8-K
CULLEN/FROST BANKERS, INC. (CFR)
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 30, 2020
Cullen/Frost Bankers, Inc.
(Exact name of registrant as specified in its charter)
| Texas | 001-13221 | 74-1751768 | |||||
|---|---|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | 111 W. Houston Street, | San Antonio, | Texas | 78205 | |
| --- | --- | --- | --- | ||||
| (Address of principal executive offices) | (Zip code) | (210) | 220-4011 | ||||
| --- | --- | --- | |||||
| (Registrant's telephone number, including area code) | N/A | ||||||
| --- | |||||||
| (Former name, former address and former fiscal year, if changed since last report |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on<br><br>which registered |
|---|---|---|
| Common Stock, $.01 Par Value | CFR | New York Stock Exchange |
| 5.375% Non-Cumulative Perpetual Preferred Stock, Series A | CFR.PRA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
Attached as Exhibit 99.1 and incorporated into this item by reference is a press release issued by the Registrant on January 30, 2020 regarding its financial results for the quarter and year ended December 31, 2019. The information furnished by the Registrant pursuant to this item shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
| 99.1 | Press Release dated January 30, 2020 with respect to the Registrant's financial results for the quarter and year ended December 31, 2019. |
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| 104 | Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CULLEN/FROST BANKERS, INC.
By: /s/ Jerry Salinas
Jerry Salinas
Group Executive Vice President
and Chief Financial Officer
Dated: January 30, 2020
EXHIBIT INDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release dated January 30, 2020 with respect to the Registrant's financial results for the quarter and year ended December 31, 2019. |
| 104 | Cover Page Interactive Data File - The cover page XBRL tags are embedded within the inline XBRL document. |
Exhibit
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 4^th^ 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. |
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| • | 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. |
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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. |
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| • | 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. |
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| • | 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. |
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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. |
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| • | Volatility and disruption in national and international financial and commodity markets. |
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| • | Government intervention in the U.S. financial system. |
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| • | Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs. |
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| • | Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements. |
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| • | The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board. |
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| • | Inflation, interest rate, securities market and monetary fluctuations. |
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| • | 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. |
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| • | The soundness of other financial institutions. |
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| • | Political instability. |
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| • | Impairment of our goodwill or other intangible assets. |
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| • | Acts of God or of war or terrorism. |
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| • | The timely development and acceptance of new products and services and perceived overall value of these products and services by users. |
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| • | Changes in consumer spending, borrowings and savings habits. |
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| • | Changes in the financial performance and/or condition of our borrowers. |
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| • | Technological changes. |
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| • | The cost and effects of failure, interruption, or breach of security of our systems. |
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| • | Acquisitions and integration of acquired businesses. |
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| • | Our ability to increase market share and control expenses. |
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| • | Our ability to attract and retain qualified employees. |
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| • | Changes in the competitive environment in our markets and among banking organizations and other financial service providers. |
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| • | 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. |
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| • | Changes in the reliability of our vendors, internal control systems or information systems. |
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| • | Changes in our liquidity position. |
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| • | Changes in our organization, compensation and benefit plans. |
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| • | 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. |
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| • | Greater than expected costs or difficulties related to the integration of new products and lines of business. |
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| • | Our success at managing the risks involved in the foregoing items. |
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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) | ||||||||||||||
| 2018 | ||||||||||||||
| 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 | 29,693 | 29,114 | 28,954 | 29,153 | ||||||||||
| Total assets | 32,248 | 31,491 | 31,356 | 31,330 | ||||||||||
| Non-interest-bearing demand deposits | 10,316 | 10,148 | 10,193 | 10,740 | ||||||||||
| Interest-bearing deposits | 16,036 | 15,845 | 15,919 | 15,767 | ||||||||||
| Total deposits | 26,352 | 25,993 | 26,112 | 26,507 | ||||||||||
| Shareholders' equity | 3,828 | 3,632 | 3,441 | 3,277 | ||||||||||
| Period-End Balance: | ||||||||||||||
| Loans | 14,750 | $ | 14,635 | $ | 14,459 | $ | 14,406 | $ | 14,100 | |||||
| Earning assets | 30,358 | 29,216 | 29,281 | 29,894 | ||||||||||
| Goodwill and intangible assets | 658 | 658 | 658 | 659 | ||||||||||
| Total assets | 33,098 | 31,817 | 31,663 | 32,293 | ||||||||||
| Total deposits | 27,084 | 25,985 | 26,295 | 27,149 | ||||||||||
| Shareholders' equity | 3,881 | 3,739 | 3,592 | 3,369 | ||||||||||
| Adjusted shareholders' equity (1) | 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 | % | 0.93 | % | 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 | % | 0.17 | % | 0.22 | % | 0.19 | % | 0.26 | % | |||||
| Non-performing assets: | ||||||||||||||
| Non-accrual loans | 102,303 | $ | 97,446 | $ | 71,521 | $ | 92,162 | $ | 73,739 | |||||
| Restructured loans | 6,160 | 3,973 | 4,028 | — | ||||||||||
| Foreclosed assets | 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 | % | 0.72 | % | 0.53 | % | 0.68 | % | 0.53 | % | |||||
| Total assets | 0.32 | 0.24 | 0.31 | 0.23 | ||||||||||
| CONSOLIDATED CAPITAL RATIOS | ||||||||||||||
| Common Equity Tier 1 Risk-Based Capital Ratio(2) | % | 12.35 | % | 12.29 | % | 12.34 | % | 12.27 | % | |||||
| Tier 1 Risk-Based Capital Ratio(2) | 12.99 | 12.94 | 13.00 | 12.94 | ||||||||||
| Total Risk-Based Capital Ratio(2) | 14.63 | 14.60 | 14.68 | 14.64 | ||||||||||
| Leverage Ratio | 9.36 | 9.40 | 9.35 | 9.06 | ||||||||||
| Equity to Assets Ratio (period-end) | 11.73 | 11.75 | 11.34 | 10.43 | ||||||||||
| Equity to Assets Ratio (average) | 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. |
All values are in US Dollars.
7
| Cullen/Frost Bankers, Inc. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | ||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| 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) | 1,052,564 | 1,043,431 | 939,958 | 888,035 | ||||||||||
| Provision for loan losses | 21,613 | 35,460 | 51,673 | 51,845 | ||||||||||
| Non-interest income: | ||||||||||||||
| Trust and investment management fees | 119,391 | 110,675 | 104,240 | 105,512 | ||||||||||
| Service charges on deposit accounts | 85,186 | 84,182 | 81,203 | 81,350 | ||||||||||
| Insurance commissions and fees | 48,967 | 46,169 | 47,154 | 48,926 | ||||||||||
| Interchange and debit card transaction fees (2) | 13,877 | 23,232 | 21,369 | 19,666 | ||||||||||
| Other charges, commissions and fees | 37,231 | 39,931 | 39,623 | 37,551 | ||||||||||
| Net gain (loss) on securities transactions | (156 | ) | (4,941 | ) | 14,975 | 69 | ||||||||
| Other | 46,790 | 37,222 | 41,144 | 35,656 | ||||||||||
| Total non-interest income (2) | 351,286 | 336,470 | 349,708 | 328,730 | ||||||||||
| Non-interest expense: | ||||||||||||||
| Salaries and wages | 350,312 | 337,068 | 318,665 | 310,504 | ||||||||||
| Employee benefits | 77,323 | 74,575 | 72,615 | 69,746 | ||||||||||
| Net occupancy | 76,788 | 75,971 | 71,627 | 65,690 | ||||||||||
| Technology, furniture and equipment | 83,102 | 74,335 | 71,208 | 64,373 | ||||||||||
| Deposit insurance | 16,397 | 20,128 | 17,428 | 14,519 | ||||||||||
| Intangible amortization | 1,424 | 1,703 | 2,429 | 3,325 | ||||||||||
| Other (2) | 173,538 | 175,289 | 178,988 | 165,561 | ||||||||||
| Total non-interest expense (2) | 778,884 | 759,069 | 732,960 | 693,718 | ||||||||||
| Income before income taxes | 508,681 | 408,363 | 341,411 | 319,799 | ||||||||||
| Income taxes | 53,763 | 44,214 | 37,150 | 40,471 | ||||||||||
| Net income | 454,918 | 364,149 | 304,261 | 279,328 | ||||||||||
| Preferred stock dividends | 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 | 6.90 | 5.51 | 4.70 | 4.28 | ||||||||||
| Cash dividends per common share | 2.58 | 2.25 | 2.15 | 2.10 | ||||||||||
| Book value per common share at end of quarter | 51.19 | 49.68 | 45.03 | 44.30 | ||||||||||
| OUTSTANDING COMMON SHARES | ||||||||||||||
| Period-end common shares | 62,986 | 63,476 | 63,474 | 61,982 | ||||||||||
| Weighted-average common shares - basic | 63,705 | 63,694 | 62,376 | 62,758 | ||||||||||
| Dilutive effect of stock compensation | 982 | 968 | 593 | 715 | ||||||||||
| Weighted-average common shares - diluted | 64,687 | 64,662 | 62,969 | 63,473 | ||||||||||
| SELECTED ANNUALIZED RATIOS | ||||||||||||||
| Return on average assets | % | 1.44 | % | 1.17 | % | 1.03 | % | 0.97 | % | |||||
| Return on average common equity | 14.23 | 11.76 | 10.16 | 9.86 | ||||||||||
| Net interest income to average earning assets (1) | 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. |
All values are in US Dollars.
8
| Cullen/Frost Bankers, Inc. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | ||||||||||||||
| 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 | 28,900 | 28,359 | 26,717 | 25,955 | ||||||||||
| Total assets(1) | 31,030 | 30,450 | 28,832 | 28,061 | ||||||||||
| Non-interest-bearing demand deposits | 10,757 | 10,819 | 10,034 | 10,180 | ||||||||||
| Interest-bearing deposits | 15,532 | 15,085 | 14,478 | 13,861 | ||||||||||
| Total deposits | 26,289 | 25,905 | 24,512 | 24,041 | ||||||||||
| Shareholders' equity | 3,284 | 3,173 | 3,059 | 2,895 | ||||||||||
| Period-End Balance: | ||||||||||||||
| Loans | 14,750 | $ | 14,100 | $ | 13,146 | $ | 11,975 | $ | 11,487 | |||||
| Earning assets | 29,894 | 29,595 | 28,025 | 26,431 | ||||||||||
| Goodwill and intangible assets | 659 | 660 | 662 | 663 | ||||||||||
| Total assets(1) | 32,293 | 31,748 | 30,196 | 28,566 | ||||||||||
| Total deposits | 27,149 | 26,872 | 25,812 | 24,344 | ||||||||||
| Shareholders' equity | 3,369 | 3,298 | 3,003 | 2,890 | ||||||||||
| Adjusted shareholders' equity (2) | 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 | % | 0.94 | % | 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 | % | 0.33 | % | 0.27 | % | 0.30 | % | 0.14 | % | |||||
| Non-performing assets: | ||||||||||||||
| Non-accrual loans | 102,303 | $ | 73,739 | $ | 150,314 | $ | 100,151 | $ | 83,467 | |||||
| Restructured loans | — | 4,862 | — | — | ||||||||||
| Foreclosed assets | 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 | % | 0.53 | % | 1.20 | % | 0.86 | % | 0.75 | % | |||||
| Total assets | 0.23 | 0.50 | 0.34 | 0.30 | ||||||||||
| CONSOLIDATED CAPITAL RATIOS | ||||||||||||||
| Common Equity Tier 1 Risk-Based Capital Ratio(3) | % | 12.27 | % | 12.42 | % | 12.52 | % | 11.37 | % | |||||
| Tier 1 Risk-Based Capital Ratio(3) | 12.94 | 13.16 | 13.33 | 12.38 | ||||||||||
| Total Risk-Based Capital Ratio(3) | 14.64 | 15.15 | 14.93 | 13.85 | ||||||||||
| Leverage Ratio | 9.06 | 8.46 | 8.14 | 7.79 | ||||||||||
| Equity to Assets Ratio (period-end) | 10.43 | 10.39 | 9.94 | 10.12 | ||||||||||
| Equity to Assets Ratio (average) | 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. |
All values are in US Dollars.
9
| Cullen/Frost Bankers, Inc. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED) | ||||||||||||||
| 2018 | ||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||
| TAXABLE-EQUIVALENT YIELD/COST | ||||||||||||||
| Earning Assets: | ||||||||||||||
| Interest-bearing deposits | % | 2.19 | % | 2.64 | % | 2.50 | % | 2.35 | % | |||||
| Federal funds sold and resell agreements | 2.21 | 2.48 | 2.58 | 2.41 | ||||||||||
| Securities | 3.43 | 3.42 | 3.37 | 3.39 | ||||||||||
| Loans, net of unearned discounts | 5.16 | 5.34 | 5.33 | 5.20 | ||||||||||
| Total earning assets | 4.21 | 4.33 | 4.27 | 4.15 | ||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||
| Interest-bearing deposits: | ||||||||||||||
| Savings and interest checking | 0.07 | 0.08 | 0.09 | 0.08 | ||||||||||
| Money market deposit accounts | 0.93 | 1.03 | 1.09 | 1.00 | ||||||||||
| Time accounts | 1.74 | 1.66 | 1.43 | 1.14 | ||||||||||
| Public funds | 1.34 | 1.51 | 1.39 | 1.31 | ||||||||||
| Total interest-bearing deposits | 0.63 | 0.68 | 0.69 | 0.63 | ||||||||||
| Total deposits | 0.39 | 0.41 | 0.42 | 0.37 | ||||||||||
| Federal funds purchased and repurchase agreements | 1.53 | 1.69 | 1.72 | 1.56 | ||||||||||
| Junior subordinated deferrable interest debentures | 4.18 | 4.34 | 4.40 | 4.24 | ||||||||||
| Subordinated notes payable and other notes | 4.71 | 4.71 | 4.72 | 4.72 | ||||||||||
| Total interest-bearing liabilities | 0.75 | 0.80 | 0.81 | 0.74 | ||||||||||
| Net interest spread | 3.46 | 3.53 | 3.46 | 3.41 | ||||||||||
| Net interest income to total average earning assets | 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 | 212 | 246 | 250 | 317 | ||||||||||
| Securities | 13,444 | 13,322 | 12,770 | 12,435 | ||||||||||
| Loans, net of unearned discount | 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 | 7,763 | 7,588 | 7,696 | 7,792 | ||||||||||
| Time accounts | 1,023 | 970 | 895 | 836 | ||||||||||
| Public funds | 538 | 513 | 554 | 467 | ||||||||||
| Total interest-bearing deposits | 16,036 | 15,845 | 15,919 | 15,767 | ||||||||||
| Total deposits | 26,352 | 25,993 | 26,112 | 26,507 | ||||||||||
| Federal funds purchased and repurchase agreements | 1,291 | 1,242 | 1,180 | 1,138 | ||||||||||
| Junior subordinated deferrable interest debentures | 136 | 136 | 136 | 136 | ||||||||||
| Subordinated notes payable and other notes | 99 | 99 | 99 | 99 | ||||||||||
| Total interest-bearing funds | 18,067 | $ | 17,562 | $ | 17,322 | $ | 17,334 | $ | 17,140 |
All values are in US Dollars.
10