Cullen/Frost Bankers Inc. in San Antonio reported a double-digit drop in third-quarter earnings after provisioning for expected losses caused by Hurricane Ike, which lashed the Galveston and Houston areas in mid-September.
The $14.1 billion-asset company said Wednesday that its earnings fell 13%, to $49 million, from a year earlier. Earnings per share fell 14%, to 82 cents, 6 cents below the average estimate of analysts polled by Thomson Reuters.
The parent of Frost National Bank set aside $18.9 million for loan losses, more than triple what it provisioned in last year's third quarter, and roughly $10 million of that was hurricane-related. If the hurricane had not hit, Cullen/Frost's provision would still have increased by about 55% from a year earlier, because asset quality has weakened in its markets. Its ratio of nonperforming assets to total assets increased 17 basis points from a year earlier, to 0.39%.
Overall, average loans increased by 13.4%, to $8.4 billion, and its net interest income was up 3.7%, to nearly $140 million. Average deposits increased 1.5%, to $10.4 billion.
Year-to-date, the company has earned $154.3 million, down roughly 2% from the same period last year.
Cullen/Frost's shares closed at $51.62 Wednesday, down 1.6%.