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CULLEN/FROST REPORTS THIRD QUARTER EARNINGS

 SAN ANTONIO, Oct. 14 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NASDAQ NMS: CFBI) today reported net income of $11.98 million, or $1.07 per common share, for the third quarter of 1993. This was an increase over the $7.40 million, or $.69 per common share for the same period last year. Year-to-date results are $38.9 million, or $3.50 per common share, compared to net income of $16.1 million or $1.52 per common share for the nine months ended September 30, 1992.
 "We are pleased that our earnings progress continues," said T.C.Frost, chairman of the board. "Results for the first nine months set a new record high in the 125-year history of our organization." During the third quarter, Cullen/Frost reached an agreement to purchase Texas Commerce Bank in Corpus Christi in exchange for Cullen/Frost Bank in Dallas. Texas Commerce's two Corpus Christi offices are expected to merge into Frost Bank during the first quarter of 1994, improving its position in the Corpus Christi market from ninth to fourth. In addition, Cullen/Frost will branch its three Cullen Bank offices in Houston into Frost Bank during the fourth quarter of this year. Severance costs of $600,000 related to this were recognized in the third quarter.
 "These moves are consistent with our strategy to attain a more significant presence in key Texas markets, bring increased convenience to customers and improve operating efficiencies," Frost added.
 Financial highlights include:
 -- Net interest income on a non-taxable equivalent basis was $31.9 million for the third quarter, compared with $32.8 million for the previous quarter. The decline is due principally to maturities of securities with high interest rates.
 --Non-interest income for the third quarter totaled $18.8 million, flat when compared with the previous quarter. Trust income increased while income from foreclosed properties declined.
 --Non-interest expenses excluding the provision for real estate losses and severance costs associated with the Cullen Bank branching and the First City transition costs were $40.0 million compared with $38.5 million for the quarter ended June 30, 1993.
 --The quarterly combined provision for possible loan losses and real estate valuations was a credit of $2.0 million, compared to a $4.4 million charge for the third quarter of last year. Net charge-offs of $500,000 for the year were down compared with $7.7 million for the first nine months of 1992. Non-performing assets at the end of the third quarter were $39.8 million, down from $64.4 million at September 30, 1992.
 --Capital increased with equity to assets at 7.3 percent at September 30, 1993, up from 6.4 percent a year ago.
 --Year-to-date 1993 results were impacted by non-recurring items including $8.4 million in additional income resulting from a mandatory change in accounting for income taxes, $5.0 million in transition expenses associated with the New First City acquisition, and $600,000 related to branching Cullen Bank.
 Cullen/Frost Bankers, Inc. is a multi-bank holding company with assets of $3.5 billion at September 30, 1993. The Corporation has four member banks with a total of 27 offices in five major Texas banking markets: San Antonio, Austin, Corpus Christi, Houston/Galveston and Dallas.
 Cullen/Frost Bankers' stock is traded on The NASDAQ Stock Market under the symbol CFBI.
 CULLEN/FROST BANKERS, INC.
 CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 CONDENSED INCOME STATEMENTS
 (in thousands of dollars)
 1993 1992
 3rd 2nd 1st 4th 3rd
 Qtr Qtr Qtr Qtr Qtr
 Net interest income $31,890 $32,834 $30,980 $29,687 $29,251
 Net interest income (a) 32,107 33,074 31,216 29,950 29,523
 Provision (credit) for
 possible loan losses (2,251) --- (590) 200 1,000
 Non-interest income 18,846 18,822 17,683 16,250 15,911
 Provision for real estate
 losses 266 251 913 1,730 3,365
 Non-interest expense (b)40,584 40,460 40,395 34,547 33,200
 Net income 11,977 10,727 16,224(c) 8,041 7,403
 PER COMMON SHARE DATA
 (adjusted for 10 percent Stock Dividend)
 Net income-Primary $1.07 $.96 $1.47(c) $.74 $.69
 Shareholders' equity 23.39 22.28 21.29 19.80 19.08
 Average common and
 common equivalent
 shares 11,166,116 11,149,081 11,102,284 11,057,560 11,010,958
 BALANCE SHEET SUMMARY
 (in millions of dollars)
 Average Balance:
 Loans $1,173 $1,178 $1,092 $1,009 $1,006
 Earning assets 3,019 3,065 2,834 2,697 2,644
 Total assets 3,549 3,579 3,316 3,117 3,060
 Private deposits 3,017 3,040 2,819 2,637 2,585
 Public funds 124 110 93 114 117
 Total deposits 3,141 3,150 2,912 2,751 2,702
 Period-End Balance:
 Loans 1,174 1,181 1,176 1,011 1,010
 Earning assets 2,961 2,964 2,979 2,708 2,631
 Total assets 3,508 3,494 3,537 3,151 3,064
 Total deposits 3,102 3,102 3,126 2,769 2,718
 Shareholders' equity 257 244 233 206 195
 CAPITAL RATIOS
 Tier 1 Capital
 Ratio 15.08 pct 13.79 pct 12.78 pct 15.66 pct 15.63 pct
 Total Capital
 Ratio 16.45 15.16 14.15 17.52 17.57
 Equity to Assets
 Ratio 7.33 6.99 6.69 6.54 6.37
 Leverage Ratio 6.05 5.52 5.56 6.43 6.19
 (a) Taxable-equivalent basis assuming a 35 percent tax rate for 1993 and a 34 percent tax rate for 1992.
 (b) Excluding the provision for real estate losses. Includes transition costs of approximately $2.0 million and $3.0 million for the second and first quarters of 1993, respectively.
 (c) Includes the one-time benefit of $8,439,000 related to a change in accounting for income taxes.
 Cullen/Frost Bankers, Inc.
 CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 1993 1992
 3rd 2nd 1st 4th 3rd
 Qtr Qtr Qtr Qtr Qtr
 SELECTED FINANCIAL DATA
 (in thousands of dollars)
 Return on average assets 1.34 pct 1.2 pct 1.98 pct 1.03 pct .96 pct
 Return on average equity 18.87 17.87 27.86 15.61 15.14
 Net interest income to
 average earning
 assets (a) 4.24 4.32 4.43 4.43 4.45
 Allowance for possible
 loan losses $28,559 $31,050 $31,389 $31,897 $33,678
 As a percentage of
 period-end loans 2.43 2.63 2.67 3.15 3.33
 Net charge-offs:
 Real estate $307 $76 $484 $2,142 $214
 Commercial
 and industrial (329) (22) (637) (164) 543
 Energy (2) (2) (5) (31) (14)
 Consumer 285 297 440 13 827
 Other (21) (10) (364) 21 (3)
 Total 240 339 (82) 1,981 1,567
 As a percentage of
 average loans .08 .12 (.03) .78 .62
 Non-performing assets:
 Non-accrual loans 19,650 20,073 23,742 23,117 33,224
 Restructured loans 635 647 712 31 31
 Foreclosed assets,
 net of allowance 19,506 21,427 26,175 28,155 31,187
 Total 39,791 42,147 50,629 51,303 64,442
 As a percentage of:
 Total assets 1.13 1.21 1.43 1.63 2.10
 Total loans plus
 foreclosed assets 3.33 3.50 4.21 4.94 6.19
 (a) Taxable-equivalent basis assuming a 35 percent tax rate for 1993 and a 34 percent tax rate 1992.
 CULLEN/FROST BANKERS, INC.
 CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 Nine Months Ended September 30
 1993 1992
 CONDENSED INCOME STATEMENTS
 (in thousands of dollars)
 Net interest income $ 95,704 $ 86,970
 Net interest income (a) 96,397 87,836
 Provision(credit)for possible
 loan losses (2,841) (1,050)
 Non-interest income 55,351 45,563
 Provision for real estate
 losses 1,430 17,581
 Non-interest expense (b) 121,439 99,640
 Net income (c) 38,928 16,081
 PER COMMON SHARE DATA
 (adjusted for 10 percent Stock Dividend)
 Net income-Primary (c) $ 3.50 $ 1.52
 Shareholders' equity 23.39 19.08
 Average common and common
 equivalent shares 11,139,578 10,942,096
 BALANCE SHEET SUMMARY
 (in millions of dollars)
 Average Balance:
 Loans $ 1,148 $ 1,030
 Earning assets 2,973 2,617
 Total assets 3,482 3,034
 Private deposits 2,960 2,584
 Public funds 109 113
 Total deposits 3,069 2,697
 Period-End Balance:
 Loans $ 1,174 $ 1,010
 Earning assets 2,961 2,631
 Total assets 3,508 3,064
 Total deposits 3,102 2,718
 Shareholders' equity 257 195
 (a) Taxable-equivalent basis assuming a 35 percent tax rate for 1993 and a 34 percent tax rate for 1992.
 (b) Excluding the provision for real estate losses. Year-to-date 1993 includes approximately $5.0 million in transition costs related to the New First City acquisition.
 (c) Year-to-date 1993 net income includes the one-time benefit of $8,439,000 related to a change in accounting for income taxes.
 Cullen/Frost Bankers, Inc.
 CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 Nine Months Ended September 30
 1993 1992
 SELECTED FINANCIAL DATA
 (in thousands of dollars)
 Return on average assets 1.49 pct .71 pct
 Return on average equity 21.42 11.44
 Net interest income to
 average earning assets (a) 4.33 4.48
 Allowance for possible
 loan losses $ 28,559 $ 33,678
 As a percentage of
 period-end loans 2.43 pct 3.33 pct
 Net charge-offs:
 Real estate $ 867 $ 2,205
 Commercial
 and industrial (988) 587
 Energy (9) (114)
 Consumer 1,022 1,352
 Other (395) 3,629
 Total $ 497 $ 7,659
 As a percentage of
 average loans .06 pct .99 pct
 Non-performing assets:
 Non-accrual loans $ 19,650 $ 33,224
 Restructured loans 635 31
 Foreclosed assets,
 net of allowance 19,506 31,187
 Total $ 39,791 $ 64,442
 As a percentage of:
 Total assets 1.13 pct 2.10 pct
 Total loans plus
 foreclosed assets 3.33 6.19
 (a) Taxable-equivalent basis assuming a 35 percent tax rate for 1993 and a 34 percent tax rate for 1992.
 -0- 10/14/93
 /CONTACT: John D. Gellhausen of Cullen/Frost, 210-220-4878 or Tammy Valentine of Dublin-McCarter & Associates, 210-227-0221/
 (CFBI)


CO: Cullen/Frost Bankers, Inc. ST: Texas IN: FIN SU: ERN

LG -- NY018 -- 2105 10/14/93 10:23 EDT
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