Exhibit 99.1


A.B. Mendez
Investor Relations
210.220.5234
or
Bill Day
Media Relations
210.220.5427


FOR IMMEDIATE RELEASE    
January 30, 2020




CULLEN/FROST REPORTS 4th QUARTER AND 2019 ANNUAL RESULTS
Board declares first quarter dividend on common and preferred stock


SAN ANTONIO -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported fourth quarter and annual results for 2019. Cullen/Frost reported net income available to common shareholders for the fourth quarter of 2019 of $101.7 million, or $1.60 per diluted common share, compared to $117.2 million, or $1.82 per common diluted share, for the fourth quarter 2018. For the fourth quarter of 2019, returns on average assets and common equity were 1.21 percent and 10.74 percent, respectively, compared to 1.48 percent and 14.85 percent for the same period in 2018.

The company also reported 2019 annual net income available to common shareholders of $435.5 million, a decrease of 2.5 percent compared to 2018 earnings of $446.9 million. On a per-share basis, 2019 earnings were $6.84 per diluted common share compared to $6.90 per diluted common share reported in 2018. For the year 2019, returns on average assets and common equity were 1.36 percent and 12.24 percent respectively, compared to 1.44 percent and 14.23 percent reported in 2018.






“These earnings show the result of consistent execution of our sustainable organic growth strategy,” said Phil Green, Cullen/Frost chairman and CEO. “As illustrated by our Houston expansion, where we have opened 10 of the 25 planned new financial centers, we are investing for steady, long-term growth while maintaining our quality standards.

“We saw deposit growth rebound in the second half of 2019 after a more challenging environment earlier in the year,” Green said.

For the fourth quarter of 2019, net interest income on a taxable-equivalent basis was $275.0 million, up 0.4 percent compared to the same quarter in 2018. Average loans for the fourth quarter of 2019 increased $755.3 million, or 5.4 percent, to $14.7 billion, from the $13.9 billion reported for the fourth quarter a year earlier. Average deposits for the quarter were $27.2 billion, an increase of 2.6 percent or $678.4 million compared to $26.5 billion in last year's fourth quarter.

For 2019, average total loans were $14.4 billion, an increase of approximately $822.6 million, or 6.0 percent, from the $13.6 billion reported the previous year. Average total deposits for 2019 increased to $26.4 billion, up 0.5 percent, or $124.2 million, over the $26.3 billion reported in 2018.

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 2019 were 12.36 percent, 12.99 percent, and 14.57 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III requirements.
•
Net interest income for the fourth quarter totaled $251.1 million, an increase of 0.8 percent compared to the $249.2 million reported for the fourth quarter of 2018. The net interest margin was 3.62 percent for the fourth quarter compared to 3.72 percent for the fourth quarter of 2018 and 3.76 percent for the third quarter of 2019.

2


•
Non-interest income for the fourth quarter of 2019 was $95.3 million, up $8.1 million or 9.3 percent from the $87.1 million reported a year earlier. Trust and investment management fees increased by $3.0 million, or 10.2 percent, compared to the fourth quarter of 2018. The increase in trust and investment management fees was primarily the result of higher average equity valuations and an increase in the number of accounts. Other income increased $3.0 million, primarily driven by a $1.6 million increase in public finance underwriting fees. 
•
Non-interest expense for the fourth quarter of 2019 was $220.8 million, up $21.1 million, or 10.6 percent, compared to the $199.7 million reported for the fourth quarter of 2018. Net occupancy expense increased $7.2 million, primarily driven by a $5.6 million increase in lease expenses associated with our downtown San Antonio headquarters move and our Houston expansion. Salaries and wages expense increased $7.1 million due to an increase in the number of employees and normal annual merit and market increases and, to a lesser extent, an increase in stock compensation. Employee benefits expense increased $2.6 million, or 13.6 percent, impacted by higher expenses related to our profit sharing/401(k) plan (up $1.1 million), defined benefit retirement plan (up $585,000), and payroll tax (up $554,000). Technology, furniture and equipment expense was up $3.8 million, or 17.3 percent, compared to the fourth quarter of 2018. The increase was primarily driven by a $3.8 million increase in software maintenance and cloud services expense.
•
For the fourth quarter of 2019, the provision for loan losses was $8.4 million, compared to net charge-offs of $12.7 million. For the fourth quarter of 2018, the provision for loan losses was $3.8 million, compared to net charge-offs of $9.2 million. The allowance for loan losses as a percentage of total loans was 0.90 percent at December 31, 2019, compared to 0.93 percent last quarter and 0.94 percent at year-end 2018. Non-performing assets were $109.5 million at year end, compared to $105.0 million the previous quarter, and $74.9 million at year-end 2018.


3


The Cullen/Frost board declared a first-quarter cash dividend of $0.71 per common share, payable March 13, 2020 to shareholders of record on February 28 of this year. The board of directors also declared a cash dividend of $0.3359375 per share of the Noncumulative Perpetual Preferred Stock, Series A, which is traded on the NYSE under the symbol "CFR PrA." The Series A Preferred Stock dividend is payable on March 16, 2020, to shareholders of record on February 28 of this year.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 30, 2020, at 10 a.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 800-944-6430. Digital playback of the conference call will be available after 12 p.m. CT on the day of the call until midnight Sunday, February 2, 2020 at 855-859-2056, with the Conference ID# of 1379608. A replay of the call will also be available by webcast at the URL listed below after 2 p.m. CT on the day of the call.
Cullen/Frost investor relations website: www.frostbank.com/investor-relations/
Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding company, headquartered in San Antonio, with $34.0 billion in assets at December 31, 2019. One of the 60 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.

4


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 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) 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 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 failure, interruption, or breach of security of our systems.
•
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 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.

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.


5


Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
2019
 
2018
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
CONDENSED INCOME STATEMENTS
 
 
 
 
 
 
 
 
 
Net interest income
$
251,098

 
$
253,007

 
$
253,431

 
$
246,469

 
$
249,209

Net interest income (1)
275,038

 
276,618

 
277,751

 
271,179

 
273,810

Provision for loan losses
8,355

 
8,001

 
6,400

 
11,003

 
3,767

Non-interest income:
 
 
 
 
 
 
 
 
 
Trust and investment management fees
32,928

 
31,649

 
30,448

 
31,697

 
29,882

Service charges on deposit accounts
23,454

 
22,941

 
21,798

 
20,790

 
21,632

Insurance commissions and fees
12,138

 
11,683

 
10,118

 
18,406

 
11,394

Interchange and debit card transaction fees
3,608

 
4,117

 
3,868

 
3,280

 
3,774

Other charges, commissions and fees
9,020

 
10,108

 
8,933

 
9,062

 
9,371

Net gain (loss) on securities transactions
28

 
96

 
169

 
—

 
(43
)
Other
14,079

 
8,630

 
7,304

 
13,550

 
11,108

Total non-interest income
95,255

 
89,224

 
82,638

 
96,785

 
87,118

 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
 
 
Salaries and wages
97,951

 
93,812

 
90,790

 
92,476

 
90,878

Employee benefits
21,651

 
21,002

 
20,051

 
23,526

 
19,066

Net occupancy
24,864

 
24,202

 
21,133

 
19,267

 
17,699

Technology, furniture and equipment
25,759

 
22,415

 
22,157

 
21,664

 
21,960

Deposit insurance
2,374

 
2,491

 
2,453

 
2,808

 
2,219

Intangible amortization
264

 
274

 
305

 
325

 
331

Other
47,943

 
44,668

 
46,320

 
41,734

 
47,544

Total non-interest expense
220,806

 
208,864

 
203,209

 
201,800

 
199,697

Income before income taxes
117,192

 
125,366

 
126,460

 
130,451

 
132,863

Income taxes
13,511

 
13,530

 
14,874

 
13,955

 
13,610

Net income
103,681

 
111,836

 
111,586

 
116,496

 
119,253

Preferred stock dividends
2,016

 
2,016

 
2,015

 
2,016

 
2,016

Net income available to common shareholders
$
101,665

 
$
109,820

 
$
109,571

 
$
114,480

 
$
117,237

 
 
 
 
 
 
 
 
 
 
PER COMMON SHARE DATA
 
 
 
 
 
 
 
 
 
Earnings per common share - basic
$
1.61

 
$
1.74

 
$
1.73

 
$
1.80

 
$
1.84

Earnings per common share - diluted
1.60

 
1.73

 
1.72

 
1.79

 
1.82

Cash dividends per common share
0.71

 
0.71

 
0.71

 
0.67

 
0.67

Book value per common share at end of quarter
60.11

 
59.76

 
57.39

 
54.64

 
51.19

 
 
 
 
 
 
 
 
 
 
OUTSTANDING COMMON SHARES
 
 
 
 
 
 
 
 
 
Period-end common shares
62,669

 
62,537

 
62,638

 
63,081

 
62,986

Weighted-average common shares - basic
62,609

 
62,566

 
62,789

 
63,009

 
63,441

Dilutive effect of stock compensation
625

 
593

 
765

 
819

 
811

Weighted-average common shares - diluted
63,234

 
63,159

 
63,554

 
63,828

 
64,252

 
 
 
 
 
 
 
 
 
 
SELECTED ANNUALIZED RATIOS
 
 
 
 
 
 
 
 
 
Return on average assets
1.21
%
 
1.35
%
 
1.40
%
 
1.48
%
 
1.48
%
Return on average common equity
10.74

 
11.83

 
12.60

 
14.08

 
14.85

Net interest income to average earning assets (1)
3.62

 
3.76

 
3.85

 
3.79

 
3.72

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

6


Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 
 
2019
 
2018
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
BALANCE SHEET SUMMARY
 
 
 
 
 
 
 
 
 
($ in millions)
 
 
 
 
 
 
 
 
 
Average Balance:
 
 
 
 
 
 
 
 
 
Loans
$
14,705

 
$
14,471

 
$
14,375

 
$
14,205

 
$
13,949

Earning assets
30,621

 
29,693

 
29,114

 
28,954

 
29,153

Total assets
33,314

 
32,248

 
31,491

 
31,356

 
31,330

Non-interest-bearing demand deposits
10,772

 
10,316

 
10,148

 
10,193

 
10,740

Interest-bearing deposits
16,414

 
16,036

 
15,845

 
15,919

 
15,767

Total deposits
27,186

 
26,352

 
25,993

 
26,112

 
26,507

Shareholders' equity
3,900

 
3,828

 
3,632

 
3,441

 
3,277

 
 
 
 
 
 
 
 
 
 
Period-End Balance:
 
 
 
 
 
 
 
 
 
Loans
$
14,750

 
$
14,635

 
$
14,459

 
$
14,406

 
$
14,100

Earning assets
31,281

 
30,358

 
29,216

 
29,281

 
29,894

Goodwill and intangible assets
657

 
658

 
658

 
658

 
659

Total assets
34,027

 
33,098

 
31,817

 
31,663

 
32,293

Total deposits
27,640

 
27,084

 
25,985

 
26,295

 
27,149

Shareholders' equity
3,912

 
3,881

 
3,739

 
3,592

 
3,369

Adjusted shareholders' equity (1)
3,644

 
3,576

 
3,520

 
3,498

 
3,433

 
 
 
 
 
 
 
 
 
 
ASSET QUALITY
 
 
 
 
 
 
 
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
$
132,167

 
$
136,559

 
$
134,929

 
$
136,350

 
$
132,132

As a percentage of period-end loans
0.90
%
 
0.93
%
 
0.93
%
 
0.95
%
 
0.94
%
 
 
 
 
 
 
 
 
 
 
Net charge-offs:
$
12,747

 
$
6,371

 
$
7,821

 
$
6,785

 
$
9,213

Annualized as a percentage of average loans
0.34
%
 
0.17
%
 
0.22
%
 
0.19
%
 
0.26
%
 
 
 
 
 
 
 
 
 
 
Non-performing assets:
 
 
 
 
 
 
 
 
 
Non-accrual loans
$
102,303

 
$
97,446

 
$
71,521

 
$
92,162

 
$
73,739

Restructured loans
6,098

 
6,160

 
3,973

 
4,028

 
—

Foreclosed assets
1,084

 
1,427

 
907

 
1,175

 
1,175

Total
$
109,485

 
$
105,033

 
$
76,401

 
$
97,365

 
$
74,914

As a percentage of:
 
 
 
 
 
 
 
 
 
Total loans and foreclosed assets
0.74
%
 
0.72
%
 
0.53
%
 
0.68
%
 
0.53
%
Total assets
0.32

 
0.32

 
0.24

 
0.31

 
0.23

 
 
 
 
 
 
 
 
 
 
CONSOLIDATED CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
Common Equity Tier 1 Risk-Based Capital Ratio(2)
12.36
%
 
12.35
%
 
12.29
%
 
12.34
%
 
12.27
%
Tier 1 Risk-Based Capital Ratio(2)
12.99

 
12.99

 
12.94

 
13.00

 
12.94

Total Risk-Based Capital Ratio(2)
14.57

 
14.63

 
14.60

 
14.68

 
14.64

Leverage Ratio
9.28

 
9.36

 
9.40

 
9.35

 
9.06

Equity to Assets Ratio (period-end)
11.50

 
11.73

 
11.75

 
11.34

 
10.43

Equity to Assets Ratio (average)
11.71

 
11.87

 
11.53

 
10.97

 
10.46

 
 
 
 
 
 
 
 
 
 
(1) Shareholders' equity excluding accumulated other comprehensive income (loss).
(2) After a review of risk-weight classifications during the first quarter of 2019, risk-weightings for certain loans were reclassified. Amounts
     reported prior to March 31, 2019 have been revised to reflect these reclassifications.

7


Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
2016
 
2015
CONDENSED INCOME STATEMENTS
 
 
 
 
 
 
 
 
 
Net interest income
$
1,004,005

 
$
957,892

 
$
866,422

 
$
776,336

 
$
736,632

Net interest income (1)
1,100,586

 
1,052,564

 
1,043,431

 
939,958

 
888,035

Provision for loan losses
33,759

 
21,613

 
35,460

 
51,673

 
51,845

Non-interest income:
 
 
 
 
 
 
 
 
 
Trust and investment management fees
126,722

 
119,391

 
110,675

 
104,240

 
105,512

Service charges on deposit accounts
88,983

 
85,186

 
84,182

 
81,203

 
81,350

Insurance commissions and fees
52,345

 
48,967

 
46,169

 
47,154

 
48,926

Interchange and debit card transaction fees (2)
14,873

 
13,877

 
23,232

 
21,369

 
19,666

Other charges, commissions and fees
37,123

 
37,231

 
39,931

 
39,623

 
37,551

Net gain (loss) on securities transactions
293

 
(156
)
 
(4,941
)
 
14,975

 
69

Other
43,563

 
46,790

 
37,222

 
41,144

 
35,656

Total non-interest income (2)
363,902

 
351,286

 
336,470

 
349,708

 
328,730

 
 
 
 
 
 
 
 
 
 
Non-interest expense:
 
 
 
 
 
 
 
 
 
Salaries and wages
375,029

 
350,312

 
337,068

 
318,665

 
310,504

Employee benefits
86,230

 
77,323

 
74,575

 
72,615

 
69,746

Net occupancy
89,466

 
76,788

 
75,971

 
71,627

 
65,690

Technology, furniture and equipment
91,995

 
83,102

 
74,335

 
71,208

 
64,373

Deposit insurance
10,126

 
16,397

 
20,128

 
17,428

 
14,519

Intangible amortization
1,168

 
1,424

 
1,703

 
2,429

 
3,325

Other (2)
180,665

 
173,538

 
175,289

 
178,988

 
165,561

Total non-interest expense (2)
834,679

 
778,884

 
759,069

 
732,960

 
693,718

Income before income taxes
499,469

 
508,681

 
408,363

 
341,411

 
319,799

Income taxes
55,870

 
53,763

 
44,214

 
37,150

 
40,471

Net income
443,599

 
454,918

 
364,149

 
304,261

 
279,328

Preferred stock dividends
8,063

 
8,063

 
8,063

 
8,063

 
8,063

Net income available to common shareholders
$
435,536

 
$
446,855

 
$
356,086

 
$
296,198

 
$
271,265

 
 
 
 
 
 
 
 
 
 
PER COMMON SHARE DATA
 
 
 
 
 
 
 
 
 
Earnings per common share - basic
$
6.89

 
$
6.97

 
$
5.56

 
$
4.73

 
$
4.31

Earnings per common share - diluted
6.84

 
6.90

 
5.51

 
4.70

 
4.28

Cash dividends per common share
2.80

 
2.58

 
2.25

 
2.15

 
2.10

Book value per common share at end of quarter
60.11

 
51.19

 
49.68

 
45.03

 
44.30

 
 
 
 
 
 
 
 
 
 
OUTSTANDING COMMON SHARES
 
 
 
 
 
 
 
 
 
Period-end common shares
62,669

 
62,986

 
63,476

 
63,474

 
61,982

Weighted-average common shares - basic
62,742

 
63,705

 
63,694

 
62,376

 
62,758

Dilutive effect of stock compensation
700

 
982

 
968

 
593

 
715

Weighted-average common shares - diluted
63,442

 
64,687

 
64,662

 
62,969

 
63,473

 
 
 
 
 
 
 
 
 
 
SELECTED ANNUALIZED RATIOS
 
 
 
 
 
 
 
 
 
Return on average assets
1.36
%
 
1.44
%
 
1.17
%
 
1.03
%
 
0.97
%
Return on average common equity
12.24

 
14.23

 
11.76

 
10.16

 
9.86

Net interest income to average earning assets (1)
3.75

 
3.64

 
3.69

 
3.56

 
3.45

 
 
 
 
 
 
 
 
 
 
(1) Taxable-equivalent basis assuming a 21% tax rate for 2019 and 2018 and 35% tax rate for 2015-2017.
(2) Beginning in 2018, in connection with the adoption of a new accounting standard, interchange and debit card transaction fees are reported net of related network costs. Prior to 2018, such network costs were reported separately as a component of other non-interest expense. For comparative purposes, interchange and debit card transaction fees reported net of related network costs would have totaled $11,289 in 2017 and $8,473 in 2016.

8


Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
2016
 
2015(1)
BALANCE SHEET SUMMARY ($ in millions)
 
 
 
 
 
 
 
 
 
Average Balance:
 
 
 
 
 
 
 
 
 
Loans
$
14,441

 
$
13,618

 
$
12,460

 
$
11,555

 
$
11,267

Earning assets
29,600

 
28,900

 
28,359

 
26,717

 
25,955

Total assets(1)
32,086

 
31,030

 
30,450

 
28,832

 
28,061

Non-interest-bearing demand deposits
10,358

 
10,757

 
10,819

 
10,034

 
10,180

Interest-bearing deposits
16,055

 
15,532

 
15,085

 
14,478

 
13,861

Total deposits
26,413

 
26,289

 
25,905

 
24,512

 
24,041

Shareholders' equity
3,702

 
3,284

 
3,173

 
3,059

 
2,895

 
 
 
 
 
 
 
 
 
 
Period-End Balance:
 
 
 
 
 
 
 
 
 
Loans
$
14,750

 
$
14,100

 
$
13,146

 
$
11,975

 
$
11,487

Earning assets
31,281

 
29,894

 
29,595

 
28,025

 
26,431

Goodwill and intangible assets
657

 
659

 
660

 
662

 
663

Total assets(1)
34,027

 
32,293

 
31,748

 
30,196

 
28,566

Total deposits
27,640

 
27,149

 
26,872

 
25,812

 
24,344

Shareholders' equity
3,912

 
3,369

 
3,298

 
3,003

 
2,890

Adjusted shareholders' equity (2)
3,644

 
3,433

 
3,218

 
3,027

 
2,776

 
 
 
 
 
 
 
 
 
 
ASSET QUALITY ($ in thousands)
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
$
132,167

 
$
132,132

 
$
155,364

 
$
153,045

 
$
135,859

As a percentage of period-end loans
0.90
%
 
0.94
%
 
1.18
%
 
1.28
%
 
1.18
%
 
 
 
 
 
 
 
 
 
 
Net charge-offs:
$
33,724

 
$
44,845

 
$
33,141

 
$
34,487

 
$
15,528

Annualized as a percentage of average loans
0.23
%
 
0.33
%
 
0.27
%
 
0.30
%
 
0.14
%
 
 
 
 
 
 
 
 
 
 
Non-performing assets:
 
 
 
 
 
 
 
 
 
Non-accrual loans
$
102,303

 
$
73,739

 
$
150,314

 
$
100,151

 
$
83,467

Restructured loans
6,098

 
—

 
4,862

 
—

 
—

Foreclosed assets
1,084

 
1,175

 
2,116

 
2,440

 
2,255

Total
$
109,485

 
$
74,914

 
$
157,292

 
$
102,591

 
$
85,722

As a percentage of:
 
 
 
 
 
 
 
 
 
Total loans and foreclosed assets
0.74
%
 
0.53
%
 
1.20
%
 
0.86
%
 
0.75
%
Total assets
0.32

 
0.23

 
0.50

 
0.34

 
0.30

 
 
 
 
 
 
 
 
 
 
CONSOLIDATED CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
Common Equity Tier 1 Risk-Based Capital Ratio(3)
12.36
%
 
12.27
%
 
12.42
%
 
12.52
%
 
11.37
%
Tier 1 Risk-Based Capital Ratio(3)
12.99

 
12.94

 
13.16

 
13.33

 
12.38

Total Risk-Based Capital Ratio(3)
14.57

 
14.64

 
15.15

 
14.93

 
13.85

Leverage Ratio
9.28

 
9.06

 
8.46

 
8.14

 
7.79

Equity to Assets Ratio (period-end)
11.50

 
10.43

 
10.39

 
9.94

 
10.12

Equity to Assets Ratio (average)
11.54

 
10.58

 
10.42

 
10.61

 
10.32

 
 
 
 
 
 
 
 
 
 
(1) Certain items in the 2015 financial statements have been reclassified to conform to the current presentation in connection with the adoption
     of an accounting standard in 2016 that requires unamortized debt issuance costs related to a recognized debt liability be presented in the
     balance sheet as a direct deduction from the carrying amount of that debt liability.
(2) Shareholders' equity excluding accumulated other comprehensive income (loss).
(3) After a review of risk-weight classifications during the first quarter of 2019, risk-weightings for certain loans were reclassified. Amounts
     reported at December 31, 2018 have been revised to reflect these reclassifications.




9


Cullen/Frost Bankers, Inc.
TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)
 
 
2019
 
2018
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
TAXABLE-EQUIVALENT YIELD/COST
 
 
 
 
 
 
 
 
 
Earning Assets:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
1.64
%
 
2.19
%
 
2.64
%
 
2.50
%
 
2.35
%
Federal funds sold and resell agreements
1.71

 
2.21

 
2.48

 
2.58

 
2.41

Securities
3.37

 
3.43

 
3.42

 
3.37

 
3.39

Loans, net of unearned discounts
4.88

 
5.16

 
5.34

 
5.33

 
5.20

Total earning assets
3.98

 
4.21

 
4.33

 
4.27

 
4.15

 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
Savings and interest checking
0.04

 
0.07

 
0.08

 
0.09

 
0.08

Money market deposit accounts
0.66

 
0.93

 
1.03

 
1.09

 
1.00

Time accounts
1.72

 
1.74

 
1.66

 
1.43

 
1.14

Public funds
1.05

 
1.34

 
1.51

 
1.39

 
1.31

Total interest-bearing deposits
0.49

 
0.63

 
0.68

 
0.69

 
0.63

 
 
 
 
 
 
 
 
 
 
Total deposits
0.29

 
0.39

 
0.41

 
0.42

 
0.37

 
 
 
 
 
 
 
 
 
 
Federal funds purchased and repurchase agreements
1.21

 
1.53

 
1.69

 
1.72

 
1.56

Junior subordinated deferrable interest debentures
3.83

 
4.18

 
4.34

 
4.40

 
4.24

Subordinated notes payable and other notes
4.71

 
4.71

 
4.71

 
4.72

 
4.72

Total interest-bearing liabilities
0.59

 
0.75

 
0.80

 
0.81

 
0.74

 
 
 
 
 
 
 
 
 
 
Net interest spread
3.39

 
3.46

 
3.53

 
3.46

 
3.41

Net interest income to total average earning assets
3.62

 
3.76

 
3.85

 
3.79

 
3.72

 
 
 
 
 
 
 
 
 
 
AVERAGE BALANCES
 
 
 
 
 
 
 
 
 
($ in millions)
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
$
2,000

 
$
1,566

 
$
1,171

 
$
1,729

 
$
2,452

Federal funds sold and resell agreements
275

 
212

 
246

 
250

 
317

Securities
13,641

 
13,444

 
13,322

 
12,770

 
12,435

Loans, net of unearned discount
14,705

 
14,471

 
14,375

 
14,205

 
13,949

Total earning assets
$
30,621

 
$
29,693

 
$
29,114

 
$
28,954

 
$
29,153

 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
Savings and interest checking
$
6,850

 
$
6,712

 
$
6,774

 
$
6,774

 
$
6,673

Money market deposit accounts
7,905

 
7,763

 
7,588

 
7,696

 
7,792

Time accounts
1,069

 
1,023

 
970

 
895

 
836

Public funds
590

 
538

 
513

 
554

 
467

Total interest-bearing deposits
16,414

 
16,036

 
15,845

 
15,919

 
15,767

 
 
 
 
 
 
 
 
 
 
Total deposits
27,186

 
26,352

 
25,993

 
26,112

 
26,507

 
 
 
 
 
 
 
 
 
 
Federal funds purchased and repurchase agreements
1,418

 
1,291

 
1,242

 
1,180

 
1,138

Junior subordinated deferrable interest debentures
136

 
136

 
136

 
136

 
136

Subordinated notes payable and other notes
99

 
99

 
99

 
99

 
99

Total interest-bearing funds
$
18,067

 
$
17,562

 
$
17,322

 
$
17,334

 
$
17,140

 
 
 
 
 
 
 
 
 
 
 


10