Banks

Return to Article

Cullen/Frost Suffers Hurricane Woes

TheStreet Ratings

Once these most recent quarterly results are finalized, they will be run through TheStreet.com Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit TheStreet.com Ratings Screener.

On Jan. 28, 2009, Cullen/Frost Bankers (CFR) reported that its Q4 FY08 earnings fell 3.2%, hurt by increased provisions for possible loan losses related to Hurricane Ike, despite increases in interest income and noninterest income. Net income declined to $52.96 million or $0.89 per share from $54.70 million or $0.93 per share in Q4 FY07. The latest quarterly earnings beat the consensus estimate of $0.87 per share.

During Q4 FY08, CFR's net interest income (on a tax-equivalent basis) edged up 6.2% to $143.71 million, gaining from higher average volume of interest-earning assets. Furthermore, total average earning assets rose 8.9% to $12.44 billion, while average deposits increased 6.5% to $10.91 billion. Moreover, total average loans spiked 15.2% from $8.71 billion from $7.56 billion in the prior year quarter. Subsequently, net interest margin dipped 10 basis points to 4.60% from 4.70% a year ago. Moreover, noninterest income inched up 4.2% to $69.20 million, while non-interest expense ascended 8.2% to $123.54 million.

For the latest fourth quarter, provision for credit losses more than doubled to $8.55 million from $3.58 million. Net charge-offs mounted 54.7% to $5.42 million, while net charge-offs as a percentage of average loan (annualized) rose to 0.25% from 0.18%. Nonperforming assets more than doubled to $78.04 million, while as a percentage of total assets advanced to 0.52% from 0.22% a year ago. The company continued to be well-capitalized, by having total risk-based capital ratio of 12.58% and Tier 1 risk-based capital ratio of 10.30% as of December 31, 2008.

During Q4 FY08, the bank paid a quarterly cash dividend of $0.42 per share to its common stockholders.

For FY08, CFR's net income fell 2.3% to $207.26 million or $3.50 per share from $212.07 million or $3.55 per share. Net interest income rose 2.9% to $534.03 million from $518.74 million in FY07, while noninterest income climbed 7.1% to $287.32 million from $268.23 million a year ago.

A detailed report covering this quarterly release is now available. To purchase the report, click here.