QUESTIONS AND ANSWERS ABOUT THE MERGER, THE ANNUAL MEETING AND THE VOTING MEETING

American State’s shareholders will also transact such other business that may properly come before the annual meeting. As of the date of this proxy statement/prospectus, American State’s board of directors is not aware of any matters, other than those stated above, that may be brought before the annual meeting.

The voting representatives will vote all of the shares subject to the shareholders’ agreement at the annual meeting of shareholders that will follow the voting meeting for each item according to the outcome of the votes concerning that item at the voting meeting. American State’s shareholders whose shares are subject to the shareholders’ agreement will also transact such other business that may properly come before the voting meeting. As of the date of this proxy statement/prospectus, the voting representatives are not aware of any matters, other than those stated above, that may be brought before the voting meeting.

Item 1—FOR the approval of the reorganization agreement;

Item 2—FOR the election of each nominee for director; and

Item 3—FOR the authority to adjourn or postpone the annual meeting.

Item 1—FOR the approval of the reorganization agreement;

Item 2—FOR the election of each nominee for director;

Item 3—FOR the authority to adjourn or postpone the voting meeting or the annual meeting; and

Item 4—FOR termination of the shareholders’ agreement immediately before the merger is effective.

Because approval of the authority to adjourn or postpone the voting meeting or the annual meeting and to terminate the shareholders’ agreement each requires the affirmative approval of at least a majority of the outstanding shares of American State common stock subject to the shareholders’ agreement, the failure to return your voting meeting proxy card will have the same effect as a vote against those proposals at the voting meeting, unless you attend the voting meeting in person and vote for approval of that proposal.

SUMMARY

This brief summary highlights selected information from this proxy statement/prospectus and may not contain all of the information that is important to you. We urge you to carefully read this entire document and the other documents we refer to in this document. These documents will give you a more complete description of the items for consideration at the annual meeting and the voting meeting. For more information about Prosperity, see “Where You Can Find More Information” on page 120. We have included page references in this summary to direct you to other places in this proxy statement/prospectus where you can find a more complete description of the topics we have summarized.

The Companies

Prosperity Bancshares, Inc.

Prosperity Bank Plaza

4295 San Felipe

Houston, Texas 77027

(713) 693-9300

Prosperity, a Texas corporation, is a financial holding company pursuant to the Gramm-Leach-Bliley Act and bank holding company registered under the Bank Holding Company Act of 1956, as amended (the BHC Act). Through Prosperity Bank, its wholly owned subsidiary bank, Prosperity conducts a complete range of commercial and personal banking activities. Prosperity currently operates a total of one hundred seventy-seven (177) full-service banking centers, with sixty (60) in the Houston area; twenty (20) in the South Texas area including Corpus Christi and Victoria; thirty-two (32) in the Dallas/Fort Worth area; twenty-one (21) in the East Texas area; thirty-four (34) in the Central Texas area including Austin and San Antonio; and ten (10) in the Bryan/College Station area. As of December 31, 2011, on a consolidated basis, Prosperity had total assets of $9.8 billion, total loans of $3.8 billion, total deposits of $8.1 billion and shareholders’ equity of $1.6 billion.

American State Financial Corporation

1401 Avenue Q

Lubbock, Texas 79408

(806) 767-7000

American State Financial Corporation, a Texas corporation, is a bank holding company registered under the BHC Act and the holding company for American State Bank. American State Bank, or ASB, currently has thirty-seven (37) banking locations in eighteen (18) counties in Texas. As of December 31, 2011, on a consolidated basis, American State had total assets of $3.1 billion, total deposits of $2.5 billion, total loans (net of unearned discount and allowance for loan losses) of $1.2 billion and shareholders’ equity of $279.7 million.

Proposed Merger of American State into Prosperity

We have attached the reorganization agreement to this document as Appendix A. Please read the entire reorganization agreement. It is the legal document that governs the merger.

We propose a merger whereby American State will merge with and into Prosperity. Prosperity will be the surviving entity in the merger. Immediately following completion of the merger, ASB will merge into Prosperity Bank and all existing offices of ASB will become full-service banking centers of Prosperity Bank. We expect to complete the merger during the third quarter of 2012, although delays could occur.

Terms of the Merger of American State into Prosperity (page 48)

Pursuant to the terms of the reorganization agreement, all outstanding shares of American State common stock will be converted into an aggregate of 8,525,000 shares of Prosperity common stock and $178.5 million in cash, with the cash portion of the merger consideration subject to decrease if American State’s equity capital on the closing date is less than $275.0 million, in the manner set forth in the reorganization agreement.

Because the number of shares of Prosperity common stock to be issued in the merger is fixed, the value of the total merger consideration you will receive will fluctuate based on the market price of the Prosperity common stock. Further, the cash portion of the merger consideration is subject to decrease as described above. Accordingly, you will not know the exact amount of cash or the value of the stock portion of the merger consideration you will receive in connection with the merger when you vote on the reorganization agreement.

Material Federal Income Tax Consequences (page 74)

The merger is intended to qualify as a reorganization under the Internal Revenue Code of 1986, as amended, or the Code. As a result of receiving Prosperity common stock and cash in exchange for American State common stock, in general, shareholders of American State will recognize gain, but not loss, equal to the lesser of cash received or gain realized in the merger. The amount of gain realized will equal the amount by which the cash plus the fair market value, at the effective time of the merger, of the Prosperity common stock exceeds the basis in the American State common stock to be surrendered in exchange therefor.

This tax treatment may not apply to every shareholder of American State. Determining the actual tax consequences of the merger to you may be complicated and will depend on your specific situation and on variables not within our control. You should consult your own tax advisor for a full understanding of the merger’s tax consequences to you.

Opinion of Financial Advisor of American State (page 52)

Sandler O’Neill + Partners, L.P. has delivered a written opinion to the board of directors of American State that, as of the date of the reorganization agreement, based upon and subject to certain matters stated in the opinion, the merger consideration is fair to the holders of American State common stock from a financial point of view. We have attached this opinion to this proxy statement/prospectus as Appendix B. The opinion of Sandler O’Neill is not a recommendation to any American State shareholder as to how to vote on the proposal to approve the reorganization agreement. You should read this opinion completely to understand the procedures followed, matters considered and limitations on the reviews undertaken by Sandler O’Neill in providing its opinion.

Prosperity Plans to Continue to Pay Quarterly Dividends (page 114)

Following the merger, subject to applicable statutory and regulatory restrictions, Prosperity intends to continue its practice of paying quarterly cash dividends. For the first quarter of 2012, Prosperity paid a cash dividend of $0.195 per share.

Ownership of Prosperity After the Merger

Pursuant to the reorganization agreement, Prosperity will issue 8,525,000 shares of its common stock to American State shareholders in connection with the merger. Based on 47,456,041 shares of Prosperity common stock outstanding as of April 24, 2012, after the merger, the former American State shareholders would own approximately 15.23% of the outstanding shares of Prosperity common stock.

Market Prices of Prosperity Common Stock (page 114)

Shares of Prosperity common stock are quoted on the New York Stock Exchange under the symbol “PB.” On February 24, 2012, the last trading day before the merger was announced, Prosperity common stock closed at $41.14 per share. On April 24, 2012, Prosperity common stock closed at $44.52 per share. The market price of Prosperity common stock will fluctuate prior to the merger. You should obtain the current stock quotation for Prosperity common stock. Shares of American State are not traded on any established public trading market.

Voting Meeting of Shareholders Subject to the Shareholders’ Agreement (page 45)

The voting meeting of the shareholders subject to the shareholders’ agreement will be held on June 5, 2012, at 3:00 p.m., local time (one hour before the annual meeting), at the ASB Conference Center at 1501 Avenue Q, Lubbock, Texas 79401 (the same location as the annual meeting) for the purpose of directing the voting representatives’ vote of the American State common stock subject to the shareholders’ agreement. At the voting meeting, these shareholders will be asked to consider and vote on the following:

The American State Annual Meeting (page 45)

The annual meeting of shareholders of American State will be held on June 5, 2012, at 4:00 p.m., local time, at the ASB Conference Center at 1501 Avenue Q, Lubbock, Texas 79401. At the annual meeting, you will be asked to consider and vote on the following:

Voting of Shares Subject to the Shareholders’ Agreement (page 46)

You may vote at the voting meeting of American State shareholders subject to the shareholders’ agreement if you owned American State common stock subject to the shareholders’ agreement at the close of business on April 25, 2012. You can cast one vote for each share of American State common stock you owned at that time that was subject to the shareholders’ agreement. As of April 25, 2012, there were 1,969,847 shares of American State common stock subject to that agreement, which represents 79.7 of the total outstanding shares of American State common stock.

All of the shares subject to the shareholders’ agreement will be voted by the voting representatives at the annual meeting FOR or AGAINST each proposal according to the result of the vote at the voting meeting pursuant to the terms of the shareholders’ agreement attached to this proxy statement/prospectus as Appendix D. Pursuant to the terms of the shareholders’ agreement, two-thirds of the shares subject to the shareholders’ agreement must be voted for approval of the reorganization agreement at the voting meeting in order for any of the shares of American State common stock subject to the shareholders’ agreement to be voted in favor of approval of the reorganization agreement at the annual meeting. The proposals to elect directors, adjourn or postpone the voting meeting or the annual meeting and to terminate the shareholders’ agreement each requires the affirmative approval of at least a majority (or 984,924 shares) of the outstanding shares of American State common stock subject to the shareholders’ agreement.

If at least two-thirds of the shares subject to the shareholders’ agreement are voted in favor of approval of the reorganization agreement at the voting meeting, the voting representatives will vote all of the shares subject to the shareholders’ agreement in favor of approval of the reorganization agreement at the annual meeting. If you fail to vote at the voting meeting, it will have the effect at the voting meeting of a vote against the reorganization agreement. Because of the number of shares of American State common stock subject to the shareholders’ agreement, the voting results at the voting meeting will determine the voting results at the annual meeting.

If at least a majority of the shares subject to the shareholders’ agreement are voted in favor of the election of the director nominees, then the voting representative will have the authority to vote all of the shares subject to the shareholders’ agreement in favor of the election of the director nominees. If you fail to vote at the voting meeting, it will have the effect at the voting meeting of a vote against the election of the director nominees.

If at least a majority of the shares subject to the shareholders’ agreement are voted in favor of adjourning or postponing the voting meeting or the annual meeting, then the voting representative will have the authority to postpone or adjourn the voting meeting and will have the authority to vote all of the shares subject to the shareholders’ agreement in favor of postponing or adjourning the annual meeting. If you fail to vote at the voting meeting, it will have the effect at the voting meeting of a vote against postponing or adjourning these meetings.

If at least a majority of the shares subject to the shareholders’ agreement are voted in favor of termination of the shareholders’ agreement, then the shareholders’ agreement will terminate immediately before the merger is effective. If you fail to vote at the voting meeting, it will have the effect of a vote against termination of the shareholders’ agreement.

You may vote your shares of American State common stock subject to the shareholders’ agreement by attending the voting meeting and voting in person or by completing and mailing the enclosed voting meeting proxy card. If you are the record holder of your shares, you can revoke your voting meeting proxy at any time before the vote is taken at the voting meeting by sending a written notice revoking the proxy or a later-dated proxy to the voting representatives, or by voting in person at the voting meeting.

Record Date Set at April 25, 2012; At Least Two-Thirds Shareholder Vote Required to Approve the Reorganization Agreement (page 45)

You may vote at the annual meeting of American State shareholders or the voting meeting, as applicable, if you owned American State common stock at the close of business on April 25, 2012. You can cast one vote for each share of American State common stock you owned at that time. As of April 25, 2012, there were 2,470,083 shares of American State common stock outstanding.

Approval of the reorganization agreement requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of American State common stock entitled to vote. If you fail to vote, it will have the effect of a vote against the reorganization agreement.

If your shares are not subject to the shareholders’ agreement , you may vote your shares of American State common stock by attending the annual meeting and voting in person or by completing and mailing the enclosed proxy card. If you are the record holder of your shares, you can revoke your proxy at any time before the vote is taken at the annual meeting by sending a written notice revoking the proxy or a later-dated proxy to the Secretary of American State, or by voting in person at the annual meeting.

American State’s Reasons for the Merger and Recommendations of American State’s Board (page 50)

Based on the reasons discussed elsewhere in this proxy statement/prospectus, the board of directors of American State believes that the merger is fair to you and in your best interests, and unanimously recommends that you vote FOR the proposal to approve the reorganization agreement. For a discussion of the circumstances surrounding the merger and the factors considered by the American State’s board of directors in approving the reorganization agreement, see page 50.

Members of American State’s Management are Expected to Vote Their Shares For Approval of the Reorganization Agreement (page 46; Exhibit A to Appendix A)

The directors and executive officers of American State and certain directors of ASB have entered into an agreement to vote the shares of American State common stock they control in favor of approval of the reorganization agreement. As of the record date, 516,908 shares of American State common stock, or approximately 20.93% of the outstanding shares of the common stock entitled to vote at the annual meeting, were bound by the voting agreement. Of these shares, 509,252 are subject to the shareholders’ agreement and are eligible to vote at the voting meeting.

Effective Time of the Merger

The merger will become effective at the date and time specified in the certificate of merger to be issued by the Texas Secretary of State. If American State shareholders approve the reorganization agreement at the annual meeting, and if all necessary government approvals are obtained and the other conditions to the parties’ obligations to effect the merger are met or waived by the party entitled to do so, we anticipate that the merger will be completed in the third quarter of 2012, although delays could occur.

We cannot assure you that the necessary shareholder and governmental approvals will be obtained or that the other conditions to completion of the merger can or will be satisfied.

Treatment of American State Options

Not later than ten (10) days after the American State annual meeting, the board of directors of American State intends to accelerate the exercise date for all outstanding options to acquire American State common stock for a limited period of time to expire on a date chosen by the American State board of directors. On or before such specified date, each American State option may be exercised for cash by the holder of such option. After such date, all unexercised options will terminate. In certain circumstances, American State will provide financing for the exercise price. If all outstanding options are exercised by the holders thereof, American State would be obligated to issue 29,200 shares of American State common stock prior to the merger. The exchange ratio set forth in this proxy statement/prospectus assumes the issuance of such shares.

Exchange of American State Stock Certificates (page 60)

As soon as practicable after the effective time of the merger, you will receive a letter and instructions from Computershare Investor Services, acting in its role as Prosperity’s exchange agent, with respect to the procedures for surrendering your stock certificates representing shares of American State common stock in exchange for stock certificates representing shares of Prosperity common stock and cash. You must carefully review and complete

these materials and return them as instructed along with your stock certificates for American State common stock. Please do not send American State or Prosperity any stock certificates until you receive these instructions.

Conditions to Completion of the Merger (page 64)

The completion of the merger depends on a number of conditions being met. These include, among others:

Any condition to the completion of the merger may be waived in writing by the party to the reorganization agreement entitled to the benefit of such condition. A party to the reorganization agreement could choose to complete the merger even though a condition has not been satisfied, as long as permitted by law. We cannot be certain when or if the conditions to the merger will be satisfied or waived, or that the merger will be completed.

Regulatory Approvals Required (page 78)

We cannot complete the merger unless it is approved by the Board of Governors of the Federal Reserve System (Federal Reserve) or such approval is waived by the Federal Reserve. Prosperity intends to file any required documentation with the Federal Reserve Bank of Dallas to request a waiver of its approval after the regulatory applications required for the bank merger (as described below) are accepted for filing.

In addition, the merger of ASB with and into Prosperity Bank requires the approval of the Federal Deposit Insurance Corporation (FDIC) and Texas Department of Banking (TDB). We expect to obtain all necessary regulatory approvals, although we cannot be certain if or when we will obtain them. On March 16, 2012, Prosperity Bank and ASB filed applications with the FDIC and TDB to obtain approval of the bank merger. The U.S. Department of Justice will have between 15 and 30 days following approval by the FDIC to challenge the approval on antitrust grounds. While American State and Prosperity do not know of any reason that the Department of Justice would challenge regulatory approval by the FDIC and believe that the likelihood of such action is remote, there can be no assurance that the Department of Justice will not initiate such a proceeding, or if such a proceeding is initiated, as to the result of any such challenge.

Amendments or Waiver (page 71)

Prosperity and American State may amend the reorganization agreement and each party may waive its right to require the other party to adhere to any term or condition of the reorganization agreement. However, the amount of cash and number of shares of Prosperity common stock to be received by the shareholders of American State pursuant to the terms of the reorganization agreement may not be decreased after the approval of the reorganization agreement without the further approval of the American State shareholders.

Termination of the Reorganization Agreement (page 72)

Prosperity and American State can mutually agree at any time to terminate the reorganization agreement without completing the merger. In addition, either Prosperity or American State may decide, without the consent of the other, to terminate the reorganization agreement if:

American State may terminate the reorganization agreement, without the consent of Prosperity, if the board of directors of American State receives an unsolicited, bona fide alternative acquisition proposal (as defined in the reorganization agreement) and, under certain terms and conditions, determines that it is a superior proposal to that of the reorganization agreement and that the failure to accept such proposal would be inconsistent with its fiduciary duties; but Prosperity has the right to adjust the terms and conditions of the reorganization agreement so that the superior proposal no longer constitutes a superior proposal.

In addition, Prosperity may terminate the reorganization agreement, without the consent of American State, if:

Prosperity also has the right to terminate the reorganization agreement on or prior to May 26, 2012, if the results of any environmental inspections or surveys of American State properties identify certain potential or current violations of environmental laws or environmental law requires certain remedial or clean up action that could have a material adverse effect on American State.

Termination Fee (page 72)

If the reorganization agreement is terminated by:

then American State will be required to pay Prosperity a termination fee of $20.0 million, plus up to $750,000 for its expenses related to the proposed transaction.

If either Prosperity or American State terminates the reorganization agreement (1) after August 24, 2012 (or September 23, 2012, if regulatory approval has not been obtained by August 9, 2012) and, at the time of termination, the registration statement has been declared effective at least 25 business days prior to such date and American State has failed to call, give notice of, convene and hold the shareholder meeting in accordance with reorganization agreement, or (2) because American State’s shareholders do not approve the reorganization agreement and an acquisition proposal exists at the time of termination, American State will be required to pay Prosperity up to $750,000 for its expenses related to the proposed transaction.

Some of the Directors and Officers of American State Have Financial Interests in the Merger that Differ from Your Interests (page 70)

Some of the directors and officers of American State have interests in the merger that differ from, or are in addition to, their interests as shareholders of American State. These interests include:

Comparison of Rights of Shareholders of Prosperity and American State (page 85)

American State is a Texas corporation and the rights of shareholders of American State are governed by Texas law and American State’s articles of incorporation and bylaws. Prosperity is a Texas corporation and the rights of Prosperity shareholders are governed by Texas law and Prosperity’s articles of incorporation and bylaws. Upon completion of the merger, shareholders of American State will become shareholders of Prosperity and their rights will be governed by Prosperity’s articles of incorporation and bylaws, in addition to Texas law. Prosperity’s articles of incorporation and bylaws will remain the same unless later altered, amended or repealed.

Dissenters’ Rights of Appraisal in the Merger (page 79)

A shareholder of American State whose shares are not subject to the shareholders’ agreement has the right under Texas law to dissent from the merger and have the appraised fair value of his shares of American State common stock paid to him in cash. The appraised fair value may be more or less than the value of the shares of Prosperity common stock and cash being paid in the merger.

If your shares are subject to the shareholders’ agreement and two-thirds of the shares subject to the shareholders’ agreement vote their shares in favor of the reorganization agreement at the voting meeting, you will not have the right to vote against approval of the reorganization agreement and dissent from the merger.

Persons having beneficial interests in American State common stock held of record in the name of another person, such as a broker or bank, must act promptly to cause the record holder to take the actions required under Texas law to exercise your dissenter’s rights.

In order to dissent, you must carefully follow the requirements of the Texas Business Organizations Code, including giving the required written notice prior to the annual meeting at which the vote on the reorganization agreement is taken. These steps are summarized under the caption “—Dissenters’ Rights of American State Shareholders” on page 79.

If you intend to exercise dissenters’ rights, you should read the statutes carefully and consult with your own legal counsel. You should also remember that if you return a signed proxy card, but fail to provide instructions as to how your shares of American State common stock are to be voted, you will be considered to have voted in favor of the reorganization agreement and you will not be able to assert dissenters’ rights. Furthermore, if your shares are subject to the shareholders’ agreement and you vote your shares at the voting meeting against approval of the reorganization agreement, but the requisite number of shares subject to the shareholders’ agreement are voted in favor of approval of the reorganization agreement such that the voting representatives vote such shares at the annual meeting to approve the reorganization agreement, you will be considered to have voted in favor of the reorganization agreement and you will not be able to assert dissenters’ rights.

Also, if you exercise dissenters’ rights, you may have taxable income as a result, so you should consult with your own tax advisor if you intend to dissent. See “—Material U.S. Federal Income Tax Consequences of the Merger.” If the reorganization agreement is approved by the shareholders of American State, holders of American State common stock who make a written objection to the merger prior to the American State annual meeting, vote against the approval of the reorganization agreement and properly make a written demand for payment following notice of the merger will be entitled to receive the appraised fair value of their shares in cash under the Texas Business Organizations Code.

The text of the provisions of the Texas Business Organizations Code pertaining to dissenters’ rights is attached to this proxy statement/prospectus as Appendix C.

Selected Historical Consolidated Financial Data of Prosperity

The following table summarizes financial results actually achieved by Prosperity for the years and as of the dates indicated and should be read in conjunction with Prosperity’s consolidated financial statements and the notes to the consolidated financial statements contained in reports that Prosperity has previously filed with the SEC. Historical financial information for Prosperity can be found in its Annual Report on Form 10-K for the year ended December 31, 2011. See “Where You Can Find More Information” on page 120 for instructions on how to obtain the information that has been incorporated by reference. You should not assume the results of operations for past periods indicate results for any future period.

Selected Historical Consolidated Financial Data of American State

The following table summarizes financial results actually achieved by American State for the years and as of the dates indicated and should be read in conjunction with American State’s consolidated financial statements as of December 31, 2011 and 2010 and for the three years ended December 31, 2011 and the notes to the consolidated financial statements, which appear elsewhere in this proxy statement/prospectus. You should not assume that the results of operations for past periods indicate results for any future period.