The energy sector downturn took a big bite out of quarterly earnings at Cullen/Frost Bankers in San Antonio.
The $29 billion-asset company said in a press release Wednesday that its fourth-quarter profit fell 20% from a year earlier, to $56.2 million, or 90 cents a share.
Net interest income rose 4% to $186.1 million. Total loans rose 5% to $11.5 billion, while the net interest margin widened by 9 basis points to 3.43%.
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Cullen/Frost Bankers in San Antonio said it plans to report a large increase in its loan-loss provision because of issues in the energy sector.
January 20 -
Texas Capital Bancshares in Dallas reported lower quarterly profit that largely reflected an increased provision for energy loan losses.
January 20 -
There is a growing belief that reserves for energy loans should represent 5% of a bank's exposure to the sector. Three banks have already announced plans to move in that direction, prompting speculation as to which other lenders will be next.
January 13
The company warned earlier this month that it would increase its loan-loss provision to $34 million as a result of the energy sector downturn. The provision was $4.4 million a year earlier.
Net chargeoffs rose 169% to $8.5 million. Nonperforming assets, as a percentage of total assets, rose to 0.3% from 0.23%.
Fee income rose 0.6% to $83.2 million. Higher fees from insurance commissions and interchange and debit card transactions offset a decline in trust and investment management fees.
Noninterest expense rose 3% to $173.4 million because of higher costs for employee salaries and occupancy. Furniture and equipment expenses also rose, as Cullen/Frost opened a new operations center in San Antonio during the quarter.
