This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Texas Bank Growth Needs to be Wrangled

The second-largest Texas bank is USAA Federal Savings Bank, with $52.2 billion in total assets as of Dec. 30. The bank is part of USAA, which provides insurance banking and investment services to military personnel.

The third-largest bank headquartered in Texas is Wells Fargo Bank South Central, NA of Houston, with $33.7 billion in total assets as of June 30. This subsidiary of Wells Fargo is a mortgage lender, originating $55.6 billion in first-lien residential loans during 2011, while selling $48.9 billion.

Next is Frost National Bank of San Antonio, which had $20.4 billion in total assets as of Dec. 30. The bank is a subsidiary of Cullen/Frost Bankers (CFR - Get Report). First National Bank's fourth-quarter ROA was 1.19%, declining from 1.79% the previous quarter, but improving from 0.69% a year earlier.

The holding company reported that noninterest income declined during the fourth quarter by $5 million because of the Durbin rule, while service charges on deposit accounts also declined. The company also saw an increase in noninterest expense, with salary expense increasing by $5.4 million, or 9%, from a year earlier, "as a result of normal annual merit and market increases, and increases in stock-based compensation expense and incentive compensation."

Cullen/Frost's shares were up 7% year-to-date through Tuesday's close at $56.71, following a 10% decline last year. The shares trade for twice their tangible book value and 16 times the consensus 2012 EPS estimate of $3.65. The consensus 2013 EPS estimate is $3.82.

Deutsche Bank analyst Dave Rochester has a "Hold" rating on Cullen/Frost, based on the stock's relatively high valuation, saying on Jan. 26 that "while CFR has an attractive deposit franchise in one of the strongest economic regions of the U.S., with good longer-term growth prospects, and solid management, we await a better entry point, as we expect more limited upside potential to trading multiples/EPS/ROTCE."

Interested in more on Cullen/Frost Bankers? See TheStreet Ratings' report card for this stock.

Amegy Bank, NA of Houston had $12.2 billion in total assets as of Dec. 30. The bank is a subsidiary of Zions Bancorporation (ZION) of Salt Lake City.

Amegy Bank performed solidly during 2011, with ROA ranging from 1.06% to 1.77%, and earning $159.4 million for the year.
4 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.77 0.00%
CMA $44.34 0.00%
CFR $63.38 0.00%
PB $52.29 0.00%
WFC $50.59 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs