PR Newswire | Jan 27, 2022 09:01AM EST

01/27 08:00 CST

CULLEN/FROST REPORTS 4th QUARTER AND 2021 ANNUAL RESULTSBoard declares first quarter dividend on common and preferred stock, and authorizes $100 million stock repurchase program SAN ANTONIO, Jan. 27, 2022

SAN ANTONIO, Jan. 27, 2022 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE: CFR) today reported fourth quarter and full year results for 2021. Net income available to common shareholders for the fourth quarter of 2021 was $99.4 million, or $1.54 per diluted common share, compared to $88.3 million, or $1.38 per diluted common share for the fourth quarter of 2020. For the fourth quarter of 2021, returns on average assets and average common equity were 0.81 percent and 9.26 percent, respectively, compared to 0.86 percent and 8.55 percent for the same period in 2020.

The company also reported 2021 annual net income available to common shareholders of $435.9 million, an increase of 34.7 percent compared to 2020 earnings available to common shareholders of $323.6 million. On a per-share basis, 2021 earnings were $6.76 per diluted common share compared to $5.10 per diluted common share reported in 2020. For the year 2021, returns on average assets and average common equity were 0.95 percent and 10.35 percent respectively, compared to 0.85 percent and 8.11 percent reported in 2020.

"In the fourth quarter and throughout 2021, we continued executing on our organic growth strategy by opening new locations, preparing for the Dallas expansion that's now under way, working to once again make mortgage loans, and helping more than 30,000 PPP borrowers through the loan forgiveness process," said Phil Green, Cullen/Frost chairman and CEO. "This strategy plus the outstanding dedication of our Frost bankers led to an acceleration in linked-quarter growth in loans excluding PPP, and puts us in a strong position as we move into the new year."

For the fourth quarter of 2021, net interest income on a taxable-equivalent basis was $264.0 million, down 0.6 percent compared to the same period in 2020. Average loans for the fourth quarter of 2021 decreased $2.0 billion, or 10.9 percent, to $16.0 billion, from the $17.9 billion reported for the fourth quarter a year earlier, and decreased 1.3 percent compared to the third quarter of 2021. Excluding PPP loans, fourth quarter average loans of $15.4 billion represented a 2.4 percent increase compared to the fourth quarter of 2020 and a 3.8 percent increase compared to the third quarter of 2021. Average deposits for the quarter were $41.0 billion, an increase of 20.2 percent, or $6.9 billion, compared to $34.1 billion in last year's fourth quarter.

For 2021, average total loans were $16.8 billion, a decrease of approximately $394.8 million, or 2.3 percent, from the $17.2 billion reported the previous year. Excluding PPP loans, 2021 average loans of $14.9 billion represented a 0.6 percent decrease compared to 2020. Average total deposits for 2021 were $38.5 billion, up 22.4 percent, or $7.0 billion, compared to the $31.4 billion reported in 2020.

Noted financial data for the fourth quarter

* The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital Ratios for Cullen/Frost at the end of the fourth quarter of 2021 were 13.13 percent, 13.70 percent, and 15.45 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III requirements. * Net interest income on a tax-equivalent basis was $264.0 million for the fourth quarter of 2021, a decrease of 0.6 percent compared to the $265.7 million reported for the fourth quarter of 2020. The net interest margin was 2.31 percent for the fourth quarter of 2021 compared to 2.82 percent for the fourth quarter of 2020 and 2.47 percent for the third quarter of 2021. * Non-interest income for the fourth quarter of 2021 was $109.1 million, up $17.7 million, or 19.4 percent, from the $91.3 million reported a year earlier. During the fourth quarter, we recorded a $9.7 million gain on the exchange of a branch facility. Excluding the gain on this transaction, non-interest income for the fourth quarter of 2021 would have been up $8.0 million, or 8.7 percent, compared to the fourth quarter of 2020. Other non-interest income increased $8.9 million or 66.7 percent compared to the fourth quarter of 2020, primarily driven by the $9.7 million gain on the above-mentioned exchange transaction. Trust and investment management fees increased by $6.2 million, or 19.1 percent, compared to the fourth quarter of 2020. The increase in trust and investment management fees was primarily the result of a $3.7 million increase in investment management fees, a $1.7 million increase in oil and gas fees and a $1.3 million increase in estate fees. Service charges on deposits increased $1.4 million, or 6.7 percent, compared to the fourth quarter of 2020, mainly driven by a $1.4 million increase in commercial service charges related to treasury management services. * Non-interest expense for the fourth quarter of 2021 was $238.6 million, up $15.7 million, or 7.0 percent, compared to the $222.9 million reported for the fourth quarter of 2020. Non-interest expense for the fourth quarter was impacted by a $5.5 million contribution to the Frost Charitable Foundation and $4.2 million of asset write-offs during the fourth quarter of 2021. Excluding these two items, total non-interest expense for the fourth quarter of 2021 would have increased by $5.9 million, or 2.7 percent compared to the fourth quarter of 2020. Other non-interest expense increased by $9.7 million or 21.5 percent compared to the fourth quarter of 2020, primarily driven by the increase in donations expense and the asset write-offs mentioned above. Employee benefits expense increased by $3.3 million compared with the fourth quarter of 2020. The increase in employee benefits expense was primarily related to a $3.0 million increase in discretionary benefit plan expense. Technology, furniture and equipment expense was up $766,000 or 2.8 percent compared to the fourth quarter of 2020. The increase was primarily related to increases in cloud services expense (up $1.2 million) and depreciation of furniture and equipment (up $600,000) partly offset by a decrease in software maintenance (down $1.3 million). * For the fourth quarter of 2021, the company did not report a credit loss expense, and reported net charge-offs of $2.8 million. For the fourth quarter of 2020, the company reported a $13.8 million credit loss expense and reported net charge-offs of $13.6 million. The allowance for credit losses on loans as a percentage of total loans was 1.52 percent at December 31, 2021, compared to 1.58 percent at September 30, 2021 and 1.51 percent at year-end 2020. Excluding PPP loans, which carry a guarantee from the SBA, the allowance for credit losses on loans as a percentage of total loans was 1.56 percent at the end of the fourth quarter of 2021, compared to 1.67 percent at September 30, 2021 and 1.75 percent at year-end 2020. Non-accrual loans were $53.7 million at year end, compared to $57.1 million the previous quarter, and $61.4 million at year-end 2020.

The Cullen/Frost board declared a first-quarter cash dividend of $0.75 per common share, payable March 15, 2022 to shareholders of record on February 28 of this year. The board of directors also declared a cash dividend of $11.125 per share of Series B Preferred Stock (or $0.278125 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable on March 15, 2022, to shareholders of record on February 28 of this year.

In addition, the Corporation's board of directors authorized a new $100.0 million stock repurchase plan. Under the plan, shares may be repurchased over a one-year period from time to time at various prices in the open market or through private transactions.

Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 27, 2022, at 1:00 p.m. Central Time (CT) to discuss the results for the quarter and the year. The media and other interested parties are invited to access the call in a "listen only" mode at 877-709-8150. Playback of the conference call will be available after 5:00 p.m. CT on the day of the call until midnight Sunday, January 30, 2022 at 877-660-6853, with the Conference ID# of 13725840. A replay of the call will also be available by webcast at the URL listed below after 5:00 p.m. CT on the day of the call.

Cullen/Frost investor relations website: https://investor.frostbank.com/

Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $50.9 billion in assets at December 31, 2021. One of the 50 largest U.S. banks, 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, Permian Basin, 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"), including statements regarding the potential effects of the ongoing COVID-19 pandemic on our business, financial condition, liquidity and results of operations, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us or with our approval 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, services or operations; (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:

* Local, regional, national and international economic conditions and the impact they may have on us and our customers and our assessment of that impact. * Volatility and disruption in national and international financial and commodity markets. * Government intervention in the U.S. financial system. * Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs. * Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements. * The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board. * Inflation, interest rate, securities market and monetary fluctuations. * The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which we and our subsidiaries must comply. * The soundness of other financial institutions. * Political instability. * Impairment of our goodwill or other intangible assets. * Acts of God or of war or terrorism. * The potential impact of climate change. * The timely development and acceptance of new products and services and perceived overall value of these products and services by users. * Changes in consumer spending, borrowings and savings habits. * Changes in the financial performance and/or condition of our borrowers. * Technological changes. * The cost and effects of cyber incidents or other failures, interruptions or security breaches of our systems or those of our customers or third-party providers. * Acquisitions and integration of acquired businesses. * Our ability to increase market share and control expenses. * Our ability to attract and retain qualified employees. * Changes in the competitive environment in our markets and among banking organizations and other financial service providers. * The 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. * Changes in the reliability of our vendors, internal control systems or information systems. * Changes in our liquidity position. * Changes in our organization, compensation and benefit plans. * The impact of the ongoing COVID-19 pandemic and any other pandemic, epidemic or health-related crisis. * The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals. * Greater than expected costs or difficulties related to the integration of new products and lines of business. * Our success at managing the risks involved in the foregoing items

Further, statements about the potential effects of the ongoing COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any 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/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)



2021 2020

4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr

CONDENSED INCOME STATEMENTS

Net interest $ 240,708 $ 246,122 $ 257,156 $ 240,881 $ 242,246 income

Net interest 264,049 269,321 279,997 263,949 265,721 income ^(1)

Credit loss - - - 63 13,756 expense

Non-interest income:

Trust and investment 38,425 37,381 37,874 35,314 32,270 management fees

Service charges on deposit 22,234 21,216 19,849 19,993 20,830 accounts

Insurance commissions and 11,714 11,748 10,773 17,313 11,704 fees

Interchange and card transaction4,237 4,490 4,641 4,093 3,746 fees

Other charges, commissions and 10,107 9,785 8,640 8,304 9,427 fees

Net gain (loss) on securities 69 - - - - transactions

Other 22,270 8,569 9,470 8,219 13,360

Total non-interest 109,056 93,189 91,247 93,236 91,337 income



Non-interest expense:

Salaries and 105,541 99,463 97,035 93,458 104,843 wages

Employee 19,189 21,576 18,728 22,536 15,852 benefits

Net occupancy 27,435 27,208 26,650 26,051 26,822

Technology, furniture and 28,230 28,494 27,998 28,016 27,464 equipment

Deposit 3,339 3,088 2,877 2,928 2,706 insurance

Intangible 153 157 185 202 208 amortization

Other 54,708 38,017 41,781 36,951 45,017

Total non-interest 238,595 218,003 215,254 210,142 222,912 expense

Income before 111,169 121,308 133,149 123,912 96,915 income taxes

Income taxes 10,148 13,333 15,081 7,897 8,645

Net income 101,021 107,975 118,068 116,015 88,270

Preferred stock 1,669 1,668 1,669 2,151 - dividends

Net income available to $ 99,352 $ 106,307 $ 116,399 $ 113,864 $ 88,270 common shareholders



PER COMMON SHARE DATA

Earnings per common share - $ 1.54$ 1.66$ 1.81$ 1.78$ 1.39basic

Earnings per common share - 1.54 1.65 1.80 1.77 1.38 diluted

Cash dividends 0.75 0.75 0.72 0.72 0.72 per common share

Book value per common share at 67.11 66.39 66.44 64.89 65.82 end of quarter



OUTSTANDING COMMON SHARES

Period-end 63,986 63,668 63,646 63,532 63,011 common shares

Weighted-average common shares - 63,879 63,652 63,606 63,306 62,940 basic

Dilutive effect of stock 462 445 496 510 311 compensation

Weighted-average common shares - 64,341 64,097 64,102 63,816 63,251 diluted



SELECTED ANNUALIZED RATIOS

Return on 0.81 % 0.90 % 1.02 % 1.09 % 0.86 % average assets

Return on average common 9.26 9.87 11.18 11.13 8.55 equity

Net interest income to 2.31 2.47 2.65 2.72 2.82 average earning assets ^(1)



(1) Taxable-equivalent basis assuming a 21% tax rate.



Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)



2021 2020

4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr

BALANCE SHEET SUMMARY

($ in millions)

Average Balance:

Loans $ 15,984 $ 16,189 $ 17,246 $ 17,684 $ 17,945

Earning assets 46,008 43,980 42,916 39,804 38,262

Total assets 48,897 46,774 45,665 42,530 40,963

Non-interest-bearing17,885 16,999 16,456 15,309 15,119 demand deposits

Interest-bearing 23,142 22,117 21,815 20,097 19,010 deposits

Total deposits 41,027 39,116 38,271 35,406 34,129

Shareholders' equity4,400 4,417 4,320 4,295 4,175



Period-End Balance:

Loans $ 16,336 $ 15,833 $ 16,596 $ 17,890 $ 17,481

Earning assets 48,063 44,964 43,943 41,380 39,648

Goodwill and 656 656 656 656 657 intangible assets

Total assets 50,878 47,860 46,698 44,047 42,391

Total deposits 42,696 39,613 38,734 36,925 35,016

Shareholders' equity4,440 4,372 4,374 4,268 4,293

Adjusted shareholders' equity4,092 4,022 3,961 3,880 3,780 ^(1)



ASSET QUALITY

($ in thousands)

Allowance for credit$ 248,666 $ 250,150 $ 255,288 $ 261,258 $ 263,177 losses on loans:

As a percentage of 1.52 % 1.58 % 1.54 % 1.46 % 1.51 % period-end loans



Net charge-offs: $ 2,789$ 2,115$ 1,591$ 1,919$ 13,565

Annualized as a percentage of 0.07 % 0.05 % 0.04 % 0.04 % 0.30 % average loans



Non-accrual loans: $ 53,713 $ 57,055 $ 57,250 $ 50,976 $ 61,449

As a percentage of 0.33 % 0.36 % 0.34 % 0.28 % 0.35 % total loans

As a percentage of 0.11 0.12 0.12 0.12 0.14 total assets



CONSOLIDATED CAPITAL RATIOS

Common Equity Tier 1 Risk-Based Capital 13.13 % 13.42 % 13.60 % 13.45 % 12.86 % Ratio

Tier 1 Risk-Based 13.70 14.01 14.21 14.07 13.47 Capital Ratio

Total Risk-Based 15.45 15.90 16.17 16.07 15.44 Capital Ratio

Leverage Ratio 7.34 7.52 7.60 7.97 8.07

Equity to Assets 8.73 9.14 9.37 9.69 10.13 Ratio (period-end)

Equity to Assets 9.00 9.44 9.46 10.10 10.19 Ratio (average)



(1) Shareholders' equity excluding accumulated other comprehensive income (loss).



Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)

(In thousands, except per share amounts)



Year Ended December 31,

2021 2020 2019

CONDENSED INCOME STATEMENTS

Net interest income $ 984,867 $ 976,001 $ 1,004,005

Net interest income ^1,077,315 1,070,937 1,100,586 (1)

Credit loss expense ^63 241,230 33,759 (2)

Non-interest income:

Trust and investment 148,994 129,272 126,722 management fees

Service charges on 83,292 80,873 88,983 deposit accounts

Insurance commissions51,548 50,313 52,345 and fees

Interchange and card 17,461 13,470 14,873 transaction fees

Other charges, 36,836 34,825 37,123 commissions and fees

Net gain (loss) on securities 69 108,989 293 transactions

Other 48,528 47,712 43,563

Total non-interest 386,728 465,454 363,902 income



Non-interest expense:

Salaries and wages 395,497 387,328 375,029

Employee benefits 82,029 75,676 86,230

Net occupancy 107,344 102,938 89,466

Technology, furniture112,738 105,232 91,995 and equipment

Deposit insurance 12,232 10,502 10,126

Intangible 697 918 1,168 amortization

Other ^(2) 171,457 166,310 180,665

Total non-interest 881,994 848,904 834,679 expense ^(2)

Income before income 489,538 351,321 499,469 taxes

Income taxes 46,459 20,170 55,870

Net income 443,079 331,151 443,599

Preferred stock 7,157 2,016 8,063 dividends

Redemption of - 5,514 - preferred stock

Net income available to common $ 435,922 $ 323,621 $ 435,536 shareholders



PER COMMON SHARE DATA

Earnings per common $ 6.79$ 5.11$ 6.89share - basic

Earnings per common 6.76 5.10 6.84 share - diluted

Cash dividends per 2.94 2.85 2.80 common share

Book value per common share at end of 67.11 65.82 60.11 quarter



OUTSTANDING COMMON SHARES

Period-end common 63,986 63,011 62,669 shares

Weighted-average 63,613 62,727 62,742 common shares - basic

Dilutive effect of 489 277 700 stock compensation

Weighted-average common shares - 64,102 63,004 63,442 diluted



SELECTED ANNUALIZED RATIOS

Return on average 0.95 % 0.85 % 1.36 % assets

Return on average 10.35 8.11 12.24 common equity

Net interest income to average earning 2.53 3.09 3.75 assets ^(1)



(1) Taxable-equivalent basis assuming a 21% tax rate.

(2) Prior to 2020, credit loss expense related to off-balance-sheet credit exposures was previously reported as a component of other non-interest expense. In connection with the adoption of a new accounting standard in 2020, such amounts have been reclassified to credit loss expense to make prior periods comparable to the current presentation.

Cullen/Frost Bankers, Inc.

CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)



Year Ended December 31,

2021 2020 2019

BALANCE SHEET SUMMARY ($ in millions)

Average Balance:

Loans $ 16,770 $ 17,164$ 14,441

Earning assets 43,196 35,248 29,600

Total assets 45,983 37,961 32,086

Non-interest-bearing demand 16,671 13,564 10,358 deposits

Interest-bearing deposits 21,802 17,875 16,055

Total deposits 38,473 31,438 26,413

Shareholders' equity 4,359 4,039 3,702



Period-End Balance:

Loans $ 16,336 $ 17,481$ 14,750

Earning assets 48,063 39,648 31,281

Goodwill and intangible assets 656 657 657

Total assets 50,878 42,391 34,027

Total deposits 42,696 35,016 27,640

Shareholders' equity 4,440 4,293 3,912

Adjusted shareholders' equity ^4,092 3,780 3,644 (1)



ASSET QUALITY ($ in thousands)

Allowance for credit losses on $ 248,666 $ 263,177 $ 132,167 loan:

As a percentage of period-end 1.52 % 1.51 % 0.90 % loans



Net charge-offs: $ 8,414$ 103,435 $ 33,724

Annualized as a percentage of 0.05 % 0.60 % 0.23 % average loans



Non-accrual loans: $ 53,713 $ 61,449$ 102,303

As a percentage of total loans 0.33 % 0.35 % 0.69 %

As a percentage of total assets0.11 0.14 0.30



CONSOLIDATED CAPITAL RATIOS

Common Equity Tier 1 Risk-Based13.13 % 12.86 % 12.36 % Capital Ratio

Tier 1 Risk-Based Capital Ratio13.70 13.47 12.99

Total Risk-Based Capital Ratio 15.45 15.44 14.57

Leverage Ratio 7.34 8.07 9.28

Equity to Assets Ratio 8.73 10.13 11.50 (period-end)

Equity to Assets Ratio 9.48 10.64 11.54 (average)



(1) Shareholders' equity excluding accumulated other comprehensive income (loss).



Cullen/Frost Bankers, Inc.

TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)



2021 2020

4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr

TAXABLE-EQUIVALENT YIELD/ COST^(1)

Earning Assets:

Interest-bearing deposits 0.15 % 0.15 % 0.11 % 0.10 % 0.10 %

Federal funds sold 0.22 0.48 0.15 0.24 0.31

Resell agreements 0.25 0.29 0.20 0.15 0.24

Securities 3.08 3.35 3.36 3.41 3.41

Loans, net of unearned 3.89 4.16 4.28 3.87 3.74 discounts

Total earning assets 2.36 2.53 2.71 2.78 2.89



Interest-Bearing Liabilities:

Interest-bearing deposits:

Savings and interest 0.01 0.01 0.01 0.01 0.02 checking

Money market deposit 0.11 0.10 0.09 0.07 0.07 accounts

Time accounts 0.21 0.24 0.32 0.53 0.82

Total interest-bearing 0.07 0.07 0.06 0.07 0.09 deposits



Total deposits 0.04 0.04 0.04 0.04 0.05



Federal funds purchased 0.12 0.13 0.08 0.08 0.08

Repurchase agreements 0.10 0.11 0.11 0.09 0.11

Junior subordinated deferrable interest 1.81 1.85 1.87 1.89 1.96 debentures

Subordinated notes payable4.70 4.70 4.70 4.70 4.70 and other notes

Total interest-bearing 0.10 0.10 0.10 0.10 0.13 liabilities



Net interest spread 2.26 2.43 2.61 2.68 2.76

Net interest income to total average earning 2.31 2.47 2.65 2.72 2.82 assets



AVERAGE BALANCES

($ in millions)

Assets:

Interest-bearing deposits $ 15,549$ 15,278$ 13,347$ 9,865$ 7,718

Federal funds sold 31 2 21 5 2

Resell agreements 8 8 8 3 15

Securities 14,436 12,503 12,294 12,247 12,582

Loans, net of unearned 15,984 16,189 17,246 17,684 17,945 discount

Total earning assets $ 46,008$ 43,980$ 42,916$ 39,804 $ 38,262



Liabilities:

Interest-bearing deposits:

Savings and interest $ 11,205$ 10,910$ 10,882$ 9,714$ 8,938checking

Money market deposit 10,823 10,086 9,790 9,245 8,934 accounts

Time accounts 1,114 1,121 1,143 1,138 1,138

Total interest-bearing 23,142 22,117 21,815 20,097 19,010 deposits



Total deposits 41,027 39,116 38,271 35,406 34,129



Federal funds purchased 27 27 34 41 38

Repurchase agreements 2,368 2,188 2,059 1,840 1,705

Junior subordinated deferrable interest 126 137 136 136 136 debentures

Subordinated notes payable99 99 99 99 99 and other notes

Total interest-bearing $ 25,762$ 24,568$ 24,143$ 22,213 $ 20,988 funds



(1) Taxable-equivalent basis assuming a 21% tax rate.

A.B. Mendez Investor Relations 210.220.5234

or

Bill DayMedia Relations210.220.5427

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SOURCE Cullen/Frost Bankers, Inc.