SAN ANTONIO, April 26, 2017 /PRNewswire/ -- Cullen/Frost
Bankers, Inc. (NYSE:CFR) today reported first quarter 2017 results.
The company's net income available to common shareholders for the
first quarter of 2017 was $82.9
million, compared to $66.8
million in the first quarter of 2016. On a per-share basis,
net income was $1.28 per diluted
common share, compared to $1.07 per
diluted common share reported a year earlier. Returns on average
assets and common equity were 1.12 percent and 11.55 percent,
respectively, compared to 0.96 percent and 9.55 percent,
respectively, for the same period a year earlier.
For the first quarter of 2017, net interest income on a
taxable-equivalent basis increased 10.1 percent to $252.4 million, compared to the $229.2 million reported for the same quarter of
2016. Average loans for the first quarter of 2017 increased
$592.1 million, or 5.1 percent, to
$12.1 billion, from the $11.5 billion reported for the first quarter a
year earlier. Average deposits for the quarter were $25.8 billion compared to $24.0 billion reported for last year's first
quarter, an increase of 7.8 percent.
"We continue to build momentum from the last half of 2016,
particularly in net interest income and loan growth," said
Cullen/Frost Chairman and CEO Phil
Green.
"Frost is well-positioned to continue growing in a higher
interest rate environment, and at the same time, we have never lost
sight of our culture and our value proposition, which have served
us so well. In February, Frost received 33 national and regional
Greenwich Excellence awards for satisfaction in small-business and
middle-market banking and treasury management. That's more than any
other bank in the country, and having a third party like Greenwich
acknowledge it shows the commitment that Frost and our Frost
bankers have made to providing high quality customer service."
Noted financial data for the first quarter of 2017 follows:
- The Common Equity Tier 1, Tier 1 and Total Risk-Based Capital
Ratios at the end of the first quarter of 2017 were 12.71 percent,
13.50 percent and 15.62 percent, respectively, and continue to be
in excess of well-capitalized levels. Current capital ratios exceed
Basel III fully phased-in requirements.
- Net-interest income on a taxable equivalent basis for the first
quarter of 2017 totaled $252.4
million, an increase of 10.1 percent, compared to
$229.2 million for the same period a
year ago. This increase is mainly due to an increase in the volume
of earning assets in both loans and securities, combined with
higher yields on loans and cash balances that we maintain at the
Federal Reserve. The net interest margin was 3.64 percent for the
first quarter of 2017, an increase over the 3.58 percent reported
for the first quarter of 2016 and 3.55 percent for the fourth
quarter of 2016. The increase in the net interest margin compared
to a year ago was primarily driven by an increase in the yield on
earning assets from the first quarter of 2016 to the first quarter
of 2017 impacted by the December 2016
Federal Reserve rate hike and to a lesser extent the March 2017 rate hike.
- Non-interest income for the first quarter of 2017 totaled
$83.7 million, a decrease of
$12.4 million, or 12.9 percent,
compared to $96.1 million reported
for the first quarter of 2016. This decrease resulted primarily
from a pre-tax gain of $14.9 million
realized from the sale of securities in the first quarter of 2016.
Trust and investment management fees were $26.5 million, up $1.1
million, or 4.5 percent, from the first quarter of 2016.
Investment fees were up $1.5 million,
or 7.3 percent, and were partially offset by lower estate fees,
down $212,000, and lower oil and gas
fees, down $118,000. Insurance
commissions and fees were $13.8
million, down $1.6 million, or
10.4 percent, compared to the $15.4
million reported in the first quarter a year earlier. Most
of this decrease was due to lower property and casualty company
bonuses down $2.6 million, offset in
part by higher benefit commissions up $1.3
million. Other income was up $1.4
million from last year's first quarter and included sundry
and other miscellaneous income up $735,000, and public finance underwriting fees up
$556,000.
- Non-interest expense was $187.9
million for the quarter, up $8.8
million or 4.9 percent compared to the $179.2 million reported for the first quarter a
year earlier. Total salaries rose $3.2
million, or 4.1 percent, to $82.5
million, and were impacted by normal annual merit and market
increases combined with increases in new employees and stock
compensation expense. Employee benefits were up $1.3 million, or 6.5 percent, due mainly to an
$896,000 increase in payroll taxes
and a $592,000 increase in expenses
related to our 401(k) and profit sharing plans. Net occupancy
expense rose $2.1 million, or 11.9
percent, mostly due to a $1.1 million
increase in lease expense and an increase of $443,000 in repairs and maintenance/service
contracts expense. Higher property taxes, up $338,000, and higher utilities expense, up
$275,000 also contributed to the
increase. Deposit insurance expense was up $1.3 million from last year's first quarter
totaling $4.9 million. This increase
was primarily due to an increase in the assessment rate impacted by
a new surcharge as well as an increase in assets.
- For the first quarter of 2017, the provision for loan losses
was $8.0 million, compared to net
charge-offs of $7.9 million, compared
with $8.9 million and $5.7 million, respectively, for the fourth
quarter of 2016. For the first quarter of 2016, the provision for
loan losses was $28.5 million,
compared to net charge-offs of $2.5
million. The allowance for loan losses as a percentage of
total loans was 1.26 percent at March 31,
2017, compared to 1.40 percent at the end of the first
quarter of 2016. Non-performing assets were $118.2 million at the end of the first quarter of
2017, compared to $180.0 million at
the end of the first quarter of 2016 and $102.6 million at the end of the fourth quarter
of 2016.
Cullen/Frost Bankers, Inc. will host a conference call on
Wednesday, April 26, 2017, at 10 a.m.
Central Time (CT) to discuss the results for the quarter.
The media and other interested parties are invited to access the
call in a "listen only" mode at 1-800-944-6430. Digital playback of
the conference call will be available after 2 p.m. CT until midnight Sunday, April 30, 2017
at 855-859-2056 with Conference ID # of 9304464. The call will also
be available by webcast at the URL listed below and available for
playback after 2 p.m. CT. After
entering the Web site, www.frostbank.com, scroll down to the bottom
of the home page. Under Company Information, click on Investor
Relations.
Cullen/Frost Bankers, Inc. (NYSE: CFR) is a financial holding
company, headquartered in San
Antonio, with $30.5 billion in
assets at March 31, 2017. 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"), 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 or services; (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.
- 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.
Greg Parker
Investor Relations
210.220.5632
or
Bill Day
Media Relations
210.220.5427
Cullen/Frost
Bankers, Inc.
|
CONSOLIDATED
FINANCIAL SUMMARY (UNAUDITED)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr(2)
|
|
1st
Qtr(2)
|
CONDENSED INCOME
STATEMENTS
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
208,509
|
|
|
$
|
201,603
|
|
|
$
|
194,507
|
|
|
$
|
190,502
|
|
|
$
|
189,724
|
|
Net interest income
(1)
|
252,393
|
|
|
244,961
|
|
|
235,665
|
|
|
230,158
|
|
|
229,173
|
|
Provision for loan
losses
|
7,952
|
|
|
8,939
|
|
|
5,045
|
|
|
9,189
|
|
|
28,500
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
Trust and investment
management fees
|
26,470
|
|
|
26,434
|
|
|
26,451
|
|
|
26,021
|
|
|
25,334
|
|
Service charges on
deposit accounts
|
20,769
|
|
|
20,434
|
|
|
20,540
|
|
|
19,865
|
|
|
20,364
|
|
Insurance commissions
and fees
|
13,821
|
|
|
11,342
|
|
|
11,029
|
|
|
9,360
|
|
|
15,423
|
|
Interchange and debit
card transaction fees
|
5,574
|
|
|
5,531
|
|
|
5,435
|
|
|
5,381
|
|
|
5,022
|
|
Other charges,
commissions and fees
|
9,592
|
|
|
9,798
|
|
|
10,703
|
|
|
10,069
|
|
|
9,053
|
|
Net gain (loss) on
securities transactions
|
—
|
|
|
109
|
|
|
(37)
|
|
|
—
|
|
|
14,903
|
|
Other
|
7,474
|
|
|
19,786
|
|
|
7,993
|
|
|
7,321
|
|
|
6,044
|
|
Total non-interest
income
|
83,700
|
|
|
93,434
|
|
|
82,114
|
|
|
78,017
|
|
|
96,143
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
Salaries and
wages
|
82,512
|
|
|
81,851
|
|
|
79,411
|
|
|
78,106
|
|
|
79,297
|
|
Employee
benefits
|
21,625
|
|
|
16,754
|
|
|
17,844
|
|
|
17,712
|
|
|
20,305
|
|
Net
occupancy
|
19,237
|
|
|
17,996
|
|
|
18,202
|
|
|
18,242
|
|
|
17,187
|
|
Furniture and
equipment
|
17,990
|
|
|
17,734
|
|
|
17,979
|
|
|
17,978
|
|
|
17,517
|
|
Deposit
insurance
|
4,915
|
|
|
5,016
|
|
|
4,558
|
|
|
4,197
|
|
|
3,657
|
|
Intangible
amortization
|
458
|
|
|
560
|
|
|
586
|
|
|
619
|
|
|
664
|
|
Other
|
41,178
|
|
|
53,940
|
|
|
41,925
|
|
|
42,591
|
|
|
40,532
|
|
Total non-interest
expense
|
187,915
|
|
|
193,851
|
|
|
180,505
|
|
|
179,445
|
|
|
179,159
|
|
Income before income
taxes
|
96,342
|
|
|
92,247
|
|
|
91,071
|
|
|
79,885
|
|
|
78,208
|
|
Income
taxes
|
11,401
|
|
|
8,528
|
|
|
10,852
|
|
|
8,378
|
|
|
9,392
|
|
Net income
|
84,941
|
|
|
83,719
|
|
|
80,219
|
|
|
71,507
|
|
|
68,816
|
|
Preferred stock
dividends
|
2,016
|
|
|
2,016
|
|
|
2,016
|
|
|
2,015
|
|
|
2,016
|
|
Net income available
to common shareholders
|
$
|
82,925
|
|
|
$
|
81,703
|
|
|
$
|
78,203
|
|
|
$
|
69,492
|
|
|
$
|
66,800
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE
DATA
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic
|
$
|
1.29
|
|
|
$
|
1.29
|
|
|
$
|
1.24
|
|
|
$
|
1.12
|
|
|
$
|
1.07
|
|
Earnings per common
share - diluted
|
1.28
|
|
|
1.28
|
|
|
1.24
|
|
|
1.11
|
|
|
1.07
|
|
Cash dividends per
common share
|
0.54
|
|
|
0.54
|
|
|
0.54
|
|
|
0.54
|
|
|
0.53
|
|
Book value per common
share at end of quarter
|
46.20
|
|
|
45.03
|
|
|
47.98
|
|
|
48.22
|
|
|
45.94
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING COMMON
SHARES
|
|
|
|
|
|
|
|
|
|
Period-end common
shares
|
63,916
|
|
|
63,474
|
|
|
62,891
|
|
|
62,049
|
|
|
61,984
|
|
Weighted-average
common shares - basic
|
63,738
|
|
|
63,157
|
|
|
62,450
|
|
|
61,960
|
|
|
61,929
|
|
Dilutive effect of
stock compensation
|
999
|
|
|
881
|
|
|
691
|
|
|
497
|
|
|
70
|
|
Weighted-average
common shares - diluted
|
64,737
|
|
|
64,038
|
|
|
63,141
|
|
|
62,457
|
|
|
61,999
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED ANNUALIZED
RATIOS
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
1.12
|
%
|
|
1.09
|
%
|
|
1.07
|
%
|
|
0.99
|
%
|
|
0.96
|
%
|
Return on average
common equity
|
11.55
|
|
|
11.03
|
|
|
10.31
|
|
|
9.70
|
|
|
9.55
|
|
Net interest income
to average earning assets (1)
|
3.64
|
|
|
3.55
|
|
|
3.53
|
|
|
3.57
|
|
|
3.58
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Taxable-equivalent basis assuming a 35% tax rate
|
(2) Certain items in
prior financial statements have been reclassified to conform to the
current presentation in connection with the early adoption of a new
accounting standard which requires all income tax effects related
to settlements of share-based payment awards be reported in
earnings as an increase or decrease to income tax
expense.
|
Cullen/Frost
Bankers, Inc.
|
CONSOLIDATED
FINANCIAL SUMMARY (UNAUDITED)
|
|
|
2017
|
|
2016
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
BALANCE SHEET
SUMMARY
|
|
|
|
|
|
|
|
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
Average
Balance:
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
12,090
|
|
|
$
|
11,726
|
|
|
$
|
11,457
|
|
|
$
|
11,537
|
|
|
$
|
11,498
|
|
Earning
assets
|
28,007
|
|
|
27,677
|
|
|
27,051
|
|
|
26,183
|
|
|
25,943
|
|
Total
assets
|
30,144
|
|
|
29,835
|
|
|
29,132
|
|
|
28,240
|
|
|
28,081
|
|
Non-interest-bearing
demand deposits
|
10,726
|
|
|
10,454
|
|
|
10,002
|
|
|
9,617
|
|
|
10,059
|
|
Interest-bearing
deposits
|
15,095
|
|
|
14,952
|
|
|
14,650
|
|
|
14,405
|
|
|
13,897
|
|
Total
deposits
|
25,821
|
|
|
25,406
|
|
|
24,652
|
|
|
24,022
|
|
|
23,956
|
|
Shareholders'
equity
|
3,055
|
|
|
3,091
|
|
|
3,161
|
|
|
3,025
|
|
|
2,958
|
|
|
|
|
|
|
|
|
|
|
|
Period-End
Balance:
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
12,186
|
|
|
$
|
11,975
|
|
|
$
|
11,581
|
|
|
$
|
11,584
|
|
|
$
|
11,542
|
|
Earning
assets
|
28,475
|
|
|
28,025
|
|
|
27,466
|
|
|
26,789
|
|
|
26,298
|
|
Goodwill and
intangible assets
|
661
|
|
|
662
|
|
|
662
|
|
|
662
|
|
|
663
|
|
Total
assets
|
30,525
|
|
|
30,196
|
|
|
29,603
|
|
|
28,976
|
|
|
28,400
|
|
Total
deposits
|
26,142
|
|
|
25,812
|
|
|
25,108
|
|
|
24,287
|
|
|
24,157
|
|
Shareholders'
equity
|
3,097
|
|
|
3,003
|
|
|
3,162
|
|
|
3,137
|
|
|
2,992
|
|
Adjusted
shareholders' equity (1)
|
3,103
|
|
|
3,027
|
|
|
2,946
|
|
|
2,855
|
|
|
2,813
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses:
|
$
|
153,056
|
|
|
$
|
153,045
|
|
|
$
|
149,773
|
|
|
$
|
149,714
|
|
|
$
|
161,880
|
|
As a percentage of
period-end loans
|
1.26
|
%
|
|
1.28
|
%
|
|
1.29
|
%
|
|
1.29
|
%
|
|
1.40
|
%
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs:
|
$
|
7,941
|
|
|
$
|
5,667
|
|
|
$
|
4,986
|
|
|
$
|
21,355
|
|
|
$
|
2,479
|
|
Annualized as a
percentage of average loans
|
0.27
|
%
|
|
0.19
|
%
|
|
0.17
|
%
|
|
0.74
|
%
|
|
0.09
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-performing
assets:
|
|
|
|
|
|
|
|
|
|
Non-accrual
loans
|
$
|
116,176
|
|
|
$
|
100,151
|
|
|
$
|
96,833
|
|
|
$
|
85,130
|
|
|
$
|
177,455
|
|
Restructured
loans
|
—
|
|
|
—
|
|
|
1,946
|
|
|
1,946
|
|
|
—
|
|
Foreclosed
assets
|
2,042
|
|
|
2,440
|
|
|
2,158
|
|
|
2,375
|
|
|
2,572
|
|
Total
|
$
|
118,218
|
|
|
$
|
102,591
|
|
|
$
|
100,937
|
|
|
$
|
89,451
|
|
|
$
|
180,027
|
|
As a percentage
of:
|
|
|
|
|
|
|
|
|
|
Total loans and
foreclosed assets
|
0.97
|
%
|
|
0.86
|
%
|
|
0.87
|
%
|
|
0.77
|
%
|
|
1.56
|
%
|
Total
assets
|
0.39
|
|
|
0.34
|
|
|
0.34
|
|
|
0.31
|
|
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
Risk-Based Capital Ratio
|
12.71
|
%
|
|
12.52
|
%
|
|
12.40
|
%
|
|
11.90
|
%
|
|
11.82
|
%
|
Tier 1 Risk-Based
Capital Ratio
|
13.50
|
|
|
13.33
|
|
|
13.24
|
|
|
12.73
|
|
|
12.66
|
|
Total Risk-Based
Capital Ratio
|
15.62
|
|
|
14.93
|
|
|
14.86
|
|
|
14.36
|
|
|
14.39
|
|
Leverage
Ratio
|
8.34
|
|
|
8.14
|
|
|
8.18
|
|
|
8.13
|
|
|
7.96
|
|
Equity to Assets
Ratio (period-end)
|
10.15
|
|
|
9.94
|
|
|
10.68
|
|
|
10.82
|
|
|
10.54
|
|
Equity to Assets
Ratio (average)
|
10.14
|
|
|
10.36
|
|
|
10.85
|
|
|
10.71
|
|
|
10.53
|
|
|
|
|
|
|
|
|
|
|
|
(1) Shareholders'
equity excluding accumulated other comprehensive income
(loss).
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cullenfrost-reports-first-quarter-results-300446086.html
SOURCE Cullen/Frost Bankers, Inc.