Cullen/Frost Bankers (CFR) in San Antonio posted higher quarterly earnings because of strong loan growth and a securities gain.

The $23.1 billion-asset company's earnings rose 9% from a year earlier, to $60.2 million, or 97 cents a share.

Net interest income rose 3% from a year earlier, to $154.4 million. The net interest margin contracted by 28 basis points from the fourth quarter of 2011, to 3.48%. Average loans grew 5.1% during 2012, to $8.5 billion.

Asset quality improved in the fourth quarter. Nonperforming assets fell 14% from a year earlier, to $105.9 million. The company recorded a $4.1 million loan-loss provision in the fourth quarter, compared to a decision to not record a provision a year earlier.

Noninterest income rose 12% from a year earlier, to $75.8 million. The company recorded a $4.4 million gain from selling nearly $600 million in short-term Treasury notes. The company also saw rising fee income from investment management, trusts, insurance and cards.

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