Frost Bank reports strong third quarter earnings

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Cullen/Frost Chairman and CEO Dick Evans says the merger with WNB Bancshares Inc. in the Permian Basin region of West Texas contributed to Frost Bank's strong earnings during the third quarter.

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Mike W. Thomas

Reporter- San Antonio Business Journal

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Cullen/Frost Bankers Inc. reported strong growth in deposits and loans during the third quarter of 2014 and a nearly 30 percent increase in net income compared to a year ago.

The acquisition of WNB Bancshares Inc. in the oil-rich West Texas city of Odessa in May 2013 contributed to about half of that growth, while the rest is credited to the rebounding economy across Texas.

The San Antonio-based bank's net income for the third quarter rose to $75.6 million, a 29.4 percent increase over third quarter 2013 earnings of $58.4 million. Average deposits for the quarter were $22.7 billion, an increase of $3.3 billion, or 16.9 percent, over the $19.5 billion reported a year ago. For the third quarter of 2014, average loans increased $1.4 billion, or 14.7 percent, to $10.6 billion, from the $9.3 billion reported a year earlier.

"This strong loan growth is the result of our focused calling effort and team-selling approach, combined with our acquisition of WNB Bancshares," said Cullen/Frost CEO Dick Evans in a statement.

Frost Bank is the seventh largest banking operation in North Texas in terms of local deposits, with $4.69 billion in DFW. The bank has 36 DFW branches, according to the latest Dallas Business Journal research.

Evans said the bank was fortunate to have positive results in an economy that's showing signs of improvement despite ongoing regulatory and rate challenges. Frost has seen its year-to-date average deposits rise $11.3 billion since before the economic recession began in 2007, he added.

"Our success is a reflection of our efforts to build and extend relationships with customers who understand and appreciate our value proposition," Evans said.

Cullen/Frost Bankers (NYSE: CFR) is a financial holding company with $27.4 billion in assets as of Sept. 30, 2014.

Mike W. Thomas covers technology/telecom, military, finance, regulatory issues as well as nonprofits/education.