Cullen/Frost Reports 4th Quarter And 2020 Annual Results
Board declares first quarter dividend on common and preferred stock, and authorizes $100 million stock repurchase program
SAN ANTONIO, Jan. 28, 2021 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE: CFR) today reported fourth quarter and full year results for 2020. Net income available to common shareholders for the fourth quarter of 2020 was $88.3 million, or $1.38 per diluted common share, compared to $101.7 million, or $1.60 per diluted common share, for the fourth quarter of 2019. For the fourth quarter of 2020, returns on average assets and average common equity were 0.86 percent and 8.55 percent, respectively, compared to 1.21 percent and 10.74 percent for the same period in 2019.
The company also reported 2020 annual net income available to common shareholders of $323.6 million, a decrease of 25.7 percent compared to 2019 earnings available to common shareholders of $435.5 million. On a per-share basis, 2020 earnings were $5.10 per diluted common share compared to $6.84 per diluted common share reported in 2019. For the year 2020, returns on average assets and average common equity were 0.85 percent and 8.11 percent respectively, compared to 1.36 percent and 12.24 percent reported in 2019.
"In 2020, Frost Bankers made the best of a challenging environment, as we neared completion of our 25-branch Houston expansion and made $3.3 billion of PPP loans, providing timely assistance to over 19,000 customers. And last week we began accepting new PPP loan applications as the second phase of the PPP program gets under way," said Phil Green, Cullen/Frost chairman and CEO. "Our commitment to our organic growth strategy puts us in a strong position as we move ahead into the coming year."
For the fourth quarter of 2020, net interest income on a taxable-equivalent basis was $265.7 million, down 3.4 percent compared to the same period in 2019. Average loans for the fourth quarter of 2020 increased $3.2 billion, or 22.0 percent, to $17.9 billion, from the $14.7 billion reported for the fourth quarter a year earlier. Excluding PPP loans, fourth quarter average loans of $15.0 billion represented a 2.3 percent increase compared to the fourth quarter of 2019. Average deposits for the quarter were $34.1 billion, an increase of 25.5 percent, or $6.9 billion, compared to $27.2 billion in last year's fourth quarter.
For 2020, average total loans were $17.2 billion, an increase of approximately $2.7 billion, or 18.9 percent, from the $14.4 billion reported the previous year. Excluding PPP loans, 2020 average loans of $15.0 billion represented a 3.9 percent increase compared to 2019. Average total deposits for 2020 were $31.4 billion, up 19.0 percent, or $5.0 billion, compared to the $26.4 billion reported in 2019.
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 2020 were 12.86 percent, 13.47 percent, and 15.44 percent, respectively. Current capital ratios continue to be in excess of well-capitalized levels and exceed Basel III requirements.
- Net interest income on a tax-equivalent basis was $265.7 million, a decrease of 3.4 percent compared to the $275.0 million reported for the fourth quarter of 2019. The net interest margin was 2.82 percent for the fourth quarter compared to 3.62 percent for the fourth quarter of 2019 and 2.95 percent for the third quarter of 2020.
- Non-interest income for the fourth quarter of 2020 was $91.3 million, down $3.9 million, or 4.1 percent, from the $95.3 million reported a year earlier. Service charges on deposits decreased $2.6 million, or 11.2 percent, compared to the fourth quarter of 2019, mainly driven by a decrease in overdraft and NSF fees, down $2.7 million compared to the fourth quarter of 2019. Other income decreased $719,000 or 5.1 percent compared to the fourth quarter of 2019, primarily driven by a $454,000 decrease in derivative revenue. Trust and investment management fees decreased by $658,000, or 2.0 percent, compared to the fourth quarter of 2019. The decrease in trust and investment management fees was primarily the result of a $1.7 million decrease in oil & gas fees and a $1.1 million decrease in estate fees when compared with the fourth quarter of 2019, partly offset by a $1.0 million increase in investment fees.
- Non-interest expense for the fourth quarter of 2020 was $222.9 million, up $2.1 million, or 1.0 percent, compared to the $220.8 million reported for the fourth quarter of 2019. Salaries and wages expense increased $6.9 million compared to the fourth quarter of 2019. The increase was impacted by severance expense of $5.2 million related to organizational restructurings. Employee benefits expense decreased by $5.8 million compared with the fourth quarter of 2019. The decrease in employee benefits expense was primarily related to a decrease in certain discretionary benefit plan expenses. Fourth quarter net occupancy expense increased $2.0 million compared to the fourth quarter of 2019, impacted by our Houston expansion. The total increase was primarily driven by increases in depreciation on leasehold improvements (up $857,000), property taxes (up $797,000) and building depreciation (up $176,000), among other things. Technology, furniture and equipment expense was up $1.7 million or 6.6 percent compared to the fourth quarter of 2019. The increase was primarily driven by a $1.6 million increase in software expenses. Other non-interest expense decreased by $2.9 million or 6.1 percent compared to the fourth quarter of 2019, primarily driven by a $3.2 million decrease in travel and entertainment expense.
- For the fourth quarter of 2020, credit loss expense related to loans was $13.3 million, compared to net charge-offs of $13.6 million. For the fourth quarter of 2019, the credit loss expense related to loans was $8.4 million, compared to net charge-offs of $12.7 million. The allowance for credit losses on loans as a percentage of total loans was 1.51 percent at December 31, 2020, compared to 1.45 percent last quarter and 0.90 percent at year-end 2019. Excluding PPP loans, which carry a guarantee from the SBA, the allowance for credit losses on loans as a percentage of total loans was 1.75 percent at the end of the fourth quarter of 2020. Non-performing assets were $62.3 million at year end, compared to $96.4 million the previous quarter, and $109.5 million at year-end 2019. Credit loss expense related to off-balance-sheet exposures was $489,000 in the fourth quarter of 2020.
- As described further below, we have declared the first dividend payment on our 4.450% Non-Cumulative Perpetual Preferred Stock, Series B, issued on November 19, 2020, which will take place during the first quarter and will total $2.151 million. This preferred stock is represented by depositary shares, each representing a 1/40th interest in a share of preferred stock. Each subsequent quarterly dividend payment to holders of our Preferred Stock will total $1.669 million.
The Cullen/Frost board declared a first-quarter cash dividend of $0.72 per common share, payable March 15, 2021 to shareholders of record on February 26 of this year. The board of directors also declared a cash dividend of $14.3388889 per share of Series B Preferred Stock (or $0.3584722 per depositary share). The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol "CFR PrB." The Series B Preferred Stock dividend is payable on March 15, 2021, to shareholders of record on February 26 of this year.
In addition, the Corporation's board of directors authorized a new $100.0 million stock repurchase plan. Under the plan, shares may be repurchased over a one-year period from time to time at various prices in the open market or through private transactions.
Cullen/Frost Bankers, Inc. will host a conference call on Thursday, January 28, 2021, at 1:00 p.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 5:00 p.m. CT on the day of the call until midnight Sunday, January 31, 2021 at 855-859-2056, with the Conference ID# of 6337817. A replay of the call will also be available by webcast at the URL listed below after 5:00 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 $42.4 billion in assets at December 31, 2020. 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"), including statements regarding the potential effects of the ongoing COVID-19 pandemic on our business, financial condition, liquidity and results of operations, 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 cyber incidents or other failures, interruptions or security breaches of our systems or those of third-party providers.
- 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 impact of the ongoing COVID-19 pandemic and any other pandemic, epidemic or health-related crisis.
- 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
Further, statements about the potential effects of the ongoing COVID-19 pandemic on our business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, clients, third parties and us.
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.
A.B. Mendez
Investor Relations
210.220.5234
Bill Day
Media Relations
210.220.5427
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
CONDENSED INCOME STATEMENTS | |||||||||||||||||||
Net interest income | $ | 242,246 | $ | 243,423 | $ | 245,811 | $ | 244,521 | $ | 251,098 | |||||||||
Net interest income (1) | 265,721 | 267,041 | 269,722 | 268,453 | 275,038 | ||||||||||||||
Credit loss expense | 13,756 | 20,302 | 31,975 | 175,197 | 8,355 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Trust and investment management fees | 32,270 | 31,469 | 31,060 | 34,473 | 32,928 | ||||||||||||||
Service charges on deposit accounts | 20,830 | 19,812 | 17,580 | 22,651 | 23,454 | ||||||||||||||
Insurance commissions and fees | 11,704 | 11,456 | 10,668 | 16,485 | 12,138 | ||||||||||||||
Interchange and debit card transaction fees | 3,746 | 3,503 | 2,966 | 3,255 | 3,608 | ||||||||||||||
Other charges, commissions and fees | 9,427 | 8,370 | 7,663 | 9,365 | 9,020 | ||||||||||||||
Net gain (loss) on securities transactions | — | — | — | 108,989 | 28 | ||||||||||||||
Other | 13,360 | 8,991 | 7,664 | 17,697 | 14,079 | ||||||||||||||
Total non-interest income | 91,337 | 83,601 | 77,601 | 212,915 | 95,255 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and wages | 104,843 | 93,323 | 90,350 | 98,812 | 97,951 | ||||||||||||||
Employee benefits | 15,852 | 16,074 | 18,861 | 24,889 | 21,651 | ||||||||||||||
Net occupancy | 26,822 | 25,466 | 25,266 | 25,384 | 24,864 | ||||||||||||||
Technology, furniture and equipment | 27,464 | 26,482 | 26,046 | 25,240 | 25,759 | ||||||||||||||
Deposit insurance | 2,706 | 2,372 | 2,800 | 2,624 | 2,374 | ||||||||||||||
Intangible amortization | 208 | 212 | 241 | 257 | 264 | ||||||||||||||
Other | 45,017 | 38,221 | 36,115 | 46,957 | 47,943 | ||||||||||||||
Total non-interest expense | 222,912 | 202,150 | 199,679 | 224,163 | 220,806 | ||||||||||||||
Income before income taxes | 96,915 | 104,572 | 91,758 | 58,076 | 117,192 | ||||||||||||||
Income taxes | 8,645 | 9,516 | (1,314) | 3,323 | 13,511 | ||||||||||||||
Net income | 88,270 | 95,056 | 93,072 | 54,753 | 103,681 | ||||||||||||||
Preferred stock dividends | — | — | — | 2,016 | 2,016 | ||||||||||||||
Redemption of preferred stock | — | — | — | 5,514 | — | ||||||||||||||
Net income available to common shareholders | $ | 88,270 | $ | 95,056 | $ | 93,072 | $ | 47,223 | $ | 101,665 | |||||||||
PER COMMON SHARE DATA | |||||||||||||||||||
Earnings per common share - basic | $ | 1.39 | $ | 1.50 | $ | 1.47 | $ | 0.75 | $ | 1.61 | |||||||||
Earnings per common share - diluted | 1.38 | 1.50 | 1.47 | 0.75 | 1.60 | ||||||||||||||
Cash dividends per common share | 0.72 | 0.71 | 0.71 | 0.71 | 0.71 | ||||||||||||||
Book value per common share at end of quarter | 65.82 | 65.07 | 63.97 | 61.17 | 60.11 | ||||||||||||||
OUTSTANDING COMMON SHARES | |||||||||||||||||||
Period-end common shares | 63,011 | 62,782 | 62,670 | 62,553 | 62,669 | ||||||||||||||
Weighted-average common shares - basic | 62,940 | 62,727 | 62,596 | 62,643 | 62,609 | ||||||||||||||
Dilutive effect of stock compensation | 311 | 193 | 205 | 407 | 625 | ||||||||||||||
Weighted-average common shares - diluted | 63,251 | 62,920 | 62,801 | 63,050 | 63,234 | ||||||||||||||
SELECTED ANNUALIZED RATIOS | |||||||||||||||||||
Return on average assets | 0.86 | % | 0.96 | % | 0.99 | % | 0.57 | % | 1.21 | % | |||||||||
Return on average common equity | 8.55 | 9.30 | 9.60 | 4.88 | 10.74 | ||||||||||||||
Net interest income to average earning assets (1) | 2.82 | 2.95 | 3.13 | 3.56 | 3.62 | ||||||||||||||
(1) Taxable-equivalent basis assuming a 21% tax rate. | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
BALANCE SHEET SUMMARY | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Average Balance: | |||||||||||||||||||
Loans | $ | 17,945 | $ | 18,149 | $ | 17,550 | $ | 14,995 | $ | 14,705 | |||||||||
Earning assets | 38,262 | 36,749 | 35,128 | 30,804 | 30,621 | ||||||||||||||
Total assets | 40,963 | 39,435 | 37,838 | 33,534 | 33,314 | ||||||||||||||
Non-interest-bearing demand deposits | 15,119 | 14,585 | 13,785 | 10,737 | 10,772 | ||||||||||||||
Interest-bearing deposits | 19,010 | 18,289 | 17,528 | 16,654 | 16,414 | ||||||||||||||
Total deposits | 34,129 | 32,875 | 31,313 | 27,391 | 27,186 | ||||||||||||||
Shareholders' equity | 4,175 | 4,065 | 3,899 | 4,009 | 3,900 | ||||||||||||||
Period-End Balance: | |||||||||||||||||||
Loans | $ | 17,481 | $ | 18,224 | $ | 17,972 | $ | 15,338 | $ | 14,750 | |||||||||
Earning assets | 39,648 | 37,482 | 36,613 | 31,440 | 31,281 | ||||||||||||||
Goodwill and intangible assets | 657 | 657 | 657 | 657 | 657 | ||||||||||||||
Total assets | 42,391 | 40,101 | 39,378 | 34,147 | 34,027 | ||||||||||||||
Total deposits | 35,016 | 33,500 | 32,679 | 28,141 | 27,640 | ||||||||||||||
Shareholders' equity | 4,293 | 4,085 | 4,009 | 3,827 | 3,912 | ||||||||||||||
Adjusted shareholders' equity (1) | 3,780 | 3,580 | 3,521 | 3,463 | 3,644 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||
Allowance for credit losses on loans: | $ | 263,177 | $ | 263,475 | $ | 250,061 | $ | 263,881 | $ | 132,167 | |||||||||
As a percentage of period-end loans | 1.51 | % | 1.45 | % | 1.39 | % | 1.72 | % | 0.90 | % | |||||||||
Net charge-offs: | $ | 13,565 | $ | 10,176 | $ | 41,048 | $ | 38,646 | $ | 12,747 | |||||||||
Annualized as a percentage of average loans | 0.30 | % | 0.22 | % | 0.94 | % | 1.04 | % | 0.34 | % | |||||||||
Non-performing assets: | |||||||||||||||||||
Non-accrual loans | $ | 61,449 | $ | 91,578 | $ | 79,461 | $ | 66,727 | $ | 102,303 | |||||||||
Restructured loans | — | 3,932 | 4,932 | — | 6,098 | ||||||||||||||
Foreclosed assets | 850 | 850 | 806 | 806 | 1,084 | ||||||||||||||
Total | $ | 62,299 | $ | 96,360 | $ | 85,199 | $ | 67,533 | $ | 109,485 | |||||||||
As a percentage of: | |||||||||||||||||||
Total loans and foreclosed assets | 0.36 | % | 0.53 | % | 0.47 | % | 0.44 | % | 0.74 | % | |||||||||
Total assets | 0.15 | 0.24 | 0.22 | 0.20 | 0.32 | ||||||||||||||
CONSOLIDATED CAPITAL RATIOS | |||||||||||||||||||
Common Equity Tier 1 Risk-Based Capital Ratio | 12.86 | % | 12.71 | % | 12.48 | % | 12.02 | % | 12.36 | % | |||||||||
Tier 1 Risk-Based Capital Ratio | 13.47 | 12.71 | 12.48 | 12.02 | 12.99 | ||||||||||||||
Total Risk-Based Capital Ratio | 15.44 | 14.69 | 14.43 | 13.97 | 14.57 | ||||||||||||||
Leverage Ratio | 8.07 | 7.85 | 8.01 | 8.84 | 9.28 | ||||||||||||||
Equity to Assets Ratio (period-end) | 10.13 | 10.19 | 10.18 | 11.21 | 11.50 | ||||||||||||||
Equity to Assets Ratio (average) | 10.19 | 10.31 | 10.30 | 11.95 | 11.71 | ||||||||||||||
(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, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||
CONDENSED INCOME STATEMENTS | |||||||||||||||||||
Net interest income | $ | 976,001 | $ | 1,004,005 | $ | 957,892 | $ | 866,422 | $ | 776,336 | |||||||||
Net interest income (1) | 1,070,937 | 1,100,586 | 1,052,564 | 1,043,431 | 939,958 | ||||||||||||||
Credit loss expense (2) | 241,230 | 33,759 | 21,685 | 35,888 | 51,673 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Trust and investment management fees | 129,272 | 126,722 | 119,391 | 110,675 | 104,240 | ||||||||||||||
Service charges on deposit accounts | 80,873 | 88,983 | 85,186 | 84,182 | 81,203 | ||||||||||||||
Insurance commissions and fees | 50,313 | 52,345 | 48,967 | 46,169 | 47,154 | ||||||||||||||
Interchange and debit card transaction fees (3) | 13,470 | 14,873 | 13,877 | 23,232 | 21,369 | ||||||||||||||
Other charges, commissions and fees | 34,825 | 37,123 | 37,231 | 39,931 | 39,623 | ||||||||||||||
Net gain (loss) on securities transactions | 108,989 | 293 | (156) | (4,941) | 14,975 | ||||||||||||||
Other | 47,712 | 43,563 | 46,790 | 37,222 | 41,144 | ||||||||||||||
Total non-interest income (3) | 465,454 | 363,902 | 351,286 | 336,470 | 349,708 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and wages | 387,328 | 375,029 | 350,312 | 337,068 | 318,665 | ||||||||||||||
Employee benefits | 75,676 | 86,230 | 77,323 | 74,575 | 72,615 | ||||||||||||||
Net occupancy | 102,938 | 89,466 | 76,788 | 75,971 | 71,627 | ||||||||||||||
Technology, furniture and equipment | 105,232 | 91,995 | 83,102 | 74,335 | 71,208 | ||||||||||||||
Deposit insurance | 10,502 | 10,126 | 16,397 | 20,128 | 17,428 | ||||||||||||||
Intangible amortization | 918 | 1,168 | 1,424 | 1,703 | 2,429 | ||||||||||||||
Other (2)(3) | 166,310 | 180,665 | 173,466 | 174,861 | 178,988 | ||||||||||||||
Total non-interest expense (2)(3) | 848,904 | 834,679 | 778,812 | 758,641 | 732,960 | ||||||||||||||
Income before income taxes | 351,321 | 499,469 | 508,681 | 408,363 | 341,411 | ||||||||||||||
Income taxes | 20,170 | 55,870 | 53,763 | 44,214 | 37,150 | ||||||||||||||
Net income | 331,151 | 443,599 | 454,918 | 364,149 | 304,261 | ||||||||||||||
Preferred stock dividends | 2,016 | 8,063 | 8,063 | 8,063 | 8,063 | ||||||||||||||
Redemption of preferred stock | 5,514 | — | — | — | — | ||||||||||||||
Net income available to common shareholders | $ | 323,621 | $ | 435,536 | $ | 446,855 | $ | 356,086 | $ | 296,198 | |||||||||
PER COMMON SHARE DATA | |||||||||||||||||||
Earnings per common share - basic | $ | 5.11 | $ | 6.89 | $ | 6.97 | $ | 5.56 | $ | 4.73 | |||||||||
Earnings per common share - diluted | 5.10 | 6.84 | 6.90 | 5.51 | 4.70 | ||||||||||||||
Cash dividends per common share | 2.85 | 2.80 | 2.58 | 2.25 | 2.15 | ||||||||||||||
Book value per common share at end of quarter | 65.82 | 60.11 | 51.19 | 49.68 | 45.03 | ||||||||||||||
OUTSTANDING COMMON SHARES | |||||||||||||||||||
Period-end common shares | 63,011 | 62,669 | 62,986 | 63,476 | 63,474 | ||||||||||||||
Weighted-average common shares - basic | 62,727 | 62,742 | 63,705 | 63,694 | 62,376 | ||||||||||||||
Dilutive effect of stock compensation | 277 | 700 | 982 | 968 | 593 | ||||||||||||||
Weighted-average common shares - diluted | 63,004 | 63,442 | 64,687 | 64,662 | 62,969 | ||||||||||||||
SELECTED ANNUALIZED RATIOS | |||||||||||||||||||
Return on average assets | 0.85 | % | 1.36 | % | 1.44 | % | 1.17 | % | 1.03 | % | |||||||||
Return on average common equity | 8.11 | 12.24 | 14.23 | 11.76 | 10.16 | ||||||||||||||
Net interest income to average earning assets (1) | 3.09 | 3.75 | 3.64 | 3.69 | 3.56 | ||||||||||||||
(1) Taxable-equivalent basis assuming a 21% tax rate for 2020, 2019 and 2018 and 35% tax rate for 2016-2017. | |||||||||||||||||||
(2) Prior to 2020, credit loss expense related to off-balance-sheet credit exposures was previously reported as a component of other non- | |||||||||||||||||||
(3) Beginning in 2018, in connection with the adoption of a new accounting standard, interchange and debit card transaction fees are reported | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED) | |||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||
BALANCE SHEET SUMMARY ($ in millions) | |||||||||||||||||||
Average Balance: | |||||||||||||||||||
Loans | $ | 17,164 | $ | 14,441 | $ | 13,618 | $ | 12,460 | $ | 11,555 | |||||||||
Earning assets | 35,248 | 29,600 | 28,900 | 28,359 | 26,717 | ||||||||||||||
Total assets | 37,961 | 32,086 | 31,030 | 30,450 | 28,832 | ||||||||||||||
Non-interest-bearing demand deposits | 13,564 | 10,358 | 10,757 | 10,819 | 10,034 | ||||||||||||||
Interest-bearing deposits | 17,875 | 16,055 | 15,532 | 15,085 | 14,478 | ||||||||||||||
Total deposits | 31,438 | 26,413 | 26,289 | 25,905 | 24,512 | ||||||||||||||
Shareholders' equity | 4,039 | 3,702 | 3,284 | 3,173 | 3,059 | ||||||||||||||
Period-End Balance: | |||||||||||||||||||
Loans | $ | 17,481 | $ | 14,750 | $ | 14,100 | $ | 13,146 | $ | 11,975 | |||||||||
Earning assets | 39,648 | 31,281 | 29,894 | 29,595 | 28,025 | ||||||||||||||
Goodwill and intangible assets | 657 | 657 | 659 | 660 | 662 | ||||||||||||||
Total assets | 42,391 | 34,027 | 32,293 | 31,748 | 30,196 | ||||||||||||||
Total deposits | 35,016 | 27,640 | 27,149 | 26,872 | 25,812 | ||||||||||||||
Shareholders' equity | 4,293 | 3,912 | 3,369 | 3,298 | 3,003 | ||||||||||||||
Adjusted shareholders' equity (1) | 3,780 | 3,644 | 3,433 | 3,218 | 3,027 | ||||||||||||||
ASSET QUALITY ($ in thousands) | |||||||||||||||||||
Allowance for credit losses on loan: | $ | 263,177 | $ | 132,167 | $ | 132,132 | $ | 155,364 | $ | 153,045 | |||||||||
As a percentage of period-end loans | 1.51 | % | 0.90 | % | 0.94 | % | 1.18 | % | 1.28 | % | |||||||||
Net charge-offs: | $ | 103,435 | $ | 33,724 | $ | 44,845 | $ | 33,141 | $ | 34,487 | |||||||||
Annualized as a percentage of average loans | 0.60 | % | 0.23 | % | 0.33 | % | 0.27 | % | 0.30 | % | |||||||||
Non-performing assets: | |||||||||||||||||||
Non-accrual loans | $ | 61,449 | $ | 102,303 | $ | 73,739 | $ | 150,314 | $ | 100,151 | |||||||||
Restructured loans | — | 6,098 | — | 4,862 | — | ||||||||||||||
Foreclosed assets | 850 | 1,084 | 1,175 | 2,116 | 2,440 | ||||||||||||||
Total | $ | 62,299 | $ | 109,485 | $ | 74,914 | $ | 157,292 | $ | 102,591 | |||||||||
As a percentage of: | |||||||||||||||||||
Total loans and foreclosed assets | 0.36 | % | 0.74 | % | 0.53 | % | 1.20 | % | 0.86 | % | |||||||||
Total assets | 0.15 | 0.32 | 0.23 | 0.50 | 0.34 | ||||||||||||||
CONSOLIDATED CAPITAL RATIOS | |||||||||||||||||||
Common Equity Tier 1 Risk-Based Capital Ratio | 12.86 | % | 12.36 | % | 12.27 | % | 12.42 | % | 12.52 | % | |||||||||
Tier 1 Risk-Based Capital Ratio | 13.47 | 12.99 | 12.94 | 13.16 | 13.33 | ||||||||||||||
Total Risk-Based Capital Ratio | 15.44 | 14.57 | 14.64 | 15.15 | 14.93 | ||||||||||||||
Leverage Ratio | 8.07 | 9.28 | 9.06 | 8.46 | 8.14 | ||||||||||||||
Equity to Assets Ratio (period-end) | 10.13 | 11.50 | 10.43 | 10.39 | 9.94 | ||||||||||||||
Equity to Assets Ratio (average) | 10.64 | 11.54 | 10.58 | 10.42 | 10.61 | ||||||||||||||
(1) Shareholders' equity excluding accumulated other comprehensive income (loss). | |||||||||||||||||||
Cullen/Frost Bankers, Inc. | |||||||||||||||||||
TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED) | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
TAXABLE-EQUIVALENT YIELD/COST(1) | |||||||||||||||||||
Earning Assets: | |||||||||||||||||||
Interest-bearing deposits | 0.10 | % | 0.10 | % | 0.10 | % | 1.24 | % | 1.64 | % | |||||||||
Federal funds sold and resell agreements | 0.25 | 0.24 | 0.27 | 1.22 | 1.71 | ||||||||||||||
Securities | 3.41 | 3.44 | 3.53 | 3.46 | 3.37 | ||||||||||||||
Loans, net of unearned discounts | 3.74 | 3.73 | 3.95 | 4.65 | 4.88 | ||||||||||||||
Total earning assets | 2.89 | 3.04 | 3.24 | 3.84 | 3.98 | ||||||||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||
Savings and interest checking | 0.02 | 0.02 | 0.02 | 0.02 | 0.04 | ||||||||||||||
Money market deposit accounts | 0.07 | 0.09 | 0.09 | 0.50 | 0.66 | ||||||||||||||
Time accounts | 0.82 | 1.11 | 1.40 | 1.67 | 1.72 | ||||||||||||||
Public funds | 0.02 | 0.02 | 0.09 | 0.85 | 1.05 | ||||||||||||||
Total interest-bearing deposits | 0.09 | 0.12 | 0.14 | 0.39 | 0.49 | ||||||||||||||
Total deposits | 0.05 | 0.07 | 0.08 | 0.24 | 0.29 | ||||||||||||||
Federal funds purchased and repurchase agreements | 0.11 | 0.12 | 0.15 | 0.95 | 1.21 | ||||||||||||||
Junior subordinated deferrable interest debentures | 1.96 | 2.05 | 2.90 | 3.54 | 3.83 | ||||||||||||||
Subordinated notes payable and other notes | 4.70 | 4.70 | 4.71 | 4.71 | 4.71 | ||||||||||||||
Federal Home Loan Bank advances | — | — | 0.29 | — | — | ||||||||||||||
Total interest-bearing liabilities | 0.13 | 0.15 | 0.19 | 0.47 | 0.59 | ||||||||||||||
Net interest spread | 2.76 | 2.89 | 3.05 | 3.37 | 3.39 | ||||||||||||||
Net interest income to total average earning assets | 2.82 | 2.95 | 3.13 | 3.56 | 3.62 | ||||||||||||||
AVERAGE BALANCES | |||||||||||||||||||
($ in millions) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Interest-bearing deposits | $ | 7,718 | $ | 5,888 | $ | 4,986 | $ | 2,586 | $ | 2,000 | |||||||||
Federal funds sold and resell agreements | 17 | 31 | 92 | 260 | 275 | ||||||||||||||
Securities | 12,582 | 12,680 | 12,501 | 12,963 | 13,641 | ||||||||||||||
Loans, net of unearned discount | 17,945 | 18,149 | 17,550 | 14,995 | 14,705 | ||||||||||||||
Total earning assets | $ | 38,262 | $ | 36,749 | $ | 35,128 | $ | 30,804 | $ | 30,621 | |||||||||
Liabilities: | |||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||
Savings and interest checking | $ | 8,397 | $ | 8,077 | $ | 7,615 | $ | 7,030 | $ | 6,850 | |||||||||
Money market deposit accounts | 8,884 | 8,555 | 8,230 | 7,874 | 7,905 | ||||||||||||||
Time accounts | 1,133 | 1,120 | 1,118 | 1,109 | 1,069 | ||||||||||||||
Public funds | 596 | 537 | 565 | 640 | 590 | ||||||||||||||
Total interest-bearing deposits | 19,010 | 18,289 | 17,528 | 16,654 | 16,414 | ||||||||||||||
Total deposits | 34,129 | 32,875 | 31,313 | 27,391 | 27,186 | ||||||||||||||
Federal funds purchased and repurchase agreements | 1,743 | 1,578 | 1,295 | 1,259 | 1,418 | ||||||||||||||
Junior subordinated deferrable interest debentures | 136 | 136 | 136 | 136 | 136 | ||||||||||||||
Subordinated notes payable and other notes | 99 | 99 | 99 | 99 | 99 | ||||||||||||||
Federal Home Loan Bank advances | — | — | 440 | — | — | ||||||||||||||
Total interest-bearing funds | $ | 20,988 | $ | 20,103 | $ | 19,498 | $ | 18,149 | $ | 18,067 | |||||||||
(1) Taxable-equivalent basis assuming a 21% tax rate. | |||||||||||||||||||
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SOURCE Cullen/Frost Bankers, Inc.
