.38%

0.00%

0.35%

0.35%

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

2Q07

2Q08

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

12

Net Interest Margin

*

Net Interest Margin

*

4.10%

4.03%

4.12%

4.07%

3.93%

3.93%

3.82%

4.09%

3.82%

3.60%

3.70%

3.80%

3.90%

4.00%

4.10%

4.20%

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

* Tax equivalent-

annualized

Net Interest Margin for 2006 -

3.80% and for 2007 -

4.06%

13

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

2

nd

Quarter Earnings

15

Supplemental

Data

16

Supplemental

Supplemental

Data

The Houston MSA is the nation’s 6

th

largest regional area with 5.6 million residents

The Dallas/ Fort Worth MSA is the nation’s 4

th

largest regional area with 6.1

million residents

Texas has five of the nation’s top 20 cities for population:* Houston #4, San

Antonio #7, Dallas #9, Austin #16, Ft. Worth #18

April 2008 Unemployment Rate**: Dallas/ Fort Worth MSA 3.9%, Houston MSA

3.8%, Austin MSA 3.3%, San Antonio 3.6%, Texas 3.9%, U.S. 4.8%

There are approximately 650 banks in Texas (125 are greater than $300 million in

asset size); Dallas/ Fort Worth MSA has roughly 110 independent banks (25 are over

$300 million in asset size) and the Houston MSA has about 70 independent banks (20

are over $300 million in asset size)*** 

* Source: July 2006 U.S. Census Bureau; **Source: Texas Workforce Commission (data not seasonally adjusted); ***Source

FDIC

17

Financial Highlights

Financial Highlights

As Originally Reported

(Dollars in thousands, except EPS)

RATIOS

$26.44

$24.69

$25.54

$20.26

$16.69

$12.32

$10.49

Book value per share

$7.79

$6.75

$7.42

$6.62

$6.48

$4.96

$4.53

Tangible book value per share

46.17%

46.19%

46.29%

45.29%

48.93%

49.45%

51.82%

Efficiency Ratio

5.87%

14.11%

13.13%

8.09%

32.34%

8.72%*

1.49%*

$90,635*

$200,435

$52,923

2007

6.04%

13.67%

12.70%

7.87%

26.93%

7.96%

1.43%

$23,437

$53,971

$13,066

2Q08

5.48%

14.18%

12.36%

7.57%

32.04%

8.54%

1.47%

$22,993

$51,344

$13,845

2Q07

4.17%

16.90%

15.82%

7.10%

29.94%

15.60%

1.32%

$26,548

$64,499

$16,966

2003

5.24%

14.55%

13.55%

7.76%

31.53%

10.24%

1.44%

$61,725

$138,145

$33,982

2006

4.38%

14.67%

13.56%

6.30%

33.41%

14.27%

1.36%

$34,707

$81,967

$23,071

2004

5.46%

16.37%

15.34%

7.83%

29.88%

11.56%

1.42%

$47,860

$110,897

$30,021

2005

Tier I Risk Capital

Total Risk Capital

Net Interest Income

Tangible Ratio

Leverage Ratio

Non-Interest Income

ROAE –

tangible

ROAE

ROAA

Net Income

(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.

*

Net

Income,

ROAA,

and

ROAE

does

not

include

the

non-cash

after

tax

impairment

charge

related

to

FNMA/FLHMC

preferred

stock

of

$6.5

million.

18

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

1

10/22/2007

Banco Popular North America

6

Bank

TX

140,000

NA

10.1

Yes

2

6/15/2000

Compass Bancshares, Inc.

5

Bank

TX

87,000

NA

NA

Yes

3

2/27/1998

Grimes County Capital Corporation

1

Bank

TX

5,900

250

4.24

No

4

3/30/1997

Wells Fargo & Company

1

Bank

TX

NA

NA

NA

No

5

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)

1

2/7/2008

1st Choice Bancorp, Inc.

Houston

TX

Bank

Mixed

Purchase

6,372,343

313,900

4.69

66.2

2

05/01/07

The Bank of Navasota

Navasota

TX

Bank

Common Stock

Purchase

6,247,926

72,300

1.14

17.1

3

07/19/06

Texas United Bancshares, Inc.

La Grange

TX

Bank

Common Stock

Purchase

4,547,220

1,818,000

27.82

357.1

4

11/16/05

SNB Bancshares, Inc.

Houston

TX

Bank

Mixed

Purchase

3,493,972

1,121,747

24.30

242.7

5

09/12/05

Grapeland Bancshares, Inc.

Grapeland

TX

Bank

Common Stock

Purchase

3,479,747

73,000

2.15

7.3

6

10/26/04

FirstCapital Bankers, Inc.

Corpus Christi

TX

Thrift

Common Stock

Purchase

2,709,169

773,566

22.21

135.7

7

05/12/04

Village Bank and Trust

Austin

TX

Thrift

Cash

Purchase

2,449,553

110,400

4.31

20.2

8

04/26/04

Liberty Bank

Austin

TX

Thrift

Mixed

Purchase

2,449,553

186,000

7.06

42.0

9

10/06/03

First State Bank of North Texas

Dallas

TX

Bank

Mixed

Purchase

2,078,532

93,900

4.32

21.3

10

07/21/03

Mainbancorp

Dallas

TX

Bank

Mixed

Purchase

1,983,277

195,700

8.98

39.7

11

03/05/03

BankDallas SSB

Dallas

TX

Thrift

Cash

Purchase

1,822,256

40,716

2.19

7.0

12

02/03/03

Abrams Centre Bancshares, Inc.

Dallas

TX

Bank

Cash

Purchase

1,822,256

95,388

4.97

16.3

13

08/15/02

First National Bank of Bay City

Bay City

TX

Bank

Cash

Purchase

1,360,356

28,174

2.03

5.0

14

07/15/02

Southwest Bank Holding Company

Dallas

TX

Bank

Cash

Purchase

1,289,637

127,055

8.97

21.0

15

05/02/02

Paradigm Bancorporation, Incorporated

Houston

TX

Bank

Common Stock

Purchase

1,289,637

259,262

16.74

41.6

16

04/26/02

First State Bank

Needville

TX

Bank

Cash

Purchase

1,289,637

17,539

1.36

3.7

17

02/22/02

Texas Guaranty Bank, N.A.

Houston

TX

Bank

Cash

Purchase

1,262,152

75,019

5.61

11.8

18

11/08/00

Commercial Bancshares, Inc.

Houston

TX

Bank

Common Stock

Pooling

693,079

401,271

36.67

53.3

19

06/21/99

South Texas Bancshares, Inc.

Beeville

TX

Bank

Cash

Purchase

461,903

142,091

23.53

23.4

20

6/5/1998

Union State Bank

East Bernard

TX

Bank

Cash

Purchase

339,287

79,174

18.92

17.6

19

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%

36.2%

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%

41.9%

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

20

Deposit Composition

Deposit Composition

Non-interest

bearing DDA

24.3%

MMA &

Savings

27.6%

Interest

Bearing DDA

14.2%

CDs & IRAs

<$100,000

15.9%

CDs & IRAs

>$100,000

18.0%

$ in thousands

2Q08 Cost of Deposits-

2.01%

June 30, 2008

Amount

Non-interest bearing DDA

$

1,285,493

24.3

%

Interst Bearing DDA

750,214

14.2

MMA & Savings

1,465,525

27.6

CD's & IRA's<100m

840,744

15.9

CD's & IRA's>100m

954,658

18.0

Total Deposits

$

5,296,634

100.0

%

% of total

21

Asset Quality -

NCO/Average Loans

Asset Quality -

NCO/Average Loans

0.23%

0.04%

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*

2Q07

2Q08

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

2

nd

Quarter

Earnings

-

KBW