Cullen/Frost Bankers, Inc. 10-K Summary
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1996. Cullen/Frost Bankers, Inc. is a Texas-based bank holding company headquartered in San Antonio. As of year-end 1996, the company operated 52 offices across six Texas markets through two primary national bank subsidiaries: The Frost National Bank (accounting for approximately 97% of consolidated assets) and the United States National Bank of Galveston. The company reported consolidated total assets of $4.89 billion and total deposits of $4.24 billion.
Key Financial Metrics
While detailed income statement figures (revenue, net income, cash flow) are incorporated by reference to the Annual Report to Shareholders and not explicitly listed in this filing text, the following balance sheet and capital metrics are provided:
- Total Assets: $4,888,384,000
- Total Deposits: $4,242,594,000
- Total Loans: $2,252,036,000 (Combined subsidiary loans)
- Trust Assets Administered: Approximately $8.1 billion
- Market Value of Voting Stock (Non-Affiliates): $816,829,125 (as of March 25, 1997)
- Shares Outstanding: 22,507,928 (as of March 25, 1997)
Capital Ratios (Year-End 1996):
| Bank Subsidiary | Tier 1 Risk-Based | Total Risk-Based | Leverage Ratio |
|---|---|---|---|
| Frost National Bank | 5.76% | 9.78% | 11.03% |
| U.S. National Bank of Galveston | 7.11% | 14.43% | 15.72% |
Both subsidiaries were classified as "well capitalized" under FDICIA standards.
Material Changes and Subsequent Events
The filing notes that acquisitions were completed in the first quarter of 1997, expanding the office count to 52. A significant subsequent event occurred on February 6, 1997, when Cullen/Frost Capital Trust issued $100 million of 8.42% Capital Securities, Series A. The filing text does not provide specific comparative financial data (e.g., year-over-year revenue or profit changes) as that information is incorporated by reference from the Annual Report to Shareholders.
Outlook, Risks, and Management Commentary
Regulatory Environment: The company is subject to strict capital adequacy guidelines. Both subsidiaries met the "well capitalized" threshold (Total Risk-Based Capital > 10%, Tier 1 > 6%, Leverage > 5%).
Dividend Capacity: At December 31, 1996, subsidiary banks had approximately $6.48 million available for dividend payments to the holding company without prior regulatory approval.
FDIC Assessments: Due to legislative action regarding Financing Corporation (FICO) bonds, the company expects an assessment expense of approximately $500,000 for 1997.
Legal Proceedings: Management believes pending litigation arising from ordinary banking operations will not have a material effect on the consolidated financial position.
Interstate Banking: Texas opted out of interstate branching in 1995, limiting the company's ability to establish de novo branches in other states, though interstate acquisitions remain possible under specific conditions.
Investor Verification Checklist
- Verify the specific revenue, net income, and earnings per share figures in the 1996 Annual Report to Shareholders (incorporated by reference), as these are not detailed in the 10-K text.
- Review the impact of the $100 million Capital Securities issuance (Feb 1997) on the company's capital structure and interest expense.
- Confirm the details of the acquisitions completed in Q1 1997 and their integration status.
- Assess the $500,000 FDIC assessment expense projected for 1997 against the company's liquidity position.
- Monitor the $6.48 million dividend availability at the subsidiary level to gauge potential cash flow to the holding company.