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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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.
---
The aggregate market value of the voting stock held by non-affiliates of
the registrant was $816,829,125 based on the closing price of such stock as of
March 25, 1997.
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, 1997
-------------------------- --------------
Common Stock, $5 par value 22,507,928
DOCUMENTS INCORPORATED BY REFERENCE
(1) Annual Report to Shareholders for the Year Ended December 31, 1996 (Parts I
& II)
(2) Proxy Statement for Annual Meeting of Shareholders to be held May 28, 1997
(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, 1996 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. and 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,
1996 and 1995.
23.2 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 30, 1997 /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))(2)
3.2 Amended By-Laws of Cullen/Frost Bankers, Inc. (1995 Form 10-K/A,
Exhibit 3.2)(11)
4.1 Shareholder Protection Rights Agreement dated as of August 1, 1996
between Cullen/Frost Bankers, Inc. and The Bank of New York, as
Rights Agent (1996 Form 8-A12G/A, Exhibit 1)(13)
10.1 1983 Non-qualified Stock Option Plan, as amended (1989 Form S-8,
Exhibit 4(g))(4)
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)(3)*
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)(1)
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)(1)
10.5 Form of Revised Change-In-Control Agreements with four Executive
Officers (1989 Form 10-K, Exhibit 10.13(a))(6)*
10.6 1988 Non-qualified Stock Option Plan (1989 Form S-8, Exhibit
4(g))(5)
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))(7)*
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))(8)*
10.9 Cullen/Frost Bankers, Inc. Restricted Stock Plan (1992 Form S-8,
Exhibit 4(d))(9)*
10.10 Cullen/Frost Bankers, Inc. 1992 Stock Plan (1992 Form S-8, Exhibit
4(d))(10)
10.11 Cullen/Frost Bankers, Inc. Supplemental Executive Retirement Plan
(1994 Form 10-K, Exhibit 10.13)(12)
10.12 Form of Revised Change-in-Control Agreements with one Executive
Officer (1994 Form 10-K, Exhibit 10.14)(12)
10.13 Retirement Agreement with one Executive Officer
11 Statement re: computation of earnings per share
13 The Cullen/Frost 1996 Annual Report to Shareholders for the Year
Ended December 31, 1996, (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, 1996,
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, 1996,
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 Consent of Independent Auditors
23.1 Consent of Independent Auditors with respect to Form 10-K/A for the
1991 Thrift Incentive Stock Purchase Plan.
23.2 Consent of Independent Auditors with respect to 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, 1996.
- ----------------------
(1) 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)
(2) 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)
(3) 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)
(4) 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)
(5) 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)
(6) 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)
(7) 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)
(8) 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)
(9) 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)
(10) 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)
(11) 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)
(12) 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)
(13) Incorporated herein by reference to the designated Exhibits to
Cullen/Frost's Current Report on Form 8-A12G/A dated August 1, 1996
(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,
1996 and 1995 (filed pursuant to Rule 15d-21 of the Securities and
Exchange Act of 1934)
23.2 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, 1996 and 1995
<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, 1996 and 1995
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, 1996 and 1995
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, 1996 and 1995, 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, 1996 and 1995, 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, 1996, 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 1996 financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
1996 financial statements taken as a whole.
The schedule of assets held for investment purposes that accompanies the Plan's
financial statements does not disclose the historical cost of certain plan
assets held by the Plan trustee. Disclosure of this information is required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974.
/s/Ernst & Young LLP
June 20, 1997
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
1996 1995
--------------------------
Assets
Investments, at fair value:
Common stock of Cullen/Frost Bankers, Inc. $ 48,389,886 $ 38,632,050
AIM Short-Term Prime Money Market Fund 3,638,886 3,837,669
AIM LTD Maturity Treasury Fund 557,177 -
Templeton Growth Fund 1,788,533 -
Fidelity Advisor Growth Opportunities Fund 2,492,788 -
Optimum Mix/Total Return Portfolio 2,380,739 -
Participant loans 4,734,801 2,738,364
--------------------------
Total investments 63,982,810 45,208,083
Receivables:
Employer contributions 87,841 -
Participants' contributions 143,447 112,921
Proceeds of sale of common stock of
Cullen/Frost Bankers, Inc. 365,085 325,993
Interest 256 14,757
--------------------------
Net assets available for benefit $ 64,579,439 $ 45,661,754
==========================
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
1996 1995
---------------------------
Additions to net assets attributed to:
Investment activities:
Interest $ 179,797 $ 161,260
Dividends 1,482,206 880,968
Net appreciation in fair value of
investments 12,622,446 14,969,335
---------------------------
14,284,449 16,011,563
Contributions:
Employer 1,565,914 57,149
Participants 5,501,575 2,739,074
---------------------------
Total additions 21,351,938 18,807,786
Deductions from net assets attributed to:
Benefits paid to participants 2,434,253 1,803,705
---------------------------
Net increase 18,917,685 17,004,081
Net assets available for benefits at
beginning of year 45,661,754 28,657,673
---------------------------
Net assets available for benefits at
end of year $ 64,579,439 $ 45,661,754
===========================
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, 1996 and 1995
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), AIM LTD Maturity Treasury Fund, Templeton Growth Fund, Fidelity Advisor
Growth Opportunities Fund, and Optimum Mix/Total Return Portfolio, which are
stated at fair value based on quoted market prices on the valuation date, and
in a money market fund. Changes in fair market value and gains and losses on
the sale of investment securities are reflected in the statements of changes in
net assets available for benefits as net appreciation in fair value of
investments. Money market investments are valued at cost which approximates
fair value.
Administrative expenses of the Plan are paid by Cullen/Frost Bankers, Inc.
Use of Estimates
The preparation 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.
Reclassification
Certain 1995 balances have been reclassified to conform with 1996
classification.
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.
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, 1996 and 1995
2. Description of the Plan (continued)
General
The Plan is a defined contribution plan qualified under Section 401(a) of the
Internal Revenue Code and covers full-time employees who complete 90 days of
service and part-time employees who complete 90 days of service and are
scheduled to work more than 1,000 hours in a year. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
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, AIM LTD Maturity Treasury
Fund, Templeton Growth Fund, Fidelity Advisor Growth Opportunities Fund,
Optimum Mix/Total Return Portfolio, or AIM Short-Term Prime Money Market Fund.
Participants are able to invest their contributions in these funds in 1%
increments. 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.
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, 1996 and 1995
2. Description of the Plan (continued)
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, upon death or
disability, or when the participant reaches age 65.
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 one to five 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) Plan 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) Plan account.
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, 1996 and 1995
2. Description of the Plan (continued)
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, 1996, there were ten terminated participants in the Plan
entitled to aggregate vested benefits totaling $27,961 in cash distributions
and 9,479 shares of CFBI common stock, or $315,177, applying the fair market
value of the stock of $33.25 per share at December 31, 1996. The actual
distribution of these benefits, in the form of stock and cash, will occur
subsequent to December 31, 1996 at the per share market price as of the
distribution date subsequent to year-end for those participants. At December
31, 1995, there were 22 terminated participants 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.
4. Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
1996 1995
---------------------------
Net assets available for benefits per the
financial statements $ 64,579,439 $ 45,661,754
Amounts allocated to withdrawing
participants (343,138) (277,350)
---------------------------
Net assets available for benefits per the
Form 5500 $ 64,236,301 $ 45,384,404
===========================
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, 1996 and 1995
4. Form 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended December 31
1996 1995
-------------------------
Benefits paid to participants per the financial
statements $ 2,434,253 $ 1,803,705
Add: Amounts allocated to withdrawing
participants at the end of the year 343,138 277,350
Less: Amounts allocated to withdrawing
participants at the end of the prior year (277,350) (492,125)
-------------------------
Benefits paid to participants per the
Form 5500 $ 2,500,041 $ 1,588,930
========================
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.
5. Income Tax Status
The Plan obtained its latest determination letter on October 26, 1996, in which
the Internal Revenue Service stated that the Plan is in compliance with the
applicable requirements of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
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, 1996 and 1995
6. 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:
<TABLE>
<CAPTION>
Cullen/Frost AIM Short-
Bankers, Inc. Term Prime AIM LTD
Common Stock Money Market Maturity
Totals Fund Fund Treasury Fund
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Additions to net assets
attributed to:
Interest $ 179,797 $ - $ 179,797 $ -
Dividends 1,482,206 1,178,814 - 13,968
Net appreciation in fair
value of investments 12,622,446 12,280,645 - (1,251)
Investment election transfer - (3,817,139) (637,460) 339,447
Contributions:
Employer 1,565,914 1,565,914 - -
Employee 5,501,575 2,672,820 600,193 227,963
Loan withdrawals - (3,699,677) (226,983) (18,297)
------------------------------------------------------------
Total additions (decreases) 21,351,938 10,181,377 (84,453) 561,830
Deductions to net assets
attributed to:
Benefits paid to terminated
participants 2,434,253 1,961,552 311,007 12,409
Loan interest and principal - (1,680,969) (196,677) (7,756)
------------------------------------------------------------
Total deductions (additions) 2,434,253 280,583 114,330 4,653
------------------------------------------------------------
Net increase (decrease) 18,917,685 9,900,794 (198,783) 557,177
Net assets available for
benefits at beginning of year 45,661,754 39,085,721 3,837,669 -
------------------------------------------------------------
Net assets available for
benefits at end of year $64,579,439 $48,986,515 $ 3,638,886 $ 557,177
============================================================
</TABLE>
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, 1996 and 1995
6. Statement of Changes in Net Assets Available for Benefits Segregated by
Participant Directed Investment Type (continued)
<TABLE>
<CAPTION>
Fidelity Advisor Optimum
Growth Mix/Total
Templeton Opportunities Return Participant
Growth Fund Fund Portfolio Loans
------------------------------------------------------------
<S> <C> <C> <C> <C>
Additions to net assets
attributed to:
Interest $ - $ $ - $ -
Dividends 81,799 152,772 54,853 -
Net appreciation in fair
value of Investments 126,401 172,494 44,157 -
Investment election transfer 1,053,455 1,154,394 1,907,303 -
Contributions:
Employer - - - -
Employee 568,735 1,045,285 386,579 -
Loan withdrawals (33,154) (88,617) (48,402) 4,115,130
------------------------------------------------------------
Total additions (decreases) 1,797,236 2,436,328 2,344,490 4,115,130
Deductions to net assets
attributed to:
Benefits paid to terminated
participants 58,267 68,020 22,998 -
Loan interest and principal (49,564) (124,480) (59,247) 2,118,693
------------------------------------------------------------
Total deductions (additions) 8,703 (56,460) (36,249) 2,118,693
------------------------------------------------------------
Net increase (decrease) 1,788,533 2,492,788 2,380,739 1,996,437
Net assets available for
benefits at beginning of year - - - 2,738,364
------------------------------------------------------------
Net assets available for
benefits at end of year $ 1,788,533 $ 2,492,788 $ 2,380,739 $ 4,734,801
=============================================================
</TABLE>
11
<PAGE>
Supplemental Schedules
<PAGE>
401(k) Stock Purchase Plan for the Employees of
Cullen/Frost Bankers, Inc. and Its Affiliates
<TABLE>
<CAPTION>
Item 27a-Schedule of Assets Held for Investment Purposes
December 31, 1996
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
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
*Cullen/Frost Bankers, Common Stock
Inc. 1,455,335 shares **$ 48,389,886 $ 48,389,886
AIM Short-Term Prime Money market deposit
Money Market Fund account, variable
interest, available upon
demand 3,638,886 3,638,886
*Participant loans Interest accrued at Frost
National Bank prime
rate, varying maturity
dates, 8.25 - 8.50%
charged during 1996 - 4,734,801
Optimum Mix/Total
Return Portfolio Mutual fund 2,319,444 2,380,739
AIM LTD Maturity
Treasury Fund Mutual fund 557,350 557,177
Templeton Growth Fund Mutual fund 1,687,282 1,788,533
Fidelity Advisor Growth
Opportunities Fund Mutual fund 2,369,053 2,492,788
* Denotes party-in-interest
** Market value was substituted in lieu of historical cost due to historical
cost not being available. See paragraph five in "Report of Independent
Auditors" for disclosure.
</TABLE>
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
Year Ended December 31, 1996
Description of Current Value
Asset (Including Interest of Asset on
Identity of Rate and Maturity Purchase Selling Cost of Transaction Net Gain
Party Involved* in Case of a Loan) Price Price Asset Date or (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - Series of
Securities Transactions
Templeton Growth Fund $ 2,004,015 $ - $ 2,004,015 $ 2,004,015 $ -
Templeton Growth Fund - 329,899 304,749 329,899 25,150
Loan Fund 4,115,130 - 4,115,130 4,115,130 -
Loan Fund - 2,118,693 2,118,693 2,118,693 -
AIM Short-Term Prime
Money Market Fund 3,011,972 - 3,011,972 3,011,972 -
AIM Short-Term Prime
Money Market Fund - 2,432,103 2,432,103 2,432,103 -
Growth Opportunities 3,583,675 - 3,583,675 3,583,675 -
Growth Opportunities - 451,287 402,528 451,287 48,759
Common stock:
Cullen/Frost Bankers,Inc. 9,401,249 - 9,401,249 9,401,249 -
Cullen/Frost Bankers,Inc. - 10,133,173 **10,133,173 10,133,173 -
There were no
Category (i), (ii), or
(iv) transactions
during the year ended
December 31, 1996.
* All transactions on market
** Market value was substituted in lieu of historical cost due to historical
cost not being available. See paragraph five in "Report of Independent
Auditors" for disclosure.
13
</TABLE>
EXHIBIT 23.2
Consent of Independent Auditors with respect to 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. and Its Affiliates, the Registration Statement (Form S-8 No. 33-
53492) pertaining to the Cullen/Frost Bankers, Inc. Restricted Stock Plan, the
Registration Statement (Form S-8 No. 33-53622) pertaining to the Cullen/Frost
Bankers, Inc. 1992 Stock Plan, and the Registration Statement (Form S-4 No.
333-23225 and Form S-4 No. 333-23225-01) pertaining to the registration and
exchange of $100,000,000 in capital securities, Series A, of our report dated
June 20, 1997, with respect to the financial statements of the 401(k) Stock
Purchase Plan for the 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, 1996.
ERNST & YOUNG LLP
San Antonio, Texas
June 27, 1997
