A $15 million gain from securities transactions and modest loan growth weren't enough to offset the impact of delinquent energy loans on Cullen/Frost Bankers' first-quarter profit.
The San Antonio company on Wednesday reported earnings of $66.8 million in the first quarter, a 4.8% decline from the same period last year. Earnings per share fell 2.7% to $1.07.
The $28 billion-asset parent of Frost Bank said that net interest income rose 5%, to nearly $190 million, as total loans increased 3% to $11.5 billion.
Credit quality, however, was hampered by continued weakness in the energy markets. The allowance for loan losses rose 53% to $161.9 million, representing about 1.4% of total loans. Net chargeoffs rose 24% to $2.5 million. Total nonperforming assets increased almost threefold to $180 million.
Noninterest income rose 15.5% to $96.1 million, largely because of a $14.9 million net gain from the sale of municipal bonds and U.S. Treasuries, compared to a $228,000 gain a year ago.
Noninterest expense rose 4.5% to $179 million on higher costs for occupancy, and furniture and equipment, as the company opened a new operations and support center, One Frost Tower in San Antonio, and Frost Bank opened new branches.