Cullen/Frost Bankers, Inc. (NYSE:CFR) Q1 2019 Earnings Conference Call - Final Transcript

Apr 25, 2019 • 11:00 am ET

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Cullen/Frost Bankers, Inc. (NYSE:CFR) Q1 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Cullen/Frost Bank First Quarter Earnings Call. My name is Sherry, and I will be facilitating the audio portion of today's interactive broadcast. All lines have been placed on mute to prevent any background noise. For those of you on the stream, please take note of the options available in your event counsel.

At this time, I would like to turn the show over to Mr. A.B. Mendez, Director of Investor Relations. Mr. Mendez, you may begin.

Executive
A.B. Mendez

Thanks, Sherry. This morning's conference call will be led by Phil Green, Chairman and CEO; and Jerry Salinas, Group Executive Vice President and CFO.

Before I turn the call over to Phil and Jerry, I need to take a moment to address the safe harbor provisions. Some of the remarks made today will constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. We intend that such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Please see the last page of text in this morning's earnings release for additional information about the risk factors associated with these forward-looking statements. If needed, a copy of the release is available at our website or by calling the Investor Relations department at (210) 220-5234.

At this time, I'll turn the call over to Phil.

Executive
Phillip D. Green

Thanks, A.B. Good morning, everyone, and thanks for joining us. Today, I'll review first quarter results for Cullen/Frost and our Chief Financial Officer, Jerry Salinas will also provide additional comments before we open it up to your questions. In the first quarter, Cullen/Frost earned $114.5 million, or $1.79 per share, which represents 11% increase compared to the $1.61 per share reported in the same quarter last year. Our return on average assets reached 1.48% for the first quarter and that was compared to 1.36% in the first quarter last year. Average deposits in the first quarter were $26.1 billion, down slightly from the first quarter last year. The quarter saw pressure on demand deposit volumes, but we continued to see strong new customer flows.

Average loans in the first quarter were $14.2 billion. This represents an increase of almost $1 billion, or 6.8% versus the first quarter last year. Growth was broad-based across all categories. Our provision for loan losses was $11 million in the first quarter, compared to $3.8 million for the fourth quarter of 2018, and $6.9 million in the first quarter of 2018. Net charge-offs in the first quarter were $6.8 million, compared with $9.2 million in the fourth quarter and $12.4 million in the first quarter of last year. First quarter annualized net charge-offs were only 19 basis points of average loans.

Nonperforming assets totaled $97.4 million in the first quarter, compared with $74.9 million in the fourth quarter of 2018, and $136.6 million in the first quarter of last year. Overall delinquencies for accruing loans at the end