Cullen/Frost Bankers 3Q profit down on loan losses

Holding company Cullen/Frost Bankers says 3rd-quarter profit falls about 9 percent

• On 4:15 pm EDT, Wednesday October 21, 2009

SAN ANTONIO (AP) -- Cullen/Frost Bankers Inc. said Wednesday its third-quarter profit fell about 9 percent as charge-offs and money set aside for defaulted loans remained high.

Cullen/Frost, a San, Antonio, Texas-based bank holding company, earned $44.7 million, or 75 cents per share, in the quarter that ended Sept. 30. That is down from the $49 million, or 83 cents per share, it earned a year earlier.

Analysts polled by Thomson Reuters had expected the company to earn a greater 77 cents per share, on average.

Net interest income, or the money a bank receives from interest on assets like commercial and personal loans, rose 4 percent to $144.9 million from $139.7 million. Total noninterest income, or the cash banks make from mortgage load service fees and other fees and charges, fell 10 percent to $69.5 million from $77.3 million.

The company said it set aside $16.9 million to cover loan losses during the quarter, down from $18.9 million a year earlier. But the percentage of loans expected to be troubled increased slightly.

Average loans for the third quarter rose slightly to $8.6 billion from $8.4 billion a year earlier, but were down compared with the $8.8 billion reported in the second quarter, as both business and consumer customers respond to the recession.

"Texas went into the recession later than the rest of the nation, in November of 2008," said Cullen/Frost CEO Dick Evans, in a statement. "Today, businesses and consumers are conserving cash and reining in spending, as you would expect."

The company said it is confident its credit quality levels continue to be manageable, despite the volatility.

Cullen/Frost Bankers shares fell $2.10, or 4.2 percent, to close at $48.54.

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