SecProbe.io

CORRESP
 1
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 CORRESP

 September 30, 2025
 VIA EDGAR Madeleine Joy Mateo
 Division of Corporation Finance Office of Finance
 Securities and Exchange Commission 100 F Street, N.E.
 Washington, D.C. 20549

 Re:
 Prosperity Bancshares, Inc.

  
 Registration Statement on Form S-4

  
 File No. 333-290333

  
 Request for Effectiveness
 Dear Ms. Mateo: Reference is made to the
Registration Statement on Form S-4 (File No. 333-290333) filed by Prosperity Bancshares, Inc. (the “ Company ”) with the U.S. Securities and
Exchange Commission (the “ SEC ”) on September 17, 2025, as amended on September 30, 2025 (the “ Registration Statement ”).
 The Company hereby requests the Registration Statement be made effective at 4:00 p.m., Eastern Time, on September 30, 2025, or as soon as
possible thereafter, in accordance with Rule 461 promulgated under the Securities Act of 1933, as amended. Please contact Matthew T.
Carpenter at (212) 403-1031 or MTCarpenter@wlrk.com with any questions you may have concerning this letter, or if you require any additional information. Please notify Mr. Carpenter when this request
for acceleration of effectiveness of the Registration Statement has been granted. [ Signature Page Follows ]

 Very truly yours,

 PROSPERITY BANCSHARES, INC.

 By:

 /s/ Charlotte Rasche

 Name:

 Charlotte Rasche

 Title:

 Executive Vice President and General Counsel

 cc:
 Matthew T. Carpenter, Wachtell, Lipton, Rosen & Katz

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 September 24, 2025

David Zalman
Chief Executive Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, TX 77027

 Re: Prosperity Bancshares, Inc.
 Registration Statement on Form S-4
 Filed September 17, 2025
 File No. 333-290333
Dear David Zalman:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you
that the company and its management are responsible for the accuracy and
adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.

 Please contact Madeleine Joy Mateo at 202-551-3465 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Finance
cc: Matthew T. Carpenter, Esq.
</TEXT>
</DOCUMENT>

CORRESP
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CORRESP

 Prosperity Bancshares, Inc.

Prosperity Bank Plaza

 4295 San
Felipe

 Houston, Texas 77027

January 30, 2023

 VIA EDGAR

United States Securities and Exchange Commission

 Division of
Corporation Finance

 Office of Finance

 100 F. Street, N.E.

 Washington, D.C. 20549

 Attention: John Stickel

Re:
 Prosperity Bancshares, Inc.

Registration Statement on Form S-4

Filed January 11, 2023

 File
No. 333-269187

 Ladies and Gentlemen:

Pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, Prosperity Bancshares, Inc. hereby requests acceleration of the
effective date of its Registration Statement on Form S-4 (File No. 333-269187) (the “Registration Statement”). We
respectfully request that the Registration Statement become effective as of 4:00 p.m., Washington, D.C. time, on January 31, 2023, or as soon as practicable thereafter.

Please contact William S. Anderson of Bracewell LLP at 713.221.1122 with any questions you may have regarding this request. In addition,
please notify Mr. Anderson by telephone when this request for acceleration has been granted.

Very truly yours,

Prosperity Bancshares, Inc.

By:

 /s/ Charlotte M. Rasche

Name:

Charlotte M. Rasche

Title:

Executive Vice President and General Counsel

United States securities and exchange commission logo
January 20, 2023
Charlotte Rasche
Executive Vice President and General Counsel
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX 77027
Re:Prosperity Bancshares, Inc.
Registration Statement on Form S-4
Filed January 11, 2023
File No. 333-269187
Dear Charlotte Rasche:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact John Stickel at 202-551-3324 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance

CORRESP
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CORRESP

 Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

 Houston,
Texas 77027

 September 16, 2019

 VIA EDGAR

 United States Securities and Exchange Commission

Division of Corporation Finance

 Office of Financial Services

 100 F Street, N.E.

 Washington, D.C. 20549

Attention: Jessica Livingston

Re:
 Prosperity Bancshares, Inc.

 Draft Registration Statement on Form S-4

 Filed August 23, 2019

 File No. 333-233443

Dear Ms. Livingston:

 Please accept this
letter as the response of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) from our telephonic
correspondence with the Division of Corporation Finance on August 30, 2019 and September 4, 2019 with respect to the Company’s Registration Statement on Form S-4 filed August 23, 2019 (the “Initial Registration
Statement”). The Company is concurrently filing with the Commission Amendment No. 1 to the Initial Registration Statement (the “Revised Registration Statement”), which includes changes in response to the Staff’s
comment.

 For ease of reference, we have repeated the Staff’s comment below in italics, followed by the response of the Company.

Exhibits and Financial Statement Schedules

 Please
file the employment agreement of Kevin J. Hanigan as an exhibit to the Registration Statement or explain why it is not required.

 Response

The Company filed the complete text of Mr. Hanigan’s employment agreement as Exhibit 10.1 to its Current Report on Form 8-K filed on
June 20, 2019, which is incorporated by reference in the Initial Registration Statement.

 The Company respectfully submits that
Mr. Hanigan’s employment agreement, which will be effective upon and is subject to the closing of the merger, is not required to be filed as an exhibit to the Company’s Registration Statement on Form S-4 because Item 601(b)(10)
of Regulation S-K is not applicable to the Registration Statement. Footnote 1 to the exhibit table set forth in Item

 United States Securities and Exchange Commission

September 16, 2019

  Page
 2

601(a) states that an exhibit need not be provided if (1) an election has been made under Form S-4 to provide information about the registrant at a level prescribed by Form S-3 and
(2) Form S-3 would not require the registrant to provide such exhibit if it were registering a primary offering. An election has been made under Form S-4 to provide information in the Form S-4 about Prosperity at a level prescribed by Form S-3,
and Item 601(b)(10) is inapplicable to a Form S-3 registration statement. (See Response Letters from Franklin Financial Network Inc. dated January 24, 2018, First Midwest Bancorp, Inc. dated October 18, 2016 and January 15, 2016,
Prosperity Bancshares, Inc. dated November 3, 2015 and PacWest Bancorp dated May 19, 2015.)

 Moreover, while Item 5 of
Schedule 14A requires the interests of certain persons to be described in the Form S-4, it does not require new agreements with the acquiror to be filed as an exhibit to the Form S-4.

However, in light of the Staff’s comment, we have added Mr. Hanigan’s employment agreement as Exhibit 10.1 to Revised
Registration Statement and incorporated such agreement by reference to the Company’s Current Report on Form 8-K filed on June 20, 2019.

* * *

 The Company
respectfully requests the Staff’s assistance in completing its review of the Revised Registration Statement as soon as possible. If you have any questions regarding the foregoing or desire further information or clarification, please do not
hesitate to contact William S. Anderson of Bracewell LLP, the Company’s counsel, at (713) 221-1122 or the undersigned at (281) 269-7205. Thank you for your review.

Sincerely,

/s/ Charlotte M. Rasche

 Charlotte M. Rasche

Executive Vice President and General

Counsel

cc:
 William S. Anderson

Bracewell LLP

 711 Louisiana,
Suite 2300

 Houston, Texas 77002

(713) 221-1122

CORRESP
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CORRESP

 Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

 Houston,
Texas 77027

 September 16, 2019

 VIA EDGAR

 United States Securities and Exchange Commission

Division of Corporation Finance

 Office of Financial Services

 100 F Street, N.E.

 Washington, D.C. 20549

Attention: Jessica Livingston

Re:
 Prosperity Bancshares, Inc.

 Registration Statement on Form S-4 (File No. 333-233443)

Dear Ms. Livingston:

 The undersigned, Prosperity
Bancshares, Inc. (the “Company”), pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended, hereby requests that the effective date of the above-referenced Registration Statement on Form S-4 be accelerated to
4:00 p.m. Eastern Time on Tuesday, September 17, 2019, or as soon possible thereafter.

 We request that we be notified of such effectiveness by a
telephone call to Daniel W. Areshenko of Bracewell LLP, the Company’s counsel, at (713) 221-1358 and that such effectiveness also be confirmed in writing.

Sincerely,

PROSPERITY BANCSHARES, INC.

By:

/s/ Charlotte M. Rasche

 Charlotte M. Rasche

 Executive Vice President
and General Counsel

Mail Stop 4720

July 3, 2017

Mr. David Zalman
Chief Executive Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2016
Filed February 28, 2017
File No. 001 -35388

Dear Mr. Zalman :

We have comp leted our review of your filing .  We remind you that the company and its
management are responsible for the accuracy and adequacy of the ir disclosure s, notwithstanding
any review, comments, action or absence  of action  by the staff .

Sincerely,

/s/ Michael Volley

Michael Volley
Staff Accountant
Office of Financial Services

CORRESP
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June 30, 2017

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, DC 20549

Attention:

 Mr. Michael Volley

 Staff Accountant

Re:  Prosperity Bancshares, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2016

Filed February 28, 2017

Form 8-K Filed April 26, 2017

File No. 001-35388

Mr. Volley:

Please accept this letter as the response of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation Finance dated June 6, 2017 (the “Comment Letter”) with respect to the Company’s Form 8-K filed April 26, 2017 (the “Form 8-K”).

For ease of reference, we have repeated the Staff’s comment below, followed by the corresponding response of the Company.

Form 8-K for Filed April 26, 2017

Exhibit 99.1

We note your discussion and presentation of numerous non-GAAP financial metrics that exclude the impact of purchase accounting on page 2 and page 11. It appears that disclosing financial metrics excluding the impact of purchase accounting represents an individually tailored recognition and measurement method which results in a misleading financial metric that violates Rule 100(b) of Regulation G. Please refer to Question 100.04 of the Compliance and Disclosure Interpretations for guidance. Therefore, in future filings, please do not disclose non-GAAP financial metrics that exclude the impact of purchase accounting.

United States Securities and Exchange Commission

June 30, 2017

Page 2

We acknowledge the Staff’s comment.  As discussed over the course of several telephone conferences and e-mail exchanges between the Staff and the Company during the month of June, the Company will omit from its future filings with the Commission any non-GAAP financial metrics that exclude the impact of purchase accounting adjustments.  Specifically, the metrics of net income (excluding purchase accounting adjustments), earnings per share (excluding purchase accounting adjustments) and net interest margin (excluding purchase accounting adjustments) that appeared on page 2, and the tabular presentation that appeared on page 11, of Exhibit 99.1 to the Form 8-K will be omitted from the Company’s future filings.

In future filings, the Company will set forth in footnotes to certain GAAP financial metrics any purchase accounting adjustment amount included within each such metric. We respectfully submit as Exhibit A attached hereto an example of the revised disclosures as they would have appeared in Exhibit 99.1 to the Form 8-K.

The Company believes the foregoing is responsive to the comment raised by the Staff in its Comment Letter. If you have further questions or require additional clarifying information, please call the undersigned at 281-269-7204.

Sincerely,

/s/David Hollaway

David Hollaway

Chief Financial Officer

Exhibit A

Results of Operations for the Three Months Ended March 31, 2017

Net income was $68.565 million(2) for the three months ended March 31, 2017 compared with $68.951 million(3) for the same period in 2016. Net income per diluted common share was $0.99 for the three months ended March 31, 2017 compared with $0.98 for the same period in 2016.  Annualized returns on average assets, average common equity and average tangible common equity for the three months ended March 31, 2017 were 1.23%, 7.45% and 15.82%(1), respectively.  Prosperity’s efficiency ratio (excluding credit loss provisions, net gains and losses on the sale of assets and taxes) was 43.01% for the three months ended March 31, 2017.

Net interest income before provision for credit losses for the three months ended March 31, 2017 was $152.435 million compared with $166.257 million during the same period in 2016, a decrease of $13.822 million or 8.3%. This change was primarily due to a decrease in loan discount accretion of $9.741 million. Linked quarter net interest income before provision for credit losses decreased $1.397 million or 0.9% to $152.435 million compared with $153.832 million during the three months ended December 31, 2016. This change was primarily due to a decrease in loan discount accretion of $2.799 million.

The net interest margin on a tax equivalent basis was 3.20% for the three months ended March 31, 2017, compared with 3.48% for the same period in 2016. This change was primarily due to a decrease in loan discount accretion of $9.741 million. On a linked quarter basis the net interest margin was 3.20% compared with 3.26% for the three months ended December 31, 2016. This change was primarily due to a decrease in loan discount accretion of $2.799 million.  Noninterest income was $30.824 million for the three months ended March 31, 2017 compared with $30.793 million for the same period in 2016, an increase of $31 thousand or 0.1%. On a linked quarter basis, noninterest income increased $1.349 million or 4.6% compared with the three months ended December 31, 2016. This increase was primarily due to the net gain on sale of assets for the three months ended March 31, 2017.

Noninterest expense was $78.062 million for the three months ended March 31, 2017 compared with $80.528 million for the same period in 2016, a decrease of $2.466 million or 3.1%. This change was primarily due to a decrease in salaries and benefits expense. On a linked quarter basis, noninterest expense decreased $1.086 million or 1.4% compared with the three months ended December 31, 2016.

Balance Sheet Information

At March 31, 2017, Prosperity had $22.477 billion in total assets, an increase of $499.074 million or 2.3%, compared with $21.978 billion at March 31, 2016.

Loans at March 31, 2017 were $9.739 billion, an increase of $84.845 million or 0.9%, compared with $9.654 billion at March 31, 2016. Linked quarter loans increased $117.193 million or 1.2% (4.9% annualized) from $9.622 billion at December 31, 2016.

As part of its commercial and industrial lending activities, Prosperity extends credit to oil and gas production and service companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas service loans are loans to companies that provide services for oil and gas production and exploration. At March 31, 2017, oil and gas loans totaled $267.445 million or 2.8% of total loans, of which $108.267 million were to production companies and $159.178 million were to service companies. This compares with total oil and gas loans of $362.826 million or 3.8% of total loans at March 31, 2016, of which $166.422 million were to production companies and $196.404 million were to service companies. On a linked quarter basis, oil and gas loans decreased $17.094 million, from $284.539 million or 3.0% of total loans at December 31, 2016, of which $119.934 million were production loans and $164.605 million were service loans.

Deposits at March 31, 2017 were $17.036 billion, a decrease of $837.194 million or 4.7%, compared with $17.873 billion at March 31, 2016. Linked quarter deposits decreased $271.730 million or 1.6% from $17.307 billion at December 31, 2016. This change primarily resulted from seasonality.

___________

(2) Includes purchase accounting adjustments of $2.675 million, net of tax, primarily comprised of loan discount accretion of $4.753 million.

(3) Includes purchase accounting adjustments of $8.712 million, net of tax, primarily comprised of loan discount accretion of $14.494 million.

Exhibit A

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Mar 31, 2017

Dec 31, 2016

Sep 30, 2016

Jun 30, 2016

Mar 31, 2016

Profitability

Net income (D) (E)

$

68,565

$

68,793

$

68,651

$

68,071

$

68,951

Basic earnings per share

$

0.99

$

0.99

$

0.99

$

0.98

$

0.98

Diluted earnings per share

$

0.99

$

0.99

$

0.99

$

0.98

$

0.98

Return on average assets (F)

1.23

%

1.26

%

1.27

%

1.24

%

1.24

%

Return on average common equity (F)

7.45

%

7.58

%

7.66

%

7.70

%

7.85

%

Return on average tangible common equity (F) (G)

15.82

%

16.33

%

16.79

%

17.15

%

17.60

%

Tax equivalent net interest margin (D) (H)

3.20

%

3.26

%

3.29

%

3.37

%

3.48

%

Efficiency ratio(I)

43.01

%

43.29

%

43.26

%

42.46

%

41.08

%

Liquidity and Capital Ratios

Equity to assets

16.41

%

16.31

%

16.80

%

16.26

%

15.92

%

Common equity tier 1 capital

14.45

%

14.48

%

14.41

%

13.66

%

13.20

%

Tier 1 risk-based capital

14.45

%

14.48

%

14.41

%

13.66

%

13.20

%

Total risk-based capital

15.14

%

15.20

%

15.14

%

14.37

%

13.90

%

Tier 1 leverage capital

8.62

%

8.68

%

8.50

%

8.11

%

7.70

%

Period end tangible equity to period end tangible assets(E)

8.50

%

8.32

%

8.46

%

8.04

%

7.73

%

Other Data

Weighted-average shares used in computing earnings per common share

Basic

69,480

69,482

69,478

69,565

70,174

Diluted

69,482

69,486

69,484

69,574

70,181

Period end shares outstanding

69,480

69,491

69,478

69,480

69,543

Cash dividends paid per common share

$

0.3400

$

0.3400

$

0.3000

$

0.3000

$

0.3000

Book value per common share

$

53.10

$

52.41

$

51.74

$

51.02

$

50.32

Tangible book value per common share(E)

$

25.11

$

24.40

$

23.70

$

22.97

$

22.27

Common Stock Market Price

High

$

77.87

$

73.68

$

56.27

$

54.57

$

47.50

Low

$

65.34

$

52.81

$

45.94

$

43.28

$

33.57

Period end closing price

$

69.71

$

71.78

$

54.89

$

50.99

$

46.39

Employees – FTE

3,033

3,035

3,071

3,106

3,132

Number of banking centers

244

245

245

245

246

____________

(D) Includes purchase accounting adjustments for the three-month periods ended as follows:

Mar 31, 2017

Dec 31, 2016

Sep 30, 2016

Jun 30, 2016

Mar 31, 2016

Loan discount accretion

$4,753

$7,552

$7,620

$9,304

$14,494

Securities amortization

$852

$950

$1,051

$948

$1,722

Time deposits amortization

$99

$232

$575

$178

$182

(E) Using effective tax rate of 33.1%, 32.7%, 32.9%, 33.1% and 32.7% for the three-month periods ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively.

(F) Interim periods annualized.

(G) Refer to the "Notes to Selected Financial Data" at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.

(H) Net interest margin for all periods presented is based on average balances on an actual 365 day or 366 day basis.

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

June 6 , 2017

Mr. David Zalman
Chief Executive Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
 Form 10-K for Fiscal Year Ended  December  31, 2016
Filed February 28, 2017
Form 8 -K Filed April 26, 2017
File No. 001-35388

Dear Mr. Zalman :

We have limited our review of your filings to the financial statements and related
disclosures and have the following comment.  In our comment , we may ask you to provide us
with information so we may better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comment applies to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment , we may have  additional comments.

Form 8 -K, filed April 2 6, 2017

Exhibit 99.1

1. We note your discussion and presentation of numerous non-GAAP financial metrics that
exclude the impact of purchase accounting on page 2 and page 11.  It appears that disclosing
financial metrics excluding the impact of purchase accounting represents an individually
tailored recognition and measurement method which r esults in a misleading financial metric
that violates Rule 100(b) of Regulation G.  Please refer to Question 100.04 of the
Compliance and Disclosure Interpretations for guidance.  Therefore, in future filings, please
do not disclose non-GAAP financial metr ics that exclude the impact of purchase accounting.

Mr. David Zalman
Prosperity Bancshares, Inc.
June 6 , 2017
Page 2

 We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

You may contact John Spitz, Staff Accountant, at (202) 551 -3484  or me at (202) 551 -
3437  with any questions.

Sincerely,

 /s/ Michael Volley

Michael  Volley
Staff Accountant
Office of Financial Services

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CORRESP

 Prosperity Bancshares, Inc.

Prosperity Bank Plaza

 4295 San
Felipe

 Houston, Texas 77027

November 12, 2015

 U.S. Securities and
Exchange Commission

 100 F Street, N.E.

 Washington,
D.C. 20549

 Attention: Mr. David Lin

Re:
Prosperity Bancshares, Inc.

Registration Statement on Form S-4 (Registration No. 333-207346)

 Dear Mr. Lin:

The undersigned, Prosperity Bancshares, Inc. (the “Company”), pursuant to Rule 461 promulgated under the Securities Act of 1933, as amended,
hereby requests that the effective date of the above-referenced Registration Statement on Form S-4 be accelerated to 4:00 p.m. eastern time on Friday, November 13, 2015, or as soon thereafter as practicable.

We request that we be notified of such effectiveness by a telephone call to Jason M. Jean of Bracewell & Giuliani LLP, the Company’s counsel, at
(713) 221-1328 and that such effectiveness also be confirmed in writing.

 The Company hereby acknowledges, at the time of this request, that:

•

should the Securities and Exchange Commission (the “Commission”) or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action
with respect to the filing;

•

the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the
disclosure in the filing; and

•

the Company may not assert staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 Very truly yours,

PROSPERITY BANCSHARES, INC.

By:

/s/ Charlotte M. Rasche

Charlotte M. Rasche

Executive Vice President and General Counsel

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Correspondence

 November 12, 2015

United States Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, NE

 Washington, DC 20549

 Attention: Mr. David Lin

Re:
Prosperity Bancshares, Inc.

 Registration Statement on Form S-4

Filed October 8, 2015

File No. 333-207346

 Mr. Lin:

 Please accept this letter as the responses of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation Finance dated November 6, 2015 (the “Comment Letter”) with respect to the Company’s Amendment
No. 1 to the Registration Statement on Form S-4 (the “Form S-4”).

 We enclose for filing with the Commission Amendment No. 2 to the
Form S-4 (the “Revised Registration Statement”), together with exhibits thereto. We are separately providing the Staff hard copies of this letter and marked copies of the Revised Registration Statement.

In addition to revisions made in response to the Staff’s comments, the Revised Registration Statement also includes other changes that are intended to
update, clarify and render more complete the information contained therein.

 For ease of reference, we have repeated each of the Staff’s comments
below, followed by the corresponding response of the Company.

 Cover Page

1.
 We note your revised disclosure in response to comment 4. However, we are unable to concur that your revised disclosure sufficiently constitutes
counsels’ tax opinions. In particular, we note your disclosure that each of Prosperity and Tradition will receive opinions from their respective counsels, each dated the closing date of the merger, that the merger will constitute a
reorganization. In light of your election to file short-form legal opinions, please revise this section to state clearly that it is the opinion of counsels that the merger will constitute a reorganization. Also, please revise the first sentence of

 United States Securities and Exchange Commission

November 12, 2015

  Page
 2

the last paragraph on page 67, which states that “[t]hese opinions are and will be subject to customary qualifications and assumptions . . . .” Because this discussion constitutes the opinion of counsels,
any assumptions and qualifications should be contained in this section.

 Response: In response to the Staff’s comment, the
Company’s counsel has filed a new tax opinion as Exhibit 8.1.

2.
We note your response to comment 5. Please provide additional analysis with respect to your conclusion that the voting agreement is not material to the company. Please see Securities Act Rule 408 and Regulation S-K
Compliance and Disclosure Interpretation Question 246.08 for further guidance.

 Response: As disclosed in the Revised
Registration Statement, certain shareholders of Tradition Bancshares, Inc. (“Tradition”) who control 324,099 shares (or 47.4% of the outstanding shares) of Tradition have entered into a voting agreement pursuant to which they have agreed
to vote the shares of Tradition common stock they control in favor of the adoption and approval of the reorganization agreement. Holders of an additional 132,273 shares (or 19.3% of the outstanding shares) of Tradition would have to vote in favor of
the reorganization agreement in order for it to be approved.

 The Company acknowledges its obligations under Securities Act Rule 408 and maintains that
the Revised Registration Statement includes all material information that may be necessary to make the required statements contained therein, in light of the circumstances under which they are made, not misleading. To that end, the Company believes
that the summary of the voting agreement contained on pages 9 and 35 of the Revised Registration Statement contains all of the information related to the voting agreement that a shareholder of Tradition would reasonably consider to be relevant when
making a decision as to how to vote such shareholder’s shares.

 Meanwhile, the Company respectfully submits that the voting agreement, which does not
guarantee the minimum vote required to approve the acquisition agreement of Tradition, a company that has total assets of approximately 2.5% of the Company’s total assets, is not material to the Company. In other words, as the acquisition
itself is not material to the Company, neither is the voting agreement that helps to effectuate the transaction. Further, when analyzed from the standpoint of whether such an agreement would be material to the new entity created by the merger of
Tradition with and into the Company, the voting agreement cannot be material to the new entity because the agreement will terminate upon the consummation of the merger and never be in effect for the new entity.

Nevertheless, in response to the Staff’s original comment, the Company has filed the voting agreement as Exhibit 99.3 to the Revised Registration
Statement.

 United States Securities and Exchange Commission

November 12, 2015

  Page
 3

 In the event that the Company
requests acceleration of the effective date of the Form S-4, as amended, the Company acknowledges that:

•

should the Commission or the Staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

•

the action of the Commission or the Staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the
disclosure in the filing; and

•

the Company may not assert Staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 The Company respectfully requests the Staff’s assistance in completing its review of Amendment No. 2 as soon as possible. If you
have further questions or require additional clarifying information, please call the undersigned at 281-269-7205.

Sincerely,

/s/ Charlotte M. Rasche

Charlotte M. Rasche

Executive Vice President and General Counsel

Mail Stop 4720

November 6 , 2015

Via E -mail
David Zalman
Chairman and Chief Executive Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX  77027

Re: Prosperity Bancshares, Inc.
Amendment No. 1 to  Registration Statement on Form S -4
Filed November 3 , 2015
  File No. 333-207346

Dear Mr. Zalman :

We have limited our review of your amended registration statement and the related
response letter to those issues we have addressed in our comments.  In  some of our comments,
we may ask you to provide us with information so we may better understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requeste d information.   If you do not  believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information  you
provide in response to these  comments, we may have  additional comments.

1. We note your revised disclosure in response to comment 4.  However, we are unable to
concur that your revised disclosure sufficiently constitutes counsels’ tax opinions.  In
particular, we note your disclosure that each of Prosperity and Tradition will receive
opinions from their respective counsels, each dated the closing date of the merger, that
the merger will constitute a reorganization.  In light of your election to file sh ort-form
legal opinions, please revise this section to state clearly that it is the opinion of counsels
that the merger will constitute a reorganization.  Also , please revise the first sentence of
the last paragraph on page 67, which states that “[t]hese op inions are and will be subject
to customary qu alifications and assumptions . . . . ”  Because this discussion constitutes
the opinion of counsels, any assumptions and qualifications should be contained in this
section.

David Zalman
Prosperity Bancshares, Inc.
November 6 , 2015
Page 2

2. We note your response to comment 5.  Plea se provide additional analysis with respect to
your conclusion that the voting ag reement is not material to the company.  Please see
Securities Act Rule 408 and Regulation S -K Compliance and Disclosure Interpretation
Question 246.08 for further guidance.

Please contact David Lin at (202) 551 -3552  or me at (202) 551 -3391  with any questions.

Sincerely,

 /s/ Erin E. Martin

Erin E. Martin
Special Counsel
Office of Financial Services

cc: Shanna Kuzdzal
Jason M. Jean, Esq.

CORRESP
1
filename1.htm

CORRESP

 November 3, 2015

United States Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, NE

 Washington, DC 20549

 Attention: Mr. David Lin

Re:
Prosperity Bancshares, Inc.

Registration Statement on Form S-4

Filed October 8, 2015

File No. 333-207346

 Mr. Lin:

Please accept this letter as the responses of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation Finance dated October 29, 2015 (the “Comment Letter”) with respect to the Company’s Registration Statement
on Form S-4 (the “Form S-4”).

 For ease of reference, we have repeated each of the Staff’s comments below, followed by the corresponding
response of the Company.

 Cover Page

1.
Please revise to disclose the possible upward and downward adjustments to the merger consideration in greater detail. Alternatively, you may add a cross-reference to the relevant Q&A on pages 1—2 of the
prospectus.

 Response: In response to the Staff’s comment, the Company has revised its disclosures on the cover page of the
proxy statement/prospectus to include a cross-reference to the relevant Q&A on pages 1-2 of the prospectus. We believe this is preferable since the details of the adjustments are located immediately following the cover page and table of
contents. Please see the fourth sentence of the first full paragraph of the cover page of the proxy statement/prospectus for the additional disclosure, which reads as follows:

 United States Securities and Exchange Commission

November 3, 2015

  Page
 2

 The details of the possible adjustments to the merger consideration are described in the last
question on page 1 under the heading “Questions and Answers About the Merger and the Special Meeting.”

 Opinion of Tradition’s
Financial Advisor, page 39

2.
We note your disclosure that Sandler O’Neill discussed certain projected financial information with the senior management of Prosperity, including:

•

certain projected transaction costs, purchase accounting adjustments, expected cost savings and other synergies, as disclosed in the sixth bullet on page 40; and

•

an estimated long-term annual growth rate and dividend payout ratio, as disclosed in the first full paragraph on page 41.

Please revise to disclose any material projections or provide us an analysis supporting your determination disclosure of such projections is
not material.

 Response: In response to the Staff’s comment, the Company has revised its disclosures in the Form S-4 to
include the material projected financial information requested. Please see page 45 of Amendment No. 1 to the Form S-4 under the heading “Opinion of Tradition’s Financial Advisor” and page 53 under the heading
“Opinion of Tradition’s Financial Advisor—Pro Forma Merger Analysis” for the additional disclosures. For ease of reference, the applicable paragraphs from those sections are below, with the additional disclosures
underlined.

 In preparing its analyses, Sandler O’Neill used internal financial projections for Tradition for
the years ending December 31, 2015 through December 31, 2019, as discussed with the senior management of Tradition, and publicly available median analyst earnings per share estimates for Prosperity for the years ending December 31,
2015 and December 31, 2017 and an estimated long-term annual growth rate of 5.0% and a dividend payout ratio growing at $0.05 per share annually for each year thereafter, as estimated by Sandler O’Neill
and discussed with the senior management of Prosperity. Sandler O’Neill also used in its analyses certain projections of transaction costs, purchase accounting adjustments and expected cost savings that are described on page 53
below under the heading “Pro Forma Merger Analysis,” and which were discussed with the senior management of Prosperity. With respect to those projections and estimates, the respective senior management of Tradition and
Prosperity confirmed to Sandler O’Neill that those projections and estimates reflected the best currently available projections and estimates of those respective managements of the future financial performance of Tradition and Prosperity,
respectively, and Sandler O’Neill assumed that such performance would be achieved. Sandler O’Neill expressed no opinion as to any such projections or the assumptions on which they are based. Sandler O’Neill also assumed that there was
no material change in the respective assets, financial condition, results of operations, business or prospects of Tradition or Prosperity since the date of the most recent financial data made available to Sandler O’Neill as of the date of its
opinion. Sandler O’Neill assumed in all respects material to its analysis that Tradition and

 United States Securities and Exchange Commission

November 3, 2015

  Page
 3

Prosperity would remain as going concerns for all periods relevant to its analyses. Sandler O’Neill expressed no opinion as to any of the legal, accounting or tax matters relating to the
merger or any other transactions contemplated in connection therewith.

 Pro Forma Merger Analysis. Sandler
O’Neill analyzed certain potential pro forma effects of the merger, assuming the following, as discussed with the senior management of Prosperity as well as with the senior management of Tradition: (i) the merger closes in the fourth
quarter of 2015; (ii) aggregate consideration value of $76.5 million ($39.0 million in cash consideration and $37.5 million in stock consideration) or $111.79 per share of Tradition common stock; (iii) a reversal of Tradition’s
loan loss reserve equal to $4.7 million; (iv) a credit mark of $8.0 million; (v) a core deposit intangible equal to 1.50% of Tradition’s core deposits, amortized straight-line over eight years; and (vi) cost savings of 30% of
Tradition’s estimated non-interest expense.

 Financial Interests of Directors and Officers of Tradition...., page 58

3.
In the last bullet on page 58, you disclose that “Prosperity’s obligation to complete the merger is subject to Tradition Bank terminating and fully liquidating its deferred compensation agreements with
certain executive officers....” Please revise to quantify the aggregate interests of each such executive officer with respect to the deferred compensation agreements.

Response: In response to the Staff’s comment, the Company has revised its disclosures in the Form S-4 to quantify the aggregate
interests of each such executive officer with respect to the deferred compensation agreements. Mr. Norris is the only executive officer with such an agreement. Neither Mr. Vickery nor Mr. Wooten has a deferred compensation agreement.
Please see page 62 of Amendment No. 1 to the Form S-4 under the heading “Financial Interests of Directors and Officers of Tradition and Tradition Bank in the Merger—Deferred Compensation Agreements” for the additional
disclosure. The paragraph from that section is below, with the additional disclosure underlined.

 Deferred Compensation
Agreements. Prosperity’s obligation to complete the merger is subject to Tradition Bank terminating and fully liquidating its deferred compensation agreements with certain officers, including one executive officer,
Mr. Norris, whose aggregate payout under his deferred compensation agreement is estimated to be approximately $55,400, before the completion of the merger. Under the terms of the deferred compensation agreements, Tradition Bank may
provide deferred compensation to these officers, either as a percentage of the officer’s annual bonus or as a result of the officer achieving certain performance objectives. Termination of the deferred compensation agreements in connection with
a change of control accelerates the vesting and distribution of the officer’s account balance.

 United States Securities and Exchange Commission

November 3, 2015

  Page
 4

 Material U.S. Federal Income Tax Consequences of the Merger, page 62

4.
We note your election to file short-form tax opinions as exhibits to the prospectus. Therefore, your disclosure in this section does not appear sufficient to constitute counsels’ tax opinions. We refer to your
disclosure on page 63 that it is a condition to completion of the merger that each of Prosperity and Tradition will receive a legal opinion that the merger will be treated as a “reorganization.” Please revise your disclosure to state
clearly that the discussion in the tax consequences section of the prospectus is counsels’ opinion. Alternatively, please file long-form tax opinions.

Response: In response to the Staff’s comment, the Company has revised its disclosures in the Form S-4 to state clearly that the
discussion in the tax consequences section of the proxy statement/prospectus is counsels’ opinion. Please see the last sentence of the first full paragraph under the heading “Material U.S. Federal Income Tax Consequences of the
Merger—Tax Consequences of the Merger Generally” of Amendment No. 1 to the Form S-4 for the additional disclosure, which reads as follows:

Consistent with such tax opinions, the U.S. federal income tax consequences of the merger discussed within this “Material U.S. Federal
Income Tax Consequences of the Merger” section reflects the opinion of Bracewell & Giuliani LLP and Thompson & Knight LLP, respectively.

In addition, the second paragraph from that section is below, with the additional disclosures underlined:

These opinions are and will be subject to customary qualifications and assumptions, including assumptions regarding the absence
of changes in existing facts and the completion of the merger strictly in accordance with the merger agreement and the registration statement. In rendering their tax opinions and approving of this description of the U.S. federal income tax
consequences of the merger, each counsel relied and will rely upon representations and covenants, including those contained in certificates of officers of Prosperity and Tradition, reasonably satisfactory in form and substance to each such
counsel, and will assume that these representations are true, correct and complete without regard to any knowledge limitation, and that these covenants will be complied with. If any of these assumptions or representations are inaccurate in any way,
or any of the covenants are not complied with, these opinions and this description could be adversely affected. The opinions and this description represent each counsel’s best legal judgment, but have no binding effect or official
status of any kind, and no assurance can be given that contrary positions will not be taken by the Internal Revenue Service or a court considering the issues. In addition, we have not requested nor do we intend to request a ruling from the Internal
Revenue Service as to the U.S. federal income tax consequences of the merger. Accordingly, there can be no assurances that the Internal Revenue Service will not assert, or that a court will not sustain, a position contrary to any of the tax
consequences set forth below or any of the tax consequences described in the tax opinions.

 United States Securities and Exchange Commission

November 3, 2015

  Page
 5

 Exhibits

5.
Please file the following as exhibits to the registration statement:

•

the voting agreement, as discussed in the last paragraph of page 9; and

•

the employment agreements with Prosperity Bank, as discussed in the penultimate bullet on page 58.

Alternatively, please tell us how you concluded that you are not required to do so.

Response: The Company respectfully submits that these agreements are not required to be filed as exhibits to the Form S-4.

The Company has concluded that the voting agreement is not material to the Company and therefore is not required to be filed with the Form S-4 as a material
contract under Item 601(b)(10) of Regulation S-K. Moreover, the Company respectfully submits that, even if the voting agreement were deemed to be a material contact, Item 601(b)(10) is not applicable
to the Form S-4. Footnote 1 to the exhibit table set forth in Item 601(a) of Regulation S-K states that an exhibit need not be provided about a company if (1) an election has been made under
Form S-4 to provide information about the company at a level prescribed by Form S-3 and (2) Form S-3 would not require the company to provide such exhibit if it were registering a primary offering. An election has been made under Form S-4 to provide information in the Form S-4 about the Company at a level prescribed by Form S-3, and Item 601(b)(10) of Regulation S-K is inapplicable to a Form S-3 registration statement. (See Response Letter from PacWest Bancorp dated May 19, 2015.)

 With respect
to the employment agreements, the individuals that have entered into such agreements are not, and upon completion of the merger will not be, directors or executive officers of the Company, and as a result, the Company does not believe that it is
required pursuant to Item 601(b)(10) of Regulation S-K to file such agreements as exhibits to the Form S-4. Even if such individuals were directors or officers of the Company, the Company respectfully
submits that Item 601(b)(10) is not applicable to the Form S-4 for the reasons discussed above.

 In the
event that the Company requests acceleration of the effective date of the Form S-4, as amended, the Company acknowledges that:

•

should the Commission or the Staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

•

the action of the Commission or the Staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the
disclosure in the filing; and

 United States Securities and Exchange Commission

November 3, 2015

  Page
 6

•

the Company may not assert Staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 The Company respectfully requests the Staff’s assistance in completing its review of Amendment No. 1 as soon as possible. If you
have further questions or require additional clarifying information, please call the undersigned at 281-269-7205.

Sincerely,

/s/ Charlotte M. Rasche

Charlotte M. Rasche

Executive Vice President and General Counsel

Mail Stop 4720

October 29, 2015

Via E -mail
David Zalman
Chairman and Chief Executive Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX  77027

Re: Prosperity Bancshares, Inc.
Registration Statement on Form S -4
Filed October  8, 2015
  File No. 333-207346

Dear Mr. Zalman :

We have limited our review of your registration statement to those issues we have
addressed in our comments.  In  some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information.   If you do not  believe our com ments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, w e may have  additional comments.

Cover Page

1. Please revise to disclose the possible upward and downward adjustments to the merger
consideration in greater detail.  Alternatively, you may add a cross -reference to the
relevant Q&A on pages 1 – 2 of the pro spectus.

Opinion of Tradition’s Financial Advisor, page 39

2. We note your disclosure that Sandler O’Neill discussed certain projected financial
information with the senior management of Prosperity, including:

David Zalman
Prosperity Bancshares, Inc.
October 29, 2015
Page 2

  certain projected transaction costs, purchase accounting adjustments, expected cost
savings and other synergies, as disclosed in the sixth bullet on page 40; and

 an estimated long -term annual growth rate and dividend payout ratio, as disclosed in
the first full paragraph on page 41.

Please revise t o disclose any material projections or provide us an analysis supporting
your determination disclosure of such projections is not material.

Financial Interests of Directors and Officers of Tradition . . . , page 58

3. In the last bullet on page 58, you  disclose that “Prosperity’s obligation to complete the
merger is subject to Tradition Bank terminating and fully liquidating its deferred
compensation agreements w ith certain executive officer s . . . . ”  Please revise to quantify
the aggregate interests of each  such executive officer with respect to the deferred
compensation agreements.

Material U.S. Federal Income Tax Consequences of the Merger, page 62

4. We note your election to file short -form tax opinions as exhibits to the prospectus.
Therefore, your discl osure in this section does not appear  sufficient to constitute
counsels’ tax opinions.  We refer to your disclosure on page 63 that it is a condition to
completion of the merger that each of Prosperity and Tradition will receive a legal
opinion that the merger will  be treated as a “reorganization.”  Please revise your
disclosure to state clearly that the discussion in the tax consequences section of the
prospectus is counsels’ opinion.  Alternatively, please file long -form tax opinions.

Exhibits

5. Please file the fo llowing as exhibits to the registration statement:

 the voting agreement, as discussed in the last paragraph of page 9; and

 the employment agreements with Prosperity Bank, as discussed in the penultimate
bullet on page 58.

Alternatively, please tell us how you concluded that you are not required to do so.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Act of 193 3 and
all applicabl e Securities  Act rules require.   Since the company and its management are in
possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

David Zalman
Prosperity Bancshares, Inc.
October 29, 2015
Page 3

Notwithstanding our comments, in the event you request acceleration of the effective date
of the pending registration statement , please provide a written statement from the company
acknowledging that:

 should the Commission or the staff, acting pursuant to delegated authority, declare the
filing effective, it does not foreclose the Commission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company  may not assert staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Please refer to Rules 460 and 461 regarding requests for  acceleration .  We will consider a
written request for acceleration of the effective date of the registration statement as confirmation
of the fact that those requesting acceleration are aware of their respective responsibilities under
the Securities Act o f 1933 and the Securities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration statement.  Please allow
adequate time  for us to review any amendment prior to the requested effective date of the
registration statement.

Please contact David Lin at (202) 551 -3552  or me at (202) 551 -3391  with any questions.

Sincerely,

 /s/ Erin E. Martin

Erin E. Martin
Special Counsel
Office of Financial Services

cc: Shanna Kuzdzal
Jason M. Jean, Esq.

January 26, 2015

Via E -mail
David Holloway
Chief Financial Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
  Form 10 -K for th e Fiscal Year Ended December 31, 2013
Filed February 28, 2104
File No. 001-35388

Dear Mr. Holloway :

We have completed our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing  and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We u rge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ John P. Nolan

John P. Nolan
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

CORRESP

 January 16, 2015

United States Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, NE

 Washington, DC 20549

 Attention: Mr. John P. Nolan

 Re: Prosperity
Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

 File No. 001-35388

 Mr. Nolan:

 Please accept this letter as the
responses of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation
Finance dated December 24, 2014 (the “Comment Letter”) with respect to the Company’s Form 10-K for the fiscal year ended December 31, 2013 (the “Form 10-K”).

For ease of reference, we have repeated each of the Staff’s comments below in bold, followed by the corresponding response of the Company.

Form 10-K for Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1.
We note your response and proposed disclosures provided as a result of comment one from our letter dated October 14, 2014. However, we only note brief disclosures explaining how incremental credit quality
changes are reflected in your provision for loan losses and corresponding allowance for loan losses. Please tell us and revise your future filings to provide a detailed understanding into the reasons for the changes in your asset quality and how
these are reflected in the provision for loan losses and allowance for loan losses. Please provide us with your proposed disclosures.

 United States Securities and Exchange Commission

January 16, 2015

  Page
 2

 As noted in the proposed disclosure below, changes in the Company’s asset quality are reflected in the
allowance for credit losses in several ways. Any specific reserves included in the allowance are calculated on a loan-by-loan basis and reflect current changes in the credit quality of those loans. Accordingly, when a specific reserve is required,
the allowance for credit losses is increased by that amount. The historical credit loss factor used in the allowance methodology, on the other hand, is based on a three-year look back period, which is then applied to estimate credit losses inherent
in the loan portfolio. The historical loss factor is calculated quarterly so as to accurately reflect the losses during the prior three-year period. A deterioration in the credit quality of the loan portfolio in the current period would increase the
historical credit loss factor to be applied in future periods, just as an improvement in credit quality would decrease the historical credit loss factor.

In addition to the specific reserves identified for impaired loans and historical credit loss information, a change in the allowance for credit losses can be
attributable to changes in environmental factors and growth in the balance of legacy loans and the re-categorization, or migration, of fair-valued acquired loans to acquired legacy loans, which subjects such loans to the Company’s allowance
methodology.

 Because the Company has historically had sound asset quality, resulting in minimal specific reserves and low historical credit losses, the
allowance for credit losses is heavily determined by the size of the loan portfolio subject to the allowance methodology and environmental factors that include Company-specific risk indicators and general economic conditions, both of which are
constantly changing.

 The allowance for credit losses totaled $73.3 million at June 30, 2014 compared with $67.3 million at December 31, 2013, an
increase of $6.0 million or 8.9%. At June 30, 2014, $60.0 million of the allowance was attributable to legacy loans, which was essentially unchanged from the allowance of $60.1 million attributable to legacy loans at December 31, 2013. Although
the legacy loan balance increased over this period, the increase did not impact the allowance because of the amount of fully secured loans and the lower environmental factors that resulted from the robust regional economy in the Company’s
market areas.

 At June 30, 2014, $1.9 million of the allowance was attributable to Non-PCI loans compared with $321 thousand of the allowance at
December 31, 2013, an increase of $1.6 million or 500.6%. The increase was primarily attributable to a specific reserve identified for a commercial real estate loan that became impaired.

The remaining $11.3 million of the allowance for credit losses at June 30, 2014 was attributable to acquired legacy loans compared with $6.8 million of
the allowance at December 31, 2013, an increase of $4.5 million or 65.5%. The increase was primarily due to the increase in the acquired legacy loan balance as a result of the recategorization of fair valued acquired loans to acquired legacy
loans, partially offset by the lower environmental factors.

 United States Securities and Exchange Commission

January 16, 2015

  Page
 3

 The Company respectfully submits the following proposed disclosure, which would replace the last paragraph on
page 4 and the first and second full paragraphs on page 5 of the Company’s November 12, 2014 response to the Commission’s October 14, 2014 Comment Letter (the “Prior Response”). The proposed disclosure below would also
replace the same language that is reproduced on pages B-7 and B-8 of the Prior Response. The Company proposes to include a similar disclosure in its future quarterly and annual reports.

The Company further disaggregates its allowance for credit losses to distinguish between the portion of the allowance attributed to legacy
loans and the portion of the allowance attributed to acquired loans. The following table shows the allocation of the allowance for credit losses among various categories of loans disaggregated between legacy loans, acquired legacy loans, Non-PCI
loans and PCI loans. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which future losses may occur. The total allowance is available to absorb losses from any loan category, regardless of whether
allocated to a legacy loan or an acquired loan.

June 30, 2014

Acquired Loans

Acquired

Total

Percent of Loans

Legacy Loans

Legacy Loans

Non-PCI Loans

PCI Loans

Allowance

to Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable

 Commercial and industrial

$
4,410

$
4,809

$
1,738

$
—

$
10,957

23.0
%

 Real estate

51,262

6,180

135

—

57,577

69.4
%

 Agriculture and agriculture real estate

1,172

249

27

—

1,448

5.8
%

 Consumer and other

3,167

89

28

—

3,284

1.8
%

 Total allowance for credit losses

$
60,011

$
11,327

$
1,928

$
—

$
73,266

100.0
%

December 31, 2013

Acquired Loans

Acquired

Percent of

Legacy

Non-PCI

Total

Loans to

Legacy Loans

Loans

Loans

PCI Loans

Allowance

Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable to:

 Commercial and industrial

$
6,139

$
1,831

$
197

$
—

$
8,167

16.5
%

 Real estate

51,235

4,889

110

—

56,234

73.9
%

 Agriculture and agriculture real estate

1,174

55

—

—

1,229

6.8
%

 Consumer and other

1,567

71

14

—

1,652

2.8
%

 Total allowance for credit losses

$
60,115

$
6,846

$
321

$
—

$
67,282

100.0
%

 The allowance for credit losses totaled $73.3 million at June 30, 2014 compared with $67.3 million at
December 31, 2013, an increase of $6.0 million or 8.9%. At June 30, 2014, $60.0 million of the allowance was attributable to legacy loans, which was essentially unchanged from the allowance of $60.1 million attributable to legacy loans at
December 31, 2013. Although the legacy loan balance increased over this period, the increase did not impact the allowance because of the amount of fully secured loans and the lower environmental factors that resulted from the robust regional
economy in the Company’s market areas.

 United States Securities and Exchange Commission

January 16, 2015

  Page
 4

 At June 30, 2014, $1.9 million of the allowance was attributable to Non-PCI loans compared
with $321 thousand of the allowance at December 31, 2013, an increase of $1.6 million or 500.6%. The increase was primarily attributable to a specific reserve identified for a commercial real estate loan that became impaired.

The remaining $11.3 million of the allowance for credit losses at June 30, 2014 was attributable to acquired legacy loans compared with
$6.8 million of the allowance at December 31, 2013, an increase of $4.5 million or 65.5%. The increase was primarily due to the increase in the acquired legacy loan balance as a result of the recategorization of fair valued acquired loans to
acquired legacy loans, partially offset by the lower environmental factors.

 At June 30, 2014, the Company had $224.1 million of
total outstanding discounts on Non-PCI and PCI loans, of which $138.0 million was accretable.

 A change in the allowance for credit losses
can be attributable to several factors, most notably (1) specific reserves identified for impaired loans, (2) historical credit loss information, (3) changes in environmental factors and (4) growth in the balance of legacy loans
and the re-categorization of fair-valued acquired loans to acquired legacy loans, which subjects such loans to the allowance methodology.

Changes in the Company’s asset quality are reflected in the allowance in several ways. Specific reserves are calculated on a loan-by-loan
basis and reflect current changes in the credit quality of the loan portfolio. Historical credit losses, on the other hand, are based on a three-year look back period, which are then applied to estimate current credit losses inherent in the loan
portfolio. A deterioration in the credit quality of the loan portfolio in the current period would increase the historical credit loss factor to be applied in future periods, just as an improvement in credit quality would decrease the historical
credit loss factor.

 The allowance for credit losses is further determined by the size of the loan portfolio subject to the allowance
methodology and environmental factors that include Company-specific risk indicators and general economic conditions, both of which are constantly changing. The Company evaluates the environmental and economic factors on an annual basis to determine
both the factors considered and the relative weighting of such factors. Through the application on a quarterly basis of such factors, including credit concentrations; delinquency trends; economic and business conditions; the quality of lending
management and staff; lending policies and procedures; loss and recovery trends; nature and volume of the portfolio; nonaccrual and problem loan trends; and other adjustments for items not covered by other factors, the Company ensures the allowance
methodology incorporates recent trends and economic conditions as it estimates the imminent losses embedded in the loan portfolio.

 As
described in the section captioned “Critical Accounting Policies” above, the Company’s determination of the allowance for credit losses involves a high degree of judgment and complexity. The Company’s analysis of qualitative, or
environmental, factors on pools of loans with common risk characteristics, in combination with the quantitative historical loss information

 United States Securities and Exchange Commission

January 16, 2015

  Page
 5

and specific reserves, provides the Company with an estimate of possible future losses. The allowance must reflect changes in the balance of loans subject to the allowance methodology, as well as
the estimated imminent losses associated with those loans. In the Company’s case, due to the strong regional economy reducing the environmental factors, minimal specific reserves and historically low credit losses, the $6.0 million increase in
the allowance for credit losses during the first six months of 2014 was primarily attributable to the growth in the loan portfolio.

2.
We note your response to comment two from our letter dated October 14, 2014. Please tell us how your allowance for loan losses accounting policy for non-PCI loans is consistent with ASC 310-10-35-24 which
requires you to compare to the present value of expected future cash flows to the recorded investment and record a provision accordingly. Also, please tell us if you would record a different amount of provision for loan losses for each period
presented if you instead compared the present value of expected future cash flows to the recorded investment of these loans.

 According
to ASC 310-10-35-22, when a loan is impaired, a creditor shall measure impairment based on the present value of expected cash flows discounted at the loan’s effective interest rate, except that as a practical expedient, a creditor may
measure impairment based on a loan’s observable market price, or the fair value of the collateral if the loan is a collateral-dependent loan (emphasis added). ASC 310-10-35-24 continues by providing that the creditor may choose a
measurement method on a loan-by-loan basis. The rule further states that if the present value of expected future cash flows, or alternatively, the observable market price of the loan or the fair value of the collateral, is less than the recorded
investment in the loan, a creditor shall recognize an impairment by creating a valuation allowance with a corresponding charge to expense or by adjusting an existing valuation allowance for the impaired loan with a corresponding charge to expense.

 Because essentially all of the Company’s impaired Non-PCI loans for the periods presented in the Company’s filings with the Commission were
collateral-dependent, the Company elected to measure the amount of the specific reserve necessary based on the fair value of the collateral compared with the recorded investment in such loan as permitted by ASC 310-10-35-24. Any impaired Non-PCI
loans that were not collateral-dependent were either fully reserved against or so immaterial in value as to not warrant an analysis for a specific reserve. In accordance with ASC 310-10-35-24, the Company will continue to analyze impaired Non-PCI
loans on a loan-by-loan basis in the future and may choose to use a different measurement method to determine the specific reserve, as appropriate. Because the Company historically has determined the required specific reserve for impaired Non-PCI
loans by comparing the fair value of collateral to the recorded investment of these loans in accordance with accounting guidance, the Company does not believe any change to the amount of the provision for credit losses for each period presented is
needed.

 United States Securities and Exchange Commission

January 16, 2015

  Page
 6

 The Company respectfully submits the following proposed disclosure, which would replace the first full
paragraph on the top of page 8 and the same language that is reproduced on pages A-7 and B-7 of the Prior Response:

 Non-PCI loans that
have deteriorated to an impaired status subsequent to acquisition are evaluated for a specific reserve on a quarterly basis which, when identified, is added to the allowance for credit losses. The Company reviews impaired Non-PCI loans on a
loan-by-loan basis and determines the specific reserve based on the difference between the recorded investment in the loan and one of three factors: expected future cash flows, observable market price or fair value of the collateral. Because
essentially all of the Company’s impaired Non-PCI loans have been collateral-dependent, the amount of the specific reserve has been determined by comparing the fair value of the collateral securing the Non-PCI loan with the recorded investment
in such loan. In the future, the Company will continue to analyze impaired Non-PCI loans on a loan-by-loan basis and may use an alternative measurement method to determine the specific reserve, as appropriate and in accordance with applicable
a

CORRESP
1
filename1.htm

CORRESP

 January 9, 2015

Via EDGAR

 John P. Nolan

Senior Assistant Chief Accountant

 Division of Corporate Finance

 Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549

Re:
Prosperity Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

File No. 001-35388

 Dear Mr. Nolan:

 We have received your comment letter dated December 24, 2014 related to the filing referenced above. We request an additional five business days to
prepare our response, and therefore, expect to provide our response to your comment letter no later than January 16, 2015.

 Very truly yours,

 /s/ Charlotte M. Rasche

 Charlotte M. Rasche

 Executive Vice President and General Counsel

 80 Sugar Creek Center Boulevard

 Sugar Land, TX 77478

charlotte.rasche@prosperitybankusa.com

December 2 4, 2014

Via E -mail
David Holloway
Chief Financial Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
  Form 10 -K for the Fiscal Year Ended December 31 , 2013
Filed February 28, 2104
File No. 001-35388

Dear Mr. Holloway :

We have reviewed your supplemental response  dated November 12 , 2014 and have the
following comments.  In some of our comments, we may ask you to provide  us with information
so we may better understand your disclosure.

Please respond to this letter within ten business days by providing the requested
information  or by advising us when you will provide the requested response.   If you do not
believe our comm ents apply to your facts and circumstances or do not believe future revisions
are appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments, including
the draft of your proposed disclosur es, we may have  additional comments.

Form 10 -K for Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1. We note your response and proposed disclosures provided as a result of comment one from
our letter dated October 14 , 2014.  However, we only note brief disclosures explaining how
incremental credit quality changes are reflected in your provision for loan losses and
corresponding allowance for loan losses. Please tell us and revise your future filings to
provide a detai led understanding into the reasons for the changes in your asset quality and
how these are reflected in the provision for loan losses and allowance for loan losses.  Please
provide us with your proposed disclosures.

David Holloway
Prosperity Bancshares, Inc.
December 2 4, 2014
Page 2

 2. We note your response to comment two f rom our letter dated October 14, 2014.  Please tell
us how your allowance for loan losses accounting policy for non -PCI loans is consistent with
ASC 310 -10-35-24 which requires you to compare to the present value of expected future
cash flows to the record ed investment and record a provision accordingly.  Also, please tell
us if you would record a different amount of provision for loan losses for each period
presented if you instead compared the present value of expected future cash flows to the
recorded in vestment of these loans.

You may contact John Spitz, Staff Accountant , at (202) 551 -3484  or me at (202) 551 -
3492  with any other questions.

Sincerely,

 /s/ John P. Nolan

John P. Nolan
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

CORRESP

 November 12, 2014

United States Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, NE

 Washington, DC 20549

Attention:
    Mr. John P. Nolan

Re:
Prosperity Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

 File No. 001-35388

 Mr. Nolan:

 Please accept this letter as the
responses of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation
Finance dated October 14, 2014 (the “Comment Letter”) with respect to the Company’s Form 10-K for the fiscal year ended December 31, 2013 (the “Form 10-K”).

For ease of reference, we have repeated each of the Staff’s comments below in bold, followed by the corresponding response of the Company.

Form 10-K for Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1.
We note your response to comment one from our letter dated August 26, 2014. Specifically, you proposed future filing revisions to disaggregate your non-performing loans and non- performing assets and also your
allowance for credit losses between your originated and acquired loan portfolio. Please also revise your future filings to provide the following:

•

Disaggregate your allowance for credit losses and other related data table on page 51 to differentiate between your originated and acquired loan portfolios; and

 United States Securities and Exchange Commission

November 12, 2014

 Page 2

 As explained in the Company’s response letter dated September 24, 2014, the
Company is unable to calculate the allowance for credit losses and other data attributed to loans originated by an acquired institution for periods prior to 2013 in the level of detail necessary to present the requested disclosures in their
entirety. Without the allowance information at December 31, 2012 to use as the beginning balance at January 1, 2013, the Company is also unable to provide the requested disclosure for the year ended December 31, 2013. However, in its
annual report on Form 10-K for the fiscal year ending December 31, 2014, the Company will be able to present the allowance and other related data as of December 31, 2014 segregated between its originated and acquired loan portfolios.

In order to address the matters covered by the Staff’s Comment Letter, the Company has provided additional detail of the division of its loan portfolio
into “legacy loans” and “acquired loans.” Within the category of “acquired loans” are “acquired legacy loans” and “fair-valued acquired loans,” which are further broken into “Non-PCI loans”
and “PCI loans.” A description of each type of loan is included in the following proposed disclosure, which would be included immediately prior to the “Overview” heading in the “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” section of the Company’s annual report on Form 10-K and quarterly report on Form 10-Q.

Included in this discussion and analysis are descriptions of the composition, performance, and credit quality of the Company’s loan
portfolio. The Company has two general categories of loans in its portfolio. Loans originated by Prosperity Bank and made pursuant to the Company’s loan policy and procedures in effect at the time the loan was made are referred to as
“legacy loans.” “Acquired loans” refer to all loans acquired in a business combination. Those acquired loans that are renewed or substantially modified after the date of the business combination, which therefore causes them to
become subject to the Company’s allowance for credit losses methodology, are referred to as “acquired legacy loans.” Modifications are reviewed for determination of troubled debt restructuring status independently of this process.
Acquired loans with a fair value discount or premium at the date of the business combination that remained at the reporting date are referred to as “fair-valued acquired loans.” All fair-valued acquired loans are further categorized into
“Non-PCI loans” and “PCI loans” (purchased credit impaired loans). Acquired loans with evidence of credit quality deterioration at acquisition for which it is probable that the Company would not be able to collect all contractual
amounts due are PCI loans.

 The Company respectfully submits the following proposed disclosure to disaggregate its allowance for credit losses and other
related data table, which would be included immediately after the table that currently appears in the Company’s quarterly report on Form 10-Q for the period ended June 30, 2014 (the
“Form 10-Q”) on page 50 under the caption “Financial Condition – Allowance for Credit Losses” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.

 United States Securities and Exchange Commission

November 12, 2014

 Page 3

 The following table presents, as of and for the periods
indicated, information regarding the allowance for credit losses differentiated between legacy loans and acquired loans. The charge-offs and recoveries with respect to the acquired loans shown below are primarily from acquired legacy loans. Reported
net charge-offs may include those from Non-PCI loans and PCI loans, but only if the total charge-off required is greater than the remaining discount.

As of and for the Six Months Ended June 30, 2014

Acquired

Legacy Loans

Loans

Total

(Dollars in thousands)

 Average loans outstanding

$
5,117,142

$
3,499,654

$
8,616,796

 Gross loans outstanding at end of period

$
5,260,467

$
4,047,695

$
9,308,162

 Allowance for credit losses at beginning of period

$
60,115

$
7,167

$
67,282

 Provision for credit losses

68

6,857

6,925

 Charge-offs:

 Commercial and industrial

(71
)

(131
)

(202
)

 Real estate and agriculture

(367
)

(593
)

(960
)

 Consumer and other

(1,844
)

(80
)

(1,924
)

 Recoveries:

 Commercial and industrial

159

26

185

 Real estate and agriculture

1,180

4

1,184

 Consumer and other

771

5

776

 Net charge-offs

(172
)

(769
)

(941
)

 Allowance for credit losses at end of period

$
60,011

$
13,255

$
73,266

 Ratio of allowance to end of period loans

1.14
%

0.33
%

0.79
%

 Ratio of net charge-offs to average loans (annualized)

0.01
%

0.04
%

0.02
%

 Ratio of allowance to end of period nonperforming loans

1750.6
%

66.3
%

312.9
%

•

Disclose how changes in credit quality of your originated loan portfolio and acquired loan portfolio are reflected in the amount of your provision for loan loss recorded during each period as issued in our previous
comment. Your analysis expand upon your current disclosure by quantifying each loan portfolio component of your allowance for credit losses (ASC 310-10, ASC 450-20) and explaining how incremental credit quality changes are reflected.

 The Company has revised its proposed disclosures to disclose what factors impact changes in the provision for loan losses, including
changes in credit quality of its legacy loans and acquired legacy loans.

 The Company respectfully submits the following proposed disclosure, which would
be included immediately after the table that currently appears on page 53 in the Form 10-K under the caption “Financial Condition – Allowance for Credit Losses” in the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section. As discussed below, the entirety of the Company’s proposed disclosure for its Allowance for Credit Losses in future annual reports, including the information below, is included herein in
Exhibit A.

 United States Securities and Exchange Commission

November 12, 2014

 Page 4

 Beginning in 2013, the Company further disaggregates its allowance for
credit losses to distinguish between the portion of the allowance attributed to legacy loans and the portion of the allowance attributed to acquired loans. The following table shows the allocation of the allowance for credit losses among various
categories of loans disaggregated between legacy loans, acquired legacy loans, Non-PCI loans and PCI loans. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which future losses may occur. The
total allowance is available to absorb losses from any loan category, regardless of whether allocated to a legacy loan or an acquired loan.

December 31, 2013

Acquired Loans

Legacy Loans

Acquired
Legacy
Loans

Non-PCI
Loans

PCI Loans

Total
Allowance

Percent of
Loans to
Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable to:

 Commercial and industrial

$
6,139

$
1,831

$
197

$
—

$
8,167

16.5
%

 Real estate

51,235

4,889

110

—

56,234

73.9
%

 Agriculture and agriculture real estate

1,174

55

—

—

1,229

6.8
%

 Consumer and other

1,567

71

14

—

1,652

2.8
%

 Total allowance for credit losses

$
60,115

$
6,846

$
321

$
—

$
67,282

100.0
%

 At December 31, 2013, the allowance for credit losses totaled $67.3 million, or 0.87% of total loans. At
December 31, 2012, the allowance aggregated $52.6 million or 1.01% of total loans and at December 31, 2011, the allowance was $51.6 million or 1.37% of total loans. At December 31, 2013, $6.8 million of the allowance for credit losses
was attributable to acquired legacy loans and $60.1 million of the allowance for credit losses was attributable to legacy loans. The allowance for credit losses as a percentage of total loans decreased 14 basis points at December 31, 2013
compared with December 31, 2012, primarily due to the disproportionate increase in fair-valued acquired loans. At December 31, 2013, $321 thousand in additional allowance was required for Non-PCI loans, which had purchase discounts
remaining of $87.8 million. In addition, no impairment charges or related allowances were required in 2013 for PCI loans.

 A change
in the allowance for credit losses can be attributable to several factors, including growth in the balance of legacy loans and the re-categorization of fair-valued acquired loans to acquired legacy loans, which subjects them to the allowance
methodology, historical credit loss information, specific reserves identified for impaired credits and changes in environmental factors. Due to the strong regional economy and historically low credit loss data, the increase in the allowance for
credit losses was primarily attributable to a growth in the legacy and acquired legacy loan balances.

 The Company respectfully submits the following
proposed disclosure, which would be included immediately after the table that currently appears on page 50 under the caption “Financial Condition – Allowance for Credit Losses” in the “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” section of the Company’s Form 10-Q. As discussed below, the entirety of the Company’s proposed disclosure for its Allowance for Credit Losses in future quarterly reports, including the
information below, is included herein in Exhibit B.

 The Company further disaggregates its allowance for credit losses to
distinguish between the portion of the allowance attributed to legacy loans and the portion of the allowance attributed to acquired loans. The following table shows the allocation of the allowance for credit losses among various categories of loans
disaggregated between legacy loans, acquired legacy loans, Non-PCI loans and PCI loans. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which future losses may occur. The total allowance is
available to absorb losses from any loan category, regardless of whether allocated to a legacy loan or an acquired loan.

 United States Securities and Exchange Commission

November 12, 2014

 Page 5

June 30, 2014

Acquired Loans

Legacy
Loans

Acquired
Legacy
Loans

Non-PCI
Loans

PCI
Loans

Total
Allowance

Percent of
Loans to
Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable to:

 Commercial and industrial

$
4,410

$
4,809

$
1,738

$
—

$
10,957

23.0
%

 Real estate

51,262

6,180

135

—

57,577

69.4
%

 Agriculture and agriculture real estate

1,172

249

27

—

1,448

5.8
%

 Consumer and other

3,167

89

28

—

3,284

1.8
%

 Total allowance for credit losses

$
60,011

$
11,327

$
1,928

$
—

$
73,266

100.0
%

December 31, 2013

Acquired Loans

Legacy
Loans

Acquired
Legacy
Loans

Non-PCI
Loans

PCI
Loans

Total
Allowance

Percent of
Loans to
Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable to:

 Commercial and industrial

$
6,139

$
1,831

$
197

$
—

$
8,167

16.5
%

 Real estate

51,235

4,889

110

—

56,234

73.9
%

 Agriculture and agriculture real estate

1,174

55

—

—

1,229

6.8
%

 Consumer and other

1,567

71

14

—

1,652

2.8
%

 Total allowance for credit losses

$
60,115

$
6,846

$
321

$
—

$
67,282

100.0
%

 At June 30, 2014, the allowance for credit losses totaled $73.3 million compared with $67.3 million at
December 31, 2013. At June 30, 2014, $11.3 million of the allowance for credit losses was attributable to acquired legacy loans compared with $6.8 million at December 31, 2013, an increase of $4.5 million or 65.5%. At June 30,
2014, the Company had $224.1 million of total outstanding discounts on acquired loans, of which $138.0 million was accretable.

 A change
in the allowance for credit losses can be attributable to several factors, including growth in the balance of legacy loans and the re-categorization of fair-valued acquired loans to acquired legacy loans, which subjects them to the allowance
methodology, historical credit loss information, specific reserves identified for impaired credits and changes in environmental factors. Due to the strong regional economy and historically low credit loss data, the increase in the allowance for
credit losses was primarily attributable to a growth in the legacy and acquired legacy loan balances.

 Please provide us with your
proposed disclosures as of both June 30, 2014 and December 31, 2013.

 In response to the Staff’s Comment Letter, the Company has
revised its proposed disclosures to be included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its annual reports on Form 10-K and quarterly reports on Form 10-Q. While the applicable
revised proposed disclosures are included within the Company’s responses to the Staff’s comments herein, the Company has also attached two exhibits that show the revised proposed disclosures as a whole within the context of the Form 10-K
and the Form 10-Q, as applicable. These exhibits include additional disclosures not included in the Company’s responses to the Staff’s comments herein that provide additional context and detail necessary for a full understanding of the
proposed disclosures.

 United States Securities and Exchange Commission

November 12, 2014

 Page 6

 The Company respectfully submits the proposed disclosures attached as Exhibit A
in response to the Staff’s comments, which would be included under the caption “Financial Condition” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Form
10-K. The Company will include similar disclosures in its future annual filings.

 In addition, the Company respectfully submits the proposed disclosures
attached as Exhibit B in response to the Staff’s comments, which would be included under the caption “Financial Condition” in the “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of the Company’s quarterly report on Form 10-Q. The Company will include similar disclosures in its future quarterly filings.

Further, as discussed with the Staff, the Company has included the majority of the proposed disclosures discussed her

CORRESP
1
filename1.htm

CORRESP

 October 23, 2014

Via EDGAR

 John P. Nolan

Senior Assistant Chief Accountant

 Division of Corporate Finance

 Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549

Re:
Prosperity Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

File No. 001-35388

 Dear Mr. Nolan:

 We have received your comment letter dated October 14, 2014 related to the filing referenced above. As previously discussed with you, we request an
additional ten business days to gather the necessary data, and therefore, expect to provide our response to your comment letter no later than November 12, 2014.

Very truly yours,

/s/ Charlotte M. Rasche

Charlotte M. Rasche

Executive Vice President and General Counsel

80 Sugar Creek Center Boulevard

Sugar Land, TX 77478

charlotte.rasche@prosperitybankusa.com

October 14 , 2014

Via E -mail
David Holloway
Chief Financial Officer
Prosperity Bancshares, Inc.
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
  Form 10 -K for th e Fiscal Year Ended December 31 , 2013
Filed February 28, 2104
File No. 001-35388

Dear Mr. Holloway :

We have reviewed your supplemental response  dated September 24, 2014 and have the
following comments.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to this letter within ten business days by providing the requested
information  or by advising us when you will provide the requested response.   If you do not
believe our comme nts apply to your facts and circumstances or do not believe future revisions
are appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments, including
the draft of your proposed disclosure s, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1. We note your response to comment one from our letter dated August 26, 2014.  Specifically,
you proposed future filing revisions to disaggregate your non -performing loans and non -
performing assets and also your allowance for credit losses between your originated and
acquired loan portfolio. Please also revise your future filings to provide the following :

 Disaggregate your allowance for credit losses and other related data table on page 51 to
differentiate between your originated and acquired loan portfolios; and

David Holloway
Prosperity Bancshares, Inc.
October 14 , 2014
Page 2

  Disclose how changes in credit quality of your originated loan portfolio and acquired
loan p ortfolio are reflected in the amount of your provision for loan loss recorded during
each period as issued in our previous comment. Your analysis expand  upon your current
disclosure by quantifying each loan portfolio component of your allowance for c redit
losses (ASC 310 -10, ASC 450 -20) and explaining how incremental credit quality changes
are reflected.

Please provide us with your proposed disclosures as of both June 30, 2014 and December 31,
2013.

2. As a related matter, please also address the foll owing with respect to your proposed
disclosures provided as a result of your response to comment one from our letter dated
August 26, 2014:

 You state that purchased credit impaired (PCI) loans are acquired loans not subject to
your allowance for credit losses methodology. ASC 310 -30-35-10 requires you to
continue to estimate cash flows expected to be collected over the life of the loan and to
record an allowance for credit losses when deemed necessary. Please revise your
proposed disclosures accordingly or further explain why these loans are not subject to
your allowance for credit losses methodology.
 Similarly, we note proposed disclosure tha t a loan originated at an acquired institution
that was originally subject to fair value accounting is subject to your allowance
methodology when loan renews or substantially modifies the terms of the loan (other than
a troubled debt restructuring). Please  explain in further detail what procedures are
performed on these loans subsequent to acquisition and how they are factored into your
allowance for credit losses as of each period.
 Please revise your tables presented on page six of your response for consis tency, if
necessary. Specifically, we note that while the total allowance for credit losses amounts
are the same for 2013, the individual loan portfolio segment totals are different, so please
revise or explain why this information is correct.

3. You state i n your proposed disclosures in response to comment one to our letter dated August
26, 2014 that as of December 31, 2013 and 2012 no additional allowance was required for
those loans not deemed credit -impaired that had remaining purchase discounts available  but
that you also have a $7.2 million allowance as of December 31, 2013 related to acquired
loans with no discount remaining. Please tell us and revise your future filings to address the
following:

 You state in your response that the difference between the initial fair value and the
unpaid principal balance is recognized as interest income on a level -yield basis over the
lives of the related loans. Please specify whether you are accreting this discount over the
expected or contractual lives of these acqu ired loans.   If you use expected cash flows,

David Holloway
Prosperity Bancshares, Inc.
October 14 , 2014
Page 3

 please disclose the information required by ASC 310 -30-50-2 separately from your ASC
310-30 disclosures.
 Explain in further detail when you determine whether or not to record an allowance for
credit losses on th ese acquired loans not deemed credit -impaired at acquisition. Please
clarify whether you compare a portion or the entire amount of the discount in your
determination as to whether or not to record an allowance for credit losses. Please
provide the authorit ative guidance you relied upon to support your accounting along with
any additional supp lemental  information  to enhance our understanding .

You may contact John Spitz, Staff Accountant , at (202) 551 -3484  or me at (202) 551 -
3492  with any other q uestions.

Sincerely,

 /s/ John P. Nolan

John P. Nolan
Senior Assistant Chief Accountant

CORRESP
1
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CORRESP

 September 24, 2014

United States Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, NE

 Washington, DC 20549

 Attention: Mr. John P. Nolan

 Re: Prosperity
Bancshares, Inc.

 Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

 File No. 001-35388

 Mr. Nolan:

 Please accept this letter as the
responses of Prosperity Bancshares, Inc. (the “Company”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in the letter from the Division of Corporation
Finance dated August 26, 2014 (the “Comment Letter”) with respect to the Company’s Form 10-K for the fiscal year ended December 31, 2013 (the “Form 10-K”).

For ease of reference, we have repeated each of the Staff’s comments below, followed by the corresponding response of the Company.

Form 10-K for Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1.
We note your table of the allowance for credit losses and other loan portfolio data. We also note that your loan portfolio continues to grow in large part due to acquisitions as summarized on page 47. Please tell us
and revise your future filings to address the following:

•

 You state on page 53 that as of December 31, 2013 and 2012, no allowance was required for acquired loans not deemed credit-impaired and
also that no impairment charges or related allowances were required in 2013 or 2012 for your acquired PCI loans. As a result of the significance of your acquired loan portfolio

 United States Securities and Exchange Commission

September 24, 2014

  Page
 2

with no corresponding allowance for credit losses for any period presented, please enhance the relevant sections of your MD&A disclosures to disaggregate your allowance for credit losses and
related asset quality disclosures differentiating between your acquired loan portfolio for all periods presented and your originated loan portfolio. Given the number of acquisitions in the last two fiscal years and the difference in size of each
consider disaggregating some of these disclosures by acquisition.

•

As a related matter, please revise future filings to more fully disclose how changes in the credit quality of your originated loan portfolio are reflected in the amount of your provision for loan loss recorded
during the period and the amount of the allowance for loan losses at period end as we only note brief disclosure on page 43. For example, please explain how the increase in your provision for loan losses by 183% in 2013 compared to 2012 compared to
organic loan growth of 5.6% as disclosed on page 47. Your analysis should quantify each loan portfolio component of your allowance for loan losses (ASC 310-10, 450-20) and explain how incremental credit quality changes are reflected.

 Please provide us with your proposed disclosures as of June 30, 2014 and December 31, 2013.

The Company recognizes that its disclosures of nonperforming assets and the allowance for credit losses would be enhanced by differentiating between loans
originated by the Company and loans originated by an acquired institution. Unfortunately, the level of detail necessary to calculate the requested information for periods prior to 2013 is not available, as further explained below. As a result, the
Company can differentiate loans included in nonperforming assets and the allowance for 2013, but is unable to calculate the amount of nonperforming assets and the allowance attributed to loans originated by an acquired institution for periods prior
to 2013 in the level of detail necessary to present the requested disclosures in their entirety. While the Company has been an active acquirer during 2012 and 2013, the Company made no whole-bank acquisitions in 2009-2011. Going forward, however,
the Company will revise its future filings to include the requested information for periods for which such data is available.

 The Company utilizes a
branding process for acquired loans whereby each loan is assigned a unique identifier, or “brand,” upon purchase. Prior to 2013, these brands were not consistently retained on renewed or otherwise modified acquired loans, which caused some
renewed or modified loans to lose their identification as loans originated at an acquired institution. Maintaining that distinction is important when disaggregating the allowance attributed to originated and acquired loans, respectively.
Accordingly, the migration of acquired loans recorded at fair value into the category of loans subject to the Company’s allowance for credit losses methodology would be incomplete because some acquired loans would have lost their assigned
brands at renewal. However, in its Form 10-K for the fiscal year ending December 31, 2014, the Company will be able to present the 2013 and 2014 nonperforming asset and allowance disaggregation, thereby enabling investors to see the migration
over that time period.

 As noted on page 81 of the Form 10-K for the fiscal year ended December 31, 2013 under the heading “Loans Held for
Investment,” [l]oans acquired in business combinations are initially recorded at fair value based on a discounted cash flow valuation methodology that considers, among other things, projected default rates, loss given defaults and recovery
rates with no carryover of any existing allowance for loan losses. Acquired loans with evidence of credit quality deterioration at acquisition are reviewed to determine if it is probable that the Company will not be able to collect all contractual
amounts due, including both principal and interest. When both conditions exist, such loans are accounted for as purchased credit-impaired (“PCI”).

For acquired loans not deemed credit-impaired at acquisition, the difference between the initial fair value and the unpaid principal balance is recognized as
interest income on a level-yield basis over the lives of the related loans.”

 United States Securities and Exchange Commission

September 24, 2014

  Page
 3

 The Company respectfully submits the following proposed disclosures related to disaggregating nonperforming
assets and the allowance for credit losses as of December 31, 2013, which would be included under the caption “Financial Condition” in the “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of the Form 10-K. The proposed disclosure below under the caption “Acquired Loans” would appear on page 51 of the Form 10-K immediately following the “Loan Portfolio” discussion, while the excerpted
disclosures below under the captions “Nonperforming Assets” and “Allowance for Credit Losses” would replace the applicable existing disclosures under the corresponding captions in the Form 10-K. The Company will include similar
disclosures in its future annual filings.

 Acquired Loans

For credit analysis purposes, the Company segregates its loans into two primary categories: originated loans and acquired loans. Originated
loans are loans that were originated by Prosperity Bank and were made pursuant to the Company’s loan policy and procedures in effect at the time the loan was made. Acquired loans include both those loans that were originated by an acquired
institution with a fair value discount or premium at the date of acquisition that remained at the reporting date as well as those loans that were originated at an acquired institution with a fair value discount or premium at the date of acquisition
but were subsequently renewed or substantially modified (other than Troubled Debt Restructurings) and therefore became subject to the Company’s allowance for credit losses methodology as a result.

Nonperforming Assets

 Nonperforming
assets include loans on nonaccrual status, accruing loans 90 days past due or more, and real estate which has been acquired through foreclosure and is awaiting disposition. Nonperforming assets do not include purchased loans that were identified
upon acquisition as having experienced credit deterioration since origination (“purchased credit impaired loans” or “PCI loans”). PCI loans are acquired loans not subject to the Company’s allowance for credit losses
methodology.

 The Company has several procedures in place to assist it in maintaining the overall quality of its loan portfolio. The
Company has established underwriting guidelines to be followed by its officers, and the Company also monitors its delinquency levels for any negative or adverse trends. There can be no assurance, however, that the Company’s loan portfolio will
not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.

 As part of the on-going
monitoring of the Company’s loan portfolio and the methodology for calculating the allowance for credit losses, management grades each loan from 1 to 9. Depending on the grade, loans in the same grade are aggregated and a loss factor is applied
to the total loans in the group to determine the allowance for credit losses. For certain loans in risk grades 7 to 9, a specific reserve may be taken.

The Company generally places a loan on nonaccrual status and ceases accruing interest when the payment of principal or interest is delinquent
for 90 days, or earlier in some cases, unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan.

The Company requires appraisals on loans collateralized by real estate. With respect to potential problem loans, an evaluation of the
borrower’s overall financial condition is made to determine the need, if any, for possible writedowns or appropriate additions to the allowance for credit losses.

 United States Securities and Exchange Commission

September 24, 2014

  Page
 4

 The Company’s conservative lending approach has resulted in sound asset quality. The
Company had $22.5 million in nonperforming assets at December 31, 2013 compared with $13.0 million at December 31, 2012 and $12.1 million at December 31, 2011. In order to gain a more effective understanding of the asset quality of
the loan portfolio, the Company determined it was appropriate to differentiate between nonperforming assets originated by the Company and nonperforming assets originated by acquired institutions. At December 31, 2013, $13.9 million of
nonperforming assets were originated by the Company and $8.6 million were originated at acquired institutions. The nonperforming assets at December 31, 2013 consisted of 40 separate credits or ORE properties.

The following table presents information regarding past due loans and nonperforming assets differentiated between originated loans and
acquired loans at December 31, 2013:

December 31,

2013

Originated

Acquired

Total

Amount

Amount

Amount

(Dollars in thousands)

 Nonaccrual loans

$
5,386

$
4,845

$
10,231

 Accruing loans 90 or more days past due

1,408

3,539

4,947

 Total nonperforming loans

6,794

8,384

15,178

 Repossessed assets

17

10

27

 Other real estate

7,071

228

7,299

 Total nonperforming assets

$
13,882

$
8,622

$
22,504

 Nonperforming assets to total loans and other real estate

0.29
%

 The following table presents information regarding past due loans and nonperforming assets at the dates
indicated:

December 31,

2013

2012

2011

2010

2009

(Dollars in thousands)

 Nonaccrual loans

$
10,231

$
5,382

$
3,578

$
4,439

$
6,079

 Accruing loans 90 or more days past due

4,947

331

—

189

2,332

 Total nonperforming loans

15,178

5,713

3,578

4,628

8,411

 Repossessed assets

27

68

146

161

116

 Other real estate

7,299

7,234

8,328

11,053

7,829

 Total nonperforming assets

$
22,504

$
13,015

$
12,052

$
15,842

$
16,356

 Nonperforming assets to total loans and other real estate

0.29
%

0.25
%

0.32
%

0.45
%

0.48
%

 United States Securities and Exchange Commission

September 24, 2014

  Page
 5

 Allowance for Credit Losses

[….]

 Loans acquired were
initially recorded at fair value, which included an estimate of credit losses expected to be realized over the remaining lives of the loans, and therefore no corresponding allowance for credit losses was recorded for these loans at acquisition.
Methods utilized to estimate the required allowance for credit losses for acquired loans not deemed credit-impaired at acquisition are similar to originated loans; however, the estimate of loss is based on the unpaid principal balance less the
remaining purchase discount. The Company further disaggregates its allowance for credit losses to distinguish between the portion of the allowance attributed to originated loans and the portion of the allowance attributed to acquired loans that are
now subject to the Company’s allowance for credit losses methodology. A loan originated at an acquired institution that was originally subject to fair value accounting is subject to the Company’s allowance methodology when the Company
renews or substantially modifies the terms of the loan (other than a Troubled Debt Restructuring). The most common instance occurs at maturity of the acquired loan when the Company subsequently renews the loan under its current underwriting
standards.

 At December 31, 2013, the allowance for credit losses totaled $67.3 million, or 0.87% of total loans. At
December 31, 2012, the allowance aggregated $52.6 million or 1.01% of total loans and at December 31, 2011, the allowance was $51.6 million or 1.37% of total loans. At December 31, 2013, $7.2 million of the allowance for credit losses
was attributable to acquired loans with no discount remaining that are subject to the Company’s allowance for credit losses methodology. The allowance for credit losses as a percentage of total loans decreased 14 basis points at
December 31, 2013 compared with December 31, 2012, due to the disproportionate increase in acquired loans subject to fair value accounting. At December 31, 2013 and 2012, no additional allowance was required for those acquired loans
not deemed credit-impaired that had purchase discounts remaining of $87.8 million and $56.2 million, respectively. Acquired loans with purchase discount remaining are evaluated at period end in order to determine if the discount remaining is
adequate to cover potential credit losses and therefore, require no additional allowance. Purchased credit impaired (PCI) loans are not considered nonperforming loans and are not subject to the Company’s allowance methodology. PCI loans had
$45.5 million and $23.8 million of purchase discounts outstanding at December 31, 2013 and 2012, respectively, of which $9.9 million and $7.5 million, respectively, is considered accretable. No impairment charges or related allowances were
required in 2013 or 2012 for acquired PCI loans.

 United States Securities and Exchange Commission

September 24, 2014

  Page
 6

 The following table shows the allocation of the allowance for credit losses among various
categories of loans disaggregated between originated loans and acquired loans. The allocation is made for analytical purposes and is not necessarily indicative of the categories in which future losses may occur. The total allowance is available to
absorb losses from any loan category, regardless of whether allocated to an originated loan or an acquired loan.

December 31,

2013

Originated
Amount

Acquired
Amount

Total
Amount

Percent of
Loans to
Total Loans

(Dollars in thousands)

 Balance of allowance for credit losses applicable to:

 Commercial and industrial

$
5,164

$
2,028

$
7,192

16.5
%

 Real estate

52,777

4,999

57,776

73.9
%

 Agriculture

993

55

1,048

6.8
%

 Consumer and other

1,181

85

1,266

2.8
%

 Total allowance for credit losses

$
60,115

$
7,167

$
67,282

100.0
%

 The following table shows the allocation of the allowance for credit losses among various categories of loans
and certain other information as of the dates indicated. The allocation is made for a

CORRESP
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CORRESP

 September 3, 2014

Via EDGAR

 John P. Nolan

Senior Assistant Chief Accountant

 Division of Corporate Finance

 Securities and Exchange Commission

 100 F Street, N.E.

Washington, D.C. 20549

Re:
Prosperity Bancshares, Inc.

Form 10-K for the Fiscal Year Ended December 31, 2013

Filed February 28, 2014

File No. 001-35388

 Dear Mr. Nolan:

We have received your comment letter dated August 26, 2014 related to the filing referenced above. As discussed with you today, we request an additional
ten business days to gather the necessary data, and therefore, expect to provide our response to your comment letter no later than September 24, 2014.

Very truly yours,

/s/ Charlotte M. Rasche

 Charlotte M. Rasche

 Sr. Executive Vice
President and General Counsel

 80 Sugar Creek Center Boulevard

Sugar Land, TX 77478

charlotte.rasche@prosperitybankusa.com

August 26, 2014

Via E -mail
David Holloway
Chief Financial Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, Texas 77027

Re: Prosperity Bancshares, Inc.
  Form 10 -K for th e Fiscal Year Ended December 31 , 2013
Filed February 28, 2104
File No. 001-35388

Dear Mr. Holloway :

We have reviewed your filing an d have the following comments .  In our comments , we
may ask you to provide us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by providing the requested
information or by advising us when you will provide the requested response.   If you do not
believe our comme nts apply to your facts and circumstances , pleas e tell us why in your response.

After reviewing the information you provide in response to these comments , we may
have  additional comments.

Form 10 -K for Fiscal Year Ended December 31, 2013

Allowance for Credit Losses, page 51

1. We note y our table of the allowance for credit losses and other loan portfolio data.  We also
note that your loan portfolio continues to grow in large part due to acquisitions as
summarized on page 47. Please tell us and revise your future filings to address the fo llowing:

 You state on page 53 that as of December 31, 2013 and 2012, no allowance was required
for acquired loans not deemed credit -impaired and also that no impairment charges or
related allowances were required in 2013 or 2012 for your acquired PCI loan s. As a
result of the significance of your acquired loan portfolio with no corresponding
allowance for credit losses for any period presented, please enhance the relevant sections

David Holloway
Prosperity Bancshares, Inc.
August 26, 2014
Page 2

 of your MD&A disclosures to disaggregate your allowance for credit losses an d related
asset quality disclosures differentiating between your acquired loan portfolio for all
periods presented and your originated loan portfolio. Given the number of acquisitions in
the last two fiscal years and the difference in size of each consider  disaggregating some
of these disclosures by acquisition.
 As a related matter, please revise future filings to more fully disclose how changes in the
credit quality of your originated loan portfolio are reflected in the amount of your
provision for loan loss recorded during the period and the amount of the allowance for
loan losses at period end as we only note brief disclosure on page 43.  For example,
please explain how  the increase in your provision for loan losses by 183% in 2013
compared to 2012 comp ared to organic loan growth of 5.6% as disclosed on page
47.  Your analysis should quantify each loan portfolio component of your allowance for
loan losses (ASC 310 -10, 450 -20) and explain how incremental credit quality changes
are reflected.

Please pro vide us with your proposed disclosures as of June 30, 2014 and December 31,
2013.

Note 2. Acquisitions, page 85

2. We note your acquired PCI loan disclosure on page 87 and that the information appears to be
presented only for the 2013 acquisitions.   ASC 310 -30-50 requires certain disclosures, like
outstanding balance and related carrying amount, for all acquired loans, not just those
acquired during the period.   Please revise your future filings to include the applicable
disclosures for all acquisitions and consider providing disaggregated disclosures for
significant acquisitions given the number of acquisitions in the last two years.

             We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

            In responding to our comments, please provide  a writt en statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

David Holloway
Prosperity Bancshares, Inc.
August 26, 2014
Page 3

  the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact John Spitz, Staff Accoun tant, at (202) 551 -3484  or me at (202) 551 -
3492  with any other questions.

Sincerely,

 /s/ John P. Nolan

John P. Nolan
Senior Assistant Chief Accountant

Mail Stop 4561         June 30, 2009
Via US Mail and facsimile to (281) 269-7222

David Zalman Chief Executive Officer Prosperity Bancshares, Inc. Prosperity Bank Plaza 4295 San Felipe Houston, TX 77027

Re: Prosperity Bancshares, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2008
Filed March 2, 2009
 File No. 000-25051

Dear Mr. Zalman:

 We have completed our review of your Form 10-K for fiscal year ended
December 31, 2008 and have no further comments  at this time.  Pl ease contact Allicia
Lam at (202) 551-3316 or me at (202) 551-3419
 with any questions.

          S i n c e r e l y ,

Christian Windsor
        S p e c i a l  C o u n s e l

CORRESP
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Correspondence

 [Letterhead of Prosperity Bancshares, Inc.]

 May 18, 2009

 United States Securities and Exchange
Commission

 Division of Corporate Finance

 100 F Street, N.E.

 Mail Stop 4561

 Washington, D.C. 20549

Re:
Prosperity Bancshares, Inc.

 Form 10-K for Fiscal Year
Ended December 31, 2008

 Filed March 2, 2009

 File No. 000-25051

 Ladies and Gentlemen:

 The purpose of this letter is to provide the response of Prosperity Bancshares, Inc. (the “Company”) to your letter dated April 10, 2009 to David Zalman, Chief Executive Officer of the Company, setting
forth the comments of the Division of Corporate Finance (the “Staff”) regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. For your convenience, we have repeated the Staff’s
comments and used the section headings and numbering used by the Staff in its letter.

 Form 10-K for the Fiscal Year Ended December 31, 2008

 Item 11. Executive Compensation, page 64

 Executive Compensation and Other Matters, page 14 of the Definitive Proxy Statement on Schedule 14A

1.
You state that the Compensation Committee monitors the base salary levels and various incentives of the named executive officers of the Company to ensure that overall
compensation remains competitive within the peer group. Please tell us whether you benchmark the compensation of your named executive officers to a certain percentage or range of compensation within your peer group.

 The Company does not benchmark the compensation of its named executive officers to a certain percentage or range of compensation within its peer group. Instead, as noted
on page 15 of the Company’s proxy statement for its 2009 annual meeting of shareholders (the “2009

United States Securities and Exchange Commission

 May 18,
2009

 Page 2

 Proxy Statement”), the Compensation
Committee of the Company’s Board of Directors reviews the compensation of the Chairman of the Board and Chief Executive Officer and the other named executive officers relative to the compensation paid to similarly situated executives at
companies that the Company considers to be peer companies. The list of peer companies is disclosed in the 2009 Proxy Statement. The Compensation Committee uses this information as a point of reference for measurement, but not as the determinative
factor in setting the compensation of the Company’s named executive officers. The Company does not use compensation data of its peer group to “target” a specific peer group compensation level for any given executive. Rather, the
Compensation Committee uses its understanding of peer group compensation as a starting point for its decision-making.

 Because the comparative compensation
information is just one of the analytical tools that is used in setting named executive officer compensation, the Compensation Committee has discretion in determining the nature and extent of its use. Further, given the limitations associated with
comparative pay information for setting individual executive compensation, including the difficulty of assessing and comparing wealth accumulation through equity gains and post employment amounts, the Compensation Committee may elect not to use the
comparative compensation information at all in the course of making compensation decisions.

 In response to the Staff’s comment, the Company will
revise the disclosure included in its future proxy statements and any other applicable filings to enhance the discussion of the Compensation Committee’s use of competitive compensation information from its peer group in making compensation
decisions with respect to the Company’s named executive officers.

2.
You have not disclosed the specific targets for the eight performance indicators, including total return, increase in earnings per share, increase in deposits, increase in
assets, increase in loans, return on average equity, the efficiency ratio and increase in dividends that were used as bases for awarding cash bonuses to your named executive officers. To the extent you believe that disclosure of the historical
performance targets is not required because it would result in competitive harm such that the targets could be excluded under Instruction 4 to Item 402(b) of Regulation S-K, please provide a detailed supplemental analysis supporting your
conclusion. In particular, your competitive harm analysis should clearly explain the nexus between disclosure of the performance objectives and the competitive harm that is likely to result from disclosure. Refer to Item 402(b)(2)(v) of
Regulation S-K and Regulation S-K Compliance and Disclosure Interpretation 118.04.

 United States Securities and Exchange Commission

 May 18, 2009

  Page
 3

 In response to the Staff’s comment and after further review of this topic, in future proxy statements and any
other applicable filings, the Company will include information concerning the specific historical performance targets used to set the annual incentive bonus for the preceding fiscal year. This information will supplement the Company’s existing
disclosure with respect to the non-equity incentive compensation for its named executive officers.

 For example, in the proxy statement for its 2010 annual
meeting of shareholders, the Company will disclose the actual performance targets used to determine the annual incentive bonus awarded to the Company’s named executive officers for the immediately preceding 2009 fiscal year. The information the
Company proposes to include in its future proxy statements and any other applicable filings will provide a level of disclosure substantially similar to the information set forth below, which is presented for the 2008 fiscal year.

 “For 2008, the performance goals were quantitative in nature and the Compensation Committee determined the 2008 annual incentive
bonus based on achievement of those quantitative goals. In determining the amount of the annual incentive bonus, a target performance goal is established with respect to eight performance indicators. These indicators consist of total return,
increase in earnings per share, increase in deposits, increase in assets, increase in loans, return on average equity, efficiency ratio and increase in dividends. A specific percentage weight of the total eligible bonus is allocated to each of these
performance indicators. Additionally, a portion of the bonus may be awarded by the Compensation Committee in its sole discretion based on subjective factors.

 In 2008, 20% of the total eligible bonus was allocated to each of total return and increase in earnings per share, 15% was allocated to
each of return on average equity and the discretionary portion, 10% was allocated to efficiency ratio and 5% was allocated to each of the remaining performance indicators. If the Company’s performance reaches or exceeds the target goal with
respect to a particular indicator, the named executive officer will receive a bonus for such indicator based on the amount by which actual performance exceeded the target goal.

 United States Securities and Exchange Commission

 May 18, 2009

  Page
 4

 For the 2008 fiscal year, the target goals and calculation factor for each of the
eight performance indicators were as follows:

 Indicator

Target

 Calculation Factor

 Total return

8.00
%

1.5% for each 1.0% above the target

 Increase in earnings per share

10.00
%

1.5% for each 1.0% above the target

 Increase in deposits

5.00
%

1.0% for each 1.0% above the target

 Increase in assets

5.00
%

1.0% for each 1.0% above the target

 Increase in loans

5.00
%

1.0% for each 1.0% above the target

 Return on average equity

12.00
%

2.0% for each 1.0% above the target

 Efficiency ratio

55.00
%

1.0% for each 1.0% below the target

 Increase in dividends

7.00
%

1.0% for each 1.0% above the target

 In the event the Company’s performance is less than the target goal with
respect to a particular performance indicator, no incentive compensation is payable for that particular indicator. For 2008, the aggregate annual incentive bonus earned by the named executive officers averaged 36.20% of their aggregate base
salaries.”

 The Company respectfully requests that it not be required to amend its 2009 Proxy Statement in response to the Staff’s comments. The
Company’s 2009 Proxy Statement was mailed to its shareholders on or about March 20, 2009 and the Company’s 2009 annual meeting of shareholders was held on April 21, 2009. Further, the Company has disclosed the specific
information that would be included in any amendment to its 2009 Proxy Statement in this response letter, which will be publicly available. Accordingly, the Company believes that amending its 2009 Proxy Statement to include the aforementioned
information would provide its shareholders and others with little, if any, benefit. As noted above, the Company proposes to supplement its disclosure in future proxy statements and any other applicable filings to address the Staff’s comments.

 In connection with this response letter with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008,
the Company acknowledges that (i) it is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Securities and Exchange
Commission from taking any action with respect to the filing; and (iii) the Staff’s position is that the Company may not assert Staff comments as a defense in any proceeding initiated by the Securities and Exchange Commission or any person
under the federal securities laws of the United States.

 United States Securities and Exchange Commission

 May 18, 2009

  Page
 5

 If you have any questions or need additional information regarding this letter, please contact me at (281) 269-7205.

Very truly yours,

 /s/ Peter Fisher

 Peter Fisher

 General Counsel

Mail Stop 4561         April 10, 2009
Via US Mail and facsimile to (281) 269-7222

David Zalman Chief Executive Officer Prosperity Bancshares, Inc. Prosperity Bank Plaza 4295 San Felipe Houston, TX 77027

Re: Prosperity Bancshares, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2008
Filed March 2, 2009
 File No. 000-25051

Dear Mr. Zalman:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.
 Form 10-K for the Fiscal Year Ended December 31, 2008

 Item 11.  Executive Compensation, page 64

 Executive Compensation and Other Matters, page 14 of Definitive Proxy Statement on
Schedule 14A
 1. You state that the Compensation Committee monitors the base salary levels and
various incentives of the named executive officers of the Company to ensure that

David Zalman, Chief Executive Officer
Prosperity Bancshares, Inc.
Page 2 of 3
overall compensation remains competitive within the peer group.  Please tell us
whether you benchmark the compensation of your named executive officers to a
certain percentage or range of compensation within your peer group.

2. You have not disclosed the specific target s for the eight performance indicators,
including total return, increase in earnings  per share, increase in deposits, increase
in assets, increase in loans, return on average equity, the efficiency ratio and
increase in dividends that were used as bases for awarding cash bonuses to your
named executive officers.  To the extent  you believe that disclosure of the
historical performance targets is not required because it would result in
competitive harm such that the targets could be excluded under Instruction 4 to Item 402(b) of Regulation S-K, please provide a detailed supplemental analysis supporting your conclusion.  In particular , your competitive harm analysis should
clearly explain the nexus between disclo sure of the performance objectives and
the competitive harm that is likely to result from disclosure.  Refer to Item
402(b)(2)(v) of Regulation S-K and Regul ation S-K Compliance and Disclosure
Interpretation 118.04.

 As appropriate, please amend your filing and respond to these comments within
10 business days or tell us when you will provid e us with a response.  You may wish to
provide us with marked copies of the amendm ent to expedite our review.  Please furnish
a cover letter with your amendment that keys your responses to our comments and
provides any requested information.  Detailed co ver letters greatly faci litate our review.
Please understand that we may have addi tional comments after reviewing your
amendment and responses to our comments.
   We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

David Zalman, Chief Executive Officer
Prosperity Bancshares, Inc. Page 3 of 3
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.     Please contact Allicia Lam, Staff Attorn ey, at (202) 551-3316 or me at (202) 551-
3698 with any questions.
Sincerely,

Mark Webb Legal Branch Chief

Mail Stop 4561

September 7, 2007

Mr. David Hollaway
Chief Financial Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX 77027

Re: Prosperity Bancshares, Inc.
  Form 10-K for the Fiscal Year Ended December 31, 2006
  File No. 000-25051

Dear Mr. Hollaway:

We have completed our review of your Form 10-K and related filings and have no
further comments at this time.

Sincerely,

Donald Walker
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

SEC Correspondence Letter

 [Letterhead of Prosperity Bancshares, Inc.]

 August 17, 2007

 Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Mail Stop 4561

 Washington, D.C. 20549

Re:
Prosperity Bancshares, Inc.

Form 10-K for Fiscal Year Ended December 31, 2006

Form 10-Q for the Quarter Ended March 31, 2007

File No. 000-25051

 Ladies and Gentlemen:

 The purpose of this letter is to respond to your letter dated July 11, 2007 to David Hollaway, Chief Financial Officer of Prosperity Bancshares, Inc. (the
“Company”), setting forth the staff’s comments regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and the Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007.

 Form 10-K for the Fiscal Year Ended December 31, 2006:

 Management’s Discussion and Analysis

 Allowance for Credit Losses, page 40

1.
We note your disclosure on page 42 that in 2006 the company revised its allowance methodology to provide for more specific allowance of its reserves.

 Securities and Exchange Commission

 August 17, 2007

 Page 2

Please describe for us your previous methodology related to your unallocated allowance and the methodology changes implemented in 2006.

 Prior to 2006, the Company determined the unallocated portion of its allowance for credit losses by developing and applying a loss factor based on
historical losses and various environmental risk factors over all loans outstanding in the Company’s loan portfolio. Beginning in 2006, the Company enhanced its methodology for determining the unallocated portion of the allowance for credit
losses by segmenting these factors and risk criteria with respect to the various categories of outstanding loans. Accordingly, different loss factors are applied to different categories of loans, depending on the environmental risk factors as well
as the historical charge-off data related to such loans. The enhancements to the methodology by themselves did not result in any changes to the Company’s overall allowance for credit losses.

 Consolidated Financial Statements

 Note 7 –
Allowance for Credit Losses, page 83

2.
Please provide us with a comprehensive analysis describing how you applied the guidance of SOP 03-3 for each acquisition completed during 2005 and 2006. Quantify and
describe the nature of non-performing loans acquired and describe your determination of which loans were within the scope of the SOP.

 In 2005, the Company completed the acquisitions of First Capital Bankers, Inc. and Grapeland Bancshares, Inc. and in 2006, the Company completed the acquisition of SNB Bancshares, Inc. Prior to consummation of each of
these acquisitions, the target entity disposed of a portion of its loans, including all loans that were deemed by such entity to be nonperforming at that time.

 The Company evaluated each target entity’s loan portfolio at the acquisition date. To identify loans within the scope of Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in
a Transfer, the Company reviewed the loans acquired from each target entity to determine those that (1) have experienced deterioration of credit quality between origination and the date of acquisition and (2) for which it was probable,
at the acquisition date, that the Company will be unable to collect all contractually required payments receivable. To identify loans that could meet these two criteria, the Company reviewed the each target entity’s loans that were past

 Securities and Exchange Commission

 August 17, 2007

 Page 3

 due 90
days or more, designated as non-accrual or had higher risk ratings. Each identified loan was reviewed to determine the likelihood of repayment, including the strength of the underlying collateral and the borrower’s financial position.

 At each respective acquisition date, the Company believed that it would be able collect all the contractually required payments related to
the acquired loans. Accordingly, the Company acquired no loans with which there was an expected difference between contractual cash flows and expected cash flows that would have brought such loans within the scope of SOP 03-3.

 Form 10-Q for the Quarterly Period Ended March 31, 2007:

 Management’s Discussion and Analysis

 Allowance for Credit Losses, page 18

3.
We note your disclosure that the allowance balance acquired with acquisitions in the three months ended March 31, 2007 was approximately $12.7 million. Please reconcile
for us the allowance balance acquired with the sum of the allowance for loan losses of the Texas United Bancshares bank subsidiaries as disclosed in their December 31, 2006 Call Reports. Describe for us the reasons for the significant increase
in the allowance between December 31, 2006 and January 31, 2007, including the nature and amounts of any adjustments made to the allowance prior to or in connection with the acquisition.

 In late December 2006, Texas United Bancshares, Inc. (“Texas United”) sold approximately $20.5 million in loans at a discount. The balances of
such loans remaining, aggregating $3.8 million, were then charged off. Texas United advised the Company that, based upon the sale of such loans and the related charge-offs, and in accordance with its methodology for determination of the allowance
for loan losses, Texas United made a provision for loan losses of $4.2 million in January 2007 to increase its allowance for loan losses to an amount that it determined would be adequate to cover probable losses inherent in the Texas United loan
portfolio. Subsequent to taking this provision, Texas United recorded additional charge-offs against the allowance for loan losses which resulted in a net increase in the Texas United allowance during January 2007 of $3.7 million. These transactions
took place prior to the Company’s acquisition of Texas United.

 Securities and Exchange Commission

 August 17, 2007

 Page 4

 A
breakdown of the transactions in the Texas United allowance for loan losses during January 2007 is as follows (dollars in thousands):

 Beginning Balance 12/31/06:

$
8,981
(1)

 Texas United provision for loan losses

4,224

 Texas United net charge-offs

(465
)

 Ending Balance 1/31/07:

$
12,740

(1)
Includes $3.8 million in net charge-offs made in late December 2006.

 There were no adjustments made to the Texas United allowance for loan losses in connection with the acquisition. The Company evaluated the guidance contained in item A.5, Topic 2: Business Combinations of Staff
Accounting Bulletin Releases related to “adjustments to allowances for loan losses in connection with business combinations” in determining the appropriate level of allowance that should be recorded on the Company’s books related
to the acquisition. The Company concluded that the amount recorded was appropriate based on the Company’s established methodology in determining the adequacy of its allowance for credit losses.

4.
Please describe for us how you applied the guidance of SOP 03-3 for loans acquired in the Texas United Bancshares acquisition. Quantify and describe the nature of
non-performing loans acquired and describe your determination of which loans were within the scope of the SOP.

 To
identify loans within the scope of SOP 03-3, the Company reviewed the loans acquired from Texas United to determine those that (1) have experienced deterioration of credit quality between origination and the date of acquisition and (2) for
which it was probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable. To identify loans that could possibly meet these two criteria, the Company reviewed the Texas United loans that were
past due 90 days or more, designated as non-accrual or had higher risk ratings. Each identified loan was reviewed to determine the likelihood of repayment, including the strength of the underlying collateral and the borrower’s financial
position.

 Any loan for which the discounted value of the expected cash flows resulted in a deficit was deemed to be impaired under SOP
03-3. The Company identified ten loans that had

 Securities and Exchange Commission

 August 17, 2007

 Page 5

 a total
outstanding balance of approximately $799,000 at the date of acquisition which it deemed to be impaired under SOP 03-3. As indicated in response to question 3 above, a portion of the loans in the Texas United loan portfolio were sold at a discount
with any remaining portion charged off prior to the acquisition date.

 Form 8-K filed July 3, 2007:

5.
We note your disclosure that the merger agreement amendment increases The Bank of Navasota’s minimum allowance for loan losses from 1.3% to 2.0%. Please tell us the reasons
for this amendment to the merger agreement.

 The Agreement and Plan of Reorganization dated as of May 1, 2007, as
amended (the “Merger Agreement”), by and among the Company, Prosperity Bank and The Bank of Navasota, N.A. (the “Bank”) was amended to correct a typographical error. The Merger Agreement includes a requirement that as of the last
day of the calendar month immediately preceding the closing date of the merger, the Bank’s allowance for loan losses be in an amount equal to at least 2.0% of total loans as of such date (the “Minimum Allowance Requirement”). The
Merger Agreement also includes a provision that requires a deduction to the merger consideration if the Bank’s equity capital on the closing date of the merger is less than a specified dollar amount. The purpose of the Minimum Allowance
Provision is to prevent the Bank from attempting to increase its equity capital by reducing or ceasing to make provisions to its allowance for loan losses pursuant to its established methodology during the time between execution of the Merger
Agreement and the closing date. During negotiations, the parties determined that the Minimum Allowance Requirement would be equal to the Bank’s ratio of the allowance for loan losses to total loans as of the Bank’s most recent financial
statements provided to the Company. As of the date of the letter of intent executed by the parties, the Bank’s ratio of the allowance for loan losses to total loans was 2.0%. The ratio of 1.3% included in the original agreement was a
typographical error. When the parties realized this error, the Merger Agreement was amended to reflect the intent of the parties.

 Securities and Exchange Commission

 August 17, 2007

 Page 6

 In connection with this
response letter with respect to the Company’s Form 10-K for the fiscal year ended December 31, 2006 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, the Company hereby acknowledges that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

•

 staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United
States.

Very truly yours,

/s/ David Hollaway

 David Hollaway

 Chief Financial
Officer

Mail Stop 4561

July 11, 2007

Mr. David Hollaway
Chief Financial Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX 77027

Re: Prosperity Bancshares, Inc.
  Form 10-K for the Fiscal Year Ended December 31, 2006
Form 10-Q for the Fiscal Quarter Ended March 31, 2007
  File No. 000-25051

Dear Mr. Hollaway:

We have reviewed your filings and have the following comments.  We have
limited our review to only your financial statements and related disclosures and do not
intend to expand our review to other portions of your documents.  In our comments we ask you to provide us with information so we may better understand your disclosure.  Please be as detailed as necessary in your explanation.  After reviewing this information, we may raise additional comments.

 Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2006:

Management’s Discussion and Analysis

Allowance for Credit Losses, page 40

1. We note your disclosure on page 42 that in 2006 the company revised its allowance methodology to provide for more specific allowance of its reserves.  Please describe for us your previous methodology related to your unallocated allowance and the methodology changes implemented in 2006.

Mr. David Hollaway
Prosperity Bancshares, Inc.
7/11/2007 Page 2

Consolidated Financial Statements

Note 7 – Allowance for Credit Losses, page 83

2. Please provide us with a comprehensive analysis describing how you applied the guidance of SOP 03-3 for each acquisition completed during 2005 and 2006.  Quantify and describe the nature of non-performing loans acquired and describe your determination of which loans were within the scope of the SOP.

Form 10-Q for the Quarterly Period Ended March 31, 2007:

Management’s Discussion and Analysis

Allowance for Credit Losses, page 18

3. We note your disclosure that the allowance balance acquired with acquisitions in the three months ended March 31, 2007 was approximately $12.7 million.  Please reconcile for us the allowance balance acquired with the sum of the allowance for loan losses of the Texas United Bancshares bank subsidiaries as disclosed in their December 31, 2006 Call Reports.  Describe for us the reasons for the significant increase in the allowance between December 31, 2006 and January 31, 2007, including the nature and amounts of any adjustments made to the allowance prior to or in connection with the acquisition.

4. Please describe for us how you applied the guidance of SOP 03-3 for loans acquired in the Texas United Bancshares acquisition.  Quantify and describe the nature of non-performing loans acquired and describe your determination of which loans were within the scope of the SOP.

Form 8-K filed July 3, 2007:

5. We note your disclosure that the merger agreement amendment increases The Bank of Navasota’s minimum allowance for loan losses from 1.3% to 2.0%.  Please tell us the reasons for this amendment to the merger agreement.

* * * *

Please respond to these comments within 10 business days or tell us when you
will provide us with a response.  Please submit your response letter on EDGAR.  Please understand that we may have additional comments after reviewing your response to our comments.

Mr. David Hollaway
Prosperity Bancshares, Inc.
7/11/2007 Page 3
  We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision.  Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comment, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in our review
of your filing or in response to our comment on your filing.

You may contact Joyce Sweeney, Staff A ccountant, at (202) 551-3449, or me at
(202) 551-3490 if you have any questions.

Sincerely,

Donald Walker
Senior Assistant Chief Accountant

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

October 21, 2005

Mail Stop 4561

By U.S. Mail and facsimile to (979)543-1906

Mr. David Zalman,
President and Chief Executive Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX  77027

Re:	Prosperity Bancshares, Inc
      Form 10-K for Fiscal Year Ended December 31, 2004
	File No.  000-25051

Dear Mr. Zalman:

	We have completed our targeted review of your Form 10-K and
related filings and have no further comments at this time.

					Sincerely,

		Amit Pande
		Assistant Chief Accountant

</TEXT>
</DOCUMENT>

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

September 7, 2005
Mail Stop 4561

By U.S. Mail and facsimile to (979)543-1906

Mr. David Zalman,
President and Chief Executive Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX  77027

Re:	Prosperity Bancshares, Inc
      Form 10-K for Fiscal Year Ended December 31, 2004
	File No.  000-25051

Dear Mr. Zalman:

      We have reviewed your response letter dated August 24, 2005
and
have the following additional comments.

Form 10-K

Notes to the Consolidated Financial Statements

Note 5.  Securities, page 69 and 70

1. Please refer to prior comment #1.  Please provide the terms for
the preferred security series you hold including but not limited
to:
* Whether the series are callable or not, cumulative or not,
perpetual or not and the related terms,
* The interest rate indices they are tied to for reset,
* The reset schedule and terms of pricing and price at each reset
date.

2. In your response letter dated August 24, 2005 you cited two
preferred security series as examples for supporting your recovery
projections for your preferred security series that are currently
in
unrealized loss positions.  Your recovery assumptions rely on the
preferred securities repricing models to behave similarly to bond
models; however these securities have similar risks to those
associated with equity securities as well.   Please tell us how
you
considered the following in your analysis:

* The change in the credit rating of the issuing companies from
the
time the series were issued to present day;
* Any additional impact credit rating change would have on
repricing;
* The availability and applicability of preferred stock valuation
models:
* The impact and basis of the reset options, reset intervals, and
length of the reset schedule;
* The very low levels of interest rates at previous reset dates,
and
the higher current levels of interest rates, and the expected
changes
in interest rates;
* The degree of comparability between the terms of the example
securities and the preferred security series you hold; and
* Any additional information that supports your belief that your
securities will behave in the same manner as the example
securities.

* * * * *

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments and provide any
requested supplemental information.  Detailed letters greatly
facilitate our review.  Please understand that we may have
additional
comments after reviewing your response to our comments.

	You may contact Paula Smith (Staff Accountant) at (202) 551-
3696
or me at (202) 551-3490 if you have any questions regarding
comments
on the financial statements and related matters.

Sincerely,

							Don Walker
							Senior Assistant Chief
Accountant
??

??

??

??

David Zalman, President and Chief Executive Officer
Prosperity Bancshares, Inc.
Page 1 of 2

</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

Letter of Correspondence

 CONFIDENTIAL TREATMENT REQUEST BY

 PROSPERITY BANCSHARES, INC. PURSUANT TO 17 C.F.R. § 200.83

 September 21, 2005

 Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Mail Stop 4561

 Washington, D.C. 20549

 Attention: Don Walker

Re:
Prosperity Bancshares, Inc.

 Form 10-K for Fiscal Year
Ended December 31, 2004

 File No. 000-25051

 Ladies and Gentlemen:

 The purpose of this letter is to respond to your letter dated September 7, 2005 to David Zalman, President and Chief Executive Officer of Prosperity Bancshares, Inc. (the “Company”), setting forth the
staff’s comments regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. For reference purposes, the text of each comment is included below. The Company is requesting confidential treatment of
portions of this letter pursuant to the provisions of 17 C.F.R. § 200.83. This letter omits confidential information included in the unredacted version of the letter that was delivered to the Division of Corporation Finance and asterisks denote
such omissions. Any correspondence, questions, notices and orders concerning this request may be addressed to David Hollaway, Prosperity Bancshares, Inc., 1301 N. Mechanic, El Campo, Texas 77437, (979) 543-2200 (telephone), (979) 543-1906
(facsimile) (the “Confidential Treatment Contact Person”).

 Mr. Don Walker

 September
21, 2005

 Page 2

 Form 10-K

 Notes to Consolidated
Financial Statements

 Note 5. Securities, page 69 and 70

 1. Please refer to prior comment #1. Please provide
the terms for the preferred security series you hold including but not limited to:

•

Whether the series are callable or not, cumulative or not, perpetual or not and the related terms,

•

The interest rate indices they are tied to for reset,

•

The reset schedule and terms of pricing and price at each reset date.

 The staff is advised that the terms for the preferred security series held by the Company are as follows:

 Description

Amount

Purchase Date

Coupon

Tax
Equivalent
Yield

 Next

 Coupon
Reset Date

 Index

 FHLMC PFD STK

$
5,000,000.00

10/06/2000

3.58

4.93

12/31/2009

5 YR CMT

 FHLMC PFD STK

2,000,000.00

11/05/1999

3.58

4.93

12/31/2009

5 YR CMT

 FHLMC PFD STK

2,000,000.00

11/09/1999

3.58

4.93

12/31/2009

5 YR CMT

9,000,000.00

 FNMA PFD STK

5,000,000.00

03/20/2000

1.37

1.89

03/31/2006

2 YR CMT Less 16 basis points

 FNMA PFD STK

5,000,000.00

09/26/2000

1.37

1.89

03/31/2006

2 YR CMT Less 16 basis points

 FNMA PFD STK

5,000,000.00

02/08/2001

1.37

1.89

03/31/2006

2 YR CMT Less 16 basis points

15,000,000.00

 Total

$
24,000,000.00

 FNMA (Fannie Mae) securities are
variable rate, non-cumulative, non-convertible, perpetual and callable on coupon reset date. The rates reset every 2 years (on March 31, beginning on March 31, 2002) to the 2 year CMT rate less 16 basis points.

 FHLMC (Freddie Mac) securities are variable rate, non-cumulative, non-convertible, perpetual
and callable on coupon reset date. The rates reset every 5 years (on December 31, beginning on December 31, 2004) to the 5 year CMT rate.

 Mr. Don Walker

 September
21, 2005

 Page 3

 2. In your response letter dated August 24, 2005 you cited two preferred security series as examples for supporting your recovery projections for
your preferred security series that are currently in unrealized loss positions. Your recovery assumptions rely on the preferred securities re-pricing models to behave similarly to bond models; however these securities have similar risks to those
associated with equity securities as well. Please tell us how you considered the following in your analysis:

•

The change in the credit rating of the issuing companies from the time the series were issued to present day;

•

Any additional impact credit rating change would have on re-pricing;

•

The availability and applicability of preferred stock valuation models;

•

The impact and basis of the reset options, reset intervals, and length of the reset schedule;

•

The very low levels of interest rates at previous reset dates, and the higher current levels of interest rates, and the expected changes in interest rates;

•

The degree of comparability between the terms of the example securities and the preferred security series you hold; and

•

Any additional information that supports your belief that your securities will behave in the same manner as the example securities.

 With respect to the specific questions noted above, the Company would respectfully request
that the staff please consider the following:

•

The change in the credit rating of the issuing companies from the time there series were issued to present day

 As noted below, the ratings of these securities are basically unchanged
since the purchase date. The securities are still considered high quality investment grade, which supports the conclusion that it is not a credit impairment issue that is negatively impacting these securities.

 FNMA (Fannie Mae)

a. At purchase:

Moody’s Aa3; S&P AA-; Fitch A+

b. Today:

Moody’s Aa3; S&P AA-; Fitch A+

 FHLMC (Freddie
Mac)

a. At purchase:

Moody’s Aa3; S&P AA-; Fitch AA

b. Today:

Moody’s Aa3; S&P AA-; Fitch AA-

 Mr. Don Walker

 September
21, 2005

 Page 4

•

Any additional impact the credit rating change would have on re-pricing

 As with any security, if the rating agencies were to downgrade the securities to junk status, there is the potential for a
substantially negative impact on the prices of the securities. However, the Company’s analysis has concluded that it is not the credit status of the FHLMC and FNMA securities that is affecting their price (see above credit ratings). The
accounting problems that each entity experienced, and in FNMA’s case the delay in filing restatements to its financial statements, may have contributed to the adverse pricing of these securities. Management believes that if these entities
return to regular reporting of financial results, it should help alleviate some of the uncertainty surrounding these organizations and in return ease the negative drag on the security prices.

•

The availability and applicability of preferred stock valuation models

 Although agency preferred stocks are technically equity securities in name, they are, in substance, debt-like instruments
and should be treated accordingly because:

 1. They do not
offer any conversion option or participation in the profitability of the issuers;

 2. They have par amounts, dividends that replace interest payments, track Treasury indices, and are callable at par; and

 3. Although they do not have a maturity date, they act very much like long-term (30 year) subordinated debt.

 The primary difference between these securities and long-term subordinated
debt is the tax treatment.

 The valuation model the Company
uses gives consideration to the perpetual nature of these securities. The model is run two ways (1) assuming a call is exercised in the distant future (20 years) similar to a debt security and (2) assuming a call is never exercised, replicating an
equity security that has no maturity date. In fact, aside from the tax treatment, the agencies could have issued true debt securities with long maturity dates and nearly identical features as contained in these preferred stocks.

 Mr. Don Walker

 September
21, 2005

 Page 5

•

The impact and basis of the reset options, reset intervals, and length of the reset schedule

 FNMA (Fannie Mae)

 As previously noted, the FNMA issues reset every 2 years based on the 2 year
CMT rate less 16 basis points and this reset option allows the security to re-price at current market rates. This reset can have an impact on the pricing of the securities both positive and negative, depending on where rates are at the time the
coupon resets and where rates are headed until the next reset date. The past two coupon reset dates (March 2002 and March 2004) saw the prices of these securities decrease because the resets occurred as the 2 year CMT rate was declining to historic
lows. With rates now increasing, and projected to continue to increase for the near future, the value of these securities is expected to regain value as they approach their reset date. This is exactly what has happened in the two examples the
Company provided (see detail below) and is also reflected in the FNMA issues the Company owns. The Company’s FNMA securities have increased 6% in value since December 31, 2004 because of rising interest rates and the approaching coupon reset
date (March 31, 2006). Had this FNMA issue reset using current rates, with the 2 year CMT at 3.87%, the current coupon of 1.37% would increase to 3.71% (2 year CMT less 16 basis points), or 5.11% on a tax equivalent basis.

 FHLMC (Freddie Mac)

 The FHLMC securities reset every 5 years based on the 5 year CMT Rate. The
first coupon reset was in December 2004, at a time when the 5 year CMT had declined approximately 60% from the date that this security was issued. Going forward, the 5 year CMT is projected to increase back to the rate levels in existence when this
security was first issued (see the Bloomberg survey submitted as Schedule E and the rate projections submitted as Schedule D included with the Company’s letter dated August 24, 2005 (“First Letter”)). These rising rates in conjunction
with the next reset date are expected to lead to a rise in the pricing of these securities, causing them to regain their carrying value. This is supported by the two examples provided below and the recent price increase in the Company’s
preferred stock noted above. It should also be noted that projected rate increases simply put rates back to their historical averages, up from the very low rates of recent times.

 The reset schedules are important because price changes in these securities are highly correlated to changes in interest
rates at the reset dates. The reset date then has to be considered in conjunction with the absolute level of interest rates and the direction rates are moving at reset. If over time the value of the securities do not significantly move in value
despite changes in interest rates and the passage of

 Mr. Don Walker

 September
21, 2005

 Page 6

 reset dates, then additional analysis needs to be done to determine what else is impacting the value of these securities and if there is an
other-than-temporary impairment.

•

The very low levels of interest rates at previous reset dates, and the higher current levels of interest rates, and the expected changes in interest rates

 The very low level of interest rates has been a
significant factor affecting the pricing of these securities. With interest rates at their lowest levels in over 40 years and the coupon rates resetting during this time frame, the impact on prices were negative and substantial because of the
leveraged impact of the tax treatment of these securities. However, with interest rates currently at higher levels and projected to further increase, the impact is expected be positive to the value of these securities. The Bloomberg survey (Schedule
E submitted with the First Letter) projects rates to move back to average levels, which would return these securities to their original carrying value or greater. The time frame for the projections covers the next four years (including coupon reset
dates). In fact, during past periods when interest rates were at the levels projected for the coming years, these securities did trade at carrying value or better. It should be noted that the Board of Governors of the Federal Reserve System
(“Federal Reserve”) has publicly stated that rates are too low, and they intend to bring them back to more historical levels. Since mid 2004, the Federal Reserve has raised rates 10 times, and they have expressed the necessity to continue
this trend.

•

The degree of comparability between the terms of the example securities and the preferred security series you hold

 The first example cited in the Company’s First Letter was a FHLMC
preferred stock security (variable rate, non-cumulative, non-convertible, perpetual and callable every coupon reset date) that resets every 2 years based on the 2 year CMT rate. These securities reset in March of 2005 at 3.93% or 5.41% on a tax
equivalent basis up from 1.82% or 2.51% on a tax equivalent basis, reflecting a higher rate environment compared with the previous reset which happened at a time when rates were at historic lows. As these securities approached their coupon reset
date, the price increased in value approximately 10%.

 The
second example cited was a FHLMC preferred stock security (variable rate, non-cumulative, non-convertible, perpetual and callable every coupon reset date) that resets every year based on the 1 year Libor rate. These securities reset in March 2005 at
3.64% or 5.01% on a tax equivalent basis up from 1.14% or 1.57% on a tax equivalent basis, once again reflecting a higher rate environment compared to the previous reset which happened at a time when rates were at historic lows. As these securities
approached their coupon reset date, the price

 Mr. Don Walker

 September
21, 2005

 Page 7

 increased in value approximately 3%. Because this security re-prices annually, and it is rapidly approaching another reset date in a rising rate
environment, it has increased in value an additional 5%.

 By
comparison, the terms of the Company’s two securities are very similar:

 Rule 83 confidential treatment request made by Company; request numbers 1-4.

 FNMA preferred stock security owned by the bank (variable rate, non-cumulative, non-convertible, perpetual and callable every coupon reset date) resets
every 2 years based on the 2 year CMT rate less 16 basis points. The last reset of 1.37% (1.89% on a tax equivalent basis) in March 2004 came during a time of historically low interest rates. Rates have significantly increased since then and they
are projected to be much higher at next reset date in March 2006. For example, the 2 year CMT is projected to be ***1 (see the First Letter including rate projections submitted as Schedule D), which would put the new coupon rate at ***2 (2 year CMT less 16 basis points) or ***3 on a tax equivalent basis. This increase in rate
is similar to the above examples. The FNMA issues the Company owns have many of the same features as the securities in the example above; specifically, variable rate, non-cumulative, non-convertible, perpetual and callable at every coupon reset
date. Because of the comparability of these securities, the Company’s FNMA issues are expected to increase in price as historically evidenced by the comparable examples provided. It should be noted that the amount of the rate increase at reset
date for the Company’s FNMA securities, based on the projections included in the First Letter, is expected to be ***4 compared with the 110 and 150 basis points, respectively for the two examples above. In fact, as of August, Bloomberg pricing shows that the Company’s FNMA securities have improved 6% in value since December 31, 2004,
reflecting rising rates and the approaching coupon reset date.

1
The Company requests that the information contained in request number 1 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

2
The Company requests that the information contained in request number 2 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

3
The Company requests that the information contained in request number 3 be treated as confidential information and that the Commission provide timely notice to the
Confidential

CORRESP
1
filename1.htm

Letter to the SEC

 CONFIDENTIAL TREATMENT REQUEST BY

 PROSPERITY BANCSHARES, INC. PURSUANT TO 17 C.F.R. § 200.83

 August 24, 2005

 Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Mail Stop 4561

 Washington, D.C. 20549

 Attention: Don Walker

Re:

Prosperity Bancshares, Inc.

Form 10-K for Fiscal Year Ended December 31, 2004

File No. 000-25051

 Ladies and Gentlemen:

 The purpose of this letter is to respond to your letter dated August 11, 2005 to David
Zalman, President and Chief Executive Officer of Prosperity Bancshares, Inc. (the “Company”), setting forth the staff’s comments regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. For
reference purposes, the text of each comment is included below. The Company is requesting confidential treatment of portions of this letter pursuant to the provisions of 17 C.F.R. § 200.83. This letter omits confidential information included in
the unredacted version of the letter that was delivered to the Division of Corporation Finance and asterisks denote such omission. Any correspondence, questions, notices and orders concerning this request may be addressed to David Hollaway,
Prosperity Bancshares, Inc., 1301 N. Mechanic, El Campo, Texas, 77437, (979) 543-2200 (telephone), (979) 543-1906 (facsimile) (the “Confidential Treatment Contact Person”).

 Form 10-K

 Notes to Consolidated Financial Statements

 Note 5. Securities, page 69 and 70

1.
We note gross unrealized losses on your 70% non-taxable preferred stock securities increased $5.8 million from December 31, 2003 to December 31, 2004. Please provide us your
analyses supporting your belief that an other-than-temporary impairment did not exist at December 31, 2004, at March 31, 2005 or at June 30, 2005. We note the guidance in paragraph 16 of SFAS No. 115 and SAB Topic 5:M. Your response should include
but not be limited to the name of securities, purchase dates and prices, current amortized cost, respective unrealized losses and other information you consider in your periodic analysis.

 Mr. Don Walker

 August 24,
2005

 Page 2

 Overview:

 The staff is advised that
management of the Company performs an analysis on our security portfolio on a quarterly basis to determine if an other-than-temporary impairment exists. Our review includes the guidance provided by SFAS 115 and specifically paragraph 16, SAB Topic
5:M.

 In preparing our year-end 2004 financials, management performed an
additional review of these securities because of the issues surrounding Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC).

 The specific securities in question are listed below and as of 12/31/04, 3/31/05 and 6/30/05, show a total unrealized loss of $6.1 million,
$6.6 million and $6.5 million, respectively.

 Security

 Purchase Dates

Amount

Yield

Unrealized Loss

 FNMA Series F 70% non-taxable preferred

3/00, 9/00 & 2/01

$
15 million

1.37%
1.89% tax equivalent

$
$
$
4.3 million as of 12/04
4.2 million as of 3/05
4.1 million as
of 6/05

 FHLMC Series L 70% non-taxable preferred

11/99 & 10/00

$
9 million

3.58%
4.97% tax equivalent

$
$
$
1.8 million as of 12/04
2.4 million as of 3/05
2.4 million as of
6/05

 Based on our analysis through 6/30/05,
we project that these securities will recover to their carrying value within a reasonable period of time. This time frame is internally defined since there is no “bright-line test” established by accounting literature. In addition, and as
discussed further below, the Company demonstrates the intent and ability to hold these securities until such time as the market value recovers.

 We have taken into consideration current market information in our analysis and third party evidence to support our assumptions of rising rates which will project market
values reaching carrying cost.

 We have reviewed numerous factors and believe
that there are enough positive conditions as of the date of this letter to support our conclusion that these particular securities are not other-than-temporarily impaired.

 Analysis Detail:

 The Company has the intent and ability to hold these securities until the market value recovers.

•

Intent to Hold Securities: The security portfolio exists not as a trading portfolio, but as an investment vehicle for core deposits that are not being used in the loan
funding process. To further corroborate the Company’s historical treatment of the securities

 Mr. Don Walker

 August 24,
2005

 Page 3

 portfolio as a holding area for core deposits, it should be noted that over the last 5 years, we have sold just one $ 20 million issue, which represents a
nominal portion of the total portfolio, which had a carrying value of $ 1.4 billion as of June 30, 2005. We believe this further supports the Company’s intent to hold these particular securities until they recover in market value.

•

Ability to Hold Securities: In terms of our balance sheet, we are uniquely positioned to hold these investments and as a result there is not a liquidity issue. As of
06/30/2005, these securities represented just $24 million, or 1.6 %, out of a $1.4 billion portfolio. Cash flow from the portfolio is approximately $300 million per year and the effective duration of the portfolio is 3.0 years. This means that the
portfolio is turning over in a relatively short period of time and allows the Company to easily fund future loan growth from the cash flow. Historically, the Company has grown organically 10% per year in loans, which would equate to a $150 million
net increase, based on the 6/30/05 loan balance of $1.5 billion. Even disregarding deposit growth, which has historically had 5% organic growth per year, and a 5 year compounded annual growth rate of over 30%, when acquisitions are included, the $
300 million cash flow from the portfolio would be more than enough to fund $ 150 million in new loans. Based on this information, the portfolio cash flow mitigates the need to sell securities to offset liquidity issues, which in turn supports the
Company’s ability to hold these specific securities until their market value matches carrying value. Had the portfolio been created by leveraging the balance sheet with borrowings or high cost funds, there could be a question of the
Company’s ability to hold these securities (See selected balance sheet data attached as Schedule A and cash flow data attached as Schedules B1, B2 and B3).

 The Company has also considered the length, time and the extent to which the market value has been less than the cost of these securities
and has determined that they are not other-than-temporarily impaired at this time. We have also projected, based on (1) a rising rate scenario and (2) coupon reset dates, that these securities will recover in market value over a reasonable period of
time.

•

Coupon reset dates are important to these securities in terms of providing an opportunity to re-price at market rates which are currently higher than the coupon rates, and would
positively impact the market value of these securities. There are two recent examples of other preferred issues that illustrate this scenario.

•

FHLMC Series M 2 year Treasury (Symbol FRE M) - these securities reset in March 2005 and had a previous reset in March 2003. The rate reset in March 2005 from 1.82% to 3.93%. The
pricing of the security reflected this rate increase. At the end of 2004 this security traded in the high 30’s and by the reset date in March 2005, the value had increased to 42 (Please refer to Schedule C).

•

A second example was the FHLMC N 1 year Libor (Symbol FRE N) - these securities reset in March 2005. This security moved from 1.14% to 3.64% and had been trading in the 30 range,
but increased to 41 when their reset date was reached (Please refer to Schedule C).

 Mr. Don Walker

 August 24,
2005

 Page 4

 It is our assumption that the securities we own will react in much the same way as the two examples above in a similar, significantly rising rate
environment. As they approach their coupon reset dates, they will regain market value in a like manner. It should be noted that the rise in price will not happen on a straight-line basis, especially as it approaches the reset date.

 Rule 83 confidential treatment request made by Company; request
numbers 1-3.

•

Concerning the FHLMC securities (current rate 3.58% and tax equivalent 4.97%) – the market value was less than carrying value for the last nine months as of 2004. In fact the
average loss during that time frame was less than 10% during five of nine months. With the rising rate environment, we project the values of these securities to move up as well (the rise in value will not occur on a straight-line basis). Our
projections show that as rates increase, and the next coupon reset date approaches, these securities should begin to move up in market value and reach their carrying value by the next reset date which is December 2009. This is shown on the
spreadsheet attached as Schedule D. Using the Bloomberg Economic Survey of projected rates on Fed Funds, included as Schedule E, we show that rising rates will impact the market value of these securities positively over the next five years. Based on
the median of projections in the Bloomberg Economic Survey, the fed funds rate is projected to be 4.25% by year-end 2006. The FHLMC issue prices off of the 5 year Treasury note which has historically traded at 112 basis points over the Fed funds
rate during the last 20 years. Based on the above, the 5 year yield would then be ***%1 by year-end 2006, as set
forth on Schedule D. Making these assumptions puts the 5 year Treasury at ***%2 by the reset date of 12/09 (Refer to
Schedule D). While the rate increase may not be linear as the spreadsheet shows because rates will move up and down over time, the projected rate would seem reasonable as the 5 year Treasury note yearly average over the last 20 years has been 6.57%
(rates obtained from Federal Reserve – refer to Schedule F). Our calculation shows that ***%3 is the rate
needed to see these securities reach par (see spreadsheet attached as Schedule G). Historically these securities have traded at and above par when the 5 year was around 6% because the tax equivalent nature of these securities provided enough spread
to the investor to allow them to trade at par or better.

1
The Company requests that the information contained in Request Number 1 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

2
The Company requests that the information contained in Request Number 2 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

3
The Company requests that the information contained in Request Number 3 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

 Mr. Don Walker

 August 24,
2005

 Page 5

 Rule 83 confidential treatment request made by Company; request numbers 4-7.

•

Concerning the FNMA securities (current rate 1.37% and tax equivalent 1.89%) – these securities are showing a gain in their market value as rates continue to rise and they get
closer to their reset date in March 2006. These securities gained value from 12/31/04 through the first six months of 2005. As they get closer to their coupon reset date in March 2006 and rates continue to rise, we project the market price of these
securities to increase. It should be noted that the last reset was at a low point in market rates in March 2004. They reset at 1.37% and the current 2 year Treasury note rate is approximately 4.07%. Using the Bloomberg Economic Survey of projected
rates on Fed Funds (included as Schedule E), we show that rising rates will impact the market value positively over the next five years. Based on the median of projections in the Bloomberg Economic Survey, the fed funds rate is projected to be 4.25%
for the first quarter of 2006 and year-end 2006. This security prices off of the 2 year Treasury note less 16 basis points which have historically, over the last 20 years, traded at 58 basis points over the Fed funds rate. That would project the 2
year treasury at ***%,4 or approximately ***%5 tax equivalent, next year at its reset date. Assuming the same type of increase until the next reset date in March 2008, the rate would increase to
***%6 (refer to Schedule D). The historical average rate of the 2 year Treasury note over the last 20 years has been
6.03% (rates obtained from Federal Reserve - Refer to Schedule F) supporting our expectation of an increase in price on these securities over the next 5 years. Our calculation shows that a ***%7 rate is needed to see these securities reach par (see spreadsheet attached as Schedule H). Historically these securities have traded at and above par when the
2 year was around 6% because the tax equivalent nature of these securities provided enough spread to the investor to allow them to trade at par or better.

 Our analysis has concluded that the financial condition of FNMA and FHLMC is not an issue and should not be considered a negative for either
company.

•

Both of these organizations continue to be rated as investment grade by the rating agencies.

•

Dividend payments have not been suspended at either of the organizations.

4
The Company requests that the information contained in Request Number 4 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

5
The Company requests that the information contained in Request Number 5 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

6
The Company requests that the information contained in Request Number 6 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

7
The Company requests that the information contained in Request Number 7 be treated as confidential information and that the Commission provide timely notice to the
Confidential Treatment Contact Person identified on Page 1 before it permits any disclosure of the marked information.

 Mr. Don Walker

 August 24,
2005

 Page 6

•

While we do not rely on the fact that these are both government sponsored agencies, and there is no implied guarantee, there is some validity to the fact that their
quasi-governmental status serves to enhance their strength and stability as it relates to creditworthiness. As GSAs they are subject to an additional layer of regulatory oversight and scrutiny that a private company would not have to endure. It is
also important to note that, while the new increased capital requirements imposed on these institutions do indeed limit asset growth, they also serve to strengthen the companies, especially from a shareholder perspective. Indeed the issues regarding
regulatory scrutiny and increased capital requirements both serve to further enhance credit stability.

 Based on the above analysis, the Company has concluded that there are no other-than-temporary impairment issues at this time. Management will continue to monitor all of
its securities on a quarterly basis to insure that the assumptions used have not materially changed and thus create a

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

August 11, 2005
Mail Stop 4561

By U.S. Mail and facsimile to (979)543-1906

Mr. David Zalman,
President and Chief Executive Officer
Prosperity Bancshares, Inc.
Prosperity Bank Plaza
4295 San Felipe
Houston, TX  77027

Re:	Prosperity Bancshares, Inc
      Form 10-K for Fiscal Year Ended December 31, 2004
	File No.  000-25051

Dear Mr. Zalman:

      We have limited our review of your filing to the issue we
have
addressed in our comment. Where indicated, please provide us with
the
supplemental documentation we requested in response to this
comment.
Please be as detailed as necessary in your explanation.  After
reviewing this information, we may or may not raise additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K

Notes to the Consolidated Financial Statements

Note 5.  Securities, page 69 and 70

1. We note gross unrealized losses on your 70% non-taxable
preferred
stock securities increased $5.8 million from December 31, 2003 to
December 31, 2004.  Please provide us your analyses supporting
your
belief that an other-than-temporary impairment did not exist at
December 31, 2004, at March 31, 2005, or at June 30, 2005.   We
note
the guidance in paragraph 16 of SFAS No. 115 and SAB Topic 5:M.
Your
response should include but not be limited to the name of
securities,
purchase dates and prices, current amortized cost, respective
unrealized losses and other information you consider in your
periodic
analysis.

* * * * *

       As appropriate, please respond to this comment within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comment
and provides any requested supplemental information.  Detailed
cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information required under the
Securities Exchange Act of 1934 and that they have provided all
information investors require for an informed investment decision.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

	You may contact Paula Smith (Staff Accountant) at (202) 551-
3696
or me at (202) 551-3490 if you have any questions regarding
comments
on the financial statements and related matters.

Sincerely,

							Don Walker
							Senior Assistant Chief
Accountant
??

??

??

??

David Zalman, President and Chief Executive Officer
Prosperity Bancshares, Inc.
Page 1 of 2

</TEXT>
</DOCUMENT>