Cullen/Frost Bankers (CFR) in San Antonio reported a small downtick in quarterly profit after announcing a merger that would expand its business in the Texas energy sector.
The $23.5 billion-asset holding company for Frost Bank earned $58.4 million in the third quarter, down less than 1% from the same period in 2012, it said Wednesday. Per-share earnings were 96 cents, meeting the average forecast of analysts polled by Bloomberg.
Cullen/Frost's net interest income rose by 3%, to $155.4 million, as its average earning assets grew by 10%, to $21.2 billion. Its net interest margin tightened by 16 basis points, to 3.38%.
Cullen/Frost's provision for loan losses was up 104%, at $5.1 million, and its net chargeoffs doubled, to $5.4 million.
Noninterest income increased by 4%, to $74 million, as revenue from asset management grew. The bank's noninterest expense rose by 5%, to $151.8 million, as its headcount increased. The bank also recorded $853,000 in expenses related to its agreement in August to acquire WNB Bancshares in Odessa, Texas.
The WNB Bancshares merger would allow Cullen/Frost to expand into the oil- and gas-rich Permian Basis region in western Texas and expand its energy-finance business.