SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [Fee Required]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
FOR THE TRANSITION PERIOD FROM _______ to _______
Commission File Number 0-7275
CULLEN/FROST BANKERS, INC.
(Exact name of registrant as specified in its charter)
Texas 74-1751768
- ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 W. Houston Street
San Antonio, Texas 78205
- ------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (210) 220-4011
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $5 Par Value
(with attached rights)
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
The aggregate market value of the voting stock held by non-affiliates of
the registrant was $532,348,838 based on the closing price of such stock as of
March 25, 1996.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Outstanding at
Class March 25, 1996
-------------------------- --------------
Common Stock, $5 par value 11,213,693
DOCUMENTS INCORPORATED BY REFERENCE
(1) Annual Report to Shareholders for the Year Ended December 31, 1995 (Parts I
& II)
(2) Proxy Statement for Annual Meeting of Shareholders to be held May 29, 1996
(Part III)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12,13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
CULLEN/FROST BANKERS, INC.
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 as set forth in the pages attached
hereto:
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
1. Financial Statements--Reference is made to Part II, Item 8 of this Annual
Report on Form 10-K. In addition, pursuant to Rule 15d-21 under the
Securities Exchange Act of 1934 the financial statements and supplemental
schedules required by Form 11-K with respect to the 401(k) Stock Purchase
Plan for Employees of Cullen/Frost Bankers, Inc. are its Affiliates are
filed herewith as Exhibit 19.2 to this Annual Report on Form 10-K.
2. Exhibits--The following additional exhibits are filed herewith as a part of
this Amendment No. 2 to the registrant's Annual Report on Form 10-K.
19.2 The financial statements and exhibits required by Form 11-K with
respect to the 401(k) Stock Purchase Plan for Employees of
Cullen/Frost Bankers, Inc. for the fiscal years ended December 31,
1995 and 1994.
23.3 Consent of Independent Auditors with respect to Form 10-K as amended
by this Form 10-K/A for the 401(k) Stock Purchase Plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Cullen/Frost Bankers, Inc.
--------------------------
(Registrant)
Date: June 28, 1996 By:/s/Phillip D. Green
-----------------------
Phillip D. Green
Executive Vice President
and Chief Financial Officer
(Duly Authorized Officer and
Principal Accounting Officer)
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------
(a) The following documents are filed as part of this Annual Report on Form
10-K:
1. Financial Statements -- Reference is made to Part II, Item 8, of this
Annual Report on Form 10-K.
2. The Financial Statement Schedules are omitted, as the required information
is not applicable.
3. Exhibits -- The following exhibits are filed as a part of this Annual
Report on Form 10-K:
Exhibit
Number
-------
3.1 Restated Articles of Incorporation, as amended (1988 Form S-8,
Exhibit 4(a))(3)
3.2 Amended By-Laws of Cullen/Frost Bankers, Inc.
4.1 Guaranty, dated April 27, 1981, by Cullen/Frost Bankers, Inc. to
Colonial/Citizens Associates (1985 Form S-8, Exhibit 4(e))(1)
4.2 Shareholder Protection Rights Agreement dated as of July 25, 1989
between Cullen/Frost Bankers, Inc. and The Bank of New York, as
Rights Agent (1989 Form 8-K, Exhibit 1)(5)
10.1 1983 Non-qualified Stock Option Plan, as amended (1989 Form S-8,
Exhibit 4(g))(6)
10.2 Restoration of Retirement Income Plan for Participants in the
Retirement Plan for Employees of Cullen/Frost Bankers, Inc. and its
Affiliates (as amended and restated)(1988 Form 10-K, Exhibit
10.4)(4)*
10.3 Contract of Sale, dated June 9, 1987, between The Frost National
Bank of San Antonio and Tower Investors, Ltd. for the sale of the
Frost Bank Tower (1987 Form 10-K, Exhibit 10.10)(2)
10.4 Master Lease, dated June 9, 1987, between The Frost National Bank
of San Antonio and Tower Investments, Ltd. for the lease of the
Frost Bank Tower (1987 Form 10-K, Exhibit 10.11)(2)
10.5 Form of Revised Change-In-Control Agreements with four Executive
Officers (1989 Form 10-K, Exhibit 10.13(a))(8)*
10.6 1988 Non-qualified Stock Option Plan (1989 Form S-8, Exhibit
4(g))(7)
10.7 The 401(k) Stock Purchase Plan for employees of Cullen/Frost
Bankers, Inc. and its Affiliates (1990 Form S-8, Exhibit 4(g))(9)*
10.8 1991 Thrift Incentive Stock Purchase Plan for Employees of
Cullen/Frost Bankers, Inc. and its Affiliates (1991 Form S-8,
Exhibit 4(g))(10)*
10.9 Cullen/Frost Bankers, Inc. Restricted Stock Plan (1992 Form S-8,
Exhibit 4(d))(11)*
10.10 Cullen/Frost Bankers, Inc. 1992 Stock Plan (1992 Form S-8, Exhibit
4(d))(12)
10.11 Cullen/Frost Bankers, Inc. Supplemental Executive Retirement Plan
(1994 Form 10-K, Exhibit 10.13)(13)
10.12 Form of Revised Change-in-Control Agreements with one Executive
Officer (1994 Form 10-K, Exhibit 10.14)(13)
11 Statement re: computation of earnings per share
13 The Cullen/Frost 1995 Annual Report to Shareholders for the Year
Ended December 31, 1995, (furnished for the information of the
Commission and not deemed to be "filed" except for the portion
expressly incorporated by reference)
19.1 Annual Report on Form 11-K for the Year Ended December 31, 1995,
for the 1991 Thrift Incentive Stock Purchase Plan (filed pursuant
to Rule 15d-21 of the Securities and Exchange Act of 1934)(14)
12
<PAGE>
19.2 Annual Report on Form 11-K for the Year Ended December 31, 1995,
for the 401(k) Stock Purchase Plan (filed pursuant to Rule 15d-21
of the Securities and Exchange Act of 1934)(14)
21 Subsidiaries of Cullen/Frost
23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors with respect to Form 11-K for the
1991 Thrift Incentive Stock Purchase Plan.
23.3 Consent of Independent Auditors with respect to Form 10-K as
amended by this Form 10-K/A for the 401(k) Stock Purchase Plan.
24 Power of Attorney
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 601 of Regulation S-K.
(b) Reports on Form 8-K -- No such reports were filed during the quarter ended
December 31, 1995.
- ----------------------
(1) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed December 18, 1985
(File No. 33-2271)
(2) Incorporated herein by reference to the designated Exhibits to the
Cullen/Frost Annual Report on Form 10-K for the Year Ended
December 31, 1987 (File No. 0-7275)
(3) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed June 24, 1988
(File No. 33-22758)
(4) Incorporated herein by reference to the designated Exhibits to the
Cullen/Frost Annual Report on Form 10-K for the Year Ended
December 31, 1988 (File No. 0-7275)
(5) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Current Report on Form 8-K dated July 25, 1989
(File No. 0-7275)
(6) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed September 5, 1989
(File No. 33-30776)
(7) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed September 5, 1989
(File No. 33-30777)
(8) Incorporated herein by reference to the designated Exhibits to the
Cullen/Frost Annual Report on Form 10-K for the Year Ended
December 31, 1989 (File No. 0-7275)
(9) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed October 31, 1990
(File No. 33-37500)
(10) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed March 18, 1991
(File No. 33-39478)
(11) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed October 20, 1992
(File No. 33-53492)
(12) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Report on Form S-8 filed October 23, 1992
(File No. 33-53622)
(13) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Annual Report on Form 10-K for the Year-Ended
December 31, 1994 (File No. 0-7275)
(14) To be filed as an amendment.
13
<PAGE>
EXHIBIT INDEX TO FORM 10-K/A
Exhibit
Number Description of Exhibits
- ------------------------------------------
19.2 The financial statements and exhibits required by Form 11-K with
respect to the 401(k) Stock Purchase Plan for Employees of
Cullen/Frost Bankers, Inc. for the fiscal years ended December 31,
1995 and 1994 (filed pursuant to Rule 15d-21 of the Securities and
Exchange Act of 1934)
23.3 Consent of Independent Auditors with respect to Form 10-K as amended
by this Form 10-K/A for the 401(k) Stock Purchase Plan.
EXHIBIT 19.2
The Financial Statements and Supplemental Schedules for the 401(k) Stock
Purchase Plan for Employees of Cullen/Frost Bankers, Inc.
for the years ended December 31, 1995 and 1994
<PAGE>
401(k) Stock Purchase Plan
for the Employees of
Cullen/Frost Bankers, Inc.
and Its Affiliates
Financial Statements
and Supplemental Schedules
Years Ended December 31, 1995 and 1994
with Report of Independent Auditors
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Financial Statements
and Supplemental Schedules
Years Ended December 31, 1995 and 1994
Contents
Report of Independent Auditors 1
Financial Statements
Statements of Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5
Supplemental Schedules
Item 27a - Schedule of Assets Held for Investment Purposes 12
Item 27d - Schedule of Reportable Transactions 13
<PAGE>
Report of Independent Auditors
Compensation and Benefits Committee of the
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
San Antonio, Texas
We have audited the accompanying statements of net assets available for
benefits of the 401(k) Stock Purchase Plan for the Employees of Cullen/Frost
Bankers, Inc. and Its Affiliates as of December 31, 1995 and 1994, and the
related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,in
all material respects, the net assets available for benefits of the Plan at
December 31, 1995 and 1994, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of
assets held for investment purposes as of December 31, 1995, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's
1
<PAGE>
Compensation and Benefits Committee of the
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, and are not a required part of the
financial statements. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the 1995 financial statements
and, in our opinion, are fairly stated in all material respects in relation
to the 1995 financial statements taken as a whole.
/s/ Ernst & Young LLP
June 18, 1996
2
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Statements of Net Assets Available for Benefits
December 31
1995 1994
------------------------------
Assets
Investments, at fair value:
Common stock of Cullen/Frost Bankers, Inc. $ 38,632,050 $ 23,503,254
Money market fund 3,837,669 2,236,263
Receivables:
Employer contributions - 37,269
Participants' contributions 112,921 85,795
Proceeds of sale of common stock of
Cullen/Frost Bankers, Inc. 325,993 -
Interest 14,757 9,865
Participant loans 2,738,364 2,785,227
----------------------------
Net assets available for benefits $ 45,661,754 $ 28,657,673
See accompanying notes.
3
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31
1995 1994
----------------------------
Additions to net assets attributed to:
Investment activities:
Gain on sale or distribution of Cullen/Frost
Bankers, Inc. common stock $ 1,217,829 $ 2,174,473
Interest 161,260 89,898
Dividends 880,968 514,767
Net unrealized appreciation (deppreciation)
in fair value of Cullen/Frost Bankers, Inc.
common stock 13,751,506 (5,374,794)
----------------------------
16,011,563 (2,595,656)
Contributions:
Employer 57,149 942,670
Participants 2,739,074 2,619,126
----------------------------
Total additions 18,807,786 966,140
Deductions from net assets attributed to:
Benefits paid to terminated participants 1,803,705 4,538,887
Interest on notes payable - 6,325
----------------------------
Total deductions 1,803,705 4,545,212
----------------------------
Net increase (decrease) 17,004,081 (3,579,072)
Net assets available for benefits at
beginning of year 28,657,673 32,236,745
----------------------------
Net assets available for benefits at
end of year $45,661,754 $28,657,673
============================
See accompanying notes.
4
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements
December 31, 1995 and 1994
1. Significant Accounting Policies
The accounting records of the 401(k) Stock Purchase Plan for the Employees
of Cullen/Frost Bankers, Inc. and Its Affiliates (the Plan) are maintained
on the accrual basis of accounting.
The Plan's investments are held in common stock of Cullen/Frost Bankers, Inc.
(CFBI), which is stated at fair value based on quoted market prices on the
valuation date, and in a money market fund. Changes in fair market value
are reflected in the statement of changes in net assets available for benefits
as net unrealized appreciation (depreciation) in fair value of investments.
Money market investments are valued at cost which approximates fair value.
The historical cost of a specific security sold is used to compute gains and
losses on the sale of investment securities.
Administrative expenses of the Plan are paid by Cullen/Frost Bankers, Inc.
(CFBI).
Use of Estimates
The preperation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. Description of the Plan
The following is a general description of the Plan. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan qualified under Section 401(a) of
the Internal Revenue Code and covers all employees scheduled to work 1,000
or more hours a year or, if not scheduled to work 1,000 hours, those
employees who do actually work 1,000 hours in a year. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
5
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
2. Description of the Plan (continued)
Contributions and Investment Options
Participants may contribute an amount not less than 2% and not exceeding 16%
of their compensation, limited by 401(k) regulations, and may direct
investments of their accounts in either common stock of CFBI or money market
funds. The first 6% of the participant's contribution must be invested in
common stock of CFBI. Additional contributions above 6% can be invested in
additional common stock of CFBI or in a money market fund. CFBI matches 100%
of the participants' contributions up to 6% of the participants' compensation.
Participant Accounts
Each participant's account is credited with the participant's contributions
and allocations of (a) the Company's contributions and (b) Plan earnings.
Forfeited balances of terminated participants' nonvested accounts are used to
restore forfeitures of reemployed participants, pay administrative expenses,
or reduce future company contributions. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's
account. As of December 31, 1995, there were approximately 10,000 forfeited
shares available for use.
Vesting
Participants are immediately vested in their voluntary contributions plus
actual earnings thereon. Participants employed prior to January 1, 1991 are
100% vested in their employer contributions. Participants employed after
December 31, 1990 vest in their employer contributions at 20% per year with
100% vesting occurring after completion of five years of service, or upon
death or disability.
Participant Loans
Participants may borrow from their fund accounts a minimum of $500 up to a
maximum of $50,000 or 50% of their account balance, reduced by the highest
amount of any loan outstanding within the previous twelve months. Loan
transactions are treated as a transfer from (to) the investment fund to
(from) the loan fund. Loan terms range from 1
6
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
2. Description of the Plan (continued)
to 5 years or up to 30 years for the purchase of a primary residence. The
loans are secured by the balance in the participant's account and bear
interest at a rate commensurate with local prevailing rates as determined
quarterly by the Plan administrator. Principal and interest are paid ratably
through semi-monthly payroll deductions. Subject to IRS limitations,
participants may make hardship withdrawals from a portion of their 401(k)
contributions to pay for an immediate and heavy financial need.
Payment of Benefits
Upon normal retirement at age 65, or in the event of death or disability, a
participant will receive a lump-sum payment of his (her) account in the Plan
and all amounts which have been allocated to his (her) ESOP account.
Distribution of a participant's account must occur no later than April of the
calendar year after the participant reaches age 70 1/2. In the event of
termination of employment with the employer for any other reason, the
participant is entitled to the vested portion of his (her) account in the
Plan and all vested amounts which have been allocated to his (her) ESOP
account.
Plan Termination
Although it has not expressed any intent to do so, CFBI has the right under
the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
3. Benefits Payable to Terminated Participants
At December 31, 1995 there were 22 terminated participants in the Plan
entitled to aggregate vested benefits totaling 5,547 shares of CFBI
common stock, or $277,350, applying the fair market value of the stock of
$50 per share at December 31, 1995. The actual distribution of these
benefits, in the form of stock and cash, will occur subsequent to
December 31, 1995 at the $50 per share market price for those
participants electing their distributions in cash, and at the per share
market price as of the distribution date subsequent to year-end for those
participants electing their distributions in shares. At December 31, 1994,
there were 34 terminated participants entitled to aggregate vested benefits
totaling 15,939 shares of CFBI common stock.
7
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
4. Notes Payable to Cullen/Frost Bankers, Inc.
During 1988, the Board of Directors of CFBI authorized the borrowing of up to
$1,000,000 for the purpose of buying additional shares through the ESOP. The
ESOP borrowed $300,000 during 1988 and the remaining $700,000 during 1989 from
CFBI. Interest at floating prime and principal payments of $50,000 are due
quarterly through November 1, 1994. The notes were paid off on November 1,
1994 and all collateral released.
5. Form 5500
The Department of Labor requires that the realized gains and losses from
securities transactions reflected in Form 5500 be calculated as the
difference between the proceeds of securities sold and the fair market value
of those securities at the beginning of the year (or purchase price if
acquired during the year of sale). Under generally accepted accounting
principles (GAAP), realized gains and losses are calculated on the difference
between the sales proceeds and the historical cost. The following schedule
shows the amounts reflected in the accompanying GAAP financial statements,
compared to the amounts in the Form 5500, as of and for the years ended
December 31, 1995 and 1994:
GAAP
Financial
Statements Form 5500
--------------------------------
Year Ended December 31, 1995
Realized gain $ 1,217,829 $ 561,131
Net unrealized in fair value 13,751,506 14,408,204
Year Ended December 31, 1994
Realized gain $ 2,174,473 $ 136,864
Net unrealized depreciation in fair value (5,374,794) (3,337,185)
8
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
5. Form 5500 (continued)
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
December 31
1995 1994
-----------------------------
Net assets available for benefits per the
financial statements $ 45,661,754 $ 28,657,673
Amounts allocated to withdrawing
participants (277,350) (492,125)
-----------------------------
Net assets available for benefits per the
Form 5500 $ 45,384,404 $ 28,165,548
=============================
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
Year Ended December 31
1995 1994
-----------------------------
Benefits paid to participants per the
financial statements $ 1,803,705 $ 4,538,887
Add amounts allocated to withdrawing
participants at the end of the year 277,350 492,125
Less amounts allocated to withdrawing
participants at the end of the prior
year (492,125) (734,985)
-----------------------------
Benefits paid to participants per the
Form 5500 $ 1,588,930 $ 4,296,027
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
9
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
6. Income Tax Status
The plan administrator is in the process of obtaining a determination letter
from the Internal Revenue Service of the Plan's qualification under Internal
Revenue Code (IRC) Section 401(a). The current determination letter is dated
June 6, 1989. The Plan was amended during 1993. It is anticipated that the
Plan qualifies under 401(a) Section of the IRC and is, therefore, not subject
to tax under present income tax laws.
7.Statement of Changes in Net Assets Available for Benefits Segregated by
Participant Directed Investment Type
The following represents the changes in net assets available for benefits
segregated by participant directed investment type:
Cullen/Frost
Bankers, Inc. Money
Common Stock Market Loan
Fund Fund Fund Total
-------------------------------------------
Additions to net assets
attributed to:
Gain on sale or distribution
of Cullen/Frost Bankers, Inc.
common stock $ 1,217,829 $ - $ - $ 1,217,829
Interest 14,928 146,332 - 161,260
Dividends 880,968 - - 880,968
Net unrealized appreciation in
fair value of Cullen/Frost
Bankers, Inc. common stock 13,751,506 - - 13,751,506
Investment election transfer (1,298,286) 1,298,286 - -
Contributions:
Employer 57,149 - - 57,149
Participants 2,530,958 208,116 - 2,739,074
Loan withdrawals (1,537,659) (257,201) 1,794,860 -
--------------------------------------------
Total additions 15,617,393 1,395,533 1,794,860 18,807,786
10
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Notes to Financial Statements (continued)
December 31, 1995 and 1994
7.Statement of Changes in Net Assets Available for Benefits Segregated by
Participant Directed Investment Type (continued)
Cullen/Frost
Bankers, Inc. Money
Common Stock Market Loan
Fund Fund Fund Total
------------------------------------------------
Deductions to net assets
attributed to:
Benefits paid to terminated
participants $ 1,729,440 $ 74,265 $ - $ 1,803,705
Loan interest and principal (1,577,372) (264,351) 1,841,723 -
------------------------------------------------
Total deductions 152,068 (190,086) 1,841,723 1,803,705
------------------------------------------------
Net increase (decrease) 15,465,325 1,585,619 (46,863) 17,004,081
Net assets available for
benefits at beginning of year 23,620,396 2,252,050 2,785,227 28,657,673
------------------------------------------------
Net assets available for
benefits at end of year $39,085,721 $3,837,669 $2,738,364 $45,661,754
================================================
8.Subsequent Event
Effective January 1, 1996, the Plan was amended and restated. The restated plan
allows participants to invest in at least three diversified investment funds.
Additionally, participants can generally change their investment funds on any
business day.
11
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1995
Description of
Investment, Including
Identity of Issue, Maturity Date, Rate of
Borrower, Lessor, Interest, Collateral, Par Current
or Similar Party or Maturity Date Cost Value
- ------------------------------------------------------------------------------
*Common stock of
Cullen/Frost Bankers,
Inc. 772,641 shares $15,975,285 $ 38,632,050
Short-Term Prime Money market deposit
Portfolio - I account, variable
interest, available
upon demand 3,837,669 3,837,669
*Participant loans Interest accrued at
Frost National Bank
prime rate, varying
maturity dates,
8.5 - 9% charged
during 1995 - 2,738,364
* Denotes party-in-interest
12
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
<TABLE>
<CAPTION>
Item 27d - Schedule of Reportable Transactions(1)
Year Ended December 31, 1995
Description of
Asset (Including Current Value
Interest Rate and of Asset on
Identity of Maturity in Case Purchase Selling Cost of Transaction Net Gain
Party Involved of a Loan) Price Price Asset Date or (Loss)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - Series of
Securities Transactions
Short-Term Investment $4,229,722 principal
Company Prime amount, short-term
Portfolio - I investment fund $ - $ 4,229,772 $ 4,229,772 $ 4,229,772 $ -
Short-Term Investment $5,886,235 principal
Company Prime amount, short-term
Portfolio - I investment fund 5,886,235 - 5,886,235 5,886,235 -
Common stock:
Cullen/Frost Bankers, Inc. 21,835 shares - 987,406 357,187 987,406 630,219
Cullen/Frost Bankers, Inc. 22,197 shares (2) - 933,213 345,603 933,213 587,610
Cullen/Frost Bankers, Inc. 55,434 shares 2,215,443 - 2,215,443 2,215,443 -
There were no Category (i),
(ii), or (iv) transactions
during the year ended
December 31, 1995.
(1) Reportable transactions consist of transactions or series of transactions
in excess of 5% of the current value of plan assets at the beginning of
year.
(2) Shares distributed to terminated participants.
</TABLE>
13
EXHIBIT 23.3
Consent of Independent Auditors with respect to Form 10-K
as amended by this Form 10-K/A for the 401(k) Stock Purchase Plan.
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-30776) pertaining to the Cullen/Frost Bankers, Inc. 1983
Nonqualified Stock Option Plan, the Registration Statement (Form S-8 No.
33-30777) pertaining to the Cullen/Frost Bankers, Inc. 1988 Nonqualified Stock
Option Plan, the Registration Statement (Form S-8 No. 33-37500) pertaining to
the 401(k) Stock Purchase Plan for Employees of Cullen/Frost Bankers, Inc. and
its Affiliates, the Registration Statement (Form S-8 No. 33-39478) pertaining
to the 1991 Thrift Incentive Stock Purchase Plan for Employees of Cullen/Frost
Bankers, Inc. the Registration Statement (Form S-8 No. 33-53492) pertaining to
the Cullen/Frost Bankers, Inc. Restricted Stock Plan, and the Registration
Statement (Form S-8 No. 33-53622) pertaining to the Cullen/Frost Bankers, Inc.
1992 Stock Plan, of our report dated June 18, 1996, with respect to the
financial statements of the 401(k) Stock Purchase Plan for Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates included in this Annual Report
(Form 10-K as amended by this Form 10-K/A) for the year ended December 31, 1995.
ERNST & YOUNG LLP
San Antonio, Texas
June 27, 1996
