Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1995 Commission file number 0-7275 Cullen/Frost Bankers, Inc. (Exact name of registrant as specified in its charter) Texas 74-1751768 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 W. Houston Street, San Antonio, Texas 78205 (Address of principal executive offices) (Zip code) (210) 220-4011 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No . Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: At October 31, 1995 there were 11,190,225 shares of Common Stock, $5 par value, outstanding.
Part I. Financial Information <TABLE> <CAPTION> Item 1. Financial Statements (Unaudited) Consolidated Statements of Income Cullen/Frost Bankers, Inc. and Subsidiaries (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30 September 30 -------------------- ------------------- 1995 1994 1995 1994 ------- ------- ------- ------- <S> <C> <C> <C> <C> INTEREST INCOME Loans, including fees $39,721 $27,821 $110,467 $76,823 Securities: Taxable 24,951 24,259 73,813 70,313 Tax-exempt 84 84 258 265 ------- ------- ------- ------- Total Securities 25,035 24,343 74,071 70,578 Time Deposits --- --- --- 2 Federal funds sold and securities purchased under resale agreements 1,660 506 4,781 3,045 ------- ------- ------- ------- Total Interest Income 66,416 52,670 189,319 150,448 INTEREST EXPENSE Deposits 23,476 16,128 64,484 44,467 Federal funds purchased and securities sold under repurchase agreements 3,506 1,739 11,731 4,372 Long-term notes payable and other borrowings 296 --- 403 --- ------- ------- ------- ------- Total Interest Expense 27,278 17,867 76,618 48,839 ------- ------- ------- ------- Net Interest Income 39,138 34,803 112,701 101,609 Provision for possible loan losses 1,500 --- 4,772 --- ------- ------- ------- ------- Net Interest Income After Provision For Possible Loan Losses 37,638 34,803 107,929 101,609 NON-INTEREST INCOME Trust department 7,720 7,628 23,841 22,024 Service charges on deposit accounts 7,548 7,385 22,086 21,121 Other service charges, collection and exchange charges, commissions and fees 2,900 2,483 8,096 7,001 Net gain (loss) on securities transactions --- (51) 93 (491) Other 2,898 4,008 10,109 10,085 ------- ------- ------- ------- Total Non-Interest Income 21,066 21,453 64,225 59,740 NON-INTEREST EXPENSE Salaries and wages 15,094 13,030 43,026 39,436 Pension and other employee benefits 2,609 2,734 7,786 8,691 Net occupancy of banking premises 4,532 4,232 13,438 12,495 Furniture and equipment 2,780 2,770 7,890 7,870 Provision for real estate losses 100 --- 600 --- Restructuring costs --- 830 400 830 Other 15,194 17,888 46,871 49,188 ------- ------- ------- ------- Total Non-Interest Expense 40,309 41,484 120,011 118,510 ------- ------- ------- ------- Income Before Income Taxes 18,395 14,772 52,143 42,839 Income Taxes 6,442 5,278 18,328 15,005 ------- ------- ------- ------- Net Income $11,953 $ 9,494 $ 33,815 $27,834 ======= ======= ======= ======= Net Income per common share: Primary $ 1.05 $ .84 $ 2.99 $ 2.48 Fully diluted 1.05 .84 2.97 2.48 Dividends per share .35 .15 .79 .45 See notes to consolidated financial statements. </TABLE>
<TABLE> <CAPTION> Consolidated Balance Sheets Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands, except per share amounts) September 30 December 31 September 30 1995 1994 1994 ------------ ----------- ------------ <S> <C> <C> <C> Assets Cash and due from banks $ 365,435 $ 365,792 $ 320,819 Time deposits 11 12 12 Securities held to maturity 968,956 1,051,245 1,079,814 Securities available for sale 590,768 542,797 600,599 Federal funds sold and securities purchased under resale agreements 105,667 167,550 82,241 Loans, net of unearned discount of $1,728 at September 30, 1995, $3,487 at December 31, 1994 and $4,338 at September 30, 1994 1,761,272 1,483,293 1,370,476 Less: Allowance for possible loan losses (30,600) (25,741) (25,467) ---------- ---------- ---------- Net Loans 1,730,672 1,457,552 1,345,009 Banking premises and equipment 90,673 88,667 89,695 Accrued interest and other assets 150,605 120,105 125,765 ---------- ---------- ---------- Total Assets $4,002,787 $3,793,720 $3,643,954 ========== ========== ========== Liabilities Demand Deposits: Commercial and individual $ 724,313 $ 710,138 $ 710,644 Correspondent banks 92,026 77,425 92,158 Public funds 41,511 44,740 37,782 ---------- ---------- ---------- Total demand deposits 857,850 832,303 840,584 Time Deposits: Savings and Interest-on-Checking 711,096 763,300 766,516 Money market deposit accounts 684,385 559,153 570,526 Time accounts 1,053,116 842,520 850,339 Public funds 163,250 90,686 73,934 ---------- ---------- ---------- Total time deposits 2,611,847 2,255,659 2,261,315 ---------- ---------- ---------- Total deposits 3,469,697 3,087,962 3,101,899 Federal funds purchased and securities sold under repurchase agreements 119,547 370,235 199,047 Accrued interest and other liabilities 83,393 40,086 54,215 ---------- ---------- ---------- Total Liabilities 3,672,637 3,498,283 3,355,161 Shareholders' Equity Common stock, par value $5 per share 55,904 55,615 55,450 Shares authorized: 30,000,000 Shares outstanding: 11,180,822; 11,123,062; and 11,089,986 Surplus 117,912 116,362 115,519 Retained earnings 149,930 126,038 119,057 Unrealized gain (loss) on securities available for sale, net of tax 6,404 (2,578) (1,233) ---------- ---------- ---------- Total Shareholders' Equity 330,150 295,437 288,793 ---------- ---------- ---------- Total Liabilities and Shareholders' Equity $4,002,787 $3,793,720 $3,643,954 ========== ========== ========== See notes to consolidated financial statements. </TABLE>
<TABLE> <CAPTION> Consolidated Statements of Changes in Shareholders' Equity Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands) Unrealized Gain (Loss) on Securities Common Retained Available Stock Surplus Earnings for Sale Total -------- -------- -------- -------- -------- <S> <C> <C> <C> <C> <C> Balance at January 1, 1994 $ 55,046 $113,385 $ 95,978 $ 9,124 $273,533 Net income for the year ended December 31, 1994 37,423 37,423 Proceeds from employee stock purchase plan and options 537 2,553 (29) 3,061 Tax benefit related to exercise of stock options 256 256 Loan payments from employee stock ownership plan 170 170 Issuance of restricted stock 32 168 200 Restricted stock plan deferred compensation expense, net (89) (89) Unrealized loss on securities available for sale, net of tax (11,702) (11,702) Cash dividend (7,415) (7,415) -------- -------- --------- -------- ------- Balance at December 31, 1994 55,615 116,362 126,038 (2,578) 295,437 Net income for the nine months ended September 30, 1995 33,815 33,815 Proceeds from employee stock purchase plan and options 157 218 375 Tax benefit related to exercise of stock options 254 254 Issuance of restricted stock 132 1,078 1,210 Restricted stock plan deferred compensation expense, net (1,119) (1,119) Adjustment to unrealized gain on securities available for sale, net of tax 8,982 8,982 Cash dividend (8,804) (8,804) -------- -------- -------- -------- -------- Balance at September 30, 1995 $ 55,904 $117,912 $149,930 $ 6,404 $330,150 ======== ======== ======== ======== ======== See notes to consolidated financial statements. </TABLE>
<TABLE> <CAPTION> Consolidated Statements of Cash Flows Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands) Nine Months Ended September 30 ------------------ 1995 1994 ------- ------- <S> <C> <C> Operating Activities Net income $ 33,815 $ 27,834 Adjustments to reconcile net income to net cash provided by operating activities: Provision for possible loan losses 4,772 --- Provision for real estate losses 600 --- (Provision) credit for deferred taxes (843) 2,123 Accretion of discounts on loans (1,535) (3,888) Accretion of securities' discounts (12,796) (7,894) Amortization of securities' premiums 1,691 2,748 Net (gain) loss on securities transactions (93) 491 Net gain on sale of assets (2,473) (1,648) Depreciation and amortization 13,720 13,791 Increase in interest receivable (2,974) (1,525) Increase in interest payable 1,957 439 Restructuring accrual (306) (1,067) Net change in other assets and liabilities 23,674 10,573 --------- -------- Net cash provided by operating activities 59,209 41,977 Investing Activities Proceeds from maturities of securities held to maturity 81,828 116,865 Purchases of securities held to maturity (833) (209,115) Proceeds from sales of securities available for sale 28,412 10,515 Proceeds from maturities of securities available for sale 475,110 252,232 Purchases of securities available for sale (488,810) (256,168) Net increase in loans (153,671) (119,390) Net increase in bank premises and equipment (4,658) (10,271) Proceeds from sales of repossessed properties 1,081 2,030 Net cash and cash equivalents received from bank acquisitions/exchange 8,734 2,599 --------- -------- Net cash used by investing activities (52,807) (210,703) Financing Activities Net increase (decrease) in demand deposits, IOC accounts, and savings accounts 75,282 (28,047) Net increase (decrease) in certificates of deposit 122,707 (17,391) Net increase (decrease) in short-term borrowings (259,413) 34,928 Proceeds from employee stock purchase plan and options 1,585 2,318 Dividends paid (8,804) (4,971) --------- -------- Net cash used by financing activities ( 68,643) (13,163) --------- -------- Decrease in cash and cash equivalents ( 62,241) (181,889) Cash and cash equivalents at beginning of year 533,354 584,961 --------- -------- Cash and cash equivalents at the end of the period $471,113 $403,072 ========= ======== Supplemental information: Interest paid $ 74,661 $ 48,399 Loans originated to facilitate the sale of repossessed properties 351 1,067 See notes to consolidated financial statements. </TABLE>
Notes to Consolidated Financial Statements Cullen/Frost Bankers, Inc. and Subsidiaries (tables in thousands) Basis of Presentation The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have not been audited by independent accountants, but in the opinion of management, reflect all adjustments necessary for a fair presentation of the financial position and results of operations. All such adjustments were of a normal and recurring nature. For further information, refer to the consolidated financial statements and footnotes thereto included in the Corporation's annual report on Form 10-K for the year ended December 31, 1994. The balance sheet at December 31, 1994 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Allowance for Possible Loan Losses An analysis of the transactions in the allowance for possible loan losses is presented below. The amount charged to operating expense is a reflection of management's assessment of the adequacy of the allowance. <TABLE> <CAPTION> Nine Months Ended September 30 -------------------- (in thousands) 1995 1994 - ----------------------------------------------------------------------- <S> <C> <C> Balance at beginning of the period $25,741 $26,298 Provision for possible loan losses 4,772 --- Changes related to disposition of bank subsidiary --- (2,684) Net charge-offs: Losses charged to the allowance (4,373) (3,214) Recoveries 4,460 5,067 ------- ------- Net recoveries 87 1,853 ------- ------- Balance at end of the period $30,600 $25,467 ======= ======= </TABLE> The Corporation adopted Statement of Financial Accounting Standards No. 114("SFAS 114"), "Accounting by Creditors for Impairment of a Loan," as amended by Statement of Financial Accounting Standards No. 118, "Accounting by Creditors for Impairment of a Loan -- Income Recognition and Disclosure" ("SFAS 118"), effective January 1, 1995. In accordance with SFAS 114 and 118, a loan is classified as in-substance foreclosure when the Corporation has taken possession of the collateral regardless of whether formal foreclosure proceedings take place. In accordance with SFAS 114 and 118, loans previously classified as in-substance foreclosure but for which the Corporation had not taken possession of the collateral were reclassified to loans. This reclassification did not materially impact the Company's financial condition or results of operations. At September 30, 1995, the recorded investment in impaired loans totaled $8,009,000 of which $5,308,000 related to loans with no valuation reserve and $2,701,000 related to loans with a valuation reserve of $502,000. All the impaired loans were real estate loans and collectibility was measured based on the fair value of the collateral. The average recorded investment in the impaired loans during the three months and nine months ended September 30, 1995, was approximately $8,734,000 and $8,595,000, respectively. Interest payments on impaired loans are typically applied to principal unless collectibility of the principal amount is fully assured, in which case interest is recognized on the cash basis. The Corporation did not recognize interest revenue on impaired loans for the three and nine months ended September 30, 1995.
SFAS 114 and SFAS 118 consider a loan to be impaired when, based upon current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the contractual terms of the loan. SFAS 114 and 118 do not apply to large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. Earnings Per Common Share The weighted average number of shares used to compute per common share earnings, including common stock equivalents where applicable, were: <TABLE> <CAPTION> Three Months Ended Nine Months Ended September 30 September 30 ------------------------ ------------------------ 1995 1994 1995 1994 ------------------------ ------------------------ <S> <C> <C> <C> <C> Primary 11,364,097 11,241,686 11,316,543 11,214,416 Fully Diluted 11,373,158 11,245,899 11,369,554 11,225,500 </TABLE> Income Taxes Tax expense for the third quarter of 1995 was $6,442,000. This amount consisted of current tax expense of $7,308,000 and deferred tax benefit of $866,000. Year-to-date tax expense was $18,328,000, consisting of current tax expense of $19,171,000 and deferred tax benefit of $843,000. Net deferred tax assets were $12,473,000 at September 30, 1995, with no valuation allowance. The deferred tax assets were supported by taxes paid in prior years and the future reversal of existing taxable temporary differences. The tax expense for the third quarter of 1994 was $5,278,000. Income tax payments for the first nine months of 1995 and 1994 were $17,936,000 and $12,513,000, respectively. Acquisitions On April 4, 1995, the Corporation acquired Valley Bancshares, Inc., including its subsidiary, Valley National Bank in McAllen, Texas with $49 million in deposits. On May 19, 1995, the Corporation acquired National Commerce Bank in Houston, Texas with $101 million in deposits. On July 21, 1995, the Corporation acquired the two San Antonio branches of Comerica Bank Texas, with $34 million in deposits. In addition, on September 5, 1995, the Corporation entered into a definitive agreement to acquire S.B.T. Bancshares, Inc. which owns State Bank and Trust in San Marcos, Texas with $100 million in deposits. Also, on October 20, 1995, the Corporation signed a definitive agreement to acquire the five offices of Park National Bank in Houston, Texas with $210 million in deposits.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Review Cullen/Frost Bankers, Inc. and Subsidiaries (taxable-equivalent basis - tables in thousands) Results of Operations Cullen/Frost Bankers, Inc. reported net income of $11,953,000 or $1.05 per common share for the quarter ended September 30, 1995 compared to $9,494,000 or $.84 per common share for the third quarter of 1994 and net income of $11,223,000 or $.99 per common share for the second quarter of 1995. Net income for the nine months ended September 30, 1995 was $33,815,000 or $2.99 per common share compared to $27,834,000 or $2.48 per common share for the same period of 1994. On April 4, 1995, the Corporation completed the acquisition of Valley Bancshares, Inc., including its subsidiary, Valley National Bank in McAllen, Texas ("Valley") with $49 million in deposits. On May 19, 1995, the acquisition of National Commerce Bank in Houston ("NCB") with its three branch locations and $101 million in deposits was completed. On July 21, 1995, the Corporation acquired the two San Antonio branches of Comerica Bank Texas with approximately $34 million in deposits. These acquisitions were accounted for as purchase transactions, and as such, the results of operations are included in the financial information that follows from the date of acquisition. The acquisitions did not have a material impact on the third quarter net income and are not expected to have a material impact on the Corporation's 1995 net income. In addition, during the third quarter of 1995, the Corporation entered into definitive agreements to acquire S.B.T. Bancshares, Inc., which owns State Bank and Trust Company, of San Marcos, Texas with $100 million in deposits and Park National Bank of Houston, Texas, with $211 million in deposits. These acquisitions are expected to be completed in the first quarter of 1996 following shareholder action and the receipt of normal regulatory approvals. The results of operations are included in the material that follows. Certain balances have been reclassified as a result of the adoption of Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan" ("SFAS 114"), as amended by Statement of Financial Accounting Standards No. 118, "Accounting by Creditors for Impairment of a Loan--Income Recognition and Disclosure" ("SFAS 118"), effective January 1, 1995. The adoption of these standards did not have a material impact on the Corporation's financial position or results of operations. Other reclassifications have been made to make prior quarters comparable. All balance sheet figures are presented in averages unless otherwise noted.
<TABLE> <CAPTION> Summary of Operations ------------------------------------------------- Three Months Ended Nine Months Ended ---------------------------- September 30 1995 1994 ------------------ ------------------ ------- 1995 1994 Sept 30 June 30 Sept 30 - -------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Taxable-equivalent net interest income $113,332 $102,063 $39,401 $37,540 $34,960 Taxable-equivalent adjustment 631 454 263 189 157 -------- ------- ------- ------- ------- Net interest income 112,701 101,609 39,138 37,351 34,803 Provision for possible loan losses 4,772 --- 1,500 2,772 --- Non-Interest income: Net gain (loss) on securities transactions 93 (491) --- --- (51) Other 64,132 60,231 21,066 22,743 21,504 ------- ------- ------- ------- ------- Total non-interest income 64,225 59,740 21,066 22,743 21,453 Non-Interest expense: Restructuring costs 400 830 --- --- 830 Provision for real estate losses 600 --- 100 --- --- Other 119,011 117,680 40,209 39,932 40,654 ------- ------- ------- ------- ------- Total non-interest expense 120,011 118,510 40,309 39,932 41,484 ------- ------- ------- ------- ------- Income before income taxes 52,143 42,839 18,395 17,390 14,772 Income Taxes 18,328 15,005 6,442 6,167 5,278 ------- ------- ------- ------- ------- Net Income $ 33,815 $ 27,834 $11,953 $11,223 $ 9,494 ======= ======= ======= ======= ======= Net Income per common share: Primary $ 2.99 $ 2.48 $ 1.05 $ .99 $ .84 Fully Diluted 2.97 2.48 1.05 .99 .84 Return on Average Assets 1.16% 1.02% 1.18% 1.16% 1.03% Return on Average Equity 14.20 13.07 14.43 14.06 12.91 </TABLE> Net Interest Income The increase in net interest income from the second quarter of 1995 and the third quarter of 1994 reflects increased loan volumes and the favorable impact of the acquisitions. The net interest margin was 4.58 percent for the third quarter of 1995 compared to 4.52 percent and 4.48 percent for the second quarter of 1995 and third quarter of 1994, respectively. Net interest spread of 3.81 percent increased nine basis points from the second quarter of 1995 and decreased seven basis points from the third quarter of 1994. The net interest spread increase from the second quarter of 1995 was primarily a result of lower deposit costs. The decrease from the third quarter of 1994 resulted from narrower spreads between loan yields and deposit costs.
<TABLE> <CAPTION> Change in Net Interest Income ---------------------------------------------------------------- Third Quarter Third Quarter Year-to-Date 1995 1995 1995 vs. vs. vs. Third Quarter Second Quarter Year-to-Date 1994 1995 1994 ---------------------------------------------------------------- Percentage of Percentage of Percentage of Amount Total Change Amount Total Change Amount Total Change - -------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> <C> Due to volume $ 4,273 96.22% $ 1,113 59.81% $ 9,845 87.36% Due to interest rate spread 168 3.78 748 40.19 1,424 12.64 ------- ------- ------- ------- ------- ------- $ 4,441 100.00% $ 1,861 100.00% $11,269 100.00% ======= ======= ======= ======= ======= ======= </TABLE> <TABLE> <CAPTION> Non-Interest Income Nine Months Ended Three Months Ended September 30 ------------------------------ ------------------ 1995 1994 -------------------- ------- Non-Interest Income 1995 1994 Sept 30 June 30 Sept 30 - ------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Trust department $23,841 $22,024 $ 7,720 $ 8,070 $ 7,628 Service charges on deposit accounts 22,086 21,121 7,548 7,484 7,385 Other service charges, collection and exchange charges, commissions and fees 8,096 7,001 2,900 2,840 2,483 Net gain (loss) on securities transactions 93 (491) --- --- (51) Other 10,109 10,085 2,898 4,349 4,008 ------- ------- ------- ------- ------- Total $64,225 $59,740 $21,066 $22,743 $21,453 ======= ======= ======= ======= ======= </TABLE> For the third quarter 1995... Total non-interest income was down $1.7 million or 7.4 percent compared to the second quarter of 1995 and down 1.8 percent from the third quarter of 1994. Second quarter results were favorably impacted by the transfer of Frost Bank's municipal bond administration business to The Bank of New York and the absence of such business had a negative impact on third quarter non interest income. Trust fee income decreased 4.3 percent from last quarter and was up slightly from the third quarter of 1994. The decrease from the second quarter can be attributed to lower tax fees, which are typically highest in the second quarter, and lower corporate trust income which is directly related to the sale of the Corporation's municipal bond administration business to The Bank of New York in the second quarter. Service charges on deposit accounts were up slightly compared to the second quarter of this year and increased 2.2 percent from the third quarter of 1994. Most of the increase from the third quarter last year results from service charges related to the recent acquisitions. Other service charges increased 2.1 percent compared to the second quarter of 1995 and 16.8 percent compared to the third quarter of 1994. The increase from the third quarter of 1994 is mainly due to bankcard discounts and fees from the sale of mutual funds. Other non-interest income decreased $1.5 million or 33.4 percent from the second quarter of this year and $1.1 million or 27.7 percent compared to the third quarter of 1994. Most of the decrease from the second quarter is due to the gain recognized on the transfer of the bond administration business and lower gains on the sales of foreclosed assets. The decrease from the third quarter of 1994 is mostly due to lower income from foreclosed properties.
For the nine months ended September 30, 1995... Non-interest income rose $4.5 million or 7.5 percent compared to the same period last year. Trust income increased $1.8 million or 8.3 percent due to improved financial market conditions and a higher fee structure that was implemented in the second quarter last year. Service charges on deposit accounts increased $965,000 or 4.6 percent compared to the same period last year. Most of the increase is due to higher volumes. Other service charges rose $1.1 million or 15.6 percent compared to the same period one year ago. The increase is mainly due to bankcard income, fees from the sale of mutual funds and higher loan prepayment penalty fees. Other income is unchanged compared to the same period last year, while income from securities transactions is up $584,000 as a result of a loss recognized in the third quarter of last year. Non-Interest Expense <TABLE> <CAPTION> Three Months Ended Nine Months Ended ------------------------------ September 30 1995 1994 ------------------ -------------------- ------- Non-Interest Expense 1995 1994 Sept 30 June 30 Sept 30 - ------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> <C> Salaries and wages $ 43,026 $ 39,436 $15,094 $14,395 $13,030 Pension and other employee benefits 7,786 8,691 2,609 2,371 2,734 Net occupancy of banking premises 13,438 12,495 4,532 4,323 4,232 Furniture and equipment 7,890 7,870 2,780 2,550 2,770 Restructuring costs 400 830 --- --- 830 Other 46,871 49,188 15,194 16,293 17,888 -------- -------- ------- ------- ------- 119,411 118,510 40,209 39,932 41,484 Provision for real estate losses 600 --- 100 --- --- -------- -------- ------- ------- ------- Total $120,011 $118,510 $40,309 $39,932 $41,484 ======== ======== ======= ======= ======= </TABLE> For the third quarter 1995... Non-interest expense was flat compared to last quarter and decreased $1.2 million or 2.8 percent compared to the third quarter of 1994. Salaries and wages increased 4.9 percent from the second quarter of 1995 and 15.8 percent from the third quarter of 1994. The majority of the increase from both periods is due to acquisitions. Pension and employee benefits increased 10.0 percent compared to the second quarter of 1995 and decreased 4.6 percent compared to the third quarter of 1994. The second quarter benefits expense was favorably impacted by a refund on workers' compensation insurance, while the decrease from the third quarter of 1994 is primarily due to lower medical insurance expense. Net occupancy of banking premises expense increased 4.8 percent from the second quarter of 1995 and 7.1 percent from the third quarter of 1994. Most of the increase from both periods results from the recent acquisitions. Furniture and equipment expense increased 9.0 percent from the second quarter of 1995 and was flat compared to the third quarter of 1994. Approximately 40 percent of the increase from the second quarter is due to the recent acquisitions. The remainder of the increase is due to higher equipment rental and service contracts expense. Other non-interest expenses decreased 6.7 percent from the second quarter of 1995 and 15.1 percent from the third quarter of 1994 mostly due to a reduction in FDIC insurance premiums. Under current FDIC guidelines, the new assessment rate imposed on banks ranges from 4 cents for each $100 of domestic deposits (for well capitalized banks in the highest of three supervisory rating categories) to 31 cents (for inadequately capitalized banks in the lowest of the three supervisory rating categories). This is a decrease from the previous assessment range of 23 cents to 31 cents for those respective categories for each $100 of domestic deposits. Timing of charitable contributions also accounts for a portion of the decrease from the third quarter of 1994.
For the nine months ended September 30, 1995... Total non-interest expense was up $1.5 million or 1.3 percent compared to the same period one year ago. Salaries and wages were up $3.6 million or 9.1 percent compared to the same period one year ago primarily because of the acquisitions. Pension and other benefits decreased 10.4 percent from the same period last year due to lower medical insurance expense and a refund on workers' compensation insurance. Net occupancy of banking premises increased $943,000 primarily due to higher property taxes, increased lease expense as a result of acquisitions, and building maintenance expenses, while furniture and equipment expense remained unchanged. Other non-interest expenses decreased $2.3 million primarily because of the reduction in the required FDIC insurance premium. Year-to-date 1995 non-interest expenses also include a $400,000 restructuring charge related to the market valuation of bank premises available for sale and a $600,000 provision for foreclosed real estate losses. The same period last year included an $830,000 restructuring charge and no provision for foreclosed real estate losses. Income Taxes Tax expense for the third quarter of 1995 was $6,442,000. This compares to tax expense of $5,278,000 for the third quarter of 1994. The Corporation has an effective tax rate for 1995 and 1994 which approximates the statutory rate of 35 percent. Balance Sheet The acquisitions, higher brokered deposits (which averaged $48,111,000 for the quarter) and public funds are the primary reasons for average balance sheet increases from a year ago. Average assets of $4,031,926,000 increased 3.6 percent and 10.7 percent from the second quarter of 1995 and the third quarter of 1994, respectively. Total deposits averaged $3,356,273,000 for the current quarter, up 4.6 percent from the previous quarter and up 7.8 percent when compared to the third quarter of 1994. Loans <TABLE> <CAPTION> 1995 1994 ------------------------ ------------------------- Loan Portfolio Percentage Period-End Balances September 30 of Total December 31 September 30 - --------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Commercial $ 506,116 28.7% $ 375,085 $ 327,985 Consumer 380,559 21.6 331,039 312,422 Real estate 810,188 46.0 714,518 681,897 Other 66,137 3.8 66,138 52,510 Unearned discount (1,728) (.1) (3,487) (4,338) ---------- ------ ---------- ---------- Total Loans $1,761,272 100.0% $1,483,293 $1,370,476 ========== ====== ========== ========== </TABLE> Average loans for the third quarter of 1995 were $1,747,810,000. This represents an increase of 4.5 percent from the second quarter of 1995 and an increase of 29.3 percent from the third quarter of last year. At September 30, 1995 period-end loans totaled $1,761,272,000, up 1.1 percent from the previous quarter and up 28.5 percent from the same period last year. Most of the increase from the second quarter is attributable to consumer and commercial loans which increased $18 million and $11 million, respectively. This increase was partially offset by a $13 million decrease in real estate loans. During the third quarter, the Corporation continued its loan growth which is reflective of the improved economic conditions in the Texas markets served. Approximately one third of the increase in loans from a year ago resulted from acquisitions. Real Estate Loans Real estate loans at September 30, 1995 were $810,188,000 or 46.0 percent of loans, compared to 49.8 percent a year ago. Residential permanent mortgage loans at September 30, 1995 were $332,469,000 compared to $326,213,000 at June 30, 1995 and $278,711,000 at September 30, 1994. Real estate loans classified as "other" are essentially amortizing commercial and industrial loans with maturities of less than five years secured by real property.
At September 30, 1995, real estate loans 90 days past due (excluding non- accrual and restructured loans) were $3,858,000, compared with $5,179,000 at June 30, 1995, and $3,685,000 at September 30, 1994. <TABLE> <CAPTION> 1995 1994 --------------------- -------- Real Estate Loans Percentage Period-End Balances Sept 30 of Total Sept 30 - ------------------------------------------------------------------------------- <S> <C> <C> <C> Construction $ 45,329 5.6% $ 37,827 Land 39,988 4.9 36,852 Permanent mortgages: Commercial 200,519 24.8 163,823 Residential 332,469 41.0 278,711 Other 191,883 23.7 164,684 -------- ------ -------- $810,188 100.0% $681,897 ======== ====== ======== Non-accrual and restructured $ 12,606 1.7% $ 14,659 </TABLE> Mexico The Corporation's cross border outstandings to Mexico, excluding $14,305,000 in loans secured by assets held in the United States, totaled $25,262,000 at September 30, 1995 or 1.4 percent of total loans. The peso devaluation which occurred in the fourth quarter of last year will continue to impact the demand for trade-related cross-border loans, except for those Mexican companies dealing in export trade. All of the Corporation's Mexican loans are either secured by liquid U.S. assets or are loaned to financial institutions to finance international trade transactions. Of the trade- related credits, approximately 68 percent are related to companies exporting from Mexico. As of September 30, 1995, none of the Mexican related loans were on non-performing status. <TABLE> <CAPTION> MEXICAN LOANS ---------------------------------------- September 30, 1995 Amount Percentage of Total Loans - ---------------------------------------------------------------------------------------- <S> <C> <C> Loans to financial institutions $25,246 1.4% Loans to private firms or individuals 16 --- ------- ---- $25,262 1.4% ======= ==== </TABLE> Non-Performing Assets <TABLE> <CAPTION> NON-PERFORMING ASSETS -------------------------- Real September 30, 1995 Estate Other Total - --------------------------------------------------------------------------- <S> <C> <C> <C> Non-accrual and restructured loans $12,606 $1,322 $13,928 Foreclosed assets 2,699 528 3,227 ------- ------ ------- Total $15,305 $1,850 $17,155 ======== ====== ======= As a percentage of total non-performing assets 89.2% 10.8% 100.0% </TABLE> Non-performing assets totaled $17,155,000 at September 30, 1995, down 3.5 percent from $17,768,000 at June 30, 1995 and down 16.4 percent from $20,509,000 at September 30, 1994. Non-performing assets as a percentage of total loans and foreclosed assets decreased to .97 percent at September 30, 1995 from 1.49 percent one year ago.
Foreclosed assets consist of property which has been formally repossessed. Foreclosed assets are valued at the lower of the loan balance or estimated fair value, less estimated selling costs, at the time of foreclosure. Write-downs occurring at acquisition are charged against the allowance for possible loan losses. On an ongoing basis, properties are appraised as required by market indications and applicable regulations. Write-downs are provided for subsequent declines in value. Expenses related to maintaining foreclosed properties are included in other non-interest expense. The after-tax impact (assuming a 35 percent marginal tax rate) of lost interest from non-performing assets was $278,000 or $.02 per common share for the third quarter of 1995, compared to approximately $374,000 or $.03 per common share for the third quarter of 1994 and $287,000 or $.03 per common share for the second quarter of 1995. For the nine months ended September 30, 1995, the after-tax impact (assuming a 35 percent marginal tax rate) was approximately $861,000 or $.08 per common share, compared with approximately $1,152,000 or $.10 per common share for the comparable period last year. Total loans 90 days past due (excluding non-accrual and restructured loans) were $5,964,000 at September 30, 1995, compared to $6,440,000 at June 30, 1995, and $5,423,000 at September 30, 1994. Allowance for Possible Loan Losses The allowance for possible loan losses was $30,600,000 or 1.74 percent of period-end loans at September 30, 1995, compared to $28,886,000 or 1.66 percent at June 30, 1995 and $25,467,000 or 1.86 percent at September 30, 1994. The allowance for possible loan losses as a percentage of non-accrual and restructured loans was 219.7 percent at September 30, 1995, compared to 204.4 percent at June 30, 1995 and 159.0 percent at the end of the third quarter of 1994. The Corporation recorded a $1,500,000 provision for possible loan losses during the third quarter of 1995. This compares to $2,772,000 for the previous quarter and no provision for possible loan losses recorded during 1994. The provision is reflective of the continued growth in the loan portfolio. Net recoveries in the third quarter of 1995 totaled $214,000, compared to net charge-offs of $771,000 for the second quarter of 1995 and $180,000 for the third quarter of 1994. <TABLE> <CAPTION> NET CHARGE-OFFS (RECOVERIES) --------------------------------------- 1995 1994 ---------------------------- -------- Third Percentage Second Third Quarter of Total Quarter Quarter - ------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Real Estate $ (118) 55.1% $ (227) $ 805 Commercial and industrial (690) 322.5 (129) (810) Consumer 608 (284.1) 1,127 221 Other, including foreign (14) 6.5 --- (36) -------- ------- ------- -------- $ (214) 100.0% $ 771 $ 180 ======== ======= ======= ======== Provision for possible loan losses $ 1,500 $ 2,772 $ --- Allowance for possible loan losses 30,600 28,886 25,467 </TABLE> Capital and Liquidity At September 30, 1995, shareholders' equity was $330,150,000 compared to $288,793,000 at September 30, 1994 and $321,660,000 at June 30, 1995. The Corporation increased its cash dividend to $.35 per common share in the third quarter of 1995 from $.22 per common share in the second quarter of 1995 and $.15 per common share for the third quarter a year ago. This equates to a dividend payout ratio of 32.7 percent, 21.8 percent and 17.5 percent for the third and second quarters of 1995 and the third quarter of 1994, respectively. The Federal Reserve Board (the "Board") utilizes capital guidelines designed to measure Tier 1 and Total Capital on a risk adjusted basis taking into consideration the risk inherent in both on-balance sheet and off-balance sheet items.
The following summarizes capital information for the Corporation at September 30, 1995 and September 30, 1994. <TABLE> <CAPTION> September 30, 1995 September 30, 1994 ------------------- ------------------- Capital Amount Ratio Amount Ratio - ------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> Risk-Based Tier 1 Capital $ 269,969 13.03% $ 248,947 14.88% Tier 1 Capital Minimum requirement 82,905 4.00 66,917 4.00 Total Capital $ 295,935 14.28% $ 269,914 16.13% Total Capital Minimum requirement 165,810 8.00 133,834 8.00 Risk-adjusted assets, net of goodwill $2,072,629 $1,672,931 Leverage ratio 6.80% 6.92% Average equity as a percentage of average assets 8.19 7.82 </TABLE> In December of 1991, the FDIC Improvement Act of 1991 ("FDICIA") established five capital tiers. Federal banking agencies adopted final rules effective December 16, 1992 relating to these tiers. At September 30, 1995, both of the Corporation's subsidiary banks were considered "well capitalized" as defined by FDICIA, the highest regulatory category. A financial institution is deemed to be well capitalized if the institution has a total risk-based capital ratio of 10.0 percent or greater, a Tier 1 risk-based capital ratio of 6.0 percent or greater, and a leverage ratio of 5.0 percent or greater, and the institution is not subject to an order, written agreement, capital directive or prompt corrective action directive to meet and maintain a specific level for any capital measure. Funding sources available at the holding company level include a $7,500,000 short-term line of credit. There were no borrowings outstanding from this source at September 30, 1995. Asset liquidity is provided by cash and assets which are readily marketable or which will mature in the near future. These include cash, time deposits in banks, securities available for sale, maturities and cash flows from securities held to maturity, and Federal funds sold and securities purchased under resale agreements. Liability liquidity is provided by access to funding sources, principally core deposits and Federal funds purchased. Additional sources of liability liquidity include brokered deposits and securities sold under agreement to repurchase. The liquidity position of the Corporation is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate.
<TABLE> <CAPTION> Consolidated Average Balance Sheets and Interest Income Analysis-Year-to-Date Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands - taxable-equivalent basis*) September 30, 1995 September 30, 1994 ------------------------ -------------------------- Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost -------- ------- ------ -------- ------- ----- <S> <C> <C> <C> <C> <C> <C> ASSETS Time deposits $ 17 $ --- 3.88% $ 75 $ 2 3.41% Securities: U.S. Treasury 235,723 10,583 6.00 277,015 8,971 4.33 U.S. Government agencies and corporations 1,308,612 62,711 6.39 1,362,043 60,058 5.88 States and political subdivisions 5,952 412 9.22 6,013 428 9.49 Other 10,441 504 6.43 31,141 1,264 5.43 --------- ------- ---------- ------- Total securities 1,560,728 74,210 6.34 1,676,212 70,721 5.63 Federal funds sold and securities purchased under resale agreements 110,208 4,781 5.72 119,533 3,045 3.36 Loans, net of unearned discount 1,649,910 110,959 8.99 1,314,454 77,134 7.85 --------- ------- ---------- ------- Total Earning Assets and Average Rate Earned 3,320,863 189,950 7.64 3,110,274 150,902 6.48 Cash and due from banks 365,313 337,551 Allowance for possible loan losses (27,602) (26,270) Banking premises and equipment 90,653 89,320 Accrued interest and other assets 140,033 130,545 --------- ---------- Total Assets $3,889,260 $3,641,420 ========== ========== LIABILITIES Demand deposits: Commercial and individual $ 688,880 $ 669,699 Correspondent banks 124,648 126,787 Public funds 35,301 38,752 --------- --------- Total demand deposits 848,829 835,238 Time deposits: Savings and Interest-on-Checking 727,069 9,931 1.83 809,189 10,869 1.80 Money market deposit accounts 587,775 16,704 3.80 540,509 11,007 2.72 Time accounts 944,952 34,888 4.94 857,476 20,932 3.26 Public funds 93,696 2,961 4.23 81,253 1,659 2.73 --------- ------- --------- ------- Total Time deposits 2,353,492 64,484 3.66 2,288,427 44,467 2.60 --------- --------- Total Deposits 3,202,321 3,123,665 Federal funds purchased and securities sold under resale agreements 294,642 11,731 5.25 177,098 4,372 3.26 Long-term notes payable --- --- --- --- --- --- Other borrowings 9,988 403 5.40 --- --- --- --------- ------- ---------- ------- Total Interest-Bearing Funds and Average Rate Paid 2,658,122 76,618 3.85 2,465,525 48,839 2.65 --------- ------- ---- ---------- ------- ---- Accrued interest and other liabilities 63,895 55,945 --------- ---------- Total Liabilities 3,570,846 3,356,708 SHAREHOLDERS' EQUITY 318,414 284,712 --------- ---------- Total Liabilities and Shareholders' Equity $3,889,260 $3,641,420 ========== ========== Net interest income $113,332 $102,063 ======= ======= Net interest spread 3.79% 3.85% ===== ===== Net interest income to total average earning assets 4.56% 4.39% Net interest income to total average earning ===== ===== assets - with federal funds net 4.72% 4.57% *Taxable-equivalent basis assuming a 35% tax rate. ===== ===== </TABLE>
<TABLE> <CAPTION> Consolidated Average Balance Sheets and Interest Income Analysis-By Quarter Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands - taxable-equivalent basis*) September 30, 1995 June 30, 1995 ----------------------------------------------------- Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost -------- ------- ----- -------- ------- ----- <S> <C> <C> <C> <C> <C> <C> ASSETS Time deposits $ 15 $ --- 3.52% $ 21 $ --- 3.81% Securities: U.S. Treasury 255,079 3,848 5.99 227,406 3,489 6.15 U.S. Government agencies and corporations 1,301,094 21,001 6.46 1,307,456 20,917 6.40 States and political subdivisions 5,647 134 9.49 6,551 144 8.77 Other 6,447 97 6.03 7,238 115 6.37 --------- ------- --------- ------- Total securities 1,568,267 25,080 6.39 1,548,651 24,665 6.37 Federal funds sold and securities purchased under resale agreements 114,483 1,660 5.67 111,611 1,628 5.77 Loans, net of unearned discount 1,747,810 39,939 9.07 1,671,840 37,811 9.07 --------- ------- --------- ------- Total Earning Assets and Average Rate Earned 3,430,575 66,679 7.73 3,332,123 64,104 7.71 Cash and due from banks 392,513 359,029 Allowance for possible loan losses (29,708) (27,176) Banking premises and equipment 92,132 91,634 Accrued interest and other assets 146,414 137,257 --------- --------- Total Assets $4,031,926 $3,892,867 ========== ========== LIABILITIES Demand deposits: Commercial and individual $ 705,914 $ 685,220 Correspondent banks 134,085 121,666 Public funds 37,277 32,193 ---------- ---------- Total demand deposits 877,276 839,079 Time deposits: Savings and Interest-on-Checking 720,160 2,908 1.60 727,039 3,562 1.97 Money market deposit accounts 638,351 6,238 3.88 564,081 5,408 3.85 Time accounts 1,006,887 13,061 5.15 992,628 12,737 5.15 Public funds 113,599 1 269 4.43 84,904 916 4.33 ---------- ------- ---------- ------- Total time deposits 2,478,997 23,476 3.76 2,368,652 22,623 3.83 ---------- ------- ---------- ------- Total Deposits 3,356,273 3,207,731 Federal funds purchased and securities sold under resale agreements 258,409 3,506 5.31 290,927 3,834 5.21 Long term notes payable --- --- --- --- Other borrowings 21,818 296 5.38 7,906 107 5.44 Total Interest-Bearing Funds and Average Rate Paid 2,759,224 27,278 3.92 2,667,485 26,564 3.99 ---------- ------- ----- ---------- ------- ----- Accrued interest and other liabilities 66,878 66,070 ---------- ---------- Total Liabilities 3,703,378 3,572,634 SHAREHOLDERS' EQUITY 328,548 320,233 ---------- ---------- Total Liabilities and Shareholders' Equity $4,031,926 $3,892,867 ========== ========== Net interest income $39,401 $37,540 ======= ======= Net interest spread 3.81% 3.72% ==== ==== Net interest income to total average earning assets 4.58% 4.52% ==== ==== Net interest income to total average earning assets- with federal funds net 4.74% 4.67% ==== ==== *Taxable-equivalent basis assuming a 35% tax rate. </TABLE>
<TABLE> <CAPTION> Consolidated Average Balance Sheets and Interest Income Analysis-By Quarter Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands - taxable-equivalent basis*) March 31, 1995 December 31, 1994 ------------------------------------------------------- Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Cost Balance Expense Cost --------- -------- ----- --------- ------- ----- <S> <C> <C> <C> <C> <C> <C> ASSETS Time deposits $ 15 $ --- 3.77% $ 17 $ --- 3.65% Securities: U.S. Treasury 224,345 3,246 5.87 263,293 3,193 4.81 U.S. Government agencies and corporations 1,317,465 20,793 6.31 1,361,448 20,896 6.14 States and political subdivisions 5,659 134 9.48 5,680 134 9.47 Other 17,763 292 6.65 23,265 355 6.04 --------- ------ ---------- ------- Total securities 1,565,232 24,465 6.26 1,653,686 24,578 5.94 Federal funds sold and securities purchased under resale agreements 104,418 1,493 5.72 76,802 1,101 5.61 Loans, net of unearned discount 1,527,663 33,208 8.82 1,414,415 29,570 8.29 --------- ------ --------- ------ Total Earning Assets and Average Rate Earned 3,197,328 59,166 7.47 3,144,920 55,249 6.99 Cash and due from banks 343,861 353,406 Allowance for possible loan losses (25,880) (25,763) Banking premises and equipment 88,149 89,754 Accrued interest and other assets 139,338 145,624 --------- --------- Total Assets $3,742,796 $3,707,941 ========= ========= LIABILITIES Demand deposits: Commercial and individual $ 675,170 $ 685,828 Correspondent banks 118,016 117,378 Public funds 36,423 37,876 ------- --------- Total demand deposits 829,609 841,082 Time deposits: Savings and Interest-on-Checking 734,161 3,461 1.91 757,568 3,556 1.86 Money market deposit accounts 560,032 5,057 3.66 567,203 4,703 3.29 Time accounts 833,435 9,090 4.42 846,069 8,432 3.95 Public funds 82,242 777 3.83 100,608 839 3.31 --------- ------ --------- ------- Total Time Deposits 2,209,870 18,385 3.37 2,271,448 17,530 3.06 --------- ------ --------- ------- Total Deposits 3,039,479 3,112,530 Federal funds purchased and other borrowings 335,436 4,391 5.24 234,678 2,793 4.66 --------- ------ --------- ------ Total Interest-Bearing Funds and Average Rate Paid 2,545,306 22,776 3.62 2,506,126 20,323 3.21 --------- ------ ---- --------- ------- ---- Accrued interest and other liabilities 61,667 66,924 --------- --------- Total Liabilities 3,436,582 3,414,132 SHAREHOLDERS' EQUITY 306,214 293,809 --------- --------- Total Liabilities and Shareholders' Equity $3,742,796 $3,707,941 ========= ========== Net interest income $36,390 $34,926 ======= ======= Net interest spread 3.85% 3.78% ===== ===== Net interest income to total average earning assets 4.58% 4.43% ===== ===== Net interest income to total average earning assets - with federal funds net 4.74% 4.54% ===== ===== * Taxable-equivalent basis assuming a 35% tax rate. </TABLE>
<TABLE> <CAPTION> Consolidated Average Balance Sheets and Interest Income Analysis-By Quarter Cullen/Frost Bankers, Inc. and Subsidiaries (dollars in thousands - taxable-equivalent basis*) September 30, 1994 ------------------------- Interest Average Income/ Yield/ Balance Expense Cost --------- -------- ----- <S> <C> <C> <C> ASSETS Time deposits $ 15 $ --- 3.56% Securities: U.S. Treasury 284,653 3,047 4.25 U.S. Government agencies and corporations 1,392,808 20,800 5.97 States and political subdivisions 5,689 135 9.48 Other 26,621 407 5.69 --------- ------- Total securities 1,709,771 24,389 5.70 Federal funds sold and securities purchased under resale agreements 51,091 506 3.87 Loans, net of unearned discount 1,351,462 27,932 8.20 --------- ------ Total Earning Assets and Average Rate Earned 3,112,339 52,827 6.76 Cash and due from banks 333,469 Allowance for possible loan losses (25,763) Banking premises and equipment 90,840 Accrued interest and other assets 129,698 --------- Total Assets $3,640,583 ========= LIABILITIES Demand deposits: Commercial and individual $ 682,961 Correspondent banks 113,604 Public funds 39,251 --------- Total demand deposits 835,816 Time deposits: Savings and Interest-on-Checking 790,578 3,595 1.80 Money market deposit accounts 557,601 4,257 3.03 Time accounts 851,708 7,668 3.57 Public funds 77,021 608 3.13 --------- ------- Total Time Deposits 2,276,908 16,128 2.81 --------- ------- Total Deposits 3,112,724 Federal funds purchased and other borrowings 182,217 1,739 3.73 --------- ------ Total Interest-Bearing Funds and Average Rate Paid 2,459,125 17,867 2.88 --------- ------- ---- Accrued interest and other liabilities 53,807 --------- Total Liabilities 3,348,748 SHAREHOLDERS' EQUITY 291,835 --------- Total Liabilities and Shareholders' Equity $3,640,583 ========= Net interest income $34,960 ======= Net interest spread 3.88% ===== Net interest income to total average earning assets 4.48% ===== Net interest income to total average earning assets - with federal funds net 4.56% ===== * Taxable-equivalent basis assuming a 35% tax rate. </TABLE>
Part II: Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11 Statement regarding Computation of Earnings per Share 27 Statement regarding Financial Data Schedules (b) Reports on Form 8-K None
Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Cullen/Frost Bankers, Inc. (Registrant) Date: November 6, 1995 By: ----------------------- Phillip D. Green Executive Vice President and Treasurer (Duly Authorized Officer and Principal Accounting Officer)
Cullen/Frost Bankers, Inc. Form 10-Q Exhibit Index Exhibit Description - ------- ----------- 11 Statement re: Computation of Earnings per Share 27 Statement re: Financial Data Schedule