Cullen/Frost Reports First Quarter Results
- Loans grow by 13.2 percent
- Deposits up by 14.2 percent
SAN ANTONIO, April 24, 2013
SAN ANTONIO, April 24, 2013 /PRNewswire/ -- Cullen/Frost Bankers, Inc. today
released results for the first quarter of 2013, as the Texas financial
services leader posted solid fundamentals and demonstrated its ability to
operate effectively in a challenging regulatory and interest rate environment.
Cullen/Frost net income available to common shareholders for the first quarter
of 2013 was $55.1 million, or $.91 per diluted common share, compared to net
earnings of $61.0 million, or $.99 per diluted common share for the first
quarter 2012. For the first quarter of 2013, return on average assets and
return on average common equity were 1.01 percent and 9.47 percent,
respectively, compared to 1.23 percent and 10.59 percent for the same period
"I am very pleased with our loan and deposit growth for the first quarter
compared to last year's first quarter," said Dick Evans, Cullen/Frost Chairman
and CEO. "Although many businesses remain somewhat cautious, we are seeing the
results of our disciplined calling effort, as both new and established
customers generated average loan growth of 13.2 percent. Deposits continue to
be strong, with average deposits up a solid 14.2 percent, or $2.3 billion,
since the first quarter of 2012. Fee income growth this quarter was
broad-based, including a 6 percent increase in trust and investment management
fees and a 5.6 percent increase in insurance commissions and fees."
The provision for loan losses was $6.0 million, compared to $1.1 million for
the first quarter of 2012 and $4.1 million for the fourth quarter of 2012. Net
charge-offs for the first quarter of 2013 were $16.9 million compared to $4.1
million for the first quarter of 2012. Included in the first quarter's
charge-offs was a $15 million charge-off associated with a single commercial
and industrial loan relationship. "Aside from this one loan, all traditional
measures of credit quality remain positive," saidEvans. Non-performing assets
at March 31, 2013 were $105.9 million, compared to $120.5 million for the
first quarter of 2012.
"Our capital levels and liquidity are stronger today than before the financial
crisis began in 2008. Even as other banks suspended dividends during the
recession, Cullen/Frost continued to pay – and even increase – the dividend we
pay our shareholders. We have increased our dividend for 18 consecutive years.
"As always, I thank our outstanding employees for their hard work, loyalty and
commitment to ensuring that our customers have a positive experience at Frost.
"Just this past week, J.D. Power and Associates' 2013 Retail Banking
Satisfaction Study ranked Frost highest in customer satisfaction with retail
banking in Texas for the fourth consecutive year. I am grateful to our
employees for making this possible," Evans continued.
For the first quarter of 2013, average total loans were $9.1 billion, an
increase of $1.1 billion, or 13.2 percent, compared to $8.0 billion for the
first quarter of 2012. Average total deposits for the first quarter 2013 rose
to $18.7 billion, up 14.2 percent, or $2.3 billion, over the $16.4 billion
reported for the first quarter of 2012. Net interest income on a
taxable-equivalent basis increased to $172.8 million, up 4.9 percent over the
$164.7 million reported for the first quarter a year ago.
Noted financial data for the first quarter:
oTier 1 and Total Risk-Based Capital Ratios for the Corporation at the end
of the first quarter of 2013 were 14.23 percent and 15.44 percent,
respectively, and are in excess of well-capitalized levels. The ratio of
tangible common equity to tangible assets was 8.00 percent at the end of
the first quarter of 2013, compared to 8.93 percent for the same quarter
last year. The tangible common equity ratio, which is a non-GAAP financial
measure, is equal to end of period common shareholders' equity less
goodwill and intangible assets divided by end of period total assets less
goodwill and intangible assets.
oNet interest income on a taxable-equivalent basis for the first quarter
totaled $172.8 million, an increase of 4.9 percent compared to the $164.7
million reported for the first quarter of 2012. The increase was driven
primarily from an increase in the average volume of earning assets and was
partly offset by a decrease in the net interest margin. The net interest
margin was 3.45 percent for the first quarter, compared to 3.73 percent
for the first quarter of 2012 and 3.48 percent for the fourth quarter of
oNon-interest income for the first quarter of 2013 was $77.8 million,
compared to the $72.0 million reported a year earlier. Trust and
investment management fees increased $1.2 million, or 6.0 percent, to
$21.9 million, from the $20.7 million reported in the first quarter of
2012. Most of this increase was due to investment fees, up $1.3 million
from the first quarter last year. Insurance commissions and fees were
$13.1 million, a 5.6 percent increase over the $12.4 million reported for
the first quarter of 2012. Other income was $11.0 million, up $3.8 million
from the $7.2 million reported for the previous year's first quarter. The
increase was due to a gain recognized from the sale of a bank owned
downtown San Antonio office building and parking garage of $4.3 million
that occurred in the first quarter of 2013.
oNon-interest expense for the first quarter of 2013 was $155.8 million, up
$13.8 million, from the $142.0 million for the first quarter of 2012.
Salaries and employee benefits were up $4.1 million, or 5.0 percent, over
the same quarter a year earlier, as a result of normal annual merit and
market increases, and an increase in incentive compensation offset in part
by a decrease in employee stock compensation expense. Other expense was
$41.5 million, an $8.6 million increase from the $32.9 million reported
for the first quarter of 2012. Approximately $6.2 million of the increase
was from the write-down of land that is part of the headquarters facility
that was recently made available for sale. Frost also had an $812,000
increase in ATM expense, related to a branding arrangement that began in
2012 and more than doubled the number of Frost ATMs. In addition, fraud
losses were up $488,000 when compared to the first quarter of 2012.
oFor the first quarter of 2013, the provision for loan losses was $6.0
million, compared to net charge-offs of $16.9 million. For the first
quarter of 2012, the provision for loan losses was $1.1 million, compared
to net charge offs of $4.1 million. The allowance for loan losses as a
percentage of total loans was 1.02 percent at March 31, 2013, compared to
1.32 percent at the end of the first quarter of 2012. Non-performing
assets were $105.9 million at the end of the first quarter of 2013,
compared to $120.5 million at the end of the first quarter of 2012 and
$105.2 million for the fourth quarter of 2012.
Cullen/Frost Bankers, Inc. will host a conference call on Wednesday, April 24,
2013 at 10 a.m. Central Daylight Time (CDT) to discuss the results for the
quarter. The media and other interested parties are invited to access the call
in a "listen only" mode at 800-944-6430. Digital playback of the conference
call will be available after 12 p.m. CDT until midnight Sunday, April 28, 2013
at 855-859-2056, with Conference ID# 35821897. The call will also be available
by webcast on the company's website, frostbank.com, and available for playback
after 2 p.m. CDT. After entering the website, go to "About Frost" on the top
navigation bar, then click on Investor Relations.
Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company,
headquartered in San Antonio, with $22.5 billion in assets at March 31, 2013.
Among the top 50 largest U.S. banks and one of 24 banks included in the KBW
Bank Index, Frost provides a wide range of banking, investments and insurance
services to businesses and individuals across Texas in the Austin, Corpus
Christi, Dallas, Fort Worth, Houston, Rio Grande Valley and San Antonio
regions. Founded in 1868, Frost has helped clients with their financial needs
during three centuries. Additional information is available at frostbank.com.
Forward-Looking Statements and Factors that Could Affect Future Results
Certain statements contained in this Earnings Release that are not statements
of historical fact constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Act"),
notwithstanding that such statements are not specifically identified as such.
In addition, certain statements may be contained in the Corporation's future
filings with the SEC, in press releases, and in oral and written statements
made by or with the approval of the Corporation that are not statements of
historical fact and constitute forward-looking statements within the meaning
of the Act. Examples of forward-looking statements include, but are not
limited to: (i) projections of revenues, expenses, income or loss, earnings or
loss per share, the payment or nonpayment of dividends, capital structure and
other financial items; (ii) statements of plans, objectives and expectations
of Cullen/Frost or its management or Board of Directors, including those
relating to products or services; (iii) statements of future economic
performance; and (iv) statements of assumptions underlying such statements.
Words such as "believes", "anticipates", "expects", "intends", "targeted",
"continue", "remain", "will", "should", "may" and other similar expressions
are intended to identify forward-looking statements but are not the exclusive
means of identifying such statements.
Forward-looking statements involve risks and uncertainties that may cause
actual results to differ materially from those in such statements. Factors
that could cause actual results to differ from those discussed in the
forward-looking statements include, but are not limited to:
oLocal, regional, national and international economic conditions and the
impact they may have on the Corporation and its customers and the
Corporation's assessment of that impact.
oVolatility and disruption in national and international financial markets.
oGovernment intervention in the U.S. financial system.
oChanges in the mix of loan geographies, sectors and types or the level of
non-performing assets and charge-offs.
oChanges in estimates of future reserve requirements based upon the
periodic review thereof under relevant regulatory and accounting
oThe effects of and changes in trade and monetary and fiscal policies and
laws, including the interest rate policies of the Federal Reserve Board.
oInflation, interest rate, securities market and monetary fluctuations.
oThe effects of changes in laws and regulations (including laws and
regulations concerning taxes, banking, securities and insurance) with
which the Corporation and its subsidiaries must comply.
oThe soundness of other financial institutions.
oImpairment of the Corporation's goodwill or other intangible assets.
oActs of God or of war or terrorism.
oThe timely development and acceptance of new products and services and
perceived overall value of these products and services by users.
oChanges in consumer spending, borrowings and savings habits.
oChanges in the financial performance and/or condition of the Corporation's
oAcquisitions and integration of acquired businesses.
oThe ability to increase market share and control expenses.
oThe Corporation's ability to attract and retain qualified employees.
oChanges in the competitive environment in the Corporation's markets and
among banking organizations and other financial service providers.
oThe effect of changes in accounting policies and practices, as may be
adopted by the regulatory agencies, as well as the Public Company
Accounting Oversight Board, the Financial Accounting Standards Board and
other accounting standard setters.
oChanges in the reliability of the Corporation's vendors, internal control
systems or information systems.
oChanges in the Corporation's liquidity position.
oChanges in the Corporation's organization, compensation and benefit plans.
oThe costs and effects of legal and regulatory developments including the
resolution of legal proceedings or regulatory or other governmental
inquiries and the results of regulatory examinations or reviews.
oGreater than expected costs or difficulties related to the integration of
new products and lines of business.
oThe Corporation's success at managing the risks involved in the foregoing
Forward-looking statements speak only as of the date on which such statements
are made. The Corporation undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which such statement is made, or to reflect the occurrence of unanticipated
Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
Net interest $ 152,813 $ 154,405 $ 151,532 $ 149,217 $ 149,707
Net interest 172,802 172,156 167,341 163,972 164,707
Provision for 6,000 4,125 2,500 2,355 1,100
investment 21,885 20,543 20,843 21,279 20,652
charges on 20,044 21,162 20,797 20,639 20,794
commissions and 13,070 8,436 9,964 9,171 12,377
and debit card 4,011 4,330 4,194 4,292 4,117
charges, 7,755 7,740 7,265 7,825 7,350
(loss) on 5 4,435 -- 370 (491)
Other 11,010 9,241 8,095 6,187 7,180
non-interest 77,780 75,887 71,158 69,763 71,979
Salaries and 66,465 67,442 64,984 62,624 63,702
Employee 17,991 12,867 14,019 14,048 16,701
Net occupancy 11,979 11,772 13,193 12,213 11,797
Furniture and 14,185 13,932 14,193 13,734 13,420
Deposit 2,889 3,159 2,593 2,838 2,497
Intangible 820 918 973 994 1,011
Other 41,485 35,977 34,495 36,085 32,912
non-interest 155,814 146,067 144,450 142,536 142,040
Income before 68,779 80,100 75,740 74,089 78,546
Income taxes 13,591 19,912 17,071 16,027 17,513
Net income 55,188 60,188 58,669 58,062 61,033
dividends and 137 -- -- -- --
available to $ 55,051 $ 60,188 $ 58,669 $ 58,062 $ 61,033
PER COMMON SHARE
common share - $ 0.91 $ 0.98 $ 0.95 $ 0.94 $ 0.99
common share - 0.91 0.97 0.95 0.94 0.99
Cash dividends 0.48 0.48 0.48 0.48 0.46
per common share
Book value per
at end 38.33 39.32 39.35 38.48 37.81
Period-end 59,970 61,479 61,462 61,404 61,373
common shares - 60,593 61,382 61,317 61,291 61,201
of stock 581 339 369 344 332
common shares - 61,174 61,721 61,686 61,635 61,533
Return on 1.01 % 1.09 % 1.11 % 1.14 % 1.23 %
average common 9.47 9.84 9.75 9.95 10.59
income to 3.45 3.48 3.54 3.61 3.73
^(1) Taxable-equivalent basis assuming a 35% tax rate.
Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
($ in millions)
Loans $ 9,109 $ 8,868 $ 8,635 $ 8,268 $ 8,050
Earning assets 20,415 20,138 19,218 18,605 18,087
Total assets 22,213 21,964 21,010 20,401 19,920
Non-interest-bearing 7,431 7,690 7,161 6,829 6,399
Interest-bearing 11,292 10,736 10,289 10,053 9,998
Total deposits 18,723 18,426 17,450 16,882 16,397
Shareholders' 2,431 2,433 2,393 2,347 2,317
Loans $ 9,162 $ 9,224 $ 8,811 $ 8,490 $ 8,127
Earning assets 20,787 21,148 20,024 19,033 18,583
Goodwill and 543 544 545 546 547
Total assets 22,498 23,124 21,848 20,866 20,417
Total deposits 19,044 19,497 18,245 17,277 16,909
Shareholders' 2,443 2,417 2,419 2,363 2,321
shareholders' 2,229 2,179 2,144 2,110 2,076
($ in thousands)
Allowance for $ 93,589 $ 104,453 $ 105,401 $ 105,648 $ 107,181
percentage of 1.02 % 1.13 % 1.20 % 1.24 % 1.32 %
Net charge-offs $ 16,864 $ 5,073 $ 2,747 $ 3,888 $ 4,066
a percentage of 0.75 % 0.23 % 0.13 % 0.19 % 0.20 %
Non-accrual $ 91,644 $ 89,744 $ 106,407 $ 92,255 $ 97,870
Restructured 1,613 -- -- -- --
Foreclosed 12,630 15,502 18,524 19,818 22,676
Total $ 105,887 $ 105,246 $ 124,931 $ 112,073 $ 120,546
and foreclosed 1.15 % 1.14 % 1.41 % 1.32 % 1.48 %
Total assets 0.47 0.46 0.57 0.54 0.59
Risk-BasedCapital 14.23 % 13.68 % 14.10 % 14.07 % 14.47 %
Risk-BasedCapital 15.44 15.11 15.62 15.61 16.10
Leverage Ratio 8.42 8.28 8.59 8.65 8.68
Assets Ratio 10.86 10.45 11.07 11.32 11.37
Assets Ratio 10.94 11.08 11.39 11.51 11.63
^(1)Shareholders' equity excluding accumulated other comprehensive
SOURCE Cullen/Frost Bankers, Inc.
Press spacebar to pause and continue. Press esc to stop.