Cullen/Frost Reports 4th Quarter And 2018 Annual Results
Board declares first quarter dividend on common and preferred stock
SAN ANTONIO, Jan. 31, 2019 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE:CFR) today reported fourth quarter and annual results for 2018. Cullen/Frost reported net income available to common shareholders for the fourth quarter of 2018 of $117.2 million, or $1.82 per diluted common share, both up 19 percent compared to fourth quarter 2017. For the fourth quarter of 2018, returns on average assets and common equity were 1.48 percent and 14.85 percent, respectively, compared to 1.26 percent and 12.66 percent for the same period in 2017.
The company also reported 2018 annual net income available to common shareholders of $446.9 million, an increase of 25.5 percent compared to 2017 earnings of $356.1 million. On a per-share basis, 2018 earnings were $6.90 per diluted common share, compared to $5.51 per diluted common share reported in 2017. For the year 2018, returns on average assets and common equity were 1.44 percent and 14.23 percent respectively, compared to 1.17 percent and 11.76 percent reported in 2017.
"Our solid fourth-quarter and full-year 2018 earnings resulted from our continued, consistent execution of our plan," said Phil Green, Cullen/Frost chairman and CEO. "We continue to realize high-single-digit loan growth while pursuing consistent, above-market, profitable organic growth across our enterprise.
"We also continue to execute on our Houston expansion efforts," Green said. "We opened the first of the 25 new financial centers planned over the next two years in the Houston area just before the end of the fourth quarter."
During the fourth quarter of 2018, average loans increased 8.3 percent to $13.9 billion, up approximately $1.1 billion compared to $12.9 billion in the fourth quarter of 2017. Average deposits rose by 0.5 percent to $26.5 billion, up $123.7 million from the $26.4 billion reported in the fourth quarter of 2017. Average demand deposits were down $358 million, or 3.2 percent. This decrease was offset by a continued increase in average interest-bearing deposits, which were up $482 million or 3.2 percent compared to the fourth quarter of 2017.
For 2018, average total loans were $13.6 billion, an increase of approximately $1.2 billion, or 9.3 percent, from the $12.5 billion reported the previous year. Average total deposits for 2018 increased to $26.3 billion, up 1.5 percent, or $384.1 million, over the $25.9 billion reported in 2017.
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 2018 were 12.65 percent, 13.34 percent, and 15.09 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III fully phased-in requirements.
- Net interest income for the fourth quarter totaled $249.2 million, an increase of 11.3 percent compared to the $223.9 million reported for the fourth quarter of 2017. The net interest margin was 3.72 percent for the fourth quarter compared to 3.70 percent for the fourth quarter of 2017 and 3.66 percent for the third quarter of 2018. Had the current 21 percent corporate tax rate been in place, fourth quarter 2017 net interest margin would have been 3.39 percent. A shift in the mix of earning assets to higher yielding assets, primarily loans, and higher interest rates positively affected the net interest margin compared to a year ago.
- Non-interest income for the fourth quarter of 2018 was $87.1 million, down $3.0 million from the $90.1 million reported a year earlier. Other income decreased $1.0 million, impacted by higher gains on the sale of properties recorded in the fourth quarter last year. The year-on-year comparison for the interchange and debit card transaction fees line of non-interest income was negatively impacted by $3.0 million related to the change in accounting standard addressed in the last bullet below.
- Non-interest expense for the fourth quarter of 2018 was $199.7 million, up $3.4 million, or 1.7 percent, compared to the $196.3 million reported for the fourth quarter of 2017. Technology, furniture and equipment expense was up $2.6 million. The increase was primarily driven by a $1.4 million increase in software maintenance expense. Employee benefits expense increased $2.0 million, or 12.0 percent, impacted by higher medical benefits expense. Deposit insurance decreased $2.6 million, primarily due to the elimination of the surcharge during the fourth quarter as the Deposit Insurance Fund reached the prescribed reserve level set by the FDIC. Other non-interest expense of $47.5 million increased 0.4 percent compared to the fourth quarter of 2017. Adjusted for the accounting change related to interchange and ATM-related expenses, other non-interest expense would have increased $3.0 million or 6.8 percent. Other non-interest expense in the fourth quarter of 2018 was impacted by higher advertising/marketing expenses, up $2.6 million from a year earlier.
- For the fourth quarter of 2018, the provision for loan losses was $3.8 million, compared to net charge-offs of $9.2 million. For the fourth quarter of 2017, the provision for loan losses was $8.1 million, compared to net charge-offs of $7.0 million. The allowance for loan losses as a percentage of total loans was 0.94 percent at December 31, 2018, compared to 1.00 percent last quarter and 1.18 percent at year-end 2017. Non-performing assets were $74.9 million at year end, compared to $86.4 million the previous quarter, and $157.3 million at year-end 2017.
- The interchange and debit card transaction fees category of non-interest income and the other expense category were each impacted by our adoption at the beginning of 2018 of a new accounting standard that affects how we report revenues and network costs associated with ATM and debit card network transactions. Prior to 2018, we recognized such revenues and network costs on a gross basis. Beginning in 2018, ATM and debit card transaction fees are reported net of related network costs. For the fourth quarter of 2018, gross interchange and debit card transaction fees totaled $6.7 million while related network costs totaled $3.0 million. On a net basis, we reported $3.8 million as interchange and debit card transaction fees. See note 2 on page 6 of this release and our forthcoming Form 10-K for more information on the effects of this and other accounting changes.
The Cullen/Frost board declared a first-quarter cash dividend of $0.67 per common share, payable March 15, 2019 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 also payable on March 15, 2019, to shareholders of record on February 28 of this year.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 31, 2019, 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 until midnight Sunday, February 3, 2019 at 855-859-2056, with the Conference ID# of 1165418. 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 $32.3 billion in assets at December 31, 2018. 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.
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.
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
2018 | 2017 | ||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
CONDENSED INCOME STATEMENTS | |||||||||||||||||||
Net interest income | $ | 249,209 | $ | 241,665 | $ | 237,270 | $ | 229,748 | $ | 223,914 | |||||||||
Net interest income (1) | 273,810 | 265,687 | 260,531 | 252,536 | 268,611 | ||||||||||||||
Provision for loan losses | 3,767 | 2,650 | 8,251 | 6,945 | 8,102 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Trust and investment management fees | 29,882 | 30,801 | 29,121 | 29,587 | 28,985 | ||||||||||||||
Service charges on deposit accounts | 21,632 | 21,569 | 21,142 | 20,843 | 21,248 | ||||||||||||||
Insurance commissions and fees | 11,394 | 11,037 | 10,556 | 15,980 | 11,728 | ||||||||||||||
Interchange and debit card transaction fees (2) | 3,774 | 3,499 | 3,446 | 3,158 | 6,082 | ||||||||||||||
Other charges, commissions and fees | 9,371 | 9,580 | 9,273 | 9,007 | 9,948 | ||||||||||||||
Net gain (loss) on securities transactions | (43) | (34) | (60) | (19) | (24) | ||||||||||||||
Other | 11,108 | 11,205 | 11,588 | 12,889 | 12,108 | ||||||||||||||
Total non-interest income (2) | 87,118 | 87,657 | 85,066 | 91,445 | 90,075 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and wages | 90,878 | 87,547 | 85,204 | 86,683 | 89,173 | ||||||||||||||
Employee benefits | 19,066 | 18,355 | 17,907 | 21,995 | 17,022 | ||||||||||||||
Net occupancy | 17,699 | 19,894 | 19,455 | 19,740 | 18,190 | ||||||||||||||
Technology, furniture and equipment | 21,960 | 21,004 | 20,459 | 19,679 | 19,352 | ||||||||||||||
Deposit insurance | 2,219 | 4,694 | 4,605 | 4,879 | 4,781 | ||||||||||||||
Intangible amortization | 331 | 336 | 369 | 388 | 402 | ||||||||||||||
Other (2) | 47,544 | 41,838 | 40,909 | 43,247 | 47,360 | ||||||||||||||
Total non-interest expense (2) | 199,697 | 193,668 | 188,908 | 196,611 | 196,280 | ||||||||||||||
Income before income taxes | 132,863 | 133,004 | 125,177 | 117,637 | 109,607 | ||||||||||||||
Income taxes | 13,610 | 15,160 | 13,836 | 11,157 | 9,083 | ||||||||||||||
Net income | 119,253 | 117,844 | 111,341 | 106,480 | 100,524 | ||||||||||||||
Preferred stock dividends | 2,016 | 2,016 | 2,015 | 2,016 | 2,016 | ||||||||||||||
Net income available to common shareholders | $ | 117,237 | $ | 115,828 | $ | 109,326 | $ | 104,464 | $ | 98,508 | |||||||||
PER COMMON SHARE DATA | |||||||||||||||||||
Earnings per common share - basic | $ | 1.84 | $ | 1.80 | $ | 1.70 | $ | 1.63 | $ | 1.54 | |||||||||
Earnings per common share - diluted | 1.82 | 1.78 | 1.68 | 1.61 | 1.53 | ||||||||||||||
Cash dividends per common share | 0.67 | 0.67 | 0.67 | 0.57 | 0.57 | ||||||||||||||
Book value per common share at end of quarter | 51.19 | 49.49 | 49.53 | 48.58 | 49.68 | ||||||||||||||
OUTSTANDING COMMON SHARES | |||||||||||||||||||
Period-end common shares | 62,986 | 63,923 | 63,904 | 63,794 | 63,476 | ||||||||||||||
Weighted-average common shares - basic | 63,441 | 63,892 | 63,837 | 63,649 | 63,314 | ||||||||||||||
Dilutive effect of stock compensation | 811 | 1,022 | 1,062 | 1,013 | 981 | ||||||||||||||
Weighted-average common shares - diluted | 64,252 | 64,914 | 64,899 | 64,662 | 64,295 | ||||||||||||||
SELECTED ANNUALIZED RATIOS | |||||||||||||||||||
Return on average assets | 1.48 | % | 1.49 | % | 1.43 | % | 1.36 | % | 1.26 | % | |||||||||
Return on average common equity | 14.85 | 14.40 | 14.03 | 13.62 | 12.66 | ||||||||||||||
Net interest income to average earning assets (1) | 3.72 | 3.66 | 3.64 | 3.52 | 3.70 | ||||||||||||||
(1) Taxable-equivalent basis assuming a 21% tax rate for 2018 and 35% tax rate for 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 $3,233 in the fourth quarter of 2017. | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
2018 | 2017 | ||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
BALANCE SHEET SUMMARY | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Average Balance: | |||||||||||||||||||
Loans | $ | 13,949 | $ | 13,683 | $ | 13,537 | $ | 13,295 | $ | 12,879 | |||||||||
Earning assets | 29,153 | 28,796 | 28,647 | 29,002 | 29,012 | ||||||||||||||
Total assets | 31,330 | 30,918 | 30,758 | 31,131 | 31,107 | ||||||||||||||
Non-interest-bearing demand deposits | 10,740 | 10,690 | 10,629 | 10,972 | 11,098 | ||||||||||||||
Interest-bearing deposits | 15,767 | 15,462 | 15,440 | 15,457 | 15,286 | ||||||||||||||
Total deposits | 26,507 | 26,152 | 26,069 | 26,429 | 26,384 | ||||||||||||||
Shareholders' equity | 3,277 | 3,335 | 3,270 | 3,255 | 3,232 | ||||||||||||||
Period-End Balance: | |||||||||||||||||||
Loans | $ | 14,100 | $ | 13,815 | $ | 13,712 | $ | 13,364 | $ | 13,146 | |||||||||
Earning assets | 29,894 | 29,042 | 28,494 | 29,414 | 29,595 | ||||||||||||||
Goodwill and intangible assets | 659 | 659 | 659 | 660 | 660 | ||||||||||||||
Total assets | 32,293 | 31,223 | 30,687 | 31,459 | 31,748 | ||||||||||||||
Total deposits | 27,149 | 26,349 | 25,996 | 26,678 | 26,872 | ||||||||||||||
Shareholders' equity | 3,369 | 3,308 | 3,310 | 3,243 | 3,298 | ||||||||||||||
Adjusted shareholders' equity (1) | 3,433 | 3,449 | 3,373 | 3,297 | 3,218 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||
Allowance for loan losses: | $ | 132,132 | $ | 137,578 | $ | 150,226 | $ | 149,885 | $ | 155,364 | |||||||||
As a percentage of period-end loans | 0.94 | % | 1.00 | % | 1.10 | % | 1.12 | % | 1.18 | % | |||||||||
Net charge-offs: | $ | 9,213 | $ | 15,298 | $ | 7,910 | $ | 12,424 | $ | 7,041 | |||||||||
Annualized as a percentage of average loans | 0.26 | % | 0.44 | % | 0.23 | % | 0.38 | % | 0.22 | % | |||||||||
Non-performing assets: | |||||||||||||||||||
Non-accrual loans | $ | 73,739 | $ | 82,601 | $ | 119,181 | $ | 123,152 | $ | 150,314 | |||||||||
Restructured loans | — | — | — | 12,058 | 4,862 | ||||||||||||||
Foreclosed assets | 1,175 | 3,765 | 3,643 | 1,371 | 2,116 | ||||||||||||||
Total | $ | 74,914 | $ | 86,366 | $ | 122,824 | $ | 136,581 | $ | 157,292 | |||||||||
As a percentage of: | |||||||||||||||||||
Total loans and foreclosed assets | 0.53 | % | 0.62 | % | 0.90 | % | 1.02 | % | 1.20 | % | |||||||||
Total assets | 0.23 | 0.28 | 0.40 | 0.43 | 0.50 | ||||||||||||||
CONSOLIDATED CAPITAL RATIOS | |||||||||||||||||||
Common Equity Tier 1 Risk-Based Capital Ratio | 12.65 | % | 12.93 | % | 12.69 | % | 12.69 | % | 12.42 | % | |||||||||
Tier 1 Risk-Based Capital Ratio | 13.34 | 13.63 | 13.40 | 13.42 | 13.16 | ||||||||||||||
Total Risk-Based Capital Ratio | 15.09 | 15.44 | 15.29 | 15.36 | 15.15 | ||||||||||||||
Leverage Ratio | 9.06 | 9.19 | 9.02 | 8.62 | 8.46 | ||||||||||||||
Equity to Assets Ratio (period-end) | 10.43 | 10.60 | 10.78 | 10.31 | 10.39 | ||||||||||||||
Equity to Assets Ratio (average) | 10.46 | 10.79 | 10.63 | 10.46 | 10.39 | ||||||||||||||
(1) Shareholders' equity excluding accumulated other comprehensive income (loss). | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
CONDENSED INCOME STATEMENTS | |||||||||||||||||||
Net interest income | $ | 957,892 | $ | 866,422 | $ | 776,336 | $ | 736,632 | $ | 686,934 | |||||||||
Net interest income (1) | 1,052,564 | 1,043,431 | 939,958 | 888,035 | 807,937 | ||||||||||||||
Provision for loan losses | 21,613 | 35,460 | 51,673 | 51,845 | 16,314 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Trust and investment management fees | 119,391 | 110,675 | 104,240 | 105,512 | 106,237 | ||||||||||||||
Service charges on deposit accounts | 85,186 | 84,182 | 81,203 | 81,350 | 81,946 | ||||||||||||||
Insurance commissions and fees | 48,967 | 46,169 | 47,154 | 48,926 | 45,115 | ||||||||||||||
Interchange and debit card transaction fees (2) | 13,877 | 23,232 | 21,369 | 19,666 | 18,372 | ||||||||||||||
Other charges, commissions and fees | 37,231 | 39,931 | 39,623 | 37,551 | 36,180 | ||||||||||||||
Net gain (loss) on securities transactions | (156) | (4,941) | 14,975 | 69 | 38 | ||||||||||||||
Other | 46,790 | 37,222 | 41,144 | 35,656 | 32,256 | ||||||||||||||
Total non-interest income (2) | 351,286 | 336,470 | 349,708 | 328,730 | 320,144 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and wages | 350,312 | 337,068 | 318,665 | 310,504 | 292,349 | ||||||||||||||
Employee benefits | 77,323 | 74,575 | 72,615 | 69,746 | 60,151 | ||||||||||||||
Net occupancy | 76,788 | 75,971 | 71,627 | 65,690 | 55,745 | ||||||||||||||
Technology, furniture and equipment | 83,102 | 74,335 | 71,208 | 64,373 | 62,087 | ||||||||||||||
Deposit insurance | 16,397 | 20,128 | 17,428 | 14,519 | 13,232 | ||||||||||||||
Intangible amortization | 1,424 | 1,703 | 2,429 | 3,325 | 3,520 | ||||||||||||||
Other (2) | 173,538 | 175,289 | 178,988 | 165,561 | 167,656 | ||||||||||||||
Total non-interest expense (2) | 778,884 | 759,069 | 732,960 | 693,718 | 654,740 | ||||||||||||||
Income before income taxes | 508,681 | 408,363 | 341,411 | 319,799 | 336,024 | ||||||||||||||
Income taxes | 53,763 | 44,214 | 37,150 | 40,471 | 58,047 | ||||||||||||||
Net income | 454,918 | 364,149 | 304,261 | 279,328 | 277,977 | ||||||||||||||
Preferred stock dividends | 8,063 | 8,063 | 8,063 | 8,063 | 8,063 | ||||||||||||||
Net income available to common shareholders | $ | 446,855 | $ | 356,086 | $ | 296,198 | $ | 271,265 | $ | 269,914 | |||||||||
PER COMMON SHARE DATA | |||||||||||||||||||
Earnings per common share - basic | $ | 6.97 | $ | 5.56 | $ | 4.73 | $ | 4.31 | $ | 4.32 | |||||||||
Earnings per common share - diluted | 6.90 | 5.51 | 4.70 | 4.28 | 4.29 | ||||||||||||||
Cash dividends per common share | 2.58 | 2.25 | 2.15 | 2.10 | 2.03 | ||||||||||||||
Book value per common share at end of quarter | 51.19 | 49.68 | 45.03 | 44.30 | 42.87 | ||||||||||||||
OUTSTANDING COMMON SHARES | |||||||||||||||||||
Period-end common shares | 62,986 | 63,476 | 63,474 | 61,982 | 63,149 | ||||||||||||||
Weighted-average common shares - basic | 63,705 | 63,694 | 62,376 | 62,758 | 62,072 | ||||||||||||||
Dilutive effect of stock compensation | 982 | 968 | 593 | 715 | 902 | ||||||||||||||
Weighted-average common shares - diluted | 64,687 | 64,662 | 62,969 | 63,473 | 62,974 | ||||||||||||||
SELECTED ANNUALIZED RATIOS | |||||||||||||||||||
Return on average assets | 1.44 | % | 1.17 | % | 1.03 | % | 0.97 | % | 1.05 | % | |||||||||
Return on average common equity | 14.23 | 11.76 | 10.16 | 9.86 | 10.51 | ||||||||||||||
Net interest income to average earning assets (1) | 3.64 | 3.69 | 3.56 | 3.45 | 3.41 | ||||||||||||||
(1) Taxable-equivalent basis assuming a 21% tax rate for 2018 and 35% tax rate for 2014-2017. | |||||||||||||||||||
(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 $8,473 in 2016. | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015(1) | 2014(1) | |||||||||||||||
BALANCE SHEET SUMMARY ($ in millions) | |||||||||||||||||||
Average Balance: | |||||||||||||||||||
Loans | $ | 13,618 | $ | 12,460 | $ | 11,555 | $ | 11,267 | $ | 10,299 | |||||||||
Earning assets | 28,900 | 28,359 | 26,717 | 25,955 | 23,877 | ||||||||||||||
Total assets | 31,030 | 30,450 | 28,832 | 28,061 | 25,766 | ||||||||||||||
Non-interest-bearing demand deposits | 10,757 | 10,819 | 10,034 | 10,180 | 9,125 | ||||||||||||||
Interest-bearing deposits | 15,532 | 15,085 | 14,478 | 13,861 | 12,928 | ||||||||||||||
Total deposits | 26,289 | 25,905 | 24,512 | 24,041 | 22,053 | ||||||||||||||
Shareholders' equity | 3,284 | 3,173 | 3,059 | 2,895 | 2,712 | ||||||||||||||
Period-End Balance: | |||||||||||||||||||
Loans | $ | 14,100 | $ | 13,146 | $ | 11,975 | $ | 11,487 | $ | 10,988 | |||||||||
Earning assets | 29,894 | 29,595 | 28,025 | 26,431 | 26,052 | ||||||||||||||
Goodwill and intangible assets | 659 | 660 | 662 | 663 | 667 | ||||||||||||||
Total assets | 32,293 | 31,748 | 30,196 | 28,566 | 28,276 | ||||||||||||||
Total deposits | 27,149 | 26,872 | 25,812 | 24,344 | 24,136 | ||||||||||||||
Shareholders' equity | 3,369 | 3,298 | 3,003 | 2,890 | 2,851 | ||||||||||||||
Adjusted shareholders' equity (2) | 3,433 | 3,218 | 3,027 | 2,776 | 2,710 | ||||||||||||||
ASSET QUALITY ($ in thousands) | |||||||||||||||||||
Allowance for loan losses: | $ | 132,132 | $ | 155,364 | $ | 153,045 | $ | 135,859 | $ | 99,542 | |||||||||
As a percentage of period-end loans | 0.94 | % | 1.18 | % | 1.28 | % | 1.18 | % | 0.91 | % | |||||||||
Net charge-offs: | $ | 44,845 | $ | 33,141 | $ | 34,487 | $ | 15,528 | $ | 9,210 | |||||||||
Annualized as a percentage of average loans | 0.33 | % | 0.27 | % | 0.30 | % | 0.14 | % | 0.09 | % | |||||||||
Non-performing assets: | |||||||||||||||||||
Non-accrual loans | $ | 73,739 | $ | 150,314 | $ | 100,151 | $ | 83,467 | $ | 59,925 | |||||||||
Restructured loans | — | 4,862 | — | — | — | ||||||||||||||
Foreclosed assets | 1,175 | 2,116 | 2,440 | 2,255 | 5,251 | ||||||||||||||
Total | $ | 74,914 | $ | 157,292 | $ | 102,591 | $ | 85,722 | $ | 65,176 | |||||||||
As a percentage of: | |||||||||||||||||||
Total loans and foreclosed assets | 0.53 | % | 1.20 | % | 0.86 | % | 0.75 | % | 0.59 | % | |||||||||
Total assets | 0.23 | 0.50 | 0.34 | 0.30 | 0.23 | ||||||||||||||
CONSOLIDATED CAPITAL RATIOS(3) | |||||||||||||||||||
Common Equity Tier 1 Risk-Based Capital Ratio | 12.65 | % | 12.42 | % | 12.52 | % | 11.37 | % | N/A | ||||||||||
Tier 1 Risk-Based Capital Ratio | 13.34 | 13.16 | 13.33 | 12.38 | 13.68 | % | |||||||||||||
Total Risk-Based Capital Ratio | 15.09 | 15.15 | 14.93 | 13.85 | 14.55 | ||||||||||||||
Leverage Ratio | 9.06 | 8.46 | 8.14 | 7.79 | 8.16 | ||||||||||||||
Equity to Assets Ratio (period-end) | 10.43 | 10.39 | 9.94 | 10.12 | 10.08 | ||||||||||||||
Equity to Assets Ratio (average) | 10.58 | 10.42 | 10.61 | 10.32 | 10.53 | ||||||||||||||
(1) Certain items in prior financial statements have been reclassified to conform to the current presentation in connection with the adoption of a new accounting standard 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) Beginning in 2015, capital ratios are calculated in accordance with the Basel III Capital Rules. Capital ratios for prior periods were calculated in accordance with previous capital rules. | |||||||||||||||||||
A.B. Mendez
Investor Relations
210.220.5234
or
Bill Day
Media Relations
210.220.5427
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SOURCE Cullen/Frost Bankers, Inc.
