<SEC-DOCUMENT>0000039263-14-000064.txt : 20150227
<SEC-HEADER>0000039263-14-000064.hdr.sgml : 20150227
<ACCEPTANCE-DATETIME>20141218131205
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000039263-14-000064
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20141218

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CULLEN/FROST BANKERS, INC.
		CENTRAL INDEX KEY:			0000039263
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				741751768
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		100 W HOUSTON ST
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78205
		BUSINESS PHONE:		210-220-4011

	MAIL ADDRESS:	
		STREET 1:		POST OFFICE BOX 1600
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78296-1600

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CULLEN FROST BANKERS INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FROST BANK CORP
		DATE OF NAME CHANGE:	19770823
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd">
<html>
	<head>
		<!-- Document created using Wdesk 1 -->
		<!-- Copyright 2014 Workiva -->
		<title>SEC Comment Letter Response to Letter Dated 12-15-14</title>
	</head>
	<body style="font-family:Times New Roman;font-size:10pt;">
<a name="seb7cd2a92ad543f3bf2a3830dc167358"></a><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><br><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">December&#160;18, 2014</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Ms. Suzanne Hayes</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Assistant Director</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">United States Securities and Exchange Commission</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Division of Corporation Finance</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">100 F Street, N.E.</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Washington, D.C. 20549</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Re:&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Cullen/Frost Bankers, Inc.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Form 10-K for Fiscal Year Ended December&#160;31, 2013</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Filed February6, 2014</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Form 10-Q for Fiscal Period Ended June&#160;30, 2014</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Filed July 30, 2014</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">File No. 001-13221</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Dear Ms. Hayes:</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">We are writing in response to your letter dated December&#160;15, 2014 with respect to the review of the Annual Report on Form 10-K for the fiscal year ended December&#160;31, 2013 of Cullen/Frost Bankers, Inc. (the "Corporation"), which was filed on February&#160;6, 2014 and the Quarterly Report on Form 10-Q for the fiscal period ended June&#160;30, 2014, which was filed on July&#160;30, 2014. Our responses to your comments are provided below. For your convenience, we have restated the text of the comments.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In providing these responses, the Corporation acknowledges that:</font></div><div style="line-height:120%;padding-left:24px;padding-top:8px;text-align:justify;"><font style="padding-top:8px;text-align:justify;font-family:inherit;font-size:11pt;padding-right:24px;">&#8226;</font><font style="font-family:inherit;font-size:11pt;">The Corporation is responsible for the adequacy and accuracy of the disclosure in the filings.</font></div><table cellpadding="0" cellspacing="0" style="padding-top:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:24px;"><font style="font-family:inherit;font-size:11pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:12px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:24px;"><font style="font-family:inherit;font-size:11pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Corporation may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</font></div></td></tr></table><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;text-decoration:underline;">Form 10-K for Fiscal Year Ended December&#160;31, 2013</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations, page 30</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Net Interest Income, page 32</font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:30px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">1.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">We note your disclosure in this section and on page 43 that you are still waiting to determine the impact of certain provisions of the Dodd-Frank Act that went into effect on July 21, 2011. Please update these sections in your next annual report.</font></div></td></tr></table><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">Response</font><font style="font-family:inherit;font-size:11pt;">:  The disclosure referenced in your comment is stated as follows:</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") repealed the federal prohibition on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts beginning July&#160;21, 2011. Although the ultimate impact of this legislation </font></div><br><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><hr style="page-break-after:always"><a name="seb7cd2a92ad543f3bf2a3830dc167358"></a><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">on the Corporation has not yet been determined, the Corporation may begin to incur interest costs associated with demand deposits in the future as market conditions warrant.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Market conditions and the prevailing interest rate environment since the effective date of repeal have not necessitated that the Corporation pay interest to generate and/or retain certain demand deposits. Accordingly, to date, the Corporation has not experienced any significant additional interest costs as a result of the repeal. The disclosure above is intended to convey that, while there has not been any significant impact to date, the Corporation may be impacted in the future as future market conditions and/or the future interest rate environment could warrant the payment of interest in order to generate and/or retain certain demand deposits. Because the interest rate that could ultimately be paid on these demand deposits depends upon a variety of factors, some of which are beyond the Corporation&#8217;s control, the Corporation is not able to reliably estimate the ultimate impact of the repeal of the federal prohibition on the payment of interest on demand deposits and a statement was made to that effect.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In future filings, to the extent applicable, the Corporation will update the disclosure as follows:</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") repealed the federal prohibition on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts beginning July&#160;21, 2011. To date, the Corporation has not experienced any significant additional interest costs as a result of the repeal; however, the Corporation may begin to incur interest costs associated with certain demand deposits in the future as market conditions warrant.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;text-decoration:underline;">Form 10-Q for Fiscal Period Ended June&#160;30, 2014</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations, page 44</font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:12px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:30px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">2.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">We note your disclosure regarding interest rate swap contracts and the amortization of the prime rate contract that will end in October 2014. We further note the guidance that was provided during the second-quarter earnings call to the effect that the company plans to utilize $720&#160;million in excess liquidity to purchase municipal securities over a six-moth period starting in the fourth quarter, to offset the lost swap income. In future filings, please revise to disclose such prospective information in your MD&amp;A. For guidance, refer to Part III of Exchange Act Release No. 26831 (May 18, 1989).</font></div></td></tr></table><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">Response:</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;In future filings, the Corporation will disclose significant prospective information in Management's Discussion and analysis of Financial Condition and Results of Operations, as applicable, and will discuss any material, known expected future trends.</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:90.4296875%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="35%"></td><td width="34%"></td><td width="31%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:right;font-size:11pt;"><font style="font-family:Times New Roman;font-size:11pt;font-style:italic;">*</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><font style="font-family:Times New Roman;font-size:11pt;font-style:italic;">*</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:Times New Roman;font-size:11pt;font-style:italic;">*</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Should you have any questions concerning the foregoing, please do not hesitate to call me at (210) 220-4841.</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Sincerely,</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">/s/ Phillip D. Green</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Phillip D. Green</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Group Executive Vice President</font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">and Chief Financial Officer</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div>	</body>
</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
