Cullen/Frost Announces Pricing Of $150 Million Preferred Stock Offering And Entry Into Accelerated Share Repurchase Agreement

SAN ANTONIO, Feb. 12, 2013 /PRNewswire/ -- Cullen/Frost Bankers, Inc. (NYSE: CFR) ("Cullen/Frost") today announced the pricing of a public offering of 6,000,000 shares, or $150 million in aggregate liquidation preference, of its 5.375% non-cumulative perpetual preferred stock, Series A, which qualifies as Tier 1 capital.  The preferred stock has a liquidation preference of $25 per share.  The offering is expected to close on February 15, 2013, subject to customary closing conditions. 

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Morgan Stanley, Goldman, Sachs & Co. and UBS Investment Bank are the joint-book running managers for the offering. 

The net proceeds from the issuance and sale of the preferred stock, after deducting underwriting discount and commissions, and the payment of estimated expenses, will be approximately $144.5 million.  Cullen/Frost intends to use the net proceeds from the offering to repurchase $144.0 million of shares of its common stock pursuant to an accelerated share repurchase ("ASR") agreement it has entered into today with Goldman, Sachs & Co.  Under the terms of the ASR agreement, Cullen/Frost will pay $144.0 million to Goldman, Sachs & Co. on February 15, 2013 and in exchange will receive shares of its common stock, with the substantial majority of shares expected to be delivered on February 15, 2013 and any additional shares expected to be delivered upon completion of the program.  The total number of shares that Cullen/Frost will receive and the total consideration paid ultimately will be determined based on the volume-weighted daily average price of its common stock during the repurchase program. 

This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the prospectus supplement or the shelf registration statement or prospectus.

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