Cullen/Frost and WNB Bancshares Announce Merger Agreement

          Cullen/Frost and WNB Bancshares Announce Merger Agreement

PR Newswire

SAN ANTONIO and ODESSA, Texas, Aug. 13, 2013

SAN ANTONIO and ODESSA, Texas, Aug. 13, 2013 /PRNewswire/ -- Cullen/Frost
Bankers, Inc. (NYSE: CFR) and WNB Bancshares, Inc. ("WNB") announced today the
signing of a definitive merger agreement that provides for the merger of WNB
into Cullen/Frost. The announcement was made jointly by Dick Evans, chairman
and CEO of Cullen/Frost Bankers, Inc., and Jack Wood, president of WNB. The
agreement has been approved by the Boards of Directors of both companies.


WNB Bancshares operates eight branches through its subsidiary, Western
National Bank, primarily in the Midland and Odessa areas of West Texas, with
$1.4 billion in assets, $1.2 billion in deposits and $656 million in loans as
of June 30, 2013. WNB was chartered in 1977 and is owned primarily by the
Wood Family.

Cullen/Frost and WNB expect that the merger will have many strategic benefits
for both companies: it will allow Cullen/Frost to strengthen its
Texas-focused franchise and enter the attractive Midland and Odessa markets
while giving the customers of WNB access to Cullen/Frost's wide array of
financial products and services. WNB's senior management has agreed to remain
with Cullen/Frost. Jack Wood, WNB's president, will join the Cullen/Frost
Board. All other current WNB Board members will continue as advisory
directors for their regions.

Cullen/Frost chairman and CEO Dick Evans said, "The Permian Basin plays a big
role in the Texas economy because it is a driver of the state's surging oil
and gas business. Joining WNB with the Cullen/Frost team is a great way to
increase our participation in the region, and we're proud to bring our 145
year-old franchise to this dynamic area.

"Currently, the Permian Basin is responsible for approximately 14 percent of
the oil produced in the United States and 57 percent of the oil produced in
Texas. New technology has made vast amounts of additional reserves available
for production, which we believe will extend the region's growth for decades
as exploration and production companies, oilfield services companies and other
commercial ventures continue to invest in the region."

Evans also said, "Already, the region is a proven job generator for oil and
gas and other industries. Forbes Magazine recently ranked Midland and Odessa
first and second in the nation, respectively, for job growth in small places.
This job growth is the result of 40 consecutive months of economic expansion
in the region. Based on June 2013 Bureau of Labor Statistics data, the
unemployment rates for Midland at 3.7% and Odessa at 4.5% are well below those
of Texas (6.5%) and the U.S (7.6%)."

Evans continued, "I am delighted we have reached an agreement to merge with
WNB. We have known and admired the Wood family for many years. They operate
their bank with the same strong values that have guided them through years of
doing business in the Midland and Odessa areas. Frost and WNB share a common
vision of community-oriented banking, a conservative lending philosophy and a
superior level of customer service. In addition, the WNB team provides proven
oil and gas lending expertise and infrastructure. I am happy to welcome the
employees and customers of WNB into the Frost financial family."

Jack Wood, president of WNB said, "We are extremely happy to merge with
Cullen/Frost. Our organizations share a strong commitment to customer service
and high standards. We believe that joining with Frost will allow us to bring
additional sophisticated financial services to our customers while maintaining
the level of service they've come to expect from us."

Under the terms of the agreement, Cullen/Frost will issue two million shares
of Cullen/Frost common stock and an amount of cash necessary to bring the
aggregate consideration to $220 million. The two million shares will be
valued at the volume weighted average price of the Cullen/Frost common stock
during the 10 trading days shortly prior to closing. The $220 million
purchase price can be adjusted up or down based on a targeted book equity
value of WNB of $87 million at closing. The transaction is currently expected
to be approximately 4 percent accretive to Cullen/Frost's 2014 earnings per
share before one-time restructuring charges.

The transaction is expected to close in January 2014 upon the satisfaction of
customary closing conditions, including the approvals of the Federal Reserve
and the Texas Department of Banking.

Cullen/Frost's financial advisors were Goldman, Sachs & Co. and its legal
advisors were Sullivan & Cromwell LLP. WNB's financial advisors were Commerce
Street Capital, LLC and its legal advisors were Haynie Rake Repass & Lowry,
P.C. and Atkins, Hollmann, Jones, Peacock, Lewis, & Lyon, Inc.

An Investor Presentation containing additional information regarding this
proposed merger is available on Cullen/Frost's Investor Relations website page
at The Investor Presentation does not form a part of this

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company,
headquartered in San Antonio, with $22.6 billion in assets at June 30, 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

Cautionary Statements and Factors that Could Affect Future Results
Certain statements contained in this announcement 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 future filings of
Cullen/Frost Bankers, Inc. ("Cullen/Frost") with the SEC, in press releases,
and in oral and written statements made by or with the approval of
Cullen/Frost 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) statements
about the benefits of the merger (the "Merger") of Cullen/Frost and WNB
Bancshares, Inc. ("WNB"), including future financial and operating results,
cost savings, enhanced revenues and accretion to reported earnings that may be
realized from the Merger; (ii) statements of plans, objectives and
expectations of Cullen/Frost or WNB or their managements or Boards of
Directors; (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:

  oThe risk that the merger does not close at the expected time or at all.
  oThe risk that the businesses of Cullen/Frost and WNB will not be
    integrated successfully or such integration may be more difficult,
    time-consuming or costly than expected.
  oExpected cost savings from the Merger may not be fully realized or
    realized within the expected time frame.
  oRevenues following the Merger may be lower than expected.
  oDeposit attrition, operating costs, customer loss and business disruption
    following the Merger, including, without limitation, difficulties in
    maintaining relationships with employees, may be greater than expected.
  oThe ability to obtain governmental approvals of the Merger on the proposed
    terms and schedule.
  oLocal, regional, national and international economic conditions and the
    impact they may have on Cullen/Frost and WNB and their customers and
    Cullen/Frost's and WNB's assessment of that impact.
  oChanges in 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
  oInflation, interest rate, securities market and monetary fluctuations.
  oChanges in the competitive environment among financial holding companies
    and banks.
  oChanges in laws and regulations (including laws and regulations concerning
    taxes, banking, securities and insurance) with which Cullen/Frost and WNB
    must comply.

Additional factors that could cause Cullen/Frost's results to differ
materially from those described in the forward-looking statements can be found
in Cullen/Frost's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K filed with the SEC. All subsequent written and
oral forward-looking statements concerning the proposed transaction or other
matters and attributable to Cullen/Frost or WNB or any person acting on their
behalf are expressly qualified in their entirety by the cautionary statements
referenced above. Forward-looking statements speak only as of the date on
which such statements are made. Cullen/Frost and WNB undertake 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 events.

Cullen/Forst contacts
Greg Parker
Investor Relations
Renee Sabel
Media Relations

Western National contact
Brenda Denton
Media Relations

SOURCE Cullen/Frost Bankers, Inc.

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