Cullen/Frost Bankers (CFR) 8-K 2003 and Timing of Earnings Conference Call

EXHIBIT 99.1
		Greg Parker
		Investor Relations
		210/220-5632
		or
		Renee Sabel
		Media Relations
		210/220-5416
FOR IMMEDIATE RELEASE
JANUARY 28, 2004
CULLEN/FROST REPORTS 4th QUARTER RESULTS, RECORD ANNUAL EARNINGS FOR
2003 AND TIMING OF EARNINGS CONFERENCE CALL
SAN ANTONIO - Cullen/Frost Bankers, Inc. today reported net income for the fourth quarter of 2003 of $32.6 million, or $.61 per diluted common share, an 8.2 percent increase over fourth quarter 2002 earnings of $30.2 million, or $.58 per diluted common share. For the last quarter of 2003, return on average assets and equity were 1.37 percent and 17.02 percent, respectively, compared to 1.35 percent and 17.15 percent for the same quarter of 2002. The company also reported record annual earnings for 2003 of $130.5 million, or $2.48 per diluted common share, an 11.6 percent increase compared to $117.0 million, or $2.23 per diluted common share reported in 2002. For the year 2003, return on average assets and equity were 1.36 percent and 17.78 percent respectively, compared to 1.40 percent and 17.96 percent reported in 2002. "I am pleased to report that 2003 was another record year for our company, with earnings for the year reaching an all-time high, as we grew revenues, lowered credit costs and managed expenses," said Dick Evans, Cullen/Frost chairman and CEO. "One of the strongest drivers of our performance continues to be a steady increase in non-interest income, which now represents almost 41 percent of our annual revenue. This fee income not only helps us to grow revenues; it also serves as a stabilizing influence in an interest rate environment that continues at the lowest level in four decades. In 2003 we were also able to increase deposits and once again began to see increases in our total loan portfolio." "Our outstanding staff has worked hard to grow the business and control expenses, and I am deeply grateful for their dedication to this company. Through their efforts, Cullen/Frost will continue our commitment to building and maintaining long-term relationships with our customers and enhancing value to our shareholders." Forthe year ended December 31, 2003, average annual total deposits grew to $7.6 billion, a 9.9 percent increase over 2002. Average total loans for 2003 were $4.5 billion and flat when compared to the previous year. With interest rates remaining at historically low levels, net interest income of $313.8 million was unchanged when compared to the previous year. For 2003, non-interest income increased to $215.4 million, a 7.2 percent increase over the previous year, while non-interest expenses rose 4.5 percent over 2002 to $326.0 million. Noted financial data for the fourth quarter follows:
w	Net-interest income increased to $79.5 million, up 1.3 percent from the $78.5 million reported a year earlier. This rise in net interest income was impacted in part by a 5.5 percent increase in average deposits from the same quarter a year earlier, to $7.6 billion, which also resulted in higher average earning assets. Average loans for the quarter were flat at $4.5 billion when compared to the same period in 2002, but increased 1.9 percent from the previous quarter. The net interest margin, which continues to experience pressure from low interest rates, was 4.01 percent for the fourth quarter, up from 3.88 percent the previous quarter and down from 4.41 percent for the fourth quarter of 2002.
w	Non-interest income for the fourth quarter of 2003 totaled $52.9 million, up $3.1 million over the $49.7 million reported a year ago. Fueling this 6.3 percent increase was growth in revenues from service charges on deposits, split between commercial and retail activity. Trust fees for the fourth quarter have rebounded to the highest level of the year, rising 10.0 percent to $12.8 million, compared to $11.6 million during the same quarter a year earlier. Most of the increase in Trust fees was due to increased investment fees as market conditions have improved from last year. Non-interest income as a percentage of total revenue was 39.9 percent for the fourth quarter of 2003 compared to 38.8 percent for the same quarter last year.
w	Non-interest expense was $82.5 million for the quarter, up $3.1 million or 3.8 percent from the $79.4 million for the fourth quarter of 2002. Most of the increase was due to salaries and wages, which were up $2.4 million due to an increased number of employees, and normal annual merit increases.
w	The provision for possible loan losses for the fourth quarter of 2003 was $1.5 million, compared to net charge-offs of $1.4 million, or 12 basis points of average loans. For the fourth quarter of 2002, the provision for possible loan losses was $4.5 million, compared to net charge-offs of $3.4 million. The allowance for possible loan losses as a percentage of total loans was 1.82 percent at December 31, 2003 compared to 1.83 percent at December 31, 2002. Non-performing assets were $52.8 million at year-end, up $11.6 million compared to $41.2 million the previous quarter and $42.9 million at the end of 2002. The increase from the prior quarter resulted primarily from two credits reported in the third quarter of 2003 as potential problem loans moving to non-accrual loan status at the end of the year.
Cullen/Frost Bankers, Inc. will host a conference call on January 28, 2004 at 10:00 a.m. Central Standard Time (CST) to discuss the results for the fourth quarter. The media and other interested parties are invited to access the call in "listen only" mode at 1-800-944-6430. Digital playback of the conference call will be available after 11:00 a.m. CST until midnight Sunday, February 1, 2004 at 1-800-642-1687 with Conference ID # of 5006999. The call will also be available by webcast at the URL listed below and available for playback after 2:00 p.m. CST. To access the webcast and playback, go towww.frostbank.com and click on Investor Relations. Cullen/Frost Bankers, Inc. isa financial holding company, headquartered in San Antonio, with assets of $9.7 billion at December 31, 2003. The corporation provides a full range of commercial and consumer banking products, investment and brokerage services, insurance products and investment banking services. Its subsidiary, Frost Bankoperates 79 financial centers across Texas in Austin, Boerne, Corpus Christi, Dallas, Fort Worth, Galveston, Harlingen, Houston, McAllen, New Braunfels, San Antonio and San Marcos. Founded in 1868, Frost is the largest Texas-based bank, helping Texans with their financial needs during three centuries. Cullen/Frost Bankers' stock is traded on the New York Stock Exchange under the symbol CFR.
Forward-Looking Statements and Factors that Could Affect Future Results
Certain statements contained in this Earnings Release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in the Corporation's future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Corporation that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of Cullen/Frost or its management or Board of Directors, including those relating to produc ts or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
w	Local, regional and international economic conditions and the impact they may have on the Corporation and its customers and the Corporation's assessment of that impact.
w	Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.
w	The effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board.
w	Inflation, interest rate, market and monetary fluctuations.
w	Political instability.
w	Acts of war or terrorism.
w	The timely development and acceptance of new products and services and perceived overall value of these products and services by users.
w	Changes in consumer spending, borrowings and savings habits.
w	Technological changes.
w	Acquisitions and integration of acquired businesses.
w	The ability to increase market share and control expenses.
w	Changes in the competitive environment among financial holding companies.
w	The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Corporation and its subsidiaries must comply.
w	The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board and other accounting standard setters.
w	Changes in the Corporation's organization, compensation and benefit plans.
w	The costs and effects of litigation and of unexpected or adverse outcomes in such litigation.
w	Greater than expected costs or difficulties related to the integration of new lines of business.
w	The Corporation's success at managing the risks involved in the foregoing items.
Forward-looking statements speak only as of the date on which such statements are made. The Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
		2003															2002
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
CONDENSED INCOME STATEMENTS
Net interest income	$		79,526		$		77,454		$		78,669		$		78,109		$		78,516
Net interest income(1)			80,806				78,756				79,971				79,412				79,852
Provision for possible loan losses			1,500				1,998				3,446				3,600				4,500
Non-interest income
Trust fees			12,769				11,646				12,206				10,865				11,609
Service charges on deposit   accounts			22,373				22,576				21,752				21,104				20,705
Insurance commissions and fees			5,912				7,276				6,641				8,831				6,377
Other charges, commissions and   fees			4,245				6,334				4,440				3,649				3,847
Net gain on securities   transactions			- --				40				- --				- --				- --
Other			7,553				7,339				10,221				7,589				7,205
Total non-interest income	$		52,852		$		55,211		$		55,260		$		52,038		$		49,743
Non-interest expense
Salaries & wages			37,194				37,408				35,523				36,497				34,831
Employee benefits			9,176				9,129				9,420				10,591				9,034
Net occupancy			7,040				7,804				7,372				7,070				7,008
Furniture & equipment			5,496				5,418				5,395				5,459				5,783
Intangible amortization			1,409				1,412				1,380				1,685				1,735
Other			22,151				21,111				21,126				19,769				21,025
Total non-interest expense	$		82,466		$		82,282		$		80,216		$		81,071		$		79,416
Income from continuing operations   before income taxes			48,412				48,385				50,267				45,476				44,343
Income taxes			15,777				15,622				16,034				14,606				14,189
Net income	$		32,635		$		32,763		$		34,233		$		30,870		$		30,154
PER SHARE DATA
Net income - basic	$		.63		$		.64		$		.67		$		.60		$		.59
Net income - diluted			.61				.62				.65				.59				.58
Cash dividends			.24				.24				.24				.22				.22
Book value			14.87				14.69				14.57				13.99				13.72
OUTSTANDING SHARES
Period-end shares			51,776				51,752				51,464				51,347				51,295
Weighted-average shares - basic			51,713				51,503				51,307				51,239				51,217
Dilutive effect of stock   compensation			1,521				1,315				1,046				962				1,147
Weighted-average shares - diluted			53,234				52,818				52,353				52,201				52,364
SELECTED ANNUALIZED RATIOS
Return on average assets			1.37	%			1.33	%			1.41	%			1.33	%			1.35	%
Return on average equity			17.02				17.78				18.72				17.63				17.15
Net interest income to average   earning assets(1)			4.01				3.88				3.95				4.10				4.41

(1) Taxable-equivalent basis based on a 35% tax rate.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
		2003															2002
		4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
Loans	$		4,543		$		4,457		$		4,455		$		4,534		$		4,516
Earning assets			8,029				8,083				8,118				7,811				7,250
Total assets			9,422				9,737				9,755				9,416				8,858
Non-interest-bearing demand    deposits			2,974				3,203				3,076				2,895				2,866
Interest-bearing deposits			4,675				4,545				4,489				4,448				4,386
Total deposits			7,649				7,748				7,565				7,343				7,252
Shareholders' equity			761				731				733				710				698
Period-End Balance:
Loans	$		4,591		$		4,526		$		4,462		$		4,511		$		4,519
Earning assets			8,132				8,018				8,445				8,084				7,710
Goodwill and intangible    assets			115				116				118				119				119
Total assets			9,672				9,655				10,014				9,815				9,536
Total deposits			8,069				7,740				7,902				7,754				7,628
Shareholders' equity			770				760				750				718				704
Adjusted shareholders'    equity(1)			762				745				717				692				671
ASSET QUALITY
($ in thousands)
Allowance for possible
loan losses	$		83,501		$		83,410		$		83,410		$		83,410		$		82,584
as a percentage of
Period-end loans			1.82	%			1.84	%			1.87	%			1.85	%			1.83	%
Net charge-offs:	$		1,409		$		1,998		$		3,446		$		2,774		$		3,416
As a percentage of
average loans			.12	%			.18	%			.31	%			.25	%			.28	%
Non-performing assets:
Non-accrual loans	$		47,451		$		34,218		$		37,153		$		39,100		$		34,861
Foreclosed assets			5,343				6,977				6,403				9,009				8,047
Total	$		52,794		$		41,195		$		43,556		$		48,109		$		42,908
As a percentage of:
Total assets			.55	%			.43	%			.43	%			.49	%			.45	%
Total loans plus
foreclosed assets			1.15				.91				.97				1.06				.95
CONSOLIDATED CAPITAL RATIOS
Tier 1 Risk-Based
Capital Ratio			11.41	%			11.36	%			11.11	%			10.78	%			10.46	%
Total Risk-Based
Capital Ratio			15.01				15.00				14.79				14.48				14.16
Leverage Ratio			7.83				7.39				7.10				7.07				7.25
Equity to Assets Ratio   (period-end)			7.96				7.87				7.49				7.32				7.38
Equity to Assets Ratio   (average)			8.08				7.51				7.51				7.54				7.88

(1) Shareholders' equity excluding accumulated other comprehensive income,net of tax.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except per share amounts)
			Year Ended December 31
				2003			2002			2001			2000			1999
CONDENSED INCOME STATEMENTS
Net interest income			$	313,758		$	313,773		$	315,826		$	322,312		$	296,603
Net interest income(1)				318,945			318,772			320,695			326,997			301,220
Provision for possible loan losses				10,544			22,546			40,031			14,103			12,427
Non-interest income
	Trust fees			47,486			47,463			48,784			49,266			46,411
	Service charges on deposit   accounts			87,805			78,417			70,534			60,627			58,787
	Insurance commissions and fees			28,660			25,912			18,598			10,698			3,912
	Other charges, commissions and   fees			18,668			16,860			16,176			15,548			13,279
	Net gain on securities transactions			40			88			78			4			(86	)
	Other			32,702			32,229			29,547			29,472			28,426
	Total non-interest income		$	215,361		$	200,969		$	183,717		$	165,615		$	150,729
Non-interest expense
	Salaries & wages			146,622			139,227			138,347			133,525			119,902
	Employee benefits			38,316			34,614			35,000			28,808			25,944
	Net occupancy			29,286			28,883			29,419			27,693			27,045
	Furniture & equipment			21,768			22,597			23,727			21,329			19,892
	Intangible amortization			5,886			7,083			15,127			15,625			15,000
	Restructuring charges			--			--			19,865			--			--
	Other			84,157			79,738			78,172			76,832			75,252
	Total non-interest expense		$	326,035		$	312,142		$	339,657		$	303,812		$	283,035
Income from continuing operations,   before income taxes				192,540			180,054			119,855			170,012			151,870
Income taxes				62,039			57,821			39,749			58,746			52,116
Income from continuing operations			$	130,501		$	122,233		$	80,106		$	111,266		$	99,754
Loss from discontinued operations,   net of tax				- --			(5,247	)		(2,200	)		(2,449	)		(2,112	)
Cumulative effect of accounting   change, net of tax				- --			- --			3,010			- --			- --
Net income			$	130,501		$	116,986		$	80,916		$	108,817		$	97,642
PER SHARE DATA
Income from continuing   operations - basic			$	2.54		$	2.40		$	1.55		$	2.13		$	1.87
Income from continuing   operations - diluted				2.48			2.33			1.50			2.07			1.82
Net income - basic				2.54			2.29			1.57			2.09			1.83
Net income - diluted(2)				2.48			2.23			1.52			2.03			1.78
Cash dividends				.94			.875			.84			.76			.675
Book value				14.87			13.72			11.58			11.14			9.64
OUTSTANDING SHARES
Period-end shares				51,776			51,295			51,355			51,430			52,823
Weighted-average shares - basic				51,442			51,001			51,530			52,123			53,368
Dilutive effect of stock   compensation				1,216			1,422			1,818			1,534			1,378
Weighted-average shares - diluted				52,658			52,423			53,348			53,657			54,746
SELECTED ANNUALIZED RATIOS
Income from continuing operations   ROA				1.36	%		1.46	%		1.02	%		1.56	%		1.45	%
Return on average assets				1.36			1.40			1.03			1.52			1.42
Income from continuing operations   ROE				17.78			18.77			13.05			20.87			19.08
Return on average equity				17.78			17.96			13.18			20.41			18.68
Net interest income to average   earning assets(1)				3.98			4.58			4.89			5.32			5.15
(1)		Taxable-equivalent basis based on a 35% tax rate.
(2)		Excluding the impact of goodwill amortization (discontinued in 2002 in accordance with SFAS No. 142) diluted earnings per share would have been $1.65 for 2001, $2.16 for 2000, $1.90 for 1999, and $1.48 for 1998.

Cullen/Frost Bankers, Inc.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
					Year Ended December 31
						2003			2002			2001			2000			1999
BALANCE SHEET SUMMARY
($ in millions)
Average Balance:
	Loans				$	4,497		$	4,537		$	4,547		$	4,353		$	3,934
	Earning assets					8,011			6,961			6,565			6,148			5,858
	Total assets					9,584			8,353			7,842			7,154			6,880
	Non-interest-bearing demand deposits					3,038			2,540			2,187			1,897			1,792
	Interest bearing deposits					4,539			4,354			4,364			4,155			4,057
	Total deposits					7,577			6,894			6,551			6,052			5,849
	Shareholders' equity					734			651			614			533			523
Period-End Balance:
	Loans				$	4,591		$	4,519		$	4,519		$	4,535		$	4,167
	Earning assets					8,132			7,710			6,811			6,422			5,838
	Goodwill and intangible assets					115			119			124			133			138
	Total assets					9,672			9,536			8,375			7,665			7,001
	Total deposits					8,069			7,628			7,098			6,500			5,954
	Shareholders' equity					770			704			595			573			509
	Adjusted shareholders' equity(1)					762			671			609			577			548
ASSET QUALITY
	($ in thousands)
Allowance for possible loan losses					$	83,501		$	82,584		$	72,881		$	63,265		$	58,345
		As a percentage of period-end loans				1.82	%		1.83	%		1.61	%		1.40	%		1.40	%
Net charge-offs:					$	9,627		$	12,843		$	30,415		$	9,183		$	8,764
		As a percentage of average loans				..21	%		..28	%		..67	%		..21	%		..22	%
Non-performing assets:
	Non-accrual loans				$	47,451		$	34,861		$	33,196		$	16,662		$	14,854
	Foreclosed assets					5,343			8,047			4,234			2,271			3,983
				Total	$	52,794		$	42,908		$	37,430		$	18,933		$	18,837
		As a percentage of:
	Total assets					.55	%		.45	%		.45	%		.25	%		.27	%
	Total loans plus foreclosed assets					1.15			..95			..83			..42			..45
(1)			Shareholders' equity excluding accumulated other comprehensive income, net of tax.