UPDATE 1-Prosperity Bancshares Q2 profit tops Street view

* Q2 shr $0.57 vs est $0.49

* Net interest income up 40 pct

* Provision for bad loans up 7-fold from year ago

July 17 (Reuters) - Prosperity Bancshares Inc PRSP.O posted a higher second-quarter profit, topping analysts' average estimate, as an increase in average earning assets boosted its net interest income.

Net income for the second quarter was $26.5 million, or 57 cents a share, compared with $23.4 million, or 52 cents a share, in the year-ago quarter.

Analysts expected the company to earn 49 cents a share, excluding items, according to Reuters Estimates.

Net interest income, before provision for credit losses, rose 40 percent to $75.5 million.

However, provision for credit losses rose to $6.9 million, from $1 million a year earlier.

Shares of the Houston-based company closed at $30.15 Thursday on Nasdaq. (Reporting by Supantha Mukherjee in Bangalore; Editing by Himani Sarkar)