CULLEN/FROST BANKERS, INC. - FORM 8-K - EX-99.1 - EX-99.1 2020 FOURTH QUARTER EARNINGS RELEASE - January 28, 2021

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8-K - 8-K - CULLEN/FROST BANKERS, INC.cfr-20210128.htm


Exhibit 99.1


A.B. Mendez
Investor Relations
210.220.5234
    or
Bill Day
Media Relations
210.220.5427


FOR IMMEDIATE RELEASE    
January 28, 2021




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 -- 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.


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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
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$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.


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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.
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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 heath-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.

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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
20202019
4th Qtr3rd Qtr2nd Qtr1st Qtr4th 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 expense13,756 20,302 31,975 175,197 8,355 
Non-interest income:
Trust and investment management fees32,270 31,469 31,060 34,473 32,928 
Service charges on deposit accounts20,830 19,812 17,580 22,651 23,454 
Insurance commissions and fees11,704 11,456 10,668 16,485 12,138 
Interchange and debit card transaction fees3,746 3,503 2,966 3,255 3,608 
Other charges, commissions and fees9,427 8,370 7,663 9,365 9,020 
Net gain (loss) on securities transactions— — — 108,989 28 
Other13,360 8,991 7,664 17,697 14,079 
Total non-interest income91,337 83,601 77,601 212,915 95,255 
Non-interest expense:
Salaries and wages104,843 93,323 90,350 98,812 97,951 
Employee benefits15,852 16,074 18,861 24,889 21,651 
Net occupancy26,822 25,466 25,266 25,384 24,864 
Technology, furniture and equipment27,464 26,482 26,046 25,240 25,759 
Deposit insurance2,706 2,372 2,800 2,624 2,374 
Intangible amortization208 212 241 257 264 
Other45,017 38,221 36,115 46,957 47,943 
Total non-interest expense222,912 202,150 199,679 224,163 220,806 
Income before income taxes96,915 104,572 91,758 58,076 117,192 
Income taxes8,645 9,516 (1,314)3,323 13,511 
Net income88,270 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 $1.61 
Earnings per common share - diluted1.38 1.50 1.47 0.75 1.60 
Cash dividends per common share0.72 0.71 0.71 0.71 0.71 
Book value per common share at end of quarter65.82 65.07 63.97 61.17 60.11 
OUTSTANDING COMMON SHARES
Period-end common shares63,011 62,782 62,670 62,553 62,669 
Weighted-average common shares - basic62,940 62,727 62,596 62,643 62,609 
Dilutive effect of stock compensation311 193 205 407 625 
Weighted-average common shares - diluted63,251 62,920 62,801 63,050 63,234 
SELECTED ANNUALIZED RATIOS
Return on average assets0.86 %0.96 %0.99 %0.57 %1.21 %
Return on average common equity8.55 9.30 9.60 4.88 10.74 
Net interest income to average earning assets (1)
2.82 2.95 3.13 3.56 3.62 
(1) Taxable-equivalent basis assuming a 21% tax rate.
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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
20202019
4th Qtr3rd Qtr2nd Qtr1st Qtr4th Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans$17,945 $18,149 $17,550 $14,995 $14,705 
Earning assets38,262 36,749 35,128 30,804 30,621 
Total assets40,963 39,435 37,838 33,534 33,314 
Non-interest-bearing demand deposits15,119 14,585 13,785 10,737 10,772 
Interest-bearing deposits19,010 18,289 17,528 16,654 16,414 
Total deposits34,129 32,875 31,313 27,391 27,186 
Shareholders' equity4,175 4,065 3,899 4,009 3,900 
Period-End Balance:
Loans$17,481 $18,224 $17,972 $15,338 $14,750 
Earning assets39,648 37,482 36,613 31,440 31,281 
Goodwill and intangible assets657 657 657 657 657 
Total assets42,391 40,101 39,378 34,147 34,027 
Total deposits35,016 33,500 32,679 28,141 27,640 
Shareholders' equity4,293 4,085 4,009 3,827 3,912 
Adjusted shareholders' equity (1)
3,780 3,580 3,521 3,463 3,644 
ASSET QUALITY
($ in thousands)
Allowance for credit losses on loans:$263,177 $263,475 $250,061 $263,881 $132,167 
As a percentage of period-end loans1.51 %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 loans0.30 %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 assets850 850 806 806 1,084 
Total$62,299 $96,360 $85,199 $67,533 $109,485 
As a percentage of:
Total loans and foreclosed assets0.36 %0.53 %0.47 %0.44 %0.74 %
Total assets0.15 0.24 0.22 0.20 0.32 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio12.86 %12.71 %12.48 %12.02 %12.36 %
Tier 1 Risk-Based Capital Ratio13.47 12.71 12.48 12.02 12.99 
Total Risk-Based Capital Ratio15.44 14.69 14.43 13.97 14.57 
Leverage Ratio8.07 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).
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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
Year Ended December 31,
20202019201820172016
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 fees129,272 126,722 119,391 110,675 104,240 
Service charges on deposit accounts80,873 88,983 85,186 84,182 81,203 
Insurance commissions and fees50,313 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 fees34,825 37,123 37,231 39,931 39,623 
Net gain (loss) on securities transactions108,989 293 (156)(4,941)14,975 
Other47,712 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 wages387,328 375,029 350,312 337,068 318,665 
Employee benefits75,676 86,230 77,323 74,575 72,615 
Net occupancy102,938 89,466 76,788 75,971 71,627 
Technology, furniture and equipment105,232 91,995 83,102 74,335 71,208 
Deposit insurance10,502 10,126 16,397 20,128 17,428 
Intangible amortization918 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 taxes351,321 499,469 508,681 408,363 341,411 
Income taxes20,170 55,870 53,763 44,214 37,150 
Net income331,151 443,599 454,918 364,149 304,261 
Preferred stock dividends2,016 8,063 8,063 8,063 8,063 
Redemption of preferred stock5,514 — — — — 
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 - diluted5.10 6.84 6.90 5.51 4.70 
Cash dividends per common share2.85 2.80 2.58 2.25 2.15 
Book value per common share at end of quarter65.82 60.11 51.19 49.68 45.03 
OUTSTANDING COMMON SHARES
Period-end common shares63,011 62,669 62,986 63,476 63,474 
Weighted-average common shares - basic62,727 62,742 63,705 63,694 62,376 
Dilutive effect of stock compensation277 700 982 968 593 
Weighted-average common shares - diluted63,004 63,442 64,687 64,662 62,969 
SELECTED ANNUALIZED RATIOS
Return on average assets0.85 %1.36 %1.44 %1.17 %1.03 %
Return on average common equity8.11 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-interest expense. In connection with the adoption of a new accounting standard in 2020, such amounts have been reclassified to credit loss expense to make prior periods comparable to the current presentation.
(3) 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 $8,473 in 2016.
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Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
Year Ended December 31,
20202019201820172016
BALANCE SHEET SUMMARY ($ in millions)
Average Balance:
Loans$17,164 $14,441 $13,618 $12,460 $11,555 
Earning assets35,248 29,600 28,900 28,359 26,717 
Total assets37,961 32,086 31,030 30,450 28,832 
Non-interest-bearing demand deposits13,564 10,358 10,757 10,819 10,034 
Interest-bearing deposits17,875 16,055 15,532 15,085 14,478 
Total deposits31,438 26,413 26,289 25,905 24,512 
Shareholders' equity4,039 3,702 3,284 3,173 3,059 
Period-End Balance:
Loans$17,481 $14,750 $14,100 $13,146 $11,975 
Earning assets39,648 31,281 29,894 29,595 28,025 
Goodwill and intangible assets657 657 659 660 662 
Total assets42,391 34,027 32,293 31,748 30,196 
Total deposits35,016 27,640 27,149 26,872 25,812 
Shareholders' equity4,293 3,912 3,369 3,298 3,003 
Adjusted shareholders' equity (1)
3,780 3,644 3,433 3,218 3,027 
ASSET QUALITY ($ in thousands)
Allowance for credit losses on loan:$263,177 $132,167 $132,132 $155,364 $153,045 
As a percentage of period-end loans1.51 %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 loans0.60 %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 assets850 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 assets0.36 %0.74 %0.53 %1.20 %0.86 %
Total assets0.15 0.32 0.23 0.50 0.34 
CONSOLIDATED CAPITAL RATIOS
Common Equity Tier 1 Risk-Based Capital Ratio12.86 %12.36 %12.27 %12.42 %12.52 %
Tier 1 Risk-Based Capital Ratio13.47 12.99 12.94 13.16 13.33 
Total Risk-Based Capital Ratio15.44 14.57 14.64 15.15 14.93 
Leverage Ratio8.07 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).



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Cullen/Frost Bankers, Inc.
TAXABLE-EQUIVALENT YIELD/COST AND AVERAGE BALANCES (UNAUDITED)
20202019
4th Qtr3rd Qtr2nd Qtr1st Qtr4th Qtr
TAXABLE-EQUIVALENT YIELD/COST(1)
Earning Assets:     
Interest-bearing deposits0.10 %0.10 %0.10 %1.24 %1.64 %
Federal funds sold and resell agreements0.25 0.24 0.27 1.22 1.71 
Securities3.41 3.44 3.53 3.46 3.37 
Loans, net of unearned discounts3.74 3.73 3.95 4.65 4.88 
Total earning assets2.89 3.04 3.24 3.84 3.98 
Interest-Bearing Liabilities:
Interest-bearing deposits:
Savings and interest checking0.02 0.02 0.02 0.02 0.04 
Money market deposit accounts0.07 0.09 0.09 0.50 0.66 
Time accounts0.82 1.11 1.40 1.67 1.72 
Public funds0.02 0.02 0.09 0.85 1.05 
Total interest-bearing deposits0.09 0.12 0.14 0.39 0.49 
Total deposits0.05 0.07 0.08 0.24 0.29 
Federal funds purchased and repurchase agreements0.11 0.12 0.15 0.95 1.21 
Junior subordinated deferrable interest debentures1.96 2.05 2.90 3.54 3.83 
Subordinated notes payable and other notes4.70 4.70 4.71 4.71 4.71 
Federal Home Loan Bank advances— — 0.29 — — 
Total interest-bearing liabilities0.13 0.15 0.19 0.47 0.59 
Net interest spread2.76 2.89 3.05 3.37 3.39 
Net interest income to total average earning assets2.82 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 agreements17 31 92 260 275 
Securities12,582 12,680 12,501 12,963 13,641 
Loans, net of unearned discount17,945 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 accounts8,884 8,555 8,230 7,874 7,905 
Time accounts1,133 1,120 1,118 1,109 1,069 
Public funds596 537 565 640 590 
Total interest-bearing deposits19,010 18,289 17,528 16,654 16,414 
Total deposits34,129 32,875 31,313 27,391 27,186 
Federal funds purchased and repurchase agreements1,743 1,578 1,295 1,259 1,418 
Junior subordinated deferrable interest debentures136 136 136 136 136 
Subordinated notes payable and other notes99 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.

11

CULLEN/FROST BANKERS, INC. Reports